Luján Cosponsors Bill to Protect New Mexico Royalty Payments from Sequester Cuts

Rep. Ben Ray Luján

Washington, D.C. – U.S. Rep. Ben Ray Luján of New Mexico’s Third District joined with a number of Representatives from Western states to introduce legislation that protects state mineral royalty payments from cuts due to the sequester.

The States Mineral Protection Act allows states the option of directly collecting their share of federal mineral royalties under the Mineral Leasing Act. This would prohibit the federal government from sequestering mineral royalties owed to the states and eliminate a 2 percent fee that the federal government charges for collection of the royalties.

“New Mexico’s federal lands provide significant royalties that fund education and infrastructure in our state,” Luján said. “The state’s share of these funds is just that – the state’s share – and should not be withheld by the federal government due to sequestration. The sequester is a failed experiment – one that I have been opposed to every step of the way – that is harming New Mexico and should be repealed in full. But absent a comprehensive solution, Congress should stand up to protect funds that belong to the states and play a vital role in our communities.”

The Minerals Leasing Act provides that all states be paid 50 percent of the revenues resulting from the leasing of mineral resources on federal public domain lands within their borders. As a result of sequestration, the Department of Interior has notified state governments that $110 million in mineral royalties, including $25 million for New Mexico, will not be paid over the next six months. The legislation ensures that the states will continue to receive their share of mineral royalties by allowing states the option to collect their share directly.

The payee of the royalties would write two checks, one to the federal government and one to the state that the land is located in, thereby preventing the federal government from withholding payment. The bill also eliminates New Receipts Sharing, where the federal government withholds 2 percent of mineral revenue owed to the state in order to cover the cost of administering the collection and disbursement of the state’s share.

The House bill is a companion version of legislation that was recently introduced in the Senate by Sen. Tom Udall of New Mexico.

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