House Committee on Finance (01/27/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	01/27/2009	ATTENDANCE

Time:	09:50 AM to 11:09 AM	Apuan	X
		Benefield	X
Place:	LSB A	Gerou	X
		Kefalas	X
This Meeting was called to order by		Kerr A.	X
	Representative Judd	Lambert	X
		Roberts	X
This Report was prepared by		Summers	X
	Ron Kirk	Swalm	X
		Frangas	X
		Judd	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB09-1035 HB09-1101		Amended, Referred to Appropriations Amended, Referred to the Committee of the Whole

09:50 AM -- House Bill 09-1035 - Concerning Sales and Use Tax Refunds for Certain Technology Companies

Representative Riesberg, prime sponsor, explained the provisions of the bill. He explained that House Bill 09-1035 would allow certain clean technology and medical device firms to receive refunds on sales and use taxes paid on the purchase of equipment used in research and development. The firms must be headquartered in Colorado and have no more than 50 employees. Each taxpayer may not receive more than a $50,000 refund during any calendar year.

The committee discussed the $50,000 cap in the bill. Representative Riesberg noted that the cap was placed in the bill to limit impacts.

The following persons testified:

09:55 AM -- Mr. Larry Blankenship, ValveXchange Inc., testified in support of the bill. Mr. Blankenship explained that his company is developing a new heart value that will make it possible for heart patients to avoid open-heart surgery. He explained the development process of the valve and the sale of the product after its approval by the FDA. He closed by saying that the development of the product and the research tied to its production have created jobs in Colorado. He continued by saying that the refund mechanism in House Bill 09-1035 will be very valuable to ValveXchange and the state. The incentive in House Bill 09-1035 will result in other companies moving to Colorado.

The committee discussed the use of venture capital rather than state money in the funding of "clean technology" firms. Mr. Blankenship responded by saying that venture capital is an important funding source for many start-up companies. However, through 2008, venture capital was strong but now these companies are taking a "wait and see" attitude given the economy. The committee discussed the products that would be used by ValveXchange that would qualify for the sales and use tax refund. Mr. Blankenship continued by discussing the operation of the business.

The committee closed the discussion by asking why the clean technology industry should receive this tax break over other industries. Mr. Blankenship responded by saying that the industry is well-positioned to attract businesses from other states that will create high paying jobs and provide money back to the state.

10:18 AM -- Ms. Denise Brown, Colorado Cleantech Industry Association (CCIA), testified in support of the bill. Ms. Brown discussed the bill as an incentive for the medical device industry that will create new jobs in Colorado. She closed by pointing out that the industry is closely tied to the research institutions that are based in Colorado. This bill will provide an important incentive to the industry.

The committee discussed the number of jobs that would be created by the sales and use tax refund in the bill. Ms. Brown responded by saying that as many as 50 jobs per year may result from the legislation and noted that other economic gains may also be realized.

10:39 AM

The bill was placed on the table for action and amendments L.001 (Attachment A) and L.002 (Attachment B) were distributed to the committee. Representative Riesberg explained that amendment L.001 makes a number of technical changes and includes a 6 percent trigger. It also contains a repeal date of July 1, 2014. Amendment L.002 makes technical changes to amendment L.001.


BILL:	HB09-1035
TIME:	10:40:42 AM
MOVED:	Frangas
MOTION:	Moved amendment L.001. The amendment makes a number of technical changes and includes a 6 percent trigger, and a repeal date of July 1, 2014. The motion passed without objection by those members present.
SECONDED:	Kefalas
		VOTE
	Apuan
	Benefield
	Gerou
	Kefalas
	Kerr A.
	Lambert
	Roberts
	Summers
	Swalm
	Frangas
	Judd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1035
TIME:	10:45:38 AM
MOVED:	Frangas
MOTION:	Moved amendment L.002 (makes technical changes to amendment L.001). The motion passed without objection by those members present.
SECONDED:	Summers
		VOTE
	Apuan
	Benefield
	Gerou
	Kefalas
	Kerr A.
	Lambert
	Roberts
	Summers
	Swalm
	Frangas
	Judd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1035
TIME:	10:46:51 AM
MOVED:	Kefalas
MOTION:	Refer House Bill 09-1035, as amended, to the Committee on Appropriations. The motion passed on a 7-4 vote.
SECONDED:	Benefield
		VOTE
	Apuan	No
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	No
	Roberts	Yes
	Summers	Yes
	Swalm	No
	Frangas	Yes
	Judd	No

Final YES: 7 NO: 4 EXC: 0 ABS: 0 FINAL ACTION: PASS

10:55 AM -- House Bill 09-1101 - Concerning the Administration of Sales Tax Collections

Representative Benefield, prime sponsor, explained the provisions of the bill and distributed amendment L.001 (Attachment C), and a fact-sheet from the Department of Revenue on House Bill 09-1101 (Attachment D). She commented that the bill imposes a penalty on vendors that are delinquent in filing their sales tax return to the Department of Revenue. Representative Benefield explained that some vendors remit the taxes they collect on time, but fail to file the corresponding tax return. This results in the department being unable to determine where to distribute the local government portion of the sales taxes it receives.

The following person testified:

11:03 AM -- Mr. Scott Downs, Colorado Fiscal Policy Institute, testified in support of the bill. He commented that the bill encourages fiscal accountability and will help local governments get the taxes that are collected by the Department of Revenue on a more efficient basis.

11:05 AM

The bill was placed on the table for action and Representative Benefield discussed amendment L.001. She noted that the amendment makes technical changes and clarifies language that applies to the penalties in the bill.


BILL:	HB09-1101
TIME:	11:05:50 AM
MOVED:	Benefield
MOTION:	Moved amendment L.001. The amendment makes technical changes and clarifies language that applies to the penalties in the bill. The motion passed without objection by those members present.
SECONDED:	Frangas
		VOTE
	Apuan
	Benefield
	Gerou
	Kefalas
	Kerr A.
	Lambert
	Roberts
	Summers
	Swalm
	Frangas
	Judd

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: Pass Without Objection


BILL:	HB09-1101
TIME:	11:08:07 AM
MOVED:	Benefield
MOTION:	Refer House Bill 09-1101, as amended, to the Committee of the Whole. The motion passed on a 11-0 vote.
SECONDED:	Frangas
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	Yes
	Roberts	Yes
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

Final YES: 11 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: PASS

11:09 AM

Adjourn.