Reps. Cory Gardner (R-Colo.) and Scott Tipton (R-Colo.) recently pushed for legislation that would improve the process of distributing royalty payments to the state and federal government.
The State Mineral Revenue Protection Act was introduced in May with Rep. Cynthia Lummis (R-W.Va.) as its sponsor and Gardner, Tipton and seven additional cosponsors in the House. The proposed bill would amend the Mineral Leasing Act to allow states the option to collect their portion of mineral royalties directly from the producer. It would also grant states full property interest in their shares.
The proposed bill is intended to prevent the federal government from withholding state funds due to administrative costs such as a sequestration.
The Obama Administration announced in March that it would deduct $110 million in federal mineral royalties paid to states due to sequestration. Colorado, as a result, lost $5.7 million by July.
Gardner, Tipton and 20 additional Congressmen reacted to the cuts on May 16 with a letter to Sylvia Burwell, the director of the Office of Management and Budget.
“MLA revenue is the economic lifeblood of many states and local communities across rural America,” the Congressmen said. “States, such as Colorado, New Mexico, North Dakota, Utah and Wyoming, use MLA revenue to address, among other others, impacts from energy and mineral production.”
The Department of Interior recently announced it would pay back mineral royalties that it took from states in 2013. According to Tipton and Gardner, the new bill in Congress would ensure the federal government does not hold up payments in the future.
“States like Colorado count on revenue from mineral royalty payments,” Gardner said. “These revenues, which fund vital services, should not be held up by dysfunction at the federal level. I’m proud to join my colleagues from across the West to offer a solution that strengthens states’ mineral rights in the face of federal uncertainty.”