A piece of legislation that could potentially create thousands of jobs in Colorado — Rep. Joe Rice’s House Bill 1001 — is gaining momentum, having passed the House Finance Committee on a bipartisan 10-1 vote. It now goes to the House Appropriations Committee.

“We all feel these tough times, whether we are here working to balance the budget in the Capitol, or tightening our belts at home with our families, or facing budget cuts at work,” Rice said. “I believe that this bill is a terrific idea, one that will get Colorado working again. We can begin to put Colorado back to work, and to put our economy back on the right track with the passage of this bill.”

HB 1001 provides an income tax credit to firms that create jobs in Colorado.

The proposed legislation will focus on bringing new businesses to Colorado by offering tax incentives to companies that move to Colorado and create more than 20 new jobs in urban areas or over 10 new jobs in certain rural areas. The credit will allow employers to pay just half of the usually-required federal social security and Medicare taxes, for up to 10 years.

“When companies are looking for a new place to locate or expand, now we can put this incentive on the table,” Rep. Rice said. “This is a targeted and important tool that pays back a portion of the new revenue brought to Colorado — it’s a great deal for our great state. We can compete where we haven’t been able to, and hopefully, we can tip the scales in our favor.”

The tax credit, effective for tax years 2009 through 2019, is equal to one-half of the amount the employer is required to pay in federal social security and Medicare taxes on the created jobs.

In most cases, this is equal to 3.825 percent of each job's annual wage. For each job created, firms receive the credit each year the job is retained for up to five years.

The bill allows the credit to be given for jobs in any industry.

Firms are required to file an initial application to the Colorado Economic Development Commission outlining the number of jobs they expect to create over a period of up to five years and must provide documentation.

Each year, the commission is required to issue a tax credit certificate in the amount of the credit for that year to the firm, who in turn must submit the certificate with its income tax return to the Department of Revenue.

In addition, the commission is authorized to audit the accounts of each firm within twelve months following the receipt of the credit by the firm.

House Speaker Terrance Carroll said in a press release, “Our agenda to expand the circle of opportunity by creating good jobs and bolstering the economy is moving forward. This bill will provide significant incentives to entice new businesses to come to Colorado and create good jobs.”

Rice continued, “This bill is different than most other tax incentives that I’ve seen, with more checks and balances than any other similar proposals. A company has to prove that they would have located elsewhere if not for this incentive. Then, they must create the jobs.”