Final
STAFF SUMMARY OF MEETING

SENATE COMMITTEE ON FINANCE

Date:01/24/2006
ATTENDANCE
Time:02:00 PM to 03:22 PM
Brophy
X
Shaffer
X
Place:SCR 354
Taylor
X
Teck
X
This Meeting was called to order by
Tupa
X
Senator Sandoval
Veiga
X
Sandoval
X
This Report was prepared by
Jason Schrock
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
Conf 06-Colorado Housing and Finance Authority
SJR06-004
SB06-018
SB06-056		Referred to the Floor
Referred to the Floor
Witness Testimony Only
Committee of the Whole, Consent Calendar


02:01 PM -- Confirmation for the Colorado Housing and Finance Authority (CHFA)

Senator Sandoval, chair, called the meeting to order.

Mr. John Blumberg introduced himself and discussed his background. He explained his qualifications to serve on the authority. He closed by describing recent CHFA meetings he has attended (A copy of the Governor's appointment letter and resume for Mr. Blumberg is provided as Attachment A).
BILL:Conf 06-CHFA
TIME: 02:03:11 PM
MOVED:Teck
MOTION:Motion to refer the name of Mr. John Blumberg to the floor of the Senate with favorable recommendation. The motion passed on a 6 - 0 vote.
SECONDED:
VOTE
Brophy
Yes
Shaffer
Yes
Taylor
Yes
Teck
Yes
Tupa
Excused
Veiga
Yes
Sandoval
Yes
Final YES: 6 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS





02:04 PM -- SJR 06-004 (Revenue Resolution)

Senator Sandoval, prime sponsor, discussed the revenue resolution. A Joint Budget Committee (JBC) memo on the revenue resolution was distributed to the committee (Attachment B). She explained that the JBC and the finance committee chairs agreed to use the Legislative Council Staff FY 2006-07 revenue estimate for the resolution.

02:08 PM -- Mr. Mike Mauer, Legislative Council Staff, discussed the difference between the December 2005 FY 2006-07 revenue estimate and the September 2005 estimate.
BILL:004
TIME: 02:09:36 PM
MOVED:Sandoval
MOTION:Motion to adopt L.001 (Attachment C). The motion passed without objection.
SECONDED:
VOTE
Brophy
Shaffer
Taylor
Teck
Tupa
Veiga
Sandoval
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:004
TIME: 02:10:18 PM
MOVED:Sandoval
MOTION:Motion to refer SJR06-004, as amended, to the Senate for final action. The motion passed on a 7 - 0 vote.
SECONDED:
VOTE
Brophy
Yes
Shaffer
Yes
Taylor
Yes
Teck
Yes
Tupa
Yes
Veiga
Yes
Sandoval
Yes
Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS











02:14 PM -- Senate Bill 06-018

Senator Bacon, prime sponsor, discussed the provisions of SB 06-018 which allows municipalities that have utilized tax increment financing (TIF) to extend the period beyond 30 years in which taxes are divided between a downtown development authority (DDA) and other local governments. Should a municipality choose such an option, the base year by which the increment is calculated is advanced by the same number of years as the extension. Senator Bacon stated that the bill did not impact urban renewal authorities. Senator Tupa inquired into how the bill would impact local government budgets. Senator Bacon discussed the need to have municipalities and counties resolve their differences on the bill. He explained how the bill could impact school finance. If a TIF is extended another ten years, a school district would not receive the revenue that is going into the TIF and the state would then pay more to the school district. However, he added that since DDAs and TIFs generally cause an increase in property values, they generate increased tax revenue that would have not occurred.

Senator Teck explained how the bill was not extending a tax and would not require voter approval. The bill just extends the period of time in which tax revenue is redirected to repay bonds. He also explained how TIFs generally work.

The following persons testified on the bill:

02:27 PM -- Mr. Chip Steiner, Fort Collins DDA, spoke in favor of the bill and indicated that the Colorado Municipal League (CML) was in favor of the bill. He explained that the bill did not allow for a new tax, just an expansion of the period of time in which tax revenue is allocated to a DDA. He also discussed the value of TIFs in the revitalization of downtown areas. He stated that TIFs were the best tool available. The bill would allow DDAs to collect revenue for additional 10 year increments for further revitalization efforts. If a TIF period were extended, the base year of the TIF would be adjusted by the additional amount of years.

Senator Tupa discussed his concerns with the bill and its potential impact on school finance.

Mr. Steiner continued by discussing the benefits of allowing TIFs to be extended.

Senator Bacon shared Senator Tupa's concern about school finance. However, he indicated that most of the state increase in education spending was due to the Gallagher Amendment, not TIFs. He noted that without TIFs, there would be less property tax revenue for schools and the state would have to increase its aid to school districts.

02:40 PM -- Mr. Jim Ignatius, Teller County, indicated that he would support the bill if Senator Bacon were to consider an amendment that would require TIFs to have more accountability. The bill should be amended to require DDAs to provide information on how a TIF scheme is benefitting the DDA.

02:44 PM -- Mr. Bob Campbell, Teller County, discussed how the aforementioned amendment to create increased DDA accountability was crucial. He indicated that local governments do not need to consent to the creation of DDAs in municipalities. However, it is beneficial to have the support of other local governments.












02:45 PM -- Mr. Frank Lancaster, Larimer County, also indicated he would support the bill with an accountability amendment. He explained how TIFs divert revenue that would have gone to services. He stated that county commissioners and other local governments should give permission for existing TIFs to extend an additional ten year period.

Senator Bacon noted that it was important to keep in mind that there would not be any new tax revenue without DDAs. He explained that there was no way to know the precise amount of value that is added to an area due to a DDA. Senator Teck indicated that the added value amount estimate depended upon the appraisal of property, which is an art, not a science.

02:56 PM -- Mr. Jim Golden, City of Longmont, discussed how a DDA had revitalized downtown Longmont and explained how the bill would enhance Longmont's ability to bond for further improvements.

02:58 PM -- Mr. Bruce Hill, Mayor, Grand Junction, testified in favor of bill. He distributed letters from the Mesa County Commissioners and Grand Junction City Council in support of the bill (Attachments D and D). He explained that the bill allows DDAs to leverage an existing TIF scheme to continue revitalization efforts and not have to create a new one and start over.

03:03 PM -- Mr. Doug Simons, Enstrom Candies, Inc. and Grand Junction DDA, testified in support of the bill and noted that TIFs are the key to revitalizing downtowns. There are currently 10 DDAs in 8 counties. The bill would allow each DDA to operate on its own time frame.

03:09 PM -- Mr. John Giardino, Colorado Mountain College, testified in opposition to the bill. He provided background information on the DDA in Glenwood Springs. He explained that extended TIFs would negatively impact Colorado Mountain College because it is mostly property tax funded. He indicated that some wealthy communities, such as Vail, Aspen, and Glenwood Springs, are abusing DDAs by unnecessarily creating TIFs which cause a loss of property tax revenue to schools. This bill would make the situation worse.

The committee discussed how only areas declared as blighted can form urban renewal authorities; DDAs can be formed without blight.


03:18 PM

Senator Bacon explained that there was a need for more time to work out the differences among local governments regarding the bill. Senator Sandoval took the bill off the table.


03:19 PM -- Senate Bill 06-056

Senator Bacon, prime sponsor, explained the provisions of SB 06-056 regarding the Capital Development Committee. The bill clarifies that, effective July 1, 2009, the Joint Budget Committee has authority to review and hold hearings and make recommendations on proposals for construction of capital improvements only if the Capital Development Committee's statutory authority to do so is actually repealed July 1, 2009.











03:20 PM -- Mr. Jeremiah Bary, Office of Legislative Legal Services, described the provisions of the bill, which he considered a technical bill.
BILL:SB06-056
TIME: 03:21:18 PM
MOVED:Teck
MOTION:Motion to refer SB 06-056 to the Committee of the Whole with favorable recommendation and with a recommendation that it be placed on the consent calendar. The motion passed on a 7 - 0 vote.
SECONDED:
VOTE
Brophy
Yes
Shaffer
Yes
Taylor
Yes
Teck
Yes
Tupa
Yes
Veiga
Yes
Sandoval
Yes
Final YES: 7 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS


03:22 PM

The committee recessed.