The MMS's Minerals Revenue
Management is responsible for management of all revenues associated with both federal
offshore and onshore mineral leases. The effort is one of the federal governments
greatest sources of non-tax revenues. While MMSs Offshore Minerals Management offices contend with
all aspects of offshore federal leasing, federal onshore mineral
leasing activities are managed by the Department of the Interiors Bureau of Land
Management and the Department of Agricultures U.S. Forest Service.
Indian mineral leases (which are not federal leases and located only onshore) are
administered by the Bureau of Indian Affairs and the Bureau of Land Management. The MMS
MRM, in conjunction with the Bureau of Indian Affairs, provides revenue management
services for mineral leases on Indian lands.
Operationally based at the Denver Federal Center in Colorado, the Minerals
Revenue Management has field offices near principal energy development areas in Texas,
Oklahoma and New Mexico to augment the program.
Some federal lands are leased to individuals and companies for minerals
development. Lease holders competitively bid, initially pay a bonus and subsequently, rent
for the right to develop these onshore and offshore lands.
If minerals are found, extracted and sold, the federal government is
entitled to a certain percentage of, or royalty on, the production.
Using sophisticated, computerized accounting systems, the MRM processes
more than $300 million (mostly via electronic funds transfers) each month. Bonuses, rents
and royalties from nearly 70,000 leases can amount to several billion dollars each year-an
amount that peaked to more than $10 billion in l983, but averages about $4 billion in
recent years. Totals fluctuate with market prices, amount of production and number of
lease sales.
For offshore leases, the Minerals Revenue Management distributes the
collected money to U.S. Treasury accounts. In recent years, annual deposits have been
nearly $900 million to the the Land and Water Conservation Fund and $150 million to
Historic Preservation Fund. The remainder is sent to the U. S. Treasury's
General Fund. Additionally, a portion of royalties from certain offshore federal leases,
adjacent to seaward boundaries of coastal states, are shared with those states.
Distribution of revenues associated with onshore federal lands is split
50-40-10, with 50 percent of the money going directly to the state within which the
specific lease was located. Forty percent is sent to the Reclamation Fund of the U.S.
Treasury. This special account finances the Bureau of Reclamation's water projects in 17
western states. The remaining 10 percent goes to the Treasury's General Fund.
One exception, Alaska, gets a 90-percent share of the revenues. The
remainder goes to the U.S. Treasury.
In 2000, 35 states received $800 million as their cumulative share of
onshore federal leases.
Money collected for Indian mineral leases is all--l00 percent--turned over
to respective Indian tribes or individual Allottees through the Office of Trust Funds
Management.
The MRM is comprised of about 600 federal and 300 contractor
employees-mostly accountants and computer experts, but also auditors, geologists,
economists, administrators and more.
While expertise may vary according to his or her profession, each employee is charged
with enthusiasm toward total quality service to their customers, the MMS and the Nation. |