First Regular Session
Sixty-first General Assembly
LLS NO. 970478.01 JAP
SENATE BILL 97142
STATE OF COLORADO
BY SENATOR Mutzebaugh
A BILL FOR AN ACT
CONCERNING VALUATION OF PROPERTY FOR PROPERTY TAX
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments which may be subsequently
Instructs an assessing officer, in valuing vacant land, to first determine whether the land is being actively developed for retail sale and, if it is, to apply specified discount factors when using the market approach to appraisal in determining the value of the land. Prohibits consideration of the indirect costs of development in valuing said vacant land.
Specifies that "site improvements", as applied to vacant land, includes culverts and other sewage and drainage facilities only if they have been dedicated to public use and accepted for maintenance. Directs the assessor to obtain a completed subdivision land valuation questionnaire from subdivision developers and other owners of vacant land. Specifies that the questionnaire should elicit information concerning whether the land is being actively developed for retail sale.
For property tax years beginning on or after January
1, 1997, repeals provisions allowing a petitioner to submit a
petition to arbitration after denial by the county board of equalization
of an appeal of an assessor's valuation. Removes the limitations
on the right of a respondent to seek judicial review of decisions
by the board of assessment appeals regarding property valuation.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. 391103 (14), Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amended to read:
391103. Actual value determined when. (14) (a) The general assembly hereby finds and declares that, in determining the actual value of vacant land, there appears to exist a wide disparity in the treatment of vacant land by the assessing officers of the various counties; that the methods of appraisal currently being utilized by assessing officers for such valuation remain unclear; and that such assessing officers are provided detailed information concerning the appraisal of vacant land in the manuals, appraisal procedures, and instructions prepared and published by the administrator. THE GENERAL ASSEMBLY FURTHER FINDS THAT THE PROVISIONS OF THIS SUBSECTION (14) ARE NECESSARY TO AID DEVELOPERS OF VACANT LAND BY RELIEVING SOME OF THE PROPERTY TAX BURDEN INCURRED WHILE THE VACANT LAND IS BEING ACTIVELY PREPARED AND DEVELOPED FOR RETAIL SALE TO END USERS OF THE PROPERTY.
(b) (I) The assessing officers shall
give appropriate consideration to the cost approach, market approach,
and income approach to appraisal as required by the provisions
of section 3 of article X of the state constitution in determining
the actual value of vacant land.
using the market approach to appraisal in determining the actual
value of vacant land as of the assessment date, assessing officers
shall take into account, but need not limit their consideration
to, the following factors: The anticipated market absorption
rate, the size and location of such land, the direct costs of
development, any amenities, any site improvements, access, and
use. When using anticipated market absorption rates, the assessing
officers shall use appropriate discount factors in determining
the present worth of vacant land until eighty percent of the lots
within an approved plat have been sold and shall include all vacant
land in the approved plat. For purposes of such discounting,
direct costs of development shall be taken into account. The
use of present worth shall reflect the anticipated market absorption
rate for the lots within such plat, but such time period shall
not generally exceed thirty years. For purposes of this paragraph
(b), no indirect costs of development, including, but not limited
to, costs relating to marketing, overhead, or profit, shall be
considered or taken into account.
WHEN USING THE MARKET APPROACH TO APPRAISAL IN DETERMINING THE
ACTUAL VALUE OF VACANT LAND AS OF THE ASSESSMENT DATE, THE ASSESSING
OFFICER SHALL FIRST DETERMINE WHETHER THE VACANT LAND IS BEING
ACTIVELY PREPARED AND DEVELOPED BY THE CURRENT OWNER FOR RETAIL
SALE TO ONE OR MORE END USERS. SUCH DETERMINATION SHALL REST
WITHIN THE DISCRETION OF THE ASSESSING OFFICER AND SHALL BE BASED
UPON OBJECTIVE CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES.
THE ASSESSING OFFICER MAY CONSIDER THE SUBJECTIVE INTENT OF THE
CURRENT OWNER AS TO PLANS FOR DEVELOPMENT AND SALE, BUT IT SHALL
NOT BE A CONTROLLING FACTOR IN THE DETERMINATION.
(II) IF THE ASSESSING OFFICER DETERMINES THAT THE VACANT LAND IS BEING ACTIVELY PREPARED AND DEVELOPED FOR RETAIL SALE TO ONE OR MORE END USERS, THE ASSESSING OFFICER SHALL TAKE INTO ACCOUNT, BUT NEED NOT LIMIT CONSIDERATION TO, THE FOLLOWING DISCOUNT FACTORS IN USING THE MARKET APPROACH TO APPRAISAL TO DETERMINE THE ACTUAL VALUE OF THE VACANT LAND AS OF THE ASSESSMENT DATE:
(A) THE ANTICIPATED MARKET ABSORPTION RATE IF IT IS LONGER THAN TWO YEARS BUT LESS THAN TEN YEARS;
(B) THE SIZE AND LOCATION OF THE PARCEL OF VACANT LAND BEING VALUED;
(C) THE DIRECT COSTS OF DEVELOPMENT ACTUALLY INCURRED AND PAID BY THE CURRENT OWNER WHICH ARE SEPARATE AND APART FROM AND IN ADDITION TO THE SALES PRICE PAID FOR THE LAND BY THE CURRENT OWNER; AND
(D) ANY AMENITIES, SITE IMPROVEMENTS, ACCESS TO THE VACANT LAND, AND PERMITTED USES OF THE LAND.
(III) WHEN USING ANTICIPATED MARKET ABSORPTION RATES, THE ASSESSING OFFICER SHALL USE APPROPRIATE DISCOUNT FACTORS IN DETERMINING THE PRESENT WORTH OF VACANT LAND UNTIL EIGHTY PERCENT OF THE LOTS WITHIN AN APPROVED PLAT OR OTHER MARKETING AREA, AS DETERMINED BY THE ASSESSOR, HAVE BEEN SOLD OR IMPROVED AND SHALL INCLUDE ALL VACANT LAND IN SAID APPROVED PLAT OR MARKETING AREA.
(IV) FOR PURPOSES OF THIS PARAGRAPH (b), THE ASSESSING OFFICER SHALL NEITHER CONSIDER NOR TAKE INTO ACCOUNT ANY INDIRECT COST OF DEVELOPMENT, INCLUDING, BUT NOT LIMITED TO, COSTS RELATING TO MARKETING, OVERHEAD, OR PROFIT.
(c) (I) For purposes of this subsection (14), "vacant land" means any lot, parcel, site, or tract of land upon which no buildings or fixtures, other than minor structures, are located. "Vacant land" may include land with site improvements. "Vacant land" includes land that is part of a development tract or subdivision when using present worth discounting in the market approach to appraisal; however, "vacant land" shall not include any lots within such subdivision or any portion of such development tract that improvements, other than site improvements or minor structures, have been erected upon or affixed thereto. "Vacant land" does not include agricultural land, producing oil and gas properties, severed mineral interests, and all mines, whether producing or nonproducing.
(II) For purposes of this subsection (14):
(A) "Minor structures" means improvements that do not add value to the land on which they are located and that are not suitable to be used for and are not actually used for any commercial, residential, or agricultural purpose.
(B) "Site improvements" means streets with curbs and gutters, culverts and other sewage and drainage facilities THAT ARE DEDICATED TO PUBLIC USE AND ACCEPTED FOR MAINTENANCE, and utility easements and hookups for individual lots or parcels.
(d) As soon after the assessment date
as may be practicable, the assessor shall mail or deliver two
copies of a subdivision land valuation questionnaire for each
approved plat within the county to the lastknown address
of the subdivision developer OR OTHER OWNER known or believed
to own vacant land within such approved plat. Such questionnaire
shall be designed to elicit information vital TO DETERMINING WHETHER
THE VACANT LAND IS BEING ACTIVELY PREPARED AND DEVELOPED FOR RETAIL
SALE TO ONE OR MORE END USERS AND to determining the present worth
of vacant land within such approved plat.
THE subdivision developer, or his OR HER agent, OR THE OWNER,
OR HIS OR HER AGENT, shall answer all questions to the best of
his OR HER ability, attaching such exhibits or statements thereto
as may be necessary, and shall sign and return the original copy
thereof to the assessor no later than the March 20 subsequent
to the assessment date. All information provided by the subdivision
developer OR THE OWNER in such questionnaire shall be kept confidential
by the assessor; except that the assessor shall make such information
available to the person conducting any valuation for assessment
study pursuant to section 391104 (16) and his OR HER
employees and the property tax administrator and his OR HER employees.
(e) If any subdivision developer OR OWNER
fails to complete and file one or more questionnaires by March
20, then the assessor may determine the actual value of the taxable
vacant land within an approved plat OR MARKETING AREA
THAT is owned by such subdivision developer OR OWNER on the basis
of the best information available to and
obtainable by the assessor.
SECTION 2. 391113 (6), Colorado Revised Statutes, 1994 Repl. Vol., is amended to read:
391113. Abatement and refund of taxes. (6) Notwithstanding any law to the contrary, for taxes levied on and after January 1, 1990, BUT PRIOR TO JANUARY 1, 1997, a taxpayer may file a petition for abatement or refund of taxes levied on property if the valuation of such property was the subject of an arbitration hearing pursuant to section 398108.5 and the arbitrator presiding over such hearing failed to deliver a decision to the taxpayer prior to the beginning date of the period during which the assessor sits to hear all objections and protests concerning the valuation of such property in the year following the year in which such arbitration hearing was held.
SECTION 3. 398107 (1), Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amended to read:
398107. Hearings on appeal.
(1) At the hearing upon a petition, the assessor or
the assessor's authorized representative shall be present and
shall produce information to support the basis and amount of the
assessor's valuation of the property. The board shall hear and
consider all testimony and examine all exhibits produced or introduced
by either the petitioner or the assessor, with no presumption
in favor of any pending valuation, and may subpoena witnesses
to testify. The costs of producing the petitioner's witnesses
shall be paid by the petitioner, and the costs of producing the
assessor's witnesses shall be paid by the county. On the basis
of the testimony produced and the exhibits introduced, the board
shall grant or deny the petition, in whole or in part, and shall
notify the petitioner and the assessor in writing. If the board
denies the petition, in whole or in part, such written notice
shall inform the petitioner of the right to appeal within the
thirtyday period following the denial to the district court
or the board of assessment appeals pursuant to the provisions
of section 398108 (1).
within the thirtyday period following the denial to submit
the case to arbitration pursuant to the provisions of section
398108.5. Such notice
shall state that, if the appeal is to the board of assessment
appeals, the hearing before the board of assessment appeals shall
be the last hearing at which testimony, exhibits, or any other
type of evidence may be introduced by either party and that, if
there is an appeal to the court of appeals pursuant to section
398108 (2), the record from the hearing before the
board of assessment appeals and no new evidence shall be the basis
for the court's decision. The phone number and address of the
board of assessment appeals shall also be included on the notice.
The notice shall also state, in general
terms, how to pursue arbitration and that, if a taxpayer submits
the case to arbitration, the decision reached under such process
shall be final and not subject to review.
SECTION 4. 398108 (1) and (2), Colorado Revised Statutes, 1994 Repl. Vol., as amended, are amended to read:
review. (1) If the county board
of equalization grants a petition, in whole or in part, the assessor
shall adjust the valuation accordingly;
if the petition is denied, in whole or in part, the petitioner
may appeal the valuation set by the assessor or, if the valuation
is adjusted as a result of a decision of the county board of equalization,
the adjusted valuation to the board of assessment appeals or to
the district court of the county wherein the petitioner's property
is located for a trial de novo. or
the petitioner may submit the case to arbitration pursuant to
the provisions of section 398108.5.
Such appeal or submission to arbitration
shall be taken no later than thirty days after the date such denial
was mailed pursuant to section 398107 (2). Any decision
rendered by the county board of equalization shall state that
the petitioner has the right to appeal the decision of the county
board to the board of assessment appeals or to the district court
of the county wherein the petitioner's property is located or
to submit the case to arbitration
and, to preserve such right, the time by which such appeal or
submission to arbitration must be
made. Any request by any person other than the taxpayer pro se
for a hearing before the board of assessment appeals shall be
accompanied by a nonrefundable filing fee in an amount of twentyfive
dollars for each tract, parcel, or lot of real property and for
each schedule of personal property included in such request; except
that, if any request for a hearing before the board of assessment
appeals involves more than one tract, parcel, or lot owned by
the same taxpayer and involves the same issue regarding the valuation
of such real property, only one filing fee shall be required for
such request for a hearing. In addition, any request by a taxpayer
for a hearing before the board of assessment appeals shall be
stamped with the date on which such request was received by the
board. All such requests shall be presumed to be on time unless
the board can present evidence to show otherwise.
(2) If the petitioner has appealed to
the board of assessment appeals,
FOLLOWING the decision of the board of assessment appeals, is
against the petitioner, the petitioner
OR THE RESPONDENT may petition the court of appeals for judicial
review according to the Colorado appellate rules and the provisions
of section 244106 (11), C.R.S. If
the decision of the board is against the respondent, the respondent,
upon the recommendation of the board that it either is a matter
of statewide concern or has resulted in a significant decrease
in the total valuation of the respondent county, may petition
the court of appeals for judicial review according to the Colorado
appellate rules and the provisions of section 244106
(11), C.R.S. In addition, on and after June 7, 1989, if the decision
of the board is against the respondent, the respondent may petition
the court of appeals for judicial review of alleged procedural
errors or errors of law within thirty days of such decision when
the respondent alleges procedural errors or errors of law by the
board of assessment appeals. If the board does not recommend
its decision to be a matter of statewide concern or to have resulted
in a significant decrease in the total valuation of the respondent
county, the respondent may petition the court of appeals for judicial
review of such questions within thirty days of such decision.
Any decision issued by the board of assessment appeals shall
inform the petitioner or respondent, as may be appropriate, of
the right to petition the court of appeals for judicial review.
SECTION 5. 398108.5 (1) (a), Colorado Revised Statutes, 1994 Repl. Vol., is amended, and the said 398108.5 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:
398108.5. Arbitration of property valuations arbitrators qualifications procedures repeal. (1) (a) In order to give taxpayers an alternative to pursuing an appeal of the county board of equalization's decision through either the board of assessment appeals or the district court, an arbitration process shall be established; EXCEPT THAT THE ARBITRATION PROCESS ESTABLISHED IN THIS SECTION SHALL NOT BE AVAILABLE TO PERSONS FILING PETITIONS WITH THE COUNTY BOARD OF EQUALIZATION FOR PROPERTY TAX YEARS BEGINNING ON OR AFTER JANUARY 1, 1997. The board of county commissioners shall develop a list of persons who shall be qualified to act as arbitrators of property valuation disputes. Such list shall be kept in the office of the county clerk and recorder.
(7) THIS SECTION IS REPEALED, EFFECTIVE JANUARY 1, 1998.
SECTION 6. Effective date applicability. This act shall take effect upon passage. Section 1 of this act shall apply to property tax years beginning on or after January 1, 1999. Section 398108 (2), Colorado Revised Statutes, as amended in section 4 of this act, shall apply to petitions filed with the court of appeals on or after July 1, 1997.
SECTION 7. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.