Capital letters indicate new material to be added to existing statute.

Dashes through the words indicate deletions from existing statute.

First Regular Session

Sixty-first General Assembly

LLS NO. R97@0790.01 SLE

STATE OF COLORADO




BY REPRESENTATIVES Anderson, Grampsas, Owen, and Dyer;

also SENATORS Norton, Lacy, Blickensderfer, B. Alexander, Ament, Chlouber, Dennis, Hopper, Mutzebaugh, and Wattenberg.

FINANCE

HOUSE CONCURRENT RESOLUTION 97-1004

SUBMITTING TO THE REGISTERED ELECTORS OF THE STATE OF COLORADO AN AMENDMENT TO THE CONSTITUTION OF THE STATE OF COLORADO, CONCERNING TAX REFORM, AND IN CONNECTION THEREWITH, REDUCING THE AMOUNT OF PROPERTY TAX LEVIED BY SCHOOL DISTRICTS TO FUND THE COST OF OPERATIONS OF PUBLIC SCHOOLS, ALLOWING CORPORATE INCOME TO BE TAXED AT A DIFFERENT RATE THAN NONCORPORATE INCOME FOR STATE INCOME TAX PURPOSES, INCREASING THE RATES OF THE STATE INCOME TAX ON CORPORATIONS AND THE STATE SALES AND USE TAX TO GENERATE REVENUES FOR THE STATE REPLACEMENT OF DECREASED REVENUES TO SCHOOL DISTRICTS, PROVIDING THAT RESIDENTIAL PROPERTY BE VALUED NO LOWER THAN A SPECIFIED PERCENTAGE OF ACTUAL VALUE FOR PROPERTY TAX PURPOSES, REDUCING THE ASSESSMENT RATE USED TO VALUE PERSONAL PROPERTY FOR PROPERTY TAX PURPOSES, CLARIFYING THE DEFINITION OF "LOCAL GROWTH" FOR PURPOSES OF CALCULATING CONSTITUTIONAL REVENUE LIMITATIONS OF LOCAL GOVERNMENTS OTHER THAN SCHOOL DISTRICTS, AND AUTHORIZING THE USE OF TEMPORARY TAX CREDITS AND TEMPORARY TAX RATE REDUCTIONS TO REFUND STATE REVENUES IN EXCESS OF ANY STATUTORY GENERAL FUND APPROPRIATIONS LIMIT.


Resolution Summary

(Note: This summary applies to this resolution as introduced and does not necessarily reflect any amendments which may be subsequently adopted.)

Eliminates the property tax as a source of revenue for the financing of public schools under the "Public School Finance Act of 1994" or any successor act and as a source of revenue for the replacement of funds a school district would otherwise receive under other state categorical programs.

Provides that the general assembly, in adjusting the ratio of valuation for assessment for residential real property pursuant to section 3 of article X of the state constitution, shall not adjust the assessment ratio for residential real property to be less than 9%.

Reduces the assessment ratio on business personal property for property tax purposes from 29% to 14.5%. Specifies that, when adjusting the ratio of valuation for assessment for residential real property, the general assembly shall not consider any loss in the aggregate percentage of the statewide valuation for assessment for personal property caused by the reduction in the assessment rate for personal property.

For purposes of section 20 of article X of the state constitution, clarifies the definition of "local growth" for non­school districts to mean the percentage change in the actual value of taxable real property and real property that is exempt from taxation but is required to be listed and valued due to certain changes in taxable real property. Specifies that all corporate income shall be taxed at one rate and all noncorporate income shall be taxed at one rate but that the rate for noncorporate income tax and corporate income tax need not be the same.

Authorizes the general assembly to use temporary tax credits and temporary rate reductions to refund any state general fund revenues that exceed a statutory general fund appropriations limit.

For the 1998 income tax year and each year thereafter, increases the rate of the state corporate income tax imposed on the state net income of each domestic C corporation and foreign C corporation doing business in Colorado by an additional 7%.

Commencing on or after July 1, 1998, increases the state sales and use tax rate by an additional 1.75%. Specifies that any compensation allowed vendors for their costs of collection and remittance shall not include any amount based upon the 1.75% increase in the tax rate.

Specifies that these amendments to the state constitution take effect only upon voter approval of House Bill 97­_____ at the November 1997, statewide election.


Be It Resolved by the House of Representatives of the Sixty­first General Assembly of the State of Colorado, the Senate concurring herein:

SECTION 1.  At the next election at which such question may be submitted, there shall be submitted to registered electors of the state of Colorado, for their approval or rejection, the following amendment to the constitution of the state of Colorado, to wit:

Section 2 of article IX of the constitution of the state of Colorado is amended to read:

Section 2.  Establishment and maintenance of public schools. (1)  The general assembly shall, as soon as practicable, provide for the establishment and maintenance of a thorough and uniform system of free public schools throughout the state, wherein all residents of the state, between the ages of six and twenty­one years, may be educated gratuitously. One or more public schools shall be maintained in each school district within the state, at least three months in each year; any school district failing to have such school shall not be entitled to receive any portion of the school fund for that year.

(2) (a)  FOR SCHOOL BUDGET YEARS BEGINNING ON AND AFTER JULY 1, 1998, THE PROPERTY TAX SHALL NOT BE USED AS A SOURCE OF REVENUE FOR THE PAYMENT OF THE COSTS OF THE FINANCIAL BASE OF SUPPORT FOR THE SYSTEM OF FREE PUBLIC SCHOOLS IN THE STATE AS DETERMINED UNDER THE PROVISIONS OF THE "PUBLIC SCHOOL FINANCE ACT OF 1994", AS FROM TIME TO TIME AMENDED, OR UNDER ANY ACT THAT MAY SUBSEQUENTLY BE ENACTED AS A SUCCESSOR ACT CONCERNING THE FINANCING OF PUBLIC SCHOOLS, NOR SHALL A PROPERTY TAX BE LEVIED BY A SCHOOL DISTRICT FOR THE PURPOSE OF GENERATING REVENUE TO REPLACE CATEGORICAL PROGRAM SUPPORT FUNDS THAT THE DISTRICT WOULD OTHERWISE BE ELIGIBLE TO RECEIVE FROM THE STATE. NOTHING IN THIS SECTION SHALL PROHIBIT THE LEVYING OF A PROPERTY TAX BY A SCHOOL DISTRICT FOR OTHER PURPOSES AUTHORIZED BY LAW.

(b)  THIS SUBSECTION (2) SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­____ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS SUBSECTION (2) SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

Section 3 (1) (b) of article X of the constitution of the state of Colorado is amended to read:

Section 3. Uniform taxation ­ exemptions. (1) (b) (I)  Residential real property, which shall include all residential dwelling units and the land, as defined by law, on which such units are located, and mobile home parks, but shall not include hotels and motels, shall be valued for assessment at twenty­one percent of its actual value. For the property tax year commencing January 1, 1985, the general assembly shall determine the percentage of the aggregate statewide valuation for assessment which THAT is attributable to residential real property. For each subsequent year, the general assembly shall again determine the percentage of the aggregate statewide valuation for assessment which THAT is attributable to each class of taxable property, after adding in the increased valuation for assessment attributable to new construction and to increased volume of mineral and oil and gas production AND ADDING IN AN AMOUNT EQUAL TO ANY DECREASE IN AGGREGATE STATEWIDE VALUATION FOR ASSESSMENT THAT IS ATTRIBUTABLE TO THE REDUCTION IN THE RATIO OF VALUATION FOR ASSESSMENT FOR PERSONAL PROPERTY FOR PROPERTY TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 1998, PURSUANT TO THIS SUBPARAGRAPH (I). For each year in which there is a change in the level of value used in determining actual value, the general assembly shall adjust the ratio of valuation for assessment for residential real property which THAT is set forth in this paragraph (b) as is necessary to insure ENSURE that the percentage of the aggregate statewide valuation for assessment which THAT is attributable to residential real property shall remain the same as it was in the year immediately preceding the year in which such change occurs; EXCEPT THAT, FOR PROPERTY TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 1998, THE GENERAL ASSEMBLY SHALL NOT ADJUST THE RATIO OF VALUATION FOR ASSESSMENT FOR RESIDENTIAL REAL PROPERTY TO BE LESS THAN NINE PERCENT OF THE ACTUAL VALUE OF SUCH PROPERTY. Such adjusted ratio shall be the ratio of valuation for assessment for residential real property for those years for which such new level of value is used. FOR PROPERTY TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 1998, PERSONAL PROPERTY NOT OTHERWISE EXEMPT FROM TAXATION UNDER THIS ARTICLE SHALL BE VALUED FOR ASSESSMENT AT FOURTEEN AND ONE­HALF PERCENT OF ITS ACTUAL VALUE. All other taxable property shall be valued for assessment at twenty­nine percent of its actual value. However, the valuation for assessment for producing mines, as defined by law, and lands or leaseholds producing oil or gas, as defined by law, shall be a portion of the actual annual or actual average annual production therefrom, based upon the value of the unprocessed material, according to procedures prescribed by law for different types of minerals. Non­producing unpatented mining claims, which are possessory interests in real property by virtue of leases from the United States of America, shall be exempt from property taxation.

(II)  THIS PARAGRAPH (b), AS AMENDED, SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­____ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS PARAGRAPH (b), AS AMENDED, SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

Section 20 (2) (g), (4) (a), and (8) (a) of article X of the constitution of the state of Colorado are amended to read:

Section 20.  The Taxpayer's Bill of Rights. (2)  Term definitions. Within this section:

(g) (i)  "Local growth" for a non­school district means a net percentage change in actual value of all REAL PROPERTY THAT IS EXEMPT FROM TAXATION BUT IS REQUIRED BY STATUTE TO BE LISTED AND VALUED AND ALL TAXABLE real property in a district from construction of taxable real property improvements, minus destruction of similar improvements, and additions to, minus deletions from, taxable real property. For a school district, it means the percentage change in its student enrollment.

(ii)  THIS PARAGRAPH (g), AS AMENDED, SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­____ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS PARAGRAPH (g), AS AMENDED, SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

(4)  Required elections. Starting November 4, 1992, districts must have voter approval in advance for: (a) (i) Unless (1), or (6), OR (7) (e) applies, any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to any district.

(ii)  THIS PARAGRAPH (a), AS AMENDED, SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­____ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS PARAGRAPH (a), AS AMENDED, SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

(8)  Revenue limits. (a) (i)  New or increased transfer tax rates on real property are prohibited. No new state real property tax or local district income tax shall be imposed. Neither an income tax rate increase nor a new state definition of taxable income shall apply before the next tax year. Any income tax law change after July 1, 1992, shall also require All NONCORPORATE taxable net income to SHALL be taxed at one THE SAME rate, AND ALL CORPORATE TAXABLE NET INCOME SHALL BE TAXED AT THE SAME RATE, excluding refund tax credits or voter­approved tax credits, with no added tax or surcharge. THE TAX RATE FOR NONCORPORATE TAXABLE NET INCOME MAY BE THE SAME AS OR DIFFERENT FROM THE TAX RATE FOR CORPORATE TAXABLE NET INCOME.

(ii)  THIS PARAGRAPH (a), AS AMENDED, SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­____ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS PARAGRAPH (a), AS AMENDED, SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

Section 20 (7) of article X of the constitution of the state of Colorado is amended BY THE ADDITION OF A NEW PARAGRAPH to read:

Section 20.  The Taxpayer's Bill of Rights. (7)  Spending limits.  (e) (i)  FOR ANY FISCAL YEAR IN WHICH STATE GENERAL FUND REVENUES EXCEED ANY STATUTORY STATE GENERAL FUND APPROPRIATIONS LIMIT AND CANNOT THEREFORE BE APPROPRIATED, THE GENERAL ASSEMBLY BY LAW MAY REFUND ALL OR ANY PORTION OF SUCH EXCESS STATE GENERAL FUND REVENUES USING ANY REASONABLE METHOD FOR REFUNDS, INCLUDING TEMPORARY TAX CREDITS AND TEMPORARY TAX RATE REDUCTIONS.

(ii)  THIS PARAGRAPH (e) SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­___ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS PARAGRAPH (e) SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

Article X of the constitution of the state of Colorado is amended BY THE ADDITION OF THE FOLLOWING NEW SECTIONS to read:

Section 21.  Corporate income tax.  (1)  FOR INCOME TAX YEARS COMMENCING ON AND AFTER JANUARY 1, 1998, THE RATE OF STATE INCOME TAX IMPOSED UPON EACH DOMESTIC C CORPORATION AND FOREIGN C CORPORATION AS SPECIFIED BY LAW SHALL BE INCREASED BY AN ADDITIONAL SEVEN PERCENT OF THE INCOME SUBJECT TO SAID TAX AS SPECIFIED BY LAW. NOTWITHSTANDING ANY PROVISION OF THE STATE CONSTITUTION TO THE CONTRARY, ALL REVENUES ATTRIBUTABLE TO THE INCREASE IN THE RATE OF THE STATE INCOME TAX PURSUANT TO THIS SUBSECTION (1) SHALL BE CREDITED TO THE STATE PUBLIC SCHOOL FUND CREATED IN SECTION 22­54­114, COLORADO REVISED STATUTES, OR ITS SUCCESSOR FUND.

(2)  NOTWITHSTANDING ANY PROVISION OF THE STATE CONSTITUTION TO THE CONTRARY, VOTER APPROVAL OF THIS SECTION SHALL CONSTITUTE VOTER APPROVAL OF THE INCREASE IN THE RATE OF THE STATE INCOME TAX SET FORTH IN SUBSECTION (1) OF THIS SECTION FOR PURPOSES OF SECTION 20 (4) (a) OF ARTICLE X OF THE STATE CONSTITUTION AND SHALL CONSTITUTE REVENUE CHANGES APPROVED BY VOTERS FOR PURPOSES OF SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION.

(3)  THIS SECTION SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­____ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS SECTION SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

Section 22.  State sales and use tax. (1)  ON AND AFTER JULY 1, 1998, THE RATE OF THE STATE SALES AND USE TAX AS SPECIFIED BY LAW SHALL BE INCREASED BY AN ADDITIONAL ONE AND THREE­QUARTERS PERCENT OF THE AMOUNT SUBJECT TO SAID TAX AS SPECIFIED BY LAW. NO COMPENSATION ALLOWED BY LAW TO VENDORS FOR THEIR EXPENSES IN THE COLLECTION AND REMITTANCE OF STATE SALES AND USE TAX SHALL INCLUDE ANY AMOUNT BASED UPON THE INCREASE IN THE RATE OF THE STATE SALES AND USE TAX PURSUANT TO THIS SUBSECTION (1). NOTWITHSTANDING ANY PROVISION OF THE STATE CONSTITUTION TO THE CONTRARY, ALL REVENUES ATTRIBUTABLE TO THE INCREASE IN THE RATE OF THE STATE SALES AND USE TAX PURSUANT TO THIS SUBSECTION (1) SHALL BE CREDITED TO THE STATE PUBLIC SCHOOL FUND CREATED IN SECTION 22­54­114, COLORADO REVISED STATUTES, OR ITS SUCCESSOR FUND.

(2)  NOTWITHSTANDING ANY PROVISION OF THE STATE CONSTITUTION TO THE CONTRARY, VOTER APPROVAL OF THIS SECTION SHALL CONSTITUTE VOTER APPROVAL OF THE INCREASE IN THE RATE OF THE STATE SALES AND USE TAX SET FORTH IN SUBSECTION (1) OF THIS SECTION FOR PURPOSES OF SECTION 20 (4) (a) OF ARTICLE X OF THE STATE CONSTITUTION AND SHALL CONSTITUTE REVENUES CHANGES APPROVED BY VOTERS FOR PURPOSES OF SECTION 20 (7) (a) OF ARTICLE X OF THE STATE CONSTITUTION.

(3)  THIS SECTION SHALL TAKE EFFECT FOLLOWING THE APPROVAL OF HOUSE BILL 97­____ BY THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION. THIS SECTION SHALL NOT TAKE EFFECT IF THE REGISTERED ELECTORS AT THE NOVEMBER 1997, STATEWIDE ELECTION DISAPPROVE HOUSE BILL 97­____.

SECTION 2.  Each elector voting at said election and desirous of voting for or against said amendment shall cast a vote as provided by law either "Yes" or "No" on the proposition: "SHALL STATE TAXES BE INCREASED $________ ANNUALLY, AND BY WHATEVER ADDITIONAL AMOUNTS ARE RAISED ANNUALLY THEREAFTER, BY AN AMENDMENT TO THE CONSTITUTION OF THE STATE OF COLORADO, CONCERNING TAX REFORM, AND IN CONNECTION THEREWITH, REDUCING THE AMOUNT OF PROPERTY TAX LEVIED BY SCHOOL DISTRICTS TO FUND THE COST OF OPERATIONS OF PUBLIC SCHOOLS, ALLOWING CORPORATE INCOME TO BE TAXED AT A DIFFERENT RATE THAN NONCORPORATE INCOME FOR STATE INCOME TAX PURPOSES, INCREASING THE RATES OF THE STATE INCOME TAX ON CORPORATIONS AND THE STATE SALES AND USE TAX TO GENERATE REVENUES FOR THE STATE REPLACEMENT OF DECREASED REVENUES TO SCHOOL DISTRICTS, PROVIDING THAT RESIDENTIAL PROPERTY BE VALUED NO LOWER THAN A SPECIFIED PERCENTAGE OF ACTUAL VALUE FOR PROPERTY TAX PURPOSES, REDUCING THE ASSESSMENT RATE USED TO VALUE PERSONAL PROPERTY FOR PROPERTY TAX PURPOSES, CLARIFYING THE DEFINITION OF "LOCAL GROWTH" FOR PURPOSES OF CALCULATING CONSTITUTIONAL REVENUE LIMITATIONS OF LOCAL GOVERNMENTS OTHER THAN SCHOOL DISTRICTS, AND AUTHORIZING THE USE OF TEMPORARY TAX CREDITS AND TEMPORARY TAX RATE REDUCTIONS TO REFUND STATE REVENUES IN EXCESS OF ANY STATUTORY GENERAL FUND APPROPRIATIONS LIMIT?"

SECTION 3.  The votes cast for the adoption or rejection of said amendment shall be canvassed and the result determined in the manner provided by law for the canvassing of votes for representatives in Congress, and if a majority of the electors voting on the question shall have voted "Yes", the said amendment shall become a part of the state constitution.