Date: 02/25/2009

Presentation by Legislative Council Staff


Votes: View--> Action Taken:

12:42 PM -- Presentations by Legislative Council Staff about Mineral Taxes in Colorado

Mr. Jason Schrock and Mr. Marc Carey, Legislative Council Staff (LCS), provided an overview of mineral taxes in Colorado, including the state severance taxes for oil and gas and Federal Mineral Lease (FML) revenue on federal lands. The staff distributed a handout of the presentation to the committee (Attachment B).


12:43 PM

Mr. Schrock provided an overview of mineral development in Colorado. He provided information about the energy boom in production, particularly in natural gas, since 2003. He further stated this production is beginning to slide because of current economic conditions. Mr. Schrock discussed natural gas production and prices. He responded to questions from the committee about pipeline issues facing Colorado producers and prices national producers can obtain. He also discussed pipeline capacity, severance taxes, and property taxes.

12:53 PM

Mr. Schrock responded to questions from the committee about the volatility of natural gas prices. Discussion ensued on this subject. He also responded to questions about property tax credits and how the credits are being administered. Discussion ensued about audits that have been conducted about mineral tax revenue.

01:01 PM

Mr. Carey provided an overview of taxes collected from mineral extraction, including the FML revenue and severance tax revenue, and discussed how the mineral tax revenues are allocated within the state's budget. The allocation of state severance tax revenue, he explained, is divided between the Department of Natural Resources and the Department of Local Affairs. These agencies distribute this revenue for programs throughout the state. The allocation of FML revenue, he explained, is primarily for K-12 education, water projects, local government grants, and school districts. Any spillover allocation for FML revenue, he said, goes toward higher education capital construction projects. Mr. Carey discussed the impacts of recent legislation that has been passed on revenue allocation, and also provided the committee information about revenue allocation during instances when the state faces revenue reductions.

01:06 PM

Mr. Carey responded to questions from the committee about the revenue for K-12 education and school districts. Discussion ensued about money for education from state lands that are managed by the State Land Board.

01:10 PM

Mr. Schrock returned and responded to questions about severance tax revenue and whether the revenue would recover in future fiscal years. Discussion continued about the price of natural gas and the impacts of this price on the state's fiscal situation.

01:13 PM

The committee adjourned.