Senate Committee on Finance (02/19/2009)

Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON FINANCE

Date:	02/19/2009	ATTENDANCE

Time:	11:13 AM to 12:16 PM	Brophy	X
		Heath	X
Place:	SCR 354	Isgar	*
		King K.	*
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:
SB09-181 HB09-1093 HB09-1101		Referred to the Committee of the Whole Referred to the Committee of the Whole Referred to the Committee of the Whole

11:13 AM

The meeting came to order. A quorum was present.

11:13 AM -- Senate Bill 09-181

Senator Tapia, prime sponsor, presented Senate Bill 09-181, a bill that eliminates the requirement that the General Assembly adopt an annual resolution certifying the amount of State Education Fund money available for appropriation for the next fiscal year. Senator Tapia explained that the bill was recommended by the Joint Budget Committee (JBC). He distributed a summary of the bill (Attachment A), a copy of House Joint Resolution 08-1011, adopted in 2008 (Attachment B) and a report on the State Education Fund prepared by Legislative Council Staff (LCS) (Attachment C). Senator Tapia said the resolution summarizes what is already being reported in the LCS report, and responded to questions from the committee about the annual report and related resolutions.

11:20 AM

Discussion ensued about whether the resolution gives non-JBC legislators an opportunity each year to discuss education issues. Discussion also ensued about the maintenance of effort provision in state law.

11:25 AM

Senator Sandoval passed the gavel to Senator Hudak to chair the meeting and was excused to present a bill in another committee. The committee continued to discuss the annual report prepared by LCS.

11:29 AM

No witnesses were signed up to testify on the bill. Senator Hudak closed public testimony, and Senator Sandoval returned to the meeting and resumed her role as chair.


BILL:	SB09-181
TIME:	11:30:47 AM
MOVED:	Isgar
MOTION:	Refer Senate Bill 09-181 to the Committee of the Whole. The motion passed 6-1.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	No
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

Final YES: 6 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

11:32 AM

The committee recessed.

11:33 AM

The committee reconvened.

11:33 AM -- House Bill 09-1093

Senator Veiga, prime sponsor, presented House Bill 09-1093, legislation that establishes administrative and auditing measures to allow the Colorado Department of Revenue (DOR) to better comply with corporate income tax reporting requirements. The bill requires disclosure of reportable corporate transactions, and establishes penalties for failure to disclose these transactions. Senator Veiga explained that she has worked on the bill for several years, and that a similar bill was vetoed last year by the Governor. She stated that concerns about the proposal have been worked out by the business stakeholders. Senator Veiga responded to questions about the penalties in the bill.

The following witnesses testified on the bill:

11:38 AM -- Mr. Phillip Horwitz representing the DOR, testified about the bill. He stated that in many cases, corporate income taxpayers do not agree with the department on the taxes owed or on the exemptions that the corporation can include on their tax return. The bill, he stated, would taxpayers to report transactions on corporate income tax returns. Mr. Horwitz responded to questions about penalties for corporate taxpayers and the auditing process for these taxpayers.

11:47 AM

Discussion continued about the penalties that are accessed to corporate income taxpayers after audits are conducted. Mr. Horwitz stated that taxpayers always have a right to protest a penalty that the business is assessed. He stated that the penalty established by the bill is for the failure to disclose and not for the taxes owed. Discussion ensued about whether the penalties are consistent with penalties imposed by the federal government and in other states. Discussion turned to why the department needs the information about corporate transactions if there may not be an underlying tax owed.

11:55 AM

Discussion continued about the reporting requirements in the bill. Mr. Horwitz stated reporting requirements are also being debated in other states around the nation. He further said the Colorado Bar Association and other professionals have made comments about the bill. The committee also discussed if this bill is the same approach the Internal Revenue Service has taken to these tax issues.

11:58 AM -- Ms. Laura Oldright, representing the Colorado Center on Law and Policy, testified in support of the bill. She said the DOR has limited auditing resources and that the agency should be given all the resources it needs to ensure corporations pay the correct taxes.

12:00 PM

Senator Sandoval closed public testimony.


BILL:	HB09-1093
TIME:	12:03:03 PM
MOVED:	Heath
MOTION:	Refer House Bill 09-1093 to the Committee of the Whole. The motion passed 6-1.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	No
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

Final YES: 6 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:05 PM -- House Bill 09-1101

Senator Veiga, prime sponsor, presented House Bill 09-1101, which establishes penalties for vendors who fail to file a sales tax return or incorrectly account for the amount of sales taxes due on the tax return. She explained that a penalty is not imposed on those individuals who pay their taxes but fail to file a sales tax return, making it difficult for DOR to determine and allocate the taxes owed to local tax jurisdictions. Senator Veiga explained that this also puts a strain on local governments because these tax jurisdictions often have to wait several months for the sales tax revenue.

12:07 PM -- Mr. Phillip Horwitz, representing DOR, was available to answer the committee's questions. He responded to questions about the vendors fee, and he said that DOR already has the authority to disallow the vendors fee if taxpayers fail to file a sales tax return on time. Mr. Horwitz also responded to questions about how much sales tax revenue due to local tax jurisdictions is currently being held by the department. Discussion also ensued about local tax jurisdictions experiencing delays in getting sales tax revenue from the department.

12:12 PM

Committee discussion ensued about taxpayers that incorrectly file their sales tax returns. Mr. Horwitz responded to questions about the abatement of penalties, stating the executive director of the department can waive penalties in certain cases.

12:15 PM

Senator Sandoval closed public testimony.


BILL:	HB09-1101
TIME:	12:15:12 PM
MOVED:	Hudak
MOTION:	Refer House Bill 09-1101 to the Committee of the Whole. The motion passed 6-1.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	No
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

Final YES: 6 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:16 PM

The committee recessed, until its next meeting.