Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE
Date:02/16/2005
ATTENDANCE
Time:01:34 PM to 04:07 PM
Benefield
X
Cloer
*
Place:HCR 0107
Crane
X
Frangas
X
This Meeting was called to order by
Garcia
X
Representative Vigil
Jahn
X
Marshall
X
This Report was prepared by
Massey
X
Ron Kirk
May M.
X
McCluskey
X
Witwer
X
Judd
X
Vigil
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
HB05-1289
HB05-1196
HB05-1278
HB05-1244
HB05-1251
HB05-1180
HB05-1227		Referred to the Committee of the Whole
Amended, Referred to Committee on Appropriations
Referred to Committee on Appropriations
Amended, Referred to the Committee of the Whole
Referred to the Committee of the Whole
Referred to the Committee of the Whole
Referred to Committee on Appropriations


01:35 PM -- House Bill 05-1289 - Concerning the Adjustment of the Residential Assessment Rate

Representative Vigil, prime sponsor, explained that the Gallagher Amendment requires the General Assembly to establish the ratio of valuation of assessment for residential real property on a biannual basis. Because the value of existing residential property did not grow at a faster pace than that of all other property, this bill establishes that the ratio of valuation of assessment for residential real property (known as the residential assessment rate) for the 2005 and 2006 property tax years remain at 7.96 percent of actual value. It should be noted that TABOR does not allow for the residential assessment rate to be higher than the previous year even if the calculation set forth by the Gallagher Amendment would yield that it should.











The following person testified:

01:37 PM -- Ms. Mary Huddleston, State Property Tax Administrator, Division of Property Taxation, responded to committee questions and began discussing the calculation for new construction as it influences the adjustment of the residential assessment rate. Ms. Huddleston explained how the residential assessment rate responds to changes in both residential construction and the economy. When the economy contracts and residential growth is constant, the residential assessment rate declines. Ms. Huddleston commented that the Gallagher Amendment has done its job by keeping property taxes low for residential homeowners.
BILL:HB05-1289
TIME: 01:44:08 PM
MOVED:Garcia
MOTION:Refer HB 05-1289 to the Committee of the Whole. The motion passed on a 13-0-0 vote.
SECONDED:McCluskey
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


01:45 PM -- House Bill 05-1196 - Concerning Appropriations from the Highway Users Tax Fund to the Department of Revenue

 Representative Hall, prime sponsor, explained that current law allows the General Assembly to appropriate off-the-top moneys from the Highway Users Tax Fund (HUTF) to the Department of Revenue for administration and expenses of the Motor Vehicle Division, but only for three years, ending with FY 2004-05. He explained House Bill 05-1196 extends the period for which these appropriations are allowed for four additional years, through FY 2008-09. Representative Hall distributed amendment L.001 (Attachment A) and a fact sheet on House Bill 05-1196 (Attachment B).









BILL:HB05-1196
TIME: 01:51:25 PM
MOVED:McCluskey
MOTION:Moved amendment L.001. (The amendment reduces the legislation's time horizon by two years, thus, the amendment extends the General Assembly's authority to make appropriations from the HUTF to the Department of Revenue through FY 2006-07 rather than FY 2008-09.) The motion passed without objection by those members present.
SECONDED:Judd
VOTE
Benefield
Cloer
Excused
Crane
Frangas
Garcia
Jahn
Marshall
Massey
May M.
McCluskey
Witwer
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection

























BILL:HB05-1196
TIME: 01:51:59 PM
MOVED:Garcia
MOTION:Refer HB 05-1196, as amended, to the Committee on Appropriations. The motion passed on a 12-0-1 vote.
SECONDED:McCluskey
VOTE
Benefield
Yes
Cloer
Excused
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS


01:53 PM -- House Bill 05-1278 - Concerning the State Criminal Alien Assistance Program

Representative Hall, prime sponsor, explained House Bill 05-1278 creates the State Criminal Alien Assistance Program (SCAAP) Cash Fund to consist of moneys received by the state under the federal state criminal alien assistance program. Representative Hall distributed a fact sheet on House Bill 05-1278 (Attachment C) and explained that the program is a federal program that assists states and localities with the costs of incarcerating certain individuals who are in the United States illegally.



















BILL:HB05-1278
TIME: 01:58:02 PM
MOVED:Massey
MOTION:Refer HB 05-1278 to the Committee on Appropriations. The motion passed on a 13-0-0 vote.
SECONDED:McCluskey
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


02:02 PM -- House Bill 05-1244 - Concerning the Administration of Colorado's Gross Conservation Easement Credit

 Representative Hoppe, prime sponsor, explained that current law allows for taxpayers to claim an income tax credit for the donation of a gross conservation easement. She indicated that HB05-1244 gives power to the Executive Director of the Department of Revenue to review and evaluate the appraisal value of the easement, and the amount and validity of the credit. She stated that under the bill any dispute resolutions regarding a credit are binding on any transferees. Representative Hoppe explained that the bill also requires that any transferee purchase the credit prior to the filing deadline for the transferee's income tax return. For credit holders that pass away prior to fully using all credits, the bill states that any remaining credits be transferred to the estate and may be claimed or transferred by the estate.

















The following persons testified:

02:05 PM -- Mr. J. D. Wright, representing 10 conservation districts in the Lower Arkansas Valley, testified in opposition toward the bill. Mr. Wright commented that retroactive provisions in the bill can cause a number of concerns for persons who have claimed or transferred gross conservation easement credits when the legislation was initially enacted in 2000. He also mentioned that the original bill followed the federal standard for determining whether an appraisal was accurate and that under House Bill 05-1244, the Department of Revenue is responsible for reviewing and evaluating the appraised value of a conservation easement as well as the amount and validity of the credit. Mr. Wright closed by questioning whether the department has the expertise to determine the true value of a conservation easement.

The committee discussed the need for the department to have the authority to review and evaluate appraisals for land that are converted to conservation easements.

02:15 PM -- Mr. Vernon Dillon, representing farmers and ranchers of southwestern Colorado, testified in opposition to the bill and commented on his concern about the department's inability to evaluate appraisals for conservation easements as required under House Bill 05-1244.

02:17 PM -- Mr. Larry Kueter, Colorado Coalition of Land Trusts, testified in support of the legislation. Mr. Kueter discussed the impact of Colorado's gross conservation easement on open space in Colorado and pointed out that the credit's transferability is important to the program's success. Mr. Kueter discussed the technical provisions in the bill.

The committee discussed the number of conservation easements that are annually audited by the Internal Revenue Service. Mr. Kueter discussed the need for the department to evaluate appraisals because it is important to the success of the program. Representative Vigil commented on his concern that the department is not required to consult with an expert in the field of appraisals when the department evaluates a conservation easement credit claimed.

The committee discussed the Internal Revenue Service's review of large, highly valued, conservation easements.

02:45 PM -- Mr. Steve Acquafresca, Mesa Land Trust, testified in support of the legislation and distributed a handout (Attachment D) on the Mesa Land Trust to committee members. Mr. Acquafresca discussed the benefits of the conservation easement credit and commented on its ability to preserve valuable ranch lands on the western slope.

The committee discussed how the value of a conservation easement is derived.

02:56 PM -- Mr. Bruce Nelson, Manager of Tax Policy for the Colorado Department of Revenue, responded to technical questions regarding conservation easements. Mr.Nelson commented that Virginia is the only other state that allows transferable gross conservation easement credits in addition to Colorado and that the value of the appraisal drives the value of the credit which is a charitable contribution under federal law.








The committee discussed the statute of limitations as it applies to state income tax filers.
BILL:HB05-1244
TIME: 03:16:38 PM
MOVED:May M.
MOTION:Moved to amend printed bill, page 2, strike lines 15 through 17 and substitute the following "credit, and the validity of the credit". The effect of the amendment is to allow the statute of limitations as it applies to income tax filers to apply in the same way to taxpayers who claim the gross conservation easement credit. The motion passed without objection by those members present.
SECONDED:Vigil
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Jahn
Marshall
Massey
May M.
McCluskey
Witwer
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection























BILL:HB05-1244
TIME: 03:24:00 PM
MOVED:Cloer
MOTION:Refer HB 05-1244, as amended, to the Committee of the Whole. The motion passed on a 13-0-0 vote.
SECONDED:McCluskey
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


03:26 PM -- House Bill 05-1251 - Concerning the Payment of Income Tax By Nonresident Partners of Publicly Traded Partnerships

Representative Knoedler, prime sponsor, explained that House Bill 05-1251 states that a publicly-traded partnership may not file a composite income tax return or make composite tax payments on behalf of its nonresident partners. In addition, it exempts a publicly traded partnership from the requirement to either file an agreement by each nonresident to pay the income tax on that partner's share of income attributable to this state or to pay the income tax on behalf of each nonresident partner. Representative Knoedler commented that the bill applies to income tax years starting in 2006.



















The following person testified:

03:32 PM -- Mr. J.R. McPherson, Duke Energy Field Services, testified in support of the legislation.
BILL:HB05-1251
TIME: 03:38:55 PM
MOVED:Massey
MOTION:Refer HB 05-1251 to the Committee of the Whole. The motion passed on a 13-0-0 vote.
SECONDED:May M.
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


03:41 PM -- House Bill 05-1180 - Concerning Changes to Horticultural and Floricultural Operations

Representative Rose, prime sponsor, discussed the provisions of HB05-1180 and commented on the revised fiscal note. He stated that the revised fiscal note reflects amendments adopted in the House Agriculture committee on January 31, 2005. He explained that because the bill no longer extends agricultural sales and use tax and motor vehicle registration exemptions to horticultural and floricultural enterprises, there is no longer a state fiscal impact. He noted that the bill modifies the definition of an agricultural industry for a variety of state and local regulations to explicitly include horticultural and floricultural operations. Therefore, the bill establishes maximum pay periods for certain employees, includes horticulture and floriculture activities in flood-plains, and excludes these industries from having certain construction permits reopened. He explained that the bill also eliminates some regulatory restrictions on horticultural and floricultural industries, including hazardous waste, noise abatements, and air quality control regulations. Representative Rose closed by saying that the amended bill explicitly states that nothing in the bill shall be construed as changing the property tax classification of a floricultural or horticultural enterprise.










The committee discussed whether the legislation would change anything in regard to the valuation of floricultural or horticultural properties.

The following persons testified:

03:51 PM -- Mr. R. J. Hicks, Green Industries of Colorado, commented on the intent of the bill. He stated that the primary goal of the bill is to allow horticulture and floriculture operations to enjoy the same benefits allowed under federal law as agricultural operations.
BILL:HB05-1180
TIME: 03:59:41 PM
MOVED:Cloer
MOTION:Refer HB 05-1180 to the Committee of the Whole. The motion passed on a 13-0-0 vote.
SECONDED:McCluskey
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


04:02 PM -- House Bill 05-1227 - Concerning Entities Licensed for Placement of Children

Representative Frangas, prime sponsor, explained that HB05-1227 expands the definition of child placement agency (CPA) to include entities that facilitate placement for a fee. He stated that the Department of Human Services is authorized to license federally-accredited agencies to make placements under the "Intercountry Adoption Act of 2000" and to charge a fee for that licensing. Representative Frangas noted that House Bill 05-1227 clarifies that a child who is placed by a CPA in a foster care home shall be deemed to remain in foster care status until the date that the final decree of adoption is entered or until the date that the child is returned to his or her biological parents.










The following person testified:

04:04 PM -- Mr. Matthew Flora, Legislative Liaison, Colorado Department of Human Services, responded to committee questions.
BILL:HB05-1227
TIME: 04:05:41 PM
MOVED:Frangas
MOTION:Refer HB 05-1227, to the Committee on Appropriations. The motion passed on a 13-0-0 vote.
SECONDED:Cloer
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Jahn
Yes
Marshall
Yes
Massey
Yes
May M.
Yes
McCluskey
Yes
Witwer
Yes
Judd
Yes
Vigil
Yes
Final YES: 13 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


04:07 PM

Adjourn.