BOARD01816

• Board Meeting Date: 11/19/2001
• Description: CF Section - Proposed Statute Revisions Construction Fund and Severance Tax Trust Fund Perpetual Base Account
• Board Meetings - Doc Type: Memo

Discussion

Section 37-60-121 (2.5)(a), CRS, created the Litigation Fund (Account) in the
Construction Fund,

Currently, the Board is only authorized to spend up to $4,0 million from the Litigation
Fund for litigation in support of water users whose water supply yield may be diminished as a
result of by, pass flow requirements, or to oppose federal applications for instream flows,

The funds in the account have never been spent op. litigation, but $1 million dollars of the
original $4 million was transferred to the Native Species Conservation Trust Fund pursuant to SB
99-173, leaving a current balance in the fund of $3 million,

The intent of the revisions is to continuously make available a $3 million pool of funds to
the Board to avoid, prevent, or defend against future litigation directed toward the water users of
the state,

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The proposed revision also expands the use of the Litigation Fund to include expenditures
relative to more general questions of law and regulation, The funds could be used for outside
litigation support, retention of experts, operating costs, and other general costs associated with
investigating the impacts federal or state regulatory processes may have on the state and its water
users,

For example, we spent operating funds on outside experts in the Golden case, We also
spent funds preparing our proposed monitoring plan that helped avoid litigation during the recent
Snowmass Creek 404 permitting discussions, The State Engineer is also always involved in
litigation of a statewide importance, We believe that because the Attorney General is a member
of our Board and we are constantly collaborating to address issues of law and the challenges
presented by lawsuits and regulations, that a framework exists to ensure the prudent expenditure
of funds more expeditiously, We also do not believe it is in the best interest of the state or water
users to wait until the Attorney General is out of funds' before being able to take advantage of the
Litigation Fund, '

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