119-S-451 Investigative Journalist Impact Analysis

Summary

What the bill does: S. 451 (Restoring State Mineral Revenues Act) strikes subsection 35(b) of the Mineral Leasing Act, ending the statutory 2% reduction applied to payments “to the States” and making conforming changes in related statutes. It does not alter royalty rates, leasing terms, or compliance obligations. Likely effect: a transfer of funds from the federal Treasury to mineral‑producing states, with no direct changes to production incentives. [3]Congress.gov — Text: S.451 — 119th Congress (2025-2026)[1]ECFR / U.S. Code — 30 U.S.C. §191 (prelim): Disposition of moneys received (sho…

Economic Effects

Principal channel is a fiscal reallocation of existing mineral revenues, not a change in market structure or operator costs. [1]ECFR / U.S. Code — 30 U.S.C. §191 (prelim): Disposition of moneys received (sho…

- State revenues increase: Repeal of 35(b) would raise state receipts by the amount of the prior 2% deduction applied to onshore MLA (and geothermal) payments. Using ONRR’s FY2025 statewide disbursements as a broad ceiling ($4.07B, including offshore shares), a simple 2% upper‑bound implies about $81M; the realized amount will be lower because the 2% applied only to MLA/related onshore programs, not all ONRR disbursements. [2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…[1]ECFR / U.S. Code — 30 U.S.C. §191 (prelim): Disposition of moneys received (sho…

- Federal receipts decrease: The 2% had been deposited to Treasury as miscellaneous receipts (earlier budgets described it as offsetting administrative costs). Eliminating it reduces federal receipts on the order of tens of millions annually; prior Interior budget justifications projected roughly $44M (FY2014) and $449M over 10 years when adopting the policy—indicative of the scale at stake. [1]ECFR / U.S. Code — 30 U.S.C. §191 (prelim): Disposition of moneys received (sho…[4]U.S. Department of the Interior — Interior FY2013 Budget Justification (net rec…

- Who benefits: Gains concentrate in the highest‑receipt states (e.g., New Mexico, Wyoming), which routinely receive the largest ONRR disbursements. [2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…

- Business/market effects: Operator costs, royalties, and lease terms are unchanged; production economics remain driven by prices, geology, and state tax/regulatory regimes. The bill alters only the distribution of federal receipts, so near‑term employment/price effects are negligible. [3]Congress.gov — Text: S.451 — 119th Congress (2025-2026)

- No effect on other statutory allocations: The MLA’s 50% state/40% Reclamation Fund/10% Treasury framework and special cases (e.g., Alaska) remain; repeal affects the 2% reduction applied to state payments, not the base shares or rates. [5]Congressional Research Service (EveryCRSReport) — CRS: Revenue Allocation Under…

Social Effects

Impacts depend on how incremental state dollars are budgeted; documented uses include education, infrastructure, and local services in recipient states. [2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…[6]Congress.gov — House Report 106-1012: Mineral Revenue Payments Clarification Ac…

- Public services: ONRR notes that state disbursements support infrastructure, education, emergency services, conservation, and preservation programs. Many states historically dedicate portions of mineral revenues to education. Incremental funds from repeal would flow through these existing channels. [2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…[6]Congress.gov — House Report 106-1012: Mineral Revenue Payments Clarification Ac…

- Distributional pattern: Benefits accrue to communities in producing regions; non‑producing states see no direct gain. Research also underscores that fossil‑fuel revenues can be central to local budgets, which shapes fiscal capacity and transition risks. [7]Web search · turn 5 #1

- Community exposure is unchanged: The bill does not expand leasing or weaken standards; thus, it does not directly alter environmental health exposures often cited near extraction sites. Any social outcomes tied to exposure remain governed by separate siting and regulatory decisions. [3]Congress.gov — Text: S.451 — 119th Congress (2025-2026)

Environmental Effects

Mechanism is fiscal only; no direct changes to leasing pace, environmental review, bonding, or emission standards. [3]Congress.gov — Text: S.451 — 119th Congress (2025-2026)

- Direct effects: None identified. Repeal of a bookkeeping deduction does not change extraction volumes or emissions under federal leases. [3]Congress.gov — Text: S.451 — 119th Congress (2025-2026)

- Indirect effects (uncertain): States with higher net receipts could increase infrastructure around producing areas, but evidence tying the 2% deduction to measurable environmental outcomes is lacking; any long‑run effect would be second‑order relative to commodity prices and federal/state permitting policies. (No quantified studies identified specific to this provision.)

Temporal Analysis

- Short term (enactment to 1–2 years): States’ MLA‑related payments rise by the foregone 2%; Treasury’s miscellaneous receipts fall by the same. Program operations and operator compliance unchanged. FY2025 ONRR data illustrate the revenue base and its concentration by state. [1]ECFR / U.S. Code — 30 U.S.C. §191 (prelim): Disposition of moneys received (sho…[2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…

- Long term (3–10 years): Fiscal effects scale with prices/production. Recent disbursements to states fell from $4.29B (FY2024) to $4.07B (FY2025), underscoring volatility; the value of the 2% swing rises and falls accordingly. [8]U.S. Department of the Interior — Interior Department Announces $16.45 Billion…[2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…

Unintended Consequences and Risks

- Revenue volatility: Greater state reliance on extractive revenues increases exposure to commodity swings, with planning challenges for school funding and capital projects; ONRR attributes annual changes partly to price movements. [2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…

- Equity and concentration: Gains accrue to a small set of producing states and counties; non‑producing states do not share in the windfall, potentially widening interstate fiscal disparities tied to resource endowments. [2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…

Assessment (Analytical Stance)

Overall: Neutral. S. 451 is a narrow fiscal change that increases state shares and reduces federal miscellaneous receipts without altering extraction incentives or environmental safeguards. Distributional impacts favor top recipient states; macroeconomic and environmental effects are minimal. Monitoring should focus on state budgeting of incremental funds and transparent accounting of ONRR disbursements post‑repeal. [3]Congress.gov — Text: S.451 — 119th Congress (2025-2026)[2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…

Sourcing Notes

1. Bill text and status are taken from Congress.gov; the 12/02/2025 hearing date is reflected on the All‑Info page. [3]Congress.gov — Text: S.451 — 119th Congress (2025-2026)[9]Congress.gov — All Information: S.451 — 119th Congress (actions and hearings)
2. The 2% deduction and its disposition are drawn from the current U.S. Code (30 U.S.C. §191(b)). [1]ECFR / U.S. Code — 30 U.S.C. §191 (prelim): Disposition of moneys received (sho…
3. ONRR disbursement magnitudes and state rankings use DOI press releases for FY2024 and FY2025. [8]U.S. Department of the Interior — Interior Department Announces $16.45 Billion…[2]U.S. Department of the Interior — Interior Announces $14.61 Billion in Fiscal Y…
4. Baseline revenue‑sharing structure (50% state/40% Reclamation/10% Treasury; Alaska exception; rentals treatment) is summarized from CRS. [5]Congressional Research Service (EveryCRSReport) — CRS: Revenue Allocation Under…
5. Historical and budgeting context for the 2% policy’s scale relies on Interior budget justifications and House historical report on state uses. [4]U.S. Department of the Interior — Interior FY2013 Budget Justification (net rec…[6]Congress.gov — House Report 106-1012: Mineral Revenue Payments Clarification Ac…