C.R.S. § 22-32-149

(1) A school district board of education may establish a scholarship program for students who receive a high school diploma from the school district or successfully complete a high school equivalency examination while enrolled in the school district. The scholarships must be funded from additional mill levy revenue that is approved pursuant to section 22-54-108 ; from gifts, grants, or donations that the school district receives for purposes of the scholarship program; or from a combination of both. A board of education that establishes a scholarship program is strongly encouraged to: (a) Prioritize scholarships for students who are eligible for free or reduced-price meals pursuant to the provisions of the federal “Richard B. Russell National School Lunch Act”, 42 U.S.C. sec. 1751 et seq., and students whose parents do not have a postsecondary credential, to facilitate awarding scholarships to increase graduates’ access to postsecondary education; and (b) Limit the use of scholarship money to tuition, books and supplies, and transportation.