Legislators fight back on money ‘theft’

Source: Gillette News Record

Lawmakers from energy producing states are pressuring the federal government to rescind its decision to withhold a portion of the states’ mineral revenue payments and return the money to them.

On Wednesday, a coalition of state lawmakers sent a letter to the Committee on Energy and Resource calling the Interior Department’s decision to withhold $110 million in federal mineral revenue payments a “purely political decision” that is “akin to theft.”

Two weeks ago, the Interior Department informed 35 energy producing states that it would take that money as part of the federal sequester mandate. Wyoming would lose $53 million — more than any other state.

The money would be taken each month starting in March during the remainder of the fiscal year. Wyoming’s check for revenues from energy development for March arrived at the end of the month about $10 million short.

New Mexico is the only state that comes close in comparison to Wyoming. It is estimated to lose $26 million in revenue payments over the next six months.

In their letter to the energy committee, the Energy Producing States Coalition members write that Interior’s Office of Natural Resources Revenue has no right to withhold the monthly payments and ask Interior “to rescind their decision and fully provide states with their entitled mineral royalties.”

The coalition describes itself as a bipartisan collection of like-minded legislators from 10 states stretching from Alaska to Mississippi that focuses on energy and transmission development issues.

“This purely political decision by the Obama administration is akin to theft and clearly disregards the intent of the Budget Control Act (BCA),” said the letter signed by three state lawmakers, including Rep. Thomas Lubnau, R-Gillette.

He said the letter is sent in an effort to create bipartisan political pressure to have the administration change the policy as they encourage state attorneys general to pursue legal action.

Wyoming’s Attorney General’s Office determined last week that the state has no legal basis to challenge the federal action to cut mineral payments to the states.

Congressional Research Service says that the reductions in payments from mineral revenues qualify for the purposes of the Budget Control Act.

“Distribution of revenue received from lease sales, bonuses, and royalties under the Mineral Leasing Act is directed in 30 USC 191. Because the funding for these payments is not provided in an appropriations act, such payments would appear to be correctly classified as non-defense, direct spending for purposes of the BCA,” according to Adam Vann, legislative attorney with American Law Division, Congressional Research Service.

State lawmakers say “this rationale is an incredibly narrow interpretation of the BCA and obviously ignores the intent of the law.”

“Royalty payments are based upon actual development of mineral resources on public lands within the states. The ‘distribution of revenue’ is the legally required portion due to the states where the development occurs. The states have as much of a right to these revenues as the federal government,” they said in their letter.

The energy producing states use the mineral revenue payments to help fund public school systems and community colleges, as well as highway transportation and flood protection projects.

In Wyoming, the loss of these payments will be absorbed mainly in the budget reserve account.

By taking the money that belongs to the states, the Interior’s action is meant to “maximize the negative impact on the American public and thereby placing additional financial burdens on States to cover traditional federal spending,” the coalition said in the letter.

“The federal government should get its own house in order and perform a thorough audit of its spending to eliminate duplicative programs across budget lines before it starts stealing from the states,” the lawmakers wrote.

They encourage their State Attorneys General to seek legal remedies.

They also encourage their membership to educate state and congressional leaders, counties and school districts and others “negatively affected by this sequestration decision.”