Second Regular Session Sixty-ninth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 14-0715.01 Jason Gelender x4330 SENATE BILL 14-139 SENATE SPONSORSHIP Scheffel, HOUSE SPONSORSHIP (None), Senate Committees House Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning state-supported financing for charter school capital construction, and, in connection therewith, making an appropriation from the state education fund to the state charter school debt reserve fund. 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.) The state currently provides several mechanisms, including a state charter school debt reserve fund, and a "moral obligation" program that creates a "moral obligation" of the state to make appropriations to enable the payment of bonds issued by the Colorado educational and cultural facilities authority on behalf of qualified charter schools that would not otherwise be paid, that help charter schools finance capital construction on more favorable terms than they would otherwise be able to. The bill allows increased use of these mechanisms by: Increasing the balance of the state charter school debt reserve fund by making a one-time appropriation of $3 million from the state education fund and requiring that investment earnings on the fund be credited to the fund rather than to the state education fund; and Increasing the maximum limit of the state's "moral obligation" from $400 million to $500 million. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 22-30.5-407, amend (2) (a) (III), (2) (a) (IV), (2) (c), (4) (d) introductory portion, and (4) (d) (II); and add (2) (a) (I.5) and (2) (a) (V) as follows: 22-30.5-407. State charter school debt reserve fund - creation - use of fund moneys - legislative declaration. (2) (a) There is hereby created in the state treasury the state charter school debt reserve fund. The fund shall consist of the following moneys: (I.5) Three million dollars that are appropriated from the state education fund to the state charter school debt reserve fund on July 1, 2014; (III) Moneys transferred from the state education fund to the state charter school debt reserve fund pursuant to paragraph (d) of subsection (4) of this section; and (IV) Moneys credited to the fund by the state treasurer pursuant to section 22-30.5-408 (2) (c) (II); and (V) Interest and income credited to the fund pursuant to paragraph (c) of this subsection (2). (c) All interest and income derived from the deposit and investment of moneys in the state charter school debt reserve fund shall be before June 30, 2014, is credited to the state education fund and all interest and income derived from the deposit and investment of moneys in the state charter school debt reserve fund on and after July 1, 2014, is credited to the state charter school debt reserve fund; except that all interest and income derived from the deposit and investment of moneys in the state charter school interest savings account shall be credited to the account in accordance with paragraph (b) of this subsection (2). At the end of any fiscal year, all unexpended and unencumbered moneys in the state charter school debt reserve fund and the account shall remain in the fund and the account respectively. (4) (d) If the state treasurer expends moneys from the portion of the state charter school debt reserve fund that is not the state charter school interest savings account or if the state treasurer expends moneys from the state charter school interest savings account for purposes other than the payment of the administrative costs of the state treasurer, the state treasurer shall withhold charter school per pupil facilities aid program moneys to the extent necessary to restore that portion of the state charter school debt reserve fund, by the transfer of all withheld amounts from the state education fund to that portion of the state charter school debt reserve fund, to a one four million dollar balance and to the extent necessary to restore the state charter school interest savings account, by the transfer of all withheld amounts from the state education fund to the state charter school interest savings account, to the balance prior to expenditure of moneys from the account, in accordance with the following requirements: (II) If, in any given fiscal year, the state treasurer determines that after withholding the maximum amount of charter school per pupil facilities aid program moneys that may be withheld pursuant to subparagraph (I) of this paragraph (d) the portion of the state charter school debt reserve fund that is not the state charter school interest savings account will not be restored to a one four million dollar balance or the state charter school interest savings account will not be restored to the balance in the account prior to the state treasurer's expenditure of moneys from the account, each charter school that is not relying upon the state charter school debt reserve fund and the provisions of section 22-30.5-408 with respect to bonds issued on its behalf by the Colorado educational and cultural facilities authority shall have its payment reduced by the same percentage and by a maximum of ten percent. SECTION 2. In Colorado Revised Statutes, 22-30.5-408, amend (2) (a) and (2) (c) (II) as follows: 22-30.5-408. Replenishment of qualified charter school debt service reserve funds - additional responsibilities - state treasurer - qualified charter schools - definitions. (2) (a) If the Colorado educational and cultural facilities authority has issued qualified charter school bonds on behalf of any qualified charter school that fails immediately to restore its qualified charter school debt service reserve fund to the applicable qualified charter school debt service reserve fund requirement, the board of directors of the authority shall submit to the governor a certificate certifying any amount of moneys required to restore the qualified charter school debt service reserve fund to the applicable qualified charter school debt service reserve fund requirement. The governor shall submit a request for appropriations in an amount sufficient to restore any or all qualified charter school debt reserve funds to their respective qualified charter school debt service reserve fund requirements and the general assembly may, but shall not be required to, appropriate moneys for said purpose. If, in its sole discretion, the general assembly appropriates any moneys for said purpose, the aggregate outstanding principal amount of bonds for which moneys may be appropriated for said purpose shall not exceed four five hundred million dollars. (c) (II) Any net proceeds from the sale of property securing the bonds for which the qualified charter school debt reserve fund is established shall be used to reimburse the state treasurer for any costs incurred in connection with the sale of such property. The state treasurer shall credit any additional net proceeds from the sale of such property to the state charter school debt reserve fund to restore the fund to a balance of one four million dollars. The state treasurer shall credit any remaining net proceeds from the sale of such property to the state charter school interest savings account in the state charter school debt reserve fund. 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.