AG Memo - TABORandwatersupplygrants1105

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