Colorado § 23-5-103 - Pledge of income.

§ 23-5-103. Pledge of income.

(1) The governing board of any one or more state educational institutions, including but not limited to the state colleges under the control and operation of their respective boards of trustees, that enters into a contract for the advancement of money is authorized, in connection with or as a part of the contract, to pledge the net income derived or to be derived from land or facilities constructed, acquired, and equipped as security for the repayment of the money advanced in the contract, together with interest, and for the establishment and maintenance of reserves in connection with the contract. For the same purpose, any such governing board is also authorized, subject to the limitations specified in section 23-5-119.5 (5), to pledge the net income derived or to be derived from other facilities that are included in a designated enterprise or, if not included, other facilities that are not acquired and not to be acquired with money appropriated to the institution by the state of Colorado, and to pledge the net income, fees, and revenues derived from such sources, if unpledged, or, if pledged, the net income, fees, and revenues currently in excess of the amount required to meet principal, interest, and reserve requirements in connection with outstanding obligations to which the net income, fees, and revenues have been pledged. A governing board of an institution or group of institutions designated as an enterprise pursuant to section 23-5-101.7 that has entered into a contract for the advancement of money on behalf of the institution or group of institutions may pledge up to one hundred percent of tuition revenues of the enterprise, except for general fund money appropriated by the general assembly, and all or a portion of a facility construction fee that may be imposed as security for the repayment of the money advanced pursuant to the contract. The pledge of tuition revenues or the imposition of a facility construction fee includes a process for student input consistent with the institutional plan for student fees adopted by the governing board of the applicable institution pursuant to section 23-5-119.5.

(2) Any advancement of moneys may be evidenced by interim warrants, if necessary, and bonds to be executed by and on behalf of the educational institution receiving the advancement and containing such terms and provisions, including provisions for redemption prior to maturity, as may be determined by the governing board of such institution. Such warrants or bonds may, at the discretion of the governing board, be registerable as to principal or interest, or both, and shall never be sold at less than ninety-five percent of the principal amount thereof and accrued interest thereon to the date of delivery nor at a price which will result in a net effective interest rate which exceeds that specified in the contract for the advancement of moneys. Any of the warrants or bonds of the institution issued pursuant to this article or any other law may be refunded pursuant to article 54 of title 11, C.R.S., if in the judgment of the governing board such refunding is to the best interests of the educational institution. Such refunding obligations may be made payable from any source which may be legally pledged for the payment of the obligations being refunded at the time of the issuance of the obligations so refunded or from any of the sources described in subsection (1) of this section, notwithstanding the pledge for the payment of the outstanding obligations being refunded is thereby modified.

(3) If the pledged net income, fees, and revenues exceed the amount required to meet principal, interest, and reserve requirements in connection with revenue bonds of the institution to which such income has been pledged and exceed the amount necessary for the maintenance and operation of the auxiliary facility plus any amount set aside in a reserve fund for repair and replacement of the facility, the governing board may retain such surplus and utilize the same in such manner as in its judgment is for the best interests of the educational institution; except that, if the governing board uses the surplus moneys on a project expected to be paid from cash funds or other nonstate moneys, the project shall be subject to the provisions of section 23-1-106. Use of such surplus shall be reviewed in advance by representatives of the student government at the institution with which the auxiliary facility is associated.

(4) Anticipation warrants or bonds issued pursuant to this article may be used as security for any depository bond or obligation where any kind of bonds or other securities shall or may by law be deposited as security.

Source: L. 53: p. 554, § 2. CRS 53: § 124-1-7. L. 61: p. 710, § 2. L. 63: p. 867, § 1. C.R.S. 1963: § 124-1-5. L. 67: p. 201, § 2. L. 68: p. 7, § 1. L. 70: p. 345, § 2. L. 78: (1) amended, p. 380, § 1, effective March 24. L. 88: (1) amended, p. 858, § 6, effective July 1. L. 93: (1) and (3) amended, p. 1823, § 3, effective June 6. L. 94: (1) amended, p. 1680, § 6, effective May 31. L. 97: (1) and (3) amended, p. 1406, § 3, effective July 1. L. 2003: (1) amended, p. 789, § 9, effective July 1. L. 2004: (1) amended, p. 722, § 11, effective July 1; (1) amended, p. 1935, § 4, effective July 1. L. 2011: (1) and (3) amended, (HB 11-1301), ch. 297, pp. 1419, 1431, §§ 9, 31, effective August 10. L. 2016: (1) amended, (SB 16-121), ch. 56, p. 135, § 1, effective March 31; (3) amended, (HB 16-1459), ch. 317, p. 1281, § 2, effective August 10. L. 2022: (1) amended, (SB 22-121), ch. 76, p. 385, § 1, effective April 7.

Cross references: For the legislative declaration contained in the 2004 act amending subsection (1), see section 1 of chapter 215, Session Laws of Colorado 2004. For the legislative declaration contained in the 2004 act amending subsection (1), see section 1 of chapter 391, Session Laws of Colorado 2004.

ANNOTATION

There is no constitutional or statutory limit on revenue bonds issued by state educational institutions. Lewis v. State Bd. of Agriculture, 138 Colo. 540, 335 P.2d 546 (1959).

This section specifically authorizes the pledging of net income derived from other housing facilities, dining facilities, or recreational facilities to pay bonds. Lewis v. State Bd. of Agriculture, 138 Colo. 540, 335 P.2d 546 (1959).

The issuance of revenue bonds by a state university pledging excess revenues produced by one self-liquidating facility as security for the payment of revenue bonds issued for another project, where all of the projects are related to the operation and maintenance of Colorado state university, does not offend against any provision of the state constitution and is with the authority conferred by law. Lewis v. State Bd. of Agriculture, 138 Colo. 540, 335 P.2d 546 (1959).

There is no constitutional objection to the issuance of revenue bonds to finance a building program at Colorado state university, payment of which is secured by income and fees of certain self-liquidating facilities of the university in accordance with this section. Perl-Mack Civic Ass'n v. Bd. of Dirs. of Baker Metro. & San. Dist., 140 Colo. 371, 344 P.2d 685 (1959).