Western lawmakers push to restore cuts to federal mineral royalties; states stand to $110M

CHEYENNE, Wyo. – A bipartisan group of western lawmakers is pushing legislation in Washington to restore cuts of $110 million in federal mineral royalty payments to 35 states.

Senators from New Mexico, North Dakota, Utah and Idaho signed onto legislation introduced Tuesday by Sen. Mike Enzi, a Wyoming Republican. Similar legislation was introduced in the House by Rep. Cynthia Lummis, R-Wyo.

The bills would allow states to collect royalty payments directly from companies that produce minerals from federal lands within their borders while placing the states’ share off-limits to federal budget cuts.

Mineral-producing states and the federal government traditionally have split the proceeds 50-50, but the cuts this year under the federal budget reduction law would take more than 5 per cent from the states’ share. Wyoming is the nation’s largest coal-producing state and stands to lose $53 million in this year’s cuts while New Mexico, the next-highest state, would lose $26 million.

Federal officials have said they have no choice about the cuts, which they regard the same as any other government appropriations. Western lawmakers, however, say their states have a right to the money and that it ought to be off-limits to budget cuts.

In addition to prohibiting the federal government from withholding mineral royalties, the legislation introduced Tuesday also would eliminate a 2 per cent fee the federal government currently charges states for collecting the revenue. The legislation would allow the federal government to keep its 50 per cent share.

“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,” Enzi stated in a release. “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.”

Co-sponsors are Sens. 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.

Udall last week questioned new Interior Secretary Sally Jewell about the cuts at a congressional hearing. Jewell responded to Udall that the cuts were the result of the federal law that required across-the-board budget cuts, not any particular decision by her agency.

“It affects all revenues and payments, so I’m unclear what kind of jurisdiction we would have over this,” Jewell said.

On Tuesday, Udall stated, “We have an existing agreement for mineral development within our states’ borders that should be honoured and off limits to federal meddling. The royalties New Mexico earns from the extraction of our abundant natural resources is used to fund public education and other critical services.”

This year’s cuts to the mineral program follow congressional action last year that stripped Wyoming of more than $700 million that had been promised for abandoned mine land reclamation work in coming years. The state’s congressional delegation has said it hopes to restore the funds.

“This spring my home state of Wyoming saw $53 million in royalty funds disappear right before their eyes,” Lummis said in a statement. “This is just another example of what has become a bad habit in Washington: raiding Wyoming’s coffers to cover federal spending.”

Also Tuesday, the Western Governors’ Association wrote to Agriculture Secretary Tom Vilsack expressing concern and requesting a legal justification of cuts both to the mineral royalty program as well as to another federal program that supports rural schools.

Forest Service Chief Thomas Tidwell recently wrote demand letters to 41 states asking for the return of $17.9 million in timber payments used to pay for schools, roads, and search and rescue operations in rural counties and conservation projects.

At least two Republican governors, Matt Mead of Wyoming and Sean Parnell of Alaska, have refused the request to refund hundreds of thousands of dollars of federal money.