Date: 02/03/2006

Final
BILL SUMMARY for HB06-1017

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View--> Action Taken:
Moved amendment L.001 (Attachment B). The motion
Moved to refer House Bill 06-1017, as amended, to 		Pass Without Objection
PASS



08:02 AM -- House Bill 06-1017

Representative Hall, prime sponsor, stated that House Bill 06-1017 is a new job incentive bill and distributed proposed amendment L.001 along with a memo prepared by fiscal note staff indicating that with passage of the amendment, the fiscal impact would change (Attachments A and B). He explained that the bill provides tiers for wage incentives, and a 5-year sunset. Representative Hall stated that although the bill does have a large fiscal note, the Office of Economic Development has a different estimate that is closer to a $5 million fiscal impact. He told the committee the offset would pay for the cost over the next few years. Representative Hall responded to a question about the mechanics of the bill. There was committee discussion about the meaning of verifiability, placing more accountability into the bill, and the bill's scope. Representative Hall explained that the scope goes beyond enterprise zones, it also extends to rural and metro counties.

08:20 AM -- Kevin Hougen, representing the Aurora Chamber of Commerce, testified in support of the bill. He gave an example of a recent incentive that was used in Aurora to help keep Raytheon in Colorado. There was committee discussion about narrowing the scope of the bill. Mr. Hougen was asked to give some more examples of recent successful incentives in Aurora. Mr. Hougen talked about Aurora's recent success with Raytheon in detail.

08:27 AM -- Chuck Berry, Colorado Association of Commerce and Industry, testified in support of the bill. Mr. Berry was asked if he felt the bill should state that employers must provide health care to their employees in the newly created jobs in order to receive the incentive. Mr. Berry stated that health care has historically been a voluntary program for employers that was started as an incentive program to gain employees, and that government has to be careful about mandating that program. There was committee discussion that followed about adding health care for the employees to the bill in order for employers to receive these incentives.

08:42 AM -- Clarke Becker, Colorado Rural Development Council, responded to earlier questions raised discussions by the committee. He stated that the criteria in the bill could provide specific opportunities to rural Colorado.

08:45 AM -- Brian Vogt, Office of Economic Development and International Trade (OEDIT), gave an explanation of the three components of economic development in the public sector. The first is the business environment, what attracts businesses to the state: infrastructure, work force, taxes, rules, and regulations. Second, is persuasion: reaching out to companies so they consider Colorado as an option for relocation or to start their business in. The third component is competitive incentives. He discussed the strong competition that surrounds Colorado, such as Texas that just appropriated several hundred million dollars for business incentives. He talked about how New Mexico lured Eclipse from Colorado because of the weight of the incentives the state offered. He mentioned that businesses have also been lost to Utah for the same reason. Mr. Vogt discussed recent deals Colorado has made, for instance a recent deal in Sterling that will create 250 jobs. He stated that something should be in place to reach out to more areas in Colorado. Mr. Vogt added that if Colorado had a more open, accessible, across the board incentive, it would send a signal nationally and world wide that Colorado is a place where ease of doing business also includes the ease of showing that what is brought to the state has value.

08:54 AM -- Mr. Vogt responded to the committee's earlier concerns regarding accountability. He stated that the OEDIT would put into place requirements to ensure the performance would be rock solid before an incentive would be paid to an employer. He was asked to give some examples of successful incentives other states have offered. He explained that the two states that are the toughest to compete with right now are New Mexico and Texas due to the amount of money they are putting into economic development.

08:58 AM -- Recess

The committee recessed.


12:22 PM -- Reconvene

Mr. Vogt spoke to the earlier discussion about adding health care to the bill to receive the incentive. Representative Borodkin talked about a bill she is sponsoring, House Bill 1038, that includes the health care portion, and stated she would like to sit down and put the two bills together. Representative Hall stated he would like to work with the Economic Development Committee and discuss whether they would like to add any more provisions to the bill.

12:49 PM -- Representative Hall explained amendment L.001 (Attachment B). He explained that the amendment: changes the program from 10 to 5 years; limits the total amount of incentives that may be claimed in a given fiscal year; directs the incentives to be paid on a first-come first-served basis if the total amount of claims made exceeds the amount appropriated; and only takes effect if the General Assembly appropriates money, up to $5 million.
BILL:HB06-1017
TIME: 12:52:00 PM
MOVED:McCluskey
MOTION:Moved amendment L.001 (Attachment B). The motion passed without objection.
SECONDED:Balmer
VOTE
Balmer
Borodkin
Butcher
Carroll M.
Coleman
Knoedler
Liston
McCluskey
Paccione
Penry
Welker
Cerbo
Marshall
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection



12:53 PM

Representative Welker discussed the idea of amending the bill to clarify that the term "employee" meant legally present in the United States. He did not offer the amendment. Representative Hall reiterated his previous statement that over time the bill would pay for itself and eventually earn more money then it is paying out. There was committee discussion about the fiscal note.
BILL:HB06-1017
TIME: 12:57:18 PM
MOVED:Knoedler
MOTION:Moved to refer House Bill 06-1017, as amended, to the Committee on Appropriations. The motion passed 8-5.
SECONDED:Balmer
VOTE
Balmer
Yes
Borodkin
No
Butcher
No
Carroll M.
Yes
Coleman
No
Knoedler
Yes
Liston
Yes
McCluskey
Yes
Paccione
Yes
Penry
Yes
Welker
Yes
Cerbo
No
Marshall
No
Final YES: 8 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS