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Congressman Lummis introduces legislation guarding state’s share of mineral royalties from federal grabs.

Tuesday U.S. Representative Cynthia Lummis (R-Wyo) introduced the State Mineral Revenue Protection Act, legislation that protects Wyoming from Washington’s efforts to use the state’s mineral revenue to pay its debts.  Under the Mineral Leasing Act (MLA) the federal government is required to pay states 50% of royalties back to the states.  The State Mineral Revenue Protection Act amends the MLA to grant states the option to collect their share of the mineral royalties, and grant 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.

Participation in the program is entirely voluntary; states can choose to continue with the current royalty collection and distribution laws.  Operators in states that choose to collect the royalty on their own would pay the state share directly to the state, and also pay the federal government its 50% share.  The royalty rate itself is not increased under the bill.

“This spring my home state of Wyoming saw $53 million in royalty funds disappear right before their eyes,” Rep. Lummis said. “This is just another example of what has become a bad habit in Washington: raiding Wyoming’s coffers to cover federal spending. It is becoming more and more apparent that when the federal government is a middle man for funds owed to the state, the middle man cannot be trusted to make the payments.  The solution? Remove the middle man. States are fully capable of collecting these royalty payments, and states are much better off if their share of the revenue never leaves the states’ borders.”

U.S. Senator Mike Enzi introduced companion legislation in the Senate.

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