First Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 11-0699.01 Ed DeCecco SENATE BILL 11-098 SENATE SPONSORSHIP King S., HOUSE SPONSORSHIP (None), Senate Committees House Committees State, Veterans & Military Affairs A BILL FOR AN ACT Concerning the phase-out of the property tax on business personal property. 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://www.leg.state.co.us/billsummaries.) Beginning with the first odd-numbered property tax year after target growth occurs, the bill exempts a percentage of all business personal property from the levy and collection of the property tax. The percentage of the business personal property that is exempt from the property tax increases over time until all of the property is exempt. The following list shows how the exemption percentage increases over time: Years one to 4, 20% of business personal property is exempt; Years 5 to 8, 40% of business personal property is exempt; Years 9 to 12, 60% of business personal property is exempt; Years 13 to 16, 80% of business personal property is exempt; and Years 17 and after, all business personal property is exempt from property tax. The bill defines"target growth" to mean that the total assessed value of all business personal property in the state increases by 12% from one property tax year to the next. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 39-3-118.5, Colorado Revised Statutes, is amended to read: 39-3-118.5. Business personal property - exemption. (1) For property tax years commencing on and after January 1, 1996, business personal property shall be exempt from the levy and collection of property tax until such business personal property is first used in the business after acquisition. (2) (a) (I) For the first odd-numbered property tax year after target growth occurs, and for the next three property tax years thereafter, twenty percent of all business personal property shall be exempt from the levy and collection of property tax. (II) For the next four property tax years after the last property tax year specified in subparagraph (I) of this paragraph (a), forty percent of all business personal property shall be exempt from the levy and collection of property tax. (III) For the next four property tax years after the last property tax year specified in subparagraph (II) of this paragraph (a), sixty percent of all business personal property shall be exempt from the levy and collection of property tax. (IV) For the next four property tax years after the last property tax year specified in subparagraph (III) of this paragraph (a), eighty percent of all business personal property shall be exempt from the levy and collection of property tax. (V) For all property tax years after the last property tax year specified in paragraph (IV) of this paragraph (a), all business personal property shall be exempt from the levy and collection of property tax. (b) The exemption set forth in paragraph (a) of this subsection (2) shall apply regardless of the property tax year in which the property is first used in a business. (c) The value of the business personal property after applying the exemption set forth in paragraph (a) of this subsection (2) is the actual value for the purpose of determining whether the property also qualifies for an exemption pursuant to section 39-3-119.5. (d) The administrator shall certify when target growth occurs and shall publish the exemption percentage set forth in paragraph (a) of this subsection (2) that will apply for each property tax year until all business personal property is exempt from taxation. (e) As used in this subsection (2), "target growth" means that the total assessed value of all business personal property in the state increases by twelve percent from one property tax year to the next. SECTION 2. 39-4-102 (3), Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW PARAGRAPH to read: 39-4-102. Valuation of public utilities. (3) (e) Business personal property owned by a public utility is exempt from the levy and collection of property tax pursuant to section 39-3-118.5 (2). The value of the exemption is removed from the system market value and is determined by applying the market to book ratio to the net of the historical cost less depreciation of the business personal property. SECTION 3. Act subject to petition - effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 10, 2011, if adjournment sine die is on May 11, 2011); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part shall not take effect unless approved by the people at the general election to be held in November 2012 and shall take effect on the date of the official declaration of the vote thereon by the governor.