Capitol Connection – June 4th, 2021
Legislative Advocacy this week at the State Capitol
Transparency and Accountability Improvements for Special Districts
Senate Bill 262 increases transparency and accountability about property taxes for residents. Special Districts include anything from your neighborhood construction improvement or development to fire district or scientific and cultural district or even water districts such as Water World. One type of special district is a metro district. Metro districts provide a financing tool for quasi-governmental entities and builders to fund the public infrastructure or services that local communities and neighborhoods use such as the swimming pool or landscaping, etc. Metro districts can allow potential first-time homebuyers to purchase a home with a lower down-payment in a new construction development. To learn more about Metro Districts and how they affect affordability check out the Northeast Local Boards report on Metro Districts and Affordability.
Under the legislation, special districts would be required to publish important information such as contact information for current directors and managers of the district, budget information, map of district boundaries, meeting schedules, announcements about elections and nominations to serve on the board, annual reports, intergovernmental agreements, the bond servicing plan, and instructions about how to obtain a copy of the rules and regulations and list of improvements.
The best part of the bill is the requirement for the builder or developer of new construction to increase disclosures to residents about their estimated tax responsibilities, access to the special district website information and a formula to calculate how it could increase. This transparency is critical for consumers to understand how much their potential mortgage and other taxes will cost them every month. And, REALTORS® do not have this special district information, so now that we are requiring the parties with the information about property taxes and special districts to share it with the purchaser, consumers have much more knowledge going into a new home purchase transaction.
LPC Position: Support
Bill Status: The bill passed the House Transportation and Local Government Committee and could be heard over the weekend on the House floor.
SALT Parity (State and Local Taxes SALT) Moves Across the Country Including Colorado
The federal Tax Cuts and Jobs Act of 2017 placed a temporary $10,000 annual cap on the federal income tax deduction for state and local taxes, known as the “SALT” deduction, for individual income taxpayers. The cap is set to expire on December 31, 2025. Currently, pass-through businesses, such as sole proprietorships, partnerships and S-corporations, do not pay the corporate income tax. Instead, any profits generated are “passed through” to the owners of the business and who are then taxed at the individual level.
House Bill 1327 allows Colorado owners of partnerships and S-corporations to elect to pay their state income taxes at the entity level rather than the individual level beginning in the 2022 tax year instead of being subject to the federal deduction cap. C-corporations already are not subject to the cap, so this legislation would allow other business organizational structures to be treated equally under the law. Several other states are considering similar pieces of legislation, and now Colorado would join them.
LPC Position: Monitor
Bill Status: The bill passed the House Appropriations Committee with unanimous support and with moves to the House Floor for further discussion any day.
Federal Stimulus Dollars for Colorado Housing Programs
House Bill 1329 creates the Affordable Housing and Home Ownership Cash Fund to respond to the COVID-19 housing crisis. The bill authorizes the General Assembly to transfer funds to programs or services that benefit those disproportionately impacted by COVID-19, focusing on programs or services that address housing insecurity, lack of affordable housing or homelessness.
After the bill goes into effect, the state treasurer is required to transfer $550 million federal American Rescue Plan dollars to this new fund and requires the executive committee of the legislative council to create a task force to meet during the 2021 interim and issue a report with recommendations to the General Assembly and the Governor on ways to use the federal funding for transformative housing policies and programs. Additionally, the bill transfers $100 million to the Department of Local Affairs to be used by the Division of Housing for programs and services that provide gap financing for projects financed through the Housing Investment Trust Fund or the Housing Development Grant Fund to assist those disproportionately affected by COVID-19.
HB21-1329 will also fund one of CAR’s Century of Opportunity bills, HB21-1271 (best practices affordable housing incentives), which was amended to utilize the federal dollars for this legislation rather than rely on General Fund support.
LPC Position: Support
Bill Status: The bill passed third reading on the House Floor and will be heard in the Senate any day.
Last Minute Legislation That Would Temporarily Reduce Property Tax Assessment Rates Related to Initiative 27 on the Statewide Ballot
Senate Bill 293 is a last minute late bill that would temporarily reduce property tax assessment rates for single family residential and multi-family homes. It also creates new classifications of property tax treatment by creating two residential categories: single family and multifamily and four nonresidential categories: commercial nonresidential, agricultural, renewable energy production and lodging. And it also allows homeowners’ whose property taxes increased by more than 4% (with a minimum of $100 and maximum of $10,000) to be deferred and paid later during a transaction for sale starting in 2023. Lawmakers would have to revisit these tax assessment rates in two years regardless and implement a study to review the performance of the referral program.
The temporary 2022- and 2023-year reductions would allow for the following:
- Multifamily residential property, including duplexes, triplexes and apartment buildings, would be reduced from 7.15% to 6.8%
- Single family residential property would be reduced from 7.15% to 6.95%
- Agricultural and property used for producing renewable energy nonresidential property would be reduced from 29% to 26.4%
What is behind this last-minute piece of legislation is an attempt by policymakers at the Capitol to circumvent Initiative 27 on the statewide ballot that would permanently reduce property taxes in the commercial and residential sectors. And now that Colorado voters approved the decoupling of Gallagher last year, just as CAR said it could have unintended consequences for property owners in the future when that passed, policymakers now have the ability to make changes to property tax assessment rates and create new classes of property without as many consequences when Gallagher tethered the commercial and residential sectors together. The one silver lining is that this bill in draft form would have taxed short term rentals at the commercial rate and require all homeowners apply to get a residential rate every year and that is not present in the introduced SB21-293.
LPC Position: Monitor
Bill Status: The bill passed third reading on the Senate floor late this afternoon.
HB21-1271: Affordable Housing Incentives – Passed Senate second reading today with a few amendments and will be heard on third reading any day.
HB21-1200: Financial Literacy – On the Governor’s desk for his consideration.
HB21-1134: Credit Pilot Program – Passed third reading in the Senate today and will be prepared for the Governor’s review.
HB21-1028: Division of Housing Reporting – The bill is headed to the Governor’s desk after the funding was restored to the bill with procedural processes yesterday.
For more information on CAR’s Century of Opportunity Legislative Package, visit ColoradoCenturyofOpportunity.com
Housing Industry News & Upcoming Events
Your Input Needed: The City and County of Denver is Adopting a New Building and Fire Code
The City and County of Denver is adopting a new building and fire code, which will incorporate the 2021 series of international codes, as well as advance the voluntary 2019 Denver Green Code. To kick-off the code adoption process, they’ve created working groups to consider updates to energy and holistic sustainability requirements in Denver’s building codes and regulations. Learn more about the process here.
Before beginning the formal code adoption process, the City and County of Denver will be hosting a series of targeted working group discussions focused around two themes: raising the bar on energy performance and defining holistic sustainability priorities and ideas beyond those related to energy.
How you can participate:
- Submit ideas or topics: Click the button below to submit ideas or topics to working group members.
- Join a meeting: Attendees will be able to listen to the working group’s discussion, hear ideas that have been submitted, and use the chat and Q&A functions to ask questions and weigh in.
- Open comment session: Toward the end of each working group meeting, there will be an opportunity for attendees to comment on discussed ideas. Priority will be given to attendees who submitted an idea or topic in advance.
Appeals Court Rejects Bid by Landlords to Resume Evictions (The Hill)
On Wednesday, a federal appeals court in Washington, D.C., denied a request by a group of landlords to resume evictions, leaving the temporary nationwide eviction moratorium, which is set to expire on June 30, intact for now. Read full article here.
Don’t Miss It! CAR Virtual Fair Housing Event on June 16
As REALTORS®, it is our duty to help every consumer pursue their dream of homeownership and to build thriving communities.
Please join CAR for this free opportunity to learn about Fair Housing:
- The History
- A REALTORS® Role
- Solutions for Teams and Individual Agents
- Support and Resources to go forward with the commitment that REALTORS® support Housing for All
When: June 16 at 9:30 a.m. – noon
Speakers, more info and registration: Click Here
Happy RPAC Month!
The REALTORS® Political Action Committee (RPAC) is one of the strongest advocacy organizations in the nation. For more than 50 years, RPAC enables us to advocate for REALTOR® interests at all three levels of Government.
Robert Walkowicz, 2021 CAR Chair shares why he supports RPAC, and why you should as well. “I see my investment as buying something of value. RPAC only takes stands on issues that promote private property ownership and only supports candidates that do the same. Without regard to political party affiliation. I see it as a way of helping my buyers, sellers, and investors build well by protecting their investments.”
Check out this video of Robert and our CEO, Tyrone Adams discuss the importance of RPAC.
As always, thank you for supporting RPAC!
Did you sign up for RPAC BINGO?
To celebrate RPAC month we have a fun way to support RPAC, get out in the community and connect with new members. BINGO! Purchase one card for $25 or five cards for $100 for a chance to win gift cards, or even a night stay at the Broadmoor hotel for CAR’s 100-Year Celebration! Click here to purchase a card today!