C.R.S. § 39-5-132 — Assessment and taxation of new construction

(1) The general assembly hereby finds and declares that it is a matter of statewide concern that revenues from property taxes on newly constructed buildings may need to be put to special use in order to accommodate the capital needs resulting from such new construction, especially to accommodate the capital needs of the public schools in this state. The general assembly further declares that it is essential that such revenue be available as soon as possible after the time such new construction is put to use. The general assembly further finds and declares that the board of county commissioners is the appropriate governmental unit to determine the extent of the growth within the county and the finding of severe growth impact shall be at the sole discretion of the board. (2) (a) (I) (A) If the board of county commissioners determines that a county is becoming severely impacted by residential growth, the board of county commissioners shall make a finding of severe growth impact based upon the rate of increase in the county of the number of residential units being constructed within the county and an increase in pupil enrollment in school districts within the county such that at least one school district in the county meets the growth criteria described in sub-subparagraph (E) of this subparagraph (I), and other factors which indicate patterns of growth and growth impact, and shall, on or before January 1, resolve to implement the assessment and levy procedures required under this section. When a board of county commissioners makes such resolution, the provisions of this section shall apply countywide notwithstanding any law to the contrary. The board of county commissioners shall not make a finding of severe growth impact unless the number of residential units in the county will increase by over two percent during the county's current fiscal year. The board of county commissioners may negotiate with taxing authorities in the county to provide the costs of implementing the assessment and levy procedures required under this section. Notwithstanding any other provision of law to the contrary, any such taxing authority is hereby authorized to use moneys from its general fund to provide the costs specified in this subparagraph (I) and to deposit any moneys received as reimbursement pursuant to subsection (4) of this section into its general fund. (B) Whenever construction occurs on any new taxable building within the boundaries of a county after January 1 of a given year, the assessor shall value the building on July 1 of that year, and the assessor shall add the valuation for assessment thereof to the abstract of assessment for such tax year, except that portion of the valuation for assessment as is excluded by paragraph (b) of this subsection (2). If the building is complete on July 1, such valuation for assessment shall be prorated at the same ratio as the number of months it is completed bears to the full year. Otherwise, the valuation added to the abstract shall be one-half of the difference between the valuation for assessment on January 1 and the valuation for assessment on July 1. For the purposes of this section, the total valuation for assessment of all newly constructed taxable buildings in a county as calculated pursuant to this subsection (2) shall be known as the growth valuation for assessment for such county. For purposes of this section, completion shall be considered to be when a certificate of occupancy is issued, when the building is ready for use, or after the final inspection, at the sole discretion of the county assessor. As used in this section, building means a roofed and walled real property improvement, and any uncertainty concerning whether or not a particular real property improvement is a building within the meaning of this definition shall be resolved by the property tax administrator. (C) The assessor shall give written notification of the valuation of such newly constructed taxable building to the taxpayer. The notice shall, at a minimum, set forth the valuation on the assessment date, the prorated valuation of the newly constructed taxable building, and the total valuation for the property tax year. The notice shall also advise the taxpayer that he may protest and appeal the valuation of the newly constructed taxable building at the same time and in the same manner, pursuant to section 39-5-122, as the total valuation of his property for the next property tax year may be appealed. If the taxpayer is successful in the protest or appeal, the amount in excess shall be refunded directly to the taxpayer by the county treasurer. (D) In order to promote the most efficient administration of this section, each county or municipality shall ensure that any office or agency that received information relative to the state of completion of new taxable buildings shall promptly transmit such information to the county assessor. After January 1, 1987, the property tax administrator shall transmit to the assessor in August of each year both the assessed value of any newly constructed buildings owned by public utility companies and their state of completion on July 1 as well as their value on the previous January 1. (E) The growth criteria for school districts for purposes of sub-subparagraph (A) of this subparagraph (I) shall be whether the commissioner of education or the commissioner's designee certifies that the pupil enrollment of the district for the past three years, as determined on October 1 of each year in accordance with former section 22-53-103 (7) or section 22-54-103 (10), has increased by three percent or more over each preceding year for those districts with pupil enrollments of at least one thousand pupils or by twenty-five or more pupils each year for those districts with pupil enrollments of less than one thousand pupils. (II) All general property taxes which are levied on all other taxable real and personal property within a county in the tax year during which such construction occurs shall also be levied against the growth valuation for assessment of such county for collection the following year. Revenues raised from taxes levied on such growth valuation for assessment shall be credited to the county's capital growth fund, which each board of county commissioners shall establish, for use and distribution pursuant to subsection (4) of this section. The actual value and valuation for assessment of such newly constructed taxable building for subsequent years shall be the actual value and valuation for assessment as determined by the provisions of law other than this section, and tax revenues attributable thereto shall be distributed as provided by law without regard to this section. (b) The provisions of this section shall not apply to that portion of the valuation for assessment of a newly constructed taxable building and the land underlying such building which is contained in the abstract of assessment on the assessment date. (c) If the newly constructed taxable building is a residential unit, the assessment percentage to be applied to the land underlying such building shall be based on a residential classification of the land. If the land underlying such building was classified as vacant land, the classification shall be changed to residential on the abstract of assessment for the tax year in which the assessor added the valuation of the newly taxable residential building to the abstract for assessment. (3) By August 25 of each year, the assessor shall notify the board of county commissioners of the amount of the growth valuation for assessment of the county for that tax year, the percentage that such growth valuation for assessment bears to the total valuation for assessment of the county for such tax year, the portion of such growth valuation for assessment that is attributable to newly constructed taxable buildings within the boundaries of each taxing authority in the county, and the percentage that such portion bears to the total valuation for assessment of each taxing authority in which such newly constructed taxable buildings are located. (4) Upon collection of taxes on the growth valuation for assessment in the first year, the board of county commissioners shall reimburse the county general fund and the taxing authorities which contributed to the costs of implementing the procedures specified pursuant to this section and shall also pay into the county general fund the projected budgeted costs of implementation in this second year. The remaining moneys shall be distributed to the taxing authorities as next specified in this subsection (4). In the second and subsequent years that procedures are implemented pursuant to this section, the board of county commissioners, after depositing into the county general fund the projected budgeted costs of administering this section in the current year, shall distribute the moneys in the county's capital growth fund to the taxing authorities where the newly constructed taxable building is actually located in the same manner as all other property tax revenues collected on similar taxable buildings are distributed; except that such moneys shall be used by the taxing authority for capital expenditures only and not for operating expenses. Every taxing authority receiving funds pursuant to this subsection (4) shall make capital expenditures so that they benefit the taxing authority within the county levying on the growth valuation for assessment pursuant to this section, unless such governing body finds a compelling reason for making expenditures so that they benefit the taxing authority within another county. (5) Money received by a school district pursuant to this section must be deposited in the district's capital reserve fund and must not be included in calculating the amount of revenue that a district is entitled to receive from the property tax levy for the general fund of the district under the Public School Finance Act of 2025, article 54 of title 22. (6) When the board of county commissioners determines that a county is no longer being severely impacted by residential growth, the board of county commissioners shall so find and shall, on or before January 1, resolve to end implementation of the assessment and levy procedures required under this section. (7) Nothing in this section affects tax increment financing implemented pursuant to sections 31-25-107 (9), 30-31-109 (13), and 31-25-807 (3), nor the distribution of specific ownership taxes pursuant to section 42-3-107 (24). Source: L. 85: Entire section added, p. 1223, § 1, effective July 1. L. 88: (5) amended, p. 824, § 37, effective May 24. L. 90: (2)(a)(I)(C), (2)(a)(I)(D), and (3) amended, p. 1693, § 10, effective June 9. L. 94: (2)(a)(I)(A) and (5) amended and (2)(a)(I)(E) added, pp. 807, 825, §§ 11, 55, effective April 27; (7) amended, p. 2568, § 87, effective January 1, 1995. L. 96: (3) amended, p.17, § 3, effective February 22. L. 2002: (2)(c) added, p. 843, § 3, effective August 7. L. 2005: (7) amended, p. 1183, § 35, effective August 8. L. 2024: (5) amended, (HB 24-1448), ch. 236, p. 1538, § 64, effective May 23; (7) amended, (HB 24-1172), ch. 387, p. 2683, § 18, effective August 7.