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e e Option B - A direct loan authorization to LA WMA with language similar to SB 96-124 SECTION _' Lower Arkansas water management association loan - appropriation. (1) Pursuant to section 37-60-122 (1) (b), Colorado Revised Statutes, the Colorado water conservation board is hereby authorized to expend up to two million two hundred fifty dollars ($2,250,000) from the Colorado water conservation board construction fund for the purpose of making loans to the Lower Arkansas water management association to purchase augmentation water, or the rights to such water, to replace out of priority depletions to surface water rights and prevent material depletions of usable state line flows in violation of the Arkansas river compact. (2) Contracts entered into by the Colorado water conservation board pursuant to section 37-60-119 (2), Colorado Revised Statutes, for loans specified in subsection (1) of this section shall be subject to an interest rate and repayment period to be determined solely by the Colorado water conservation board. Pursuant to section 37-60-120 (1), Colorado Revised Statutes, the board shall require such terms and conditions in such contracts as will ensure repayment of funds made available by it. The board shall not disburse any moneys for any loan authorized by subsection (1) of this section unless and until it is satisfied, in its sole discretion, that the recipient of any such loan will be able to make repayment pursuant to the terms and conditions established by the board and subsection (3) of this section. (3) The board shall approve or deny the loan in subsection (1) of this section based upon criteria including but not limited to whether: ( a) The source of augmentation water is from a reliable, permanent supply; ( b) The applicant has adequate security or collateral to assure repayment; ( c) The applicant is able to show the ability to collect payments for the augmented water from its members; ( d) The loan will assist in maintaining the agricultural viability of the Arkansas river valley;