House Committee on Finance (04/14/2010)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	04/14/2010	ATTENDANCE

Time:	11:46 AM to 07:54 PM	DelGrosso	X
		Frangas	X
Place:	LSB A	Gerou	X
		Kagan	X
This Meeting was called to order by		Kefalas	X
	Representative Judd	Labuda	X
		Roberts	X
This Report was prepared by		Summers	X
	Ron Kirk	Swalm	X
		Benefield	X
		Judd	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HCR10-1003 HB10-1285 HB10-1287 HB10-1169		Amended, Referred to Appropriations Amended, Referred to Appropriations Amended, Referred to Appropriations Laid Over

11:49 AM -- HCR 10-1003 - Concerning a Constitutional Rainy Day Fund

Representative Curry, prime sponsor, explained the provisions of the bill and distributed amendment L.001 (Attachment A) and the severance tax forecast from Legislative Council Staff (Attachment B). She noted that the resolution submits to the voters in November 2010 an amendment to the state constitution to create the State Rainy Day Fund. Starting FY 2011-12, this concurrent resolution would credit $25 million in severance tax revenue to the fund in years when severance tax revenue exceeds $50 million.

The committee discussed the unintended consequences of establishing a constitutional rainy day fund. Representative Curry responded saying that there were more protections built into the constitutional approach than if a statutory fund were established by the General Assembly. After a brief committee discussion, testimony was heard.

The following persons testified:

12:02 PM -- Mr. Bill Clayton, representing Colorado Counties Incorporated (CCI), testified in opposition toward the bill. He closed by discussing the importance of severance tax revenue that is distributed to local governments such as counties.

12:07 PM -- Mr. Kevin Bommer, Colorado Municipal League (CML), testified. He did not take a position on the measure.

12:09 PM

Recess.

01:31 PM

The committee reconvened. It resumed consideration of HCR 10-1003.


BILL:	HCR10-1003
TIME:	01:31:26 PM
MOVED:	Benefield
MOTION:	Moved amendment L.001 (Attachment A). The motion passed without objection by those members present.
SECONDED:	Judd
		VOTE
	DelGrosso
	Frangas
	Gerou
	Kagan
	Kefalas
	Labuda
	Roberts
	Summers
	Swalm
	Benefield
	Judd

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


BILL:	HCR10-1003
TIME:	01:32:41 PM
MOVED:	Roberts
MOTION:	Refer House Concurrent Resolution 10-1003, as amended, to the Committee on Appropriations. The motion passed on a 10-1 vote.
SECONDED:	Kefalas
		VOTE
	DelGrosso	Yes
	Frangas	Yes
	Gerou	Yes
	Kagan	Yes
	Kefalas	Yes
	Labuda	No
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Benefield	Yes
	Judd	Yes

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

01:39 PM -- House Bill 10-1285 - Concerning Higher Fees on Commercial Class A Motor Vehicles

Representative Priola, prime sponsor, explained that House Bill 10-1285 raises the fines on commercial motor vehicles and uses the additional fine revenue to fund an existing sales tax refund and income tax credit for commercial investment in Colorado. He continued saying that neither tax incentive is available because they are conditional upon the executive director of the Department of Revenue providing written notice to the revisor of statues that a sustainable revenue source has been identified to pay for them. To date, a sustainable source of revenue has not been identified.

Representative Priola distributed Amendment L.002 (Attachment C) and a staff memorandum on the fiscal impact of the amendment (Attachment D). He noted that as amended by L.002, the bill caps the tax incentives at the amount of new fine revenue generated by the bill, thereby providing a sustainable revenue source for the incentives. The amendment also limits each tax incentive to truck tractors or semitrailers with a gross weight rating of fifty-four thousand pounds or greater designated as Class A personal property.

The following persons testified:

01:56 PM -- Mr. Greg Fulton, representing Colorado Motor Carriers Association, testified in support of the bill and distributed a handout on truck tractor registrations to the committee (Attachment E).

02:33 PM -- Mr. Jim Niedringhaus, representing MHC KenWorth, testified in support of the bill and discussed the jobs it would bring to Colorado.

02:37 PM -- Mr. Larry Wolf, representing HVH Transportation, testified in support of the bill.

02:40 PM -- Mr. Bruce Biggi, representing the City of Greeley and who is also the Economic Development Manager for the city, testified in support of the bill.


BILL:	HB10-1285
TIME:	02:45:11 PM
MOVED:	Gerou
MOTION:	Moved amendment L.002 (Attachment C). The motion passed without objection by those members present.
SECONDED:	DelGrosso
		VOTE
	DelGrosso
	Frangas
	Gerou
	Kagan
	Kefalas
	Labuda
	Roberts
	Summers
	Swalm
	Benefield
	Judd

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


BILL:	HB10-1285
TIME:	02:46:09 PM
MOVED:	Gerou
MOTION:	Refer House Bill 10-1285, as amended, to the Committee on Appropriations. The motion passed on a 9-2 vote.
SECONDED:	DelGrosso
		VOTE
	DelGrosso	Yes
	Frangas	Yes
	Gerou	Yes
	Kagan	Yes
	Kefalas	Yes
	Labuda	No
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Benefield	No
	Judd	Yes

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

02:53 PM -- House Bill 10-1287 - Concerning the Use of State Motor Vehicles

Representative Lambert, prime sponsor, explained that House Bill 10-1287, as amended by the House State Veterans & Military Affairs Committee, repeals a state agency's ability to waive reimbursement to the state for commuting. An exception from reimbursement is made for an officer or employee whose duties are routinely related to law enforcement and expose them to life-threatening situations.

Representative Lambert continued by saying that the bill also requires commuter program information to be reported each August to the Division of Central Services (DCS) within the Department of Personnel & Administration (DPA). He said that under the bill, any person who fails to reimburse the state for their participation in the commuter program before the annual August report is subject to a new civil penalty of twice the amount owed. The DCS is authorized to collect penalties and deposit them in a new Commuting Reimbursement Cash Fund.

Representative Lambert distributed amendment L.011 (Attachment F) and explained that it more clearly defines who is subject to the reimbursement requirements, based on aligning state statute with the Internal Revenue Code. He continued by saying that it directs the Department of Personnel and Administration to apply the Internal Revenue Code's lease-value methodology for determining the amount of individual reimbursements. After a brief committee discussion, testimony was heard.

The following persons testified:

03:30 PM -- Mr. Ari Zavaras, representing the Colorado Department of Corrections, testified in support of the bill as amended by amendment L.011.

03:44 AM -- Mr. Bobby Juchem, representing the Colorado State Patrol, responded to questions and expressed concerns about the bill's treatment of on-call responses by officers. In many circumstances, officers do work-related tasks on the commute to work.

03:57 PM -- Mr. Herman Stockinger, representing the Colorado Department of Transportation, responded to committee questions.

The committee engaged in a discussion about the definition of "home-office" by the Internal Revenue Service (IRS) and whether it is consistent with the amended bill. The discussion continued and a representative from the Colorado Department of Transportation responded to the discussion.


BILL:	HB10-1287
TIME:	04:00:06 PM
MOVED:	Kefalas
MOTION:	Moved amendment L.011 (Attachment F), and an amendment to the amendment (L.013) (Attachment G). The motion passed on a 11-0 vote.
SECONDED:	DelGrosso
		VOTE
	DelGrosso	Yes
	Frangas	Yes
	Gerou	Yes
	Kagan	Yes
	Kefalas	Yes
	Labuda	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Benefield	Yes
	Judd	Yes

Not Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB10-1287
TIME:	04:30:09 PM
MOVED:	Frangas
MOTION:	Moved amendment L.016 (Attachment H). The motion failed on a 9-2 vote.
SECONDED:	Labuda
		VOTE
	DelGrosso	No
	Frangas	Yes
	Gerou	No
	Kagan	No
	Kefalas	No
	Labuda	Yes
	Roberts	No
	Summers	No
	Swalm	No
	Benefield	No
	Judd	No

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


BILL:	HB10-1287
TIME:	04:15:59 PM
MOVED:	Labuda
MOTION:	Moved to sever amendment L.012 (Attachment I) (Severed Section B lines 11 through 21). The motion failed on a 8-3 vote.
SECONDED:	Benefield
		VOTE
	DelGrosso	No
	Frangas	Yes
	Gerou	No
	Kagan	No
	Kefalas	No
	Labuda	Yes
	Roberts	No
	Summers	No
	Swalm	No
	Benefield	Yes
	Judd	No

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


BILL:	HB10-1287
TIME:	04:02:20 PM
MOVED:	Benefield
MOTION:	Moved to sever amendment L.012 (Attachment I) (Severed Section A lines 1 through 10). The motion failed on a 8-3 vote.
SECONDED:	Labuda
		VOTE
	DelGrosso	No
	Frangas	No
	Gerou	No
	Kagan	No
	Kefalas	Yes
	Labuda	Yes
	Roberts	No
	Summers	No
	Swalm	No
	Benefield	Yes
	Judd	No

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


BILL:	HB10-1287
TIME:	04:39:36 PM
MOVED:	Kefalas
MOTION:	Refer House Bill 10-1287, as amended, to the Committee on Appropriations. The motion passed on a 10-1 vote.
SECONDED:	Kagan
		VOTE
	DelGrosso	Yes
	Frangas	Yes
	Gerou	Yes
	Kagan	Yes
	Kefalas	Yes
	Labuda	No
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Benefield	Yes
	Judd	Yes

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

04:43 PM

Recess.

04:48 PM -- House Bill 10-1169 - Concerning Conservation Easements

The committee reconvened.

Representative McKinley, prime sponsor, briefly explained the provisions of the bill. The bill affects the Executive Director of the Department of Revenue's ability to contest an appraisal and credit claimed for a conservation easement donated prior to January 1, 2008. An exception is made for a valuation that has been disallowed by the Internal Revenue Service (IRS) on or before July 31, 2010, and an appraisal performed by an appraiser who is convicted of fraud. Public testimony began.

The following persons testified:

05:00 PM -- Mr. John Swartout, representing Colorado Coalition of Land Trusts, testified in opposition of the bill.

05:06 PM -- Ms. Jillane Hixson, representing herself, testified in support of the bill. Ms. Hixson discussed her family's experience and challenges after they created a conservation easement and had the donation challenged by the Colorado Department of Revenue. She explained many of the costs associated with the department's demand for recapture of the credit and noted that after six years of dispute, she settled her tax issue with the Internal Revenue Service.

05:21 PM -- Mr. Jim Butcher, representing his land development company, described his experience with the state program and testified in support of the bill. Mr. Butcher discussed the process of creating the easement and spoke to the easement's appraised value. He closed by discussing his challenges to settle his demand for recapture of the credits with the Department of Revenue.

05:52 PM -- Mr. Jim Walker, representing himself as an attorney who represented a number of taxpayers who donated easements, testified in support of the bill. He noted that nearly 100 clients have pending challenges for recapture by the Department of Revenue that have not yet been resolved. Mr. Walker closed by saying the core problem is valuation and the use of the income approach to value property for purposes of valuing a conservation easement.

05:57 PM -- Mr. Trevor Ellis, representing Ellis International Services, testified in support of the bill.
,
06:07 PM -- Mr. Spencer Sprague, representing himself, testified in support of the bill and discussed appraisal techniques.

06:15 PM -- Mr. Ira Paulin, representing himself, testified in support of the legislation.

06:28 PM -- Mr. Howard Hallman, representing himself, testified in support of the bill and discussed the valuation of conservation easements.

06:31 PM -- Ms. Valerie Emick, representing herself, testified in support of the bill and discussed her experiences with conservation easements. She noted the costs that her family incurred by responding to letters of demand by the Department of Revenue.

06:46 PM -- Mr. Mark McDonald, representing himself, testified in support of the bill.

06:57 PM -- Ms. Deni Thompson, representing herself, testified in support of the bill and discussed the fiscal note.

07:01 PM -- Mr. Mark Couch, Department of Revenue, responded to committee questions. Mr. Couch noted that currently, the department is disputing $121 million in claims tied to conservation easements. Mr. Couch responded to questions about the ongoing disputes saying that the department may only resolve five denials per year. Mr. Couch responded to committee questions about the process saying that the department needs additional FTE to solve the disputed easement claims.

The committee engaged in a closing discussion about the funding in the long bill that will help address the backlog of disputed conservation easements. After a brief committee discussion, Representative Judd, Chairman, laid the bill over.

07:53 PM

Adjourn.