Thursday, April 3, 2008

Ritter, Legislators Announce Plan to Use Mineral Royalties To Create Rainy Day Reserve, Fund Higher Ed Capital Projects, Assist Local Communities

Gov. Bill Ritter and a bipartisan group of legislators announced Thursday morning a landmark bill to use the state's share of federal mineral royalties to fund higher education capital projects, assist local communities affected by energy development activities, and establish a reserve fund that would stabilize higher education funding.

About $1 billion of the expected royalty revenues would be directed to affected communities over the next decade. Another $650 million would be alloated toward capital construction projects at colleges and universities around the state.

The proposal would also direct three-quarters of a billion dollars into public education over the next ten years and dedicate $150 million to the Colorado Water Conservation Board.

Any bonus payments received by the state, in addition to royalties, would be used to fund the new rainy day reserve dedicated to higher education maintenance and appropriations stabilization. Another portion of those bonus payments would go into a "local government permanent fund" to help communities affected by energy extraction activities.

The U.S. government receives royalties on minerals, except for those governed by the General Mining Law of 1872, extracted from federal public lands. Colorado, like all other states, receives a share of the royalties attributable to extraction activities within its borders.

Forecasts say that Colorado can expect to receive about $2.7 billion in royalty payments between 2008 and 2018.

The bipartisan sponsors of the historic legislation spoke of its importance to assuring Colorado's fiscal stability as the bill was released this morning.

"The real legacy of this bi-partisan legislation is that when the drilling stops, Colorado will have a substantial permanent fund to take care of the state's colleges, universities and impacted communities,” Sen. Josh Penry, R-Fruita, said.

Rep. Bernie Buescher, D-Grand Junction, noted that the proposal, if enacted into law, would be Colorado's first effort to tap energy extraction as a means of funding basic needs in over 100 years of mining history.

"We’ve had repeated booms from mineral and energy development in this state for over 100 years,” Buescher said. “This will be the first time we put something away for our children.”

SB 218 will make its first legislative stop in the Senate Education Committee. The measure is sponsored by Sen. Gail Schwartz, D-Snowmass Village, and Rep. David Balmer, R-Centennial, along with Penry and Buescher.