DALLAS -- Colorado's Amendment I could continue to have a chilling effect on future debt issuance in the state, despite a flurry of recent bond issues that had been held up by unsuccessful legal challenges by supporters of the 1992 amendment.

An estimated $437 million in bond issues that were approved by voters in November 1993 to finance various school districts and municipalities had been put on hold after amendment supporters argued that the ballot initiatives were improperly worded.

But a Sept. 12 ruling by the Colorado Supreme Court freed those issues -- and breathed life into a bond market nearly snuffed out by the antidebt amendment.

"That Supreme Court decision has allowed those bonds to be issued," said Steve Binder, managing director of public finance for Kemper Securities in Denver.

Supporters of Amendment 1 had argued that the measure requires ballot initiatives to be worded in two separate questions: one asking whether the bonds should be issued, and the second asking whether taxes should be raised to pay for the debt service.

Some Colorado issuers, however, lumped the questions together. This prompted a legal challenge from Amendment 1 supporters in Boulder County, who, seeking to block bond issues approved by voters in November 1993, argued in district court that ballot wording requirements had been violated.

A Boulder County district court rejected the lawsuit, and the ruling was upheld in September by the Colorado Supreme Court. Other issues, meanwhile, had been kept on hold pending the outcome of the appeal.

Since the high court's decision, the major bond issues that had been restrained by the challenge have gone through.

Those issues included $81.8 million in Douglas County school bonds, $89 million in Boulder County school bonds, and $37 million in Roaring Fork School District bonds.

"The great majority has been issued and sold," said Larry Hoyt, the Boulder County attorney.

Binder, though, estimated that the legal challenge cost taxpayers $12 million on the $89 million Boulder County school project alone because of higher interest rates, which climbed roughly 100 basis points between November 1993, when voters approved the bonds, and October of this year, when the securities were actually issued.

Underwriters, meanwhile, point out that the Colorado Supreme Court did not overturn Amendment 1 -- the court simply ruled that bond issuers did not have to present separate questions of bond issuance and tax increases on the ballot.

"We still have to go to an election on virtually every bond issue," Binder said. As a result, issues will be put in one big lump for dollar-conscious voters to mull over at one time.

"It makes it difficult from an issuer's perspective," Binder said.

And if most or all of the issues are approved by voters, issuers will rush to market and create an oversupply situation, which, in turn, could artificially drive up interest rates, investment bankers said.

Hoyt, however, said he doesn't think Amendment 1 will significantly affect his county's ability to issue bonds. He pointed to the approval last month by Boulder County voters of $5.8 million in revenue bonds to build and operate recycling facilities in the county. Plans call for those bonds to be issued in 1995, he said.

As for challenges to the Colorado Supreme Court's decision, Amendment I supporters petitioned the court for a rehearing, but the request was denied.

While speculation about a possible federal appeal in the case lingers, David Broadwell, attorney for the Colorado Municipal League, has doubts that a successful appeal could be mounted.

He pointed out that the backers of Amendment I suffered defeat at the polls last month when voters shot down Amendment 12, a proposal aimed at election reform.

"They may take a less aggressive litigation fact now," Broadwell said.

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