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<br />001343 <br /> <br />will be used and allocated. the state has had a clear policy on <br />water resources development for several decades. That policy. <br />which has been premised upon the objective of putting all of <br />Colorado's compact entitlements to beneficial consumptive use. <br />has had three major elements: <br /> <br />(1) Reliance on the federal government to finance. <br />construct and largely pay for (i.e.. federal expenditures <br />were not repayable to the U.S. or were repayable only in <br />part and often without interest) major irrigation and flood <br />control projects. <br /> <br />(2) Reliance on industrial users to finance. construct. <br />and pay for their own water development projects. and <br /> <br />(3) Reliance on municipalities to finance. construct. and <br />pay for their own water development projects. with federal <br />loan and grant assistance being sought in the case of <br />smaller rural communities. <br /> <br />State government. of course. has actively participated in <br />only the first of these three areas. However. its suppor.t of <br />federal projects has led to substantial and tangible results. <br />In particular. the state policy of seeking and promoting <br />federal projects has resulted in substantially greater amounts <br />of water being used in irrigation than would have otherwise <br />been the case. This is because the federal government has <br />provided substantial subsidies which have enabled water <br />resources development to occur which would not have otherwise <br />occurred had water rights holders had to utili~e private <br />financing to construct their projects. The federal <br />government's programs in this regard. and the state's <br />aggressive utilization of them. reflect a major social policy <br />for settling the state. diversifying its economic base. and <br />realizing the beneficial consumptive use of its compact <br />entitlements. <br /> <br />In the face of reductions in federal funding programs. the <br />state embraced a major new policy in 1971 with the creation of <br />the Colorado Water Conservation Board (CWCB) construction <br />fund. The fund is used to make long-term. low interest loans <br />for the construction of new water resources projects and the <br />repair and rehabilitation of existing projects. Because the <br />terms of these loans are substantially more favorable than what <br />is available from commercial lending institutions. this program <br />represents an extension of the federal subsidization policy for <br />water resources development. albeit at a vastly reduced scale <br />given the limitations on the availability of state appropria- <br />tions to the construction fund. As with the federal programs. <br />the thrust of the CWCB const ruct ion fund pr.ogram iR to benef i. t. <br />irrigated agricultur.e and small rur.al communities. <br /> <br />-5- <br />