Every year, billions of dollars in revenue are generated from energy production on federal lands. Since states bear most of the costs associated with mineral development, they are guaranteed a share of the revenue under federal law. But the federal government isn't upholding its end of the bargain and is trying to keep state money.
A bipartisan group of Senators today introduced a bill that would allow states the option to collect their own share of federal mineral revenue and protect money that is rightfully owed under the Mineral Leasing Act (MLA). The bill would prohibit the federal government from withholding mineral royalties and would eliminate the two percent fee the federal government charges for collecting the revenue. The federal government would still keep its 50 percent share of mineral revenue under the legislation.
"Wyoming is fully capable of collecting its share of mineral revenues and shouldn't have to wait for the federal government to write us a check," said Senator Mike Enzi. "The money owed to the state is written into law and is not negotiable. It sets a dangerous precedent when Washington thinks it's ok to take state money instead of cutting its own spending. The government needs to uphold its end of the deal."
"We have an existing agreement for mineral development within our states' borders that should be honored and off limits to federal meddling," said Senator Tom Udall. "The royalties New Mexico earns from the extraction of our abundant natural resources is used to fund public education and other critical services."
"Wyoming and other states deal with this issue daily and have the resources and manpower needed to make sure that mineral revenues are properly paid and collected," said Senator John Barrasso. "Our bill will make the process more efficient, cost effective, and accountable. We must make sure Washington delivers on its obligations to mineral producing states."
"At a time of budget tightening across the country and in Washington, states are increasingly left to take on additional financial burdens to take the place of federal funding that is no longer available," said Senator Heidi Heitkamp. "Yet, in the face of increasing reliance on states to bear the burden, the Department of the Interior has decided to take it upon itself to not distribute millions of dollars of royalty revenues due to the state of North Dakota. Interior has no right to refuse to pay North Dakota its statutorily determined portion of mineral royalty revenue collected from oil and gas development, extraction and production in our state. This money should be put towards infrastructure maintenance and upgrades and funding for critical services like schools, law enforcement, and health services in Indian Country and other impacted areas."
"This legislation is about fairness," said Senator John Hoeven. "These royalties are revenues generated by developing resources and spurring economic activity in our respective states. By successfully developing these resources, North Dakota has become a powerhouse for the nation, contributing to our country's economy, energy security and job growth. At the same time, we build and maintain the infrastructure that successful communities and economies need to thrive. North Dakota and other productive states are clearly entitled to a fair share of the royalties they produce in exchange for what we contribute to our nation."
"Utah's rightfully owed almost $9 million in royalties through the Mineral Leasing Act over the next six months, which is used for public schools, infrastructure, and other necessary improvements," said Senator Orrin Hatch. "This bill would make sure that Utah -- as well as other states that have mineral resources on Federal public domain lands -- receive these royalties that they're owed."
The MLA provides that all States be paid 50 percent of the revenues resulting from the leasing of mineral resources on Federal public domain lands within their borders. Revenue payments are based upon actual development of mineral resources on public lands within the states. These royalties are used by states to fund such necessary items as public school systems, community colleges, emergency response activities and basic infrastructure projects.
The original co-sponsors of this bill are Senators Tom Udall, D-N.M., John Barrasso, R-Wyo., Heidi Heitkamp, D-N.D., John Hoeven, R-N.D., Orrin Hatch, R-Utah, and Jim Risch, R-Idaho.
Identical legislation was also introduced today in the House by Rep. Cynthia Lummis, R-Wyo.