Date: 01/28/2009

Final
BILL SUMMARY for HB09-1001

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View--> Action Taken:
Moved amendment L.001 (Attachment F). The motion
Moved amendment L.003 (Attachment G). The motion
Moved amendment L.004 (Attachment H). The motion
Moved to refer House Bill 09-1001, as amended, to
Pass Without Objection
Pass Without Objection
Pass Without Objection
PASS



03:00 PM -- House Bill 09-1001

Representative Rice, prime sponsor, presented House Bill 09-1001 concerning the creation of an income tax credit to incentivize Colorado job growth. HB 09-1001 provides an income tax credit to firms that create at least 20 jobs in Colorado and retain them for at least one year. The tax credit, effective for tax years 2009 through 2019, is equal to one-half of the amount the employer is required to pay in federal social security and Medicare taxes on the created jobs. In most cases, this is equal to 3.825 percent of each job's annual wage. For each job created, firms receive the credit each year the job is retained for up to five years, but no later than tax year 2019. Each year's credit may be carried forward for ten years and is non-refundable. The bill allows the credit to be given for jobs in any industry and with any wage level.

Firms are required to file an initial application to the Colorado Economic Development Commission (Commission) outlining the number of jobs they expect to create over a period of up to five years and must provide documentation indicating that, if not for the credit, the jobs would have been created in a competing state. Once an initial credit application has been approved, firms are required to file an annual application for each year's credit with documentation on the actual number of jobs created and retained during that year. Each year, the Commission is required to issue a tax credit certificate in the amount of the credit for that year to the firm, who in turn must submit the certificate with its income tax return to the Department of Revenue. The total amount any firm may receive in credits during the period agreed upon in the initial application cannot exceed the total amount calculated in the initial application for that period.

The bill grants the Commission authority to deny any initial application. In addition, the Commission is authorized to audit the accounts of each firm within twelve months following the receipt of the credit by the firm. The Commission is required to provide annual reports on the credits granted and claimed to the House and Senate Finance Committees and to share information with the Department of Revenue about each taxpayer for which they approved a credit.


03:05 PM

Representative Rice addressed the fiscal note and stated that the higher the number on the fiscal note, the more jobs in Colorado. Representative Soper asked about the fact that the bill applies to any job at any wage level. Representative Liston asked why the fiscal analyst did not include the increase in the number of jobs and he feels that it is alright that the bill applies to any type of job. Representative Rice responded to the type of jobs and said that under the bill, the higher paying the job in the state, the bigger the tax credit. He also addressed the concerns about the fiscal note. Representative Rice responded to additional questions from the committee.

03:19 PM --
Carol Hedges, representing the Colorado Fiscal Policy Institute, testified against the bill. She explained that the bill is not the right answer right now. Ms. Hedges talked about the importance and impact of education, transportation, and health care over tax credits in this economy. She commended the sponsor for his work on the bill. Ms. Hedges talked about the difficulty of figuring out whether jobs were created due to a tax credit or whether they would have been created regardless.

03:29 PM --
Don Elliman, representing the Office of Economic Development and International Trade, testified in support of the bill. He responded to questions from the committee. Representative Soper asked what other ways exist that could create jobs other than tax credits. Mr. Elliman responded.

03:39 PM --
Richard Wobbekind, representing himself, testified in support of the bill. Mr. Wobbekind talked about the fiscal note and said that the bill provides a small incentive. He talked about the high income jobs that were lost in early 2000s. Mr. Wobbekind talked about an economic study that was recently completed. Representative Liston asked for some examples of what other states are doing. Mr. Wobbekind deferred to the next witness.

03:49 PM --
Tom Clark, representing the Denver Metro Chamber of Commerce, testified in support of the bill. He talked about the Colorado business climate and recent legislation that has been passed in the state. Mr. Clark said the bill is copied after the Chicago package that brought some big companies to Chicago. Representative Liston asked for some examples of what other states are doing. Mr. Clark talked about some projects Colorado and Texas have competed for that Texas won.

03:57 PM -- Clarke Beeker, representing the Economic Development Council of Colorado, testified in support of the bill.

04:00 PM --
Preston Gibson, President of the Jefferson Economic Council, testified in support of the bill. He said his board unanimously supported this bill.

04:02 PM --
Loren Furman, representing the Colorado Association of Commerce and Industry, the state-wide chamber of commerce, testified in support of the bill. Representative Stephens talked about the importance of getting business here with incentives and keeping businesses here in the long-term.

Representative Rice discussed amendment L.001 (Attachment F).

09HouseBus0128AttachF.pdf

BILL:HB09-1001
TIME: 04:06:33 PM
MOVED:Rice
MOTION:Moved amendment L.001 (Attachment F). The motion passed without objection.
SECONDED:Balmer
VOTE
Balmer
Bradford
Gagliardi
Liston
Priola
Ryden
Scanlan
Soper
Stephens
Casso
Rice
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

BILL:HB09-1001
TIME: 04:07:22 PM
MOVED:Rice
MOTION:Moved amendment L.003 (Attachment G). The motion passed without objection.
09HouseBus0128AttachG.pdf
SECONDED:Balmer
VOTE
Balmer
Bradford
Gagliardi
Liston
Priola
Ryden
Scanlan
Soper
Stephens
Casso
Rice
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:HB09-1001
TIME: 04:10:37 PM
MOVED:Rice
MOTION:Moved amendment L.004 (Attachment H). The motion passed without objection.
09HouseBus0128AttachH.pdf
SECONDED:Balmer
VOTE
Balmer
Bradford
Gagliardi
Liston
Priola
Ryden
Scanlan
Soper
Stephens
Casso
Rice
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


04:11 PM

Representative Rice gave some closing comments on the bill. Some members talked about their concern about the fiscal note, but felt that the bill will gain money.

BILL:HB09-1001
TIME: 04:16:21 PM
MOVED:Rice
MOTION:Moved to refer House Bill 09-1001, as amended, to the Committee on Finance. The motion passed 11-0.
SECONDED:Balmer
VOTE
Balmer
Yes
Bradford
Yes
Gagliardi
Yes
Liston
Yes
Priola
Yes
Ryden
Yes
Scanlan
Yes
Soper
Yes
Stephens
Yes
Casso
Yes
Rice
Yes
Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS