Wyoming, the nation's biggest coal-producing state, stands to lose more than $50 million this year, while New Mexico faces a loss of about $25 million. They top a list of 35 states that face mineral payment cuts this year.
Sen. Tom Udall, D-N.M., told Interior Secretary Sally Jewell at a hearing in Washington on Tuesday that the federal Mineral Leasing Act requires the federal government to split revenues from the sale of minerals on federal lands with the states. He said he regards the payments as state revenues that ought to be off limits from federal meddling.
"This revenue is vital to New Mexico, where it funds our public education system," Udall told Jewell. "New Mexico state leaders are very upset by the Department of Interior's Office of Natural Resources Revenue determination that these state revenues are subject to sequestration."
The federal government last year paid $2.1 billion to the states as their share of revenue from energy and mineral production on federal lands and offshore. Wyoming received nearly $1 billion.
The cuts this year trimmed about 5 percent from all the states' shares. Wyoming is losing at least $53 million this fiscal year, while New Mexico would lose $26 million.
Jewell responded to Udall that the cuts were the result of the federal law that required across-the-board budget cuts, not any particular decision by her agency.
"It affects all revenues and payments, so I'm unclear what kind of jurisdiction we would have over this," Jewell said.
Udall responded: "These are state revenues. What we're going to do in legislation is look to make sure you don't get your hands on them at all, so we don't get in this kind of situation. So that's where we are on that."
Republican Sens. Mike Enzi and John Barrasso, of Wyoming, said Tuesday they're working on the legislation.
Wyoming's congressional delegation is still stinging from separate congressional action late last year that cut more than $700 million that had been promised to the state for mine land restoration.
Daniel Head, a spokesman for Enzi, said the bill to restore the mineral leasing payments will likely be introduced this week.
"The federal government took money that doesn't belong to it and used the sequester as an excuse," Head said. "States are guaranteed a share of the billions of dollars in revenue generated from energy production on federal lands, as they bear most of the costs associated with mineral development. The federal government should be cutting its own budget instead of taking money owed to the states."
Wyoming Gov. Matt Mead said recently that he had asked the state's attorney general to review the cuts in mineral revenue payments to see if there was any avenue for a legal challenge, but the attorney general's office concluded there was not.
On Tuesday, the Republican governor said Wyoming's congressional delegation has done an excellent job addressing federal mineral royalties.
"Our delegation and my office have been working with U.S. and state lawmakers from similarly impacted states," Mead said. "I am encouraged to see support from other states on this important issue."