Welcome funding news
The convoluted conditions federal officials have placed recently on mineral leasing funds in Colorado have made it difficult — even for those familiar with the program — to determine how counties can obtain all the money due to them.
But, based on a letter sent late last month by the U.S. Department of Interior, there is reason to hope Mesa County is meeting the federal requirements and will be in line for twice the amount of funds it has received the past couple years. The county might also retroactively receive some of the money it didn’t get in 2011 and 2012.
If the additional funds are forthcoming, it bodes well for expanding an “unconventional energy epicenter” at Colorado Mesa University, a research facility that could become important to the economy and the energy future of this region.
The questions over funding involve two separate sources of federal money that go to counties with federal lands within their boundaries and energy or mineral development on those lands.
One program is called PILT, or payment in lieu of taxes. It was created by Congress in the 1970s to provide counties that have significant amounts of federal lands an alternate source of revenue, since the federal government does not pay property taxes on its land.
The second program, mineral leasing funds, ensures that a portion of federal royalties paid by oil, gas, coal and other industries go to the counties in which the minerals were extracted.
Neither program is a handout. They recognize that counties provide services such as law enforcement on federal lands and deal with the impacts of mineral development on those lands.
In the past, funding from the two programs wasn’t linked. But several years ago, the Interior Department said that PILT money for counties would be reduced by whatever amount a county received in mineral leasing funds. The only way for a county to receive funds from both programs was if there were two separate entities to receive them.
The Colorado Legislature responded by passing a bill that authorized counties to create federal mineral lease districts to receive the lease money.
Mesa County established just such a district — with an appointed board that includes one county commissioner. The district board decided its first installment of mineral lease funds should go to the energy epicenter at CMU.
However, the Interior Department initially rejected the districts, saying the boards weren’t sufficiently independent from the county governments. As a result, it cut Mesa County’s PILT payment by roughly $1.6 million a year.
But the December letter from the Interior Department indicates that the mineral lease districts authorized by the state Legislature might pass the independence test, after all.
Although the Dec. 21 letter offers no guarantee that more PILT money will be forthcoming for Mesa County, it is the first indication that could occur. We hope the money due Mesa County will soon be available and the energy facility at CMU can begin moving forward.