Second Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06-0489.01 Nicole Hoffman HOUSE BILL 06-1017 HOUSE SPONSORSHIP Hall, SENATE SPONSORSHIP Spence, House Committees Senate Committees Business Affairs and Labor A BILL FOR AN ACT Concerning the creation of a performance-based incentive for employers that create high quality new jobs in the state. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Allows a performance-based incentive (incentive) to any employer that creates a certain number of new full-time jobs in the state as a result of opening a new business or relocating or expanding an existing business. States that an employer in a rural area that creates at least 5 new jobs within one month shall qualify for an incentive for every new job created, and that an employer in an urban area that creates at least10 new jobs within one month shall qualify for an incentive for every new job created. Specifies that the amount of the incentive is as follows:  If the employer claiming the incentive earns at least 50% of its gross receipts from products that are produced in Colorado and sold to buyers outside of Colorado or, if the gross receipts of the employer are derived from the performance of services, performs services in Colorado and earns at least 50% of its gross receipts from services sold or provided to persons outside of Colorado, the employer shall be allowed an incentive in the amount of $1,000 for every new job created.  If the average wage for all new jobs created by the employer for which the incentive is claimed is 110% or more but less than 115% of the average wage in the county in which the new jobs are created, the employer shall be allowed an incentive in the amount of $1,000 for every new job created.  If the average wage for all new jobs created by the employer for which the incentive is claimed is 115% or more but less than 120% of the average wage in the county in which the new jobs are created, the employer shall be allowed an incentive in the amount of $1,250 for every new job created.  If the average wage for all new jobs created by the employer for which the incentive is claimed is 120% or more of the average wage in the county in which the new jobs are created, the employer shall be allowed an incentive in the amount of $1,500 for every new job created. Specifies that a full-time job created by an employer shall be in addition to the average number of full-time jobs that the employer provided in the state during the 3 years preceding the creation of such new job in order for the employer to be allowed to claim the incentive for creating the new job. Requires the employer to maintain all of the new jobs for at least one year in order to be eligible to claim the incentive. Specifies that an employer shall be allowed to include a new job in the total count of new jobs created one time. Specifies that in order for an employer to claim an incentive for new jobs created, the employer shall submit an incentive application to the economic development commission (commission). Directs the commission to create the application form, and specifies the information that shall be included in the application. Requires the commission to review each application submitted and to determine the amount of the incentive due to each employer that submitted an application. Directs the commission to issue an incentive payment to every employer who is eligible to receive an incentive. Directs the commission to develop procedures for the administration of the incentive program, including establishing deadlines for employers to claim incentives and for the commission to issue the incentive payment. In addition, directs the commission to develop procedures for any employer that claims an incentive to determine the number of new jobs created and to verify that the average wage for the new jobs is the applicable percentage above the average wage in the county in which the new jobs are created. Requires the commission to include certain data regarding the number of employers that claim incentives in its annual report to the general assembly. Defines terms. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Part 1 of article 46 of title 24, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 24-46-105.7. Performance-based incentive for new job creation - definitions. (1) As used in this section, unless the context otherwise requires: (a) "Employee" means a full-time employee hired to fill a new job. (b) "New job" means a full-time job created in the state by an employer for which an employee is hired and that is in addition to the average number of full-time jobs that the employer provided in the state during the three years preceding the date that such employee was hired. (c) "Rural area" means: (I) A county with a population of less than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census; (II) A municipality with a population of less than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census, that is located ten miles or more from a municipality with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census; or (III) The unincorporated part of a county located ten miles or more from a municipality with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census. (d) "Urban area" means: (I) A county with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census; (II) A municipality with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census, or a municipality with a population of less than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census, that is located less than ten miles from a municipality with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census; or (III) The unincorporated part of a county located less than ten miles from a municipality with a population of more than fifty thousand people, according to the most recently available population statistics of the United States bureau of the census. (2) Subject to the provisions of this section, on or after January 1, 2006, but prior to January 1, 2017, any employer in a rural area that creates at least five new jobs within one month and any employer in an urban area that creates at least ten new jobs within one month by opening a new business or expanding or relocating an existing business shall be allowed to claim a performance-based incentive for every new job created so long as the employer maintains all of the new jobs for at least one year. An employer shall be allowed to include a new job in the calculation of the number of new jobs created one time. The amount of the incentive shall be as follows: (a) The employer shall be allowed a performance-based incentive in the amount of one thousand dollars for every new job created if: (I) The employer earns at least fifty percent of its gross receipts from products that are produced in Colorado and sold to buyers outside of Colorado or, if the gross receipts of the employer are derived from the performance of services, performs services in Colorado and earns at least fifty percent of its gross receipts from services sold or provided to persons outside of Colorado; or (II) The average wage for all new jobs created by the employer for which the performance-based incentive is claimed is one hundred ten percent or more but less than one hundred fifteen percent of the average wage in the county in which the new jobs are created. (b) If the average wage for all new jobs created by the employer for which the performance-based incentive is claimed is one hundred fifteen percent or more but less than one hundred twenty percent of the average wage in the county in which the new jobs are created, the employer shall be allowed an incentive in the amount of one thousand two hundred fifty dollars for every new job created. (c) If the average wage for all new jobs created by the employer for which the performance-based incentive is claimed is one hundred twenty percent or more of the average wage in the county in which the new jobs are created, the employer shall be allowed an incentive in the amount of one thousand five hundred dollars for every new job created. (3) An employer that qualifies to claim a performance-based incentive for new jobs created pursuant to this section and that qualifies for an income tax credit pursuant to section 39-30-105, C.R.S., shall be allowed to claim both the incentive allowed pursuant to this section and the credit allowed pursuant to section 39-30-105, C.R.S. (4) (a) In order for an employer to claim a performance-based incentive for new jobs created pursuant to this section, the employer shall submit an incentive application to the commission. The application shall be submitted on a form created by the commission and shall include the name of the employer claiming the incentive, verification of the number of new jobs that the employer created, the average wage of all new jobs that the employer created, the number of incentives claimed by the employer, the total amount of the incentives claimed by the employer, and any other information deemed necessary by the commission. (b) The commission shall review each application submitted, determine whether the employer is eligible to receive a performance-based incentive, determine the amount of the incentive due to each employer eligible to receive an incentive, and issue the incentive payment to each employer that is eligible to receive the incentive. (c) The commission shall develop procedures for the administration of this section, including establishing deadlines for employers to claim performance-based incentives and for the commission to issue payment of the incentives pursuant to this section. In addition, the commission shall develop procedures for any employer that claims an incentive for new jobs created pursuant to this section to determine the number of new jobs created and to verify that the average wage for the new jobs for which the incentive is claimed is the applicable percentage above the average wage in the county in which the new jobs are created, based on the most recent statistics available from the department of labor and employment. (5) The commission shall include data regarding the number of employers that claimed the performance-based incentive pursuant to this section and the total amount of all incentives claimed during the most recent fiscal year for which such information is available in an annual report to the general assembly. SECTION 2. 24-46-106, Colorado Revised Statutes, is amended to read: 24-46-106. Repeal of part. This part 1 is repealed, effective July 1, 2006 July 1, 2017. 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.