STAFF SUMMARY OF MEETING
COMMITTEE ON JOINT FINANCE
|Time:||12:33 PM to 01:13 PM|
|This Meeting was called to order by|
|This Report was prepared by|
X = Present, E = Excused, A = Absent, * = Present after roll call
|Bills Addressed: ||Action Taken:|
|Presentation by OEDIT|
Presentation by Legislative Council Staff
The meeting of the Joint Finance Committee came to order.
12:33 PM -- Presentation by OEDIT
Mr. Matt Cheroutes and Ms. Pam Reichert, representing the Colorado Office of Economic Development and International Trade (OEDIT), presented an update on international trade developments to the Joint Finance Committee. The presenters distributed a memorandum (Attachment A). The update is a reporting requirement pursuant to Section 24-47-101, Colorado Revised Statutes, that requires OEDIT to inform the General Assembly by March 1 of each year about ongoing trade developments, trade negotiations and the possible impact on Colorado's economy.
Ms. Reichert stated that there are three bilateral trade agreements that have been signed by the United States with Columbia, Panama, and South Korea. These agreements, she explained, have not been passed by the U.S. Congress. Ms. Reichert explained that a new U.S. Trade Representative as well as a new U.S. Secretary of Commerce still need to be confirmed. She stated that the agreements would allow U.S. exports greater access to world markets. This, she stated, could help the computer electronics, machinery, chemical, and agricultural industries in Colorado. Ms. Reichert stated the office is not aware of any Colorado laws that could be determined as an "impermissible barrier" to implementing the trade agreements.
Ms. Reichert also stated OEDIT prepared a final report that showed a 4.3 percent increase in Colorado's exports in 2008. She also discussed the top trading markets around the world and the top Colorado exports.
Ms. Reichert responded to questions about Colorado's presence in the international trade market. She stated that Colorado works through the U.S. foreign commercial offices that handle trade issues overseas to assist businesses, and the state does not have its own trade offices. She explained that the state works with these trade offices to assist small business in Colorado in exporting their products.
12:42 PM -- Presentations by Legislative Council Staff about Mineral Taxes in Colorado
Mr. Jason Schrock and Mr. Marc Carey, Legislative Council Staff (LCS), provided an overview of mineral taxes in Colorado, including the state severance taxes for oil and gas and Federal Mineral Lease (FML) revenue on federal lands. The staff distributed a handout of the presentation to the committee (Attachment B).
Mr. Schrock provided an overview of mineral development in Colorado. He provided information about the energy boom in production, particularly in natural gas, since 2003. He further stated this production is beginning to slide because of current economic conditions. Mr. Schrock discussed natural gas production and prices. He responded to questions from the committee about pipeline issues facing Colorado producers and prices national producers can obtain. He also discussed pipeline capacity, severance taxes, and property taxes.
Mr. Schrock responded to questions from the committee about the volatility of natural gas prices. Discussion ensued on this subject. He also responded to questions about property tax credits and how the credits are being administered. Discussion ensued about audits that have been conducted about mineral tax revenue.
Mr. Carey provided an overview of taxes collected from mineral extraction, including the FML revenue and severance tax revenue, and discussed how the mineral tax revenues are allocated within the state's budget. The allocation of state severance tax revenue, he explained, is divided between the Department of Natural Resources and the Department of Local Affairs. These agencies distribute this revenue for programs throughout the state. The allocation of FML revenue, he explained, is primarily for K-12 education, water projects, local government grants, and school districts. Any spillover allocation for FML revenue, he said, goes toward higher education capital construction projects. Mr. Carey discussed the impacts of recent legislation that has been passed on revenue allocation, and also provided the committee information about revenue allocation during instances when the state faces revenue reductions.
Mr. Carey responded to questions from the committee about the revenue for K-12 education and school districts. Discussion ensued about money for education from state lands that are managed by the State Land Board.
Mr. Schrock returned and responded to questions about severance tax revenue and whether the revenue would recover in future fiscal years. Discussion continued about the price of natural gas and the impacts of this price on the state's fiscal situation.
The committee adjourned.