§ 39-1-103 — Actual value determined - when - legislative declaration

Colorado § 39-1-103

• Jurisdiction: Colorado
• Title 39: Taxation
• Art.: General Provisions

Text

(1) The
valuation for assessment of producing mines and nonproducing mining claims shall
be determined as provided in article 6 of this title.

(2) The valuation for assessment of leaseholds and lands producing oil or
gas shall be determined as provided in article 7 of this title.

(3) The actual value for property tax purposes of the operating property and
plant of all public utilities doing business in this state shall be determined by the
administrator, as provided in article 4 of this title.

(4) (a) Repealed.

(b) The valuation for assessment of mobile homes shall be determined as
provided in section 39-5-203.

(5) (a) All real and personal property shall be appraised and the actual value
thereof for property tax purposes determined by the assessor of the county
wherein such property is located. The actual value of such property, other than
agricultural lands exclusive of building improvements thereon and other than
residential real property and other than producing mines and lands or leaseholds
producing oil or gas, shall be that value determined by appropriate consideration of
the cost approach, the market approach, and the income approach to appraisal. The
assessor shall consider and document all elements of such approaches that are
applicable prior to a determination of actual value. The actual value reflects the
value of the fee simple estate. Despite any orders of the state board of equalization,
no assessor shall arbitrarily increase the valuations for assessment of all parcels
represented within the abstract of a county or within a class or subclass of parcels
on that abstract by a common multiple in response to the order of said board. If an
assessor is required, pursuant to the order of said board, to increase or decrease
valuations for assessment, such changes shall be made only upon individual
valuations for assessment of each and every parcel, using each of the approaches
to appraisal specified in this subsection (5)(a), if applicable. The actual value of
agricultural lands, exclusive of building improvements thereon, shall be determined
by consideration of the earning or productive capacity of such lands during a
reasonable period of time, capitalized at a rate of thirteen percent. Land that is
valued as agricultural and that becomes subject to a perpetual conservation
easement shall continue to be valued as agricultural notwithstanding its dedication
for conservation purposes; except that, if any portion of such land is actually used
for nonagricultural commercial or nonagricultural residential purposes, that portion
shall be valued according to such use. Nothing in this subsection (5) shall be
construed to require or permit the reclassification of agricultural land or
improvements, including residential property, due solely to subjecting the land to a
perpetual conservation easement. The actual value of residential real property shall
be determined solely by consideration of the market approach to appraisal. A gross
rent multiplier may be considered as a unit of comparison within the market
approach to appraisal. The valuation for assessment of producing mines and of
lands or leaseholds producing oil or gas shall be determined pursuant to articles 6
and 7 of this title 39. In establishing actual value, an assessor shall also consider:

(I) Current use;

(II) Existing zoning and other governmental land use or environmental
regulations and restrictions;

(III) Multi-year leases or other contractual agreements affecting the use of
or income from the property;

(IV) Easements and reservations of record; and

(V) Covenants, conditions, and restrictions of record.

(b) If, having considered the three approaches prescribed in paragraph (a) of
this subsection (5), at the sole discretion of the assessor the use of the three
approaches to value cannot accurately determine the actual value of any parcel of
taxable property, or in the opinion of the assessor the application of the three
approaches to value does not result in uniform, just, and equalized valuation, then
the actual value thereof shall be determined by comparison of the surface use of
such property with a similar surface use.

(c) Except as provided in section 39-1-102 (14.4)(b) or 39-1-102 (14.4)(c) and in
subsections (5)(e) and (5)(f) of this section, once any property is classified for
property tax purposes, it shall remain so classified until such time as its actual use
changes or the assessor discovers that the classification is erroneous. The property
owner shall endeavor to comply with the reasonable requests of the assessor to
supply information which cannot be ascertained independently but which is
necessary to determine actual use and properly classify the property when the
assessor has evidence that there has been a change in the use of the property.
Failure to supply such information shall not be the sole reason for reclassifying the
property. Any such request for such information shall be accompanied by a notice
that states that failure on the part of the property owner to supply such information
will not be used as the sole reason for reclassifying the property in question.
Subject to the availability of funds under the assessor's budget for such purpose,
no later than May 1 of each year, the assessor shall inform each person whose
property has been reclassified from agricultural land to any other classification of
property of the reasons for such reclassification including, but not limited to, the
basis for the determination that the actual use of the property has changed or that
the classification of such property is erroneous.

(d) If a parcel of land is classified as agricultural land as defined in section
39-1-102 (1.6)(a)(III) and the perpetual conservation easement is terminated,
violated, or substantially modified so that the easement is no longer granted
exclusively for conservation purposes, the assessor may reassess the land
retroactively for a period of seven years and the additional taxes, if any, that would
have been levied on the land during the seven year period prior to the termination,
violation, or modification shall become due.

(e) (I) Except as provided in subparagraph (II) of this paragraph (e) and in
paragraph (f) of this subsection (5), if a parcel of land is classified as agricultural
land as defined in section 39-1-102 (1.6) and the productivity of such parcel of land
is destroyed by a natural cause on or after January 1, 2012, so that, were it not for
the destruction of the productivity of the land by a natural cause, the land would
have qualified as agricultural land for the following property tax year, the
agricultural land classification shall remain in place for the year of destruction and
the four subsequent property tax years so long as the assessor receives evidence
from the owner that the owner is in the process of rehabilitating the productivity of
the land for agricultural use. Such evidence includes, but is not limited to, removing
debris, removing contaminants, restoring fences and agricultural structures,
reseeding, providing water for livestock, or contouring the land suitable for
agricultural use.

(II) The agricultural land classification of the land described in subparagraph
(I) of this paragraph (e) must change according to current use if:

(A) The productivity of the land is not rehabilitated for agricultural use prior
to the January 1 after the period described in subparagraph (I) of this paragraph (e),
unless the property owner provides documentary evidence to the assessor that
during such period a good-faith effort was made to rehabilitate the productivity of
the land for agricultural use but that additional time is necessary;

(B) The assessor determines that the classification at the time of destruction
of the productivity of the land as a result of a natural cause was erroneous; or

(C) A change of use has occurred. For purposes of this sub-subparagraph (C),
a change of use does not include the temporary loss of agricultural classification of
the land as a result of the destruction of the productivity of the land by a natural
cause.

(f) (I) Except as provided in subparagraph (II) of this paragraph (f), if a parcel
of land is classified as agricultural land as defined in section 39-1-102 (1.6)(a)(II) and
the productivity of the parcel of land is destroyed by a natural cause on or after
January 1, 2012, so that, were it not for the destruction of the productivity of the
land by a natural cause, the land would have qualified as agricultural land for the
following property tax year, the agricultural land classification shall remain in place
notwithstanding the length of the rehabilitation period specified in subparagraph (I)
of paragraph (e) of this subsection (5) so long as the owner is in compliance with an
approved forest management plan and is on the list provided by the Colorado state
forest service as having such a plan.

(II) The agricultural land classification of the land described in subparagraph
(I) of this paragraph (f) must change according to current use if:

(A) The assessor determines that the classification at the time of destruction
of the productivity of the land as a result of a natural cause was erroneous; or

(B) A change of use has occurred. For purposes of this sub-subparagraph (B),
a change of use does not include the temporary loss of agricultural classification of
the land as a result of the destruction of the productivity of the land by a natural
cause.

(6) and (7) Repealed.

(8) In any case in which sales prices of comparable properties within any
class or subclass are utilized when considering the market approach to appraisal in
the determination of actual value of any taxable property, the following limitations
and conditions shall apply:

(a) (I) Use of the market approach shall require a representative body of
sales, including sales by a lender or government, sufficient to set a pattern, and
appraisals shall reflect due consideration of the degree of comparability of sales,
including the extent of similarities and dissimilarities among properties that are
compared for assessment purposes. In order to obtain a reasonable sample and to
reduce sudden price changes or fluctuations, all sales shall be included in the
sample that reasonably reflect a true or typical sales price during the period
specified in section 39-1-104 (10.2). Sales of personal property exempt pursuant to
the provisions of sections 39-3-102, 39-3-103, and 39-3-119 to 39-3-122 shall not be
included in any such sample.

(II) Because of the unique characteristics and limited number of oil shale
mineral interests, a minimum of five arm's-length sales of reasonably comparable
oil shale mineral interests shall be required to constitute a market for purposes of
utilization of the market approach to appraisal in determining the actual value of
nonproducing oil shale mineral interests.

(b) Each such sale included in the sample shall be coded to indicate a typical,
negotiated sale, as screened and verified by the assessor.

(c) All such coded, typical sales samples shall be supplied to the
administrator for the performance of his duties.

(d) In no event shall a sales ratio be established or utilized for any class or
subclass of property unless and until there have been at least thirty such coded,
typical sales or at least five percent of all properties in such class or subclass
within the county have been sold and verified by the assessor as coded, typical
sales, whichever amount is greater. When such minimum requirement has not been
met but typical sales within any such class or subclass indicate that valuations in
the class or subclass are too high or too low, such fact shall be reported to the
state board of equalization, which board may order an independent appraisal study
in such county.

(e) Repealed.

(f) Such true and typical sales shall include only those sales which have been
determined on an individual basis to reflect the selling price of the real property
only or which have been adjusted on an individual basis to reflect the selling price
of the real property only.

(9) (a) In the case of an improvement which is used as a residential dwelling
unit and is also used for any other purpose, the actual value and valuation for
assessment of such improvement shall be determined as provided in this paragraph
(a). The actual value of each portion of the improvement shall be determined by
application of the appropriate approaches to appraisal specified in subsection (5) of
this section. The actual value of the land containing such an improvement shall be
determined by application of the appropriate approaches to appraisal specified in
subsection (5) of this section. The land containing such an improvement shall be
allocated to the appropriate classes based upon the proportion that the actual
value of each of the classes to which the improvement is allocated bears to the
total actual value of the improvement. The appropriate valuation for assessment
ratio shall then be applied to the actual value of each portion of the land and of the
improvement.

(b) In the case of land containing more than one improvement, one of which
is a residential dwelling unit, the determination of which class the land shall be
allocated to shall be based upon the predominant or primary use to which the land
is put in compliance with land use regulations. If multiuse is permitted by land use
regulations, the land shall be allocated to the appropriate classes based upon the
proportion that the actual value of each of the classes to which the improvements
are allocated bears to the combined actual value of the improvements; the
appropriate valuation for assessment ratio shall then be applied to the actual value
of each portion of the land.

(10) Common property or common elements within a common interest
community as defined in the Colorado Common Interest Ownership Act, article
33.3 of title 38, C.R.S., shall be appraised and valued pursuant to the provisions of
section 38-33.3-105, C.R.S.

(10.5) (a) The general assembly hereby finds and declares that bed and
breakfasts are unique mixed-use properties; that all areas of a bed and breakfast,
except for the commercial lodging area, are shared and common areas that allow
innkeepers and guests to interact in a residential setting; that the land on which a
bed and breakfast is located and that is used in conjunction with the bed and
breakfast is primarily residential in nature; and that there appears to exist a wide
disparity in how assessors classify the different portions of bed and breakfasts.

(b) Therefore, notwithstanding any other provision of this article 1, a bed and
breakfast shall be assessed as provided in this subsection (10.5). The commercial
lodging area of a bed and breakfast shall be assessed at the rate for lodging
property. Any part of the bed and breakfast that is not a commercial lodging area
shall be considered a residential improvement and assessed accordingly. The
actual value of each portion of the bed and breakfast shall be determined by the
application of the appropriate approaches to appraisal specified in subsection (5) of
this section. The actual value of the land containing a bed and breakfast shall be
determined by the application of the appropriate approaches to appraisal specified
in subsection (5) of this section. The land containing a bed and breakfast shall be
assessed as follows:

(I) The portion of land directly underneath a bed and breakfast shall be
assessed pursuant to the procedures pertaining to land set forth in subsection (9)
of this section.

(II) There shall be a rebuttable presumption that all remaining land shall be
assessed as residential land. Such presumption shall only be overcome if there is a
nonresidential use not reasonably associated with the operation of the bed and
breakfast on some portion of the remaining land, in which case, such portion of the
remaining land shall be assessed as nonresidential land.

(III) Subparagraphs (I) and (II) of this paragraph (b) shall not apply to
agricultural land.

(10.7) (a) The general assembly hereby finds and declares that:

(I) A nursing home is a unique residential property that is the residence of
the individuals living there at the time, regardless of their length of stay;

(II) There is a discrepancy in how assessing officers classify nursing homes
that provide short-term services and nursing homes that provide longer-term
services for purposes of calculating property tax; and

(III) Therefore, it is important for the general assembly to clarify that all
nursing homes, regardless of a resident's length of stay, must be classified as
residential real property.

(b) For property tax years commencing on and after January 1, 2023, land
used for a nursing home and any improvements affixed to that land for the use of
the nursing home are classified and assessed as residential real property,
regardless of a resident's length of stay.

(11) The general assembly hereby declares that consideration by assessing
officers of the cost approach, market approach, and income approach to the
appraisal of real property has resulted in valuations of minerals in place which are
neither uniform, nor just and equal, because of wide variations within the same
locality in quality and quantity of mineral deposits, if any, because of uncertainty in
the existence or extent of such deposits, because of difficulty in measuring
acquisition or replacement costs, or because of speculative value judgments when
minerals in place are not income producing. Therefore, in the absence of
preponderant evidence shown by the assessing officer that the use of the cost
approach, market approach, and income approach result in uniform and just and
equal valuation, minerals in place are not to be considered in determining the actual
value of real property.

(12) In any case in which the income approach is utilized in the determination
of the actual value of any nonproducing oil shale mineral interests, the following
limitations and conditions shall apply:

(a) The assessor shall capitalize the annual rental income for such
nonproducing mineral interests at a capitalization rate of thirteen percent. If
nonproducing mineral interests are unleased, the assessor shall use the annual
rental as defined in paragraph (b) of this subsection (12).

(b) For the purposes of this subsection (12), annual rental means annual
rental payments, or other compensatory payments payable for the right to hold a
mineral interest, which payments are fixed and certain in amount and payable
periodically over a fixed period calculated on a twelve-month basis. Annual rental
shall be the representative annual rental for such mineral interests leased within
the county or the area, and annual rental does not include royalty payments,
advanced royalty payments, bonus payments, or minimum royalty payments
covering periods when the mineral interests are not in production, even though said
payments may be fixed and certain in amount and payable periodically. For the
purposes of this paragraph (b), royalty payments, advanced royalty payments,
and minimum royalty payments mean payments attributable to a portion of the
current or future mineral production of a mineral interest, paid for the privilege of
producing minerals, and bonus payments means compensation paid as
consideration for the granting of a mineral lease or other compensatory payments
which are payable regardless of the extent of use of the mineral interest and which
are fixed and certain in amount and may be payable in one or more periodical
increments over a fixed period.

(13) (a) The general assembly hereby finds and declares that, in the
consideration of the cost approach, market approach, and income approach to the
appraisal of personal property by assessing officers, the cost approach shall
establish the maximum value of property if all costs incurred in the acquisition and
installation of such property are fully and completely disclosed by the property
owner to the assessing officer.

(b) Therefore, in the assessment of taxable personal property, the assessing
officer shall consider the value derived from the cost approach to be the maximum
value of the property if the property owner has timely filed his declaration and the
declaration contains all relevant information pertaining to the valuation of the
property and, also includes, a full disclosure of all costs incurred in the acquisition
and installation of all personal property owned by or in the possession of the
taxpayer.

(c) Assessing officers shall consider the cost approach to the appraisal of
property, pursuant to the provisions of this subsection (13), in good faith and shall
deny the use of the cost approach only upon just cause that the requirements set
forth in this subsection (13) and in section 39-5-116 have not been complied with by
a taxpayer. If it is determined at any time that an assessing officer wrongly denied
the use of the cost approach, such assessing officer shall be held liable for all costs
incurred by the taxpayer in protesting such assessment based on such denial.
However, nothing in this subsection (13) shall preclude the assessing officers from
considering the market approach or income approach to the appraisal of personal
property when such consideration would result in a lower value of the property and
when such valuation is based on independent information obtained by the assessing
officers.

(14) (a) The general assembly hereby finds and declares that, in determining
the actual value of vacant land, there appears to exist a wide disparity in the
treatment of vacant land by the assessing officers of the various counties; that the
methods of appraisal currently being utilized by assessing officers for such
valuation remain unclear; and that such assessing officers are provided detailed
information concerning the appraisal of vacant land in the manuals, appraisal
procedures, and instructions prepared and published by the administrator.

(b) The assessing officers shall give appropriate consideration to the cost
approach, market approach, and income approach to appraisal as required by the
provisions of section 3 of article X of the state constitution in determining the
actual value of vacant land. When using the market approach to appraisal in
determining the actual value of vacant land as of the assessment date, assessing
officers shall take into account, but need not limit their consideration to, the
following factors: The anticipated market absorption rate, the size and location of
such land, the direct costs of development, any amenities, any site improvements,
access, and use. When using anticipated market absorption rates, the assessing
officers shall use appropriate discount factors in determining the present worth of
vacant land until eighty percent of the lots within an approved plat have been sold
and shall include all vacant land in the approved plat. For purposes of such
discounting, direct costs of development shall be taken into account. The use of
present worth shall reflect the anticipated market absorption rate for the lots
within such plat, but such time period shall not generally exceed thirty years. For
purposes of this paragraph (b), no indirect costs of development, including, but not
limited to, costs relating to marketing, overhead, or profit, shall be considered or
taken into account.

(c) (I) For purposes of this subsection (14), vacant land means any lot,
parcel, site, or tract of land upon which no buildings or fixtures, other than minor
structures, are located. Vacant land may include land with site improvements.
Vacant land includes land that is part of a development tract or subdivision when
using present worth discounting in the market approach to appraisal; however,
vacant land shall not include any lots within such subdivision or any portion of
such development tract that improvements, other than site improvements or minor
structures, have been erected upon or affixed thereto. Vacant land does not
include agricultural land, producing oil and gas properties, severed mineral
interests, and all mines, whether producing or nonproducing.

(II) For purposes of this subsection (14):

(A) Minor structures means improvements that do not add value to the land
on which they are located and that are not suitable to be used for and are not
actually used for any commercial, residential, or agricultural purpose.

(B) Site improvements means streets with curbs and gutters, culverts and
other sewage and drainage facilities, and utility easements and hookups for
individual lots or parcels.

(d) As soon after the assessment date as may be practicable, the assessor
shall mail or deliver two copies of a subdivision land valuation questionnaire for
each approved plat within the county to the last-known address of the subdivision
developer known or believed to own vacant land within such approved plat. Such
questionnaire shall be designed to elicit information vital to determining the
present worth of vacant land within such approved plat. Such subdivision developer
or his agent shall answer all questions to the best of his ability, attaching such
exhibits or statements thereto as may be necessary, and shall sign and return the
original copy thereof to the assessor no later than the March 20 subsequent to the
assessment date. All information provided by the subdivision developer in such
questionnaire shall be kept confidential by the assessor; except that the assessor
shall make such information available to the person conducting any valuation for
assessment study pursuant to section 39-1-104 (16) and his employees and the
property tax administrator and his employees.

(e) If any subdivision developer fails to complete and file one or more
questionnaires by March 20, then the assessor may determine the actual value of
the taxable vacant land within an approved plat which is owned by such subdivision
developer on the basis of the best information available to and obtainable by the
assessor.

(15) The general assembly hereby finds and declares that assessing officers
shall give appropriate consideration to the cost approach, market approach, and
income approach to appraisal as required by section 3 of article X of the state
constitution in determining the actual value of taxable property. In the absence of
evidence shown by the assessing officer that the use of the cost approach, market
approach, and income approach to appraisal requires the modification of the actual
value of taxable property for the first year of a reassessment cycle in order to
result in uniform and just and equal valuation for the second year of a reassessment
cycle, the assessing officer shall consider the actual value of any taxable property
for the first year of a reassessment cycle, as may have been adjusted as a result of
protests and appeals, if any, prior to the assessment date of the second year of a
reassessment cycle, to be the actual value of such taxable property for the second
year of a reassessment cycle.

(16) (a) The general assembly hereby finds and declares that in the
consideration of the cost approach, market approach, and income approach to
appraisal for the valuation of superfund water treatment facilities, the cost
approach to appraisal does not adequately reflect characteristics specific to
superfund water treatment facilities that negatively impact the value of such
facilities, including, but not limited to, the lack of income producing ability and the
absence of any market for sale of superfund water treatment facilities. Therefore,
in the assessment of superfund water treatment facilities, the income approach to
appraisal shall be considered the primary indicator of value and the cost approach
or market approach to appraisal shall be used only if the value determined under
the cost approach or market approach is less than the value determined under the
income approach to appraisal. For the purposes of determining the actual value of
superfund water treatment facilities as of the assessment date using the income
approach to appraisal, the assessing officer shall capitalize the actual income
generated by the facility during the calendar year preceding the assessment date
at the rate of ten percent per annum.

(b) For purposes of this subsection (16), superfund water treatment
facilities means real and personal property that is:

(I) Installed and constructed pursuant to an agreement with or an order of
the federal government or the state or any of its political subdivisions and to satisfy
the federal Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, 42 U.S.C. sec. 9601 et seq., as amended; and

(II) Operated for the purpose of eliminating, reducing, controlling, or
disposing of pollutants, as defined in section 25-8-103 (15), C.R.S., that could alter
the physical, chemical, biological, or radiological integrity of state waters if
released into state waters.

(17) (a) The general assembly declares that the valuation of possessory
interests in exempt properties is uncertain and highly speculative and that the
following specific standards for the appropriate consideration of the cost approach,
the market approach, and the income approach to appraisal in the valuation of
possessory interests must be provided by statute and applied in the valuation of
possessory interests to eliminate the unjust and unequalized valuations that would
result in the absence of specific standards:

(I) The actual value of any possessory interest of the lessee or permittee of
lands owned by the United States and leased or permitted for use for ski area
recreational purposes in connection with a business conducted for profit shall be
determined by capitalizing at an appropriate rate the annual fee paid to the United
States by the lessee or permittee of such land for the use thereof in the
immediately preceding calendar year, adjusted to the level of value using a factor
or factors to be published by the administrator pursuant to the same procedures
and principles as are provided for property in section 39-1-104 (12.3)(a)(I). The rate
used to capitalize any fee pursuant to this subparagraph (I) shall include an
appropriate rate of return, an appropriate adjustment for the applicable property
tax rate, and an appropriate adjustment to reflect the portion of the fee, if any,
required to be paid over by the United States to the state of Colorado and its
political subdivisions.

(II) (A) Except for possessory interests in land leased or permitted for use for
ski area recreational purposes valued in accordance with subparagraph (I) of this
paragraph (a) and except as otherwise provided in subparagraph (III) of this
paragraph (a), the actual value of a possessory interest in land, improvements, or
personal property shall be determined by appropriate consideration of the cost
approach, the market approach, and the income approach to appraisal. When the
cost or income approach to appraisal is applicable, the actual value of the
possessory interest shall be determined by the present value of the reasonably
estimated future annual rents or fees required to be paid by the holder of the
possessory interest to the owner of the underlying real or personal property
through the stated initial term of the lease or other instrument granting the
possessory interest; except that the actual value of a possessory interest in
agricultural land, including land leased by the state board of land commissioners
other than land leased pursuant to section 36-1-120.5, C.R.S., shall be the actual
amount of the annual rent paid for the property tax year. The rents or fees used to
determine the actual value of a possessory interest under the cost or income
approach to appraisal shall be the actual contract rents or fees reasonably
expected to be paid to the owner of the underlying real or personal property unless
it is shown that the actual contract rents or fees to be paid for the possessory
interest being valued are not representative of the market rents or fees paid for
that type of real or personal property, in which case the market rents or fees shall
be substituted for the actual contract rents or fees.

(B) The rents or fees taken into account under the cost or income approach
to appraisal under sub-subparagraph (A) of this subparagraph (II) shall exclude that
portion of the rents and fees required to be paid for all rights other than the
exclusive right to use and possess the land, improvements, or personal property.
Such rents or fees to be excluded shall include, but shall not be limited to, any
portion of such rents or fees attributable to any of the following: Nonexclusive
rights to use and possess public property, such as roads, rights-of-way, easements,
and common areas; rights to conduct a business, as determined in accordance with
guidelines to be published by the administrator; income of the holder of the
possessory interest that is not directly derived from and directly related to the use
or occupancy of the possessory interest; any amount paid under a timber sales
contract or similar agreement for the purchase of timber or for the right to acquire
and remove timber; and reimbursement to the owner of the underlying real or
personal property of the reasonable costs of operating, maintaining, and repairing
the land, improvements, or personal property to which the possessory interest
pertains, regardless of whether such costs are separately stated, provided that the
types of such costs can be identified with reasonable certainty from the documents
granting the possessory interest. The actual value of the possessory interest so
determined shall be adjusted to the taxable level of value using a factor or factors
to be published by the administrator pursuant to the same procedures and
principles as are provided for personal property in section 39-1-104 (12.3)(a)(I).

(III) Subparagraphs (I) and (II) of this paragraph (a) shall not apply to any
management contract. In the case of a management contract, the possessory
interest shall be presumed to have no actual value. For purposes of this
subparagraph (III), management contract means a contract that meets all of the
following criteria:

(A) The government owner of the real or personal property subject to the
contract directly or indirectly provides the management contractor all funds to
operate the real or personal property;

(B) The government owns all of the real or personal property used in the
operation of the real or personal property subject to the contract;

(C) The government maintains control over the amount of profit the
management contractor can realize or sets the prices charged by the management
contractor, or the management contractor's exclusive obligation is to operate and
manage the real or personal property for which the management contractor
receives a fee;

(D) The government reserves the right to use the real or personal property
when it is not being managed or operated by the management contractor;

(E) The management contractor has no leasehold or similar interest in the
real or personal property;

(F) To the extent the management contractor manages a manufacturing
process for the government on the real property subject to the contract, the
government owns all or substantially all of the personal property used in the
process; and

(G) The real or personal property is maintained and repaired at the expense
of the government.

(b) This subsection (17) shall not apply to and shall not be construed to affect
or change the valuation of public utilities pursuant to article 4 of this title, the
valuation of equities in state lands pursuant to section 39-5-106, the valuation of
mines pursuant to article 6 or any other article of this title, or the valuation of oil
and gas leaseholds and lands pursuant to article 7 of this title.

(18) (a) The general assembly hereby finds and declares that real property
that is located in a district in which limited gaming is authorized but that is not used
for limited gaming may be unfairly valued by comparison of said real property with
real property that is used for limited gaming. The general assembly further finds
that real property that is located in a gaming district may be reasonably used for
purposes other than limited gaming, that such alternative uses may be beneficial in
strengthening the economies of gaming districts, and that such alternative uses
should be encouraged. In addition, the general assembly finds that applying the
cost and market approaches to appraisal in valuing real property that is located in a
limited gaming district but that is not used for limited gaming may result in an
unfairly high valuation of real property that is reasonably used for a purpose other
than limited gaming. Therefore, the provisions of this subsection (18) shall govern
the classification and valuation of real property that is located within a gaming
district but that is not used for limited gaming.

(b) For property tax years beginning on or after January 1, 1999, if the actual
use as of the assessment date of any real property that is located in a limited
gaming district but that is not used for limited gaming is used as residential real
property, the real property shall be classified as residential real property, and the
assessing officer shall determine the actual value of said real property as of the
assessment date by applying the market approach to appraisal. If, due to the
limited number of real properties located within a limited gaming district that are
not used for limited gaming and that are used as residential real property,
comparable valuation data is not available from within a limited gaming district to
determine adequately the actual value of real property located within said limited
gaming district that is not used for limited gaming and that is used as residential
real property, notwithstanding any law to the contrary, the assessing officer shall
consider sales of reasonably comparable residential real property located inside
and outside of any limited gaming district for purposes of utilization of the market
approach to appraisal in determining the actual value of said real property located
within a limited gaming district that is not used for limited gaming and that is used
as residential real property.

(c) For property tax years beginning on or after January 1, 1999, if the actual
use as of the assessment date of any real property that is located in a limited
gaming district is not for limited gaming or as residential real property, including
but not limited to vacant land, the real property shall be classified as nongaming
real property, and the assessing officer shall determine the actual value of said real
property as of the assessment date by giving appropriate consideration to the cost,
market, and income approaches to appraisal. If, due to the limited number of real
properties located within a limited gaming district that are not used for limited
gaming or as residential real property, comparable valuation data is not available
from within a limited gaming district to determine adequately the actual value of
real property located within said limited gaming district that is not used for limited
gaming or as residential real property, notwithstanding any law to the contrary, the
assessing officer shall:

(I) Consider sales of reasonably comparable real property that is not used as
residential property located inside and outside of any limited gaming district for
purposes of utilization of the market approach to appraisal in determining the
actual value of real property located within a limited gaming district that is not
used for limited gaming or as residential real property; and

(II) Consider reasonably comparable real property that is not used as
residential property located inside and outside of any limited gaming district for
purposes of utilization of the income approach to appraisal in determining the
actual value of real property located within a limited gaming district that is not
used for limited gaming or as residential real property.

(d) For purposes of this subsection (18), real property is considered to be
used for limited gaming if the owner or lessee of the real property holds a retail
gaming license issued pursuant to part 5 of article 30 of title 44, and if the owner or
lessee actually uses the real property in offering limited gaming for play or for
administrative support services related to providing limited gaming or makes the
real property available for other uses by persons who are engaged in limited
gaming for play, including but not limited to using the property for parking, for a
restaurant, or for a hotel or motel.

Legislative History

Source: L. 64: R&RE, p. 676, � 1. C.R.S. 1963: � 137-1-3. L. 67: p. 945, �� 2-4. L. 70: p. 380, � 9. L. 71: p. 1242, � 1. L. 73: pp. 237, 1429, �� 18, 1. L. 75: (6)(a)(I) amended, p. 1453, � 1, effective May 22; (4)(b) repealed, p. 1473, � 30, effective July 18. L. 76: (5) amended, p. 754, � 3, effective January 1, 1977. L. 77: (5) amended and (7) and (8) added p. 1729, � 2, effective June 20; (4)(b) RC&RE, p. 1740, � 2, effective January 1, 1978. L. 81: (5)(a) amended, p. 1829, � 1, effective June 12. L. 83: (8)(d) amended, p. 1489, � 1, effective April 21; (9) added, p. 1492, � 1, effective April 21; (4)(a) and (5)(b) repealed and (5)(a), IP(8), and (8)(a) amended, pp. 1485, 1480, �� 11, 2, effective April 22; (6) repealed, p. 1488, � 6, effective June 1. L. 84: (8)(e) and (8)(f) added, p. 986, � 1, effective March 16; (10) added, p. 987, � 1, effective April 5. L. 85: (5)(b) RC&RE, (8)(a) amended, and (11) and (12) added, pp. 1210, 1211, �� 3, 4, effective May 9; (5)(a) amended, p. 1217, � 1, effective May 24. L. 87: (7) repealed, p. 1304, � 1, effective May 20; (13) added, p. 1415, � 2, effective June 16; (8)(e) amended, p. 1388, � 9, effective June 20. L. 88: (14) added, p. 1281, � 4, effective January 1, 1989. L. 89: (8)(a)(I) amended, p. 1482, � 4, effective May 9; (14)(b) and (14)(c)(I) amended, p. 1449, � 1, effective June 7. L. 90: (5)(c), (14)(d), and (14)(e) added, (8)(a)(I) and (14)(b) amended, and (8)(e) repealed, pp. 1701, 1688, 1705, �� 34, 3, 2, 41, effective June 9; (15) added, p. 1697, � 22, effective January 1, 1991. L. 91: (8)(a)(I) amended, p. 2005, � 3, effective June 6. L. 92: (14)(b) amended, p. 2215, � 1, effective June 2. L. 93: (10) amended, p. 654, � 22, effective April 30; (5)(c) amended, p. 1743, � 2, effective July 1. L. 95: (8)(a)(I) amended, p. 8, � 2, effective March 9; (5)(a) amended and (5)(d) added, p. 174, � 3, effective April 7. L. 96: (16) added, p. 130, � 1, effective March 25; (5)(a) and (8)(a)(I) amended, p. 718, � 1, effective May 22; (14)(c) amended, p. 1198, � 1, effective June 1; (17) added, p. 1852, � 4, effective June 5. L. 97: (17)(a)(II)(B) amended, p. 1030, � 63, effective August 6. L. 98: (18) added, p. 110, � 1, effective March 23. L. 2000: (5)(a) amended, p. 1499, � 2, effective August 2. L. 2002: IP(17)(a) amended, p. 1008, � 1, effective August 7; (10.5) added, p. 1672, � 2, effective January 1, 2003. L. 2003: (17)(a)(II)(A) amended, p. 1696, � 1, effective January 1, 2004; (17)(a)(II)(B) amended, p. 2492, � 1, effective January 1, 2004. L. 2004: (17)(a)(II)(A) amended, p. 1088, � 1, effective January 1, 2005. L. 2010: (5)(a) amended, (HB 10-1197), ch. 175, p. 634, � 2, effective August 11. L. 2011: (5)(c) amended, (HB 11-1042), ch. 138, p. 480, � 2, effective May 4. L. 2015: (5)(c) amended and (5)(e) and (5)(f) added, (HB 15-1008), ch. 90, p. 258, � 1, effective April 10. L. 2018: (5)(c) amended, (HB 18-1283), ch. 270, p. 1666, � 2, effective August 8; (18)(d) amended, (SB 18-034), ch. 14, p. 249, � 45, effective October 1. L. 2021: IP(10.5)(b) amended, (SB 21-293), ch. 301, p. 1812, � 11, effective June 23; (5)(a) amended, (HB 21-1312), ch. 299, p. 1791, � 4, effective July 1. L. 2022: (10.7) added, (HB 22-1296), ch. 310, p. 2227, � 2, effective August 10. L. 2023: (5)(a) amended, (SB 23-304), ch. 259, p. 1496, � 1, effective August 7.