Date: 03/12/2012
Final
BILL SUMMARY for HB12-1314
HOUSE COMMITTEE ON AGRICULTURE, LIVESTOCK, & NATURAL RESOURCES
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01:37 PM -- House Bill 12-1314
Representative Sonnenberg, bill sponsor, presented House Bill 12-1314, which creates an exemption to the current requirement that all taxpayers owing severance tax on oil and gas production must file a return with the Department of Revenue (DOR). The exemption applies to any taxpayer that has less than $250 withheld by unit operators and first purchasers. Under current law, if a taxpayer fails to file a severance tax report, the executive director of DOR may estimate the amount of taxes, interest and penalties due and mail the estimate to the taxpayer. Within 10 days of mailing, if no response is received, the estimated amount becomes the taxpayer's severance tax liability to the state. This bill prohibits the executive director from making and sending an estimated tax liability to taxpayers exempted by the bill. Representative Sonnenberg answered questions from the committee about who the exemption would apply to.
The following individuals testified:
01:43 PM -- Travis Holland, Colorado Petroleum Association and Colorado Oil and Gas Association, spoke in support of the bill and discussed current law regarding who owes severance tax on oil and gas production and must file tax returns for oil and gas operations. He also discussed the tiered rate structure for severance tax. Mr. Holland answered questions from the committee.
02:04 PM -- Neil Ray, National Association of Royalty Owners, spoke in support of the bill and discussed why he believes the state revenue losses and state expenditures described in the fiscal note are too high. He also discussed his personal experiences as a royalty owner in filing tax returns on oil and gas production revenue. Mr. Ray answered questions from the committee.
02:27 PM -- Marc Carey, Legislative Council Staff, explained how the state expenditures and revenues in the fiscal note were calculated.
02:31 PM -- Richard Giardini, Department of Revenue, discussed revenue collected from royalty owners and answered questions from the committee concerning situations where royalty owners have tax liability that they were not aware of. He also answered questions about notices provided to royalty owners from the Department of Revenue.
02:47 PM
Representative Fischer provided some amendment suggestions regarding the withholding amount to qualify for the exemption that is specified in the bill.
02:53 PM
The chair laid the bill over and the committee adjourned.