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<br />Discussion <br /> <br />There are two major issues to be addressed wIth respect to <br />st~te financing mechanIsms: <br /> <br />1. <br /> <br />Should projects be eligible for 100 percent financIng? <br />If so, under what cIrcumstances (.I.e., what crIterIa.,' <br />should be employed In makIng such a determInatIon)?-':'-l:.i; <br />~ ,-,. <br /> <br />Should state financing include subsIdies or not? If <br />so, what form should such subsIdies take (e.g., grant:s, <br />or loans made under terms and conditIons more favorable <br />than those available from commercial lending <br />institutions)? How is this determination to be made? <br />Under what circumstances, and to what extent, should <br />such subsidies be made available (i.e., what criterIa <br />should be employed in making such a determination)? <br /> <br />With respect to the projects before the Board for action on <br />December 3-4, three of them (Fruitland Mesa, Overland, and Rio <br />Grande) involve requests for 100 percent financing and grants. <br />Traditionally, the Board has recommended, and the legislature has <br />authorized, only 50 percent financing with no grants. The <br />relevant statutory language reads as follows: <br /> <br />2. <br /> <br />(III) The board's participation in the <br />construction cost of a project shall <br />generally be limited to fifty percent of a <br />project's total cost. . . . <br /> <br />'(IV) The board shall participate in only <br />those projects which can repay the board's <br />investment. Grants shall not be made. . . . <br /> <br />Section 37-60-121(1)(b), CRS 1973, as <br />amende(\. <br /> <br />In addition, the statutory language governing the severance tax <br />trust fund specifies that "repayment of moneys from the severance <br />tax trust fund used for state water projects shail be required in <br />the authorization and contract for each such project. . . .". <br />Sect ion 39-29-109, CRS 1973, as amended. . <br /> <br />I <br /> <br />A component of the second issue cited ~b~we is the question I <br />Q' wftdt _ervtce chdrge, or "Interest rate," should be applIed on <br />repayments to the construction fund or severance tax trust fund. <br />While section 37-60-119(2), CRS 1973, as amended, specifies only <br />that "service charges shall be assessed at no less than five <br />percent," thus leaving to the Board's discretion the question of <br />whether higher rates should be set, it is clear that a growing <br />number of legislators feel that service charges should be <br />substantially higher than five percent. Please recall that at <br />its July meeting, the Board passed a motion specifying that for <br />all projects to be presented to the 1982 General Assembly, the <br />recommended service charge would be five percent. <br /> <br />-2- <br />