A bill that would have allowed Colorado to offer smaller tax breaks for second homes was rejected Monday in the first committee hearing during a special session of the House.

“I understand the intent here and I think it’s a potentially good idea … I don’t think it’s been adequately vetted,” said Rep. Judy Amabile, a Democrat from Boulder, as she voted against the bill. “I look forward to you bringing it back next session.”

House Bill 1002 would have sent a question to the 2025 ballot asking voters to create a new homeownership class for owner-occupied residential properties. It was one of nine bills rejected on the first day of the special session, failing by a vote of 7-3.

The ballot proposal would have only allowed a 10% property tax exemption for owner-occupied residential properties up to $70,000.

During the hearing and comment period, concerns about House Bill 1002 were brought to the attention of the Budget Committee by, among others, real estate agents and a representative of the Colorado Assessors’ Association.

Support local journalism

Donate

Bird, a Westminster Democrat who voted against the bill, expressed concern that it could have unintended consequences and potentially discourage people from investing in rental properties, thereby restricting that part of the housing market.

“I think in the long run we would pass these costs on to the tenants,” she said.

The concept of taxing primary home owners differently than those who own multiple homes, has been considered by the legislature several times. It was also included in Proposition HHwhich voters decisively rejected in 2023.

Governor Jared Polis called the special session to avoid a fight at the ballot box over property taxes in November. If voters approve, Initiatives 50 and 108 would drastically reduce property taxes in the state and cut funding for schools and local governments.

The two conservative groups that introduced the measures, Advance Colorado and Colorado Concern, have promised to withdraw them if lawmakers agree to a pre-discussed compromise during the special session.

The bill, including the compromise, was also introduced on Monday as House Bill 1001. It builds on a bipartisan bill passed earlier this year.

The deal provides a relatively modest increase in the property tax cuts from the previously passed Senate Bill 233 and a slightly stronger limit on tax growth. SB 233 promised to cut property taxes by an estimated $1.3 billion per year. The new deal increases those cuts by an additional $260 million.

But lawmakers are frustrated about how this compromise was developed – in meetings of a few selected legislatorsPolis’ government and supporters of the electoral measures.

HB 1001 passed the Budget Committee by a vote of 8 to 3. It will be considered by all members of the House of Representatives on Tuesday.

​​Representative Elizabeth Velasco, a Democrat from Glenwood Springs and a member of the Appropriations Committee, voted against House Bill 1001 along with another Democrat.

“I really hope I can get a yes vote,” she said. “I think a lot of community members have big concerns.”

Velasco voted yes to House Bill 1002.

Supporters of Initiatives 108 and 50 have threatened that they will not withdraw their measures if additional bills are passed during the special session that they believe will harm future property tax negotiations.

Representative Mike Weissman (D-Aurora) and Senator Chris Hansen (D-Denver) have introduced a resolution to put a constitutional amendment on the ballot that, if passed by voters, could prevent statewide property tax votes from taking effect without the support of local communities.

Sen. Barbara Kirkmeyer, a Brighton Republican who was involved in the property tax negotiations, said if a bill with that concept were passed, it would end the current agreement with supporters of Initiatives 108 and 50.

This motion for a resolution was adopted in the first committee hearing and will also be discussed in plenary on Tuesday.

The special session is expected to last at least until Thursday.