49-193.04. Drought mitigation revolving fund; purposes; exemption; security
A. Monies in the fund may be used for the following purposes:
1. The department of water resources may award grants to facilitate the forbearance of water deliveries that would avoid reductions in this state's Colorado river supplies. Grants may not be used to supplant or take the place of any existing forbearance contract for water to be stored in Lake Mead.
2. The state land department may apply for grants to support the state land department's ability to make the best use of water resources associated with state trust land, in alignment with the state land department's trust responsibilities, to maximize the benefits for the trust beneficiaries and this state's future. Before developing any infrastructure for the Butler Valley groundwater basin under a state land department grant, the state land department shall obtain a hydrological study of groundwater availability in the Butler Valley groundwater basin.
3. The board may make low-cost, long-term loans for planning, designing, constructing or financing water supply development projects to import water supplies from outside this state into this state, with priority given to those loan applications that demonstrate the largest statewide benefit.
4. The board may pay the costs to administer the fund.
B. Monies in the fund may not be used to provide financial assistance to transfer water or the right to water related to a mainstream Colorado river entitlement away from an area near the Colorado river.
C. Grants from the fund are exempt from the provisions of title 41, chapter 24 governing the solicitation and award of grant applications.
D. Loans prescribed under subsection A, paragraph 3 of this section may be secured by providing linked deposit guarantees through third-party lenders by depositing monies with the lender on the condition that the lender make a loan on terms approved by the board, at a rate of return on the deposit approved by the board and the state treasurer, and by giving the lender recourse against the deposit of loan repayments that are not made when due.