Colorado § 29-3-101 - Short title.

§ 29-3-101. Short title.

This article shall be known and may be cited as the "County and Municipality Development Revenue Bond Act".

Source: L. 67: p. 671, § 1. C.R.S. 1963: § 36-24-1. L. 73: p. 475, § 1.

ANNOTATION

Law reviews. For article, "Financing Real Estate Developments", see 11 Colo. Law. 2093 (1982).

This section does not contravene § 1 of art. XI, Colo. Const. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Revenue bond financing, as authorized by this section, does not constitute the pledging of credit for a private corporation and does not subject the county to the debt, contract, and liability of a private corporation in contravention of § 1 of art. XI, Colo. Const. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Nor § 6 of art. XI, Colo. Const. Revenue bond financing authorized by this statute does not unlawfully create county debt without the required election and for unauthorized purposes in contravention of § 6 of art. XI, Colo. Const. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Since there is no pledge of the credit of the county for the payment of revenue bonds, no "debt" is thereby created, and, consequently, the issuance of such bonds has no effect whatsoever on the debt limitations prescribed in § 6 of art. XI, Colo. Const. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

The provisions of this section do not contain delegations of power in contravention of § 35 of art. V, Colo. Const., and § 8 of art. XIV, Colo. Const. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Not violative of substantive due process. The revenue bond financing authorized by this section serves a bona fide public purpose and thereby does not deprive taxpayers of substantive due process of law in contravention of § 25 of art. II, Colo. Const., and of the fourteenth amendment to the United States Constitution. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

The argument under the "due process" clauses of the state and federal constitutional provisions that the revenue bond financing authorized by this statute favors one private enterprise over another engaged, or wishing to engage, in the same business in the same locality (in short, that the financing is for the private benefit of a private enterprise); that there is no assurance a competitor would receive the same consideration; and consequently that the project is not for a public purpose is without merit. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Public project not necessarily municipal. The fact that project financed by revenue bonds is for a "public purpose" does not necessarily make its existence or its function municipal in nature. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

But its effect may fulfill public purpose. It is the effect of, or the benefits flowing from, the completed project and its operation by private enterprise that fulfills the "public purpose" requirement and not, "per se", the county's participation therein. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

The mechanics of securing obligations are constitutionally immaterial. Since revenue bonds do not create a "debt" within the meaning of that term as used in § 6 of art. XI, Colo. Const., the mechanics of securing the obligations of those who advance the funds for the project are constitutionally immaterial. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Under Colorado law, public revenue bonds do not create debt, if there is no pledge of public property. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

No monetary liability of county. A county is not authorized to, and could not under the law, use general county funds, nor is it in any manner responsible for any shortages or deficiencies which may occur as the result of the development or the operation of the project financed with revenue bonds. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Purchaser on notice as to no such liability. If a bond purchaser sees fit to purchase revenue bonds of a project for the sake of a federal tax advantage, he certainly will be on notice of the fact that there will never be any pecuniary liability against the city, and that he will be able to look only to the revenues of the project and the project property itself for payment of his bonds. With it expressed clearly in the law and on the face of each bond that neither the credit nor taxing power of the municipality is pledged, no bondholder will ever be heard to say he was deceived or that he thought otherwise. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

The participation of a county as a "lessor" under this section does not constitute a "municipal function". Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Validity sustained by weight of authority. The employment of public revenue bonds to foster the promotion of local industry is not a new concept, and the weight of authority sustains the validity of laws such as this statute. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Law cognizant of supreme court decisions. This section was passed with full knowledge by the general assembly of the decisions of the supreme court approving revenue bond financing. Allardice v. Adams County, 173 Colo. 133, 476 P.2d 982 (1970).

Supreme court would not determine the constitutionality of this section when requested by the governor, stating that the question should only be answered after thorough analysis and study, with full opportunity for those who may be affected to be heard. In re House Bill No. 1503 of the Forty-sixth General Assembly, 163 Colo. 45, 428 P.2d 75 (1967).