House passes "angel investor" bill

DENVER - The Colorado House of Representatives passed House Bill 1045 -
also known as the "angel investor tax credit" - on Friday, with
bipartisan support.  It is now up to the Colorado Senate to approve it
before the end of the legislative session on May 11.

The bill, sponsored in the House by Rep. John Kefalas, D-Fort Collins,
would renew the Colorado Innovation Investment Tax Credit, initially
created in 2009 to encourage investments in small and startup
businesses.

The bill expired in 2010 after a one-year pilot program. If signed into
law this year, it would provide investors in small businesses a state
income tax credit of 15 percent of their donation up to a maximum credit
of $20,000. 

Investments eligible for the credit must be at least $25,000 to
businesses less than 5 years old involved in research, development or
manufacturing of new technologies, products or processes.

The program's primary goal is to encourage investment in small,
early-stage companies, helping small businesses become successful and,
ultimately, make significant contributions to the local economy.

For now, the bill doesn't include any money to support the potential tax
credit, but Kefalas and his co-sponsor, Sen. Linda Newell, D-Denver,
hope funds can be made available in the future through the Colorado
Office of Economic Development and International Trade.

During its pilot run, the angel investor tax credit allowed investors to
claim over $600,000 in credits for donating to 21 businesses statewide
in 2010.  The businesses that received the investments were able to
create 28 jobs for Colorado residents.