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TITLE 39 - TAXATION

 ARTICLE 1
General provisions

39-1-101.  Legislative declaration. 

        The general assembly declares that its purpose in enacting articles 1 to 13 of this title is to exercise the authority granted in section 3 of article X of the state constitution wherein it is provided, among other things, that "the actual value of all real and personal property not exempt from taxation under this article shall be determined under general laws, which shall prescribe such methods and regulations as shall secure just and equalized valuations for assessment of all real and personal property not exempt from taxation under this article".  It further declares that it intends to fix the percentage of such determined actual value at which all such property shall be assessed for taxation.  It further declares that the actual value of certain classes of real property may not be able to be determined after appropriate consideration of the three approaches to value; Therefore, it is incumbent upon the general assembly to provide for a means to determine the actual value of such taxable property, and to effect this result the general assembly hereby finds and declares that, when appropriate consideration of the three approaches to value fails to derive an actual value for such property, the actual value of such property shall be determined by comparison of the surface use of such property to property with a similar surface use.  It further declares that the actual value of nonproducing oil, gas, and oil and gas mineral interests shall be determined by the income approach capitalizing annual net rental income at an appropriate market rate.  To these ends, the provisions of said articles shall be strictly construed. 

39-1-102.  Definitions 

        As used in articles 1 to 13 of this title, unless the context otherwise requires: 

        (1)  "Administrator" means the property tax administrator. 

        (1.1)  "Agricultural and livestock products" means plant or animal products in a raw or unprocessed state which are derived from the science and art of agriculture.  "Agriculture", for the purposes of this subsection (1.1), means farming, ranching, animal husbandry, and horticulture. 

            (1.3)  "Agricultural equipment which is used on the farm or ranch in the production of agricultural products" means any personal property used on a farm of ranch, as defined in subsections (3.5) and (13.5) of this section, for planting, growing, and harvesting agricultural products or for raising or breeding livestock for the primary purpose of obtaining a monetary profit and includes any mechanical system used on the farm or ranch for the conveyance and storage of animal products in a raw or unprocessed state, regardless of whether or not such mechanical system is affixed to real property.

            (1.6) (a) "Agricultural land" whether used by the owner of the land or lessee, means one of the following: 

            (I) A parcel of land, whether located in an incorporated or unincorporated area and regardless of the uses for which such land is zoned, that was used the previous two years and presently is used as a farm or ranch, as defined in subsections (3.5) and (13.5) of this section, or that is in the process of being restored through conservation practices. Such land must have been classified or eligible for classification as "agricultural land", consistent with this subsection (1.6), during the ten years preceding the year of assessment. Such land must continue to have actual agricultural use. "Agricultural land" under this subparagraph (I) includes land underlying any residential improvement located on such agricultural land and also includes the land underlying other improvements if such improvements are an integral part of the farm or ranch and if such other improvements and the land area dedicated to such other improvements are typically used as an ancillary part of the operation. The use of a portion of such land for hunting, fishing, or other wildlife purposes, for monetary profit or otherwise, shall not affect the classification of agricultural land. For purposes of this subparagraph (I), a parcel of land shall be "in the process of being restored through conservation practices" if: The land has been placed in a conservation reserve program established by the natural resources conservation service pursuant to 7 U.S.C. secs. 1 to 5506; or a conservation plan approved by the appropriate conservation district has been implemented for the land for up to a period of ten crop years as if the land has been placed in such a conservation reserve program.  

            (II) A parcel of land that consists of at least forty acres; that is forest land; which is used to produce tangible wood products that originate from the productivity of such land for the primary purpose of obtaining a monetary profit; that is subject to a forest management plan; and that is not a farm or ranch, as defined in subsections (3.5) and (13.5) of this sec­tion.  "agricultural land" under this subparagraph (II) includes land underlying any residential improvement located on such agricultural land.

            (III) A parcel of land that consists of at least eighty acres, or of less than eighty acres if such parcel does not contain any residential improvements, and that is subject to a perpetual conservation easement, if such land was classified by the assessor as agricultural land under subparagraph (I) or (II) of this paragraph (a) at the time such easement was granted, if the grant of the easement was to a qualified organization, if the easement was granted exclusively for conservation purposes, and if all current and contemplated future uses of the land are described in the conservation easement.  “Agricultural land” under this subparagraph (III) does not include any portion of such land that is actually used for non agricultural commercial or residential purposes.

            (IV) A parcel of land, whether located in an incorporated or unincorporated are and regardless of the uses for which such land is zoned, used as a farm or ranch, as defined in subsections (3.5) and (13.5) of this section, if the owner of the land has a decreed right to appropriated water granted in accordance with article 92 of title 37, C.R.S. or a final permit to appropriated ground water granted in accordance with article 90 of title 37, C.R.S., for purposes other than residential purposes, and water appropriated under such right or permit shall be and is used for the production of agricultural or livestock products on such land;

            (V) A parcel of land, whether located in an incorporated or unincorporated area and regardless of the uses for which such land is zoned, that has been reclassified from agricultural land to a classification other than agricultural land and that met the definition of agricultural land as set forth in subparagraphs (I) to (IV) of the paragraph (a) during the three years before the year of assessment.  For purposes of this subparagraph (V), the parcel of land need not have been classified or eligible for classification as agricultural land during the ten years preceding the year of assessment as required by subparagraph (I) of this paragraph (a).

            (b)  All other agricultural property that does not meet the definition set forth in paragraph (a) of this subsection (1.6) shall be classified as all other property and shall be valued using appropriate consideration of the three approaches to appraisal based on its actual use on the assessment date.(2)  "Assessor"  means the elected assessor of a county, or his appointed successor, and, in the case of the city and county of Denver, such equivalent officer as may be provided by its charter. 

            (c) An assessor must determine, based on sufficient evidence, that a parcel of land does not qualify as agricultural land as defined in subparagraph (IV) of paragraph (a) of this subsection (1.6) before land may be changed from agricultural land to any other classification.

            (2) "Assessor" means the elected assessor of a county, or his or her appointed successor, and, in the case of the city and county of Denver, such equivalent officer as may be provided by its charter, and, in the case of the city and county of Broomfield, such equivalent officer as may be provided by its charter or code.

        (2.5) "Bed and breakfast" means an overnight lodging establishment, whether owned by a natural person or any legal entity, that is a residential dwelling unit or an appurtenance thereto, in which the innkeeper resides, or that is a building designed but not necessarily occupied as a single family residence that is next to, or directly across the street from, the innkeeper's residence, and in either circumstance, in which:  

        (a) Lodging accommodations are provided for a fee;                                                                                                     

        (b) At least one meal per day is provided at no charge other than the fee for the lodging accommodations; and      

        (c) There are not more than thirteen sleeping rooms available for transient guests.                           

        (3)  "Board"  means the board of assessment appeals. 

        (3.1) "Commercial lodging area" means a guest room or a private or shared bathroom within a bed and breakfast that is offered for the exclusive use of paying guests on a nightly or weekly basis. Classification of a guest room or a bathroom as a "commercial lodging area" shall be based on whether at any time during a year such rooms are offered by an innkeeper as nightly or weekly lodging to guests for a fee. Classification shall not be based on the number of days that such rooms are actually occupied by paying guests.                                                                                                           

        (3.2) “Conservation purpose” means any of the following purposes as set forth in section 170 (h) of the federal “ Internal Revenue Code of 1986”, as amended:

        (a) The preservation of land areas for outdoor recreation, the education of the public, or the protection of a relatively natural habitat  for fish, wildlife, plants, or similar ecosystems; or

        (b) The preservation of open space, including farmland and forest land, where such preservation is for the scenic enjoyment of the public or is pursuant to a clearly delineated federal, state, or local government conservation policy and where such preservation will yield a significant public benefit.

        (3.5)  "Farm"  means a parcel of land which is used to produce agri­cultural products that originate from the land's productivity for the primary purpose of obtaining a monetary profit. 

        (4)  "Fixtures"  means those articles which, although once movable chattels, have become an accessory to and a part of real property by having been physically incorporated therein or annexed or affixed thereto.  "Fixtures" includes systems for the heating, air conditioning, ventilation, sanitation, lighting, and plumbing of such building.  "Fixtures" does not include machi­nery, equipment, or other articles related to a commercial or industrial operation which are affixed to the real property for proper utilization of such articles.

        (4.3) "Forest land" means land of which at least ten percent is stocked by forest trees of any size and includes land that formerly had such tree cover and that will be naturally or artificially regenerated.  "Forest land" includes roadside, streamside, and shelterbelt strips of timber which have a crown width of at least one hundred twenty feet.  "Forest land" includes unimproved roads and trails, streams, and clearings which are less than one hundred twenty feet wide.

        (4.4) "Forest management plan" means an agreement which includes a plan to aid the owner of forest land in increasing the health, vigor, and beauty of such forest land through use of forest management practices and which has been either executed between the owner of forest land and the Colorado state forest service or executed between the owner of forest land and a professional forester and has been reviewed and has received a favorable recommendation from the Colorado state forest service.  The Colorado forest service shall annually inspect each parcel of land subject to a forest management plan to determine if the terms and conditions of such plan are being complied with and shall report by March 1 of each year to the assessor in each affected county, the legal descriptions of those properties and the names of their owners that no longer qualify for the agricultural classification because of noncompliance with their forest management plans.  No property shall be entitled to the agricultural classification unless the legal description and the name of the owner appear on the report submitted by the Colorado state forest service.  The Colorado state forest service shall charge a fee for the inspection of each parcel of land in such amount for the reasonable costs incurred by the Colorado state forest service in conducting such inspections.  Such fee shall be paid by the owner of such land prior to such inspection.  Any fees collected pursuant to this subsection (4.4) shall be subject to annual appropriation by the general assembly.

        (4.5) "Forest management practices" means practices accepted by pro­fessional foresters which control forest establishment, composition, density, and growth for the purpose of producing forest products and associated ameni­ties following sound business methods and technical forestry principles.

        (4.6) "Forest trees" means woody plants which have a well-developed stem or stems, which are usually more than twelve feet in height at maturity, and which have a generally well-defined crown.

        (5)  Repealed, L. 83, p. 1488, section 6, effective June 1, 1983. 

        (5.5) (a) "Hotels and motels" means improvements and the land associated with such improvements that are used by a business establishment primarily to provide lodging, camping, or personal care or health facilities to the general public and that are predominantly used on an overnight or weekly basis; except that "hotels and motels" does not include:

(I) A residential unit, except for a residential unit that is a hotel unit;

(II) A residential unit that would otherwise be classified as a hotel unit if the residential unit is held as inventory by a developer primarily for sale to customers in the ordinary course of the developer's trade or business, is marketed for sale by the developer, and either has been held by the developer for less than two years since the certificate of occupancy for the residential unit has been issued or is not depreciated under the internal revenue code, as defined in section 39-22-103 (5.3), while owned by the developer;

(III) A residential unit that would otherwise be classified as a hotel unit if the residential unit has been acquired by a lender or an owners' association through foreclosure, a deed in lieu of foreclosure, or a similar transaction, is marketed for sale by the lender or owners' association and is not depreciated under the internal revenue code, as defined in section 39-22-103 (5.3), while owned by the lender or owners' association; or

(IV) Repealed.

(b) If any time share estate, time share use period, undivided interest, or other partial ownership interest in any hotel unit is owned by any non-hotel unit owner, then, unless a declaration or other express agreement binding on the non-hotel unit owners and the hotel unit owners provides otherwise:

(I) The hotel unit owners shall pay the taxes on the hotel unit not required to be paid by the non-hotel unit owners pursuant to subparagraph (II) of this paragraph (b).

(II) Each non-hotel unit owner shall pay that portion of the taxes on the hotel unit equal to the non-hotel unit owner's ownership or usage percentage of the hotel unit multiplied by the property tax that would have been levied on the hotel unit if the actual value and valuation for assessment of the hotel unit had been determined as if the hotel unit was residential real property.

(III) For purposes of determining the amount due from any hotel unit owner or non-hotel unit owner pursuant to subparagraph (II) of this paragraph (b), the assessor shall, upon the request of any hotel unit owner or non-hotel unit owner, calculate the property tax that would have been levied on the hotel unit if the actual value and valuation for assessment of the hotel unit had been determined as if the hotel unit were residential real property. A hotel unit owner or non-hotel unit owner may petition the county board of equalization for review of the assessor's calculation pursuant to the procedures set forth in section 39-10-114. Any appeal from the decision of the county board shall be governed by section 39-10-114.5.

(c) As used in this subsection (5.5):

(I) "Condominium unit" means a unit, as defined in section 38-33.3-103 (30), C.R.S., and also includes a time share unit.

(II) "Hotel unit owners" means any person or member of a group of related persons whose ownership and use of a residential unit cause the residential unit to be classified as a hotel unit.

(III) "Hotel units" means more than four residential unit ownership equivalents in a project that are owned, in whole or in part, directly, or indirectly through one or more intermediate entities, by one person or by a group of related persons if the person or group of related persons uses the residential units or parts thereof in connection with a business establishment primarily to provide lodging, camping, or personal care or health facilities to the general public predominantly on an overnight or weekly basis. "Hotel unit" means any residential unit included in hotel units. For purposes of this subparagraph (III):

(A) "Control" means the power to direct the business or affairs of an entity through direct or indirect ownership of stock, partnership interests, membership interests, or other forms of beneficial interests.

(B) "Related persons" means individuals who are members of the same family, including only spouses and minor children, or persons who control, are controlled by, or are under common control with each other. Persons are not related persons solely because they engage a common agent to manage or rent their residential units, they are members of an owners' association or similar group, they enter into a tenancy in common or a similar agreement with respect to undivided interests in a residential unit, or any combination of the foregoing.

(IV) "Project" means one or more improvements that contain residential units if the boundaries of the residential units are described in or determined by the same declaration, as defined in section 38-33.3-103 (13), C.R.S.

(V) "Residential unit" means a condominium unit, a single family residence, or a townhome.

(VI) "Non-hotel unit owner" means any owner of a time share estate, time share use period, undivided interest, or other partial ownership interest in any hotel unit who is not a hotel unit owner with respect to the hotel unit.

(VII) "Residential unit ownership equivalent" means:

(A) In the case of time share units, time share interests or time share use periods in one or more time share units that in the aggregate entitle the owner of such time share interests or time share use periods to three hundred sixty-five days of use in any calendar year or three hundred sixty-six days of use in any calendar year that is a leap year; and

(B) In the case of residential units other than time share units, undivided interests or other ownership interests in one or more such residential units that total one hundred percent. For purposes of this sub-subparagraph (B), any undivided interest or other ownership interest not stated in terms of a percentage of total ownership shall be converted to a percentage of total ownership based on the rights accorded to the holder of the undivided interest or other ownership interest.

(VIII) "Time share unit" means a condominium unit that is divided into time share estates as defined in section 38-33-110 (5), C.R.S., or that is subject to a time share use as defined in section 12-61-401 (4), C.R.S.

(5.6) "Hotels and motels" as defined in subsection (5.5) of this section shall not include bed and breakfasts.

        (6)  "Household furnishings"  means that personal property, other than fixtures, in residential structures and buildings which is not used for the production of income at any time. 

        (7)  "Improvements"  means all structures, buildings, fixtures, fences, and water rights erected upon or affixed to land, whether or not title to such land has been acquired. 

        (7.1) "Innkeeper" means the owner, operator, or manager of a bed and breakfast.                            

        (7.2)  "Inventories of merchandise and materials and supplies which are held for consumption by a business or are held primarily for sale" means those classes of personal property which are held primarily for sale by a business, farm, or ranch, including components of personal property to be held for sale, or which are held for consumption by a business, farm, or ranch, or which are rented for thirty days or less for the purposes of this subsection (7.2), "personal property rented for thirty days or less" means personal prop­erty rented for thirty days or less which can be returned at the option of the person renting the property, in a transaction on which the sales or use tax is actually collected before being finally sold, whether or not such personal property is subject to depreciation.  It is the purpose of the general assembly to exempt "personal property rented for thirty days or less" from property tax because of the similarity of such property to inventories of merchandise held by retail stores.  Further, the general assembly intends this exemption to encompass a transaction under a rental agreement in which the customer pays rent in order to use an item for a brief period of time; it is not intended to encompass an equipment lease contract covering a specific period of time and which includes financial penalties for early cancellation.  Except for "personal property rented for thirty days or less", the term "inventories of merchandise and materials and supplies which are held for con­sumption by a business or are held primarily for sale" does not include per­sonal property which is held for rent or lease or is subject to an allowance for depreciation.  For property tax years commencing on or after January 1, 1984, the term does include inventory which is owned by and which is in the possession of the manufacturer of such inventory unless: 

        (a)  Such inventory is in the possession of the manufacturer after having previously been leased by the manufacturer to a customer; and

        (b)  Such manufacturer has not designated such inventory for scrapping, substantial reconditioning, renovating, or remanufacturing in accordance with its customary practices.  For the purposes of this paragraph (b), normal maintenance shall not constitute substantial reconditioning, renovating, or remanufacturing. 

            (7.5)  Repealed.

            (7.8)  "Livestock" includes all animals. 

            (7.9) "Minerals in place" means, without exception, metallic and non-metallic mineral substances of every kind while in the ground. 

            (8)  "Mobile home" means a mobile home as defined in section 42-1-102(82) (b), C.R.S. 1973.

            (8.5) "Not for private gain or corporate profit" means the ownership and use of property whereby no person with any connection to the owner thereof shall receive any pecuniary benefit except for reasonable compensation for services rendered and any excess income over expenses derived from the opera­tion or use of the property and all proceeds from the sale of the property of the owner shall be devoted to the furthering of any exempt purpose.

            (8.7) “Perpetual conservation easement” means a conservation easement in gross, as described in article 30.5 of title 38, C.R.S. that qualifies as a perpetual conservation restriction pursuant to section 170 (h) of the federal “Internal Revenue Code of 1986”, as amended, an any regulations issued thereunder.

            (9)  "Person" means natural persons, corporations, partnerships, limited liability companies, associations, and other legal entities which are or may become taxpayers by reason of the ownership of taxable real or personal prop­erty. 

            (10)  "Personal effects" means such personal property as is or may be worn or carried on or about the person, and such personal property as is usually associated with the person or customarily used in personal hobby, sporting, or recreational activities and which is not used for the production of income at any time. 

            (11)  "Personal property" means everything that is the subject of ownership and that is not included within the term "real property".  "Personal property" includes machinery, equipment, and other articles related to a commercial or industrial operation that are either affixed or not affixed to the real property for proper utilization of such articles.  Except as otherwise specified in Articles 1 to 13 of this title, and pipeline, telecommunications line, utility line, cable television line, or other similar business asset or article installed through an easement, right-of-way, or leasehold for the purpose of commercial or industrial operation and not for the enhancement of real property shall be deemed to be personal property, including, without limitation, oil and gas distribution and transmission pipelines, gathering system pipelines flow lines, process lines, and related water pipeline collection, transportation, and distribution systems.  Structures and other buildings installed on an easement, right-of-way, or leasehold that are not specifically referenced in this subsection (11) shall be deemed to be improvements pursuant to subsection (7) of this section.

            (12)  "Political subdivision" means any entity of government authorized by law to impose ad valorem taxes on taxable property located within its territorial limits. 

            (12.1)  Repealed, L. 88, p. 1275, section 14, effective May 29, 1988.

            (12.3) and (12.4)  Repealed.

            (12.5)  "Professional forester" means any person who has received a bachelor's or higher degree from an accredited school of forestry.

            (13)  "Property" means both real and personal property. 

            (13.2) “Qualified organization” means a qualified organization as defined in section 170 (h) (3) of the federal “Internal Revenue Code of 1986”, as amended.

            (13.5)  "Ranch" means a parcel of land which is used for grazing livestock for the primary purpose of obtaining a monetary profit.  For the pur­poses of this subsection (13.5), "livestock" means domestic animals which are used for food for human or animal consumption, breeding, draft, or profit. 

            (14)  "Real property" means: 

            (a)  All lands or interests in lands to which title or the right of title has been acquired from the government of the United States or from sovereign authority ratified by treaties entered into by the United States, or from the state;

            (b)  All mines, quarries, and minerals in and under the land, and all rights and privileges thereunto appertaining; and

            (c)  Improvements. 

            (14.3)  "Residential improvements" means a building, or that portion of a building, designed for use predominantly as a place of residency by a person, a family, or families.  The term includes buildings, structures, fixtures, fences, amenities, and water rights that are an integral part of the residential use.  The term also includes mobile homes and manufactured homes as defined in section 42-1-102 (106) (b), C.R.S.

(14.4)  "Residential land" means a parcel or contiguous parcels of land under common ownership upon which residential improvements are located and that is used as a unit in conjunction with the residential improvements located thereon. The term includes parcels of land in a residential subdivision, the exclusive use of which land is established by the ownership of such residential improvements. The term does not include any portion of the land that is used for any purpose that would cause the land to be otherwise classified, except as provided for in section 39-1-103 (10.5). The term also does not include land underlying a residential improvement located on agricultural land.

     (14.5)  "Residential real property" means residential land and residential improvements but does not include hotels and motels as defined in subsection (5.5) of this section. 

        (15)  Repealed. 

        (15.5)  "School" means an educational institution having a curriculum comparable to that of a publicly supported elementary or secondary school or college, or any combination thereof, and requiring daily attendance.

        (16)  "Taxable property"  means all property, real and personal, not expressly exempted from taxation by law. 

        (17) "Treasurer" means the elected treasurer of a county or his or her appointed successor, and, in the case of the city and county of Denver, such equivalent officer as may be provided by its charter, and, in the case of the city and county of Broomfield, such equivalent officer as may be provided by its charter or code.

        (18)  "Works of art"  means those items of personal property that are original creations of visual art, including, but not limited to: 

        (a)  Sculpture, in any material or combination of materials, whether in the round, bas-relief, high relief, mobile, fountain, kinetic, or electronic;

         (b)  Paintings or drawings; 

         (c)  Mosaics; 

         (d)  Photographs; 

         (e)  Crafts made from clay, fiber and textiles, wood, metal, plastics, or any other material, or any combination thereof; 

         (f)  Calligraphy; 

         (g)  Mixed media composed of any combination of forms or media; or

         (h)  Unique architectural embellishments.   

39-1-103. Actual value determined - when. 

        (1)  The valuation for assessment of producing mines and nonproducing mining claims shall be determined as provided in article 6 of this title. 

            (2)  The valuation for assessment of leaseholds and lands producing oil or gas shall be determined as provided in article 7 of this title. 

            (3)  The actual value for property tax purposes of the operating property and plant of all public utilities doing business in this state shall be determined by the administrator, as provided in article 4 of this title. 

            (4) (a)  Repealed.

            (b)  The valuation for assessment of mobile homes shall be determined as provided in section 39-5-203. 

            (5) (a)  All real and personal property shall be appraised and the actual value thereof for property tax purposes determined by the assessor of the county wherein such property is located.  The actual value of such property, other than agricultural lands exclusive of building improvements thereon and other than residential real property and other than producing mines and lands or leaseholds producing oil or gas, shall be that value determined by appropriate consideration of the cost approach, the market approach, and the income approach to appraisal.  The assessor shall consider and document all elements of such approaches that are applicable prior to a determination of actual value.  Despite any orders of the state board of equalization, no assessor shall arbitrarily increase the valuations for assessment of all parcels represented within the abstract of a county or within a class or subclass of parcels on that abstract by a common multiple in response to the order of said board.  If an assessor is required, pursuant to the order of said board, to increase or decrease valuations for assessment, such changes shall be made only upon individual valuations for assessment of each and every parcel, using each of the approaches to appraisal specified in this paragraph (a), if applicable.  The actual value of agricultural lands, exclusive of building improvements thereon, shall be determined by consideration of the earning or productive capacity of such lands during a reasonable period of time, capitalized at a rate of thirteen percent. Land that is valued as agricultural and that becomes subject to a perpetual conservation easement shall continue to be valued as agricultural notwithstanding its dedication for conservation purposes; except that, if any portion of such land is actually used for nonagricultural commercial or residential purposes, that portion shall be valued according to such use.  The actual value of residential real property shall be determined solely by consideration of the market approach to appraisal.  The valuation for assessment of producing mines and of lands or leaseholds producing oil or gas shall be determined pursuant to articles 6 and 7 of this title. 

            (b)  If, having considered the three approaches prescribed in paragraph (a) of this subsection (5), at the sole discretion of the assessor the use of the three approaches to value cannot accurately determine the actual value of any parcel of taxable property, or in the opinion of the assessor the application of the three approaches to value does not result in uniform, just, and equalized valuation, then the actual value thereof shall be determined by comparison of the surface use of such property with a similar surface use. 

            (c)  Once any property is classified for property tax purposes, it shall remain so classified until such time as its actual use changes or the assessor discovers that the classification is erroneous. The property owner shall endeavor to comply with the reasonable requests of the assessor to supply information which cannot be ascertained independently but which is necessary to determine actual use and properly classify the property when the assessor has evidence that there has been a change in the use of the property. failure to supply such information shall not be the sole reason for reclassifying the property. Any such request for such information shall be accompanied by a notice that states that failure on the part of the property owner to supply such information will not be used as the sole reason for reclassifying the property in question. Subject to the availability of funds under the assessor's budget for such purpose, no later than May 1 of each year, the assessor shall inform each person whose property has been reclassified from agricultural land to any other classification of property of the reasons for such reclassification including, but not limited to, the basis for the determination that the actual use of the property has changed or that the classification of such property is erroneous.

            (d) If a parcel of land is classified as agricultural land as defined in section 39-1-102 (1.6) (a) (III) and the perpetual conservation easement is terminated, violated, or substantially modified so that the easement is no longer granted exclusively for conservation purposes, the assessor may reassess the land retroactively for a  period of seven years and the additional taxes, if any, that would have been levied on the land during the seven year period prior to the termination, violation, or modification shall become due.

            (6)  and (7) Repealed. 

            (8)  In any case in which sales prices of comparable properties within any class or subclass are utilized when considering the market approach to appraisal in the determination of actual value of any taxable property, the following limitations and conditions shall apply: 

            (a) (I)  Use of the market approach shall require a representative body of sales, including sales by a lender or government, sufficient to set a pattern, and appraisals shall reflect due consideration of the degree of comparability of sales, including the extent of similarities and dissimilarities among properties that are compared for assessment purposes.  In order to obtain a reasonable sample and to reduce sudden price changes or fluctuations, all sales shall be included in the sample that reasonably reflect a true or typical sales price during the period specified in section 39-1-104 (10.2).  Sales of personal property exempt pursuant to the provisions of sec­tions 39-3-102, 39-3-103, and 39-3-119 to 39-3-122 shall not be included in any such sample.

            (II)  Because of the unique characteristics and limited number of oil shale mineral interests, a minimum of five arm's-length sales of reasonably comparable oil shale mineral interests shall be required to constitute a market for purposes of utilization of the market approach to appraisal in determining the actual value of nonproducing oil shale mineral interests. 

            (b)  Each such sale included in the sample shall be coded to indicate a typical, negotiated sale, as screened and verified by the assessor. 

            (c)  All such coded, typical sales samples shall be supplied to the administrator for the performance of his duties. 

            (d)  In no event shall a sales ratio be established or utilized for any class or subclass of property unless and until there have been at least thirty such coded, typical sales or at least five percent of all properties in such class or subclass within the county have been sold and verified by the assessor as coded, typical sales, whichever amount is greater.  When such minimum requirement has not been met but typical sales within any such class or subclass indicate that valuations in the class or subclass are too high or too low, such fact shall be reported to the state board of equalization, which board may order an independent appraisal study in such county. 

            (e)  Repealed.

            (f)  Such true and typical sales shall include only those sales which have been determined on an individual basis to reflect the selling price of the real property only or which have been adjusted on an individual basis to reflect the selling price of the real property only. 

            (9) (a)  In the case of an improvement which is used as a residential dwelling unit and is also used for any other purpose, the actual value and valuation for assessment of such improvement shall be determined as provided in this paragraph (a).  The actual value of each portion of the improvement shall be determined by application of the appropriate approaches to appraisal specified in subsection (5) of this section.  The actual value of the land containing such an improvement shall be determined by application of the appropriate approaches to appraisal specified in subsection (5) of this section.  The land containing such an improvement shall be allocated to the appropriate classes based upon the proportion that the actual value of each of the classes to which the improvement is allocated bears to the total actual value of the improvement.  The appropriate valuation for assessment ratio shall then be applied to the actual value of each portion of the land and of the improvement. 

            (b)  In the case of land containing more than one improvement, one of which is a residential dwelling unit, the determination of which class the land shall be allocated to shall be based upon the predominant or primary use to which the land is put in compliance with land use regulations.  If multiuse is permitted by land use regulations, the land shall be allocated to the appropriate classes based upon the proportion that the actual value of each of the classes to which the improvements are allocated bears to the combined actual value of the improvements; the appropriate valuation for assessment ratio shall then be applied to the actual value of each portion of the land.

            (10)  Common property or common elements within a common interest community as defined in the "Colorado Common Interest Ownership Act", Article 33.3 of Title 38, C.R.S., shall be appraised and valued pursuant to the provisions of Section 38-33.3-105, C.R.S.

            (10.5) (a) The general assembly hereby finds and declares that bed and breakfasts are unique mixed-use properties; that all areas of a bed and breakfast, except for the commercial lodging area, are shared and common areas that allow innkeepers and guests to interact in a residential setting; that the land on which a bed and breakfast is located and that is used in conjunction with the bed and breakfast is primarily residential in nature; and that there appears to exist a wide disparity in how assessors classify the different portions of bed and breakfasts.

(b) Therefore, notwithstanding any other provision of this article, a bed and breakfast shall be assessed as provided in this subsection (10.5). The commercial lodging area of a bed and breakfast shall be assessed at the rate for nonagricultural or nonresidential improvements. Any part of the bed and breakfast that is not a commercial lodging area shall be considered a residential improvement and assessed accordingly. The actual value of each portion of the bed and breakfast shall be determined by the application of the appropriate approaches to appraisal specified in subsection (5) of this section. The actual value of the land containing a bed and breakfast shall be determined by the application of the appropriate approaches to appraisal specified in subsection (5) of this section. The land containing a bed and breakfast shall be assessed as follows:

            (I) The portion of land directly underneath a bed and breakfast shall be assessed pursuant to the procedures pertaining to land set forth in subsection (9) of this section.

(II) There shall be a rebuttable presumption that all remaining land shall be assessed as residential land. Such presumption shall only be overcome if there is a nonresidential use not reasonably associated with the operation of the bed and breakfast on some portion of the remaining land, in which case, such portion of the remaining land shall be assessed as nonresidential land.

(III) Subparagraphs (I) or (II) of this paragraph (b) shall not apply to agricultural land.

       (11)  The general assembly hereby declares that consideration by assessing officers of the cost approach, market approach, and income approach to the appraisal of real property has resulted in valuations of minerals in place which are neither uniform, nor just and equal, because of wide variations within the same locality in quality and quantity of mineral deposits, if any, because of uncertainty in the existence or extent of such deposits, because of difficulty in measuring acquisition or replacement costs, or because of speculative value judgments when minerals in place are not income producing.  Therefore, in the absence of preponderant evidence shown by the assessing officer that the use of the cost approach, market approach, and income approach result in uniform and just and equal valuation, minerals in place are not to be considered in determining the actual value of real property. 

         (12)  In any case in which the income approach is utilized in the determination of the actual value of any nonproducing oil shale mineral interests, the following limitations and conditions shall apply: 

         (a)  The assessor shall capitalize the annual rental income for such nonproducing mineral interests at a capitalization rate of thirteen percent.  If nonproducing mineral interests are unleased, the assessor shall use the annual rental as defined in paragraph (b) of this subsection (12). 

         (b)  For the purposes of this subsection (12), "annual rental" means annual rental payments, or other compensatory payments payable for the right to hold a mineral interest, which payments are fixed and certain in amount and payable periodically over a fixed period calculated on a twelve-month basis.  "Annual rental" shall be the representative annual rental for such mineral interests leased within the county or the area, and "annual rental" does not include royalty payments, advanced royalty payments, bonus payments, or minimum royalty payments covering periods when the mineral interests are not in production, even though said payments may be fixed and certain in amount and payable periodically.  For the purposes of this paragraph (b), "royalty payments", "advanced royalty payments", and "minimum royalty payments" means payments attributable to a portion of the current or future mineral production of a mineral interest, paid for the privilege of producing minerals, and "bonus payments" means compensation paid as consideration for the granting of a mineral lease or other compensatory payments which are payable regardless of the extent of use of the mineral interest and which are fixed and certain in amount and may be payable in one or more periodical increments over a fixed period. 

       (13) (a)  The general assembly hereby finds and declares that, in the consideration of the cost approach, market approach, and income approach to the appraisal of personal property by assessing officers, the cost approach shall establish the maximum value of property if all costs incurred in the acquisition and installation of such property are fully and completely disclosed by the property owner to the assessing officer.

         (b)  therefore, in the assessment of taxable personal property, the assessing officer shall consider the value derived from the cost approach to be the maximum value of the property if the property owner has timely filed his declaration and the declaration contains all relevant information per­taining to the valuation of the property and, also includes, a full disclosure of all costs incurred in the acquisition and installation of all personal pro­perty owned by or in the possession of the taxpayer.

         (c)  Assessing officers shall consider the cost approach to the appraisal of property, pursuant to the provisions of this subsection (13), in good faith and shall deny the use of the cost approach only upon just cause that the requirements set forth in this subsection (13) and in section 39-5-116 have not been complied with by a taxpayer.  If it is determined at any time that an assessing officer wrongly denied the use of the cost approach, such assessing officer shall be held liable for all costs incurred by the taxpayer in pro­testing such assessment based on such denial.  However, nothing in this sub­section (13) shall preclude the assessing officers from considering the market approach or income approach to the appraisal of personal property when such consideration would result in a lower value of the property and when such valuation is based on independent information obtained by the assessing offi­cers. 

         (14) (a)  The general assembly hereby finds and declares that, in deter­mining the actual value of vacant land, there appears to exist a wide disparity in the treatment of vacant land by the assessing officers of the various counties; that the methods of appraisal currently being utilized by assessing officers for such valuation remain unclear; and that such assessing officers are provided detailed information concerning the appraisal of vacant land in the manuals, appraisal procedures, and instructions prepared and published by the administrator. 

         (b)  The assessing officers shall give appropriate consideration to the cost approach, market approach, and income approach to appraisal as required by the provisions of section 3 of article X of the state constitution in determining the actual value of vacant land.  When using the market approach to appraisal in determining the actual value of vacant land, assessing offi­cers shall take into account, but need not limit their consideration to, the following factors:  The anticipated market absorption rate, the size and loca­tion of such land, the cost of development, any amenities, any site improve­ments, access, and use.  When using anticipated market absorption rates, the assessing officers shall use appropriate discount factors in determining the present worth of vacant land until eighty percent of the lots within an approved plat have been sold and shall include all vacant land in the approved plat.  The use of present worth shall reflect the anticipated market absorption rate for the lots within such plat, but such time period shall not generally exceed thirty years.

         (c) (I)  For purposes of this subsection (14), "vacant land" means any lot, parcel, site, or tract of land upon which no buildings or fixtures, other than minor structures, are located.  "Vacant land" may include land with site improvements.  "Vacant land" includes land that is part of a development tract or subdivision when using present worth discounting in the market approach to appraisal; however, "vacant land" shall not include any lots within such subdivision or any portion of such development tract that improvements, other than site improvements or minor structures, have been erected upon or affixed thereto.  "Vacant land" does not include agricultural land, producing oil and gas properties, severed mineral interests, and all mines, whether producing or nonproducing.

         (II)  For purposes of this subsection (14):

         (A)  “Minor structures” means improvements that do not add value to the land on which they are located and that are not suitable to be used for and are not actually used for any commercial, residential, or agricultural purpose.

         (B)  “Site improvements” means streets with curbs and gutters, culverts and other sewage and drainage facilities, and utility easements and hookups for individual lots or parcels.

         (d)  As soon after the assessment date as may be practicable, the assessor shall mail or deliver two copies of a subdivision land valuation questionnaire for each approved plat within the county to the last-known address of the subdivision developer known or believed to own vacant land within such approved plat.  Such questionnaire shall be designed to elicit information vital to determining the present worth of vacant land within such approved plat.  Such subdivision developer or his agent shall answer all questions to the best of his ability, attaching such exhibits or statements thereto as may be necessary, and shall sign and return the original copy thereof to the assessor no later than the March 20 subsequent to the assessment date.  All information provided by the subdivision developer in such questionnaire shall be kept confidential by the assessor; except that the assessor shall make such information available to the person conducting any valuation for assessment study pursuant to section 39-1-104 (16) and his employees and the property tax administrator and his employees.

         (e)  If any subdivision developer fails to complete and file one or more questionnaires by March 20, then the assessor may determine the actual value of the taxable vacant land within an approved plat which is owned by such sub­division developer on the basis of the best information available to and obtainable by the assessor.

         (15)  The general assembly hereby finds and declares that assessing offi­cers shall give appropriate consideration to the cost approach, market approach, and income approach to appraisal as required by section 3 of article X of the state constitution in determining the actual value of taxable pro­perty.  In the absence of evidence shown by the assessing officer that the use of the cost approach, market approach, and income approach to appraisal requires the modification of the actual value of taxable property for the first year of a reassessment cycle in order to result in uniform and just and equal valuation for the second year of a reassessment cycle, the assessing officer shall consider the actual value of any taxable property for the first year of a reassessment cycle, as may have been adjusted as a result of pro­tests and appeals, if any, prior to the assessment date of the second year of a reassessment cycle, to be the actual value of such taxable property for the second year of a reassessment cycle.

       (16) (a)  The general assembly hereby finds and declares that in the consideration of the cost approach, market approach, and income approach to appraisal for the valuation of superfund water treatment facilities, the cost approach to appraisal does not adequately reflect characteristics specific to superfund water treatment facilities that negatively impact the value of such facilities, including, but not limited to, the lack of income producing ability and the absence of any market for sale of superfund water treatment facilities.  Therefore, in the assessment of superfund water treatment facilities, the income approach to appraisal shall be considered the primary indicator of value and the cost approach or market approach to appraisal shall be used only if the value determined under the cost approach or market approach is less than the value determined under the income approach to appraisal.  For the purposes of determining the actual value of superfund water treatment facilities as of the assessment date using the income approach to appraisal, the assessing officer shall capitalize the actual income generated by the facility during the calendar year preceding the assessment date at the rate of ten percent per annum.

        (b)  For purposes of this subsection (16), “superfund water treatment facilities” means real and personal property that is:

         (I)  Installed and constructed pursuant to an agreement with or an order of the federal government or the state or any of its political subdivisions and to satisfy the federal “Comprehensive Environmental Response, Compensation, and Liability Act of 1980”, 42 U.S.C. sec. 9601, et seq., as amended; and

         (II)  Operated for the purpose of eliminating, reducing, controlling, or disposing of pollutants, as defined in section 25-8-103 (15), C.R.S., that could alter the physical, chemical, biological, or radiological integrity of state waters if released into state waters.

         (17) (a) The general assembly declares that the valuation of possessory interests in exempt properties is uncertain and highly speculative and that the following specific standards for the appropriate consideration of the cost approach, the market approach, and the income approach to appraisal in the valuation of possessory interests must be provided by statute and applied in the valuation of possessory interests to eliminate the unjust and unequalized valuations that would result in the absence of specific standards:

         (I)  The actual value of any possessory interest of the lessee or permittee of lands owned by the United States and leased or permitted for use for ski area recreational purposes in connection with a business conducted for profit shall be determined by capitalizing at an appropriate rate the annual fee paid to the United States by the lessee or permittee of such land for the use thereof in the immediately preceding calendar year, adjusted to the level of value using a factor or factors to be published by the administrator pursuant to the same procedures and principles as are provided for property in section 39-1-104 (12.3) (a) (I).  The rate used to capitalize any fee pursuant to this subparagraph (I) shall include an appropriate rate of return, an appropriate adjustment for the applicable property tax rate, and an appropriate adjustment to reflect the portion of the fee, if any, required to be paid over by the United States to the state of Colorado and its political subdivisions.

         (II) (A) Except for possessory interests in land leased or permitted for use for ski area recreational purposes valued in accordance with subparagraph (I) of this paragraph (a) and except as otherwise provided in subparagraph (III) of this paragraph (a), the actual value of a possessory interest in land, improvements, or personal property shall be determined by appropriate consideration of the cost approach, the market approach, and the income approach to appraisal. When the cost or income approach to appraisal is applicable, the actual value of the possessory interest shall be determined by the present value of the reasonably estimated future annual rents or fees required to be paid by the holder of the possessory interest to the owner of the underlying real or personal property through the stated initial term of the lease or other instrument granting the possessory interest; except that the actual value of a possessory interest in agricultural land, including land leased by the state board of land commissioners other than land leased pursuant to section 36-1-120.5, C.R.S., shall be the actual amount of the annual rent paid for the property tax year. The rents or fees used to determine the actual value of a possessory interest under the cost or income approach to appraisal shall be the actual contract rents or fees reasonably expected to be paid to the owner of the underlying real or personal property unless it is shown that the actual contract rents or fees to be paid for the possessory interest being valued are not representative of the market rents or fees paid for that type of real or personal property, in which case the market rents or fees shall be substituted for the actual contract rents or fees.

         (II) (A) Except for possessory interests in land leased or permitted for use for ski area recreational purposes valued in accordance with sub-subparagraph (I) of this paragraph (a) and except as otherwise provided in subparagraph (III) of this paragraph (a), the actual value of a possessory interest in land, improvements, or personal property shall be determined by appropriate consideration of the cost approach, the market approach, and the income approach to appraisal. When the cost or income approach to appraisal is applicable, the actual value of the possessory interest shall be determined by the present value of the reasonably estimated future annual rents or fees required to be paid by the holder of the possessory interest to the owner of the underlying real or personal property through the stated initial term of the lease or other instrument granting the possessory interest; except that the actual value of a possessory interest in land leased by the state board of land commissioners other than land leased pursuant to section 36-1-120.5, C.R.S., shall be the actual amount of the annual rent paid for the property tax year. The rents or fees used to determine the actual value of a possessory interest under the cost or income approach to appraisal shall be the actual contract rents or fees reasonably expected to be paid to the owner of the underlying real or personal property unless it is shown that the actual contract rents or fees to be paid for the possessory interest being valued are not representative of the market rents or fees paid for that type of real or personal property, in which case the market rents or fees shall be substituted for the actual contract rents or fees.

     (B) The rents or fees taken into account under the cost or income approach to appraisal under sub-subparagraph (A) of this subparagraph (II) shall exclude that portion of the rents and fees required to be paid for all rights other than the exclusive right to use and possess the land, improvements, or personal property. Such rents or fees to be excluded shall include, but shall not be limited to, any portion of such rents or fees attributable to any of the following: Nonexclusive rights to use and possess public property, such as roads, rights-of-way, easements, and common areas; rights to conduct a business, as determined in accordance with guidelines to be published by the administrator; income of the holder of the possessory interest that is not directly derived from and directly related to the use or occupancy of the possessory interest; any amount paid under a timber sales contract or similar agreement for the purchase of timber or for the right to acquire and remove timber; and reimbursement to the owner of the underlying real or personal property of the reasonable costs of operating, maintaining, and repairing the land, improvements, or personal property to which the possessory interest pertains, regardless of whether such costs are separately stated, provided that the types of such costs can be identified with reasonable certainty from the documents granting the possessory interest. The actual value of the possessory interest so determined shall be adjusted to the taxable level of value using a factor or factors to be published by the administrator pursuant to the same procedures and principles as are provided for personal property in section 39-1-104 (12.3) (a) (I).

         (III)  Subparagraphs (I) and (II) of this paragraph (a) shall not apply to any management contract.  In the case of a management contract, the possessory interest shall be presumed to have no actual value.  For purposes of this subparagraph (III), “management contract “means a contract that meets all of the following criteria:

         (A)  The government owner of the real or personal property subject to the contract directly or indirectly provides the management contractor all funds to operate the real or personal property;

         (B)  The government owns all of the real or personal property used in the operation of the real or personal property subject to the contract;

         (C)  The government maintains control over the amount of profit the management contractor can realize or sets the prices charged by the management contractor, or the management contractor’s exclusive obligation is to operate and manage the real or personal property for which the management contractor receives a fee;

         (D)  The government reserves the right to use the real or  personal property when is not being managed or operated by the management contractor;

         (E)  The management contractor has no leasehold or similar interest in the real or personal property;

         (F)  To the extent the management contractor manages a manufacturing process for the government on the real property subject to the contract, the government owns all or substantially all of the personal property used in the process; and

         (G)  The real or personal property is maintained and repaired at the expense of the government.

         (b)  This subsection (17) shall not apply to and shall not be construed to affect or change the valuation of public utilities pursuant to article 4 of this title, the valuation of equities in state lands pursuant to section 39-5-106, the valuation of mines pursuant to article 6 or any other article of this tittle, or the valuation of oil and gas leaseholds and lands pursuant to article 7 of this title.

         (18) (a) The General Assembly hereby finds and declares that real property that is located in a district in which limited gaming is authorized but that is not used for limited gaming may be unfairly valued by comparison of said real property with real property that is used for limited gaming.  The General Assembly further finds that real property that is located in a gaming district may be reasonably used for purposes other than limited gaming, that such alternative uses may be beneficial in strengthening the economies of gaming districts, and that such alternative uses should be encouraged.  In addition, the General Assembly finds that applying the cost and market approaches to appraisal in valuing real property that is located in a limited gaming district but that is not used for limited gaming may result in an unfairly high valuation of real property that is reasonably used for a purpose other than limited gaming.  Therefore, the provisions of this subsection (18) shall govern the classification and valuation of real property that is located within a gaming district but that is not used for limited gaming.

         (b) For property tax years beginning on or after January 1, 1999, if the actual use as of the assessment date of any real property that is located in a limited gaming district but that is not used for limited gaming is used as residential real property, the real property shall be classified as residential real property, and the assessing officer shall determine the actual value of said real property as of the assessment date by applying the market approach to appraisal.  If, due to the limited number of real properties located within a limited gaming district that are not used for limited gaming and that are used as residential real property, comparable valuation data is not available for within a limited gaming district to determine adequately the actual value of real property located within said limited gaming district that is not used for limited gaming and that is used as residential real property, notwithstanding any law to the contrary, the assessing officer shall consider sales of reasonably comparable residential real property located inside and outside of any limited gaming district for purposes of utilization of the market approach to appraisal in determining the actual value of said real property located within a limited gaming district that is not used for limited gaming and that is used as residential real property.

         (c) For property tax years beginning on or after January 1, 1999, if the actual use as of the assessment date of any real property that is located in a limited gaming district is not for limited gaming or as residential real property, including but not limited to vacant land, the real property shall be classified as nongaming real property, and the assessing officer shall determine the actual value of said real property as of the assessment date by giving appropriate consideration to the cost, market, and income approaches to appraisal.  If, due to the limited number of real properties located within a limited gaming district that are not used for limited gaming or as residential real property, comparable valuation data is not available from within a limited gaming district to determine adequately the actual value of real property located within said limited gaming district that is not used for limited gaming or as residential real property, notwithstanding any law the contrary, the assessing officer shall:

        (I)  Consider sales of reasonably comparable real property that is not used as residential property located inside and outside of any limited gaming district for the purposes of utilization of the market approach to appraisal in determining the actual value of real property located within a limited gaming district that is not used for limited gaming or as residential real property; and

         (II)  Consider reasonably comparable real property that is not used as residential property located inside and outside of any limited gaming district for purposes of utilization of the income approach to appraisal in determining the actual value of real property located within a limited gaming district that is not used for limited gaming or as residential real property.

          (d)  For purposes of this subsection (18), real property is considered to be “used for limited gaming” if the owner or lessee of the real property holds a retail gaming license issued pursuant to part 5 of Article 47.1 of Title 12, C.R.S., and if the owner or lessee actually uses the real property in offering limited gaming for play or for administrative support services related to providing limited gaming or makes the real property available for other uses by persons who are engaged in limited gaming for play, including but not limited to using the property for parking, for a restaurant, or for a hotel or motel.

39-1-103.5.  Restrictions on information. 

        The state board of equalization or the administrator shall not require any person to furnish financial information concerning commercial or industrial property, except as to the value of the real property for rental purposes only.  This section shall not apply to public utilities. 

39-1-104.  Valuation for assessment. 

        (1)  The valuation for assessment of all taxable property in the state shall be twenty-nine percent of the actual value thereof as determined by the assessor and the administrator in the manner prescribed by law, and such percentage shall be uniformly applied, without exception, to the actual value, so determined, of the various classes and subclasses of real and personal property located within the territorial limits of the authority levying a property tax, and all property taxes shall be levied against the aggregate valuation for assessment resulting from the application of such percentage.  This subsection (1) shall not apply to resi­dential real property, producing mines, and lands or leaseholds producing oil or gas.

            (1.5)  Residential real property shall be valued for assessment at twenty-one percent of its actual value, except as provided in section 39-1-104.2. 

            (2)  Repealed. 

            (3)  "Valuation for assessment", as used in this section and in articles 1 to 13 of this title, means the same as the term "assessed valuation" as that term may appear in the laws of this state. 

            (4)  Except as provided in section 39-7-109, nonproducing severed mineral interests are to be valued at twenty-nine percent of actual value in the same manner as other real property.  Such valuation shall be determined by the assessing officer only upon preponderant evidence shown by such officer that the cost approach, market approach, and income approach result in uniform and just and equal valuation. 

            (5)  to (10.1) Repealed. 

            (10.2) (a)  Except as otherwise provided in subsection (12) of this sec­tion, beginning with the property tax year which commences January 1, 1989, a reassessment cycle shall be instituted with each cycle consisting of two full calendar years.  At the beginning of each reassessment cycle, the level of value to be used during the reassessment cycle in the determination of actual value of real property in any county of the state as reflected in the abstract of assessment for each year in the reassessment cycle shall advance by two years over what was used in the previous reassessment cycle; except that the level of value to be used for the years 1989 and 1990 shall be the level of value for the period of one and one-half years immediately prior to July 1, 1988; except that, if comparable valuation data is not available from such one-and-one-half-year period to adequately determine the level of value for a class of property the period of five years immediately prior to July 1, 1988, shall be utilized to determine the level of value.  Said level of value shall be adjusted to the final day of the data gathering period.

            (b)  During the two years of each reassessment cycle, in preparation for implementation in the succeeding reassessment cycle, the respective assessors shall conduct revaluations of all taxable real property utilizing the level of value for the period which will be used to determine actual value in such suc­ceeding reassessment cycle and the manuals and associated data published for the period which will be used to determine actual value in such succeeding reassessment cycle.

            (c) Repealed.

            (d)  For the purposes of this article and article 9 of this title, "level of value" means the actual value of taxable real property as ascertained by the applicable factors enumerated in section 39-1-103 (5) for the one-and-one-half-year period immediately prior to July 1 immediately preceding the assessment date for which the administrator is required by this article to publish manuals and associated data; except that, if comparable valuation data is not available from such one-and-one-half-year period to adequately deter­mine such actual value for a class of property, "level of value" means the actual value of taxable real property as ascertained by said applicable fac­tors for the five-year period immediately prior to July 1 immediately pre­ceding the assessment date.  Said level of value shall be adjusted to the final day of the data gathering period.

            (e)  Repealed.

            (10.3)  Repealed. 

            (11) (a) (I)  It is the intent of the general assembly, as manifested in subsection (10.2) of this section, that, when a change occurs in reassessment cycles as prescribed in said subsection, new manuals and associated data will be published by the administrator, pursuant to section 39-2-109 (1) (e),  and that said manuals and associated data and the level of value for the year that said manuals and associated data are published shall be utilized by assessors in the manner described in subsection (10.2) of this section for determining the actual value of real property in each county of the state. 

            (II)  The general assembly hereby further finds and declares that it is the intent of paragraph (b) of this subsection (11) to comply with the provi­sions of section 3 of article X of the state constitution, including the pro­vision which requires the enactment of "general laws, which shall prescribe such methods and regulations as shall secure just and equalized valuations for assessments of all real and personal property"; to reduce the confusion of the owners of taxable property within the state concerning assessment procedures and valuations of such property; to achieve valuations for assessment which represent the current value of such property to the extent which is equitably and practically possible; and to minimize the costs associated with achieving such current valuations for assessment.

            (b) (I)  The provisions of subsection (10.2) of this section are not intended to prevent the assessor from taking into account, in determining actual value, for the years which intervene between changes in the level of value, any unusual conditions in or related to any real property which would result in an increase or decrease in actual value.  If any real property has not been assessed at its correct level of value, the assessor may revalue such property for the intervening year so that the actual value of such property will be its correct level of value; however, the assessor may not revalue such property above or below its correct level of value except as necessary to reflect the increase or decrease in actual value attributable to an unusual condition.  For the purposes of this paragraph (b), and except as otherwise provided in this paragraph (b), an unusual condition which could result in an increase or decrease in actual value is limited to the installation of an on-site improvement, the ending of the economic life of an improvement with only salvage value remaining, the addition to or remodeling of a structure, a change of use of the land, the creation of a condominium ownership of real property as recognized in the "Condominium Ownership Act", article 33 of title 38, C.R.S., any new regulations restricting or increasing the use of the land, or a combination thereof, any detrimental acts of nature, and any damage due to accident, vandalism, fire, or explosion.  When taking into account such unusual conditions which would increase or decrease the actual value of a property, the assessor must relate such changes to the level of values as if the conditions had existed at that time. 

            (II)  The creation of a condominium ownership of real property by the conversion of an existing structure shall be taken into account as an unusual condition as provided for in subparagraph (I) of this paragraph (b) by the assessor, when at least fifty-one percent of the condominium units, as defined in section 38-33-103 (1), C.R.S. 1973, in a multi-unit property subject to condominium ownership have been sold and conveyed to bona fide purchasers and deeds have been recorded therefor. 

            (c)  Repealed.

            (12) (a)  For the property tax years commencing on or after January 1, 1987, producing mines shall be valued for assessment solely pursuant to article 6 of this title.

            (b)  For the property tax years commencing on or after January 1, 1987, oil and gas leaseholds and lands shall be valued for assessment solely pur­suant to section 39-7-102.

            (c)  Repealed.

            (12.1)  Repealed.

      (12.2) (a) Except as provided in subsection (12) of this section, for property tax years commencing on or after January 1, 1987, the requirement stated in subsections (10.2) and (11) of this section that the actual value of real property be determined according to a specified year's level of value and manuals and associated data published by the administrator for said specified year pursuant to section 39-2-109 (1) (e) shall apply to the assessment of all classes of real property, including but not limited to the following classes of real property:

            (I)  (Deleted by amendment, L. 87, p. 1390, section 2, effective April 1, 1987.) 

            (II)  (Deleted by amendment, L. 87, p. 1392, section 2, effective April 1, 1987.)

            (III)  Operating property and plants of public utilities; and

            (IV)  Agricultural land.

            (V)  (Deleted by amendment, L. 87, p. 1385, section 1, effective June 20, 1987.) 

            (b)  This subsection (12.2) shall take effect January 1, 1987.

            (12.3) (a) (I)  The actual value of personal property shall be determined by appropriate consideration of such of the three approaches specified in sec­tion 39-1-103 (5) (a) as are applicable to the appraisal of such property.  Subject to review and approval pursuant to section 39-2-109 (1) (e) the administrator shall prepare and publish appraisal procedures and instructions for the annual appraisal of such property that will include a factor or factors to adjust the actual value for the current year of assessment to the level of value applicable to real property.

            (II)  In determining actual value, depreciation attributable to age shall not exceed that for the actual age of the property on the assessment date.  Physical, functional, and economic obsolescence shall be considered in deter­mining actual value. 

            (b)  Repealed. 

            (12.4)  For property tax years commencing on and after January 1, 1987, the requirement stated in subsections (10.2) to (11) of this section that the actual value of real property be determined according to a specified year's level of value and manuals and associated data published by the administrator for said specified year pursuant to section 39-2-109 (1) (e) shall not apply to the assessment of producing coal mines and other lands producing nonmetallic minerals. 

            (13) to (15)  Repealed. 

            (16) (a) During each property tax year, the director of research of the legislative council shall contract with a private person for a valuation for assessment study to be conducted as set forth in this subsection (16). The study shall be conducted in all counties of the state to determine whether or not the assessor of each county has, in fact, used all manuals, formulas, and other directives required by law to arrive at the valuation for assessment of each and every class of real and personal property in the county. The person conducting the study shall sample each class of property in a statistically valid manner, and the aggregate of such sampling shall equal at least one percent of all properties in each county of the state. The sampling shall show that the various areas, ages of buildings, economic conditions, and uses of properties have been sampled. Such study shall be completed, and a final report of the findings and conclusions thereof shall be submitted to the state board of equalization, by September 15 of the year in which the study is conducted.

            (b) During each property tax year, beginning with the property tax year which commences January 1, 1985, in addition to the requirements set forth in paragraph (a) of this subsection (16), the study shall set forth the aggregate valuation for assessment of each county for the year in which the study is conducted.

            (c)  The person conducting any valuation for assessment study pursuant to this subsection (16) and his employees shall, during the term of his contract, have access to any document in the custody of the administrator or an assessor, including, but not limited to, such documents as are held pursuant to sections 39-4-103, 39-5-120, and 39-14-102 (1) (c).  The penalties in sec­tion 39-1-116 apply against the divulging at any time of any confidential information obtained pursuant to this paragraph (c). 

            (d)  Repealed.

 39-1-104.1.  Implementation costs - annual revaluation. (Repealed)

39-1-104.2.  Legislative declaration - adjustment of residential rate -role of state board of equalization. 

        (1)  As used in this section, unless the context otherwise requires: 

        (a)  "Residential rate" means the ratio of valuation for assessment for residential real property fixed in accordance with this section.

        (b)  "Target percentage" means the percentage of aggregate statewide valuation for assessment represented by the valuation for assessment which is attributable to residential real property in the year immediately preceding the year in which a change in the level of value occurs.

        (2)  After careful consideration of all available information, the general assembly hereby finds and declares that the action of the first session of the fifty-sixth general assembly which set the ratio of valuation for assessment for residential real property at eighteen percent has produced a deviation from the intent of section 3 of article X of the state constitu­tion which ensures that the percentage of the aggregate statewide valuation for assessment which is attributable to residential real property shall remain the same as it was in the year immediately preceding the year in which a change occurs in the level of value used in determining actual value.  There­fore, the general assembly finds that legislation is necessary for the follow­ing purposes:  To adjust the residential rate for 1988; to ensure that devia­tions from the constitutional mandate set forth in section 3 of article X of the state constitution shall not be perpetuated into this or any future year; and to provide a process for future adjustments in the ratio of val­ua­tion for assessment for residential real property.

        (3) (a)  The general assembly, pursuant to the authority granted in sec­tion 3 of article X of the state constitution, finds and declares that, for the property tax years commencing on or after January 1, 1987, but before January 1, 1989, the percentage of aggregate statewide valuation for assessment which is attributable to residential real property fails to remain as it was in the property tax year commencing January 1, 1986, when the aggre­gate statewide valuation for assessment was based on the 1985 aggregate sta­tewide valuation for assessment plus the increased valuation for assessment attributable to new construction and to increased volume of mineral and oil and gas production which occurred during 1986.  Therefore, the property tax year commencing January 1, 1988, the ratio of valuation for assessment for residential real property shall be sixteen percent of actual value. 

        (b)  The general assembly, pursuant to the authority granted in section 3 of article X of the state constitution, finds and declares that, for the pro­perty tax years commencing on or after January 1, 1989, but before January 1, 1991, the percentage of aggregate statewide valuation for assessment which is attributable to residential real property fails to remain as it was in the property tax year commencing January 1, 1988, when the aggregate statewide valuation for assessment was based on the 1987 aggregate statewide valuation for assessment.  Therefore, the administrator having determined pursuant to subsection (4) of this section that the target percentage is 44.51 percent, for the property tax years commencing on or after January 1, 1989, but before January 1, 1991, the ratio of valuation for assessment for residential real property shall be fifteen percent of actual value.

        (c)  The general assembly, pursuant to the authority granted in section 3 of article X of the state constitution, finds and declares that, for the property tax years commencing on or after January 1, 1991, but before January 1, 1993, the percentage of aggregate statewide valuation for assessment which is attributable to residential real property fails to remain as it was in the property tax year commencing January 1, 1990, when the aggregate statewide valuation for assessment was based on the 1989 aggregate statewide valuation for assessment.  Therefore, the administrator having determined pursuant to subsection (4) of this section that the target percentage is 44.57 percent, for the property tax years commencing on or after January 1, 1991, but before January 1, 1993, the ratio of valuation for assessment for residential real property shall be 14.34 percent of actual value.

        (d)  Pursuant to the authority granted in section 3 of article X of the state constitution, the general assembly finds and declares that, for the property tax years commencing on or after January 1, 1993, but before January 1, 1995, the percentage of aggregate statewide valuation for assessment which is attributable to residential real property will fail to remain as it was in the property tax year commencing January 1, 1992, when the aggregate statewide valuation for assessment was based on the 1991 aggregate statewide valuation for assessment. Therefore, the administrator having determined pursuant to subsection (4) of this section that the target percentage is 44.73 percent, the ratio of valuation for assessment for residential real property shall be 12.86 percent of actual value for the property tax years commencing on or after January 1, 1993, but before January 1, 1995.

        (e)  Pursuant to the authority granted in section 3 of article X of the state constitution, the general assembly finds and declares that, for the property tax years commencing on or after January 1, 1995, but before January 1, 1997, the percentage of aggregate statewide valuation for assessment that is attributable to residential real property will fail to remain as it was in the property tax year commencing January 1, 1994, when the aggregate statewide valuation for assessment was based on the 1993 aggregate statewide valuation for assessment.  Therefore, the administrator having determined pursuant to subsection (4) of this section that the target percentage is 45.29 percent, the ratio of valuation for assessment for residential real property shall be 10.36 percent of actual value for the property tax years commencing on or after January 1, 1995, but before January 1, 1997.

        (f)  Pursuant to the authority granted in section 3 of Article X of the State Constitution, the General Assembly finds and declares that, for the property tax years commencing on or after January 1, 1997, but before January 1, 1999, the percentage of aggregate statewide valuation for assessment that is attributable to residential real property will fail to remain as it was in the property tax year commencing January 1, 1996, when the aggregate statewide valuation for assessment was based on the 1995 aggregate statewide valuation for assessment.  Therefore, the administrator having determined pursuant to subsection (4) of this section that the target percentage is 46.17 percent, the ratio of valuation for assessment for residential real property shall be 9.74 percent of actual value for the property tax years commencing on or after January 1, 1997, but before January 1, 1999.

        (g) Pursuant to the authority granted in section 3 of article X of the state constitution, the general assembly finds and declares that, for the property tax years commencing on or after January 1,