Mineral Royalty Payment Bill Streamlines Process and Protects States' Share

Press Release

Yesterday, Congressional Western Caucus Co-Chair Cynthia Lummis (R-WY), along with Chairman Steve Pearce (R-NM), Congressman Rob Bishop (R-UT), Congressman Jason Chaffetz (R-UT), Congressman Chris Stewart (R-UT), Congressman Kevin Cramer (R-ND), Congressman Scott Tipton (R-CO), and Congressman Ben Ray Luján (D-NM), introduced the State Mineral Revenue Protection Act, a bill that streamlines how mineral royalty payments are distributed to the state and federal government.

Under the Mineral Leasing Act (MLA), the federal government is required to give 50% of royalties collected to the state. The State Mineral Revenue Protection Act amends the MLA to grant states the option to collect their share of the mineral royalties directly from the producer, and grants those states full property interest in their share. Such changes would bar the federal government from inappropriately withholding state's funds under the pretext of administrative costs or the more recent example of sequestration. Companion legislation was introduced in the Senate by U.S. Senator Mike Enzi.

Cosponsors of the bill released the following statements on the State Mineral Revenue Protection Act:

"The fact that the federal government has chosen to withhold these royalty payments that rightfully belong to the states is an outrage. This legislation will streamline the royalty payment distribution, ensuring that states will receive their share of the payments without interference. There is no reason for the states to be reliant on the federal government to disburse mineral royalty payments when history shows that the federal government cannot be relied upon to make these payments in a timely fashion. This money- which amounts to about $25 million for my home state of New Mexico- is too valuable to our schools and communities to let out of the state."

- U.S. Representative Steve Pearce (NM-02), Congressional Western Caucus Co-Chairman

"This spring my home state of Wyoming saw $53 million in royalty funds disappear right before their eyes. This is just another example of what has become a bad habit in Washington: raiding Wyoming's coffers to cover federal spending. It is becoming more and more apparent that when the federal government is a middle man for funds owed to the state, the middle man cannot be trusted to make the payments. The solution? Remove the middle man. States are fully capable of collecting these royalty payments, and states are much better off if their share of the revenue never leaves the states' borders."

- U.S. Representative Cynthia Lummis (WY- At Large), Congressional Western Caucus Co-Chairman

"Many communities in my district use mineral royalties to educate our kids, repair roads and infrastructure, as well as maintain emergency services. When the Administration decided this year to target these royalties with sequester cuts in order to inflict maximum pain, it was with no small consequence to the people of Colorado and many Western states. This 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."

- U.S. Representative Scott Tipton (CO-03)

"The federal government owns more than 60% of Utah's land and unfortunately controls most of Utah's oil and gas production and royalties. This bill would prevent the federal government from confiscating and interfering with royalty revenues that are due to the states."

- U.S. Representative Jason Chaffetz (CO-03)

"Federal lands provide significant royalties that fund education and infrastructure in many western states, including New Mexico. The state's share of these funds is just that -- the state's share -- and should not be withheld by the federal government due to sequestration. The sequester is a failed experiment -- one that I have been opposed to every step of the way -- that is harming New Mexico and should be repealed in full. But absent a comprehensive solution, Congress should stand up to protect funds that belong to the states and play a vital role in our communities."

- U.S. Representative Ben Ray Luján (NM-03)