On the same day that Colorado’s unemployment rate jumped above the national average, the Colorado House Economic and Business Development Committee voted to postpone indefinitely House Bill 11-1266. This bill proposed to create new jobs in Colorado through increasing the amount of capital and improving access to existing capital to Colorado small businesses: historically, the single largest source of new job creation.
On the last day of hearings, testimony was given by the National Federation of Independent Businesses, Commissioner Fred Joseph of the Colorado Division of Securities, the Colorado Banker’s Association and the Council on Competitiveness. Most of the testimony was opposed to the bill largely on grounds that the creation of a new governmental authority was undesirable.
The day before the hearing, the provisions of the bill regarding establishment of seed capital funds were removed. However, this attempt to salvage the proposed Small Business Capital Authority, private capital exchanges and licensing of private capital agents proved unsuccessful.
Representative Pete Lee, Democrat – House District 18 – Manitou Springs and sponsor of the bill, was lauded by witnesses and the Committee for his passion and hard work in bringing forward the bill and talking with all interested parties. The bill and its proponents, small business members of CIO Colorado, were commended for being innovative, thinking outside the box and presenting an original approach to economic development and job creation.
However, even those people who spoke in favor of the bill described it as complex with a lot of moving parts. The innovativeness of the bill worked against it within the legislative process. Once the legislative session begins and all of the representatives and senators are faced with reading and taking positions on hundreds of bills, it is almost impossible to set aside the time to fully understand anything new. Innovative legislation of any magnitude requires education of all interested parties prior to December 1, when bills are first filed. Denver businesses will have to wait another year for possible special relief or assistance from the capital crisis caused by the recession.
The vote on the bill was 6 Democrats in favor and 7 Republicans against. At this point in the legislative session, it appears unlikely that any job creation bill of any consequence will be passed this year. With the recession entering its third year and unemployment rising, no one has proposed a solution involving Colorado state government that has clear bipartisan support.
The office of the Governor and of the Office of Economic Development and International Trade were absent from this debate, being fully engaged in creating what may be the first ever comprehensive State economic development plan. Regional plans are expected to be completed by May 15 and the state plan is to be completed by late summer.
At the hearing on the bill, there were many commitments by witnesses and Committee members to work together with Representative Lee and bill proponents after the end of the legislative session. The focus of this work will be on the problem of lack of capital for small businesses and to address issues within the failed bill. It is possible that such efforts may be adopted with the State economic development plan.
Historically, new legislation requires two or three legislative sessions to achieve sufficient consensus to gain approval and become law.
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