Originally Published by Dennis Huspeni in Colorado Politics
Colorado Democratic legislators, with backing from the governor and secretary of state, aim to reduce the amount of fees new businesses pay when forming.
Dubbed the “Colorado Business Fee Relief Act,” House Bill 1001 would reduce common filing fees for new business registrations, annual renewals, trade name registrations and others. Some would be cut to as low as $1, saving an estimated $17 million in a year.
Reps. Lisa Cutter and Tom Sullivan, with Sens. Brittany Pettersen and Chris Kolker, introduced the bill as a collaboration with Gov. Jared Polis and Colorado Secretary of State Jena Griswold.
“Our top priority this session is saving Coloradans money, and that’s what this bill will do by significantly cutting fees to start a business,” Rep. Cutter, D-Littleton, said in a news release. “HB22-1001 will reduce a number of filing fees with the Colorado Department of State, keeping more money in the pockets of Colorado's entrepreneurs and small businesses who are the backbone of our economy.”
Asked about the potential effect to the state’s budget, Cutter said in an interview the general fund has flexibility.
“We want to use every tool to reduce business costs, including reducing the cost of starting your own business,” said Cutter.
A total of 39,252 new entities, or businesses, were filed at the Colorado Secretary of State’s Office in the second quarter of 2021, up 25.7% year-over-year, and 157,300 in the 12 months ending in that quarter, according to the Quarterly Business and Economic Indicators for Q3, prepared by the Leeds Business Research Division at CU Boulder in conjunction with the Secretary of State’s Office.
Business groups are expected to support the legislation, but they're also looking relief on several fronts, notably at ways to ensure the unemployment trust fund, now $1 billion in the red but shored up with a federal loan, receives substantial investments to avoid sticker shock through big premium hikes to small businesses.
Republican candidate for Secretary of State Mike O'Donnell said in a news release the measure is “well-intentioned” but “misses the mark.”
“Despite the fact that the savings to each eligible businesses aren’t significant, the revenue that the office will forgo as a result of the legislation will need to be replaced with $16.71 million in taxpayer funds during 2022/23,” O'Donnell said.
The proposed legislation affects businesses and O'Donnell noted in the release “very few of these result in the formation of businesses that will create the jobs that are so badly needed in Colorado.”
“Listen, people can’t have it both ways. You can’t tell me you want to save money for businesses, then criticize the way that money is saved," Cutter said. “Fifty dollars matters. It’s disingenuous to say it doesn’t matter to people.”
Cutter referred to $50 new business filing fees being dropped to $1.
“These fee reductions will keep money in the pockets of Colorado’s small business owners, many of whom have faced adversity and uncertainty over the last few years,” said Griswold in the news release. “Thank you to Representatives Cutter and Sullivan, and Senators Pettersen and Kolker for introducing this bill. I look forward to working together to push forward this important proposal which would provide support to the small businesses that keep our communities thriving.”
Bill sponsors explain the funding this way: “the Secretary of State’s office would utilize general fund dollars to offset the foregone revenue from the fee reductions. The reduction in filing fees under this fee relief program would remain in place during Fiscal Year 2022-23 until the amount of the general fund transfer is exhausted.”
A link to the full bill is at the Colorado General Assembly’s website leg.colorado.gov.