2023 Colorado Revised Statutes › Title 22 - EDUCATION (§§ 22-1-101 — 22-108-109) › SCHOOL DISTRICTS (§§ 22-30-101 — 22-38-115) › Article 30.5 - Charter Schools (§§ 22-30.5-101 — 22-30.5-704) › Part 4 - CHARTER SCHOOL CAPITAL FACILITIES FINANCING ACT (§§ 22-30.5-401 — 22-30.5-409) › Section 22-30.5-407 - State charter school debt reserve fund - creation - use of fund moneys - legislative declaration

(1)
The general assembly hereby finds and declares that:
(a)
The state charter school debt reserve fund created by this section is intended to enhance the ability of any qualified charter school that chooses to finance capital construction with revenues from bonds issued on behalf of the qualified charter school by the Colorado educational and cultural facilities authority created in section
23-15-104(1)(a)
, C.R.S., to obtain such financing on favorable terms by providing a source of moneys that can be used to make bond payments if the qualified charter school fails to make such payments;
(b)
It is appropriate for state education fund moneys to be appropriated to the state charter school debt reserve fund and it is also appropriate for those qualified charter schools that receive more favorable financing terms that result in interest rate savings due to the existence of and reliance upon the state charter school debt reserve fund and the provisions of section
22-30.5-408
with respect to such bonds to pay a portion of their resulting savings to the state charter school debt reserve fund and for all charter schools to bear the risk of having charter school per pupil facilities aid program moneys withheld to replenish the state charter school debt reserve fund in the event that moneys from the state charter school debt reserve fund are expended to make bond payments.
(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)
One million dollars that are hereby appropriated from the state education fund to the state charter school debt reserve fund on July 1, 2002;
(I.5)
Six million five hundred thousand dollars that are transferred from the state education fund to the state charter school debt reserve fund on July 1, 2014;
(II)
Moneys credited to the state charter school interest savings account of the fund pursuant to subsection (3) of this section;
(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;
(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).
(b)
There is hereby created within the state charter school debt reserve fund the state charter school interest savings account. The account shall consist of moneys credited to the account by the state treasurer pursuant to subsection (3) of this section and any interest and income derived from the deposit and investment of moneys in the account.
(c)
All interest and income derived from the deposit and investment of moneys in the state charter school debt reserve fund on or before June 30, 2014, are 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, are 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 remain in the fund and the account respectively.
(d)
All moneys credited to the state charter school debt reserve fund or expended from the fund, other than moneys credited to or expended from the state charter school interest savings account, are moneys originally credited to the state education fund and are therefore, in accordance with section 17 (3) of article IX of the state constitution and section
22-55-103(5)
, exempt from:
(I)
The limitation on state fiscal year spending set forth in section 20 (7)(a) of article X of the state constitution and section
24-77-103
, C.R.S.; and
(II)
The limitation on local government fiscal year spending set forth in section 20 (7)(b) of article X of the state constitution.
(3)
(a)
A qualified charter school that chooses to finance capital construction with revenues from bonds issued on behalf of the qualified charter school by the Colorado educational and cultural facilities authority created in section
23-15-104(1)(a)
, C.R.S., shall pay to the state treasurer, on an annual basis, commencing and calculated on the date of issuance of the bonds and on each one-year anniversary of the issuance of the bonds thereafter while the bonds remain outstanding, an amount equal to ten basis points of the principal amount of the bonds outstanding as of each calculation date, and such amount shall be deemed to be the amount of any interest rate savings resulting from more favorable financing terms attributable to the reliance upon the state charter school debt reserve fund and the provisions of section
22-30.5-408
with respect to such bonds. Each annual payment of ten basis points shall be prorated and payable in equal installments among the debt service payments required of the qualified charter school, with respect to the qualified charter school bonds issued for its benefit, during the twelve months following the annual computation date. The state treasurer shall credit any payment received pursuant to this paragraph (a) to the state charter school interest savings account.
(b)
The state treasurer may require each qualified charter school that makes required payments to the state treasurer pursuant to paragraph (a) of this subsection (3) to pay a fee to the state treasurer to defray any direct and indirect administrative costs incurred by the state treasurer in executing duties required by this section. The state treasurer shall deposit any fees received into the state charter school interest savings account of the state charter school debt reserve fund.
(4)
(a)
Moneys in the state charter school debt reserve fund are hereby continuously appropriated to the state treasurer, who shall expend such moneys solely for the purpose of paying principal and interest on bonds issued on behalf of a qualified charter school by the Colorado educational and cultural facilities authority and only if:
(I)
The state treasurer has been notified and has confirmed, in accordance with paragraph (b) of this subsection (4), that the qualified charter school has expended all moneys in its own debt service reserve fund or account that has been funded with proceeds derived from the issuance of the bonds and is unable to make bond payments; and
(II)
The qualified charter school has made payments to the state treasurer as required by subsection (3) of this section.
(a.5)
Notwithstanding the provisions of paragraph (a) of this subsection (4), fees deposited into the state charter school interest savings account of the state charter school debt reserve fund pursuant to paragraph (b) of subsection (3) of this section may be expended by the state treasurer for the purpose of defraying any direct and indirect administrative costs incurred by the state treasurer in executing duties required by this section.
(b)
Whenever the trustee responsible for making payments to the holders of any qualified charter school bonds, as defined in section
22-30.5-408(1)(d)
, issued on behalf of a qualified charter school by the Colorado educational and cultural facilities authority has not received payment of principal or interest on the bonds on the tenth business day immediately prior to the date on which such payment is due and the debt service reserve fund for the qualified charter school has been depleted, the trustee shall so notify the state treasurer and the qualified charter school by telephone, facsimile, or other similar communication, followed by written verification, of such payment status. The state treasurer shall immediately contact the qualified charter school and determine whether the qualified charter school will make the payment by the date on which it is due and, if the state treasurer confirms that the qualified charter school will not make the payment, the state treasurer shall make the payment.
(c)
The state treasurer shall expend all moneys in the state charter school interest savings account before expending any other moneys in the state charter school debt reserve fund. If a qualified charter school defaults on a payment with respect to outstanding qualified charter school bonds, as defined in section
22-30.5-408(1)(d)
, and the amounts of such payment defaults exceed the amounts available in the state charter school interest savings account and the state charter school debt reserve fund, moneys from the account and the fund shall be allocated pro rata among the qualified charter school bonds that will have a default in the payment of principal or interest based on the ratio that the payment default on each series of such bonds bears to the total payment defaults on all series of such qualified charter school bonds.
(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 balance of seven million five hundred thousand dollars 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:
(I)
Each qualified charter school that has had bonds issued on its behalf by the Colorado educational and cultural facilities authority that have relied upon the state charter school debt reserve fund and the provisions of section
22-30.5-408
, shall have its payments reduced by the same percentage and by a maximum of fifty percent.
(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 balance of seven million five hundred thousand dollars 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.
(5)
This section shall not be construed to create any state debt, to require the state to make any bond payments on behalf of any qualified charter school from any source of state moneys other than the state charter school debt reserve fund, or to require the state to fully pay off any outstanding bonds of a qualified charter school that cannot make scheduled bond payments.
(6)
For purposes of this section, "qualified charter school" means a qualified charter school as defined in section
22-30.5-408(1)(c)
.
(7)
A qualified charter school that chooses to finance capital construction with revenues from bonds issued on behalf of the qualified charter school by the Colorado educational and cultural facilities authority created in section
23-15-104(1)(a)
, C.R.S., shall request that the state treasurer make direct payments of principal and interest on the bonds on behalf of the qualified charter school in accordance with section
22-30.5-406(1)
. If the state treasurer does not agree to make direct payments and the qualified charter school is a district charter school, the qualified charter school shall request that its chartering district make direct payments in accordance with section
22-30.5-406(2)
. If the state treasurer does not agree to make direct payments and the qualified charter school is an institute charter school, the qualified charter school shall request that the state charter school institute make direct payments of principal and interest on the bonds on behalf of the institute charter school.
(8)
This section shall only apply to bonds issued by the Colorado educational and cultural facilities authority in reliance upon the provisions of section
22-30.5-408(2)
.
(9)
This section is in addition to, and not in limitation of, the powers granted to the Colorado educational and cultural facilities authority pursuant to article
15
of title
23
, C.R.S., to finance the costs of facilities of charter schools.
(10)
In accordance with section 11 of article II of the state constitution, the state hereby covenants with the purchasers of any outstanding bonds issued in reliance upon the existence of the state charter school interest savings account that the state will not repeal, revoke, or rescind the provisions of this part 4 concerning the account or modify or rescind the same so as to limit or impair the rights and remedies granted by this section to the purchasers of such bonds and that any moneys in the account shall not revert to the general fund.
Amended by 2014 Ch. 243,§ 18, eff. 5/21/2014.
L. 2002: Entire part added, p. 1760, § 31, effective June 7. L. 2003: Entire section amended, p. 1798, § 2, effective May 21. L. 2004: (7) amended, p. 1634, § 37, effective July 1. L. 2006: (4)(b), (4)(c), and (6) amended, p. 1493, § 25, effective June 1. L. 2011: (2)(a)(IV) added and IP(4)(d) and (4)(d)(II) amended, (SB 11-188), ch. 186, p. 712, §§ 1, 2, effective July 1. L. 2014: (2)(a)(I.5) and (2)(a)(V) added and (2)(a)(III), (2)(a)(IV), (2)(c), IP(4)(d), and (4)(d)(II) amended, (HB 14-1292), ch. 243, p. 915, § 18, effective May 21.
For the short title ("Student Success Act") in HB 14-1292, see section 1 of chapter 243, Session Laws of Colorado 2014.