First Regular Session

Sixty-first General Assembly

LLS NO. 97­0392.01 JYSENATE BILL 97­094

STATE OF COLORADO

BY SENATOR Duke;

also REPRESENTATIVE Pfiffner.

LOCAL GOVERNMENT

A BILL FOR AN ACT

CONCERNING THE DISCLOSURE TO TAXPAYERS OF GENERALOBLIGATION INDEBTEDNESS INCURRED BY POLITICAL SUBDIVISIONS.

Bill Summary

"Political Subdiv Debt Disclosure"

(Note: This summary applies to this bill as introducedand does not necessarily reflect any amendments which may be subsequentlyadopted.)

Requires the disclosure statement in every contractfor the purchase and sale of residential real property to referto the general obligation indebtedness of all political subdivisions,rather than only to the indebtedness of special taxing districts.Requires such disclosure statement to include the name of thepolitical subdivision and a description of the specific generalobligation indebtedness incurred by the political subdivision.Specifies the type of description required in the disclosure.On and after January 1, 1998, requires the tax statement mailedto each taxpayer to list the total amount and the amount of theproportionate share of such indebtedness applicable to such taxpayer'sproperty.

Be it enacted by the General Assembly of the Stateof Colorado:

SECTION 1.  38­35.7­101(1), Colorado Revised Statutes, 1982 Repl. Vol., as amended, isamended, and the said 38­35.7­101 is further amendedBY THE ADDITION OF THE FOLLOWING NEW SUBSECTIONS, to read:

38­35.7­101.  Disclosure ­political subdivisions ­ general obligation indebtedness.(1) (a)  Every contract for the purchase and saleof residential real property shall contain a disclosure statementin bold­faced type which is clearly legible and in substantiallythe following form:

"Specialtaxing districts POLITICALSUBDIVISIONS may be subject to general obligation indebtednessthat is paid by revenues produced from annual tax levies on thetaxable property within such districtsPOLITICAL SUBDIVISIONS, WHICH GENERAL OBLIGATION INDEBTEDNESS,IF ANY, IS LISTED BELOW. Property owners in such districtsPOLITICAL SUBDIVISIONS may be placed at risk for increased milllevies and excessive tax burdens to support the servicing of suchdebt where circumstances arise resulting in the inability of sucha districtPOLITICAL SUBDIVISION to discharge such indebtedness without suchan increase in mill levies. Purchasers should investigate thedebt financing requirements of the authorized general obligationindebtedness of such districtsPOLITICAL SUBDIVISIONS, existing mill levies of such districtPOLITICAL SUBDIVISION servicing such indebtedness, and the potentialfor an increase in such mill levies.

NAME OF POLITICAL SUBDIVISION: __________________________________________________________

DESCRIPTION OF GENERAL OBLIGATION INDEBTEDNESS:____________________________________________________________________________________________"

(b)  THIS SUBSECTION (1), AS AMENDED, SHALLAPPLY TO CONTRACTS ENTERED INTO ON OR AFTER THE EFFECTIVE DATEOF THIS SUBSECTION (1).

(1.5)  FOR SPECIAL DISTRICTS, THE DESCRIPTIONOF GENERAL OBLIGATION INDEBTEDNESS REQUIRED UNDER SUBSECTION (1)OF THIS SECTION SHALL BE THE SAME AS THE DESCRIPTION OF SUCH INDEBTEDNESSTHAT IS RECORDED BY A SPECIAL DISTRICT IN EACH COUNTY IN WHICHTHE DISTRICT IS LOCATED AS REQUIRED UNDER SECTION 32­1­1604,C.R.S., AS OF THE DATE OF CLOSING.

(3)  FOR PURPOSES OF THIS SECTION:

(a)  "GENERAL OBLIGATION INDEBTEDNESS"MEANS AN OBLIGATION OF A POLITICAL SUBDIVISION CREATED BY A RESOLUTIONOR ORDINANCE OF THE POLITICAL SUBDIVISION AUTHORIZING A CONTRACTOR THE ISSUANCE OF BONDS, THE OBLIGATIONS OF WHICH ARE BACKEDBY A PLEDGE OF THE FULL FAITH AND CREDIT OF THE POLITICAL SUBDIVISIONAND A COVENANT TO IMPOSE MILL LEVIES WITHOUT LIMIT TO RETIRE THEBONDS OR FUND THE CONTRACTUAL OBLIGATION.

(b)  "POLITICAL SUBDIVISION"MEANS A COUNTY, CITY AND COUNTY, CITY, TOWN, SERVICE AUTHORITY,SCHOOL DISTRICT, LOCAL IMPROVEMENT DISTRICT, LAW ENFORCEMENT AUTHORITY,WATER, SANITATION, FIRE PROTECTION, METROPOLITAN, IRRIGATION,DRAINAGE, OR OTHER SPECIAL DISTRICT, OR ANY OTHER KIND OF MUNICIPAL,QUASI­MUNICIPAL, OR PUBLIC CORPORATION ORGANIZED PURSUANTTO LAW.

SECTION 2.  39­10­103,Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amendedBY THE ADDITION OF A NEW SUBSECTION to read:

39­10­103.  Tax statement.(4) (a)  ON AND AFTER JANUARY 1, 1998, THE TAXPAYER'SSTATEMENT REQUIRED BY SUBSECTION (1) OF THIS SECTION SHALL ALSOSEPARATELY LIST THE TOTAL AMOUNT AND THE AMOUNT OF THE PROPORTIONATESHARE OF GENERAL OBLIGATION INDEBTEDNESS OF ANY POLITICAL SUBDIVISIONAPPLICABLE TO THE TAXPAYER'S PROPERTY.

(b)  THIS SUBSECTION (4) SHALL BE APPLICABLEFOR TAX STATEMENTS FOR THE 1997 TAXES PAYABLE IN 1998 AND FOREACH STATEMENT THEREAFTER.

(c)  FOR PURPOSES OF THIS SUBSECTION (4):

(I)  "GENERAL OBLIGATION INDEBTEDNESS"SHALL HAVE THE SAME MEANING AS SET FORTH IN SECTION 38­35.7­101(3) (a), C.R.S.

(II)   "POLITICAL SUBDIVISION"SHALL HAVE THE SAME MEANING AS SET FORTH IN SECTION 38­35.7­101(3) (b), C.R.S.

SECTION 3.    Effectivedate. This act shall take effect at 12:01 a.m. on the dayfollowing the expiration of the ninety­day period after finaladjournment of the general assembly that is allowed for submittinga referendum petition pursuant to article V, section 1 (3) ofthe state constitution; except that, if a referendum petitionis filed against this act or an item, section, or part of thisact within such period, then the act, item, section, or part,if approved by the people, shall take effect on the date of theofficial declaration of the vote thereon by proclamation of thegovernor.