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<br />Page 3 <br /> <br />The legislature has authorized the establishment of water activity enterprises, which are <br />excluded from the provisions of TABOR, for the purpose of pursuing or continuing water <br />activities, including water acquisition, water projects or facility activities. S 37-45.1-1 03( 1), <br />C.RS. "Water activity enterprise" is defined as "any government water activity business owned <br />by a district, which enterprise receives under ten percent of its annual revenues in grants from all <br />Colorado state and local governments combined and which is authorized to issue its own bonds <br />pursuant to this article or any other applicable law." S 37-45.1-1 02( 4), C.R S. <br /> <br />The District could establish an enterprise in order to spend the Water Supply Reserve <br />Account grant money provided the total amount of the grant is under ten percent of its total <br />annual revenue. Each district may establish more than one water activity enterprise and may <br />continue to conduct one or more water activities so long as the enterprise is wholly owned by a <br />single district and not combined with any other enterprise owned by another district. S 37-45.1.- <br />103(2)(a), C.RS. The governing body of the enterprise is the same as the governing body of the <br />district which owns it unless applicable laws or a resolution, charter, intergovernmental <br />agreement or ordinance, etc., designates a different governing body for the enterprise. S 37-45.1.- <br />103(3), C.RS. The governing body for the enterprise may exercise the district's legal authority <br />related to water activities but may not levy a tax subject to TABOR's election requirements. <br />S 37-45.1.-103(4), C.RS. An enterprise, through its governing body, may issue or reissue <br />revenue bonds, notes, or other obligations payable from the revenues derived from the function, <br />service, benefits or facilities, or any combination thereof, of the enterprise or from any other <br />available funds. S 37-45.1-104(2), C.RS. Revenues collected by a district for services rendered <br />by a water activity enterprise are not subject to the taxing and spending limitations of sections 4 <br />and 7 of section 20, article X of Amendment 1. S 37-45.1-106(2), C.RS. <br /> <br />Section 37-45.1-106(1), C.RS., authorizes a district or its water activity enterprise to <br />contract with the CWCB for grants related to water activity enterprise functions. The Attorney <br />General's Office has worked with a number of local government water and conservation districts <br />in the past to assist in the formulation of water activity enterprises to allow district-owned <br />enterprises to receive funds from loans and grants that are otherwise subject to TABOR At this <br />time, establishing a water activity enterprise appears to be the most practical way for the Rio <br />Grande Conservation District to apply for and spend the grant money from the Water Supply <br />Reserve Account provided it does not exceed the ten percent limitation on grants to enterprises. <br /> <br />cc: Alexandra Davis, First Assistant Attorney General <br />Linda Bassi, CWCB, <br /> <br />AG File: watersupplyreserveoopinionll06 <br />