The U.S. Department of the Interior announced last week that it had reversed its decision not to pay states revenue provided under the Mineral Leasing Act.

Thirty-five states had been denied a portion of their payments for 2013 after Department of Interior officials said they had no choice but to keep the money as part of the 5.1 percent across-the-board federal budget sequestration.

The Department’s Office of Natural Resources notified the states in March that it would withhold payments for March through July — and possibly for August and September.

The federal government paid the states $2.1 billion last year. Under sequestration, the states would have lost about $110 million altogether. The biggest losers would have been Wyoming at $53 million and New Mexico at $26 million.

Montana stood to lose about $2.4 million based on fiscal year 2012 numbers, but Montana Attorney General Tim Fox joined nine other Western states and successfully protested the withholding.

On Aug. 27, Interior Department officials announced their new decision. Following a lengthy legal review, they said, it was determined that the federal government must pay the states the money.

One quarter of the money Montana receives will go to counties where the mineral activities took place, and three-quarters will go to the state’s general fund. The federal government will release the money sometime after Sept. 30.

“This is money that our counties need to fund essential services like roads and bridges, and should not have been targeted in the first place by the federal government as a way to balance the books in Washington,” Fox said.

Sens. Jon Tester and Max Baucus also welcomed the news.

“I’m glad the Interior Department reversed course and is following the law of the land,” Tester said. “We need to get our debt and deficit under control, but ignoring decades-old law is the wrong way to do it.”

“This money comes from Montana, it belongs to Montana, and it should be used to clean up Montana mines, period,” Baucus said.

The Mineral Leasing Act was enacted in 1920 after officials in the U.S. Geological Survey and the Department of Interior grew concerned about how quickly public lands were being claimed by oil and gas prospectors.

Until that time, claims were made under the General Mining Act of 1872, which authorized citizens to freely prospect for minerals on public lands and allowed the discoverer to stake claims to both minerals and surrounding land for development.

The Mining Leasing Act entitles states to 48 percent of all revenue collected by the federal government for mineral activity on federal lands within the state. The act includes deposits of coal, petroleum, natural gas, other hydrocarbons, phosphates, sodium, sulfur and potassium.