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Feds To Return Mineral Payment Cuts to States

Oil Rig
Andrew Burton, Getty Images

BILLINGS, Mont. (AP) - Federal officials reversed course in a dispute over mineral payments Monday as they agreed to pay states an estimated $110 million that was being withheld under 2013 budget cuts.

The decision by the Interior Department comes after Western lawmakers and governors pressed the Obama administration to restore the money, derived primarily from payments by companies for oil and gas leasing and production royalties. Wyoming led the list of potential losers, with at least $53 million at stake for 2013.

Critics had said the government had no right to withhold the states’ share of the money. Interior officials previously defended the cuts by saying they had no choice in the matter under budget rules now in place. But they said Monday they had changed course following a legal review of the underlying Mineral Leasing Act.

Mineral leasing revenues are typically split roughly evenly between the states and the Interior Department. The government last year paid $2.1 billion to the states under the mineral leasing program.

The Interior Department says the money will be given to the states sometime after the end of the fiscal year on Sept. 30, assuming the current law stays in place.

A spokesman for Wyoming Gov. Matt Mead said he was pleased to get the news that the money would be returned to the state, but was awaiting further details on what might happen in future years.

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