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HB 25-1289

Metropolitan District Leases & Property Tax Exemptions

2025 Regular Session Introduced by Jennifer Bacon and 30 co-sponsors

Requires metro districts to disclose lease use and conflicts for exemptions, with local review; private leasebacks taxed; governing body decisions are final.

Governor Signed
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Bill Summary · HB 25-1289

HB 25-1289 — Metropolitan District Leases & Property Tax Exemptions

Status: Governor signed (June 3, 2025)
Introduced: February 28, 2025 — Effective: 90 days after adjournment sine die (if no referendum)

Purpose / Intent

The bill tightens documentation and local review for property tax exemptions claimed by metropolitan (special) districts when real property is leased to public entities. It also clarifies that private property interests that are leased to a public entity and then leased back to private parties for private use are taxable.

Key provisions

  • Additional filing requirement for metropolitan districts:
    • A metropolitan district that is a party to a lease or rental agreement effective January 1, 2025 or later — and that filed the lease with the county assessor to support a property tax exemption — must also file a statement with the county assessor describing:
    • the district’s use of the leased property;
    • the district’s authority to use the property for district purposes;
    • any private-person use of the property for private purposes; and
    • any conflict-of-interest disclosure filed by a district board member pursuant to specified disclosure statutes (e.g., §§ 24-18-109, 24-18-110, 32-1-902, 18-8-308).
  • Referral and local determination when a board-member disclosure is included:
    • If the statement includes a relevant board-member disclosure, the county assessor must submit the statement to the governing body that approved the district’s service plan (e.g., board of county commissioners or its designees) within 14 days of receipt.
    • The governing body must, within 63 days of receiving the statement, issue a written decision with findings of fact and a conclusion on whether the leased property is used for a public purpose.
    • If the governing body finds the property is not used for a public purpose, the property is not exempt from property tax.
    • A governing-body decision under this section is final: not subject to appeal and does not create a private right of action.
  • Taxation of leaseback arrangements:
    • A leasehold interest in privately owned real or personal property that was leased to the state or a political subdivision and then leased back to a private person for private purposes is taxable to the owner.

Who is affected

  • Metropolitan districts (must prepare and file additional disclosures)
  • County assessors (processing and forwarding statements)
  • Governing bodies that approved district service plans (must review and decide)
  • District board members (disclosures may trigger review)
  • Private property owners involved in lease-to-public then leaseback arrangements (may lose exemption)

Fiscal and administrative impact

  • State: minimal, one-time and ongoing workload for Department of Local Affairs (Division of Property Taxation) to update guidance and training; no appropriation required.
  • Local: minimal increased workload for county assessor offices, metropolitan districts, and governing bodies to file/process statements and make determinations.
  • Revenue: no direct statewide revenue estimate; local property tax revenues could increase conditionally if governing bodies determine properties are taxable. For school finance, increased local property tax revenue could reduce state aid obligations.

Other notable items

  • Applies to leases effective on or after January 1, 2025 (final enacted language).
  • The bill does not create an appeal path for parties dissatisfied with the governing body’s decision.

Compiled from official sources — confirm details with the bill’s official record.

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