HOUSE 3rd Reading Unamended April 19, 2013 HOUSE Amended 2nd Reading April 18, 2013First Regular Session Sixty-ninth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction LLS NO. 13-0759.01 Thomas Morris x4218 HOUSE BILL 13-1273 HOUSE SPONSORSHIP Fischer, Foote, Ginal, Hullinghorst, Lebsock, Levy, May, Pabon, Primavera, Ryden, Singer SENATE SPONSORSHIP Kefalas, Jones House Committees Senate Committees Health, Insurance & Environment Appropriations A BILL FOR AN ACT Concerning additional financial resources for local governments to address impacts caused by new oil and gas development, and, in connection therewith, making an appropriation. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) Current law authorizes local governments to designate a person to participate in certain proceedings before the Colorado oil and gas conservation commission, including the issuance of permits to drill a well. Section 2 of the bill requires oil and gas operators to pay to the commission a local government designee fee, established by the commission by rule, when applying for a permit to drill. The commission will allocate the fee equally to each local government that has registered a local government designee with the commission within whose boundaries an oil and gas facility authorized by the permit is located. The commission must set the fee, after consulting with local governments, at a level to provide reimbursement to a local government for its costs associated with maintaining a local government designee. The prohibition on local governments charging a tax or fee to conduct inspections or monitoring of oil and gas operations with regard to matters that are subject to rule, order, or permit condition administered by the commission is repealed. Section 3 authorizes local governments to collect an environmental or public health and welfare oversight charge on new oil and gas development, collectible upon issuance of a development permit by the local government. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 34-60-102, add (1) (c) as follows: 34-60-102. Legislative declaration. (1) (c) The general assembly hereby finds and declares that the public interest is best served when this article and local government regulatory authority are applied harmoniously in pursuit of comprehensive, efficient, and effective regulation of and enforcement over oil and gas operations. Nothing in this article precludes local governments from exercising their regulatory and enforcement authority over matters pertaining to the impacts of oil and gas operations within their jurisdictional boundaries. It is further declared that this article does not limit a local government's authority to protect and maintain local capital facilities and infrastructure, as well as to monitor and oversee environmental conditions or public health and welfare concerns related to oil and gas operations within their jurisdictional boundaries. SECTION 2. In Colorado Revised Statutes, 34-60-106, amend (1) (f) and (15) as follows: 34-60-106. Additional powers of commission - rules - local government designee fund. (1) The commission also has authority to require: (f) (I) That no an operator shall not commence operations for the drilling of a well for oil and gas shall be commenced without first giving to notifying the commission notice of its intention to drill; and without first obtaining a permit from the commission, under such rules and regulations as may be prescribed by the commission; and paying to the commission a filing and service fee, to be not to exceed two hundred dollars, established by the commission for the purpose of paying to pay the expense of administering this article as provided in section 34-60-122, which fee may be transferable or refundable, at the option of the commission, if such the permit is not used. but no such fee shall exceed two hundred dollars. (II) An operator must pay to the commission a local government designee fee when applying for a permit to drill. The commission shall transfer the fees to the state treasurer, who shall deposit them in the local government designee fund, which is hereby created in the state treasury. All interest earned on deposits in the fund is credited to the fund. By rule, the commission shall annually set the amount of the fee and determine a fair and equitable method of allocating the fees. In annually setting the fee, the commission shall consult with local governments and take into account: (A) The cumulative costs incurred by local governments in maintaining registered local government designees during the previous fiscal year; and (B) The total number of oil and gas permits within the boundaries of all local governments that have registered local government designees during the previous year. (III) The commission shall quarterly distribute revenues in the fund to local governments that have registered a local government designee with the commission. The commission shall distribute the fund's revenues through a grant application process established by rule. In establishing the grant process, the commission shall develop evaluation criteria to evaluate applications that ensure fair and equitable distribution of the revenues taking into account: (A) The financial ability of the applicant local government to pay the costs incurred in maintaining its local government designee; (B) The amount of oil and gas revenues received by the applicant local government from sources other than the local government designee fund; (C) The number of oil and gas permits and number of existing oil and gas facilities within the boundaries of the applicant local government; and (D) The existing mill levy set by the applicant local government. (15) The commission may, as it deems appropriate, assign its inspection and monitoring function, but not its enforcement authority, through intergovernmental agreement or by private contract; except that no such an assignment shall must not allow for the imposition of any new tax or fee by the assignee in order to conduct such the assigned inspection and monitoring and no such assignment shall must not provide for compensation contingent on the number or nature of alleged violations referred to the commission by the assignee. No A local government may charge a tax or fee to conduct inspections or monitoring of oil and gas operations with regard to matters that are subject to rule, regulation, order, or permit condition a local government's land use or other applicable authorities and that are not solely administered by the commission. Nothing in this subsection (15) shall affect affects the ability of a local government to charge a reasonable and nondiscriminatory fee that is otherwise provided for by law, including for inspection and of, monitoring for, and mitigation of road damage and compliance with local fire codes, land use permit conditions, and local building codes. SECTION 3. Appropriation. (1) In addition to any other appropriation, there is hereby appropriated, out of any moneys in the oil and gas conservation and environmental response fund created in section 34-60-122 (5), Colorado Revised Statutes, not otherwise appropriated, to the department of natural resources, for the fiscal year beginning July 1, 2013, the sum of $42,367, or so much thereof as may be necessary, to be allocated to the executive director's office, for the implementation of this act as follows: (a) $41,440 for the purchase of computer center services; and (b) $927 for the purchase of legal services. (2) In addition to any other appropriation, there is hereby appropriated to the governor - lieutenant governor - state planning and budgeting, for the fiscal year beginning July 1, 2013, the sum of $41,440, or so much thereof as may be necessary, for allocation to the office of information technology, for the provision of computer center services for the department of natural resources related to the implementation of this act. Said sum is from reappropriated funds received from the department of natural resources out of the appropriation made in paragraph (a) of subsection (1) of this section. (3) In addition to any other appropriation, there is hereby appropriated to the department of law, for the fiscal year beginning July 1, 2013, the sum of $927, or so much thereof as may be necessary, for the provision of legal services for the department of natural resources related to the implementation of this act. Said sum is from reappropriated funds received from the department of natural resources out of the appropriation made in paragraph (b) of subsection (1) of this section. (4) In addition to any other appropriation, there is hereby appropriated, out of any moneys in the oil and gas conservation and environmental response fund created in section 34-60-122 (5), Colorado Revised Statutes, not otherwise appropriated, to the department of natural resources, for the fiscal year beginning July 1, 2013, the sum of $11,407, or so much thereof as may be necessary, to be allocated to the oil and gas conservation commission for the implementation of this act as follows: (a) $7,227 for personal services; and (b) $4,180 for rulemaking hearing expenses. SECTION 4. Applicability. This act applies to conduct occurring on or after the effective date of this act. SECTION 5. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.