Date: 01/21/2015

Final
BILL SUMMARY for HB15-1012

HOUSE COMMITTEE ON FINANCE

Votes: View--> Action Taken:
Adopt amendment L.001 (Attachment B). The motion p
Adopt amendment L.003 (Attachment A). The motion p
Refer House Bill 15-1012, as amended, to the Commi		Pass Without Objection
Pass Without Objection
PASS



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