COGA Capitol Review

COGA’s Legislative Committee has taken a position on the following bills.  For more information on COGA’s positions, contact email hidden; JavaScript is required, COGA Director of Communications & Public Affairs.


HB18-1071 
Position: Oppose

Short Title: Regulate Oil Gas Operations Protect Public Safety
Sponsors: J. Salazar

Current law declares that it is in the public interest to ‘[f]oster the responsible, balanced development, production, and utilization of the natural resources of oil and gas in the state of Colorado in a manner consistent with protection of public health, safety, and welfare, including protection of the environment and wildlife resources’. The Colorado court of appeals, in Martinez v. Colo. Oil & Gas Conservation Comm’n , 2017 COA 37, has construed this language to mean that oil and gas development is not balanced with the protection of public health, safety, and welfare, including protection of the environment and wildlife resources. Rather, that development must occur in a manner consistent with such protection.

The bill codifies the result reached in Martinez.

COGA Comment: On January 29, 2018 the Colorado Supreme Court agreed to hear the Martinez v. COGCC case. This bill tries to place in statute the intent of the Martinez case ahead of a Supreme Court decision. It also ignores the important balancing tests placed in law by the Oil and Gas Conservation Act that includes protecting public health, safety, and the environment.

Status: 3/7/2018 Senate Committee on Agriculture, Natural Resources, & Energy Postpone Indefinitely


HB18-1098
Position: Support

Short Title: Roll Over Year-end Balance Envtl Response Account
Sponsors: L. Saine | M. Gray / V. Marble

Under current practice, expenditures by the Colorado oil and gas conservation commission to address the mitigation of adverse environmental impacts of oil and gas operations are paid from the environmental response account of the oil and gas conservation and environmental response fund, and the year-end balance of the account transfers into the fund. The bill specifies that the year-end balance of the account remains in the account.

COGA Comment: A notable bipartisan bill that would allow funds in the environmental response account to be rolled over from one year to the next, for things such as larger orphan well projects that cost more than the current $450k annual appropriation.

Status: 04/9/2018 | Governor Signed into Law


HB18-1150
Position: Support

Short Title: Local Government Liable Fracking Ban Oil And Gas Moratorium
Sponsors: P. Buck

The bill specifies that a local government that bans hydraulic fracturing of an oil and gas well is liable to the mineral interest owner for the value of the mineral interest and that a local government that enacts a moratorium on oil and gas activities shall compensate oil and gas operators, mineral lessees, and royalty owners for all costs, damages, and losses of fair market value associated with the moratorium.

Status: 3/7/2018 House Committee on State, Veterans, & Military Affairs Postpone Indefinitely


HB18-1157
Position: Oppose

Short Title: Increased Reporting Oil And Gas Incidents
Sponsors: K. Becker | J. Singer

Section 1 of the bill requires oil and gas operators to file written reports with the Colorado oil and gas conservation commission and other affected stakeholders for each major and minor ‘reportable event’. Operators must also give oral notice of major reportable events. A ‘major reportable event’ includes an incident involving:

  • The unauthorized release of more than 25 barrels of oil, produced water, oilfield chemicals, or exploration and production waste; and
  • The unauthorized flaring, venting, or wasting of:
  • More than 500,000 cubic feet of gas at any drilling or producing well site or at any injection or disposal facility; or
  • More than 1,500,000 cubic feet of gas at any transportation, gathering, or processing facility;
  • A fire that consumes at least these volumes of liquid or gas;
  • A spill, venting, or fire, regardless of the volume involved, that occurs within 500 feet of:
  • A sensitive area, as that term is defined by rule; or
  • A park, recreation site, wildlife refuge, lake, reservoir, stream, or urban or suburban area;
  • An accident that involves a fatal injury;
  • A blowout or loss of control of a well; and
  • An uncontrolled release of gas containing 100 or more parts per million of hydrogen sulfide.

A ‘minor reportable event’ includes an incident involving:

  • The unauthorized release of more than 5 barrels and up to 25 barrels of oil, produced water, oilfield chemicals, or exploration and production waste;
  • The unauthorized flaring, venting, or wasting of more than 50,000 cubic feet and up to 500,000 cubic feet of gas at a drilling or producing well site or at an injection or disposal facility;
  • The unauthorized venting or wasting of more than 50,000 cubic feet and up to 1,500,000 cubic feet of gas at a transportation, gathering, or processing facility;
  • Any uncontrolled fire or explosion; and
  • An accident involving serious bodily injury.
  • The commission will post the reports, notifications, and an annual summary on its website in a database that is searchable by operator, location, type of event, date, and other criteria established by the commission.

Status: 04/9/2018 | Introduced In Senate – Assigned to Agriculture, Natural Resources, & Energy


HB18-1201
Position: Support

Short Title: Severance Tax Voter-approved Revenue Change
Sponsors: D. Thurlow / D. Coram

The bill requires the secretary of state to refer a ballot issue at the general election held on November 6, 2018, to seek voter approval for the state to retain and spend an amount equal to state severance tax revenue. The change only has effect in years when the state would otherwise be required to make a refund under section 20 of article X of the state constitution (TABOR) and is conditioned on the state not:

  • Repealing or reducing any of the existing severance tax exemptions or credits; or
  • Reducing the percentage of the severance tax revenue that is allocated to local governments.
    If the state does any of these actions, then the state’s authority to retain and spend revenues based on the voters’ approval of the referred ballot issue is rescinded at that time and going forward.

Status: 04/9/2018 | House Committee on Finance Postpone Indefinitely


HB18-1215
Position: Oppose

Short Title: Safe Disposal Naturally Occur Radioactive Material
Sponsors: J. Arndt

Current law allows the state board of health to adopt rules concerning the disposal of naturally occurring radioactive materials (NORM) only after the federal environmental protection agency (EPA) has adopted rules concerning the disposal of NORM. The EPA has not adopted the rules. The bill:

  • Requires the state board to adopt rules for the disposal of NORM and technologically enhanced NORM (TENORM); and
  • While the state board is conducting its rule-making investigation, temporarily prohibits the disposal of oil and gas exploration and production waste (EP waste) with potentially high concentrations of radionuclides at a facility that is not specifically approved and designated to receive the waste unless:
  • The generator of the waste has sampled and tested the EP waste on a per-shipment basis or in a representative and statistically valid manner approved by the state board; and
  • The results of the test indicate that the EP waste contains low levels of TENORM.

A generator of EP waste must file reports with the state board.

Status: 04/18/2018 | House Committee on Finance Refer Unamended to Appropriations


HB18-1274
Position: Oppose

Short Title: Reduce Greenhouse Gas Emissions by 2050
Sponsors: K. Becker | J. Bridges / A. Kerr

The bill requires that, by the year 2050, statewide greenhouse gas emissions be reduced by at least 80% of the levels of greenhouse gas emissions that existed in the year 2005.

Status: 04/11/2018 | Senate Committee on State, Veterans, & Military Affairs Postpone Indefinitely


HB18-1289
Position: Oppose

Short Title: Exempt Local Government School Districts Forced Pooling
Sponsors: M. Foote | D. Young / M. Jones

Current law authorizes ‘forced’ or ‘statutory’ pooling, a process by which any interested person???typically an oil and gas operator???may apply to the Colorado oil and gas conservation commission for an order to pool and develop oil and gas resources located within a particularly identified drilling unit absent consent from the mineral owner. The bill exempts local governments and school districts that own mineral rights from being forced pooled but maintains their ability to engage in voluntary pooling.

Status: 3/8/2018 Introduced In House – Assigned to Transportation & Energy


HB18-1352
Position: Oppose

Short Title: Oil And Gas Facilities Distance From School Property
Sponsors: M. Foote | M. Gray / M. Jones | I. Aguilar

As part of the Colorado oil and gas conservation commission’s (commission) authority to regulate oil and gas operations to prevent and mitigate significant adverse environmental impacts to protect public health, safety, and welfare, the commission requires oil and gas production facilities and wells to be located at least 1,000 feet from school buildings and other high occupancy buildings.

The bill clarifies that the minimum 1,000-foot distance from which newly permitted oil and gas production facilities and wells must be located from any school applies to the school property line and not the school building. The bill further clarifies that the minimum distance requirement does not apply if a school commences operations near oil and gas facilities or wells that are already actively in use or permitted; except that the minimum 1,000-foot distance applies to real property owned by a school district on which a future permanent or temporary school building is planned to be constructed within 5 years.

Status: 4/3/2018 Introduced In House – Assigned to Health, Insurance, & Environment


SB18-048
Position: Oppose

Short Title: Protect Act Local Government Authority Oil & Gas Facilities
Sponsors: M. Jones / M. Foote

Section 1 of the bill specifies that the short title of the act is the ‘Protect Act’.

Current law specifies that local governments have powers, commonly called ‘House Bill 1041’ powers, which are a type of land use authority, over oil and gas mineral extraction areas only if the Colorado oil and gas conservation commission has designated a specific area as an area of state interest; sections 3 and 4 repeal that limitation.

Section 5 includes specific authority to regulate the siting of oil and gas facilities in counties’ existing land use authority. Section 6 makes the same changes with regard to municipalities’ existing land use authority.

Sections 7 and 8 specify that the Colorado oil and gas conservation commission’s authority to regulate oil and gas operations, including the siting of oil and gas facilities, does not exempt an oil and gas facility from a local government’s siting authority and that an oil and gas operator must ensure that the location of an oil and gas facility complies with city, town, county, or city and county siting regulations.

Sections 5, 6, and 8 specify that, notwithstanding any other provision of law, the governing body of a municipality and a board of county commissioners may, in order to protect the public safety, health, and welfare of the citizens of the local government, plan, zone, and refuse to allow oil and gas operations.

COGA Comment: This bill aims to give local governments the right to ban oil and natural gas development.

Status: 1/29/2018 Senate Committee on State, Veterans, & Military Affairs Postpone Indefinitely


SB18-063
Position: Oppose

Short Title: Oil Gas Higher Financial Assurance Reclamation Requirements
Sponsors: M. Jones / A. Benavidez

Section 2 of the bill prohibits the Colorado oil and gas conservation commission from accepting any of the available types of financial assurance unless the operator demonstrates, by clear and convincing evidence, that the financial assurance will be sufficient to finance all reasonably foreseeable expenses related to ensuring compliance with the oil and gas law if the operator fails to meet its compliance obligations. The commission shall calculate the total financial assurance required by multiplying the number of oil and gas facilities subject to the application by the projected cost to finance every reasonably foreseeable eventuality related to ensuring compliance with regard to each type of facility.

Section 4 adds reclamation requirements that are adapted from the reclamation requirements applicable to hard rock mines.

COGA Comment: This bill would calculate the total financial assurance required by multiplying the number of oil and gas facilities subject to the application by the projected cost to finance every reasonably foreseeable eventuality related to ensuring compliance with regard to each type of facility. Additionally, financial assurance and bonding is on the COGCC 2018 calendar and given the complexity and broad stakeholder input necessary for this good policymaking on this issue, the COGCC may be the more appropriate venue.

Status: 2/1/2018 Senate Committee on Agriculture, Natural Resources, & Energy Postpone Indefinitely


SB18-064 
Position: Oppose

Short Title: Require 100% Renewable Energy By 2035
Sponsors: M. Jones / M. Foote

The bill updates the renewable energy standard to require that all electric utilities, including cooperative electric associations and municipally owned utilities, derive their energy from 100% renewable sources by 2035. The bill also:

  • Removes recycled energy from the types of energy sources eligible for meeting the renewable energy standard;
  • Allows a utility to obtain energy efficiency credits equal in value to renewable energy credits based on any energy efficiency upgrades made for a low-income residential customer;
  • Removes multipliers used for counting certain renewable energy generated; and
  • Phases out the system of tradable renewable energy credits so that renewable energy generated after 2035 is not eligible for renewable energy credits.

COGA Comment: A 100% requirement limits competition and forces unrealistic circumstances that is bad for businesses, utilities, and consumers.

Status: 2/1/2018 Senate Committee on Agriculture, Natural Resources, & Energy Postpone Indefinitely


SB18-167
Position: Support

Short Title: Enforce Requirements 811 Locate Underground Facilities
Sponsors: R. Scott | K. Donovan / F. Winter | L. Saine

Current law requires a person, before conducting an excavation, to contact a nonprofit notification association (comprised of all owners and operators of underground facilities) by dialing ‘811’ to learn the location of underground facilities in the excavation project area. The owners and operators must then accurately mark the location of their facilities. Violations of the excavation damage prevention law are enforced exclusively through civil actions initiated by damaged parties to collect specified civil penalties and damages. In 2016, the United States department of transportation’s pipeline and hazardous materials safety administration (PHMSA) conducted an adequacy evaluation of Colorado’s enforcement of its excavation damage prevention law and determined that the enforcement is inadequate, which may eventually result in the withholding of federal funds from Colorado.

The bill creates the underground damage prevention safety commission (commission) as an independent agency within the department of labor and employment. The commission has rule-making and enforcement authority regarding the excavation damage prevention law and is required to enter into a memorandum of understanding with the notification association to facilitate implementation and administration of the law. The notification association is required to provide administrative support to the commission in performing its duties.

A review committee of the commission initially determines whether a violation of the law has occurred and, if appropriate, recommends remedial action, potentially including a fine. Fines range from $250 for a single minor violation within the previous 12 months to $75,000 for a fourth major violation within the previous 12 months. The full commission is bound by the review committee’s determination of facts but determines the final agency action regarding alleged violations. Fines are credited to the damage prevention fund, which the commission will use to develop educational programming, including by making grants, that is designed to improve worker and public safety relating to excavation and underground facilities.

Current law allows only an excavator to submit a location request to the notification association. The bill authorizes a licensed professional engineer designing excavation to submit a location request. The engineer is required to ensure that the engineering plans meet certain standards established by the American Society of Civil Engineers for defining the accuracy of an underground facility location. The notification association will collect a fee for each location request, which is deposited in the safety commission fund and used to pay the commission’s expenses.

Current law creates 2 tiers of membership in the notification association. Tier 2 members are limited members with limited benefits and include certain special districts, local governments, cable television providers, and small telecommunications providers; tier 1 members are full members with full benefits, and tier 1 consists of all other owners and operators. If, after receiving a location request, the notification association determines that a tier 1 member owns or operates the underground facilities, the notification association contacts the tier 1 member to arrange for the marking of the underground facilities. If a tier 2 member owns or operates the underground facilities, the excavator must contact the tier 2 member to arrange for the marking of the underground facilities. Effective January 1, 2021, all underground facility owners and operators are full members of the notification association with full benefits, and excavators will no longer need to contact the owners or operators to arrange for the marking.

All new underground facilities installed on or after January 1, 2020, must be electronically locatable when installed. Home rule local governments are not subject to the commission’s enforcement authority, but the governing body of a home rule local government is required to either adopt a similar enforceable damage prevention safety program or waive its exemption and delegate its damage prevention enforcement authority to the commission.

Information regarding the location of underground facilities is exempt from the ‘Colorado Open Records Act’, pursuant to the existing exemption for specialized details of critical infrastructure.

Status: 3/1/2018 Senate Committee on Finance Refer Amended to Appropriations 


SB18-192 
Position: Support

Short Title: Local Government Liable Fracking Ban Oil And Gas Moratorium
Sponsors: V. Marble / P. Buck

The bill specifies that a local government that bans hydraulic fracturing of an oil and gas well is liable to the mineral interest owner for the value of the mineral interest and that a local government that enacts a moratorium on oil and gas activities shall compensate oil and gas operators, mineral lessees, and royalty owners for all costs, damages, and losses of fair market value associated with the moratorium.

Status: 4/3/2018 Introduced In House – Assigned to State, Veterans, & Military Affairs


SB18-230
Position: Support

Short Title: Modify Laws Drilling Units Pooling Orders
Sponsors: V. Marble / L. Saine 

Current law authorizes ‘forced’ or ‘statutory’ pooling, a process by which any interested person–typically an oil and gas operator–may apply to the Colorado oil and gas conservation commission (commission) for an order to pool oil and gas resources located within a particularly identified drilling unit. After giving notice to interested parties and holding a hearing, the commission can adopt an order to require an owner of oil and gas resources within the drilling unit who has not consented to the application (nonconsenting owner) to allow an oil and gas operator to produce the oil and gas within the drilling unit notwithstanding the owners lack of consent.

The bill clarifies that an order entered by the commission establishing a drilling unit may authorize more than one well. The order must specify that a nonconsenting owner is immune from liability for costs arising from spills, releases, damage, or injury resulting from oil and gas operations on the drilling unit.

Currently, a nonconsenting owner must pay the consenting owners from the nonconsenting owner’s share of production 200% of the nonconsenting owner’s proportionate share of the costs of drilling, including equipment. The bill limits this 200% cost recovery to wells 5,000 feet or less in depth and increases the cost recovery to 300% for wells greater than 5,000 feet in depth and for horizontal wells.

Current law prohibits entry of a pooling order until the mineral rights owners have been given a reasonable offer to lease their rights. The bill specifies that the offer must be given at least 60 days before the hearing on the order and must include a copy of or link to a brochure supplied by the commission that clearly and concisely describes the pooling procedures and the mineral owner’s options pursuant to those procedures.

Status: 4/17/2018 Senate Second Reading Laid Over to 04/19/2018 – No Amendments


SJM18-002
Position: Oppose

Short Title: Eliminate Energy Subsidies
Sponsors: M. Jones / M. Foote

Memorializing Congress To Eliminate Subsidies For Energy Industries.

COGA Comment: This memorial ignores federal tax reform and would encourage Congress to remove federal deductions like Intangible Drilling Costs (IDC) and depletion deductions.

Status: 1/25/2018 Senate Committee on Agriculture, Natural Resources, & Energy Postpone Indefinitely