CO SB040

SB 25-040: Future of Severance Taxes & Water Funding Task Force

• Creates a 10-member task force within the Department of Natural Resources to study alternatives for funding water needs and local government grants as severance tax revenues decline
• Task force membership includes representatives from state agencies, oil and gas industry, agriculture, environmental organizations, water conservation districts, and local governments impacted by energy development
• Department of Natural Resources must contract with a third party to conduct the study, with a draft report due January 15, 2026 and final report due July 15, 2026 to the Water Resources and Agriculture Review Committee
• Extends the 75% ad valorem tax credit against severance taxes through January 1, 2027, then phases to 87.5% through January 1, 2028
• Appropriates $198,592 from the severance tax operational fund for FY 2025-26 to implement the task force; the task force is repealed December 31, 2026