DENVER-
The House Local Government Committee approved a measure Tuesday that would tighten reporting requirements on oil and gas production after witnesses said there is no way to determine if companies are correctly reporting production to counties and royalty owners.
The bill (House Bill 1142) would give the state Department of Revenue access to confidential information about real property taxes and business personal property taxes and clarify that valuation would be a public record, allowing royalty owners to determine if they are paying the correct taxes.
The bill now goes to the full House for debate.
The bill is part of a package introduced by lawmakers after a state audit criticized the lack of inspections of oil and gas well monitors.
A separate measure (House Bill 1180) would require the Colorado Oil and Gas Conservation Commission to ensure the accuracy of oil and gas production reporting. That bill has passed the House and awaits action in the Senate.
Auditors said nearly 30 percent of oil and gas producers and 42 percent of royalty interest owners audited by the state did not file severance tax returns between 2002 and 2004.
Auditors said the state had to rely on producers to tell them how much oil and gas they produce because it doesn’t calibrate or witness the calibration of oil and gas production equipment.
Auditors said one company ended up paying $100,000 in back taxes after the state began checking its records, auditors said. Based on records examined by auditors, eight of 27 producers and 11 of 26 royalty interest owners failed to file severance tax returns.
