Capitol Connections – June 19, 2020
Government Affairs Update
And That’s a Wrap, Legislative Session Adjourns Sine Die
The final gavel of the 2020 legislative session came down late in the afternoon on Monday. Looking back to January, many would not have imagined discussions through plexiglass and debates on various legislative proposals carrying on through mid-June.
Although stay-at-home orders and social distancing requirements paused the work of the legislature, the waning days of legislative session seemed to make up for lost time and focused major efforts toward providing relief to the Coloradans hit hardest by Covid-19. Legislators also looked for new revenue sources to direct the state’s dollars toward Covid-19 relief and finance legislative priorities.
Needless to say, there is never a shortage of hard work to go around in this type of environment. Thanks to the strong relationships the Colorado Association of REALTORS® built and our robust advocacy strategies, our Colorado REALTORS® have a seat at the table. We are proud to be the resource for real estate issues for Colorado’s policymakers. Due to the devoted work of our Legislative Policy Committee (LPC), CAR takes proactive stances on issues important to our industry and the rebuilding of our economy.
In the final days, the Colorado Association of Realtors®:
Mitigated the worst impacts to small businesses from an oppressive tax
HB-1420 Adjust Tax Expenditures For State Education Fund (LPC Position: Oppose) – De-couples the federal tax deduction for qualified business income from the state, thereby increasing taxes on small businesses from 2021 to 2023 and no longer allows those businesses to take advantage of the benefits of the 2017 Tax Cuts and Jobs Act. As initially drafted, HB-1420 would have increased taxes on any of our members who have an LLC, S-Corp, or Sole Proprietorship as their business model for the next six years.
Status: Over 2,400 Colorado REALTORS® jumped to action and contacted their state legislators and Governor Polis to alert them of the devastating impacts this bill would have on Colorado’s smallest businesses in a time when many small businesses are struggling to re-open safely. As a result, CAR worked with stakeholders to amend the bill to change the threshold for qualified business income from $75,000 to $500,000 for single filers and $1 million for joint filers. On Monday, the House approved these amendments and the bill now heads to Governor Polis for his consideration.
Advanced relief for Coloradans facing housing-hardship
HB-1410 COVID-19-related Housing Assistance (LPC Position: Support) – Allocates 19 million federal CARES Act dollars to keep people in their homes whether they rent or own. This financial assistance will help some of the most vulnerable Coloradans who do not have a home, it will help housing providers so that we can preserve and increase the amount of affordable housing available, and it will help the Coloradans who are in danger of losing their homes or apartments due to lost income–serving a threshold of 100% AMI.
This also means that the federal dollars will reach into our middle-class working families. And as a result of many stakeholder conversations there is no eviction timeframe extension added into the final bill, so housing providers should follow the most recent executive order extension by Governor Polis that takes the current rules through July.
Status: Headed to the Governor for his signature.
Reviewed Gallagher proposal changes with policymakers and shared property tax assessment rate concerns
SCR-001 Repeal Property Tax Assessment Rates (LPC Position: Monitor) – The ballot referral would de-couple the Gallagher Amendment of 1982 from the state Constitution. Gallagher requires that the proportion of taxable value for residential and nonresidential property remain constant between each assessment cycle.
The current commercial property tax rates are highly expensive for our business sectors that drive the Colorado economy and these revenues also contribute significant support to our local governments, school districts, and special districts that provide essential services such as fire protection to Coloradans. Therefore, if property tax assessments decline it would place pressure on the state budget to backfill these important needs. While CAR appreciates the intent to remedy some of the challenges that the Gallagher Amendment has presented over the years, we have expressed concern along with some members of the Colorado Real Estate Alliance, that this approach may have unintended consequences to our economy. Read CAR’s letter submitted to the General Assembly.
Status: Referred to November General Election ballot for Colorado voters to consider.
SB-223 Assessment Rate Moratorium and Conforming Changes (LPC Position: Monitor) – In November, Colorado voters will determine the fate of a proposal to repeal the Gallagher Amendment from the state Constitution as put forth by SCR-001. If Coloradans approve that change, beginning with the January 1, 2020 property tax year, there would be a moratorium on changing the ratio of valuation for assessment for any class of property. It is unclear if this legislative-free pause for four years can bind a future legislature.
Status: Headed to the Governor’s desk.