HB 17-1214

House Bill 17-1214, which has been signed into law, aims to encourage employee ownership in small businesses by requiring the Colorado Office of Economic Development to educate its staff on the benefits of this model. The bill establishes a revolving loan program that helps existing businesses transition to being employee-owned. This program can be administered through partnerships with nonprofit organizations and banks, and it sets guidelines for loans, including their maximum amount and permitted uses. The law affects small business owners interested in transitioning to an employee-owned structure and supports them financially while promoting this type of ownership model across Colorado. Since the bill has been signed, it is now active and its provisions are being implemented.

Official Summary

The bill requires the Colorado office of economic development (office) to engage the services of a local nonprofit organization that supports and promotes the employee-owned business model to educate the staff at the office on the forms and merits of employee ownership in order for the office to promote employee ownership as part of its small business assistance center. The bill requires the office to establish and administer a revolving loan program to assist transitions of existing businesses to employee-owned businesses. The bill specifies that the office may enter into a contract, following an open and competitive process, with a local nondepository nonprofit organization that supports and promotes the employee-owned business model, a bank, or a nondepository community development financial institution to establish and administer the revolving loan program. The bill allows the office to work with the Colorado housing and finance authority to assist in offering loans under the program. The bill specifies the types of businesses that may qualify for the program, sets a maximum amount of any loan, and specifies what the loans may and may not be used for. The bill also allows the office to seek matching private sector money to help capitalize the program. The bill authorizes the office to accept and expend gifts, grants, and donations to capitalize the program, and may annually keep the first 15% of the money raised for administration purposes. The bill creates the revolving loan program cash fund and the money in the fund is continuously appropriated to the office. The bill also specifies that the office is required to establish guidelines and post on its website administrative details about the revolving loan program, such as fees, costs, interest rates, and loan terms. The bill includes a repeal of the section of law creating the program, effective July 1, 2022. (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Votes