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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 26-0268.01 Jacob Bennington x2371 HOUSE BILL 26-1066
House Committees Senate Committees
Finance
A BILL FOR AN ACT
CONCERNING THE EXPANSION OF PROPERTY TAX EXEMPTIONS TO101
INCLUDE DEVELOPMENT OF LOW-INCOME RENTAL PROPERTY.102
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.)
Current law provides an exemption for taxation on property
acquired and developed for low-in come housing by nonprofit housing
providers, comm unity la nd trusts, and nonpr ofit affo rdable
homeownership developers. The bill expands the exemption to also
include property intended for low-income residential rental property.
HOUSE SPONSORSHIP
Stewart R. and Stewart K.,
SENATE SPONSORSHIP
Ball,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 39-3-113.5, amend2
(1)(a.5), (1)(b), (1)(b.5), (1)(c)(II) introductory portion, (1)(d), (2)(a),3
(2)(c)(II)(B), and (2)(c)(II)(C) as follows:4
39-3-113.5. Property acquired by nonprofit housing provider5
for low-income housing - use for charitable purposes - exemption -6
limitations - definitions.7
(1) As used in this section, unless the context otherwise requires:8
(a.5) "Community land trust" means a nonprofit organization that9
is exempt from taxation under section 501 (c)(3) of the federal "Internal10
Revenue Code of 1986", as amended, and is designed to ensure long-term11
housing affordability through a shared-equity model by acquiring and12
maintaining ownership of real property, while selling OR RENTING the13
improvements to low-to-middle income households for use as a primary14
residence.15
(b) "Indicators of intent" means off-site activities of a nonprofit16
housing provider that establish the provider's specific intent to:17
(I) Use property for the purpose of constructing or rehabilitating18
housing to be sold OR RENTED to low-income applicants; or19
(II) Sell OR RENT the property to low-income applicants for the20
purpose of constructing or rehabilitating housing for the low-income21
applicants.22
(b.5) "Land lease" means a long-term lease used in affordable23
homeownership OR RENTAL properties to lease the real property that is24
owned by a community land trust or nonprofit affordable homeownership25
OR RENTAL developer to the owner of the improvements on the real26
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property and preserve the improvements as an affordable homeownership1
OR RENTAL property.2
(c) "Low-income applicant" means:3
(II) For property tax years commencing on or after January 1,4
2024, an individual or family who both apply to a nonprofit housing5
provider to purchase OR RENT an affordable for-sale unit and whose total6
income is at or below either:7
(d) "Nonprofit housing provider" means an organization that is8
exempt from federal income tax pursuant to section 501 (c)(3) of the9
federal "Internal Revenue Code of 1986", as amended, and that has a10
primary organizational mission of THAT INCLUDES:11
(I) Working with low-income applicants to construct or12
rehabilitate housing that the organization then sells OR RENTS to the13
low-income applicants for their residential use; or14
(II) Selling OR RENTING property or improvements to low-income15
applicants for the low-income applicants' residential use.16
(2) (a) Subject to the limitations specified in subsection (3) of this17
section, for property tax years commencing on or after January 1, 2011,18
real property acquired by a nonprofit housing provider upon which the19
provider intends to construct or rehabilitate housing to be sold OR RENTED20
to low-income applicants or which the provider intends to sell OR RENT21
to low-income applicants for their residential use is deemed to be being22
used for strictly charitable purposes, regardless of whether or not there is23
actual physical use of the property, and shall be exempt from property24
taxation in accordance with section 5 of article X of the state constitution.25
(c) (II) For property tax years commencing on or after January 1,26
2024, in determining whether a nonprofit housing provider satisfies the27
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intent requirement of subsection (2)(a) of this section with respect to1
particular property, the administrator may consider indicators of intent,2
including but not limited to:3
(B) A resolution by the nonprof it housing provider's board that4
designates the property for construction or rehabilitation of for-sale OR5
RENTAL affordable housing; or6
(C) A resolution by the nonprofit housing provider's board that7
approves the purchase of the property for land banking with the purpose8
of constructing or rehabilitating for-sale OR RENTAL affordable housing. 9
SECTION 2. In Colorado Revised Statutes, 39-3-127.7, amend10
(1), (2)(a), (2)(c), (2)(d), (2)(e), (3)(a)(I), (3)(a)(III), (3)(b), (4), (6), (7)(a)11
introductory portion, and (7)(b) as follows:12
39-3-127.7. Community land trust property - nonprofit13
affordable homeownership or rental developer property - exemption14
- requirements - legislative declaration - definitions.15
(1) (a) The general assembly hereby finds and declares that:16
(I) The cost of homeownership AND HOME RENTAL has risen17
dramatically in Colorado: From December 2020 to December 2022, the18
median home value in Colorado increased over thirty percent; AND19
(II) Entry-level homeownership options AND AFFORDABLE20
RENTALS are increasingly unavailable, and community land trusts and21
nonprofit affordable homeownership HOUSING developers are playing an22
increasingly large role in helping low- and middle-income Coloradans23
access homeownership AND AFFORDABLE HOMES FOR RENT; and.24
(III) Compared to tools used to incentivize affordable rental25
housing, such as the low-income housing tax credit, there are fewer tools26
to incentivize the creation of affordable for-sale housing.27
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(b) Therefore, it is the intent of the general assembly to provide1
a limited property tax exemption to community land trusts and nonprofit2
affordable homeownership HOUSING developers in certain circumstances.3
(2) As used in this section, unless the context otherwise requires:4
(a) "Affordable homeownership OR RENTAL property" means any5
dwelling that:6
(I) Is restricted by a deed that impacts ownership of the property,7
limits the property's resale price, requires a long-term land lease with a8
community land trust or nonprofit affordable homeownership OR RENTAL9
developer, or imposes any other restriction that limits the property such10
that it may only be purchased OR RENTED by designated households, a11
community land trust, or a nonprofit affordable homeownership OR12
RENTAL developer;13
(II) Is sold OR RENTED to a household that at the time of purchase14
OR RENTAL is at or below one hundred percent of the area median income15
of households of that same size in the county in which the housing is16
located; and17
(III) Is sold OR RENTED to a purchaser OR LESSEE to be used as a18
primary residence.19
(c) "Improvement" means a permanent change to real property20
that augments the real property's value including but not limited to a21
single-family home, townhome, or condominium, OR RENTAL PROPERTY.22
(d) "Land lease" means a long-term lease used in affordable23
homeownership OR RENTAL properties to lease the real property that is24
owned by a community land trust or nonprofit affordable homeownership25
developer to the owner of the improvements on the real property and26
preserve the improvements as an affordable homeownership OR RENTAL27
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property.1
(e) "Nonprofit affordable homeownership OR RENTAL developer"2
means an organization that is exempt from federal income tax pursuant3
to section 501 (c)(3) of the federal "Internal Revenue Code of 1986", as4
amended, and that has a primary organizational mission of THAT5
INCLUDES providing for-sale OR FOR RENT affordable housing units to6
low-to-middle income households for use as a primary residence.7
(3) (a) For property tax years commencing on or after January 1,8
2024, real property is deemed to be used for a strictly charitable purpose,9
and is exempt from property taxation in accordance with section 5 of10
article X of the state constitution, if the real property:11
(I) Is held by either a community land trust or a nonprofit12
affordable homeownership OR RENTAL developer;13
(III) Is leased to the owner of the improvements as an affordable14
homeownership OR RENTAL property.15
(b) The real property described in subsection (3)(a) of this section16
is deemed to be used for a strictly charitable purpose, and is exempt from17
property taxation in accordance with section 5 of article X of the state18
constitution, un til the real property is no longer used as an affordable19
homeownership OR RENTAL property.20
(4) If a community land trust or nonprofit affordable21
homeownership OR RENTAL developer claims a property tax exemption22
pursuant to this section for a real property and then subsequently sells,23
donates, or leases that real property so that the real property no longer24
qualifies as an affordable homeownership OR RENTAL property, the25
community land trust or nonprofit affordable homeownership OR RENTAL26
developer is liable for all property taxes for the real property for the27
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property tax years when the real property did not qualify as an affordable1
homeownership OR RENTAL property and during which the community2
land trust or nonprofit affordable homeownership OR RENTAL developer3
did not pay property taxes for the real property due to the property tax4
exemption described in this section.5
(6) A community land trust or nonprofit affordable home6
ownership OR RENTAL developer that owns real property that qualifies for7
the property tax exemption described in this section shall submit the land8
lease for each real property that qualifies for the property tax exemption9
described in this section to the appropriate county assessor within10
twenty-five days of the initial execution of the land lease.11
(7) (a) Any community land trust or nonprofit affordable12
homeownership OR RENTAL developer that claims a property tax13
exemption pursuant to this section shall comply with the provisions of14
section 39-2-117; except that, if the real property that is allowed an15
exemption pursuant to this section has been subdivided, the owner of such16
property or the owner's agent is only required to:17
(b) Notwithstanding subsection (7)(a)(II) of this section, if the real18
property that is allowed an exemption pursuant to this section has been19
subdivided but the subdivided parcel has been split into a separate taxable20
parcel from the improvements and is leased to the owner of the21
improvements as an affordable homeownership OR RENTAL property, then22
the owner of such real property or the owner's agent must file an23
individual annual report for the subdivided parcel in accordance with24
section 39-2-117 (3)(a).25
SECTION 3. Act subject to petition - effective date. This act26
takes effect January 1, 2027; except that, if a referendum petition is filed27
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pursuant to section 1 (3) of article V of the state constitution against this1
act or an item, section, or part of this act within the ninety-day period2
after final adjournment of the general assembly, then the act, item,3
section, or part will not take effect unless approved by the people at the4
general election to be held in November 2026 and, in such case, will take5
effect January 1, 2027, or on the date of the official declaration of the6
vote thereon by the governor, whichever is later.7
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