House Committee on Finance (03/04/2015)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	03/04/2015	ATTENDANCE

Time:	01:36 PM to 06:35 PM	Becker K.	*
		Conti	X
Place:	LSB A	Garnett	X
		Kagan	*
This Meeting was called to order by		Pabon	*
	Representative Court	Priola	*
		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:
HB15-1056 HB15-1251 HB15-1206 HB15-1154		Referred to Appropriations Referred to the Committee of the Whole Amended, Laid Over Postponed Indefinitely

01:37 PM -- HB15-1056

Representative Court, chair, called the meeting to order. Representative Coram, sponsor, presented House Bill 15-1056. Witness testimony was heard at the committee's meeting on February 25, 2015.

01:40 PM -- Alex Schatz, Legislative Council Staff, came to the table to discuss the fiscal note. He discussed the FTE calculations in the fiscal note along with the originating court of most cases covered by the bill.


BILL:	HB15-1056
TIME:	01:43:36 PM
MOVED:	Becker K.
MOTION:	Refer House Bill 15-1056 to the Committee on Appropriations. The motion passed on a vote of 9-2.
SECONDED:	Priola
		VOTE
	Becker K.	Yes
	Conti	Yes
	Garnett	Yes
	Kagan	Yes
	Pabon	Yes
	Priola	Yes
	Roupe	Yes
	Van Winkle	Yes
	Wilson	Yes
	Foote	No
	Court	No

FINAL YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

01:48 PM -- HB15-1251

Representative Court, co-prime sponsor, introduced House Bill 15-1251. The bill reduces the Denver Public Schools Retirement Division employer contribution rate from 13.75 percent to 10.15 percent, effective January 1, 2015. The rate may be adjusted on January 1, 2020, and every fifth year thereafter.

Representative Wilson, co-prime sponsor, spoke to House Bill 15-1251. He stated the bill evaluates the current situation of the Public Employees' Retirement Association merger and determines how to move forward. Representatives Court and Wilson responded to questions regarding whether the audit recommendations were made public before this bill was introduced.

01:55 PM -- Mr. John MacPherson, representing the Denver Classroom Teachers Association-Retired and the Denver Alliance for Public Education Joint Pension Task Force, testified in opposition to the bill. He distributed pension information and an opposition letter (Attachment A and B). He stated he is concerned that Denver Public Schools (DPS) is not actually paying the share attributed to them due to offsets. He discussed Senate Bill 09-282 and its effects.

15HouseFin0304AttachA.pdf

15HouseFin0304AttachB.pdf

02:13 PM -- Superintendent Tom Boasberg, representing DPS, testified in support of the bill. He noted the focus of the merger was portability for educators, cross-subsidy concerns, school funding issues, and equity among school districts in the state. He noted this bill was required by the original merger bill. He stated the savings will go back into classroom funding.

02:30 PM -- Ms. Nora Flood, representing the Colorado League of Charter Schools, testified in support of the bill. She stated that her group supports the bill because it equalizes pension funding and it allows for more money in the classroom.

02:36 PM -- Superintendent Boasberg came back to the table to answer questions regarding DPS's share of the entire school pension fund. He stated the goal of the bill to ensure parity for a 30-year period statewide with an agreement to review adjustments every five years.


BILL:	HB15-1251
TIME:	02:41:40 PM
MOVED:	Court
MOTION:	Refer House Bill 15-1251 to the Committee of the Whole. The motion passed on a vote of 11-0.
SECONDED:	Kagan
		VOTE
	Becker K.	Yes
	Conti	Yes
	Garnett	Yes
	Kagan	Yes
	Pabon	Yes
	Priola	Yes
	Roupe	Yes
	Van Winkle	Yes
	Wilson	Yes
	Foote	Yes
	Court	Yes

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

02:49 PM -- HB15-1206

Representative Singer, sponsor, introduced House Bill 15-1206. The bill creates a refund for sales and use taxes paid on machinery and equipment used for recycling or reprocessing of waste products. Representative Singer responded to a question about the scope of the bill and stated that a proposed amendment changes the bill from a refund to an exemption. The proposed amendments also limit the bill to qualified institutions regulated by the Colorado Department of Public Health and Environment.

02:53 PM -- Ms. Marjorie Griek, representing the Colorado Association for Recycling, testified in support of the bill. She distributed a handout to the committee (Attachment C). She stated that, in Colorado, some materials are imported to be recycled and reused in manufacturing, so this bill would help the growing industry.

15HouseFin0304AttachC.pdf

03:06 PM -- Mr. Tom Lincoln, representing A1 Organics, testified in support of the bill. He discussed how the bill would have helped his business in the past and how it can help his business in the future.

03:10 PM -- Ms. Anita Comer, representing Waste-Not Recycling, testified in support of the bill. She stated that recycling is a low profit margin business and this tax exemption would have a large positive impact on her business.
03:13 PM -- Mr. Steve Derus, representing Momentum Recycling, testified in support of the bill. He stated the his company is seeking to expand into Colorado. He noted that the reduction in sales and use tax could lead the company to pay a higher rebate to the people bringing them recyclable material. He stated the bill would help create both primary and secondary jobs in Colorado.

03:20 PM -- Mr. Larson Silbaugh, Legislative Council Staff, came to the table to discuss the fiscal note. He stated the information in the fiscal note is based on prior year tax data in Colorado.

03:22 PM -- Mr. Steve Derus returned to the table to discuss the fiscal note and noted that the information regarding Momentum Recycling's proposed expansion in Colorado was not available to the fiscal analyst. He noted that the proposed facility is a one-time initial investment by Momentum Recycling in Colorado.

03:26 PM -- Mr. Alek Orloff, representing Alpine Waste & Recycling, testified in support of bill. He noted that the recycling business is nascent in Colorado because the state still has a good amount of space for landfills. He stated the demand for services has increased. He noted this bill would help his business expand and hire new employees.


BILL:	HB15-1206
TIME:	03:35:11 PM
MOVED:	Court
MOTION:	Adopt amendment L.005 (Attachment D). The motion passed without objection. 15HouseFin0304AttachD.pdf
SECONDED:	Roupe
		VOTE
	Becker K.
	Conti
	Garnett
	Kagan
	Pabon
	Priola
	Roupe
	Van Winkle
	Wilson
	Foote
	Court

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

03:40 PM -- Mr. Kevin Bronski, representing the Colorado Department of Revenue (DOR), came to the table to answer questions regarding the fiscal note. He stated that recycling is considered processing, so most recycling equipment does not qualify for the manufacturing exemption currently in statute. He noted the bill and proposed amendments will assist DOR in determining who qualifies for exemptions.

03:42 PM -- Mr. Larson Silbaugh, Legislative Council Staff, returned to the table to discuss the fiscal note. He noted that it is hard to determine the number of organizations that could potentially qualify for this exemption, especially since numerous recycling operations are owned by local governments who already qualify for exemptions. Committee discussion with Mr. Silbaugh and Mr. Bronski ensued.


BILL:	HB15-1206
TIME:	03:58:42 PM
MOVED:	Court
MOTION:	Adopt amendment L.003 (Attachment E). The motion passed without objection. 15HouseFin0304AttachE.pdf
SECONDED:	Roupe
		VOTE
	Becker K.
	Conti
	Garnett
	Kagan
	Pabon
	Priola
	Roupe
	Van Winkle
	Wilson
	Foote
	Court

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


BILL:	HB15-1206
TIME:	04:00:12 PM
MOVED:	Kagan
MOTION:	Adopt amendment L.004 (Attachment F). The motion passed without objection. 15HouseFin0304AttachF.pdf
SECONDED:	Court
		VOTE
	Becker K.
	Conti
	Garnett
	Kagan
	Pabon
	Priola
	Roupe
	Van Winkle
	Wilson
	Foote
	Court

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

04:03 PM

The bill was laid over to a future date for action only.

04:04 PM -- HB15-1154

Representative Garnett, co-prime sponsor, introduced House Bill 15-1154. The bill prohibits the application of an interchange fee to the portion of the total amount of a credit or debit card sale that represents any state, local, or district sales taxes applicable to the sale. He distributed and discussed amendment L.003 (Attachment G). Amendment L.003 would change the bill to instead require the Department of Regulatory Agencies (DORA), along with the Divisions of Financial Services and Banking and the Department of Revenue to conduct a interim study on interchange fees. Representative Garnett also clarified that the aim of the proposed study is to quantify the amount of interchange fees collected on taxes.

15HouseFin0304AttachG.pdf

Representative Becker, J., co-prime sponsor, spoke to House Bill 15-1154. He noted that the bill is intended as an economic development bill for small businesses in Colorado. He distributed amendment L.004 (Attachment H). He stated that L.004 tries to bring more stakeholders to the proposed study. He responded to a question regarding the proposed study and indicated that the concern is financial institutions are charging a fee on top of a tax.

15HouseFin0304AttachH.pdf

04:18 PM -- Mr. Scott Earl, representing Mountain West Credit Union Association, testified in opposition to the bill. He noted the proposed study goes beyond the scope of interchange fees. He stated the proposed study is biased against financial institutions because it does not include the associated costs financial institutions bear for merchants such as fraud protection.

04:28 PM -- Ms. Barbara Walker, representing the Independent Bankers of Colorado, testified in opposition to the bill. She noted that this bill may only apply to cards issued by Colorado-based financial institution. She also objected to the proposed study.

04:29 PM -- Mr. Allan Tormohlen, representing the Independent Bankers of Colorado and Cannon National Bank, testified in opposition to the bill. He noted that community banks are also small businesses and they use interchange fees to provide services to their customers.

04:41 PM -- Mr. Jim Reuter, representing FirstBank, testified in opposition to the bill. He noted that FirstBank is opposed to the bill as introduced or in the form of study. He discussed fraud prevention, the credit and debit card industry, and the industry's move to Europay, MasterCard�, and Visa� (EMV) technology.

05:01 PM -- Mr. Koger Propst, representing ANB Bank, testified in opposition to the bill. He noted that the industry is moving towards mobile payment systems and away from physical cards/EMV. He discussed the impact of the bill on the banking industry and its customers.

05:18 PM -- Ms. Jenifer Waller, representing the Colorado Bankers Association, testified in opposition of the bill. She noted the proposed study is not objective and seems biased against banks. She also questioned whether the departments involved in the proposed study have the right expertise to conduct the study.

05:26 PM -- Mr. Brian Tobias, Mr. Bruce Harrelson, and Acting State Bank Commissioner Ken Boldt, representing DORA, spoke to their concerns regarding the proposed study. Mr. Tobias spoke of the challenges associated with collecting the data required by the proposed study. They all noted that DORA has no way to compel the industry to provide them with information required by the proposed study. Commissioner Boldt noted his concerns about the time frame for conducting the proposed study which requires a report on over 350 interchange fees by October 2015.

05:39 PM -- Mr. Patrick Boyle, representing the Colorado Competitive Council, testified in opposition to the bill. He noted that the proposed study seems biased against financial institutions. He also expressed concern with the funding sources of the proposed study.

05:43 PM -- Mr. Loren Bawman, representing Jared's Nursery and GreenCo, testified in support of the bill. He distributed example interchange fee invoices (Attachments I, J, and K). He spoke to his experience with interchange fees.

15HouseFin0304AttachI.pdf

15HouseFin0304AttachJ.pdf

15HouseFin0304AttachK.pdf

05:50 PM -- Mr. Scott Paulson, representing Colorado Wyoming Petroleum Marketers Association (CWPMA) and SilCo Oil Co., testified in support of the bill. He distributed handouts to the committee (Attachment L and M). He discussed his experiences with interchange fees.

15HouseFin0304AttachL.pdf

15HouseFin0304AttachM.pdf

05:57 PM -- Ms. Mary Lou Chapman, representing the Rocky Mountain Food Industry Association, testified in support of the bill. She distributed a statement to the committee (Attachment N). She noted that her members would support moving forward with the proposed study.

15HouseFin0304AttachN.pdf

06:00 PM -- Mr. Grier Bailey, representing the CWPMA, testified in support of the bill. He discussed his members' experiences with interchange fees. He noted that CWPMA does not believe that profit should be made off of public tax systems.


BILL:	HB15-1154
TIME:	06:05:32 PM
MOVED:	Garnett
MOTION:	Adopt amendment L.003 (Attachment G). The motion passed on a vote of 8-3.
SECONDED:	Court
		VOTE
	Becker K.	Yes
	Conti	No
	Garnett	Yes
	Kagan	Yes
	Pabon	Yes
	Priola	No
	Roupe	No
	Van Winkle	Yes
	Wilson	Yes
	Foote	Yes
	Court	Yes

YES: 8 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS


BILL:	HB15-1154
TIME:	06:09:57 PM
MOVED:	Kagan
MOTION:	Adopt amendment L.004 (Attachment H). The motion passed without objection.
SECONDED:	Court
		VOTE
	Becker K.
	Conti
	Garnett
	Kagan
	Pabon
	Priola
	Roupe
	Van Winkle
	Wilson
	Foote
	Court

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


BILL:	HB15-1154
TIME:	06:11:24 PM
MOVED:	Wilson
MOTION:	Adopt amendment L.005 (Attachment O). The motion passed without objection. 15HouseFin0304AttachO.pdf
SECONDED:	Garnett
		VOTE
	Becker K.
	Conti
	Garnett
	Kagan
	Pabon
	Priola
	Roupe
	Van Winkle
	Wilson
	Foote
	Court

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

Committee discussion on the merits of the amended bill ensued.


BILL:	HB15-1154
TIME:	06:19:13 PM
MOVED:	Garnett
MOTION:	Refer House Bill 15-1154, as amended, to the Committee on the Whole. The motion failed on a vote of 2-9.
SECONDED:	Court
		VOTE
	Becker K.	No
	Conti	No
	Garnett	Yes
	Kagan	No
	Pabon	No
	Priola	No
	Roupe	No
	Van Winkle	No
	Wilson	No
	Foote	No
	Court	Yes

YES: 2 NO: 9 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB15-1154
TIME:	06:23:52 PM
MOVED:	Pabon
MOTION:	Postpone House Bill 15-1154 indefinitely. The motion passed on a vote of 10-1.
SECONDED:	Conti
		VOTE
	Becker K.	Yes
	Conti	Yes
	Garnett	Yes
	Kagan	Yes
	Pabon	Yes
	Priola	Yes
	Roupe	Yes
	Van Winkle	Yes
	Wilson	Yes
	Foote	Yes
	Court	No

Final YES: 10 NO: 1 EXC: 0 ABS: 0 FINAL ACTION: PASS

06:35 PM

The committee adjourned.