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Congressman Scott Tipton

Representing the 3rd District of Colorado

Tipton, Gardner: State Mineral Royalties Payments Should be Protected from Federal Interference

August 27, 2013
Press Release

PUEBLO, CO– While relieved that the Department of Interior (DOI) announced it would pay back mineral royalties taken from states under sequestration in 2013, Reps. Scott Tipton (R-CO) and Cory Gardner (R-CO) stressed today that a legislative fix is needed to ensure that state mineral royalty payments are not held up by the federal government in the future.

In March, the Administration announced there would be $110 million in deductions to federal mineral royalties paid to states because of sequestration. By the end of July, Colorado had already lost $5.7 million due to the misguided decision. In response to a letter sent to the DOI by Tipton, Gardner and other  in May, this week the DOI announced that the agency would “work expeditiously to disburse the sequestered FY 2013 Payments in FY 2014.”

Tipton and Gardner are pushing for a permanent solution and joined their Western Caucus colleagues in introducing legislation this year that would amend the State Mineral Revenue Protection Act. H.R. 1972 would streamline 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.

“Communities in my district use mineral royalties to help fund education, infrastructure, and emergency services. These funds are vital to the wellbeing of these areas, and states should be able to count on the fact that they will have access to them with reasonable certainty. 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.  “Federal whim shouldn’t determine if states will receive the royalty payments to which they are entitled.  Our 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.”

“States like Colorado count on revenue from mineral royalty payments,” Gardner said. “These revenues, which fund vital services, should not be held up by dysfunction at the federal level. I’m proud to join my colleagues from across the West to offer a solution that strengthens states’ mineral rights in the face of federal uncertainty.”