I_Gallagher_2018A 07/13/2018 08:35:06 AM Committee Summary PUBLICSTAFF SUMMARY OF MEETINGINTERIM COMMITTEE ALTERNATIVES TO THE GALLAGHER AMENDMENT INTERIM STUDY COMMITTEE Date 07/13/2018 Attendance Bridges X Court X Rankin X Tate X Smallwood X Esgar X Time 08:35:06 AM to 03:38:47 PM Place HCR 0112 This Meeting was called to order by Esgar This Report was prepared by Jeanette Chapman Hearing Items Action Taken hCommittee Deadline & Administration Committee Discussion Only hProperty Taxation Committee Discussion Only hOperation & History of Target Percent and Residential Assessment Rate Committee Discussion Only hSchool Finance & Mills Committee Discussion Only hImpact of Residential Assessment Rate on Prop Tax Revenue Committee Discussion Only hImpact of Residential Assessment Rate on Residential Property Committee Discussion Only hPueblo City-County Library District Committee Discussion Only hImpact of Residential Assessment Rate on Non-Residential Property Committee Discussion Only hPublic Comment Committee Discussion Only Committee Deadline & Administration - Committee Discussion Only Attachment Tag File Name Attachment http://www2.leg.state.co.us/CLICS/CLICS2018A/commsumm.nsf/0/084EFE8514CE...$File/180713 AttachA.pdf?OpenElement 180713 AttachA.pdf Attachment http://www2.leg.state.co.us/CLICS/CLICS2018A/commsumm.nsf/0/7AE64DAAC152...$File/180713 AttachB.pdf?OpenElement 180713 AttachB.pdf 08:37:18 AM Ed DeCecco, Office of Legislative Legal Services, discussed committee legislation deadlines. He provided a handout to the committee (Attachment A). 08:37:46 AM Chris Creighton, Legislative Council Staff, discussed preparation of fiscal notes for interim committee bills. He provided a copy of the committee charge memo (Attachment B). 08:38:48 AM Representative Rankin discussed his experience watching the firefighter response to forest fires in his district. 08:41:06 AM Senator Court made comments related to the committee's charge. Property Taxation - Committee Discussion Only Attachment Tag File Name Attachment http://www2.leg.state.co.us/CLICS/CLICS2018A/commsumm.nsf/0/2F6A245C74CD...$File/180713 AttachC.pdf?OpenElement 180713 AttachC.pdf 08:42:47 AM Keith Erffmeyer, Denver Assessor, introduced himself and provided a presentation of the process for property tax assessment and the disbursement of property taxes to local governments (Attachment C). 09:02:44 AM Mr. Erffmeyer responded to questions from the committee. 09:03:17 AM Mr. Erffmeyer responded to questions from the committee regarding challenges to assessments on properties. 09:18:49 AM Committee discussion continued. Members discussed which entities can request exemptions to property tax assessments or can challenge assessments. 09:23:41 AM Mr. Erffmeyer returned to his discussion of the assessment process. He responded to questions from the committee regarding how smaller counties conduct assessments. 09:24:15 AM Mr. Erffmeyer made closing comments and responded to final questions from the committee. Operation & History of Target Percent and Residential Assessment Rate - Committee Discussion Only Attachment Tag File Name Attachment http://www2.leg.state.co.us/CLICS/CLICS2018A/commsumm.nsf/0/AEA11C535DFE...$File/180713 AttachD.pdf?OpenElement 180713 AttachD.pdf 09:35:30 AM Joanne Groff, Property Tax Administrator, State of Colorado, provided a discussion of the history of the target percentage and residential assessment rates (Attachment D). She responded to questions from the committee regarding how assessments are determined in other states. 09:44:23 AM Ms. Groff continued her presentation, discussing the interaction between the Gallagher amendment and TABOR. She responded to questions from the committee. 10:01:05 AM Ms. Groff made concluding remarks and discussed court cases that were intended to clarify the conflicting requirements of Gallagher and TABOR. She responded to questions from the committee. 10:16:26 AM The committee recessed. School Finance & Mills - Committee Discussion Only Attachment Tag File Name Attachment http://www2.leg.state.co.us/CLICS/CLICS2018A/commsumm.nsf/0/75991950F6CF...$File/180713 AttachE.pdf?OpenElement 180713 AttachE.pdf 10:30:18 AM Craig Harper, Joint Budget Committee Staff, discussed the interaction of school finance with Gallagher and TABOR including property taxes and education funding in Colorado. He discussed the way the Gallagher Amendment affects school district property tax revenue and the state budget for school finance. He provided a handout to the committee (Attachment E). 10:35:10 AM Mr. Harper responded to questions from the committee. 10:46:09 AM Mr. Harper made closing comments to his presentation and responded to final questions from the committee. 11:07:37 AM Committee discussion continued. Impact of Residential Assessment Rate on Prop Tax Revenue - Committee Discussion Only Attachment Tag File Name Attachment http://www2.leg.state.co.us/CLICS/CLICS2018A/commsumm.nsf/0/7E79502C0795...$File/180713 AttachF.pdf?OpenElement 180713 AttachF.pdf 11:11:46 AM Byron Pelton, Logan County Commissioner, discussed the impact of the Gallagher Amendment on county financing. He provided an handout to the committee (Attachment F). 11:14:24 AM Ben Tisdel, Ouray County Commissioner, discussed the impact of the Gallagher Amendment in rural areas. 11:14:58 AM Commissioner Pelton responded to questions from the committee regarding local awareness of issues raised by the restrictions of the Gallagher Amendment. 11:21:27 AM Commissioner Tisdel discussed the likelihood of passing local ballot measures to address funding conflicts. 11:23:55 AM Ann Terry, Special District Association, discussed the concerns specific to special districts related to the Gallagher Amendment. She provided a handout to the committee (Attachment G). Attachment G 11:33:50 AM Al White, Fraser Valley Metropolitan Recreation District, talked about the impact of a descreased residential assessment rate on the district. 11:36:29 AM Ms. Terry responded to questions from the committee. 11:38:13 AM Senator White discussed the difference between commercial property tax revenues in rural areas and the Front Range. 11:39:48 AM Committee discussion continued regarding the changes over time to the residential assessment rates and how Gallagher, TABOR, and Amendment 23 requirements have created the current concerns over decrease in local government revenue. 11:51:06 AM Don Lombardi, West Metro Fire Protection District and the Colorado State Fire Chiefs, discussed concerns of local fire districts related to reductions in the assessment rate. 11:55:04 AM Stuart Mills, Larkspur Fire Protection District, discussed the impact of a reduction in the residential assessment rate on a small fire district. 12:06:28 PM Chief Lombardi responded to questions from the committee. 12:10:08 PM The committee recessed. Impact of Residential Assessment Rate on Residential Property - Committee Discussion Only 01:23:36 PM Senator Dennis Gallagher, representing himself, provided the committee with historical context for the passage of the amendment that bears his name. 01:36:52 PM Senator Gallegher discussed the interactions of the Gallagher Amendment with the TABOR amendment. He responded to questions from the committee. Pueblo City-County Library District - Committee Discussion Only 02:00:39 PM Jon Walker, Executive Director Pueblo Library District, discussed impact of the Gallagher Amendment on the district and the problems associated with disparate growth in property values in different parts of the state. He provided a handout to the committee (Attachment H). 02:06:41 PM Sheri Baca, Chief Financial Officer, Pueblo Library District, discussed the financial impacts on the library district under different assessment rate calculations. 02:12:51 PM Mr. Walker discussed his suggestions for reforming the Gallagher Amendment. 02:14:29 PM Doreen Martinez, President, Pueblo Library Board of Directors, discussed the importance of libraries to the Pueblo community. She discussed the communities willingness to support changes to the Gallegher amendment. Discussion ensued. Impact of Residential Assessment Rate on Non-Residential Property - Committee Discussion Only 02:39:08 PM Tyler Carlson, Managing Principal for Evergreen Development, discussed the impacts of the property tax structure on small businesses. He discussed other potential options regarding the valuation of commercial properties in Colorado. 02:47:14 PM Larry Lance, Managing Partner of Everwest Real Estate Investors, discussed the affordability of properties for small business. He commented on recent increases in property tax levels for businesses. Mr. Lance and Mr. Carlson then responded to questions from the committee. 02:55:28 PM Ms. Groff returned to the table to respond to questions about which valuation approach was allowable for various classes of property. Public Comment - Committee Discussion Only 03:08:46 PM David Wissel, Park County Assessor, provided comments on the impacts of Gallagher Amendment on Park County. He discussed the gap between residential and nonresidential assessment rates. 03:13:58 PM Pam Feely, President, West Metro Fire District, discussed concerns about what happens when property values plateau and start to decline. 03:15:52 PM Gail Lindley, Denver Bookbinding Company, discussed the impact of increasing property taxes on her business. 03:19:45 PM Gini Pingenot, Colorado Counties, Inc., discussed the impacts of the Gallagher Amendment on counties that rely primarily on property taxes to fund local needs. She expressed support for counties to be permitted to address the problem. She responded to questions from the committee. 03:28:26 PM Mr. Wissel discussed the possibility of eliminating the assessment ratios and instead using market values. 03:29:55 PM TJ Steck, Elizabeth Fire District, discussed revenue impacts to his fire district as a result of the declining residential assessment rate. He talked about the option of de-Gallagherizing and the conflicts between the Gallagher Amendment and TABOR requirements. He responded to questions from the committee. 03:38:47 PM Committee Adjourned