First Regular Session Sixty-seventh General Assembly STATE OF COLORADO INTRODUCED LLS NO. 09-0345.01 Jerry Barry HOUSE BILL 09-1011 HOUSE SPONSORSHIP Gardner B., SENATE SPONSORSHIP Morse, House Committees Senate Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning the authority of the state to enter into lease-purchase agreements for offices of the department of corrections in El Paso county. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Authorizes the state to enter into one or more lease-purchase agreements for development and construction of a building for offices for the department of corrections. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. Legislative declaration. (1) The general assembly finds that: (a) The headquarters for the department of corrections, referred to in this act as the "department", are presently located in a privately owned building that is overcrowded and inadequate; (b) By designing and constructing a new building for the headquarters of the department, referred to in this section as the "department headquarters", the state can save money by replacing privately owned, leased space with state-owned and state-operated space; (c) The source of funding for the cost of the department headquarters should be from moneys currently being paid for leasing space for the department and from such other sources as the general assembly may deem appropriate. (2) It is therefore in the best interest of the citizens of Colorado to authorize the state of Colorado, acting by and through the executive director of the department of corrections, to enter into one or more lease-purchase agreements and other agreements as necessary to finance construction of a department headquarters. SECTION 2. Lease-purchase agreement. (1) (a) The state of Colorado, acting by and through the executive director of the department of corrections, referred to in this section as the "executive director", is authorized to execute a lease-purchase agreement for up to thirty years to finance the design and construction of an office building in El Paso county for the department headquarters. The total amount of the principal component of said lease-purchase agreement shall not exceed thirty million dollars ($30,000,000), plus reasonable and necessary administrative, monitoring, and closing costs and interest. The maximum annual aggregate rentals or other payments under the lease-purchase agreement authorized by this section from state funds shall not exceed two million dollars ($2,000,000). (b) Enactment of this act shall satisfy the requirements of sections 24-82-102 (1) (b) and 24-82-801, Colorado Revised Statutes, which require authorization of a lease-purchase agreement by a bill other than an annual general appropriation bill or a supplemental appropriation bill. (2) (a) The state of Colorado, acting by and through the executive director, may, with the approval of the state treasurer, enter into the lease-purchase agreement authorized by subsection (1) of this section with any for-profit or nonprofit corporation, trust, or commercial bank as a trustee, as the lessor. (b) The lease-purchase agreement authorized in subsection (1) of this section shall provide that all of the obligations of the state under the agreement shall be subject to the action of the general assembly in annually making moneys available for all payments thereunder. The 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 the lease-purchase agreement authorized in subsection (1) of this section, the sole security available to the lessor shall be the property that is the subject of the nonrenewed lease-purchase agreement. (c) (I) The lease-purchase agreement authorized in subsection (1) of this section may contain such terms, provisions, and conditions as the executive director, acting on behalf of the state of Colorado, may deem appropriate, including all optional terms; except that the lease-purchase agreement shall specifically authorize the state of Colorado to: (A) Receive fee title to all real and personal property that is the subject of the lease-purchase agreement on or prior to the expiration of the terms of the lease-purchase agreement; and (B) Reduce the term of the lease through prepayment of rental and other payments. (II) Any title to property received by the state on or prior to the expiration of the terms of the lease-purchase agreement shall be held for the benefit and use of the state. (d) The lease-purchase agreement authorized in subsection (1) of this section may provide for the issuance, distribution, and sale of instruments by the lessor evidencing rights to receive rentals and other payments made and to be made under the lease-purchase agreement. The instruments may be issued, distributed, or sold only by the lessor or any person designated by the lessor and not by the state. The instruments shall not create a relationship between the purchasers of the instruments and the state or create any obligation on the part of the state to the purchasers. 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. (e) Interest paid under the lease-purchase agreement authorized in subsection (1) of this section, including interest represented by the instruments, shall be exempt from Colorado income tax. (f) The state of Colorado, acting through the executive director, is authorized to enter into ancillary agreements and instruments as are deemed necessary or appropriate in connection with the lease-purchase agreements, including but not limited to ground leases, easements, or other instruments relating to the real property on which the department headquarters are located or other property managed by the department. (3) The provisions of section 24-30-202 (5) (b), Colorado Revised Statutes, shall not apply to the lease-purchase agreement authorized in subsection (1) of this section or any ancillary agreement entered into pursuant to paragraph (f) of subsection (2) of this section. Any provision of the fiscal rules promulgated pursuant to section 24-30-202 (1) and (13), Colorado Revised Statutes, that the state controller deems to be incompatible or inapplicable with respect to said lease-purchase agreements or any ancillary agreement may be waived by the controller or his or her designee. SECTION 3. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.