Bill would cap tax credit for enterprise zones
DENVER — Large companies that operate inside enterprise zones would be capped on how much they could get in tax exemptions under a bill introduced into the Legislature last week.
Though the cap isn’t as much as House Majority Leader Dickey Lee Hullinghorst tried to get last year, the Boulder Democrat is satisfied, at least for now, that a major problem with the zones will be addressed.
That problem, Hullinghorst said, is that there are several large companies that operate all or part of their businesses inside enterprise zones, but not because they need help to stay in business.
In many cases, they are drilling companies that go where the oil and gas is, not the zone, and telecommunications companies that would run lines through those areas anyway, she said.
Under her measure, House Bill 1142, no single company could claim more than $1 million a year in enterprise zone tax credits. Last year, Hullinghorst tried to cap it at $500,000.
“Right now, the largest companies are getting the largest majority of the money, like 90 percent,” Hullinghorst said. “We’ll need to look at whether this cap will work and maybe reassess it in a year or two, but this saves the enterprise zone for what the enterprise zone was created for, to help small businesses in communities that are under employed and in areas that need economic incentives.”
Currently, there are nearly a dozen enterprise zone tax credits that companies can apply for, ranging from commercial vehicle purchases to vacant-building rehabilitation.
She said the bill is expected to save the state about $8.4 million a year initially, and many more millions of dollars in years to come.
That savings is to be used to fund other tax incentive measures the Democrats have introduced into the Legislature.
Hullinghorst’s bill also calls on the Colorado Office of Economic Development and International Trade to review existing enterprise zones and recommend by next year’s legislative session if their boundaries should be adjusted or they should be eliminated altogether.
She said one existing enterprise zone that needs to be eliminated covers Denver’s lower downtown district, an area that includes Coors Field and numerous successful restaurants and nightclubs.
Other business-related measures lawmakers are considering include one to offer tax incentives to advanced science-based companies such as those in aerospace and information technology; a bill to increase funding to the state’s Small Business Development Centers; and a measure that would create “economic garden” pilot projects, which would give businesses that qualify access to expertise, such as accountants or marketing experts, they might not otherwise afford to hire.
Two of those measures will get their first committee hearings on Tuesday.
At the same time, lawmakers will debate measures many in the business community are already lining up to oppose, such as a bill to bar the use of checking potential employees’ credit histories before hiring them, bills to expand union powers such as collective bargaining and a measure that would allow juries to award punitive and compensatory damages as high as $300,000 in employment discrimination cases.