DENVER – Democrats turned back a Republican attempt to withhold gas and oil taxes from cities that ban hydraulic fracturing Wednesday.
Voters in five Front Range cities have placed moratoriums on the drilling technique, effectively banning gas and oil drilling because nearly every well is hydraulically fractured.
Rep. Jerry Sonnenberg, R-Sterling, said those towns should lose a share of their severance tax money, a portion of which is set aside to help communities cope with the industrial impacts of drilling, like damaged roads.
Sonnenberg’s House Bill 1064 would have banned cash payments and grants funded by severance taxes to any town or county that doesn’t allow drilling.
“It’s about doing the right thing with those severance tax dollars and sending them to communities to help mitigate the costs of energy production,” Sonnenberg said.
Democrats disagreed, saying cities should not be punished for something their citizens decided through the democratic process.
“As I look at this bill, it just seems so punitive,” said Rep. Paul Rosenthal, D-Denver.
Kevin Bommer of the Colorado Municipal League testified against the bill and was the only witness at the hearing. He said moratoriums are only temporary.
“To punish a municipality or a county for a moratorium that is going to be gone anyway doesn’t make a lot of sense,” Bommer said.
Sonnenberg’s bill died 7-6 on a party-line vote in the House Local Government Committee.
It was one of only a few gas and oil bills to be introduced this year. Democrats are limiting their gas and oil agenda to a forthcoming bill to raise fines on the industry for spills.
But so far, no one has introduced any other bills to either boost or undercut the power of local governments over drilling.