HomeMy WebLinkAbout580154.tiff FORM C.D.;. IR „ r1
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GOLORADO
Right of Way General
ADDRESS ALL COMMUNICATIONS TO 1 MARK U. WATROUS
COLORADO DEPARTMENT OF HIGHWAYS CHIEF ENGINEER
9301 E. ARKANSAS AVE. t
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DEPARTMENT OF HIGHWAYS
DENVER 22, COLORADO March 25, 1958
Ann Spomer
County Clerk and Recorder
aeld County
Greeley, Colo.
Dear Sir or Madam:
We are enclosing, for your information, and files, a
copy of a letter from Mr. John P. Holloway, Assistant Attorney
General, regarding taxes on property acquired for right of way.
After you have read the enclosed, we would appreciate
your discussing this matter with the Assessor of your County.
Very truly yours,
MARK U. WATRCUS
Chief Engineer
BY /21,2li..,
L. G. Trueheart
Right-of-Way Engineer VI
LGT:mf
520/51/
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FRANK L.MICKEY
MANE
I.DEPUTYHICKEY
ATTORNEY O[N[RAL
JOHN L.'ARNAUD.JR.
FIRST ASSISTANT ATTORNEY
(fit 1yP $tatt of Mninrabn ROBERT CARB
FETES OVE
f ;v . I VE
�e?' FLOYD S. ENOEMAN
JOHN M. EVANS
JQat SAMUEL N.FREEMAN
DEPARTMENT OF LAW RONALD J !TT
JOHN F.HOLLOWAY
DUKE W. DUNBAR OFFICE OF THE ATTORNEY GENERAL PATRICIA H. MALDY
WILLIAM H. MOULTON
ATTORNEY MINERAL DENVER 2 GAIL F. DUREN
JOHN W.
RUNNESON
ENNER
DONALD S.ROBERTSON
WENDELL F
NEIL YAWNER
HENRY E.tauten=
ASSISTANT O
ATTORNEY/
February 25, 1958
Mr. Charles E. Shumate
Assistant Chief Engineer
Department of Highways
4241 E. Arkansas Avenue
Denver 22, Colorado
RE: Taxes on property acquired
for right of way
Dear Mr. Shumate:
At the District Engineers' Meeting I attended last week
a number of inquiries were made concerning the tax status of
property acquired by the department . This letter is an ef-
fort to explain the law with respect to this problem and will
affirm and further clarify the formal published opinion of
this office to Mr. Watrous dated November 29, 1953 . As
these questions arise with great frequency, it is suggested
that you reproduce this letter for distribution as a convenience
to field right of way personnel , if you deem it worthwhile.
In the first place there is no provision in the• law which
would authorize the County Treasurer to accept payments for a
fraction of the taxable year. Likewise, there is no provision
in the law authorizing him to accept taxes in advance prior to
the time he receives his warrant or order of collection from
the County Commissioners. . As collection follows , or is subse-
quent in time to levy, he cannot , therefore, accept taxes
estimated upon the amount of the previous year's assessment.
In addition, abatement pursuant to 137-8-4, CRS ' 53 is an
extremely cumbersome procedure, as The Colorado Tax Commission
must approve all abatements by the respective counties, and
the provision for abatement of erroneous assessments provided
for in 137-10-7, CRS ' 53 is , at best, of limited application to
the department's problem.
All taxes are due and payable one-half on or before the
last day of February and the remainder on or before the last
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day of July of the year following the one in which they were
assessed (137-9-3 , CRS '53) . However, with respect to penalties
for failure to pay, no penalty will be assessed for failure to pay
the first installment if the entire amount is paid before the
last day of April in each year (137-9-4, CRS ' 53) . The effect
of this last statutory provision is to release the first in-
stallment from penalties if the entire amount is paid before
May 1st.
On the other hand , the lien for the current year attaches
prior to collection and by law, to wit: 137-9-8 CRS 153 , at-
taches "to all property, real and personal , not exempt by law,
on the first day of March at twelve meridian, in each year." As
long as the property remains in private ownership, and hence
"not exempt by law", the county's lien is preserved no matter
how many times it may be transferred between private owners.
No problem arises, therefore, unless or until the property
assumes a tax exempt status by transfer to the state or other
tax exempt bodies. In such situations our Supreme Court in
City and County of Denver v. Tax Research Bureau, 126 Colo. 140,
has held that before the lien can be effective the property must
have been assessed and the taxes actually levied. Inasmuch as
the entire procedure is in arrears , the levy is not made until
the end, or near end, of the current year. By law, to wit:
137- , CRS ' 53 this levy (i.e. a mill levy on the assessed
valuations) is not fixed until November 1st, in counties having
a population of less than 300,000, or until the second Tuesday
in Dscember for counties having a population of more than 300,000.
As the court said in the above case,
"It is our conclusion that the lien provided
for in 137-9-8, CRS ' 53 does not become ef-
fective until the property is assessed and
the taxes levied , at which time therefore
inchoate lien relates back and attaches as
of March 1st of that year. If, before the
lien so attaches, the specific property
legally assumes a tgm exempt status, the
doctrine oofrelation does notTfunctioIi
(Emphasis added and citation amended. )
Obviously, therefore, if the department acquires property
C.E.S.
, 3
by Deed or Rule and Order in Condemnation (not immediate
possession orders) and same are recorded before November 1st
in counties with less than 300,000 on or before the second
Tuesday in December in counties with more than 300,000, the
owner is not responsible for the taxes for that year, (i .e.
the year of transfer to the department) even though he may
have occupied the property for this entire period. In my
opinion any tax sale based on current taxes which may sub-
sequently take place is void and of no effect , if the transfer
took place before these dates , and the purchaser of the cer-
tificate will have to look to the county for his remedy if,
in fact, any exists.
The above reasoning , of course , does not apply to any
tax delinquencies for prior years and in this connection the
department should protect itself by requiring payment of these
prior taxes. This payment , or the amount of such delinquencies ,
can be best evidenced by a Treasurer' s Certificate, issued pursuant
to 137-9-31 , CRS ' 53 , and if any errors are made in the certifi-
cate, it will, by law, be the county's loss and not the land-
owner or the department 's (137-9-33 , CRS ' 53) . In my opinion
this certificate should be mandatory in all total acquisitions.
In minor partial takings this precaution is not as important as
the lien will attach to the remainder and the owner will usually
pay the taxes to avoid the sale thereof.
The principles and law above mentioned are equally ap-
plicable to situations where property is acquired by condemnation,
rather than by deed, except that the lien, above cited, is
transferred from the property to the money deposited in the
registry fund of the court and the burden is thereby on the
condemning authority to name the county treasurer as a party,
so that he can come into court and make appropriate claim to
protect the county's lien. This principle of law was established
by our Supreme Court, in Capitol. Managers v. l3rasie, 72 Colo. 173 ;
Fishel v. City and County of Denver, 106 Colo. 576 and in
Moffat Tunnel Improvement District v. Housing Authority,109 Colo.
357 .
Every claim made to the department for taxes, whether
by a county or by an individual who may have purchased a Tax
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C .E.S. 't4
Certificate covering right of way, should first be examined
to determine its legal sufficiency and if, after such ex-
amination, it is determined that the claim is valid it should
be apparent that you have acquired a piece of property subject
to this encumbrance or unextinguished lien.
It is often and correctly said that the State is not liable
for taxes as it is exempt by law, to wit: 137-1-17 (1) , CRS t53 .
But the application of this general rule is limited to taxation
after acquisition. Where the State acquires property subject to
an effective lien for a determined amount of taxes for a prior
year or years and does not require the owner to discharge same,
what right does the holder of such interest possess?
Unfortunately there are no cases in Colorado defining what
rights the holder of such an interest might have against a
department of state government . At most he would be entitled to
"just compensation" which, I believe, would be his total capital
outlay for the Tax Certificate or Treasurer' s Deed , if he held
the certificate for three years. On the other hand, he may be
entitled to nothing, especially if at the time he purchased his
certificate the highway had actually been constructed on the
property. In this situation it could be argued, and it is my
personal opinion, that the holder merely acquires a contingent
right to fee title, or fee title , depending on whether he has a
certificate or deed , subject to the public right of way. In any
event each case will have to be examined on its own merits and
an individual decision rendered .
Very truly yours ,
P. 441
JUN F. HOLLOWAY
A, istant Attorney eneral
JPH:K.
cc- Wr. L. 0. Trueheart
Mr. Geo. L. Zoellner
Mr. John M. Evans
H. and T.
�fIE'A� `'.1. . . •Nom. •\•Q • . . . . e o
COLORADO DEPARTMENT OF HIGHWAYS
REGARDING TAXES ON PROPERTY ACQUIRED
FOR RIGHT OF WAY.
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