Colorado § 22-42-104 - Limit of bonded indebtedness.

§ 22-42-104. Limit of bonded indebtedness.

(1) Except as provided in subsections (1.3), (1.4), and (1.6) of this section, the limit on bonded indebtedness of a school district is the greater of the following:

(a) Twenty percent of the latest valuation for assessment of the taxable property in such district, as certified by the county assessor to the board of county commissioners; or

(b) Six percent of the most recent determination of the actual value of the taxable property in the district, as certified by the county assessor to the board of county commissioners.

(1.2) For bonded indebtedness issued after June 1, 2011, the valuation for assessment of taxable property for the purposes of this section shall be the valuation for assessment of taxable property in the district as it existed on the December 10 prior to the date of issuance of the bonded indebtedness. The county assessor for the board of county commissioners shall report the valuation for assessment of taxable property in the district to the district and the department of education on each December 10.

(1.3) Notwithstanding the provisions of paragraph (a) of subsection (1) of this section and except as provided in subsection (1.4) of this section, the limit on bonded indebtedness of a school district is the greater of the limit determined pursuant to paragraph (b) of subsection (1) of this section or twenty-five percent of the latest valuation for assessment of the taxable property in the district, as certified by the county assessor to the board of county commissioners, for any bonded indebtedness approved at any election held on or after July 1, 1994, but before July 1, 2014, if the commissioner of education or the commissioner's designee certifies that for each of the preceding three fiscal years, or for three consecutive fiscal years that include the fiscal year in which the certification is made, the pupil enrollment or the funded pupil count of the district as of the pupil enrollment count day, whichever is applicable, has increased:

(a) By two and one-half percent or more over the preceding year, if the district has a pupil enrollment or funded pupil count, whichever is applicable, of at least one thousand pupils;

(b) By twenty-five or more pupils over the preceding year, if the district has a pupil enrollment or funded pupil count, whichever is applicable, of less than one thousand pupils.

(1.4) For any bonded indebtedness approved at the 2008 general election, the limit on bonded indebtedness of a school district shall be the greater of the limit determined pursuant to subsection (1.3) of this section or thirty percent of the latest valuation for assessment of the taxable property in such district, as certified by the county assessor to the board of county commissioners, if the commissioner of education or the commissioner's designee certifies that for each of the preceding three fiscal years, or for three consecutive fiscal years that include the fiscal year in which the certification is made, the pupil enrollment or the funded pupil count of the district as of the pupil enrollment count day, whichever is applicable, increased:

(a) By two and one-half percent or more over the preceding year, if the district has a pupil enrollment or funded pupil count, whichever is applicable, of at least one thousand pupils; or

(b) By twenty-five or more pupils over the preceding year, if the district has a pupil enrollment or funded pupil count, whichever is applicable, of less than one thousand pupils.

(1.5) The debt limit provided in subsection (1.3) or (1.6) of this section applies to a district only as long as the conditions of subsection (1.3) or (1.6) of this section are met. In a year in which the conditions of said subsection (1.3) or (1.6) are not met, the debt limit is the limit set forth in subsection (1) of this section; except that the validity of bonded indebtedness incurred in any year in which the debt limit in said subsection (1.3) or (1.6) applies is not affected by a subsequent reduction in the district's debt limit.

(1.6) Notwithstanding the provisions of paragraph (a) of subsection (1) of this section and except as provided in subsection (1.4) of this section, the limit on bonded indebtedness of a school district is the greater of the limit determined pursuant to paragraph (b) of subsection (1) of this section or twenty-five percent of the latest valuation for assessment of the taxable property in the district, as certified by the county assessor to the board of county commissioners, for bonded indebtedness approved at an election held on or after July 1, 2014, if the commissioner of education or the commissioner's designee certifies that:

(a) For a district that has a pupil enrollment or funded pupil count, whichever is applicable, of one thousand pupils or more, the average of the annual percentage increases in the district's pupil enrollment or funded pupil count as of the pupil enrollment count day for the three preceding fiscal years or the five preceding fiscal years, whichever is higher, is at least two and one-half percent;

(b) For a district that has a pupil enrollment or funded pupil count, whichever is applicable, of fewer than one thousand pupils, the average of the annual increases in the district's pupil enrollment or funded pupil count as of the pupil enrollment count day for the three preceding fiscal years or the five preceding fiscal years, whichever is higher, is at least twenty-five pupils.

(2) The indebtedness of the former districts or parts of districts, constituting any new district, shall not be considered in fixing the limit of bonded indebtedness; but, if any school district shall assume the bonded indebtedness of any district or districts, or a proportionate share thereof, existing at the time of inclusion in the assuming school district, pursuant to law, such bonded indebtedness shall be included in the limit of bonded indebtedness.

(3) The permission to incur additional bonded indebtedness, granted by the property tax administrator in the division of property taxation of the department of local affairs, and any school district bonds issued pursuant thereto on or after May 10, 1972, are hereby validated. This subsection (3) shall not be construed to grant authority to incur bonded indebtedness in excess of the limit of bonded indebtedness.

(4) The validity of bonded indebtedness incurred in any year shall not be affected by a subsequent reduction in the district's limit of bonded indebtedness caused by a decrease in the valuation for assessment or actual value of taxable property in the district.

Source: L. 64: R&RE, p. 548, § 1. C.R.S. 1963: § 123-11-5. L. 70: p. 379, § 6. L. 72: p. 618, § 153. L. 73: p. 1277, § 5. L. 74: Entire section R&RE, p. 359, § 1, effective February 2. L. 83: (1)(a) amended and (3) added, p. 760, § 1, effective May 26; (2) added, p. 750, § 4, effective July 1. L. 88: (2) amended, p. 814, § 18, effective May 24. L. 90: IP(2)(a) amended, p. 1082, § 40, effective May 31. L. 91, 2nd Ex. Sess.: IP(2)(a) amended, p. 30, § 9, effective October 18. L. 92: (2)(a)(I) and (2)(a)(II) amended, p. 552, § 31, effective May 28. L. 94: Entire section amended, p. 805, § 9, effective April 27. L. 95: IP(1) amended and (1.3) and (1.5) added, p. 609, § 8, effective May 22. L. 96: IP(1.3) amended, p. 1796, § 12, effective June 4. L. 98: IP(1.3) and (1.3)(a) amended, p. 963, § 2, effective May 27. L. 2005: IP(1.3) amended, p. 434, § 8, effective April 29. L. 2007: (1.3) amended, p. 311, § 1, effective March 30; IP(1) and IP(1.3) amended and (1.4) added, p. 633, § 1, effective August 3. L. 2011: (1.2) added, (SB 11-230), ch. 305, p. 1467, § 7, effective June 9. L. 2012: IP(1.3) and IP(1.4) amended, (HB 12-1090), ch. 44, p. 153, § 17, effective March 22. L. 2014: IP(1), IP(1.3), and (1.5) amended and (1.6) added, (HB 14-1298), ch. 244, p. 923, § 8, effective May 21.

Editor's note: Amendments to subsection (1.3) by House Bill 07-1049 and House Bill 07-1239 were harmonized.

ANNOTATION

Law reviews. For article, "Property Tax Assessments in Colorado", see 12 Colo. Law. 563 (1983). For comment, "Colorado Public School Financing: Constitutional Issues", see 59 U. Colo. L. Rev. 149 (1988).

Annotator's note. Since § 22-42-104 is similar to repealed § 123-8-32, CRS 53, and laws antecedent thereto, relevant cases construing those provisions have been included in the annotations to this section.

Constitutionality of debt limit. The limit on the valuation for assessment of the taxable property for the bond redemption fund, established in subsection (1)(a), is rationally related to a legitimate state purpose, and is therefore declared constitutional. Lujan v. Colo. State Bd. of Educ., 649 P.2d 1005 (Colo. 1982).

The debt limit is determined at the time of the issuance of the bonds, whether issued in one or more series; and when the limitation is based on a percentage of the valuation, the limit of the debt is determined by the percentage of the assessed valuation in effect when the actual debt was created, which is the fixed percentage of the assessed valuation of the year next preceding the date of the bonds. Hebel v. Sch. Dist. R-1, 131 Colo. 105, 279 P.2d 673 (1955).

Issuance of bonds creates an indebtedness. The authorization of an issue of bonds is not the creation of an indebtedness, which can only arise when the bonds are issued. Hebel v. Sch. Dist. R-1, 131 Colo. 105, 279 P.2d 673 (1955).

The limit for the indebtedness is fixed by the state, which cannot be exceeded in any event. Hebel v. Sch. Dist. R-1, 131 Colo. 105, 279 P.2d 673 (1955).

Limit is based on valuations nearest the date of issuance. It undoubtedly was the intent of the general assembly that the debt limit be fixed on valuations nearest the date of the issuance of the bonds. Hebel v. Sch. Dist. R-1, 131 Colo. 105, 279 P.2d 673 (1955).

Where electors authorize an issue in excess of statutory limit, only the excess is void. Where a school district may become indebted in a certain amount by bonds, and the electors of the district authorize a debt in excess of that amount, such authorization is void only as to the excess, and valid as to the sum which it was within the power of the district to issue. Shover v. Buford, 71 Colo. 562, 208 P. 470 (1922).