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July 30, 2024 SB 24-111
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Final Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 24-0674
Sen. Kolker; Hansen
Rep. Lieder; Young
Date:
Bill Status:
Fiscal Analyst:
July 30, 2024
Signed into Law
David Hansen | 303-866-2633
david.hansen@coleg.gov
Bill Topic: SENIOR PRIMARY RESIDENCE PROP ERTY TAX REDUCTION
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☒ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill reduces property tax assessed values for the 2025 and 2026 property tax years
for senior homeowners who previously qualified for the senior homestead exemption
in 2020 or later years but have since moved, and provides a similar property tax
benefit. The bill increases state and local expenditures and impacts TABOR refund
mechanisms. If the state TABOR refund obligation is not sufficient to fully fund the
property tax benefit, the bill will increase General Fund expenditures further.
Appropriation
Summary:
For FY 2024-25, the bill requires, but does not include, an appropriation of $132,828
to the Department of Local Affairs.
Fiscal Note
Status:
The final fiscal note reflects the enacted bill. It has been updated to indicate the need
for an FY 2024-25 appropriation to DOLA, which was incorrectly omitted from prior
versions of this fiscal note.
Table 1
State Fiscal Impacts Under SB 24-111
Budget Year
FY 2024-25
Out Year
FY 2025-26
Out Year
FY 2026-27
Revenue - - -
Expenditures General Fund $132,828 $48,308 $54,642
Centrally Appropriated - $5,232 $6,976
Total Expenditures $132,828 $53,540 $61,618
Total FTE - 0.3 FTE 0.4 FTE
Transfers - - -
Other Budget Impacts General Fund Reserve $19,924 $7,246 $8,196
TABOR Refunds – Property Tax Subtraction - $49.9 million $41.4 million
TABOR Refunds – Six-Tier Mechanism - ($49.9 million) ($41.4 million)
Net TABOR Refund Change - $0 $0 Page 2
July 30, 2024 SB 24-111
Summary of Legislation
For the 2025 and 2026 property tax years, the bill reduces the assessed value, or taxable value,
of owner-occupied senior primary residences for those who have previously qualified for the
existing senior homestead exemption but who are currently ineligible. Under the bill, assessed
value is reduced by subtracting 50 percent of the first $200,000 from the actual value of the
property before the assessment rate is applied. The subtraction is limited to the lesser of
$100,000 or the amount that reduces a property’s assessed value to $1,000. The bill:
creates a new subclass of residential property called qualified-senior primary residence real
property;
establishes a process for owner-occupiers to apply to county assessors for the new
subclassification;
requires county assessors to report the properties within each county that qualify for the
new subclassification to the Division of Property Taxation by September 10 each year; and
requires the state to reimburse local governments for the lost revenue under the measure
and establishes these reimbursements as a state TABOR refund mechanism in years in which
the state refunds a TABOR surplus.
Background
Homestead exemption. The homestead exemption is available for owner-occupied primary
residences of qualifying seniors, veterans with a service-connected disability, surviving spouses
of veterans with a disability who previously qualified for the exemption, and Gold Star surviving
spouses. Under current law, the homestead exemption applies to taxes that would be assessed
on 50 percent of the first $200,000 of the home’s value, or up to $100,000.
Local government reimbursements. The state is required to reimburse local governments for
the revenue reduction attributable to the homestead exemption. Reimbursements are made
from the state General Fund via the Department of the Treasury.
TABOR refund mechanism. The homestead exemption is accounted as a TABOR refund
mechanism under current law. A TABOR surplus collected in one fiscal year is set aside to fund
reimbursements to local governments for the tax exemption in the following fiscal year.
Senior homestead exemption. A homeowner is eligible to claim the senior homestead
exemption if he or she meets the following requirements:
the homeowner is 65 years old as of January 1 of the tax year; and
the homeowner has occupied the home as his or her primary residence for the last 10 years. Page 3
July 30, 2024 SB 24-111
Comparable Crime Analysis
Legislative Council Staff is required to include certain information in the fiscal note for any bill
that creates a new crime, changes the classification of an existing crime, or creates a new factual
basis for an existing crime. The following section outlines crimes that are comparable to the
offense in this bill and discusses assumptions on future rates of criminal convictions resulting
from the bill.
Prior conviction data. The bill creates the new factual basis for perjury by prohibiting giving
false information on an application for a property to be classified as qualified-senior primary
residence real property or attempting to claim more than one property as qualified-senior
primary residence real property for the same property tax year, a class 2 misdemeanor. To form
an estimate of the prevalence of this new crime, the fiscal note analyzed the existing offense of
false swearing. From FY 2020-21 to FY 2023-24, 3 individuals have been convicted and
sentenced for this existing offense. Of the persons convicted, 1 was male and 2 were female.
Demographically, 2 were white and 1 was Hispanic. Based on the low number of sentences for
the comparable crime, the bill is not expected to have a tangible impact on criminal justice-
related expenditures or revenue at the state or local levels, these potential impacts are not
discussed further in this fiscal note. Visit leg.colorado.gov/fiscalnotes for more information
about criminal justice costs in fiscal notes.
Assumptions
Based on data from the U.S. Census Bureau American Community Survey on senior homeowners
in Colorado and the March 2024 Legislative Council Staff forecast for homestead exemptions,
the fiscal note estimates that about 56,000 seniors who qualified for the homestead exemption
from 2020 to 2025 but moved at least once during that period will qualify for the qualified-
senior primary residence real property class designation in property tax year 2025.
Based on data from the Colorado Association of Realtors on statewide home sales, as well as the
National Association of Realtors survey on generational trends in home buying and selling,
adjusted for Colorado’s demographics when possible, the fiscal note assumes that:
approximately 30 percent of homes sold in Colorado are sold by seniors ages 65 and above;
approximately 70 percent of seniors selling their homes satisfy the residency requirement
and previously qualified for the exemption each year; and
approximately 70 percent of those seniors re-purchase homes in Colorado.
Based on these assumptions, an additional 14,800 households will receive the new property
class designation in property tax year 2026 due to home sales by seniors who are expected to
have previously qualified for the senior homestead exemption, sold their home in that year, and
repurchased one in Colorado.
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July 30, 2024 SB 24-111
The estimated average expenditure per senior exemption, adjusted based on residential
assessment rate and valuation changes under Senate Bill 24-233 that concerned property
taxation, is an estimated $579 beginning in property tax year 2025, and is an estimated $606 for
property tax year 2026. Additionally, the analysis incorporates other assessment rate and
valuation changes under Senate Bill 24-233.
State Expenditures
The bill increases state expenditures by $132,828 in FY 2024-25, $53,540 in FY 2025-26 and
$61,618 in FY 2026-27, paid from the General Fund. Expenditures are shown in Table 2 and
detailed below.
Table 2
Expenditures Under SB 24-111
FY 2024-25 FY 2025-26 FY 2026-27
Department of Local Affairs
Personal Services - $19,004 $25,338
Computer Programming Contractor $132,828 $29,304 $29,304
Centrally Appropriated Costs
1
- $5,232 $6,976
Total $132,828 $53,540 $61,618
Total FTE - 0.3 FTE 0.4 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Local Affairs. General Fund expenditures in the Department of Local Affairs
Division of Property Taxation are expected to increase in FY 2025-26 and subsequent years.
Staffing. The bill requires 0.4 FTE to process and validate applications for qualified-senior
primary residence properties. Costs for FY 2025-26 are prorated to reflect the assumed
September 1, 2025, start date. Beyond the additional staff requirements, division workload
will increase to review and update procedures, forms, manuals, and to provide technical
assistance to local governments.
Computer Programming Contractor. The bill requires development of a software system
to track residential property that is taxed as primary residence property. These costs will
occur in the Office of Information Technology (OIT), paid using reappropriated funds from
DOLA. Ongoing costs for system maintenance are expected in later years as shown in
Table 2.
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July 30, 2024 SB 24-111
Reimbursements to local governments. In years when the state refunds revenue collected in
excess of the TABOR limit, the property tax valuation reduction in the bill is accounted as a
TABOR refund mechanism and does not require General Fund expenditures. In years when the
state does not refund a TABOR surplus, the bill requires General Fund expenditures in the
amount of the reimbursement.
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs
associated with this bill are addressed through the annual budget process and centrally
appropriated in the Long Bill or supplemental appropriations bills, rather than in this bill. These
costs, which include employee insurance and supplemental employee retirement payments, are
shown in Table 2.
Other Budget Impacts
TABOR refund mechanisms. The bill does not change the amount required to be refunded
under TABOR but will shift the amount refunded through various refund mechanisms. The bill
would require an estimated $49.9 million in FY 2025-26 and $41.4 million in FY 2026-27 that
would otherwise be refunded via the six-tier sales tax refund mechanism to instead be refunded
via property tax reductions, paid via reimbursements to local governments for their losses. A
forecast of TABOR revenue is not available beyond FY 2025-26.
If the state does not refund a TABOR surplus, the bill increases General Fund expenditures to
reimburse local governments for exempted property taxes, and reduces the amount otherwise
available for the General Fund budget.
General Fund reserve. Under current law, an amount equal to 15 percent of General Fund
appropriations must be set aside in the General Fund statutory reserve. Based on this fiscal note,
the bill is expected to increase the amount of General Fund held in reserve by the amounts
shown in Table 1, decreasing the amount of General Fund available for other purposes.
Local Government
Local revenue. The bill has offsetting impacts on local government revenue that will not change
net revenue to any jurisdiction. It decreases property tax revenue with offsetting increased state
reimbursements to local governments by the amounts shown in Table 1. The bill may affect local
government TABOR refunds if local voters have exempted one of, but not both of, property tax
revenue and revenue received from the state government.
Local expenditures. The bill increases expenditures for county treasurers and assessors to
implement the new property classification into existing software, to process applications, and
reimburse local governments. The bill may also require additional county assessor staff.
Effective Date
The bill was signed into law by the Governor on May 14, 2024, and takes effect on
August 7, 2024, assuming no referendum petition is filed. Page 6
July 30, 2024 SB 24-111
State Appropriations
For FY 2024-25, the bill requires, but does not include, a General Fund appropriation of $132,828
to the Department of Local Affairs. The amount is reappropriated to the Office of Information
Technology.
State and Local Government Contacts
Counties County Assessors Information Technology
Local Affairs Military Affairs Property Tax Division
Public Health and Environment Treasury
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.