Colorado

PROPOSED INCREASE IN DOC FEE LOOKS LIKE A TRANSFER TAX
A coalition of affordable housing advocates is now proposing the creation of a Colorado Housing Trust Fund. The coalition is recommending a quadrupling of the current documentary fee on residential, commercial/industrial and vacant-land real estate transfers. The current fee is set at $.01 per $100 of valuation. The fee is paid to cover the county Clerk and Recorder costs to record the transfer of real property. The coalition suggests that the fee be raised to $.04 per $100 in value on residential property and set at $.01 per $100 in value on commercial/industrial and vacant land. The proceeds would be used for creating and preserving affordable housing. Clearly, the recommended fee increase bares no relationship to the recording cost recovery that justifies the current fee and provides no direct benefit to the payer. The increased fee, in fact looks and acts like a tax, a tax on the transfer of real property. Under TABOR, new transfer taxes are prohibited. Also under TABOR, voters must approve new taxes or tax increases. There will be a great debate in the Colorado legislature about affordable housing in 2005. Realtors® have a great interest in insuring that property owners and real estate professionals are not unduly burdened with an unreasonable share of the cost of affordable housing. Affordable housing is a statewide issue. Solutions should be funded broadly.

GOVERNOR PROPOSES TABOR REFORM AND BUDGET FIX
As reported by local media, state income-tax rates would drop if voters agree to let the State spend $500 million a year that otherwise would have to be refunded to taxpayers, under a proposal Governor Bill Owens unveiled Monday. Owens' plan includes the following components: 1) Ask voters for permission to retain $500 million of state revenue surpluses each year. This money normally would be returned to them as refunds under the Taxpayer's Bill of Rights. 2) Reduce the state's income tax to 4.5 percent from 4.63 percent. Owens calls this a "common-sense" step because it eliminates the current practice of taking money from the taxpayers then turning around and refunding it. 3) Invest $100 million annually in transportation, allowing the state to bond for up to $1.7 billion of projects. 4) Amend TABOR to eliminate the "ratchet effect" during and following recessions. When state revenues drop below the TABOR limit, the following year's spending limit is based on the lower number, preventing the state from restoring funds to key programs. The proposed change would allow the limit to remain constant during and following a recession. After revenues catch up, the limit would again be allowed to grow under the TABOR formula of inflation plus population. 5) Sell off future income from the state's tobacco settlement to address short-term budget needs. This would bring in an estimated $850 million.

METH LAB CLEANUP STANDARDS PROPOSED
In 2004 the Colorado General Assembly passed House Bill 04-1182, which protects the owner of a property used as a methamphetamine lab from health-based lawsuits by future owners or renters provided the property owner has met defined clean-up standards. The bill, which was supported by the Colorado Association of REALTORS®, required the Colorado Department of Public Health and Environment to develop regulations and standards for the proper decontamination of such properties. Recently the Department announced that the Board of Health will hold a public hearing on the proposed regulations on January 19 and has made the 34-page document, "Regulations Pertaining to the Cleanup of Methamphetamine Laboratories," available online:www.cdphe.state.co.us/hm/proposedregs/meth.pdf. It is important to understand that the bill didn't provide for regulatory agency involvement in the cleanup and nor did it include a mechanism to ensure that contractors or consultants are qualified to conduct cleanups. For this reason, the Health Department's regulations provide specific standards and processes so the property owner cannot be held liable as long as the cleanup is conducted according to the procedures detailed in the regulations and all steps are properly documented. For property owners, it is vital to choose contractors and consultants who are experienced in meth lab cleanups and knowledgeable concerning the State's regulations, once these are finalized.