House Committee on Finance (04/22/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	04/22/2009	ATTENDANCE

Time:	11:21 AM to 08:10 PM	Apuan	X
		Benefield	X
Place:	LSB A	Gerou	X
		Kefalas	X
This Meeting was called to order by		Kerr A.	X
	Representative Judd	Lambert	X
		Roberts	X
This Report was prepared by		Summers	X
	Ron Kirk	Swalm	X
		Frangas	X
		Judd	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
SB09-173 HCR09-1003 HB09-1126 SB09-121 HB09-1360		Amended, Referred to Appropriations Laid Over Amended, Referred to Appropriations Referred to Appropriations Referred to the Committee of the Whole

11:21 AM -- Senate Bill 09-173 - Concerning Regional Tourism Projects

Representative Rice, prime sponsor, explained the provisions of the bill and distributed a letter of support for the bill from the Office of Economic Development and International Trade (Attachment A). He began by saying that the bill allows one or more local governments to pursue tourism-related projects on a regional basis using state sales tax increment financing. Local governments that wish to utilize the financing mechanism must designate a specific zone in which the sales tax increment will be collected. They must also designate a financing entity, which can include either an established urban renewal authority, an established metropolitan district, or a new regional tourism authority. Projects must first be approved by the Economic Development Commission.

Representative Rice continued by noting that the bill sets forth the information that must be included in an application and the criteria that must be satisfied to approve the project. Substantial work must commence within 5 years of a project being approved. After a brief discussion, Representative Rice said that no changes should be made to Urban Renewal Authorities. Representative Rice closed by saying that the bill will create new jobs in Colorado.

The committee engaged in a brief discussion about the types of tourism projects that may be affected by the bill.

The following persons testified.

11:48 AM -- Mr. Robert Cohen, Metro Denver Sports Commission, testified in support of the bill and spoke to the economic benefits.

11:59 AM -- Mr. Ray Pittman, Aurora Economic Development Council, testified in support of the bill. He closed by discussing the economic impact from out-of-state dollars. Mr. Pittman noted that the bill would result in an economic boost for Colorado.

12:06 PM

Recess.

03:30 PM

03:34 PM -- Mr. Chris Mendez, Colorado Counties Inc., testified in opposition toward the bill and distributed a graph on tax increment financing revenue (Attachment B).

03:37 PM -- Mr. Matt Cheroutes, Colorado Office of Economic Development and International Trade, expressed his support for the bill.

03:44 PM -- Mr. Chris Ward, Legislative Council Staff, responded to questions about tax increment financing.

03:55 PM -- Mr. Phillip Horowitz, Colorado Department of Revenue, responded to committee questions about tax increment financing.

04:01 PM -- Ms. Janice Sinden, Colorado Concern, testified in support of the bill and told the committee it would be a good economic development tool for the state.

04:03 PM


BILL:	SB09-173
TIME:	04:03:04 PM
MOVED:	Judd
MOTION:	Moved amendment L.010 (Attachment C). The amendment passed without objection by those members present.
SECONDED:	Benefield
		VOTE
	Apuan
	Benefield
	Gerou
	Kefalas
	Kerr A.
	Lambert
	Roberts
	Summers
	Swalm
	Frangas
	Judd

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


BILL:	SB09-173
TIME:	04:08:27 PM
MOVED:	Frangas
MOTION:	Moved amendment L.011 (Attachment D). The motion failed on a 5-6 vote.
SECONDED:	Kefalas
		VOTE
	Apuan	Yes
	Benefield	No
	Gerou	No
	Kefalas	No
	Kerr A.	Yes
	Lambert	Yes
	Roberts	No
	Summers	No
	Swalm	No
	Frangas	Yes
	Judd	Yes

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	SB09-173
TIME:	04:11:32 PM
MOVED:	Apuan
MOTION:	Refer Senate Bill 09-173, as amended, to the Committee on Appropriations. The motion passed on a 9-2 vote.
SECONDED:	Roberts
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	No
	Kerr A.	Yes
	Lambert	No
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

Final YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:13 PM

Recess.

04:16 PM -- Summary for HCR 09-1003 - Concerning the Regulation of the Game of Chance

Representative Lambert, prime sponsor, briefly explained the provisions of the resolution. After a brief committee discussion, the committee heard testimony.

The following person testified:

04:19 PM -- Mr. Corky Kyle, Colorado Charitable Bingo Association (CCBA), testified in support of the bill.

04:36 PM -- Mr. Rich Coolidge, Colorado Secretary of State, responded to committee questions regarding licensing and other issues. Mr. Coolidge closed by engaging in a discussion about taking the provisions in the resolution out of the constitution and placing the regulation in statute.

04:41 PM

After a brief committee discussion, the resolution was taken off the table.

04:43 PM -- House Bill 09-1126 - Concerning Incentives for Solar Thermal Energy Systems

Representative Hullinghorst, prime sponsor, explained the provisions of the bill. She began by noting that the bill makes all sales, storage and use of components used in solar thermal systems exempt from the state sales and use tax. The bill specifies various components for solar thermal systems that are affected, and defines such a system as one that uses the sun to produce heat or cold for heating or cooling a residential or commercial building or water, or any industrial, commercial, or manufacturing process. After a brief committee discussion, testimony was heard.

The following persons testified:

04:53 PM -- Mr. James Lowe, Colorado Solar Energy Industries Association, testified in support of the bill and said that the tax break in the legislation would level the playing field for solar products developed and sold in Colorado. The committee discussed the sales and use tax exemption in the bill. Mr. Lowe closed by discussing the industry's benefit to Colorado. The committee engaged in a discussion on solar systems.

05:11 PM -- Ms. Robyn Fugett, Colorado Sierra Club, testified in support of the bill.

05:14 PM -- Mr. Phillip Horowitz, Colorado Department of Revenue, responded to questions about the effective date in the bill and discussed changing the date to July 1, 2009.

05:19 PM


BILL:	HB09-1126
TIME:	05:19:14 PM
MOVED:	Frangas
MOTION:	Moved amendment L.002 (Attachment E). The motion passed on a 7-4 vote.
SECONDED:	Benefield
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	No
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	Yes
	Summers	No
	Swalm	No
	Frangas	Yes
	Judd	Yes

Not Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1126
TIME:	05:28:01 PM
MOVED:	Lambert
MOTION:	Moved amendment L.003 (Attachment F). The motion passed on a 9-2 vote.
SECONDED:	Gerou
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	No
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	No
	Judd	Yes

Not Final YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1126
TIME:	05:30:41 PM
MOVED:	Frangas
MOTION:	Refer House Bill 09-1126, as amended, to the Committee on Appropriations. The motion passed on a 8-3 vote.
SECONDED:	Kerr A.
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	Yes
	Summers	No
	Swalm	No
	Frangas	Yes
	Judd	Yes

Final YES: 8 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS

05:31 PM

Recess.

07:18 PM -- Senate Bill 09-121 - Concerning Sales and Use Taxes on Meals Provided to Employees

Representative Marostica, prime sponsor, explained the provisions of the bill and distributed a packet of materials on the legislation from the Colorado Restaurant Association (Attachment G). He began by explaining that the bill eliminates the requirement that free or reduced-price meals provided to employees of restaurants be considered part of their wages in order for the meals to be exempt from sales and use taxes. Current law requires free or reduced-price meals provided to employees of restaurants be subject to sales and use tax unless it is considered part of the employees' wages. Restaurants must record the meals as part of their employees' compensation in their wage documentation in order for the exemption to apply. If the meals are not part of their wages, sales or use tax is due on the value of the meals. After a brief committee discussion, testimony was heard.

The following persons testified:

07:25 PM -- Mr. Phillip Horowitz, Department of Revenue, discussed the history of the sales and use tax exemption on employee meals. He continued by discussing the history of audits of taxpayers who are exempted from paying sales taxes on employee meals. Mr. Horowitz closed by discussing the implementation of the statute as it applies to the exemption. Under the statute only if the meals are part of wages for income, are they exempt from state sales tax.

07:39 PM


BILL:	SB09-121
TIME:	07:39:19 PM
MOVED:	Lambert
MOTION:	Refer Senate Bill 09-121 to the Committee on Appropriations. The motion passed on a 11-0 vote.
SECONDED:	Summers
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

07:40 PM -- House Bill 09-1360 - Concerning the Residential Assessment Rate

Representative Judd, prime sponsor, distributed a handout on the estimated residential assessment rate (RAR) from the Department of Local Affairs (Attachment H). He continued by explaining that the recent study calculated by the Division of Property taxation found that the final RAR is 8.85 percent for 2009-2010. By leaving the RAR at 7.96, the state will pay an additional $100 million in backfill money under the School Finance Act. Representative Judd discussed the TABOR prohibition on raising the RAR and discussed the conflict with the Gallagher Amendment by not adjusting the RAR upward to 8.85 percent.

The committee discussion continued as Representative Judd discussed the link between the severance tax District Court case, the Colorado Attorney General Office memorandum on the District Court Case, and the result of leaving the RAR at 7.96 percent.

The following person testified:

07:49 PM -- Ms. JoAnn Groff, State Property Tax Administrator, responded to committee questions and commented on the RAR study. The rate estimated in the study is set at 8.85 percent and will require an additional $100 million in state backfill. Ms. Groff continued by saying that there is an additional $200 million impact in terms of less property taxes that affects other taxing jurisdictions. This is the effect of not changing the 7.96 RAR rate under TABOR.

The committee commented on the Supreme Court's opinion in Ritter vs. Mesa County and discussed past precedent. The committee discussed the shift under Gallagher from keeping the RAR at 7.96 and whether there is an economic impact assessment of retaining the 7.96 percent RAR. The committee continued to discuss the RAR rate and noted that retaining the lower RAR means that commercial properties will pay more in property taxes.

The following person testified:

08:08 PM -- Ms. Natalie Mullis, Chief Economist, Legislative Council Staff, noted that the RAR is incorporated into the forecast.

08:09 PM


BILL:	HB09-1360
TIME:	08:09:33 PM
MOVED:	Judd
MOTION:	Refer House Bill 09-1360 to the Committee of the Whole. The motion passed on a 11-0 vote.
SECONDED:	Lambert
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

08:10 PM

Adjourn.

09HouseFin0422AttachG.pdf

09HouseFin0422AttachH.pdf