House Committee on Finance (01/28/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	01/28/2009	ATTENDANCE

Time:	10:37 AM to 02:32 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:
HB09-1041 HB09-1068 HB09-1093		Referred to the Committee of the Whole Postponed Indefinitely Amended, Referred to the Committee of the Whole

10:38 AM -- House Bill 09-1041 - Concerning Fire Protection Districts

Representative Gerou, prime sponsor, explained the provisions of the bill and distributed a handout on fire protection districts (Attachment A). She noted that the bill allows a fire protection district board to charge a fee for extrication, rescue, or other safety services provided when assisting emergency medical services. Fire protection districts may change a fee for services such as services provided prior to the arrival of an ambulance rescue or extrication of trapped or injured parties, and lane safety or blocking provided by district equipment.

The committee discussed instances when fire districts have had to respond to emergency service calls. Representative Gerou responded to the discussion by noting some of the incidents that the Foothills Fire Department in Mt. Vernon Canyon have responded to that have resulted in significant costs. Representative Gerou continued by discussing the financial impacts tied to responding to these calls by fire districts and pointed out that it is really the people in the districts that are paying for services that are provided to persons who are from other areas of the state and nation.

The following person testified:

10:54 AM -- Mr. Paul Cooke, Colorado State Fire Chiefs' Association, distributed a handout on the bill (Attachment B) and testified in support of the legislation. He began by discussing the funding sources for fire protection districts and commented on the fees that can be assessed by districts when certain types of services are provided.

10:59 AM

The bill was placed on the table for action and no amendments were offered.


BILL:	HB09-1041
TIME:	10:59:29 AM
MOVED:	Gerou
MOTION:	Refer House Bill 09-1041 to the Committee of the Whole. The motion passed on a 10-0 vote.
SECONDED:	Roberts
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Excused
	Kerr A.	Yes
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

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

11:01 AM -- House Bill 09-1068 - Concerning the Business Personal Property Tax

Representative Lambert, prime sponsor, distributed a fact-sheet on the bill (Attachment C) and explained that the elimination of Colorado's business personal property tax has been a priority on the business agenda of the Colorado Association of Commerce and Industry and other business-support organizations. He began by talking about the incentives to businesses in the bill and the gains that the state could see from new business development as the tax is phased-out.

The following persons testified:

11:10 AM -- Ms. Laura Oldright, Colorado Fiscal Policy Institute, distributed a handout on the bill (Attachment D) and testified in opposition toward the measure. Ms. Oldright noted that the loss of revenue to state and local governments would be difficult to absorb during a time of economic challenges. Ms. Oldright urged the committee to vote in opposition toward the bill.

The committee discussed the role of the Colorado Fiscal Policy Institute in the formulation of tax policy. The discussion continued by the committee questioning whether phasing out the tax would not in fact stimulate the economy and pay for itself by generating more money for the state and local governments. Ms. Oldright pointed out that before the state reduce any additional incoming tax revenue, it should first address the current budget concerns tied to the recession.

Representative Lambert noted that the goal of the bill is to bring more businesses to the state and promote economic development. By lowering taxes on businesses, more companies will set up operations in the state.

11:28 AM -- Mr. Chris Mendez, Colorado Counties Incorporated, testified in opposition toward the bill and distributed a handout on property taxes collected by counties (Attachment E). Mr. Mendez said that although the tax is complex and burdensome, many counties depend upon the tax for the provision of basis services. He closed by discussing the state backfill requirement and urged the committee to oppose the bill.

11:35 AM -- Mr. Todd Herreid, Legislative Council Staff, responded to committee questions regarding county revenue issues in the bill.

The committee discussed the potential county services that would be cut should the tax be phased out by the bill. Mr. Herreid commented on the school finance and local government impacts in the bill that would result from out-of-state sales by companies based in Colorado.

11:42 AM -- Mr. Clarke Becker, Colorado Rural Development Council, testified in support of the bill. Mr. Becker discussed the incentives in the bill that would allow Colorado to be more competitive with other states. He closed by saying that the bill would be a benefit to small businesses in Colorado and asked the committee to support the legislation.

11:49 AM -- Mr. Tony Gagliardi, Nation Federation of Independent Business, testified in support of the bill. He noted that small businesses make up 98 percent of the businesses in Colorado that are adversely impacted by the tax. These are the businesses that are responsible for most of the new jobs that are created in the state. House Bill 09-1068 provides important incentives to these small businesses as the tax is phased out. Mr. Gagliardi closed by talking about the cumbersome compliance issues tied to the tax and said that the discussion on the phase-out of the tax needs to continue.

12:00 PM

Recess.

01:33 PM

Resume testimony.

01:34 PM -- Mr. Tony Gagliardi, Nation Federation of Independent Business, concluded his testimony by responding to committee questions about the effect of the phase-out of the tax on local government budgets.

01:36 PM

The bill was placed on the table for action and no amendments were offered.


BILL:	HB09-1068
TIME:	01:36:14 PM
MOVED:	Lambert
MOTION:	Refer House Bill 09-1068 to the Committee on Appropriations. The motion failed on a 5-6 vote.
SECONDED:	Roberts
		VOTE
	Apuan	No
	Benefield	No
	Gerou	Yes
	Kefalas	No
	Kerr A.	No
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	No
	Judd	No

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


BILL:	HB09-1068
TIME:	01:44:16 PM
MOVED:	Benefield
MOTION:	Moved to postpone House Bill 09-1068 indefinitely. The motion passed on a 6-5 vote.
SECONDED:	Judd
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	No
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	No
	Summers	No
	Swalm	No
	Frangas	Yes
	Judd	Yes

Final YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

01:45 PM -- House Bill 09-1093 - Concerning Reporting Requirements for Corporate Taxpayers

Representative Levy, prime sponsor, explained the provisions of the bill and distributed a fact sheet (Attachment F), amendment L.001 (Attachment G), and amendment L.002 (Attachment H) to the committee. Representative Levy began by saying that the bill establishes administrative and auditing measures to allow the Department of Revenue (DOR) to improve compliance with Colorado's corporate income tax reporting requirements. The bill adopts definitions of a real estate investment trust and a captive real estate investment trust established by the Multistate Tax Commission. In addition, the bill requires the disclosure of transactions that are described by specific sections of the Internal Revenue Code, the Code of Federal Regulations, and DOR rules. The bill establishes penalties ranging from $15,000 to $50,000 for a company that fails to disclose these transactions. The bill also establishes penalties of up to $20,000 for material advisors that fail to disclose reportable transactions to the department.

The following persons testified:

01:56 PM -- Mr. Phillip Horwitz, Department of Revenue, responded to committee questions and began by discussing policy changes that would discourage companies from taking advantage of the tax system. The purpose of House Bill 09-1093 is to identify corporate income from in-state operations through the apportionment of income. Mr. Horwitz continued by discussing the penalties in the bill saying that they were appropriate and could be waived at the discretion by the department. The department needs the bill to know who is engaging in the type of transactions that are identified in the bill. The reporting requirements in last year's House Bill 08-1408 will allow the department to use its auditing resources more efficiently than under current law. Mr. Horwitz closed by pointing out that the advantage of the bill is that it allows for corporate disclosure.

02:06 PM -- Ms. Laura Oldright, Colorado Fiscal Policy Institute, testified in support of the bill and distributed a handout to the committee (Attachment I).

02:09 PM

The bill was placed on the table for amendment, in addition to amendments L.001 and L.002, Representative Swalm distributed amendment L.003 (Attachment J).


BILL:	HB09-1093
TIME:	02:09:26 PM
MOVED:	Benefield
MOTION:	Moved amendment L.001. 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:	HB09-1093
TIME:	02:11:28 PM
MOVED:	Frangas
MOTION:	Moved amendment L.002. The motion 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:	HB09-1093
TIME:	02:18:32 PM
MOVED:	Swalm
MOTION:	Moved amendment L.003, as amended, to extend the sunset provision to 2017. After a brief committee discussion, the motion was withdrawn.
SECONDED:	Roberts
		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: TIE


BILL:	HB09-1093
TIME:	02:29:38 PM
MOVED:	Kefalas
MOTION:	Refer House Bill 09-1093, as amended, to the Committee of the Whole. The motion passed on a 10-1 vote.
SECONDED:	Benefield
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

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

02:32 PM

Adjourn.