Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

FACT SHEET MEMORANDUM

SB 12-031 Federal Mineral Leasing Districts Sen. White Staff Name: Eric Wilson What the Bill Does: SB 12-031 modifies the statute regarding Federal Mining Lease (FML) districts created under the provisions of HB 11-1218, essentially making the district independent from the county that creates it. Mineral Leasing District Creation: This bill modifies the formation of FML districts, which currently happens by a majority vote of the board of county commissioners. The board also establishes district boundaries and sets the number of directors on the FML district board. Once created via resolution, a district is considered a public instrumentality performing essential public functions. This bill establishes districts as independent, therefore the FML districts are not subject to administrative direction by any department, commission, board, or agency of the county or state. Additionally, the bill enumerates the several powers of the districts and subjects them to the Local Government Budget Law of Colorado and the Colorado Local Government Audit Law. The board of county commissioners appoints a board of directors for the district. This bill leaves it to the discretion of the county commissioners to appoint at least one county commissioner to the board of directors SB 12-031 limits the power of the board of county commissioners to remove any member of the board of directors and provides notice and opportunity to be heard in a public hearing. The bill also amends the term periods and staggers the terms of directors. Mineral Leasing Districts Dissolved: SB 12-031 enables the FML district board the discretionary power to dissolve a FML district. The board must give 15 days notice in the local newspaper and conduct a public hearing on the matter. After a hearing is conducted and objections heard, if the majority of the FML district board determines it to be in the best interest to dissolve the district, the district board shall provide a resolution. Upon filing of said resolution, the dissolution shall be complete unless the district at issue has not distributed all FML funding and has satisfied outstanding debts and obligations. Should an FML district dissolve, the bill creates an additional filing requirement, at a minimal administrative cost, to adjust distributions and county accounting. Mineral Leasing District Funding: If the resolution passes, the Executive Director of the Department of Local Affairs must allocate all future funding directly to the district. The board of directors is charged with distributing the funding the district receives from the Department of Local Affairs to areas that are socially or economically impacted DRAFT 1/29/2012 3:33 PM For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.

by the mineral leasing activities. This bill broadens FML district funding allocation potential to include those communities that are either directly or indirectly impacted by the local mineral leasing activities. This bill further allows the board of directors to reserve all or a portion of the funding for use in subsequent years. Colorado Context: Payments in Lieu of Taxes (PILT) payments are federal payments from the Department of the Interior (DOI) to local governments that help offset losses to a local government property tax base from the existence of nontaxable federal lands within the county borders.1 PILT payments go to the essential services of the county (i.e. police, firefighters, etc.)2. Historically, the FML revenues have been deducted from county PILT payments received by the county. By making these FML districts independent, counties are able to avoid this offset and receive more federal funds.

Fiscal Impact: The Colorado Legislative Council estimates that this bill will have a positive fiscal impact, which has yet to be determined. Districts are able to avoid offsets in county accounting and are afforded the potential to retain FML revenue for cooperative, larger scale projects.3

1 2

On average, DOI distributes $157 M annually. http://www.doi.gov/pilt/summary.html. CO received a PILT payment of $27,022,334 for FY 2011. http://www.nbc.gov/pilt/states.cfm#search. 3 See Fiscal Note: http://www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont3/37EBC4BD9B890E6587257981007DD3C5?Open&fil e=SB031_00.pdf

DRAFT 1/29/2012 3:33 PM

For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.