House Committee on Finance (04/24/2013)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	04/24/2013	ATTENDANCE

Time:	01:49 PM to 06:03 PM	DelGrosso	X
		Foote	X
Place:	HCR 0112	Joshi	X
		Kagan	X
This Meeting was called to order by		May	X
	Representative Court	Melton	X
		Pabon	X
This Report was prepared by		Priola	X
	Ron Kirk	Saine	X
		Swalm	X
		Wilson	X
		Labuda	X
		Court	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB13-1319 SB13-176 HB13-1059 HB13-1274 HB13-1295 HB13-1312 HB13-1288 HCR13-1001		Referred to the Committee of the Whole Referred to Business, Labor, Economic, & Workforce Development Postponed Indefinitely Amended, Referred to Appropriations Amended, Referred to Appropriations Postponed Indefinitely Amended, Referred to Appropriations Postponed Indefinitely

01:49 PM -- House Bill 13-1319 - Concerning the Residential Assessment Rate

Representative Court, prime sponsor, explained that House Bill 13-1319 sets the ratio of valuation for assessment for residential property taxes for tax years 2013 and 2014 at 7.96 percent, unchanged from the prior assessment period. Representative Court provided a history on the rate changes and asked that staff respond to questions regarding the calculation of the rate.

The following person testified:

01:50 PM -- Ms. JoAnn Groff, State Property Tax Administrator, Division of Property Taxation, discussed the history and calculation of the residential assessment rate.


BILL:	HB13-1319
TIME:	01:53:03 PM
MOVED:	Court
MOTION:	Refer House Bill 13-1319 to the Committee of the Whole. The motion passed on a vote of 12-0.
SECONDED:	Labuda
		VOTE
	DelGrosso	Yes
	Foote	Yes
	Joshi	Yes
	Kagan	Yes
	May	Yes
	Melton	Yes
	Pabon	Excused
	Priola	Yes
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	Yes
	Court	Yes

Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

01:54 PM -- Senate Bill 13-176 - Concerning the Investment of Money in the State of Israel

On behalf of Representatives Everett and Williams, prime sponsors, Representative Court moved Senate Bill 13-176 to the committee on Business, Labor, Economic, and Workforce Development saying that it was the committee of reference that would hear initial testimony on the bill, rather than the House Finance Committee.


BILL:	SB13-176
TIME:	01:54:21 PM
MOVED:	Court
MOTION:	Refer Senate Bill 13-176 to the committee on Business, Labor, Economic, and Workforce Development. The motion passed on a vote of 11-1.
SECONDED:	Labuda
		VOTE
	DelGrosso	Yes
	Foote	Yes
	Joshi	Yes
	Kagan	Yes
	May	Yes
	Melton	Yes
	Pabon	Excused
	Priola	Yes
	Saine	No
	Swalm	Yes
	Wilson	Yes
	Labuda	Yes
	Court	Yes

Final YES: 11 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS

01:55 PM -- House Bill 13-1059 - Regarding a Sales and Use Tax Exemption for Telecommunications Providers

Representative Gerou, prime sponsor, explained the provisions of the bill. She noted that House Bill 13-1059 exempts from state sales and use taxes any equipment used by a telecommunications company to provide broadband internet services in Colorado. Sales taxes are charged on goods purchased in Colorado; use taxes are charged on goods purchased elsewhere. After a brief committee discussion, the following action was taken:


BILL:	HB13-1059
TIME:	02:09:09 PM
MOVED:	DelGrosso
MOTION:	Refer House Bill 13-1059 to the Committee on Appropriations. The motion failed on a vote of 6-7.
SECONDED:	Swalm
		VOTE
	DelGrosso	Yes
	Foote	No
	Joshi	Yes
	Kagan	No
	May	No
	Melton	No
	Pabon	No
	Priola	Yes
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	No
	Court	No

YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB13-1059
TIME:	02:12:21 PM
MOVED:	Pabon
MOTION:	Postpone House Bill 13-1059 indefinitely. The motion passed on a vote of 7-6.
SECONDED:	Court
		VOTE
	DelGrosso	No
	Foote	Yes
	Joshi	No
	Kagan	Yes
	May	Yes
	Melton	Yes
	Pabon	Yes
	Priola	No
	Saine	No
	Swalm	No
	Wilson	No
	Labuda	Yes
	Court	Yes

Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:25 PM -- House Bill 13-1274 - Regarding the State Board of Land Commissioners

Representative Hullinghorst, prime sponsor, explained that House Bill 13-1274 authorizes the State Treasurer to enter into one or more lease-purchase agreements for a period of up to 25 years on behalf of the State Board of Land Commissioners for the acquisition, construction, renovation, and improvement of commercial real property. The bill specifies that it is the intent of the General Assembly that any commercial real property purchased in this manner will be leased as office space for state agencies or other tenants.

The following persons testified:

02:27 PM -- Mr. Bill Ryan, representing the State Board of Land Commissioners, spoke in support of the bill and discussed the role of the State Board of Land Commissioners to help fund K-12 education. He also identified organizations that support the bill and responded to questions from the committee about the impact of the bill on commercial property rental companies and the role of the State Treasurer in drafting the bill. He also discussed the laws that determine how the board allocates revenue to its trustees and responded to questions from the committee about legislative oversight over the board's investments.

02:30 PM -- Ms. Karin Wick, representing the Colorado Land Alliance and the Colorado Education Association, spoke in support of the bill.


BILL:	HB13-1274
TIME:	02:31:06 PM
MOVED:	Court
MOTION:	Moved Amendment L.001 (Attachment A). The motion passed without objection. 13HseFin0424AttachA.pdf
SECONDED:	Melton
		VOTE
	DelGrosso
	Foote
	Joshi
	Kagan
	May
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB13-1274
TIME:	02:31:47 PM
MOVED:	Court
MOTION:	Moved Amendment L.003 (Attachment B). The motion passed without objection. 13HseFin0424AttachB.pdf
SECONDED:	Labuda
		VOTE
	DelGrosso
	Foote
	Joshi
	Kagan
	May
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB13-1274
TIME:	02:33:40 PM
MOVED:	Court
MOTION:	Refer House Bill 13-1274, as amended, to the Committee on Appropriations. The motion passed on a vote of 7-6.
SECONDED:	Melton
		VOTE
	DelGrosso	No
	Foote	Yes
	Joshi	No
	Kagan	Yes
	May	Yes
	Melton	Yes
	Pabon	Yes
	Priola	No
	Saine	No
	Swalm	No
	Wilson	No
	Labuda	Yes
	Court	Yes

Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:44 PM -- House Bill 13-1295 - Concerning the Marketplace Fairness Act of 2013

Representative Ferrandino, prime sponsor, explained the provisions of the bill. He noted that House Bill 13-1295 simplifies the collection of sales taxes from out-of-state retailers to meet the requirements of federal legislation known as the "Marketplace Fairness Act." The Department of Revenue would be responsible for collecting and auditing sales taxes from out-of-state retailers, and distributing this revenue to the appropriate local taxing jurisdiction. Home-rule jurisdictions are not allowed to administer sales taxes from out-of-state retailers under the federal act. Representative Ferrandino closed by saying that sales taxes will be calculated based on the location of where the order was shipped to or the billing address.

After a brief discussion on local control and definitions in the bill, staff was asked to respond to committee questions.

02:49 PM -- Ms. Esther van Mourik, Office of Legislative Legal Services, responded to questions about the definitions in the bill.

The following persons testified:

02:56 PM -- Mr. Chris Howes, representing the Colorado Retail Council, testified in support of the bill.

02:59 PM -- Mr. Forrest Worthan, representing himself, testified in support of the bill.

03:03 PM -- Mr. Grant Nelson, representing the International Council of Shopping Centers, testified in support of the bill.

03:07 PM -- Mr. Richard Kaufman, representing shopathome.com, testified in support of the bill.
`
03:08 PM -- Ms. Pam Feeley, representing herself, testified in support of the bill.

03:11 PM -- Mr. Geoff Wilson, representing the Colorado Municipal League, testified in support of the bill.


BILL:	HB13-1295
TIME:	03:14:37 PM
MOVED:	Court
MOTION:	Moved Amendment L.001 (Attachment C). The motion passed without objection. 13HseFin0424AttachC.pdf
SECONDED:	Labuda
		VOTE
	DelGrosso
	Foote
	Joshi
	Kagan
	May
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB13-1295
TIME:	03:16:44 PM
MOVED:	Court
MOTION:	Moved Amendment L.002 (Attachment D). The motion passed without objection. 13HseFin0424AttachD.pdf
SECONDED:	Labuda
		VOTE
	DelGrosso
	Foote
	Joshi
	Kagan
	May
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB13-1295
TIME:	03:17:25 PM
MOVED:	Court
MOTION:	Refer House Bill 13-1295, as amended, to the Committee on Appropriations. The motion passed on a vote of 7-6.
SECONDED:	Kagan
		VOTE
	DelGrosso	No
	Foote	Yes
	Joshi	No
	Kagan	Yes
	May	Yes
	Melton	Yes
	Pabon	Yes
	Priola	No
	Saine	No
	Swalm	No
	Wilson	No
	Labuda	Yes
	Court	Yes

Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:20 PM -- House Bill 13-1312 - Concerning the Collection of Sales Taxes on Internet Purchases

Representative Williams, prime sponsor, distributed a packet of materials on House Bill 13-1312 (Attachment E) and explained the provisions of the bill. She began by saying that House Bill 13-1312 expands the definition of "nexus" for sales tax purposes, broadening the types of business activities that create taxable sales. Specifically, this bill expands the definition of nexus to include certain methods of delivering a taxable good or providing services through an agreement with an in-state company. In addition, the bill creates a presumption that an out-of-state retailer has substantial nexus, requires an out-of-state retailer to collect and remit sales taxes if that retailer contracts with the state, and requires legislative approval of any agreement that relieves an out-of-state retailer with substantial nexus from collecting sales taxes.

13HseFin0424AttachE.pdf

The committee discussed the Congressional standard for nexus under the 1992 "Quill" case, and the precedent that House Bill 13-1312 would establish given the court rulings pertaining to online sales tax collection. After a brief committee discussion, the committee heard testimony.

The following persons testified:

03:29 PM -- Mr. Adam Chase, representing the Colorado Retail Council, responded to questions about litigation and testified in support of the bill. The committee discussed whether the bill would be challenged by the courts. The committee discussed the "Quill" decision and the requirement that there must be a physical presence of the remote seller to require the collection of sales taxes. The committee continued to discuss legal issues tied to online sales.

03:55 PM -- Mr. Chris Howes, representing the Colorado Retail Council, testified in support of the bill.
03:58 PM -- Mr. Richard Kaufman, representing shopathome.com, testified in opposition to the bill.

04:03 PM -- Ms. Luralei Martin, representing Little Feet, testified in support of the bill.

04:07 PM -- Mr. Paul Garretson, representing the Garretson Sport Center Company, testified in support of the bill.

04:08 PM -- Mr. James Walker, representing the James Walker Studio Gallery, testified in support of the bill.

04:10 PM -- Ms. Linda Hunter, representing Johannes Hunter Jewelers , testified in support of the bill.

04:13 PM -- Mr. Mizraim Cordero, representing the Colorado Competitive Council, testified in support of the bill.

04:15 PM -- Mr. Bill Mueldener, representing Hein & Associates, testified in opposition to the bill. Mr. Mueldener responded to questions about federal legislation that is tied to the constitutional issues of nexus and the collection of online sales taxes. He closed by saying that the federal Congress has the right to regulate interstate commerce and will ultimately decide the issues that fall under House Bill 13-1312.

04:27 PM -- Mr. Joe Covell, representing Lawrence Covell, testified in support of the bill.


BILL:	HB13-1312
TIME:	04:29:35 PM
MOVED:	Court
MOTION:	Refer House Bill 13-1312 to the Committee of the Whole. The motion failed on a vote of 5-8.
SECONDED:	Melton
		VOTE
	DelGrosso	No
	Foote	Yes
	Joshi	No
	Kagan	No
	May	No
	Melton	Yes
	Pabon	Yes
	Priola	No
	Saine	No
	Swalm	No
	Wilson	No
	Labuda	Yes
	Court	Yes

YES: 5 NO: 8 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB13-1312
TIME:	04:38:07 PM
MOVED:	Swalm
MOTION:	Moved to postpone House Bill 13-1312 indefinitely. The motion passed on a vote of 8-5.
SECONDED:	Joshi
		VOTE
	DelGrosso	Yes
	Foote	No
	Joshi	Yes
	Kagan	Yes
	May	Yes
	Melton	No
	Pabon	No
	Priola	Yes
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	No
	Court	No

Final YES: 8 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:49 PM -- House Bill 13-1288 - Concerning A Uniform Sales Tax Base

Representative Kagan and Representative Conti, prime sponsors, explained the provisions of the bill. Representative Kagan explained that House Bill 13-1288 requires the Department of Revenue with collaboration from organizations that represent counties and municipalities, to prepare a report by December 31, 2013 that: identifies the sales tax exemptions for each jurisdiction across the state, estimates the revenue associated with each exemption, determines how a uniform sales tax base can be revenue neutral for the state and local taxing jurisdictions, and makes recommendations to the General Assembly to establish a uniform sales tax base. Representative Conti noted that the study will be beneficial to the state.

The following persons testified:

05:10 PM -- Mr. Phil Horwitz, representing the Colorado Department of Revenue, responded to questions from the committee.

05:16 PM -- Mr. Jack Lanz, representing himself, testified in support of the bill.

05:17 PM -- Ms. Brooke Delgado, representing herself, testified in support of the bill.

05:23 PM -- Ms. Gini Pingenot, representing Colorado Counties Inc., testified in support of the bill.

05:24 PM -- Mr. R. J. Hicks, representing the Metro North Chamber, testified in support of the bill.

05:26 PM -- Mr. Chris Howes, representing the Colorado Retail Council, testified in support of the bill.

05:26 PM -- Mr. Geoff Wilson, representing the Colorado Municipal League, testified in support of the bill.

05:29 PM -- Mr. Ryan Woods, representing himself, testified in support of the bill.


BILL:	HB13-1288
TIME:	05:29:23 PM
MOVED:	Kagan
MOTION:	Moved amendment L.001 (Attachment F). The motion passed without objection. 13HseFin0424AttachF.pdf
SECONDED:	Court
		VOTE
	DelGrosso
	Foote
	Joshi
	Kagan
	May
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB13-1288
TIME:	05:33:00 PM
MOVED:	Kagan
MOTION:	Refer House Bill 13-1288, as amended, to the Committee on Appropriations. The motion passed on a vote of 12-0.
SECONDED:	Court
		VOTE
	DelGrosso	Yes
	Foote	Yes
	Joshi	Yes
	Kagan	Yes
	May	Yes
	Melton	Excused
	Pabon	Yes
	Priola	Yes
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	Yes
	Court	Yes

Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

05:36 PM -- HCR 13-1001 - Concerning the Senior Homestead Exemption

Representative Scott, prime sponsor, distributed a handout on House Concurrent Resolution 13-1001 (Attachment G) and noted that it extends the benefits of the senior property tax exemption to seniors who already qualify for the exemption but have to move because of a disability. The committee engaged in a discussion on a number of issues that were tied to the exemption that are not affected by HCR 13-1001. After a brief discussion, the committee heard testimony.

13HseFin0424AttachG.pdf

The following persons testified:

05:43 PM -- Mr. Herb Homan, representing the Colorado Senior Lobby, testified in opposition to the resolution because it leaves a number of issues related to the exemption unanswered.

05:47 PM -- Mr. Paul Jacobs and Mr. Dave Wissel, both representing the Colorado Assessor's Association, testified in opposition to the bill.

05:57 PM -- Ms. JoAnn Groff, State Property Tax Administrator, did not take a position on the legislation and responded to committee questions.


BILL:	HCR 13-1001
TIME:	06:01:47 PM
MOVED:	Labuda
MOTION:	Moved Amendment L.001 (Attachment H). The motion passed without objection. 13HseFin0424AttachH.pdf
SECONDED:	DelGrosso
		VOTE
	DelGrosso
	Foote
	Joshi
	Kagan
	May
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HCR 13-1001
TIME:	06:02:40 PM
MOVED:	Labuda
MOTION:	Motion to postpone House Joint Resolution 13-1001 indefinitely. The motion passed on a vote of 8-2.
SECONDED:	Pabon
		VOTE
	DelGrosso	Yes
	Foote	Yes
	Joshi	Yes
	Kagan	Yes
	May	Yes
	Melton	Excused
	Pabon	Yes
	Priola	Excused
	Saine	Excused
	Swalm	No
	Wilson	No
	Labuda	Yes
	Court	Yes

Final YES: 8 NO: 2 EXC: 3 ABS: 0 FINAL ACTION: PASS

06:03 PM

The committee adjourned.