The proposed legislation establishes the Future of Severance Taxes and Water Funding Task Force to address the challenge of declining severance tax revenues and ensure continued funding for Colorado’s water needs.
Key Provisions:
Creation of the Task Force:
The task force is formed under the Water Resources and Agriculture Review Committee to study severance taxes and water funding.
Third-Party Study:
The Department of Natural Resources is required to contract with a third party to:
Conduct a comprehensive study on severance taxes and water funding.
Develop recommendations for sustainable water funding amidst decreasing severance tax revenue.
Reporting Timeline:
Draft Report Deadline: January 15, 2026
The third party must submit a draft report to the Department of Natural Resources and the task force for review and feedback.
Final Report Deadline: July 15, 2026
The final report, incorporating the task force’s input, must be submitted to the Water Resources and Agriculture Review Committee.
Legislative Presentation: The task force will present the final report during the 2026 legislative interim session.
This initiative aims to secure long-term water funding solutions for Colorado by exploring alternative revenue streams and enhancing fiscal sustainability in the face of declining severance tax revenues.
Summary
Water Resources and Agriculture Review Committee. The bill
creates the future of severance taxes and water funding task force (task force).
The department of natural resources is required to contract with a
third party to conduct a study on severance taxes and water funding and develop recommendations for ways to continue funding water needs in the face of decreasing severance tax revenue (study). The purpose of the task force is to work with the third party to conduct the study and develop recommendations.
No later than January 15, 2026, the third party must submit a draft
report, detailing the results of the study and any recommendations, to the department of natural resources and the task force for review. The task force is required to provide input on the draft report. No later than July 15, 2026, the third party must submit a final report, which incorporates the input of the task force, to the water resources and agriculture review committee (committee). The task force must present the final report to the committee during the 2026 legislative interim.
