Reduce Property Taxes And Voter-approved Revenue Change
- For lodging property, property listed under any improved commercial subclass code, and all other nonresidential property, excluding agricultural property and renewable energy production property, the assessment rate is reduced from 27.9% to 27.85%;
For renewable energy agricultural land, which is a newly created subclass of agricultural property that is valued undersection 7, the assessment rate is reduced from 26.4% to 21.9%.
Thereafter, the assessment rate for lodging property and all nonresidential property, excluding agricultural property and renewable energy production property and property that is not under a vacant land subclass, is reduced from 29% to:
- 27.85% for the 2024 through 2026 property tax years;
- 27.65% for the 2027 and 2028 property tax years;
- 26.9% for the 2029 and 2030 property tax years; and
- 25.9% or 26.9% for the 2031 and 2032 property tax years, depending on the increase in the valuation in the 32 counties with the smallest increases from the 2030 to 2031 property tax years (revenue increases).
The assessment rate for agricultural property, excluding renewable energy agricultural land, and renewable energy property is reduced from 29% to:
- 26.4% for the 2025 through 2030 property tax years; and
- 25.9% or 26.4% for the 2031 and 2032 property tax years, depending on the increase in the valuation in the 32 counties with the smallest revenue increases.
The assessment rate for renewable energy agricultural land, which is a newly created subclass of agricultural property that is valued under section 7 , is reduced from 29% to 21.9% for the 2024 through 2032 property tax years.
Beginning with the 2033 property tax year, all of the temporary valuation reductions expire and the valuation of all nonresidential real property is 29% of the actual value of the property.
The valuation of residential real property is based on an assessment rate of 7.15% of actual value, but currently, there are temporary reductions in the valuation. Section 9 further reduces the valuation of residential real property. For the 2023 property tax year, the valuation is reduced from 6.765% of the amount equal to the actual value minus the lesser of $15,000 or the amount that causes the valuation to be $1,000 (alternate amount) to 6.7% of the amount equal to the actual value minus the lesser of $40,000 or the alternate amount.
For the 2024 property tax year, the valuation is reduced as follows:
- For multi-family residential real property, the valuation is reduced from 6.8% of the actual value to 6.7% of the amount equal to the actual value minus the lesser of $40,000 or the alternate amount; and
- For all other residential real property, the valuation is reduced from an estimate of 6.98% of the actual value to 6.7% of the amount equal to the actual value minus the lesser of $40,000 or the alternate amount.
For the 2025 through 2032 property tax years:
- For multi-family residential real property and primary residence real property, including multi-family primary residence real property, the valuation is reduced from 7.15% of the actual value to 6.7% of the actual value minus the lesser of $40,000 or the alternate amount;
- For qualified-senior primary residence real property, including multi-family qualified-senior primary residence real property, the valuation is reduced from 7.15% of the actual value to 6.7% of the amount equal to the actual value minus $140,000 or the alternate amount; and
- For all other residential real property, the assessment rate is reduced from 7.15% to
7.16.7 %.
Beginning with the 2033 property tax year, all of the temporary valuation reductions expire and the valuation of all residential real property is 7.15% of the actual value of the property.
The bill also establishes that all of the temporary reductions in valuation for residential and nonresidential property created in the bill are contingent on the state's ability to retain and spend state surplus up to the proposition HH cap. If, for any reason, excluding a legislative enactment by the general assembly, the state is not permitted to retain and spend this money, then the temporary reductions in the bill do not apply.
and 16 , and 21 delay deadlines as necessary due to the valuation changes for the 2023 property tax year. Section 20 requires county assessors to provide notice, which will be prepared by the property tax administrator, to taxpayers about the new valuations for assessment and the application process for primary residence real property and qualified-senior primary residence real property.
The state is currently required to reimburse local governmental entities for property tax revenue lost as a result of the reductions in valuation enacted in Senate Bill 22-238. Section 14 modifies this backfill mechanism by:
- Specifying that the amount of revenue lost for a property tax year is based on a local governmental entity's mill levy for the 2022 property tax year, excluding specified mills;
- Including the additional property tax revenue reductions that result from the bill in the backfill for the 2023 property tax year;
- Eliminating the maximum amount of the backfill for the 2023 property tax year that is a refund of excess state revenues;
- Extending the backfill for the 2024 through 2032 property tax years for the valuation reductions in the bill, but making a local governmental entity that has an increase in real property total valuation of 20% or more from the 2022 property tax year ineligible for the backfill;
- Creating the local government backfill cash fund, which includes a $128 million general fund transfer, and requiring the money from the fund to be used to backfill revenue to local governments beginning with the 2024 property tax year;
and - Beginning with the 2024 property tax year, proportionally reducing the amount that each eligible local government receives, if necessary to avoid exceeding the total amount that is identified as being available for the backfills statewide
.; - Clarifies how local governmental entities, which are now defined, are treated if their boundaries are in more than one county for purposes of the backfill; and
- Requires the state treasurer to reduce a backfill as necessary to avoid a local governmental entity exceeding its constitutional fiscal year spending limit.
If the general assembly does not enact assessment rates for the 2033 property tax year that are the same or lower than the assessment rates for the 2032 property tax year described above, then the proposition HH cap is reduced to be equal to the excess state revenues cap, and the state will retain $0 under this authority beginning with the 2031-32 fiscal year. Thereafter, the general assembly may partially or wholly restore the proposition HH cap without additional voter approval if the general assembly enacts valuation reductions equal to or greater than those for the 2032 property tax year.
The amount retained under this authority is first used in the following fiscal year to backfill certain local governments for the reduced property tax revenue as a result of the property tax changes in the bill and Senate Bill 22-238, and the remainder is transferred to the state education fund to offset the revenue that school districts lose as a result of the property tax changes. Section 5 requires the state controller to include the new voter-approved revenue change in the annual report on TABOR revenues.
(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)
(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)