Federal Government Reverses Decision to Sequester MLA Revenue

Federal Government Reverses Decision to Sequester MLA Revenue

Attorney General Tim Fox announced today that the U.S. Department of the Interior has reversed its decision to withhold Mineral Leasing Act Revenue from the States. Earlier this month, Attorney General Fox joined nine other western states protesting the sequestration of state funds under the Mineral Leasing Act (MLA).

“I’m very pleased that nearly $2.4 million that Montana was owed through an existing agreement will be on its way soon,” said Attorney General Tim Fox. “This is money that our counties need to fund essential services like roads and bridges, and should not have been targeted in the first place by the federal government as a way to balance the books in Washington.”

The Interior Department’s Office of Natural Resources Revenue had notified states in March that it would withhold payments from March through July, and possibly August and September, saying the move was required by the 5.1% across-the-board sequestration cuts. More than half of the states receive mineral royalties, with western states relying heavily on this revenue because of the disproportionate amount of federal land with valuable minerals located in western states. In a bi-partisan letter sent on August 2 to President Barack Obama, U.S. Department of the Interior Secretary Sally Jewell, U.S. Department of Agriculture Secretary Tom Vilsack, and Office of Management and Budget Director Sylvia Mathews Burwell, members of the Conference of Western Attorneys General strongly objected to the loss of revenue, which is statutorily guaranteed to the states.

The MLA entitles states to 48% of all revenue collected by the federal government for mineral activity on federal lands within state boundaries. Montana would have lost nearly $2.4 million in revenue per year based on FY 2012 figures. One-quarter of the funds are paid to the counties in which they were raised; three-quarters of the revenue goes to the State’s general fund.

The Interior Department says the money will be given to the states sometime after the end of the fiscal year on September 30.

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