SENATE 3rd Reading Unamended May 7, 2012 SENATE Amended 2nd Reading May 4, 2012Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 12-0868.02 Nicole Myers x4326 SENATE BILL 12-174 SENATE SPONSORSHIP Johnston, HOUSE SPONSORSHIP Pabon, Senate Committees House Committees Finance A BILL FOR AN ACT Concerning the creation of a pilot alternate property tax valuation protest and appeal procedure for the city and county of Denver. 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.) Currently, the county board of equalization receives and hears petitions for appeal regarding the valuation for assessment of taxable property. The county board of equalization process has multiple filing deadlines and addresses valuation appeals in a single year. The board of county commissioners also receives and hears petitions for appeal and has jurisdiction over petitions for abatement or refund of taxes, including assessment of taxable property overvaluation. The board of county commissioners process has one filing deadline and can address valuation appeals, abatements, and refunds over multiple years. The bill creates a pilot program that authorizes the governing body of the city and county of Denver, at the request of the assessor, to elect to use an alternate protest and appeal procedure that combines the multiple steps in the annual valuation dispute process through the county board of equalization into the single hearing and appeal process conducted by the board of county commissioners. The filing deadlines for tax petitions and for resolving valuation disputes are specified for the city and county of Denver to use the alternate protest and appeal procedure. The bill also authorizes the city and county of Denver board of equalization and the board of county commissioners to request that the taxpayer that filed a petition, or the taxpayer's representative, to be present at the hearing and requires each board to dismiss the petition with no right to appeal if the taxpayer or the taxpayer's designee fails to be present at the hearing absent good cause. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 39-5-121, amend (1) (a) and (1.5) (a) as follows: 39-5-121. Notice of valuation - legislative declaration. (1) (a) (I) No later than May 1 in each year, the assessor shall mail to each person who owns land or improvements a notice setting forth the valuation of such land or improvements. For agricultural property, the notice shall separately state the actual value of such land or improvements in the previous year, the actual value in the current year, and the amount of any adjustment in actual value. For all other property, the notice shall state the total actual value of such land and improvements together in the previous year, the total actual value in the current year, and the amount of any adjustment in total actual value. The notice shall not state the valuation for assessment of such land or improvements or combination of land and improvements. Based upon the classification of such taxable property, the notice shall also set forth either the ratio of valuation for assessment to be applied to said actual value of all taxable real property other than residential real property prior to the calculation of property taxes for the current year or the projected ratio of valuation for assessment to be applied to said actual value of residential real property prior to the calculation of property taxes for the current year and that any change or adjustment of the projected ratio of valuation for assessment for residential real property shall not constitute grounds for the protest or abatement of taxes. With the approval of the board of county commissioners, the assessor may include in the notice an estimate of the taxes that shall be owed for the current property tax year. If such estimate is included, the notice shall clearly state that the tax amount is merely an estimate based upon the best available information. The notice shall state, in bold-faced type, that the taxpayer has the right to protest any adjustment in valuation but not the estimate of taxes if such an estimate is included in the notice, the classification of the property that determines the assessment percentage to be applied, and the dates and places at which the assessor will hear such protest. Except as otherwise provided in subparagraph (II) of this paragraph (a), such notice shall also set forth the following: That, to preserve the taxpayer's right to protest, the taxpayer must notify the assessor either in writing or in person of the taxpayer's objection and protest; that such notice must be delivered, postmarked, or given in person no later than June 1; and that, after such date, the taxpayer's right to object and protest the adjustment in valuation is lost. The notice shall be mailed together with a form that, if completed by the taxpayer, allows the taxpayer to explain the basis for the taxpayer's valuation of the property. Such form may be completed by the taxpayer to initiate an appeal of the assessor's valuation. However, in accordance with section 39-5-122 (2), completion of this form shall not constitute the exclusive means of appealing the assessor's valuation. For the years that intervene between changes in the level of value, if the difference between the actual value of such land or improvements in the previous year and the actual value of such land or improvements in the intervening year as set forth in such notice constitutes an increase in actual value of more than seventy-five percent, the assessor shall mail together with the notice an explanation of the reasons for such increase in actual value. (II) For the city and county of Denver only, if the city and county of Denver elects to use the pilot alternate protest procedure established in section 39-5-122.8, the notice mailed pursuant to subparagraph (I) of this paragraph (a) shall state that, to preserve the taxpayer's right to object and protest, the taxpayer must notify the board of county commissioners in writing of the taxpayer's objection and protest; that such notice must be delivered or postmarked no later than November 15 of the year in which the notice of value was mailed; and that after such date, the taxpayer's right to object and protest the adjustment in valuation is lost. (1.5) (a) (I) Except as otherwise provided in sub-subparagraph (A) of subparagraph (II) of this paragraph (a), no later than June 15 in each year, the assessor shall mail to each person who owns taxable personal property a notice setting forth the valuation of the personal property. The notice shall state the actual value of such personal property in the previous year, the actual value in the current year, and the amount of any adjustment in actual value. The notice shall not state the valuation for assessment of the personal property. The notice shall also set forth the ratio of valuation for assessment to be applied to said actual value prior to the calculation of property taxes for the current year. With the approval of the board of county commissioners, the assessor may include in the notice an estimate of the taxes that shall be owed for the current property tax year. If such an estimate is included, the notice shall clearly state that the tax amount is merely an estimate based upon the best available information. The notice shall state, in bold-faced type, that the taxpayer has the right to protest any adjustment in valuation but not the estimate of taxes if such an estimate is included in the notice, and the dates and places at which the assessor will hear protests. The notice shall also set forth the following: To preserve the taxpayer's right to protest, the taxpayer must notify the assessor either by mail or in person of the taxpayer's objection and protest; that the notice must be postmarked or physically delivered no later than June 30; and that, after such date, the taxpayer's right to object and protest the adjustment in valuation is lost. The notice shall be mailed together with a form that, if completed by the taxpayer, allows the taxpayer to explain the basis for the taxpayer's valuation of the property. The form may be completed by the taxpayer to initiate an appeal of the assessor's valuation. However, in accordance with section 39-5-122 (2), completion of this form shall not constitute the exclusive means of appealing the assessor's valuation. (II) For the city and county of Denver only, if the city and county of Denver elects to use the pilot alternate protest procedure established in section 39-5-122.8, the notice required pursuant to subparagraph (I) of this paragraph (a) shall be modified as follows: (A) The assessor shall mail to each person who owns taxable personal property the notice setting forth the valuation of the personal property no later than July 15 in each year; and (B) The notice shall state that, to preserve the taxpayer's right to object and protest, the taxpayer must notify the board of county commissioners in writing of the taxpayer's objection and protest; that such notice must be delivered or postmarked no later than November 15 of the year in which the notice of value was mailed; and that after such date, the taxpayer's right to object and protest the adjustment in valuation is lost. SECTION 2. In Colorado Revised Statutes, 39-5-122, amend (1) as follows: 39-5-122. Taxpayer's remedies to correct errors. (1) (a) Except as otherwise provided in paragraph (b) of this subsection (1), on or before May 1 of each year, the assessor shall give public notice in at least one issue of a newspaper published in his or her county that, beginning on the first working day after notices of adjusted valuation are mailed to taxpayers, the assessor will sit to hear all objections and protests concerning valuations of taxable real property determined by the assessor for the current year; that, for a taxpayer's objection and protest to be heard, notice must be given to the assessor; and that such notice must be postmarked, delivered, or given in person by June 1. The notice shall also state that objections and protests concerning valuations of taxable personal property determined by the assessor for the current year will be heard commencing June 15; that, for a taxpayer's objection and protest to be heard, notice must be given to the assessor; and that such notice must be postmarked or physically delivered by June 30. If there is no such newspaper, then such notice shall be conspicuously posted in the offices of the assessor, the treasurer, and the county clerk and recorder and in at least two other public places in the county seat. The assessor shall send news releases containing such notice to radio stations, television stations, and newspapers of general circulation in the county. (b) For the city and county of Denver only, if the city and county of Denver elects to use the pilot alternate protest procedure established in section 39-5-122.8, the notice required pursuant to paragraph (a) of this subsection (1) shall be modified to state that the city and county of Denver has elected to use the pilot alternate protest procedure established in section 39-5-122.8; that all objections and protests will be determined by the board of county commissioners in accordance with the protest procedures set forth in section 39-5-122.8; that to preserve the taxpayer's right to object and protest, the taxpayer must notify the board of county commissioners in writing of the taxpayer's objection and protest; that such notice must be delivered or postmarked no later than November 15 of the year in which the notice of value was mailed; and that after such date, the taxpayer's right to object and protest the adjustment in valuation is lost. SECTION 3. In Colorado Revised Statutes, add 39-5-122.8 as follows: 39-5-122.8. Pilot alternate protest procedure - city and county of Denver - repeal. (1) At the request of the assessor, the governing body of the city and county of Denver may elect to use the pilot alternate protest procedure described in subsection (2) of this section to determine objections and protests concerning valuations of taxable property. The governing body may elect not to determine objections and protests concerning valuations of taxable property in accordance with article 5 of this title, but instead elect to determine all such objections and protests in accordance with this section. The election shall not be made unless the assessor has requested the use of an alternate protest procedure. The election shall be made on or before May 1 and shall be effective for all objections and protests concerning valuations of taxable property for that year and for all future years until the governing body elects not to follow the pilot alternate protest procedure. The governing body of the city and county of Denver shall provide notice of the election to the board of assessment appeals and to the district court in such county. (2) Alternate protest procedure. (a) The city and county of Denver shall amend the notices required by sections 39-5-121 and 39-5-122 to provide notice that all objections and protests concerning valuation of taxable property shall be determined in accordance with this section. (b) If any taxpayer is of the opinion that his or her property has been valued too high, has been twice valued, or is exempt by law from taxation or that the property has been erroneously assessed to such person, he or she may file a written objection and protest with the board of county commissioners by delivering or mailing the written objection and protest no later than November 15 of the year in which the notice of value was mailed. (c) Except as otherwise provided in paragraph (d) of this subsection (2), no decision on any written objection and protest concerning valuation of taxable property shall be made by the board of county commissioners unless a hearing is held thereon, at which hearing the assessor and the taxpayer or the taxpayer's authorized representative shall have the opportunity to be present. The board may appoint independent referees who are experienced in property valuation to conduct the hearing on behalf of the board, to make findings, and to submit recommendations to the board for its final decision. All decisions shall be mailed to the taxpayer or the taxpayer's authorized representative within five business days of the date on which such decision is rendered. If requested by the board of county commissioners, the taxpayer or the taxpayer's authorized representative shall be present at a hearing held pursuant to this paragraph (c) and shall produce information to support the written objection and protest. In the event the board of county commissioners requests the taxpayer or the taxpayer's authorized representative to be present at a hearing, the board of county commissioners shall provide at least thirty days' notice of the hearing, unless the taxpayer or the taxpayer's authorized representative requests a hearing at an earlier date. The board of county commissioners shall provide written notice of the hearing by certified mail, and such written notice shall contain the date, time, and place of the hearing. Upon request of the taxpayer or the taxpayer's representative the board of county commissioners may reschedule the hearing. If the taxpayer or the taxpayer's authorized representative fails to be present at the hearing when requested by the board of county commissioners, absent good cause, the board of county commissioners shall dismiss the written objection and protest, and the taxpayer or the taxpayer's authorized representative shall not have the right to appeal the dismissal. (d) Upon authorization by the board of county commissioners, the assessor may review written objections and protests concerning valuation of taxable property and settle by written mutual agreement any such written objection and protest. Any reduction agreed upon and settled pursuant to this paragraph (d) shall not be subject to the requirements of paragraph (c) of this subsection (2). (e) Every written objection and protest concerning the valuation of taxable property shall be acted upon pursuant to the provisions of this section by the board of county commissioners or the assessor, as appropriate, within six months of the date of filing such petition. (f) If the board of county commissioners grants an objection and protest, in whole or in part, the assessor shall adjust the valuation accordingly; but, if the objection and protest is denied, in whole or in part, the taxpayer or the taxpayer's authorized representative may appeal the valuation set by the assessor or, if the valuation is adjusted as a result of a decision of the board of county commissioners, the adjusted valuation to the board of assessment appeals or to the Denver district court for a trial de novo, or the taxpayer may submit the case to arbitration pursuant to the provisions of section 39-8-108.5. Such appeal or submission to arbitration shall be taken no later than thirty days after the date such denial is mailed pursuant to paragraph (c) of this subsection (2). (g) If the board of county commissioners does not issue a written decision on an objection or protest for valuation of taxable property before December 1 of the year in which the notice of value was mailed, the taxpayer's written objection and protest shall be deemed to be a petition for abatement or refund and shall be determined in accordance with section 39-10-114. If the board of county commissioners, pursuant to section 39-10-114 (1), or the property tax administrator, pursuant to section 39-2-116, denies the petition for abatement or refund of taxes in whole or in part, the taxpayer or the taxpayer's authorized representative may appeal to the board of assessment appeals or to the Denver district court for a trial de novo, or may submit the case to arbitration pursuant to the provisions of section 39-8-108.5. Such appeal or submission to arbitration shall be taken no later than thirty days after the entry of any such decision. (3) This section is repealed, effective December 31, 2017. SECTION 4. In Colorado Revised Statutes, 39-8-104, amend (1); and add (2.5) as follows: 39-8-104. Notice of meeting. (1) Except as provided in subsection (2) subsection (2) or (2.5) of this section, prior to July 1 of each year, the county clerk and recorder shall give notice in at least one issue of a newspaper published in his or her county that beginning on July 1, the county board of equalization will sit in the county's regular public meeting location or other appropriate public meeting place to review the assessment roll of all taxable property located in the county, as prepared by the assessor, and to hear appeals from determinations of the assessor. (2.5) If the city and county of Denver elects to use the alternate pilot protest procedure established in section 39-5-122.8, the county clerk and recorder shall give notice in at least one issue of a newspaper published in the city and county of Denver that the city and county of Denver has made such election; that all objections and protests will be determined in accordance with the protest and appeal procedures set forth in section 39-5-122.8; and that to preserve the taxpayer's right to protest, the taxpayer must notify the board of county commissioners in writing of the taxpayer's objection and protest; that such notice must be delivered or postmarked no later than November 15 of the year in which the notice of value was mailed; and that after such date, the taxpayer's right to object and protest the adjustment in valuation is lost. SECTION 5. In Colorado Revised Statutes, 39-8-106 , amend (1) introductory portion as follows: 39-8-106. Petitions for appeal. (1) The county board of equalization shall receive and hear petitions from any person whose objections or protests have been refused or denied by the assessor; except that, if the city and county of Denver elects to use the alternate pilot protest procedure established in section 39-5-122.8, petitions shall be filed with the board of county commissioners. A petition shall be in a form approved by the property tax administrator pursuant to section 39-2-109 (1) (d), the contents of which shall include the following: SECTION 6. In Colorado Revised Statutes, 39-8-107, add (6) as follows: 39-8-107. Hearings on appeal. (6) If the city and county of Denver elects to use the alternative pilot protest procedure established in section 39-5-122.8, all hearings shall be conducted in accordance with that section. SECTION 7. In Colorado Revised Statutes, 39-10-114, amend (1) (a) (I) (A) and (1) (a) (I) (D) as follows: 39-10-114. Abatement - cancellation of taxes. (1) (a) (I) (A) Except as otherwise provided in sub-subparagraphs (D) and (E) of this subparagraph (I), if taxes have been levied erroneously or illegally, whether due to erroneous valuation for assessment, irregularity in levying, clerical error, or overvaluation, the treasurer shall report the amount thereof to the board of county commissioners, which shall proceed to abate such taxes in the manner provided by law. The assessor shall make such report if the assessor discovers that taxes have been levied erroneously or illegally. If such taxes have been collected by the treasurer, the board of county commissioners shall authorize refund of the same in the manner provided by law. Except as provided in sub-subparagraphs (E) and (F) sub-subparagraphs (E), (F), and (G) of this subparagraph (I), in no case shall an abatement or refund of taxes be made unless a petition for abatement or refund is filed within two years after January 1 of the year following the year in which the taxes were levied. For purposes of this sub-subparagraph (A), "clerical error" shall include includes, but shall is not be limited to, any clerical error made by a taxpayer in completing personal property schedules pursuant to the provisions of article 5 of this title. Notwithstanding any other law to the contrary, for purposes of this sub-subparagraph (A), "erroneous valuation" shall include includes, but shall is not be limited to: Any reclassification of property from agricultural land to any other classification of property for the property tax year commencing January 1, 1996, if the property in question qualifies for classification as agricultural land as determined pursuant to section 39-1-102 (1.6), as amended by Senate Bill 97-039, enacted at the first regular session of the sixty-first general assembly; and any denial of exemption from taxation for property claimed as agricultural and livestock products for the property tax year commencing January 1, 1996, if the property in question qualifies as agricultural and livestock products as determined pursuant to section 39-1-102 (1.1), as amended by Senate Bill 97-039, enacted at the first regular session of the sixty-first general assembly. (D) No abatement or refund of taxes shall be made based upon the ground of overvaluation of property if an objection or protest to such valuation has been made and a notice of determination has been mailed to the taxpayer pursuant to section 39-5-122 or a written decision has been issued pursuant to section 39-5-122.8; except that this prohibition shall not apply to personal property when a notice of determination has been mailed to the taxpayer, an objection or protest is withdrawn or not pursued, and the county assessor has undertaken an audit of such personal property that shows that a reduction in value is warranted. SECTION 8. Act subject to petition - effective date. This act takes 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 8, 2012, if adjournment sine die is on May 9, 2012); 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 will not take effect unless approved by the people at the general election to be held in November 2012 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.