Town looking into new law that could impact revenues from oil and gas industry
July 5, 2014
Concerned about a new law that changes how oil and gas property taxes are assessed, the Windsor Town Board is exploring what impact the law will have on town revenue and whether the town should spearhead an effort to fight it.
H.B. 1371 changes how property taxes are assessed for oil and gas facilities. Instead of taxes being levied for any taxing district the drilling operation passes underneath, the taxes are assessed at the location of the wellhead.
The law is scheduled to go into effect in August.
Mayor John Vazquez said June 23 the town could possibly lose "millions of dollars" in property tax revenue over the next 10 years because of the change.
Vazquez suggested the town work with the city of Greeley in opposing the new law, and possibly be prepared to file an injunction. Before the bill became law, Windsor and Greeley officials wrote to Hickenlooper and urged him for a veto, stating it isn't fair to take away the revenue from a municipality that still has to deal with negative impacts of oil and gas activity, like added wear and tear on roads.
He also asked John Frey, town attorney filling in for Ian McCargar, to look into whether the law is compliant with the Taxpayer Bill of Rights, commonly known as TABOR. He asked Frey to specifically look at the home rule rights of municipalities, pointing to a section of the law that states that home rule municipalities have the right to assess and levy taxes of real property, including mineral deposits and leases, that fall within their boundaries.
Vazquez asked the rest of the board if they were prepared to protect the town's interests and fight the new law.
"I'm asking the board, 'What are you prepared to do to protect your interests, and how far are you willing to go?'" Vazquez said.
Board members Ivan Adams and Kristie Melendez said they would like to move ahead and get some questions answered about what the new law will mean for the town's revenue streams. Board member Myles Baker said he'd like to cautiously proceed, but asked if the town could look at lobbying for a repeal of the law, rather than filing litigation to keep it from going into effect.
Board member Robert Bishop-Cotner said he'd like to wait and see how it all settles out.
Board member Jeremy Rose said he didn't have an answer one way or the other, but said he found it interesting that the town accepted oil and gas development in the first place because of a fear of litigation, and now the town was looking at using litigation to keep the development's status quo in place.
Frey told the board that it wouldn't be a simple process to advise the board on whether an injunction would be appropriate, and said with no time limit on when an injunction could be filed, he said it's important the town do some research on the topic before investing the time, money and effort to pursue any litigation.