$6 Million Withheld by Obama Administration Returned to Colorado

August 29, 2013
TIPTON:  "Federal whim shouldn’t determine if states will receive the royalty payments to which they are entitled"

TIPTON: “Federal whim shouldn’t determine if states will receive the royalty payments to which they are entitled”

WASHINGTON – The Obama administration has decided to return to Colorado its share of mineral royalties totaling nearly $6 million that was confiscated this year as part of the federal government’s sequestration efforts to curb spending.

The announcement was made in a letter this week from the Interior Department to Colorado Treasurer Walker Stapleton, with the stipulation that the money won’t be received until fiscal year 2014.

Some Colorado Republican lawmakers welcomed the decision, but said they are concerned the federal government would attempt to seize the payments through future financial ploys so they are backing legislation to make sure it doesn’t happen again.

Reps. Scott Tipton and Cory Gardner say the misguided decision to withhold payments to all states under the Mineral Leasing Act (MLA), which is expected to total $110 million this year, was overturned after they and other western lawmakers objected.

“MLA revenue is the economic lifeblood of many states and local communities across rural America,” said Tipton and Gardner along with 22 lawmakers in a letter to the White House Office of Management and Budget. Also signing the letter were Republican Rep. Mike Coffman, and Democratic Sens. Mark Udall and Michael Bennet.

“States such as Colorado, New Mexico, North Dakota, Utah and Wyoming use MLA revenue to address, along with other things, impacts from energy and mineral production,” the lawmakers said. “If MLA revenue sequestration in FY 2013 is not returned to the states, local communities across the west will experience severe hardships.”

The western lawmakers want to amend the State Mineral Revenue Protection Act to streamline how mineral royalty payments are distributed in the future.

Presently, the federal government collects the payments direclty from industry then returns 50 percent back to the states where development occurred.

The proposed legislation would give states the option to collect their share of the mineral royalties directly from the producer and also eliminate administration costs charged by federal officials.

“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, who represents the Western Slope.

“Federal whim shouldn’t determine if states will receive the royalty payments to which they are entitled,” Tipton said.

Added Gardner: “These revenues, which fund vital services, should not be held up by dysfunction at the federal level.”

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