Bill Summary for Bill Number HB06-1060

Date: 03/23/2006

Final
BILL SUMMARY for HB06-1060

SENATE COMMITTEE ON FINANCE

Votes: View-->	Action Taken:
Motion to refer HB 06-1060 to the Committee on App	TIE

10:10 AM -- House Bill 06-1060

Senator Veiga, chair, called the meeting to order. Senator Entz, prime sponsor, explained the provisions of HB 06-1060 which modifies the definition of a "farm operation" in the statutes that govern agriculture and livestock sales and use tax exemptions to include horticultural and floricultural activities. He stated that Colorado must create the exemption to better compete with other states' and countries' horticultural and floricultural industries.

The following persons testified on the bill:

10:14 AM -- Mr. Mike Gilsdorf, Arapahoe Acres Nursery, spoke in favor of the bill. He explained that his company, which grows horticultural produce, would qualify for the sales and use tax exemption provided by the bill and that his other retail and wholesales stores would not. He indicated that his horticultural produce company is classified as agricultural and that the taxation of his operations should be treated the same as other agricultural companies. He indicated that the bill would help his company compete with companies in other states.

10:21 AM -- Mr. Bill Kluth, Tagawa Greenhouses, Inc., spoke in favor of the bill. He discussed the importance of the horticultural and floricultural industries to the state's economy and explained that businesses in these industries are highly impacted by the costs of doing business. He indicated that business costs were high in the state and thus there was less money for investment. He stated that it is difficult to compete with other states and that his business may have to relocate outside the state. He indicated that the bill would help his business compete.

The committee discussed prior legislation to classify horticulture land as agricultural. This bill relates only to sales and use tax and is not a property tax issue.

10:29 AM

Senator Entz discussed how the bill would fit under the spending requirements of Referendum C. He stated that horticulture companies should be treated the same as agriculture companies and that the bill only pertains to producers, not wholesalers and retailers.

Senator Teck discussed the need for the General Assembly to look to the long-term in deciding whether the bill would help the state, regardless of Referendum C's provisions. Senator Brophy discussed whether the lack of a sales tax exemption drove equipment buyers out of the state for purchases and thought that equipment used for agriculture and horticulture should be treated the same for taxation purposes.

Senator Teck also discussed whether the size of the exemption would have a significant impact on the horticultural and floricultural industries. He also wondered whether the tax exemption would help equipment sellers more than the horticultural and floricultural industries.

10:41 AM

Senator Veiga explained her opposition to using Referendum C money for the tax exemption.


BILL:	HB06-1060
TIME:	10:41:30 AM
MOVED:	Brophy
MOTION:	Motion to refer HB 06-1060 to the Committee on Appropriations. The motion failed on a tie vote.
SECONDED:
		VOTE
	Brophy	Yes
	Shaffer	No
	Taylor	Yes
	Teck	Yes
	Tupa	No
	Veiga	No
	Sandoval	Excused
Final YES: 3 NO: 3 EXC: 1 ABS: 0 FINAL ACTION: TIE

10:42 AM

The bill was pulled off the table.