Source: https://www.coloradoattorneygeneral.gov/ag_opinions/1998/no_98_02_ag_alpha_no_lo_lg_agavi_october_26_1998
Timestamp: 2014-04-24 22:44:40
Document Index: 531766057

Matched Legal Cases: ['§ 7', '§ 3', 'art 3', '§ 3', '§ 29', '§ 29', '§ 1', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 4', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 29', '§ 302', '§ 301', '§ 1', '§ 1', '§ 29', '§ 29', '§ 7', '§ 29']

No. 98-02 AG Alpha No. LO LG AGAVI - October 26, 1998 | Colorado State Attorney General
Home » No. 98-02 AG Alpha No. LO LG AGAVI - October 26, 1998 No. 98-02 AG Alpha No. LO LG AGAVI - October 26, 1998 This Formal Attorney General Opinion is issued in response to questions submitted by the Colorado Department of Local Affairs.
Summary 1. Section 29-1-301, C.R.S., sets a limit on the annual percentage increase in district property tax revenues. This limit was saved under the Taxpayers Bill of Rights and does not conflict with TABOR § 7(c). Districts must comply with both TABOR's and the statute's revenue limits. Pre-TABOR exceptions to the 5.5% limit and the procedures for using these exceptions remain valid if no TABOR limit is violated by their use.
2. Local districts are not required to use the ballot language in TABOR § 3(c) for elections involving questions arising solely under part 3, article 1, title 29, C.R.S. If TABOR limitations are affected, TABOR § 3(c) governs the election.
3. If no TABOR limit is violated, districts and the Division of Local Government may use the procedures in § § 29-1-301 and 302 to alter the calculation of the 5.5% annual net tax revenue increase. As noted in footnote 1, use of the procedures in § 29-1-301 or 302 to increase a district's mill levy rate over that for the prior year would violate TABOR §§ 1 and 4. In such a case a TABOR election is necessary.
4. It is unclear whether the Division of Local Government has the discretion to order a taxing entity to grant temporary property tax credits or a temporary mill levy rate reduction in order to comply with the provisions of § 29-1-301, C.R.S. Whether the Division has this authority, or whether the choice of refund mechanism is left solely to the discretion of the taxing entity, temporary property tax credits or a temporary mill levy rate reduction are valid methods of carrying out the refund provisions of § 29-1-301(6), C.R.S.
5. Local districts may use the provisions of §§ 29-1-301 and 302, C.R.S., to retain an "increased levy" as defined by the Division of Local Government for the purposes specified and in the manner provided in those statutes without a TABOR election if no TABOR tax, revenue or spending limit is violated. All taxing entities subject to the 5.5% limit in § 29-1-301(1) may either seek approval from the Division of Local Government or hold an election to exempt new primary oil and gas producing properties from the 5.5% limit. Counties and cities and towns in excess of 2000 population may exempt capital construction from the 5.5% limit through a notice and hearing process. Special districts and cities and towns of less than 2000 population may seek to retain revenues in excess of the 5.5% limit for any purpose for one year or for capital projects and capital purchases for one or more years through application to the Division of Local Government. If the Division denies the application, the special district or small city or town may seek approval from its electors to exceed the 5.5% limit for the purposes described above. Taxing entities may not enter into multiple fiscal year obligations under § 29-1-302(1.5) without complying with TABOR § 4.
6. Except as specifically provided in § § 29-1-301 and 302, local districts may not hold elections to waive § 29-1-301's 5.5% annual tax revenue increase limit prior to enactment of legislation similar to title 22, article 41.5, C.R.S., authorizing a local district to vote on weakening a state wide revenue or debt limit.
AG Alpha No. LO LG AGAVI
This Formal Attorney General Opinion is issued in response to questions submitted by the Colorado Department of Local Affairs.
QUESTION No. 1: Could the Attorney General clarify the language in Formal Attorney General Opinion 93-8, which states that § 29-1-301, C.R.S., "does not conflict" with section 7(c) of art. X, sec. 20, Colo. Const., and that the statute is "incorporated into" the constitutional amendment?
ANSWER No. 1: TABOR preserved other limits on district revenue and spending which do not directly conflict with it. This office determined in Formal Attorney General Opinion 93-8 that § 29-1-301, C.R.S., does not directly conflict with TABOR. Therefore, this limit on annual levies by local governments continues in full force and effect as an additional limit on government revenue increases.
DISCUSSION No. 1: Section 29-1-301, C.R.S., limits the amount of property tax revenue that counties, municipalities and other local governments and districts described therein may levy. It requires that, if necessary, the government shall reduce its statutory tax levies to limit the annual increase in revenues from tax levies (with certain deductions and exclusions) to 5.5%.
Section 29-1-301(1.2) states that the 5.5% limit in § 29-1-301 shall not apply to "capital expenditures" of counties, cities and towns. These taxing entities may retain tax revenue in excess of the 5.5% limit after notice, public hearing and a vote of two-thirds of the taxing entity board of governors. Section 29-1-302(1) allows the Department of Local Affairs to waive a special district's 5.5% limit if the tax revenue otherwise raised would be insufficient for the needs of the special district in the current year. Section 29-1-302(1.5) allows special districts to hold an election or request an order from the Department of Local Affairs to exceed the 5.5% tax revenue limit to finance capital projects and purchase capital assets. If the Department does not timely approve the application, § 29-1-302(2) authorizes the special district to take the question to a vote of its electorate. Section 29-1-302(2)(c) allows cities and towns of less than 2000 population to utilize the procedures in § 302 as opposed to the notice and hearing provisions of § 301(1.2). Section 29-1-302(2)(b) allows any entity to take a question of exceeding the 5.5% revenue limit to its electors. As these exceptions to the 5.5% limit were in the law prior to TABOR's approval, they are not a post-TABOR weakening of the 5.5% limit, which would violate TABOR § 1.
TABOR § 1 states in part: "Other limits on district revenue, spending, and debt may be weakened only by future voter approval." (emphasis added). TABOR by its terms contemplates that other limits on government revenue, spending and debt, such as § 29-1-301, shall remain in effect. As there is no apparent conflict between the statute and TABOR, § 29-1-301 remains in force. TABOR § 7(c) sets districts' maximum percentage increase in property tax revenues. Section 29-1-301 sets a separate limit in the percentage increase in tax revenue. Hence, even if a TABOR calculation would allow a 10% overall increase in district property tax revenues, a district could only retain tax revenues up to 5.5% over the previous year's tax revenues to fund the increase, except as provided in §§ 29-1-301 & 302. Likewise, if retention of the entire 5.5% tax revenue increase causes a district to exceed its TABOR property tax revenue limit, the district could not retain property tax revenue in