House Committee on Finance (02/22/2012)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	02/22/2012	ATTENDANCE

Time:	01:30 PM to 08:37 PM	Acree	X
		Conti	X
Place:	LSB A	Hullinghorst	X
		Joshi	X
This Meeting was called to order by		Kagan	X
	Representative DelGrosso	Kefalas	X
		Labuda	X
This Report was prepared by		McCann	X
	Ron Kirk	Pabon	X
		Swalm	X
		Szabo	X
		Swerdfeger	X
		DelGrosso	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB12-1287 HB12-1265 HB12-1132 HB12-1131 HB12-1260 HB12-1241 HB12-1251		Postponed Indefinitely Postponed Indefinitely Postponed Indefinitely Referred to Appropriations Committee Vote - Tie Vote Amended, Laid Over Amended, Laid Over

01:39 PM -- House Bill 12-1287 - Concerning the Senior Homestead Exemption

Representative Pabon, prime sponsor, distributed amendments L.002 (Attachment A), L.003 (Attachment B), and background information on Colorado's senior homestead exemption (Attachment C). Representative Pabon explained that House Bill 12-1287, with amendment L.002, caps the total cost to the state for the senior property tax exemption to 1.02 percent of General Fund revenue beginning in property tax year 2012. Under current law, 50 percent of the first $200,000 of a residential property's market value is exempt from the property tax. Representative Pabon closed by noting that under the bill, the Property Tax Administrator is required to calculate a threshold amount lower than $200,000 for each property tax year such that the total amount spent on the exemption is equal to the cap.

The committee discussed the history of the senior homestead exemption and the constitutional parameters of the amendment. After a brief committee discussion, the drafter was asked to respond to issues in the bill.

The following persons testified:

02:16 PM -- Mr. Jason Gelender, Office of Legislative Legal Services, responded to committee questions about the senior homestead exemption.

02:24 PM -- Mr. Sam Doming, representing the Colorado Alliance for Retired Americans, took a neutral position on the bill and spoke to the funding of the senior homestead exemption.

02:38 PM -- Mr. Herb Homan, representing the Colorado Senior Lobby, took a neutral position on the bill and discussed the history of the homestead exemption.


BILL:	HB12-1287
TIME:	02:48:30 PM
MOVED:	Pabon
MOTION:	Moved Amendment L.002 (Attachment A). The motion passed without objection.
SECONDED:	Labuda
		VOTE
	Acree
	Conti
	Hullinghorst
	Joshi
	Kagan
	Kefalas
	Labuda
	McCann
	Pabon
	Swalm
	Szabo
	Swerdfeger
	DelGrosso

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB12-1287
TIME:	02:49:30 PM
MOVED:	Pabon
MOTION:	Moved Amendment L.003 (Attachment B). The motion failed on a vote of 6-7.
SECONDED:	Hullinghorst
		VOTE
	Acree	No
	Conti	No
	Hullinghorst	Yes
	Joshi	No
	Kagan	No
	Kefalas	Yes
	Labuda	Yes
	McCann	Yes
	Pabon	Yes
	Swalm	No
	Szabo	No
	Swerdfeger	No
	DelGrosso	Yes

YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB12-1287
TIME:	02:57:23 PM
MOVED:	Pabon
MOTION:	Refer House Bill 12-1287, as amended, to the Committee on Appropriations. The motion failed on a vote of 6-7.
SECONDED:	McCann
		VOTE
	Acree	No
	Conti	No
	Hullinghorst	Yes
	Joshi	No
	Kagan	Yes
	Kefalas	Yes
	Labuda	Yes
	McCann	Yes
	Pabon	Yes
	Swalm	No
	Szabo	No
	Swerdfeger	No
	DelGrosso	No

YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB12-1287
TIME:	03:08:16 PM
MOVED:	Swerdfeger
MOTION:	Moved to postpone House Bill 12-1287 indefinitely. The motion passed on a vote of 7-6.
SECONDED:	Joshi
		VOTE
	Acree	Yes
	Conti	Yes
	Hullinghorst	No
	Joshi	Yes
	Kagan	No
	Kefalas	No
	Labuda	No
	McCann	No
	Pabon	No
	Swalm	Yes
	Szabo	Yes
	Swerdfeger	Yes
	DelGrosso	Yes

Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:09 PM -- House Bill 12-1265 -- Concerning Certain Investments of State Money

Representative Pace, prime sponsor, explained that House Bill 12-1265 requires the state treasurer to invest no less than $25 million of state moneys in domestic fixed income securities issued for the purpose of raising capital for one or more businesses that are incorporated in, or have their corporate headquarters in, Colorado. He noted that such investment is to be made only if it fits within the treasurer's existing parameters of fiduciary responsibilities.

The committee discussed whether the State Treasurer could do under current law what was proposed in House Bill 12-1265. The committee took the following action after a brief discussion.


BILL:	HB12-1265
TIME:	03:21:38 PM
MOVED:	Kefalas
MOTION:	Refer House Bill 12-1265 to the Committee of the Whole. The motion failed on a vote of 6-7.
SECONDED:	Hullinghorst
		VOTE
	Acree	No
	Conti	No
	Hullinghorst	Yes
	Joshi	No
	Kagan	Yes
	Kefalas	Yes
	Labuda	Yes
	McCann	Yes
	Pabon	Yes
	Swalm	No
	Szabo	No
	Swerdfeger	No
	DelGrosso	No

YES: 6 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB12-1265
TIME:	03:27:38 PM
MOVED:	Acree
MOTION:	Moved to postpone House Bill 12-1265 indefinitely. The motion passed on a vote of 7-6.
SECONDED:	Swalm
		VOTE
	Acree	Yes
	Conti	Yes
	Hullinghorst	No
	Joshi	Yes
	Kagan	No
	Kefalas	No
	Labuda	No
	McCann	No
	Pabon	No
	Swalm	Yes
	Szabo	Yes
	Swerdfeger	Yes
	DelGrosso	Yes

Final YES: 7 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: PASS

03:29 PM -- House Bill 12-1132 - Concerning Creative District Incentives

Representative Miklosi, prime sponsor, distributed a packet of materials on creative districts (Attachment D). He continued by explaining that House Bill 12-1132 changes taxes for individuals and businesses involved with the state's creative districts. Creative districts are arts-oriented business clusters intended to promote local entrepreneurship. Representative Miklosi closed by saying that the creative district program was created under House Bill 11-1031, and to date, the state has not yet designated any creative districts.

The following persons testified:

04:01 PM -- Ms. Elaine Mariner, Office of Economic Development and International Trade, responded to questions about creative district programs in Colorado. She explained that under the bill, from January 1, 2013, to January 1, 2018, a person who earns income performing creative business activities within a creative district can claim a tax credit equal to 50 percent of his or her state income tax liability each year from business derived from those activities. She noted that the state sales tax rate is also reduced to 1.45 percent on sales within creative districts, from the normal sales tax rate. Ms. Mariner discussed the potential applicants that may apply to become creative districts. She noted that 45 applicants were being reviewed for purposes of the bill.

04:21 PM -- Mr. John Hall, representing the Town of Parker, testified in support of the bill. He noted that this bill will result in economic growth and new jobs for Colorado.

04:30 PM -- Ms. Kim Harrell, representing herself, testified in support of the legislation.

04:44 PM -- Ms. Laurie Brandt, representing the South Westminster Arts Group, testified in support of the legislation. She noted that this bill will result in significant economic development for the town and create jobs.

04:49 PM -- Mr. Ben Felson, representing the Colorado Fiscal Policy Institute, testified in opposition of the bill.


BILL:	HB12-1132
TIME:	04:54:23 PM
MOVED:	Pabon
MOTION:	Moved Amendment L.001 (Attachment E). The motion passed without objection.
SECONDED:	Hullinghorst
		VOTE
	Acree
	Conti
	Hullinghorst
	Joshi
	Kagan
	Kefalas
	Labuda
	McCann
	Pabon
	Swalm
	Szabo
	Swerdfeger
	DelGrosso

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB12-1132
TIME:	04:55:55 PM
MOVED:	Labuda
MOTION:	Refer House Bill 12-1132, as amended, to the Committee of the Whole. The motion failed on a vote of 2-11.
SECONDED:	Kagan
		VOTE
	Acree	No
	Conti	No
	Hullinghorst	No
	Joshi	No
	Kagan	No
	Kefalas	No
	Labuda	No
	McCann	Yes
	Pabon	Yes
	Swalm	No
	Szabo	No
	Swerdfeger	No
	DelGrosso	No

YES: 2 NO: 11 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB12-1132
TIME:	05:03:17 PM
MOVED:	Conti
MOTION:	Moved to postpone House Bill 12-1132 indefinitely. The motion passed on a vote of 10-3.
SECONDED:	Swalm
		VOTE
	Acree	Yes
	Conti	Yes
	Hullinghorst	Yes
	Joshi	Yes
	Kagan	Yes
	Kefalas	Yes
	Labuda	No
	McCann	No
	Pabon	No
	Swalm	Yes
	Szabo	Yes
	Swerdfeger	Yes
	DelGrosso	Yes

Final YES: 10 NO: 3 EXC: 0 ABS: 0 FINAL ACTION: PASS

05:05 PM -- House Bill 12-1131 - Concerning the Child Loss Awareness License Plate

Representative Labuda, prime sponsor, distributed a handout on House Bill 12-1131 (Attachment F) to the committee and explained the provisions of the bill. She noted that the bill creates the Child Loss Awareness special license plate. Representative Labuda closed by saying that the plate will be available to all applicants who pay a one-time additional fee of $50. Of this fee, $25 will be credited to the Licensing Services Cash Fund (LSCF) and $25 will be credited to the Highway Users Tax Fund (HUTF).

The following persons testified:

05:07 PM -- Ms. Corinne O'Flynn, representing the Rowan Tree Foundation, testified in support of the bill.

05:08 PM -- Ms. Jennifer Haynes, representing the Rowan Tree Foundation, testified in support of the bill.

05:09 PM -- Ms. Jennifer Mayes, representing the Rowan Tree Foundation, testified in support of the bill.


BILL:	HB12-1131
TIME:	05:14:48 PM
MOVED:	Acree
MOTION:	Refer House Bill 12-1131 to the Committee on Appropriations. The motion passed on a vote of 12-0, with 1 member excused.
SECONDED:	Swerdfeger
		VOTE
	Acree	Yes
	Conti	Yes
	Hullinghorst	Yes
	Joshi	Excused
	Kagan	Yes
	Kefalas	Yes
	Labuda	Yes
	McCann	Yes
	Pabon	Yes
	Swalm	Yes
	Szabo	Yes
	Swerdfeger	Yes
	DelGrosso	Yes

Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

05:27 PM -- House Bill 12-1241 - Concerning Enterprise Zone Designations

Representative Ferrandino, prime sponsor, began by saying that in order to be designated as an enterprise zone under current law, the area under consideration must meet certain population restrictions and at least one of the following criteria:

an unemployment rate at least 25 percent above the state average for the most recent 12-month period;

a population growth rate less than 25 percent of the state average rate for the most recent 5-year period; or

per capita income less than 75 percent of the state average for the most recent period for which data is available.

Representative Ferrandino noted that House Bill 12-1241 requires any new enterprise zone designation to meet at least two of the above criteria. Furthermore, enterprise zone designations must be reviewed at least once every five years to ensure that the existing zones continue to meet those criteria. Representative Ferrandino distributed amendments L.002 (Attachment G) and L.003 (Attachment H).

Prior to hearing testimony, Representative DelGrosso, Chairman, announced that persons testifying on House Bill 12-1241 should also voice their position on House Bill 12-1251 and House Bill 12-1260, since all three bills affect the state's enterprise zone program.

The following persons testified:

05:51 PM -- Ms. Jennifer Cassell, Office of Economic Development and International Trade, testified in support of the bill and responded to committee questions about the enterprise zone program.

05:53 PM -- Mr. Kevin Tilson, Office of Economic Development and International Trade, responded to committee questions about the 3 percent investment tax credit available through the state's enterprise zone program.

06:30 PM -- Ms. Sallie Clark, representing El Paso County, testified in support of the bill. Ms. Clark spoke to the benefits of the enterprise zone program and stated it has increased the number of jobs in El Paso County. She noted that she supported House Bill 12-1241 but was testifying in opposition of House Bill 12-1251 and House Bill 12-1260 because both bills would result in fewer jobs for the county and penalize the business community. Ms. Clark closed by noting that the five-year review in House Bill 12-1241 is excellent.

06:41 PM -- Ms. Barbara Kirkmeyer, representing Weld County, testified in support of House Bill 12-1241. Ms. Kirkmeyer spoke to the benefits of the state's enterprise zone program. She closed by saying that the county was in opposition of House Bill 12-1251 and House Bill 12-1260.

06:47 PM -- Mr. Tom Clark, representing the Metro Denver Economic Development Corporation, testified in support of House Bill 12-1241 but was testifying in opposition of House Bill 12-1251 and House Bill 12-1260. Mr. Clark spoke of the large manufacturing businesses that benefit from the enterprise zone program. He closed by saying that House Bill 12-1241 will take an honest look at Colorado's enterprise zone program.

07:05 PM -- Ms. Dianne Schwenke, representing the Grand Junction Chamber, testified in support of House Bill 12-1241 and in opposition of House Bill 12-1251 and House Bill 12-1260.

07:16 PM -- Mr. Joe Kiely, representing the Town of Limon, testified in support of House Bill 12-1241. He closed by noting the benefits of the enterprise zone program to small rural businesses.

07:28 PM -- Mr. George Awuor, representing the Bell Policy Center, testified in favor of House Bill 12-1241, House Bill 12-1251, and House Bill 12-1260. Mr. Auwor discussed his research on enterprise zone programs and the history of the state program as it was adopted from the United Kingdom.

07:39 PM -- Ms. Ali Mickelson, representing the Colorado Fiscal Policy Institute, testified in support of House Bill 12-1241, House Bill 12-1251, and House Bill 12-1260.

07:41 PM -- Ms. Dianne Orf, representing the Associated Governments of Northwest Colorado, testified in opposition to House Bill 12-1241, House Bill 12-1251, and House Bill 12-1260.

07:46 PM -- Ms. Loren Furman, representing the Colorado Association of Commerce and Industry, testified in support of House Bill 12-1241, but in opposition of House Bill 12-1251 and House Bill 12-1260.


BILL:	HB12-1241
TIME:	07:52:19 PM
MOVED:	Kagan
MOTION:	Moved Amendment L.002 (Attachment G). The motion passed without objection.
SECONDED:	Kefalas
		VOTE
	Acree
	Conti
	Hullinghorst
	Joshi
	Kagan
	Kefalas
	Labuda
	McCann
	Pabon
	Swalm
	Szabo
	Swerdfeger
	DelGrosso

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

Representative DelGrosso, Chair, laid over House Bill 12-1241, as amended, to Wednesday, February 29, 2012.

07:58 PM -- House Bill 12-1260 - Concerning Modifications to Enterprise Zone Tax Credits

Representative Labuda, prime sponsor, explained the provisions of the bill. She noted that for income tax years prior to January 1, 2013, the bill continues current limitations on the amount of the investment tax credit that may be claimed for qualified investments in an enterprise zone. Representative Labuda continued saying that under current law, a taxpayer can claim a state income tax credit equal to three percent of any qualified investment that is either acquired, placed into service, or constructed and used exclusively in an enterprise zone for the first year of ownership by the taxpayer. The credit is limited to the taxpayer's actual tax liability for the income tax year up to $5,000, plus 50 percent of any portion of the tax liability that exceeds $5,000 up to a maximum of $500,000.

The committee discussed the tax credits available under the state enterprise zone program. After a brief discussion, the following action was taken.


BILL:	HB12-1260
TIME:	08:08:59 PM
MOVED:	Hullinghorst
MOTION:	Refer House Bill 12-1260 to the Committee on Appropriations. The motion failed on a 5-5 vote.
SECONDED:	Pabon
		VOTE
	Acree	No
	Conti	No
	Hullinghorst	Yes
	Joshi	Excused
	Kagan	Yes
	Kefalas	No
	Labuda	Yes
	McCann	Yes
	Pabon	Yes
	Swalm	No
	Szabo	Excused
	Swerdfeger	Excused
	DelGrosso	No

YES: 5 NO: 5 EXC: 3 ABS: 0 FINAL ACTION: TIE

08:14 PM -- House Bill 12-1251 - Concerning Modifications to the Three Percent Investment Tax Credit

Representative Hullinghorst, prime sponsor, explained that House Bill 12-1251 continues current law limitations on the amount of the investment tax credit that may be claimed for qualified investments in an enterprise zone. She noted that under the bill, a taxpayer may appeal the $500,000 limitation by applying to the Colorado Economic Development Commission to claim a credit in excess of the limit. Representative Hullinghorst closed by saying that an independent analysis may be requested by the commission and the commission may allow all, part, or none of the taxpayer's request to claim the credit in excess of the $500,000 limit.


BILL:	HB12-1251
TIME:	08:33:33 PM
MOVED:	Hullinghorst
MOTION:	Moved Amendment L.001 (Attachment I). The motion passed without objection.
SECONDED:	Labuda
		VOTE
	Acree
	Conti
	Hullinghorst
	Joshi
	Kagan
	Kefalas
	Labuda
	McCann
	Pabon
	Swalm
	Szabo
	Swerdfeger
	DelGrosso

YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection

08:35 PM

After the committee acted on Amendment L.001, the bill was laid over to Wednesday, February 29, 2012. Representative DelGrosso, Chair, announced that the amendment phase would remain open by placed the bill on the calendar for action only.

08:37 PM

The committee adjourned.