House Committee on Finance (02/18/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	02/18/2009	ATTENDANCE

Time:	10:45 AM to 04:57 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:
HB09-1152 HB09-1061 HB09-1105 HB09-1259		Postponed Indefinitely Referred to the Committee of the Whole Amended, Referred to Appropriations Postponed Indefinitely

10:46 AM -- House Bill 09-1152 - Concerning Horse Racing

Representative Sonnenberg, prime sponsor, explained the provisions of the bill and noted that it is a product of a grassroots effort by the industry. He began by explaining that House Bill 09-1152 authorizes two new methods of conducting pari-mutuel wagering on horse races: advance deposit account wagering, in which the patron establishes a deposit account with a licensee and directs the placement of wagers from that account via the internet; and historical horse racing, in which the patron wagers on the outcome of digitally recorded races previously held at licensed horse tracks. After a brief committee discussion, the committee heard testimony on the bill.

The following persons testified:

10:52 AM -- Mr. Mark Grueskin, Colorado Gaming Association, testified in opposition of the bill and argued that it would allow the creation of "racinos" that are in violation of the state constitution that limits casino-style gambling to three historic mountain towns. Mr. Grueskin noted that if money spills over to the General Fund, it is a tax and under House Bill 09-1152, the revenue is a new "tax" based on adjusted gross proceeds (the majority of the money flows through the General Fund). He continued by making the point that the method of taxing bets under the bill is different than the current pari-mutuel tax which is based on 0.75 percent of gross wagers. He closed by urging the committee to oppose the bill.

11:10 AM -- Mr. Rod Weidmann, Board of County Commissioners of Arapahoe County, testified in opposition toward the bill and distributed a letter of opposition toward the bill from Arapahoe County (Attachment A). He continued by noting that if this bill is approved, the citizens should be allowed to vote on the proposed use of these machines authorized by the bill. He closed by saying that the bill changes the use of racing facilities from live racetracks to a casino-type facility.

The committee discussed the location of schools in Arapahoe County that are close to the race track.

11:18 AM -- Mr. Ron Bockenfeld, Arapahoe County, testified in opposition toward the bill. The City Council opposes this bill because the bill expands gambling. If we are going to expand gambling, the people should vote on it. He closed by saying that the expansion of gambling is the basic reason for opposition toward the bill.

11:25 AM -- Mr. Louis Cella, Instant Racing, discussed horse racing trends currently in the United States. He provided several examples of where pari-mutuel racing has decreased. He stated that he sees this bill as a way to modernize racing and expand the fan base. He continued by describing how instant racing works and noted that it is already taking place in Colorado. He answered questions from the committee and distributed a packet of information on the pari-mutuel industry that included revenue graphs and a news article (Attachment B). He closed by saying that the industry is having a very hard time and this bill will help the industry.

11:50 AM -- Mr. Tony Gasich, Rocky Mountain Quarter Horse Association (RMQHA), testified in support of the measure and distributed a handout of economic statistics for the industry (Attachment C). He discussed the new jobs that would be created by the bill and the bill's potential to boost the state's economy. He noted that the bill affects over 55 percent of the gross proceeds in the industry and is a winner for everyone. He closed by saying that if this bill is not passed, 1,500 jobs will be lost to the state and the industry will lose $100 million. Other neighboring states around Colorado will benefit.

12:08 PM -- Mr. David Reitz, Colorado Division of Racing, testified in support of the bill and commented that the division will regulate this industry, not the lottery. He closed by saying that this new activity will be regulated by the state and without this bill, the industry will go away in Colorado.

12:10 PM


BILL:	HB09-1152
TIME:	12:10:46 PM
MOVED:	Apuan
MOTION:	Refer House Bill 09-1152 to the Committee on Appropriations. The motion failed on a 2-9 vote.
SECONDED:	Roberts
		VOTE
	Apuan	Yes
	Benefield	No
	Gerou	No
	Kefalas	No
	Kerr A.	No
	Lambert	No
	Roberts	Yes
	Summers	No
	Swalm	No
	Frangas	No
	Judd	No

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


BILL:	HB09-1152
TIME:	12:19:05 PM
MOVED:	Frangas
MOTION:	Moved to postpone House Bill 09-1152 indefinitely. The motion passed on a 10-1 vote.
SECONDED:	Benefield
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	Yes
	Roberts	No
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

Final YES: 10 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:19 PM

Recess.

01:31 PM -- House Bill 09-1061 - Concerning Health Care Plans

Representative McGihon, prime sponsor, noted that House Bill 09-1061 had a full hearing in House Business Affairs & Labor and asked that the committee support the bill.

The following persons testified:

01:32 PM -- Ms. Betsy Murray, and Ms. Ellen Caruso, both representing the American Physical Therapy Association (APTA Colorado Chapter), testified in support of the measure.

01:36 PM


BILL:	HB09-1061
TIME:	01:36:55 PM
MOVED:	Benefield
MOTION:	Refer House Bill 09-1061 to the Committee of the Whole. The motion passed on a 9-2 vote.
SECONDED:	Frangas
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	Yes
	Summers	No
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

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

01:38 PM -- House Bill 09-1105 - Concerning the Colorado Innovation Investment Tax Credit (for action only)

Representative Kefalas, prime sponsor, briefly explained the provisions of the bill and distributed a handout on "Risk Capital Measure" (Attachment D) and amendment L.005 (Attachment E) to the committee. He explained that the amendment makes technical changes to the bill. He continued by reiterating that the bill allows certain investors to receive an income tax credit for investments made in certain aerospace, bioscience, clean energy, and information technology small businesses during tax years 2010 through 2014. The credit is equal to 15 percent of the investment for the tax year in which the investment is made and the following tax year, up to a maximum total of $100,000. (This bill was initially heard by the committee on February 4, 2009, and amended by the adoption of amendment L.003. Attachment F).

01:49 PM


BILL:	HB09-1105
TIME:	01:50:28 PM
MOVED:	Kefalas
MOTION:	Move amendment L.005 The motion passed without objection by those members present.
SECONDED:	Summers
		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:	HB09-1105
TIME:	01:52:56 PM
MOVED:	Kefalas
MOTION:	Refer House Bill 09-1105, as amended, to the Committee on Appropriations. The motion passed on a 7-4 vote.
SECONDED:	Summers
		VOTE
	Apuan	Yes
	Benefield	No
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	Yes
	Summers	Yes
	Swalm	No
	Frangas	Yes
	Judd	No

Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

01:59 PM -- House Bill 09-1259 - Concerning Local Government Impact Fees

Representative Hullinghorst, prime sponsor, explained the provisions of the bill and distributed amendment L.001 (Attachment G) and a fact sheet (Attachment H) to the committee members. She continued by saying that the bill expands the authority of a local government to charge impact fees on new development within its jurisdiction and, pursuant to an inter-governmental agreement, to charge impact fees on behalf of a school district or other special districts.

Representative Hullinghorst continued by saying that under current law, impact fees may be charged to assist a local government with the costs of capital facilities needed to serve the new development. This bill further authorizes impact fees for service programs that encourage the efficient use of energy, preserve natural resources, or provide social services. She closed by noting that at the request of a local government, the Office of Smart Growth in the Department of Local Affairs (DOLA) may provide technical assistance to the local government for the adoption or administration of impact fees. The committee engaged in a discussion about impact fees and heard testimony on the bill.

The following persons testified:

02:24 PM -- Mr. Chris Elliott, Colorado Association of Home Builders, testified in opposition toward the bill and distributed a handout to the committee on the home building industry (Attachment I). The committee briefly discussed impact fees that home builders pay in Colorado.

03:00 PM -- Ms. Pat Ratliff, Colorado Counties Inc,, testified in support of the bill and pointed out that there is no division between local governments and developers. She continued by saying that counties work together with developers to achieve the best use of the land.

The committee discussed the typical impact fee for a home. Ms. Ratliff responded saying that the average fee is between $10,000 to $12,000 per home plus water and tap fees, depending upon the local government jurisdiction.

03:08 PM -- Mr. David Koons, Summit County Builders, testified in opposition toward the bill and discussed the housing market in Summit County. Impact fees are taxes directed at the construction and building industries. He closed by saying that this bill will be a concern to the home builders in Summit County and further slow the housing market. Please do not support this bill.

The committee discussed the home building industry in the mountain communities of Colorado and commented on the number of jobs that are generated by the industry for local economies. Mr. Koons responded by discussing the economic activity associated with the industry and discussed full time jobs created by the industry. He continued by discussing the secondary jobs that are tied to the home building industry.

Mr. Koons discussed the small businesses that are tied to the home builders' industry that may be impacted by the bill. Within the building industry, it is one of the only industries that pays a high wage in contrast to the ski industry that pays minimum wage. The committee continued to discuss the workers that may be affected by the impact fees in the bill. Mr. Koons responded by talking about the contractors who hire workers in the industry.

The committee asked Mr. Koons about his fundamental concern regarding the bill. Mr. Koons responded by saying that local governments in Summit County are going to increase and charge more for homes than would otherwise be charged without the bill. He closed by saying that the bill will harm the home building industry.

03:35 PM -- Mr. Jack Fox, Colorado Association of Realtors, testified in opposition toward the bill and said that growth in mountain communities must pay its own way. He discussed the impact of impact fees on commercial developers. He closed by noting that the industry pays for the work that would be taxed twice by impact fees.

03:45 PM -- Ms. Bonnie Arnold, Colorado Association of Realtors, testified in opposition toward the bill. She noted that the costs shifted to home builders from impact fees are added to the price of a home. In this housing market, additional impact fees may harm the building industry or prolong the ongoing slump in the housing market.

03:53 PM -- Ms. Mickey Hackenberger, Colorado Association of Realtors, testified in opposition toward the bill.

03:55 PM -- Mr. Dale Case, Boulder County, testified in support of the bill.

04:10 PM -- Mr. Ira J. Rhodes, representing self, testified in support of the bill.

04:20 PM -- Ms. Stephanie Thomas, Colorado Environmental Coalition, testified in support of the bill.

The committee and sponsor engaged in a discussion about the imposition of impact fees prior to the committee's action on the bill.

04:27 PM


BILL:	HB09-1259
TIME:	04:27:33 PM
MOVED:	Benefield
MOTION:	Move amendment L.001, as amended.
SECONDED:	Kerr A.
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	No
	Judd	Yes

Not Final YES: 10 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1259
TIME:	04:28:29 PM
MOVED:	Benefield
MOTION:	Move to amend amendment L.001, Page 3, strike language on lines 5 and 6, "or service programs". The motion passed without objection by those members present.
SECONDED:	Kerr A.
		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:	HB09-1259
TIME:	04:35:42 PM
MOVED:	Judd
MOTION:	Moved a conceptual amendment, Page 5, strike lines 11 thru 20 and make any conforming amendments. The motion passed without objection by those members present.
SECONDED:	Frangas
		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:	HB09-1259
TIME:	04:36:07 PM
MOVED:	Benefield
MOTION:	Refer House Bill 09-1259, as amended, to the Committee of the Whole. The motion failed on a 3-8 vote.
SECONDED:	Judd
		VOTE
	Apuan	No
	Benefield	Yes
	Gerou	No
	Kefalas	No
	Kerr A.	Yes
	Lambert	No
	Roberts	No
	Summers	No
	Swalm	No
	Frangas	No
	Judd	Yes

Not Final YES: 3 NO: 8 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1259
TIME:	04:56:58 PM
MOVED:	Summers
MOTION:	Move to postpone House Bill 09-1259 indefinitely. The motion passed on a 9-2 vote.
SECONDED:	Lambert
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	No
	Kerr A.	No
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

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

04:57 PM

Adjourn.