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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
A solar lease on Colorado state trust land is a nonagricultural lease, and state law requires the Land Board to take a bond or damage deposit before you occupy the ground. A surety bond meets that requirement without tying up project capital in a cash deposit that sits with the Board for the life of the lease.
Colorado law requires a bond or damage deposit from anyone leasing state trust land for nonagricultural purposes, which includes solar energy leases with the Colorado State Board of Land Commissioners. Under C.R.S. 36-1-129(2)(a) the bond secures the state against lost rent, other loss or waste, and holdover occupation more than 30 days after the lease ends. The statute does not set an amount, so the Board sets it in each lease. Confirm the amount and bond form with the State Land Board before the bond is issued.
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The Colorado State Board of Land Commissioners, usually called the State Land Board, leases state trust land to raise money for public schools. C.R.S. 36-1-147.5 authorizes it to lease land for renewable energy, defined to include solar, at a rental the Board sets. Those leases must include provisions for royalties on the energy produced and for protecting the environment, including wildlife habitat, air quality, ground and surface water quality and the land surface.
The bond itself comes from C.R.S. 36-1-129(2)(a). When the Board leases state land for nonagricultural purposes, it must require a bond or damage deposit from the lessee. A solar facility is a nonagricultural use, so the requirement applies.
The statute says the bond secures the state against three things. Loss of rents, other loss or waste on the land, and occupation of the land for more than 30 days after the lease is cancelled or expires. That last point matters for solar because a project that is not removed on time can leave the developer occupying the land after the lease ends. The solar lease itself may add obligations, such as reclamation of the site, so read the lease terms the bond is written to guarantee.
C.R.S. 36-1-129(2)(b) excuses lessees who lease state land solely for agricultural purposes, though the Board can still require a bond for state owned improvements. A solar developer does not fall within that exemption.
When the Board deems a bond forfeited or needs it for remediation, the money goes into the financial warranty account of the state land board trust administration fund and is used for remediation or other work on the affected property. The surety then looks to the developer to repay what it paid.
The statute does not fix a dollar figure. The Board sets the amount in each lease, so get the figure and any required form from the State Land Board. The premium is a percentage of that amount, set by the surety after reviewing the developer's financial statements, project financing and credit.
Both. C.R.S. 36-1-129(2)(a) requires a bond or damage deposit for any nonagricultural lease of state land, and the lease sets the amount and terms.
The statute does not set a figure. The State Land Board sets it for each lease, so get the amount from the Board before the bond is issued.
No. The exemption covers lessees leasing state land solely for agricultural purposes. A solar lease is a nonagricultural use.
Lost rent, other loss or waste on the land, and staying on the land more than 30 days after the lease is cancelled or expires. Forfeited amounts go to a state account used to remediate the property.
The statute allows a bond or a damage deposit. The Board keeps any interest earned on a deposit while it holds it, so many developers prefer a surety bond.
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