Bill Summary for Bill Number SB10-155

Date: 03/17/2010

Final
BILL SUMMARY for SB10-155

HOUSE COMMITTEE ON FINANCE

Votes: View-->	Action Taken:
Refer Senate Bill 10-155 to the Committee of the W	PASS

11:31 AM -- Senate Bill 10-155 -- Concerning Limitations on the Issuance of Gift Cards

Representative Benefield, prime sponsor, presented Senate Bill 10-155. The bill establishes requirements for gift cards. She continued noting that the bill requires that issuers must redeem the card if the remaining value is less than $5. She closed by saying that the legislation prohibits an issuer from selling a gift card that has any type of service or maintenance fee.

The committee discussed whether there would be any unintended consequences should the bill pass. Representative Benefield responded by saying the bill would direct money to the Unclaimed Property Fund with the purpose of refunding money back to consumers.

Representative Gerou commented on the potential impact of the bill to businesses. She noted that the bill could have the potential to reduce taxes that businesses pay to the state. Representative Gerou noted that nationwide, there is $60 billion in total dollars that are attributed to the gift card industry. She continued by noting that Colorado businesses see fewer profits if service or maintenance fees cannot be charged by the respective business. Representative Gerou concluded by saying that if the bill prohibits a business from charging a service or maintenance fee, and the money adds to a business's bottom line, the business will have less taxable income and thus, pay less in state income taxes. Representative Gerou asked that the bill be taken off the table to allow the fiscal analyst time to calculate the General Fund revenue impact resulting from businesses paying less in corporate income taxes.

The following person testified:

11:42 AM -- Ms. Sara McPhee, Legislative Council Staff, responded to committee questions about the potential revenue impacts of the bill. She noted that quite a few retailers do not charge maintenance fees, but for those that do, those businesses would have their income tax liability reduced by the bill. Thus, there could be a potential reduction in corporate income tax revenue for the state. She closed by saying that the impact would be difficult to estimate.

11:47 AM

The committee temporarily laid over consideration of the bill to hear a presentation by the Office of Economic Development and International Trade on international trade developments.

11:48 AM -- Presentation by the Office of Economic Development and International Trade

Representative Judd, Chairman welcomed Ms. Pam Reichert, representing the Office of Economic Development and International Trade, to the meeting. She distributed a handout on the presentation (Attachment A). Ms. Reichert began by saying that in 2009, Colorado's exports declined 25 percent. She said that the financial crisis, an unprecedented decline in global demand, and a lack of export working capital contributed to the decline in exports.

Ms. Reichert continued to talk about the International Trade Policy Initiatives at the federal level and the promotional programs that are offered by the Colorado International Trade Office. She noted that in response to the recession, the office is meeting with many more Colorado companies looking to diversify and enter foreign markets. These companies can increase sales in a recessionary market that is seeing weak domestic demand. Ms. Reichert continued by saying that the grant programs stimulate international trade as the office had over 100 Colorado companies that have expressed interest in the grant program. Ms. Reichert closed by saying that the office has pending agreements with South American countries that may engage in trade with Colorado businesses.

The committee engaged in a brief discussion about transaction volume in the export markets and the creation of new jobs. Ms. Reichert responded by saying that for every $80,000 in export market transactions, one new job is created. She continued by saying that many of these jobs are highly paid due to the educational requirements of the specific job.

The committee closed the discussion on international trade developments in Colorado.

11:55 AM -- Senate Bill 10-155 -- Concerning Limitations on the Issuance of Gift Cards

The committee resumed consideration of Senate Bill 10-155. A brief discussion continued. Representative Judd, Chairman, placed the bill on the table for action.


BILL:	SB10-155
TIME:	11:55:41 AM
MOVED:	Benefield
MOTION:	Refer Senate Bill 10-155 to the Committee of the Whole. The motion passed on a 7-3 vote, with one excused.
SECONDED:	Kagan
		VOTE
	DelGrosso	No
	Frangas	Yes
	Gerou	No
	Kagan	Yes
	Kefalas	Yes
	Labuda	Yes
	Roberts	Excused
	Summers	Yes
	Swalm	No
	Benefield	Yes
	Judd	Yes

Final YES: 7 NO: 3 EXC: 1 ABS: 0 FINAL ACTION: PASS

12:00 PM

Adjourn.