Final
STAFF SUMMARY OF MEETING
HOUSE COMMITTEE ON FINANCE
| Date: | 03/19/2014 | ATTENDANCE |
 | | | |
| Time: | 01:35 PM to 07:52 PM | Becker | * |
| | DelGrosso | X |
| Place: | LSB A | Foote | X |
| | Joshi | X |
| This Meeting was called to order by | Kagan | * |
| Representative Court | Melton | X |
| Pabon | * |
| This Report was prepared by | Priola | * |
| 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: | |
HB14-1263
SB14-027
SB14-054
HB14-1279
HB14-1305
HB14-1014 | Postponed Indefinitely
Referred to Appropriations
Amended, Referred to the Committee of the Whole
Amended, Referred to Appropriations
Amended, Referred to Appropriations
Amended, Referred to Appropriations |
01:36 PM -- HB14-1263
Representative Court, Chair, called the meeting to order.
Representatives McCann and Gerou came to the table to present House Bill 14-1263. The hearing began with witness testimony, following on the bill's initial hearing on March 19, 2014.
01:38 PM -- Grier Baily, representing the Colorado Wyoming Petroleum Marketers Association (CWPMA), spoke against the bill. He stated that the bill would result in compliance issues for retailers that sell cigarettes and that the state will collect less revenue through sales and excise taxes and the Master Settlement Agreement under the new legislation. He added that the CWPMA opposes the bill because it targets the wrong community and will lead to increased law enforcement issues. Mr. Baily responded to questions on existing smoking laws and the enforcement of these laws, and whether he would be in support of the bill if stricter enforcement of tobacco laws were implemented.
01:50 PM
The bill sponsors responded to a question on why the bill incorporated a phase-in process for the new law. They responded that this was out of fairness to existing smokers who are already addicted to cigarettes. They also spoke to questions on the fiscal impact of the bill.
01:55 PM -- Brian Soule, representing himself, spoke against the bill. Mr. Soule stated that he is a former combat veteran, and wanted to speak on behalf of other combat veterans between the ages of 18 to 20 that smoke. He outlined the reasons that he believed the bill would unfairly effect this group of individuals, and added that the bill would result in reduced tax revenue, as cigarettes are the only taxed item sold on military bases.
01:58 PM -- Cindy Liverance, representing the American Lung Association of Colorado, spoke in support of the bill. Ms. Liverance spoke to the health care costs for smoking-related diseases, and the vulnerable populations in the state that would be more protected by the bill. Ms. Liverance responded to questions surrounding the measures that can be taken to prevent teenagers from smoking.
02:04 PM -- Bob Doyle, representing the Colorado Tobacco Education and Prevention Alliance, spoke in favor of the bill. Mr. Doyle outlined smoking rates in the state and how employers are looking for fewer employees who smoke, because of increased health care costs linked to the habit.
02:06 PM -- Jodi Radke, representing the Campaign for Tobacco-Free Kids, spoke in favor of the bill. She stated that the fiscal note does not account for the financial burdens to the state for the health care costs associated with smoking-related diseases, and that the bill will help reduce the costs to the state that arise from smoking. She also outlined the per-person costs associated with smoking in the state of Colorado. She responded to questions on a statistic she cited, similar legislation enacted in other states and nations, what individuals will purchase instead of cigarettes when they stop smoking, her response to Mr. Soule's testimony on how the bill would affect those in the military, and how people under 18 purchasing sweets and sodas instead of cigarettes might affect state revenue.
02:27 PM
Ms. Radke also addressed questions on the rate of alcohol consumption in teenagers and the enforcement of state laws surrounding this.
02:29 PM
Representative McCann made her closing comments, and responded to witness testimony provided in opposition to the bill.
02:36 PM
The committee discussed the merits of the bill.
| |
| BILL: | HB14-1263 | |
| TIME: | 02:48:00 PM |
| MOVED: | Court |
| MOTION: | Refer House Bill 14-1263 to the Committee on Appropriations. The motion failed on a vote of 6-7. |
| SECONDED: | Labuda |
| VOTE |
| Becker | Yes |
| DelGrosso | No |
| Foote | Yes |
| Joshi | No |
| Kagan | No |
| Melton | Yes |
| Pabon | Yes |
| Priola | No |
| Saine | No |
| Swalm | No |
| Wilson | No |
| Labuda | Yes |
| Court | Yes |
| | |
YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL |
| |
| BILL: | HB14-1263 | |
| TIME: | 02:49:33 PM |
| MOVED: | Priola |
| MOTION: | Postpone House Bill 14-1263 indefinitely. The motion passed on a vote of 9-3, with 1 member excused. |
| SECONDED: | Kagan |
| VOTE |
| Becker | Excused |
| DelGrosso | Yes |
| Foote | No |
| Joshi | Yes |
| Kagan | Yes |
| Melton | Yes |
| Pabon | Yes |
| Priola | Yes |
| Saine | Yes |
| Swalm | Yes |
| Wilson | Yes |
| Labuda | No |
| Court | No |
| | |
YES: 9 NO: 3 EXC: 1 ABS: 0 FINAL ACTION: PASS |
02:50 PM -- SB14-027
Representative Lee came to the table to present Senate Bill 14-027, which he explained authorizes the Colorado Supreme Court to request a criminal history background check from the Colorado Bureau of Investigation (CBI) in the Department of Public Safety as part of the licensing process for attorneys. In addition, the bill requires a person who wishes to be appointed as a child family investigator to undergo a background check through the CBI at his or her own expense. Representative Lee responded to questions on why the background check is required.
02:54 PM -- Patrick Broadhead, representing the Colorado State Judicial Branch, spoke in favor of the bill. He stated that the bill requires the applicant to pay the background check fee, and therefore brings in more revenue than it would expend. He responded to a question on what the background check fee covers.
02:56 PM
The committee took a brief recess.
02:57 PM
Representative Lee made his closing comments on the bill.
| |
| BILL: | SB14-027 | |
| TIME: | 02:57:56 PM |
| MOVED: | Court |
| MOTION: | Refer Senate Bill 14-027 to the Committee on Appropriations. The motion passed on a vote of 10-2, with 1 member absent. |
| SECONDED: | Kagan |
| VOTE |
| Becker | Yes |
| DelGrosso | Yes |
| Foote | Yes |
| Joshi | Yes |
| Kagan | Yes |
| Melton | Absent |
| Pabon | Yes |
| Priola | No |
| Saine | No |
| Swalm | Yes |
| Wilson | Yes |
| Labuda | Yes |
| Court | Yes |
| | |
YES: 10 NO: 2 EXC: 0 ABS: 1 FINAL ACTION: PASS |
02:59 PM -- SB14-054
Representative Pabon came to the table to present Senate Bill 14-054, and explained that under current law, an alcoholic beverage licensee or permit holder may petition the state or local liquor licensing authority for permission to pay a fine in lieu of a suspension of 14 days or less under certain circumstances. This option is allowed no more than once every two years. He stated that the bill gives state and local liquor licensing authorities the ability to accept a fine in lieu of a suspension of any number of days so long as the license or permit has not been revoked during the previous two years. He added that the bill could save jobs in the industry. He responded to questions on the fine that license holders would pay under the bill, and the limits to a licensee's option to pay the fine.
03:10 PM
Representative Pabon distributed Amendment L.001 (Attachment A), which he explained cleans up some language in the bill surrounding the revocation of licenses. Committee discussion of local authority discretion over infraction fines and suspension ensued.
14HseFin0319AttachA.pdf
03:14 PM -- David Reitz, representing the Tavern League of Colorado, spoke in favor of the bill. He spoke to the changes to statute made by the bill, and how alcohol license suspensions and revocations would be affected. He responded to questions on existing fines for infractions made by alcohol license holders, and existing statute surrounding this issue.
03:21 PM -- Jeanne McEvoy, representing the Colorado Licensed Beverage Association, spoke in favor of the bill. She provided a personal story to the committee as a former liquor store owner who had her license suspended.
| |
| BILL: | SB14-054 | |
| TIME: | 03:26:10 PM |
| MOVED: | Pabon |
| MOTION: | Refer Senate Bill 14-054, as amended, to the Committee of the Whole. The motion passed on a vote of 13-0. |
| SECONDED: | Saine |
| VOTE |
| Becker | Yes |
| DelGrosso | Yes |
| Foote | Yes |
| Joshi | Yes |
| Kagan | Yes |
| Melton | Yes |
| Pabon | Yes |
| Priola | Yes |
| Saine | Yes |
| Swalm | Yes |
| Wilson | Yes |
| Labuda | Yes |
| Court | Yes |
| | |
YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS |
03:29 PM -- HB14-1279
Representatives Primavera and Young came to the table to present House Bill 14-1279. A document summarizing the bill was distributed to the committee (Attachment B). They explained that the bill creates a state income tax credit for businesses for the amount of business personal property tax paid in Colorado. The credit is equal to the amount of business personal property tax paid, less the value of the tax benefit received by the taxpayer from deducting these taxes from his or her federal taxable income. The Representatives explained that the credit is available in tax year 2014 only to businesses with $25,000 or less of personal property, but this threshold is adjusted annually for inflation thereafter. They responded to questions on the dollar threshold of the credit and whether nonprofit companies would qualify for the credit.
14HseFin0319AttachB.pdf
03:38 PM
Ed DeCecco, Office of Legislative Legal Services, came to the table to respond to a question on the sunset date for the tax credit.
03:39 PM
Todd Herreid, Legislative Council Staff, came to the table to speak to questions on the fiscal note for the bill, and current income tax exemptions available to small businesses. Representative Young spoke to a question on how much money the state is anticipating returning to small businesses through the bill. Committee discussion ensued.
03:46 PM
Mr. Herreid responded to a question on the FTE requirements of the bill laid out in the fiscal note. Mr. DeCecco responded to questions on whether the bill applies to non-profits.
03:52 PM -- Tim Hoover, representing the Colorado Fiscal Institute (CFI), spoke against the bill. He stated that CFI is against the bill because it is unfair to state taxpayers as it uses state tax dollars to reimburse local property taxes. Mr. Hoover added that the bill will create administrative issues for the Department of Revenue, and will only benefit small businesses to a small degree. He distributed his written testimony to the committee (Attachment C) and responded to questions.
14HseFin0319AttachC.pdf
04:01 PM -- Patrick Boyle, representing the Colorado Competitive Council, spoke in favor of the bill. He stated that the business personal property tax is one of the worst tax policies in Colorado, and that the bill would work towards reducing the negative impact that it has on small business in the state. Mr. Boyle responded to questions on the business personal property tax, how businesses will likely spend the tax credit, and whether local governments could institute a business personal property tax of their own.
04:16 PM -- Mark Turner, representing the Colorado Nonprofit Association, spoke in support of the bill.
04:17 PM -- Herbert Holman, representing himself, spoke against the bill. He stated that he feels the fiscal impact of the bill was glossed over in previous committee hearings, and made an appeal to the committee and the legislature to fund a tax code review that he believes is sorely needed.
| |
| BILL: | HB14-1279 | |
| TIME: | 04:27:03 PM |
| MOVED: | Court |
| MOTION: | Adopt amendment L.003 (Attachment D). The motion passed without objection.
 14HseFin0319AttachD.pdf
|
| SECONDED: | Melton |
| VOTE |
| Becker | No |
| DelGrosso | No |
| Foote | No |
| Joshi | No |
| Kagan | No |
| Melton | No |
| Pabon | No |
| Priola | No |
| Saine | No |
| Swalm | No |
| Wilson | No |
| Labuda | No |
| Court | No |
| | |
YES: 0 NO: 13 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection |
04:27 PM
The bill sponsors made their closing comments and the committee discussed the merits of the bill.
| |
| BILL: | HB14-1279 | |
| TIME: | 04:35:39 PM |
| MOVED: | Pabon |
| MOTION: | Refer House Bill 14-1279, as amended, to the Committee on Appropriations. The motion passed on a vote of 11-2. |
| SECONDED: | Melton |
| VOTE |
| Becker | Yes |
| DelGrosso | Yes |
| Foote | Yes |
| Joshi | No |
| Kagan | Yes |
| Melton | Yes |
| Pabon | Yes |
| Priola | Yes |
| Saine | Yes |
| Swalm | Yes |
| Wilson | Yes |
| Labuda | No |
| Court | Yes |
| | |
YES: 11 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS |
04:36 PM
The committee went into a brief recess.
04:45 PM -- HB14-1305
Representatives Sonnenberg and McCann came to the table to present House Bill 14-1305. They explained that the bill allows a renewable energy company with Enterprise Zone Investment Tax Credits (ITC) to annually elect to receive a refund of the credit. The amount of the refund is equal to 85 cents for every one dollar of ITC credit. The refund for any company is capped at $2.5 million per tax year. If the company does elect to receive a refund, they are required to sign a one-time affidavit with the Colorado Economic Development Commission stating the company's intent to make further renewable investments within five years.
04:52 PM
Representative Sonnenberg stated that the bill does not create a new tax credit or expand an existing one, but in fact creates a saving for the state, and spoke to the fiscal impact of the bill. He responded to questions on how renewable energy companies with Enterprise Zone Investment Tax Credits can elect to receive a refund of the credit under the bill at a reduced rate, how companies may carry the tax credit forward, and the nature of reinvestments that qualifying and participating companies must make under the bill. Committee discussion ensued.
05:05 PM
The bill sponsors responded to questions on the requirement in the bill for participating companies to state that they intend to reinvest in Colorado and which companies qualify for the tax credit refund.
05:09 PM
Esther van Mourik, Office of Legislative Legal Services, came to the table to speak to the definitions of renewable energy laid out in statute that relate to the bill and the Renewable Portfolio Standard.
05:13 PM
Louis Pino, Legislative Council Staff, came to the table to respond to questions on the fiscal note for the bill, whether companies can still receive the ITC, and whether companies other than renewable energy companies might qualify for the credit.
05:18 PM
The bill sponsors responded to questions on other types of companies that could qualify for the credit. Committee discussion on how companies might utilize the tax credit refund ensued.
05:24 PM -- Kevin Gildea and Kerry Hattevik, representing Next Era Energy Resources, spoke in favor of the bill. Ms. Hattevik outlined the reasons that Next Era supports the bill and stated that the bill will allow the company to do more business in Colorado. She responded to questions on the Colorado tax code. Mr. Gildea responded to a question on the tax benefits received by companies like Next Era and the tax return that it must complete. The two witnesses responded to a question on whether Next Era can guarantee that any tax credit refunds received in Colorado can be guaranteed to be invested back into Colorado. Committee questioning and discussion ensued.
05:41 PM -- Anna Giovinetto, representing RES Americas, and Tom Darin, representing the American Wind Energy Association, spoke in favor of the bill. Ms. Giovinetto stated that the credit refund will allow RES Americas to reinvest in Colorado and more quickly monetize the ITC. Mr. Darin stated that Colorado is a very favorable environment for the development of different forms of renewable energy, and that the bill will advance this fact. The witnesses responded to questions on the size of the incentive of the credit refund, and the competitiveness of Colorado as a state in which to develop renewables.
05:52 PM -- Jeff Kraft, representing the Office of Economic Development and International Trade (OEDIT), came to the table and stated that OEDIT is neutral on the bill. Mr. Kraft raised some concerns that the office has with the bill, including the removal of the tax credit cap, the up-front monetization of the tax credit, and the precedent that the bill might set for tax policy in the state.
05:59 PM
Ms. van Mourik came to the table to speak to the ITC cap, how a taxpayer gets their carry-forward under current statute and the bill, and how the bill changes the ITC to a refundable credit. Committee discussion ensued.
06:10 PM
Mr. Kraft responded to questions on who will benefit most from the ITC refund, and the monetization of existing ITC credits. Committee discussion and questioning ensued.
06:18 PM
Carol Hedges, representing the Colorado Fiscal Institute, spoke against the bill. She stated that the problem with the bill is that it fundamentally changes the administration of the Enterprise Tax Zone Credit, making it an exception to the way that the state normally handles tax credits. She responded to questions on the tax liability of companies that qualify for the ITC.
06:27 PM
Representative DelGrosso moved Amendment L.001 (Attachment E) and the bill sponsors explained that it cuts the fiscal impact of the bill in half.
14HseFin0319AttachE.pdf
06:27 PM
Representative Priola moved and explained Amendment L.002 (Attachment F). He stated that the amendment firms up the language surrounding the affidavit that a company must reinvest the refund of the ITC in Colorado.
14HseFin0319AttachF.pdf
| |
| BILL: | HB14-1305 | |
| TIME: | 06:27:56 PM |
| MOVED: | Priola |
| MOTION: | Adopt amendment L.002 (Attachment F). The motion failed on a vote of 6-7. |
| SECONDED: | Melton |
| VOTE |
| Becker | Yes |
| DelGrosso | No |
| Foote | Yes |
| Joshi | Yes |
| Kagan | No |
| Melton | Yes |
| Pabon | No |
| Priola | Yes |
| Saine | No |
| Swalm | No |
| Wilson | Yes |
| Labuda | No |
| Court | No |
| | |
YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL |
06:30 PM
The bill sponsors made their closing comments on the bill and the committee discussed the merits of the bill.
| |
| BILL: | HB14-1305 | |
| TIME: | 06:40:10 PM |
| MOVED: | DelGrosso |
| MOTION: | Refer House Bill 14-1305, as amended, to the Committee on Appropriations. The motion passed on a vote of 7-6. |
| SECONDED: | Pabon |
| VOTE |
| Becker | No |
| DelGrosso | Yes |
| Foote | No |
| Joshi | Yes |
| Kagan | No |
| Melton | Yes |
| Pabon | Yes |
| Priola | Yes |
| Saine | No |
| Swalm | Yes |
| Wilson | Yes |
| Labuda | No |
| Court | No |
| | |
YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS |
06:41 PM -- HB14-1014
The committee went into a brief recess.
06:46 PM
Representatives DelGrosso and Kraft-Tharp came to the table to present House Bill 14-1014. They stated that, beginning with tax year 2014, HB14-1014 modifies the job growth incentive tax credit (JGITC) in the following ways:
• extends the period for which an employer may receive credits from 60 months (five years) to 96 months (eight years);
• lowers the requirement that wages for jobs generating the credit be at least 110 percent of the average wage in the county within which the jobs are created to 100 percent of the county's average wage; and
• alters the burden of proof that the credit was instrumental to the creation of said jobs; rather than stating that without the credit the jobs would likely not have been located in Colorado, the bill requires employers to state that without the credit the probability of locating the jobs in Colorado would be reduced.
They also spoke to the fiscal impact of the bill and how the state will be able to afford the modification of the tax credit. They responded to questions on the main intent of the bill and the changes it makes to the JGITC.
06:59 PM -- Carol Hedges, representing the Colorado Fiscal Institute, and Joshua Catalano, representing himself, spoke against the bill. Mr. Catalano spoke to the fiscal implications of the bill, stated that he believes the program would be economically harmful should the bill pass, and said that there is no evidence from other states that such programs are effective. Ms. Hedges stated that the existing tax credit does not incentivize companies to come to Colorado as it is not significant enough to effect the behavior of a business. She added that the removal of the requirement within the JGITC that a company state that without the credit the jobs would likely not have been located in Colorado (the "but-for" requirement) weakens the credit even further and its ability to pay for itself. Ms. Hedges responded to questions on the removal of the "but-for" aspect of the JGITC, and the fiscal note for the bill going out to FY 2027-28. Mr. Catalano responded to a request for his suggestion of alternative legislation to HB14-1014.
07:16 PM -- Patrick Boyle, representing the Colorado Competitive Council, Pam Reichert, representing the Metro Denver Economic Development Corporation, and Clif Harald, representing the Boulder Economic Council, spoke in favor of the bill. Ms. Reichert stated that the JGITC allows the state to hold on to companies that come to the state, that Colorado has seen an increase in companies opening their headquarters here, and that the lowering of wage requirements for the credit will be significant for rural Colorado. Mr. Harald stated that the JGITC program has been critical to the growth of the economy in Boulder, and spoke to the benefits that he believed local industry would see under the passage of the bill. Mr. Boyle said that the program is worthwhile because it requires job creation and does not provide companies with money without a return on investment.
07:26 PM -- Ken Lund and Michelle Hadwiger, representing the Office of Economic Development and International Trade (OEDIT), spoke in support of the bill. An illustration of the return on investment to Colorado from the JGITC (Attachment G) was distributed to the committee. Mr. Lund spoke to the successes of the program and stated that it was important to the state. Ms. Hadwiger outlined how OEDIT has administered the JGITC program since its inception in 2009. Mr. Lund walked the committee through illustrations of the JGITC provided in OEDIT's Attachment G. The witnesses responded to questions on how often the credit is used by existing companies versus companies newly moving to Colorado and whether the JGITC helps rural Colorado and the chronically unemployed.
14HseFin0319AttachG.pdf
07:43 PM
Representative DelGrosso spoke to the changes made by Amendment L.004 (Attachment H), which he stated cleans up the bill language.
14HseFin0319AttachH.pdf
07:45 PM
The bill sponsors made their closing comments.
| |
| BILL: | HB14-1014 | |
| TIME: | 07:48:27 PM |
| MOVED: | DelGrosso |
| MOTION: | Refer House Bill 14-1014, as amended, to the Committee on Appropriations. The motion passed on a vote of 10-3. |
| SECONDED: | Becker |
| VOTE |
| Becker | Yes |
| DelGrosso | Yes |
| Foote | Yes |
| Joshi | No |
| Kagan | Yes |
| Melton | Yes |
| Pabon | Yes |
| Priola | Yes |
| Saine | No |
| Swalm | Yes |
| Wilson | Yes |
| Labuda | No |
| Court | Yes |
| | |
YES: 10 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS |
07:52 PM
The committee was adjourned.