House Committee on Finance (04/24/2009)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON FINANCE

Date:	04/24/2009	ATTENDANCE

Time:	01:38 PM to 02:42 PM	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	E
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:
HB09-1366 HCR 09-1003		Referred to the Committee of the Whole Referred to the Committee of the Whole

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

02:30 PM -- HCR 09-1003 - Concerning the Regulation of Gaming Activities - For Action Only

(The committee initially took testimony on this resolution on Wednesday, April 22, 2009.)

The following person responded to questions regarding the amendment.

02:34 PM -- Mr. Matt Cook, Colorado Department of Revenue, responded to questions regarding the amendment and other technical changes.


BILL:	HCR09-1003
TIME:	02:34:08 PM
MOVED:	Lambert
MOTION:	Moved amendment L.001 (Attachment E). After a brief committee discussion, the motion was withdrawn.
SECONDED:	Summers
		VOTE
	Apuan
	Benefield
	Gerou
	Kefalas
	Kerr A.
	Lambert
	Roberts	Excused
	Summers
	Swalm
	Frangas
	Judd

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


BILL:	HCR09-1003
TIME:	02:41:10 PM
MOVED:	Summers
MOTION:	Refer House Concurrent Resolution 09-1003 to the Committee of the Whole. The motion passed on a 10-0 vote.
SECONDED:	Lambert
		VOTE
	Apuan	Yes
	Benefield	Yes
	Gerou	Yes
	Kefalas	Yes
	Kerr A.	Yes
	Lambert	Yes
	Roberts	Excused
	Summers	Yes
	Swalm	Yes
	Frangas	Yes
	Judd	Yes

Final YES: 10 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

02:42 PM

Adjourn.