Feds restore minerals payments to states

Resource Type: Growth, Policy

Earlier this year, the Interior Department’s Office of Natural Resources Revenue (ONRR) informed treasurers of 36 states that millions of dollars in monthly mineral lease payments would be withheld due to the sequester.

According to AP, “Federal officials reversed course in a dispute over mineral payments Monday…after Western lawmakers and governors pressed the Obama administration to restore the money.”

More than two dozen states were denied a portion of their payments for 2013 —most of them Western  states like Wyoming and New Mexico, who were at risk of losing $53 and $26 million respectively.

Interior officials previously defended the cuts by saying they had no choice in the matter under federal budget rules now in place. But on Monday, they changed course following a legal review of the underlying Mineral Leasing Act.

Senator Udall (D-N.M.) said the administration's reversal showed it had "seen reason."

"These funds are the result of an existing agreement for mineral development," he said. "The government shouldn't be using them to balance its books."

There is still some question as to what will happen to the states’ mineral payments in the coming years.

Mineral royalty payments are vital to many Western states and their rural communities, providing revenue that funds infrastructure, public education, hospitals and flood protection projects.

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