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Second Regular Session

Sixty-first General Assembly

LLS NO. 98­0133.01 GWF HOUSE BILL 98­1182

STATE OF COLORADO

BY REPRESENTATIVE Pfiffner;

also SENATOR Coffman.

FINANCE

A BILL FOR AN ACT

CONCERNING TAX POLICY REFORM, AND, IN CONNECTION THEREWITH, SPECIFYING THE VALUATION FOR ASSESSMENT PERCENTAGES FOR CERTAIN CLASSIFICATIONS OF PROPERTY, ESTABLISHING A HOMESTEAD EXEMPTION FOR A PORTION OF THE ACTUAL VALUE OF OWNER­OCCUPIED RESIDENTIAL PROPERTY USED AS A PRIMARY RESIDENCE, REPEALING THE "URBAN AND RURAL ENTERPRISE ZONE ACT", AND ALLOWING THE CARRY FORWARD OF ANY INCOME TAX CREDITS AUTHORIZED BY THE "URBAN AND RURAL ENTERPRISE ZONE ACT".

Bill Summary

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

For property tax years commencing on or after January 1, 2000:

$ Provides that residential property shall be valued for assessment at 10% of its actual value;

$ Reduces the valuation for assessment ratio for commercial real property and industrial real property from 29% to 15% of actual value;

$ Reduces the valuation for assessment ratio for personal property from 29% to 15% of actual value;

$ Repeals the statutory provisions governing the annual adjustment of the ratio of valuation for the assessment of residential real property; and

$ Provides a homestead exemption for a portion of the actual value of residential real property that is owner­occupied and used as a primary residence. Specifies the amount of the exemption to be $50,000 of the actual value or an amount equal to 20% of the actual value, whichever is less.

Repeals the "Urban and Rural Enterprise Zone Act". Allows the carry forward of any of the repealed income tax credits that were not used to offset tax liability for income tax years commencing prior to January 1, 1998.

Makes the act effective upon voter approval of specific constitutional amendments submitted at the 1998 general election. Refers the measure to voters for approval at the 1998 general election.


Be it enacted by the General Assembly of the State of Colorado:

SECTION 1.  39­1­104 (1) and (1.5), Colorado Revised Statutes, are amended, and the said 39­1­104 is further amended BY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to read:

39­1­104.  Valuation for assessment. (1)  The valuation for assessment of all taxable property in the state shall be twenty­nine percent of the actual value thereof as determined by the assessor and the administrator in the manner prescribed by law, and such percentage shall be uniformly applied, without exception, to the actual value, so determined, of the various classes and subclasses of real and personal property located within the territorial limits of the authority levying a property tax FOR PROPERTY TAX YEARS COMMENCING PRIOR TO JANUARY 1, 2000, AND TO THE ACTUAL VALUE OF THE VARIOUS CLASSES AND SUBCLASSES OF REAL PROPERTY FOR TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2000, and all property taxes shall be levied against the aggregate valuation for assessment resulting from the application of such percentage. FOR PROPERTY TAX YEARS COMMENCING PRIOR TO JANUARY 1, 2000, this subsection (1) shall not apply to residential real property, producing mines, and OR lands or leaseholds producing oil or gas. FOR PROPERTY TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2000, THIS SUBSECTION (1) SHALL NOT APPLY TO RESIDENTIAL REAL PROPERTY, INDUSTRIAL REAL PROPERTY, COMMERCIAL REAL PROPERTY, PERSONAL PROPERTY, PRODUCING MINES, OR LANDS OR LEASEHOLDS PRODUCING OIL OR GAS.

(1.5)  FOR PROPERTY TAX YEARS COMMENCING PRIOR TO JANUARY 1, 2000, residential real property shall be valued for assessment at twenty­one percent of its actual value, except as provided in section 39­1­104.2. FOR PROPERTY TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2000, RESIDENTIAL REAL PROPERTY SHALL BE VALUED FOR ASSESSMENT AT TEN PERCENT OF ITS ACTUAL VALUE.

(1.7)  FOR PROPERTY TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2000, INDUSTRIAL REAL PROPERTY AND COMMERCIAL REAL PROPERTY SHALL BE VALUED FOR ASSESSMENT AT FIFTEEN PERCENT OF ITS ACTUAL VALUE.

(1.8)  FOR PROPERTY TAX YEARS COMMENCING ON OR AFTER JANUARY 1, 2000, PERSONAL PROPERTY SHALL BE VALUED FOR ASSESSMENT AT FIFTEEN PERCENT OF ITS ACTUAL VALUE.

SECTION 2.  39­1­104.2, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SUBSECTION to read:

39­1­104.2.  Legislative declaration ­ adjustment of residential rate ­ repeal. (8)  THIS SECTION IS REPEALED, EFFECTIVE JANUARY 1, 2000.

SECTION 3.  Article 3 of title 39, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:

39­3­101.5.  Homestead exemption.  THE FIRST FIFTY THOUSAND DOLLARS OF THE ACTUAL VALUE OR AN AMOUNT EQUAL TO TWENTY PERCENT OF THE ACTUAL VALUE, WHICHEVER IS LESS, OF RESIDENTIAL REAL PROPERTY THAT, AS OF THE ASSESSMENT DATE, IS OWNER­OCCUPIED AND IS USED AS THE PRIMARY RESIDENCE OF THE OWNER SHALL BE EXEMPT FROM PROPERTY TAXATION.

SECTION 4.  39­10­114 (1) (a) (I) (C), Colorado Revised Statutes, is amended to read:

39­10­114.  Abatement, cancellation of taxes ­ repeal. (1) (a) (I) (C)  The change or adjustment of any ratio of valuation for assessment for residential real property pursuant to the provisions of section 39­1­104.2 shall not constitute grounds for abatement of taxes as provided in sub­subparagraph (A) of this subparagraph (I). THIS SUB­SUBPARAGRAPH (C) IS REPEALED, EFFECTIVE JULY 1, 2001.

SECTION 5.  Part 5 of article 22 of title 39, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:

39­22­522.  Carry forward of repealed enterprise zone tax credits.  THE REPEAL OF THE "URBAN AND RURAL ENTERPRISE ZONE ACT" SHALL NOT AFFECT THE ABILITY OF ANY TAXPAYER TO CARRY FORWARD AS A CREDIT AGAINST INCOME TAX LIABILITY FOR ANY INCOME TAX YEAR COMMENCING ON OR AFTER JANUARY 1, 1999, ANY AMOUNT OF CREDIT CLAIMED FOR ANY INCOME TAX YEAR COMMENCING PRIOR TO JANUARY 1, 1999, PURSUANT TO ARTICLE 30 OF TITLE 39 THAT HAS NOT BEEN USED AS AN OFFSET AGAINST INCOME TAXES IN ANY INCOME TAX YEAR COMMENCING PRIOR TO JANUARY 1, 1999.

SECTION 6.  Repeal.  Article 30 of title 39, Colorado Revised Statutes, is repealed.

SECTION 7.  Effective date.  This act shall take effect following proclamation by the governor of the vote of the registered electors at the 1998 general election approving House Concurrent Resolution 98­____. This act shall not take effect if the registered electors at the 1998 general election disapprove House Concurrent Resolution 98­____.

SECTION 8.  Refer to people under referendum.  This act shall be submitted to a vote of the registered electors of the state of Colorado at the next election for which it may be submitted, for their approval or rejection, under the provisions of the referendum as provided for in section 1 of article V and section 20 of article X of the state constitution, and in article 40 of title 1, Colorado Revised Statutes. Each elector voting at said election and desirous of voting for or against said act shall cast a vote as provided by law either "Yes" or "No" on the proposition: "SHALL STATE TAX POLICY BE MODIFIED BY: (1) ELIMINATING THE REQUIREMENT THAT THE GENERAL ASSEMBLY ANNUALLY ADJUST THE RATIO OF VALUATION FOR ASSESSMENT FOR RESIDENTIAL REAL PROPERTY SO THAT THE PERCENTAGE OF THE STATEWIDE VALUATION FOR ASSESSMENT ATTRIBUTABLE TO SUCH PROPERTY REMAINS THE SAME AS IT WAS IN 1985; (2) SPECIFYING THE VALUATION FOR ASSESSMENT PERCENTAGE FOR RESIDENTIAL REAL PROPERTY AT TEN PERCENT OF ITS ACTUAL VALUE; (3) REDUCING THE VALUATION FOR ASSESSMENT PERCENTAGE FOR COMMERCIAL REAL PROPERTY, INDUSTRIAL REAL PROPERTY, AND PERSONAL PROPERTY TO FIFTEEN PERCENT OF ITS ACTUAL VALUE; (4) ESTABLISHING A HOMESTEAD EXEMPTION FOR THE FIRST FIFTY THOUSAND DOLLARS OF THE ACTUAL VALUE OR AN AMOUNT EQUAL TO TWENTY PERCENT OF THE ACTUAL VALUE, WHICHEVER IS LESS, OF RESIDENTIAL REAL PROPERTY THAT IS OWNER­OCCUPIED AND USED AS A PRIMARY RESIDENCE; (5) REPEALING THE "URBAN AND RURAL ENTERPRISE ZONE ACT", WHICH PROVIDES TAX INCENTIVES TO BUSINESSES LOCATED IN ENTERPRISE ZONES; AND (6) ALLOWING THE CARRY FORWARD OF ANY INCOME TAX CREDITS GRANTED PURSUANT TO THE "URBAN AND RURAL ENTERPRISE ZONE ACT"?" The votes cast for the adoption or rejection of said act shall be canvassed and the result determined in the manner provided by law for the canvassing of votes for representatives in Congress.