Bill Summary for Bill Number HB09-1366

Date: 04/24/2009

Final
BILL SUMMARY for HB09-1366

HOUSE COMMITTEE ON FINANCE

Votes: View-->	Action Taken:
Moved amendment L.001 (Attachment D). The motion Refer House Bill 09-1366 to the Committee of the W	TIE PASS

01:39 PM -- House Bill 09-1366 - Concerning the State Income Tax Deduction for Capital Gains

Representative Pommer, prime sponsor, explained that House Bill 09-1366 eliminates the state income tax deduction for capital gains and discussed the North Carolina case that is being referenced to conclude that Colorado's state deduction appears to violate the U.S. Commerce Clause.

The committee discussed the legal perspectives and economic impact tied to repealing the state income tax deduction. After a brief discussion, the Chair asked to hear from Mr. Jason Gelender, the bill drafter.

The following persons testified:

01:47 PM -- Mr. Jason Gelender, Office of Legislative Legal Services, distributed a legal memorandum on the constitutionality of the state income tax deduction for capital gains (Attachment A). He continued to discuss the memorandum and the definition of intangibles as it applies to Colorado's state income tax deduction. The crux of the case that found North Carolina's tax on intangibles in conflict with the U.S. Constitution is that the law gives preferential treatment to in-state corporations. Mr. Gelender continued by discussing the U.S. Commerce Clause and the findings in the case. He closed by saying that there has not yet been a formal challenge to Colorado's capital gains deduction.

The committee discussed the net revenue gain that could be realized from the passage of House Bill 09-1366.

02:03 PM -- Ms. Laura Oldright, Colorado Fiscal Policy Institute, testified in support of the bill and said that the repeal of the state income tax deduction would give the legislature more flexibility in terms of balancing its budget.

02:07 PM -- Ms. Kate Watkins, Legislative Council Staff, responded to committee questions about the economic impacts of eliminating the state capital gains deduction. Ms. Watkins distributed two handouts on the revenue impact (Attachments B & C)

02:10 PM

After a brief committee discussion, the bill was placed on the table for action.


BILL:	HB09-1366
TIME:	02:10:32 PM
MOVED:	Frangas
MOTION:	Moved amendment L.001 (Attachment D). The motion failed on a 5-5 vote.
SECONDED:	Kefalas
		VOTE
	Apuan	Yes
	Benefield	No
	Gerou	No
	Kefalas	Yes
	Kerr A.	No
	Lambert	No
	Roberts	Excused
	Summers	Yes
	Swalm	No
	Frangas	Yes
	Judd	Yes

Not Final YES: 5 NO: 5 EXC: 1 ABS: 0 FINAL ACTION: TIE


BILL:	HB09-1366
TIME:	02:20:40 PM
MOVED:	Summers
MOTION:	Refer House Bill 09-1366 to the Committee of the Whole. The motion passed on a 6-4 vote.
SECONDED:	Benefield
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	No
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	Excused
	Summers	No
	Swalm	No
	Frangas	Yes
	Judd	Yes

Final YES: 6 NO: 4 EXC: 1 ABS: 0 FINAL ACTION: PASS