(1) (a) Any combination of counties, municipalities, special districts, or other political subdivisions of this state that are each authorized to own, operate, finance, or otherwise provide public improvements for any function, service, or facility may enter into a contract under section 29-1203 to establish a separate legal entity to provide any such public improvements. Any separate legal entity established is a political subdivision and public corporation of the state and is separate from the parties to the contract if the contract or an amendment to the contract states that the entity is formed in conformity with the provisions of this section and that the provisions of this section apply to the entity.
(b) A contract establishing a separate legal entity described in paragraph (a) of this subsection (1) must specify:
The name and purpose of the entity and the functions or services to be provided bythe entity;
The establishment and organization of a governing body of the entity, which must bea board of directors in which all legislative power of the entity is vested, including:
The number of directors, their manner of appointment, their terms of office, theircompensation, if any, and the procedure for filling vacancies on the board;
The officers of the entity, the manner of their selection, and their duties;
The voting requirements for action by the board; except that, unless specificallyprovided otherwise, a majority of directors constitutes a quorum, and a majority of the quorum is necessary for any action taken by the board.
(2) (a) Except as otherwise provided in paragraph (b) of this subsection (2), a separate legal entity established by contract pursuant to section 29-1-203 may, to the extent provided by the contract or an amendment to the contract and deemed by the contracting parties to be necessary or convenient to allow the entity to achieve its purposes, exercise any general power of a special district specified in part 10 of article 1 of title 32, C.R.S., so long as each of the parties to the contract may lawfully exercise the power.
A separate legal entity established by a contract pursuant to section 29-1-203 thatspecifies that the provisions of this section apply to the entity may not levy a tax or exercise the power of eminent domain.
A separate legal entity established by contract pursuant to section 29-1-203 shall filea copy of the contract and any amendments to the contract with the division of local government in the department of local affairs and the division shall retain the contract and amendments as a public record.
(3) In addition to any other powers set forth in a contract entered into pursuant to section 29-1-203 that establishes a separate legal entity and specifies that the provisions of this section apply to the entity, such an entity has the following powers:
To issue bonds, notes, or other financial obligations payable solely from revenuederived from one or more of the functions, services, systems, or facilities of the separate legal entity, from money received under contracts entered into by the separate legal entity, or from other available money of the separate legal entity. The terms, conditions, and details of bonds, notes, or other financial obligations, including related procedures and refunding conditions, must be set forth in the resolution of the separate legal entity authorizing the bonds, notes, or other financial obligations and must, to the extent practical, be substantially the same as those provided in part 4 of article 35 of title 31, C.R.S., relating to water and sewer revenue bonds; except that the purposes for which the same may be issued are not limited to the financing of water or sewerage facilities. Bonds, notes, or other financial obligations issued under this paragraph (a) are not an indebtedness of the separate legal entity or the cooperating or contracting parties within the meaning of any provision or limitation specified in the state constitution or law. Each bond, note, or other financial obligation issued under this paragraph (a) must recite in substance that it is payable solely from the revenues and other available funds of the separate legal entity pledged for the payment thereof and that it is not a debt of the separate legal entity or the cooperating or contracting parties within the meaning of any provision or limitation specified in the state constitution or law. Notwithstanding anything in this paragraph (a) to the contrary, bonds, notes, and other obligations may be issued to mature at such times not beyond forty years from their respective issue dates, shall bear interest at such rates, and shall be sold at, above, or below the principal amount thereof, at a public or private sale, all as determined by the board of directors of the separate legal entity. Interest on any bond, note, or other financial obligation issued under this paragraph (a) hereof is exempt from taxation except as otherwise may be provided by law. The resolution, trust indenture, or other security agreement under which bonds, notes, or other financial obligations are issued is a contract with the holders thereof and may contain such provisions as the board of directors of the separate legal entity determine to be appropriate and necessary in connection with the issuance thereof and to provide security for the payment thereof, including, without limitation, any mortgage or other security interest in revenue, money, rights, or property of the separate legal entity.
To acquire, lease, and sell property.
(3.5) A separate legal entity established by contract pursuant to section 29-1-203 that has issued bonds, notes, or other financial obligations as authorized by paragraph (a) of subsection (3) of this section is subject to the "Public Securities Information Reporting Act", article 58 of title 11, C.R.S., and shall file an annual information report, to the extent practical, in the manner specified in section 11-58-105, C.R.S.
(4) A contract entered into pursuant to section 29-1-203 that establishes a separate legal entity and specifies that the provisions of this section apply to the entity shall provide that, upon dissolution of the separate legal entity, all of its property is transferred to, or at the direction of, one or more of the contracting political subdivisions.
Source: L. 2015: Entire section added, (HB 15-1262), ch. 215, p. 785, § 1, effective May
20. L. 2016: (2)(c) and (3.5) added, (HB 16-1188), ch. 86, p. 243, § 1, effective August 10. 29-1-204. Establishment of separate governmental entity. (1) Any combination of cities and towns of this state which are authorized to own and operate electric systems may, by contract with each other or with cities and towns of any adjoining state, establish a separate governmental entity, to be known as a power authority, to be used by such contracting municipalities to effect the development of electric energy resources or production and transmission of electric energy in whole or in part for the benefit of the inhabitants of such contracting municipalities.
Any contract establishing such separate governmental entity shall specify:
The name and purpose of such entity and the functions or services to be provided bysuch entity;
The establishment and organization of a governing body of the entity, which shall bea board of directors in which all legislative power of the entity is vested, including:
The number of directors, their manner of appointment, their terms of office, theircompensation if any, and the procedure for filling vacancies on the board;
The officers of the entity, the manner of their selection, and their duties;
The voting requirements for action by the board; except that, unless specificallyprovided otherwise, a majority of directors shall constitute a quorum, and a majority of the quorum shall be necessary for any action taken by the board;
The duties of the board which shall include the obligation to comply with the provisions of parts 1, 5, and 6 of this article;
Provisions for the disposition, division, or distribution of any property or assets of theentity;
The term of the contract, which may be continued for a definite term or until rescinded or terminated, and the method, if any, by which it may be rescinded or terminated; except that such contract may not be rescinded or terminated so long as the entity has bonds, notes, or other obligations outstanding, unless provision for full payment of such obligations, by escrow or otherwise, has been made pursuant to the terms of such obligations.
The general powers of such entity shall include the following powers:
To develop electric energy resources and produce or transmit electric energy in whole or in part for the benefit of the inhabitants of the contracting municipalities;
To make and enter into contracts, including, without limitation, contracts with citiesand towns in any adjoining state, irrespective of whether such cities and towns are parties to the contract establishing the separate governmental entity;
To employ agents and employees;
To acquire, construct, manage, maintain, or operate electric energy facilities, works,or improvements or any interest therein;
To acquire, hold, lease (as lessor or lessee), sell, or otherwise dispose of any real orpersonal property, commodity, or service;
To condemn property for public use, if such property is not owned by any publicutility and devoted to such public use pursuant to state authority;
To incur debts, liabilities, or obligations;
To sue and be sued in its own name;
To have and use a corporate seal;
To fix, maintain, and revise fees, rates, and charges for functions, services, or facilities provided by the entity;
To adopt, by resolution, regulations respecting the exercise of its powers and thecarrying out of its purposes;
To exercise any other powers which are essential to the provision of functions, services, or facilities by the entity and which are specified in the contract;
To do and perform any acts and things authorized by this section under, through, orby means of an agent or by contracts with any person, firm, or corporation;
To deposit moneys of the power authority not then needed in the conduct of thepower authority affairs in any depository authorized in section 24-75-603, C.R.S. For the purpose of making such deposits, the board of directors may appoint, by written resolution, one or more persons to act as custodians of the moneys of the power authority. Such persons shall give surety bonds in such amounts and form and for such purposes as the board requires.
To acquire or cross railroad rights-of-way in the manner set forth in section 40-5105, C.R.S.
The separate governmental entity established by such contracting municipalities shallbe a political subdivision and a public corporation of the state, separate from the parties to the contract, and shall be a validly created and existing political subdivision and public corporation of the state, irrespective of whether a contracting municipality, including a city or town of an adjoining state, withdraws (whether voluntarily, by operation of law, or otherwise) from such entity subsequent to its creation under circumstances not resulting in the rescission or termination of the contract establishing such entity pursuant to its terms. It shall have the duties, privileges, immunities, rights, liabilities, and disabilities of a public body politic and corporate. The provisions of articles 10.5 and 47 of title 11, C.R.S., shall apply to moneys of the entity.
The bonds, notes, and other obligations of such separate governmental entity shallnot be the debts, liabilities, or obligations of the contracting municipalities.
The contracting municipalities may provide in the contract for payment to the separate governmental entity of funds from proprietary revenues for services rendered by the entity, from proprietary revenues or other public funds as contributions to defray the cost of any purpose set forth in the contract, and from proprietary revenues or other public funds as advances for any purpose subject to repayment by the entity.
(a) To carry out the purposes for which the separate governmental entity was established, the entity is authorized to issue bonds, notes, or other obligations payable solely from the revenues derived or to be derived from the function, service, or facility or the combined functions, services, or facilities of the entity or from any other available funds of the entity. The terms, conditions, and details of said bonds, notes, and other obligations, the procedures related thereto, and the refunding thereof shall be set forth in the resolution authorizing said bonds, notes, or other obligations and shall, as nearly as may be practicable, be substantially the same as those provided in part 4 of article 35 of title 31, C.R.S., relating to water and sewer revenue bonds; except that the purposes for which the same may be issued shall not be so limited and except that said bonds, notes, and other obligations may be sold at public or private sale. Bonds, notes, or other obligations issued under this subsection (7) shall not constitute an indebtedness of the entity or the cooperating or contracting municipalities within the meaning of any constitutional or statutory limitation or other provision. Each bond, note, or other obligation issued under this subsection (7) shall recite in substance that said bond, note, or other obligation, including the interest thereon, is payable solely from the revenues and other available funds of the entity pledged for the payment thereof and that said bond, note, or other obligation does not constitute a debt of the entity or the cooperating or contracting municipalities within the meaning of any constitutional or statutory limitations or provisions. Notwithstanding anything in this section to the contrary, such bonds, notes, and other obligations may be issued to mature at such times not beyond forty years from their respective issue dates, shall bear interest at such rates, and shall be sold at, above, or below the principal amount thereof, all as shall be determined by the board of the entity. Notwithstanding anything in this section to the contrary, in the case of short-term notes or other obligations maturing not later than one year from the date of issuance thereof, the board of the entity may authorize officials of the entity to fix principal amounts, maturity dates, interest rates, and purchase prices of any particular issue of such short-term notes or obligations, subject to such limitations as to maximum term, maximum principal amount outstanding, and maximum net effective interest rates as the board shall prescribe by resolution. Such action may be taken by the board of the entity only at a public meeting preceded by adequate notice, and the action of the board shall be properly recorded on the permanent records of the board.
(b) The resolution, trust indenture, or other security agreement under which any bonds, notes, or other obligations are issued shall constitute a contract with the holders thereof, and it may contain such provisions as shall be determined by the board of the entity to be appropriate and necessary in connection with the issuance thereof and to provide security for the payment thereof, including, without limitation, any mortgage or other security interest in any revenues, funds, rights, or properties of the entity. The bonds, notes, and other obligations of the entity and the income therefrom shall be exempt from taxation, except inheritance, estate, and transfer taxes.
A separate governmental entity established by contracting municipalities shall, if thecontract so provides, be the successor to any nonprofit corporation, agency, or other entity theretofore organized by the contracting municipalities to provide the same function, service, or facility, and such separate governmental entity shall be entitled to all rights and privileges and shall assume all obligations and liabilities of such other entity under existing contracts to which such other entity is a party.
The authority granted pursuant to this section shall in no manner limit the powers ofgovernments to enter into intergovernmental cooperation or contracts or to establish separate legal entities pursuant to the provisions of section 29-1-203 or any other applicable law or otherwise to carry out their powers under applicable statutory or charter provisions, nor shall such authority limit the powers reserved to cities and towns by section 2 of article XI of the state constitution. Nothing in this part 2 constitutes a legislative declaration of preference for electric systems owned by separate governmental entities over electric systems owned by other or different entities.
For the purposes of subsection (1), paragraph (b) of subsection (3), and subsection(4) of this section, "cities and towns of any adjoining state" means any city or town located in any state sharing a common border with the state of Colorado which owns an electric system and which is located not more than fifteen miles from the common border of the state of Colorado and such adjoining state.
Source: L. 75: Entire section added, p. 955, § 2, effective May 20. L. 76: (1), (3)(b), and (4) amended and (10) added, pp. 683, 684, §§ 1, 2, effective May 7. L. 77: (4) and (10) amended, p. 286, §§ 54, 55, effective June 29. L. 79: (3)(n) added, p. 1616, § 11, effective June
8. L. 82: (1) amended, p. 453, § 1, effective March 17; (7)(a) amended, p. 455, § 1, effective April 16. L. 2002: (3)(o) added, p. 1948, § 5, effective June 8.
Editor's note: This section was enacted as § 29-1-203.1 in House Bill 75-1666 but was renumbered on revision in the 1977 replacement volume for ease of location.
Cross references: For the legislative declaration contained in the 2002 act enacting subsection (3)(o), see section 1 of chapter 350, Session Laws of Colorado 2002.