Background of a Federal Mineral Lease District | Huerfano County Federal Mineral Lease District

Article 1. The Bylaws of the Huerfano County Federal Mineral Lease District

ARTICLE I. PURPOSE AND AUTHORITY The Bylaws of the Huerfano County Federal Mineral Lease District

Section 1. The purpose and authority of the Huerfano County Federal Mineral Lease District (hereinafter "District") shall be as described in the Federal Mineral Lease District Act, § 30-20-1301, et seq, C.R.S. (2011), as amended by Senate Bill 12-31 (hereinafter "the Act"), and as may from time to time be amended.

Section 2. The District is an independent body politic and corporate and a public instrumentality, not an agency of county or state government, and not subject to administrative direction by any department, commission, board, or agency of a county or the State. Its powers and limits on its power are defined by the Act.

Section 3. As contemplated by § 30-20-1304(2)(c), C.R.S., as amended by SB 12-31, the boundaries of the District shall be all of Huerfano County including all municipalities within Huerfano County.

The Colorado Act Creating Federal Mineral Lease Districts

§ 30-20-1301. Short title (1)
This part 13 shall be known and may be cited as the "Federal Mineral Lease District Act". "County" means a home rule or statutory county in this state and includes a city and county. Cite as C.R.S. § 30-20-1301 (1.5)
History. L. 2011: Entire part added, (HB11-1218), ch. 169, p. 580, §1, effective May 9.

C.R.S. 30-20-1302 COLORADO REVISED STATUTES

* This document reflects changes current through all laws passed at the Second Regular Session of the Sixty-Ninth General Assembly of the State of Colorado (2014) and changes approved by the electorate at the November 2014 election *

TITLE 30. GOVERNMENT - COUNTY COUNTY POWERS AND FUNCTIONS ARTICLE 20. PUBLIC IMPROVEMENTS PART 13. FEDERAL MINERAL LEASE DISTRICTS

C.R.S. 30-20-1302 (2014) 30-20-1302. Legislative declaration

(1) The general assembly hereby finds, determines, and declares that it is committed to making sure that all available funding received from federal mineral leasing and distributed as specified in section 34-63-102 (5.4) (c), C.R.S., is used to alleviate social, economic, and public finance impacts resulting from the development of natural resources in this state, subject to the limitations provided for in the federal act.

(2) The general assembly further finds and declares that the purpose of this legislation is to maximize the long-term benefit of funding derived from federal mineral leasing by authorizing the creation of federal mineral lease districts as funding and service delivery mechanisms, which will, consistent with sound financial practices, result in the greatest use of financial resources for the greatest number of citizens of this state, with priority given to those communities designated as impacted by the development of natural resources covered in the federal act.

(3) The general assembly further finds and declares that federal mineral lease districts provide an effective mechanism to expedite the distribution of funding, without the use or increase of ad valorem and other taxes, to those communities designated as impacted by the development of natural resources covered by the federal act.

C.R.S. 30-20-1303 COLORADO REVISED STATUTES

TITLE 30. GOVERNMENT - COUNTY COUNTY POWERS AND FUNCTIONS ARTICLE 20. PUBLIC IMPROVEMENTS PART 13. FEDERAL MINERAL LEASE DISTRICTS

C.R.S. 30-20-1303 (2014) 30-20-1303. Definitions

As used in this part 13, unless the context otherwise requires:

(1) "County" means a home rule or statutory county in this state and includes a city and county.

(1.5) "Distribute" means to grant, loan, commit, or otherwise expend available funding to achieve the purposes of the district consistent with this part 13.

(2) "District" means a federal mineral lease district created pursuant to this part 13.

(2.5) "Federal act" means section 35 of the federal "Mineral Lands Leasing Act" of February 25, 1920, as amended.

(3) "Funding" means the direct distribution of moneys from the local government mineral impact fund to counties as described in section 34-63-102 (5.4) (c), C.R.S.

(4) "Resolution" means a resolution initiated and adopted by a board of county commissioners of a county to create a federal mineral lease district as described in section 30-20-1304 (2).

C.R.S. 30-20-1304 COLORADO REVISED STATUTES

* This document reflects changes current through all laws passed at the
Second Regular Session of the Sixty-Ninth General Assembly
of the State of Colorado (2014)
and changes approved by the electorate at the November 2014 election *

TITLE 30. GOVERNMENT - COUNTY COUNTY POWERS AND FUNCTIONS ARTICLE 20. PUBLIC IMPROVEMENTS PART 13. FEDERAL MINERAL LEASE DISTRICTS

C.R.S. 30-20-1304 (2014) 30-20-1304. Power to create federal mineral lease districts

(1) Except as otherwise provided in this part 13, any county may create a district, so long as the district is created through a resolution adopted as specified in subsection (2) of this section no later than June 30, 2011, and each June 1 of every year thereafter.

(2) A board of county commissioners shall create a district by duly adopting, by majority vote, a resolution to that effect, and the resolution shall set forth:

(a) The name of the county creating the district;

(b) Repealed.

(c) A description of the boundaries of the district, which may include any municipality within the county creating the district;

(d) The name of the district; and

(e) The number of directors of the district. There shall be no fewer than three directors for a district, and the total number of directors shall be an odd number.

(3) Repealed.

(4) No later than the first business day after the adoption of a resolution, the county clerk and recorder shall transmit a certified copy of the resolution to the executive director of the department of local affairs, who shall, upon receipt of the certified copy of the resolution, allocate all future funding directly to the district.

(5) A district organized pursuant to this part 13 may be dissolved by the district board after not less than fifteen days' notice to the public is given and a hearing is held. The notice shall be published in at least one newspaper of general circulation in the county in which the district is located. After hearing any protests against or objections to dissolution, if a majority of the district board determines that it is in the best interests of all concerned to dissolve the district, the district board shall so provide by resolution, and verified copies of the resolution shall be filed within three business days with the office of the county clerk and recorder in the county in which the district is located and with the executive director of the department of local affairs. Upon such filings, the dissolution shall be complete, except that no district shall be dissolved until all funding is distributed consistent with this part 13 and has satisfied or paid in full all of its outstanding indebtedness, obligations, and liabilities.

(6) Notwithstanding any other provision in subsection (5) of this section, any board of county commissioners of a county that initiated and passed a resolution to create a district as described in section 30-20-1304 (2) as such section existed before April 6, 2012, may, within ninety days of April 6, 2012, initiate and pass a resolution to dissolve the district. For any district dissolved pursuant to this subsection (6), all undistributed funding shall be paid over to the county.

C.R.S. 30-20-1305.5 COLORADO REVISED STATUTES

TITLE 30. GOVERNMENT - COUNTY COUNTY POWERS AND FUNCTIONS ARTICLE 20. PUBLIC IMPROVEMENTS PART 13. FEDERAL MINERAL LEASE DISTRICTS

C.R.S. 30-20-1305.5 (2014) 30-20-1305.5. Powers of a district

(1) Each district formed pursuant to this part 13 is an independent public body politic and corporate. Each district is a public instrumentality, and its exercise of the powers specified in this part 13 are deemed and held to be the performance of an essential public function. A district is not an agency of county or state government and is not subject to administrative direction by any department, commission, board, or agency of a county or the state.

(2) In addition to any other powers granted to a district by this part 13, a district has the following powers:

(a) To sue and be sued;

(b) To enter into contracts and agreements including those described in section 29-1-201, C.R.S.;

(d) To sell, convey, lease, exchange, transfer, or otherwise dispose of all or any part of the district's property or assets;

(e) To enter into grant or loan agreements;

(f) In order to carry out the purposes of this part 13, to borrow money as evidenced by revenue bonds, certificates, warrants, notes, and debentures in accordance with the provisions of this part 13;

(g) To adopt an official seal;

(h) To distribute funding to an area outside the district boundaries consistent with this part 13; and

(i) To provide services consistent with the federal act and this part 13.

(3) A district does not have the power to levy and collect taxes or to use the power of eminent domain.

(4) Each district formed under this part 13 is subject to the "Local Government Budget Law of Colorado", part 1 of article 1 of title 29, C.R.S., and the "Colorado Local Government Audit Law", part 6 of article 1 of title 29, C.R.S.

HISTORY: Source: L. 2012: Entire section added, (SB 12-031), ch. 84, p. 278, § 5, effective April 6.

C.R.S. 30-20-1306 COLORADO REVISED STATUTES

TITLE 30. GOVERNMENT - COUNTY COUNTY POWERS AND FUNCTIONS ARTICLE 20. PUBLIC IMPROVEMENTS PART 13. FEDERAL MINERAL LEASE DISTRICTS

C.R.S. 30-20-1306 (2014) 30-20-1306. Board of directors - appointment or election - removal

(1) (a) (I) Except as provided in subparagraph (II) of this paragraph (a), immediately after the creation of a district, the board of county commissioners of the county shall, by majority vote, appoint a board of directors for the district. The number of directors on the board shall be as set forth in the resolution creating the district.

(II) If the board of county commissioners finds that the board of directors for the district should be elected rather than appointed, the board of county commissioners shall outline the method of such an election by duly adopting by majority vote a resolution to that effect. The election procedures shall comply with the election requirements set forth in articles 1 to 13 of title 1, C.R.S.

(b) Members of the board of directors may be county commissioners from the county that created the district, representatives of the governing body of municipalities included in the district, or other officials representing the interests of areas impacted by mineral lease activities.

(c) County commissioners serving on the board of directors, if any, shall not constitute a majority on the board of directors.

(d) The officers of the board of directors shall be the president and a secretary who shall be elected annually by the board of directors from its own members.

(e) (I) Members of the board of directors shall serve staggered terms so that not more than one director's term expires in any one year, and thereafter terms shall be for three years each, and each term shall commence on January 15.

(II) Notwithstanding subparagraph (I) of this paragraph (e), every board of county commissioners of a county that initiated and passed a resolution to create a district as described in section 30-20-1304 (2) as such section existed before April 6, 2012, shall, within ninety days of April 6, 2012, pass a resolution fixing the initial terms of all existing directors. The resolution shall designate at least one director whose initial term shall expire on January 15, 2013, at least one director whose initial term shall expire on January 15, 2014, and at least one director whose initial term shall expire on January 15, 2015. Successor directors shall serve three-year terms.

(2) (a) Each director shall hold office until the expiration of the term to which such director is appointed or elected or until a successor has been duly appointed or elected.

(b) Vacancies on the board of directors shall be filled by a majority vote of the board of county commissioners.

(c) The board of county commissioners of the county may remove any director for official misconduct, incompetence, neglect of duty, or other good cause shown, so long as the removal occurs after the director in question is given notice and an opportunity to be heard before the board of county commissioners at a public hearing.

(3) All special and regular meetings of the board of directors for a district shall be held pursuant to part 4 of article 6 of title 24, C.R.S.

HISTORY: Source: L. 2011: Entire part added, (HB 11-1218), ch. 169, p. 582, § 1, effective May 9.L. 2012: Entire section amended, (SB 12-031), ch. 84, p. 279, § 6, effective April 6.

C.R.S. 30-20-1307 COLORADO REVISED STATUTES

TITLE 30. GOVERNMENT - COUNTY COUNTY POWERS AND FUNCTIONS ARTICLE 20. PUBLIC IMPROVEMENTS PART 13. FEDERAL MINERAL LEASE DISTRICTS

C.R.S. 30-20-1307 (2014) 30-20-1307. Board of directors - powers and duties

(1) (a) Except as otherwise provided in paragraph (b) of this subsection (1), the board of directors of a district shall distribute all of the funding the district receives from the department of local affairs to areas that are socially or economically impacted, either directly or indirectly, by the development, processing, or energy conversion of fuels and minerals leased under the federal act.

(b) The board of directors may use up to ten percent of the annual funding for any administrative costs of the district.

(c) Notwithstanding any other provision of this part 13, the board of directors of a district may reserve all or a portion of the funding for use in subsequent years.

(2) The board of directors may review any reports or studies made and may seek any additional reports or studies it deems necessary regarding the distribution of funding in the district.

(3) The board of directors may cooperate or contract with any other district to provide any function or service lawfully authorized to each of the cooperating or contracting districts, including the sharing of costs, only if the cooperation or contracts are authorized by each district with the approval of each district's board of directors. Any contract providing for the sharing of costs may be entered into for any period, not to exceed the existence of the district and notwithstanding any provision of law limiting the length of any financial contracts or obligations of governments. Any such contract shall set forth fully the purposes, powers, rights, obligations, and responsibilities, financial and otherwise, of the contracting parties. Where other provisions of law provide requirements for special types of intergovernmental contracting or cooperation, those special provisions shall control.

(4) The board of directors may exercise any of the powers set forth in section 30-20-1305.5.

The Federal Act

United States Statutes
Title 30. MINERAL LANDS AND MINING
Chapter 3A.
PERMITS
LEASES
AND
PROSPECTING
Subchapter I. GENERAL PROVISIONS
Current through P. L. 113-186, 113-201 and 113-234
§ 191. Disposition of moneys received
(a)
In general
All money received from sales, bonuses, royalties
including interest charges collected under the Federal Oil
and Gas Royalty Management Act of 1982 [30 U.S.C.
1701 et seq.], and rentals of the public lands under the
provisions of this chapter and the Geothermal Steam Act
of 1970 [30 U.S.C. 1001 et seq.], shall be paid into the
Treasury of the United States; and, subject to the
provisions of subsection (b) of this section, 50 per centum
thereof shall be paid by the Secretary of the Treasury to
the State other than Alaska within the boundaries of
which the leased lands or deposits are or were located;
said moneys paid to any of such States on or after
January 1, 1976, to be used by such State and its
subdivisions, as the legislature of the State may direct
giving priority to those subdivisions of the State socially
or economically impacted by development of minerals
leased under this chapter, for (i) planning, (ii)
construction and maintenance of public facilities, and (iii)
provision of public service; and excepting those from
Alaska, 40 per centum thereof shall be paid into,
reserved, appropriated, as part of the reclamation fund
created by the Act of Congress known as the Reclamation
Act, approved June 17, 1902, and of those from Alaska,
90 per centum thereof shall be paid to the State of Alaska
for disposition by the legislature thereof: Provided, That
all moneys which may accrue to the United States under
the provisions of this chapter and the Geothermal Steam
Act of 1970 from lands within the naval petroleum
reserves shall be deposited in the Treasury as
"miscellaneous receipts", as provided by section 7433(b)
of title 10. All moneys received under the provisions of
this chapter and the Geothermal Steam Act of 1970 not
otherwise disposed of by this section shall be credited to
miscellaneous receipts. Payments to States under this
section with respect to any moneys received by the
United States, shall be made not later than the last
business day of the month in which such moneys are
warranted by the United States Treasury to the Secretary
as having been received, except for any portion of such
moneys which is under challenge and placed in a
suspense account pending resolution of a dispute. Such
warrants shall be issued by the United States Treasury not
later than 10 days after receipt of such moneys by the
Treasury. Moneys placed in a suspense account which are
determined to be payable to a State shall be made not
later than the last business day of the month in which
such dispute is resolved. Any such amount placed in a
suspense account pending resolution shall bear interest
until the dispute is resolved.
(b)
Deduction for administrative costs
In determining the amount of payments to the States
under this section, beginning in fiscal year 2014 and for
each year thereafter, the amount of such payments shall
be reduced by 2 percent for any administrative or other
costs incurred by the United States in carrying out the
program authorized by this chapter, and the amount of
such reduction shall be deposited to miscellaneous
receipts of the Treasury.
(c)
Rentals received on or after August 8, 2005
(1)
Notwithstanding the first sentence of subsection (a) of
this section, any rentals received from leases in any State
(other than the State of Alaska) on or after August 8,
2005, shall be deposited in the Treasury, to be allocated
in accordance with paragraph (2).
(2)
Of the amounts deposited in the Treasury under
paragraph (1)-
(A)
50 percent shall be paid by the Secretary of the Treasury
to the State within the boundaries of which the leased
land is located or the deposits were derived; and
(B)
50 percent shall be deposited in a special fund in the
Treasury, to be known as the "BLM Permit Processing
Improvement Fund" (referred to in this subsection as the
"Fund").
(3)
For each of fiscal years 2006 through 2015, the Fund
shall be available to the Secretary of the Interior for
expenditure, without further appropriation and without
fiscal year limitation, for the coordination and processing
of oil and gas use authorizations on onshore Federal land
under the jurisdiction of the Pilot Project officesidentified in section 15924(d) of title 42.
Cite as 30 U.S.C. § 191
Source: Feb. 25, 1920, ch. 85, §35, 41 Stat. 450; May
27, 1947, ch. 83, 61 Stat. 119; Aug. 3, 1950, ch. 527, 64
Stat. 402; Pub. L. 85-88July 10, 1957, 71 Stat. 282;
Pub. L. 85-508July 7, 1958, 72 Stat. 343, 351; Pub. L.
94-273Apr. 21, 1976, 90 Stat. 377; Pub. L. 94-377Aug.
4, 1976, 90 Stat. 1089; Pub. L. 94-422Sept. 28, 1976, 90
Stat. 1323; Pub. L. 94-579Oct. 21, 1976, 90 Stat. 2770;
Pub. L. 97-451, title I, §§104(a), 111(g), Jan. 12, 1983,
96 Stat. 2451, 2456; Pub. L. 100-203, title V, §5109,
Dec. 22, 1987, 101 Stat. 1330-261; Pub. L. 100-443,
§5(b), Sept. 22, 1988, 102 Stat. 1768; Pub. L.
103-661993; Pub. L. 106-3932000; Pub. L.
109-582005; Pub. L. 113-67Dec. 26, 2013, 127 Stat.
1181.
Notes from the Office of Law Revision Counsel
current through 5/23/2014
REFERENCES IN TEXT
The Federal Oil and Gas Royalty Management Act of
1982, referred to in subsec. (a), is Pub. L. 97-451, Jan.
12, 1983, 96 Stat. 2447, which is classified generally to
chapter 29 (§1701 et seq.) of this title. For complete
classification of this Act to the Code, see Short Title note
set out under section 1701 of this title and Tables.
The Geothermal Steam Act of 1970, referred to in subsec.
(a), is Pub. L. 91-581, Dec. 24, 1970, 84 Stat. 1566,
which is classified principally to chapter 23 (§1001 et
seq.) of this title. For complete classification of this Act
to the Code, see Short Title note set out under section
1001 of this title and Tables.
The Reclamation Act, approved June 17, 1902, referred
to in subsec. (a), is act June 17, 1902, ch. 1093, 32 Stat.
388, which is classified generally to chapter 12 (§371 et
seq.) of Title 43, Public Lands. For complete
classification of this Act to the Code, see Short Title note
set out under section 371 of Title 43 and Tables.
CODIFICATION
"Section 7433(b) of title 10" substituted in subsec. (a) for
"the Act of June 4, 1920 (41 Stat. 813), as amended June
30, 1938 (52 Stat. 1252)", which was classified to section
524 of former Title 34, Navy, on authority of act Aug. 10,
1956, ch. 1041, §49(b), 70A Stat. 640, the first section of
which enacted Title 10, Armed Forces.
Provisions of subsec. (a) which authorized the payment
of monies to the Territory of Alaska were omitted as
superseded by the provisions authorizing the payment of
monies to the State of Alaska.
AMENDMENTS
2013-Subsec. (b). Pub. L. 113-67 amended subsec. (b)
generally. Prior to amendment, text read as follows: "In
determining the amount of payments to the States under
this section, the amount of such payments shall not be
reduced by any administrative or other costs incurred by
the United States."
2005-Subsec. (c). Pub. L. 109-58 added subsec. (c).
2000-Subsec. (b). Pub. L. 106-393 amended subsec. (b)
generally. Prior to amendment, subsec. (b) related to
deductions for administration from the amount to be paid
to States under this section or under other laws requiring
payment to a State of revenues derived from the leasing
of onshore lands owned by the United States for the
production of the same types of minerals leasable under
this chapter or of geothermal steam.
1993- Pub. L. 103-66 struck out last sentence, designated
remaining provisions as subsec. (a) and in first sentence
inserted "and, subject to the provisions of subsection (b)
of this section," before "50 per centum", and added
subsec. (b). Prior to amendment, last sentence read as
follows: "In determining the amount of payments to
States under this section, the amount of such payments
shall not be reduced by any administrative or other costs
incurred by the United States."
1988-Pub. L. 100-443 struck out "notwithstanding the
provisions of section 20 thereof," before "shall be paid".
1987-Pub. L. 100-203 inserted at end "In determining the
amount of payments to States under this section, the
amount of such payments shall not be reduced by any
administrative or other costs incurred by the United
States."
1983-Pub. L. 97-451inserted reference to interest charges
collected under the Federal Oil and Gas Royalty
Management Act of 1982.
Pub. L. 97-451struck out "as soon as practicable after
March 31 and September 30 of each year" after
"Secretary of the Treasury" and "of those from Alaska",
and inserted at end provisions directing that payments to
States be made not later than the last business day of the
month in which such moneys are warranted by the United
States Treasury to the Secretary as having been received,
that warrants be issued by the Treasury not later than 10
days after receipt of the money by the Treasury, that
moneys placed in a suspense account which are
determined to be payable to a State be made not later than
the last business day of the month in which a dispute is
resolved, and that amounts placed in a suspense account
pending resolution bear interest until the dispute is
resolved.
1976-Pub. L. 94-579 substituted provisions setting forth
determination of amount, time for payments, and manner
of expenditure by the States of all moneys received from
sales, etc., under provisions of this chapter and theGeothermal Steam Act of 1970, and proviso relating to
naval petroleum reserve moneys, for provisions setting
forth determination of amount and time for payment to
the States of all moneys received from sales, etc., under
the provisions of this chapter, and provisos relating to
naval petroleum reserve moneys, additional moneys from
sales, etc., under this chapter and the Geothermal Steam
Act of 1970, and expenditure of State oil shale funds.
Pub. L. 94-422 inserted proviso that all moneys paid to
any State from sales, bonuses, royalties, and rentals of oil
shale in public lands may be used by any State for
planning, construction, and maintenance of public
facilities as legislature of State may direct.
Pub. L. 94-377 substituted "40 per centum thereof shall
be paid into, reserved" for "521⁄2 per centum thereof shall
be paid into, reserved", inserted "and the Geothermal
Steam Act of 1970, notwithstanding the provisions of
section 20 thereof" before "shall be paid into the Treasury
of the United States", "and the Geothermal Steam Act of
1970" before "from lands within the naval petroleum
reserves" and before "not otherwise disposed of by this
section", and provisos relating to the payment of an
additional 121⁄2 per centum of all money received from
lands under provisions of this chapter and the Geothermal
Steam Act of 1970 to the State within whose boundaries
the lands are located, to be used for construction of public
facilities, and relating to the use of funds received by
Colorado and Utah under the specified leases.
Pub. L. 94-273 substituted "March" for "December" and
"September" for "June".
1958-Pub. L. 85-508struck out provisions which related
to disposition of proceeds or income derived by the
United States from mineral school sections in the
Territory of Alaska and substituted ", and of those from
Alaska 521⁄2 per centum thereof shall be paid to the State
of Alaska for disposition by the legislators thereof" for ",
and of those from Alaska 521⁄2 per centum thereof shall
be paid to the Territory of Alaska for disposition by the
Legislature of the Territory of Alaska" before proviso.
1957-Pub. L. 85-88 inserted ", and of those from Alaska
521⁄2 per centum thereof shall be paid to the Territory of
Alaska for disposition by the Legislature of the Territory
of Alaska" before proviso.
1950-Act Aug. 3, 1950, in providing that payments to
States be made bi-annually instead of annually,
substituted "as soon as practicable after December 31 and
June 30 of each year" for "after the expiration of each
fiscal year".
1947-Act May 27, 1947, extended provisions by
allocating 371⁄2% of the money received from sales,
bonuses, royalties, and rentals of public lands to the
Territory of Alaska, for the construction and maintenance
of public schools or other public educational institutions
and inserted provisions relating to disposition of proceeds
or income derived by the United States from mineral
school sections in the Territory of Alaska.
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by section 104(a) of Pub. L. 97-451
applicable with respect to payments received by the
Secretary of the Treasury after Oct. 1, 1983, unless the
Secretary by rule, prescribes an earlier effective date, see
section 104(c) of Pub. L. 97-451, set out as an Effective
Date note under section 1714 of this title.
SAVINGS PROVISION
Amendment by Pub. L. 94-579 not to be construed as
terminating any valid lease, permit, patent, etc., existing
on Oct. 21, 1976, see section 701 of Pub. L. 94-579, set
out as a note under section 1701 of Title 43, Public
Lands.
FINDINGS
Pub. L. 106-3932000, provided that: "The Congress
finds the following:
"(1) Section 10201 of the Omnibus Budget
Reconciliation Act of 1993 ( Public Law 103-66; 107
Stat. 407) amended section 35 of the Mineral Leasing Act
(30 U.S.C. 191) to change the sharing of onshore mineral
revenues and revenues from geothermal steam from a
50:50 split between the Federal Government and the
States to a complicated formula that entailed deducting
from the State share of leasing revenues '50 percent of the
portion of the enacted appropriations of the Department
of the Interior and any other agency during the preceding
fiscal year allocable to the administration of all laws
providing for the leasing of any onshore lands or interest
in land owned by the United States for the production of
the same types of minerals leasable under this Act or of
geothermal steam, and to enforcement of such laws * * *'.
"(2) There is no legislative record to suggest a sound
public policy rationale for deducting prior-year
administrative expenses from the sharing of current-year
receipts, indicating that this change was made primarily
for budget scoring reasons.
"(3) The system put in place by this change in law has
proved difficult to administer and has given rise to
disputes between the Federal Government and the States
as to the nature of allocable expenses. Federal accounting
systems have proven to be poorly suited to breaking
down administrative costs in the manner required by the
law. Different Federal agencies implementing this law
have used varying methodologies to identify allocable
costs, resulting in an inequitable distribution of costs
during fiscal years 1994 through 1996. In November
1997, the Inspector General of the Department of the
Interior found that 'the congressionally approved method
for cost sharing deductions effective in fiscal year 1997may not accurately compute the deductions'.
"(4) Given the lack of a substantive rationale for the 1993
change in law and the complexity and administrative
burden involved, a return to the sharing formula prior to
the enactment of the Omnibus Budget Reconciliation Act
of 1993 [Aug. 10, 1993] is justified."
FUNDS HELD BY COLORADO AND UTAH FROM
INTERIOR DEPARTMENT OIL SHALE TEST
LEASES
Pub. L. 94-579Oct. 21, 1976, 90 Stat. 2771, provided
that: "Funds now held pursuant to said section 35 [this
section] by the States of Colorado and Utah separately
from the Department of the Interior oil shale test leases
known as C-A; C-B; U-A and U-B shall be used by such
States and subdivisions as the legislature of each State
may direct giving priority to those subdivisions socially
or economically impacted by the development of
minerals leased under this Act for (1) planning, (2)
construction and maintenance of public facilities, and (3)
provision of public services."
ADMISSION OF ALASKA AS STATE
Effectiveness of amendment by Pub. L. 85-508 was
dependent on admission of Alaska into the Union under
sections 6(k) and 8(b) of Pub. L. 85-508. Admission was
accomplished Jan. 3, 1959, on issuance of Proc. No.
3269, Jan. 3, 1959, 24 F.R. 81, 73 Stat. c16, as required
by sections 1 and 8(c) of Pub. L. 85-508. See notes
preceding section 21 of Title 48, Territories and Insular
Possessions.
OUTER CONTINENTAL
FROM LEASES
SHELF;
REVENUES
Disposition of revenues from leases on submerged lands
of outer Continental Shelf, see sections 1337 and 1338
of Title 43, Public Lands.

DOLA Federal Mineral Lease District FAQS

Colorado’s Federal Mineral Lease Districts
Frequently Asked Questions (FAQ)
Colorado Department of Local Affairs
Division of Local Government
1313 Sherman St., Rm 521
Denver CO 80203
(303) 866-2156

INTRODUCTION
In the 2011 the Colorado State Legislature passed legislation to allow counties to create a Federal Mineral Lease (FML) District for the purpose of transferring Federal Mineral Lease Direct Distribution payments to the FML District in order to streamline the mitigation of impacts according to the guidance in the Mineral Lands Leasing Act 30 U.S.C. 191 and provisions of Colorado Revised Statutes. The Department of Local Affairs, in our role as a source for technical assistance,has developed these Frequently Asked Questions to help local governments understand the statutory process of creating an FML District and any related interaction involving DOLA’s administration of the annual Federal Mineral Lease Direct Distribution.

The Department of Local Affairs makes no claim that any Federal Mineral Lease (FML) District when created by a county will qualify as a “politically and financially independent service district”, or that activities executed thereby are above challenge for federal PILT calculation purposes. Per statute when an FML District is created by a county, the county’s annual FML Direct Distributions per C.R.S § 34-63-103 (5.4) will be re-directed to the District. This document is provided for technical assistance only and does not constitute legal advice.

DOLA FML District Frequently Asked Questions (FAQ) REVISED 5/18/12

1. How does a county create an FML District?

The primary aspects of creating an FML District are the passage of a resolution creating the district and the development of a service plan. The resolution creating an FML District must include the following:
The name of the county creating the district. A description of the boundaries of the district (see Question 2).
The name of the district. The number of directors (3 or more, must be an odd number) C.R.S § 30-20-1304(2)
Once a resolution is adopted by a county, the clerk of that county must transmit a certified copy of that resolution to the Executive Director of the Department of Local Affairs. C.R.S § 30-20-1304(4)

2. How are an FML District’s boundaries determined?

The boundaries of an FML District at minimum should include all unincorporated area of the county creating the FML District. The boundaries of any municipalities can also be included within the district. Statute does not specify if/how areas outside a county can be included into a district (see Question 5); we would suggest
consulting with an attorney to discuss extraterritorial boundaries. HB 11-1218 Colorado Legislative Council Fiscal Note

3. How is a municipality included in an FML District?

A municipality can be included within an FML District by decision of the BOCC within the resolution creating the district. C.R.S § 30-20-1304(2)(c)

4.How is the Board of Directors of the FML District organized?

The board of directors of the FML District can be appointed, or a method of election of district directors can be provided for the district within the resolution by the BOCC of the county creating the district. The Board of Directors may include at members of the county BOCC but members of the BOCC may not make up a majority of the FML District board (the number of directors is outlined in the resolution creating the district). The inititial resolution is required to set up staggared three year tearms for directors. The Board of Directors elects a president and a secretary from their membership. The BOCC may remove any FML District director for misconduct, incompetence, neglect of duty or other good cause by a majority vote, only after such director has had an opportuinty to represent themselves at a public hearing. C.R.S § 30-20-1306

5. May two or more counties form a single FML District?

The formation documents of an FML District consist of a county resolution outlining specific aspects of the District (see Question 1). Generally a single county creates and adopts a resolution. C.R.S. 30-20-1307 specifically provides for cooperation or contracting by FML Districts. In addition, there are no limits to utilizing financial resources of a district outside of the established boundaries of a district. Consult with an attorney to determine what process and form of documents will be required for intergovernmental cooperation or creating a multi-county district. Possible issues to address when considering a multi-county agreement may include
but are not limited to:

Whether a contractual relationship establishes a separate legal entity.
Membership and selection of the governing body of a multi-county entity.
Ability to contract with governments other than FML Districts.
Fully enumerated powers, rights, obligations, and responsibilities, financial and otherwise, of the contracting parties.
Timeline for creation of multi-county entities (see Question 7).

6. What is the timeline for a district?

Creation of a district must occur by June 1 of the year of desired FML Direct Distribution funding for the district. C.R.S § 30-20-1304(1) The FML District’s Federal Employer ID Number (FEIN) and W9 must be
submitted to DOLA by July 15th.

FML Direct Distributions are made August 31st of each year. A budget is required to be adopted before any expenditure of funds can occur. All local governments must file a copy of their budget with DOLA. Annual
Budget for the district is due to DOLA by January 31st of each year. [C.R.S. 29-1-113] Annual Audit due to the Office of the State Auditor by July 31st of each year. Annual Application for Exemption From Audit (for governments receiving less than $500k) due by March 31st of each year. [C.R.S. 29-1-606] If a district dissolves, notification of the dissolution must be submitted to the Department immediately after passing such a resolution dissolving the district. C.R.S. § 30-20-1304 (5)

7. How does the district receive FML Direct Distribution Funds?

After a county creates an FML District and provides notification of such creation to the Department of Local Affairs, the district additionally will need to provide its Federal Employer Identification Number (FEIN) and a W9 to the Department by July 15th of the year in which the district is to receive the August 31 st Annual FML Direct Distribution. Please note, the county will continue to receive its State Severance
Tax Direct Distribution.

8. How does a district obtain a Federal Employer Identification Number (FEIN)?

The district will need to apply to the Internal Revenue Service, complete Form SS-4 (available on their website), and provide a copy of the county’s adopted resolution forming the district. The IRS may also request a copy of or reference to the Colorado statute authorizing the creation of the FML district as a public corporation.

9. Will municipalities within an FML District still receive their FML Direct Distribution Payment from DOLA?

Generally, yes. Unlike a county that creates an FML District, any municipality located within an FML District will continue to receive their municipal FML Direct Distribution payment from DOLA pursuant to C.R.S. 34-63-102(5.4)(c)(II). FML District statutes authorize DOLA to distribute to a county or FML district. Therefore,
only a county is authorized to elect to have DOLA defer the county’s FML Direct Distribution payment to an FML District. C.R.S § 34-63-102(5.4)(c). However, the existing statutory provision for DOLA’s Executive Director to accept an annual Memorandum of Understanding (MOU) between a county and all municipalities located therein pursuant to C.R.S. 34-63-102(5.4)(c)(IV)(A) remains. Therefore, using both the provisions for an FML District and annual MOU, a municipality may indirectly defer its FML Direct Distribution to an FML District. However, such MOU must detail the calculation of the proportions to be distributed among the FML District and any municipalities that will still receive payment. Please see DOLA’s Federal Mineral Lease and State Severance Tax Direct Distribution Program Guidelines for more information on MOU’s. DOLA’s Federal Mineral Lease and State Severance Tax Direct Distribution Program Guidelines.

10. Does an FML District have any impact on DOLA’s administration of the State Severance Tax Direct Distribution?

There is no impact on the Department’s Severance Tax Direct Distribution.