First Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 11-0484.01 Jason Gelender HOUSE BILL 11-1114 HOUSE SPONSORSHIP Ramirez, Baumgardner, Conti, Holbert, Kerr J., Looper, Massey, Stephens SENATE SPONSORSHIP (None), House Committees Senate Committees Finance A BILL FOR AN ACT Concerning a requirement that a state lease-purchase agreement be specifically authorized by a bill enacted with the approval of at least two-thirds of the members of each house of the general assembly, and, in connection therewith, providing specified exceptions to the requirement. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) On and after July 1, 2011, section 1 of the bill requires any state lease-purchase agreement that requires total payments exceeding $500,000 to be approved by a bill, other than the annual general appropriation act or a supplemental appropriation act, enacted with the approval of at least two-thirds of the members of each house of the general assembly, but excludes from the requirement: Lease-purchase agreements entered into by the department of transportation, institutions of higher education, the state treasurer, or the legislative department that do not also provide for the issuance of certificates of participation or similar financial instruments; and Lease-purchase agreements legally authorized by a bill enacted by the general assembly before July 1, 2011, that specifically authorized lease-purchase agreements for specifically-identified projects only or subject to a limit on the maximum amount of lease payments. Section 2 of the bill repeals a statutory provision that authorizes the state treasurer, subject to specified conditions, to enter into lease-purchase agreements on behalf of the state for the use of the department of personnel without the specific approval of the entire general assembly acting by bill. Section 3 of the bill makes a conforming amendment necessitated by section 2 of the bill. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 24-82-801 (1) (a), (1) (b), (6), and (7), Colorado Revised Statutes, are amended to read: 24-82-801. Lease-purchase agreements for acquisition of real or personal property. (1) (a) Except as provided in subsection (6) of this section, no lease-purchase agreement for real property that requires total payments exceeding five hundred thousand dollars over the term of the agreement shall be entered into unless such the agreement is specifically authorized, prior to its execution, by a bill enacted by with the approval of at least two-thirds of the members of each house of the general assembly, other than the annual general appropriation act or a supplemental appropriation act. (b) Except as provided in subsection (6) of this section, no lease-purchase agreement for personal property that requires total payments exceeding five hundred thousand dollars over the term of the agreement shall be entered into unless such the agreement is specifically authorized, prior to its execution, by a bill enacted by with the approval of at least two-thirds of the members of each house of the general assembly, other than the annual general appropriation act or a supplemental appropriation act. or specifically authorized by appropriation in the annual general appropriation act or a supplemental appropriation act. (6) (a) Notwithstanding any provision of this section to the contrary, the department of transportation, institutions of higher education, and the state treasurer may enter into lease-purchase agreements that do not further provide for the issuance, distribution, and sale of instruments evidencing rights to receive rentals and other payments made by the state as authorized by subsection (5) of this section if the state controller as authorized by section 24-30-202 approves each lease-purchase agreement that requires total payments in excess of five hundred thousand dollars over the term of the agreement or as otherwise provided by law. (b) Notwithstanding any provision of this section to the contrary, the legislative department may enter into lease-purchase agreements that do not further provide for the issuance, distribution, and sale of instruments evidencing rights to receive rentals and other payments made by the state as authorized by subsection (5) of this section pursuant to section 2-2-320, C.R.S. (c) Notwithstanding any provision of this section to the contrary, if a bill enacted by the general assembly before July 1, 2011, other than the general appropriation act or a supplemental appropriation act in the case of a lease-purchase agreement for real property, specifically authorized lease-purchase agreements for specifically-identified projects only or subject to a limit on the maximum amount of lease payments, the lease-purchase agreements may be entered into without further legislative approval. (7) Nothing in this section shall be construed to impair any contract or instrument in existence on July 1, 2009 July 1, 2011, if the contract was validly entered into or the instrument was validly issued under the law in effect at the time of entering into said contract or issuing said instrument. SECTION 2. Repeal. 24-82-802, Colorado Revised Statutes, is repealed. SECTION 3. 24-75-302 (3.5), Colorado Revised Statutes, is amended to read: 24-75-302. Capital construction fund - capital assessment fees - calculation - repeal. (3.5) (a) There is hereby created a special account within the capital construction fund established pursuant to subsection (1) of this section to be known as the "lease-purchase servicing account" for the benefit of the department of personnel. The state treasurer shall deposit into the lease-purchase servicing account all moneys transferred or received pursuant to section 24-82-802 (9), as that section existed before July 1, 2011. Moneys in the lease-purchase servicing account shall be subject to annual appropriation and shall only be used to pay annual lease-purchase payments, as defined in section 24-82-802 (1) (a), as that section existed before July 1, 2011, for lease-purchase agreements authorized pursuant to section 24-82-802, as that section existed before July 1, 2011, or for operating, maintenance, and controlled maintenance costs and to establish a reserve for controlled maintenance costs for the buildings subject to the lease-purchase agreements. All interest and income derived from the investment and deposit of moneys in the account shall be credited to the account. All moneys remaining in the account at the end of a fiscal year that are unexpended or unencumbered shall remain in the account. (b) This section is repealed, effective as of the date on which all obligations of the state under lease-purchase agreements paid from the account are paid in full. Upon such repeal, any moneys remaining in the account shall be transferred to the general fund. The state treasurer shall promptly notify the revisor of statutes in writing of the payment in full of all obligations of the state under lease-purchase agreements paid from the account. SECTION 4. Effective date. This act shall take effect July 1, 2011. SECTION 5. 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.