| Summary |
Legislative Oversight Committee Concerning Tax Policy.
Under current law, a county treasurer is required to issue a treasurer's
deed for a property, upon the presentation of a certificate of purchase of
a tax lien for that property, if certain redemption and timing conditions
are satisfied. Sections 1 to 3 of the bill end this requirement.
Section 4 establishes a process by which the lawful holder of a
certificate of purchase of a tax lien (lawful holder) may apply for a public
auction for the sale of a certificate of option for treasurer's deed (public
auction). If the public auction results in an overbid, meaning the
purchaser of the sale of a certificate of option for treasurer's deed pays an
amount in excess of the value of the tax lien, then the amount of the
overbid must be paid in order of recording priority to junior lienors who
have filed a notice of intent to redeem. After payment to all lienors, any
remaining overbid must be paid to the owner of the property subject to the
tax lien. By providing for payment of any remaining overbid amount to
the property owner, the bill brings Colorado law into compliance with the
United States supreme court's recent decision affirming a property
owner's constitutional right to the value of their property in excess of their
tax debt.
The bill specifies the required application form and deposit amount
for a lawful holder of a certificate of purchase for a tax lien to request a
public auction and the notice requirements, including by mailing,
publication, and posting. The treasurer must review the title work for the
property and include known interested parties in the notice process.
The bill specifies the general manner and timing of the public
auction to be conducted by the treasurer. The bill also provides procedural
guidance in case of certain events, including continuance of the public
auction, the effect of a bankruptcy filing related to the property, the
withdrawal of a notice of public auction, and the redemption of the tax
lien prior to the public auction.
At the public auction, the treasurer must only accept bids that are
greater than the combined value of the amount owed to the lawful holder
and the fees and costs incurred by the treasurer in complying with new
article 11.5 of title 39. If no such bid is made and paid to the treasurer,
then the lawful holder is deemed the purchaser of the certificate of option
for treasurer's deed.
If the lawful holder is not the purchaser of the certificate of option
for treasurer's deed, the lawful holder is still entitled to redeem the
property subject to the tax lien if certain procedural requirements are met,
including payment to the purchaser of all sums necessary to redeem.
Junior lienholders may also file for redemption, but only as to a portion
of the overbid, and only if certain procedural requirements are met. The
treasurer may issue a treasurer's deed to the purchaser of a certificate of
option for treasurer's deed for the relevant property.
If the property remains unredeemed, the lawful holder of the
certificate of option for treasurer's deed may present the certificate, along
with other required documentation, to the treasurer and obtain a
treasurer's deed, giving full rights to the property.
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