Date: 01/29/2015

Final
BILL SUMMARY for HB15-1104

HOUSE COMMITTEE ON FINANCE

Votes: View--> Action Taken:
Adopt amendment L.001 (Attachment D). The motion p
Adopt amendment L.002 (Attachment E). The motion p
Refer House Bill 15-1104, as amended, to the Commi		Pass Without Objection
Pass Without Objection
PASS



11:04 AM -- HB15-1104

Representative Navarro introduced House Bill 15-1104. The bill creates a Colorado educator expense deduction, which would allow educators to deduct unreimbursed education expenses from Colorado income taxes beginning in tax year 2016. The committee discussed the TABOR impact of the bill along with how much the tax exemption benefits a specific teacher each year. Representative Navarro stated that even if the amount saved for each individual teacher is low, a reduction in the taxable income of teachers is helpful no matter the dollar amount. Representative Navarro clarified that the bill concerns a tax deduction, not a tax credit. The committee discussed the current status of the federal educator tax exemption.


11:12 AM -- Ms. Nicole Myers, Legislative Legal Services Attorney, clarified that the bill goes into effect only if the federal tax deduction ends.

Committee discussion on the benefits of the tax exemption to educators ensued.


11:17 AM

The committee discussed the tax deduction, its impact on the general fund, the bill's TABOR impact, and the negative factor. The negative factor reduces each school district's total program funding, and thus its per pupil funding, by a specified percentage determined by a targeted funding level.

11:22 AM -- Mr. Kevin Bronski, Senior Policy Analyst with the Colorado Department of Revenue, testified on the bill. Mr. Bronski addressed the breakdown of the FTE figure in the fiscal note. He stated that most of the associated FTE costs go toward related computer programming costs to add a new line item to the tax form. Responding to a question from the committee, Mr. Bronkski stated that availability of interest group help to taxpayers to help answer questions regarding the tax deduction was taken into account in determining the FTE figure. He noted that the deduction relatively simple.

11:32 AM -- Ms. Merry Martin, representing herself, testified in favor of the bill. She is an educator and principal. She noted that she spends much of her own money on instructional materials, especially art or science instructional supplies. As a principal, she noted all of her teachers spent money on their classrooms. She stated that approving this bill would send a statement that Colorado values its teachers. In response to the a question on whether teachers value the deduction, she noted that teachers understand the tax deduction and the message it sends about the value of their work. She responded to questions about teacher salaries.

11:41 AM -- Ms. Amie Baca-Oehlert, Vice President of the Colorado Education Association (CEA), testified in support of the bill. She noted that in the past CEA did not support bills that might take away from the goal of reducing the negative factor, but that in this instance, the CEA sees this bill as a modest supplemental approach that allows teachers to work hard for their students. She stated that teachers appreciate this small benefit. She noted that teachers understand that they are facing unfunded mandates and in response use their own financial resources for their classrooms. She recognizes that the bill is, at best, a patch, but that it shows that the General Assembly values and supports Colorado teachers.

11:46 AM -- Mr. Larson Silbaugh, Legislative Council Staff, came to the table to address committee questions regarding the federal business expense tax deduction. He noted the federal business expense deduction is only available for taxpayers who itemize, but itemization is not necessary for the federal educator expense deduction. Also, the requirements for what meets the Internal Revenue Service standards for a qualified business expense is much narrower than what is a qualified educator expense. Ms. Baca-Oehlert came back to the table to discuss itemized tax forms, teacher salaries, and whether a majority of teachers itemize on their taxes. Mr. Silbaugh noted that in tax year 2012, 62,000 Coloradoans claimed the federal educator expenses tax deduction.

Representative Garnett introduced amendment L.001 to the committee (Attachment D). The amendment limits the deduction to $250 per year.

15HouseFin0129AttachD.pdf15HouseFin0129AttachD.pdf
BILL:HB15-1104
TIME: 11:57:07 AM
MOVED:Garnett
MOTION: Adopt amendment L.001 (Attachment D). The motion passed without objection.
SECONDED:Court
VOTE
Becker K.
Conti
Garnett
Kagan
Landgraf
Pabon
Roupe
Van Winkle
Wilson
Foote
Court
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


Representative Garnett introduced amendment L.002 to the committee (Attachment E). The amendment shortens the length of the deduction's availability.

15HouseFin0129AttachE.pdf15HouseFin0129AttachE.pdf
BILL:HB15-1104
TIME: 11:59:31 AM
MOVED:Garnett
MOTION:Adopt amendment L.002 (Attachment E). The motion passed without objection.
SECONDED:Court
VOTE
Becker K.
Conti
Garnett
Kagan
Landgraf
Pabon
Roupe
Van Winkle
Wilson
Foote
Court
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


Committee discussion regarding the merits of the bill ensued.
BILL:HB15-1104
TIME: 12:02:05 PM
MOVED:Van Winkle
MOTION:Refer House Bill 15-1104, as amended, to the Committee on Appropriations. The motion passed on a vote of 9-2.
SECONDED:Pabon
VOTE
Becker K.
No
Conti
Yes
Garnett
Yes
Kagan
Yes
Landgraf
Yes
Pabon
Yes
Roupe
Yes
Van Winkle
Yes
Wilson
Yes
Foote
No
Court
Yes
FINAL YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS
12:19 PM

The committee adjourned.