HOUSE 3rd Reading Unamended April 21, 2015 HOUSE Amended 2nd Reading April 20, 2015First Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 15-0699.01 Esther van Mourik x4215HOUSE BILL 15-1177 HOUSE SPONSORSHIP Willett and Becker K., Becker J. SENATE SPONSORSHIP Donovan, House Committees Senate Committees Business Affairs and Labor Appropriations A BILL FOR AN ACT Concerning the creation of the rural economic development initiative grant program for highly distressed rural counties. 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 creates the rural economic development initiative grant program for the purpose of creating resiliency in and growing the economies of highly distressed rural counties. The bill specifies economic factors to determine the distressed rural counties in the state and then requires the Colorado office of economic development to determine which of those distressed rural counties are highly distressed and eligible for the grants by reviewing and ranking those counties based on further economic indicators. Local governments and private employers in up to 30 highly distressed rural counties may apply for grants, on a reimbursement basis, that attract new jobs or encourage private capital investment. The program requires the applicants to provide matching funds and requires the applicants to meet certain performance criteria. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add 24-32-117 as follows: 24-32-117. Rural economic development initiative - grants - legislative declaration - definitions - repeal. (1) The general assembly finds and declares that: (a) Certain rural counties of the state are having more trouble than others recovering from the recent recession and are still distressed, and among those there are counties that are highly distressed; (b) Additional resources are needed in those highly distressed rural counties to assist in improving and accelerating the economic development there by helping those counties and private employers undertake projects to retain and create jobs, drive capital investment, and increase wages to help grow and create resiliency and diversity in the community; (c) Using timely data that is more reflective of current economic distress to determine these highly distressed areas is imperative to get money in the hands of local governments, not-for-profit economic development entities, and private employers who most need it; and (d) Based on the success of the earlier rural economic development initiative as demonstrated by the collaboration between the department of local affairs and the Colorado office of economic development, it is clear that a continuation of that grant program, with some modifications as specified in paragraph (c) of subsection (3) of this section, is a wise use of state money. (2) As used in this section, unless the context otherwise requires: (a) "Colorado office of economic development" means the Colorado office of economic development created in section 24-48.5-101. (b) "Department" means the department of local affairs. (c) (I) "Distressed rural county" means a county with a population of less than one hundred seventy-five thousand that meets two of three of the following criteria: (A) A countywide annual percent change in employment less than the statewide annual percent change in employment; (B) A countywide annual percent change in assessed value of all property less than the statewide annual average percent change in assessed value of all property; or (C) A countywide concentration of pupils eligible for free lunch pursuant to the federal "National School Lunch Act", 42 U.S.C. sec. 1751 et seq., greater than the statewide average concentration of pupils eligible for free lunch. (II) The department shall annually review the determination of distressed rural counties based on the factors set forth in subparagraph (I) of this paragraph (c) pursuant to a timeline established in policies and procedures. (III) The department shall use data from the two most recently available years and shall use data sources provided by the economics staff of the legislative council to determine whether a county meets the factors set forth in subparagraph (I) of this paragraph (c). (d) "Executive director" means the executive director of the department of local affairs. (e) "Highly distressed rural counties" means up to thirty distressed rural counties ranked as specified in paragraph (b) of subsection (3) of this section. (f) "Policies and procedures" means those policies and procedures adopted as required in paragraph (a) of subsection (5) of this section by the energy impact advisory committee created in section 34-63-102 (5) (b) (I), C.R.S. (g) "REDI program" means the rural economic development initiative grant program created in this section. (3) (a) There is hereby created in the department of local affairs the rural economic development initiative grant program for the purpose of growing and creating resiliency in highly distressed rural counties' local economies. The department shall administer the REDI program in collaboration with the Colorado office of economic development. (b) (I) The department shall limit the REDI program to up to thirty highly distressed rural counties. The department shall determine the thirty highly distressed rural counties by ranking from lowest to highest each distressed rural county by the total sum of annual percentage change in each distressed rural county for the following economic indicators: (A) Population; (B) Employment; (C) Weekly wage; and (D) Establishments. (II) The department shall use data from the two most recently available years and shall use data sources provided by the economics staff of the legislative council to determine the amount of annual percentage change in each distressed rural county for the economic indicators set forth in subparagraph (I) of this paragraph (b). (III) The department shall annually review the determination of highly distressed rural counties based on the factors set forth in subparagraph (I) of this paragraph (b) pursuant to a timeline established in policies and procedures. (IV) The department is not required to issue grants in each of the highly distressed rural counties. Such determination is at the discretion of the department. (c) The department shall review the earlier rural economic development initiative in which the department collaborated with the Colorado office of economic development and make adjustments to the REDI program to improve upon the weaknesses of the earlier program. (4) (a) The REDI program provides grants for projects that retain jobs, attract new jobs, or encourage private capital investment in any of the highly distressed rural counties. (b) The department shall evaluate applications based on whether the project in the highly distressed rural county can proceed in a timely manner and does one or more of the following: (I) Creates diversity and resiliency in the economy; (II) Creates new or retains existing jobs through a new employer or the expansion of an existing employer; (III) Benefits a key industry in the region by encouraging capital investment; (IV) Increases the average wages; (V) Encourages growth that benefits more than one community within the highly distressed rural county through collaboration; (VI) Shows compatibility with relevant communities and economic development plans; (VII) Evidences strong support from local governments; or (VIII) Evidences strong support from local workforce agencies or local workforce boards if the grant being sought is for workforce development. (c) In evaluating applications for grants in a highly distressed county, the department shall consider whether the grant would create issues of unfair competition among other existing establishments in the highly distressed county. (d) Grants may be awarded to local governments for: (I) Infrastructure needs or facilities projects that are needed to retain or attract new jobs or will encourage private capital investment; (II) Partnering with, as administrator for grants to, not-for-profit economic development entities for workforce, community, or economic development activities such as workers or grants for capacity building; (III) Partnering with, as administrator for grants to, private employers to support business expansion projects that include private capital investment, facility improvements, or operating capital that are necessary to retain jobs or create new jobs; or (IV) Partnering with, as administrator for grants to, private employers for employee training programs for retained or new employees. (e) Grant recipients shall provide a dollar match in an amount as specified in policies and procedures. (f) Grants are awarded for reimbursement of moneys already spent. Grants may be awarded only if the grant recipient meets performance criteria established in policies and procedures. Grants may be denied or grant recipients may be required to pay back the award if the performance criteria is not met. (5) (a) On or before September 1, 2015, the energy impact advisory committee must adopt policies and procedures for the REDI program that include, but need not be limited to: (I) The procedures and timelines by which a local government in a highly distressed rural county may apply for a grant; (II) Criteria for determining the grant amounts; (III) Criteria for match requirements for each type of grant; (IV) Performance criteria, such as job creation goals or construction completion milestones, for grant recipients' projects; and (V) Reporting requirements for grant recipients. (b) On or before November 1 of each year, the executive director or his or her designee shall submit a report to the finance committees of the senate and house of representatives, or any successor committees, summarizing the use of all moneys that were awarded as grants from the REDI program in the preceding fiscal year. At a minimum, the report shall specify the amount of grant moneys distributed to each grant recipient and a description of each grant recipient's use of the grant moneys. (6) Any appropriation in an annual general appropriation act for rural economic development initiative grants must be administered consistent with the provisions of this section. The entire amount of such appropriation must be used for REDI program grants and no amount of such appropriation may be used by the department for the administration of the REDI program. (7) No later than August 1, 2015, the department shall formally announce, on its web site and by letter to the state's local governments, an initiative from the local government mineral impact fund created in section 34-63-102 (5), C.R.S., of an amount not to exceed two million two hundred fifty thousand dollars for a period not to exceed three fiscal years for grant funding to local governments through the REDI program commencing with the 2015-16 fiscal year. (8) This section is repealed, effective July 1, 2018. SECTION 2. In Colorado Revised Statutes, 34-63-102, amend (5.4) (b) (I) introductory portion as follows: 34-63-102. Creation of mineral leasing fund - distribution - advisory committee - local government permanent fund created - definitions - repeal. (5.4) Except as otherwise provided in subsection (5.5) of this section, on and after July 1, 2008, all moneys other than bonus payments, as defined in paragraph (b) of subsection (5.3) of this section, credited to the mineral leasing fund created in subparagraph (II) of paragraph (a) of subsection (1) of this section shall be distributed on a quarterly basis for quarters beginning on July 1, October 1, January 1, and April 1 of each state fiscal year as follows: (b) (I) For each quarter commencing during the 2008-09 fiscal year or during any succeeding fiscal year, forty percent of the moneys shall be credited to the local government mineral impact fund. Fifty percent of the moneys so credited shall be distributed by the executive director of the department of local affairs in accordance with the purposes and priorities described in subsection (1) of this section, and for the REDI program as set forth in section 24-32-117, C.R.S. In distributing the moneys, the executive director shall give priority to those communities most directly and substantially impacted by production of energy resources on federal mineral lands and to grant applications that: 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.