Senate Bill 25-261 Engrossed

A Bill for an Act

• Page 1, Line 101Concerning the administration of the property tax deferral

• Page 1, Line 102program, and, in connection therewith, reversing the

• Page 1, Line 1032022 shift of administrative responsibilities for the

• Page 1, Line 104program from county treasurers to the state

• Page 1, Line 105treasurer and rescinding eligibility for deferral for

• Page 1, Line 106persons who are not seniors or persons called into

• Page 1, Line 107active military service.

Bill Summary

(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov/.)

Joint Budget Committee. The state has a property tax deferral program (program) under which the state makes a secured loan to a qualified taxpayer to pay property taxes owed for the taxpayer's homestead. The program was available only to seniors and persons called into active military service until 2021, when the general assembly expanded the program to also allow an otherwise nonqualifying taxpayer whose property tax had increased by at least a specified percentage (new qualified taxpayer) to participate. In 2022, the general assembly shifted much of the responsibility for the administration of the program from the county treasurers to the state treasurer.

The bill reverses the 2022 shift of administrative responsibilities for the program so that county treasurers will generally have the same responsibilities for administering the program as they did prior to 2022. The bill also specifies that a new qualified taxpayer may only claim deferral of property taxes levied for a property tax year commencing on or after January 1, 2025, if the board of county commissioners of the county in which the taxpayer's homestead is located has, after receiving input from the county treasurer of that county, adopted a resolution requiring the county treasurer to accept applications for such deferral claims.

• Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:

• Page 2, Line 2SECTION 1.  In Colorado Revised Statutes, 39-3.5-101, repeal (2.5) and (3.5) as follows:

• Page 2, Line 339-3.5-101.  Definitions. As used in this article 3.5, unless the context otherwise requires:

• Page 2, Line 4(2.5)  "State treasurer" includes a third-party administrator that

• Page 2, Line 5enters into a contract with the state treasurer to administer the property

• Page 2, Line 6tax deferral program created in this article 3.5 in accordance with section 39-3.5-103.5 (2).

• Page 2, Line 7(3.5)  "Tax-growth cap" means:

• Page 2, Line 8(a)  For property tax years commencing before January 1, 2025, an

• Page 2, Line 9amount equal to the average of a person's real property taxes paid on the

• Page 2, Line 10same homestead for the two property tax years preceding the year a deferral is claimed, increased by four percent; and

• Page 3, Line 1(b)  For property tax years commencing on or after January 1,

• Page 3, Line 22025, an amount equal to the average of a person's real property taxes

• Page 3, Line 3paid on the same homestead for the two property tax years preceding the year a deferral is claimed.

• Page 3, Line 4SECTION 2.  In Colorado Revised Statutes, 39-3.5-102, amend

• Page 3, Line 5(1)(a), (2) introductory portion, (2)(a), and (2.5)(a); and repeal (1)(c) and (2.5)(b) as follows:

• Page 3, Line 639-3.5-102.  Deferral of tax on homestead - qualifications -

• Page 3, Line 7filing of claim. (1) (a)  Subject to the provisions of this article 3.5, a

• Page 3, Line 8person who is sixty-five years of age or older or who is a person called

• Page 3, Line 9into military service on January 1 of the year in which the person files a

• Page 3, Line 10claim under this section may elect to defer the payment of real property

• Page 3, Line 11taxes. To exercise this option, the taxpayer must file a claim for deferral

• Page 3, Line 12with the state treasurer of the county in which the taxpayer's

• Page 3, Line 13homestead is located. The claim must be filed after January 1 and on or before April 1 of each year in which the taxpayer claims the deferral.

• Page 3, Line 15(c) (I)  Subject to the provisions of this article 3.5, including the

• Page 3, Line 16limitations set forth in subsection (1)(c)(II) of this section, beginning

• Page 3, Line 17January 1, 2023, a person who is not otherwise eligible for deferral under

• Page 3, Line 18this section may elect to defer the payment of the portion of real property

• Page 3, Line 19taxes that exceed the person's tax-growth cap. To exercise this option, the

• Page 3, Line 20taxpayer must file a claim for deferral with the state treasurer. The

• Page 3, Line 21taxpayer must file the claim after January 1 and on or before April 1 of each year in which the taxpayer claims the deferral.

• Page 3, Line 22(II)  In addition to any other limitations set forth in this article 3.5,

• Page 4, Line 1the minimum amount of real property taxes that may be deferred under

• Page 4, Line 2this subsection (1)(c) at one time is one hundred dollars, and the total

• Page 4, Line 3amount of real property taxes that a person may defer under this

• Page 4, Line 4subsection (1)(c) for all years shall not exceed ten thousand dollars. If a

• Page 4, Line 5taxpayer's surviving spouse elects to continue deferral under section

• Page 4, Line 639-3.5-112 (1.5)(a), the same total limit applies to the taxpayer and the surviving spouse.

• Page 4, Line 7(III)  A person who previously deferred real property taxes as a

• Page 4, Line 8person called into military service but is no longer eligible for a new

• Page 4, Line 9deferral on that basis may defer additional real property taxes under this subsection (1)(c).

• Page 4, Line 10(2)  When a taxpayer who is sixty-five years of age or older or

• Page 4, Line 11who is a person called into military service or who is otherwise eligible

• Page 4, Line 12under subsection (1)(c) of this section files a valid claim for deferral under subsection (1) of this section, it has the effect of:

• Page 4, Line 13(a)  Deferring the payment of the taxpayer's real property taxes or

• Page 4, Line 14in the case of a person who is otherwise eligible, a portion of the

• Page 4, Line 15taxpayer's real property taxes, for the calendar year previous to the year in which the claim is filed;

• Page 4, Line 16(2.5) (a)  A person called into military service may defer only the

• Page 4, Line 17real property taxes payable in a year in which the person is a person called

• Page 4, Line 18into military service. A person who is no longer a person called into

• Page 4, Line 19military service may file a valid claim in a subsequent year to continue the

• Page 4, Line 20prior allowable deferral of taxes payable in a year in which the person was a person called into military service.

• Page 4, Line 21(b)  A person who defers a portion of real property taxes under

• Page 4, Line 22subsection (1)(c) of this section may file a valid claim in a subsequent year to continue the prior allowable deferral of taxes.

• Page 5, Line 1SECTION 3.  In Colorado Revised Statutes, 39-3.5-103, amend(1)(d.5)(I)(B) and (1)(d.5)(II) as follows:

• Page 5, Line 239-3.5-103.  Property entitled to deferral. (1)  In order to qualify

• Page 5, Line 3for real property tax deferral under this article 3.5, the property shall meet

• Page 5, Line 4all of the following requirements at the time the claim is filed and so long thereafter as payment is deferred:

• Page 5, Line 5(d.5) (I)  Either of the following applies to the property:

• Page 5, Line 6(B)  The owner of the property is a person called into military

• Page 5, Line 7service or a person eligible for deferral under section 39-3.5-102 (1)(c),

• Page 5, Line 8and the total value of all liens of mortgages and deeds of trust on the

• Page 5, Line 9property, excluding any mortgage or deed of trust that the holder has

• Page 5, Line 10agreed, on a form designated by the state treasurer, to subordinate to the

• Page 5, Line 11lien of the state for deferred taxes, is less than or equal to ninety percent

• Page 5, Line 12of the actual value of the property, as determined by the county assessor;

• Page 5, Line 13except that, for property tax years commencing on or after January 1,

• Page 5, Line 142023, the limitation on the total value of all liens of mortgages and deeds

• Page 5, Line 15of trust on the property set forth in this subsection (1)(d.5)(I)(B) does not

• Page 5, Line 16apply if the owner of the property is a person called into military service

• Page 5, Line 17and who has a home loan guaranteed by the veterans administration of the United States.

• Page 5, Line 18(II)  For purposes of this subsection (1)(d.5), the actual value of

• Page 5, Line 19the property shall be the most recent appraisal by the county assessor as

• Page 5, Line 20of the time the claim for deferral is submitted to the county treasurer.

• Page 5, Line 21SECTION 4.  In Colorado Revised Statutes, repeal 39-3.5-103.5

• Page 5, Line 22as follows:

• Page 6, Line 139-3.5-103.5.  State treasurer - program administration - rules.

• Page 6, Line 2(1)  The state treasurer may conduct a public education campaign about the property tax deferral program created in this article 3.5.

• Page 6, Line 3(2)  The state treasurer may contract with a third party to

• Page 6, Line 4administer the property tax deferral program on behalf of the state treasurer.

• Page 6, Line 5(3)  The state treasurer may promulgate rules, in accordance with

• Page 6, Line 6article 4 of title 24, related to the administration of the property tax deferral program.

• Page 6, Line 7SECTION 5.  In Colorado Revised Statutes, 39-3.5-104, amend (1) introductory portion as follows:

• Page 6, Line 839-3.5-104.  Claim form - contents. (1)  A taxpayer's claim for

• Page 6, Line 9deferral must be in writing on a form prescribed and supplied by the state treasurer and supplied by the county treasurer and must:

• Page 6, Line 10SECTION 6.  In Colorado Revised Statutes, 39-3.5-105, amend (1); and repeal(1.5); and add (6) as follows:

• Page 6, Line 1139-3.5-105.  Listing of tax-deferred property - tax as lien -

• Page 6, Line 12interest accrual. (1)  If eligibility for deferral of homestead property is

• Page 6, Line 13established as provided in this article 3.5, the state treasurer shall issue a

• Page 6, Line 14certificate of deferral, which includes the name of the taxpayer, the

• Page 6, Line 15description of the property, the amount of tax deferred, and the year for

• Page 6, Line 16which the deferral was granted, and record the certificate of deferral with

• Page 6, Line 17the county clerk and recorder in the county where the property is located.

• Page 6, Line 18The state treasurer shall notify the county treasurer of a property's

• Page 6, Line 19eligibility and provide the county treasurer with the certificate of deferral, and the county treasurer shall:

• Page 6, Line 20(a)  Enter in the county treasurer's records a notation that the property is tax-deferred;

• Page 7, Line 1(b) (I)  Retain one copy Promptly, upon designation of the

• Page 7, Line 2property as tax-deferred, issue a certificate of deferral, on a

• Page 7, Line 3form prescribed by the state treasurer, that includes the name

• Page 7, Line 4of the taxpayer, the description of the property, the amount of

• Page 7, Line 5tax deferred, and the year for which the deferral was granted.

• Page 7, Line 6The county clerk and recorder shall record the certificate in

• Page 7, Line 7the county records and thereafter send a copy of the

• Page 7, Line 8certificate to the state treasurer. The county treasurer shall

• Page 7, Line 9give one copy of the certificate to the assessor and shall retain one copy in the county treasurer's office.

• Page 7, Line 10(II)  Promptly, upon designation of a mobile home as tax-deferred,

• Page 7, Line 11the owner of the mobile home shall surrender title to the property to the

• Page 7, Line 12state treasurer county clerk and recorder. The county clerk and

• Page 7, Line 13recorder shall, pursuant to the provisions of article 29 of title 38, make

• Page 7, Line 14application with the department of revenue for issuance of a new

• Page 7, Line 15certificate of title with a record of the lien of the state treasurer. This

• Page 7, Line 16procedure shall be followed for each subsequent year that the property is

• Page 7, Line 17deferred. The county treasurer shall issue a certificate of

• Page 7, Line 18deferral, on a form prescribed by the state treasurer, that

• Page 7, Line 19includes the name of the taxpayer, the description of the

• Page 7, Line 20property, the amount deferred, and the tax year for which the

• Page 7, Line 21deferral was granted, and shall send such certificate to the

• Page 7, Line 22state treasurer. The county treasurer shall give one copy of

• Page 7, Line 23the certificate to the county assessor and shall retain one copy

• Page 7, Line 24in the county treasurer's office. Upon satisfaction of the lien, the

• Page 7, Line 25state treasurer shall release the lien from the title.

• Page 8, Line 1(1.5)  Notwithstanding any provision of law to the contrary, a

• Page 8, Line 2county clerk and recorder shall not charge a fee for recording the certificate of deferral in accordance with subsection (1) of this section.

• Page 8, Line 3(6)  No later than January 1 of each year, the state

• Page 8, Line 4treasurer shall provide to each county treasurer a list by

• Page 8, Line 5owner and address of each property in the treasurer's county

• Page 8, Line 6that is subject to one or more property tax deferral liens

• Page 8, Line 7pursuant to this article 3.5 and the total amount of the lien or liens on the property as of April 30 of the prior year.

• Page 8, Line 8SECTION 7.  In Colorado Revised Statutes, 39-3.5-106, repeal (3) as follows:

• Page 8, Line 939-3.5-106.  State treasurer to pay county treasurer an amount

• Page 8, Line 10equivalent to deferred taxes. (3)  If a taxpayer defers all or part of the

• Page 8, Line 11property taxes due for a property tax year and the county treasurer

• Page 8, Line 12receives a payment from, or on behalf of, the taxpayer so that the total

• Page 8, Line 13received from the state treasurer and the payer is greater than the

• Page 8, Line 14taxpayer's property taxes due, then the county treasurer shall refund the excess to the payer of the taxes.

• Page 8, Line 15SECTION 8.  In Colorado Revised Statutes, 39-3.5-107, amend (2) as follows:

• Page 8, Line 1639-3.5-107.  Repayment of loans - release of liens - disposition

• Page 8, Line 17of payments. (2)  A taxpayer must tender repayments of a loan for

• Page 8, Line 18deferred taxes to the state treasurer, and the state treasurer shall give the

• Page 8, Line 19taxpayer a receipt therefor. A county treasurer shall not accept a

• Page 8, Line 20repayment. If repayment of a loan for deferred taxes is tendered

• Page 8, Line 21to the county treasurer, the county treasurer shall accept

• Page 8, Line 22payment, give the payer a receipt for the payment, and promptly transmit the money collected to the state treasurer.

• Page 9, Line 1SECTION 9.  In Colorado Revised Statutes, amend 39-3.5-108 as follows:

• Page 9, Line 239-3.5-108.  Notice to taxpayer regarding duty to claim

• Page 9, Line 3deferral annually.As soon as practicable after January 1, the state

• Page 9, Line 4treasurer shall send a deferral At the time the treasurer sends the

• Page 9, Line 5annual property tax notice to any taxpayer who has claimed a deferral

• Page 9, Line 6of property taxes in the previous calendar year, the treasurer shall

• Page 9, Line 7enclose a deferral notice. The deferral notice must be substantially in the following form:

• Page 9, Line 8To: (name of taxpayer)

• Page 9, Line 9If you want to defer the collection of ad valorem property taxes on

• Page 9, Line 10your homestead for the assessment year ending on December 31, , you

• Page 9, Line 11must file a claim for deferral not later than April 1, , with (state

• Page 9, Line 12treasurer or the name of third-party administrator, if applicable) the

• Page 9, Line 13office of the county treasurer. Forms for filing the claims are

• Page 9, Line 14available at (website and mailing address for state treasurer or third-party administrator, if applicable) the county treasurer's office.

• Page 9, Line 15If you fail to file your claim for deferral on or before April 1, ,

• Page 9, Line 16your real property taxes will be due and payable in accordance with the

• Page 9, Line 17schedule set out in the enclosed tax notice. you separately received from your county treasurer.

• Page 9, Line 18If you change your permanent address at any time during the

• Page 9, Line 19assessment year ending on December 31, , you must notify the state treasurer promptly county treasurer.

• Page 9, Line 20SECTION 10.  In Colorado Revised Statutes, amend 39-3.5-109

• Page 9, Line 21as follows:

• Page 10, Line 139-3.5-109.  Failure to receive notices. Failure to receive the

• Page 10, Line 2notice provided for in this article 3.5 is not a defense in any proceeding

• Page 10, Line 3for the collection of taxes or for the foreclosure of a tax lien. Neither the

• Page 10, Line 4state treasurer nor A county treasurer is not personally liable for failure to give such notices.

• Page 10, Line 5SECTION 11.  Effective date. This act takes effect July 1, 2025.

• Page 10, Line 6SECTION 12.  Safety clause. The general assembly finds,

• Page 10, Line 7determines, and declares that this act is necessary for the immediate

• Page 10, Line 8preservation of the public peace, health, or safety or for appropriations for

• Page 10, Line 9the support and maintenance of the departments of the state and state institutions.