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by and through its Water Activity Enterprise, from the Severance Tax Trust Fund Perpetual Base Account, to provide the local share for construction of the Arkansas Valley Conduit, a 138 mile water supply pipeline extending from Pueblo Reservoir to the City of Lamar. The terms of the loan are 30 years at 3.25% per annum. Security for the loan will be a pledge ofSECWCD Water Activity Enterprise revenues, including revenues received from the Arkansas Valley Conduit participants through Participant Funding Agreements. The final approval of the loan shall be conditioned upon all other standard contracting provisions ofthe CWCB, as well as the following: 1) Final Feasibility Study - Prior to execution of a State loan contract, the project sponsor is required to complete the feasibility study to the satisfaction of the CWCB Director or his designee, including institutional and financial program details; 2) Participant Funding Agreements (a) Prior to execution of a State loan contract, all proposed Participant Funding Agreements contemplated in the Loan Application & Feasibility Study shall be executed, and copies submitted to the CWCB. The format of the agreements shall be as agreed upon by the CWCB and the Enterprise prior to execution with participants. (b) Water Allocation- Participant Funding Agreements shall address water allocation to the Arkansas Valley Conduit. Based on the annual availability of Fry-Ark Project water, the District and the Enterprise shall make every attempt to allocate water in such a manner as to meet the requested demand (6,555 acre feet) ofthe participants. In average years, this will require the allocation of a minimum of 776 AF of available return flows to the project, or an equivalent amount of water from other sources; (3) Conservation Plans - Prior to execution of a State loan contract, all "covered entities" participating in the project are required to have a CWCB- approved Water Conservation Plan in place; (4) Federal Authorization - No State loan contract shall be executed until Federal legislation regarding the federaV local cost-share for the Arkansas Valley Conduit has been approved; (5) Federal Funding Appropriation - No State loan contract shall be executed until Federal legislation to authorize the federalllocal cost-share for the Arkansas Valley Conduit has been approved; (6) CWCB Loan Contract - (a) Time Limit - Provisions pertaining to the time limit for loan approval shall be as outlined in CWCB Financial Policy #2 (Time Limits), with the following exception: The moneys appropriated in the CWCB Water Projects Bill shall remain available for the designated purposes until the project is completed; except that if the SECWCD Water Activity Enterprise does not enter into a loan contract with the CWVB within two years after the effective date of the CWCB Water Projects Bill (May 2007), then the moneys appropriated shall no longer be available for the designated purposes and shall revert back to the Severance Tax Trust Fund Perpetual Base Account (b) Step-Up Provision - The contract with SECWCD Water Activity Enterprise, shall include a "step-up" provision, requiring that if any project participants fail to make their loan repayment to SECWCD, the Enterprise will cover the shortfall; (c) Taxpayer's Bill of Rights (TABOR) Compliance - The Enterprise will supply to the CWCB, a TABOR compliance letter prior to entering into the State contract, with respect both Flood Protection. Water Supply Planning and Finance. Stream and Lake Protection Water Supply Protection. Conservation and Drought Planning 6 "! . Ie It