(1) There is hereby created in the state treasury the severance tax trust fund, also referred to in this section as the "fund", which the department of natural resources shall administer. The fund is to be perpetual and held in trust as a replacement for depleted natural resources, for the development and conservation of the state's water resources pursuant to sections 37-60-106 (1)(j) and (1)(l), 37-60-119, and 37-60-122, C.R.S., for the use in funding programs that promote and encourage sound natural resource planning, management, and development related to minerals, energy, geology, and water and for the use in funding programs to reduce the burden of increasing home energy costs on low-income households. (2) State severance tax receipts must be credited to the severance tax trust fund as provided in section 39-29-108. All income derived from the deposit and investment of the money in the fund must be credited to the fund. At the end of any fiscal year, all unexpended and unencumbered money in the fund remains in the fund and must not be credited or transferred to the general fund or any other fund. All money in the fund is subject to appropriation by the general assembly for the following purposes: (a) The severance tax perpetual base fund. (I) Repealed. (I.5) There is hereby created in the state treasury the severance tax perpetual base fund, also referred to in this subsection (2)(a) as the "fund", which the Colorado water conservation board, also referred to in this subsection (2)(a) as the "board", shall administer. The state treasurer shall transfer money to the fund from the severance tax trust fund, as specified in this section. The fund also includes any money that the general assembly may appropriate or transfer thereto. The money in the fund is continuously appropriated to the board for purposes authorized by this subsection (2)(a). (II) One-half of the severance tax receipts credited to the fund for fiscal years commencing on or after July 1, 2009, shall be credited to the severance tax perpetual base fund and used as specified in subsection (2)(a)(II.5) of this section; except that the total amount of severance tax receipts credited to the severance tax perpetual base fund during the fiscal year shall not exceed fifty million dollars unless the cap established in subsection (2)(a)(III) of this section is exceeded. The authorization and contract for each project must require repayment of principal and interest to the fund, and money repaid is credited to the severance tax perpetual base fund. (II.5) The board shall use the money in the fund: (A) For state water projects pursuant to sections 37-60-119 and 37-60-122; (B) To direct the state treasurer to transfer amounts to the water supply reserve fund created in subsection (2)(c) of this section; (C) To direct the state treasurer to transfer amounts to the interbasin compact committee operation fund created in section 37-75-107; and (D) To direct the state treasurer to transfer amounts to the water efficiency grant program cash fund created in section 37-60-126 (12). (III) For fiscal years commencing on or after July 1, 2009, the state treasurer shall transfer the moneys credited to the fund that are not credited to either the severance tax perpetual base fund or the severance tax operational fund to the small communities water and wastewater grant fund created in section 25-1.5-208 (4), C.R.S.; except that the maximum amount of moneys annually credited to the small communities water and wastewater grant fund shall not exceed ten million dollars. (IV) to (XIII) Repealed. (XIV) Notwithstanding any provision of this paragraph (a) to the contrary, on July 1, 2015, the state treasurer shall transfer five hundred thousand dollars from the fund to the Colorado water conservation board construction fund, created in section 37-60-121 (1)(a), C.R.S., for use by the Colorado water conservation board, created in section 37-60-102, C.R.S., to continue the watershed restoration program. (XV) and (XVI) Repealed. (XVII) Notwithstanding any provision of this paragraph (a) to the contrary, an amount equal to nineteen million one hundred thousand dollars in the fund is restricted from being used for any purpose whatsoever, until such time that the joint budget committee, by a majority vote, releases the restriction on some or all of the money. (XVIII) Notwithstanding any provision of this subsection (2)(a) to the contrary, on June 30, 2018, the state treasurer shall transfer eleven million four hundred twenty-five thousand dollars from the fund to the general fund. (XIX) to (XXI) Repealed. (XXII) (A) Notwithstanding any other provision of this subsection (2)(a) to the contrary, on July 1, 2020, the state treasurer shall transfer forty-five million five hundred thousand dollars from the fund to the general fund. (B) The general assembly hereby declares that the transfer specified in subsection (2)(a)(XXII)(A) of this section is necessary as a result of the precipitous decrease in general fund revenues and that it is the intent of the general assembly to transfer an equal amount back to the fund as soon as possible. (XXIII) (A) Notwithstanding any other provision of this subsection (2)(a) to the contrary, on July 1, 2024, the state treasurer shall transfer twenty-six million eighty-six thousand five hundred fifty-nine dollars from the fund to the general fund. (B) This subsection (2)(a)(XXIII) is repealed, effective June 30, 2025. (b) The severance tax operational fund. (I) There is hereby created in the state treasury the severance tax operational fund, also referred to in this subsection (2)(b) as the "fund", which the department of natural resources shall administer. The state treasurer shall transfer one-half of the severance tax receipts credited to the severance tax trust fund for tax years commencing on and after July 1, 1995, to the fund. Money in the fund shall be distributed as set forth in section 39-29-109.3. (II) Repealed. (III) The fund also includes amounts that were transferred to natural resources and energy grant programs under section 39-29-109.3 and that were transferred back to the fund in accordance with subsection (2)(c)(V) of this section and sections 24-33-111 (2)(a)(I)(C), 37-60- 126 (12)(a)(V), and 37-75-107 (3). (c) The water supply reserve fund. (I) There is created in the office of the state treasurer the water supply reserve fund, referred to in this subsection (2)(c) as the "fund", administered by the Colorado water conservation board. The state treasurer shall transfer money to the fund from the severance tax operational fund as specified in subsection (2)(a)(II.5)(B) of this section. The fund also includes any other money that the general assembly may appropriate or transfer to the fund. The money in the fund is continuously appropriated, for purposes authorized by this subsection (2)(c), to the Colorado water conservation board, referred to in this subsection (2)(c) as the "board". All interest derived from the investment of money in the fund must be credited to the statewide account of the fund, which account is hereby created. Repayments of both the principal and interest on loans from the fund must be credited to the fund. Any balance remaining in the fund at the end of any fiscal year remains in the fund. The board shall allocate money by grant or loan from the fund only for water activities approved by a roundtable pursuant to article 75 of title 37. The approving roundtable is the roundtable for the basin in which a proposed water diversion or nonstructural activity would occur. If the applicant is a covered entity, as defined in section 37-60-126, the board shall allocate money by grant or loan from the fund only if the applicant has adopted a water conservation plan, as defined in section 37-60-126. The board, in consultation with the interbasin compact committee created in section 37-75-105, shall establish criteria and guidelines for allocating money from the fund, including criteria that ensure that the allocations will assist in meeting water supply needs identified pursuant to section 37-75-104 (2)(c), in a manner consistent with section 37-75-102, and facilitate both structural and nonstructural projects or methods. Eligible water activities include: (A) Competitive grants for environmental compliance and feasibility studies; (B) Technical assistance regarding permitting, feasibility studies, and environmental compliance; (C) Studies or analyses of structural, nonstructural, consumptive, and nonconsumptive water needs, projects, or activities; and (D) Structural and nonstructural water projects or activities. (II) On or before October 31 of each year, commencing with the year 2010, the board shall consult with the interbasin compact committee to produce the annual report required by section 37-75-105 (4), C.R.S., regarding how moneys in the fund were allocated in the previous twelve-month period. (III) and (IV) Repealed. (V) On April 30, 2021, the state treasurer shall transfer three million nine hundred ninety-six thousand four hundred ten dollars from the fund to the severance tax operational fund created in subsection (2)(b)(I) of this section. (VI) (A) The state treasurer shall transfer five million dollars from the general fund to the fund. By July 1, 2023, the board shall award pursuant to subsection (2)(c)(I) of this section all of the money transferred by this subsection (2)(c)(VI). (B) This subsection (2)(c)(VI) is repealed, effective September 1, 2025.
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