Date: 12/13/2013

Final
Department of Revenue SMART Act Presentation

COMMITTEE ON JOINT FINANCE

Votes: View--> Action Taken:
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09:47 AM -- Department of Revenue SMART Act Presentation

Barbara Brohl, Executive Director, and Ron Kamerzell, Senior Enforcement Director, came to the table. Ms. Brohl distributed a copy of her presentation (Attachment C), and began with an overview of the department's recent operations and its strategic plan.

13JtFinance1213AttachC.pdf13JtFinance1213AttachC.pdf

09:53 AM

Representative Kagan asked Ms. Brohl about the Marijuana Inventory Tracking System and how this data can be made available to interested parties. He explained that he has local law enforcement parties interested in receiving this marijuana tracking data, and Ms. Brohl responded that although local law enforcement may want access to this data, the department needs to consider how this access might be provided appropriately with consideration to data security and IT functionality concerns. She said that the department would be happy to provide data that is needed, but it wants to be careful as to how the information is provided.

Representative Court asked if there was anything in current statute that would prevent the department from interfacing with local law enforcement. Ms. Brohl responded that there is not.


09:58 AM

Representative Becker asked for clarification on local law enforcement's access to the tracking system, and how different types of marijuana will be regulated and tracked. Ms. Brohl responded that the system is being developed and will be made available in a thoughtful and careful manner.

Committee discussion of the availability of license information and the Marijuana Inventory Tracking System ensued.


10:02 AM

Ms. Brohl continued with an overview of the Marijuana Enforcement Division's accomplishments, and provided a timeline of its activities. She distributed a summary outlining these accomplishments to the committee (Attachment D).

13JtFinance1213AttachD.pdf13JtFinance1213AttachD.pdf

Representative Labuda asked where individuals involved in marijuana cultivation as a business can bank. Ms. Brohl responded that there is no banking system for them because banks are all federally insured. Committee discussion of the business transactions of those involved in recreational and medical marijuana sales, and how this contradicts federal law, ensued.


10:14 AM

Ms. Brohl continued with her overview of the Marijuana Enforcement Division. She explained the division's seed-to-sale tracking system, known as the Marijuana Implementation Tracking System.

Representative Swalm asked if there should be concern with marijuana shops having large quantities of cash on premises. Mr. Kamerzell responded that this is a concern of the department, and that it has been working closely with local law enforcement and law enforcement representative groups to try and mitigate the associated risks for marijuana businesses. The committee went on to discuss this issue and the banking habits of marijuana business owners.


10:23 AM

Ms. Brohl proceeded with her overview of the Marijuana Enforcement Division's recent activities and items of consideration.


10:28 AM

Ms. Brohl next discussed the issue of children obtaining marijuana, and reassured the committee that the department has put a system in place that will prevent businesses from enticing children, and explained the measures that have been taken to prevent this. The committee discussed this issue at length, including the packaging of marijuana products, and how these products are marketed and regulated.


10:40 AM

Representative Kagan asked if sellers of marijuana have the right to seize fake identification from someone attempting to illegally purchase marijuana, much like sellers of alcohol may do. Mr. Kamerzell responded that the department is working towards this. Further committee discussion and questioning of current and intended marijuana regulation, especially in relation to the sale of marijuana to minors, ensued.


10:55 AM

Senator Johnston asked Ms. Brohl about the department's plan for the collection of online tax sales in Colorado following the recent Supreme Court decision for online sales and use tax collection in New York. Ms. Brohl stated that the department is waiting for the result of the injunction request from the district court case that the department was involved in, before taking any action.

John Vecchiarelli, Senior Director of Taxation, came to the table and stated that New York's law is substantially different from Colorado's law, and that they do not address the same thing. The department is prevented from taking action currently because of the injunction, which they have appealed. Committee discussion ensued.


10:58 AM

Ms. Brohl continued with her presentation, addressing the recent activities of the department in more detail, as well as the OSA's audit of the Colorado Lottery.

Ms. Brohl stated that a big area of focus for the department in 2013 was the Division of Motor Vehicles and a major improvement to the systems and processes of the division.

Representative Priola asked Ms. Brohl to explain how they were able to decrease license processing wait times so significantly. Ms. Brohl discussed the various initiatives that the department has considered and implemented for the division that have made division-wide improvements.


11:11 AM

Senator Grantham asked Ms. Brohl to address rural division offices and the long wait times that his constituents have suffered. Mike Dixon, Senior Director, Division of Motor Vehicles, came to the table and spoke to recent issues that outer regions of Colorado have experienced, and the solutions that the department has implemented to address this problem.

Ms. Brohl continued in her presentation, covering the activity within the Division of Motor Vehicles. She spoke to the high turnover rate that the department has experienced with driver's license examiners, and how they are addressing this.

Ms. Brohl explained that they have presented their technology improvement plans to the Joint Technology Committee and the Joint Budget Committee and have made appropriations requests for a number of system upgrades.


11:20 AM

Representative DelGrosso asked Ms. Brohl why the average waiting time for tax call center inquiries has gone up over the last year, and discussed his experience with a long wait time. Mr. Vechiarelli explained that the department has tried to reduce the number of calls that it blocks to avoid user frustration, which has increased the wait times somewhat, and that the department is working towards improving this.

Senator Grantham asked Mr. Vechiarelli to talk to conservation easements and the backlog that the state had for rejected and contested appraisals within the department. Mr. Vechiarelli responded that many accounts of disallowed credits have been resolved through legislation passed in 2013, and that he believes the department has the tools available to deal with the remaining unresolved credits, which are complex in nature. Committee questioning and discussion ensued.