The Moffat County Commission approved a resolution Tuesday dissolving its federal mineral lease district created in June 2011.

The Moffat County Federal Mineral Lease District was created after Gov. John Hickenlooper signed into law Colorado House Bill 11-1218, also known as the Federal Mineral Lease Districts Act.

The legislation was designed to protect many western Colorado counties featuring large tracts of un-taxable federal lands from dwindling Payment In Lieu of Taxes funds.

The county’s FML district received in August 2011 a $1.1 million payment from the federal government, but decided not to allocate those funds to projects in unincorporated Moffat County following a challenge to the legislation by U.S. Department of the Interior Secretary Ken Salazar.

PILT and federal mineral lease assistance funds have historically been used to fund Moffat County’s infrastructure projects.

Salazar contended that Colorado’s FML districts were not autonomous from their home counties and argued FMLs provided a loophole for counties to receive a bonus payment from the federal government.

During the first session of the 2012 Colorado General Assembly, Sen. Jean White, R-Hayden, introduced amended legislation to address the autonomy issue.

Hickenlooper signed the new legislation into law April 6.

In addition to stipulating FML districts and their managing boards as independent from their home counties, the new legislation also provided local lawmakers a 90-day grace period to either opt-in or opt-out under the new guidelines.

On Tuesday, the county commission was joined by local FML district president Darryl Steele, secretary Jean Stetson, former Moffat County Attorney Jeremy Snow and new county attorney Rebecca Tyree to discuss the district’s future.

All agreed, and the commission voted unanimously, to dissolve the district.

District board members and the commissioners cited PILT’s uncertain future and a fear the U.S. Department of the Interior would once again challenge Colorado’s FML district legislation in their decision to dissolve the district.

In addition, because the U.S. Department of the Interior’s budget cycle lags 18 months behind the county’s, it is still uncertain whether FML funds would be subtracted from the county’s annual PILT payment if the federal government cannot establish grounds to challenge Colorado’s new legislation.

“It’s all speculative at this point,” commissioner Audrey Danner said. “With the nation’s increasing debt no one knows for sure what legislators might cut in an effort to balance the budget.”

Given the new law requires FML districts be autonomous from home counties, the potential decision by the federal government to subtract FML funds from annual PILT payments would mean less money coming into the county coffers.

“It feels a lot like a roll of the dice and I think we need to take into consideration the best interests of the county,” Steele said. “My personal opinion is to opt-out and see whether there is a reduction to PILT.”

According to the new legislation, FML districts may be recreated at any time following the July 5 opt-out deadline.

Nearby Mesa and Garfield counties have already made the decision to maintain their respective FML districts.

County officials therefore have the luxury of waiting to see whether Mesa and Garfield counties see a reduction to their annual PILT payments as a result of maintaining their FMLs.

Moffat County Budget Analyst Tinneal Gerber said the $1.1 million currently sitting in the Moffat County Federal Mineral Lease District account would likely be transferred to the county’s road and bridge fund to be used for future road improvement projects.

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