WASHINGTON – U.S. Senators Tom Udall (D-N.M.) and Mike Enzi (R-Wyo.) introduced legislation this week 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.
The State Mineral Revenue Protection Act is cosponsored by Senators John Barrasso (R-Wyo.), Cory Gardner (R-Colo.), and Orrin Hatch (R-Utah).
“With New Mexico facing a budget crisis, the royalties our state earns from the extraction of natural resources are needed more than ever to help fund public education and other essential services,” Udall said. “I am committed to working on a bipartisan basis to enable New Mexico to access the full share of revenue from mineral extraction that our state is owed and badly needs.”
“Mineral royalties are supposed to be split 50-50, but by charging an unfair collection fee, the federal government is squeezing the states for more dollars to pad its own coffers,” 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 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 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, claiming it is necessary 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.
U.S. Representative Liz Cheney (R-Wyo.) introduced identical legislation in the House.
