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<br />Page 2 <br /> <br />'District' means any state or local governmental entity that has <br />authority to conduct water activities, including a water <br />conservancy district created pursuant to article 45 of this title, a <br />water conservation district created by article 46, 47, 48, or 50 of <br />this title, a water and sanitation district or other entity created <br />pursuant to title 32, C.R. S., an entity created pursuant to title 29, <br />C.R. S., or this title, or a county, or a municipality. <br /> <br />S 37-45.1-102(1), c.R.S. See also; Campell v. Orchard Mesa Irrigation District, 972 P.2d <br />1037(Colo. 1998). <br /> <br />In Orchard Mesa, the Supreme Court held that irrigation districts established pursuant to <br />the 1921 irrigation district act were not local governments within the meaning of the taxing and <br />spending election requirements of TABOR. Orchard Mesa, 972 P.2d at 1040.1 The essentially <br />private character of 1921 Act irrigation districts differ in key respects from that of a public <br />governmental entity exercising taxing authority contemplated by TABOR. Id. at 1041. The <br />Court did not, however, extend its exemption of irrigation districts to other local government <br />districts. <br /> <br />2. Grants are not exempted from TABOR's spending restrictions. <br /> <br />Neither Amendment 1 nor section 24-77-102, C.R.S. interpreting TABOR provides an <br />exemption for grants from the state to local government districts. "Grant" is defined as "any <br />direct cash subsidy or other direct contribution of money from the state or any local government <br />in Colorado which is not required to be repaid." S 24-77-102(7)(a), C.R.S. <br /> <br />Amendment 1 sets forth the types of expenditures that are included in TABOR's <br />spending limitations. Fiscal year spending includes "all district expenditures and reserve <br />increases except, as to both, those for refunds made in the current or next fiscal year or those <br />from gifts, federal funds, collections from another government, pension contributions by <br />employees and pension fund earnings, reserve transfers or expenditures, damage awards, or <br />property sales." Colo. Const. art. X, S 20, cl. (2)( e). The Water Supply Reserve Account grant <br />does not fall within these enumerated exceptions and as such, would be subject to TABOR's <br />spending restrictions. <br /> <br />3. The District may form a water activity enterprise which is exempt from TABOR. <br /> <br />1 The Court determined that because the 1921 Act irrigation districts serve the interest of landowners within the <br />district as opposed to the general public. an increase of an irrigation district' s special assessment would not increase <br />the burden of the taxpaying public which TABOR sought to regulate. Id. The legal authority to levy special <br />assessments does not automatically transform a private entity into a govenllnental entity for TABOR purposes <br />because the special assessments are designated to cover the expenses incurred in irrigating land and are levied in <br />proportion to land ownership and paid only by the landowners who receive the benefit. The Comi also distinguished <br />irrigation districts from other districts based on the class of persons eligible to vote in irrigation district elections and <br />persons eligible to vote within a local govenlluent district under Amendment 1. Id. at 1041 <br /> <br />AG File: watersupplyreserveoopinionll06 <br />