C.R.S.
Section 22-54-110
Loans to alleviate cash flow deficits
- financed purchase of an asset agreements
(II)
The state treasurer shall determine the methodology for the calculation of cash deficits and establish reporting mechanisms necessary to ensure consistent and accurate reporting of cash deficits. No loan shall be made in any month unless the district has demonstrated, through the submission of any actual or projected financial or budgetary statements required by the state treasurer that a general fund cash deficit will exist for that month, and that the district has the capacity to repay the loan by June 25th of the state fiscal year in which the loan shall be made. This subparagraph (II) shall apply to a loan made from the state general fund or the proceeds of the tax and revenue anticipation notes issued pursuant to section 29-15-112, C.R.S.(a.5)
A district that chooses to participate in the interest-free or low-interest loan program shall submit an application to the state treasurer. On and after March 25, 2003, a district’s initial application to participate in the interest-free or low-interest loan program shall be subject to approval by a resolution adopted by the district board of education as follows:(I)
For a month in which the district seeks an emergency loan pursuant to paragraph (d) of this subsection (1), the chief financial officer of the district and the district superintendent shall present the emergency loan request to the district board of education, explaining the need for the emergency loan and the requested amount. The district board of education, by majority vote, shall approve or disapprove the emergency loan request and the amount. If the district board of education approves the emergency loan request, the chief financial officer and the district superintendent shall request the emergency loan from and certify the amount of the emergency loan to, as approved by the district board of education, the state treasurer as provided in paragraph (a) of this subsection (1).(II)
If, in order to receive an interest-free loan, a district seeks to have tax and revenue anticipation notes issued on its behalf pursuant to section 29-15-112, C.R.S., the chief financial officer of the district and the district superintendent shall present a request to the district board of education to participate in the interest-free loan program and to have tax and revenue anticipation notes issued on its behalf. Such request shall explain the district’s anticipated cash flow deficit for the upcoming calendar year and the total amount of tax and revenue anticipation notes that need to be issued on its behalf to cover such deficit. The district board of education, by majority vote, shall approve or disapprove the participation in the interest-free loan program and the amount of tax anticipation and revenue notes that shall be issued on behalf of the district. If the district board of education approves the participation in the interest-free loan program and the issuance of tax and revenue anticipation notes, the chief financial officer and the district superintendent shall certify to the state treasurer the amount of the tax and revenue notes, as approved by the district board of education, that shall be issued on behalf of the district. Thereafter, a district shall not be required to receive approval for an interest-free loan made from the proceeds of the tax and revenue anticipation notes that received prior approval by the district board of education.(b)
A loan may not be made under this section to cover a foreseeable level of uncollectible property taxes, nor may a loan be used by a district for the simultaneous purchase and sale of the same security or an equivalent security in order to profit from price disparity.(c)
Except as otherwise provided in paragraph (d) of this subsection (1), all loans to a district shall be made from the proceeds of the tax and revenue anticipation notes issued pursuant to section 29-15-112, C.R.S.(d)
If the amount of the tax and revenue anticipation notes, if any, issued on behalf of a district as determined by the state treasurer pursuant to section 29-15-112 (2)(f), C.R.S., is not sufficient to cover a district’s cash deficit, then the state treasurer may, in his or her discretion, make available to such district an emergency loan from the state general fund. The emergency loan shall accrue interest at the same rate as the rate of interest paid by the state treasurer on notes issued by the state pursuant to part 9 of article 75 of title 24, C.R.S.(2)
Intentionally left blank —Ed.(a)
For the months of March, April, and May of each budget year, any district receiving a loan under the provisions of paragraph (d) of subsection (1) of this section shall begin to repay such loan if the district’s available resources, as of the last day of the month, increased by the next month’s revenues exceed the next month’s expenditures plus a cash reserve. The excess resources must be remitted to the state treasurer by the close of business on the fifteenth day, or the first business day following the fifteenth day, of the following month. All loans shall be repaid by June 25 of the state fiscal year in which the loan was made or on a later alternative date as determined by the state treasurer.(a.5)
For the months of March, April, and May of each budget year, any district receiving a loan under the provisions of paragraph (c) of subsection (1) of this section shall begin to repay such loan as established by the district’s agreement with the state treasurer. All loans shall be repaid by June 25 of the state fiscal year in which the loan was made or on a later alternative date as determined by the state treasurer.(a.7)
If a district defaults on a loan that is made from the proceeds of the tax and revenue anticipation notes issued pursuant to section 29-15-112, C.R.S., by failing to repay the loan on or before the date required, interest shall accrue on the unpaid balance from the date of default until the loan is repaid in an amount that is equal to the interest paid by the state treasurer on notes issued by the state pursuant to part 9 of article 75 of title 24, C.R.S.(b)
For purposes of paragraph (a) of this subsection (2):(I)
“Available resources” means any available cash and investments in district funds which can be used to alleviate general fund cash shortfalls including, but not limited to, the district’s capital reserve fund and any fund or account within the general fund established solely for the management of risk-related activities. “Available resources” shall not include cash that is legally segregated or pledged by contract or rule and regulation of the state board.(II)
“Cash reserve” means eight percent of the district’s average monthly expenditures or twenty thousand dollars, whichever is greater.(c)
A lien in the amount of any such loan, plus any interest specified in paragraph (a.7) of this subsection (2), shall attach to any district property tax revenues, except for bond redemption fund revenues, collected during the state fiscal year in which the loan was made, and such lien shall have priority over all other expenditures from such revenues until the loan shall have been repaid in full. The county treasurer of the county in which the headquarters of the district are located shall be jointly responsible with the district for repayment of any loan made pursuant to this section, plus any interest specified in paragraph (a.7) of this subsection (2). If a district fails to repay a loan to the state treasurer in accordance with the provisions of this section, the state treasurer shall notify the county treasurer of the county in which the district is located that the district is in default on the loan and the amount of the default, plus any interest specified in paragraph (a.7) of this subsection (2). The county treasurer shall withhold any moneys of the district in the county treasurer’s possession in an amount equal to the amount of the default, plus any interest specified in paragraph (a.7) of this subsection (2), and transmit said moneys to the state treasurer. If the amount of moneys of the district in the county treasurer’s possession at the time notice of the default is given is less than the amount of the default, the county treasurer shall withhold additional moneys of the district until such time as the default, plus any interest specified in paragraph (a.7) of this subsection (2), has been completely paid to the state treasurer.(d)
Intentionally left blank —Ed.(I)
A district may sell real property to the state treasurer pursuant to the provisions of this paragraph (d) if:(A)
The district has been denied a loan pursuant to the provisions of this section in which case the fair market value of the property shall be equal to or greater than the amount of the purchase price; or(B)
The district is unable to pay a loan back in the same state fiscal year in which the loan was made in which case the fair market value of the real property shall be equal to or greater than the outstanding balance of the loan to the state treasurer.(II)
Such sale may only be made if:(A)
At the same time of the sale, the state treasurer enters into a financed purchase of an asset or certificate of participation agreement with the district covering all of the property that is subject to annual appropriation by the school district;(B)
The district pays any legal or other transaction costs incurred by the state treasurer related to the sale of the property and the financed purchase of an asset or certificate of participation agreement; and(C)
The state treasurer agrees to the sale of the property and the financed purchase of an asset or certificate of participation agreement.(III)
The provisions of subsection (2)(c) of this section shall not apply to the financed purchase of an asset or certificate of participation agreement, and no lien shall attach to any district tax revenues in order to secure the district’s payments. The financed purchase of an asset or certificate of participation agreement shall not authorize the district to receive fee title to the property that is the subject of the financed purchase of an asset or certificate of participation agreement prior to the expiration of the terms of the financed purchase of an asset or certificate of participation agreement.(IV)
Sections 24-82-102 (1)(b) and 24-82-801, C.R.S., shall not apply to the lease-purchase agreement.(V)
If a district defaults in the payment of rent required by the financed purchase of an asset or certificate of participation agreement, it shall have thirty days to cure the default. If after thirty days the district has not cured the default and if the district remains in possession of the property, the state treasurer shall recover possession of the property pursuant to the provisions of article 40 of title 13. If a court enters a judgment in favor of the state treasurer and issues a writ of restitution pursuant to section 13-40-115, the state treasurer shall liquidate the property to the best advantage of the state.(3)
The state treasurer shall consult with the department of education concerning the administration of the loan program under this section in order to assure that it is implemented in a manner that will minimize the amount of emergency loans needed by each district.(4)
A district receiving a loan pursuant to this section shall be subject to an audit conducted by, or contracted for by, the state auditor and shall be penalized through the withholding of state aid in the event an audit finds the district used the loan in a manner contrary to the provisions of this section.
Source:
Section 22-54-110 — Loans to alleviate cash flow deficits - financed purchase of an asset agreements, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-22.pdf (accessed Oct. 20, 2023).
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