Sequester to reduce mineral revenue from feds in 2014

State and local governments can expect their 2013 shares of federal mineral lease revenues restored in 2014, but their 2014 shares will be reduced under the terms of the federal sequester, officials said Tuesday.

Only an act of Congress can change the laws under which the Office of Natural Resource Revenues handles the distribution of money paid to the federal government to lease federal property for mineral development, office spokesman Patrick Etchart said Tuesday.

The Interior Department, which includes the Office of Natural Resource Revenues, on Monday announced that it would provide more than $5.7 million to Colorado and local governments within the state affected by nearby federal-mineral development.

U.S. Rep. Scott Tipton, R-Colo., said Tuesday that legislation already introduced in the House would address the issue. H.R. 1972, the State Mineral Revenue Protection Act, would grant states the option to collect their 49 percent share of the mineral royalties directly from the producer.

The change “would bar the federal government from inappropriately withholding state’s funds under the pretext of administrative costs or the more recent example of sequestration,” Tipton and U.S. Rep. Cory Gardner, co-sponsors of the bill, said in a statement.

The Interior Department this year reduced the states’ shares of mineral lease revenues by 5.1 percent, citing the reduction of federal expenditures by that amount under sequestration.

That meant that $5.7 million was withheld from Colorado’s share and $6.1 million from Utah’s. The Obama administration also withheld $40 million from Wyoming and nearly $21 million from New Mexico.

“The real problem is the Department of Interior’s belief that these funds are subject to sequester in the first place!” David Ludlam, president of the Mesa County Federal Mineral Lease District, wrote in an email. “This strange belief has resulted in Mesa County’s FML board adopting the position last week that we will go to any means necessary to support Colorado’s Congressional delegation and attorney general in securing our community’s royalty payments. Our parks, roads and sidewalks depend on it.”

Spokesmen for U.S. Sens. Michael Bennet and Mark Udall, both Colorado Democrats, said they were committed to finding a solution restoring revenues to local communities.

The Office of Natural Resource Revenues is bound not only by sequestration, but by other federal laws, such as the Balanced Budget and Emergency Deficit Control Act, Etchart said.

Etchart noted the section holding that “budgetary resources sequestered in revolving, trust and special fund accounts and offsetting collections sequestered in appropriation accounts shall not be available for obligation during the fiscal year in which the sequestration occurs, but shall be available in subsequent years to the extent otherwise provided in law.”

The office is “obliged to fulfill its mission and legal obligations based on existing and applicable law,” Etchart said.


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