Capitol Connection – June 11th, 2021
Legislative Advocacy this Week at the State Capitol
2021 Legislative Session Comes to an End
The 2021 legislative session came to a close late Tuesday. Over the past 116 legislative days, the Colorado legislature tackled several huge issues such as statewide transportation funding that has plagued the state for many years. Policymakers also allocated large state and federal stimulus dollars as our state works toward pandemic recovery and looked to reverse some of the significant cuts that were made last year in the state budget.
Some of the biggest topics of interest to real estate this year included: continued changes to the state tax code, increasing wildfire mitigation funding, new transparency and disclosure requirements for special districts and HOAs, continued energy and environmental regulations that affect the cost of housing, and regulatory changes to rental housing policy. But we are also very proud that this year CAR came to the table with public policy solutions to provide access to homeownership through our very own Century of Opportunity legislative package.
It’s no secret that this legislative session was packed from the beginning despite taking a month off in February for pandemic related safety concerns. This year, of the 678 bills introduced, CAR’s LPC actively monitored and took positions on 96 bills. It was a tough legislative session to advocate for our members in a remote testimony, mask wearing environment with new freshmen legislator learning curves, but CAR worked diligently to protect the real estate industry and property owners and led the charge to open the doors to homeownership for all Coloradans. We could not have done that without the dedication of CAR’s 42 Legislative Policy Committee members, and our lobbying team putting in the hard work and long hours. Thank you for all your time and dedication this Spring!
Legislation Unlocking the Doors to Homeownership Crosses the Finish Line
There is a lot to celebrate this year as CAR honors our 100 years of service to Colorado consumers and looks ahead at how to serve our clients and communities in the century ahead. Over the past several months, CAR and Habitat for Humanity worked to push forward four legislative solutions aimed at helping improve homeownership opportunities for all Coloradans. We are excited to announce that after all our work with other housing stakeholders and legislators, all four bills will soon become reality upon the Governor’s final approval.
About the bills:
House Bill 1028 (Annual Public Report Affordable Housing) will require the Division of Housing to annually report and make available to the public information on how our housing dollars are being spent around the state. The report will include information on where housing projects take place throughout our state, how many housing units are created and preserved and what type of projects is Colorado undertaking: homeownership, rental, supportive and rapid re-housing.
House Bill 1134 (Report Tenant Rent Payment Information to Credit Agencies) establishes a statewide pilot program enabling residents residing in housing provider properties selected by the Colorado Housing and Finance Authority (CHFA) to opt to have their rent payments reported to consumer credit bureaus as a dynamic new way build their credit.
House Bill 1200 (Revise Student Financial Literacy Standards) will strengthen financial literacy standards by ensuring Colorado’s students graduate with required curriculum costs associated with preparing for homeownership; obtaining a higher education degree or credential; how to choose, manage, and repay student loans; how to apply for federal, state and institutional financial aid; how to save for retirement, and how to manage personal credit card debt.
House Bill 1271 (Department Of Local Affairs Innovative Affordable Housing Strategies) federal stimulus dollars would cover the costs of providing three programs in the Department of Local Affairs (DOLA) to promote new solutions for statewide affordable housing development:
1.) The Affordable Housing Guided Toolkit and Local Officials Guide helps local governments develop an overall affordable housing strategy and engage stakeholders in the community.
2.) The Planning Grant Program awards funding to local governments to help adopt land use strategies, enabling local governments to be competitive in applying for a housing development incentives grant.
3.) The Housing Development Incentives Grant enables local governments to apply for state grants to adopt strategies from a menu of best practices to spur housing creation or reduce regulatory barriers. (This is the CAR & Habitat concept we created)
For more information, visit ColoradoCenturyofOpportunity.com.
Major Changes to Colorado Tax Code
House Bill 1311 raises revenue with the goal of expanding tax programs benefiting lower-income Colorado families, focusing on the earned income tax credit and child tax credit.
In order to raise that revenue, the bill makes several changes to existing state income taxes and tax credits, such as:
- Requiring taxpayers with gross incomes of $400,000 or more to add back certain itemized deductions, including charitable giving, if they exceed $30,000 for a single filer or $60,000 for joint filers.
- Repealing state income-tax deductions for all federally taxable capital gains, with an exception for certain agricultural properties that are limited to a maximum deduction of $100,000/year.
- Removing a cap so that all federally taxed Social Security income is deductible in Colorado, except for pension and annuity income.
- Extending the requirement that taxpayers with adjusted gross income of $500,000 or more for a single filer, or $1 million or more for joint filers, add back federally qualified business income deductions (199A) when calculating state taxable income through 2026.
- Capping the amount a taxpayer can deduct for contributions to a 529 College Savings Plan account to $20,000 for a single filer or $30,000 for joint filers.
- Expanding Colorado’s Earned Income Tax Credit to 20% of the federal EITC, up from 15%, starting in 2022. From 2023 through 2025, the state credit would go up to 25% before returning to 20% in 2026.
- Funding Colorado’s child tax credit for single filers making less than $75,000 and joint filers making less than $85,000.
- Making both the state EITC and child tax credit available to people who would qualify for the federal tax credits, but don’t have a valid Social Security number.
- Creating a tax credit for businesses that convert to employee-owned models, which would cover 50% of conversion costs, or up to $25,000 for worker cooperative or employee stock ownership plans, and 50%, or up to $100,000 of costs for converting to an employee ownership trust.
House Bill 1312 as introduced would have created liability for any property owner in Colorado to be subject to highest and best use assessment valuation that would have enabled the local governments to grab revenue by identifying a higher or best use of the property that might be taxed at a commercial rate rather than an agricultural or residential rate. CAR and other stakeholders worked to change that language to prevent harm to property owners throughout the state.
HB 1312 as amended, increases the business personal property tax exemption by eliminating or modifying various tax benefits such as:
the standard for insurance companies to prove they have a significant
workforce and presence in Colorado to qualify for a lower 1% insurance
premium tax. To qualify, companies would have to “substantially
perform” certain insurance company functions or have significant
direct operations in the state. It also requires companies to maintain 2% of
their domestic workforce in Colorado in 2022, with that requirement
increasing to 2.5% by 2024.
- Limiting severance tax
deductions that oil and gas companies can claim for transportation,
manufacturing or processing costs. The measure also would phase out
severance tax exemptions and tax credits for the coal industry between
2022 and 2026, with the increased revenue resulting from those changes
going to the Just Transitions Cash Fund, an account to assist communities
affected by the move away from a fossil-fuel economy.
- Adding digital goods like video, music, e-books available on CDs or to download, and streaming services to the definition of items subject to sales and use taxes.
House Bill 1312 raises the threshold from $7,900 to $50,000 for businesses seeking to exempt their personal property and equipment.
Homestead Exemption Changes Go Back to the Drawing Board
Currently, the state constitution allows a veteran who has a service-connected disability rated as a 100% permanent disability to claim a property tax exemption for 50% of the first $200,000 of actual value of the veteran’s owner-occupied primary residence. House Bill 1079 would have expanded eligibility for the exemption to allow veterans with a disability that has been rated as at least a 50% permanent disability to claim the exemption. House Concurrent Resolution 1002 would have referred the question of including gold star spouses in the benefits of the Homestead Exemption before Colorado voters on the 2022 general election ballot to decide if the homestead exemption should be expanded.
LPC Position: Supported HB 1079. CAR did not take a position before HCR 1002 was postponed indefinitely.
Bill Status: The bill sponsors postponed indefinitely both bills to conduct more outreach and stakeholder work and come back next legislative session with a revised proposal.
Housing Industry News & Upcoming Events
Developers working on affordable housing in Colorado’s mountains offer suggestions for pending wave of funding (Colorado Sun)
The unprecedented housing crisis in Colorado will soon see an equally extraordinary flood of cash. In Colorado’s high country, where affordable housing is a decades-long issue that exploded into a catastrophe last year, an army of developers on the front lines of a complex campaign to build workforce housing are ready to help guide the sudden influx of funding.
Once the governor signs HB 1271 (one of CAR’s Century of Opportunity bills), which passed through the state Senate this week, “we will by far see the most significant investment in affordable housing by the state legislature probably ever,” said Rep. Dylan Roberts, a Democrat from Avon.
Colorado weather: Extreme fire danger warning issued Thursday (Denver Post)
For the first time in over 15 years, the Storm Prediction Center on Thursday issued a warning for extreme fire danger in Western Colorado.
The Storm Prediction Center (SPC) monitors fire conditions across the country and issues fire weather outlooks that are updated multiple times a day. Forecasters at the SPC will highlight areas of concern based on how bad the fire conditions are. Those levels of severity rise from elevated to critical to extreme depending on the conditions.
Colorado Project Wildfire: Colorado REALTORS® are dedicated to working to help reduce the threat of wildfires in our communities. Through Colorado Project Wildfire, REALTORS® provide educational resources to homeowners and work with other like-minded fire prevention organizations such as the Colorado State Forest Service, Rocky Mountain Insurance Association and National Fire Protection Association to develop best practices and raise awareness.
Visit coloradorealtors.com/projectwildfire to discover ways you can become more involved.
June is National Homeownership Month
National Homeownership Month is a time to share stories of lifechanging journeys and further our fight to increase access to homeownership for future generations. As part of a monthlong celebration, NAR has partnered with the American Property Owners Alliance to promote a number of shared priorities and policies. And, as the U.S. observes both Homeownership and Pride Month in June, NAR has also kicked off a new partnership with the LGBTQ+ Real Estate Alliance.
Court Maintains CDC Eviction Moratorium Pending Appeal
A recent appeals court ruled in the lawsuit seeking relief from the Centers for Disease Control and Prevention’s (CDC’s) eviction moratorium that litigants claim is having a detrimental financial impact on housing providers across the country. On June 2, the U.S. Court of Appeals for the D.C. Circuit ruled against a motion filed by the plaintiffs seeking to vacate an emergency stay issued by the U.S. District Court for the District of Columbia.
In early May, the D.C. District Court vacated the CDC moratorium based on statutory overreach, which the Department of Justice appealed. However, the district court issued an emergency stay pending that appeal and the D.C. Circuit Court’s recent action upheld that stay. In response, the plaintiffs have petitioned the Supreme Court to vacate the stay before the CDC order expires at the end of June. Housing providers should continue to the monitor the case, as the CDC’s eviction moratorium remains in effect nationwide through its expiration on June 30, or any further extensions, pending consideration by the Supreme Court. Stay tuned to nar.realtor/CoronavirusHousingProviders for the latest, and please visit NAR’s Issue Brief for more information.
NAR Wants Your 1031 Stories
Possible proposals to repeal or limit the 1031 like-kind exchange could drastically affect the commercial real estate sector and remove a vehicle that helps many populations build intergenerational wealth including populations of color in communities across the United States. From affordable housing providers, to small businesses, to farmers, 1031s are used by a range of Americans since their creation 100 years ago.
We need your help to educate lawmakers and their staff about 1031s. It is not a tax loophole for the wealthy; it is a tax tool that has brought immeasurable revenue, jobs, investment, and economic benefit to the U.S.
Please click here to tell NAR about how you used 1031 to bring development and economic benefit to your community. Your stories will help put a human face on a critical issue for real estate.
Last Chance to Register! Fair Housing Event June 16
On June 16, panelists from across the Nation will share what steps they have implemented as real estate leaders within the industry to protect, promote and support diverse communities in the goal of Fair Housing for all. Hear from CAR’s Diversity and Inclusion Chair Natalie Davis on why you should attend.
This is your last chance to register! Take the pledge to recommit to Fair Housing and show the real estate industry that we are the miracle. We encourage you to join the conversation at CAR’s Fair Housing Event. Hear from CAR’s Diversity and Inclusion Chair Natalie Davis on why you won’t to miss this opportunity.
When: June 16 at 9:30 a.m. – noon
Speakers, more info and registration: Click Here
Save the Date: State Demography Office Annual Demography Summit
The 2021 State Demography Summit will be held virtually on Friday, November 5. Registration for this year’s summit will be free of charge and will be open starting on October 4. Continuing Education credits will be offered for Real Estate Appraisers and Real Estate Brokers.
Upcoming Webinar: State Demography Office
When: June 17, 12 – 1 p.m.
Topic: Review of 2020 Census data release
This webinar will provide an update of the 2020 Census data release. Topics covered include:
- Discuss reapportionment data
- Discuss the current state of Census Differential Privacy adjustments
- Discuss current schedule of redistricting data file (PL-94-171) and other data releases
- Discuss SDO data dissemination plans/tools
In Case You Missed It
2021 CAR Election Results
A huge thanks to all who ran for election in the 2021-2022 CAR leadership positions. For those of you who were not elected, you are still a valued leader and member of the association. We strongly encourage and hope you stay involved in CAR.
RPAC Bingo Reminder
There’s still time to purchase and complete your BINGO card to help support RPAC. Click here to purchase one card for $25 or five cards for $100.
A few reminders for those who have already purchased their cards and are working towards completing their squares.