Capitol Close Up: Special Session Update
Special Session Concludes with Property Tax Agreement and Initiatives 50 and 108 being Withdrawn from the Ballot
The General Assembly Special Session—called by Governor Polis to address recent property tax spikes and to avert two ballot measures that would have severely impacted local governments—ended yesterday with the passage of two pieces of legislation that will provide property tax relief for Coloradans. At the same time, Advance Colorado and Colorado Concern began the process to withdraw initiatives 50 and 108 from the November ballot.
Proposition 50 is a proposed constitutional amendment, that if passed, would have capped annual statewide property tax revenue collection at 4 percent. If this limit was exceeded, retention of the excess revenue must be approved by voters via a statewide ballot measure. We learned from bond counsel and underwriters that 50 would upset our ability to procure bonding for metro districts, severely limiting our industry’s ability to finance new housing projects.
We applaud Governor Polis for understanding the risk these measures posed for the production of new housing and his leadership in calling the special session.
The state House introduced 11 measures, and the Senate introduced two measures, with only House Bill 24B-1001 and House Bill 24B-1003 passing.
HB24B-1001, which CAHB supported, is considered the “deal” bill that led to the removal of Initiatives 50 and 108. This bill passed both chambers and will be signed into law by Governor Polis once he is assured that 50 and 108 have been officially withdrawn by the proponents.
HB24B-1001 expanded Senate Bill 24-233, which provided a $1.3 billion property tax break, reduced assessment rates for residential and commercial properties, and set a 5.5% annual growth cap for property-tax revenues for local governments like fire districts, school districts and other property-tax funded services.
The new legislation includes:
- Reducing the property tax growth limit to 5.25% per year for non-school districts (local governments including fire and other special districts). Local governments can have a local vote to be exempt from this limit.
- Instituting limits for school districts of 6% per year unless inflation plus enrollment is greater. School districts are allowed to exceed this limit with local voter approval.
Other parts of HB24B-1001 include:
- Local government backfill provision included in SB24-233 is extended to cover property tax year 2025 for the decrease in assessed value attributable to this bill.
- Modifying the effective date in SB24-233 so that SB24-233 takes effect either on October 1, 2024, if both property tax initiatives are withdrawn, or on the date of the official declaration of the vote if one or both of the initiatives appear on the ballot and no property tax initiative is approved by the voters.
- Clarifying that bond and MLO measures on the 2024 ballot will not be impacted by this bill.
- Process to allow local jurisdictions to capture potentially lost revenue.
We are tremendously grateful to the sponsors – Speaker McCluskie, Minority Leader Pugliese, and Senators Kirkmeyer and Hansen – for their diligence and leadership in guiding this vital compromise legislation through the session!
HB24B-1003 also passed and will make the personal property tax exemption permanent for agricultural equipment that is used in any controlled environmental agricultural (CEA). Current law had this exemption expiring in 2027. The bill also included personal property within a greenhouse eligible for the exemption. This bill is also expected to be signed into law.
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