Second Regular Session Seventieth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 16-0290.01 Ed DeCecco x4216 HOUSE BILL 16-1132 HOUSE SPONSORSHIP Van Winkle and Melton, SENATE SPONSORSHIP Grantham and Jahn, House Committees Senate Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning the inclusion of a residential storage condominium unit in the definition of a residential improvement for purposes of the property tax. 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 establishes that a residential storage condominium unit is a residential improvement. This allows the unit to be assessed as residential real property, which currently has an assessment ratio of 7.96%, instead of as nonresidential property, which has an assessment ratio of 29%. A residential storage condominium unit is defined to mean a building or portion thereof that is: A unit under the "Colorado Common Interest Ownership Act"; More than 400 square feet, unless the unit is in the same common interest community as the residence; Used by its owner to store items from or related to the owner's Colorado residence; and Not used for storage related to a business. For a building unit to qualify as a residential storage condominium unit, the owner of the building unit must annually submit an affidavit of intended use and ownership documentation. The property tax administrator is required to establish the form of the affidavit and to prepare and publish standards for assessors to determine whether a building unit qualifies as a residential storage condominium unit. The bill establishes penalties for a person that knowingly provides false information on the affidavit. An assessor may inspect a building unit to confirm that it qualifies as a residential storage condominium unit, and an owner is required to grant the assessor reasonable access to the building unit for the inspection. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 39-1-102, amend (14.3) as follows: 39-1-102. Definitions. As used in articles 1 to 13 of this title, unless the context otherwise requires: (14.3) "Residential improvements" means a building, or that portion of a building, designed for use predominantly as a place of residency by a person, a family, or families. The term includes buildings, structures, fixtures, fences, amenities, and water rights that are an integral part of the residential use. The term also includes a manufactured home as defined in subsection (7.8) of this section, a mobile home as defined in subsection (8) of this section, and a modular home as defined in subsection (8.3) of this section, and a residential storage condominium unit as set forth in section 39-1-124. SECTION 2. In Colorado Revised Statutes, add 39-1-124 as follows: 39-1-124. Residential storage condominium unit - residential improvement - affidavit - definitions. (1) As used in this section: (a) "Affidavit of intended use" means the affidavit described in paragraph (b) of subsection (2) of this section. (b) "Residential storage condominium unit" means a building that is: (I) A unit, as defined in section 38-33.3-103 (30), C.R.S.; (II) More than four hundred square feet; except that this square footage requirement does not apply if the unit and the owner's residence are part of the same common interest community; (III) Used by its owner to store items from or related to the owner's residence located in the state; and (IV) Not used for storage related to a business. (2) (a) Subject to paragraph (b) of this subsection (2), a residential storage condominium unit is a residential improvement. (b) (I) For a building unit to qualify as a residential storage condominium unit for a property tax year, an owner must submit to the assessor of the county in which the building unit is located, on or before March 1 of the property tax year: (A) An affidavit of intended use signed by the owner under the penalty of perjury in the second degree stating that the building unit meets the definition of a residential storage condominium unit set forth in this section and that there is only one building unit claimed as a residential storage condominium unit for the owner's residence; and (B) Documentation of proof of ownership of both the building unit and the owner's residence, which documentation must identify the same person as the owner for both. (II) No more than one building unit per residence may qualify as a residential storage condominium unit. If an owner claims more than one building unit as a residential storage condominium unit related to a residence, then none of the building units claimed for the residence qualify as residential storage condominium units for that property tax year. (III) The owner must submit a separate affidavit of intended use for each property tax year for each residential storage condominium unit. (IV) An owner may not seek a change in classification based on a building unit being a residential storage condominium unit unless the owner has complied with requirements of this paragraph (b) for the property tax year. Classification of a residential storage condominium unit as a residential improvement does not affect the classification for any prior or later property tax year for which the building unit does not qualify as a residential storage condominium unit. (c) If an owner submits an affidavit of intended use to an assessor, the owner shall notify the assessor if the building unit no longer meets the definition of a residential storage condominium unit or if the building unit is transferred to a new owner. (d) In addition to any penalties prescribed by law for perjury in the second degree, if a person knowingly provides false information on an affidavit of intended use, then: (I) The building unit shall not qualify as a residential storage unit; (II) The person is required to pay, to the treasurer of any county in which a building unit improperly qualified as a residential storage condominium unit due to the false information, an amount equal to the amount of property taxes not paid as a result of the improper classification; and (III) The person shall, upon conviction of perjury, be required to pay to the treasurer of any county in which a building unit improperly qualified as a residential storage condominium unit due to the false information an additional amount equal to twice the amount of the property taxes not paid as a result of the improper classification plus interest. Interest is calculated at the annual rate calculated pursuant to section 39-21-110.5 (2) and (3) from the date the invalid affidavit was filed until the date the applicant makes the payment required by this subparagraph (III). (3) The administrator shall: (a) Establish the form of the affidavit of intended use; and (b) Prepare and publish standards for assessors to determine whether a building unit qualifies as a residential storage condominium unit. (4) An assessor may inspect a building unit to confirm that it qualifies as a residential storage condominium unit under this section, and an owner shall grant the assessor reasonable access to the building unit for the inspection. SECTION 3. 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 10, 2016, if adjournment sine die is on May 11, 2016); 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) This act applies for all property tax years that commence on or after January 1, 2017.