County Pool Allocation – Severance tax and federal mineral lease direct distribution funds are first divided into county “buckets” based on the proportion of county wide factor data compared to the state wide factor data. Once determined, each county pool allocation is then distributed to counties, municipalities and school districts. (See “Subcounty Distribution” below.)
Factor – The quantifiable information used to measure the impact of mineral production and thereby determine the direct distribution of severance tax and federal mineral lease revenue to counties, municipalities and school districts. Statutorily, the factors used in direct distribution include Colorado Employee Residence Reports, mining and well permits, mineral production, population, road miles and federal mineral lease revenue generated by county.
Factor Weight – The percentage of importance assigned to a factor used to determine the impact of energy and mineral production impact, and therefore the direct distributions to counties, municipalities and school districts. Some factor weights are statutorily determined, while others are at the discretion of the Executive Director of the Department of Local Affairs.
Federal Mineral Lease Revenue – The state’s share (approximately 49%) of all bonus, non-bonus and oil shale funds paid to the federal government pursuant to the “Mineral Lands Leasing Act”. A portion of these funds are directly distributed to local governments by the Department of Local Affairs. See “Appendix C - Chart of Federal Mineral Lease Distributions”.
Non-Bonus Federal Mineral Lease Payments – All federal mineral lease collections by the state other than bonus payments and oil shale payments. Non-bonus payments can include leases, rents and royalties. Unlike bonus payments, they can vary in amount based on the amount of mineral production of the payer. The Direct Distribution program is comprised of these non-bonus payments. See “Appendix C - Chart of Federal Mineral Lease Distributions”.
Severance Tax – The tax imposed by the State of Colorado when nonrenewable natural resources are extracted, or severed, from the earth. Statutorily, a portion of the revenue from this tax is made available to local governments through the Direct Distribution program and the Energy and Mineral Impact Assistance Program to offset the impact created by nonrenewable resource development. By statute, the severance of metallic minerals, oil, natural gas, carbon dioxide, coal and oil shale are subject to the severance tax. See “Appendix B - Chart of State Severance Tax”.
Subcounty Distribution – Each county pool allocation is distributed to the county and the municipalities contained therein or school districts based on the proportion of individual unincorporated county/municipality/school district factor data compared to the countywide factor data. Both severance tax and federal mineral lease direct distributions are statutorily determined using county pool allocations and subcounty distributions.