Lawmakers Want to Cut Out Administration as Middle Man for Mineral Royalties

Colorado Republicans want legislation to protect Western states’ mineral royalties from the sticky paws of the federal government.

Under pressure from lawmakers, the Interior Department announced it would return $110 million in mineral royalty payments owed to states under the Mineral Leasing Act — during the next fiscal year.

The administration announced in March that it would withhold the money due to states because of sequestration.

States have been told that as long as sequestration continues they’ll get their mineral refunds one fiscal cycle late.

Reps. Cory Gardner (R-Colo.) and Scott Tipton (R-Colo.), noting that the unilateral decision by the administration had cost their state $5.7 million by the end of July.

“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.”

That bill from the Western Caucus would amend the State Mineral Revenue Protection Act to streamline how mineral royalty payments are distributed — giving states the option to cut out the federal middleman and go directly to the producer.

Under the Mineral Leasing Act, states are entitled to half of the production royalties collected by the federal government.

“Communities in my district use mineral royalties to help fund education, infrastructure, and emergency services. These funds are vital to the wellbeing of these areas, and states should be able to count on the fact that they will have access to them with reasonable certainty. When the Administration announced this year that it would take these funds, it was of no small consequence to the people of my district,” said Tipton.

“Federal whim shouldn’t determine if states will receive the royalty payments to which they are entitled,” he added. “Our common sense legislation will prevent this from ever happening again by empowering states with the ability to gain legal interest of the full amount they are owed.”