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Property tax revenue limit. Senate Bill 24-233 created a limit on the annual growth of specified property tax revenue (property tax limit) for certain local governments excluding school districts. Sections 2 through 6 of the bill modify that property tax limit and create a new property tax limit for school districts. Specifically, the bill:
! Lowers the property tax limit for local governments excluding school districts from 5.5% to 5.25%;
! Creates a property tax limit for school districts;
! Establishes the property tax limit for school districts as equal to the greatest amount of local share of statewide total program property tax revenue collected by a school district in a previous property tax year increased by the greater of 6% multiplied by the number of property tax years in a reassessment cycle or the percentage by which the general assembly annually increases the statewide base per pupil funding for public education from kindergarten through twelfth grade and the percentage increase in pupil enrollment for both the relevant property tax year and the other property tax year in the same reassessment cycle;
! Annually establishes the valuation for assessment (valuation) for residential property as necessary to ensure that school districts do not exceed the property tax limit for school districts and to compensate for inaccurate adjustments to valuation in the immediately preceding property tax year;
! Allows all school districts to waive the property tax limit, but requires statewide voter approval to do so and does not allow individual school districts to do so; and
! Requires certain language to be included in any ballot question that seeks to waive either property tax limit created in these sections. Nonresidential and personal property valuation reductions. Sections 7 and 8 lower the valuation for most nonresidential and personal property as follows:
! For the property tax year commencing on January 1, 2025, the valuation for most nonresidential and personal property is 27% of the actual value of the property and the valuation for vacant land is 27.5% of the actual value of the property;
! For the property y tax year commencing on January 1, 2026, the valuation for commercial property and agricultural property is 25% of the actual value of the property, the valuation for vacant land is 27.5% of the actual value of the property, and the valuation for most other nonresidential and personal property is 26%; and ! For property tax years commencing on or after January 1, 2027, the valuation for most nonresidential and personal property is 25% of the actual value of the property and the valuation for vacant land is 27.5% of the actual value of the property. Residential property valuation reductions. The bill also lowers the valuation for residential property.
The amount of the reduction is based on the increase in statewide actual value between the property tax year that commences on January 1, 2024, and the property tax year that commences on January 1, 2025. If the increase in actual value is greater than 5%, sections 9 and 10 reduce the valuation for residential property as follows:
! For property tax years commencing on or after January 1, 2025, for the purpose of a levy imposed by a school district, the valuation for residential property is 6.95% of the actual value of the property;
! For the property tax year commencing on January 1, 2025, for the purpose of a levy imposed by a local government that is not a school district, the valuation for residential property is 6.15%; and
! For property tax years commencing on or after January 1, 2026, for the purpose of a levy imposed by a local government that is not a school district, the valuation for residential property is 6.7% of the amount equal to the actual value of the property minus the lesser of 10% of the actual value of the property or $70,000 as adjusted for inflation in the first year of each subsequent reassessment cycle. If the increase in statewide actual value is less than or equal to 5%, sections 9 and 10 reduce the valuation for residential property as follows:
! For property tax years commencing on or after January 1, 2025, for the purpose of a levy imposed by a school district, the valuation for residential property is 7.05% of the actual value of the property;
! For the property tax year commencing on January 1, 2025, for the purpose of a levy imposed by a local government that is not a school district, the valuation for residential property is 6.25%; and ! For property tax years commencing on or after January 1, 2026, for the purpose of a levy imposed by a local government that is not a school district, the valuation for residential property is 6.8% of the amount equal to the actual value of the property minus the lesser of 10% of the actual value of the property or $70,000 as adjusted for inflation in the first year of each subsequent reassessment cycle.
Section 10 also adjusts the valuations for qualified-senior primary residence real property to mirror the adjustments to the valuations for residential real property made in sections 9 and 10. Definitions of assessed value and valuation for assessment.
Section 1 creates definitions of "assessed value" and "valuation for assessment" that apply throughout statute to prevent any confusion arising from having 2 different assessment rates. Conforming amendments. Sections 11 and 12 make conforming amendments. Local government backfill. Senate Bill 24-233 establishes a process for the state to reimburse local governments for lost property tax revenue for the property tax year commencing on January 1, 2024. Section 13 extends this process from Senate Bill 24-233 to cover the property tax year commencing on January 1, 2025, but only to cover decreases in assessed value attributable to the bill. Tax bills. Section 14 removes references to assessed value from taxpayers' tax bills, to prevent confusion from having 2 different assessed values on a tax bill.
Effective date. Senate Bill 24-233 becomes law only if neither of the following initiatives (property tax initiatives) are approved by the people at the general election held on November 5, 2024:
! An initiative that reduces valuations for assessment; or
! An initiative that requires voter approval for retaining property tax revenue that exceeds a limit.
Section 15 modifies the effective date of Senate Bill 24-233 so that Senate Bill 24-233 takes effect either:
! On October 1, 2024, if both property tax initiatives are withdrawn from the ballot; or
! On the date of the official declaration of the vote, if one or both of the property tax initiatives appears on the ballot and no property tax initiative is approved by the people. Section 16 establishes the effective date of the bill so that the majority of the bill only takes effect if Senate Bill 24-233 becomes law.
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