Mining royalties distribution would change with proposed law

Iron County Presiding Commissioner Jim Scaggs (right) testifies at the Missouri Senate’s Commerce, Consumer Protection, Energy and the Environment Committee hearing on Senate Bill 202 (Mine Royalties) on Wednesday, February 13. At left is Sen. Gary Romine, the Senate sponsor of the bill.

Bills introduced this session into the Missouri Senate and House would change the way royalties from mining activities in counties are distributed. Approval by the legislature would mean more money available to the Iron and Reynolds county governments.

The Senate’s Commerce, Consumer Protection, Energy and the Environment Committee has scheduled a hearing on Senate Bill 202 today (Wednesday, February 13).  Among a contingent of local people set to testify in support of the measure is the bills’s author, Jim Scaggs, Iron County’s Presiding Commissioner.  (Others testifying include Reynolds County Presiding Commissioner Joe Lloyd, Lance Mayfield - representing the citizens of Viburnum, and Superintendent James Watt of Lesterville Schools.)

Senate Bill 202 is sponsored by Sen. Gary Romine (R-Farmington). A similar bill has been sponsored in the House (HB 460) by Rep. Christina Dinkins (R-Annapolis) and has received a second reading, but has not yet been referred to committee.

“This is a bill I’ve been doing research on for over three years,” said Scaggs.  “I sent draft language to the Senate Research Committee to make sure there were no conflicts with other statutes and they sent it back.  I then coordinated with Reynolds County for a couple of edits, but I pretty much designed the bill.”

Scaggs said the effort stems from what drives all the County Commissioners in Southeast Missouri - diminishing revenue streams. He first noticed that mine royalties are distributed in the same way that the Forest Cropland Revenue is distributed.

“We have what is called Forest Cropland money.  Mark Twain National Forest has land in 26 Missouri counties,” he explained.  “Whenever there is a timber contract sale in any of those counties it all goes into a big pot and the money is distributed annually based upon the number of National Forest acres in each county.”

The Bureau of Land Management (BLM) collects the money from the timber sales, keeps 75 percent for the federal government and gives 25 percent back to the state, who distributes it among the 26 counties.

“I support that because that is a sustainable revenue stream for each county that has National Forest Land.”

However, no rules have been written by the BLM for the distribution of mine royalties.  When mining began on the Viburnum Trend back in the 1960s, the BLM decided to distribute the royalties in the same fashion as the timber sale money.  The problem with that, Scaggs said, is that the majority of the ore mined is in Reynolds and Iron counties.

“In my mind, that is just like a manufacturing business that is located in any other county and that county (should) get the benefit of that asset,” he said.

The proposed bill would change the way the mining royalties are distributed and details how each county can use that money.

The bill’s summary states: “Starting in fiscal year 2020, moneys disbursed to the Missouri Office of Administration from the Office of Natural Resources Revenue within the U.S. Department of the Interior from mining royalties on federal land located within the state shall be distributed on a proportional basis by the Office of Administration to each county in this state where such mining royalties accrued.

“Each county that receives money shall allocate 50 percent for public schools, 25 percent for the maintenance of roads and bridges in the county, and 25 percent for the following areas in a county’s public safety budget: the sheriff’s department, jail and care of prisoners, the office of prosecuting attorney, juvenile officer, and coroner. The money to be used for a county’s public safety budget shall be allocated at the discretion of the county commission.”

Over the past 10 years, the commissioner said, the royalties have generated some $2 million - $2.5 million annually.

Approximately 55 percent of the mining is in Reynolds County, 45 percent in Iron County.  There is also a small amount of mining in Dent, Crawford and Washington counties.  Another factor is that the Doe Run Company pays royalties only on federal land.  The company also does some extension mining on land that it owns.

“I think the chances are good (that the bill would make it through the legislative process),” Scaggs said. “It is the right thing to do.”

“This is a common sense change that will ensure money that is generated by the land and the mining activity that occurs in our area comes back to us and benefits the people who live and work here,” said Rep. Dinkins in a written statement. “Sen. Romine and I will work together this session to get this change across the finish line and into law so we can provide a new source of revenue for our schools, our roads, and our other vital local services like public safety.