2020 Colorado Revised Statutes
Title 34 - Mineral Resources
Article 63. Royalties Under Federal Leasing
Section 34-63-102. Creation of mineral leasing fund - distribution - advisory committee local government permanent fund created - definitions - transfer of money.

(1) (a) (I) (Deleted by amendment, L. 2011, (SB 11-238), ch. 300, p. 1441, § 1, effective June 8, 2011.)

(II) On and after July 1, 2008, all moneys, including any interest and income derived therefrom, received by the state treasurer pursuant to the provisions of the federal "Mineral Lands Leasing Act" of February 25, 1920, as amended, except those moneys described in section 34-63-104, shall be deposited by the state treasurer into the mineral leasing fund, which fund is hereby created, for use by state agencies, public schools, and political subdivisions of the state as described in subsections (5.3) and (5.4) of this section and for transfer to the higher education federal mineral lease revenues fund created in section 23-19.9-102 (1)(a), C.R.S., and the local government permanent fund created in sub-subparagraph (A) of subparagraph (I) of paragraph (a) of subsection (5.3) of this section, as required by this section and section 23-19.9-102, C.R.S.

2. In the appropriation and use of such moneys, priority shall be given to those publicschools and political subdivisions socially or economically impacted by the development, processing, or energy conversion of fuels and minerals leased under said federal mineral lands leasing act.

3. Repealed.

(2) to (4) (Deleted by amendment, L. 2011, (SB 11-238), ch. 300, p. 1441, § 1, effective June 8, 2011.)

(5) (a) (I) On and after July 1, 2008, moneys shall be paid into the local government mineral impact fund, which is hereby created, as specified in paragraph (b) of subsection (5.4) of this section and distributed as specified in paragraphs (b) and (c) of said subsection.

2. On and after July 1, 2001, all income derived from the deposit and investment of themoneys in the local government mineral impact fund shall be credited to the fund.

3. to (V) (Deleted by amendment, L. 2011, (SB 11-238), ch. 300, p. 1441, § 1, effective June 8, 2011.)

(b) (I) There is hereby created within the department of local affairs an energy impact assistance advisory committee. The committee shall be composed of the executive director of the department of local affairs, the executive director of the department of natural resources, the commissioner of education, the executive director of the department of public health and environment, the executive director of the department of transportation, and seven residents of areas impacted by energy conversion or mineral resource development. The seven residents shall be appointed by the governor, with the consent of the senate, for terms not exceeding four years to serve at the pleasure of the governor. The executive director of the department of local affairs shall act as chairperson of the committee. Members of the committee shall serve without additional compensation; except that the seven members appointed from energy impact areas shall be entitled to reimbursement for actual and necessary expenses. Any member of the committee who is a state official may designate representatives of his or her agency to serve on the committee in his or her absence. The chairperson shall convene the advisory committee from time to time as he or she deems necessary. The advisory committee shall continuously review the existing and potential impact of the development, processing, or energy conversion of mineral and fuel resources on various areas of the state, including those areas indirectly affected, and shall make continuing recommendations to the department of local affairs, including, but not limited to, those actions deemed reasonably necessary and practicable to assist impacted areas with the problems occasioned by such development, processing, or energy conversion, the immediate and projected problems which the local governments are experiencing in providing governmental services, the extent of local tax resources available to each unit of local government, the extent of local tax effort in solving energy impacted problems, and other problems which the areas have experienced, such as housing and environmental considerations, which have developed as a direct result of energy impact. In furtherance thereof, the committee shall make continuing specific recommendations regarding any discretionary distributions by the executive director of the department of local affairs authorized pursuant to this section and section 39-29-110, C.R.S. With respect to recommendations for the distribution of moneys made pursuant to this section, the committee shall give priority and preference to those public schools and political subdivisions socially or economically impacted by the development, processing, or energy conversion of fuels and minerals leased under the federal "Mineral Lands Leasing Act" of February 25, 1920, as amended. With respect to recommendations for the distribution of moneys made pursuant to section 39-29-110, C.R.S., the committee shall recommend distributions to those political subdivisions socially or economically impacted by the development, processing, or energy conversion of minerals and mineral fuels subject to taxation under article 29 of title 39, C.R.S.

(II) Repealed.

(c) Notwithstanding section 24-1-136 (11)(a)(I), the executive director of the department of local affairs shall deliver to the state auditor and file with the general assembly annually before February 1 a detailed report accounting for the distribution of all funds for the previous year. The energy impact assistance advisory committee shall review the report prior to it being delivered and filed.

(5.3) (a) Bonus payments credited to the mineral leasing fund created in subsection (1)(a)(II) of this section shall be distributed on a quarterly basis for each quarter commencing on July 1, October 1, January 1, or April 1 of any state fiscal year as follows:

(I) (A) Fifty percent of the bonus payments shall be transferred to the local government permanent fund, which is hereby created in the state treasury. Interest and income derived from the deposit and investment of moneys in the local government permanent fund shall be credited to the permanent fund and shall not be transferred to the general fund or any other fund at the end of any fiscal year. Except as otherwise provided in sub-subparagraph (B) of this subparagraph (I), moneys in the permanent fund shall not be expended for any purpose. The state treasurer may invest moneys in the local government permanent fund in any investment in which the board of trustees of the public employees' retirement association may invest the funds of the association pursuant to section 24-51-206, C.R.S.

2. If, based on the revenue estimate prepared by the staff of the legislative council inDecember of any fiscal year, it is anticipated that the total amount of moneys that will be deposited into the mineral leasing fund pursuant to subparagraph (II) of paragraph (a) of subsection (1) of this section during the fiscal year will be at least ten percent less than the amount of moneys so deposited during the immediately preceding fiscal year, the general assembly may appropriate moneys from the local government permanent fund to the department of local affairs for the current or next fiscal year. The maximum amount that the general assembly may appropriate for the current or next fiscal year pursuant to this sub-subparagraph (B) is an amount equal to the difference between the total amount of moneys credited to the local government mineral impact fund and directly distributed by the executive director of the department pursuant to paragraph (c) of subsection (5.4) of this section during the immediately preceding fiscal year and the estimated total amount of moneys to be so credited and distributed for the current fiscal year. The executive director of the department shall distribute all moneys appropriated pursuant to this sub-subparagraph (B) directly to counties and municipalities in combination with and using the methodology set forth in subparagraphs (I) to (IV) of paragraph (c) of subsection (5.4) of this section.

3. and (D) (Deleted by amendment, L. 2011, (SB 11-238), ch. 300, p. 1441, § 1, effective June 8, 2011.)

5. Notwithstanding any provision of this subsection (5.3) to the contrary, on June 30,2011, the state treasurer shall deduct four million eight hundred thousand dollars from the local government permanent fund and transfer such sum to the general fund.

6. Notwithstanding any other provision of this section, on June 30, 2020, the state treasurer shall transfer two million three hundred thousand dollars from the local government permanent fund to the general fund.

(II) Fifty percent of the bonus payments shall be transferred to the higher education federal mineral lease revenues fund created in section 23-19.9-102 (1)(a), C.R.S.

(b) For purposes of this subsection (5.3), "bonus payments" means the portion of the compensation paid to the federal government as consideration for the granting of a federal mineral lease that is payable regardless of the extent of use of the mineral interest and is fixed and certain in amount, whether or not payable in one or more periodic increments over a fixed period, that is subsequently received by the state treasurer pursuant to the provisions of the federal "Mineral Lands Leasing Act" of February 20, 1920, as amended, and that is not comprised of moneys described in section 34-63-104. "Bonus payments" do not include any compensation paid to the federal government that varies in amount based on the amount of mineral production of the payer.

(5.4) Except as otherwise provided in subsection (5.5) of this section, on and after July 1, 2008, all moneys other than bonus payments, as defined in paragraph (b) of subsection (5.3) of this section, credited to the mineral leasing fund created in subparagraph (II) of paragraph (a) of subsection (1) of this section shall be distributed on a quarterly basis for quarters beginning on July 1, October 1, January 1, and April 1 of each state fiscal year as follows:

(a) (I) For each quarter commencing during the 2008-09, 2009-10, and 2010-11 fiscal years, forty-eight and three-tenths percent of the moneys shall be transferred to the state public school fund to be used for the support of the public schools of the state; except that the total amount of moneys transferred during each of said fiscal years shall not exceed sixty-five million dollars.

(II) For each quarter commencing during the 2011-12 fiscal year or during any succeeding fiscal year, forty-eight and three-tenths percent of the moneys shall be paid into the state public school fund to be used for the support of the public schools of the state; except that the maximum amount of moneys transferred during any fiscal year shall not exceed the maximum amount of moneys allowed to be transferred during the 2010-11 fiscal year multiplied by one hundred four percent per year for each succeeding fiscal year.

(b) (I) For each quarter commencing during the 2008-09 fiscal year or during any succeeding fiscal year, forty percent of the moneys shall be credited to the local government mineral impact fund. Fifty percent of the moneys so credited shall be distributed by the executive director of the department of local affairs in accordance with the purposes and priorities described in subsection (1) of this section, and for planning, analyses, public engagement, and coordination and collaboration with federal land managers and stakeholders, or for similar or related local government processes needed by local governments for engagement in federal land management decision-making. In distributing the moneys, the executive director shall give priority to those communities most directly and substantially impacted by production of energy resources on federal mineral lands and to grant applications that:

1. Are submitted jointly by multiple local governments; or

2. Seek funding for a project that is a multi-jurisdictional project or that requires asubstantial amount of funding.

(II) Repealed.

(b.5) (Deleted by amendment, L. 2011, (SB 11-238), ch. 300, p. 1441, § 1, effective June

8, 2011.)

(b.7) and (b.8) Repealed.

(c) The executive director of the department of local affairs shall annually directly distribute the remaining fifty percent of the moneys credited to the local government mineral impact fund pursuant to paragraph (b) of this subsection (5.4) and any moneys appropriated by the general assembly from the local government permanent fund to the department pursuant to sub-subparagraph (B) of subparagraph (I) of paragraph (a) of subsection (5.3) of this section to counties, federal mineral lease districts, and municipalities as follows:

(I) Except as otherwise provided in subparagraph (III) of this paragraph (c), moneys shall be allocated to counties for each fiscal year by August 31 of the following fiscal year among those respective counties of the state from which the moneys are derived based upon the following factors:

1. The proportion of the total amount of moneys credited to the mineral leasing fundthat is derived from each of the respective counties; and

2. On the basis of the report required by section 39-29-110 (1)(d), C.R.S., the proportion of employees of mines or related facilities or crude oil, natural gas, or oil and gas operations who reside in a county to the total number of employees of mines and related facilities or crude oil, natural gas, or oil and gas operations who reside in the state.

(II) Except as otherwise specified in subparagraph (IV) of this paragraph (c), the moneys allocated to each county pursuant to subparagraph (I) of this paragraph (c) shall be further distributed to the county or the federal mineral lease district and to each municipality within the county based upon the following factors:

1. The proportion of employees reported as residents pursuant to section 39-29-110 (1)(d), C.R.S., in the county's unincorporated area or in any municipality within the county to the total number of employees reported as residents in the county as a whole pursuant to said section;

2. The proportion of the population in any such county's unincorporated area or in anysuch municipality within the county to the total population in the county, as such population is reported in the most recently published population estimate from the state demographer appointed by the executive director of the department of local affairs; and

3. The proportion of road miles in any such county's unincorporated area or in any suchmunicipality within the county to the total road miles in the county, as such miles are certified by the department of transportation to the state treasurer pursuant to sections 43-4-207 (2)(d) and 43-4-208 (3), C.R.S.

3. With respect to the distribution made pursuant to subparagraph (I) of this paragraph(c), the executive director of the department of local affairs shall establish guidelines that set forth the weight that each of the factors in sub-subparagraphs (A) and (B) of subparagraph (I) of this paragraph (c) shall be given, subject to the limitation that the factor described in said subsubparagraph (B) shall not be weighted more than thirty-five percent. In establishing the guidelines, the executive director shall weigh the factors in a manner that most accurately estimates the absolute and relative impacts of production of energy resources on federal mineral lands for each impacted county so that the counties most substantially and directly impacted by such production each receive a sufficient allocation and no county receives an excessive allocation.

4. With respect to the distribution made pursuant to subparagraph (II) of this paragraph (c), the executive director of the department of local affairs, in consultation with the energy impact assistance advisory committee established pursuant to subparagraph (I) of paragraph (b) of subsection (5) of this section, shall establish guidelines that set forth the weight that each of the factors in sub-subparagraphs (A) to (C) of subparagraph (II) of this paragraph (c) shall be given. In establishing the guidelines, the executive director and the committee shall weigh the factors in a manner that most accurately estimates the absolute and relative impacts of production of energy resources on federal mineral lands for each impacted county and municipality so that the counties and municipalities most substantially and directly impacted by such production each receive a sufficient allocation and no county or municipality receives an excessive allocation. These guidelines shall apply uniformly across the state; except that the executive director may:

1. Accept a memorandum of understanding from a county and all municipalities contained therein that establishes an alternative distribution that shall be effective within the county; and

2. After consultation with the energy impact assistance advisory committee, vary theweight that each of the factors in sub-subparagraphs (A) to (C) of subparagraph (II) of this paragraph (c) receives in an individual county in order to more fairly distribute the gross receipts among the county and all municipalities contained therein.

(d) (I) For each quarter commencing during the 2008-09 fiscal year, ten percent of the moneys shall be paid into the Colorado water conservation board construction fund created in section 37-60-121 (1), C.R.S., for appropriation by the general assembly pursuant to the provisions of section 37-60-122, C.R.S., and for use in accordance with the purposes and priorities described in subsection (1) of this section; except that the maximum amount of moneys transferred during the 2008-09 fiscal year shall not exceed fourteen million dollars.

(II) For each quarter commencing during the 2009-10 fiscal year or during any succeeding fiscal year, an amount equal to ten percent of the moneys shall be paid into the Colorado water conservation board construction fund created in section 37-60-121 (1), C.R.S., for appropriation by the general assembly pursuant to the provisions of section 37-60-122, C.R.S., and for use in accordance with the purposes and priorities described in subsection (1) of this section; except that the maximum amount of moneys transferred during a single fiscal year shall not exceed the maximum amount of moneys allowed to be transferred during the 2008-09 fiscal year multiplied by one hundred four percent per year for each succeeding fiscal year.

(e) (I) In addition to the moneys credited to the local government mineral impact fund pursuant to paragraph (b) of this subsection (5.4), for the 2008-09 fiscal year, one and seventenths percent of the moneys shall be credited to the local government mineral impact fund and distributed to school districts within the counties that receive distributions pursuant to paragraph (c) of this subsection (5.4); except that the maximum amount of moneys credited and distributed shall not exceed three million three hundred thousand dollars. The executive director of the department of local affairs shall distribute the moneys to the school districts as specified in subparagraph (III) of this paragraph (e).

2. In addition to the moneys credited to the local government mineral impact fund pursuant to paragraph (b) of this subsection (5.4), for the 2009-10 fiscal year and for each succeeding fiscal year, one and seven-tenths percent of the moneys shall be credited to the local government mineral impact fund and distributed to school districts within the counties that receive distributions pursuant to paragraph (c) of this subsection (5.4); except that the maximum amount of moneys credited and distributed for a fiscal year shall not exceed the maximum amount of moneys allowed to be credited and distributed for the 2008-09 fiscal year multiplied by one hundred four percent for each succeeding fiscal year. The executive director of the department of local affairs shall distribute the moneys to the school districts as specified in subparagraph (III) of this paragraph (e).

3. The executive director of the department of local affairs shall make the distributionsrequired by subparagraphs (I) and (II) of this paragraph (e) at the same time as the executive director makes distributions to counties pursuant to paragraph (c) of this subsection (5.4), and the total amount of the distributions made to all school districts within a single county shall be in proportion to the amount of the moneys distributed directly to the county pursuant to said paragraph (c). Where more than one school district exists within a county, the distribution to each school district shall be the percentage that the most recent funded pupil count, as determined pursuant to the "Public School Finance Act of 1994", article 54 of title 22, C.R.S., for pupils enrolled in the county attributable to that school district bears to the most recent total funded pupil count for all pupils attributable to the county.

(5.5) (a) (I) On and after July 1, 2008, but before April 14, 2016, all moneys other than bonus payments, as defined in paragraph (b) of subsection (5.3) of this section, credited to the mineral leasing fund in excess of the amounts distributed pursuant to subsection (5.4) of this section shall be transferred on a quarterly basis for each quarter commencing on July 1, October 1, January 1, or April 1 of any state fiscal year to the higher education federal mineral lease revenues fund created in section 23-19.9-102 (1)(a), C.R.S., and the higher education maintenance and reserve fund created in section 23-19.9-102 (2)(a), C.R.S., as specified in said section as that section existed prior to its repeal.

(II) On and after April 14, 2016, all moneys other than bonus payments, as defined in paragraph (b) of subsection (5.3) of this section, credited to the mineral leasing fund in excess of the amounts distributed pursuant to subsection (5.4) of this section shall be transferred on a quarterly basis for each quarter commencing on July 1, October 1, January 1, or April 1 of any state fiscal year to the higher education federal mineral lease revenues fund created in section 23-19.9-102 (1)(a), C.R.S., as specified in said section.

(b) Notwithstanding the provisions of paragraph (a) of subsection (5.4) of this section, if the amount of moneys in the higher education federal mineral lease revenues fund, established pursuant to section 23-19.9-102 (1), C.R.S., is insufficient to cover the full amount of the payments due to be made under lease-purchase agreements authorized pursuant to section 23-1106.3 (3), C.R.S., the general assembly may reduce the transfer to the state public school fund by the amount needed to cover the full amount of payments and transfer that amount to the higher education federal mineral lease revenues fund.

6. Repealed.

7. (a) No state agency or office shall expend any moneys received from the local government mineral impact fund unless such expenditure is authorized by legislative appropriation separate from the provisions of this section; except that, if the executive director of the department of local affairs with the concurrence of the governor determines that a local government emergency exists, the state agency or office may expend any moneys received from the local government mineral impact fund without further appropriation. In the event moneys are expended based on a determination that a local government emergency exists, the department of local affairs shall notify the legislative council of the expenditure.

(b) The provisions of paragraph (a) of this subsection (7) shall not apply to any moneys received by a state-supported institution of higher education that provides job training or facilities related to energy development for counties or communities with energy impacts. Such a state-supported institution of higher education may accept and expend moneys from the local government mineral impact fund.

Source: L. 53: Ex. Sess., p. 23, § 2. CRS 53: § 100-8-2. C.R.S. 1963: § 100-8-2. L. 77: Entire section R&RE, p. 1572, § 2, effective June 19. L. 79: (2) amended, p. 1663, § 131, effective July 19. L. 81: (2), (3), and (5)(a) amended, p. 1692, § 1, effective June 19. L. 82: (3)(a) and (3)(c) amended, pp. 522, 523, §§ 1, 2, effective January 1, 1983. L. 84: (3)(a) amended, p. 703, § 3, effective April 5. L. 86: (5)(b) amended, p. 424, § 56, effective March 26. L. 87: (3)(b)(II) amended and (3)(b)(IV) and (6) repealed, p. 1275, §§ 1, 2, effective April 6. L. 88: (5)(b)(I) and (5)(b)(II)(A) amended, p. 318, § 16, effective April 14. L. 90: (5)(b)(II) repealed, p. 334, § 24, effective April 3. L. 91: (5)(b)(I) amended, p. 1073, § 55, effective July 1. L. 93: (5)(a) amended, p. 448, § 4, effective April 19. L. 94: (7) added, p. 682, § 1, effective April 19. L. 97: (3)(a), (3)(c), and (5)(a) amended, p. 1145, § 1, effective May 28. L. 2000:

(5)(a) amended, p. 276, § 1, effective August 2. L. 2002: (2) amended, p. 1784, § 48, effective June 7. L. 2006: (5)(a)(I) amended, p. 984, § 3, effective May 18. L. 2007: (7) amended, p. 472, § 1, effective April 11; (5)(a)(I) amended, p. 549, § 5, effective August 3. L. 2008: (5.5) amended, p. 717, § 3, effective May 12; (5)(a)(III) added, p. 981, § 2, effective May 21; (1)(a), (2)(a), (3)(a), (3)(c)(II)(A), (4), and (5)(a)(I) amended and (5.3), (5.4), and (5.5) added, p. 2149,

§ 1, effective June 4; (3)(b)(I), (3)(b)(II), (5)(b)(I), and (5)(c) amended, p. 1678, § 1, effective August 5. L. 2009: (5)(a)(V) and (5.4)(b.5) added, (SB 09-279), ch. 367, pp. 1930, 1933, §§ 20, 27, effective June 1; (5)(a)(I) and (5.3)(a)(I) amended and (5)(a)(IV) added, (SB 09-232), ch. 435, p. 2420, § 1, effective June 4. L. 2010: (5.3)(a)(I)(A) amended and (5.3)(a)(I)(D) added, (HB 10-1327), ch. 135, p. 450, § 7, effective April 15. L. 2011: (5.3)(a)(I)(E) and (5.4)(b.7) added, (SB 11-164), ch. 33, p. 93, §§ 6, 7, effective March 18; IP(5.4)(c) and IP(5.4)(c)(II) amended, (HB 11-1218), ch. 169, p. 584, § 2, effective May 9; (5.4)(b.8) added, (SB 11-226), ch. 190, p. 734, § 5, effective May 19; (1)(a)(I), (2) to (4), (5)(a)(I), (5)(a)(III) to (5)(a)(V), (5.3)(a)(I)(C), (5.3)(a)(I)(D), (5.4)(b), and (5.4)(b.5) amended, (SB 11-238), ch. 300, p. 1441, § 1, effective June 8, 2011. L. 2013: (5.4)(b)(II) amended, (SB 13-270), ch. 250, p. 1318, § 9, effective May 23; (1)(a)(II), IP(5.3)(a), and IP(5.4) amended, (HB 13-1300), ch. 316, p. 1696, § 104, effective August 7. L. 2014: (5.3)(a)(I)(B) amended, (SB 14-106), ch. 75, p. 307, § 1, effective March 27; (5.4)(b)(II) amended, (SB 14-046), ch. 210, p. 784, § 1, effective May 15; (7)(b) amended, (HB 14-1363), ch. 302, p. 1272, § 40, effective May 31. L. 2015: (1)(c) added, (SB 15-244), ch. 132, p. 408, § 2, effective May 1; IP(5.4)(b)(I) amended, (HB 15-1225), ch. 187, p. 622, § 4, effective May 13; (5.3)(a)(I)(A) and (5.3)(a)(I)(B) amended and (5.4)(b.7) and (5.4)(b.8) repealed, (SB 15-264), ch. 259, p. 965, § 85, effective August 5. L. 2016: (1)(a)(II), (5.3)(a)(II), (5.5)(a), and (5.5)(b) amended, (HB 16-1229), ch. 84, p. 239, § 4, effective April 14. L. 2017: (5)(c) amended, (HB 17-1047), ch. 26, p. 79, § 3, effective August 9. L. 2020: IP(5.3)(a) amended and (5.3)(a)(I)(F) added, (HB 20-1406), ch. 178, p. 814, § 21, effective June 29.

Editor's note: (1) Subsection (5.4)(b)(II) provided for the repeal of subsection (5.4)(b)(II), effective July 1, 2017. (See L. 2014, p. 784.)

(2) Subsection (1)(c)(IV) provided for the repeal of subsection (1)(c), effective July 1,

2019. (See L. 2015, p. 408.)

Cross references: (1) For the "Mineral Lands Leasing Act" of February 25, 1920, see 30 U.S.C. § 181 et seq.; for the state public school fund, see article 41 of title 22.

(2) For the legislative declaration in SB 15-244, see section 1 of chapter 132, Session Laws of Colorado 2015. For the legislative declaration in HB 15-1225, see section 1 of chapter 187, Session Laws of Colorado 2015.