House Committee on Finance (02/19/2014)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	02/19/2014	ATTENDANCE

Time:	01:33 PM to 06:54 PM	Becker	X
		DelGrosso	E
Place:	LSB A	Foote	X
		Joshi	X
This Meeting was called to order by		Kagan	*
	Representative Court	Melton	X
		Pabon	X
This Report was prepared by		Priola	X
	Matt Kiszka	Saine	X
		Swalm	X
		Wilson	X
		Labuda	X
		Court	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB14-1017 HB14-1203 HB14-1195 HB14-1094 HB14-1097		Amended, Referred to Appropriations Amended, Referred to Appropriations Referred to Appropriations Amended, Referred to Appropriations Postponed Indefinitely

01:34 PM -- HB14-1017

Representative Court, Chair, called the meeting to order.

Representative Duran came to the table to present House Bill 14-1017. She started with a summary of increased housing costs and decreased property availability since the flood of 2013. She stated that the bill makes several changes to both the Home Investment Trust Fund and Housing Development Grant Fund under the Division of Housing (DOH), as well as restoring an income tax credit to owners of qualified low-income housing developments. Representative Duran read some statements from different stakeholders in Colorado who will be affected by the bill. Representative Duran responded to questions about the bill on the removal of the provision that the trust fund be governed by federal regulations, the federal and state portions of funding received by the two funds, how the funding for this bill might affect the funds that go to the State Education Fund, and the fiscal note for the bill.

01:53 PM -- Pat Coyle, Division Director, representing the Department of Local Affairs (DOLA), spoke in favor of the bill. He summarized the changes that the bill makes to existing statute, and why the state is seeing a growing need for affordable housing, noting that 144,000 households in Colorado are currently paying 35 percent of their income to rent because incomes have remained flat and rent has increased. Mr. Coyle responded to questions on the underlying issues in the housing market that the bill will affect, and whether matching federal dollars will be lost by decoupling the fund from regulation.

02:03 PM -- Cris White, representing the Colorado Housing and Finance Authority (CHFA), came to the table to speak in support of the bill. He spoke to the people that the CHFA serves, the different housing improvements that the association has made to the market in Colorado, and how the CHFA operates. Mr. White stated that the CHFA is in need of resources, and that this bill would help it address the housing issues that the state is experiencing. Mr. White responded to questions on the current funding that the CHFA has at its disposal.

02:09 PM -- Peter Lawrence, representing Novogradac & Company, spoke in favor of the bill. He summarized the public accountancy firm that he represents, and its activity within the housing market. He spoke to nationwide real estate market issues and the affordability of housing that is available to people in the U.S. and Colorado, and added that the bill would help to alleviate these problems. Mr. Lawrence responded to a question on how far back the federal program credit goes.

02:17 PM -- Cris White returned to the table to speak to Amendment L.007 (Attachment A), and summarized the changes it makes to the bill. Mr. White responded to questions on the parameters of the Low-Income Housing Tax Credit, which developments might qualify for the credit, how credits will be allocated, penalties for developer non-compliance with the terms of the credit, and the considerations made by CHFA of transit-oriented development sites.

14HseFin0219AttachA.pdf

02:33 PM -- Jerilynn Martinez, representing CHFA, came to the table to speak to projects in the state that had received the federal credit and that would benefit from the reinstatement of the Low-Income Housing Income Tax Credit.

02:34 PM -- Jeff Cunningham, representing Rubin Brown, spoke in favor of the bill. Mr. Brown spoke to the work he has done as a partner at a CPA firm with clients in the industry surrounding the Federal Low Income Housing Tax Credit, and how this credit has been a valuable source of funding for developers involved in low-income housing development. Mr. Brown stated that the bill would provide a potential additional source of capital for such developers operating in Colorado. He responded to questions on the current federal regulations that are in place for recipients of the federal tax credit, and the additional sources of funding to developers in Colorado.

02:40 PM -- George Awuor, representing the Bell Policy Center, spoke in favor of the bill. He distributed documentation summarizing his testimony (Attachment B).

14HseFin0219AttachB.pdf

02:45 PM -- Christina Johnson, representing the Colorado Cross Disability Coalition, spoke in support of the bill. Ms. Johnson commented on the importance of increased development of affordable and accessible housing in the state. Mr. White returned to the table to speak to CHFA's involvement in the development of accessible housing within its affordable housing development activities. Mr. Coyle returned to the table to address a question on whether or not there should be an additional requirement for the development of properties with increased accessibility within the bill.

02:52 PM -- Sara Reynolds, representing Housing Colorado, spoke in support of the bill. Ms. Reynolds focused on the economic impacts of affordable housing development, and how the bill would develop the economy of Colorado.

02:56 PM -- Dawn Russell, representing ADAPT, spoke in favor of the bill. Ms. Russell stated that the availability of affordable, accessible housing is the primary barrier for people with disabilities who currently live in assisted-living homes who are looking to move into their own homes. Ms. Russell responded to questions.

02:59 PM -- Anaya Robinson, representing Atlantis Community, spoke in favor of the bill. Ms. Robinson claimed that the bill would allow for the development of increased availability of affordable and accessible housing, providing those with disabilities with increased options.

03:03 PM -- Julie Farrar, representing the Colorado Developmental Disabilities Council, spoke in favor of the bill. Ms. Farrar pointed out that the population is rapidly aging, and that increased adaptability will benefit everyone as a whole.

03:04 PM -- David Zucker, representing the State Housing Board, spoke in favor of the bill. Mr. Zucker summarized his perspective on the bill as the chair of the State Housing Board, and responded to questions on increased availability of accessible housing. Mr. Coyle returned to the table to address a question on DOLA checks and balances involved in the subletting of affordable housing apartments.

03:13 PM

Amendment L.004 (Attachment C) was moved, and Representative Duran summarized the amendment for the committee.

14HseFin0219AttachC.pdf


BILL:	HB14-1017
TIME:	03:14:25 PM
MOVED:	Court
MOTION:	Adopt amendment L.004 The motion passed without objection.
SECONDED:	Labuda
		VOTE
	Becker
	DelGrosso	Excused
	Foote
	Joshi
	Kagan
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection

03:14 PM

Representative Becker distributed Amendment L.006 (Attachment D), explained the changes that it makes to the bill, and why it was drafted. The committee discussed the bill amendment.

14HseFin0219AttachD.pdf


BILL:	HB14-1017
TIME:	03:14:48 PM
MOVED:	Becker
MOTION:	Adopt amendment L.006 (Attachment D) The motion passed without objection.
SECONDED:	Pabon
		VOTE
	Becker
	DelGrosso	Excused
	Foote
	Joshi
	Kagan
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection

03:20 PM

Representative Duran explained Amendment L.007 (Attachment A) and committee questions ensued.


BILL:	HB14-1017
TIME:	03:18:30 PM
MOVED:	Court
MOTION:	Adopt amendment L.007 (Attachment A) The motion passed without objection.
SECONDED:	Becker
		VOTE
	Becker
	DelGrosso	Excused
	Foote
	Joshi
	Kagan
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection

03:20 PM

Representative Duran made her closing statement on the bill.


BILL:	HB14-1017
TIME:	03:21:13 PM
MOVED:	Court
MOTION:	Refer House Bill 14-1017, as amended, to the Committee on Appropriations. The motion passed on a vote of 7-5, with 1 member excused.
SECONDED:	Pabon
		VOTE
	Becker	Yes
	DelGrosso	Excused
	Foote	Yes
	Joshi	No
	Kagan	Yes
	Melton	Yes
	Pabon	Yes
	Priola	No
	Saine	No
	Swalm	No
	Wilson	No
	Labuda	Yes
	Court	Yes

YES: 7 NO: 5 EXC: 1 ABS: 0 FINAL ACTION: PASS

03:26 PM -- HB14-1203

Representative Duran presented House Bill 14-1203, which was recommended by the Joint Budget Committee, and establishes a $3.5 million annual appropriation beginning in FY 2013-14 and continuing for 12 years from the General Fund and the Highway Users Tax Fund (HUTF) to replace legacy radio equipment and hardware at radio tower sites that are part of the Digital Trunked Radio System (DTRS).

03:27 PM -- Kurt Schleger, representing Elbert County, spoke in favor of the bill. Mr. Schleger said that the DTRS is one of the most important tools to first responders in the state, and that the state has not yet funded keeping the technology up to date. He responded to a question on federal funding of the DTRS, which he said is no longer available.

03:27 PM -- Peg Ackerman, representing County Sheriffs of Colorado, spoke in favor of the bill. Ms. Ackerman stated that much of the DTRS technology was originally purchased with Homeland Security dollars, and that existing technology is in need of an upgrade and maintenance.

03:29 PM -- Norman Weeks, representing the Governor's Office of Information Technology, spoke in favor of the bill. Mr. Weeks described the DTRS, the function it serves in the state, and why additional funding is needed for it.

03:32 PM

Representative Duran responded to questions on the fiscal note for the bill, the number of users of the DTRS and the specific DTRS hardware that the bill is addressing. She distributed and described Amendment L.001 (Attachment E).

14HseFin0219AttachE.pdf


BILL:	HB14-1203
TIME:	03:38:03 PM
MOVED:	Court
MOTION:	Adopt amendment L.001 (Attachment E) The motion passed without objection.
SECONDED:	Kagan
		VOTE
	Becker
	DelGrosso	Excused
	Foote
	Joshi
	Kagan
	Melton
	Pabon
	Priola
	Saine
	Swalm
	Wilson
	Labuda
	Court

YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB14-1203
TIME:	03:38:49 PM
MOVED:	Court
MOTION:	Refer House Bill 14-1203, as amended, to the Committee on Appropriations. The motion passed on a vote of 11-0, with 2 members excused.
SECONDED:	Saine
		VOTE
	Becker	Yes
	DelGrosso	Excused
	Foote	Yes
	Joshi	Yes
	Kagan	Yes
	Melton	Yes
	Pabon	Yes
	Priola	Excused
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	Yes
	Court	Yes

YES: 11 NO: 0 EXC: 2 ABS: 0 FINAL ACTION: PASS

03:39 PM -- HB14-1195

Representative Gerou presented House Bill 14-1195, explaining that under current law, the Division of Insurance in the Department of Regulatory Agencies collects insurance premium taxes, penalties, and fines, which are deposited in the General Fund, with a portion of these funds being transferred to various cash funds. She explained that HB14-1195, recommended by the Joint Budget Committee, clarifies that the General Assembly controls the amount of money from this revenue source that is transferred to the Division of Insurance Cash Fund, the Wildfire Preparedness Fund, and the Wildfire Emergency Response Fund. Representative Gerou responded to a question on the funding of the Division of Insurance Cash Fund.


BILL:	HB14-1195
TIME:	03:43:38 PM
MOVED:	Court
MOTION:	Refer House Bill 14-1195 to the Committee on Appropriations. The motion passed on a vote of 10-0, with 3 members excused.
SECONDED:	Swalm
		VOTE
	Becker	Yes
	DelGrosso	Excused
	Foote	Yes
	Joshi	Yes
	Kagan	Yes
	Melton	Yes
	Pabon	Yes
	Priola	Excused
	Saine	Excused
	Swalm	Yes
	Wilson	Yes
	Labuda	Yes
	Court	Yes

YES: 10 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS

03:44 PM -- HB14-1094

Representative Pabon introduced House Bill 14-1094. He stated that it creates a "sales tax holiday" on the first weekend in August for five consecutive years, beginning in the first August after a fiscal year in which the March revenue forecast indicates that General Fund revenue exceeds $8.5 billion. Representative Pabon spoke to how the bill would benefit children and parents in the state, why a sales tax holiday is needed, and highlighted the impact of similar tax holidays in other states. He told the committee that the tax holiday would apply to any school supply with a sales price not exceeding $50 and any article of clothing with a sales price not exceeding $75. He responded to questions on how the tax holiday will affect state education funding, the potential for an economic gain in the state through the sales tax holiday, and which items will be exempt from the sales tax holiday.

03:59 PM

Representative Pabon read a letter from one of his constituents to the committee (Attachment F), and responded to questions on the school supply items that children in Colorado must provide themselves, whether there are penalties for children and their parents that do not take part in the purchase of school supplies, and what the percentage is of overall school supplies that are estimated to be purchased outside the proposed sales tax holiday.

14HseFin0219AttachF.pdf

04:08 PM -- Larson Silbaugh, Legislative Council Staff, came to the table to address a question on the assumptions of the fiscal note for increased sales during the proposed sales tax holiday, and the estimated sales that will ensue outside the month of August. Committee discussion ensued. Representative Pabon responded to a question on the timing of the sales and use tax holiday.

04:13 PM -- Chris Howes, president, representing the Colorado Retail Council, spoke in favor of the bill. Mr. Howes stated that the Colorado Retail Council believes the fiscal note is incorrect and that the bill will actually lead to a revenue gain for the state. Mr. Howes provided some letters from numerous industry stakeholders in support of the bill (Attachment G). Mr. Howes showed the committee a brief video on the benefits of back-to-school sales and use tax holidays in other states. Mr. Howes responded to questions, and the committee discussed the overall fiscal impact of the bill upon the state.

14HseFin0219AttachG.pdf

04:28 PM -- Bill Cisney, representing himself, spoke in favor of the bill. He stated that he sees the bill as a token gesture to illustrate that the state still believes in subsidized education. Mr. Cisney responded to a question on the amount of the discount that the sales tax exemption would provide and whether it would be enough of an incentive to parents in the state. Committee discussion ensued.

04:34 PM -- Eileen McCarron, representing herself, spoke in favor of the bill. She stated that, as a teacher, the sales tax holiday would have been very helpful for her in providing supplies for her students.

04:38 PM -- Deborah Kaller and Michael McGuire spoke in favor of the bill, representing themselves. Ms. Kaller noted that she and her husband, Mr. McGuire, are both volunteers in K-12 schools in Colorado, and believe that the bill would greatly benefit families in Colorado. Mr. McGuire added some observations that he had made volunteering in local schools of the lack of supplies available to students. Ms. Kaller and Mr. McGuire responded to questions.

04:46 PM

The committee discussed how the bill will increase the affordability of school supplies.

04:47 PM -- George Awuor, representing the Bell Policy Center, spoke against the bill. He stated that sales tax holidays are not good tax policy, and distributed a summary letter to the committee (Attachment H). Mr. Awuor highlighted sales tax holidays that have been repealed in other states.

14HseFin0219AttachH.pdf

04:51 PM -- Ali Mickelson, representing the Colorado Fiscal Institute (CFI), spoke against the bill. Ms. Mickelson testified that there are studies which have been performed by CFI that show that sales tax holidays are bad tax policy. She added that tax holidays provide little economic benefit, and reduce a state's ability to fund its programs. Ms. Mickelson responded to a question on why states that currently have sales tax holidays are keeping them in state law if they are not of benefit to the state.

04:54 PM

Representative Priola moved Amendment L.012 (Attachment I) and explained that it changes the eligibility period of the sales and use tax holiday. Committee discussion ensued.

14HseFin0219AttachI.pdf


BILL:	HB14-1094
TIME:	04:58:53 PM
MOVED:	Priola
MOTION:	Adopt amendment L.012 (Attachment I) The motion failed on a vote of 4-8, with 1 member excused.
SECONDED:	Joshi
		VOTE
	Becker	No
	DelGrosso	Excused
	Foote	No
	Joshi	Yes
	Kagan	No
	Melton	No
	Pabon	No
	Priola	Yes
	Saine	Yes
	Swalm	Yes
	Wilson	No
	Labuda	No
	Court	No

YES: 4 NO: 8 EXC: 1 ABS: 0 FINAL ACTION: FAIL

05:03 PM

Representative Pabon moved Amendment L.011 (Attachment J) and described it to the committee. Committee discussion ensued.

14HseFin0219AttachJ.pdf


BILL:	HB14-1094
TIME:	05:06:31 PM
MOVED:	Pabon
MOTION:	Adopt amendment L.011 (Attachment J) The motion passed on a vote of 11-1, with 1 member excused.
SECONDED:	Melton
		VOTE
	Becker	Yes
	DelGrosso	Excused
	Foote	Yes
	Joshi	Yes
	Kagan	Yes
	Melton	Yes
	Pabon	Yes
	Priola	No
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	Yes
	Court	Yes

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

05:08 PM

Representative Pabon made his closing comments and the committee discussed the merits of the bill.


BILL:	HB14-1094
TIME:	05:12:05 PM
MOVED:	Pabon
MOTION:	Refer House Bill 14-1094, as amended, to the Committee on Appropriations. The motion passed on a vote of 11-1, with 1 member excused.
SECONDED:	Priola
		VOTE
	Becker	Yes
	DelGrosso	Excused
	Foote	No
	Joshi	Yes
	Kagan	Yes
	Melton	Yes
	Pabon	Yes
	Priola	Yes
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	Yes
	Court	Yes

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

05:20 PM

The committee went into a brief recess.

05:22 PM -- HB14-1097

Representative Navarro came to the table to present House Bill 14-1097. She stated that the bill creates a "sales tax holiday" for firearms and firearm accessories during the first Friday and Saturday of August starting in 2014 and going through 2016. On the first Friday and Saturday of August, firearms, ammunition, and firearm accessories would be exempt from sales and use taxes if the vendor chooses to participate in the holiday. Representative Navarro added that the bill would help the firearms industry at a time when it most needs it. She responded to questions on whether firearm dealers are seeing increased or decreased sales in the state, what the impact of the bill would be on rural Colorado, and who the bill will benefit.

05:35 PM

The committee discussed hunting in the state, and if the bill would attract people from other states to buy firearms in Colorado and make hunting trips to the state.

05:56 PM

The committee continued to discuss the bill and the hunting habits of Colorado residents.

05:59 PM -- Eileen McCarron, representing Colorado Ceasefire, spoke against the bill. She stated that the gun industry is not in need of subsidization or increased sales, and that the proposed sales tax holiday would not benefit the state. Ms. McCarron responded to questions.

06:07 PM -- Ali Mickleson, representing the Colorado Fiscal Institute, and George Awuor, representing the Bell Policy Center, came to the table to speak against the bill. They stated that they were against the bill for the same reasons they were against House Bill 14-1094, noting that they considered it to be bad tax policy.

06:10 PM -- Michael McGuire, representing himself, spoke against the bill, noting his reasons for disagreeing with the proposed sales tax holiday. Mr. McGuire responded to questions on the funding of Colorado Parks and Wildlife.

06:20 PM -- Steve Schreiner, representing the Firearms Coalition of Colorado, spoke in support of the bill, and provided a leaflet on Colorado sportsmen and women to the committee (Attachment K). Mr. Schreiner responded to questions.

14HseFin0219AttachK.pdf

06:28 PM

Representative Navarro provided closing comments on the bill, and the committee discussed its merits.

06:45 PM

The committee continued to discuss the merits of the bill and hunting in Colorado.


BILL:	HB14-1097
TIME:	06:51:01 PM
MOVED:	Priola
MOTION:	Refer House Bill 14-1097 to the Committee on Appropriations. The motion failed on a vote of 5-7, with 1 member excused.
SECONDED:	Saine
		VOTE
	Becker	No
	DelGrosso	Excused
	Foote	No
	Joshi	Yes
	Kagan	No
	Melton	No
	Pabon	No
	Priola	Yes
	Saine	Yes
	Swalm	Yes
	Wilson	Yes
	Labuda	No
	Court	No

YES: 5 NO: 7 EXC: 1 ABS: 0 FINAL ACTION: FAIL


BILL:	HB14-1097
TIME:	06:52:01 PM
MOVED:	Labuda
MOTION:	Postpone House Bill 14-1097 indefinitely. The motion passed on a vote of 7-5, with 1 member excused.
SECONDED:	Melton
		VOTE
	Becker	Yes
	DelGrosso	Excused
	Foote	Yes
	Joshi	No
	Kagan	Yes
	Melton	Yes
	Pabon	Yes
	Priola	No
	Saine	No
	Swalm	No
	Wilson	No
	Labuda	Yes
	Court	Yes

YES: 7 NO: 5 EXC: 1 ABS: 0 FINAL ACTION: PASS

06:53 PM

The meeting was adjourned.