Temporary Decrease Statutory Property Tax Revenue Limits

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO INTRODUCED HOUSE BILL 26-1209 LLS NO. 26-0524.01 Rebecca Bayetti x4348 HOUSE SPONSORSHIP Suckla, SENATE SPONSORSHIP (None), House Committees Senate Committees Transportation, Housing & Local Government A BILL FOR AN ACT CONCERNING A TEMPORARY DECREASE IN THE STATUTORY LIMITS ON THE AMOUNT OF PROPERTY TAX REVENUE THAT A TAXING ENTITY IS ALLOWED TO RAISE.

Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) Current law restricts the annual amount of property tax revenue that a local government or a special district may collect to the amount of property tax revenue collected in the previous year plus 5.5%, with certain adjustments. This statutory limit does not apply to school districts or home rule municipalities. The limit may be waived by voter approval Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

of the voters of the taxing entity (waived jurisdictions). Current law also restricts the annual amount of property tax revenue that a waived jurisdiction may collect to the greatest amount of qualified property tax revenue collected by the taxing entity in a previous property tax year increased by 5.25% multiplied by the number of property tax years in a reassessment cycle. Similarly, the annual amount of property tax revenue that a school district may collect is limited to the greatest amount of the local share of statewide total program property tax revenue collected by a school district in a previous property tax year increased by the greater of 6% multiplied by the number of property tax years in a reassessment cycle or the sum of the percentage by which the general assembly annually increases the statewide base per pupil funding for public education from kindergarten through twelfth grade and the percentage increase in pupil enrollment for both the relevant property tax year and the other property tax year in the same reassessment cycle. Both of these statutory property tax revenue limits may also be waived by voters, except that individual school districts are not able to locally waive their individual property tax limits and, instead, must seek statewide voter approval to waive the school district limit. The bill temporarily reduces the operative percentage adjustments in these 3 statutory property tax revenue limits to 4% for property tax years beginning on or after January 1, 2027, but before January 1, 2033.

Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 29-1-301, amend (1)(a) and (1)(b); and add (1)(a.5) and (7) as follows:

29-1-301. Levies reduced - limitation - repeal.

(1) (a) EXCEPT AS PROVIDED IN SUBSECTION (1)(a.5) OF THIS SECTION, all statutory tax levies for collection in 1989 and thereafter when applied to the total valuation for assessment of the state, each of the counties, cities, and towns not chartered as home rule except as provided in this subsection (1), and each of the fire, sanitation, irrigation, drainage, conservancy, and other special districts established by law shall be so reduced as to prohibit the levying of a greater amount of revenue than was levied in the preceding year plus five and one-half percent plus the amount of revenue abated or refunded by the taxing entity by August 1 of the current year less the amount of revenue received by the taxing entity by August 1 of the current year as taxes paid on any taxable property that had previously been omitted from the assessment roll of any year, except to provide for the payment of bonds and interest thereon, for the payment of any contractual obligation that has been approved by a majority of the qualified electors of the taxing entity, for the payment of expenses incurred in the reappraisal of classes or subclasses ordered by or conducted by the state board of equalization, for the payment to the state of excess state equalization payments to school districts which excess is due to the undervaluation of taxable property, or for the payment of capital expenditures as provided in subsection (1.2) of this section. For purposes of this subsection (1), the amount of revenues received as taxes paid on any taxable property that had been previously omitted from the assessment roll shall not include the amount of such revenues received as taxes paid on oil and gas leaseholds and lands that had been previously omitted from the assessment roll due to underreporting of the selling price or the quantity of oil or gas sold therefrom. In computing the limit, the following shall be excluded: The increased valuation for assessment attributable to annexation or inclusion of additional land, the improvements thereon, and personal property connected therewith within the taxing entity for the preceding year; the increased valuation for assessment attributable to new construction and personal property connected therewith, as defined by the property tax administrator in manuals prepared pursuant to section 39-2-109 (1)(e), C.R.S., within the taxing entity for the preceding year; the increased valuation for assessment attributable to increased volume of production for the preceding year by a producing mine if said mine is wholly or partially within the taxing entity and if said increase in volume of production causes an increase in the level of services provided by the taxing entity;

and the increased valuation for assessment attributable to previously legally exempt federal property which becomes taxable if such property causes an increase in the level of services provided by the taxing entity.

(a.5) (I) AS APPLIED TO STATUTORY TAX LEVIES FOR COLLECTION IN PROPERTY TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2027, BUT BEFORE JANUARY 1, 2033, THE FIVE AND ONE-HALF PERCENT GROWTH LIMIT ESTABLISHED IN SUBSECTION (1)(a) OF THIS SECTION IS REDUCED TO FOUR PERCENT FOR PURPOSES OF THE CALCULATION REQUIRED BY THIS SECTION.

(II) THIS SUBSECTION (1)(a.5) IS REPEALED, EFFECTIVE JULY 1,

(b) For property tax years beginning on or after January 1, 1991, any taxing entity may apply to the division of local government in the department of local affairs for authorization to exclude the following from the computation of the limitation set forth in paragraph (a) of this subsection (1) LIMITATIONS SET FORTH IN SUBSECTION (1)(a) OR (1)(a.5) OF THIS SECTION: All or any portion of the increased valuation for assessment attributable to new primary oil or gas production for the preceding year from any producing oil and gas leasehold or land if such oil and gas leasehold or land is wholly or partially within the taxing entity and if such new primary oil or gas production has caused or will cause an increase in the level of services provided by the taxing entity.

(7) (a) NOTWITHSTANDING ANY PROVISION OF THIS PART 3 TO THE CONTRARY, AN INCREASED LEVY ALLOWED PURSUANT TO SECTION 29-1-302 OR AN EXISTING VOTER AUTHORIZATION TO EXCEED OR WAIVE THE LIMITATIONS SET FORTH IN THIS SECTION APPLIES TO THE TEMPORARY LIMITATION SET FORTH IN SUBSECTION (1)(a.5) UNLESS OTHERWISE SPECIFIED IN THE QUESTION APPROVED BY THE VOTERS OR THE DIVISION OF LOCAL GOVERNMENT IN THE DEPARTMENT OF LOCAL AFFAIRS.

(b) THIS SUBSECTION (7) IS REPEALED, EFFECTIVE JULY 1, 2037.

SECTION 2. In Colorado Revised Statutes, 29-1-1703, amend (1.5)(c) and (4)(b)(I) as follows:

29-1-1703. Property tax limit calculation - definitions - repeal.

(1.5) As used in subsection (1) of this section and this subsection (1.5), unless the context otherwise requires:

(c) (I) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (1.5)(c)(II) OF THIS SECTION, "growth rate percentage" means five and twenty-five hundredths percent multiplied by the number of property tax years in the current reassessment cycle.

(II) (A) FOR PROPERTY TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2027, BUT BEFORE JANUARY 1, 2033, "GROWTH RATE PERCENTAGE" MEANS FOUR PERCENT MULTIPLIED BY THE NUMBER OF PROPERTY TAX YEARS IN THE CURRENT REASSESSMENT CYCLE.

(B) THIS SUBSECTION (1.5)(c)(II) IS REPEALED, EFFECTIVE JULY 1, 2037. (4) As used in subsection (3) of this section and this subsection (4), unless the context otherwise requires:

(b) "Growth rate percentage" means the greater of:

(I) (A) FOR PROPERTY TAX YEARS OTHER THAN THOSE YEARS BEGINNING ON OR AFTER JANUARY 1, 2027, BUT BEFORE JANUARY 1, 2033, six percent multiplied by the number of property tax years in the current reassessment cycle; or

(B) FOR PROPERTY TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2027, BUT BEFORE JANUARY 1, 2033, FOUR PERCENT MULTIPLIED BY THE NUMBER OF PROPERTY TAX YEARS IN THE CURRENT REASSESSMENT CYCLE;

OR

SECTION 3. In Colorado Revised Statutes, 29-1-1705, add (4) as follows:

29-1-1705. Prior obligations not impaired - voter-approval of mill increases - disaster emergency spending - definitions - repeal.

(4) (a) NOTWITHSTANDING ANY PROVISION OF THIS PART 17 TO THE CONTRARY, AN EXISTING VOTER AUTHORIZATION TO EXCEED OR WAIVE THE LIMITATIONS SET FORTH IN THIS PART 17 APPLIES TO THE TEMPORARY GROWTH RATE PERCENTAGES DESCRIBED IN SECTION 29-1-1703 FOR PROPERTY TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 2027, BUT BEFORE JANUARY 1, 2033, UNLESS OTHERWISE SPECIFIED IN THE QUESTION APPROVED BY THE VOTERS.

(b) THIS SUBSECTION (4) IS REPEALED, EFFECTIVE JULY 1, 2037.

SECTION 4. Applicability. This act applies to property tax years commencing on or after January 1, 2027. SECTION 5.

Safety clause. The general assembly finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, or safety or for appropriations for the support and maintenance of the departments of the state and state institutions.