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Bill to Prioritize Public Health, Safety and Environment over Oil-and-Gas Production Dies in Senate Committee
Once again, the House proposes and the Senate disposes.
On Wednesday in the Senate, two minority Democrats joined six majority Republicans on the Senate Agriculture, Natural Resources and Energy Committee to ice a House bill to radically alter state policy to emphasize public health, safety and the environment at the expense of oil-and-gas production.
The CACI Energy and Environment Council opposed the measure, and CACI lobbied for its defeat.
Current policy by the state’s regulatory body, the Colorado Oil and Gas Conservation Commission, is to balance the two ends of this public policy teeter-totter. The mission of the COGCC is stated on its web site:
The Colorado Oil and Gas Conservation Commission (COGCC) is charged with fostering the responsible development of Colorado’s oil and gas natural resources in a manner consistent with the protection of public health, safety, and welfare, including the environment and wildlife resources. Our agency seeks to serve, solicit participation from, and maintain working relationships with all those having an interest in Colorado’s oil and gas natural resources.
HB-1071 would have essentially put into state statute the ruling of the Colorado Court of Appeals in the Martinez case, which is now pending before the Colorado Supreme Court.
Here’s the legislative summary of HB-1071, which was not amended in the House:
HB-1071 “Concerning the regulation of oil and gas operations in a manner consistent with the protection of public safety.”
Current law declares that it is in the public interest to ‘[f]oster the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources’. The Colorado court of appeals, in Martinez v. Colo. Oil & Gas Conservation Comm’n , 2017 COA 37, has construed this language to mean that oil and gas development is not balanced with the protection of public health, safety, and welfare, including protection of the environment and wildlife resources. Rather, that development must occur in a manner consistent with such protection.
The bill’s Fiscal Note offered a more detailed analysis of HB-1071.
The significance of the Martinez case–which the Colorado Supreme Court agreed on January 29th to hear–to not only the oil-and-gas industry but the entire state economy cannot be understated. If the ruling by the Colorado court of Appeals in the Martinez case is upheld by the Colorado Supreme Court, decisions by the state’s regulatory body over the industry would very likely be mired in litigation, which could bring new production to a screeching halt.
HB-1071 was passed by the Democrat-controlled House over the opposition of two Democrats and all minority Republicans.
The Senate sponsor was Senator Dominick Moreno (D-Commerce City). HB-1071 was sponsored in the House by Representative Joe Salazar (D-Thornton), who is running for the Democrat nomination for Colorado Attorney General. Representative Salazar is term-limited.
For more information about HB-1071 and other bills targeting the oil-and-gas industry, contact Bill Skewes, CACI Contract Lobbyist.
For more information on HB-1071 and news media coverage of the bill, read:
“Fracking bills die predictable deaths in Colorado House, Senate,” by Joey Bunch, Colorado Politics, March 8th.
“Colorado Senate kills bill to rewrite state policy on oil and gas,” Cathy Proctor, The Denver Business Journal, March 7th.
“Colorado lawmakers kill bill to require protecting the environment and people as oil and gas production move closer,” by Bruce Finley, The Denver Post, March 7th.
“Senate Committee Sets Date for Hearing on Bill Seeking to Codify State Appeals Court Ruling on Martinez Case before Colorado Supreme Court Can Rule,” CACI Colorado Capitol Report, February 23rd.
CACI Tax Council Gets Educated on Colorado Severance Tax System
During the CACI Tax Council meeting held today, the Council had the opportunity to hear a presentation by Travis Holland, Senior Tax Accountant for Anadarko Petroleum. Mr. Holland shared an overview of the current severance tax system in Colorado including details on the interplay between the ad valorum tax and the severance tax, the calculation and rates of both taxes and how they are assessed on the oil and gas industry in Colorado. Mr. Holland also spoke about the challenges of the current severance system and the industry’s discussions with the Office of the Governor on potential opportunities for improvements to the system.
In addition to this presentation, the Council discussed the notice received by CACI and Tax Council members last week from the Colorado Department of Revenue stating that it plans to rescind all revenue bulletins. The DOR staff shared with CACI staff that the intent of this decision was to formalize guidance they’ve been giving to taxpayers for years that the publications should not be relied upon and that the Department no longer regards the bulletins as binding. The bulletins were issued from 1982-1992 and some were revised in 1999.
Finally, the Tax Council discussed 2018 tax related legislation including a bill addressing a long-term severance tax solution (HB 1201). The Council took a position of SUPPORT on House Bill 1201 with a caveat that the bill be amended to reflect an earlier effective date. Details regarding this piece of legislation and others discussed are provided below:
HB 1185 by Rep. Kraft-Tharp & Senator Neville – Market based sourcing for business income tax apportionment
CACI Position: SUPPORT,
Background: Under current law, income from the sale of services and intangible property is apportioned based on where the income-producing activity is performed. This bill changes the sourcing rules so that the income is apportioned based on where the income-producing activity is used or delivered.
Status: Passed in the House Finance Committee on February 28th and scheduled for House Appropriations Committee. CACI’s Loren Furman testified in support of the bill along with Bruce Nelson, a member of CACI Tax Council.
HB 1201 by Rep. Thurlow & Senator Coram – Severance Tax Voter Approved Revenue Change
CACI Position: SUPPORT with Amendment
Background: Requires a referred measure for this November election allowing the state to retain and spend an amount equal to state severance tax revenue. This is only when the State would otherwise be required to make a TABOR refund, and conditioned on State not:
- Repealing or reducing any of the existing severance tax exemptions or credits; or
- Reducing the percentage of the severance tax revenue that is allocated to local governments.
Status: Scheduled to be heard in House Finance on April 9th.
HB 1022 by Rep. Kraft-Tharp & Senator Neville – DOR Sales Tax Request for Information
CACI Position: SUPPORT
Background: Requires DOR to issue an RFI for an electronic sales and use tax simplification system that the state or any local government that levies a sales or use tax, including a home rule municipality and county, could use for administrative simplification on state and local sales and use taxes.
Status: Signed by the Governor on March 1, 2018
CACI's Legislative Agenda
Below is a list of bills and their status on which CACI Policy Councils have taken positions. For more information on the bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
|Health Care Council Bills||Bill Title/Description||Council Position|
|HB 1007 by Rep. Kennedy & Sen. Lambert||Substance Use Disorder Payment & Coverage||Oppose|
|HB 1009 by Rep. Roberts & Sen. Donovan||Diabetes Drug Pricing Transparency Act 2018||Oppose|
|HB 1097 by Reps. Catlin, Danielson & Sens. Coram, Todd||Patient Choice Of Pharmacy||Oppose|
|SB 136 by Neville & Reps. Kraft-Tharp, Sias||Health Insurance Producer Fees And Fee Disclosure||Support|
|SB 023 by Sen. Martinez Humenik & Rep. Ginal||Promote Off-label Use Pharmaceutical Products||Oppose/Dead|
|Tax Council Bills||Bill Title/Description||Council Position|
|HB 1022 by Reps. Sias, Kraft-Tharp & Sen. Jahn,||Requiring DOR to do RFI for Sales Tax Simplification System||Support|
|HB 1185 by Reps. Kraft-Tharp, Wist & Sens. Neville, Moreno||Market Sourcing For Business Income Tax Apportionment||Support|
|HB 1036 by Rep. Leonard & Sen. Neville||Reduction of Business Personal Property Tax||Support/Dead|
|HB 1201 by Rep. Thurlow & Sen. Coram||Severance Tax Voter-Approved Revenue Change||Support w/ Amendment|
|Labor & Employment |
|Bill Title/Description||Council Position|
|HB 1001 by Reps. Winter, Gray & Sens. |
|Family and Medical Leave Insurance Program||Oppose|
|HB 1033 by Rep. Weissman & Sen. Coram||Employee Leave To Participate In Elections||Neutral|
|HB 1250 by Reps.Kraft-Tharp, Sias & Sen. Priola||Analysis to Improve Compliance With Rules By Business||Support|
|HB 1261 by Rep. Weissman||Colorado Arbitration Fairness Act||Oppose|
|HB 1262 by Reps. Jackson & Roberts||Arbitrations Services Provider Transparency Act||Oppose|
|SB 44 by Sen. Crowder & Rep. Landgraf||Veterans Employment Preference By Private Employer||Neutral|
|SB 178 by Sen. Smallwood & Rep. Kraft-Tharp||Similar Coverage Independent Commercial Vehicles||Support|
|SB 193 by Sen. Coram||Limit State Agency Occupational Regulations||Oppose|
|Energy & Environment|
|Bill Title/Description||Council Position|
|HB 1071 by Rep. Salazar||Regulate Oil Gas Operations Protect Public Safety||Oppose/Dead|
|HB 1157 by Reps. Becker, Singer||Increased Reporting Oil And Gas Incidents ||Oppose|
|HB 1215 by Rep. Arndt||Safe Disposal Naturally Occur Radioactive Material||Oppose As Introduced|
|SB 009 by Sens. Priola, Fenberg||Allow Electric Utility Customers Energy Storage Equipment||Neutral|
|SB 047 by Sen. Marble & Rep. Saine||Repeal Tax Credits Innovative Vehicles||Oppose|
|SB 063 by Sen. Jones & Rep. Benavidez||Oil Gas Higher Financial Assurance Reclamation Requirements||Oppose/Dead|
|SB 064 by Sen. Jones & Rep. Foote||Require 100% Renewable Energy By 2035||Oppose/Dead|
|SB 167 by Sens. Scott, Donovan & Reps. Winter, Saine||Enforce Requirements 811 Locate Underground Facilities||Neutral|
|Bill Title/Description||Council Position|
|SB 062 by Sen. Moreno||Snow Removal Service Liability Limitation||Oppose|
|HB 1128 by Reps. Wist, Bridges & Sens. Court, Lambert||Protections For Consumer Data Privacy||Support as Amended|
|General Business Issues Bills||Bill Title/Description||Council Position|
|SB 001 by Sens. Cooke, Baumgardner & Reps Carver, Buck||Transportation Infrastructure Funding||Support|