7D5D4E3044887DAC872582F200778397 Hearing Summary

Chris Treese, Colorado River Conservancy District and Colorado Water Congress, and Dianna Orf, Colorado Water Congress, provided a brief background on funding for water projects. There are two major sources for water programs and projects:  severance tax revenue and Federal Mineral Lease revenue (FML).  Severance tax funds are distributed to the Department of Natural Resources (DNR) and the Department of Local Affairs.  DNR uses the money to fund the perpetual base fund and the operational fund, which funds Tier I and Tier II programs. Tier I programs are mainly regulatory and statutory programs with guaranteed funding.  Tier II programs do not have a guaranteed source of funding.  Ms. Orf discussed the volatility of severance tax and FML funds.

Mr. Treese discussed the history of severance tax funding and the reserve accounts associated with severance tax funding.

Mr. Treese discussed possible solutions to program funding challenges.   These suggestions include moving non-DNR based programs off of severance tax entirely;  creating statutory or constitutional protections for severance tax funds to protect projects they currently fund; removing severance tax from TABOR restrictions and calculations; and backfilling severance tax funding with General Fund moneys.

Mr. Treese and Ms. Orf responded to questions from the committee regarding possible new funding sources, and removing TABOR restrictions and calculations from severance tax funds.  Mr. Treese distributed a copy of the panel's testimony and their presentation [Attachments A and B].