Date:	03/04/2015	ATTENDANCE
Time:	01:34 PM to 03:42 PM	Becker J.	X
		Buck	X
Place:	HCR 0112	Carver	X
		Coram	*
This Meeting was called to order by		Esgar	X
	Representative Tyler	Kraft-Tharp	X
		Melton	X
This Report was prepared by		Moreno	X
	Matt Kiszka	Neville P.	X
		Nordberg	X
		Winter	X
		Mitsch Bush	X
		Tyler	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB15-1219 HB15-1228		Referred to Finance Amended, Referred to Finance

Representative Tyler, Chair, called the meeting to order.

01:35 PM -- HB 15-1219

Representatives McCann and Becker, co-prime sponsors, came to the table to present House Bill 15-1219. The bill allows a renewable energy company with Enterprise Zone (EZ) Investment Tax Credits (ITC) to elect to receive a refund of the credit for projects completed on or after January 1, 2015. The amount of the refund is equal to 80 cents for every one dollar of ITC credit, and the refund is capped at $750,000 per tax year. The taxpayer may elect to receive a refund beginning in tax year 2015. The bill also requires the Office of Economic Development (OEDIT) to annually post on its website the level of renewable energy investment.

The Enterprise Zone Investment Tax Credit is an income tax credit equal to 3 percent of qualified investments located in an enterprise zone. Taxpayers may claim up to half their annual tax liability plus $5,000 in any one year. If the income tax credit is more than what a taxpayer may claim, the credit can be carried forward. Renewable energy companies may carry the credit forward for up to 22 years.

Representative McCann told the committee that New Mexico and Oklahoma have a similar tax credit for renewable energy investments, and that passing HB15-1219 would make Colorado more competitive with such states. She noted that the credit would be limited to one project per company per year. She said the bill would attract renewable energy development to Colorado. Representative Becker said that the bill would allow renewable energy companies to reinvest in Colorado, and that it would promote economic development, especially in rural Colorado

01:42 PM

The bill sponsors responded to questions on where the remaining 20 percent of the EZ ITC that is saved will be deposited, if the sponsors had any intention of amending the bill to state how the additional 20 percent will specifically be used for economic development, whether the bill calls for the tracking of additional jobs and the tax base that it claims to create, the types of renewable energy projects that will be eligible for the tax credit, how the tax credit that a company receives can be spent by the company, and if the tax credit would be transferable to third parties.

01:54 PM -- Kerry Hattevick, representing NextEra Energy Resources, spoke in favor of the bill. She explained that NextEra operates in 24 states and is the leading producer of wind energy in the United States. It currently has 6 operating wind farms in Colorado that are all in enterprise zones. She explained the company's upcoming projects, and said that NextEra had created 70 permanent jobs and invested $3 billion in rural Colorado so far. She said the bill would lower renewable energy prices for Colorado customers, reduce the state's liability for existing ITCs, and would make Colorado more competitive with other states that have tax credits specific to renewable energy investments. Ms. Hattevick responded to questions on the number of permanent jobs NextEra has created in Colorado, how the bill would keep Colorado competitive for renewable energy development with the rest of the country, if NextEra invests more in states with larger tax credits, if NextEra would still receive $750,000 through the existing ITC for projects it is currently developing if the bill does not pass, the net present value and discount rate of the maximum tax credit for a project if the bill passes, the jobs the bill could create from additional revenue for NextEra, the average income of a construction worker involved in a renewable energy project, and the future of NextEra with and without the passage of the bill.

02:14 PM -- Sarah Propst, representing the Interwest Energy Alliance, spoke in favor of the bill. She said that the Interwest Alliance is a trade association that supports the development of renewable energy. She told the committee that the bill will help keep new renewable energy investments coming to Colorado, that renewable energy projects have high upfront capital costs, and that they do not typically show returns for a number of years.

02:17 PM -- Aimee Leatherman, representing Renewable Energy Systems Americas (RES Americas), spoke in favor of the bill. She said that RES Americas is an established leader in the renewable energy industry, and is headquartered in Broomfield, Colorado. She said that renewable investments are capital intensive, and that when her company considers the cost of developing a new project, it considers the tax incentives of different states.

02:20 PM -- Mark Detsky, representing the Colorado Independent Energy Association (CIEA), spoke in favor of the bill. He said that CIEA is a group of independent power producers that has 30 member companies. He said the bill has the potential to reduce the cost of developing renewable energy projects, and that Colorado has been a leader in renewable energy development since it adopted its renewable energy standard ten years ago. He said that competition is fierce between states to attract renewable energy development dollars. He said the bill also provides cost-effective energy for rate payers.

02:23 PM -- Nick Colglazier, representing the Colorado Farm Bureau, spoke in favor of the bill. He said the bureau has over 25,000 members in the state and represents Colorado's agriculture industry. He said the bill would keep energy abundant and affordable in Colorado, would have a beneficial impact on rural communities surrounding renewable energy projects, and would help utilities comply with renewable energy mandates.

02:26 PM -- Chris Votoupal, representing the Colorado Cleantech Industry Association (CCIA), spoke in favor of the bill. He said the CCIA represents 150 different companies, is a non-profit trade association, and helps drive tax policies surrounding the cleantech industry. He said the bill would have benefit supply chains throughout rural communities.

02:28 PM -- Becky Long, representing Conservation Colorado, spoke in favor of the bill. She said that with the potential retirement of some federal programs, the bill would help drive investments in renewable energy projects.

02:29 PM -- Ali Mickelson, representing the Colorado Fiscal Institute (CFI), spoke in opposition to the bill. Ms. Mickelson said that CFI has concerns with the refund mechanism in the bill, which sets a dangerous precedent with the refundability of the investment tax credit. She said that the bill would not create much of a benefit for the state. She responded to questions on the rate of return of the 20 percent discount for a company receiving the credit.

02:33 PM

Louis Pino, Legislative Council Staff, came to the table. He responded to questions on the monetization of the ITC, if a company with no tax liability would still receive a check from the state, and the bill's impact on the state as shown in the fiscal note.

02:40 PM

Representative McCann made her closing comments on the bill, noting that it has safeguards built into it for the maximum amount that can be returned to an eligible taxpayer and that the taxpayer must have a tax liability in order to receive a check. Representative Becker noted that the bill encourages economic development and the development of all types of renewable energy in the state. The committee discussed the merits of the bill.

BILL:	HB15-1219
TIME:	02:55:45 PM
MOVED:	Becker J.
MOTION:	Refer House Bill 15-1219 to the Committee on Finance. The motion passed on a vote of 11-2.
SECONDED:	Coram
		VOTE
	Becker J.	Yes
	Buck	Yes
	Carver	No
	Coram	Yes
	Esgar	Yes
	Kraft-Tharp	Yes
	Melton	Yes
	Moreno	Yes
	Neville P.	Yes
	Nordberg	Yes
	Winter	Yes
	Mitsch Bush	Yes
	Tyler	No
Final YES: 11 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

02:56 PM

The committee went into a recess.



03:09 PM -- HB 15-1228

Representatives Mitsch Bush and Becker, co-prime sponsors, came to the table to present House Bill 15-1228. This bill makes several changes to the administration and collection of the special fuel excise tax on liquefied petroleum gas (LPG), beginning in calendar year 2016. These changes include:

· limiting the imposition of the tax on LPG so that, in most instances, the tax is levied when LPG is placed in a motor vehicle's fuel tank, instead of when the LPG is acquired, sold, offered for sale, or used for any purpose whatsoever;

· requiring a distributor that places LPG in a fuel tank to pay the tax or, if none, requiring a nondistributor user to pay it;

· designating the operators of private commercial fleets that use LPG as distributors where no other distribution contract is in place;

· requiring a distributor that uses LPG to propel a cargo tank motor vehicle to pay the tax on the LPG used for this purpose, based on the mileage traveled by the vehicle;

· assessing the tax on the volume of net gallons, rather than gross gallons, of LPG;

· eliminating the 2 percent allowance for LPG lost in transit or handling;

· eliminating the minimum amount, currently $25,000, of a surety bond that an LPG distributor may deposit with the Department of Revenue (DOR) in lieu of evidence of a savings account, deposit, or certificate of deposit; and

· prohibiting the DOR from collecting any penalties or interest related to the tax on LPG sold in calendar years 2014 and 2015.

03:15 PM -- Mark Larson, representing the Colorado Wyoming Petroleum Marketers Association, spoke in favor of the bill. He said that the bill will help align statute with the original legislative intent of HB 13-1110, and that it addresses a number of issues with the taxation of LPG that were created by that bill.

03:22 PM -- Charles Brown, representing the Colorado Propane Gas Association, spoke in favor of the bill. He said that HB 13-1110 created some unintended consequences for the propane industry and that only 5 percent of all propane consumed is used in automobiles. He responded to a question on technological changes within industries that utilize propane.

03:25 PM -- Marshal Youngland, representing the Colorado Propane Gas Association, spoke in favor of the bill. He thanked the DOR for working with the association on the drafting of the legislation.

03:26 PM -- Cabell Hodge, representing the Colorado Energy Office, spoke in favor of the bill.

03:28 PM

Representative Becker discussed the impact of the bill on state revenue. Greg Sobetski, Legislative Council Staff, came to the table to discuss the fiscal impact of the bill. He responded to questions on the amount of tax revenue that the state would lose if the bill passes, how many gallons of LPG are used by automobiles out of the total state consumption of LPG, and how the use of LPG will be confirmed by the DOR.

03:35 PM

Ed DeCecco, Office of Legislative Legal Services, came to the table and responded to questions on the compatibility of the incrementally increasing nature of the excise tax with the Taxpayer Bill of Rights.

03:37 PM

Representative Becker explained Amendment L.001 (Attachment A), which narrows the definition of an LPG distributor under the bill and provides companies with the opportunity to opt out of being treated as a distributor if they are not one.

150304 AttachA.pdf

BILL:	HB15-1228
TIME:	03:37:17 PM
MOVED:	Becker J.
MOTION:	Adopt amendment L.001 (Attachment A). The motion passed without objection.
SECONDED:	Nordberg
		VOTE
	Becker J.
	Buck
	Carver
	Coram
	Esgar
	Kraft-Tharp
	Melton
	Moreno
	Neville P.
	Nordberg
	Winter
	Mitsch Bush
	Tyler
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

03:38 PM

Representative Becker distributed Amendment L.002 (Attachment B), and explained that it requires distributors to report the mileage on vehicles that deliver propane.

150304 AttachB.pdf

BILL:	HB15-1228
TIME:	03:38:17 PM
MOVED:	Becker J.
MOTION:	Adopt amendment L.002 (Attachment B). The motion passed without objection.
SECONDED:	Buck
		VOTE
	Becker J.
	Buck
	Carver
	Coram
	Esgar
	Kraft-Tharp
	Melton
	Moreno
	Neville P.
	Nordberg
	Winter
	Mitsch Bush
	Tyler
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

03:38 PM

Representative Becker distributed Amendment L.004 (Attachment C), and explained that it is a simple technical amendment to the bill.

150304 AttachC.pdf

BILL:	HB15-1228
TIME:	03:38:40 PM
MOVED:	Becker J.
MOTION:	Adopt amendment L.004 (Attachment C). The motion passed without objection.
SECONDED:	Buck
		VOTE
	Becker J.
	Buck
	Carver
	Coram
	Esgar
	Kraft-Tharp
	Melton
	Moreno
	Neville P.
	Nordberg
	Winter
	Mitsch Bush
	Tyler
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

03:38 PM

Representative Becker distributed Amendment L.006 (Attachment D), and explained that it requires the reporting of any vehicular consumption of LPG.

150304 AttachD.pdf

BILL:	HB15-1228
TIME:	03:39:30 PM
MOVED:	Becker J.
MOTION:	Adopt amendment L.006 (Attachment D). The motion passed without objection.
SECONDED:	Buck
		VOTE
	Becker J.
	Buck
	Carver
	Coram
	Esgar
	Kraft-Tharp
	Melton
	Moreno
	Neville P.
	Nordberg
	Winter
	Mitsch Bush
	Tyler
YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

03:39 PM

The bill sponsors made their closing comments on the bill.

BILL:	HB15-1228
TIME:	03:40:48 PM
MOVED:	Mitsch Bush
MOTION:	Refer House Bill 15-1228, as amended, to the Committee on Finance. The motion passed on a vote of 13-0.
SECONDED:	Becker J.
		VOTE
	Becker J.	Yes
	Buck	Yes
	Carver	Yes
	Coram	Yes
	Esgar	Yes
	Kraft-Tharp	Yes
	Melton	Yes
	Moreno	Yes
	Neville P.	Yes
	Nordberg	Yes
	Winter	Yes
	Mitsch Bush	Yes
	Tyler	Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:41 PM

The committee adjourned.