Second Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 12-0451.01 Bob Lackner x4350 HOUSE BILL 12-1148 HOUSE SPONSORSHIP Sonnenberg, SENATE SPONSORSHIP (None), House Committees Senate Committees Local Government A BILL FOR AN ACT Concerning the establishment of neighborhood revitalization areas by local governments. 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.) The bill authorizes the governing body of a municipality (governing body) to designate any area within such municipality as a neighborhood revitalization area if the area satisfies certain requirements and the rehabilitation, conservation, or redevelopment of the area is necessary to protect the health, safety, or welfare of the residents of the municipality. The governing body may also declare a building that is located outside the boundaries of a neighborhood revitalization area to be a dilapidated structure if the structure satisfies certain requirements. Prior to designating an area as a neighborhood revitalization area or a structure as a dilapidated structure, the bill requires the governing body to adopt a plan for the revitalization of the area or designation of a dilapidated structure. The bill includes the required components of the plan. The bill also specifies certain actions the governing body must undertake in order to designate a building as a dilapidated structure. Prior to adopting a plan, the governing body must call and hold a hearing on the proposal. Following the hearing, the governing body may adopt the plan. Following adoption of a plan, the bill requires the governing body to create a neighborhood revitalization fund to finance the redevelopment of designated revitalization areas and dilapidated structures and to provide property tax rebates authorized by the bill. Any incremental increase in property taxes levied by the municipality resulting from improvements by a taxpayer to property in a neighborhood revitalization area or to a dilapidated structure may be credited to the municipality's neighborhood revitalization fund for the purpose of returning all or a part of the property tax increment to the taxpayer in the form of a rebate. Upon approval of an application for a rebate, the municipality is required to credit to the taxpayer all or a part of the property tax increment resulting from the improvements. The bill specifies that no portion of the increment that may be claimed as a rebate by a taxpayer may include any portion of such increment that would otherwise be credited to a school district in the absence of the creation of a neighborhood revitalization area. Nothing in the bill is intended nor shall it be construed to affect the state's share of a school district's total program for any particular budget year as such share may be set in the absence of the creation of a neighborhood revitalization area. The bill authorizes any 2 or more municipalities or a municipality and another local government to enter into an intergovernmental agreement to exercise jointly the powers and duties authorized by the bill. The bill clarifies that its provisions are not intended to be construed to prevent municipalities from enacting and enforcing additional laws and rules on the same subject that are not in conflict with those contained in the bill. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add part 14 to article 25 of title 31 as follows: PART 14 NEIGHBORHOOD REVITALIZATION 31-25-1401. Short title. This part 14 shall be known and may be cited as the "Colorado Neighborhood Revitalization Law". 31-25-1402. Legislative declaration. (1) The general assembly hereby finds, determines, and declares that: (a) Certain areas within the municipalities of the state, particularly in municipalities located within rural areas of the state, have experienced declining utilization and property values; (b) This trend of declining property values contributes to a loss of tax receipts and future economic distress; and (c) Municipalities, especially in rural areas of the state, have few concrete and readily available tools for encouraging and promoting neighborhood redevelopment. (2) (a) The purpose of this part 14 is to promote the revitalization and redevelopment of these communities by stimulating new construction, rehabilitation, and conservation in specified areas of the state. These goals will be met by means of increased incentives to local property owners to invest in distressed neighborhoods or dilapidated structures. These incentives take the form of property tax rebates that are distributed in accordance with a process controlled by the municipality. (b) The revitalization and redevelopment of these communities will help to improve declining neighborhoods and generate the increased property taxes that will result in a higher tax base in these communities over time. Moreover, the provisions of this part 14 are designed to give local governments the flexibility to offer those incentives that will best promote revitalization and redevelopment within their respective communities. (c) The provisions of this part 14 are designed and intended to promote the stabilization of blighted neighborhoods and the redevelopment of dilapidated structures, the expansion of affordable housing and housing in or near downtown areas of municipalities, the encouragement of infill development, and the expansion of local property tax bases. 31-25-1403. Definitions. As used in this part 14, unless the context otherwise requires: (1) "Dilapidated structure" means a residence or other building that is in a deteriorating condition by reason of obsolescence, inadequate provision of ventilation, light, air, or structural integrity, or is otherwise in a condition detrimental to the health, safety, or welfare of its inhabitants or a residence or other building that is in deteriorating condition and because of age, architecture, history, or significance is worthy of preservation. (2) "Governing body" means the governing body of any municipality. (3) "Increment" means the amount of ad valorem taxes that is collected by a municipality either from real property located within the neighborhood revitalization area or from dilapidated structures outside the revitalization area that is in excess of the amount that is collected from such property and attributable to the assessed valuation of such property prior to the date the neighborhood revitalization area was established or the structure was declared dilapidated pursuant to this part 14. (4) "Municipality" has the same meaning as set forth in section 31-1-101 (6). (5) "Neighborhood revitalization area" means an area: (a) In which there is a predominance of buildings or improvements that, by reason of dilapidation, deterioration, obsolescence, inadequate provision for ventilation, light, air, sanitation, or open spaces, high density of population and overcrowding, the existence of conditions that endanger life or property by fire and other causes, or a combination of such factors, is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, or crime and that is detrimental to the public health, safety, or welfare; (b) That, by reason of the presence of a substantial number of deteriorated or deteriorating structures, defective or inadequate streets, incompatible land use relationships, faulty lot layout in relation to size, adequacy, accessibility, or usefulness, unsanitary or unsafe conditions, deterioration of site or other improvements, diversity of ownership, tax or special assessment delinquency exceeding the actual value of the land, defective or unusual conditions of title, or the existence of conditions that endanger life or property by fire and other causes, or a combination of such factors, substantially impairs or arrests the sound growth of a municipality, retards the provision of housing accommodations, or constitutes an economic or social liability and is detrimental to the public health, safety, or welfare in its present condition and use; or (c) In which there is a predominance of buildings or improvements which by reason of age, history, architecture, or significance should be preserved or restored to productive use. 31-25-1404. Designation of neighborhood revitalization area. The governing body of any municipality may designate any area within the municipality as a neighborhood revitalization area if the governing body finds that the area satisfies the requirements of section 31-25-1403 (5) and that the rehabilitation, conservation, or redevelopment of the area is necessary to protect the public health, safety, or welfare of the residents of the municipality. The governing body may declare a building that is located outside the boundaries of a neighborhood revitalization area to be a dilapidated structure if the building satisfies the requirements of section 31-25-1403 (1). 31-25-1405. Neighborhood revitalization or dilapidated structure designation plan - contents - notice and hearing. (1) Prior to designating an area as a neighborhood revitalization area or a structure as a dilapidated structure, a governing body shall adopt a plan for the revitalization of the area or designation of a dilapidated structure. The plan shall include: (a) A legal description of the real property forming the boundaries of the proposed neighborhood revitalization area and a map depicting the existing parcels of real property located within the area; (b) The existing assessed valuation of the real property in the proposed neighborhood revitalization area, listing the land and building values separately; (c) A list of the names and addresses of the owners of record of real property located within the proposed neighborhood revitalization area; (d) The existing zoning classifications affecting the proposed neighborhood revitalization area and the existing and proposed land uses within the area; (e) Any proposals for improving or expanding municipal services within the proposed neighborhood revitalization area including, but not limited to, transportation facilities, water and sewage systems, refuse collection, road and street maintenance, park and recreation facilities, and police and fire protection; (f) A statement specifying the real property that is eligible for revitalization and whether rehabilitation and additions to existing buildings or new construction, or both, is eligible for inclusion in the proposed neighborhood revitalization area; (g) The criteria to be used by the governing body for determining the specific parcels of real property that are eligible for revitalization; (h) The contents of an application for a rebate of property tax increments authorized by section 31-25-1406 (3); (i) The procedure for submission of an application for a rebate of property tax increments authorized by section 31-25-1406 (3); (j) The standards or criteria to be used when reviewing and evaluating applications for a rebate of property tax increments authorized by section 31-25-1406 (3); (k) A statement specifying the maximum amount and years of eligibility for a rebate of property tax increments authorized by section 31-25-1406 (3); except that the maximum number of years of eligibility shall not exceed eight years; and (l) Any other matter deemed necessary by the governing body for inclusion in the plan. (2) Prior to declaring a building to be a dilapidated structure, the governing body shall: (a) Obtain a legal description of the real property to be declared a dilapidated structure; (b) Determine the assessed value of the property to be declared a dilapidated structure, with separate values established for the real property underlying the structure and the structure; and (c) Determine the owner of record of the structure. (3) Prior to adopting a plan pursuant to subsection (1) of this section, the governing body shall call and hold a hearing on the proposal to designate an area as a neighborhood revitalization area or a structure as a dilapidated structure. Notice of the hearing shall be posted on the web site of the municipality for a period of not less than fourteen days through and including the date of the hearing. If the municipality does not maintain a web site, the municipality shall publish the notice at least once each week for two consecutive weeks in a newspaper of general circulation within the municipality. Following the hearing or any continuation of the hearing the governing body may adopt the plan. 31-25-1406. Neighborhood revitalization fund - application for tax rebates - impact on state aid to school districts. (1) Following adoption of a plan pursuant to section 31-25-1405 (3), a governing body shall create a neighborhood revitalization fund to finance the redevelopment of designated neighborhood revitalization areas and dilapidated structures and to provide rebates authorized by this section. Moneys may be budgeted and transferred to the fund from any source that may be lawfully utilized for such purposes. Any municipality may expend money from the general fund of the municipality to further the purposes of this part 14. (2) If a governing body determines that moneys that have been credited to its neighborhood revitalization fund or any part thereof is not needed for the purposes for which so credited, the governing body may return such moneys not needed to the fund from which the moneys came. (3) Any increment in ad valorem property taxes levied by the municipality resulting from improvements by a taxpayer to property in a neighborhood revitalization area or to a dilapidated structure may be credited to the municipality's neighborhood revitalization fund for the purpose of returning all or a part of the increment to the taxpayer in the form of a rebate. A taxpayer seeking a rebate shall submit an application for a rebate in the manner and subject to the conditions provided by the plan adopted under section 31-25-1405. Upon approval of an application for a rebate received pursuant to this subsection (3),the municipality shall credit to the taxpayer all or a part of the increment resulting from the improvements. Upon payment of taxes by the taxpayer, the rebate shall be made within thirty days after the next distribution date pursuant to section 39-10-107, C.R.S. (4) Notwithstanding any other provision of this part 14, no portion of the increment that may be claimed as a rebate by a taxpayer under this part 14 may include any portion of such increment that would otherwise be credited to a school district in the absence of the creation of a neighborhood revitalization area. Nothing in this part 13 is intended nor shall it be construed to affect the state's share of a school district's total program for any particular budget year as such share may be set in the absence of the creation of a neighborhood revitalization area under this part 14. 31-25-1407. Intergovernmental agreements. Any two or more municipalities or a municipality and another local government may enter into an intergovernmental agreement pursuant to the provisions of part 2 of article 1 of title 29, C.R.S., for the purpose of exercising jointly the powers and duties authorized by this part 14. 31-25-1408. Provisions not exclusive authority for revitalization. The provisions of this part 14 constitute enabling legislation for the revitalization of neighborhood revitalization areas and designation of dilapidated structures and are not intended to prevent municipalities from enacting and enforcing additional laws and rules on the same subject that are not in conflict with the provisions of this part 14. SECTION 2. 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 7, 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.