C.R.S. § 25-1.5-208: Grant program for public water systems and domestic wastewater treatment works - small communities water and wastewater grant fund - rules - repeal.

(1) The department has, in addition to all other powers and duties imposed upon it by law, the powers and duties provided in this section as follows:

(a) To assist suppliers of water that serve a population of not more than five thousand people with meeting their responsibilities with respect to protection of public health, the department, in the name of the state and to the extent that state funds are appropriated therefor, may enter into contracts with both governmental agencies and not-for-profit public water systems, as defined in section 25-1.5-201 (2), or with counties representing unincorporated areas that serve a population of not more than five thousand people, to grant moneys for the planning, design, and construction of public water systems.

(a.5) To assist domestic wastewater treatment works, as defined in section 25-8-103 (5), that serve a population of not more than five thousand people with meeting their responsibilities with respect to the protection of public health and water quality, the department, in the name of the state and to the extent that state funds are appropriated therefor, may enter into contracts with governmental agencies, or with counties representing unincorporated areas that serve a population of not more than five thousand people, to grant moneys for eligible projects as defined in section 25-8-701 (2).

(b) The department may use up to ten percent of the appropriated money for the administration and management of project grants described in subsections (1)(a) and (1)(a.5) of this section.

(2) The water quality control commission shall promulgate rules for the administration of any appropriated grant moneys pursuant to this section and for prioritizing proposed public water systems and domestic wastewater treatment works based upon public health impacts and water quality protection. The department shall authorize grants based on water quality needs and public health-related problems. The commission shall promulgate a project categorization system for use in determining the relative priority of proposed projects. The department shall review applications for state funds and may approve only those applications that are consistent with the project categorization system.

(3) During the grant application process, the department shall seek from the division of local government in the department of local affairs a fiscal analysis of the applying entity to determine financial need. Based upon its fiscal analysis, the division of local government shall issue or deny a certificate of financial need. If a certificate of financial need is issued, the department may authorize a state grant to the project in accordance with the project prioritization adopted by the department.

(4) (a) (I) There is hereby created in the state treasury the small communities water and wastewater grant fund, referred to in this subsection (4) as the "fund". The fund consists of money transferred pursuant to section 39-29-109 (2)(a)(III) and any other money transferred to the fund by the general assembly. The money in the fund may be used only for grants made pursuant to this section and as a state match required by the federal "Infrastructure Investment and Jobs Act", Pub.L. 117-58, for water pollution control or drinking water projects authorized pursuant to section 37-95-107.6 or 37-95-107.8.

(II) All income derived from the deposit and investment of the money in the fund shall be credited to the fund. At the end of each fiscal year, all unexpended and unencumbered money in the fund shall remain in the fund and shall not revert to the general fund or to any other fund.

(b) The revenues in the fund are continuously appropriated to the department for the purposes of this section.

(c) Repealed.

(d) (I) Notwithstanding the provisions of subsection (4)(a) of this section regarding the permissible uses of money in the fund, if an application for the abandonment of a town has been filed with the secretary of state pursuant to section 31-3-201 (1)(b) and the town owns or operates a water system that is failing or is likely to fail, as determined by the department, the department may transfer up to one hundred thousand dollars from the fund to the department of public safety for the department of public safety to contract for the operation and maintenance of the town's existing water treatment infrastructure.

(II) The department of public safety shall use money transferred from the fund pursuant to this subsection (4)(d) only to contract for the routine operation and maintenance of existing water treatment infrastructure for the town, such as the operation of the chlorine disinfection system and associated sampling as determined by the department, and not for improvements to the water system or other projects that require more significant expenditures. The department of public safety shall use money transferred from the fund only after an application for abandonment of a town is filed with the secretary of state, until the secretary of state makes a final determination on that application; except that the department of public safety may use the money from the fund for an additional six months after the secretary of state makes a final determination on the application for abandonment of the town if the department of public safety determines, on a monthly basis, that the use of money from the fund is necessary.

(III) Any assistance provided for the routine maintenance or operation of existing water treatment infrastructure pursuant to this subsection (4)(d) is temporary and does not transfer ownership of the water system to the state. The state is not responsible or liable for the water system or the debts, obligations, or other requirements of the town for which an application for abandonment was filed.

(IV) This subsection (4)(d) is repealed, effective July 1, 2028.