Local Government Pledging Sales & Use Tax Capital Improvement

Statutory Revision Committee. Current law specifies that a county, city, or incorporated town may include the creation of a sales and use tax capital improvement fund (special fund) when the county, city, or incorporated town seeks voter approval to levy a sales or use tax. Before the adoption of section 20 of article X of the state constitution (TABOR), the statute provided that a county, city, or incorporated town needed to create the special fund in order to issue revenue bonds payable solely from the fund for financing capital improvements. Current law also specifies that if a county, city, or incorporated town wishes to create a special fund after it has already obtained voter approval for the levying of a sales or use tax, then the county, city, or incorporated town must seek voter approval for the creation of the special fund. The creation of the special fund does not have a purpose for a county, city, or incorporated town post-TABOR because the question of using sales or use tax revenues for financing capital improvements is asked when the county, city, or incorporated town seeks voter approval for the bond issuance. Thus, the language regarding the creation of the fund is unnecessary. Furthermore, the requirement to seek voter approval for the creation of the special fund after a county, city, or incorporated town has already obtained voter approval for the levying of a sales or use tax predates the adoption of TABOR. Because TABOR requires any district, including a county, city, or incorporated town, to seek voter approval for the issuance of any revenue bonds, the requirement to seek voter approval for the creation of the special fund is unnecessary and duplicative. The bill repeals the unnecessary and duplicative law and clarifies that the use of sales and use tax revenue bonds for capital improvements requires voter approval under TABOR. (Note: This summary applies to the reengrossed version of this bill as introduced in the second house.) , Read More