House Committee on Local Government (02/02/2010)

Final
STAFF SUMMARY OF MEETING

HOUSE COMMITTEE ON LOCAL GOVERNMENT

Date:	02/02/2010	ATTENDANCE

Time:	01:33 PM to 05:32 PM	Acree	X
		Apuan	X
Place:	HCR 0111	Bradford	X
		Liston	X
This Meeting was called to order by		Massey	X
	Representative Peniston	McKinley	X
		Priola	*
This Report was prepared by		Schafer S.	*
	Raegan Robb	Vigil	*
		Soper	X
		Peniston	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
HB10-1157 HB10-1093 HB10-1129		Postponed Indefinitely Postponed Indefinitely Committee Vote - Final Action Failed

01:32 PM

The committee chair, Representative Peniston, called the meeting to order.

01:33 PM -- House Bill 10-1157

Representative Summers, prime sponsor, presented House Bill 10-1157, concerning the authorization for county governments to obtain voter approval to levy specified taxes for the purpose of providing financial assistance to specified institutions of higher education that are not universities within their territorial boundaries. Representative Summers discussed funding challenges for higher education in Colorado and the need to assist state colleges. He explained that the bill allows a board of a state college and a board of county commissioners to impose either an ad valorem tax upon taxable property within the county or a sales tax to support the state college. The question of levying a tax would be placed before the electors of the county to support state colleges located within the territorial boundaries of a county. The bill precludes counties from imposing the tax in order to raise moneys on behalf of a university. Representative Summers addressed questions from the committee concerning language in the bill, and whether county voters would be willing to support state colleges within the county. He also discussed the process required of a state college and a board of county commissioners to refer a question to voters to approve a levy.

01:38 PM

Travis Berry, representing Western State College, testified in support of the bill and discussed the need to create other methods for funding state colleges.

01:51 PM

Jason Hopfer, Colorado Community College System, testified in support of the bill and discussed the need for additional funding options for state colleges.

01:52 PM

John Karakoulakis, Director of Legislative Affairs, Department of Higher Education, testified in support of the bill and explained that the Governor's Commission on Higher Education would be considering legislation similar to House Bill 10-1157 during the 2010 legislative session. He addressed questions from the committee and recommended that House Bill 10-1157 be postponed indefinitely due to ongoing discussions with the commission's subcommittee on sustainability.

01:57 PM

Representative Summers talked about the progress of the Governor's Higher Education Strategic Planning Steering Committee, and the need to include the ideas of House Bill 10-1157 in upcoming recommendations from the steering committee's subcommittee on sustainability.

01:58 PM

Committee discussion ensued concerning a letter supporting the ideas of House Bill 10-1157 from the House Committee on Local Government to the Higher Education Strategic Planning Subcommittee on Sustainability. The committee chair, Representative Peniston, decided that a letter would be drafted to the subcommittee for committee members to sign.


BILL:	HB10-1157
TIME:	01:59:32 PM
MOVED:	Massey
MOTION:	Moved to postpone House Bill 10-1157 indefinitely. The motion passed on a 10-0-1 roll call vote.
SECONDED:	Schafer S.
		VOTE
	Acree	Yes
	Apuan	Yes
	Bradford	Yes
	Liston	Yes
	Massey	Yes
	McKinley	Yes
	Priola	Excused
	Schafer S.	Yes
	Vigil	Yes
	Soper	Yes
	Peniston	Yes

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

02:03 PM -- House Bill 10-1093

Representative Bradford, prime sponsor, presented House Bill 10-1093, concerning a limitation on what may be considered when determining the actual value of real property for the purpose of levying property tax. Representative Bradford explained that the bill would clarify state law by prohibiting a county assessor from considering the value of stock in the determination of the actual value of real property. The bill also prohibits a county assessor from considering the value of personal property located on real property in the determination of the actual value of the real property. Representative Bradford discussed the fiscal note for the bill and explained that the fiscal impact of House Bill 10-1093 would be addressed by an amendment. She distributed a memorandum to the committee concerning an amendment to reduce the fiscal impact of House Bill 10-1093 (Attachment A).

02:10 PM

Representative Bradford discussed a specific situation where vacation cabins are developed by owners who have all purchased stock in for the property of resort companies. She explained problems with county assessors using the value of stocks to assess the actual value of real property for such resort companies. Representative Bradford distributed a handout to the committee describing a resort company in Delta County called Grand Mesa Resort Company where the county assessor began considering the value of stock in the determination of the actual value of the company's real property (Attachment B).

02:13 PM

Jack Nisley, Grand Mesa Resort Company, testified in support of the bill and discussed the history of the Grand Mesa Resort Company where stock owners are allowed to build cabins on parcels throughout a large mountain subdivision in Delta County. Mr. Nisley discussed how resort companies like Grand Mesa Resort Company function and how the actual value of real property is determined by the county assessor. He explained that the resort company was reclassified as residential real property, which changed the way this property was assessed based on the price of stocks for such resort companies. Mr. Nisley discussed problems where cabin owners were not able to pay the increasing property taxes and were being forced to sell their stock in the resort company.

02:27 PM

Mr. Nisley addressed questions from the committee concerning the formula for assessing the value of stock in the determination of the actual value of real property. Committee discussion ensued concerning these types of resort companies and the formula for assessing resort companies reclassified as residential real property.

02:58 PM

John LaFebvre, representing the Colorado County Treasurers Association and Colorado Counties Inc., testified against the bill and explained why the value of stock must be considered when assessing the value of real property. Mr. LaFebvre discussed the county process of property value and tax assessments and explained that the bill would allow various types of property tax avoidance. Mr. LaFebvre addressed questions from the committee concerning taxes levied on real property and the services paid for by county property tax dollars.

03:10 PM

Paul Jacobs, County Assessor, City and County of Denver, testified against the bill and discussed the difficulty for assessors to determine property value, and explained that the value of stock can be used to determine the actual value of real property. Mr. Jacobs discussed language in the bill and the definitions of personal property and real property in state law. Mr. Jacobs addressed questions from the committee concerning the need to determine the value of stock when assessing the actual value of real property.

03:19 PM

Patrick Boyle, Colorado Assessors Association, testified against the bill and explained that the bill was tied to one case where property was overvalued by a county assessor, and the resort company has exercised its rights to appeal the property value assessment. Mr. Boyle discussed the process of appealing property taxes at the local and state levels pursuant to state law. Mr. Boyle explained that the case in Delta County was going through the assessment appeal process and House Bill 10-1093 would create changes in state law before this case concluded. Mr. Boyle responded to question concerning the guiding laws for property tax assessment in Colorado and the large number of assessment appeal cases that are filed each year.

03:32 PM

JoAnn Groff, Director, Division of Property Taxation, Department of Local Affairs, came before the committee to address questions on the the process of property assessment and taxation. Director Groff explained the assessment of the property in Delta County and explained why the property held by the Grand Mesa Resort Company was reclassified by the county assessor. She discussed other situations in Colorado where similar resort companies were being assessed using the value of stock in determining the actual value of real property. She also discussed the right to protest property value assessment, the process of appealing property taxes at the local and state levels, and how the changes to state law under House Bill 10-1093 would influence current and future assessment appeal cases. Director Groff discussed prepared amendment L.003 (Attachment C), which strikes language in the bill that conflicted with federal laws pertaining to railroads and airlines.

03:53 PM

Todd Herreid, Fiscal Director, Legislative Council Staff, addressed the committee to discuss the fiscal impact of the introduced version of the bill and explained prepared amendment L.003 (Attachment C).

03:53 PM

James Mackley, Grand Mesa Resort Company, testified in support of the bill and explained the property tax assessment process for shareholders of resort companies like the Grand Mesa Resort Company. Mr. Mackley discussed similar resort companies in Colorado that could also have county assessors consider the value of stock when determining the actual value of the company's real property. Mr. Mackley addressed questions from the committee concerning the right of shareholders and how taxes and fees are divided between all of the share holders.

04:06 PM

Michael Dougan, Grand Mesa Resort Company, testified in support of the bill, talked about the methods of property tax appraisals, and explained why county assessors should not consider the value of stock to determine the value of the company's real property. Mr. Dougan addressed questions from the committee concerning the jump in property taxes for shareholders, due to the consideration of value of company stock to determine the actual value of the company's real property.

04:13 PM

Dale Ann Suckow, Grand Mesa Resort Company, testified in support of the bill, talked about the rights of shareholders of the resort company, and discussed why the value of stock should not be used to determine the actual value of the company's real property. Ms. Suckow addressed questions concerning the value of stock shares and how shares are transferred with the sale of each building envelope.


BILL:	HB10-1093
TIME:	04:23:26 PM
MOVED:	Peniston
MOTION:	Moved amendment L.003 (Attachment C). The motion passed on a 9-2 roll call vote.
SECONDED:	Liston
		VOTE
	Acree	Yes
	Apuan	No
	Bradford	Yes
	Liston	Yes
	Massey	Yes
	McKinley	Yes
	Priola	Yes
	Schafer S.	Yes
	Vigil	Yes
	Soper	No
	Peniston	Yes

Not Final YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

04:26 PM

Representative Bradford entered closing comments on the bill.


BILL:	HB10-1093
TIME:	04:43:01 PM
MOVED:	Bradford
MOTION:	Moved to refer House Bill 10-1093 to the Committee on Finance. The motion failed on a 4-7 roll call vote.
SECONDED:	McKinley
		VOTE
	Acree	Yes
	Apuan	No
	Bradford	Yes
	Liston	Yes
	Massey	No
	McKinley	Yes
	Priola	No
	Schafer S.	No
	Vigil	No
	Soper	No
	Peniston	No

Not Final YES: 4 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB10-1093
TIME:	04:43:59 PM
MOVED:	Priola
MOTION:	Moved to postpone House Bill 10-1093 indefinitely. The motion passed on a 7-3-1 roll call vote.
SECONDED:	Apuan
		VOTE
	Acree	Excused
	Apuan	Yes
	Bradford	No
	Liston	No
	Massey	Yes
	McKinley	No
	Priola	Yes
	Schafer S.	Yes
	Vigil	Yes
	Soper	Yes
	Peniston	Yes

Final YES: 7 NO: 3 EXC: 1 ABS: 0 FINAL ACTION: PASS

04:46 PM

The committee stood in a brief recess.

04:55 PM -- House Bill 10-1129

Representative Bradford, prime sponsor, presented House Bill 10-1129, concerning consequences related to a higher actual valuation of property for the purpose of levying the property tax. Representative Bradford discussed the process by which assessors notify certain taxpayers of increases in property value and the tax due on properties. She explained that the bill would allow taxpayers to pay the property taxes based on the prior year’s assessed value if a taxpayer is going through an appeals process. The bill would allow a taxpayer who is appealing an increase in his or her property value that is more than 300 percent from the previous year to only pay the property taxes based on the prior year’s assessed value until a final order or decision on appeal is reached. This requirement would not include property value increases for a reclassification of the property; or improvements, modifications, or additions to the property. The bill also allows taxpayers to be reimbursed for attorney fees and other appeal expenses if the final adjusted value of the property is less than one-third of the initial value that was included in the original notice of valuation to the taxpayer. Once a final adjusted property value is set, a taxpayer has 30 days to pay any property taxes due.

05:02 PM

John Nisley, Grand Mesa Resort Company, testified in support of the bill and explained that taxpayers are required to pay taxes on the assessed value, even in cases where tax payers appeal an increase in their property value. Mr. Nisley discussed the ongoing appeal process by the Grand Mesa Resort Company.

05:05 PM

John LeFebvre, Colorado County Treasurers Association, testified against the bill and discussed the process for property evaluation by county assessors. Mr. LeFebvre talked about the process of collecting property taxes and explained that the bill would require counties to pay court costs and attorney fees. Mr. LeFebvre addressed questions from the committee concerning large increases in their property value and the collection of taxes and abatements.

05:11 PM

Paul Jacobs, County Assessor, City and County of Denver, testified against the bill, explained that cases where property value increase more than 300 percent are rare. He discussed situations where property owners can see significant increases between assessment years.

05:16 PM

James Mackley, Grand Mesa Resort Company, testified in support of the bill, discussed the ongoing appeal process by the Grand Mesa Resort Company, and talked about the need for changes under House Bill 10-1129 to improve the accountability of county assessors. Mr. Mackley addressed questions from the committee concerning the 300 percent increase in property value owned by the Grand Mesa Resort Company and the provisions in the bill for awarding attorney fees to the taxpayer.

05:20 PM

Ed DeCecco, Office of Legislative Legal Services, addressed the committee to discuss provisions in the bill concerning attorney fees. He explained that the bill provides that taxpayers could receive court costs, including witness fees, and reasonable attorney fees if the final adjusted valuation is less than one-third of the valuation included in the notice of valuation.

05:24 PM

Committee discussion ensued concerning the provisions in the bill that entitle the taxpayer to be awarded legal fees.


BILL:	HB10-1129
TIME:	05:29:51 PM
MOVED:	Bradford
MOTION:	Moved to refer House Bill 10-1129, as amended, to the Committee on Finance. The motion failed on a 5-6 roll call vote.
SECONDED:	Priola
		VOTE
	Acree	Yes
	Apuan	No
	Bradford	Yes
	Liston	Yes
	Massey	No
	McKinley	Yes
	Priola	Yes
	Schafer S.	No
	Vigil	No
	Soper	No
	Peniston	No

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	HB10-1129
TIME:	05:31:04 PM
MOVED:	Schafer S.
MOTION:	Moved to postpone House Bill 10-1129 indefinitely. The motion failed on a 5-6 roll call vote.
SECONDED:	Apuan
		VOTE
	Acree	No
	Apuan	Yes
	Bradford	No
	Liston	No
	Massey	No
	McKinley	No
	Priola	No
	Schafer S.	Yes
	Vigil	Yes
	Soper	Yes
	Peniston	Yes

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL

05:32 PM

The committee adjourned.