House Committee on Finance (04/06/2005)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	04/06/2005	ATTENDANCE

Time:	01:34 PM to 05:12 PM	Benefield	X
		Cloer	E
Place:	HCR 0107	Crane	X
		Frangas	X
This Meeting was called to order by		Garcia	X
	Representative Vigil	Jahn	*
		Marshall	X
This Report was prepared by		Massey	X
	Ron Kirk	May M.	X
		McCluskey	X
		Witwer	X
		Judd	X
		Vigil	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
SCR05-001 HB05-1314 HB05-1294		Amended, Referred to Committee on Appropriations Amended, Referred to Committee on Appropriations Amended, Referred to Committee on Appropriations

01:34 PM

Representative Vigil, Chairman, called the meeting to order and commented that a quorum is present. Representative Gallegos, prime sponsor, distributed amendment L.007 (Attachment A) to committee members and explained the provisions of the bill. Representative Gallegos explained the resolution, if approved by voters in the November 2006 general election, will allow for the senior homestead exemption to be extended to 100% disabled veterans. He closed by saying the exemption for disabled veterans would not apply to surviving spouses.

The committee discussed the level of disability that would trigger the benefit under the bill for a 100% disabled veteran.

The following persons testified:

01:47 PM -- Mr. Herb Homan, representing self, commented that the Senior Lobby has not taken a position on the bill. Mr. Homan said that he was concerned about the timing of the bill because a lot could change before the exemption is approved by voters. Mr. Homan mentioned that the exemption can be beneficial because a disabled veteran with a 100 percent disability may have more expenses related to the disability than other military veterans. Mr. Homan closed by saying the proposal could be postponed one year until voters vote on House Bill 05-1194 in the November 2005 General Election.

02:03 PM -- Mr. Josh Harwood, Legislative Council Staff, responded to committee questions and commented on the funding for the military exemption. Mr. Harwood closed by pointing out the differences between the senior homestead exemption and the exemption for disabled veterans.

02:07 PM -- Mr. Jason Gelender, Office of Legislative Legal Services, responded to committee questions. Mr. Gelender clarified that SCR 05-001 does not make any changes to the existing homestead exemption for seniors.

The committee discussed exempting the entire cost of the homestead exemption from the TABOR revenue limit. After a brief discussion, the bill was placed on the table for action. The committee discussed amendment L.001. The amendment allows the state to pay for the exemption (for disabled veterans) from excess TABOR revenues, when available.


BILL:	SCR 05-001
TIME:	02:22:12 PM
MOVED:	Vigil
MOTION:	Moved amendment L.007. (The amendment allows the state to pay for the exemption (for disabled veterans) from excess TABOR revenues, when available.) The amendment passed without objection by those members present.
SECONDED:	Benefield
		VOTE
	Benefield
	Cloer	Excused
	Crane
	Frangas
	Garcia
	Jahn
	Marshall
	Massey
	May M.
	McCluskey
	Witwer
	Judd
	Vigil
Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	SCR 05-001
TIME:	02:22:59 PM
MOVED:	Judd
MOTION:	Refer SCR 05-001, as amended, to the Committee on Appropriations. The motion passed on a 12-0-1 vote.
SECONDED:	Benefield
		VOTE
	Benefield	Yes
	Cloer	Excused
	Crane	Yes
	Frangas	Yes
	Garcia	Yes
	Jahn	Yes
	Marshall	Yes
	Massey	Yes
	May M.	Yes
	McCluskey	Yes
	Witwer	Yes
	Judd	Yes
	Vigil	Yes
Final YES: 12 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

02:30 PM -- House Bill 05-1314 - Concerning Aviation Development Zones

Representative Borodkin, prime sponsor, explained the provisions of the bill and distributed a Legislative Council Staff memorandum on the fiscal assessment of proposed amendment L.001 (Attachment B) to committee members. Also distributed were two articles on tax incentives for airline manufactures (Attachments C and D) and a 2004 Annual Report for the Airports Division Northwest Mountain Region (Attachment E).

Representative Borodkin commented that as amended by L.001, the tax credit in House Bill 05-1314 is worth up to $1,200 per year per new employee, prorated by month; limited to 12 consecutive months total for each new employee; and not refundable, but may be carried forward for up to five years. Representative Borodkin asked fiscal note staff to comment on the revised numbers in the fiscal note.

02:33 PM -- Mr. Chris Ward, Legislative Council Staff, explained the provisions in amendment L.001. Mr. Ward commented that the amendment reduces the impact of the bill to the extent that some eligible businesses will not be able to take advantage of the tax credit because they have no tax liability. Mr. Ward mentioned that as amended by L.001, House Bill 05-1314 would reduce state revenues by up to $36,000 per year.

The committee briefly discussed the credit under the bill as amended by amendment L.001.

The following persons testified:

02:40 PM -- Mr. William Hamilton, Pilots of Colorado, testified in support of the legislation. Mr. Hamilton commented on the number of pilots who would benefit from the legislation. Mr. Hamilton commented that Colorado does not have a financial tax incentive in place to benefit aviation manufactures. He closed by saying House Bill 05-1314 will bring aviation manufacturers to Colorado rather than having these businesses move to other states that provide greater tax incentives.

02:42 PM -- Mr. Robert Olislagers, Airport Director for Centennial Airport, testified in support of the legislation and commented on how the legislation could benefit airports in Colorado.

02:48 PM -- Mr. George Bye, Chief Executive Officer, Aviation Technology Group, Inc., and Mr. Charlie Johnson, Chief Financial Officer, Aviation Technology Group, Inc., commented on the benefits that airline manufacturing businesses bring to Colorado. Mr. Bye commented that for every aviation manufacturing job, three additional jobs are created as support jobs for the industry. Mr. Bye closed by commenting that despite the fact that the tax benefit under House Bill 05-1314 was reduced from the introduced version of the bill, aviation manufactures appreciate the tax benefit and it will go a long way to bring more jobs to Colorado. Mr. Bye distributed a packet of color photos (Attachment F) to committee members that shows some of the jet aircraft that is manufactured by the Aviation Technology Group.

03:03 PM -- Ms. Debbie Woodward, Economic Developers' Council of Colorado, testified in support of the legislation and talked about the primary job creation that would occur should Aviation Technology Group, Inc., relocate to Colorado. Ms. Woodward distributed a letter from the Council (Attachment G) supporting House Bill 05-1314.

03:06 PM -- Mr. Preston Gibson, Jefferson Economic Council, testified in support of the legislation and distributed a letter of support (Attachment H) for HB 05-1314 from the Council. Mr. Gibson commented that this bill will help economic development efforts at all airports in Colorado.

03:10 PM -- Ms. Kristi Pollard, South East Business Partnership, urged the committee to support House Bill 05-1314 and commented on the ways airports could benefit from the bill. Representative Vigil commented on the labor force that would also benefit from the legislation.

03:13 PM -- Mr. Travis Vallin, Colorado Department of Transportation, testified in support of the legislation.

03:16 PM -- Mr. Dennis Heap, Front Range Airport, testified in support of the legislation and commented on the public and private investment that goes into the development of an airport.

03:19 PM -- Mr. John Brackney, Denver Metro Chamber of Commerce, testified in support of the legislation.


BILL:	HB05-1314
TIME:	03:22:09 PM
MOVED:	Vigil
MOTION:	Moved amendment L.001. (The amendment reduces the fiscal impact of the bill by: making the tax credit worth up to $1,200 per year per new employee, prorated by month; limits the credit to 12 consecutive months total for each new employee; and makes the credit not refundable, but allows for a five year carry forward period.) The motion passed without objection by those members present.
SECONDED:	McCluskey
		VOTE
	Benefield
	Cloer	Excused
	Crane
	Frangas
	Garcia
	Jahn
	Marshall
	Massey
	May M.
	McCluskey
	Witwer
	Judd
	Vigil
Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB05-1314
TIME:	03:24:21 PM
MOVED:	McCluskey
MOTION:	Refer House Bill 05-1314, as amended, to the Committee on Appropriations. The motion passed on a 10-2-1 vote.
SECONDED:	Benefield
		VOTE
	Benefield	Yes
	Cloer	Excused
	Crane	Yes
	Frangas	Yes
	Garcia	No
	Jahn	Yes
	Marshall	Yes
	Massey	Yes
	May M.	Yes
	McCluskey	Yes
	Witwer	Yes
	Judd	No
	Vigil	Yes
Final YES: 10 NO: 2 EXC: 1 ABS: 0 FINAL ACTION: PASS

03:36 PM -- House Bill 05-1294 - Concerning A State Income Tax Credit For Commercial Vehicles In Enterprise Zones

Representative McFayden, prime sponsor, explained the provisions of the bill and distributed a Legislative Council Staff memorandum on the fiscal assessment of proposed amendment L.003 (Attachment I) to committee members. Representative McFadyen explained House Bill 05-1294 expands the 3-percent investment tax credit for new business investment to large commercial trucks. Amendment L.003 would restrict the new credit to 2005 model year vehicles or newer and sets requirements for a vehicle to be considered "housed and based" within an enterprise zone. Thus, by restricting the credit to newer year commercial vehicles, the fiscal impact is reduced.

The following persons testified:

03:46 PM -- Mr. Herb Homan, representing self, did not take a position on the legislation but commented on his concerns about the income tax credits, deductions, and tax credits being debated by the General Assembly during a year in which the legislature has little budgetary flexibility.

03:56 PM -- Mr. Greg Fulton, Colorado Motors Carriers Association, distributed a handout entitled "Colorado Taxes versus Other States" (Attachment J) to committee members and testified in support of the legislation. Mr. Fulton said that Colorado trucking companies bear the fourth highest tax burden in the nation. In 2002, a typical five-axle tractor-semitrailer combination paid $7,341 in state highway user fees and taxes. Mr. Fulton closed by commenting on the states that border Colorado that exempt truck tractors in interstate commerce from state sales taxes.

04:08 PM -- Mt. Evan Metcalf, Colorado Office of Economic Development, responded to committee questions about Colorado's enterprise zone program and discussed the program's history.

04:19 PM -- Mr.Ken Beengle, Adams County Economic Development, testified in support of the legislation and commented that House Bill 05-1294 is not a new tax credit but corrects a vital omission in the 3-percent investment tax credit.

04:28 PM -- Mr. Joe Kiely, Town Administrator for Limon, Colorado and Vice President of the Port-to-Plains Trade Corridor Coalition, distributed a handout to committee members on the "Ports-to-Plains Trade Corridor (Attachment K) and testified in support of the legislation. Mr. Kiely discussed the new jobs that would be created by the passage of House Bill 05-1294. Mr. Kiely pointed out that in manufacturing, 1,700 direct jobs would be created in Ports-to-Plains counties. In addition, 3,613 jobs would be created indirectly. Mr. Kiely closed by discussing the revenues that these new jobs would contribute to the state's coffers.

04:36 PM -- Mr. Mike Riley, Front Range Cartage, Commerce City, testified in support of the legislation. Mr. Riley discussed the costs of starting a trucking company and how House Bill 05-1294 would help start-up companies gain initial seed moneys.

04:49 PM -- Mr. Tom Lee, Mile High Frozen Foods, testified in support of the legislation and commented that Colorado has the fourth-highest taxes in the country on commercial trucks.

04:52 PM -- Mr. Scott McCandless, McCandless International Trucks of Colorado, testified in support of the legislation. Mr. McCandless mentioned that his company employes 175 employees at three facilities and closed by saying that House Bill 05-1294 would help commercial truck dealers in Colorado to expand and hire more employees in some of the more economically-depressed areas of Colorado.

04:56 PM -- Mr. Tim Jackson, Colorado Auto Dealers Association, testified in support of the legislation.

04:59 PM -- Ms. Debbie Woodward, Economic Developers' Council of Colorado, distributed a handout from the council of support for the legislation (Attachment L) and urged the committee to vote for the legislation. Ms. Woodward commented on the distressed economic areas in the state that benefit from the enterprise zone program. Ms. Woodward closed by saying the trucking industry is important to Colorado's future.

The committee briefly discussed amendment L.001. (The amendment makes the bill effective for tax year 2006 and reduces the fiscal impact of the legislation by restricting the income tax credit to 2005 model year or newer vehicles and sets requirements for a vehicle to be considered "housed and based" within an enterprise zone.) The motion passed without objection by those members present.


BILL:	HB05-1294
TIME:	05:08:42 PM
MOVED:	Massey
MOTION:	Moved amendment L.003. (The amendment limits the credit to new commercial truck purchases.) The motion passed without objection by those members present.
SECONDED:	Frangas
		VOTE
	Benefield
	Cloer	Excused
	Crane
	Frangas
	Garcia
	Jahn
	Marshall	Excused
	Massey
	May M.
	McCluskey
	Witwer
	Judd
	Vigil
Not Final YES: 0 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB05-1294
TIME:	05:09:37 PM
MOVED:	Jahn
MOTION:	Refer HB 05-1294, as amended, to the Committee on Appropriations. The motion passed on a 7-4-2 vote.
SECONDED:	Vigil
		VOTE
	Benefield	Yes
	Cloer	Excused
	Crane	No
	Frangas	Yes
	Garcia	No
	Jahn	Yes
	Marshall	Excused
	Massey	Yes
	May M.	Yes
	McCluskey	No
	Witwer	Yes
	Judd	No
	Vigil	Yes
Final YES: 7 NO: 4 EXC: 2 ABS: 0 FINAL ACTION: PASS

05:12 PM

Adjourn.