Date: 02/01/2006

Final
BILL SUMMARY for HB06-1184

HOUSE COMMITTEE ON FINANCE

Votes: View--> Action Taken:
Moved amendment L.001 (the amendment sets the exem
Moved to postpone House Bill 06-1184 indefinitely.
Refer House Bill 06-1184, as amended, to the Commi		PASS
FAIL
FAIL


04:22 PM -- House Bill 06-1184

Representative Crane, prime sponsor, explained that House Bill 06-1184 is about restoration of the homestead exemption for seniors. Representation Crane commented that House Bill 06-1184 will offset some of the money that seniors sacrificed when the General Assembly suspended the homestead exemption as a Joint Budget Committee budget-balancing measure. Representative Crane said that the legislation will help seniors on fixed incomes to offset some of the rising costs of health care and other expenses that Social Security income and pensions do not cover.

The committee commented on the impact of the suspension to seniors during the recession. Representative Judd pointed out that as drafted, the legislation only provides an enhanced benefit to seniors who have more expensive homes. Representative Judd gave an example. As written, a qualifying senior having a home with a taxable value of $200,000 or less, receives the maximum benefit under the exemption because the senior receives the highest percentage reduction in property taxes allowed by the exemption (50 percent). For qualifying seniors with homes having a taxable value in excess of $200,000, the percentage reduction in property taxes is reduced. For example, under current law, the percentage reduction for a qualifying senior with a home having a taxable value of $300,000 allows only a 33 percent reduction in property taxes. Under House Bill 06-1184, the qualifying senior with a $200,000 condo would receive the same benefit (percentage reduction in property taxes) as a qualifying senior having a home with a $350,000 taxable value.

In response, Representative Crane pointed out that seniors of all income levels are seeing the same increases in health care costs and other expenses. All of these seniors would benefit from this bill. Representative Crane reiterated that the bill will provide a mechanism to make up for some of the benefits seniors lost during the three years the exemption was suspended.

The committee engaged in a discussion regarding funding and discussed concerns. Representative Marshall commented that legislation which expands an existing benefit is like adding a new program because the homestead exemption is already in place. She pointed out that spending additional money to expand a tax benefit that would be funded with Referendum C revenue, was not in the spirit of the Referendum or vote of the people. Representative Marshall continued by saying that had it not been for the passage of the Referendum, the program would likely have to be further suspended.

The committee discussed its concerns that the money used to fund House Bill 06-1184 would only take money away from roads. Mr. Josh Harwood, Legislative Council Staff, was called upon to explain the funding flow of revenue under the legislation that would result in less funding for SB 97-1 transfers (HUTF).

The following persons testified:

04:45 PM -- Mr. Josh Harwood, Legislative Council Staff, responded to committee questions and explained that the exemption requires funding that is above the 6 percent limit. The result is that funding for House Bill 06-1184 would make less funds available for transportation. Mr. Harwood continued by explaining that under the bill, no new seniors would qualify. Mr. Harwood commented that the same seniors who qualify under current law, would qualify under House Bill 06-1184. The legislation would provide a greater benefit to qualifying seniors with higher-priced homes. For example, under House Bill 06-1184, a qualifying senior with a $200,000 condo, receives the same benefit as a senior with a $350,000 home.

Mr. Harwood pointed out an error on page two in the fiscal note and said that the figures for the fiscal impact on the first page were correct. The bill would require a $18.5 million appropriation for FY 2006-07 and a $18.7 million appropriation for FY 2007-08. The committee discussed laying over the bill until a revised fiscal note could be provided.

The committee continued to discuss the funding diversion needed for the bill from the HUTF. Representative McCluskey expressed his concern and pointed out that the committee will be seeing many more bills that will require funding and have the same result.

05:03 PM -- Mr. Wayne Williams, Pikes Peak Area Council of Governments and the State Transportation Advisory Board, testified in opposition toward the bill and said that the state should look at funding sources other than transportation. Mr. Williams said that transportation funding is very important for the completion of a number of projects in the Colorado Springs area and urged the committee to not support the measure.

After a committee discussion on the funding diversion from the HUTF needed to finance House Bill 06-1184, Representative Crane proposed an amendment that would reduce the fiscal impact of the measure to $5.6 million for FY 2006-07. Representative Vigil placed the bill on the table for action and Representative Crane offered amendment L.001. He explained that the amendment would change the adjusted maximum amount of market value that would be exempted under the senior homestead exemption from 50 percent of the first $350,000 to 50 percent of the average value of residential real property as determined by the State Property Tax Administrator. Mr. Josh Harwood, Legislative Council Staff distributed a memorandum on the fiscal impact of the proposed change under amendment L.001 (Attachment A).

Amendment L.001 was adopted by the committee on a 8-5-0 vote. The subsequent motion to refer House Bill 06-1184, as amended, to the Committee on Appropriations failed on a 8-5-0 vote. The last vote with a motion to postpone House Bill 06-1184 indefinitely also failed on a 7-6-0 vote. Chairman Vigil pulled the bill off the table.
BILL:HB06-1184
TIME: 05:11:53 PM
MOVED:Cloer
MOTION:Moved amendment L.001 (the amendment sets the exemption at roughly $232,000 and reduces the fiscal impact to $5.6 million for FY 2006-07). The motion passed on a 8-5-0 vote.
SECONDED:Massey
VOTE
Benefield
No
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
No
Harvey
No
Jahn
Yes
Kerr
Yes
Marshall
No
Massey
Yes
McCluskey
Yes
Judd
Yes
Vigil
No
Not Final YES: 8 NO: 5 EXC: 0 ABS: 0 FINAL ACTION: PASS
BILL:HB06-1184
TIME: 05:19:23 PM
MOVED:Crane
MOTION:Refer House Bill 06-1184, as amended, to the Committee on Appropriations. The motion failed on a 8-5-0 vote.
SECONDED:Cloer
VOTE
Benefield
No
Cloer
Yes
Crane
Yes
Frangas
No
Garcia
No
Harvey
No
Jahn
No
Kerr
Yes
Marshall
No
Massey
Yes
McCluskey
Yes
Judd
No
Vigil
No
Not Final YES: 5 NO: 8 EXC: 0 ABS: 0 FINAL ACTION: FAIL
BILL:HB06-1184
TIME: 05:24:55 PM
MOVED:Judd
MOTION:Moved to postpone House Bill 06-1184 indefinitely. The motion failed on a 7-6-0 vote.
SECONDED:Garcia
VOTE
Benefield
Yes
Cloer
No
Crane
No
Frangas
No
Garcia
Yes
Harvey
No
Jahn
Yes
Kerr
No
Marshall
Yes
Massey
No
McCluskey
No
Judd
Yes
Vigil
Yes
Not Final YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL