Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:01/21/2015
ATTENDANCE
Time:01:35 PM to 04:02 PM
Becker K.
X
Dore
X
Place:LSB A
Garnett
X
Kagan
X
This Meeting was called to order by
Lawrence
X
Representative Court
Pabon
X
Roupe
X
This Report was prepared by
Van Winkle
X
Katie Ruedebusch
Wilson
X
Foote
X
Court
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
HB15-1012
HB15-1058		Amended, Referred to Transportation & Energy
Postponed Indefinitely


01:35 PM

Representative Court, Chair, called the meeting to order. Representative Court noted she had a student present to observe the meeting. Also, Representative Wilson introduced the Miami Yoder Student Council and their sponsor Ms. Sheila Hartley. The committee thanked the students for their attendance. Finally, Representative Dore and Representative Lawrence joined the committee for the meeting in place of excused members Representative Conti and Representative Priola.


01:37 PM -- HB15-1012, Sales and Use Tax Exemption for Dyed Diesel

Representative Becker, J., sponsor, introduced House Bill 15-1012 to the committee. The bill exempts dyed diesel from state sale and use taxes. Although the large majority of dyed diesel is tax exempt, some sales, such as dyed diesel to a for-profit hospital to run its backup generators, is subject to tax. The bill eliminates the small minority of sales of dyed diesel that are not tax exempt which offers clarification to all parties involved. Representative Becker noted the bill has no TABOR impact


01:40 PM

The committee asked for clarification on fuel used for generators. Committee discussion then ensued regarding taxed dyed diesel, generators used in industrial or non-industrial settings, and the history of tax-exempt dyed diesel.







01:43 PM -- Steve Cure, Director of Agfinity and Colorado Wyoming Petroleum Marketers Association member, testified in support of the bill. Mr. Cure described refined fuels delivery and noted that $30 million of their deliveries are dyed diesel. He noted that as a collector of taxes it is hard to determine what is taxable dyed diesel for both bulk fuel delivery and at retail locations. Since 99 percent of sales are tax exempt, this bill would clarify "commercial" versus "industrial" use by exempting the fuel from all state sales and use taxes. Mr. Cure responded to questions from the committee regarding Department of Revenue (DOR) audits and dyed diesel tax procedures.

01:53 PM -- Grier Bailey, Manager of Government Affairs for the Colorado Wyoming Petroleum Marketers Association (CWPMA), testified in support of the bill. He responded to a committee question regarding state and local taxes. He stated it seems that it is a bigger burden to collect taxes on taxable dyed diesel sales than the amount of revenue collected. He summarized that this bill is codifying current practice into statute. He thanked DOR for working with the industry on questions regarding dyed diesel. He also summarized the history of red-dyed fuel and that the exemption is for the common good. The fuel is mostly used by farmers to grow our food and construction entities to build our roads.


01:57 PM

The committee discussed the tax treatment of dyed diesel by the Internal Revenue Service (IRS). The committee talked about dyed diesel fuel used by the oil or gas industry backup generators. Witnesses stated that is a question for the taxing authority and that it is an example of why this bill helps clarify those issues. Committee discussion ensued on commercial uses versus industrial uses.

Representative Becker, J. distributed amendment L.003 (Attachment A) and explained that the amendment adds a declaration summarizing the bill's intent.

15HouseFin0121AttachA.pdf15HouseFin0121AttachA.pdf























BILL:HB15-1012
TIME: 02:10:19 PM
MOVED:Court
MOTION:Adopt amendment L.003 (Attachment A). The motion passed without objection.
SECONDED:Dore
VOTE
Becker K.
Dore
Garnett
Kagan
Lawrence
Pabon
Roupe
Van Winkle
Wilson
Foote
Court
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

Representative Becker, J. distributed amendment L.001 (Attachment B) which removes home rule counties and municipalities from the bill.

15HouseFin0121AttachB.pdf15HouseFin0121AttachB.pdf

Mr. Geoff Wilson, General Counsel for the Colorado Municipal League, testified to the amendment. He answered questions regarding the Colorado Constitution, taxation policy, and Colorado counties. Mr. Bailey also answered some questions regarding home rule counties and municipalities and sales taxes.





















BILL:HB15-1012
TIME: 02:13:17 PM
MOVED:Court
MOTION:Adopt amendment L.001 (Attachment B). The motion passed without objection.
SECONDED:Roupe
VOTE
Becker K.
Dore
Garnett
Kagan
Lawrence
Pabon
Roupe
Van Winkle
Wilson
Foote
Court
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

Representative Becker, J. summarized that some confusion exists regarding taxable dyed diesel and this bill goes towards solving this problem.
BILL:HB15-1012
TIME: 02:19:52 PM
MOVED:Court
MOTION:Refer House Bill 15-1012, as amended, to the Committee on Transportation and Energy. The motion passed on a vote of 11-0.
SECONDED:Dore
VOTE
Becker K.
Yes
Dore
Yes
Garnett
Yes
Kagan
Yes
Lawrence
Yes
Pabon
Yes
Roupe
Yes
Van Winkle
Yes
Wilson
Yes
Foote
Yes
Court
Yes
FINAL YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS







02:22 PM -- HB15-1058

Rep. Becker, J., Sponsor, introduced House Bill 15-1058. The bill transfers 70 percent of the year-end General Fund surplus into the State Education Fund and 30 percent to a new Higher Education Fund. The intent of the bill is to reduce the effect of the negative factor. In essence, after all the funding adjustments required by the school finance act are calculated, the negative factor reduces each district's total program funding, and thus its per pupil funding, by a specified percentage determined by a targeted funding level. He noted that rural schools in particular have been hurt by the negative factor.

Committee discussion ensued regarding how the surplus is used currently. Representative Becker, J. responded to question on the projected end date of the transfers. He also summarized the determination of the 70/30 percent split. He stated the goal for the Higher Education Fund to protect funding for higher education and give higher education institutions a "rainy day" account. The Committee then discussed permanent versus time-specific transfers, current education funding, and the surplus.

02:59 PM -- Ms. Jane Urschel, PhD, Deputy Executive Director of the Colorado Association of School Boards, testified in support of the bill. She discussed the negative factor and Amendment 23. She noted that the number one priority of CASB is to pay off the negative factor. She noted the effort by the legislature last year to decrease the negative factor, but said that the General Assembly did not come close getting rid of the negative factor. She stated that the negative factor is a credit card debt the assembly needs to pay on behalf of students.

03:04 PM -- Mr. Brett Miles, Superintendent of Holyoke RE-IJ School District, testified in support of the bill. He noted the substantial impact the negative factor has had on his school district and its budgets. He discussed the impact on the purchase of new textbooks and school buses.

03:08 PM -- Mr. Rob Sanders, Superintendent of Buffalo School District RE-4J, testified in support of the bill. He testified that his school district has lost $1.8 million to the negative factor over five years. He discussed the loss of teachers to neighboring states. He noted that every penny that goes to the districts helps.

03:11 PM -- Dr. Jo Barbie, Superintendent of Weld County School District, RE-1, testified in support of the bill. She talked about the extensive cuts in her school district resulting from the negative factor. She noted the school district has 63 percent of students on free or reduced lunch. She said the school district has faced new mandates, accountability, and assessment systems along with funding cuts.

03:20 PM -- Mr. John Stoffel, representing himself, testified in support of the bill. He has five grandchildren in the Cherry Creek and Gilpin school districts. He believes that our schools do not have enough support and funding. He requested the committee support the bill.

03:23 PM -- Dr. Valentina Flores, Ed.D, representing herself and the children of Colorado, testified in support of the bill. She noted that she is a new member of the State Board of Education. She discussed the many requirements school districts face dealing with evaluation and assessment. She also expressed concern regarding the costs to school districts to implement these programs.

03:27 PM -- Mr. Brian Tanner, Government Affairs Director of the Colorado Education Association, testified in support of the bill. He discussed quality public education and the need for adequate resources for schools. He supports increased funding for K-12 education. He said he understands the bill is not a panacea, but it is step a towards funding our schools.







Committee discussion ensued regarding the education budget.


03:30 PM

Representative Becker, J reiterated his support for the bill and giving surplus dollars to education. He said this bill moves education forward as a priority in Colorado and begins the process of fixing education funding problems. Committee discussion ensued.
BILL:HB15-1058
TIME: 03:36:15 PM
MOVED:Dore
MOTION:Refer House Bill 15-1058 to the Committee on Education. The motion failed on a vote of 5-6.
SECONDED:Lawrence
VOTE
Becker K.
No
Dore
Yes
Garnett
No
Kagan
No
Lawrence
Yes
Pabon
No
Roupe
Yes
Van Winkle
Yes
Wilson
Yes
Foote
No
Court
No
YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL





















BILL:HB15-1058
TIME: 04:01:25 PM
MOVED:Pabon
MOTION:Postpone House Bill 15-1058 indefinitely. The motion passed on a vote of 6-5.
SECONDED:Becker K.
VOTE
Becker K.
Yes
Dore
No
Garnett
Yes
Kagan
Yes
Lawrence
No
Pabon
Yes
Roupe
No
Van Winkle
No
Wilson
No
Foote
Yes
Court
Yes
FINAL YES: 6 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS


04:02 PM

The committee adjourned.