First Regular Session Sixty-eighth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 11-0349.01 Gregg Fraser HOUSE BILL 11-1137 HOUSE SPONSORSHIP Hullinghorst, SENATE SPONSORSHIP Heath, House Committees Senate Committees Local Government A BILL FOR AN ACT Concerning the authority of a local improvement district. 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.) Current law allows a county to create a local improvement district (district) in order to construct and fund certain improvements within the boundaries of the district with the affirmative vote of affected property owners. Some of these improvements can be funded by imposing a sales tax throughout the district or by using a combination of assessments and a sales tax. Section 1 of the bill allows a district to also use these funding mechanisms to provide certain services. Current law prohibits a district that levies a sales tax from having separate, noncontiguous areas within a county. Section 2 of the bill would eliminate this prohibition, allowing a district to impose a sales tax in noncontiguous areas of a county. Section 2 also authorizes a district to use marketing or advertising of events to promote the general development of business within the district. Section 3 of the bill allows all districts in which a sales tax is levied to provide transportation services, vehicles, equipment, and improvements in the district. Section 4 authorizes the owners of real property to petition to have their property included within the boundaries of a district that levies a sales tax. The bill specifies procedures for hearing and then granting or denying the petition. Sections 5 and 6 of the bill make conforming amendments. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 30-20-601, Colorado Revised Statutes, is amended to read: 30-20-601. Power to make local improvements. Except as otherwise provided in this part 6, any county in this state may construct any of the local improvements mentioned in this part 6 and fund such improvements by assessing the cost thereof, wholly or in part, upon the property especially benefited by such improvements or, for the funding of improvements and services authorized by section 30-20-603 (1) (a), (1) (a.5), and (1) (c), and (1) (d), by imposing a sales tax throughout the district or by utilizing a combination of such assessments and tax. The improvements shall be authorized by resolution duly adopted and shall be constructed under the direction of the county engineer or other officer having similar duties or under the direction of the board in accordance with plans and specifications adopted by the board. SECTION 2. 30-20-602 (2) and (2.9), Colorado Revised Statutes, are amended, and the said 30-20-602 is further amended BY THE ADDITION OF A NEW SUBSECTION, to read: 30-20-602. Definitions. As used in this part 6, unless the context otherwise requires: (2) "District" means the geographical division of the county or counties within which any local improvements are made or proposed, when so declared by resolution of the board. Except for a district in the unincorporated area of a county in which a sales tax is levied pursuant to section 30-20-604.5, There may be noncontiguous parts or sections of a county included in one district, but no district shall include territory that is included in an undissolved district that was formed for the same type of improvement. Notwithstanding any other provision of this part 6 and except in the case of a district formed prior to December 31, 2002, by a city that has been authorized to become a city and county pursuant to an amendment to the state constitution that has been approved by the registered electors of the state of Colorado, no district in which a sales tax is levied pursuant to section 30-20-604.5 shall be formed that includes territory within a municipality, and any such district shall be as compact as possible. Except as provided in section 30-20-603 (11.5) (b) (I), no district that crosses county boundaries may be formed by intergovernmental agreement or otherwise. A district that is authorized to impose and collect a sales tax may increase the territory within its boundaries in accordance with the procedures set forth in section 30-20-603.5. (2.9) "Informational products and materials" means any marketing or advertising device or event used to promote the general development of business within a district, but does not include any marketing or advertising device or event used to promote a single store or company. (4.9) "Service" means any service a district is authorized to provide in accordance with the provisions of section 30-20-603 (1) (a), (1) (a.5), (1) (c), (1) (d), or (1) (g). SECTION 3. 30-20-603 (1) (a.5) and (3) (a), Colorado Revised Statutes, are amended to read: 30-20-603. Improvements and funding authorized - how instituted - conditions. (1) (a.5) In a district formed prior to December 31, 2002, by a city that has been authorized to become a city and county pursuant to an amendment to the state constitution that has been approved by the registered electors of the state of Colorado and in which a sales tax is levied pursuant to section 30-20-604.5, the improvements may also consist of the provision of transportation services, vehicles, equipment, parking, and improvements in the district. Transportation services may be provided by the district in an area within the regional transportation district as described in section 32-9-106.1, C.R.S., if the regional transportation district consents to the provision of such services. (3) (a) Except as to improvements initiated by the board as authorized by subsection (2) of this section, no improvement shall be ordered under this part 6 unless a petition for the same is first presented, subscribed by the owners of property to be assessed for more than one-half of the entire costs estimated by the board to be assessed, and, except as specified in this section, nothing in this part 6 shall restrict the right of such owners from securing any particular kind or variety of improvements petitioned for. In any case where a proposed improvement district includes two or more assessment units, the owners of property to be assessed for more than one-half of the entire costs estimated by the board to be assessed in each assessment unit shall petition as specified in this part 6. In any case where a proposed improvement district formed prior to December 31, 2002, plans to provide transportation services and improvements pursuant to paragraph (a.5) of subsection (1) of this section and to levy a sales tax pursuant to section 30-20-604.5 to fund such services and improvements, the owners of the taxable real and personal property within the proposed improvement district having a valuation for assessment of not less than fifty percent of the valuation for assessment of all real or personal property within the district shall sign the petition presented to the board. SECTION 4. Part 6 of article 20 of title 30, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read: 30-20-603.5. Inclusion of additional territory. (1) The boundaries of a district that levies a sales tax pursuant to section 30-20-604.5 may be altered by the inclusion of additional real property by the fee owner or owners of one hundred percent of any real property capable of being served with improvements or services of the district by filing with the board a petition in writing requesting that such property be included in the special district. The petition shall set forth a legal description of the property, state that assent to the inclusion of such property in the district is given by the fee owner or owners thereof, and be acknowledged by the fee owner or owners in the same manner as required for the conveyance of land. (2) The board shall hear the petition at a public meeting after publication of notice of the filing of such petition, the place, time, and date of such meeting, the names and addresses of the petitioners, and notice that all persons interested shall appear at such time and place and show cause in writing why the petition should not be granted. The board may continue such hearing to a subsequent meeting. There shall be no withdrawal from a petition after publication of notice by the board without the consent of the board. The failure of any person in the existing district to file a written objection shall be taken as an assent to the inclusion of the area described in the notice. (3) The board shall grant or deny the petition, in whole or in part, with or without conditions, and the action of the board shall be final and conclusive. If a petition is granted as to all or any of the real property therein described, the board shall make an order to that effect by resolution and file the same with the county clerk and recorder, and the property shall thereupon be included in the district for the purpose of the levy, imposition, and collection of the district's sales tax. The board shall also cause a copy of the resolution to be sent to each property owner and each currently licensed sales-tax-collecting vendor in the area added to the district. (4) Sales tax shall be levied throughout the additional property included within the boundaries of the district pursuant to this section commencing on the first day of the month following the adoption by the board of the resolution approving the addition of the property to the district's boundaries. SECTION 5. 30-20-604.5 (1), (5), and (6) (b), Colorado Revised Statutes, are amended to read: 30-20-604.5. District sales tax. (1) The board of any county or of any city that has been authorized to become a city and county pursuant to an amendment to the state constitution that has been approved by the registered electors of the state of Colorado and that subsequently becomes a city and county for the purpose of funding all or a portion of the cost of any improvements constructed or transportation services provided pursuant to section 30-20-603 (1) (a), (1) (a.5), and (1) (c), may levy a sales tax throughout the district upon every transaction or other incident with respect to which a sales tax is authorized pursuant to section 29-2-105, C.R.S.; except that such tax may be levied only upon those transactions specified in section 39-26-104 (1) (a), (1) (b), (1) (e), and (1) (f), C.R.S. The board may, in its discretion, levy or continue to levy a sales tax on the sales of low-emitting motor vehicles, power sources, or parts used for converting such power sources as specified in section 39-26-719 (1), C.R.S. (5) (a) Except as provided in paragraph (b) of this subsection (5), all revenue collected from such sales tax to be expended for street improvement purposes, except the amounts retained under subsection (2) of this section, shall be credited to a special fund designated as the sales tax street improvement fund, such designation to include the name or description of the district. The fund shall be used only to pay the costs of the district improvements authorized by section 30-20-603 (1) (a) and (1) (c), the costs of debt service on bonds issued pursuant to section 30-20-619 (4), if any, or both of such costs. (b) In a district formed prior to December 31, 2002, by a city that has been authorized to become a city and county pursuant to an amendment to the state constitution that has been approved by the registered electors of the state of Colorado, all revenue collected from such sales tax to be expended for street improvement purposes, except the amounts retained under subsection (2) of this section, shall be credited to a special fund designated as the sales tax street improvement fund, such designation to include the name or description of the district. The fund shall be used only to pay the costs of the district improvements and transportation services authorized by section 30-20-603 (1) (a.5) and (1) (c), the costs of debt service on bonds issued pursuant to section 30-20-619 (4), if any, the costs of operations, maintenance, and replacement, and the costs of organization of the district. (6) (b) Notwithstanding paragraph (a) of this subsection (6), if an improvement includes the use of sales tax for the improvement's operation or maintenance or for the provision of services, the board shall continue to levy and collect the sales tax as specified in the resolution authorizing such tax. SECTION 6. 30-20-627, Colorado Revised Statutes, is amended to read: 30-20-627. Local improvements completed - dissolution. When the local improvements specified in the preliminary order referred to in section 30-20-603 (5) and specified in the resolution authorizing the improvements have been completed and any debt incurred or bonds issued have been paid, the board shall take all steps necessary to dissolve the district and, upon completion of such steps, shall declare, by resolution, that the district is dissolved; except that this requirement does not apply to a district formed for the purposes authorized in section 30-20-603 (11.5), nor to a district levying a sales tax for services or the continuing operation and maintenance of improvements pursuant to section 30-20-604.5. Upon dissolution, any moneys remaining to the credit of such district that have not been transferred to a special surplus and deficiency fund as permitted in section 30-20-619 (3) may be used for any county purpose as determined by the board, including, without limitation, the reimbursement to the county of any county moneys spent to provide any portion of the costs of the local improvements completed within the dissolved district. SECTION 7. Act subject to petition - effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 10, 2011, if adjournment sine die is on May 11, 2011); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part shall not take effect unless approved by the people at the general election to be held in November 2012 and shall take effect on the date of the official declaration of the vote thereon by the governor.