A Loophole Big Enough to Drive a Bulldozer Through

DENVER, Colo. -- The Senate Judiciary Committee cast a vote for stronger taxpayer protections Wednesday, approving a bill that requires advance voter approval for the creation of any urban redevelopment taxing district that’s built on non-urban or agricultural land.

Introducing the bill were Senate President Bill Cadman (Colorado Springs) and Senate Majority Leader Mark Scheffel (Parker), who said it is needed to close a widely-abused loophole – what some call the blighted land loophole -- which legislators tried but failed to close in 2010. Senate Bill 284 restores balance and fairness to state urban renewal rules by updating that 2010 law.

“Blight” designations originally were intended to be used for redeveloping decaying urban areas. Those willing to build on “blighted” land enjoyed special tax benefits as a result, encouraging such activity. Problems cropped up, however, when some politicians and developers began using the “blight” designation on non-urban, agricultural or “greenfield” parcels, circumventing the intent of the law. Lawmakers narrowed but did not close the loophole in 2010. Municipalities have used a weakness in the 2010 “fix” to continue the practice, simply by as getting affected local taxing jurisdictions, such as school districts, to agree in writing to have the land declared blighted and placed into development.

SB-284 preserves that option but adds a provision stating that if a municipality proposes to use tax funds to support a development on agricultural land, and obtains agreements from local taxing jurisdictions to blight the land, a vote of the citizens in the affected area is required to consent to the development. That also prevents end-runs of the Taxpayer’s Bill of Rights, a problem highlighted by a recent court ruling that nullified one urban development zone created through a sham “election.”

The bill is also sponsored by Senator Lucia Guzman (D-Denver), House Agriculture Committee Chairman Ed Vigil (D-Fort Garland) and Representative Paul Lundeen (R-Colorado Springs).

“Giving local citizens a voice in proposals to plow under farms and ranches in the name of taxpayer-subsidized development is a common-sense way to keep faith

with the Taxpayer’s Bill of Rights, while helping protect farms and ranches at the same time,” President Cadman said. “It’s just not fair to use an ‘urban renewal’ tool on non-urban parcels without local taxpayers having some say. Our bill accomplishes that goal.”

“It’s too easy for taxing entities, such as school districts, to just sign off on the blighting of agricultural land to jump-start taxpayer subsidies,” Sen. Scheffel said. “Taxpayers must be at the table and if a proposed development is a huge win for a local community, our experience with TABOR is that voters will make the right choice.”

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