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July 20, 2006 <br />* Confidential Attorney-Client Privilege* <br />INTEROFFICE MEMORANDUM <br />� <br />TO: Rod Kuharich, Director, CWCB �''�" �� <br />Mike Serlet, Chief, Water Supply Pla.nning & Financing Section <br />THRU: Alexandra Davis, First Assistant Attorney General <br />FROM: Amy F. Stengel <br />Assistant Attorney General <br />Natural Resources and Environment Section <br />RE: Agricultural Emergency Drought Response Grant Appropriations <br />Issue• <br />This memo discusses the use of appropriations pursuant to § 37-60-123.5, C.R.S. for emergency <br />drought-related water augmentation purposes. The State Controller's Office, through their AAG <br />in the State Services Section, has raised a question as to whether the current year's <br />appropriations can be used for drought designations that occurred in prior years. <br />Background• <br />The Agricultural Emergency Drought Response Program (the Program) was created through <br />Senate Bi1102S-001. The Program provides loans and grants to agricultural organizations for <br />emergency drought-related water augmentation purposes. The Program is currently administered <br />by a Management Committee, composed of the Director of the Colorado Water Conservation <br />Board, the State Engineer, the Executive Director of the Department of Natural Resources, and <br />the Commissioner of Agriculture. The Program provides grants for the lease of augmentation <br />water during drought years, loans for the purchase of water rights for augmentation purposes as <br />well as loans for the construction of water structures required to return augmentation water to the <br />river. <br />Discussion • <br />Pursuant to 37-60-123.5, C.R.S., the legislature continuously appropriates one million <br />dollars "annually per such designation" to make loans and grants to agricultural organizations for <br />emergency drought-related water augmentation purposes. § 37-60-123.5, C.R.S. The <br />Department of Natural Resources ("Department") has interpreted the statute to allow for <br />continuous renewal of appropriations (not requiring annual legislative action) but limited to one <br />million dollars total in each fiscal year. Based on this continuous renewal, the Department has <br />historically disbursed grant monies from present-year appropriations for requests made in prior <br />years. The Department has thus administered the Program in a way that utilizes the statute's <br />continuous appropriations to meet diverse drought assistance needs which cannot typically be <br />