Severance Tax

C.R.S. tit. 39, art. 29

in effect

C.R.S. § 39-29-101 Legislative declaration

39-29-101. Legislative declaration. (1) The general assembly hereby finds and declares that, when nonrenewable natural resources are removed from the earth, the value of such resources to the state of Colorado is irretrievably lost. Therefore, it is the intent of the general assembly to recapture a portion of this lost wealth through a special excise tax, in addition to other business taxes, on the nonrenewable natural resources removed from the soil of this state and sold for private profit. (2) The general assembly further finds and declares that the severance of nonrenewable resources provides a potential source of revenue to the state and its political subdivisions. Therefore, it is the intent of the general assembly to impose a tax on the process of severance in addition to other business taxes. (3) It additionally is the intent of the general assembly that a portion of the revenues derived from such a severance tax be used by the state for public purposes, that a portion be held by the state in a perpetual trust fund, and that a portion be made available to local governments to offset the impact created by nonrenewable resource development.

C.R.S. § 39-29-102 Definitions

39-29-102. Definitions. As used in this article 29, unless the context otherwise requires: (1) "Coal" means coal which has been processed into the form in which it is sold or otherwise used. Such processing includes, but is not limited to, cleaning and washing. (1.5) "Commercial production", for a commercial oil shale facility, means production from such facility in excess of the first fifteen thousand tons per day of oil shale or ten thousand barrels per day of shale oil, whichever is greater. The calculation of the daily production shall be determined by dividing the total production of a calendar month by the total number of days in such month. (2) "Executive director" means the executive director of the department of revenue. (2.5) For tax years commencing on or after January 1, 2000, "gas" means natural gas, coalbed methane, and carbon dioxide. (3) "Gross income" means: (a) For oil and gas, the net amount realized by the taxpayer for sale of the oil or gas, whether the sale occurs at the wellhead or after transportation, manufacturing, and processing of the product. Net amount shall be calculated pursuant to rules promulgated by the department of revenue on the basis of the gross lease revenues, less deductions for direct costs actually paid or accrued by the taxpayer for transportation, manufacturing, and processing of the product. For purposes of this subsection (3)(a), direct costs include depreciation. Where the parties to the sale are related parties and the sales price is lower than the price for which that oil or gas could otherwise have been sold to a ready, willing, and able buyer and where the taxpayer was legally able to sell the oil or gas to such a buyer, gross income shall be determined by reference to comparable arms-length sales of like kind, quality, and quantity in the same field or area, less deductions for transportation, manufacturing, and processing done prior to the sale. For purposes of this subsection (3)(a), "related parties" shall be defined by the department of revenue pursuant to rules and regulations. (b) For metallic minerals, the value of ore immediately after its removal from the mine, and does not include any value added subsequent to mining by any treatment processes, such as crushing, grinding or concentration, by transportation from the mine, or by marketing of such ore or any products derived therefrom, but does not include income from the extraction or processing of ores or minerals from mine waste or residue of previously processed ores. (4) "Gross proceeds", for oil shale, means the value of the oil shale at the point of severance. Such value shall be determined by deducting from the first sales price of the shale oil all costs, including direct and indirect expenditures, for: (a) Equipment and machinery; (b) Fragmenting, crushing, conveying, beneficiating, pyrolysis, retorting, refining, and transporting; and processed ores. (4) "Gross proceeds", for oil shale, means the value of the oil shale at the point of severance. Such value shall be determined by deducting from the first sales price of the shale oil all costs, including direct and indirect expenditures, for: (a) Equipment and machinery; (b) Fragmenting, crushing, conveying, beneficiating, pyrolysis, retorting, refining, and transporting; and (c) Royalty payments. (4.5) "Local units of government locally impacted" means units of government in the geographic area wherein reside employees of the operation producing the minerals and mineral fuels taxed pursuant to this article. The geographic area shall be determined on the basis of residence as reported in accordance with section 39-29-110 (1)(d). (5) "Metallic minerals" means all minerals except molybdenum, oil and gas, carbon dioxide, coal, oil shale, rock, sand, gravel, stone products, earths, limestone, and dolomite. (6) "Molybdenum ore" means ore which is mined primarily for the extraction of molybdenum therefrom. (6.5) For tax years commencing on or after January 1, 2000, "oil" means crude oil and condensate. (7) "Transportation" means the cost of moving identifiable, measurable oil or gas, including gas that is not in need of initial separation, from the point at which it is first identifiable and measurable to the sales point or other point where value is established. Any compression downstream of the meter or measurement point is deductible as a component of transportation. "Gathering" means the movement of an unseparated, bulk production stream to a point, on or off the lease, where the production stream undergoes initial separation into identifiable oil, gas, or free water and is not deductible as transportation. This definition shall not be construed to affect the legal relationship between royalty owners and lessees.

C.R.S. § 39-29-103 Tax on severance of metallic minerals

39-29-103. Tax on severance of metallic minerals. (1) In addition to any other tax, there shall be levied, collected, and paid for each taxable year a tax upon the severance from the earth in this state of all metallic minerals as to all such severance occurring on and after January 1, 1978. Such tax shall be levied against every mining operation engaged in the severance of metallic minerals and shall be based upon the gross income of such mining operation. The rate of the tax for all metallic minerals shall be as follows: (a) For taxable years commencing prior to July 1, 1999: Percentage tax Amount of gross income on gross income First $11,000,000 No tax Amount exceeding $11,000,000 2.25% (b) For taxable years commencing on or after July 1, 1999: Percentage tax Amount of gross income on gross income First $19,000,000 No tax Amount exceeding $19,000,000 2.25% (2) There shall be allowed, as a credit against the tax computed in accordance with subsection (1) of this section, an amount equal to all ad valorem taxes assessed during the taxable year in the case of accrual basis taxpayers or paid during the taxable year in the case of cash basis taxpayers on producing mines valued for assessment pursuant to section 39-6-106. Such credit shall not exceed fifty percent of the tax computed in accordance with subsection (1) of this section.

C.R.S. § 39-29-104 Tax on severance of molybdenum ore

39-29-104. Tax on severance of molybdenum ore. (1) In addition to any other tax, there shall be levied, collected, and paid for each calendar quarter a tax upon the severance of all molybdenum ore in this state. Such tax shall be levied against every person engaged in the severance of molybdenum ore. The rate of the tax for each calendar quarter shall be five cents per ton of molybdenum ore. On and after July 1, 1999, no tax provided for in this section shall be imposed on the first six hundred twenty-five thousand tons of molybdenum ore produced each quarter of the taxable year. (2) Such actual severance shall be reported on quarterly declaration forms prescribed by the executive director. Such forms shall be filed with and the tax owed shall be paid to the department of revenue on or before the fifteenth day following the end of each such quarter.

C.R.S. § 39-29-105 Tax on severance of oil and gas

39-29-105. Tax on severance of oil and gas. (1) (a) In addition to any other tax, there shall be levied, collected, and paid for each taxable year commencing prior to January 1, 2000, a tax upon the gross income of crude oil, natural gas, carbon dioxide, and oil and gas severed from the earth in this state; except that oil produced from any wells that produce ten barrels per day or less of crude oil for the average of all producing days during the taxable year shall be exempt from the tax. Nothing in this paragraph (a) shall exempt a producer of oil and gas from submitting a production employee report as required by section 39-29-110 (1)(d)(I). The tax for crude oil, natural gas, carbon dioxide, and oil and gas shall be at the following rates of the gross income: Under $25,0002% $25,000 and under $100,0003% $100,000 and under $300,0004% $300,000 and over5% (b) In addition to any other tax, there shall be levied, collected, and paid for each taxable year commencing on or after January 1, 2000, a tax upon the gross income attributable to the sale of oil and gas severed from the earth in this state; except that oil produced from any wells that produce fifteen barrels per day or less of oil and gas produced from wells that produce ninety thousand cubic feet or less of gas per day for the average of all producing days for such oil or gas production during the taxable year shall be exempt from the tax. The tax for oil and gas shall be at the following rates of the gross income: Under $25,000 2% $25,000 and under $100,000 3% $100,000 and under $300,000 4% $300,000 and over 5% (2) (a) With respect to crude oil, natural gas, carbon dioxide, and oil and gas, there shall be allowed, as a credit against the tax computed in accordance with the provisions of paragraph (a) of subsection (1) of this section for each taxable year commencing prior to January 1, 2000, an amount equal to eighty-seven and one-half percent of all ad valorem taxes assessed during the taxable year in the case of accrual basis taxpayers or paid during the taxable year in the case of cash basis taxpayers upon crude oil, natural gas, carbon dioxide, and oil and gas leaseholds and leasehold interests and oil and gas royalties and royalty interests for state, county, municipal, school district, and special district purposes, except such ad valorem taxes assessed or paid for such purposes upon equipment and facilities used in the drilling for, production of, storage of, and pipeline transportation of crude oil, natural gas, and carbon dioxide. However, no credit shall be allowed for ad valorem taxes paid or assessed on oil wells that produce ten barrels per day or less of crude oil for the average of all producing days during the taxable year. (b) (I) With respect to oil and gas, there is allowed, as a credit against the tax computed in accordance with the provisions of subsection (1)(b) of this section for each taxable year commencing on or after January 1, 2000, but prior to January 1, 2024, an amount equal to eighty-seven and one-half percent of all ad valorem taxes assessed during the taxable year in the case of accrual basis taxpayers or paid during the taxable year in the case of cash basis taxpayers upon oil and gas leaseholds and leasehold interests and oil and gas royalties and royalty interests for state, county, municipal, school district, and special district purposes, except such ad valorem taxes assessed or paid for such purposes upon equipment and facilities used in the drilling for, production of, storage of, and pipeline transportation of oil and gas. he case of cash basis taxpayers upon oil and gas leaseholds and leasehold interests and oil and gas royalties and royalty interests for state, county, municipal, school district, and special district purposes, except such ad valorem taxes assessed or paid for such purposes upon equipment and facilities used in the drilling for, production of, storage of, and pipeline transportation of oil and gas. (II) With respect to oil and gas there is allowed, as a credit against the tax computed in accordance with the provisions of subsection (1)(b) of this section for each taxable year commencing on or after January 1, 2024, but prior to January 1, 2026, an amount equal to seventy-five percent of all ad valorem taxes assessed during the taxable year in the case of accrual basis taxpayers or paid during the taxable year in the case of cash basis taxpayers upon oil and gas leaseholds and leasehold interests and oil and gas royalties and royalty interests for state, county, municipal, school district, and special district purposes, except such ad valorem taxes assessed or paid for such purposes upon equipment and facilities used in the drilling for, production of, storage of, and pipeline transportation of oil and gas. (III) Notwithstanding subsections (2)(b)(I) and (2)(b)(II) of this section, no credit shall be allowed for ad valorem taxes paid or assessed on oil and gas production that is exempt from the state severance tax pursuant to subsection (1) of this section. (c) For a taxable year beginning on or after January 1, 2026, but before January 1, 2027, for each well that is not exempt from the state severance tax pursuant to subsection (1)(b) of this section, there is allowed a credit against the tax computed in accordance with the provisions of subsection (1)(b) of this section in an amount calculated by the formula C = 0.65625 x GI x ML, where: (I) C is the amount of the credit; (II) GI is the gross income attributable to the well for the current taxable year; and (III) ML is the total of all mill levies, fixed not later than December 22 of the preceding calendar year pursuant to section 39-1-111, by all local governments for property at the well's location. (d) For a taxable year beginning on or after January 1, 2027, for each well that is not exempt from the state severance tax pursuant to subsection (1)(b) of this section, there is allowed a credit against the tax computed in accordance with subsection (1)(b) of this section in an amount calculated by the formula C = 0.7656 x GI x ML, where: (I) C is the amount of the credit; (II) GI is the gross income attributable to the well for the current taxable year; and (III) ML is the total of all mill levies, fixed not later than December 22 of the preceding calendar year pursuant to section 39-1-111, by all local governments for property at the well's location.

C.R.S. § 39-29-106 Tax on the severance of coal

39-29-106. Tax on the severance of coal. (1) In addition to any other tax, there shall be levied, collected, and paid for each taxable year a tax upon the severance of all coal in this state. Such tax shall be levied against every person engaged in the severance of coal. Subject to the exemption and credits authorized in subsections (2), (3), and (4) of this section, the rate of the tax shall be thirty-six cents per ton of coal. (2) (a) Repealed. (b) On and after July 1, 1999, but before January 1, 2026, no tax provided for in subsection (1) of this section is imposed on the first: (I) Three hundred thousand tons of coal produced in each quarter of the 2021 taxable year; (II) Two hundred forty thousand tons of coal produced in each quarter of the 2022 taxable year; (III) One hundred eighty thousand tons of coal produced in each quarter of the 2023 taxable year; (IV) One hundred twenty thousand tons of coal produced in each quarter of the 2024 taxable year; and (V) Sixty thousand tons of coal produced in each quarter of the 2025 taxable year. (c) Repealed. (3) For taxable years commencing prior to January 1, 2026, there is allowed, as a credit against the tax imposed by subsection (1) of this section, an amount equal to the percentage set forth in subsection (3.5) of this section of such tax for coal produced from underground mines. (3.5) The percentage for the credits allowed under subsections (3) and (4) of this section is equal to: (a) Fifty percent for the 2021 taxable year; (b) Forty percent for the 2022 taxable year; (c) Thirty percent for the 2023 taxable year; (d) Twenty percent for the 2024 taxable year; and (e) Ten percent for the 2025 taxable year. (4) For taxable years commencing prior to January 1, 2026, there is allowed, as an additional credit against the tax imposed by subsection (1) of this section, an amount equal to the percentage set forth in subsection (3.5) of this section of such tax for the production of lignitic coal, as such coal is classified by the American society for testing and materials (ASTM) in their D 388 standard for the classification of coals by rank. (5) For every full one and one-half percent change in the index of producers' prices for all commodities prepared by the bureau of labor statistics of the United States department of labor, the tax rate provided in subsection (1) of this section shall be increased or decreased one percent. The executive director shall determine such adjustments to the rate of tax based upon changes in the index of producers' prices from the level of such index as of January, 1978, to the level of such index as of the last month of the quarter immediately preceding the quarter for which any taxes are due.

C.R.S. § 39-29-107 Tax on severance of oil shale - repeal

39-29-107. Tax on severance of oil shale - repeal. (1) (a) (I) Prior to January 1, 2024, in addition to any other tax, there shall be levied, collected, and paid for each taxable year a tax upon the severance of oil shale as to all such severance occurring on and after January 1, 1978. Such tax shall be levied against every person engaged in the severance of oil shale. Subject to the provisions of subsections (2) and (3) of this section, such tax shall be levied on the gross proceeds from each commercial oil shale facility at a rate of four percent of such gross proceeds. (II) This subsection (1)(a) is repealed, effective December 31, 2027. (b) On and after January 1, 2024, in addition to any other tax, there shall be levied, collected, and paid for each taxable year a tax upon the severance of oil shale. Such tax shall be levied against every person engaged in the severance of oil shale. Such tax shall be levied on the gross proceeds from each commercial oil shale facility at a rate of four percent of such gross proceeds. (2) (a) Prior to January 1, 2024, the tax shall only have application to a commercial oil shale facility one hundred eighty days after the facility commences commercial production, as follows: Year Fraction of tax imposed by subsection (1) First year 1/4 Second year 1/2 Third year 3/4 Fourth and each succeeding year Entire rate imposed by subsection (1). (b) This subsection (2) is repealed, effective December 31, 2027. (3) (a) Prior to January 1, 2024, the production of the first fifteen thousand tons per day of oil shale or ten thousand barrels per day of shale oil, whichever is greater, shall be exempt from the tax. (b) This subsection (3) is repealed, effective December 31, 2027. (3.1) (a) Prior to January 1, 2024, the calculation of the daily production subject to the tax and to the exemption in subsection (3) of this section shall be determined by dividing the total production of a calendar month by the total number of days in such month. (b) This subsection (3.1) is repealed, effective December 31, 2027. (4) Repealed.

C.R.S. § 39-29-107.5 Credit allowed for prior payment of impact assistance

39-29-107.5. Credit allowed for prior payment of impact assistance. (Repealed)

C.R.S. § 39-29-107.8 Refunds

39-29-107.8. Refunds. (1) Prior to the allocation in section 39-29-108, the state treasurer shall set aside and maintain all revenue from the tax imposed pursuant to this article in a reserve that is available for the payment of refunds related to the tax in accordance with section 39-21-108. At the end of each month, any moneys in the reserve that are not required for a refund are the total gross receipts realized that are available for allocation under section 39-29-108. (2) (a) Prior to July 1, 2016, if the amount in the reserve is less than the amount of refunds that are required to be made from the reserve, then the state treasurer shall credit to the reserve from the proceeds of the money collected under article 22 of this title an amount equal to the deficit. (b) On or after July 1, 2016, but prior to July 1, 2017, the state treasurer shall credit to the reserve from the proceeds of the money collected under article 22 of this title an amount equal to the amount by which the refunds for the tax imposed pursuant to this article that are made for a month exceed fifteen percent of the gross severance tax revenues for the same month. (c) (I) If, as of the end of the state fiscal year commencing on July 1, 2017, the amount in the reserve is less than the amount of refunds that are required to be made from the reserve, then the state treasurer shall credit to the reserve from the proceeds of the money collected under article 22 of this title 39 an amount equal to one-fourth of the deficit. (II) The amount credited to the reserve in accordance with subsection (2)(c)(I) of this section replaces any money from the reserve that was transferred to the severance tax operational fund, and as a result, no amount shall be recouped from the operational fund for purposes of making a refund for the fiscal year commencing on July 1, 2017. (3) The state treasurer shall credit money to the reserve in accordance with subsection (2) of this section on a monthly basis. If there is insufficient revenue available to be credited, the state controller may authorize an advance under section 24-75-203 (2), C.R.S., to the reserve to be used for the refunds. There is no limit on the amount of an advance that the state controller may make for this purpose.

C.R.S. § 39-29-108 Allocation of severance tax revenues - definitions - repeal

39-29-108. Allocation of severance tax revenues - definitions - repeal. (1) Except as provided in subsection (3) of this section, the total gross receipts realized from the severance taxes imposed on minerals and mineral fuels under the provisions of this article shall be credited as follows: (a) For oil and gas, one hundred percent to the state general fund; (b) For oil shale, forty percent to the state general fund, forty percent to the state severance tax trust fund created by section 39-29-109, and twenty percent to the local government severance tax fund created by section 39-29-110; (c) For molybdenum, as follows: (I) For fiscal years ending on or before June 30, 1979, seventy percent to the state general fund, twenty percent to the state severance tax trust fund created by section 39-29-109, and ten percent to the local government severance tax fund created by section 39-29-110; (II) For the fiscal year ending June 30, 1980, sixty percent to the state general fund, thirty percent to the state severance tax trust fund created by section 39-29-109, and ten percent to the local government severance tax fund created by section 39-29-110; (III) For the fiscal year ending June 30, 1981, fifty percent to the state general fund, forty percent to the state severance tax trust fund created by section 39-29-109, and ten percent to the local government severance tax fund created by section 39-29-110; (d) For coal and metallic minerals, as follows: (I) For fiscal years ending on or before June 30, 1979, forty percent to the state general fund, fifteen percent to the state severance tax trust fund created by section 39-29-109, and forty-five percent to the local government severance tax fund created by section 39-29-110; (II) For the fiscal year ending June 30, 1980, thirty percent to the state general fund, twenty-five percent to the state severance tax trust fund created by section 39-29-109, and forty-five percent to the local government severance tax fund created by section 39-29-110; (III) For the fiscal year ending June 30, 1981, twenty percent to the state general fund, thirty-five percent to the state severance tax trust fund created by section 39-29-109, and forty-five percent to the local government severance tax fund created by section 39-29-110. (2) (a) Repealed. (b) Except as set forth in subsections (2)(d) and (2)(e) of this section, of the total gross receipts realized from the severance taxes imposed on minerals and mineral fuels under the provisions of this article after June 30, 2017, fifty percent shall be credited to the state severance tax trust fund created by section 39-29-109, and fifty percent shall be credited to the local government severance tax fund created by section 39-29-110. (c) Repealed. (d) The state treasurer shall credit an amount of the increased coal tax that is attributable to the reduction or discontinuation of the exemption in section 39-29-106 (2)(b) and the credits in section 39-29-106 (3) and (4) to the just transition cash fund created in section 8-83-504 (1). ent shall be credited to the local government severance tax fund created by section 39-29-110. (c) Repealed. (d) The state treasurer shall credit an amount of the increased coal tax that is attributable to the reduction or discontinuation of the exemption in section 39-29-106 (2)(b) and the credits in section 39-29-106 (3) and (4) to the just transition cash fund created in section 8-83-504 (1). (e) (I) Except as provided in subsection (2)(e)(II) of this section, for the state fiscal years 2023-24 through 2026-27, the state treasurer shall credit the discrete increased amount of severance tax for oil and gas production that is attributable to the reduction of the credit against tax pursuant to section 39-29-105 (2)(b)(II) and 39-29-105 (2)(c) to the decarbonization tax credits administration cash fund created in section 24-38.5-120 (2). (II) Repealed. (III) As used in this subsection (2)(e), unless the context otherwise requires: (A) Repealed. (B) "Discrete increased amount of severance tax for oil and gas production" means the amount of tax collected that is attributable to a twelve and one-half percent reduction in the severance tax credit for oil and gas production set forth in section 39-29-105 (2)(b)(II) for tax years beginning on or after January 1, 2024, but before January 1, 2026, and a ten and nine hundred thirty-five thousandths percent reduction set forth in section 39-29-105 (2)(c) for tax years beginning on or after January 1, 2026, but before January 1, 2027. (C) Repealed. (2.5) and (3) Repealed. (4) (a) Notwithstanding any provisions of this section to the contrary, for the 1987-88, 1988-89, 1989-90, 1990-91, 1991-92, 1992-93, and 1993-94 fiscal years, those gross receipts realized from the severance taxes imposed on minerals and mineral fuels which would otherwise be credited to the state severance tax trust fund under the provisions of this section shall be credited to the state general fund. (b) Notwithstanding any provisions of this section to the contrary, for the 1994-95 fiscal year, those gross receipts realized from the severance taxes imposed on minerals and mineral fuels which would otherwise be credited to the state severance tax trust fund under the provisions of this section shall be credited to the uranium mill tailings remedial action program fund created in section 39-29-116 (2); except that the amount credited to such fund during the 1994-95 fiscal year shall not exceed five million dollars. Any receipts in excess of five million dollars shall be credited to the state severance tax trust fund. (c) Notwithstanding any provisions of this section to the contrary, for the 1995-96 and 1996-97 fiscal years, those gross receipts realized from the severance taxes imposed on minerals and mineral fuels which would otherwise be credited to the state severance tax trust fund under the provisions of this section shall be credited to the uranium mill tailings remedial action program fund created in section 39-29-116 (2); except that the amount credited to such fund during the 1995-96 and 1996-97 fiscal years shall not exceed two and one-half million dollars per fiscal year. Any receipts in excess of two and one-half million dollars shall be credited to the state severance tax trust fund. (5) (a) To assist in the preparation of state budgets, the consensus revenue estimate group shall prepare a quarterly forecast of severance revenues, including price and production volume. 96 and 1996-97 fiscal years shall not exceed two and one-half million dollars per fiscal year. Any receipts in excess of two and one-half million dollars shall be credited to the state severance tax trust fund. (5) (a) To assist in the preparation of state budgets, the consensus revenue estimate group shall prepare a quarterly forecast of severance revenues, including price and production volume. (b) As used in this subsection (5): (I) "Consensus revenue estimate group" means the staff of the legislative council appointed pursuant to section 2-3-304, C.R.S., in consultation with the office of state planning and budgeting created in section 24-37-102, C.R.S. (II) "Price insurance contract" means a written agreement between the state treasurer and a qualified counterparty relating to a commodity price for crude oil and natural gas based on levels of floor transactions or forward rate transactions executed through standard financial industry mechanisms. (III) "Qualified counterparty" means a person whose long-term obligations are rated, at the time a price insurance contract is executed, in one of the two top rating categories of a nationally recognized rating agency. (IV) "Severance revenues" means: (A) The revenues generated from taxes levied pursuant to this article; and (B) The state share of federal mineral leasing royalties received pursuant to section 34-63-102, C.R.S. (c) Repealed. (6) Repealed. (7) (a) The director of the office of state planning and budgeting and the executive directors of the departments of revenue, natural resources, education, and local affairs, or their designees, shall, in consultation with the stakeholder group convened pursuant to subsection (7)(c) of this section, develop an implementation plan with recommendations to: (I) Change the legal incidence of the state severance tax on oil and gas from interest owners to operators. At a minimum, the implementation plan must make recommendations related to: (A) The legislative and administrative steps necessary to implement the change; (B) Any changes to the tax rate and structure that are necessary to implement the shift in legal incidence in a manner that is revenue neutral to the greatest extent possible; and (C) Any other recommendations to reduce disruption to the state, local governments, and stakeholders during and after the transition; (II) Require electronic filing of returns for severance taxes; (III) Require additional electronic data collection necessary to ease the administration and enforcement of the state severance tax on oil and gas, including consideration of opportunities for increased data sharing among state and local government agencies; and (IV) Make recommendations for the long-term restructuring of the credit allowed in section 39-29-105 (2) including: (A) Linking the size of the credit in a given tax year to oil and gas taxpayers' profitability or revenues for that tax year; (B) Separating the credit for oil production and gas production; (C) Linking the credit in a given tax year to the relative difference between oil and gas prices for that tax year compared to historic monthly henry hub natural gas spot prices as reported by the United States energy information administration and monthly Cushing, Oklahoma west Texas intermediate spot prices as reported by the United States energy information administration; (D) Updating the department of revenue's severance tax form and reprogramming GenTax to make these changes possible; and (E) Giving consideration to the fact that the current credit size results in the state effectively subsidizing local taxing jurisdictions which was not the original intent of the credit. termediate spot prices as reported by the United States energy information administration; (D) Updating the department of revenue's severance tax form and reprogramming GenTax to make these changes possible; and (E) Giving consideration to the fact that the current credit size results in the state effectively subsidizing local taxing jurisdictions which was not the original intent of the credit. (b) The implementation plan required by subsection (7)(a) of this section must include a quantitative fiscal analysis of the changes described in subsections (7)(a)(I) and (7)(a)(IV) of this section and the calculation of the credit allowed in section 39-29-105 (2)(c) and make recommendations as to how they can be implemented while maintaining revenue neutrality. (c) The persons identified in subsection (7)(a) of this section shall establish a stakeholder group, consisting of affected industries and parties, including local government representatives, to assist in the development of the implementation plan. (d) The persons identified in subsection (7)(a) of this section shall submit the written implementation plan to the joint budget committee no later than January 15, 2025. Prior to submission of the implementation plan, the stakeholder group shall have an opportunity to review the draft recommendations and individual stakeholders may provide comments in response to the implementation plan to be included with the submission of the implementation plan. (e) It is the intent of the general assembly that the recommendations within the implementation plan pursuant to subsection (7)(a) of this section be implemented by tax year 2026 with respect to changing the structure of the credit, provided that revenue to the state, as determined by legislative council staff, is neutral with respect to amendments made to 39-29-105 (2)(b) and (2)(c) as amended by House Bill 23-1272. To this end, it is the intent of the general assembly that 39-29-105 (2)(c) be further amended or superseded by the recommendation or recommendations during the 2025 legislative session. (f) This subsection (7) is repealed, effective July 1, 2025.

C.R.S. § 39-29-108.5 Credit of state share to capital construction fund - repayment

39-29-108.5. Credit of state share to capital construction fund - repayment. (Repealed)

C.R.S. § 39-29-109 Severance tax trust fund - created - administration - distribution of money - legislative declaration - repeal

39-29-109. Severance tax trust fund - created - administration - distribution of money - legislative declaration - repeal. (1) There is hereby created in the state treasury the severance tax trust fund, also referred to in this section as the "fund", which the department of natural resources shall administer. The fund is to be perpetual and held in trust as a replacement for depleted natural resources, for the development and conservation of the state's water resources pursuant to sections 37-60-106 (1)(j) and (1)(l), 37-60-119, and 37-60-122, C.R.S., for the use in funding programs that promote and encourage sound natural resource planning, management, and development related to minerals, energy, geology, and water and for the use in funding programs to reduce the burden of increasing home energy costs on low-income households. (2) State severance tax receipts must be credited to the severance tax trust fund as provided in section 39-29-108. All income derived from the deposit and investment of the money in the fund must be credited to the fund. At the end of any fiscal year, all unexpended and unencumbered money in the fund remains in the fund and must not be credited or transferred to the general fund or any other fund. All money in the fund is subject to appropriation by the general assembly for the following purposes: (a) The severance tax perpetual base fund. (I) Repealed. (I.5) There is hereby created in the state treasury the severance tax perpetual base fund, also referred to in this subsection (2)(a) as the "fund", which the Colorado water conservation board, also referred to in this subsection (2)(a) as the "board", shall administer. The state treasurer shall transfer money to the fund from the severance tax trust fund, as specified in this section. The fund also includes any money that the general assembly may appropriate or transfer thereto. The money in the fund is continuously appropriated to the board for purposes authorized by this subsection (2)(a). (II) One-half of the severance tax receipts credited to the fund for fiscal years commencing on or after July 1, 2009, shall be credited to the severance tax perpetual base fund and used as specified in subsection (2)(a)(II.5) of this section; except that the total amount of severance tax receipts credited to the severance tax perpetual base fund during the fiscal year shall not exceed fifty million dollars unless the cap established in subsection (2)(a)(III) of this section is exceeded. The authorization and contract for each project must require repayment of principal and interest to the fund, and money repaid is credited to the severance tax perpetual base fund. (II.5) The board shall use the money in the fund: (A) For state water projects pursuant to sections 37-60-119 and 37-60-122; (B) To direct the state treasurer to transfer amounts to the water supply reserve fund created in subsection (2)(c) of this section; (C) To direct the state treasurer to transfer amounts to the interbasin compact committee operation fund created in section 37-75-107; and (D) To direct the state treasurer to transfer amounts to the water efficiency grant program cash fund created in section 37-60-126 (12). (III) For fiscal years commencing on or after July 1, 2009, the state treasurer shall transfer the moneys credited to the fund that are not credited to either the severance tax perpetual base fund or the severance tax operational fund to the small communities water and wastewater grant fund created in section 25-1.5-208 (4), C.R.S.; except that the maximum amount of moneys annually credited to the small communities water and wastewater grant fund shall not exceed ten million dollars. (IV) to (XIII) Repealed. to the fund that are not credited to either the severance tax perpetual base fund or the severance tax operational fund to the small communities water and wastewater grant fund created in section 25-1.5-208 (4), C.R.S.; except that the maximum amount of moneys annually credited to the small communities water and wastewater grant fund shall not exceed ten million dollars. (IV) to (XIII) Repealed. (XIV) Notwithstanding any provision of this paragraph (a) to the contrary, on July 1, 2015, the state treasurer shall transfer five hundred thousand dollars from the fund to the Colorado water conservation board construction fund, created in section 37-60-121 (1)(a), C.R.S., for use by the Colorado water conservation board, created in section 37-60-102, C.R.S., to continue the watershed restoration program. (XV) and (XVI) Repealed. (XVII) Notwithstanding any provision of this paragraph (a) to the contrary, an amount equal to nineteen million one hundred thousand dollars in the fund is restricted from being used for any purpose whatsoever, until such time that the joint budget committee, by a majority vote, releases the restriction on some or all of the money. (XVIII) Notwithstanding any provision of this subsection (2)(a) to the contrary, on June 30, 2018, the state treasurer shall transfer eleven million four hundred twenty-five thousand dollars from the fund to the general fund. (XIX) to (XXI) Repealed. (XXII) (A) Notwithstanding any other provision of this subsection (2)(a) to the contrary, on July 1, 2020, the state treasurer shall transfer forty-five million five hundred thousand dollars from the fund to the general fund. (B) The general assembly hereby declares that the transfer specified in subsection (2)(a)(XXII)(A) of this section is necessary as a result of the precipitous decrease in general fund revenues and that it is the intent of the general assembly to transfer an equal amount back to the fund as soon as possible. (XXIII) (A) Notwithstanding any other provision of this subsection (2)(a) to the contrary, on July 1, 2024, the state treasurer shall transfer twenty-six million eighty-six thousand five hundred fifty-nine dollars from the fund to the general fund. (B) This subsection (2)(a)(XXIII) is repealed, effective June 30, 2025. (b) The severance tax operational fund. (I) There is hereby created in the state treasury the severance tax operational fund, also referred to in this subsection (2)(b) as the "fund", which the department of natural resources shall administer. The state treasurer shall transfer one-half of the severance tax receipts credited to the severance tax trust fund for tax years commencing on and after July 1, 1995, to the fund. Money in the fund shall be distributed as set forth in section 39-29-109.3. (II) Repealed. (III) The fund also includes amounts that were transferred to natural resources and energy grant programs under section 39-29-109.3 and that were transferred back to the fund in accordance with subsection (2)(c)(V) of this section and sections 24-33-111 (2)(a)(I)(C), 37-60-126 (12)(a)(V), and 37-75-107 (3). oney in the fund shall be distributed as set forth in section 39-29-109.3. (II) Repealed. (III) The fund also includes amounts that were transferred to natural resources and energy grant programs under section 39-29-109.3 and that were transferred back to the fund in accordance with subsection (2)(c)(V) of this section and sections 24-33-111 (2)(a)(I)(C), 37-60-126 (12)(a)(V), and 37-75-107 (3). (c) The water supply reserve fund. (I) There is created in the office of the state treasurer the water supply reserve fund, referred to in this subsection (2)(c) as the "fund", administered by the Colorado water conservation board. The state treasurer shall transfer money to the fund from the severance tax operational fund as specified in subsection (2)(a)(II.5)(B) of this section. The fund also includes any other money that the general assembly may appropriate or transfer to the fund. The money in the fund is continuously appropriated, for purposes authorized by this subsection (2)(c), to the Colorado water conservation board, referred to in this subsection (2)(c) as the "board". All interest derived from the investment of money in the fund must be credited to the statewide account of the fund, which account is hereby created. Repayments of both the principal and interest on loans from the fund must be credited to the fund. Any balance remaining in the fund at the end of any fiscal year remains in the fund. The board shall allocate money by grant or loan from the fund only for water activities approved by a roundtable pursuant to article 75 of title 37. The approving roundtable is the roundtable for the basin in which a proposed water diversion or nonstructural activity would occur. If the applicant is a covered entity, as defined in section 37-60-126, the board shall allocate money by grant or loan from the fund only if the applicant has adopted a water conservation plan, as defined in section 37-60-126. The board, in consultation with the interbasin compact committee created in section 37-75-105, shall establish criteria and guidelines for allocating money from the fund, including criteria that ensure that the allocations will assist in meeting water supply needs identified pursuant to section 37-75-104 (2)(c), in a manner consistent with section 37-75-102, and facilitate both structural and nonstructural projects or methods. Eligible water activities include: (A) Competitive grants for environmental compliance and feasibility studies; (B) Technical assistance regarding permitting, feasibility studies, and environmental compliance; (C) Studies or analyses of structural, nonstructural, consumptive, and nonconsumptive water needs, projects, or activities; and (D) Structural and nonstructural water projects or activities. (II) On or before October 31 of each year, commencing with the year 2010, the board shall consult with the interbasin compact committee to produce the annual report required by section 37-75-105 (4), C.R.S., regarding how moneys in the fund were allocated in the previous twelve-month period. (III) and (IV) Repealed. (V) On April 30, 2021, the state treasurer shall transfer three million nine hundred ninety-six thousand four hundred ten dollars from the fund to the severance tax operational fund created in subsection (2)(b)(I) of this section. (VI) (A) The state treasurer shall transfer five million dollars from the general fund to the fund. By July 1, 2023, the board shall award pursuant to subsection (2)(c)(I) of this section all of the money transferred by this subsection (2)(c)(VI). (B) This subsection (2)(c)(VI) is repealed, effective September 1, 2025.

C.R.S. § 39-29-109.3 Severance tax operational fund - core reserve - grant program reserve - definitions - repeal

39-29-109.3. Severance tax operational fund - core reserve - grant program reserve - definitions - repeal. (1) The executive director of the department of natural resources shall submit with the department's budget request for each fiscal year a list and description of the programs the executive director recommends to be funded from the severance tax operational fund created in section 39-29-109 (2)(b), referred to in this section as the "operational fund". Except as otherwise provided in subsections (10) and (12) of this section, the general assembly may appropriate money from the total money available in the operational fund to fund recommended programs as follows: (a) (I) For programs or projects within the energy and carbon management commission created in section 34-60-104.3 (1), up to thirty-five percent of the money in the operational fund for fiscal years commencing on or after July 1, 2009. (II) Money appropriated for programs or projects pursuant to subsection (1)(a)(I) of this section shall be used by the energy and carbon management commission for plugging and abandonment projects, for well-site location reclamation projects, or for regulatory and environmental programs or projects as specifically appropriated by the general assembly for use on such programs or projects; except that, if the commission determines that an emergency exists, the commission may expend any money received for the emergency without any further appropriation. In determining the uses of this money, the commission shall give priority to uses that reduce industry fees and mill levies. (b) For programs within the Colorado geological survey, up to fifteen percent of the moneys in the operational fund; (b.5) For the avalanche information center, up to five percent of the moneys in the operational fund; (c) For programs within the division of reclamation, mining, and safety, up to thirty percent of the money in the operational fund for fiscal years commencing before July 1, 2008, and up to twenty-five percent of the money in the operational fund for fiscal years commencing on or after July 1, 2008; (d) For programs within the Colorado water conservation board and for purposes authorized by article 75 of title 37, C.R.S., up to five percent of the moneys in the operational fund; (e) For fiscal years commencing on or after July 1, 2008, only, for programs within the division of parks and wildlife that monitor, manage, or mitigate the impacts of mineral or mineral fuel production activities on wildlife in any region of the state in which production activity is occurring or, from any location in the state, research such impacts, up to five percent of the moneys in the operational fund, which moneys shall not supplant moneys that would otherwise be made available for such programs; (f) For fiscal years commencing on or after July 1, 2009, for programs within the division of parks and wildlife that operate, maintain, or improve state parks in any region of the state in which production activity is occurring, up to ten percent of the moneys in the operational fund. erational fund, which moneys shall not supplant moneys that would otherwise be made available for such programs; (f) For fiscal years commencing on or after July 1, 2009, for programs within the division of parks and wildlife that operate, maintain, or improve state parks in any region of the state in which production activity is occurring, up to ten percent of the moneys in the operational fund. (g) If the general assembly appropriates less than one hundred percent of the money available in the operational fund for the purposes set forth in subsections (1)(a) to (1)(f) of this section, then the general assembly may additionally appropriate: (I) Up to five million dollars to the species conservation trust fund created in section 24-33-111 (2)(a); (II) Up to four million six thousand five dollars from the operational fund to the division of parks and wildlife aquatic nuisance species fund created in section 33-10.5-108 (1); (III) Through the 2023-24 state fiscal year, up to four hundred fifty thousand dollars, and for the 2024-25 state fiscal year and each state fiscal year thereafter, up to seven hundred thousand dollars to the conservation district grant fund created in section 35-1-106.7; (IV) For the 2022-23 state fiscal year, up to ten million dollars to the wildfire mitigation capacity development fund created in section 24-33-117 (1); and (V) For the 2023-24 state fiscal year and each state fiscal year thereafter, up to five million dollars to the wildfire mitigation capacity development fund created in section 24-33-117 (1). (1.5) On June 30, 2021, and July 1, 2022, the state treasurer shall transfer nine million four hundred fifty-six thousand five dollars from the general fund to the operational fund. (1.7) and (2) Repealed. (3) (a) It is the intent of the general assembly that the operational fund maintain a reserve equal to two times the current state fiscal year's appropriations made from the operational fund, but if severance tax revenues are less than anticipated, then money in the reserve is available to be used for expenditures authorized by the appropriations. (b) and (c) Repealed. (3.5) (a) Repealed. (b) If at the end of a fiscal year the reserve for the operational fund specified in subsection (3)(a)(I) of this section is full, then, on August 15 following the end of the fiscal year, the state treasurer shall transfer the remainder to the severance tax perpetual base fund created in section 39-29-109 (2)(a). (c) Repealed. (4) to (8) Repealed. (9) On June 30, 2023, the state treasurer shall transfer twelve million six hundred thousand dollars from the operational fund to the water plan implementation cash fund created in section 37-60-123.3. (10) (a) On July 1, 2023, the state treasurer shall transfer ten million dollars from the operational fund to the capital construction fund created in section 24-75-302 (1)(a) for use by state-supported institutions of higher education in energy impacted counties for energy-related programs or projects. (b) This subsection (10) is repealed, effective July 1, 2026. (11) (a) On June 30, 2025, the state treasurer shall transfer eighteen million two hundred fifty-nine thousand eight hundred five dollars from the fund to the general fund. (b) This subsection (11) is repealed, effective June 30, 2026. (12) (a) On July 1, 2024, the state treasurer shall transfer seven hundred forty-eight thousand dollars from the operational fund to the clean water cash fund created in section 25-8-210 (4) for use by the department of public health and environment in administering the program described in section 25-8-205.1. (b) This subsection (12) is repealed, effective July 1, 2027.

C.R.S. § 39-29-109.5 Interest differential - public school energy efficiency fund - creation - uses - definitions - repeal

39-29-109.5. Interest differential - public school energy efficiency fund - creation - uses - definitions - repeal. (Repealed)

C.R.S. § 39-29-110 Local government severance tax fund - creation - administration - definitions - repeal

39-29-110. Local government severance tax fund - creation - administration - definitions - repeal. (1) (a) (I) There is created in the department of local affairs a local government severance tax fund. In accordance with section 39-29-108, portions of the state severance tax receipts must be credited to the local government severance tax fund. All income derived from the deposit and investment of the money in the local government severance tax fund must be credited to the local government severance tax fund. (II) Repealed. (III) The executive director of the department of local affairs shall distribute any moneys and make loans from such fund in accordance with the purposes and priorities provided in paragraph (b) of this subsection (1). (b) (I) Seventy percent of the funds from the local government severance tax fund shall be distributed to those political subdivisions socially or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to taxation under this article and used for the planning, construction, and maintenance of public facilities and for the provision of public services. Such funds shall also be distributed to political subdivisions to compensate them for loss of property tax revenue resulting from the deduction of severance taxes paid in the determination of the valuation for assessment of producing mines. The executive director of the department of local affairs shall consider the economic needs of a political subdivision for purposes of making distributions pursuant to this subparagraph (I). (II) (A) In addition to the distribution of moneys authorized under subparagraph (I) of this paragraph (b), the executive director may distribute moneys or make loans, or any combination thereof, to such political subdivisions for the planning, design, construction, erection, building, acquisition, alteration, modernization, reconstruction, improvement, or expansion of domestic wastewater treatment works or potable water treatment facilities. Any loan made by the executive director under the authority of this section shall only be made under such terms as will insure repayment of the loan with interest assessed and collected at an interest rate of not less than five percent. (B) As used in this subparagraph (II), "domestic wastewater treatment works" means a system or facility of a political subdivision for treating, neutralizing, stabilizing, collecting, or disposing of domestic wastewater, which system or facility has a designed capacity to receive more than two thousand gallons of domestic wastewater per day, and "domestic wastewater treatment works" includes appurtenances to such system or facility, such as outfall sewers, pumping stations, and collection and interceptor lines, and the equipment related to such appurtenances. (C) As used in this subparagraph (II), "potable water treatment facilities" means a system or facility of a political subdivision for treating water to be supplied to the public for domestic use, and "potable water treatment facilities" includes water treatment plants, treated water storage facilities, water mains, water distribution lines, pumps, and appurtenances. (III) In addition to the distribution of moneys authorized under subparagraphs (I) and (II) of this paragraph (b), the executive director shall distribute: (A) Moneys to the uranium mill tailings remedial action program fund in accordance with the provisions of section 39-29-116 (3); (B) Moneys to the department of public health and environment for any direct and indirect costs associated with the monitoring, notification, and handling of designated uranium mill tailings that are authorized in section 25-11-303, C.R.S., and the amount of the distribution made pursuant to this sub-subparagraph (B) shall be equal to the amount appropriated to the department of public health and environment by the general assembly for such direct and indirect costs; and t and indirect costs associated with the monitoring, notification, and handling of designated uranium mill tailings that are authorized in section 25-11-303, C.R.S., and the amount of the distribution made pursuant to this sub-subparagraph (B) shall be equal to the amount appropriated to the department of public health and environment by the general assembly for such direct and indirect costs; and (C) Up to fifty thousand dollars each state fiscal year to political subdivisions that include mill sites designated for cleanup pursuant to federal Public Law 95-604 for reimbursement of actual, documented costs related to the cleanup of uranium mill tailings. (IV) In addition to the distribution of moneys authorized under subparagraphs (I), (II), and (III) of this paragraph (b), the executive director may distribute moneys to those privately organized volunteer fire departments serving areas socially or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to taxation under this article, for the purpose of purchasing equipment to fight fires. (V) In addition to the distribution of moneys authorized under subparagraphs (I), (II), (III), and (IV) of this paragraph (b), the executive director of the department of local affairs may distribute moneys for planning, analyses, public engagement, and coordination and collaboration with federal land managers and stakeholders, or for similar or related local government processes needed by local governments for engagement in federal land management decision-making. (c) (I) For state fiscal years commencing prior to July 1, 2008, an amount equal to thirty percent of said gross receipts credited to the local government severance tax fund shall be distributed to counties or municipalities on the basis of the proportion of employees of the mine or related facility or crude oil, natural gas, or oil and gas operation who reside in any such county's unincorporated area or in any such municipality to the total number of employees of the mine or related facility or crude oil, natural gas, or oil and gas operation. Such distribution shall be made on the basis of the report required in paragraph (d) of this subsection (1). For state fiscal years commencing on or after July 1, 2008, thirty percent of said gross receipts credited to the local government severance tax fund shall be allocated to counties based upon the following factors: (A) On the basis of the report required in paragraph (d) of this subsection (1), the proportion of employees of mines or related facilities or crude oil, natural gas, or oil and gas operations who reside in a county to the total number of employees of mines or related facilities or crude oil, natural gas, or oil and gas operations who reside in the state; (B) The proportion of the mine and well permits issued in a county to the total number of such permits issued in the state; and (C) The proportion of the overall quantity of mineral production within a county to the total overall quantity of production within the state. (II) (A) For the state fiscal year commencing on July 1, 2008, the factor set forth in sub-subparagraph (A) of subparagraph (I) of this paragraph (c) shall be weighted fifty percent and the factors set forth in sub-subparagraphs (B) and (C) of subparagraph (I) of this paragraph (c) shall be weighted twenty-five percent each. (B) For state fiscal years commencing on or after July 1, 2009, each of the three factors set forth in subparagraph (I) of this paragraph (c) shall be weighted thirty percent, and the executive director of the department of local affairs, in consultation with the energy impact assistance advisory committee established pursuant to section 34-63-102 (5)(b)(I), C.R.S., shall establish guidelines that set forth the factor or factors under which the remaining ten percent shall be weighted. set forth in subparagraph (I) of this paragraph (c) shall be weighted thirty percent, and the executive director of the department of local affairs, in consultation with the energy impact assistance advisory committee established pursuant to section 34-63-102 (5)(b)(I), C.R.S., shall establish guidelines that set forth the factor or factors under which the remaining ten percent shall be weighted. (III) Except as otherwise set forth in subparagraph (IV) of this paragraph (c), the moneys allocated to each county pursuant to this paragraph (c) shall be further distributed to the county and to each municipality within the county based upon the following factors: (A) The proportion of employees reported as residents under paragraph (d) of this subsection (1) in any such county's unincorporated area or in any such municipality within the county to the total number of employees reported as residents in the county as a whole under paragraph (d) of this subsection (1); (B) The proportion of the population in any such county's unincorporated area or in any such municipality within the county to the total population in the county, as such population is reported in the most recently published population estimate from the state demographer appointed by the executive director of the department of local affairs; and (C) The proportion of road miles in any such county's unincorporated area or in any such municipality within the county to the total road miles in the county, as such miles are certified by the department of transportation to the state treasurer pursuant to sections 43-4-207 (2)(d) and 43-4-208 (3), C.R.S. (IV) With respect to the distribution made pursuant to subparagraph (III) of this paragraph (c), the executive director of the department of local affairs, in consultation with the energy impact assistance advisory committee established pursuant to section 34-63-102 (5)(b)(I), C.R.S., shall establish guidelines that set forth the weight that each of the factors in sub-subparagraphs (A) to (C) of subparagraph (III) of this paragraph (c) shall be given. These guidelines shall apply uniformly across the state; except that the executive director may: (A) Accept a memorandum of understanding from a county and all municipalities contained therein that establishes an alternative distribution that shall be effective within such county; and (B) After consultation with the energy impact assistance advisory committee established pursuant to section 34-63-102 (5)(b)(I), C.R.S., vary the weight that each of the factors in sub-subparagraphs (A) to (C) of subparagraph (III) of this paragraph (c) receives in an individual county, in order to more fairly distribute the gross receipts among the county and all municipalities contained therein. (V) Moneys distributed from the local government severance tax fund pursuant to this paragraph (c) shall be distributed no later than August 31 of each year. Counties and municipalities shall utilize revenues received under this subsection (1) only for the purposes of capital expenses and general operating expenses. (VI) On or before January 1, 2010, and every second January 1 thereafter, the executive director of the department of local affairs shall submit to each member of the general assembly a report that evaluates the effectiveness of the allocation and distribution of moneys pursuant to this paragraph (c) to counties and municipalities impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to taxation under this article, and, if appropriate, that proposes changes to the allocation and distribution. The provisions of section 24-1-136 (11)(a)(I), C.R.S., shall not apply to the report. (c.5) (Deleted by amendment, L. 2008, p. 1680, § 6, effective August 5, 2008.) ties and municipalities impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to taxation under this article, and, if appropriate, that proposes changes to the allocation and distribution. The provisions of section 24-1-136 (11)(a)(I), C.R.S., shall not apply to the report. (c.5) (Deleted by amendment, L. 2008, p. 1680, § 6, effective August 5, 2008.) (d) (I) (A) Ninety days prior to the end of each fiscal year, for each taxable year to which this sub-subparagraph (A) applies, the executive director of the department of revenue shall send every producer who is subject to the severance tax and whose payment is subject to the distribution formula provided in this subsection (1) a form on which the producer shall submit a report to the department of revenue indicating the following: The name and address of the producer, the name of the mine, related facility, or operation, the names of the municipalities or counties in which its employees maintain their actual residences as given by the employees, giving the number of employees for each such municipality or unincorporated area of each such county, and the total number of employees of the mine or related facility or crude oil, natural gas, or oil and gas operation. The producer may use and submit any other report form in lieu of the state form sent by the executive director of the department of revenue that contains the same information as prescribed in the state form. The report shall be due April 30 of each year. The executive director of the department of revenue shall submit a copy of the report required by this paragraph (d) to the executive director of the department of local affairs. In the case of failure of any producer to submit the report on or before the date required by this paragraph (d) to the department of revenue, a written notice shall be sent to the producer by the department of revenue by first-class mail as set forth in section 39-21-105.5 stating that the producer has failed to submit a copy of the report required by this paragraph (d) and informing the producer of the penalty provision contained in this paragraph (d). If the producer fails within forty-five days after receipt of the written notice to submit the required report, there shall be levied and collected a penalty for the failure in the amount of fifty dollars for each day, or portion thereof, during which the failure continues. Any moneys and interest collected under this paragraph (d) shall be added to the fifteen percent of gross receipts from the local government severance tax fund and distributed to counties or municipalities in the manner prescribed by paragraph (c) of this subsection (1). Moneys distributed from the local government severance tax fund pursuant to paragraph (c) of this subsection (1) shall be distributed no later than August 31 of each year. Any producer not liable for severance tax under this section shall not be required to submit a report under this subsection (1). This sub-subparagraph (A) shall apply to any report for a taxable year commencing prior to January 1, 2008. istributed from the local government severance tax fund pursuant to paragraph (c) of this subsection (1) shall be distributed no later than August 31 of each year. Any producer not liable for severance tax under this section shall not be required to submit a report under this subsection (1). This sub-subparagraph (A) shall apply to any report for a taxable year commencing prior to January 1, 2008. (B) Every party that registers exempt production with the department of revenue, withholds income pursuant to section 39-29-111 (1), or files a declaration pursuant to section 39-29-104 (2) or 39-29-112 (2) shall submit a report to the department of local affairs in a format specified by the executive director of the department indicating the following: The name and address of the party; the name of the mine, related facility, or operation; the names of the municipalities or counties in which the party's employees maintain their actual residences as given by the employees, giving the number of the employees for each such municipality or unincorporated area of each such county; and the total number of the employees of the mine or related facility or crude oil, natural gas, or oil and gas operation. The report shall be due April 30 of each year. This sub-subparagraph (B) shall apply to any report for a taxable year commencing on or after January 1, 2008. (II) (A) (Deleted by amendment, L. 2008, p. 1680, § 6, effective August 5, 2008.) (B) For purposes of this paragraph (d), an "employee of a crude oil, natural gas, or oil and gas operation" means any individual who is employed and compensated for at least five hundred hours of work in any six months during the calendar year preceding the due date of the report by a producer, interest owner, or party who contracts with a producer or interest owner for the purposes of extracting such crude oil, natural gas, or oil and gas out of the ground and at point of first sale. (C) In the case of failure of any party to submit the report required pursuant to sub-subparagraph (B) of subparagraph (I) of this paragraph (d) on or before the required date to the department of local affairs, a written notice shall be sent to the party by the department by first-class mail stating that the party has failed to submit a copy of the report required by sub-subparagraph (B) of subparagraph (I) of this paragraph (d) and informing the party of the penalty provision contained in this sub-subparagraph (C). If the party fails within forty-five days after receipt of the written notice to submit the required report, there shall be levied and collected a penalty for the failure in the amount of fifty dollars for each day, or portion thereof, during which the failure continues. Any moneys and interest collected under this sub-subparagraph (C) shall be added to the thirty percent of gross receipts from the local government severance tax fund distributed to counties or municipalities in the manner prescribed by paragraph (c) of this subsection (1). The notice required pursuant to this sub-subparagraph (C) shall be sent in accordance with the provisions of section 39-21-105.5, and the provisions of that section shall otherwise apply to the notice. added to the thirty percent of gross receipts from the local government severance tax fund distributed to counties or municipalities in the manner prescribed by paragraph (c) of this subsection (1). The notice required pursuant to this sub-subparagraph (C) shall be sent in accordance with the provisions of section 39-21-105.5, and the provisions of that section shall otherwise apply to the notice. (e) and (f) (Deleted by amendment, L. 2008, p. 1680, § 6, effective August 5, 2008.) (2) Repealed. (2.5) In accordance with the provisions of section 34-63-102 (5)(b)(VI), the energy impact assistance advisory committee established pursuant to said section shall make recommendations to the executive director of the department of local affairs regarding the distribution of money authorized pursuant to this section. (3) Notwithstanding section 24-1-136 (11)(a)(I), the executive director of the department of local affairs shall deliver to the state auditor and file with the general assembly annually before February 1 a detailed report accounting for the distribution of all funds for the previous year. The energy impact assistance advisory committee shall review the report prior to it being delivered and filed. (4) Repealed. (5) Notwithstanding any provision of this section to the contrary, on June 1, 2009, the state treasurer shall deduct seven million five hundred thousand dollars from the local government severance tax fund and transfer such sum to the general fund. (6) Notwithstanding any provision of this section to the contrary, on April 15, 2010, the state treasurer shall deduct fifty million three hundred twenty-seven thousand seven hundred ninety-six dollars from the local government severance tax fund and transfer such sum to the general fund. (7) Notwithstanding any provision of this section to the contrary: (a) On June 30, 2011, the state treasurer shall deduct seventy million dollars from the local government severance tax fund and transfer such sum to the general fund. (b) Due to the transfer made pursuant to paragraph (a) of this subsection (7), for the state fiscal year commencing on July 1, 2010, the amount of the gross receipts credited to the local government severance tax fund that are distributed pursuant to paragraph (b) of subsection (1) of this section shall be decreased by three million dollars and the amount of gross receipts that are distributed pursuant to paragraph (c) of subsection (1) of this section shall be increased by three million dollars. (c) On June 30, 2012, the state treasurer shall deduct forty-one million dollars from the local government severance tax fund and transfer such sum to the general fund. (d) On June 30, 2018, the state treasurer shall transfer twenty-two million eight hundred fifty thousand dollars from the local government severance tax fund to the general fund. ction shall be increased by three million dollars. (c) On June 30, 2012, the state treasurer shall deduct forty-one million dollars from the local government severance tax fund and transfer such sum to the general fund. (d) On June 30, 2018, the state treasurer shall transfer twenty-two million eight hundred fifty thousand dollars from the local government severance tax fund to the general fund. (e) On July 1, 2024, the state treasurer shall transfer twenty-five million dollars from the local government severance tax fund to the general fund. (8) Notwithstanding any provision of this section to the contrary, an amount equal to forty-eight million three hundred thousand dollars in the local government severance tax fund that would otherwise be distributed under paragraph (b) of subsection (1) of this section is restricted from being used for any purpose whatsoever, until such time that the joint budget committee, by a majority vote, releases the restriction on some or all of the money. It is the general assembly's intent that the restriction of money in the fund shall not affect the distributions made under paragraph (c) of subsection (1) of this section. (9) (a) In addition to the severance tax receipts credited to the local government severance tax fund that are distributed as specified in subsections (1)(b) and (1)(c) of this section, on June 14, 2021, if possible, or as soon as possible thereafter, the state treasurer shall transfer five million dollars from the general fund to the local government severance tax fund. The executive director of the department of local affairs shall award the money by August 15, 2021, or as soon as possible thereafter to provide grants for renewable and clean energy implementation projects that meet the department's eligibility criteria for funding under the department's renewable and clean energy initiative program and is specifically encouraged to prioritize communities in which renewable and clean energy infrastructure is sparse and consider geographical diversity when making grants. The department of local affairs shall report to the general assembly regarding the grants provided pursuant to this subsection (9) during its 2022 departmental presentation to legislative committees of reference required by section 2-7-203. (b) This subsection (9) is repealed, effective July 1, 2025.

C.R.S. § 39-29-111 Withholding of income from oil and gas interest - definition

39-29-111. Withholding of income from oil and gas interest - definition. (1) (a) Every producer or purchaser who disburses funds that are owed to any person owning a working interest, a royalty interest, a production payment, or any other interest in any oil or gas produced in Colorado shall, unless such production is exempt under section 39-29-105 (1) and the producer or purchaser has registered such exempt production with the department of revenue in accordance with rules promulgated by the department, withhold from the amount owed to such person an amount equal to one percent of the gross income from such interest, except for income accruing to the United States or the state of Colorado or to any political subdivision of the state of Colorado. The amount withheld is based on gross income as defined in section 39-29-102 (3)(a). On the first day of each month beginning with July 1, 2007, the aggregate of all such amounts withheld during the calendar month that was three months prior thereto shall be paid to the department in the manner set forth in section 39-21-119.5 (4)(b). Nothing in this section shall be so construed as to reduce the tax imposed by this article 29. (b) Repealed. (2) Every person making a return as required by section 39-29-112 may take credit for the amount withheld by the producer or the first purchaser against the tax shown to be due upon such return, and any overpayment shown on such return shall be refunded to the taxpayer. (3) For the purposes of subsection (1) of this section, "producer or purchaser" means every person producing or extracting oil and gas deposits located within this state or the first purchaser of oil and gas produced from deposits located within this state. (4) On or before March 1 of each year, every producer or purchaser shall provide each person holding any interest pursuant to subsection (1) of this section with a statement of the amounts deducted and withheld pursuant to this section from disbursements made to such person during the preceding calendar year. Such statements shall be retained in the records of every producer or purchaser for a period of three years and shall be made available to the department of revenue upon the written request of the department.

C.R.S. § 39-29-112 Procedures and reports - definitions - repeal

39-29-112. Procedures and reports - definitions - repeal. (1) Except as set forth in subsections (6) and (7) of this section, every person subject to taxation under the provisions of this article shall make an annual return to the department of revenue, separate and apart from other returns required to be made under the provisions of articles 20 to 28 of this title, upon a form to be prescribed by the executive director. Such return shall be filed with the department of revenue on or before the fifteenth day of the fourth month following the end of the taxable year. Payment of the tax shown to be due shall be made at the time such return is filed. The executive director may grant a reasonable extension of time for filing returns and for paying the tax under such rules as he may prescribe. In the event of the failure to file the return within the time required or the extension of the time granted by the executive director, there shall be added to the tax a penalty as provided for in section 39-29-115. (2) Every corporation subject to taxation under this article 29 shall make a declaration and payment of estimated tax if the tax imposed by this article 29 for the taxable year can reasonably be expected to exceed five thousand dollars. Such declaration and payment shall be made to the department of revenue, separate and apart from other returns required under articles 20 to 28 of this title 39, upon a form prescribed by the executive director. Such declaration shall be filed with and payment made to the department of revenue in accordance with the provisions of section 39-22-606. (3) All unexpended balances in any oil shale and oil and gas severance tax withholding fund established to carry out the purposes of this article as of June 30, 1978, and on each June 30 thereafter, or at any time determined by the controller with the approval of the state treasurer shall be credited to the general fund of the state. Such unexpended balances shall include all moneys which for any reason cannot be refunded. All warrants covering refunds from said severance tax withholding fund which cannot for any reason be delivered to the taxpayer to whom due and which are not presented for payment within six months after the date of issuance thereof shall be void, and the moneys represented thereby shall be included in the unexpended balance in said fund at the expiration of any fiscal year. Persons entitled to the refunds of moneys represented by warrants which cannot be delivered to the taxpayer and which are not presented for payment within six months after the date of issuance thereof may file claims for refund at any time within four years after the date the tax return which establishes the right to the refund was required to be filed. Claims for refund not filed within the prescribed four-year period shall not be allowed or paid. (4) The tax imposed by this article is hereby declared to be a special classified and limited tax in accordance with the provisions of section 17 of article X of the state constitution. (5) The taxpayer's taxable year under this article shall be the same as his taxable year for federal income tax purposes. (6) The provisions of subsections (1) to (3) and subsection (5) of this section shall not apply to persons filing quarterly declaration forms and making quarterly payments of tax pursuant to the provisions of section 39-29-104. (7) A person is not required to make a separate, annual return to the department of revenue for a taxable year pursuant to subsection (1) of this section if: (a) The person has less than two hundred fifty dollars withheld by all unit operators or first purchasers pursuant to section 39-29-111 (1) for the taxable year; and quarterly payments of tax pursuant to the provisions of section 39-29-104. (7) A person is not required to make a separate, annual return to the department of revenue for a taxable year pursuant to subsection (1) of this section if: (a) The person has less than two hundred fifty dollars withheld by all unit operators or first purchasers pursuant to section 39-29-111 (1) for the taxable year; and (b) The amount of withholding is greater than or equal to the amount of tax levied pursuant to this article that is owed by the person for the taxable year. (8) (a) As used in this subsection (8), unless the context otherwise requires: (I) "Operator" has the meaning set forth in section 34-60-103. (II) "Random sample" has the meaning set forth in section 2-3-128 (1)(e). (b) On or before April 15, 2025, the executive director shall submit a report to the state auditor that includes: (I) The severance tax monthly withholding statements and annual severance tax reports filed for the 2023 calendar year by the operators included in the random sample; (II) For the random sample and the total population of operators in the state, a description of any missing severance tax monthly withholding statements and annual severance tax reports due for the 2023 calendar year or incomplete or incorrect severance tax monthly withholding statements and annual severance tax reports that were accepted for the 2023 calendar year without a request for completion or correction; and (III) For the random sample and the total population of operators in the state, a description of any penalties assessed for the 2023 calendar year for missing, incomplete, or incorrect severance tax monthly withholding statements and annual severance tax reports, with the data broken down by: (A) Type of violation; and (B) Penalty amount assessed against a person for the violation. (c) The executive director shall publish the report submitted to the state auditor pursuant to subsection (8)(b) of this section on the department of revenue's website. (d) The executive director shall provide the state auditor with any additional information that the state auditor requests under section 2-3-128. (e) This subsection (8) is repealed, effective July 1, 2026.

C.R.S. § 39-29-113 Exemption prohibited - when

39-29-113. Exemption prohibited - when. (1) If any person likely to be liable for taxes imposed pursuant to the provisions of this article transfers all or part of his property to another person controlled, directly or indirectly, by the transferor before or after the transfer, the executive director may disallow to the transferee any exemption from tax otherwise authorized pursuant to this article unless such transferee establishes by a clear preponderance of the evidence that the securing of such an exemption was not a major purpose of such transfer. (2) As used in this section, "control" means: (a) The ownership, directly or indirectly, of more than fifty percent of the voting stock of the transferee corporation; or (b) With respect to a transferee other than a corporation, that the transferor owns, during any part of the transferee's taxable year, a greater economic interest than any other owner of the transferee.

C.R.S. § 39-29-114 Component members of a controlled group treated as one taxpayer

39-29-114. Component members of a controlled group treated as one taxpayer. (1) For the purposes of this article, persons who are members of the same controlled group of corporations shall be treated as one taxpayer. (2) If fifty percent or more of the beneficial interest in two or more corporations, trusts, or estates is owned by the same or related persons (taking into account only persons who own at least five percent of such beneficial interest), the exemptions allowed under this article shall be allocated among all such entities in proportion to their respective quantities of production from the property of such entities. (3) In the case of individuals who are members of the same family, the exemptions allowed under this article shall be allocated among such individuals in proportion to their respective quantities of production from the property of such individuals. For the purposes of this article, the family of an individual shall be deemed to include only his spouse and children. (4) For the purposes of this section, the term "controlled group of corporations" has the meaning given to such term by the "Internal Revenue Code of 1986", in section 613A, as of January 1, 1987. The change of the reference in this section from the "Internal Revenue Code of 1954" to the "Internal Revenue Code of 1986" shall not affect any act done or any right accrued or accruing before or after such change, but all rights and liabilities shall continue and may be enforced in the same manner as if such references had not been changed.

C.R.S. § 39-29-115 Penalties and interest

39-29-115. Penalties and interest. (1) Any person who fails to file a report or to pay the tax due thereon shall pay a penalty of thirty percent of the tax assessed or thirty dollars, whichever is greater, and the interest due under the provisions of section 39-21-110.5. (1.5) Any person who fails to withhold income and make a payment required pursuant to section 39-29-111 shall pay a penalty of up to thirty percent of the required payment or thirty dollars, whichever is the greater amount, and the interest due under the provisions of section 39-21-110.5. Any person who withholds income pursuant to section 39-29-111 and who fails to file the annual report required by the rules promulgated by the department of revenue related to such withholding shall pay a penalty of up to fifteen percent of the amount of withholding that should have been reflected in the report or one thousand five hundred dollars, whichever is the lesser amount. The penalty set forth in this subsection (1.5) for failing to withhold income and make a payment shall not apply if the income was from a well that qualified for the exemption set forth in section 39-29-105 (1)(b) for the prior taxable year. (2) Tax assessed pursuant to an error contained on a previously filed return which was due to negligence or disregard of the law shall have added thereto: (a) A penalty of ten percent of the tax assessed; and (b) Penalty interest of one-half of one percent per month, in addition to the interest due under section 39-21-110.5, on the tax assessed. (3) (a) Except as set forth in paragraph (b) of this subsection (3), if any person fails, neglects, or refuses to file a report required by this article, the executive director may, upon such information as may be available to him, estimate the amount of tax due for the period for which no report was filed, with applicable penalties and interest, and mail such estimate to the last-known address of such person. The amount so estimated, together with the penalties and interest, shall become fixed, due, and payable, as if such person had filed a report showing such amounts unless, within ten days after receiving the estimate, such person files a true and correct report for the period and pays the tax, penalty, and interest due thereon. (b) The executive director shall not send an estimate for a taxable year pursuant to paragraph (a) of this subsection (3) to a person who has less than two hundred fifty dollars withheld by all unit operators or first purchasers for the taxable year pursuant to section 39-29-111 (1), unless the executive director has good cause to believe that such person does not qualify for the exception to the filing requirement set forth in section 39-29-112 (7). (4) The executive director may waive, for good cause shown, any of the penalties authorized by this section.

C.R.S. § 39-29-116 Uranium mill tailings remedial action program fund - creation - oversight committee - repeal

39-29-116. Uranium mill tailings remedial action program fund - creation - oversight committee - repeal. (1) The general assembly hereby declares that the purpose of creating the uranium mill tailings remedial action program fund is to provide a funding source to match federal funds available under the federal "Uranium Mill Tailings Radiation Control Act of 1978", 42 U.S.C. sec. 7901 et seq., for the purpose of cleaning up certain sites designated in Colorado for cleanup. The general assembly states that its intent in enacting this section is to assure that Colorado has those state moneys set aside in order to obtain the federal funds before those federal funds are completely used in cleaning up other sites or are no longer available. The general assembly further intends that the amount of moneys transferred into this new fund from the severance tax trust fund and the amounts which will be awarded from the local government severance tax fund and the local government mineral impact fund should be sufficient to clean up all of the federal designated sites in Colorado without additional appropriation, transfers, or awards. (2) There is hereby created in the office of the state treasurer the uranium mill tailings remedial action program fund for the sole purpose of providing a state match to federal funds available for the cleanup of uranium mill tailing sites as designated for cleanup under the federal "Uranium Mill Tailings Radiation Control Act of 1978", 42 U.S.C. sec. 7901 et seq. The fund shall consist of moneys transferred to the fund from the severance tax trust fund in accordance with section 39-29-109 (5) as it existed prior to its repeal and any other moneys made available or appropriated into the uranium mill tailings remedial action program fund pursuant to subsection (3) of this section. The moneys in the uranium mill tailings remedial action program fund available for remedial costs only shall not exceed fifty-seven million dollars. Moneys in the fund shall be subject to annual appropriation. All interest derived from the deposit and investment of moneys in the uranium mill tailings remedial action program fund shall be credited to such fund. Any unexpended and unencumbered moneys in the uranium mill tailings remedial action program fund at the end of the 1998-99 fiscal year shall be credited and transferred to the local government severance tax fund established pursuant to section 39-29-110. (3) (a) The state treasurer may accept and credit to the uranium mill tailings remedial action program fund any donations received by the state for the express purpose of projects for the cleanup of uranium mill tailings. The donations may include any amounts made available from the local government severance tax fund and the local government mineral impact fund as directed by the executive director of the department of local affairs pursuant to section 39-29-110 and section 34-63-102, C.R.S. It is the intent of the general assembly that a minimum of six million dollars be retained in the local government severance tax fund and the local government mineral impact fund for grants and loans to local communities. (b) Before or during fiscal year 1993-94, the executive director of the department of local affairs shall distribute not less than five million dollars to the uranium mill tailings remedial action program fund from the local government mineral impact fund, the local government severance tax fund, or a combination thereof. The executive director shall determine the amount of moneys, if any, to be distributed from each fund. l year 1993-94, the executive director of the department of local affairs shall distribute not less than five million dollars to the uranium mill tailings remedial action program fund from the local government mineral impact fund, the local government severance tax fund, or a combination thereof. The executive director shall determine the amount of moneys, if any, to be distributed from each fund. (c) Before or during fiscal years 1994-95, 1995-96, and 1996-97, the executive director of the department of local affairs shall distribute in the aggregate not less than five million dollars to the uranium mill tailings remedial action program fund from the local government mineral impact fund, the local government severance tax fund, or a combination thereof; except that at least two and one-half million dollars shall be distributed before or during fiscal year 1995-96. The executive director shall determine the amount of moneys, if any, to be distributed from each fund. (d) For fiscal years after 1996-97, the executive director of the department of local affairs may distribute moneys from the local government mineral impact fund and the local government severance tax fund pursuant to sections 34-63-102 and 39-29-110 (1)(b)(III)(A), C.R.S., respectively. (4) Repealed. (5) No new sites may be added to the uranium mill tailings remedial action program without the approval of the general assembly acting by bill. (6) This section is repealed, effective July 1, 2027.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-39.docxFetched: 10/6/2026