STAFF SUMMARY OF MEETING
COMMITTEE ON JOINT SELECT COMMITTEE ON JOB CREATION AND ECONOMIC GROWTH
|12:24 PM to 02:40 PM
|This Meeting was called to order by
|This Report was prepared by
X = Present, E = Excused, A = Absent, * = Present after roll call
|Presentation on Bills
|Presentation by Staff and Committee Members
12:24 PM -- Discussion On Proposed Legislation
Senator Schwartz, Chair, called the meeting to order and announced that the committee would discuss the following bills.
Senator Schwartz asked staff to speak about a bill summary that was distributed to the committee on the above legislation.
The following person testified:
12:04 PM -- Mr. Todd Herreid, Legislative Council Staff, began by distributing a spreadsheet (Attachment G) on bills voted upon by the committee during the prior meeting on Thursday, January 29, and the current meeting's proposed bills. The committee discussed the categories of information on the staff side-by-side.
The committee discussed whether any new bill requests should be added to the list of bills before the committee. Senator Mitchell asked that the committee consider a bill request that would align local government permit fees for solar panels with the fee structure under state law. Senator Mitchell continued the discussion by asking that the committee consider another bill in concept that would make it easier for in-state mail order businesses to more easily access information that would allow the business to know the taxing jurisdictions that sales transactions occur in for purposes of collecting and remitting state and local sales taxes. On a voice vote of those members present, the committee asked that both concepts be drafted for bill purposes.
12:15 PM -- Concerning a General Assembly Lobbyist in Washington, D.C.
Representative McFadyen, briefly discussed Draft Bill LLS No. 09-0623.01. She noted that the draft bill requires the General Assembly to retain one or more lobbyists based in Washington, D.C., with extensive experience. Representative McFadyen noted that the bill draft's goal is to allow the state to receive its fair share of federal stimulus dollars. The committee discussed the legislation. Representative McFadyen discussed the possible costs in the bill and asked that the committee consider the bill.
12:21 PM -- Concerning Incentives for the Development of Solar Thermal Energy Systems (HB 09-1126)
Senator Heath, distributed a handout on solar thermal jobs (Attachment H) and discussed House Bill 09-1126. He noted that the bill allows local governments to provide the same incentives for solar electric installations that are authorized by the federal government. The committee engaged in a brief discussion about including geothermal heating systems in the bill.
12:26 PM -- Concerning the Creation of a State Small Business Web Page
Senator Mitchell, briefly discussed Draft Bill LLS No. 09-0762.01 and commented that it is a bill that requires the Secretary of State to create and maintain a web page that contains information regarding all state requirements related to the creation of a small business in Colorado.
12:32 PM -- Concerning a Statewide Residential Energy Improvement Loan Program
Representative Miklosi, briefly discussed Draft Bill LLS No. 09-0765.01 saying that it creates a residential energy improvement loan program and distributed a handout on the draft bill (Attachment I). He closed by saying that the bill would create many installation and supplemental jobs and increase residential property values.
12:40 PM -- Concerning Unemployment Insurance Benefits
Senator Heath, briefly discussed Draft Bill LLS No. 09-0647.01. He noted that the bill draft waives for a certain number of weeks the requirements for employees attached to regular jobs to register for work and report to an employment office as a condition of being eligible to receive unemployment insurance benefits. He closed by saying that there is no cost to the state.
12:48 PM -- Concerning the Colorado Clean Energy Development Authority
Representative Solano, briefly discussed Draft Bill LLS No. 09-0793.01. She noted that it allows the Colorado Clean Energy Development Authority to make commercial loans for projects consisting of electrical transmission, generation, and storage equipment. The committee closed the discussion by commenting on its benefit to the Governor's Energy Office.
12:49 PM -- Presentation on Enterprise Zones
12:55 PM -- Mr. Kevin Tilson, Office of Economic Development and International Trade, distributed a packet of materials on Colorado's Enterprise Zone Program. The packet consisted of information on Enterprise Zone Tax Credits (Attachment J), Colorado's Enterprise Zone Program (Attachment K), Colorado's Enhanced Rural Enterprise Zone Program (Attachment L), and a statewide map of Colorado Enterprise Zones (Attachment M).
Mr. Tilson briefly described each of the enterprise zone tax credits authorized under state law. He discussed the benefits of each credit to taxpayers and talked about the distribution of credits taken by taxpayers under the program. Mr. Tilson noted that the 3 percent investment tax credit makes up about 67 percent of all credits claimed.
Mr. Tilson continued by discussing the administration of the Enterprise Zone Program and briefly discussed the Enhanced Rural Enterprise Zone Program. The credits under the enhanced program are greater than those available to taxpayers under the regular program. Mr. Tilson closed by talking about the location of the enterprise zones throughout the state.
01:05 PM -- Staff Presentation on Revenue Impact of Enterprise Zone Credits
Staff discussed the enterprise zone credits claimed by taxpayers in FY 2006-07 and FY 2007-08. Statewide, taxpayers claimed about $47.4 million in total credits for FY 2007-08, a 9 percent increase over the $43.6 million in credits claimed the prior year. Staff explained that enterprise zone administrators certify credits each year for businesses but credits claimed are generally less than those certified. Businesses can only take these credits to the extent that the business has a tax liability that is reduced by the credits. The committee discussed whether the growth in credits can be correlated to growth in nonfarm employment growth. Staff responded by saying that the certified amount of annual credits may be a better proxy because it is not affected by tax liability.
Senator Schwartz asked that members of the committee be given bounded copies of the December 2008 Annual Report on Enterprise Zones from the Office of Economic Development and International Trade.
01:30 PM -- Staff Presentation on Federal Economic Stimulus Plan
01:31 PM -- Mr. Todd Herreid, Legislative Council Staff, distributed a handout on the Federal Economic Stimulus Plan (Attachment N) and a handout on an estimate from the Congressional Budget Office on the cost of the plan (Attachment O). Mr. Herreid noted that the plan would appropriate federal money for a wide range of federal programs and would increase or extend certain benefits payable under the Medicaid, unemployment compensation, and nutrition assistance programs. The legislation also reduces individual and corporate income tax collections and makes other changes to the tax laws. The total program would increase federal appropriations by over $604 billion during the FY 2009-10 period.
The committee engaged in a brief discussion on the implication of federal aid to the state of Colorado and its effect on the TABOR revenue limit and the 6 percent spending limit. Mr. Herreid noted that the federal money would not be subject to the TABOR limit as federal transfers are exempt. He closed by discussing the potential boost that may be given to the state's economy given the federal plan's spending on nationwide transportation infrastructure projects.
01:57 PM -- Staff Presentation on How Colorado Compares in State and Local Government Taxes
01:58 PM -- Mr. Ron Kirk, Legislative Council Staff, distributed a memorandum entitled How Colorado Compares in State and Local Taxes(Attachment P) and began by discussing Colorado's tax structure and its effect on state and local government tax rankings. He noted that the rankings provide a national perspective for evaluating the relative tax burden of Colorado's citizens and businesses and for comparing the differences in overall tax structures. Colorado’s combined state and local taxes of $98.01 per $1,000 of personal income were the fifth lowest in the nation in FY 2005-06. Colorado’s tax structure has had a long tradition of having a strong, decentralized local government tax system that has resulted in state taxes that continue to rank among the lowest in the country while local government taxes rank among the highest. As an example, when looking at state taxes, Colorado had the second lowest state tax collections ($48.91 per $1,000 of personal income) for FY 2006-07 in the country. In comparison, Colorado has the twelfth highest local government taxes in the nation at $49.51 per $1,000 of income in FY 2005-06. Mr. Kirk closed by saying that these rankings have remained fairly stable over the last decade.
02:12 PM -- Presentation on Property Taxes
02:13 PM -- Ms. JoAnn Groff and Ms. Janeen Odgen, Division of Property Taxation, distributed a handout on mix-use properties (Attachment Q), and Section 39-1-103, C.R.S. governing improvements that are made to residential dwellings for property tax valuation purposes (Attachment R). Ms. Groff noted that when a portion of an improvement is used for residential purposes and a portion is also used for any other purpose, the actual value of each portion of the improvement is determined using the appropriate appraisal methods. The land is allocated to the appropriate classes based upon the proportion that is extended to each of the improvements.
The committee discussed the calculation of the residential assessment rate given the Gallagher Amendment. Ms. Groff noted that the rate has remained unchanged at 7.96 percent for some years and given Gallagher, would increase up to 8.91 percent for the current assessment cycle. However, TABOR does not allow the rate to move upward without voter approval. Thus, the rate is lower than it would otherwise be given the restriction on tax rate increases.
The committee closed the discussion on the administration of business personal property taxes.