Michael Bennet, a U.S. Senator from Colorado, has recently introduced a bill designed to create investment in communities facing economic struggles from declining fossil fuel extraction and production.
“I have heard time and again from Coloradans about the effects coal mine and power plant closures have on our rural communities and their economies,” Bennet said at the introduction of the “National Energy Community Transition Act. He began to speak with his staff and other experts about possible strategies for filling the gap in an important local tax base, amounting to as much as 60% of local revenue according to Bennet’s staff.
Northwestern Colorado’s rural Moffatt and Routt Counties were hit hard with this reality in recent years, as coal companies announced the pending closure of several coal mines and coal-fired power plants.
The bill will establish an endowment fund and federally-chartered corporation to invest in communities facing economic struggles from declining fossil fuel extraction and production.
“My legislation was carefully crafted with feedback from local leaders in Northwest Colorado to create an enduring way to support economic revitalization in our communities,” Bennet said.
“This bill is a true reflection of how people across Colorado and the West come together to develop sustainable solutions to the biggest challenges facing our communities. I will continue to work with Coloradans to make sure our local economies can thrive today and into the future.”
Numerous local public officials in the rural region are supportive of Bennet’s proposal.
“Tri-County leaders have had an ongoing conversation with Senator Bennet about how we can achieve an economic future that honors traditional industry and land uses that have built the communities and landscapes we all enjoy today while embracing an economic future that supports our core services and offers new opportunities into the future,” said Moffat County Commissioner Melody Villard.
“We believe the endowment concept has the opportunity to do just that. We continue to advocate for legislative proposals that benefit our region. As impacted local governments, we appreciate Senator Bennet modifying draft legislation after considering local government input.”
The bill would provide a down payment establishing a new permanent endowment and outline methods for growing the fund over time. The endowment’s principal balance would create a perpetual funding source for communities in economic transition from fossil fuel dependence. The funds would be invested and managed with the goal of generating a return of five percent annually, according to Bennet’s staff.
Two accounts, a permanent account to be filled with the initial deposit and income generated over time and a benefits account to be filled with a percentage of otherwise-unobligated federal leasing revenue from public lands and resources, whether that comes from fossil fuels or renewable energy production, would be created within the Endowment.
The bill would provide annual Formula payments directly to the county, municipal or Tribal governments to sustain budgets and core public services such as public safety, hospitals, and school funding. Grants would also be made to eligible local organizations for planning and economic diversification, local capacity building, implementation of transition plans, and projects for workforce retraining and community development.
A similar approach to supporting local government funding for services has been successful in several states that generate income from state trust lands in the West.
“New Mexico’s Land Grant Permanent Fund is a perfect example of how governments can manage non-renewable resources for the benefit of its citizens,” said Mark Haggerty, Senior Fellow with the Center for American Progress, in an interview with the Daily Yonder. “It’s a huge story that deserves more attention.”
Haggerty said that New Mexico’s Permanent Fund generated from oil and gas development on state trust lands in the Permian Basin is now worth $25 billion. “This is a bipartisan fiscally conservative way for a state to manage its public lands and public resources. The state [of New Mexico] owns one out of every 11 acres. By putting all of their fossil fuel royalties into a permanent fund (rather than spending the income on the annual operating budget), New Mexico will actually earn more from their capital fund each year than they ever did from extraction,” Haggerty said.
The State Investment Council invests part of the capital in the permanent fund in new clean energy generation, such as solar power production, that creates jobs and economic development in rural communities while helping to transition away from fossil fuels, Haggerty said.
The proposed National Community Energy Transition Act has been referred to the Judiciary Committee for consideration. The legislation and its benefits would be available to local and county governments nationwide impacted by reduced fossil fuel mining, production, and energy generation.