A. The commission shall grant monies from the fund consistent with the application guidelines developed pursuant to section 45-2105. The commission shall establish a procedure by which monies may be granted annually which shall include a maximum of six months between the receipt of the proposal by the commission and the disbursement of monies. The commission shall give priority in funding to the following:

1. Projects for which matching monies or assets of comparable value, including in-kind contributions, will be provided by other sources.

2. Projects that provide for the continued maintenance of the portion of the river and stream and associated riparian habitat that are enhanced by the project.

3. Projects that include broad based local involvement.

4. Projects that directly benefit perennial or intermittent rivers or streams or that otherwise increase the supply of water.

B. The commission shall require as a condition of approval of any proposal all of the following provisions:

1. Allowing access for inspection and evaluation of the project.

2. Controlling the expenditure of and accounting for any monies granted by the commission

3. Requiring that those persons responsible for the project submit all pertinent information and research gained from the project to the commission.

4. Requiring that any person receiving a grant spend no more than five percent of the grant on costs of administration.

C. The commission shall provide for public involvement regarding the applications submitted to the commission which shall include notice to any person who requests notice of applications and which shall provide a reasonable opportunity for comment on the application which shall not be less than forty-five days.

D. On receipt of an application the commission shall notify cities, towns, counties, natural resource conservation districts, special districts and Indian communities affected by the proposal and shall provide a reasonable opportunity for comment on the application which shall not be less than forty-five days.

E. Any person, state agency or political subdivision of this state may submit a request for funding from the fund for purposes prescribed by this section. A federal agency is not eligible for funding from the fund. Requests for funding shall be made to the commission. Requests for funding submitted to the commission may be accompanied by expressions of support from affected cities, towns, counties, natural resource conservation districts, special districts or Indian communities.

F. As a condition of approval by the commission, the applicant shall commit to work jointly with the affected cities, towns, counties, natural resource conservation districts, special districts and Indian communities that have contacted the commission pursuant to subsection D of this section on all aspects of the proposal’s implementation and monitoring, unless the jurisdiction chooses not to participate.

G. Monies in the fund may only be spent to finance programs located in this state.

H. Monies in the fund may be spent for any of the following:

1. Granting monies to entities for the acquisition of central Arizona project water or effluent that will protect or restore rivers or streams consistent with state water law. No entity may exercise the right of eminent domain to acquire water or water rights using monies derived from this fund.

2. Granting monies to assist in developing, promoting and implementing water conservation programs, directly related to the purposes of this chapter, outside of the active management areas.

3. Granting monies in support of research and data collection, compilation and analysis directly related to the purposes of this chapter except that no more than five percent of the monies deposited in the fund in any fiscal year may be spent for this purpose. Before the approval of any such project, the commission shall consult with the department of water resources and the state land department to determine whether any research of a similar nature has been or is in the process of being performed and is already available. The commission shall not approve a proposal if either department determines that sufficient data exists and notifies the commission in writing.

4. Granting monies for the development and implementation of capital projects or specific measures consistent with the purposes of this chapter.

I. Monies in the fund may not be spent for:

1. Any project that includes the planting of mesquite, tamarisk or other nonnative high water usage trees that consume water to a degree that is detrimental to water conservation efforts, but may be used for removal of mesquite, tamarisk or other nonnative high water usage trees that consume water to a degree that is detrimental to water conservation efforts.

2. Any remedial action purposes undertaken pursuant to the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96-510; 94 Stat. 2767; 42 United States Code § 9601) or Title 49, Chapter 2, Article 5.