Senate Committee on Finance (04/16/2009)

Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON FINANCE

Date:	04/16/2009	ATTENDANCE

Time:	10:45 AM to 12:10 PM	Brophy	X
		Heath	*
Place:	SCR 354	Isgar	X
		King K.	X
This Meeting was called to order by		Scheffel	X
	Senator Sandoval	Hudak	X
		Sandoval	X
This Report was prepared by
	Elizabeth Hanson
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB09-1043 HB09-1035 HB09-1242 HB09-1173		Referred to Appropriations Referred to Appropriations Amended, Referred to the Committee of the Whole Referred to Appropriations

10:47 AM -- House Bill 09-1043

Senator Williams, prime sponsor, presented House Bill 09-1043. This bill creates a new income tax checkoff as a funding mechanism for the Make-A-Wish Foundation of Colorado Fund. The checkoff would be added to the state income tax form for tax years 2009 through 2011 as a voluntary contribution. Senator Williams explained that the checkoff would provide funding for children with life-threatening illnesses, and that the average wish costs about $6,000. She explained that the fund is new, and the General Assembly would appropriate the money from the new fund to the Department of Revenue through the annual budget process. After subtracting these costs, she stated, the money would be transferred to the Make-A-Wish Foundation of Colorado.

The following person testified on the bill:

10:51 AM -- Ms. Becky Schilling, representing the Make-A-Wish Foundation of Colorado, testified in support of the bill. She explained that the Make-A-Wish Foundaton is the largest wish-granting foundation in the world. Ms. Schilling stated that the foundation has been granting wishes in Colorado for 250 children per year, and explained that children are referred to the foundation with a doctor certifying that the child has the illness. She said that all the money raised in Colorado assists children in Colorado. Ms. Schilling explained that the wishes usually fall into four categories, including a wish to travel, a wish to have something, a wish to meet someone, and a wish to be something. She gave examples of the children's wishes.

10:58 AM -- Ms. Eileen Danahy, representing the Make-A-Wish Foundation of Colorado, testified in support of the bill. She distributed information to the committee, including background about the Make-A-Wish Foundation of Colorado (Attachment A), the mission statement of the foundation (Attachment B), a fact sheet supporting House Bill 1043 (Attachment C), and a copy of the foundation's Fall/Winter 2008 edition of the Wish Colorado newsletter, available at www.wishcolorado.org/resources/publications.html. Ms. Danahy provided the committee with ways in which the foundation will notify the public about the tax checkoff so that it can raise $75,000, the amount required to stay on the tax checkoff form. She also provided information about Tax Checkoff Colorado, an organization that publicizes the checkoff programs. Ms. Danahy responded to questions from the committee about other wish-granting organizations in the Colorado area.

11:03 AM

Senator Sandoval closed public testimony. Senator Williams also provided closing comments about children who have received wishes by the foundation.


BILL:	HB09-1043
TIME:	11:05:47 AM
MOVED:	Brophy
MOTION:	Refer House Bill 09-1043 to the Committee on Appropriations. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

11:06 AM -- House Bill 09-1035

Senator Heath, prime sponsor, presented House Bill 09-1035, which allows certain clean technology and medical device firms to receive refunds on sales and use tax paid on the purchase of equipment used in research and development. Senator Heath provided background information about the reasons for the bill and explained that it is recommended by the Joint Select Committee on Job Creation and Economic Growth. He stated that the bill will assist small businesses that have 50 employees or less. He also explained that the bill was amended to state that the refund would only be available in years where there is sufficient revenue to allow General Fund revenues to increase by the maximum allowed six percent.

The following persons testified on the bill:

11:13 AM -- Mr. Larry Lansing, representing the Colorado Bioscience Association, testified in support of the bill. He distributed a letter of support for the bill from Solix Biofuels (Attachment D). Mr. Lansing provided background information about Beacon Biotechnology, the company where he is employed, and explained the medical technology it is developing.

11:16 AM

Senator Sandoval closed public testimony.


BILL:	HB09-1035
TIME:	11:17:17 AM
MOVED:	Heath
MOTION:	Refer House Bill 09-1035 to the Committee on Appropriations. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

11:18 AM -- House Bill 09-1242

Senator King, prime sponsor, presented House Bill 09-1242, which allows Colorado higher education institutions to create a venture development investment fund, into which gifts, grants, and donations from individuals, businesses, and other entities would be deposited. Senator King explained that the tax credits were eliminated from the bill in the House of Representatives. He provided the committee with background about tax credits in Oregon for venture development. Senator King stated that higher education institutions in Colorado support the bill and that he would like to explore adding a tax credit in the future.

Senator King distributed a copy of Amendment L.006 (Attachment E).

The following person testified:

11:23 AM -- Mr. Emmanuel Hilaire, representing National Jewish Health, testified in support of the bill. He explained that National Jewish is a premiere research hospital in the nation, and that over the past ten years, the research has led to over 300 new inventions of new technologies. These new inventions, he explained, are often at the early stage of development and require additional financial support to make them more attractive to venture capitalists and biotech companies. He stated that the donations proposed in the bill would encourage additional research and development in Colorado. Mr. Hilaire responded to questions from the committee about the ownership of patents when new technologies are developed.

11:30 AM

Senator Sandoval closed public testimony.


BILL:	HB09-1242
TIME:	11:30:57 AM
MOVED:	King K.
MOTION:	Adopt Amendment L.006 (Attachment E). The motion passed without objection.
SECONDED:
		VOTE
	Brophy
	Heath
	Isgar
	King K.
	Scheffel
	Hudak
	Sandoval

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1242
TIME:	11:31:25 AM
MOVED:	King K.
MOTION:	Refer House Bill 09-1242, as amended, to the Committee of the Whole. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

11:30 AM

The committee recessed.

11:36 AM -- House Bill 09-1173

The committee reconvened.

Senator Hodge, prime sponsor, presented House Bill 09-1173. The bill provides methods to reduce the amount of contraband tobacco products in the state through enforcement efforts and the establishment of new civil penalties for the possession of contraband tobacco products. Senator Hodge responded to questions from the committee about the nature of contraband tobacco products. She explained that the tobacco is transported into Colorado from nonlegitmate sellers, and if cigarettes are not stamped by the state, the tax has not been paid. She also responded to questions about the nature of cigarette taxes and whether the problem is growing in Colorado.

The following persons testified on the bill:

11:39 AM -- Mr. Chip Creager, representing Creager Mercantile, testified in support of the bill. He stated that one of the consequences of having a high tax rate on tobacco products is illegal activity. Mr. Creager shared his concerns about the loss of revenue to his business and to the state. He said the bill would level the playing field for legitimate businesses. Mr. Creager responded to questions from the committee about internet sales and retail sales, and provided his concerns about how the state is enforcing the tobacco laws in Colorado.

11:46 AM -- Ms. Mary Szarmach, representing Smoker Friendly /Gasamat, testified in support of the bill. She provided information about the recent increase of the excise tax on tobacco products by the federal government. She stated that the company has recently closed several stores and laid off over 40 workers. Ms. Szarmach provided figures from the Department of Revenue about the amount of tax revenue that Colorado and the federal government has received from cigarette taxes. She responded to questions from the committee about cigarette use, cigarette sales, and the cost of the tax. She also responded to questions about the tax treatment of cigarettes on Indian reservations.

11:57 AM -- Mr. Wilson Croom, representing the Colorado Association of Distributors, testified in support of the bill. He provided background information about what parties are exempt from cigarette sales taxes and the stamps on the carton of cigarettes. The bill, he said, would allow the Department of Revenue to better enforce tobacco laws by requiring retailers to provide invoices illustrating that the cigarette tax was paid. In addition, the bill adds a penalty for retailers that sell cigarettes that do not have a stamp to pay a penalty of $5 per packet, he explained. Mr. Croom said that the money from these penalties would be deposited into a fund for enforcement of tobacco laws. Mr. Croom responded to questions from the committee about contraband products. He also provided the committee with figures about the loss of tax revenue.

12:03 PM -- Mr. Phillip Horwitz, representing the Colorado Department of Revenue, explained the department is in charge of enforcing cigarette taxation, and explained the difference between the tax treatment of cigarettes and other tobacco products. Mr. Horwitz said that cigarettes are stamped, while other tobacco products are taxed at the distributor level. He also provided his concerns about cigarettes sold over the internet from distributors that have not paid the tax. Mr. Horwitz responded to questions from the committee about whether the bill will address enforcement problems.

12:10 PM

Senator Sandoval closed public testimony.


BILL:	HB09-1173
TIME:	12:10:17 PM
MOVED:	Hudak
MOTION:	Refer House Bill 09-1173 to the Committee on Appropriations. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:10 PM

The committee recessed.