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Last modified
3/26/2010 3:55:22 PM
Creation date
9/30/2006 10:22:08 PM
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Template:
Publications
Year
1998
Title
Construction Fund Annual Report 1998
CWCB Section
Finance
Author
CWCB
Description
Construction Fund Annual Report 1998
Publications - Doc Type
CF Annual Report
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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />3.0 Severance Tax Trust Fund <br /> <br />The Severance Tax Trust Fund was created in 1978 "...to be perpetual and held in trust as a <br />replacement for depleted natural resources and for the development and conservation of the state's <br />water resources pursuant to sections 37-60-106 (J) (j) and (1) (I), 37-60-119, and 37-60-122, <br />CR,S...." The citations refer to the Colorado Water Conservation Board's Water Project <br />Construction Loan Program supported by the CWCB Construction Fund. <br /> <br />Prior to 1994, all the money transferred to the Severance Tax Trust Fund was appropriated by <br />the General Assembly for other purposes such as capital construction, the federal Uranium Mill <br />Tailings Remedial Action Project (UMTRAP), and to offset General Fund budget shortfalls. <br />Furthermore, the previous law required all interest from investments to revert to the General Fund. <br />Consequently, no water projects were ever financed through the Severance Tax Trust Fund. <br /> <br />In 1996, Senate Bi1196-170 conceming the Severance Tax Trust Fund was signed into law by <br />Governor Romer. SB 96-170 reaffirmed the fund's original purpose and expanded the use of the <br />fund for "..funding programs that promote and encourage sound natural resource planning, <br />management, and development related to minerals, energy, geology, and water." The bill also <br />created two new accounts within the fund and made an appropriation for FY 97. The two new <br />accounts are: <br /> <br />. the Operational Account (OPA) <br />. the Perpetual Base Account (PBA) <br /> <br />The passage of SB 96-170 ~as due in large part to the efforts of the state Minerals, Energy and <br />. I.. . . <br />Geology Policy Advisory Board which was established in 1995 pursuant to Section 34-20-104, <br />C.R.S. At their July 10, 1996 meeting, the MEGA Board recommended that use of the Severance <br />Tax Trust Fund for water project construction and water planning "give preference to energy <br />impacted areas." <br /> <br /> <br />3.1 Cash Sources <br /> <br />Beginning in 1978, the State of Colorado has collected millions of dollars annually in severance <br />taxes from the production of oil and gas, coal, and minerals (molybdenum, gold, and silver). The <br />oil and gas severance tax rate is based on value of production. The coal severance tax is based on <br />tonnage. The rate was cut by a third in 1988 and is now frozen by TABOR. Molybdenum severance <br />tax is on a cents per ton basis. The rate was cut by 2/3 in 1987. <br /> <br />Total severance tax reven)le to the state has swung widely due to variation in the price and tax <br />rate on oil and gas and large ta,'{ refunds. Severance tax revenue during calendar year 1998 is shown <br />below. <br /> <br />CWCB FY98 Annual Report, page 17 <br />
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