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States Battle to Recover Royalties for Energy Production on Public Lands

Tom Williams/CQ Roll Call File Photo
Udall, who served for eight years as his state’s attorney general, said the threat to withhold royalties from oil, gas and coal production breaches an agreement between the state and federal governments.

Udall, who served for eight years as his state’s attorney general, said the threat to withhold royalties breaches a compact between the state and federal governments.

“These state royalties are part of the bargain between Western states and the federal government, which owns so much land within our states,” Udall said. “Altering that bargain risks increasing conflict between the state and the federal government.”

Udall’s cousin Mark plans to join with fellow Colorado Democrat Michael Bennet this week to introduce legislation in the Senate that would end the payment delays permanently by exempting mineral royalties from the sequester completely.

In the meantime, the fate of state payments from other resource-funded federal programs remains unsettled. Interior is currently reviewing whether payments authorized by other federal laws — including the sharing of geothermal leasing revenues with counties and offshore oil and gas royalties with Gulf Coast states — qualify for the same treatment as those under the Mineral Leasing Act.

Congressional frustration over the administration’s efforts to recover the timber payments that were already distributed appears headed for a showdown later this month.

House Natural Resources Chairman Doc Hastings, R-Wash., issued a series of subpoenas last week to the Agriculture Department and the Office of Management and Budget setting a Sept. 18 deadline to produce documents related to the sequester.

Hastings said the administration’s refusal to turn over documents his committee has sought for months adds insult to the injury of the sequester.

“Retroactively cutting these funds and asking states to pay back the money is outrageous and will cause considerable economic harm to communities that are already struggling to survive,” he said in a statement.

An administration official said the timber payments do not meet the “very specific rules” for an exemption from the sequester under the 1985 statute. “The law does not provide the administration any discretion in the application of sequestration to this funding,” the official said.

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