TITLE: CONCERNING THE EXPANSION OF PROPERTY TAX EXEMPTIONS FOR ENTITIES THAT SERVE CHILDREN.

Fiscal Impact Summary	FY 1999/2000	FY 2000/2001
State Revenues General Fund
State Expenditures General Fund - School Finance	$1,775	$1,775
FTE Position Change	0.0 FTE	0.0 FTE
Other State Impact: None
Effective Date: Property tax years commencing on or after January 1, 1999
Appropriation Summary for FY 1999-2000: $1.775 to the Department of Education, Public School Finance, Total Program
Local Government Impact: The bill is projected to reduce total property tax collections for local governments by approximately $4,129 annually beginning in calendar year 2000, as compared to the amount that would be collected under current law.

For property tax exemption purposes, current law (Section 39-1-102 (15.5)(a), C.R.S.) defines a school to mean an educational institution having a curriculum comparable to that of a publicly supported elementary or secondary school or college, or any combination thereof, and requiring daily attendance. This bill, as amended in the Senate Finance Committee, expands the definition of a "school" to include an institution that is licensed as a child care center pursuant to Article 6 of Title 26, C.R.S., and that is operated by and as an integral part of a not-for-profit educational institution that meets the other requirements of the definition of a school.

The Division of Property Taxation has identified four properties that will be granted an exemption from property taxation based on the expanded definition of a "school " contained in the bill. These properties had erroneously been granted an exemption from property taxation in the past, (see the Local Government Impact Section below). Based on current law, these properties will be assessed as taxable, and will be required to pay property tax in the future. Had these properties been properly identified as taxable in the past, and therefore been paying property taxes all along, the amount of state aid paid to school districts where these properties are located would have been approximately $1,775 less than is currently being paid. For these four properties, this bill will keep the amount of state aid paid to affected school districts at current levels.

Background. The Division of Property Taxation has granted exemption to approximately 90 properties where the primary use is a child care center, and has granted exemption to approximately 200 other properties where the property owner operates a child care center as a secondary use of the property. It has come to the attention of the Division that four of these properties do not qualify for a property tax exemption under the provisions of current law. Based on current law, the Division has indicated its intention to revoke the exemption of these properties, and therefore, impose property tax on these properties in the future. It is possible that 10 to 15 additional properties are claiming exemption, but do not qualify for the exemption under current law.

The amended bill exempts the four properties that are identified above for property tax purposes. These properties have a total actual value of $180,739, and an assessed value of $52,414. Based on the average statewide mill levy of 78.774 mills, the estimated property tax that should be paid on these properties is approximately $4,129 annually if current law is enforced in the future. This is that amount of property tax that will be exempted by the bill.

The provisions of the bill suggest an increase in the FY 1999-00 appropriation for the Department of Education, Public School Finance, Total Program of $1,775