May 11, 2026 · Appropriations · 6,741 words · 12 speakers · 378 segments
. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Senators Gonzalez.
Good morning.
Kirkmeyer.
Here.
Goldberg.
Here.
Liston.
Here.
Pelton.
It's Monday.
Mr. Vice Chair.
Here.
Madam Chair.
Here.
I was here early.
Good job.
I would have been here early, but I had to slow down through Morgan County because the roads are so bad.
I don't think it's that.
I don't think it's that.
But you knew that. Okay, we're going to hear House Bill 1065, and we have our two bill sponsors at the table. And bill sponsors, would you like us to move the J amendment?
Yes, please, Madam Chair.
Thank you. Okay, Mr. Vice Chair.
Thank you, Madam Chair. I move 1065 and J002.
Committee members, any questions? Senator Kirkmeyer.
Great. It would be wonderful if the bill sponsors could explain the fiscal notes and why we think it's a good idea to do $191,000 from the general fund.
Senator Roberts.
Thank you, Madam Chair. Thank you, Senator Kirkmeyer. So the funding would go to the – goes to Oedit. They're the ones that would be administering the transit investment area, investment TIF, as well as the housing and affordability tax credit. But I can walk you through the merits of both programs if that's what you're asking for.
That would be great.
Okay. Senator Roberts.
Thank you, Madam Chair. So this is a proposal that is supported by all of our local governments, CML, CCI, because these local areas are excited about the ability to draw down financing to help invest in areas around transit hubs. So the bill would create a transit investment authority in which three per year could be created using state sales tax within two miles of a transit center to help invest in infrastructure around that transit center to make public transit more attractive and more viable for folks by building more improvements and making things better for that transit hub. And then the second part, and that is capped at $75 million a year, again, using state sales tax revenue. And then the second part is a transit and housing investment zone tax credit that's modeled off of the statewide housing, affordable housing tax credit. And LIHTC would be administered by Oedit to help build housing around our transit areas. This is exciting for urban, suburban, and rural areas that want to invest in more affordable housing options near their transit centers.
Senator Bridges.
Thank you, Madam Chair. What are the AMIs for that housing?
Senator Roberts.
There is no AMI. In the bill, it would be modeled after similar AMI levels that we have elsewhere in state statutes. So it can be different based on the region where the housing is being created.
Senator Bridges.
Thank you, Madam Chair. So is this just low-income housing, or could this be middle-income housing, like workforce housing type stuff?
Senator Roberts.
Thank you, Madam Chair. It would depend on where it is. So, yes, I think some of the higher AMI counties would be able to have a higher AMI, and it's not limited just to a specific AMI level.
Okay. Are there any objections to the adoption of... I'm sorry, Senator Kirkmeyer.
Thank you, Madam Chair. So our state revenue will be decreased by $630,000 in the first year, and then it will continue to go up from there. Is that correct? And that's income tax, or is that... I mean, where's the net sales tax if you said this was a sales tax?
Credit. Senator Roberts.
Thank you, Madam Chair. Thank you, Senator Kirkmeyer. So it's a TIF using the 2.9% sales tax within the designated transit investment area for a period of no more than 30 years. So it's the sales tax that are generated within two miles of that transit center.
Senator Kirkmeyer.
And are local governments going to use their own sales tax revenue for this?
Senator Roberts.
Thank you, Madam Chair. They could, Senator Kirkmeyer, but they don't have to. This is the state sales tax. And, again, this bill is strongly supported by all of our municipalities and counties.
Of course it is.
Okay. Are there objections to J2? Can I see an objection? Mr. Catlett, please poll the committee on the adoption of J2. Senators Gonzalez.
Aye.
Kirkmeyer.
No.
Colker.
Aye.
Liston.
No.
Pelton.
No.
Mr. Vice Chair.
Aye.
Madam Chair.
Aye.
That amendment passes 4-3. Mr. Catlett, please poll the committee on the adoption of House Bill 1065 as amended. Senators Gonzalez.
Aye.
Kirchmeier.
No.
Coker.
Aye.
Liston.
no for now pelton no mr vice chair madam chair hi that bill passes four to three
thank you next up we're going to move out of order and we're going to hear house bill 1289 Senator Weissman, can you tell us what of the amendments we have?
We have a J3, an L73, and an L74, which says something about how hard you've been working on this.
Which of these amendments would you like us to?
I am asking the committee to adopt both of the L's and the J. The J, a staff prepared, tracks L74. I'm also asking for L73.
Mr. Vice Chair. Thank you, Madam Chair. I move House Bill 1289, J3, L73, and L74.
Committee members, questions? Senator Kirkmeyer.
Given the fact that we just saw a 28-page fiscal note, can you tell us what this does?
Sure.
Senator Weissman.
Thanks. Yes, Madam Chair. Yes Senator Liston I go for the brief version So this is a tax cleanup bill There are other bills moving I believe one is on the committee docket this morning that are proposing some bigger changes in tax in our state 1289 is not trying to be that bill. For a number of years, we had the Interim Committee on Tax. That committee begat bills like this that would try to make small adjustments to a number of provisions at once. That committee was shut down last interim for fiscal reasons. Nonetheless, this bill draws its inspiration in part from the tax expenditure profiles by the OSA that have informed a lot of that interim committee's work over the years and that continue to be prepared by the office, notwithstanding the temporary cessation of the interim committee. Other sources that the bill draws from are looking at how some provisions of our taxes compare to practices in other states, such as rules for taxation of complex multi-state C-Corp group filers. We also have tried to take cognizance in a few places here of how the federal tax environment has changed and to some extent also just learning, e.g., from impacted taxpayers, businesses, as we've had provisions on the books over the last couple of years and are just trying to make adjustments to our tax code in response to those learnings. So that's a very high-level set of statements.
Senator Kroekmeyer.
So are we going to increase taxes then by basically $6.9 million?
Senator Weissman.
Senator, there are provisions cutting different ways in here. There are some tax expenditures that are concluded. Some are continued provisions of some are modified, aiming in a net neutral way where we are landing on net in the positive. Again, you can't ascribe it to any one thing, but maybe more than anything else, it is due to the modification of some tax expenditures in the fuel excise space with the result that money will flow in to HUTF. We are also concluding some tax expenditures concerning tobacco and nicotine products. those flow in a variety of ways, indicated in the back part of the fiscal note, page 20-something, in part to early childhood and pre-K programs.
Senator Kirkmeyer.
So Table 1A shows that budget in the revenue, that there'll be a total revenue of $6.9 million. So essentially, are we increasing taxes by $6.9 million to get to the total revenue?
Senator Weissman.
the total net of everything going on and all the provisions in here does end up being net positive by a bit. The point of this bill is not revenue. The point of this bill is to try to clean up our tax code. Some things in some aspects of the bill, we are increasing tax expenditures. For example, trying to help people do, you know, beetle mitigation, things like that, trying to help people use newer technologies. But on net, we have that positive impact in some years.
Senator Weissman, can you just touch on what's going to happen to the drives fund with the adoption of a subsequent bill that we're going to be hearing?
Sure. Thanks, Madam Chair. So some interesting interaction between a couple of different pieces of legislation this year There are certain income streams that normally go into HUTF for example taxes levied on fuels There are two things going on in 1289 that in one case end, in one case reduce but do not end tax expenditures related to taxes levied on fuels. There's what's called the volumetric adjustment. When you're moving liquid fuel around, depending on the temperature, its volume will expand or contract. There's some equation in physics. It's too early for me to try to state about how that works. We have a 2% figure in our statute. What we think we learned at the tax expenditure committee a couple of interims ago is that, frankly, 1% is probably more scientifically accurate to capture that. So we're making that change in 1289. Another thing that we're doing is we are ending what's called a bad debt allowance. If a business incurs a bad debt, that can be written off as a business expense per federal tax laws, and then that flows through to us through dynamic informity. So there's still some way for a business that has experienced a bad debt to deal with that. The result of those two changes means that compared to right now, more of that excise tax flows in than would because we are limiting those tax expenditures. That excise tax lands in HUTF. It is my understanding that another bill intends to address some issues in the drives software with an allocation out of HUTF. I believe the committee will hear that bill in a bill or two. You could think of the necessary HUTF funding for that other bill as originating, at least in part, from the modifications to the tax expenditures I just described. Thank you, Madam Chair.
I just want to confirm something that I've heard you say a couple of times, and it does seem to me to be the case given this, that this is about streamlining and efficiencies and that that is fundamentally, most importantly, why it is that this bill is being run and what this bill does. Senator Weissman.
Thank you, Madam Chair. Senator, yes. We end up a little bit revenue positive. That's not the point. We are looking at being over the TABOR cap in the near term. We are not allowed to retain any revenue that goes over that. We're just driving TABOR rebate. I think most members of the committee have been around me long enough to know that if I want to write a bill that is going to drive a gigantic increase in revenue to the state by making bigger changes to the tax code than we see here, I know how to do that. That is not this bill. Again, there are other bills moving that propose much bigger things. I don't know where those bills are going to go this year. Senator Bridges, to your question, example. We have a provision dating back to some 1970s aspects of federal tax law that's gotten badly out of sync. It's kind of unfixable. We are ending that. In the space of tax policy related to clean tech, geothermal, industrial decarbonization, electric vehicles, electric trucks, electric lawn equipment, we have seen the federal tax environment change. We have had those programs running for a couple years. at CO We have had some requests from merchants of some of that equipment to make some changes So there a bunch of provisions in the bill addressing those things They're not inherently meant to be revenue positive or negative. They're just meant to make the tax system more responsive as we have come to understand the needs. I wouldn't have said this when I started here 10 years ago, but I've come to think of a tax code as kind of a living thing like a garden. it needs tending to perform optimally, and 1289 is trying to do some of that tending.
Okay. Senator Kirkmeyer.
Great. Thank you. On the income tax changes to taxable income, the wages and salaries deduction is being repealed, and what exactly is that? Which wages and salary deductions being repealed?
Senator Weissman.
Okay. This is a fun one, Senator. So...
Everyone else thinks it's fun, but I'm...
Dating back to the 70s. All right. I'm on page 10. At the federal tax level, we don't want people double dipping, right? So what federal tax law has come to say, this is Internal Revenue Code 280C, where some income that a taxpayer has, federally speaking, is going to drive claiming a credit. at the federal level, you can't also take a deduction for that which you take a credit for. Only makes sense, right? But we're one of the few dynamic informity states. So you have this situation where a taxpayer is getting a federal credit, not a federal deduction. Okay, but then they're not getting the state deduction for the lack of that federal deduction, either because dynamic informity. That's just how dynamic informity works. So decades ago, we put into our state tax law a provision that would let you effectively take a deduction for what you would have deducted but for you claim the credit instead at the federal level. And then what is or isn't sort of within that IRC 280C has evolved a lot over the years. We haven't kept up. States are all over the place in this issue. Rather than try to sort of untangle this Gordian knot, the policy choice here, and this has been briefed a couple times by tax expenditure profiles from OSA, the policy choice here is simply to say we're going to get rid of this deduction. Taxpayers continue to benefit from the credit that they get federally. We saw in H.R. 1 last year there have been a bunch of additional generous accelerated deductions for all manner of business expenses. Sections 168, 169, 174, I think, of Internal Revenue Code were some of those. At any rate, the feds will do their tax thing. We will do our tax thing. This is intended to simplify, among other things.
Senator Kirkmeyer.
So what's the bottom line to the taxpayer?
Senator Weissman.
Bottom line to a lot of taxpayers is going to be no impact because 280C is not something that impacts all taxpayers. Wages and salaries are a common business deduction, obviously. So if you are deducting those federally, you experience those as coming off your tax base at the state level through dynamic conformity. where 280C comes in is if there's something sort of narrow and bespoke that gives you not a deduction but a credit people would generally rather have a credit than a deduction right in their taxes if you are a kind of taxpayer who can get a federal credit for whatever reason federal law has said you can get it for you don't also get So it's only some taxpayers that are even going to be impacted by this, that the general rule of wages and salaries are deductible business expenses in federal law and state law continues to obtain.
Senator Kirkmeyer.
So the impact is some taxpayers will see an increase in taxes that they have to pay.
Senator Weissman.
If you are a taxpayer who benefits from a federal credit, does not thereby take a deduction because of IRC 280C, you would see a slightly higher Colorado taxable income when this provision goes away. Yes. And again, that is a pretty small number of taxpayers in the state. You will note in the fiscal note, this is one of those provisions that's not broken out into its own line by DUR. It gets lumped together with other things, so there's a little bit of inexactitude in how it can be scored. I think how LCS chose to score this is they sort of made a maximalist assumption, which is that everything, I think about $53 million in that line, was attributable to this 280C provision, which is obviously not the case, again, because it's rolled up with other stuff. And then you apply 4.4%, et cetera, you end up at about $2.3 million from memory. But check me on that. So that would be the maximum impact to Colorado taxpayers from our letting this provision sunset. I think the actual impact would be less than that, again, because there's 50-somethings rolled up in that line, and it's not all 280C. Bottom line is it's a tax increase.
And then on the employer-sponsored health insurance tax credit, when the credit is repealed for these businesses, are we to assume they're going to have a $2.4 million tax increase essentially because the tax credit goes away?
Senator Weissman.
I think you are referring to the provision whereby we cap the applicability of this tax expenditure at smaller businesses, 50 or below.
Senator Kirkmeyer. Thank you. So larger businesses, 50 or above, would see a repeal and would mean an increase in taxes because they wouldn't get the tax credit anymore?
Senator Weissman.
All other things equal, yes.
Okay.
Are there objections to L2J? Well, let's start with L73. Seeing none, L-73 is adopted. Are there objections to L-74?
I'm sorry. I'm just reading. L-73 actually reduces previously authorized general fund transfers to the state highway fund. So we're going to transfer less to the state highway fund? Is that what L-73 does?
Senator Weissman.
Yes, and Senator, let me give you an explanation. I know that you in particular in this committee, rightly so, are concerned about the general fund. This goes back to the conversation about HUTF. a few moments ago because of changes happening in the bill that will result in more HUTF coming in that is non-TAPER exempt. So all other things equal, we risk crowding out room under the general fund. 73 backs up on a part of SB 21-260. That provided, AMONG MANY OTHER THINGS FOR GENERAL FUND TRANSFERS TO, IN RELEVANT PART HERE, THE STATE HIGHWAY FUND THE STATE SHARE OF HUTF IF YOU WILL 60 RIGHT BECAUSE WE HAVE MORE HUTF coming in in a way that will waterfall down to the state 73 tries to take cognizance of what happening in other parts of the bill so that the amount going on the state highway fund is going to be held harmless as though none of this were happening, but by dialing back the transfer from the general fund dollar for dollar we we preserve that much more room in the general fund but but state highway funding is held harmless on net does that make sense not really but senator kirkmaier and how does that impact in the 60 22 18 split
generally between state federal our state counties and cities senator
Weissman the we're not touching the split the split is still 60 22 18 and to
the extent that more HUTF dollars are coming in, they go through the same waterfall. So the recipients of the 22 and the 18, the counties and the cities, are going to get their share. They don't have to care about general fund getting crowded out. We do. So that's why this state highway fund transfer adjustment.
Okay. So I'd like to object to 73.
Okay. Mr. Catlett, please poll the committee on the adoption of L-73. Senators Gonzalez.
Aye.
Kirkmeyer.
No.
Colker.
Aye.
Liston.
No.
Pelton.
No.
Mr. Vice Chair.
Madam Chair. Aye.
That amendment is adopted. I want to vote a four to three. Next up, are there objections to the adoption of L74? Seeing none, L74 is adopted. Mr. Catlett, please pull the committee on, oh, are there objections to J3? Seeing none, J3 is adopted. Mr. Catlett, please pull the committee on the adoption of House Bill 1289 as adopted by J3L73 and L74. Senators Gonzalez.
Aye.
Kirkmeyer. No.
Colker. Aye. Liston. No.
Pelton. No.
Mr. Vice Chair. Aye.
Madam Chair. Aye. That bill passes 4-3.
Thank you, Committee. Thank you. Next up, we will hear
House Bill 1102.
And I have one amendment, L42.
Senator Snyder, would you like us to move L42? Yes, Madam Chair.
Mr. Vice Chair.
Thank you, Madam Chair.
I move House Bill 1102 and L42.
Senator Kirkmeyer. Great. Thank you, Madam Chair. What does L42 do Senator Snyder You know that a great question I got my yellow sheet here just about five minutes ago Me too Specifically I have not mastered that yet Exactly what
it does. I can tell you all about the program and what we're trying to do here. All right.
Well, let's start with that, maybe the classic comic book version. Okay.
So 1102 is looking to find a sustainable path for funding for drives, which runs all of our DMV operations. I'll spare you the long history of that, but it is scheduled to be underwater and bankrupt by the beginning of the 27-28 fiscal year. So, trying to come up with that sustainable source of funding, they are looking to divert money from the Hut-Tough to the tune of $4.5 million in 2627 and then all the way up to $6.312 million in 2728. But realize that it says right at the top, none of this goes into effect unless Section 22 of the previous Bill 1289 passes. So that seeks to reduce the fuel allowance that the fuel distributors enjoy. It's currently 2.5% allowance. That will be cut down to one. That will actually bring in more money than we're diverting from HutTough back into HutTough. So if everything passes, it will be a net increase to funding in Hut-Tuff. But when I first was approached to get on this bill, I saw them taking money out of Hut-Tuff, which is so important to counties and cities and local government, and I told them I couldn't support that unless we found a way to backfill it. So the backfill will be coming from $12.89, from reducing the fuel allowance that currently exists from 2.5% to 1%.
Okay, they're making fun of you.
HUTF. HUTF. Did I say it wrong? You keep calling it HUTF. It's just HUTF. Which I think we should start calling it, everyone. I like it.
I don't think so.
HUTF.
Okay, and I got to phone a friend here on L42,
and it's just a technical amendment that's aligning dates from an amendment that was put on in finance. Thank you.
So, committee members, are there any objections to the adoption of L42? Seeing none, L42 is adopted. Mr. Catlett, please poll the committee on the adoption.
I just still have a question, please.
Senator Kirkmeyer.
So I need you to actually explain the hold harmless provision. It's based off of whether or not we increase taxes in another bill, and then we're going to hold it harmless. Otherwise, if that bill doesn't pass, then this doesn't pass?
Senator Snyder.
Correct. Although I would parse words with you about tax increase. reducing an allowance that's currently given to the fuel distributors. Like I said, 2% allowance right off the top and a half percent allowance for bad debts and fuel spillage, I guess it is. But that would be the source of funding to make HUT-Tough not only whole, but increase funding into HUTF by approximately million a year because we be funding the drives account with about million but the total new money into HUTF from the reduction in the allowance will eventually reach $9.9 million.
Senator Kirkmeyer.
So instead of taking the whole reduction of the allowance on the fuel and putting it into the HUTF, where it should go, we're actually going to put $4.5 million into the drive's cash fund to run the drive's cash fund.
Yes.
So we could have had even more money in HUTF going to transportation,
but instead we're not going to do that. We're going to reduce the allowance. Is that what it is? We're going to reduce the allowance for the fuel or increase the allowance on the fuel?
Reduce the allowance.
Senator Schneider.
From 2.5% to 1%.
Senator Bridges.
Thank you, Madam Chair.
I don't think it's accurate to say not going to transportation drives is a key part of our broader transportation infrastructure. It is not explicitly to the project's tough funds, which, look, I love it. I'm going to use that from now on. But it is absolutely supporting our broader transportation infrastructure.
Okay.
Senator Pelton.
Thank you, Madam Chair. Senator Bridges, does drives fill potholes and fix roads? Because that's kind of the reason why I have an issue with what we're doing here.
Senator Bridges.
Thank you, Madam Chair. I mean, drives does ensure that you have that driver's license and a license plate so that you can drive on those roads.
And if we don't have a system that is ensuring folks can get driver's licenses and register their vehicles, then our roads will be far emptier. And perhaps the potholes will be more avoidable. Okay. Senator Snyder.
Thank you, Madam Chair.
I think it's important to remember, too, that this is not a new concept. The state auditor has been calling for years about questioning the efficacy of the allowance that the fuel distributors get. I can't recall right off top if they were calling for the complete elimination of that. This does not do that. And, you know, DMVs are probably one of the most interactive things the state government does with citizens and voters. And if we don't have the money to fund those DMV centers, I think the cascade of complaints will dwarf what we may have experienced with other programs.
Senator Kirkmeyer.
HUTF is TABOR exempt?
Senator Snyder.
That's a great question. I thought it was, but I don't believe it is. So I'll just say we do need funding for drives, and it is absolutely terrible what we're doing to citizens of Colorado who are trying to get their driver's license, a new driver's license or renew their driver's license, and that they have to make an appointment and wait months. And then if they don't bring absolutely everything they need, they have to get to the back of the line again. Just I've gotten so many complaints, and I think this is a good solve.
Mr. Catlett, please poll the committee on the adoption of 1102 as amended by L42 Senators Gonzalez
Aye
Kirkmeyer
No
Coker
Aye
Liston. No. Pelton. No. Mr. Vice Chair. Aye. Madam Chair. Aye. That bill passes 4-3. Next up, we will hear from about 12-23, and I see Senators Ball and Roberts coming to the table. And we have a bunch of amendments listed here, and my understanding is you would like us to move J-1, L21, L23, and L24. Is that correct? Mr. Vice Chair.
Thank you, Madam Chair. I would say so moved, but I think we can't do that here. I move House Bill 1223, J1, J21, J23, and J1, L21, L23, and L24.
Senator Kirkmeyer.
Thank you, Madam Chair.
Maybe you can explain the fiscal note and tell us what the bill actually does. I'm sorry?
We're not doing 22.
Not 22. No.
Not 22.
Senator Ball.
Thank you, Madam Chair.
So the bill eliminates the downloadable software tax exemption. It also funds the expanded family affordability credit, credit in addition to the retail food establishment sales tax deduction for gas and electricity and the special sales tax deduction for the next two years for four months of the year.
Senator Kirkmeyer. And after two years, what happens with the family affordability tax credit and the taxable refund?
Senator Ball.
Thank you, Madam Chair. So the two-year limit is only on the special state sales tax deduction. It is not on the retail food establishment sales tax deduction for gas and electricity or the expanded family affordability credit.
Senator Kerkmeyer. So in effect, are we layering another family affordability tax refundable credit tax refund on top of the one that we currently have?
Senator Ball.
Yes, that's right.
Senator Kerkmeyer. And what happens with that credit, that taxable refund credit, when we are not above the cap?
Senator Ball.
How do we pay for it?
Senator Roberts.
Thank you, Madam Chair. So the bill removes the downloadable software tax exemption permanently, and so the funding will permanently go to the family affordability credit that's created in this bill.
Senator Kirkmeyer.
And so if we are not above the cap, do we still have to pay the taxable refund on the family affordability tax credit?
Senator Ball.
Thank you, Madam Chair.
Correct.
So that would come out of the general fund?
Senator Ball.
Thank you, Madam Chair.
Like any tax refund, this would just be revenue that does not hit the state.
Senator Kirkmeyer.
If we eliminate a tax exemption, we increase taxes, right?
And when we're below the cap, one thing happens. When we're above the cap, we pay for it above the cap, from above the cap. When we're below the cap though, it ends up coming out of the general fund because you've decreased revenues and now we below the cap So how do we pay for the taxable refund in the family affordability tax credit We pay for that out of the general fund correct Senator Ball Thank you Madam Chair
So there's basically no change to the general fund.
It's just a difference in where that money is coming from.
So right now, the money from the downloadable software tax exemption does not reach the general fund.
It doesn't matter whether we're above or below the Tabor cap.
So even if we were below the taper cap, that's money that the state doesn't receive.
That continues to be the case with this bill in the future.
It's just that that money is no longer coming to the state or not coming to the state because of the downloadable software tax exemption.
It's not coming to the state because of the impact of the three different tax deductions that are covered in this bill.
Senator Kirkmeyer.
If we are below the cap, is there still a taxable refund required?
Senator Ball.
Yes, there is.
I think what Senator Kirkmeyer is getting at is the current affordability tax credit has a trigger, which doesn't exactly have to do with whether we're above or below the cap, but it does have a trigger, and that trigger is triggered right now. And so I believe that the senator is potentially asking you, are there any triggers in this bill that would turn that off under certain circumstances? Which I don't think there are, but Senator Ball.
I don't believe there are.
Senator Kirkmeyer.
So again, there are no triggers.
Doesn't turn it off. Even if it did turn it off, it's always a year too late, essentially. And we end up paying for the family affordability tax credit refund, the refundable part of that, the credit is refundable. We end up paying for that out of the general fund when we're below the cap. So is it the same for this expanded family affordability credit?
Senator Roberts.
Thank you, Madam Chair.
Senator Kirkmeyer, there is no trigger for this expanded family affordability credit
because it is paid directly from the removal of the exemption for downloadable software.
So it's a one-to-one transfer.
Any money that comes in from the downloadable software tax that will now be assessed goes to the Family Affordability Credit. There is no trigger regarding TaborCap or exceeding or not.
Okay.
Senator Liston.
Thank you.
So on page seven of the fiscal note, it says expanded family affordability credit, the EFAC, and we call that EFAC, I guess maybe, will decrease general fund revenue to Tabor by $43 million in fiscal 26, 27 and $77 million with increasing amounts.
Would you explain that?
Senator Ball.
Thank you, Madam Chair.
So in effect, that's the status quo.
It's just that the impact of that right now is coming from the downloadable software tax exemption.
So right now, because of the downloadable software tax exemption, there's $43 million less coming into what would be the general fund in 26-27, and then $77 million in 27-28.
So there's no change in the amount of money that the state is receiving.
that tax exemption is going away and it's effectively being replaced by the expanded family affordability credit and the two restaurant credits that we described.
Senator Liston Thank you Madam Chair And I was just trying to understand the nexus for the downloadable software tax credit or exemption and the expanded family affordability credit
I mean, how does software relate to the family affordability credits just because there was more money there?
I'm just trying to understand the nexus between software and the families.
Senator Roberts.
Thank you, Madam Chair.
So right now, if you need to go purchase software and you go to a store to buy a Microsoft Office software to download onto your computer, you're paying sales tax.
But if you download it from the Internet, you're not paying sales tax.
So we're modern, and obviously that happens a lot more in the modern times, downloading this from the Internet.
So we're trying to modernize our tax code in that regard.
There is not, I suppose, a direct nexus.
This is a choice in values of how do we allocate these funds to help Coloradans. We've decided in this bill to do it in a few ways, to fund the expanded family affordability credit, which helps our working families in Colorado. But we're also giving sales tax relief to some of the most important small businesses, in my opinion, in our state, which is our restaurants. So that is the choice that we're making in this bill on how to use that revenue.
Okay, let's start with the amendments. Are there objections to the adoption of L21? Seeing none, L21 is adopted. Are there objections to L23? Seeing none, L23 is adopted. Are there objections to amendment L24? Seeing none, L24 is adopted. And that leaves us with J1. Are there any objections to J1? Seeing none, J1 is adopted. Mr. Catlett, please poll the committee on the adoption of House Bill 1223 as amended by J1, L21, L23, and L24. And that, I know, will take a minute.
Do, do, do, do, do, do, do. it's final jeopardy it's the final countdown I know
Senator Gonzalez
Aye.
Kirkmeyer.
No.
Colkert.
Aye.
Liston.
No.
Pelton.
No.
Mr. Vice Chair.
Aye.
Madam Chair. Aye. That bill passes 4-3. Next up, we have House Bill 1272. And I see Senator Weissman is here. And I see we have J3 and J4. Which or either or both of those would you like us to run? Senator Weissman.
Thanks, Madam Chair.
I think after some discussion, I'm back around to the prior time that this bill was before the committee,
which is asking for the adoption of J3 just to catch the appropriate by a small amount to the latest fiscal analysis.
So J3 but not J4 Correct not J4 Okay Mr Vice Chair Thank you Chair I move House Bill 12 72 and J3 Committee members we did already have some discussion about this
but are there questions for the bill sponsor? I'm sorry.
Yes. Senator Kirkmeyer.
So did we eliminate the fiscal note?
Senator Weissman.
J3 does not eliminate the fiscal note.
It does not?
It does not.
It just reduces, it just increases it to 76,000.
Senator Weissman.
So there's an appropriate here already from the House.
Subsequent to the House, the fiscal analyst got some new data from the impacted agency,
which apparently surfaced that they need an additional fractional FTE.
That is what J3 is proposing to do.
Senator Kirkmeyer.
And so that leaves in, so the fiscal note would be instead of $97,000, it's going to be $76,000?
Senator Weissman.
So the total number in the box is sort of the direct appropriate and the centrally appropriated aspect.
You could, I guess if you see Table 1A, that's going to break it out.
Senator Kerkmeyer.
So just so we're clear, we have a fiscal note that's going to increase by .6 FTE in the Department of Labor
and $91,000 of essentially general fund monies.
Senator Weissman. That would be the net impact of the bill as amended by J3, but to be clear, that's the total net impact.
J3 is not adding all of that.
J3 is adding .2 FTE on top of what's already there
and about $13,000 on top of what's already there.
Okay. Committee members, are there objections to J3? Seeing none, J3 is adopted. Mr. Catlett, please poll the committee on the adoption of House Bill 1272 as amended by J3. Senators Gonzalez.
Aye.
Kirkmeyer.
No.
Coker.
Aye.
Liston.
No.
Pelton.
No.
Mr. Vice Chair.
Aye.
Madam Chair. Aye. That bill passes 4-3. Thank you, committee. Thank you. Next up, we have House Bill 1306 with Senator Kipp. And Senator Kipp, we have a J2 and an L7. AND WOULD YOU LIKE US TO MOVE BOTH OF THOSE? I BELIEVE SO, YES. THE J2 REDUCES AN APPROPRIATION TO THE DEPARTMENT OF REVENUE, WHICH SHOULD MAKE YOU ALL HAPPY. AND L-007 FINISHES THE FIX THAT WE WERE PUTTING IN TO MAKE SURE THAT THERE IS NO APPROPRIATION NEEDED FOR THIS BILL. MR. VICE CHAIR. THANK YOU, MADAM CHAIR.
I move 1306 and J002 and L007, 007.
Committee members, are there objections to L7? Seeing none, L7 is adopted. Are there objections to J2? Seeing none, J2 is adopted. Mr. Catlett, please poll the committee on the adoption of House Bill 1306 as amended. Okay. Senators Gonzalez. Aye.
Kirkmeyer. No.
Coker. Aye.
Liston. No.
Pelton. No.
Mr. Vice Chair. Aye.
Madam Chair. Aye.
That bill passes four to three.
Okay.
We don't.
They're all dying. Next up.
Yeah, they're all dying.
They don't have enough to eat.
No.
They can't catch the horses.
Because they shouldn't have been put here in the first place.
They can't catch the horses.
Next up we have 1324.
And we also have L9. Senator Doherty, would you like us to adopt or to run L9, to move L9?
Yes, please.
Okay. Mr. Vice Chair.
Thank you, Madam Chair.
I move House Bill 1324 into L9. Committee members, questions?
Senator Kirkmeyer.
Thank you, Madam Chair.
Yeah, can you explain the fiscal note?
I'm trying to figure out what it is.
And then also, can you explain why we need to have a fee increase?
Senator Doherty.
So we're actually, it was recommended for the fee increase, but we're not going that route anymore, which is what the amendment says in front of you.
L9 goes back to the original $1 from two. Thank you. Okay. Any objections to the adoption of L9? Seeing none, L9 is adopted. Mr. Catlett, please poll the committee on the adoption of 1324 as amended. Senators Gonzalez.
Aye.
Kirkmeyer.
Aye.
Colker.
Aye.
Liston.
Aye.
Pelton.
Despite my feelings of Dora, I'll vote an aye.
Mr. Vice Chair.
Aye.
Madam Chair. Aye. That bill passes unanimously. Mr. Vice Chair.
May I suggest the consent committee?
Any objections? Calendar. Calendar. Yeah, calendar. Consent calendar. Thank you. Any objections? Seeing none, that will be on the consent calendar. And our work here is complete until this afternoon. The Senate Committee on Appropriations is adjourned. Thank you. Thank you. Thank you Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
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Thank you. Thank you.
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Thank you. Thank you. Thank you. Thank you. Thank you Thank you. Thank you.