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of revenue. Specifically, the proposal is to cap the amount of revenue the CWCB receives and utilize revenues above the cap for other purposes. Because the CWCB receives 10-percent of all FML, which in 2007 was about $12 million, we were invited to take part in this discussion. If this cap is implemented, Harris Sherman and I indicated that we would support a cap if it were high enough to account for our base funding needs and some growth. The cap we are advocating is $16 million annually. I also believe that to avoid long-term harm to the agency, the cap needs to "sunset" in no longer than 10-years. We also testified that if the FML revenue the CWCB receives is capped, our other funding sources (the Construction Fund and Perpetual Base Account) must be combined into the existing Construction Fund and all severance tax revenue sent directly to the Construction Fund. This will provide adequate revenues to meet existing, operational, grant making and litigation needs, while still maintaining the character of the "revolving fund." The CWCB's management of its revolving funds ensures its financial growth targets are met before commitments to other projects and operational expenses are made. This allows the Fund to be managed as a true trust fund. It is not clear to me how this proposal will proceed, if it will proceed at all. It may be that an "omnibus" mineral revenue reform bill will be introduced or one of the 16 bills considered by the Committee may become the vehicle as more than one of the bills contained provisions that would cap the FML revenue the CWCB receives. Regardless, if these deliberations proceed I need the authority to work to ensure that our interests are protected. Legislative Proposal *SECTION 30. 37-XX-XXX Colorado Revised Statutes, is amended to read: Merging the Severance Tax Trust Fund Perpetual Base Account with the Construction Fund. Merging Water Project Loan Funds: When drafted, the statute revision will merge all activities, revenues, programs, laws, rules and operations of the Severance Tax Trust Fund Perpetual Base Account into the activities, revenues, programs, laws, rules, and operations of the Colorado Water Conservation Board's Construction Fund. All revenues now being received by the Perpetual Base Account will be deposited into the Construction Fund by the State Treasurer. The two funds will be operated as one, with all statutory authorizations of the Construction Fund remaining unchanged. Staff Recommendation Approve the staff recommendation regarding the inclusion of statutory changes in the 2008 Projects Bill or other legislation as appropriate to achieve the Board's intent. Colorado Water Conservation Board Flood Protection • Water Project Planning and Finance • Stream and Lake Protection Water Supply Protection • Conservation and Drought Planning • Intrastate Water Planning