Colorado § 32-1-503 - Effect of exclusion order.

§ 32-1-503. Effect of exclusion order.

(1) Territory excluded from a special district pursuant to the provisions of this part 5 shall not be subject to any property tax levied by the board for the operating costs of the special district. For the purpose of retiring the special district's outstanding indebtedness and the interest thereon existing at the effective date of the exclusion order, the special district shall remain intact, and the excluded territory shall be obligated to the same extent as all other property within the special district but only for that proportion of such outstanding indebtedness and the interest thereon existing immediately prior to the effective date of the exclusion order. The board shall levy annually a property tax on all such excluded and remaining property sufficient, together with other funds and revenues of the special district, to pay such outstanding indebtedness and the interest thereon. The board is also empowered to establish, maintain, enforce, and, from time to time, modify such service charges, tap fees, and other rates, fees, tolls, and charges, upon residents or users in the area of the special district as it existed prior to the exclusion, as may in the discretion of the board be necessary to supplement the proceeds of said tax levies in the payment of the outstanding indebtedness and the interest thereon. In no event shall excluded territory of a special district become obligated for the payment of any bonded indebtedness created after the date of the court's exclusion order.

(2) The change of boundaries of the special district shall not impair nor affect its organization, nor shall it affect, impair, or discharge any contract, obligation, lien, or charge on which it might be liable or chargeable had such change of boundaries not been made.

(3) Notice of the court order of any exclusion accomplished pursuant to this part 5 shall be given in accordance with the provisions of section 32-1-105.

Source: L. 81: Entire article R&RE, p. 1562, § 1, effective July 1.

Editor's note: This section is similar to former § 32-1-308 as it existed prior to 1981.

ANNOTATION

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

This section is directory to the taxing authorities. In re Org. of S.W. Adams County Fire Prot. Dist., 192 Colo. 142, 556 P.2d 1215 (1976).

Property excluded from a fire protection district by a July 12, 1974 order was subject to all property taxes levied by the district for the 1974 taxable year, and for the taxable year 1975 and thereafter, the excluded territory was subject only to a levy for taxes for a pro rata share of the district's indebtedness outstanding on January 1, 1975. City & County of Denver v. Bd. of Dirs., 37 Colo. App. 496, 549 P.2d 1090 (1976).

Property excluded from a special district pursuant to this section is still obligated to the same extent as all other property within the special district for purposes of retiring the special district's outstanding indebtedness existing at the time of the exclusion order. Excluded property is to be valued and assessed in the same manner, and subject to the same mill levy, as all other property in the district. In re Black Forest Fire/Rescue Prot. Dist., 85 P.3d 591 (Colo. App. 2003).

"Proportion", as used in this section, refers to the relationship between a special district's outstanding indebtedness prior to the exclusion of property and its total indebtedness. Nothing in the section suggests that "proportion" refers to any relationship between the assessed value of the excluded property and the assessed value of the district as a whole. In re Black Forest Fire/Rescue Prot. Dist., 85 P.3d 591 (Colo. App. 2003).

A court-ordered monetary transfer from the city to the special district upon exclusion is not double taxation for the same government service. The transfer of money to the special district was to compensate the district for its financial loss and was intended to support facilities outside of the city that will remain in the district. Taxes collected by the city and used to pay the transfer amount would serve a different purpose from taxes used to support facilities within the city that are excluded from the district. Cherry Hills Vill. v. S. Suburban Park & Recreation Dist., 219 P.3d 421 (Colo. App. 2009).

This section cannot be construed to prohibit trial courts from ordering monetary transfers upon exclusion. Such an interpretation would be contrary to the provisions of § 32-1-502 (2)(d), which requires courts to resolve disputes in a manner that is fair and equitable. Cherry Hills Vill. v. S. Suburban Park & Recreation Dist., 219 P.3d 421 (Colo. App. 2009).

PART 6

CONSOLIDATION

Law reviews: For article, "Consolidation of Fire Protection Districts: A Case Study", see 24 Colo. Law. 813 (1995).