Senate Committee on Finance (02/26/2009)

Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON FINANCE

Date:	02/26/2009	ATTENDANCE

Time:	10:02 AM to 11:01 AM	Brophy	*
		Heath	*
Place:	SCR 354	Isgar	*
		King K.	X
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:
Conf 09-PERA Board HB09-1050 HB09-1257 HB09-1219 HB09-1265		Favorably Refer to the Full Senate Referred to the Committee of the Whole Referred to the Committee of the Whole Referred to the Committee of the Whole Referred to the Committee of the Whole

10:02 AM -- Confirmation to the PERA Board

Mr. Howard Crane, appointee to the Public Employees' Retirement Association (PERA) Board, described his background and interest in serving on the board. A copy of his appointment letter and resume was distributed to the committee (Attachment A). Mr. Crane also distributed a statement to the committee about his qualifications and background (Attachment B). Mr. Crane has completed one and a half years of service as a member of the PERA Board.

(Attachment A and Attachment B can be viewed at State Archives)

Mr. Crane stated that he has been an investment professional for 38 years. He explained that his educational background is in economics and applied mathematics. Mr. Crane also said he has worked extensively with investment and actuarial finance, serving as a Chief Investment Officer for Watson Wyatt, and has extensive experience managing large pension plans. Mr. Crane responded to questions from the committee about the current value of PERA's investments. He stated that the PERA board will need to evaluate actuarial conditions moving forward. Additional discussion ensued about the market, current financial obligations, and the value of PERA's investments.


BILL:	Confirmation to the PERA Board
TIME:	10:11:33 AM
MOVED:	Hudak
MOTION:	Refer Howard M. Crane with a favorable recommendation to the full Senate to serve on the Public Employees' Retirement Association Board for a term expiring July 10, 2012. The motion passed 6-0, with one excused.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Excused
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

10:12 AM -- House Bill 09-1050

Senator Tochtrop, prime sponsor, presented House Bill 09-1050. This bill will extend the voluntary tax check-off benefitting the Colorado Easter Seals Fund on the Colorado individual income tax form. The bill would extend the check-off from tax year 2009 to 2011.

The following persons testified on the bill:

10:13 AM -- Ms. Lynn Robinson, representing Easter Seals Colorado, testified in support of the bill. She provided the committee with a written statement about Easter Seals (Attachment C) and a letter supporting the checkoff from a Denver resident (Attachment D). Ms. Robinson stated that Easter Seals is the only organization that assists individuals with all disabilities. She explained that Easter Seals has programs in the areas of employment, physical fitness, and rehabilitation. She also said that Easter Seals provides one of the only stroke centers in the Denver Metro area. Ms. Robinson stated that one in five individuals will have a disability in their lifetime and the mission of Easter Seals is to respond to the needs of disabled individuals.

10:15 AM -- Ms. Mary Stites, representing herself, testified in support of the bill. Her son, Frank, also appeared before the committee. She stated that her family has benefited from Easter Seals for 15 years, and her son benefits from its programs every week. She stated that as a single mother, she would like to be able to continue to use these programs.

Ms. Robinson responded to questions from the committee about recent names changes for Easter Seals.

10:18 AM

Senator Sandoval closed public testimony.


BILL:	HB09-1050
TIME:	10:19:35 AM
MOVED:	Hudak
MOTION:	Refer House Bill 09-1050 to the Committee of the Whole with a recommendation it be placed on the consent calendar. The motion passed 6-0, with one excused.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Excused
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

10:20 AM -- House Bill 09-1257

Senator Scheffel, prime sponsor, presented House Bill 09-1257. This bill amends the current cap on public funds invested in a certificate of deposit (CD) in a bank or saving and loan association. The current cap in state law is set at $100,000. The bill states that the amount of public funds invested in a CD may not exceed the amount insured by the Federal Deposit Insurance Corporation (FDIC). Senator Scheffel explained that the FDIC limit has recently been increased from $100,000 to $250,000, and the bill allows the state limit on public funds invested in CDs to increase when the FDIC increases the amount insured.

The following person testified on the bill:

10:22 AM -- Ms. Barbara Walker, representing the Independent Bankers of Colorado, testified in support of the bill. She stated that the bill would allow for flexibility so that the public funding cap could adjust when a new cap is set by the FDIC.

10:22 AM

Senator Sandoval closed public testimony.


BILL:	HB09-1257
TIME:	10:23:11 AM
MOVED:	Scheffel
MOTION:	Refer House Bill 09-1257 to the Committee of the Whole with a recommendation that it be placed on the consent calendar. The motion passed 6-0, with one excused.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Excused
	Isgar	Yes
	King K.	Yes
	Scheffel	Yes
	Hudak	Yes
	Sandoval	Yes

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

10:23 AM -- House Bill 09-1219

Senator Sandoval, prime sponsor, presented House Bill 09-1219. This bill reduces the interest the Colorado Department of Revenue will pay on overpayments associated with corporate tax returns. The bill prohibits the payment of interest on overpayments of corporate income taxes that do not satisfy a bona fide estimate of tax liability. She explained that individual taxpayers are overpaying their taxes, which results in the state paying interest to these individuals from the date the tax is due. She stated this rate is prime rate plus 3 percent. Senator Sandoval stated DOR estimates that the agency is paying millions in interest for these tax overpayments.

Senator Sandoval responded to questions from the committee about the fiscal note.

The following person testified on the bill:

10:27 AM -- Mr. Phillip Horwitz, representing the Colorado Department of Revenue (DOR), responded to questions from the committee about how much interest the agency is paying to taxpayers and provided specific examples of tax overpayments. He stated that the agency has no way of knowing whether taxpayers are overpaying taxes on purpose. However, significant tax overpayments have resulted, he explained. He also explained that the department always has a burden of proof. Mr. Horwitz responded to additional questions about the burden of proof in these cases.

10:35 AM

Discussion ensued about the burden of proof, preponderance of evidence in these cases, and potential audit procedures. Discussion also ensued about lowering the interest rate for tax overpayments. Mr. Horwitz also responded to committee questions about potential litigation.

10:39 AM

Senator Hudak closed public testimony.


BILL:	HB09-1219
TIME:	10:41:22 AM
MOVED:	Sandoval
MOTION:	Refer House Bill 09-1219 to the Committee of the Whole. The motion passed 5-1, with one excused.
SECONDED:
		VOTE
	Brophy	Yes
	Heath	Excused
	Isgar	Yes
	King K.	Yes
	Scheffel	No
	Hudak	Yes
	Sandoval	Yes

Final YES: 5 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS

10:42 AM -- House Bill 09-1265

Senator King, prime sponsor, presented House Bill 09-1265. This bill would limit the number of years a tax abatement refund for nonprofit entities can include interest to two years. Under current law, a property tax abatement is given to certain nonprofit organizations, and when a taxing authority collects property taxes that are not actually owed, an interest refund may be awarded. Senator King explained that in some instances interest payments for tax overpayment of property taxes by nonprofit organizations have been significant, and this can cause financial strain for local jurisdictions.

The following persons testified on the bill:

10:44 AM -- Mr. John Lefebvre, representing the Colorado County Treasurers Association, testified in support of the bill. He stated that in most tax cases, the period of time for interest on abatement cases is two years. He explained that in some counties, interest being paid for property tax overpayments is greater than the revenue the entity receives. He also explained that paying these back taxes has resulted in a high cost for several school districts. He stated nonprofit entities should be on the same playing field.

Mr. Lefebvre responded to questions from the committee about nonprofit tax issues. Discussion ensued about the amount of abatement that has resulted. He provided examples to the committee about tax abatements. Discussion also ensued the type of nonprofit that is benefiting from these abatements.

10:52 AM

Senator King also discussed property tax impacts and tax abatement issues. Discussion ensued about the period of time that it takes to resolve tax abatement issues. Mr. Lefebvre further responded to questions from the committee about the amount of interest that local governments may pay to taxpayers.

10:57 AM -- Mr. Chris Mendez, representing Colorado Counties Inc., testified in support of the bill. He explained that the bill would not change the ability of an entity to gain nonprofit status, and that counties face difficult budgeting issues.

11:00 AM

Senator Sandoval closed public testimony.


BILL:	HB09-1265
TIME:	11:00:28 AM
MOVED:	King K.
MOTION:	Refer House Bill 09-1265 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

10:42 AM

The committee recessed.