SENATE 3rd Reading Unamended May 4, 2015 SENATE Amended 2nd Reading April 20, 2015First Regular Session Seventieth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 15-0749.01 Bob Lackner x4350 SENATE BILL 15-135 SENATE SPONSORSHIP Martinez Humenik and Jahn, Hodge, Holbert, Todd HOUSE SPONSORSHIP Lebsock and Saine, Senate Committees House Committees Local Government A BILL FOR AN ACT Concerning modifications to statutory provisions governing urban redevelopment affecting public bodies in connection with urban renewal projects. 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 makes the following modifications to the "Urban Renewal Law" (URL): Section 1 of the bill increases the maximum number of allowable commissioners on an urban renewal authority from 11 to 13. The bill specifies that one commissioner on the authority may, if the county so chooses, be appointed by the board of county commissioners of the county within the territorial boundaries of which the urban renewal area is located. The bill specifies additional procedures if the urban renewal area is located within the boundaries of more than one county. The bill specifies additional requirements governing the appointment of this commissioner position. In the case of the special fund established for the collection of taxes to implement tax increment financing by the authority, section 2 of the bill requires all moneys remaining in the fund that have not previously been rebated and that originated as property tax increment generated based on the mill levy of a taxing body within the boundaries of the urban renewal area to be repaid to each taxing body, other than the municipality, based on the pro rata share of the total mill levy attributable to each taxing body's mill levy in the last year in which property taxes were divided. Any funds remaining in the special fund not generated by property tax increment are excluded from any such repayment requirement. Section 3 of the bill allows a commissioner of the authority to be appointed by the board of county commissioners where the governing body of the municipality is the authority. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 31-25-104, amend (2) (a) and (2) (b) as follows: 31-25-104. Urban renewal authority. (2) (a) (I) An authority shall consist consists of any odd number of commissioners which shall must be not less than five nor more than eleven thirteen commissioners, each of whom shall must be appointed by the mayor, who shall designate the chairman for the first year; Such except that, in order to represent the collective interests of the county and all taxing bodies levying a mill levy within the boundaries of the urban renewal area other than the municipality, one such commissioner on the authority may, if the county so chooses, be appointed by the board of county commissioners of the county within the territorial boundaries of which the urban renewal area is located. (II) If the urban renewal area is located within the boundaries of more than one county, the appointment is made by the board of commissioners of the county that has the largest population residing within the boundaries of the urban renewal authority area, unless the county with the largest population elects to delegate the appointment to the board of commissioners of the county with the second largest population residing within the urban renewal area. The county with the second largest population may similarly delegate its appointment authority to the board of commissioners of any other county within the territorial boundaries of which the urban renewal area is located. (III) If no county appoints a commissioner to the authority, then the county appointment remains vacant until such time, if ever, as a county through its board of commissioners makes an appointment pursuant to this paragraph (a). (IV) If the appointing county is a city and county, the requirements of this paragraph (a) pertaining to county representation on the authority need not be satisfied. (V) If a county's appointment of a commissioner causes the authority to have an even number of commissioners, then the mayor shall appoint an additional commissioner to restore an odd number of commissioners to the authority. All mayoral appointments and designation shall be chair designations are subject to approval by the governing body of the municipality within which the authority has been established. Not more than one of the commissioners appointed by the mayor may be an official of the municipality. (VI) In the event that an official of the municipality is appointed as commissioner of an authority, acceptance or retention of such appointment shall not be is not deemed a forfeiture of his or her office, or incompatible therewith, or and does not affect his or her tenure or compensation in any way. The term of office of a commissioner of an authority who is a municipal official shall is not be affected or curtailed by the expiration of the term of his or her municipal office. (b) The commissioners who are first appointed shall must be designated by the mayor to serve for staggered terms so that the term of at least one commissioner will expire each year. Thereafter, the term of office shall be is five years. A commissioner shall hold holds office until his or her successor has been appointed and has qualified. Vacancies other than by reason of expiration of terms shall must be filled by the mayor for the unexpired term; except that, in the case of a commissioner on the authority who has been appointed by the board of commissioners of a county pursuant to paragraph (a) of this subsection (2), a vacancy on the authority for the balance of the unexpired term must be filled by the board of commissioners of the county that made the original appointment. A majority of the commissioners shall constitute constitutes a quorum. The mayor shall file with the clerk a certificate of the appointment or reappointment of any commissioner, and such certificate shall be is conclusive evidence of the due and proper appointment of such commissioner. A commissioner shall receive receives no compensation for his or her services, but he shall be is entitled to the necessary expenses, including traveling expenses, incurred in the discharge of his or her duties. SECTION 2. In Colorado Revised Statutes, 31-25-107, amend (3.5) (a) introductory potion, (3.5) (b), (3.7), (9) (a) introductory portion, (9) (a) (II), (11), and (12) (c); and add (9.5) as follows: 31-25-107. Approval of urban renewal plans by local governing body. (3.5) (a) At least thirty forty-five days prior to the hearing on an urban renewal plan or a substantial modification to such plan, regardless of when the urban renewal plan was first approved, the governing body or and the authority, or their designees, shall schedule and conduct a pre-submittal meeting with the board of county commissioners, or the board's designee, to review the urban renewal plan, or any substantial modification of the plan and, if applicable, an urban renewal impact report as further described in this subsection (3.5). The purpose of the pre-submittal meeting is for the governing body, the authority, and the board of county commissioners, or their respective designees, to meet to review preliminary materials, identify potential impacts to the county from the urban renewal project, and to provide an opportunity for the board of county commissioners to submit data and information pursuant to subsection (3.7) of this section. Following the pre-submittal meeting, but not later than sixty days prior to the hearing on the urban renewal plan or any substantial modification of such plan, the governing body or authority shall submit such a final urban renewal plan or modification to the board of county commissioners, and, if property taxes collected as a result of the county levy will be utilized, the governing body or the authority shall also submit an urban renewal impact report, which shall include, at a minimum, the following information concerning the impact of such plan: (b) The inadvertent failure of a governing body or an authority to conduct a pre-submittal meeting required by paragraph (a) of this subsection (3.5) or to submit an urban renewal plan, substantial modification to the plan, or an urban renewal impact report, as applicable, to a board of county commissioners in accordance with the requirements of paragraph (a) of this subsection (3.5) shall neither create a cause of action in favor of any party nor invalidate any urban renewal plan or modification to the plan. (3.7) Upon request of the governing body or the authority, or at the pre-submittal meeting required by paragraph (a) of subsection (3.5) of this section, each county that is entitled to receive a copy of the plan shall provide available county data and projections to assist the governing body or the authority in preparing the urban renewal impact report required pursuant to subsection (3.5) of this section. (9) (a) Notwithstanding any law to the contrary, any urban renewal plan, as originally approved or as later modified pursuant to this part 1, may contain a provision that taxes, if any, levied after the effective date of the approval of such urban renewal plan upon taxable property in an urban renewal area each year or that municipal sales taxes collected within said area, or both such taxes, by or for the benefit of any public body shall must be divided for a period not to exceed twenty-five years after the effective date of adoption of such a provision, as follows: (II) That portion of said property taxes or all or any portion of said sales taxes, or both, in excess of the amount of property taxes or sales taxes paid into the funds of each such public body in accordance with the requirements of subparagraph (I) of this paragraph (a) shall must be allocated to and, when collected, paid into a special fund of the authority to pay the principal of, the interest on, and any premiums due in connection with the bonds of, loans or advances to, or indebtedness incurred by, whether funded, refunded, assumed, or otherwise, the authority for financing or refinancing, in whole or in part, an urban renewal project, or to make payments under an agreement executed pursuant to subsection (11) of this section. Any excess municipal sales tax collections not allocated pursuant to this subparagraph (II) shall must be paid into the funds of the municipality. Unless and until the total valuation for assessment of the taxable property in an urban renewal area exceeds the base valuation for assessment of the taxable property in such urban renewal area, as provided in subparagraph (I) of this paragraph (a), all of the taxes levied upon the taxable property in such urban renewal area shall must be paid into the funds of the respective public bodies. Unless and until the total municipal sales tax collections in an urban renewal area exceed the base year municipal sales tax collections in such urban renewal area, as provided in subparagraph (I) of this paragraph (a), all such sales tax collections shall must be paid into the funds of the municipality. When such bonds, loans, advances, and indebtedness, if any, including interest thereon and any premiums due in connection therewith, have been paid, all taxes upon the taxable property or the total municipal sales tax collections, or both, in such urban renewal area shall must be paid into the funds of the respective public bodies, and all moneys remaining in the special fund established pursuant to this subparagraph (II) that have not previously been rebated and that originated as property tax increment generated based on the mill levy of a taxing body within the boundaries of the urban renewal area must be repaid to each taxing body, other than the municipality, based on the pro rata share of the prior year's assessed property tax increment attributable to each taxing body's current mill levy in which property taxes were divided pursuant to this subsection (9). Any moneys remaining in the special fund not generated by property tax increment are excluded from any such repayment requirement. Notwithstanding any other provision of law, any additional revenues the municipality, county, special district, or school district receives either because the voters have authorized the municipality, county, special district, or school district to retain and spend said moneys pursuant to section 20 (7) (d) of article X of the state constitution subsequent to the creation of the special fund pursuant to this subparagraph (II) or as a result of an increase in the property tax mill levy approved by the voters of the municipality, county, special district, or school district subsequent to the creation of the special fund are not included in the amount of the increment that is allocated to and, when collected, paid into the special fund of the authority. (9.5) Within the twelve-month period prior to the effective date of the approval or modification of the urban renewal plan requiring the allocation of moneys to an authority pursuant to paragraph (a) of subsection (9) of this section, the municipality, county, special district, or school district is entitled to the reimbursement of any moneys that such municipality, county, special district, or school district pays to, contributes to, or invests in the authority for the project. The reimbursement is to be paid from the special fund of the authority established pursuant to paragraph (a) of subsection (9) of this section. (11) The governing body or the authority may enter into an agreement with any taxing entity within the boundaries of which property taxes collected as a result of the taxing entity's levy, or any portion of the levy, will be subject to allocation pursuant to subsection (9) of this section. The agreement may provide for the allocation of responsibility among the parties to the agreement for payment of the costs of any additional county infrastructure or services necessary to offset the impacts of an urban renewal project and for the sharing of revenues. Except with the consent of the governing body or the authority, any such shared revenues shall be are limited to all or any portion of the taxes levied upon taxable property within the urban renewal area by the taxing entity. The agreement may provide for a waiver of any provision of this part 1 that provides for notice to the taxing entity, requires any filing with or by the taxing entity, requires or permits consent from the taxing entity, or provides any enforcement right to the taxing entity. (12) (c) The arbitration hearing, if any, shall commence commences within sixty days after the receipt by the governing body of the notice of objection. The parties to the arbitration shall be are the county, governing body, and authority. At the arbitration hearing, the governing body or the authority, as applicable, shall have has the burden of proving by a preponderance of the evidence that it submitted the urban renewal plan, a substantial modification to the plan, and an urban renewal impact report, as applicable, to the county pursuant to paragraph (a) of subsection (3.5) of this section and that it did not abuse its discretion in preparing the estimate or statement provided to the county pursuant to subparagraphs (III) and (IV) of paragraph (a) of subsection (3.5) of this section and that the governing body did not abuse its discretion in connection with the findings it has made under paragraph (h) of subsection (4) of this section. The decision of the arbitrators shall must be based upon the objections contained in the notice filed pursuant to subparagraph (I) of paragraph (b) of this subsection (12) and upon the record of the hearing held pursuant to subsection (3) of this section. In rendering a decision, the arbitrators shall take into consideration the goals and objectives of the urban renewal plan, information that has been submitted by the county as contained in the record of the pre-submittal meeting held pursuant to paragraph (a) of subsection (3.5) of this section, the record of the hearing on the urban renewal plan and the impact report provided to the county pursuant to subsection (3.5) of this section, the reasonableness of the county's objections contained in the notice, the extent to which the urban renewal project will improve existing county infrastructure, the extent to which tax increment revenues, if any, to be generated by development within the urban renewal area and collected by the authority pursuant to paragraph (a) of subsection (9) of this section may reasonably be expected to defray the cost of the additional infrastructure and services requested by the county, and the debt service requirements of the authority. The arbitration hearing shall must be concluded not later than seven days after its commencement, and the decision of the arbitrators shall must be rendered not later than thirty days after the conclusion of the hearing. The order of the arbitrators shall be is limited to either approving the urban renewal plan or, upon a finding of abuse of discretion, remanding the plan to the governing body for reconsideration of the county's objections. The order shall be is final and binding on the parties and shall not be is not subject to judicial review except to enforce the order or to determine whether the order was procured by corruption, fraud, or other similar wrongdoing. SECTION 3. In Colorado Revised Statutes, 31-25-115, add (1.5) as follows: 31-25-115. Transfer - abolishment. (1.5) When the governing body of a municipality designates itself as the authority or transfers an existing authority to the governing body pursuant to subsection (1) of this section, one commissioner of the authority may be appointed by the board of commissioners of a county in accordance with the procedures specified in section 31-25-104 (2) (a). SECTION 4. In Colorado Revised Statutes, add 31-25-107.5 as follows: 31-25-107.5. Data analysis on the tax increment financing of urban renewal projects - definitions - repeal. (1) As used in this section, unless the context otherwise requires: (a) "Affected jurisdictions" means municipalities, counties, special districts, and school districts. (b) "State agencies" means the governor's office of economic development created in section 24-48.5-101 (1), C.R.S., and the office of state planning and budgeting referenced in section 24-37-201, C.R.S. (c) "URA TIF data analysis" means the urban renewal authority tax increment financing data analysis authorized in subsection (2) of this section. (2) The state agencies shall collaborate in the production of a 2015 URA TIF data analysis that analyzes the positive and negative effects of tax increment financing by urban renewal authorities on affected jurisdictions and the state general fund. The 2015 URA TIF data analysis must address, without limitation, the following matters: (a) The impact on existing revenues and the costs of providing services with respect to all affected jurisdictions in the absence of action to prevent and eliminate blighted conditions; (b) The various impacts on urban renewal projects relative to the costs of providing infrastructure and services with respect to all affected jurisdictions; (c) The revenues received by the affected jurisdictions resulting from urban renewal projects either directly within the urban renewal area or as a result of development outside the urban renewal area that is generated by the urban renewal projects; (d) The front-end contributions, whether in terms of monetary payments or the provision of services, land, or infrastructure, that affected jurisdictions provide in order to achieve successful completion of urban renewal projects; and (e) Successful examples, whether within the state or across the nation, of affected jurisdictions collaborating in the sharing of revenues arising from tax increment financing while covering the costs of providing services. (3) In producing the 2015 URA TIF data analysis, the state agencies may request information from affected jurisdictions, conduct public meetings, and appoint committees and study groups as determined appropriate by the state agencies. (4) (a) The state agencies shall complete the 2015 URA TIF data analysis not later than December 1, 2015. (b) Upon completion of the 2015 URA TIF data analysis, the state agencies shall provide copies of the same to the governor, the executive director of the department of local affairs, and the committees of reference of the general assembly exercising jurisdiction over finance and local government. (5) This section is repealed, effective July 1, 2017. SECTION 5. Act subject to petition - effective date - applicability. (1) 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 5, 2015, if adjournment sine die is on May 6, 2015); 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 2016 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor. (2) Sections 1 and 3 of this act amending sections 31-25-104 and 31-25-115, Colorado Revised Statutes, apply to any urban renewal authority established under said section 31-25-104 or 31-25-115 prior to, on, or after the effective date of this act. (3) Section 2 of this act amending section 31-25-107, Colorado Revised Statutes, applies to any urban renewal area created on or after January 1, 2016, under an urban renewal plan that contains a provision authorizing the levying of taxes in accordance with section 31-25-107 (9), Colorado Revised Statutes.