Bipartisan coalition introduces bill to protect states’ mineral royalties
February 20, 2015
U.S. Senators Mike Enzi, R-Wyo., Tom Udall, D-N.M., John Barrasso, R-Wyo., Representatives Cynthia Lummis, R-Wyo., Michelle Lujan Grisham, D-N.M., and Ben Ray Luján, D-N.M., introduced legislation today that would allow states to collect their own mineral royalties, protecting money that is rightfully owed to the states. The bill would effectively eliminate a collection fee charged by the federal government, which amounts to around $40 million per year.
"For years, the federal government split the revenue 50-50, but only when it was short on money did it decide to squeeze a few states with this unfair surcharge," Enzi said. "By empowering states to collect their own mineral revenue, they would no longer have to worry about the federal government snatching up mineral royalties that are rightfully theirs."
"The federal government's unnecessary fee on mineral revenues takes money from state budgets — money that many New Mexico communities depend to fund public schools, emergency response and other critical services," Udall said. "New Mexico earned these royalties from our abundant natural resources, and New Mexico communities deserve to keep their share of the revenues without federal interference."
"States are in the best position to make sure that their mineral revenues are properly paid and collected," Barrasso said. "Our bill will ensure Washington delivers on its obligation to mineral producing states while also making the process more efficient, cost effective and accountable."
"We need to stop Washington's taxing of state coffers to cover federal spending," Rep. Lummis said. "Citing administrative costs, the federal government has been taking an additional 2% annually that is owed to mineral states like Wyoming and New Mexico. To address this, I am pleased to re-introduce this legislation that I wrote last Congress to remove the federal middle man and allow states the option to collect their 50% share of royalties under the Mineral Leasing Act. I look forward to working with Sens. Enzi and Barrasso and my other colleagues in Congress to protect states' money by keeping it from needlessly leaving the states' borders."
"This bi-partisan bill will ensure New Mexico can keep its fair share of revenue and help the state invest in important priorities, including schools, infrastructure development, small businesses, and other public welfare and economic development programs," Rep. Lujan Grisham said.
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"New Mexico's federal lands are a significant resource that provides important royalties that should be used to strengthen New Mexico," Rep. Luján said. "This legislation will ensure that more of the money that is rightfully owed to states will be returned in order to support vital programs and investments that make a difference in our communities. Sending the money directly to the states and not to the federal government first will streamline the process, reduce administrative costs, and allow states to receive more of these critical funds."
The Mineral Leasing Act provides that the continental states be paid 50 percent of the revenues resulting from the leasing of mineral resources on federal public domain lands within their borders. These royalties are used by states to fund such necessary items as public school systems, community colleges, emergency response activities and basic infrastructure projects.
Currently, the federal government charges states a 2 percent fee to cover collection and disbursement costs. This legislation would ensure that states can continue to receive their 50 percent share of mineral royalties by giving them the option to administer their own programs.