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• Board Meeting Date: 9/16/2008
• Description: CF Section - Amendment 52 - Use of Severance Tax Revenue for Highways
• Board Meetings - Doc Type: Memo

3ra Draft
Amendment 52
Use of Severance Tax Revenue for Highways
1 Amendment 52 proposes amending the Colorado Constitution to:
2 1 require the state legislature to spend a portion of state severance tax
3 collections on highway projects.
4 Summary and Analysis
5 Whaf is the severance tax? Companies that extract nonrenewable natural
6 resources such as coal, oil, natural gas, gold, and silver from the earth pay the state
7 severance tax. The amount of severance tax paid is based on company income or the
8 volume of the resource mined.
9 How is severance tax revenue spent now? The state legislature determines how
10 severance tax revenue is spent. Under existing statutes, it is evenly divided between
11 local governments and state programs. State statute distributes the local government
12 portion to communities impacted by the mineral extraction industry -either directly
13 based on mining activity in the area or through competitive loans or grants. The state
14 portion is spent on loans for local water projects like dams, pipelines, and canals;
15 programs regulating mining activity; and, in recent years, programs like low-income
16 energy assistance and wildlife conservation. Figure 1 shows the amount of severance
17 tax revenue spent on different state programs over the past six years and the amount
18 budgeted for 2009.
19 Figure 1. Severance Tax Revenue Spent on State Programs
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21 agriculture; state parks; and wildlife conservation.
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