TITLE: CONCERNING THE ESTABLISHMENT OF THE “RURAL TECHNOLOGY ENTERPRISE ZONE ACT” TO INCREASE PRIVATE INVESTMENT IN TECHNOLOGY INFRASTRUCTURE THAT IMPROVES INTERNET ACCESS IN RURAL AREAS OF THE STATE.

The provisions of this bill would require the Public Utilities Commission (PUC), Department of Regulatory Agencies, to conduct a technology infrastructure needs assessment and inventory of rural Colorado to assess the ability to access internet services. Based on the outcome of the needs assessment, the bill would allow the PUC to designate up to six rural areas in the state, each with a population of no more than ten thousand persons, as a technology enterprise zone. The bill would provide an income tax credit, equal to ten percent of the amount of the total investment made for the income tax years from 1999 to 2004, to any person who provides qualifying investments in technology infrastructure to provide internet services. The bill would limit the amount of credit claimed by any one person pursuant to this provision to $100,000 in any one tax year. The bill would allow any tax credit to be carried forward for a period not to exceed ten years. The bill would become effective upon signature of the Governor.

STATE FISCAL IMPACT SUMMARY	FY 1998/99	FY 1999/2000
State Revenues General Fund Other Fund	Reduction in Revenues
State Expenditures General Fund Other Fund
FTE Position Change	None	None
Local Government Impact — None

The provisions of this bill would result in a loss in state revenues. The number of individuals or corporations that would invest in qualifying investments, and the amount that they would invest within the to-be-designated enterprise zones is unknown. The amount of the reduction in state revenues cannot be accurately estimated at this time.

Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.

The PUC currently is required to promote telecommunication services from universal access to advanced services. This bill would provide more specific direction for those requirements. The PUC would not require any additional resources to implement the provisions of the bill. Based on an agreement with the Joint Budget Committee, Legislative Council Fiscal Note Staff, and the Department of Revenue, the Department of Revenue will absorb the costs of approximately 520 hours of programming time necessary to make changes to the Federal State Electronic Filing (FSEF) system. This would be absorbed within their current appropriation. The provisions of the bill would not affect any other agency of the state, or unit of local government.

This fiscal note implies that no additional spending authority would be required in FY 1998/99.