Governor Signs Angel Investor Bill
Tuesday, May 24, 2011
Posted by: Su Hawk
Hickenlooper signs angel-investor credit, ag tax break
Denver Business Journal - by Ed Sealover
Date: Monday, May 23, 2011, 4:58pm MDT
(CSIA Note: HB11-1045 was one of CSIA's priorities this year, and we were pleased to support Representative John Kefalas (D-Fort Collins) in his efforts to extend this tax credit beyond the one-year pilot program originally approved. The successful passage of this bill is yet another important step in the work to create a vibrant technology ecosystem, and CSIA was proud to be involved in the effort. Thank you also to Board member Catharine Merigold for testifyng with us, alongside other technology community members including Stephen Miller and Bruce Donaldson, and for the successful campaign by Sandra Hagen Solin and Capitol Solutions.)
John Hickenlooper on Monday signed into law a tax break on agricultural products and an extension of a tax-credit program for angel investors.
In a morning ceremony at Aero Applicators, a Sterling agribusiness, Hickenlooper signed House Bill 1005, sponsored by Rep. Jerry Sonnenberg, R-Sterling. As of July 1, the bill reinstates a tax exemption on agricultural compounds, pesticides and bull semen that had been suspended last year in order to balance the current fiscal year’s budget.
Supporters had argued that the suspension of the tax break had hurt the state more than helped it because farmers in towns near the state’s borders — where a great deal of the state’s agricultural land is — would cross over to buy materials in Nebraska or other states without the tax. HB 1005, which was part of this year’s budget-balancing compromise, reinstates the tax break two years earlier than originally scheduled.
"The repeal of the ag tax is a win for rural Colorado,” Sonnenberg said in a news release. "This bill not only helps farmers and ranchers, but it also allows for Colorado’s agribusiness to be at a level playing field with other states that don’t have this onerous tax.”
Then, on Monday afternoon, Hickenlooper signed House Bill 1045. That measure continues a program offering tax credits to investors who give at least $25,000 to a small Colorado business that is less than five years old and is involved in the research, development or manufacturing of new technologies, products or processes.
The Colorado Innovation Investment Tax Credit gave out $622,000 in 2010 to investors who helped companies generate 28 jobs and leverage those investments to bring in roughly 10 times as much private investment. But about $130,000 in unspent funds set aside for the credits was swept into the general fund to help balance the budget this year, and the program appeared to be ending.
HB 1045 continues the structure of the program in order to give sponsoring Rep. John Kefalas, D-Fort Collins, and officials from the Colorado Office of Economic Development and International Trade the chance to find other funding, possibly from the federal government.
Business leaders had said as the bill was going through the legislative process that the money for the program, while not a big chunk in comparison to the $18 billion state budget, could mean a lot to helping small companies to grow.
"Investors, particularly here in Colorado, have an opportunity to put their money in a variety of places,” said Stephen Miller, president/CEO of Colorado clean-tech incubator CleanLaunch, while testifying to the Senate Business, Labor and Technology Committee on May 9. "Something like the investment tax credit helps not only tip the scales in favor of an investment but helps keep dollars here in Colorado.”