Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:03/09/2006
ATTENDANCE
Time:10:48 AM to 12:36 PM
Benefield
X
Cloer
X
Place:HCR 0107
Crane
X
Frangas
X
This Meeting was called to order by
Garcia
X
Representative Vigil
Harvey
X
Jahn
X
This Report was prepared by
Kerr
X
Ron Kirk
Marshall
X
Massey
X
McCluskey
X
Judd
X
Vigil
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
HB06-1354
HB06-1355
HB06-1323
HB06-1365
HB06-1362		Referred to the Committee of the Whole
Referred to Appropriations
Amended, Referred to Appropriations
Amended, Referred to Appropriations
Laid Over


10:48 AM -- House Bill 06-1354 - Concerning Conservation Easements

Representative Madden, prime sponsor, explained that House Bill 06-1354 amends the existing income tax credit for conservation easement donations to 50 percent of the value of the donated easement, with a maximum amount, or cap, of $375,000 for the credit. This cap on the tax credit takes effect with a donation of $750,000. Thus, a donation above $750,000 receives the maximum $375,000 tax credit. The change applies to donations made on January 1, 2007, and later.

Representative Madden continued by explaining that the provisions in the bill are revenue neutral and do not expand the credit but change the method under which the credit can be claimed. The committee briefly discussed the initial estimated cost of the income tax credit as compared to the actual amount of credits claimed.

The following persons testified:

10:51 AM -- Mr. Larry Kueter, Isaacson Rosenbaum, P.C., and counsel to the Colorado Coalition of Land Trusts, testified in support of the legislation. Mr. Kueter commented that he supported a revenue neutral change and methodology for claiming the credit that may be more aligned with the federal tax code. The Internal Revenue Service is looking at whether a dollar-for-dollar credit is a charitable donation for purposes of the exemption. Mr. Kueter closed by saying that he is concerned that current state law may not be consistent with federal tax law as applied by the recent IRS rulings on gross conservation easement credits.



11:00 AM -- Mr. Will Shafroth, Colorado Conservation Trust, commented that House Bill 06-1354 is a tool for economic development and testified in support of the legislation.

11:03 AM -- Mr. Steve Acquafresca, Mesa Land Trust, testified in support of the legislation. Mr. Acquafresca said that the change in the method for which the credit can be taken will provide less of an incentive to "fragment" land parcels to maximize the amount of the credit taken. Mr. Acquafresca closed by saying that this bill will result in all landowners being treated more fairly whether they own large or small parcels of land that are converted to conservation easements.

11:06 AM -- Ms. Lynne Sherrod, Colorado Cattlemen's Agricultural Land Trust, testified in support of the legislation. Ms. Sherrod commented that the tax credit has added a significant amount of open space to Colorado that everyone can enjoy.

11:11 AM -- Mr. Jay Winner, Lower Arkansas Valley Water Conservancy District, testified in support of the legislation.
BILL:HB06-1354
TIME: 11:16:13 AM
MOVED:McCluskey
MOTION:Refer House Bill 06-1354 to the Committee of the Whole. The motion passed on a 11-1-1 vote.
SECONDED:Massey
VOTE
Benefield
Yes
Cloer
No
Crane
Yes
Frangas
Yes
Garcia
Yes
Harvey
Excused
Jahn
Yes
Kerr
Yes
Marshall
Yes
Massey
Yes
McCluskey
Yes
Judd
Yes
Vigil
Yes
Final YES: 11 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS


11:18 AM -- House Bill 06-1355 - Concerning the Regulation of the Auction of Big Game Hunting Licenses

Representative McKinley, explained that under current law, the Department of Natural Resources, Division of Wildlife, is authorized to auction or raffle up to two hunting licenses each for rocky mountain big horn sheep, mountain goats, or shiras moose, and four licenses each for mule or whitetail deer, rocky mountain elk, and pronghorn. A nonprofit organization involved in the conservation or welfare of big horn sheep, mountain goats, or moose may be authorized to conduct the auction or raffle, and retain up to 10 percent of sale proceeds. For deer, elk, and pronghorn, the nonprofit may retain up to 80 percent of sale proceeds. The state uses the remaining proceeds for the benefit of these types of wildlife.




Representative McKinley said that this legislation increases from 10 percent to 25 percent the amount of proceeds that may be kept by a nonprofit for big horn sheep, mountain goats, and moose and reduces from 80 percent to 25 percent the amount a nonprofit may retain for deer, elk, and pronghorn.

The following person testified:

11:19 AM -- Mr. Rick Kahn, Colorado Division of Wildlife, commented on the provisions of the bill that generate revenues and responded to committee questions.
BILL:HB06-1355
TIME: 11:21:25 AM
MOVED:Cloer
MOTION:Refer House Bill 06-1355 to the Committee on Appropriations. The motion passed on a 10-0-3 vote.
SECONDED:Judd
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Harvey
Excused
Jahn
Excused
Kerr
Yes
Marshall
Yes
Massey
Excused
McCluskey
Yes
Judd
Yes
Vigil
Yes
Final YES: 10 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS


11:22 AM -- House Bill 06-1323 - Concerning Fraud in the Mortgage Lending Process

Representative Marshall, prime sponsor, briefly explained the provisions of the bill and distributed amendments L.003 and L.004 (Attachments A and B). Representative Marshall said that HB06-1323 addresses fraud in the mortgage lending process. It defines residential mortgage fraud as making false statements or filing documents known to have false or omitted information in the mortgage lending process. Residential mortgage fraud carries a penalty fine of no less than $75,000. Representative Marshall continued by saying the bill establishes that the investigation and prosecution of mortgage fraud are under the concurrent jurisdiction of the district attorney and the state Attorney General. Finally, the bill states that the court cannot accept a plea bargain for charges brought alongside a mortgage fraud charge unless the plea agreement includes an order of restitution.

The committee briefly discussed the bill and the amendments. The amendments were moved and explained by Representative Marshall. She said that amendment L.003 makes a technical change to the section in the statutes that govern "Theft" and amendment L.004 changes provisions in state law to be consistent with federal law. Both amendments passed without objection by those members present and the bill was referred, as amended, to the Committee on Appropriations.




BILL:HB06-1323
TIME: 11:27:16 AM
MOVED:Marshall
MOTION:Moved amendment L.003. (The amendment makes a technical change to the section in the statutes that govern "Theft" (Section 18-4-401, C.R.S.)) The motion passed without objection by those members present.
SECONDED:Massey
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Harvey
Jahn
Kerr
Marshall
Massey
McCluskey
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:HB06-1323
TIME: 11:29:20 AM
MOVED:Marshall
MOTION:Moved amendment L.004. (The amendment changes provisions in state law to be consistent with federal law.) The motion passed without objection by those members present.
SECONDED:Massey
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Harvey
Jahn
Kerr
Marshall
Massey
McCluskey
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:HB06-1323
TIME: 11:29:48 AM
MOVED:Marshall
MOTION:Refer House Bill 06-1323, as amended, to the Committee on Appropriations. The motion passed on a 11-1-1 vote.
SECONDED:Frangas
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Harvey
Excused
Jahn
Yes
Kerr
Yes
Marshall
Yes
Massey
Yes
McCluskey
Yes
Judd
No
Vigil
Yes
Final YES: 11 NO: 1 EXC: 1 ABS: 0 FINAL ACTION: PASS


11:31 AM -- House Bill 06-1365 - Concerning Performance-Based Budgeting for State Agencies (for action only)

The committee initially heard House Bill 06-1365 on Wednesday, March 8, 2006. Representative Frangas presented the bill and the committee discussed the need for a conceptual amendment that would exclude school districts from the impact of the provisions in the bill.

On Thursday, March 9, 2006, Representative Frangas distributed amendments L.002 and L.003 (Attachments C and D) and explained that together, the amendments would achieve the committee's goal of excluding school districts from any provisions that dealt with performance-based budgeting in House Bill 06-1365. The amendments were moved by Representative Frangas and both passed without objection by those members present. House Bill 06-1365 was referred as amended, to the Committee on Appropriations.















BILL:HB06-1365
TIME: 11:32:04 AM
MOVED:Frangas
MOTION:Moved amendment L.002. (The amendment clarifies that school districts which receive money from appropriations to the Department of Education are not affected or impacted by provisions in House Bill 06-1365.) The motion passed without objection by those members present.
SECONDED:Crane
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Harvey
Jahn
Kerr
Marshall
Massey
McCluskey
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection
BILL:HB06-1365
TIME: 11:32:49 AM
MOVED:Frangas
MOTION:Moved amendment L.003. (The amendment makes a technical change in the bill's title.) The motion passed without objection by those members present.
SECONDED:Judd
VOTE
Benefield
Cloer
Crane
Frangas
Garcia
Harvey
Jahn
Kerr
Marshall
Massey
McCluskey
Judd
Vigil
Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection



BILL:HB06-1365
TIME: 11:33:38 AM
MOVED:Frangas
MOTION:Refer House Bill 06-1365, as amended, to the Committee on Appropriations. The motion passed on a 12-0-1 vote.
SECONDED:Crane
VOTE
Benefield
Yes
Cloer
Yes
Crane
Yes
Frangas
Yes
Garcia
Yes
Harvey
Excused
Jahn
Yes
Kerr
Yes
Marshall
Yes
Massey
Yes
McCluskey
Yes
Judd
Yes
Vigil
Yes
Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS


11:35 AM -- House Bill 06-1362 - Concerning Incentives for the Motion Picture Film Industry

Representative Massey and Representative Jahn, prime sponsors, explained the provisions of the bill and commented on the need for Colorado to attract more film production to the state. Representatives Massey and Jahn began by showing the committee a brief video on the motion pictures filmed in Colorado over the years.

Representative Massey began by describing the provisions in the bill. The bill allows any production company that spends at least 75 percent of its production expenditures in Colorado on qualified local expenditures and at least 75 percent of payroll expenditures on local hires to claim an incentive payment from the Colorado Economic Development Commission (EDC). The bill defines several terms, including qualifying local expenditures, qualifying payroll expenditures, and production company. The amount of the incentive would be determined as follows:

● If the film originates in Colorado and total qualifying expenditures are at least $100,000, the incentive will be equal to 10 percent of the total qualifying expenditures.

● If the film does not originate in Colorado, but total qualifying expenditures are at least $1 million, the incentive will be equal to 10 percent of the total qualifying expenditures.

Representative Jahn commented that the bill requires a company to apply to the EDC prior to beginning production in Colorado. The bill allows the EDC to determine the application and evaluation process. For each application that meets the guidelines for eligibility, the EDC will grant conditional written approval to the production company. Once the film production is completed, the company then would submit financial records along with a signed affidavit, detailing expenses incurred while filming in Colorado. If the amount expended is equal to or exceeds the production company's projected expenditure, then the company is issued an incentive payment in the amount specified in the bill.




The committee briefly discussed the incentives in the bill.

The following persons testified:

11:43 AM -- Mr. Dennis Berkfeldt, President of the Denver Branch of the American Federation of Television and Radio Artists, distributed a handout (Attachment E) to committee members and testified in support of the bill. Mr. Berkfeldt commented on the history of film production in Colorado and said that the state needs to be more competitive. Mr. Berkfeldt said that surrounding states such as Utah and New Mexico, offer more incentives to the film industry to make films in their states than Colorado. Mr. Berkfeldt commented on the economic impact of the film industry to these states and said that Colorado needs to offer some incentives or the film industry will look to other locations for making films. Mr. Berkfeldt closed by saying that House Bill 06-1362 incentives will only be realized by the industry after a film has been make, jobs have been filled, and dollars have been spent in Colorado. This means that the state and local governments will capture tax revenues from film industry expenditures before money is spend under the bill.

11:47 AM -- Mr. John Singer, Screen Actors Guild, testified in support of the bill. Mr. Singer commented on the economic benefits the state would realize under the bill and urged the committee to support the legislation.

11:48 AM -- Mr. Jim Taylor, American Entertainment Union, testified in support of the bill and commented on the history of filming motion pictures in Colorado. Mr. Taylor said that House Bill 06-1362 will help promote film-making in Colorado and bring back an industry that was once very active in the state.

11:52 AM -- Mr. Ron Schwab, International Teamsters Union, testified in support of the legislation and talked about the large number of trucks used in the filming of motion pictures. Mr. Schwab said that Colorado is one of the only states that does not provide an incentive to the film industry. Mr. Schwab closed by saying that House Bill 06-1362 is all about bringing jobs to Colorado. When a film is made, it takes carpenters, tradesmen, truck-drivers, and the film industry to make a motion picture possible. Mr. Schwab urged the committee to support the legislation.

11:57 AM -- Mr. Ken Seagren, Lighting Services Inc., testified in support of the bill and said that the legislation will stimulate Colorado's economy by bringing the film industry to Colorado.

11:59 AM -- Mr. Greg Babcock, coloradofilmlocations.com, urged the committee to support the bill. Mr. Babcock commented on the number of films that are filmed in locations other than Colorado because the state does not offer the industry any incentives. Mr. Babcock closed by commenting on a film that was shot in Vancouver, B.C. rather than in Colorado.

12:05 PM -- Mr. Martin Cuff, Colorado Film Commission, testified in support of the bill and distributed a handout to committee members (Attachment F). Mr. Cuff commented on the benefits the state would receive from having more films shot in Colorado. Currently, the average feature film and even an average television commercial, spends about $100,000 a day. Mr. Cuff said that this money is spend on local labor and services, camera operators, sound and lighting technicians, caterers, plumbers, carpenters, electricians, animal trainers, truck drivers, and many other people who are needed to make a film. Mr. Cuff said that estimates show that for every state dollar spent on the production of a film, an additional $2.50 is spent in the wider economy. Mr. Cuff closed by saying that incentives are a standard film business practice. The state needs to adopt House Bill 06-1362.

12:10 PM -- Mr. Tony Gagliardi, National Federation of Independent Businesses, urged the committee to support the bill and commented on the number of small businesses that would benefit from the legislation.




12:14 PM -- Mr. Maurice Devany, representing himself, urged the committee to support the legislation.

12:16 PM -- Mr Emzy Veazy III , representing himself, testified in support of the legislation and commented on the need to make the legislation fair to everyone. Mr. Veazy closed by saying that equity is important and part of the political economy.

12:25 PM -- Mr. Thomas J. O'Connor, Independent Filmmakers, testified in support of the legislation.

Representative Massey and the committee engaged in a discussion about the state money used for incentives in the bill. Committee members voiced a concern that there is no cap in the bill for the money appropriated by the General Assembly for incentives. Representative Massey said that the bill states that the amount of incentive payments would be limited to the amount appropriated by the General Assembly for the purpose of this program. Should the EDC receive applications for incentives that exceed the amount appropriated, the funds are to paid on a first-come, first-served basis.

After a brief committee discussion, Representative Vigil, Chairman pulled the bill off the table to allow the sponsors to add a provision to the bill that would address a cap on state incentives. (The bill was not rescheduled.)


12:36 PM

Adjourn.