First Regular Session
Sixty-second General Assembly
LLS NO. 99-0763.01 Robert Lackner HOUSE BILL 99-1321
STATE OF COLORADO
BY REPRESENTATIVES Swenson, Hagedorn, Dean, George, Gotlieb,
Johnson, Kaufman, Kester, King, Larson, May, Miller, Mitchell, Witwer;
also SENATORS Lacy, Teck, Anderson.
FINANCE
A BILL FOR AN ACT
101 CONCERNING THE TEMPORARY EXEMPTION OF TANGIBLE PERSONAL
102 PROPERTY TO BE USED FOR BIOTECHNOLOGICAL PURPOSES FROM
103 STATE SALES AND USE TAX FOR THE PURPOSE OF REFUNDING STATE
104 REVENUES IN EXCESS OF THE CONSTITUTIONAL LIMITATION ON
105 STATE FISCAL YEAR SPENDING.
Bill Summary
(Note: This summary applies to this bill as introduced and does
not necessarily reflect any amendments that may be subsequently
adopted.)
For any fiscal year commencing on or after July 1, 1998, if, by
September 1 of the calendar year in which that fiscal year ended, the state
controller has certified the existence of excess revenues for the preceding
state fiscal year that the voters did not authorize the state to retain and
spend, exempts from state sales and use tax, for the period October 1 of
the calendar year during which that fiscal year ended through June 30 of
the calendar year immediately subsequent to the calendar year in which
such fiscal year ended, all sales of tangible personal property purchased
by companies to be used in Colorado directly and predominately in
research and development of biotechnology. Defines terms.
Provides for publication of the state sales and use tax exemption
in rules promulgated by the executive director of the department of
revenue and in such notices and publications as are customarily issued by
the department concerning such exemptions.
Requires the state controller to certify the amount of state revenues
in excess of the constitutional limitation on state fiscal year spending for
any given fiscal year by a specified date. Requires the state auditor to
[ ] denotes HOUSE amendment. { } denotes SENATE amendment.
Capital letters indicate new material to be added to existing statute.
Dashes through the words indicate material to be deleted from existing statute.
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conduct an audit of the certified amount of excess state revenues by a
specified date.
1 Be it enacted by the General Assembly of the State of Colorado:
2 SECTION 1. Legislative declaration. The general assembly
3 hereby finds and declares that House Bill 99-____, enacted at the first
4 regular session of the sixty-second general assembly, is substantially
5 similar to Senate Bill 99-127, the prime sponsor of which was our
6 esteemed former colleague, senator Tony Grampsas. The general
7 assembly recognizes that senator Grampsas was the prime sponsor of
8 similar legislation in 1997 while serving as a member of the house of
9 representatives. The general assembly further finds and declares that
10 senator Grampsas was a strong proponent of using public and private
11 resources to ensure that the people of this state are among the nation's
12 best-educated and that, as a consequence of that educational achievement,
13 Colorado can play a leading role in the development of new and
14 beneficial technologies. Therefore, it is the intent of the general assembly
15 that this act be a living testament to the public vision and spirit exhibited
16 by senator Grampsas during his distinguished public career.
17 SECTION 2. Part 1 of article 26 of title 39, Colorado Revised
18 Statutes, is amended BY THE ADDITION OF A NEW SECTION to
19 read:
20 39-26-127. Fiscal years commencing on or after July 1, 1998
21 - temporary exemption of tangible personal property to be used for
22 biotechnological purposes from state sales and use tax - authority of
23 executive director. (1) FOR ANY FISCAL YEAR COMMENCING ON OR
24 AFTER JULY 1, 1998, IF, BY SEPTEMBER 1 OF THE CALENDAR YEAR IN
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1 WHICH THAT FISCAL YEAR ENDED, THE CONTROLLER HAS CERTIFIED IN
2 ACCORDANCE WITH THE PROVISIONS OF SECTION 24-77-106.5, C.R.S.,
3 THAT THE AGGREGATE AMOUNT OF STATE REVENUES EXCEEDS THE
4 LIMITATION ON STATE FISCAL YEAR SPENDING IMPOSED BY SECTION 20 (7)
5 (a) OF ARTICLE X OF THE STATE CONSTITUTION FOR THE FISCAL YEAR
6 ENDING IN THAT CALENDAR YEAR, AND VOTERS STATEWIDE EITHER HAVE
7 NOT AUTHORIZED THE STATE TO RETAIN AND SPEND ALL OF THE EXCESS
8 REVENUES FOR THAT FISCAL YEAR OR HAVE AUTHORIZED THE STATE TO
9 RETAIN AND SPEND ONLY A PORTION OF THE EXCESS STATE REVENUES FOR
10 THAT FISCAL YEAR, THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF
11 REVENUE SHALL, FOR THE PERIOD OF OCTOBER 1 OF THE CALENDAR YEAR
12 DURING WHICH THAT FISCAL YEAR ENDED THROUGH JUNE 30 OF THE
13 CALENDAR YEAR IMMEDIATELY SUBSEQUENT TO THE CALENDAR YEAR IN
14 WHICH SUCH FISCAL YEAR ENDED, TEMPORARILY EXEMPT FROM THE STATE
15 SALES AND USE TAX IMPOSED PURSUANT TO SECTIONS 39-26-104 AND
16 39-26-202, TANGIBLE PERSONAL PROPERTY TO BE USED IN COLORADO
17 DIRECTLY AND PREDOMINATELY IN RESEARCH AND DEVELOPMENT OF
18 BIOTECHNOLOGY IN ACCORDANCE WITH SECTIONS 39-26-114 (20) (a) AND
19 39-26-203 (1) (hh).
20 (2) (a) ANY STATE SALES AND USE TAX EXEMPTION ALLOWED
21 PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL BE PUBLISHED IN
22 RULES PROMULGATED BY THE EXECUTIVE DIRECTOR OF THE DEPARTMENT
23 OF REVENUE IN ACCORDANCE WITH ARTICLE 4 OF TITLE 24, C.R.S., AND
24 SHALL BE INCLUDED IN SUCH NOTICES AND PUBLICATIONS AS ARE
25 CUSTOMARILY ISSUED BY THE DEPARTMENT OF REVENUE ON AT LEAST A
26 QUARTERLY BASIS CONCERNING EXEMPTIONS FROM THE STATE SALES AND
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1 USE TAX.
2 (b) IF ONE OR MORE BALLOT QUESTIONS THAT SEEK
3 AUTHORIZATION FOR THE STATE TO RETAIN AND SPEND ALL OR ANY
4 PORTION OF THE AMOUNT OF EXCESS STATE REVENUES FOR THE
5 IMMEDIATELY PRECEDING FISCAL YEAR ARE SUBMITTED TO THE VOTERS AT
6 A STATEWIDE ELECTION TO BE HELD IN NOVEMBER OF ANY CALENDAR
7 YEAR COMMENCING ON OR AFTER JANUARY 1, 1999, THE EXECUTIVE
8 DIRECTOR OF THE DEPARTMENT OF REVENUE SHALL NOT PUBLISH RULES
9 CONTAINING ANY STATE SALES AND USE TAX EXEMPTION ALLOWED
10 PURSUANT TO THIS SECTION UNTIL SUCH RULES ARE ABLE TO REFLECT THE
11 IMPACT OF THE RESULTS OF SUCH ELECTION ON THE EXEMPTION FROM THE
12 STATE SALES AND USE TAX ALLOWED PURSUANT TO SECTIONS 39-26-114
13 (20) (a) AND 39-26-203 (1) (hh).
14 SECTION 3. 39-26-114, Colorado Revised Statutes, is amended
15 BY THE ADDITION OF A NEW SUBSECTION to read:
16 39-26-114. Exemptions - disputes - credits or refunds.
17 (20) (a) SUBJECT TO SECTION 39-26-127, ALL SALES OF TANGIBLE
18 PERSONAL PROPERTY PURCHASED BY ANY COMPANY TO BE USED IN
19 COLORADO DIRECTLY AND PREDOMINATELY IN RESEARCH AND
20 DEVELOPMENT OF BIOTECHNOLOGY ARE EXEMPT FROM TAXATION UNDER
21 THIS PART 1.
22 (b) AS USED IN THIS SUBSECTION (20):
23 (I) "BIOTECHNOLOGY" MEANS:
24 (A) THE APPLICATION OF TECHNOLOGIES TO PRODUCE OR MODIFY
25 PRODUCTS, TO DEVELOP MICROORGANISMS FOR SPECIFIC USES, TO
26 IDENTIFY TARGETS FOR SMALL PHARMACEUTICAL DEVELOPMENT, OR TO
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1 TRANSFORM BIOLOGICAL SYSTEMS INTO USEFUL PROCESSES OR PRODUCTS;
2 AND
3 (B) THE POTENTIAL ENDPOINTS OF THE RESULTING PRODUCTS,
4 PROCESSES, MICROORGANISMS, OR TARGETS ARE FOR IMPROVING HUMAN
5 OR ANIMAL HEALTH CARE OUTCOMES.
6 (II) "RESEARCH AND DEVELOPMENT" MEANS QUALIFIED RESEARCH
7 AS DEFINED BY 26 U.S.C. SEC. 41 (d) (1).
8 (III) "TANGIBLE PERSONAL PROPERTY" INCLUDES CAPITAL
9 EQUIPMENT, INSTRUMENTS, APPARATUS, AND SUPPLIES USED IN
10 LABORATORIES, INCLUDING, BUT NOT LIMITED TO, MICROSCOPES,
11 MACHINES, GLASSWARE, CHEMICAL REAGENTS, COMPUTERS, COMPUTER
12 SOFTWARE, AND TECHNICAL BOOKS AND MANUALS.
13 SECTION 4. 39-26-203 (1), Colorado Revised Statutes, is
14 amended BY THE ADDITION OF A NEW PARAGRAPH to read:
15 39-26-203. Exemptions. (1) This part 2 is declared to be
16 supplementary to the "Emergency Retail Sales Tax Law of 1935", part 1
17 of this article, and shall not apply:
18 (hh) (I) SUBJECT TO SECTION 39-26-127, TO THE STORAGE, USE, OR
19 CONSUMPTION OF TANGIBLE PERSONAL PROPERTY TO BE USED IN
20 COLORADO DIRECTLY AND PREDOMINATELY IN RESEARCH AND
21 DEVELOPMENT OF BIOTECHNOLOGY.
22 (II) AS USED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH (hh),
23 "BIOTECHNOLOGY" MEANS:
24 (A) THE APPLICATION OF TECHNOLOGIES TO PRODUCE OR MODIFY
25 PRODUCTS, TO DEVELOP MICROORGANISMS FOR SPECIFIC USES, TO
26 IDENTIFY TARGETS FOR SMALL PHARMACEUTICAL DEVELOPMENT, OR TO
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1 TRANSFORM BIOLOGICAL SYSTEMS INTO USEFUL PROCESSES OR PRODUCTS;
2 AND
3 (B) THE POTENTIAL ENDPOINTS OF THE RESULTING PRODUCTS,
4 PROCESSES, MICROORGANISMS, OR TARGETS ARE FOR IMPROVING HUMAN
5 OR ANIMAL HEALTH CARE OUTCOMES.
6 (III) AS USED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH (hh),
7 "RESEARCH AND DEVELOPMENT" MEANS QUALIFIED RESEARCH AS DEFINED
8 BY 26 U.S.C. SEC. 41 (d) (1).
9 (IV) AS USED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH (hh),
10 "TANGIBLE PERSONAL PROPERTY" INCLUDES CAPITAL EQUIPMENT,
11 INSTRUMENTS, APPARATUS, AND SUPPLIES USED IN LABORATORIES,
12 INCLUDING, BUT NOT LIMITED TO, MICROSCOPES, MACHINES, GLASSWARE,
13 CHEMICAL REAGENTS, COMPUTERS, COMPUTER SOFTWARE, AND
14 TECHNICAL BOOKS AND MANUALS.
15 SECTION 5. 24-77-106.5, Colorado Revised Statutes, is
16 amended to read:
17 24-77-106.5. Annual financial report. (1) (a) For each fiscal
18 year, the controller shall prepare a financial report for the state for
19 purposes of ascertaining compliance with the provisions of this article.
20 Any financial report prepared pursuant to this section shall include, but
21 shall not be limited to, state fiscal year spending, reserves, revenues, and
22 debt. Such financial report shall be audited by the state auditor.
23 (b) BASED UPON THE FINANCIAL REPORT PREPARED IN
24 ACCORDANCE WITH PARAGRAPH (a) OF THIS SUBSECTION (1) FOR ANY
25 GIVEN FISCAL YEAR, THE CONTROLLER SHALL CERTIFY TO THE GOVERNOR,
26 THE GENERAL ASSEMBLY, AND THE EXECUTIVE DIRECTOR OF THE
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1 DEPARTMENT OF REVENUE NO LATER THAN SEPTEMBER 1 FOLLOWING THE
2 END OF A FISCAL YEAR THE AMOUNT OF STATE REVENUES IN EXCESS OF THE
3 LIMITATION ON STATE FISCAL YEAR SPENDING IMPOSED BY SECTION 20 (7)
4 (a) OF ARTICLE X OF THE STATE CONSTITUTION, IF ANY, FOR SUCH FISCAL
5 YEAR.
6 (2) ANY FINANCIAL REPORT PREPARED AND CERTIFICATION OF
7 STATE EXCESS REVENUES MADE PURSUANT TO SUBSECTION (1) OF THIS
8 SECTION SHALL BE AUDITED BY THE STATE AUDITOR. NO LATER THAN
9 SEPTEMBER 15 FOLLOWING THE CERTIFICATION MADE BY THE STATE
10 CONTROLLER FOR ANY GIVEN FISCAL YEAR, THE STATE AUDITOR SHALL
11 REPORT AND TRANSMIT TO THE GOVERNOR, THE GENERAL ASSEMBLY, AND
12 THE EXECUTIVE DIRECTOR OF THE DEPARTMENT OF REVENUE THE RESULTS
13 OF ANY AUDIT CONDUCTED IN ACCORDANCE WITH THIS SUBSECTION (2).
14 (2) (3) Notwithstanding any generally accepted accounting
15 principles to the contrary, financial reports prepared pursuant to
16 subsection (1) of this section shall not include any unrealized gains or
17 losses on investments held by the state.
18 SECTION 6. Safety clause. The general assembly hereby finds,
19 determines, and declares that this act is necessary for the immediate
20 preservation of the public peace, health, and safety.