June 24, 2019

James Johnson: Colorado Amends “Agricultural Land” Classification

Post by James T. Johnson and Kimberly A. Martin

In May of this year, Governor Hickenlooper signed into law House Bill 11-1146, which amends the statutory definition of “agricultural land” for property tax purposes.  Historically, land underlying a residence located on a parcel of property that otherwise was classified as “agricultural land” was also classified as agricultural land for property tax purposes.  This classification resulted in the residence being qualified for more favorable “agricultural” property tax treatment as compared to the residential classification.

Under House Bill 11-1146, now excluded from the classification of “agricultural land” is up to two acres of land upon which a “residential improvement” is located if the residential improvement is not “integral to an agricultural operation” conducted on the land.  Any such excluded land will be classified as “residential land” for property tax purposes, but the remainder of the property would retain its agricultural classification.  If the residence is integral to the operation of a farm or ranch, the classification does not change.  Further, vacant land or any other land upon which a residence is not located, whether or not subdivided, is not affected by this legislation.

House Bill 11-1146 does not expressly define “integral” but provides that a residence is deemed integral to an agricultural operation if the person occupying such residence “either regularly conducts, supervises, or administers material aspects of the agricultural operation or is the spouse or a parent, grandparent, sibling, or child” of such person. As with all classifications of property for taxation purposes, the applicable county assessor is responsible for making the determination of whether property underlying a residence should be classified as “agricultural land” or “residential land,” in other words, whether the residence is “integral” to a farm or ranch operation. The determination may be appealed to the applicable county board of equalization.

Implementation of House Bill 11-1146 may implicate the Taxpayer Bill of Rights (TABOR), in that it may result in an increase in tax revenues to local governments and/or special districts in excess of the revenue limits prescribed by TABOR. If the local government or special district previously has not obtained voter approval to retain and spend excess revenues (known as “de-Brucing”) and determines that the implementation of House Bill 11-1146 will cause a net property tax gain that exceeds TABOR’s limits, House Bill 11-1146 provides that the government or district may place the issue before the voters for approval. If the voters do not approve the retention of the excess revenues, or if the government or district does not submit the issue to the voters, it must adjust its mill levy to eliminate any such net property tax revenue gain.

House Bill 11-1146 will apply to the 2012 property tax year and all subsequent tax years.

James Johnson is a Shareholder in Otten Johnson’s land use, real estate, and litigation groups. He represents clients in all aspects of real estate development and related issues, including disputes regarding entitlement approvals and eminent domain.

Kimberly Martin is s an associate in the firm’s land use and real estate practice groups. Her practice focuses on all aspects of entitlement matters.

They contribute to the firm’s Rocky Mountain Real Estate Law blog, where this post (and a client alert) originally appeared on August 23, 2011.

Governor Hickenlooper Signs Twelve More Bills into Law

On Monday, twelve more bills reached Governor John Hickenlooper’s desk and were signed into law. The bills were the nineteenth group to emerge from the 2011 General Assembly.

  • HB 11-1026
    • Sponsored by Rep. Gerou and Sen. Jahn. Designation of Storm Water System Administrators, and Appropriations Therefore.
  • HB11-1100
    • Sponsored by Rep. Looper and Sen. Morse. Consideration of Military Expense Towards Qualification for Personal Licensure and Certification.
  • HB 11-1145
    • Sponsored by Rep. McCann and Sen. Tochtrop. Requirements Surrounding Background Checks for Child Care Facilities.
  • HB 11-1196
    • Sponsored by Rep. Summers and Sen. Foster. Measure to Increase Flexibility in Funding for Family Services.
  • HB 11-1283
    • Sponsored by Reps. Gerou and Riesberg and Sen. Steadman. Extension of the Bioscience Discovery Evaluation Program.
  • HB 11-1289
    • Sponsored by Rep. Sonnenberg and Sen. Hodge. Concerning the Manner in which the State Historical Society Acts with Regard to Water Supply Structures.
  • HB 11-1146
    • Sponsored by Rep. Massey and Sen. Steadman. Requirement that a Residence Be Integral to an Agricultural Operation in Determining Whether Two Acres or Less Associated with the Residence Satisfies the Definition of Agricultural Land for Property Tax Purposes.
  • HB 11-1209
    • Sponsored by Rep. Jones and Rep. Heath. Creation of Small Business Navigator by the Small Business Assistance Center Under the Office of Economic Development.
  • HB 11-1218
    • Sponsored by Rep. Baumgardner and Sen. White. Concerning the Power to Create a Federal Mineral Lease District for Purposes of Receiving Moneys Distributed by the Department of Local Affairs.
  • HB 11-1274
    • Sponsored by Rep. Sonnenberg and Sen. Schwartz. Concerning the Funding of Colorado Water Conservation Board Projects.
  • HB 11-1230
    • Sponsored by Rep. Duran and Sen. Boyd. Consolidation of State Programs that Distribute Federal Moneys to Persons Needing Assistance in Obtaining Housing into the Division of Housing within the Department of Local Affairs.
  • SB 11-231
    • Sponsored by Sen. Steadman and Rep. Nikkel. Allowing the Channel Authority to Make Available via the Internet Audio Recordings of Proceedings of the General Assembly, Requiring Certain Members of the Board of Directors to Serve on the General Assembly and to Represent the Major Political Parties in Each House.

For a complete list of Governor Hickenlooper’s 2011 legislation decisions click here.

HB 11-1146: Amending Definition of Agricultural Land to Exclude Up to Two Residential Improvement Acres for Property Tax Purposes

On January 24, 2011, Rep. Tom Massey, R-Buena Vista, and Sen. Pat Steadman, D-Denver, introduced HB 11-1146 – Concerning a requirement that a residence be integral to an agricultural operation in determining whether two acres or less associated with the residence satisfies the definition of agricultural land for property tax purposes. This summary is published here courtesy of the Colorado Bar Association’s e-Legislative Report.

The bill amends the existing statutory definition of agricultural land for purposes of the property tax to exclude up to 2 acres of land associated with a residential improvement located on such agricultural land unless the residence is integral to an agricultural operation conducted on the land.

The bill requires the property tax administrator to define the phrase “integral to the agricultural operation” in manuals, appraisal procedures, and instructions promulgated by the administrator. The bill specifies certain factors the administrator is to consider in promulgating the definition. Any person who objects to the application of the term “integral to an agricultural operation” to their property and whose objections or protests have been denied by the county assessor may submit a petition for appeal to the county board of equalization. On February 21, the Agriculture, Livestock, & Natural Resources Committee amended the bill and referred it to the Appropriations Committee; the Appropriations Committee is scheduled to hear the bill on Friday, March 4.

Summaries of other featured bills can be found here.