Colorado Legislative Council Staff



TABOR Refund Impact

General Fund Revenue Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-879

Rep. Tool



Bill Status:

Fiscal Analyst:

March 20, 1998

House Finance

Harry Zeid (866-4753)



Summary of Legislation

            Under current law, a person who is 65 years of age or older who meets certain restrictions may elect to defer the payment of property taxes by claiming the deferral with the county treasurer. If the taxpayer is eligible for the deferral, the State Treasurer then pays the amount certified as the property tax deferral to the county treasurer. The state then accrues interest, beginning May 1 of the calendar year in which the deferral was claimed, at the rate of 8.0 percent per annum, compounded annually. This bill would reduce the annual rate of interest on deferred property taxes to 7.0 percent, commencing May 1, 1999.

            The bill would reduce General Fund interest earnings on the deferred property taxes. Therefore, the bill is assessed as having state General Fund revenue impact. The bill will become effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution.


FY 1998/99

FY 1999/2000

State Revenues

General Fund - reduction

Other Fund



State Expenditures

General Fund

Other Fund



FTE Position Change



Local Government Impact — None

State Revenues

            Currently, 386 homeowners take advantage of the state’s property tax deferral program. The value of prior taxes and interest deferred through the program is $3.94 million. A reduction in the interest rate from 8.0 percent to 7.0 percent would reduce state General Fund interest earnings on deferrals currently outstanding by approximately $39,400 annually beginning in FY 1999-00. It is assumed that a lowering of the interest rate charged on property tax deferrals will increase the number of participants in the program. However, the number of potential program participants in the future has not been estimated.

            Currently, the property tax deferral program includes 14 accounts that are up for collections and one account that is in foreclosure. The total value of the delinquency is $60,743 (1.54 percent of the program value). It is likely that as the number of participants in the program increases, the number and value of the delinquencies may increase correspondingly.

TABOR Refund Impact

            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase or decrease in state revenue from changes in fees, fines, licenses, or other revenue sources, such as interest earnings, will affect the amount of the state revenue to be refunded.

Spending Authority

            The fiscal note would imply that no appropriations or spending authority are required to implement the provisions of the bill.


Departments Contacted

            State Treasurer