HOUSE 3rd Reading Unamended April 12, 2013 HOUSE Amended 2nd Reading April 11, 2013First Regular Session Sixty-ninth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 13-0432.01 Duane Gall x4335 HOUSE BILL 13-1253 HOUSE SPONSORSHIP Lee, Court, Exum, Garcia, Hamner, Kraft-Tharp, Pabon, Ryden, Tyler SENATE SPONSORSHIP Kerr, House Committees Senate Committees Business, Labor, Economic, & Workforce Development Appropriations A BILL FOR AN ACT Concerning a study to assess the availability of capital for small businesses in Colorado, and, in connection therewith, making an appropriation. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill directs the governor's office of economic development and international trade (OEDIT) to commission a study and report by a private Colorado entity (defined as the study author) identifying the availability of, need for, and barriers to acquisition of, capital for Colorado small businesses. The report is to be delivered on or before May 1, 2014. The study author is directed to survey Colorado small businesses and collect data on their size and location, existing sources of capital, uses to which they put capital, and impediments to acquiring capital. The report will contain a summary of this information and the study author's findings and recommendations concerning the adequacy of existing mechanisms for providing capital to Colorado's small businesses and the steps state and local governments, private industry, and federal agencies can take to improve access to capital. The bill creates a fund for purposes of financing the study. The fund consists of some moneys appropriated by the general assembly and the remainder from private gifts, grants, and donations. Any unexpended and unencumbered moneys remaining in the fund as of June 30, 2014, revert to the general fund of the state. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add part 4 to article 46 of title 24 as follows: PART 4 ACCESS TO CAPITAL FOR SMALL BUSINESSES 24-46-401. Legislative declaration - need for empirical study. (1) The general assembly hereby finds that: (a) The present and prospective right to gainful employment and general welfare of the people of this state require, as a public purpose, the promotion and development of new and expanded business enterprises; (b) Improved access to capital and the formation and funding of capital markets for small businesses will encourage and foster the development and diversification of Colorado's economy and the reduction of unemployment and underemployment in the state; (c) The state of Colorado continues to have high levels of unemployment and underemployment; and (d) Small businesses are historically the single largest source of net new jobs; (2) The general assembly determines that: (a) Promoting the availability of capital for small businesses is in the public interest and serves a public purpose of the state in promoting the welfare of the citizens of the state economically, as it supports the formation and growth of new and existing businesses and the resulting increase in employment, economic activity, and stability; and (b) Small businesses in Colorado would benefit from empirical research, conducted by informed professionals, on the currently available sources of investment capital, the existing barriers to access to that capital, and practical methods of overcoming those barriers. (3) The general assembly declares that the study and report pursuant to this part 4 will provide significant new information and facilitate the provision of available capital to stimulate the growth of small business enterprises, promote innovation, increase employment opportunities for Colorado's citizens, and thus serve the public interest. 24-46-402. Definitions. As used in this part 4, unless the context otherwise requires: (1) "Commission" means the Colorado economic development commission created in section 24-46-102. (2) "Office" means the governor's office of economic development and international trade or its successor office. (3) "Small business" means a for-profit enterprise that is licensed to conduct business in Colorado and has up to five hundred employees. (4) "Study author" means a Colorado-based, private organization, nonprofit or organized for profit, with experience in conducting research and with knowledge of Colorado's capital markets, participants, and mechanisms for matching Colorado small businesses with capital sources. 24-46-403. Small business capital study - selection of study author - advisory committee - membership - duties - creation of fund - report. (1) The office shall contract with a study author to conduct the study described in this section. The primary purpose of the study is to assess the need for and availability of capital for Colorado small businesses and the barriers to access to capital that are currently faced by those businesses. In addition, the study may be used by the Colorado small business development centers network for strategic planning to ensure that quality training and consulting programs are in place for small and medium-sized businesses. (2) The office shall award the contract based on competitive bids. The office shall award the contract within ninety days after receiving sufficient funding. (3) The office's staff shall facilitate the efforts of the study author and may provide staff support if necessary. (4) The study must include a survey of Colorado small businesses and lenders. The study author shall strive to collect data from as many businesses and lenders as is necessary to produce an appropriate sample on topics that may include: (a) Geographic location; (b) Type of business, including the products and services the business provides; (c) Years in operation and stage of business development; (d) Number of employees; (e) The amount, sources, and use of capital secured during the previous ten years; (f) The business's readiness to receive capital; (g) A forecast of its capital needs for the next five years; and (h) Any other information the study author deems relevant. (5) The study author shall consult with the office's existing partnerships that have knowledge of capital needs for small businesses, including key industry networks, regional partnerships, small business development centers, micro-lenders, and other economic development partners. (6) Report. On or before May 1, 2014, the study author shall deliver a report to the commission. The office shall make the report available on the internet by June 1, 2014, and shall incorporate it into the office's November 1, 2014, annual report to the general assembly. The report must include a summary of the study author's findings under subsection (4) of this section, together with the study author's conclusions and recommendations for action by Colorado's state and local governments, private industry, and federal agencies to: (a) Reduce existing constraints and limitations in securing capital; (b) Improve the ability of small businesses to qualify for credit; (c) Increase the amount of capital available to Colorado's small businesses; and (d) Otherwise improve access to capital by Colorado's small businesses. (7) The office is hereby authorized to receive funding for the financing of the study. The sources of funding may include public or private gifts, grants, and donations. The office shall transmit all moneys received under this section to the state treasurer, who shall credit them to the small business capital study fund, also referred to in this section as the "fund", which is hereby created in the state treasury. The fund consists of any moneys credited to the fund pursuant to this subsection (7) and any moneys appropriated to the fund by the general assembly. All moneys credited to the fund and any interest and income earned on the deposit and investment of moneys in the fund remain in the fund, subject to annual appropriation by the general assembly for purposes of this section. Any unexpended and unencumbered moneys remaining in the fund on June 30, 2014, shall revert to the general fund. 24-46-404. Repeal of part. This part 4 is repealed, effective July 1, 2014. SECTION 2. Appropriation. (1) In addition to any other appropriation, for the fiscal year beginning July 1, 2013, there is hereby appropriated, out of any moneys in the general fund not otherwise appropriated, to the governor, lieutenant governor, and state planning and budgeting to be credited to the small business capital study fund created in section 24-46-403 (7), Colorado Revised Statutes, the sum of $100,000, to be used for purposes consistent with the creation of the fund. (2) In addition to any other appropriation, there is hereby appropriated, out of the small business capital study fund, to the governor-lieutenant governor-state planning and budgeting, for the fiscal year beginning July 1, 2013, the sum of $100,000, or so much thereof as may be necessary, for allocation to economic development programs for contract expenses related to the implementation of this act. SECTION 3. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.