BOARD00886

• Board Meeting Date: 3/29/1999
• Description: Severance Tax Legislation
• Board Meetings - Doc Type: Memo

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OFFICE OF THE EXECUTIVE DIRECTOR

STATE OF COLORADO ~
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Department of Natural Resources
1313 Sherman Street. Room 71 B
Denver, Colorado 80203
Phone: [phone]
TDO: [phone]
Fax: [phone]

March 2. 1999

DEPARTMENT OF
NATURAL
RESOURCES

Representative Lola Spradley
Representative Gary McPherson
Members of the House Finance Committee
. State Capitol
Denver, CO 80203

Bill Owens
Governor

Greg E. Walcher
Executive Director

Dear Representative Spradley and House Finance Committee Members:

Last week the Departments of Local Affairs and Natural Resources provided differing information on
the fiscal aspects ofHB 1249. This situation produced confusion regarding the impact of the legislation
on the state severance tax fund and the programs managed by the two agencies. We apologize for that
situation.

The two departments have developed a single set of spreadsheets related to the fund and pending
legislation, The attached spreadsheets identify the revenue streams under current law. under HB 1249 as
amended in the House Agriculture Committee, and under the proposed Administration amendments with
and without the triggering of HB 1233, The analysis runs through the year 2030 to highlight the
dynamics of each fund in the two agencies,

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The purpose of the proposed Administration amendments is to support the severance tax exemptions
proposed by the mining industry without a negative impact to the programs currently funded by the tax in
the Department of Natural Resources. Those funds currently replace fees paid by industry and local
governments, declining federal funds for industry-related programs, and some general funds for state
regulatory activities and programs benefitting the public,

The Administration amendments continue these efforts at current funding levels significantly into the
future by limiting DNR's use of the fund to about one-third of the amount authorized under SB 96-170,
The amendments also provide for over $400 million in loans for construction of water projects over the
next 30 years through management of the DNR Perpetual Fund in a manner comparable to the current
Colorado Water Conservation Board Construction Fund,

Thank you very much for the opportunity to provide you with this additional information. Weare
available if you have further questions,

Sincerely.

"

G E, Walcher
Executive Director
Department of Natural Resources

Bob Brooks
Executive Director
Department of Local Affairs

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Board of Land Commissioners. Division of Minerals & Geology/Geological Survey
Oil & Gas Conservation Commission. Colorado State Parks. Soil Conservation Board
Water Conservation Board. Division of Water Resources. Division at" Wildlife