US MMS reports large increase in state mineral revenues

The US Department of the Interior's Minerals Management Service said Monday that state governments' share of federal mineral revenues from public lands increased 30% in the fiscal year that ended Sept. 30.

Nov. 5, 2003

2 min read

By OGJ editors
WASHINGTON, DC, Nov. 5 -- The US Department of the Interior's Minerals Management Service said Monday that state governments' share of federal mineral revenues from public lands increased 30% in the fiscal year (FY) that ended Sept. 30.

MMS said it distributed more than $1 billion to 35 states during FY 2003 compared with FY 2002 payments that totaled $716.3 million.

"These revenues are particularly important to many states today," said Johnnie Burton, MMS director. In many cases, Burton said, states share their revenues with individual counties that apply the funds to a variety of local needs ranging from school funding to infrastructure improvements.

The money distributed through September represents the states' cumulative share of revenues collected from mineral production on federal lands located within their borders, and from federal offshore oil and gas tracts adjacent to their shores.

As has typically been the case, Wyoming in FY 2003 received the most royalty receipts, a record $467 million, an increase over last year's $359.3 million. New Mexico was next with $297 million, compared with $191.4 million in FY 2002.

Other large revenue-sharing states include Colorado, which received $53.9 million; Louisiana, $30.7 million; Montana, $25.5 million; California, $25.4 million; and Texas, which nearly doubled its royalty share this year to $17 million.

The federal government shares its lease and royalty revenues with the states where oil and gas production occurs. Half of the revenues go to the state, 40% to the Reclamation Fund for water projects, and 10% to the US Department of the Treasury.

Alaska is the only exception: Under its statehood act, it gets 90% of the federal receipts. In FY 2003 Alaska collected $12.7 million from MMS while the previous year it received $9.1 million.

Coastal states also share in revenues from federal leases adjacent to their seaward boundaries. Alabama, for example, received $13.7 million in FY 2003.