We are celebrating another successful legislative session. Our office, the Colorado Office of Economic Development and International Trade (OEDIT), works with Colorado legislators to pass bills that empower all to thrive in Colorado’s economy. These legislative priorities create additional funding and support resources for existing OEDIT programs and new initiatives that benefit large and small businesses, Colorado communities, and tourist destinations across Colorado.
During the 2023 legislative session, OEDIT’s legislative agenda delivered $198 million in economic investments across Colorado. These dollars are in addition to ongoing funding provided to OEDIT programs via the annual budget or “Long Bill.” Here are a few of the highlights:
Officially Establish Rural Support
Rural communities make up a significant portion of the Colorado experience and economy, which is why the Rural Opportunity Office (ROO) was established as a standalone division within OEDIT. The office, which is made up of staff members that live all over the state in rural areas, works to provide those communities with a direct connection to OEDIT’s 150+ programs, as well as other state, federal, and private economic development resources. With the new bill (SB23-006), the Rural Opportunity Office is codified in state statute, giving it long-term legitimacy and annual funding through the long bill budget to continue acting as OEDIT’s boots on the ground for economic development planning and support in rural Colorado.
Continuing to Support Colorado’s Advanced Industries
Colorado recognizes seven specific industries as “Advanced Industries” which include aerospace, advanced manufacturing, bioscience, electronics, energy and natural resources (including cleantech), infrastructure and engineering, and technology and information. Together, they account for nearly 30% of the state’s total wage earnings, around 30% of total sales revenue, and almost 35% of the state’s total exports. To ensure the continued growth of this vital aspect of Colorado’s economy, the Advanced Industries Accelerator (AIA) Program was created in 2013. This program promotes growth and sustainability in these Colorado-based industries by driving innovation, commercialization, and public-private partnerships, while also increasing access to early-stage capital and creating a strong infrastructure that enhances the state’s capacity to be globally competitive. This new bill (SB23-066) will reauthorize and continue the AIA program—one of the most critical programs within OEDIT—as well as carry forward the important statewide economic opportunities created by the AIA program.
Future Workforce Development Planning
In Colorado there are two jobs open for every unemployed person, yet a majority of high skill jobs require postsecondary education or training beyond a high school diploma. Only half of high school graduates from the 2019-2020 school year enrolled in postsecondary education, a 10% decline from 2019 when postsecondary education was already on the decline across nearly all ethnic groups, in cities and rural areas alike. SB23-205 dedicates $25 million to create a pilot program within OEDIT to provide $1,500 scholarships and career counseling to students graduating from high school in Colorado or who have received a high school equivalency diploma in the 2023-24 academic year and pursue a technical training, apprenticeship, or higher education degree that aligns with an in-demand career pathway.
Continuing Infrastructure Investments and Jumpstarting A New Rail Project
This bill (SB23-283) transfers $84 million to the existing Infrastructure Investments and Jobs Act (IIJA) Cash Fund for the purposes of providing matching funds to state projects that seek to draw down federal funding through IIJA. This bill also transfers $5 million to the state highway cash fund at CDOT to ensure that CDOT can maximize its operational capacity related to the development of Front Range Passenger Rail. This bill delivers additional infrastructure investments on top of the $80.25 million provided by the legislature last year. In total, the $164.25 million available for IIJA matching funds will maximize Colorado’s drawdown of federal infrastructure dollars.
Expanding Employee Ownership
This bill (HB23-1081) expands the Employee Ownership Tax Credit program within OEDIT by increasing the cap from $25,000 to $40,000 for worker cooperatives and employee ownership trusts and from $100,000 to $150,000 for employee stock ownership plans (ESOPs).The bill also:
- Enables businesses that are partially employee owned to become eligible for the tax credit for the purposes of incentivizing the continued growth of employee ownership within the business. Currently, businesses that are partially employee-owned are not eligible for the tax credit.
- Establishes new equity transfer methods that are deemed eligible under the tax credit program. The following structures are now eligible for a tax credit of up to $25,000: LLC membership, phantom stock, profit interest, profit sharing , restricted stock, stock appreciation right, stock option, or synthetic equity.
Colorado’s Semiconductor Initiative
The CHIPS and Science Act will invest $280 billion over five years, out of that figure, $50 billion will be immediately available through the CHIPS for America Fund created within the US Department of Commerce. Of the $50 billion, $39 billion will be distributed to companies operating in the semiconductor ecosystem. The new Colorado bill HB23-1260 is part of a broader set of strategies and actions in order to bring these funds into the state of Colorado. The bill also provides:
$15 million in refund certificates each year over the next five years (totaling $75 million), reviewed and approved by the EDC. These certificates are exclusively available for entities that are in the semiconductor industry for the first two fiscal years and then expand to include advanced manufacturing industries—preference will also be placed on those pursuing federal CHIPS Act funding or American Rescue Plan Act (ARPA) funding in Colorado.
These certificates can be used against Job Growth Incentive Tax Credit (JGITC) and three existing enterprise zone tax credits: new facility employee tax credit, investment tax credit, research & development tax credit
Creates CHIPS Zones, which will allow for qualified entities within the designated areas to access the three enterprise zone tax credits listed above
Like existing incentives, these will be performance-based—a hallmark of Colorado incentives to ensure that they are earned by the companies
The CHIPS and Science Act will lower costs, create jobs, strengthen supply chains and ensure national and economic security for the United States.
For those looking to go deep into this year’s legislative session, here’s a look at two more bills that passed impacting OEDIT programming: