Suthers says sequester unlawful

Federal officials have offered no authority for the sequestration of millions of dollars from federal mineral leases that were intended to be used by states and localities to deal with energy development, Colorado Attorney General John Suthers said.

“Given the lack of articulated authority to sequester funds, I believe the sequester is unlawful, especially as it relates to royalty payments due to states under the federal Mineral Leasing Act,” Suthers wrote to the Americans for Prosperity Foundation.

Energy and mining companies pay royalties to the federal government to produce minerals from lands administered mostly by the Bureau of Land Management, but also by the U.S. Forest Service and some other agencies.

Those funds are then split, 51 percent to the federal government, 49 percent to the states and the local governments within them, to help localities deal with the effects of energy and mineral development.

About $110 million is being withheld from the states, $8.4 million of it from Colorado, as the federal government applies the rules of sequestration in the Budget Control Act of 2011 to the mineral lease-sharing program.

Suthers’ comments came on the heels of a letter from the Western Governors’ Association in which the governors of Colorado and Utah wrote to federal officials saying that cutting lease revenues from the federal government isn’t the same as reducing federal expenditures.

“Any comparison between a mineral receipt transfer and an appropriated expenditure is fundamentally flawed,” Govs. John Hickenlooper of Colorado and Gary Herbert of Utah wrote in May.

Hickenlooper has become the chairman of the association.

The federal government has in some cases sought the return of federal mineral lease money already distributed to the states. It also has said it will reduce future distributions.

Federal mineral lease funds have played a role in several western Colorado projects, including the 29 Road overpass in the Grand Valley, the western Parachute interchange on Interstate 70 and the Colorado Mesa University Unconventional Energy Epicenter.

Many western and southern Colorado communities “use mineral and timber royalties to educate kids, repair roads and infrastructure, as well as maintain emergency services,” U.S. Rep. Scott Tipton, R-Colo. said. “When the administration decided to target these royalties with sequester cuts in order to inflict maximum pain, it was with no small consequence to the people of Colorado and many Western states. It’s disappointing the Administration is picking winners and losers, and instead of making cuts to reduce waste, fraud and abuse, is taking away vital funds that rural communities rely on.”

Tipton is a sponsor of the State Mineral Revenue Protection Act, which protects the states’ share of federal mineral royalties.


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