Public School Fund

C.R.S. tit. 22, art. 41
in effect

C.R.S. § 22-41-101 Composition of fund

22-41-101. Composition of fund. (1) (Deleted by amendment, L. 2006, p. 608, § 29, effective August 7, 2006.) (2) The public school fund of the state shall consist of the proceeds of such lands as have been, or may be, granted to the state by the federal government for educational purposes; all estates that may escheat to the state; all other grants, gifts, or devises that may be made to the state for educational purposes; and such other moneys as the general assembly may appropriate or transfer. (3) Notwithstanding the provisions of subsection (2) of this section, the proceeds from the sale or other disposition of state land pursuant to a nonsimultaneous exchange pursuant to section 36-1-124.5, C.R.S., shall not be deemed a part of the designated trust fund except as provided in section 36-1-124.5 (4), C.R.S.

C.R.S. § 22-41-102 Fund inviolate

22-41-102. Fund inviolate. (1) The public school fund shall forever remain inviolate and intact; the interest and income earned on the deposit and investment of the fund only shall be expended in the maintenance of the schools of the state and shall be distributed to the several school districts of the state in such manner as may be prescribed by law. No part of said fund, principal or interest and income, shall ever be transferred to any other fund or used or appropriated, except as provided in this article and article 43.7 of this title. The state treasurer shall be custodian of the fund, and the same shall be securely and profitably invested as may be directed by the public school fund investment board created in section 22-41-102.5. The state, by appropriation, shall supply all losses of principal that may occur as determined pursuant to section 2-3-103 (5), C.R.S., or section 22-41-104 (2). (2) (Deleted by amendment, L. 2003, p. 2131, § 25, effective May 22, 2003.) (3) (a) Except as provided in paragraph (b) of this subsection (3), for the 2010-11 state fiscal year through the 2012-13 fiscal year, the first eleven million dollars of any interest or income earned on the investment of the moneys in the public school fund shall be credited to the state public school fund created in section 22-54-114 for distribution as provided by law. Any amount of such interest and income earned on the investment of the moneys in the state public school fund in excess of eleven million dollars, other than interest and income credited to the public school capital construction assistance fund, created in section 22-43.7-104 (1), pursuant to section 22-43.7-104 (2)(b)(I), shall remain in the fund and shall become part of the principal of the fund. (b) and (c) Repealed. (d) For the 2013-14 state fiscal year through the 2014-15 fiscal year, the first sixteen million dollars of any interest or income earned on the investment of the moneys in the public school fund shall be credited to the state public school fund created in section 22-54-114 for distribution as provided by law. Any amount of such interest and income earned on the investment of the moneys in the state public school fund in excess of sixteen million dollars, other than interest and income credited to the public school capital construction assistance fund, created in section 22-43.7-104 (1), pursuant to section 22-43.7-104 (2)(b)(I), shall remain in the fund and shall become part of the principal of the fund. (e) For the 2015-16 and the 2016-17 state fiscal year, the first twenty-one million dollars of any interest or income earned on the investment of the moneys in the public school fund is credited to the state public school fund created in section 22-54-114 for distribution as provided by law. Any amount of such interest and income earned on the investment of the moneys in the state public school fund in excess of twenty-one million dollars, other than interest and income credited to the public school capital construction assistance fund, created in section 22-43.7-104 (1), pursuant to section 22-43.7-104 (2)(b)(I), shall remain in the fund and shall become part of the principal of the fund. mount of such interest and income earned on the investment of the moneys in the state public school fund in excess of twenty-one million dollars, other than interest and income credited to the public school capital construction assistance fund, created in section 22-43.7-104 (1), pursuant to section 22-43.7-104 (2)(b)(I), shall remain in the fund and shall become part of the principal of the fund. (f) For the 2017-18 and 2018-19 state fiscal years, interest or income earned on the investment of the moneys in the public school fund must be used or credited in the following order: (I) The first twenty-one million dollars is credited to the state public school fund created in section 22-54-114 for distribution as provided in that section; except that, if the interest or income earned on the investment of the moneys in the public school fund is less than twenty-one million dollars, then the available amount must also be used to entirely cover the cost of services and reimbursement described in subparagraph (II) of this paragraph (f); (II) An amount annually appropriated to the state treasurer to pay for the services of private professional fund managers hired by the public school fund investment board pursuant to section 22-41-102.5 (5), and to pay for any reimbursement for travel and other necessary expenses incurred by the members of the public school fund investment board pursuant to section 22-41-102.5 (2); (III) Any amount in excess of twenty-one million dollars plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (f), up to thirty-one million dollars plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (f), is credited to the restricted account of the public school capital construction assistance fund created in section 22-43.7-104 (5) for use as provided in that section; and (IV) Any amount in excess of thirty-one million dollars plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (f) is credited as specified by the general assembly, taking into consideration the recommendations of the public school fund investment board described in section 22-41-102.5 (4)(a)(III). (g) For the 2019-20 state fiscal year through the 2021-22 state fiscal year, interest or income earned on the investment of the money in the public school fund must be used or credited in the following order: (I) The first twenty-one million dollars is credited to the state public school fund created in section 22-54-114 for distribution as provided in that section; except that, if the interest or income earned on the investment of the moneys in the public school fund is less than twenty-one million dollars, then the available amount must also be used to entirely cover the cost of services and reimbursement described in subparagraph (II) of this paragraph (g); (II) An amount annually appropriated to the state treasurer to pay for the services of private professional fund managers hired by the public school fund investment board pursuant to section 22-41-102.5 (5), and to pay for any reimbursement for travel and other necessary expenses incurred by the members of the public school fund investment board pursuant to section 22-41-102.5 (2); (III) Any amount in excess of twenty-one million dollars plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (g), up to forty-one million dollars plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (g), is credited to the restricted account of the public school capital construction assistance fund created in section 22-43.7-104 (5) for use as provided in that section; and plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (g), up to forty-one million dollars plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (g), is credited to the restricted account of the public school capital construction assistance fund created in section 22-43.7-104 (5) for use as provided in that section; and (IV) Any amount in excess of forty-one million dollars plus the cost of services and reimbursement described in subparagraph (II) of this paragraph (g) is credited as specified by the general assembly, taking into consideration the recommendations of the public school fund investment board described in section 22-41-102.5 (4)(a)(III). (h) For the 2022-23 state fiscal year through the 2023-24 state fiscal year, interest or income earned on the investment of the money in the public school fund must be used or credited as follows: (I) The general assembly shall annually appropriate to the state treasurer an amount necessary to pay for the services of the investment consultant hired by the public school fund investment board pursuant to section 22-41-102.5 (5) and to pay for any reimbursement for travel and other necessary expenses incurred by the members of the public school fund investment board pursuant to section 22-41-102.5 (2); (II) After the appropriation made pursuant to subsection (3)(h)(I) of this section, all remaining interest and income, not to exceed twenty-one million dollars, shall be credited to the state public school fund created in section 22-54-114 for distribution as provided in that section; (III) After money in the public school fund has been appropriated or credited pursuant to subsections (3)(h)(I) and (3)(h)(II) of this section, all remaining interest and income, not to exceed twenty million dollars, shall be credited to the restricted account of the public school capital construction assistance fund, which account is created in section 22-43.7-104 (5), for use as provided in that section; and (IV) Any additional interest and income remaining in the public school fund may be credited as specified by the general assembly, taking into consideration the recommendations of the public school fund investment board described in section 22-41-102.5 (4)(a)(III), or, if not credited pursuant to this subsection (3)(h)(IV), remains in the public school fund. (i) For the 2024-25 state fiscal year, interest and income earned on the investment of the money in the public school fund must be used or credited as follows: (I) The general assembly shall annually appropriate to the state treasurer an amount necessary to pay for the services of the investment consultant hired by the public school fund investment board pursuant to section 22-41-102.5 (5) and to pay for any reimbursement for travel and other necessary expenses incurred by the members of the public school fund investment board pursuant to section 22-41-102.5 (2); (II) After the appropriation made pursuant to subsection (3)(i)(I) of this section, the lesser of all interest and income or eleven million dollars is credited to the state public school fund created in section 22-54-114 for distribution as provided in that section; (III) After money in the public school fund has been appropriated or credited pursuant to subsections (3)(i)(I) and (3)(i)(II) of this section, the lesser of all interest and income or thirty million dollars is credited to the restricted account of the public school capital construction assistance fund created in section 22-43.7-104 (5) for use as provided in that section; and (IV) Any additional interest and income remaining in the public school fund may be credited as specified by the general assembly, taking into consideration the recommendations of the public school fund investment board described in section 22-41-102.5 (4)(a)(III), or, if not credited pursuant to this subsection (3)(i)(IV), remains in the public school fund. or use as provided in that section; and (IV) Any additional interest and income remaining in the public school fund may be credited as specified by the general assembly, taking into consideration the recommendations of the public school fund investment board described in section 22-41-102.5 (4)(a)(III), or, if not credited pursuant to this subsection (3)(i)(IV), remains in the public school fund. (j) For the 2025-26 state fiscal year, interest and income earned on the investment of the money in the public school fund must be used or credited as follows: (I) The general assembly shall annually appropriate to the state treasurer an amount necessary to pay for the services of the investment consultant hired by the public school fund investment board pursuant to section 22-41-102.5 (5) and to pay for any reimbursement for travel and other necessary expenses incurred by the members of the public school fund investment board pursuant to section 22-41-102.5 (2); (II) After the appropriation made pursuant to subsection (3)(j)(I) of this section, the lesser of all interest and income or five million dollars is credited to the state public school fund created in section 22-54-114 for distribution as provided in that section; (III) After money in the public school fund has been appropriated or credited pursuant to subsections (3)(j)(I) and (3)(j)(II) of this section, the lesser of all interest and income or thirty-six million dollars is credited to the restricted account of the public school capital construction assistance fund created in section 22-43.7-104 (5) for use as provided in that section; and (IV) Any additional interest and income remaining in the public school fund may be credited as specified by the general assembly, taking into consideration the recommendations of the public school fund investment board described in section 22-41-102.5 (4)(a)(III), or, if not credited pursuant to this subsection (3)(j)(IV), remains in the public school fund. (k) For the 2026-27 state fiscal year and each state fiscal year thereafter, interest and income earned on the investment of the money in the public school fund must be used or credited as follows: (I) The general assembly shall annually appropriate to the state treasurer an amount necessary to pay for the services of the investment consultant hired by the public school fund investment board pursuant to section 22-41-102.5 (5) and to pay for any reimbursement for travel and other necessary expenses incurred by the members of the public school fund investment board pursuant to section 22-41-102.5 (2); (II) After money in the public school fund has been appropriated pursuant to subsection (3)(k)(I) of this section, the lesser of all interest and income or forty-one million dollars is credited to the restricted account of the public school capital construction assistance fund created in section 22-43.7-104 (5) for use as provided in that section; and (III) Any additional interest and income remaining in the public school fund may be credited as specified by the general assembly, taking into consideration the recommendations of the public school fund investment board described in section 22-41-102.5 (4)(a)(III), or, if not credited pursuant to this subsection (3)(k)(III), remains in the public school fund.

C.R.S. § 22-41-102.5 Public school fund investment board - creation - working group - report

22-41-102.5. Public school fund investment board - creation - working group - report. (1) (a) There is hereby created the public school fund investment board, referred to in this section as the "board". The board consists of five members, as follows: (I) The state treasurer, who serves as chair; (II) A member of the state board of land commissioners, appointed by majority vote of the commissioners; and (III) Three members appointed by the state treasurer. Such appointees must have diversity in party affiliation and professional qualifications regarding the prudent investment of trust fund money or expertise in institutional investment management. (b) Initial appointments of members must be made no later than thirty days after August 10, 2016. The board must meet for the first time no later than thirty days after the appointment of the members as required in this paragraph (b), and the board must meet no less than quarterly thereafter. (c) The state treasurer and two other voting members of the board constitutes a quorum of the board. (2) (a) Except for the state treasurer, members of the board serve two-year terms and may not serve more than three consecutive terms, and none of the board members, except for the treasurer, may hold any state elective office. The state board of land commissioners or the state treasurer may remove their appointed members for any cause that renders the member incapable of discharging or unfit to discharge the member's duty to the board. The state board of land commissioners or the state treasurer may fill any vacancy by appointment, and such appointment must be made no later than ninety days after the date of the vacancy. A member appointed to fill a vacancy serves until the expiration of the term for which the vacancy was filled. Members of the board serve without compensation but may receive reimbursement for travel and other necessary expenses actually incurred in the performance of their duties. The reimbursements are paid from the interest and income earned on the deposit and investment of the public school fund subject to the requirements set forth in section 22-41-102. (b) Beginning with the state treasurer's appointments to the board to replace existing board members whose final terms expire on or after July 1, 2022, the state treasurer may stagger the terms of newly appointed board members to ensure that the terms of no more than two of the state treasurer's three appointments to the board expire in the same year. In the state treasurer's discretion, the first three new members appointed by the state treasurer on or after July 1, 2022, may serve an initial term of between one and three years, as determined by the state treasurer. After the initial term, the members serve two-year terms for a total of three consecutive terms, as set forth in subsection (2)(a) of this section. (3) The board shall direct the state treasurer on how to securely invest money deposited in the public school fund for the intergenerational benefit of public schools and in a manner that complies with the "Uniform Prudent Investor Act", article 1.1 of title 15, C.R.S. (4) (a) No later than March 31, 2017, the board shall establish policies that are necessary and proper for the administration of this section, including but not limited to: (I) A conflict of interest policy for board members; (II) A policy establishing allowable investments that comply with section 22-41-104 and section 3 of article IX of the state constitution; and (III) Recommendations to the general assembly regarding the distribution of income and interest described in section 22-41-102 (3)(h)(IV). administration of this section, including but not limited to: (I) A conflict of interest policy for board members; (II) A policy establishing allowable investments that comply with section 22-41-104 and section 3 of article IX of the state constitution; and (III) Recommendations to the general assembly regarding the distribution of income and interest described in section 22-41-102 (3)(h)(IV). (b) The policies must be posted on the department of the treasury's website no later than April 5, 2017. (5) The board may enter into contracts with private professional fund managers to provide expertise, technical support, and advice on investment market conditions. Such contract or contracts must be bid by employing standard public bidding practices including, but not limited to, the use of requests for information, requests for proposals, or any other standard vendor selection practices determined by the board to be best suited to selecting an appropriate private professional fund manager. Payments for these services will be paid from the interest and income of the public school fund subject to the requirements set forth in section 22-41-102. (6) Repealed.

C.R.S. § 22-41-103 Certain lands considered to be investments of fund

22-41-103. Certain lands considered to be investments of fund. (1) All lands, title to which has or may become vested in the state as the result of foreclosure proceedings, shall be designated as "public school fund lands" and shall be considered an investment of the public school fund. (2) Such lands shall be under the control and direction of the state board of land commissioners and may be disposed of by the board in the same manner as public school lands; except that any mineral rights acquired under said foreclosure proceedings may be sold with the land. The board shall keep a separate list of all such lands in its office.

C.R.S. § 22-41-104 Lawful investments

22-41-104. Lawful investments. (1) The state treasurer, as directed by the public school fund investment board, may invest and reinvest moneys accrued or accruing to the public school fund in the types of deposits and investments authorized in sections 24-36-109, 24-36-112, and 24-36-113, C.R.S., and bonds issued by school districts. The moneys may also be invested in stocks and other financial assets as specified in the public school fund investment board investment policy established as required in section 22-41-102.5 (4)(b); except that investment includes only mutual funds, index funds, and any other instrument that is not a direct investment in a corporation. (2) The state treasurer has authority, to be exercised at the state treasurer's discretion, to effect exchanges or sales whenever such exchanges or sales will not result in an aggregate loss of principal to the public school fund. An aggregate loss of principal to the public school fund occurs only when an exchange or sale that resulted in an initial loss of principal is not offset by a gain on an exchange or sale in the fund within eighteen months. The calculation of an aggregate loss must also include any gains that were realized in the twelve months prior to the loss of principal. (3) (Deleted by amendment, L. 97, p. 375, § 6, effective August 6, 1997.)

C.R.S. § 22-41-104.5 Other financial transactions

22-41-104.5. Other financial transactions. (1) The state treasurer may engage in financial transactions whereby: (a) Obligations are purchased with moneys accrued or accruing to the public school fund under an agreement providing for the resale of such obligations to the original seller at a stated price together with a payment to the fund of interest for the period the fund holds the obligations, but the market value of such obligations shall at all times be at least equal to the total purchase price; (b) Obligations owned by the fund are sold under an agreement providing for the repurchase of such obligations by the fund at a stated price together with the payment to the buyer of interest for the period the buyer holds the obligations; (b.5) Loans are made to school districts under the provisions of section 3 of article IX of the state constitution; (c) Obligations owned by the fund are delivered to reputable and financially responsible dealers in such obligations under an agreement which provides: (I) For the replacement thereof with obligations of the same kind and amount upon demand therefor by the state treasurer; and (II) For the payment to the state treasury by said dealer of a commission or other compensation, based upon the amount of such obligations, for the period of time between the delivery of such obligations to such dealer and the replacement thereof; and (III) For the pledge and delivery by said dealer to the state treasury of other obligations which are lawful investments having a market value at all times equal to at least the market value of the obligations so delivered to guarantee the replacement of such obligations. (d) (Repeal provision deleted by revision.) (2) The state treasurer may make such arrangements for the custody, safekeeping, and registration of obligations as will enable him to make prompt delivery thereof upon maturity or in the event of sale.

C.R.S. § 22-41-105 Income distinguished from principal

22-41-105. Income distinguished from principal. (1) Any amount paid as a premium for an interest-bearing obligation in excess of the amount realized upon disposition of said obligation must be recovered as a return of principal out of interest thereafter derived from the public school fund. Such recovery must be made and recorded on a systematic basis applied consistently from year to year. (2) Interest and income that is not distributed as specified in section 22-41-102 (3) on June 30 of any fiscal year becomes part of the principal of the public school fund.

C.R.S. § 22-41-107 Reports

22-41-107. Reports. Notwithstanding section 24-1-136 (11)(a)(I), the public school fund investment board shall submit financial statements on November 1 of each fiscal year to the state treasurer, the state board of land commissioners, the office of state planning and budgeting, the joint budget committee, and the education and finance committees of the senate and house of representatives, or any successor committees.

C.R.S. § 22-41-108 Transfer of records

22-41-108. Transfer of records. On July 1, 1973, the state board of land commissioners shall deliver to the state treasurer all records relating to investments of the public school fund made by the board.

C.R.S. § 22-41-109 Bond guarantee loans

22-41-109. Bond guarantee loans. (1) The general assembly hereby finds that school districts of this state are experiencing great need for improved school facilities; that, although the issuance of school bonds can pave the way for improved facilities, such bonds must be marketable and their interest rate must be competitive in order to benefit the district; that, if the risk assumed by school bond purchasers was diminished, interest rates would generally be reduced; that the use of permanent school funds to guarantee payments of principal and interest, with appropriate safeguards for the public school fund, is consistent with the purpose for which the fund was created; and that section 3 of article IX of the state constitution specifically authorizes the use of the public school fund of the state for the purposes of this section. (2) The state treasurer is authorized to contract with school districts in this state for the guarantee of payments of principal and interest on the district's bonds as such payments become due. The state treasurer shall not enter into such contract if the guarantee would result in the total amount of outstanding guaranteed bonds exceeding an amount equal to three times the market value of the public school fund. Each year the state treasurer shall analyze the status of guaranteed bonds as compared to the book value and market value of the public school fund and shall certify whether the amount of bonds guaranteed is within the limit prescribed by this subsection (2). (3) The board of education of a school district desiring to enter into a guarantee contract authorized by this section shall include, in the resolution submitting the question of issuing bonds to the registered electors of the school district, a statement that the school district intends to contract with the state treasurer for the guarantee of principal and interest payments to holders of such bonds. The resolution shall set forth, and any resulting guarantee contract shall provide, that the district shall repay any loan of public school funds with interest as provided in subsection (4) of this section by the end of the calendar year next following the close of the fiscal year in which the loan was made, out of any available funds of the school district or out of the proceeds of a levy on the taxable property of the school district at a rate sufficient to produce the amount required to repay the loan. No guarantee contract shall be executed pursuant to this section unless the registered electors of the school district have approved such provisions for the contract by their vote approving the issuance of bonds. (4) Any guarantee contract authorized by this section shall include a provision requiring the payment of interest on loans made pursuant to the contract at the prevailing rate of interest being earned by investments of the public school fund on the date the loan is made. (5) A board of education seeking the guarantee of eligible bonds shall notify the commissioner of education and the state treasurer indicating the name of the school district and the principal amount of the bonds to be issued, the name and address of the school district's paying agent for the bonds, the maturity schedule, the estimated interest rate, and the date of the bonds. (6) After receipt of the request for the guarantee of bonds, the commissioner of education shall review the applicant school district regarding the school district's accreditation category, the school district's financial status based on its audited financial statements for the previous three years, and the total amount of the school district's bonded indebtedness in relation to the limitation on indebtedness provided by law. If, after the investigation, the commissioner of education is satisfied that the school district's bonds should be guaranteed under this section, the commissioner of education shall endorse the request for the bond guarantee to the state treasurer. previous three years, and the total amount of the school district's bonded indebtedness in relation to the limitation on indebtedness provided by law. If, after the investigation, the commissioner of education is satisfied that the school district's bonds should be guaranteed under this section, the commissioner of education shall endorse the request for the bond guarantee to the state treasurer. (7) Whenever the paying agent has not received payment of principal of or interest on bonds or other obligations to which this section applies fifteen business days immediately prior to the date on which such payment is due, the paying agent shall so notify the state treasurer and the school district by telephone, facsimile, or other similar communication, followed by written verification, of such payment status. The state treasurer shall immediately contact the school district and determine whether the school district will make the payment by the date on which it is due. (8) If the school district indicates that it will not make the payment by the date on which it is due, the state treasurer shall forward the amount in immediately available funds necessary to make the payment of the principal of or interest on the bonds or other obligations of the school district to the paying agent on the business day immediately prior to the date on which payment is due. Such payment shall constitute a loan to the school district from the public school fund in accordance with the terms of the guarantee contract. (9) In order to assure sufficient liquidity to meet obligations under the provisions of this section, the state treasurer shall invest moneys in the public school fund in an amount equal to at least ten percent of the principal amount of bonds guaranteed under this section in interest-bearing obligations of the United States as provided in section 22-41-104 (1)(d) with maturity dates of three years or less. (10) The amounts forwarded to the paying agent by the state treasurer shall be applied to the paying agent solely to the payment of the principal of or interest on such bonds or other obligations of the school district. (11) Any school district to which this section applies shall file with the state treasurer a copy of the resolution that authorizes the issuance of bonds or other obligations, a copy of the official statement or other offering document for such bonds or other obligations, the agreement, if any, with the paying agent for such bonds or other obligations, and the name, address, and telephone number of such paying agent. (12) As provided in section 11 of article II of the state constitution, the state hereby covenants with the purchasers and owners of bonds and other obligations issued by school districts that the state will not repeal, revoke, or rescind the provisions of this section or modify or amend the same so as to limit or impair the rights and remedies granted by this section; but nothing in this subsection (11) shall be deemed or construed to require the state to continue the payment of state assistance to any school district or to limit or prohibit the state from repealing, amending, or modifying any law relating to the amount of state assistance to school districts or the manner of payment or the timing thereof. Nothing in this section shall be deemed or construed to create a debt of the state with respect to such bonds or other obligations within the meaning of any state constitutional provision or to create any liability except to the extent provided in this section. (13) Whenever the state treasurer is required by this section to make a payment of principal of or interest on bonds or other obligations on behalf of a school district, the department of education shall initiate an audit of the school district to determine the reasons for the nonpayment and to assist the school district, if necessary, in developing and implementing measures to assure that future payments will be made when due. er is required by this section to make a payment of principal of or interest on bonds or other obligations on behalf of a school district, the department of education shall initiate an audit of the school district to determine the reasons for the nonpayment and to assist the school district, if necessary, in developing and implementing measures to assure that future payments will be made when due. (14) Whenever the state treasurer makes a payment of principal and interest on bonds or other obligations of a school district because of the failure to collect property taxes levied in accordance with law for the school district's bond redemption fund, the district may transfer any such delinquent property taxes later collected out of the school district's bond redemption fund and into its general fund. (15) In the event that any public school fund moneys are lost by reason of the failure of any school district to repay a loan made pursuant to this section, the general assembly shall restore such public school fund moneys, together with such interest as would have accrued thereto, by an appropriation in the amount of such loss from the general fund of the state. (16) If two or more repayments from the public school fund are made on the guaranteed bonds of a school district and the commissioner of education determines that the school district is acting in bad faith under the guarantee, the commissioner of education may request the attorney general to institute appropriate legal action to compel the school district governing board to comply with the duties required by law in regard to the bonds.

C.R.S. § 22-41-110 Timely payment of school district obligations

22-41-110. Timely payment of school district obligations. (1) (a) The state treasurer, on behalf of a school district, shall make payment as provided in this section of principal and interest on bonds or other obligations to which this section applies, unless the school district board of education adopts a resolution stating it will not accept payment on behalf of the school district of principal and interest on bonds or other obligations as provided in this section. If a school district chooses to adopt such a resolution, it shall be adopted prior to issuance or incurrence of the bonds or obligations to which it applies. Following adoption of the resolution, the school district shall provide written notice to the state treasurer of its refusal to accept the payment. The refusal to accept payment shall take effect upon the date the state treasurer receives the written notice and shall continue in effect until the date the state treasurer receives written notice from the school district that the school district board of education has adopted a resolution rescinding the refusal to accept payment pursuant to this section. Notwithstanding any provision of subsections (2) to (8) of this section to the contrary, the state treasurer shall not make payment of principal or interest on bonds or other obligations on behalf of a school district that provides written notice of its refusal to accept payment by the state treasurer on behalf of the school district as provided in this paragraph (a), until the state treasurer receives written notice of the rescission of refusal to accept payment. (b) This section applies to: (I) General obligation bonds issued by a school district on or after July 1, 1991, pursuant to article 42 or 43 of this title; except that this section shall not apply to bonds issued by a school district pursuant to section 22-42-102 (2)(a)(IX); (II) Obligations of a school district in connection with a lease agreement or installment purchase agreement entered into by a school district under section 22-32-127 or 22-45-103 (1)(c) on or after July 1, 1991; and (III) Refunding bonds issued by a school district pursuant to article 56 of title 11. (IV) Repealed. (2) Whenever the paying agent has not received payment of principal of or interest on bonds or other obligations to which this section applies on the business day immediately prior to the date on which such payment is due, the paying agent shall so notify the state treasurer and the school district, by telephone, facsimile, or other similar communication, followed by written verification, of such payment status. The state treasurer shall immediately contact the district and determine whether the district will make the payment by the date on which it is due. (3) If the district indicates that it will not make the payment by the date on which it is due, the state treasurer shall forward the amount in immediately available funds necessary to make the payment of the principal of or interest on the bonds or other obligations of the school district to the paying agent. The state treasurer shall recover the amount forwarded by withholding amounts from the school district's payments of the state's share of the district's total program received in accordance with article 54 of this title and from property tax and specific ownership tax revenues collected by the county treasurer on behalf of the school district; except that the state treasurer may not recover amounts from property tax revenues that are pledged to pay notes or bonds issued by the school district trict's payments of the state's share of the district's total program received in accordance with article 54 of this title and from property tax and specific ownership tax revenues collected by the county treasurer on behalf of the school district; except that the state treasurer may not recover amounts from property tax revenues that are pledged to pay notes or bonds issued by the school district. The total amount withheld in a month from the state's share of total program and the tax revenues due to the school district for each occasion on which the treasurer forwards an amount pursuant to this section shall not exceed one-twelfth of the amount forwarded; except that the state treasurer, in one or more months during the twelve-month withholding period, may withhold more than one-twelfth of the amount forwarded, if the school district in one or more months during the twelve-month withholding period receives total program and tax revenues in an amount that is less than one-twelfth of the amount forwarded. The state treasurer shall not withhold for more than twelve consecutive months for each occasion on which the treasurer forwards amounts pursuant to this section. The state treasurer, in writing, shall notify the county treasurer for the school district of the amount of tax revenues to be withheld pursuant to this subsection (3) and the period of withholding. Notwithstanding any provision of this subsection (3) to the contrary, a school district may elect to make early repayment of all or any portion of an amount forwarded by the state treasurer on behalf of the school district pursuant to this section. When a school district fully repays an amount forwarded by the state treasurer on behalf of the school district pursuant to this section, the state treasurer, in writing, shall notify the county treasurer for the school district to discontinue the withholding of tax revenues. (4) The amounts forwarded to the paying agent by the state treasurer shall be applied by the paying agent solely to the payment of the principal of or interest on such bonds or other obligations of the school district. The state treasurer shall notify the department of education, the chief financial officer of the district, and the general assembly of amounts withheld and payments made pursuant to this section. (5) Any school district to which this section applies shall file with the state treasurer a copy of the resolution which authorizes the issuance of bonds or other obligations, a copy of the official statement or other offering document for such bonds or other obligations, the agreement, if any, with the paying agent for such bonds or other obligations, and the name, address, and telephone number of such paying agent. The failure of any school district to file such information shall not affect the obligation of the state treasurer to withhold the state's share of the district's total program and the district's tax revenues under this section. (6) As provided in section 11 of article II of the state constitution, the state hereby covenants with the purchasers and owners of bonds and other obligations issued by school districts that it will not repeal, revoke, or rescind the provisions of this section or modify or amend the same so as to limit or impair the rights and remedies granted by this section; but nothing in this subsection (6) shall be deemed or construed to require the state to continue the payment of state assistance to any school district or to limit or prohibit the state from repealing, amending, or modifying any law relating to the amount of state assistance to school districts or the manner of payment or the timing thereof. Nothing in this section shall be deemed or construed to create a debt of the state with respect to such bonds or other obligations within the meaning of any state constitutional provision or to create any liability except to the extent provided in this section. nding, or modifying any law relating to the amount of state assistance to school districts or the manner of payment or the timing thereof. Nothing in this section shall be deemed or construed to create a debt of the state with respect to such bonds or other obligations within the meaning of any state constitutional provision or to create any liability except to the extent provided in this section. (7) Whenever the state treasurer is required by this section to make a payment of principal of or interest on bonds or other obligations on behalf of a school district, the department of education shall initiate an audit of the district to determine the reason for the nonpayment and to assist the district, if necessary, in developing and implementing measures to assure that future payments will be made when due. (8) Whenever the state treasurer makes a payment of principal and interest on bonds or other obligations of a school district and withholds amounts from the district's payments of the state's share of the district's total program and from the district's unpledged tax revenues pursuant to this section because of the failure to collect property taxes levied in accordance with law for the district's bond redemption fund, the district may transfer, or may instruct the third-party custodian that administers the district's bond redemption fund to transfer, any such delinquent property taxes later collected out of the district's bond redemption fund and into its general fund.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-22.docxFetched: 10/6/2026