C.R.S.
Section 24-82-802
Financed purchase of an asset or certificate of participation agreements for real property
- definitions
- financed purchase of an asset or certificate of participation rental cash fund
(1)
As used in this section, unless the context otherwise requires:(a)
Intentionally left blank —Ed.(I)
“Annual financed purchase of an asset or certificate of participation payment” means the total amount due from the state on property subject to a financed purchase of an asset or certificate of participation agreement and includes:(A)
The annual base rent scheduled to be paid and the additional rent estimated to be paid on or pursuant to the financed purchase of an asset or certificate of participation agreement and any ancillary agreements that may include, but need not be limited to, any of the following that are paid on a current basis and not paid by a seller or other third party as part of a financed purchase of an asset or certificate of participation agreement: All acquisition costs, such as due diligence costs associated with evaluation of an existing building; land acquisition; penalties for breaking lease agreements; a capital reserve for space planning and capital improvements needed in the building for demolition and construction of tenant space for state agencies or the release to existing tenants; relocation costs; office furniture and equipment; insurance; and the costs associated with any financed purchase of an asset or certificate of participation financing; plus(B)
Operating and maintenance costs and a reserve for controlled maintenance costs.(II)
For the construction of a new building on land owned or leased by the state, the acquisition costs may also include the architectural and engineering design and engineering costs, site preparation, provisions for utilities and tap fees, and materials and construction costs.(b)
“Annual rent costs” means base rent typically found in the leased space line item in the annual general appropriation bill plus all operation, maintenance, and related costs paid to a lessor or other third party.(c)
“Department” means the department of personnel, created in section 24-1-128.(d)
“Executive director” means the executive director of the department of personnel.(e)
“Financed purchase of an asset agreement” and “certificate of participation agreement” shall have the same meanings as provided in section 24-82-801 (4).(2)
Intentionally left blank —Ed.(a)
Subject to the provisions of this section, the state treasurer, on behalf of the state of Colorado for the use of the department, is authorized to enter into one or more financed purchase of an asset or certificate of participation agreements for real and associated personal property existing or to be constructed pursuant to requirements of the state to be exclusively used, possessed, and managed by the department for state agencies and nonstate lessees of the department as the executive director may solely determine according to the plan approved pursuant to subsection (4) of this section and subject to the terms of the financed purchase of an asset or certificate of participation agreement.(b)
Subject to section 2 of article XI of the state constitution, the state treasurer, for the use and benefit of the department, may enter into such financed purchase of an asset or certificate of participation agreements in conjunction with the state board of land commissioners, created pursuant to section 9 of article IX of the state constitution, or with a private person. The state treasurer shall transfer all benefits and responsibilities under the financed purchase of an asset or certificate of participation agreement to the department. The department shall manage the property for the state as the executive director may solely determine, subject to the terms of the financed purchase of an asset or certificate of participation agreement.(3)
The state treasurer shall enter into a financed purchase of an asset or certificate of participation agreement authorized pursuant to subsection (2) of this section on behalf of the state for the use and benefit of the department only if, at the time that the financed purchase of an asset or certificate of participation agreement is executed:(a)
The state agencies that will be located in the property that is the subject of the financed purchase of an asset or certificate of participation agreement are funded, in whole or in part, by appropriations and a portion of the appropriations are being expended to pay rent to a seller;(b)
The projected annual rent costs of the state agencies that will be located in the property plus any current rental payments or rental payments projected to be received from nonstate lessees for each fiscal year during the maximum term of the financed purchase of an asset or certificate of participation agreement exceed the annual financed purchase of an asset or certificate of participation payment for the property, adjusted as appropriate to account for any differences in services provided to, or costs paid for the benefit of, the state under the related leases and financed purchase of an asset or certificate of participation agreements;(c)
The property or proposed construction plan for the property has been reviewed by the state architect who shall make written recommendations to the executive director for controlled maintenance needs during the term of the financed purchase of an asset or certificate of participation agreement;(d)
The plan for the financed purchase of an asset or certificate of participation transaction has been approved first by the office of state planning and budgeting and the capital development committee of the general assembly pursuant to subsection (4) of this section;(e)
The executive director acknowledges his or her approval of the terms of the financed purchase of an asset or certificate of participation agreements and any ancillary agreements;(f)
The agreements for the financed purchase of an asset or certificate of participation transaction accurately reflect the plan approved by the office of state planning and budgeting and the capital development committee; and(g)
The state controller has approved all agreements pursuant to section 24-30-202.(4)
Prior to the state treasurer entering into any financed purchase of an asset or certificate of participation agreement pursuant to this section, the executive director shall submit the report required by section 24-82-102 (1) and the plan for the financed purchase of an asset or certificate of participation transaction to the office of state planning and budgeting. If the office of state planning and budgeting approves the report and the plan, it shall submit the report and the plan to the capital development committee of the general assembly. The capital development committee shall approve the plan or refer its recommendations regarding the plan, with written comments, to the executive director and the office of state planning and budgeting.(5)
Approval of the plan by the office of state planning and budgeting shall not authorize the department to expend any money on the annual financed purchase of an asset or certificate of participation payment in any fiscal year in an amount greater than the projected annual rent costs of the state agencies plus any rental payments projected to be received from nonstate lessees for such fiscal year, adjusted as appropriate to account for any differences in services provided to, or costs paid for the benefit of, the state under the related leases and financed purchase of an asset or certificate of participation agreements.(6)
The state of Colorado, acting by and through the state treasurer, for the use and benefit of the department may, at the state treasurer’s sole discretion, enter into one or more financed purchase of an asset or certificate of participation agreements authorized by subsection (2) of this section with any for-profit or nonprofit corporation, trust, or commercial bank as a trustee, as seller.(7)
Intentionally left blank —Ed.(a)
A financed purchase of an asset or certificate of participation agreement authorized in subsection (2) of this section shall provide that all of the obligations of the state under the financed purchase of an asset or certificate of participation agreement shall be subject to the action of the general assembly in annually making money available for all payments thereunder. The financed purchase of an asset or certificate of participation agreement shall also provide that the obligations shall not be deemed or construed as creating an indebtedness of the state within the meaning of any provision of the state constitution or the laws of the state of Colorado concerning or limiting the creation of indebtedness by the state of Colorado and shall not constitute a multiple fiscal-year direct or indirect debt or other financial obligation of the state within the meaning of section 20 (4) of article X of the state constitution. In the event the state of Colorado does not renew a financed purchase of an asset or certificate of participation agreement authorized in subsection (2) of this section, the sole security available to the seller shall be the property encumbered to secure the nonrenewed financed purchase of an asset or certificate of participation agreement or equivalent substitute collateral provided by the state.(b)
A financed purchase of an asset or certificate of participation agreement authorized in subsection (2) of this section may contain such terms, provisions, and conditions as the state treasurer, acting on behalf of the state of Colorado and for the use and benefit of the department, may deem appropriate, including all optional terms; except that a financed purchase of an asset or certificate of participation agreement:(I)
Shall not exceed in its term the shorter of the remaining useful life of the building or twenty-five years; and(II)
Shall specifically authorize the state of Colorado:(A)
To receive title to all real and personal property that is the subject of the financed purchase of an asset or certificate of participation agreement on or prior to the expiration of the terms of the financed purchase of an asset or certificate of participation agreement; and(B)
To reduce the term of the agreement through prepayment of rental and other payments subject to the terms of the financed purchase of an asset or certificate of participation agreement and any ancillary agreement.(c)
A financed purchase of an asset or certificate of participation agreement authorized in subsection (2) of this section may provide for the issuance, distribution, and sale of instruments evidencing rights to receive rentals and other payments made and to be made under the financed purchase of an asset or certificate of participation agreement. The instruments shall not be notes, bonds, or any other evidence of indebtedness of the state within the meaning of any provision of the state constitution or the law of the state concerning or limiting the creation of indebtedness of the state and shall not constitute a multiple fiscal-year direct or indirect debt or other financial obligation of the state within the meaning of section 20 (4) of article X of the state constitution.(d)
Interest paid under a financed purchase of an asset or certificate of participation agreement authorized in subsection (2) of this section, including interest represented by the instruments, shall be exempt from Colorado income tax.(e)
The state of Colorado, acting through the state treasurer, for the use and benefit of the department, is authorized, if the executive director concurs, to enter into ancillary agreements and instruments as are deemed necessary or appropriate in connection with a financed purchase of an asset or certificate of participation agreement, including but not limited to ground leases, site leases, easements, or other instruments relating to the real property on which the facilities are located; except that no ancillary agreement is authorized that would cause the annual financed purchase of an asset or certificate of participation payment to exceed the annual rent costs appropriated to the state agencies prior to the financed purchase of an asset or certificate of participation agreement plus any rent projected to be received from nonstate lessees.(f)
A financed purchase of an asset or certificate of participation agreement authorized in subsection (2) of this section may require the state to provide insurance; except that no insurance is authorized that would cause the annual financed purchase of an asset or certificate of participation payment to exceed the annual rent costs of the state agencies prior to the financed purchase of an asset or certificate of participation agreement plus any rent projected to be received from nonstate lessees, adjusted as described in subsection (3)(b) of this section. The insurance may be provided through the self-insured property fund created pursuant to section 24-30-1510.5.(8)
Any provision of the fiscal rules promulgated pursuant to section 24-30-202 (1) and (13) that the state controller deems to be incompatible or inapplicable with respect to said financed purchase of an asset or certificate of participation agreements or any such ancillary agreement may be waived by the controller or his or her designee.(9)
If a financed purchase of an asset or certificate of participation agreement authorized pursuant to subsection (2) of this section is executed, during the term of the financed purchase of an asset or certificate of participation agreement, money that at the time of the execution is appropriated to a state agency for rental payments in an amount equal to the annual financed purchase of an asset or certificate of participation payment, less any payments projected to be received from nonstate lessees pursuant to subsection (10) of this section, shall be transferred to the financed purchase of an asset or certificate of participation servicing account of the capital construction fund, created in section 24-75-302 (3.5), and, subject to annual appropriation, shall be used to pay the annual financed purchase of an asset or certificate of participation payments for the property that is the subject of the financed purchase of an asset or certificate of participation agreement or for operating, maintenance, and controlled maintenance costs for the property subject to the financed purchase of an asset or certificate of participation agreement. Money held in the financed purchase of an asset or certificate of participation servicing account shall be for the benefit of the department.(10)
Intentionally left blank —Ed.(a)
If the executive director determines that, in a property subject to a financed purchase of an asset or certificate of participation agreement authorized pursuant to subsection (2) of this section, there is space that is not needed by a state agency, the executive director, separately or in conjunction with the state board of land commissioners or another person, may:(I)
Hire a building manager to manage the space; or(II)
Subject to the approval of the office of state planning and budgeting, lease the space to any person on commercially reasonable terms.(b)
Intentionally left blank —Ed.(I)
Any money received by the executive director on behalf of nonstate lessees pursuant to subsection (10)(a) of this section shall be transmitted to the state treasurer, who shall credit the same to the financed purchase of an asset or certificate of participation rental cash fund for the benefit of the department, which fund is hereby created and referred to in this section as the “fund”. The money in the fund shall be subject to annual appropriation by the general assembly to the department of personnel and shall only be used for the annual financed purchase of an asset or certificate of participation payments for financed purchase of an asset or certificate of participation agreements authorized pursuant to subsection (2) of this section or for operating, maintenance, and controlled maintenance costs for the buildings subject to the financed purchase of an asset or certificate of participation agreements.(II)
Any money in the fund not expended for the purpose of this subsection (10) may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of money in the fund shall be credited to the fund. Any unexpended and unencumbered money remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be credited or transferred to the general fund or another fund.
Source:
Section 24-82-802 — Financed purchase of an asset or certificate of participation agreements for real property - definitions - financed purchase of an asset or certificate of participation rental cash fund, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-24.pdf (accessed Oct. 20, 2023).
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