Rep. Scott launches bill to promote drilling, use taxes for college tuition
DENVER — Rep. Ray Scott hopes to spur more oil and natural gas drilling in the state and help fund higher education at the same time.
The Grand Junction Republican introduced a bill into the Colorado Legislature on Friday that would exempt oil and gas wells permitted between July 1 and June 30, 2015, from the state’s severance tax.
After that, and for the remaining life of those wells, severance taxes generated from them would go into the state’s College Opportunity Fund, which is used to pay college tuition stipends to in-state students.
The idea is similar to Amendment 58, which nearly 60 percent of voters rejected in 2008.
That amendment was the brain-child of former Gov. Bill Ritter. It would have increased the severance tax rate and put some of that increased revenue toward college scholarships.
Even though that Democratic governor backed a similar idea, Scott doesn’t believe Democratic leaders in the House will follow suit.
Instead of being sent to the House Transportation and Energy Committee as Scott had hoped, House Speaker Mark Ferrandino, D-Denver, assigned it to the State, Veterans and Military Affairs Committee.
No matter which party is in charge, that’s the panel the majority party often uses to ensure the death of minority party bills they don’t like.
The point behind Scott’s HB1122 is to boost jobs and the economy and help higher education at the same time, he said.
“The oil and gas industry in Colorado is arguably the largest industry in our state,” Scott said. “They are our prime racehorse. You don’t feed your prime racehorse straw. You feed ‘em oats. You make them want to run. You make them want to go. We have to have the conversation about what we’re doing to compete with other states on oil and gas drilling.”
Ritter’s amendment was expected to raise an additional $321 million, but Scott doesn’t expect that much.
He said he has no idea how many new wells would be permitted during the two-year time-out, but if 100 are drilled, the tuition fund could see an additional $35 million annually for several years.
If that happens, it would create more jobs, which in turn would generate millions more in other tax revenue, he said.
Scott said he hopes to get support from higher education advocates, but he knows local government officials and outdoor enthusiasts won’t like it.
Under current law, half of the state’s severance taxes goes to Colorado Parks and Wildlife, and the other half to the Department of Local Affairs, which distributes it in the form of grants to fund water projects and local communities.
“The concept here is to create jobs, produce energy, which would help us with the recessionary problems that we’re having, and at the same time help higher ed,” Scott said.
“Each derrick’s going to create potentially 200 jobs. If we could get one extra derrick in Mesa County right now, that 200 jobs is important. If we got five, that’s a thousand jobs.”