Click here for Fiscal Note

Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0800.01D JAG HOUSE BILL 98­1413

STATE OF COLORADO

BY REPRESENTATIVES Romero, Owen, and Grampsas;

also SENATORS Rizzuto, Blickensderfer, and Lacy.

BUSINESS AFFAIRS & LABOR

A BILL FOR AN ACT

CONCERNING RESTRICTIONS ON ECONOMIC INCENTIVES, AND, IN CONNECTION THEREWITH, TRANSFERRING THE AUTHORITY OF BOARDS OF EDUCATION OF SCHOOL DISTRICTS TO NEGOTIATE AGREEMENTS TO PROVIDE ECONOMIC INCENTIVES TO PERSONS OR ENTITIES CREATING NEW BUSINESS FACILITIES TO THE COLORADO ECONOMIC DEVELOPMENT COMMISSION AND PROHIBITING THE ECONOMIC DEVELOPMENT COMMISSION FROM ENTERING INTO SUCH AGREEMENTS WITH, OR PROVIDING GRANTS OR LOANS FROM THE COLORADO DEVELOPMENT FUND TO, ANY PERSON OR ENTITY EMPLOYING PERSONS WHO ARE ENGAGED IN A LABOR STRIKE AGAINST SUCH A PERSON OR ENTITY WITHIN COLORADO AT THE TIME THE AGREEMENT IS TO BE ENTERED INTO OR THE GRANT OR LOAN IS TO BE APPROVED OR MADE.

Bill Summary

(Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.)

Eliminates the authority of boards of education of school districts to negotiate agreements to provide economic incentives to taxpayers creating new business facilities. Allows the Colorado economic development commission to enter into agreements for specified school districts to provide economic incentives and credits against taxes imposed by such school districts to such taxpayers. Requires any school district subject to such agreements to make incentive payments or allow tax credits as specified in the agreement.

Prohibits the Colorado economic development commission from entering into an agreement requiring a school district to provide economic incentives or credits against taxes to a person or entity that employs persons who are engaged in a labor strike against the person or entity within Colorado at the time the agreement is to be entered into. Prohibits the commission from making a grant or loan from the Colorado economic development fund to a person or entity that employs persons who are engaged in a labor strike against the person or entity within Colorado at the time the grant or loan is to be approved or made.


Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  22­32­110 (1) (ff) and (1) (gg), Colorado Revised Statutes, are amended to read:

22­32­110.  Board of education ­ specific powers ­ repeal. (1)  In addition to any other power granted to a board of education of a school district by law, each board of education of a school district shall have the following specific powers, to be exercised in its judgment:

(ff) (I)  To negotiate for an incentive payment or credit with any taxpayer who establishes a new business facility, as defined in section 39­22­508.2 (3), C.R.S., but excluding the requirements of paragraph (b) of said subsection (3), in such school district; however, no negotiations may be entered into with any taxpayer establishing a new business facility unless such school district has been notified, pursuant to sections 30­11­123 (5) and 31­15­903 (4), C.R.S., by any county and by any municipality in which such new business facility would be located of agreements negotiated by such local governments with such taxpayer. In no instance shall any such negotiation result in an annual incentive payment or credit which exceeds fifty percent of the amount of the taxes levied by the school district upon the taxable personal property located at or within such new business facility and used in connection with the operation of such new business facility for the current property tax year. An agreement negotiated pursuant to this paragraph (ff) prior to July 1, 1994, shall be valid. Any school district which negotiates any agreement pursuant to the provisions of this paragraph (ff) shall inform any county and any municipality in which a new business facility would be located of such negotiations. The terms of any agreement made pursuant to the provisions of this paragraph (ff) shall not exceed four years.

(II)  NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (I) OF THIS PARAGRAPH (ff), A BOARD OF EDUCATION OF A SCHOOL DISTRICT SHALL NOT ENTER INTO AN AGREEMENT FOR AN INCENTIVE PAYMENT OR CREDIT WITH A TAXPAYER ON OR AFTER THE EFFECTIVE DATE OF THIS SUBPARAGRAPH (II). ANY AGREEMENT ENTERED INTO PURSUANT TO SUBPARAGRAPH (I) OF THIS PARAGRAPH (ff) PRIOR TO THE EFFECTIVE DATE OF THIS SUBPARAGRAPH (II) SHALL BE VALID.

(III)  THIS PARAGRAPH (ff), IS REPEALED, EFFECTIVE FOUR YEARS AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH (ff), AS AMENDED.

(gg) (I)  To negotiate for an incentive payment or credit with any taxpayer who expands a facility, as defined in section 39­22­508.2 (2) (a), C.R.S., the expansion of which constitutes a new business facility, as defined in section 39­22­508.2 (3), C.R.S., but excluding the requirements of paragraph (b) of said subsection (3), and which is located in such school district; however, no negotiations may be entered into with any taxpayer expanding a facility unless such school district has been notified, pursuant to sections 30­11­123 (5) and 31­15­903 (4), C.R.S., by any county and by any municipality in which such expanded business facility is located of agreements negotiated by such local governments with such taxpayer. In no instance shall any such negotiation result in such an annual incentive payment or credit which is greater than fifty percent of the amount of the taxes levied by the school district upon the taxable personal property directly attributable to such expansion, located at or within such expanded facility, and used in connection with the operation of such expanded facility for the current property tax year. An agreement negotiated pursuant to this paragraph (gg) prior to July 1, 1994, shall be valid. Any school district which negotiates any agreement pursuant to the provisions of this paragraph (gg) shall inform any county and any municipality in which an expanded business facility is located of such negotiations. The terms of any agreement made pursuant to the provisions of this paragraph (gg) shall not exceed four years.

(II)  NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (I) OF THIS PARAGRAPH (gg), A BOARD OF EDUCATION OF A SCHOOL DISTRICT SHALL NOT ENTER INTO AN AGREEMENT FOR AN INCENTIVE PAYMENT OR CREDIT WITH A TAXPAYER ON OR AFTER THE EFFECTIVE DATE OF THIS SUBPARAGRAPH (II). ANY AGREEMENT ENTERED INTO PURSUANT TO SUBPARAGRAPH (I) OF THIS PARAGRAPH (gg) PRIOR TO THE EFFECTIVE DATE OF THIS SUBPARAGRAPH (II) SHALL BE VALID.

(III)  THIS PARAGRAPH (gg) IS REPEALED, EFFECTIVE FOUR YEARS AFTER THE EFFECTIVE DATE OF THIS PARAGRAPH (gg), AS AMENDED.

SECTION 2.  22­54­106 (8) (a) (I) and (8) (b), Colorado Revised Statutes, are amended to read:

22­54­106.  Local and state shares of district total program.  (8) (a) (I)  Subject to the limitations in subparagraph (II) of this paragraph (a), for any school district which has entered into an agreement with a taxpayer pursuant to section 22­32­110 (1) (ff) or (1) (gg), OR WHICH HAS BEEN SUBJECT TO A REDUCTION IN PROPERTY TAX REVENUE AS A RESULT OF A BUSINESS INCENTIVE OR CREDIT AGAINST TAXES IMPOSED BY THE SCHOOL DISTRICT PROVIDED TO A TAXPAYER BY THE COLORADO ECONOMIC DEVELOPMENT COMMISSION PURSUANT TO SECTION 24­46­105 (2.5) (b) (I), C.R.S., the state's share of the district's total program shall be the amount by which the district's total program exceeds the amount of specific ownership tax revenue paid to the district and the amount of property tax revenue which the district would have been entitled to receive if the valuation for assessment of the district did not include the portion of the valuation for assessment of the personal property of such taxpayer which, when levied upon by the district, would result in property tax revenue equal to the amount of incentive payment or credit to such taxpayer pursuant to such agreement.

(b)  The calculation required by paragraph (a) of this subsection (8) is solely for the purpose of determining the state's share of a district's total program if the district has entered into an agreement pursuant to section 22­32­110 (1) (ff) or (1) (gg) OR HAS BEEN SUBJECT TO A REDUCTION IN PROPERTY TAX REVENUE AS A RESULT OF A BUSINESS INCENTIVE OR CREDIT AGAINST TAXES IMPOSED BY THE SCHOOL DISTRICT PROVIDED TO A TAXPAYER BY THE COLORADO ECONOMIC DEVELOPMENT COMMISSION PURSUANT TO SECTION 24­46­105 (2.5) (b) (I), C.R.S., and nothing in this subsection (8) shall be construed to decrease the valuation for assessment of personal property in the district or to affect the number of mills required by subsection (2) of this section or section 22­54­107 to be levied on the valuation for assessment of real and personal property in the district.

SECTION 3.  24­46­105 (2.5), Colorado Revised Statutes, is amended, and the said 24­46­105 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:

24­46­105.  Colorado economic development fund ­ creation. (2.5) (a)  The moneys in the fund may be used by the commission to make grants or loans to both public and private persons and entities for use in carrying out the purposes of this article, subject to the provisions of subsection SUBSECTIONS (3) AND (4) of this section. The commission may establish whatever terms and conditions it deems appropriate in making such grants or loans.

(b) (I)  ON AND AFTER THE EFFECTIVE DATE OF THIS SECTION, AS AMENDED, THE COMMISSION MAY ENTER INTO AGREEMENTS FOR A SPECIFIED SCHOOL DISTRICT TO MAKE INCENTIVE PAYMENTS OR PROVIDE CREDITS AGAINST TAXES IMPOSED BY SUCH SCHOOL DISTRICT TO A PERSON OR ENTITY IF SUCH PERSON OR ENTITY:

(A)  ESTABLISHES A NEW BUSINESS FACILITY, AS DEFINED IN SECTION 39­22­508.2 (3), C.R.S., BUT EXCLUDING THE REQUIREMENTS OF PARAGRAPH (b) OF SAID SUBSECTION (3), IN THE SCHOOL DISTRICT; OR

(B)  EXPANDS A FACILITY, AS DEFINED IN SECTION 39­22­508.2 (2) (a), C.R.S., SUCH THAT THE EXPANSION CONSTITUTES A NEW BUSINESS FACILITY, AS DEFINED IN SECTION 39­22­508.2 (3), C.R.S., BUT EXCLUDING THE REQUIREMENTS OF PARAGRAPH (b) OF SAID SUBSECTION (3), IN THE SCHOOL DISTRICT.

(II)  AN ANNUAL INCENTIVE PAYMENT OR CREDIT MADE BY A SCHOOL DISTRICT PURSUANT TO AN AGREEMENT ENTERED INTO BY THE COMMISSION PURSUANT TO SUBPARAGRAPH (I) OF THIS PARAGRAPH (b) SHALL NOT EXCEED, IN ANY PROPERTY TAX YEAR, FIFTY PERCENT OF THE AMOUNT OF TAXES LEVIED BY THE SCHOOL DISTRICT UPON THE TAXABLE PERSONAL PROPERTY LOCATED AT OR WITHIN THE NEW BUSINESS FACILITY OR FIFTY PERCENT OF THE AMOUNT OF TAXES LEVIED BY THE SCHOOL DISTRICT UPON THE TAXABLE PERSONAL PROPERTY DIRECTLY ATTRIBUTABLE TO THE EXPANSION OF AN EXISTING FACILITY THAT IS LOCATED AT OR WITHIN SUCH EXPANDED FACILITY AND THAT IS USED IN CONNECTION WITH THE OPERATION OF SUCH EXPANDED FACILITY.

(III)  THE TERMS OF ANY AGREEMENT TO MAKE INCENTIVE PAYMENTS OR PROVIDE CREDITS AGAINST TAXES IMPOSED BY A SCHOOL DISTRICT TO ANY PERSON OR ENTITY ENTERED INTO PURSUANT TO SUBPARAGRAPH (I) OF THIS PARAGRAPH (b) SHALL NOT EXCEED FOUR YEARS.

(IV)  ANY SCHOOL DISTRICT SUBJECT TO AN AGREEMENT ENTERED INTO BY THE COMMISSION PURSUANT TO SUBSECTION (1) OF THIS SECTION SHALL MAKE ALL INCENTIVE PAYMENTS AND ALLOW ALL CREDITS SPECIFIED IN SUCH AGREEMENT.

(c)  The loan amount and any interest earned thereon shall be paid back to the commission, and such moneys shall be credited to a special account in the fund to be known as the revolving account. In accordance with subsection (2) of this section, interest earned on the investment or deposit of moneys in the economic development fund shall also be credited to the revolving account. All moneys in the revolving account may be used by the commission to make loans and grants as provided in this subsection (2.5) without further appropriation by the general assembly. The commission shall report to the joint budget committee by January 1 of each year all expenditures from, and the unencumbered balance of, the revolving account. The commission shall not approve grants or loans to state departments or agencies for specific projects which are typically considered by the general assembly in the general appropriation bill or in supplemental appropriation bills unless the joint budget committee approves the application for such grants or loans.

(4)  THE COMMISSION SHALL NOT APPROVE OR MAKE A GRANT OR LOAN TO ANY PERSON OR ENTITY OR ENTER INTO AN AGREEMENT REQUIRING A SCHOOL DISTRICT TO PROVIDE AN ECONOMIC INCENTIVE TO ANY PERSON OR ENTITY IF EMPLOYEES OF THE PERSON OR ENTITY ARE ENGAGED IN A LABOR STRIKE WITHIN THE STATE OF COLORADO AGAINST THE PERSON OR ENTITY AT THE TIME THE GRANT OR LOAN IS TO BE APPROVED OR MADE OR THE AGREEMENT IS TO BE ENTERED INTO.

SECTION 4.  Effective date.  This act shall take effect January 1, 1999, unless a referendum petition is filed during the ninety­day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution. If such a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.