Senate Committee on Finance (04/30/2009)

Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON FINANCE

Date:	04/30/2009	ATTENDANCE

Time:	11:43 AM to 03:26 PM	Brophy	*
		Heath	X
Place:	SCR 354	Isgar	*
		King K.	X
This Meeting was called to order by		Scheffel	*
	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:
Conf 09-Advisory Committee on Governmental Accounting HCR09-1003 HB09-1333 HB09-1360 HB09-1346 HB09-1288 HB09-1342		Favorably Refer to the Full Senate Amended, Referred to the Committee of the Whole Amended, Referred to the Committee of the Whole Referred to the Committee of the Whole Referred to the Committee of the Whole Amended, Referred to Appropriations Amended, Referred to Appropriations

11:44 AM -- Conf 09-Confirmation of Advisory Committee on Governmental Accounting

Ms. Kellie J. Case and Ms. Kathleen R. Askelson, appointees to the Colorado Advisory Committee on Governmental Accounting, provided their background and interest in serving on the committee. Copies of the appointees' applications and resumes are included as Attachment A.

Attachment A can be viewed at State Archives.

Ms. Case began by explaining her background in local government as an accountant, her education in accounting, and her previous term on the committee. Ms. Askelson provided her experiences in the areas of governmental accounting and school finance. The panel responded to questions about the current activities of the advisory committee regarding governmental accounting rules.


BILL:	Conf 09-Advisory Committee on Governmental Accounting
TIME:	11:51:02 AM
MOVED:	Hudak
MOTION:	Refer the appointments of Ms. Kellie J. Case and Ms. Kathleen R. Askelson to the Advisory Committee on Governmental Accounting to the full Senate with a favorable recommendation. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

11:51 AM -- House Concurrent Resolution 09-1003

Senator King, prime sponsor, presented House Concurrent Resolution 09-1003. The concurrent resolution gives the General Assembly the power to designate the licensing and enforcement authority for games of chance such as bingo and raffles. Licensing and enforcement of games of chance will be located within the Department of Revenue unless otherwise determined by the General Assembly. Under current law, the Colorado Constitution specifically gives the power to the Department of State.

Senator King explained that the bill requires a two-thirds vote in both the House and Senate and provided background information about the bill. Senator King responded to questions from the committee about why the change is being proposed.

The follow persons testified:

11:57 AM -- Mr. Corky Kyle, representing the Colorado Charitable Bingo Association (CCBA), testified in support of the bill. He explained that Colorado is the only state in the country in which the Secretary of State regulates this type of gaming. He added that typically agencies pertaining to gaming or revenue have this responsibility.

Senator King distributed a copy of Amendment L.005 (Attachment B).

11:59 AM -- Mr. Mark Couch, representing the Colorado Department of Revenue (DOR), testified. He discussed a document in which DOR stated its support for moving gaming enforcement to its agency late last year. He responded to questions from the committee.

12:01 PM

Senator Sandoval closed public testimony.


BILL:	HCR09-1003
TIME:	12:01:57 PM
MOVED:	King K.
MOTION:	Adopt Amendment L.005 (Attachment B). The motion passed without objection.
SECONDED:
		VOTE
	Brophy
	Heath
	Isgar
	King K.
	Scheffel
	Hudak
	Sandoval

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


BILL:	HCR09-1003
TIME:	12:02:31 PM
MOVED:	King K.
MOTION:	Refer House Concurrent Resolution 09-1003, as amended, to the Committee of the Whole. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

12:03 PM -- House Bill 09-1333

Senator Bacon, prime sponsor, presented House Bill 09-1333 which reduces the amount of the transfers from the State Historical Fund to the State Museum Cash Fund that are scheduled to occur on or before October 1, 2009, and on October 1, 2010. He responded to questions from the committee about funding for historical projects. Members of the committee received a fact sheet about the bill (Attachment C) and Amendment L.002 (Attachment D).

The following person testified:

12:05 PM -- Mr. Ed Nichols, representing the Colorado Historical Society, testified in support of the bill. He explained that the schedule of the projects would not change, and that financial savings realized through the reduction of material and labor costs as well as funds set aside would be used for historical projects. He also stated that the cost of construction is declining.

12:08 PM

Senator Sandoval closed public testimony.


BILL:	HB09-1333
TIME:	12:08:43 PM
MOVED:	King K.
MOTION:	Adopt Amendment L.002 (Attachment D). The motion passed without objection.
SECONDED:
		VOTE
	Brophy
	Heath
	Isgar
	King K.
	Scheffel
	Hudak
	Sandoval

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


BILL:	HB09-1333
TIME:	12:08:56 PM
MOVED:	King K.
MOTION:	Refer House Bill 09-1333, as amended, to the Committee of the Whole with a recommendation that it be placed on the consent calendar. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

12:09 PM -- House Bill 09-1360

Senator Sandoval, prime sponsor, presented House Bill 09-1360 which addresses taxes for residential real property. Section 3 (1) (b) of Article X of the State Constitution, otherwise known as the Gallagher Amendment, requires the General Assembly to establish the ratio of valuation of assessment for residential real property, or the residential assessment rate, every two years at a rate that satisfies the requirements of the amendment. The bill establishes the residential assessment rate at 7.96 percent for tax years 2009 and 2010, the same rate in place since 2003. Senator Sandoval explained the provisions of the bill and referred questions to Ms. JoAnn Groff.

The following person testified:

12:09 PM -- Ms. JoAnn Groff, the Colorado Property Tax Administrator, testified and was available to answer committee questions. She distributed a handout about the residential assessment rate (Attachment E). Ms. Groff explained that the law compels that every two years, the Office of the Property Tax Administrator must conduct a study about the residential assessment rate. She stated the recent study illustrates that the assessment rate would actually be 8.85 percent if the provisions of the Gallagher Amendment were applied. However, she explained that TABOR stipulates that any increase of an assessment ratio must go to a vote of the people. Ms. Groff continued, saying that the legislature has maintained the rate at 7.96 percent. She responded to questions from the committee about the increase in the assessment rate, and discussed residential values and the current economic environment.

12:14 PM

Senator Hudak closed public testimony.


BILL:	HB09-1360
TIME:	12:14:58 PM
MOVED:	Sandoval
MOTION:	Refer House Bill 09-1360 to the Committee of the Whole. The motion passed 6-0, with one excused.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Excused
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

12:14 PM -- House Bill 09-1346

Senator Shaffer, prime sponsor, presented House Bill 09-1346 which clarifies the process for public entities in Colorado to take advantage of financing mechanisms provided under the federal economic stimulus package. The bill also specifies how federally-established caps on the volume of bonds will be administered. By way of background, public entities that issue stimulus bonds or borrow money under a capped program must report how much of their allocation is used, so any unused capacity can be reallocated. The bill allows two or more public entities to act jointly to issue stimulus bonds.

Senator Shaffer explained that the bill enables the state and school districts to finance more projects and allows agencies to obtain lower-cost financing. He stated that education finance would be a priority and provided background information about the Building Excellent Schools Today (BEST) program.

The following person testified:

12:18 PM -- Ms. Mary Wickersham, representing the Colorado Department of the Treasury, testified in support of the bill. She explained that the bill will allow public entities access to bond financing that is subsidized by the federal government. Ms. Wickersham explained the bond programs and responded to questions about state bonds and interest rates.

12:23 PM

Senator Sandoval closed public testimony.


BILL:	HB09-1346
TIME:	12:23:49 PM
MOVED:	Hudak
MOTION:	Refer House Bill 09-1346 to the Committee of the Whole with a recommendation that it be placed on the consent calendar. The motion passed 5-2.
SECONDED:
		VOTE
	Brophy	No
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	No
	Hudak	Yes
	Sandoval	Yes

Final YES: 5 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:25 PM

The committee recessed, and Senator Sandoval stated it would reconvene at 2:30 p.m.

02:38 PM

The committee reconvened.

02:38 PM -- House Bill 09-1288

Senator Kopp, prime sponsor, presented House Bill 09-1288. This bill was amended by the Senate Finance Committee on April 28, 2009, by adopting Amendment L.007 (Attachment F) and was laid over for further consideration. The bill requires the Governor's Office of Information Technology (OIT) to create and maintain a searchable database with revenue and expenditure data from the state's Financial Data Warehouse (FDW), a tool that allows users to obtain information from the state's accounting system.

Senator Kopp discussed the bill and distributed a copy of Amendment L.009 (Attachment G).

02:40 PM -- Ms. Dara Hesse and Mr. Dave Cuneo, representing the Governor's Office of Information Technology (OIT), were available to answer committee questions. They responded to questions about the bill and the executive order. Mr. Cuneo responded to questions about the level of detail in the database. He stated that the department is trying to develop a web page that would provide the information at an aggregate level to better explain the information to the public. He explained that providing detailed information would involve listing line items from accounting documents that may not be clear to the public.

02:45 PM

Ms. Hesse continued to discuss the language in the bill and Amendment L.007. The committee discussed the usage of "identical." The panel also responded to questions about the Colorado Open Records Act, otherwise known as CORA, and Amendment L.007. Mr. Cuneo further explained that detailed data would involve the downloading of millions of line items from accounting documents, which may not provide the information in a way that is accessible to the public.

02:50 PM

Senator Kopp responded to questions from the committee about the bill's language, and discussed the fiscal note. The panel from OIT responded to questions about the language in Amendment L.007. Mr. Cuneo also responded to additional questions about what the web page would provide, and explained that some financial information would remain confidential.

02:56 PM

Senator Sandoval closed public testimony.


BILL:	HB09-1288
TIME:	02:56:35 PM
MOVED:	King K.
MOTION:	Adopt Amendment L.009 (Attachment G). The motion passed without objection.
SECONDED:
		VOTE
	Brophy
	Heath
	Isgar
	King K.
	Scheffel
	Hudak
	Sandoval

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


BILL:	HB09-1288
TIME:	02:59:21 PM
MOVED:	King K.
MOTION:	Refer House Bill 09-1288, as amended, to the Committee on Appropriations. The motion passed 7-0.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Yes
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

03:01 PM -- House Bill 09-1342

Senator Williams and Senator Boyd, co-prime sponsors, presented House Bill 09-1342. The bill eliminates the state sales and use tax exemption on the sale of cigarettes for two fiscal years starting on July 1, 2009, and maintains the exemption for counties, statutory municipalities, and special districts.

Senator Boyd began by stating that the legislature is looking for fiscal solutions in difficult economic times. She explained that the exemption would apply to two fiscal years, and discussed additional revenue and the fiscal note. She also discussed the vendor fee and an amendment she planned to offer. Senator Boyd explained that Colorado was unique in having a sales tax exemption for cigarettes and that other states do not have this exemption. She distributed a copy of Amendment L.009 (Attachment H) and Amendment L.010 (Attachment I) to the committee.

The bill sponsors responded to questions about the elimination of the tax. Committee discussion ensued about the vendor fee.

03:08 PM

Mr. Ed DeCecco, Office of Legislative Legal Services (OLLS), came to the table to discuss the bill. He responded to questions from the committee about the language on page 11 and the vendor fee. The committee continued discussing the vendor fee.

The following persons testified:

03:11 PM -- Mr. Grier Bailey, representing the Colorado Wyoming Petroleum Marketers Association, testified against the bill. He distributed a handout about cigarette taxes in Colorado (Attachment J). Mr. Bailey shared his views about the proposed amendments. He stated that the tax policy issue would have to be examined again in two years. Mr. Bailey also shared his concerns that increasing taxes may encourage more contraband activities for cigarettes, and also stated that tobacco demand has decreased one to two percent every year. He said that the majority of the individuals that smoke make under $40,000 per year and shared his concerns about addressing fiscal issues in a way that impacts these individuals.

03:17 PM -- Mr. Phil Horwitz, representing the Colorado Department of Revenue, responded to committee questions about the vendor fee issue.

03:19 PM

Senator Sandoval closed public testimony.


BILL:	HB09-1342
TIME:	03:20:20 PM
MOVED:	Heath
MOTION:	Moved a conceptual amendment to eliminate the sales tax exemption for cigarettes permanently. The committee discussed this amendment and the bill sponsors also shared their thoughts. The motion failed 3-4.
SECONDED:
		VOTE
	Brophy	No
	Heath	Yes
	Isgar	Yes
	King K.	No
	Scheffel	No
	Hudak	Yes
	Sandoval	No

Not Final YES: 3 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB09-1342
TIME:	03:25:17 PM
MOVED:	Hudak
MOTION:	Adopt Amendment L.009 (Attachment H). The motion passed without objection.
SECONDED:
		VOTE
	Brophy
	Heath
	Isgar
	King K.
	Scheffel
	Hudak
	Sandoval

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


BILL:	HB09-1342
TIME:	03:26:05 PM
MOVED:	Hudak
MOTION:	Adopt Amendment L.010 (Attachment I). The motion passed 4-3.
SECONDED:
		VOTE
	Brophy	No
	Heath	Yes
	Isgar	Yes
	King K.	No
	Scheffel	No
	Hudak	Yes
	Sandoval	Yes

Not Final YES: 4 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB09-1342
TIME:	03:26:32 PM
MOVED:	Hudak
MOTION:	Refer House Bill 09-1342, as amended, to the Committee on Appropriations. The motion passed 4-3.
SECONDED:
		VOTE
	Brophy	No
	Heath	Yes
	Isgar	Yes
	King K.	No
	Scheffel	No
	Hudak	Yes
	Sandoval	Yes

Final YES: 4 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:26 PM

The committee adjourned.