No oil, gas wells in your backyard? Don’t expect tax dollars, bill says
DENVER — Local governments that restrict or delay oil and gas development in their jurisdictions would lose severance tax dollars for doing so under a bill heard in a House committee Monday.
The measure, House Bill 1356, is the latest measure this session dealing with a conflict between the drilling industry and local governments, some of which have passed or are considering land-use restrictions on oil and gas companies, such as setbacks, noise abatement or road placements.
Other measures failed earlier this session and a governor’s special task force looking into the issue resulted in no recommendations on how to address the conflict.
Rep. Jerry Sonnenberg, R-Sterling, said he introduced the bill to make it clear that governments that take actions resulting in lowering production, and severance tax collections as a result, shouldn’t get their share of those taxes.
“What I’m trying to say is if you have oil and gas production, you need the severance dollars to mitigate those effects from oil and gas,” the Sterling Republican said. “If you’re restricting oil and gas and don’t have that production, you shouldn’t be getting any money.”
More than a dozen people testified against the measure, including some from Sonnenberg’s hometown, most saying the measure is badly defined or goes too far. No one spoke in favor of it.
Alan Curtis, a water attorney for the city of Sterling, told the House Agriculture, Livestock & Natural Resources Committee that the bill is unnecessarily punitive, especially for local governments that might delay a drilling project because they want time to study impacts.
“If they have an actual problem that’s related to oil and gas development and they want to take time to get it in control, does that mean they are no longer eligible to receive funds?” he asked. “We’re opening a can of worms here and there doesn’t appear to be a reason to open the can.”
Moments after Curtis spoke, Sonnenberg posted a message on Twitter saying the city was being greedy.
Other witnesses questioned the speed at which the bill was going through the Legislature. It was introduced late Friday and up in its first committee hearing Monday.
Kevin Bommer, legislative advocacy manager for Colorado Counties Inc., said state law gives local governments the right to enact land-use regulations over a wide range of issues, including oil and gas.
He said there are legitimate reasons for delaying development, particularly if they concern public safety issues.
“Shutting it all off is extraordinarily punitive,” Bommer said.
The committee didn’t vote on the measure to give Sonnenberg time to draft a proposed amendment altering it.