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CAR Moves to Support Development Permit Approval Process Bill

SB13-258, Concerning Stages in Development Permit Approval Process, by Senator Mary Hodge (D-Brighton) and Representative Dominick Moreno (D-Commerce City) was reviewed by LPC again this week.

Under current law, a local government may not approve an application for a development permit unless it determines that the applicant has satisfactorily demonstrated that the proposed water supply will be adequate. The term "adequate" is defined to mean a water supply that will be sufficient for build-out of the proposed development in terms of quality, quantity, dependability and availability to provide a supply of water for the type of proposed development. A local government is permitted to make the adequacy determination only once during the development permit approval process.

The bill modifies the definition of the term "development permit" to clarify both that it is the local government that may determine the adequacy of water supply, and that the local government can determine at what stage of the development permit process to require evidence of adequate water.

SB-258 is a response to a district court ruling that CAR believes erred in its interpretation of HB08-1141. CAR worked tirelessly on HB-1141 to ensure proof of adequate water for new residential developments, while confirming a local government’s purview to determine that their standard is met. Further, CAR fought diligently against attempts from some stakeholders to add language that we believe was designed to stop most future developments. The erroneous ruling, if left to stand, could reopen the efforts of “no-growth” advocates to use the judicial system to severely limit future of planned unit developments.

We will continue to update you as the process moves forward.

CAR takes position of Support on Real Property Title Documents Bill

HB13-1307, Concerning Legal Description in Real Property Title Documents, by Rep. Daniel Kagan (D- Cherry Hills Village) was discussed in LPC this week.

Under current law, the fact that a document of title relating to real property does not contain an address, identifying number, or assessor's schedule number or parcel number does not render the document ineffective, nor render the title unmarketable, if the property's legal description appears in the document. The bill specifies that the absence of a legal description in a document of title relating to real property does not necessarily:

• render the document defective or invalid, or void the recording of the document by the county clerk and recorder of the county where the real property is situated; or

• determine whether the document is valid against a person obtaining rights in real property

HB-1307 attempts to address issues created by the Colorado Supreme Court decision in Sender v. Cygan. In Sender, the Court held that the absence of a legal description rendered a deed defective, or invalid, upon its recording. This legislation clarifies that a failure to include a legal description on a document does not, in and of itself, necessarily render that document defective or invalid upon its recording. CAR worked with other stakeholders to amend the bill and include a legislative declaration which clarifies the legislature’s determination that the Court misinterpreted existing law. Without this legislative fix, many property owners could be negatively impacted simply due to a scrivener’s error on a recorded document. The LPC took a position of support, and we are pleased to report that it has passed the House on 3rd reading today.

CAR Monitoring Real Property Assessment Bill

HB13-1319, Concerning Assessment Ratio for Residential Real Property, by Rep. Lois Court (D-Denver) and Senator Mike Johnston (D-Denver), was brought up in LPC today.

Section 3 (1) (b) of Article X of the State Constitution, commonly known as the Gallagher Amendment, requires the General Assembly to set the residential assessment rate every two years at a rate that satisfies the requirements of the amendment. This bill establishes the residential assessment rate at 7.96 percent for tax years 2013 and 2014, the same rate in place since 2003. The bill takes effect upon signature of the Governor or upon becoming law without his signature.

A property's taxable value is determined by multiplying its actual value by the relevant assessment rate. A residential assessment rate of 7.96 percent means that a home worth $100,000 has a taxable value of $7,960. If the mill levy, or property tax rate, for that home is equal to 100 mills, the yearly tax bill would be $796.

The Gallagher Amendment, approved by voters in 1982, restrains growth in residential property taxes by establishing the residential share of the statewide property tax base. When the amendment was first implemented, residential property comprised roughly 45 percent of all taxable value statewide. Gallagher limits the residential share of taxable values to this historical proportion, with adjustments for new construction and changes in the volume of minerals and oil and gas produced in the state. Since the amendment was implemented, these adjustments have shifted the proportions so that the residential share now accounts for 45.86 percent of statewide taxable values. This percentage is referred to as the "residential target percentage." Because residential property values do not increase over time at the same rate as nonresidential property values, the Gallagher Amendment requires that the residential assessment rate be adjusted over time to ensure that the residential target percentage is met. If the value of residential property increases at a faster rate than the value of nonresidential property and the residential assessment rate is not adjusted, the percentage of the state tax base attributable to residential property would rise above the target percentage. In order to make sure the target percentage is met, the residential assessment rate is lowered. This occurred in most years between 1985 and 2003, during which time the residential assessment rate decreased from 21 percent to 7.96 percent.

Since 2003, however, actual values for residential property have been increasing at rates lower than nonresidential property. Therefore, in order to maintain the approximate 45 percent residential target percentage, it is necessary to increase the residential assessment rate. An assessment rate of 9.13 percent would produce the residential target percentage required for 2013 and 2014. However, Article X, Section 20 (4) (a) of the state constitution requires voter approval for any increase in the assessment rate for a class of property.

CAR Mid-Session Legislative Update
Webcast recording is available for the CAR Mid-Session Legislative Update featuring Rachel Nance, VP Public Policy. Special guests include representatives from the Colorado Oil and Gas Association. The one hour presentation can be viewed HERE. Thank you to Metro Brokers and First American Title for supporting the seminar.