PILT (Payments in Lieu of Taxes):
Somewhat Simplified
M. Lynne Corn
Specialist in Natural Resources Policy
October 28, 2010July 25, 2012
Congressional Research Service
7-5700
www.crs.gov
RL31392
CRS Report for Congress
Prepared for Members and Committees of Congress
PILT (Payments in Lieu of Taxes): Somewhat Simplified
Summary
Under federal law, local governments are compensated through various programs for losses to
reductions
to their property tax bases due to the presence of most federally owned land. These lands cannot be
be taxed, but may create demand for services such as fire protection, police cooperation, or simply
simply longer roads to skirt the federal property. Some of these programs are run by specific agencies,
agencies and apply only to that agency’s land. The most widely applicable program, administered
by the
Department of the Interior (DOI), applies to many types of federally owned land, and is called
called “Payments in Lieu of Taxes,” or PILT. The authorized level of PILT payments is calculated under
under a complex formula. This paperreport addresses only the DOI PILT program. administered by DOI.
There is no PILT-like
program generally applicable to military lands, but a small fraction of
military lands are eligible
for the DOI PILT program. Furthermore, PILT does not apply to
Indian-owned lands, virtually
none of which are subject to local taxes.
This paperreport explains PILT payments, with an analysis of the five major factors affecting the
calculation of a payment to a given county. It also describes the effects of certain changes in PILT
in 2008. Previously, annual appropriations were necessary to fund PILT, but a 2008 provision (in
P.L. 110-343) for mandatory spending ensured that, beginning with FY2008 and continuing for
four more years, all counties will receive 100% of the authorized payment. Efforts have begun to
convert the temporary mandatory spending into a permanent feature of PILT. With the enactment
of five years of mandatory spending, counties might also renew the long-term debate over the
equity of the PILT formula itself in future years.
Other issues have arisen concerning PILT since the program was created in 1976. One is the
perceived delay in making PILT payments in 2010. An administrative controversy arose when
DOI announced that the PILT payments would be delayed past the normal June issuance. DOI
cited various reasons, but counties (many facing falling revenue bases) protested the delay.
Checks were eventually issued with only minor delay
through the payment to be made in 2012, all counties will receive 100% of the authorized
payment. On July 6, 2012, the President signed P.L. 112-141, containing a provision extending
mandatory spending to FY2013.
Other issues have been the inclusion of additional lands under the PILT program, particularly
some or all Indian lands, which are not now eligible for PILT. Most categories of Indian-owned
lands cannot be taxed by local governments, though they generally enjoy county services. In
. In some counties, this means a very substantial
portion of the land is not taxable. The remaining tax
burden (for roads, schools, fire and police
protection, etc.) therefore falls more heavily on other
property owners. To help compensate for
this lossburden, some counties have proposed that Indian
lands (variously defined) be included among
those eligible for PILT payments. Other Examples of other
lands mentioned from time to time for inclusion include
are those of the National Aeronautics and Space
Administration, and the Departments of Defense and
Homeland Security. In addition, some
counties would like to revisit the compensation formula
and to emphasize a payment rate more similar
to property tax rates (which vary widely among
counties), a feature that would be a major change
in counties with high property values. Finally,
for lands in the National Wildlife Refuge System
(NWRS), some have argued, some would argue that all lands of the system
should be eligible for PILT, rather than
limiting the PILT payments to lands reserved from the
public domain and excluding PILT
payments for acquired lands. The exclusion of NWRS-acquired lands affects primarily
counties in eastern states.
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
Contents
Changes to PILT in the 110th Congress ........................................................................................3
How PILT Works: Five Steps to Calculate Payment.....................................................................
eastern states.
With the extension of mandatory spending to FY2013, the program would return to funding
through annual appropriations in FY2014. Over the next few years, the larger debate for Congress
might then be summarized as three decisions: (1) whether to approve future extensions of
mandatory spending (either temporary or permanent); (2) whether to make the diametrically
opposed choice of reducing the program through appropriations or changing the PILT formula;
and (3) whether to add or subtract any lands to the list of those now eligible for PILT payments.
Background on all three issues is discussed here.
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
Contents
Introduction...................................................................................................................................... 1
Changes to PILT in the 110th and 112th Congresses ......................................................................... 4
How PILT Works: Five Steps to Calculate Payment ....................................................................... 4
Step 1. How Many Acres of Eligible Lands Are There? ........................................................... 4
Step 2. What Is the Population in the County? .......................................................................... 6
Step 3. Are There Prior-Year Payments from Other Federal Agencies?...................................6. 7
Step 4. Does the State Have Pass-Through Laws? ...................................................................7. 8
Step 5. What Is This Year’s Consumer Price Index? ................................................................8. 9
Putting It All Together: Calculating a County’s Payment .............................................................9. 10
National Totals......................................................................................................................... 12 11
From Authorization to Appropriation ............................................................................................ 1112
Current Issues ................................................................................................................................ 12
Inclusion of Indian Lands 11
Timing of Payments ............................................................................................................ 12 13
Inclusion of Native Lands Urban Lands and Tax Equivalency...................................................................... 14
National Wildlife Refuge System Lands ............................. 12
Inclusion of Urban Lands and Tax Equivalency .................................................... 14
Congressional Interest.............................. 13
National Wildlife Refuge Lands .......................................................................................... 14........... 15
Figures
Figure 1. Total PILT Payments, FY1993-FY2010, Actual and FY2012: Appropriations in Current and
Inflation-Adjusted Dollars (to 2010) (to 2009
Dollars).................................................................................................................................... 2
Figure 2. Total PILT Payments, FY1993-FY2010FY2012 Authorized Amount and Appropriation ........... 3
Figure 3. Ceiling Payments Based on County Population Level, FY2010 FY2012......................................6 7
Figure 4. PILT Payment Level as a Function of Agency-Specific Prior Payments
(FY2010 (FY2012) ....................... 8
Figure 5. Steps in Calculating PILT for Eligible Federal Lands..................................................... 11
Tables
Table 1. PILT Payments to Selected Urban Counties, FY2012 .....................................................7
Figure 5. Steps in Calculating PILT for Eligible Federal Lands .................................................. 10
Tables
Table 1. PILT Payments to Selected Urban Counties, FY2010 ................................................... 13
Table 2. NWRS Acres Eligible for PILT in Selected States, FY2008 .......................................... 14
Contacts
Author Contact Information 14
Table 2. NWRS Acres Eligible for PILT in Selected States, FY2010............................................ 15
Table A-1. Total PILT Payments, FY1993-FY2012: Appropriations in Current and
Inflation-Adjusted Dollars (to 2010) .......................................................................................... 16
Table A-2. Total PILT Payments, FY1993-FY2012, Authorized Amount and
Appropriation.............................................................................................................................. 17
Table A-3. Prior-Year Payment Laws That Are Offset Under Next PILT Payment ....................... 18
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
Appendixes
Appendix. PILT Data Tables.......................................................................................................... 16
Contacts
Author Contact Information.......................................................................................................... 14. 20
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
G
enerallyIntroduction
Generally, federal lands may not be taxed by state or local governments unless the
governments governments
are authorized to do so by Congress. SinceBecause local governments are often
financed by property or
sales taxes, this inability to tax the property values or products
derived from the federal lands may
affect local tax bases, sometimes significantly. Instead of authorizing
taxation, Congress has
usually chosen to create various payment programs designed to
compensate for lost tax revenue.
These programs take various forms. Many pertain to the lands of
a particular agency (e.g., the
National Forest System or the National Wildlife Refuge System).1
The most wide-ranging
payment program is called “Payments in Lieu of Taxes” or PILT.2 It is
administered by the
Department of the Interior and affects most acreage under federal ownership.
Exceptions include
most military lands and lands under the Department of Energy (DOE lands
have their own
smaller payment program).3 In FY2010FY2012, the PILT program covered 608.1606.5 million
acres, or about
94% of all federal land.
The Payments in Lieu of Taxes Act of 1976 (P.L. 94-565, as amended, 31 U.S.C. §§ 6901-6907)
was passed at a time when U.S. policy was shifting from one of disposal of federal lands to one of
retention. The policy meant that the retained lands would no longer be expected to enter the local
tax base at some later date. Because of that shift, Congress agreed with recommendations of a
federal commission
that if these federal lands were never to become part of the local tax base, then some
some compensation should be offered to local governments to make up for the presence of non-taxable
nontaxable land within their jurisdictions.4 Moreover, there was a long-standing concern that some federal
federal lands produced large revenues for local governments, while other federal lands produced
little or
none. Many Members none. Many Members, especially those from western states with a high percentage of
federal lands, felt that the imbalance needed to be addressed. The resulting law
authorizes federal
PILT payments to local governments that may be used for any governmental
purpose.
Many of the issues addressed when PILT was created have continued to the present time. One
. One issue is the appropriate
payment level and, complicated by later erosion of the purchasing power of the payments
due to
inflation. For many years, counties held that payments were not keeping pace witheffectively declining because of
inflation. Then PILT was amended in 1994. Figure 1 shows a major increase in the actual dollars
appropriated for PILT from FY1993 to FY2010. Even adjusted for inflation, the figure indicates a
substantial increase over this period.5
The authorized payment level went up (adjusted
annually for inflation), but continued to be subject to annual appropriations. Figure 1 shows a
major increase in the actual and inflation-adjusted dollars appropriated for PILT from FY1993 to
1
For more information on some of these agency-specific payment programs, see CRS Report RL30335, Federal Land
Management Agencies’ Mandatory Spending Authorities, coordinated by Ross W. Gorte; and CRS Report R41303,
by M. Lynne Corn and Carol Hardy Vincent; and CRS
Report R41303, Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000, by Ross W. Gorte. The
M. Lynne
Corn. The program under the Department of Energy is described in U.S. General Accounting Office [now Government
Accountability Office], Energy Management: Payments in Lieu of Taxes for DOE Property May Need to Be
Reassessed, GAO/RCED-94-204 (Washington, DC: July 1994).
2
U.S. Department of the Interior, Office of Budget, National Summary: Fiscal Year 2010 Payments in Lieu of TaxesPayments in Lieu of Taxes: National Summary Fiscal Year 2012,
Washington, DC, 20102012. A similar document is issued every year; each contains tables for payments and acreage by
state and county. To query data from the most recent fiscal year, see http://www.doi.gov/pilt/.
3
A program to support, commonly referred to as Impact Aid, supports local schools forbased on the presence of children of federal
employees, including military dependents,
. It provides some support to local governments, however, and to some extent
it compensates for lost property tax revenue
when military families live on federally owned land. For more information,
see CRS Report RL34119, Impact Aid for
Public K-12 Education: Reauthorization Under the Elementary and Secondary Education Act, by Rebecca R. Skinner
and Richard N. Apling.
4
U.S. RL33960, The Elementary and Secondary Education Act, as Amended by the No Child Left Behind
Act: A Primer, by Rebecca R. Skinner.
4
Public Land Law Review Commission, One third of the Nation’s Land: A Report to the President and to the
Congress, Washington, DC, June 1970, pp. pp. 235-241.
5
Inflation adjustments in this paper use the implicit price deflator for the Gross Domestic Product. See
http://faq.bea.gov/cgi-bin/bea.cfg/php/enduser/std_adp.php?p_faqid=513.
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
Figure 1.Total PILT Payments, FY1993-FY2010,
Actual and Inflation-Adjusted (to 2009 Dollars)
($ in millions)
450
400
Appropriated
Appropriation - adjusted
350
300
250
200
150
100
50
0
1993
1996
1999
2002
2005
2008
But the 1994 amendments, designed to overcome years of erosion due to inflation, have caused
the authorized payment level to increase still faster. (See Figure 2.)
. 235-241.
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
FY2012.5 But the 1994 amendments, designed to overcome years of erosion due to inflation,
caused the authorized payment level to increase still faster. (See Figure 2.)
Figure 1.Total PILT Payments, FY1993-FY2012:
Appropriations in Current and Inflation-Adjusted Dollars (to 2010)
($ in millions)
$450
$400
$350
$300
$250
$200
$150
$100
Appropriated
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
FY99
FY98
FY97
FY96
FY95
FY94
$0
FY93
$50
Appropriation - adjusted
Source: Current dollars from annual Payments in Lieu of Taxes: National Summary. Inflation adjustment is based
on chain-type price index.
Note: For the same data in tabular format, see Table A-1.
Critics of PILT cite examples of what they view as its “quirkiness.” First, while there is no
distinction between acquired and public domain lands6 for other categories of eligible lands,
acquired lands of the Fish and Wildlife Service (FWS) are not eligible for PILT—to the
consternation of many statescounties in the East and Midwest, where nearly all FWS lands are were
acquired.
Second, some of the “units of general local government”7 that receive large payments have other
substantial sources of revenue, while some of the counties receiving little are relatively poor.
Third, a few counties which receive very large payments from other federal revenue-sharing
programs (because of valuable timber, mining, recreation, and other land uses) nonetheless are
6
Second, while payments under the Secure Rural Schools (SRS) program7 require an
offset in the following year’s PILT payment for certain lands under the jurisdiction of the Forest
Service, if the eligible lands are under the jurisdiction of the Bureau of Land Management
(BLM), no reduction in the next year’s PILT payment occurs.8 Third, while payments under the
Bankhead-Jones Farm Tenant Act (7 U.S.C. §1012) require a reduction in the following year’s
PILT payment if the lands are under BLM, no such reduction occurs if Bankhead-Jones payments
are for lands under the Forest Service. Fourth, some of the “units of general local government”9
5
Inflation adjustments in this report use the implicit price deflator for the Gross Domestic Product. See
http://faq.bea.gov/cgi-bin/bea.cfg/php/enduser/std_adp.php?p_faqid=513.
6
Acquired lands are those which the United States obtained from a state or individual. Public domain lands are
generally those which the United States obtained from a sovereign nation.
7
See CRS Report R41303, Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000, by
M. Lynne Corn.
8
All of the BLM lands eligible for SRS payments are in Oregon.
9
Unit of general local government is defined in the law (31 U.S.C. § 6901(2)) as “a county (or parish), township,
6901(2)) as “a county (or parish), township,
(continued...)
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that receive large payments have other substantial sources of revenue, while some of the counties
receiving little are relatively poor. Fifth, a few counties which receive very large payments from
other federal revenue-sharing programs (because of valuable timber, mining, recreation, and other
land uses) nonetheless are also authorized to receive a minimum payment ($0.34 per acre)10 from
PILT, thus somewhat cancelling out the goal of evening payments across counties. Sixth, in some
counties the PILT payment greatly exceeds the amount that the county would receive if the land
were taxed at fair market value, while in others it is much less. Given such issues, and the
complexity of federal land management policies, consensus on substantive change in the PILT
law has been elusive, particularly when Congress has a stated goal of reducing federal
expenditures.
Figure 2.Total PILT Payments, FY1993-FY2012
Authorized Amount and Appropriation
($ in millions)
$450
$400
$350
$300
$250
$200
$150
$100
Authorized
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
FY04
FY03
FY02
FY01
FY00
FY99
FY98
FY97
FY96
FY95
FY94
$0
FY93
$50
Appropriated
Source: Annual Payments in Lieu of Taxes: National Summary.
Note: For the same data in tabular format, see Table A-2.
(...continued)
borough, or city where the city is independent of any other unit of general local government, that (i) is within the class
or classes of such political subdivisions in a State that the Secretary of the Interior, in his discretion, determines to be
the principal provider or providers of governmental services within the State; and (ii) is a unit of general government as
determined by the Secretary of the Interior on the basis of the same principles as were used on January 1, 1983, by the
Secretary of Commerce for general statistical purposes” plus the District of Columbia, Puerto Rico, Guam, and the
Virgin Islands. To avoid the use of the unwieldy unit of general local government, the word county will be used in the
rest of this paperreport, and must be understood here to be equivalent to the above definition. This shorthand is often used by
DOI.
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also authorized to receive a minimum payment (33¢/acre)8 from PILT. Fourth, in some counties
the PILT payment greatly exceeds the amount that the county would receive if the land were
taxed at fair market value, while in others it is much less. Given such problems, and the
complexity of federal land management policies, consensus on substantive change in the PILT
law has been elusive, particularly when Congress has a stated goal of reducing federal
expenditures.
Figure 2.Total PILT Payments, FY1993-FY2010
Authorized Amount and Appropriation
($ in millions)
400
350
300
250
200
150
100
50
0
1995
1993
1999
1997
2003
2001
2007
2005
2009
Authorized Amount
Appropriated Amount
FY2008 Added Amount
Changes to PILT in the 110th Congress
10
This and subsequent references to payment rates and ceilings are based on FY2012 figures unless otherwise noted.
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Changes to PILT in the 110th and 112th Congresses
The Continuing Appropriations Act, 2009 (P.L. 110-329), provided the FY2008 level ($228.9
million) through March 6, 2009; if this had been the full-year appropriation, it would have
constituted roughly 61% of the figure estimated for full payment of the FY2009 authorized level.
However, §Section 601(c) of Division CTitle VI of P.L. 110-343 (the Emergency Economic Stabilization Act of
of 2008) provided for mandatory spending of the full authorized level for five years—FY2008FY2012. For FY2008, an additional payment was made to raise the FY2008 level to the full
authorized amount, and for FY2009-FY2012, the payments are to be at 100% of the authorized
amount.
8
This and all subsequent references to payment rates and ceilings are based on FY2010 figures unless otherwise noted.
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PILT (Payments in Lieu of Taxes): Somewhat Simplifiedat 100% of the authorized
amount. On July 6, 2012, the President signed P.L. 112-141, whose Section 100111 extends
mandatory spending for PILT to FY2013, without making any other changes to the law.11
How PILT Works: Five Steps to Calculate Payment
Calculating a particular county’s PILT payment first requires answering several questions:
1. How many acres of eligible lands are in the county?
2. What is the population of the county?
3. What were the previous year’s payments, if any, for all of the eligible lands under
the other
payment programs of federal agencies?912
4. Does the state have any laws requiring the payments from other federal agencies
to be
passed through to other local government entities, such as school districts,
rather than staying
with the county government?
5. What was the increase in the Consumer Price Index during the year?
Each of these questions will be discussed below. Finally, their use in the computation of each
county’s payment is described.
Step 1. How Many Acres of Eligible Lands Are There?
Nine categories of federal lands are identified in the law as eligible for PILT payments:1013
1. lands in the National Park System;
2. lands in the National Forest System;
3. lands administered by the Bureau of Land Management;
4. lands in the National Wildlife Refuge System that are withdrawn from the public domain;
5. lands dedicated to the use of federal water resources development projects;11
6. dredge disposal areas under the jurisdiction of the U.S. Army Corps of Engineers;
7. lands located in the vicinity of Purgatory River Canyon and Piñon Canyon, Colorado, that
were acquired after December 31, 1981, to expand the Fort Carson military reservation;
8. lands on which are located semi-active or inactive Army installations used for mobilization
and for reserve component training; and
9
11
As final agreement was being reached on this bill, the House Appropriations Committee reported H.R. 6091, which
also extended PILT through FY2013. In light of the enactment of P.L. 112-141, the PILT provision of H.R. 6091 could
be dropped at a later stage of its House or Senate consideration.
12
Regardless of how many agencies have jurisdiction over these eligible lands in a county, all of theirthe payments are
specified in
31 U.S.C. §6903(a)(1) are added together, and deducted from the following year’s single PILT payment. Any other
federal lands payments the county may get that are not specified in that provision are not deducted. The formula in 31
U.S.C. §The formula in 31 U.S.C. § 6903 sets a
cap on the total PILT payment for all of the eligible land in the county.
1013
See 31 U.S.C. § 6901. The law refers to these nine categories of lands as “entitlement lands,” and the term is used
throughout the act. However, because entitlement is a word which is used in a very different, and potentially confusing,
context in the congressional budget process, these lands will be called eligible lands in this paper.
11
These lands are under the jurisdiction of the Bureau of Reclamation, for the most part.
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9. certain lands acquired by DOI or the Department of Agriculture under the Southern Nevada
report.
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3. lands administered by the Bureau of Land Management;
4. lands in the National Wildlife Refuge System that are withdrawn from the public
domain;
5. lands dedicated to the use of federal water resources development projects;14
6. dredge disposal areas under the jurisdiction of the U.S. Army Corps of Engineers;
7. lands located in the vicinity of Purgatory River Canyon and Piñon Canyon,
Colorado, that were acquired after December 31, 1981, to expand the Fort Carson
military reservation;
8. lands on which are located semi-active or inactive Army installations used for
mobilization and for reserve component training; and
9. certain lands acquired by DOI or the Department of Agriculture under the
Southern Nevada Public Land Management Act (P.L. 105-263).
Section 6904/6905 Payments
Two sections of the PILT law (31 U.S.C. §6904 and §6905) provide special payments for limited categories of land, for
limited periods. These are described in the annual National SummaryFY2012 Payments in Lieu of Taxes: National Summary (p. 12) as follows:
Section 6904 of the Act authorizes payments for lands or interests therein, which were acquired after December
December 31, 1970, as additions to the National Park System or National Forest Wilderness Areas. To
receive a PILT
payment, these lands must have been subject to local real property taxes within the five year
period preceding
acquisition by the Federal government. Payments under this section are made in addition
to payments under
Section 6902. They are based on one percent of the fair market value of the lands at the
time of acquisition, but
may not exceed the amount of real property taxes assessed and levied on the
property during the last full fiscal
year before the fiscal year in which [they were] acquired. Section 6904
payments for each acquisition are to be
made annually for five years following acquisition, unless otherwise
mandated by law....
Section 6905 of the Act authorizes payments for any lands or interests in land owned by the Government in the
the Redwood National Park or acquired in the Lake Tahoe Basin under the Act of December 23, 1980 (P.L.
96-586,
94 Stat. 3383). Section 6905 payments continue until the total amount paid equals 5 percent of the
fair market
value of the lands at the time of acquisition. However, the payment for each year cannot exceed
the actual
property taxes assessed and levied on the property during the last full fiscal year before the fiscal
year in which
the property was acquired by the Federal government.
In the FY2010FY2012 payments, the Section 6904/6905 payments totaled $587,638609,568 or 0.16% of the total program. California
counties received the largest amount ($88,856). Twelve107,846). Sixteen states and territories received nothing had no counties receiving payments
under these two
sections in FY2010FY2012. These states and territories were Alabama, Connecticut, Delaware, Illinois,
Iowa, Kansas, New Jersey, North Dakota,
Oklahoma, Rhode Island, South Dakota, Utah, Vermont, and Guam, Puerto Rico and the Virgin Islands.
Rico, and the Virgin Islands.
The payments under Section 6904 cease five years after acquired land is incorporated into a national park unit or a
National Forest Wilderness Area. As a result, counties experience a sudden drop in their PILT payment after five
years.
14
These lands are under the jurisdiction of the Bureau of Reclamation, for the most part.
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In addition, if any lands in the above categories were exempt from real estate taxes at the time
they were acquired by the United States, those lands are not eligible for PILT, except in three
circumstances:
1. land received by the state or county from a private party for donation to the federal
federal government within eight years of the original donation;
2. lands acquired by the state or county in exchange for land that was eligible for
PILT; or
3. lands in Utah acquired by the United States if the lands were eligible for a
payment in lieu
of taxes program from the state of Utah.
Only the nine categories of lands (plus the three exceptions) on this list are eligible for PILT
payments; other federal lands—such as military bases, post offices, federal office buildings, and
the like—are not eligible for PILT. The exclusion of lands in the National Wildlife Refuge System
that are acquired is an interesting anomaly, and may reflect nothing more than the House and
Senate committee jurisdictions at the time P.L. 94-565 was enacted.12
12
At the time, jurisdiction over the National Wildlife Refuge System (NWRS) generally was in one committee, while
jurisdiction over public domain lands was within the jurisdiction of a different committees. This was true in both the
House and Senate. The committees considering PILT had no jurisdiction over the acquired lands within the NWRS.
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Step 2. What Is the Population in the County?
The law restricts the payment a county may receive based on population. For example, for the
FY2008 payment15
Step 2. What Is the Population in the County?
The law restricts the payment a county may receive based on population. Under the schedule
provided in 31 U.S.C. §6903, counties are paid at a rate that varies with the population; counties
with low populations are paid at a high rate per person, and populous counties are paid less per
person. For example, for FY2012, a county with a population of 1,000 people will not receive a
PILT payment
over $153,500 ($153.50 over $166,210 ($166.21 per person); a jurisdiction with a population of 30,000 will
not receive a
payment over $2,303,100 ($76.77 per person). In FY2008, no county may receive a PILT
payment over $3,070,500 493,900 ($83.13 per person). And no county is credited with a
population over 50,000. Consequently, in FY2012, at the authorized payment level of $66.49 per
person, no county may receive a PILT payment over $3,324,500 (50,000 x $66.49/person)
regardless of population. Figure 3 shows the relationship between the
population of a county and the maximum PILT payment.
Figure 3. Ceiling Payments Based on County Population Level, FY2010
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
10000
0
30000
50000
20000
40000
County Population
Step 3. Are There Prior-Year Payments from Other Federal
the maximum PILT payment.
15
At the time, jurisdiction over the National Wildlife Refuge System (NWRS) generally was in one committee, while
jurisdiction over public domain lands was within the jurisdiction of a different committees. This was true in both the
House and Senate. The committees considering PILT had no jurisdiction over the acquired lands within the NWRS.
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Figure 3. Ceiling Payments Based on County Population Level, FY2012
Payment ($ in thousands)
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
1
4
7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52
County Population (in thousands)
Source: Calculations based on Payments in Lieu of Taxes: National Summary FY2012, p. 14.
Step 3. Are There Prior-Year Payments from Other
Federal Agencies?
Federal land varies greatly in revenue production. Some lands have a large volume of timber
sales, some have recreation concessions such as ski resorts, and some generate no revenue at all.
Some federal lands have payment programs for state or local governments, and these may vary
markedly from year to year. To even out the payments among counties and prevent grossly
disparate payments, Congress provided that the previous year’s payments on eligible federal
lands from agency-specific payment programs to counties would be subtracted from the PILT
payment of
the following year. So for a hypothetical county with three categories of eligible
federal land, one
paying the county $1,000, the second $2,000, and the third $3,000, then $6,000
would be
subtracted from the following year’s PILT payment. Most counties are paid under this
offset offset
provision, which is called the standard rate. In Figure 4, the standard rate is shown by the
sloping portion of the line, indicating that as the sum of the paymentspayment rates from other agencies
increases, the PILT payment rate declines on a dollar-for-dollar basis.
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Figure 4. PILT Payment Level as a Function of Agency-Specific Prior Payments
(FY2010)
2.5
2
1.5
1
0.5
0
0.3
0
0.9
0.6
1.5
1.2
2.1
1.8
2.4
Other Agencies' Payments, Year 1 ($/Acre)
PILT Payment
(FY2012)
Pilt payment, year 2 ($/acre)
2.5
2
1.5
1
0.5
0
0.0
0.3
0.6
0.9
1.2
1.5
1.8
2.1
2.4
2.7
Other agencies' payments, year 1 ($/acre)
At the same time, Congress wanted to ensure that each county got some PILT payment, however
small, even if the eligible lands produced a substantial county payment from other agencies. If the
county had payments from three federal payment programs of $1,000, $2,000, and $1 million, for
instance, subtracting $1.003 million from a small PILT payment would produce a negative
number—meaning no PILT payment to the county at all. In that case, a minimum rate applies,
which does not deduct the other agencies’ payments. In Figure 4, the flat portion to the right
shows that, after the other agencies’ payments reach a certain level ($2.07 in FY2010), 47 per acre in FY2012),
the rate of
the PILT payment remains fixed (at $0.33/acre, for FY2010)34 per acre in FY2012).
The payments made in prior years that count against future PILT payments are specified in law
(16 U.S.C. §6903(a)(1)). Any other payment programs beyond those specified would not affect
later PILT payments. These specified payments are shown in Table A-3. Eligible lands under
some agencies (e.g., National Park Service and Army Corps of Engineers) have no payment
programs that affect later PILT payments.
Step 4. Does the State Have Pass-Through Laws?
Counties may receive payments above the calculated amount described above, depending on state
law. Specifically, states may require that the payments from federal land agencies pass through
the county government to some other entity (typically a countylocal school district), rather than accrue
to the county government itself. When counties in a “pass-through” state are paid under the
formula which deducts their prior year payments from other agencies (e.g., from the Refuge
Revenue Sharing Fund (RRSF; 16 U.S.C. § 715s) of FWS), or the Forest Service (FS) Payments
to to
States (16 U.S.C. § 500)1316), the amount paid to the other entity is not deducted from the
county’s
PILT payments in the following year. According to DOI:
Only the amount of Federal land payments actually received by units of government in the
prior fiscal year are deducted. If a unit receives a Federal land payment, but is required by
State law to pass all or part of it to financially and politically independent school districts, or
1316
Under 16 U.S.C. § 500, these payments are made to the states or territories, and must be used for schools or roads in
the counties where the national forests are located. Each state has its own rules on the mechanics of that transfer, on the
proportion to be used for roads and the proportion for schools. Some states direct that the education portion be given
directly to school boards. For more information see CRS Congressional Distribution Memo, Forest Service RevenueSharing Payments: Distribution System, by Ross W. Gorte, Nov. 19, 1999.
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
any other single (continued...)
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Only the amount of Federal land payments actually received by units of government in the prior
fiscal year are deducted. If a unit receives a Federal land payment, but is required by State law to
pass all or part of it to financially and politically independent school districts, or any other single
or special purpose district, payments are considered to have not been
received by the unit of local
government and are not deducted from the Section 6902
payment.1417
For example, if a state requires all counties to pass along some or all of their RRSF payments
from FWS to the local school boards, the amount passed along is not deducted from the counties’
PILT payments for the following year (31 U.S.C. § 6907). Or if two counties of equal population
in two states each received $2,000 under the FS Payments to States, and State #1 pays that
amount directly to the local school board, but State #2 does not, then under this provision, the
PILT payment to the county in State #1 will not be reduced in the following year, but that of the
county in State #2 will drop by $2,000. State #1 will have increased the total revenue coming to
the state and to each county by taking advantage of this feature.1518
Consequently, the feature of PILT that was apparently intended to even out payments among
counties (at least of equal population size) may not have that result if the state takes advantage of
this pass-through feature. 1619 Under 31 U.S.C. § 6903(b)(2), the governor of each stateeach governor gives the
Secretary of
the Interior an annual statement onof the amounts actually paid to each county
government under
the relevant federal agencies’ payment laws. DOI checks each governor’s
report against the records of the
payment programs of federal agencies.
In addition, a state may also require that the there is a pass-through option for the PILT payment itself. A state may require that the
PILT payment itself go to a smaller unit of
government, contained within the county (typically a
school district) (16 U.S.C. § 6907). If so, one
check is sent by the federal government to the state
for distribution by the state to these smaller
units of government. The distribution must occur
within 30 days. As of FY2010FY2012, Wisconsin is the
only state to have selected this feature of PILT.
Step 5. What Is This Year’s Consumer Price Index?
A provision in the 1994 amendments to PILT adjusts the authorization levels for inflation. The
standard and minimum rates, as well as the payment ceilings, are adjusted each year. These levels
are adjusted based on the change in the Consumer Price Index for the 12 months ending on the
preceding June 30. Under 31
U.S.C. §6903(d), “the Secretary of the Interior shall adjust each dollar amount specified in
subsections (b) and (c) to reflect changes in the Consumer Price Index published by the Bureau of
Labor Statistics of the Department of Labor, for the 12 months ending the preceding June 30.”
This is an unusual degree of inflation adjustment; no other federal land
agency’s payment
program has this feature. But as will be shown below, increases in the
authorization do not
necessarily lead to a commensurate increase in the funds received by the
counties.
14
(...continued)
directly to school boards. For more information see CRS Congressional Distribution Memo, Forest Service RevenueSharing Payments: Distribution System, by Ross W. Gorte, Nov. 19, 1999.
17
U.S. Dept. of the Interior, Payments in Lieu of Taxes: National Summary, Fiscal Year 20102012, p. 11.10.
18
Note that even though a county as a whole may benefit from this provision, the county government itself may not, if
it must foregowill not,
because it forgoes the revenues given directly to its school system.
1619
However, the Supreme Court has held that states cannot direct counties, once they have actually received their PILT
payment, to spend their PILT payments (i.e., payments
under the DOI-managed program described in this paperreport) for
particular purposes, once they have actually received
their PILT payment. Lawrence County v. Lead-Deadwood School District, No. 40-1, 469 U.S. 256 (1985).
15
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Putting It All Together:
Calculating a County’s Payment
Knowing the answers to these five questions, one can then make two comparisons to calculate the
authorized payment level for a county. (Figure 5 shows a flow chart of the steps in these
comparisons.) FY2010 payment levels are used in this paper for all charts and comparisonsAll charts and comparisons in this report are based on FY2012 payment levels.
Alternative A. Which is less: the county’s eligible acreage times $2.4047 per acre or the county’s
ceiling payment based on its population? Pick the lesser of these two numbers. From it, subtract
the previous year’s total payments for these eligible lands under agency-specific payment or
revenue-sharing revenuesharing programs of the federal agencies that control the eligible land. 1720 The amount to
be be
deducted is based on an annual report from the governor of each state to DOI. This option is
called the standard provision.
Alternative B. Which is less: the county’s eligible acreage times 33¢$0.34 per acre or the county’s
ceiling payment? Pick the lesser of these two. This option is called the minimum provision, and is
used in the counties that received relatively large payments (over $2.07/acre for FY2010) from
13 per acre for FY2012)
from other federal agencies in the previous year.
The county is authorized to receive whichever of the above calculations—(A) or (B)—is greater.
This calculation must be made for all counties individually to determine the national
authorization level. From the program’s inception through FY2007, the authorized payments were
subject to annual appropriations. After passage of P.L. 110-343, this spending is mandatory for
FY2008-FY2012. If Congress takes no further action, annual appropriations will again be
required for PILT payments in FY2013.
The combination of agency-, and if appropriations were insufficient for full funding, each
county received a pro rata share of the appropriation. After passage of P.L. 110-343 and P.L. 112141, each county receives the full authorized amount for FY2008-FY2013.
The combination of specific payments and PILT in the standard option means that
reductions (or
increases) in those other payments in the previous year could be exactly offset by
increases (or
reductions) in PILT payments. However, for FY2010 (provided that the county’s
population is not so low as to
affect the outcome), PILT payments cannot fall below 33¢ per acre
$0.34 per acre for FY2012 (see Alternative
B, above), so the full offset occurs only when the other federal payments in the
previous year
total less than $2.0713 per acre (i.e., the maximum payment of $2.4047 per acre minus
the 33¢ per $0.34 per
acre minimum payment from PILT).18
1721
20
Payments under the Secure Rural Schools program for Forest Service lands and certain(but not Bureau of Land Management
lands) are included among those prior year payments to be deducted. See CRS Report R41303, Reauthorizing the
Secure Rural Schools and Community Self-Determination Act of 2000, by Ross W. Gorte.
18M. Lynne Corn.
21
To illustrate more concretely, imagine each county as a large bucket, whose sides are marked off in “$/acre.” PILT,
in effect, checks the payment already in the bucket from other agencies, then adds at least enough money to the bucket
to bring it to the $2.4047/acre mark. Moreover, if the bucket is already above the $2.4013/acre mark, PILT adds 3334¢/acre,
regardless of the amount in the bucket already. The money bucket could reach levels of $15/acre or more, with the last
3334¢ added by PILT. The county population ceilings might then be thought of as holes in the sides of some of the
buckets that prevent the buckets from filling beyond a certain level for that bucket (i.e., county).
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
Figure 5. Steps in Calculating PILT for Eligible Federal Lands
(FY2010 payment levels)
Calculate ceiling
payment based
on population.
Pick the lesser of (1)
eligible acres x
$2.40/acre or (2)
county’s ceiling payment.
From the lesser amount,
subtract the previous
year’s payment from all
eligible lands.*
Pick the lesser of (1)
eligible acres x $0.33/acre
or (2) county’s ceiling
payment.
Pick the greater of these
two amounts. This is the
full payment amount.
Appropriate $. Does funding
cover authorization?
Yes
Pay each county
full amount
No
Pay each county a
prorated share of
full amount.
Note: *These are the agency-specific payments for federal lands. The amount subtracted is reduced in states
with pass-through lawsFY2012 payment levels)
Note: The payments (marked *) are the specific payments for federal lands. The amount subtracted is reduced
in states with pass-through laws. Also, funding covers authorization through FY2013; under current law, the PILT
program returns to annual appropriations in FY2014.
Source: Prepared by CRS, based on PILT statute (31 U.S.C §§6901-6907).
The standard option, with its offset between agency-specific payments and PILT payments, still
does not guarantee a constant level of federal payments to counties, because of the time lag in
determining PILT payments. Federal payments for a given fiscal year are generally based on the
receipts of the prior year. PILT payments of the following fiscal year are offset by these payments.
To illustrate, consider a county whose only eligible federal lands are under the jurisdiction of
FWS. If the federal receipts on the FWS lands drop in FY2008FY2012 (compared to FY2007FY2011), payments
in FY2009FY2013 from the FWS Refuge Revenue Sharing Fund will fall. PILT payments will therefore
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
increase to offset the drop—in FY2010FY2013. (This example assumes that the PILT payment is
calculated under the standard option.) The counties will be authorized to receive at least $2.4047 per
acre from RRSF and PILT payments combined, 1922 but the two payments would not come in the
same year. Consequently, if RRSF payments fall from year to year, the combined payments in the
19
An exception would occur if the county’s population is so small that the county is affected by the PILT ceiling on
payments due to population.
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PILT (Payments in Lieu of Taxes): Somewhat Simplified
given year would be less than $2.40given year would be less than $2.47 per acre, but if RRSF payments rise, the authorized
combined payment in the given year would be more than $2.4047 per acre.
National Totals
Information from all 1,850 counties with eligible land is needed on a national scale before an aggregate
aggregate figure for the nation can be calculated precisely, and consequently no precise dollar
figure can be
given in advance for each year’s PILT authorization level.2023 However, since the because the
amount for full
authorization for FY2010FY2012 has been calculated, and since the because major changes in the
factors stated above are not likely, in
sum, to decrease the payments at the national level, the full
authorization level for FY2011FY2013 seems
likely to be similar to the amount shown for full authorization in FY2010, which was $358.5
million. Individual counties, or very slightly larger than, the
amount for the full authorization in FY2012 ($393.0 million), even though individual counties’
payments may vary.
From Authorization to Appropriation
Until about 1994, the full amount authorized under the law’s formula had generally been
appropriated, with a few exceptions such as sequestration under the Gramm-Rudman-Hollings
Act (Title II of P.L. 99-177). But the buying power of the payments fell due to inflation. In
response, Congress amended the law in 1994 (P.L. 103-397) to adjust for inflation.
The amendment focused on increasing the total payments, building in inflation protection, and
making certain additional categories of land eligible. 2124 After the amendments passed, the
increasing discrepancy between appropriations and the rapidly rising authorization levels led to
even greater levels of frustration among local governments, and prompted intense interest among
some Members in increasing appropriations, until. The result was the passage of P.L. 110-343 and P.L.
112-141. (See Figure 2,
above.) Whether Congress will make the mandatory spending authority permanent remains to be
seen. above.)
Current Issues
While the enactment of fivesix years of mandatory spending put the issue of full funding to rest for
the time being, no doubtin all likelihood county governments will strongly support continuing mandatory
spending for PILT. Four other issues are also being debated: timeliness of PILT payments,
inclusion of Native or other categories of lands; tax equivalency, especially for eligible urban
lands; and payments affecting the National Wildlife Refuge System.
20
22
An exception would occur if the county’s population is so small that the county is affected by the PILT ceiling on
payments due to population.
23
DOI does not include estimated full payment levels in its annual budget justification to Congress, and confines itself
to the Administration’s request for the year. However, DOI’s annual report of current year PILT payments to counties
includes this information.
2124
Other important issues in 1994 were the question of the equity of the payments and the balance struck in the payment
formula (a) between heavily and sparsely populated communities, (b) between those with federal lands generating large
revenues and those with lands generating little or no revenue, and (c) between the amounts paid under PILT and the
amounts that would be paid if the lands were simply taxed at fair market value. But these issues were not addressed in
the 1994 amendments and have scarcely been mentioned in the debate since then.
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Timing of Payments
Before 2005, payments had been made late in the federal fiscal year. In 2005, to assist the nation’s
counties, whose fiscal year often begins on July 1, DOI moved the payment date forward to midJune, and met this target from 2005 through 2009. But on June 18, 2010, DOI announced that
FY2010 payments under PILT would be made not later than July 15, 2010.22 In part because of
the effects of the recent economic downturn, many counties protested the announced delay in
getting their 2010 funds, even though the expected payment date was still within historic and
statutory limits.
According to the DOI press release, the delay resulted from delayed reporting of prior year
payments from some states. (See “Step 3. Are There Prior-Year Payments from Other Federal
Agencies?”) In addition, some states had had changed their pass-through laws regarding prioryear payments from other federal agencies. (See “Step 4. Does the State Have Pass-Through
Laws?”) These changes, which could increase a county’s PILT payment, sometimes substantially,
had to be evaluated by DOI lawyers to determine whether the recipient county agency (most
commonly a school board) was in fact truly independent of the county government. This review
took extra time, partly because there were a number of such changes. DOI argued that it needed
the extra month to comply with the PILT statute.
On June 29, 2010, Secretary Ken Salazar announced that local governments received their funds
by that day.23 Because of the concern among counties and the role played by delayed reporting on
prior-year payments, S. 3730 was introduced in the 111th Congress to require a report to the
House Natural Resources and the Senate Energy and Natural Resources Committees identifying
the states that had not yet reported their prior year payments by January 15 of each year. In
addition, the names of states that had not reported by February 1 would be published in the
Federal Register. The bill would also mandate that the PILT payment be distributed no later than
May 1 of each year. No hearings have yet been held on the bill.
Inclusion of Native Lands
Some counties with many acres of non-taxable Indian lands within their boundaries have
supported adding Indian lands to the list of lands eligible for PILT. The primary arguments made
are that these lands receive benefits from the county, such as road networks, but Indian residents
do not pay for them with property taxes; on the other hand, the federal government does not
12
PILT (Payments in Lieu of Taxes): Somewhat Simplified
spending for PILT. This question has been the biggest issue facing the program in the 112th
Congress. At the same time, with the congressional debate over spending levels in general, there
may be proposals to modify or even eliminate PILT in later years as a means of reducing federal
deficits. Three more specific issues are also being debated: inclusion of Indian or other categories
of lands; tax equivalency, especially for eligible urban lands; and payments affecting the National
Wildlife Refuge System.
Inclusion of Indian Lands
While the inclusion of other lands (e.g., military lands generally or those of specific agencies such
as the National Aeronautics and Space Administration) under the PILT program has been
mentioned from time to time, some counties with many acres of non-taxable Indian lands within
their boundaries have long supported adding Indian lands to the list of lands eligible for PILT.
The primary arguments made are that these lands receive benefits from the county, such as road
networks, but Indian residents do not pay for them with property taxes; on the other hand, the
federal government does not actually own these lands.
The complexity of the PILT formula makes it very difficult to calculate the consequences of such
a move, either for authorization levels or appropriation levels. Additionally, Congress would have
to decide what sorts of “Indian lands” would be eligible for such payments and a variety of other
complex issues.24 Once the eligible categories were determined, Congress might wish to limit
22
DOI Press Release at http://www.doi.gov/news/pressreleases/Interior-Announces-FY2010-PILT-PaymentSchedule.cfm.
23
DOI press Release, http://www.doi.gov/news/pressreleases/PILT-Local-Governments-will-Receive-358-Million-ToCompensate-for-Tax-Exempt-Federal-Lands.cfm.
24
The many classifications of “Indian lands” include trust lands, restricted lands, and fee (private) lands, both on and
off reservations. Trust lands are lands held by the federal government in trust for an Indian tribe or individual.
Restricted lands are lands held by an Indian tribe or individual but subject to federal restrictions on alienation (e.g.,
(continued...)
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25 If some categories of Indian lands were to be added to those lands already
eligible, Congress might wish to limit payments to counties with more than some minimum
percentage of Indian lands within their
borders. Regardless, even a very restrictive definition of
“Indian lands” seems likely to add many
millions of acres to those already eligible. Once the Even if the
criteria for eligibility were fixeddetermined, it would still
be difficult to determine the effect on
authorization levels. To paint an extreme example, if all of
the eligible Indian lands were in
counties whose PILT payments were already capped due to the
population ceiling, inclusion of
Indian lands would have no effect on PILT authorization levels.
As long as mandatory spending is in place, appropriations would go up to fund the newly eligible
lands. If mandatory spending is allowed to expireexpires and annual appropriations are less than the
authorized level,
each county would receive a pro rata share of the full authorizedauthorized full payment level.
Individual Individual
counties whose eligible acres had jumped markedly with the inclusion of Indian lands
might might
receive substantially more than in the past. MostOther counties (particularly those with few or no
eligible Indian acres) would receive a smaller fraction of the authorized amount as limited dollars
would be distributed among more lands.
Inclusion of Urban Lands and Tax Equivalency
Some observers have wondered whether urban federal lands are included in the PILT program.
The response is that urban lands are not excluded from PILT under the current law. For example,
in FY2010, the counties in which Sacramento, Chicago, Cleveland, and Arlington (VA) are found,
as well as the District of Columbia, all received relatively small PILT payments, as shown in
Table 1.
Table 1. PILT Payments to Selected Urban Counties, FY2010
County
Eligible Acres
Sacramento County (CA)
Cook County (IL)
Cuyahoga County (OH)
Arlington County (VA)
District of Columbia
a.
FY2010 Authorized Payment ($)
9,621
23,068
139
334
2,592
7,985
27
0a
6,963
25,087
Under the formula, Arlington County’s 27 eligible acres (all under the National Park Service) would
generate a payment of $65. However, under the law, no payment is made for amounts under $100.
Eastern counties, which tend to be small, rarely have large populations and large eligible acreage
in the same county. On the other hand, western counties tend to be very large and, like
(...continued)
25
The many classifications of “Indian lands” include trust lands, restricted lands, and fee (private) lands, both on and
off reservations. Trust lands are lands held by the federal government in trust for an Indian tribe or individual.
Restricted lands are lands held by an Indian tribe or individual but subject to federal restrictions on alienation (e.g.,
sale) or encumbrance (e.g., mortgaging). Most, but by no means all, Indian trust and restricted lands are on Indian
reservations. Trust and restricted lands, whether on or off reservations, are not subject to state or local land taxes. Onreservation Indian fee lands may or may not be subject to state and local land taxes, depending on the federal statute
under which the land was fee-patented. Off-reservation Indian fee lands are generally subject to state and local land
taxes. (Indian reservations may also include non-Indian fee lands, which are subject to state and local taxation.)
Alaskan Native corporation lands (none of which are trust lands) are affected by the Alaska Native Claims Settlement
Act’s limits on state taxation. Congress would have to decide which of these many classifications of Indian lands would
be subject to PILT benefits. Further, Congress might choose to distinguish between Indian lands which have never been
taxed by a county or state versus those Indian lands that were once taxable but which were acquired into non-taxable
status after some specified date.
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Sacramento, may have many eligible acres as well as large populations. Furthermore, as the cases
of Arlington and the District illustrate, PILT payments are by no means acting as an equivalent to
property tax payments, since private owners of those 6,963 acres in the District or the 27 acres in
Arlington would surely pay much more than $25,087, or $0, respectively, if the land were subject
toInclusion of Urban Lands and Tax Equivalency
Some observers have wondered whether urban federal lands are included in the PILT program.
The response is that urban lands are not excluded from PILT under the current law. For example,
in FY2012, the counties in which Sacramento, Chicago, and Cleveland are found, as well as the
District of Columbia, all received PILT payments (see Table 1), though the property tax on
similar, but non-federal, lands would likely have been substantially greater.
Table 1. PILT Payments to Selected Urban Counties, FY2012
County
Sacramento County (CA)
Cook County (IL)
Cuyahoga County (OH)
Arlington County (VA)
District of Columbia
a.
Eligible Acres
FY2012 Authorized Payment ($)
9,621
23,740
139
343
2,592
8,166
27
0a
6,959
17,339
Under the formula, Arlington County’s 27 eligible acres (all under the National Park Service) would
generate a payment of $65. However, under the law, no payment is made for amounts under $100.
Source: U.S. Dept. of the Interior, Payments in Lieu of Taxes: National Summary, FY2012.
Eastern counties, which tend to be small, rarely have large populations and large eligible acreage
in the same county. On the other hand, western counties tend to be very large and may have many
eligible acres, and some, like Sacramento, may have large populations as well. Furthermore, as
the cases of Arlington County and the District of Columbia illustrate, PILT payments are by no
means acting as an equivalent to property tax payments, because if the 6,959 acres in the District
of Columbia or the 27 acres in Arlington County were owned by taxable entities, those entities
would surely pay much more than $17,339, or $0, respectively, in property taxes.
Because the formula in PILT does not reflect an amount commensurate with property taxes,
counties such as these might support a revised formula that would approach property tax
payments.
National Wildlife Refuge System Lands
As noted above, lands in the National Wildlife Refuge System (NWRS) that arewere withdrawn from
from the public domain are eligible for PILT, and those that arewere acquired are not. In addition, the
National Wildlife Refuge Fund (NWRF) , also called the Refuge Revenue-Sharing Fund, or RRSF)
relies on annual appropriations for full funding. For
FY2010 FY2012, payments for NWRF are
approximately 3824% of the authorized level. For refuge lands
eligible for PILT, some or perhaps
all of the NWRF payment will be made up for in the following
year’s PILT payment, but for
acquired lands, this will not occur sincebecause they are not eligible for
PILT. Congress may consider
making all refuge lands eligible for PILT, and/or providing
mandatory spending for NWRF, as it
has for PILT. Eastern counties could be the largest
beneficiaries of such a change, although some
western states may also have many NWRS acres
that are not currently eligible for PILT. (See
Table 2 for selected state examples.) Adding the 10.9
million acres of NWRS lands currently
ineligible for PILT would increase PILT lands by 1.8%.
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Table 2. NWRS Acres Eligible for PILT in Selected States, FY2008FY2010
State
NWRS Acres Reserved from
Public Domain
Total NWRS Acres
Percent Eligible
for PILT
Alabama
0
71,360386
0.0
Arizona
1,553,464
1,738,104
89.4
334
86,873
0.4
0
66,768465
1,740,545
89.2
334
118,473
0.3
0
68,107
0.0
433,135
1,412,040445,163
30.70
77
9,093
0.8
267,562
581,124
46.0
Iowa
Maine
Montana
Ohio
Oregon
Author Contact Information
M. Lynne Corn
Specialist in Natural Resources Policy
lcorn@crs.loc.gov, 7-7267
Congressional Research Service
14234
0.8
275,018
590,741
46.5
Iowa
Maine
Montana
Ohio
Oregon
Source: Annual Report of Lands Under Control of the U.S. Fish and Wildlife Service As of September 30, 2010 (the
most recent year available).
Congressional Interest
Congressional interest, after the 1994 revisions to PILT, has focused on the three areas cited
above: (1) whether to approve mandatory spending (either temporary or permanent); (2) whether
to make the diametrically opposed choice of reducing the program through appropriations or
through changing the PILT formula; and (3) whether to add or subtract any lands to the list of
those now eligible for PILT payments. PILT payments for FY2012 totaled $393.0 million in
mandatory spending; in contrast, the annual appropriation contained in P.L. 112-74 for the bulk of
funding for the Department of the Interior was $10.3 billion, or 26 times the PILT program. For a
relatively small fraction of the federal budget, PILT garners considerable attention for local
reasons: (1) according to the FY2012 Payments in Lieu of Taxes: National Summary, 1850
counties were eligible for PILT; (2) the average payment per county (many of which are sparsely
populated) was $212,456; (3) while some counties received only $100 (below which figure PILT
makes no payment), many received over $1 million and 14 received over $3 million.26 The
resulting impact on budgets of local governments helps generate interest despite the
comparatively small size of the PILT program.
26
Payments in Lieu of Taxes: National Summary, FY2012. The 14 counties were in seven states: AK (1), AZ (3),
CA (3), NV (2), NM (1), UT (2), and WY (2).
Congressional Research Service
15
PILT (Payments in Lieu of Taxes): Somewhat Simplified
Appendix. PILT Data Tables
The first two tables below show the data presented in Figure 1 and Figure 2. The third shows the
agency payments that offset payments under PILT in the following year.
Table A-1. Total PILT Payments, FY1993-FY2012:
Appropriations in Current and Inflation-Adjusted Dollars (to 2010)
($ in millions)
Year
Appropriation
Inflation-Adjusted
Appropriation
1993
103.2
146.31
1994
104.1
144.54
1995
101.1
137.51
1996
112.8
150.55
1997
113.1
148.33
1998
118.8
154.07
1999
124.6
159.25
2000
134.0
167.63
2001
199.2
243.69
2002
209.4
252.09
2003
218.6
257.75
2004
224.7
257.68
2005
226.8
251.73
2006
232.5
249.98
2007
232.5
242.93
2008
367.2
375.35
2009
381.6
385.99
2010
358.1
358.10
2011
375.2
375.16
2012
393.0
384.79
Source: Current dollars from annual Payments in Lieu of Taxes: National Summary. Inflation adjustment is based
on chain-type price index.
Notes: For the same data in a bar chart, see Figure 1.
Congressional Research Service
16
PILT (Payments in Lieu of Taxes): Somewhat Simplified
Table A-2. Total PILT Payments, FY1993-FY2012,
Authorized Amount and Appropriation
($ in millions)
Year
Authorized
Appropriated
1993
103.2
103.2
1994
104.4
104.1
1995
130.5
101.1
1996
165.1
112.8
1997
212.0
113.1
1998
260.5
118.8
1999
303.7
124.6
2000
317.6
134.0
2001
338.6
199.2
2002
350.8
209.4
2003
324.1
218.6
2004
331.3
224.7
2005
332.0
226.8
2006
344.4
232.5
2007
358.3
232.5
2008
367.2
367.2
2009
381.6
381.6
2010
358.1
358.1
2011
375.2
375.2
2012
393.0
393.0
Source: Annual Payments in Lieu of Taxes: National Summary.
Notes: For the same data in a bar chart, see Figure 2.
Congressional Research Service
17
Table A-3. Prior-Year Payment Laws That Are Offset Under Next PILT Payment
Federal Agency
Making Payment
Short Title of Law or
Common Name
Forest Service
Bureau of Land
Management
CRS-18
P.L. or Date
U.S. Stat.
U.S. Code
Lands Eligible for
Payments
“25% payments” or
“Payments to states”
Act of May 23,
1908 (ch. 192,
§13)
35 Stat. 260
16 U.S.C. §500
All NF lands
25% of gross receipts to
state for roads and
schools in counties
None
Act of June 20,
1910 (ch. 310)
36 Stat. 557, §6
not codified
NF lands in AZ and
NM
Proportion of lands in
National Forests (NFs)
reserved for schools
times proceeds from
sales in NF
None
Act of June 22,
1948 (ch. 593, §5);
Act of June 22,
1956 (ch. 425, §2)
62 Stat. 570, 70
Stat. 328
16 U.S.C. §577g,
§577g-1
Lands in Superior NF,
MN
0.75% of appraised value
(in addition to 25%
payments above)a
Mineral Leasing Act for
Acquired Lands (§6)
Act of Aug. 7,
1947
61 Stat. 915
30 U.S.C. §355
NF lands with mineral
leasing
50% of mineral leasing
revenues to states for
counties
Material Disposal Act
Act of July 31,
1947 (§3)
61 Stat. 681
30 U.S.C. §603
Net revenues from
sale of land and
materials
Varies depending on type
of receipt and agency
Secure Rural Schools and
Community SelfDetermination Actb
P.L. 106-393, as
amended
114 Stat. 1607, as
amended
16 U.S.C. §7101 et
seq.
NF lands (but not
lands under Land
Utilization Program
(LUP) or National
Grasslands), if this
option is chosen by
county instead of 25%
payments
Complex formula, see
CRS Report R41303,
Reauthorizing the Secure
Rural Schools and
Community SelfDetermination Act of 2000
Mineral Lands Leasing Act
Act of February
25, 1920 (ch. 85,
§35)
41 Stat. 450
30 U.S.C. §191
Public lands
50% of leasing revenues
to states for counties
Taylor Grazing Act
Act of June 28,
1934 (ch. 865,
§10)
48 Stat. 1273
43 U.S.C. §315i
Public lands
12.5% of grazing receipts
to states for counties
Bankhead-Jones Farm
Tenant Act
Act of July 22,
1937 (ch. 513,
§33)
50 Stat. 526
7 U.S.C. §1012
National Grasslands
and LUP lands
managed by BLM
25% of revenues for use
of lands to states
Payment Rate
Federal Agency
Making Payment
Short Title of Law or
Common Name
P.L. or Date
U.S. Stat.
U.S. Code
Lands Eligible for
Payments
Mineral Leasing Act for
Acquired Lands (§6)
Act of Aug. 7,
1949
61 Stat. 915
30 U.S.C. §355
Public lands with
mineral leasing
50% of mineral leasing
revenues to states for
counties
Material Disposal Act
Act of July 31,
1947 (§3)
61 Stat. 681
30 U.S.C. §603
Net revenues from
sale of land and
materials
Varies depending on type
of receipt and agency
Fish and Wildlife
Service
Refuge Revenue Sharing
Act
Act of June 15,
1935 (ch. 261,
§401(c)(2))
49 Stat. 383
16 U.S.C.
§715s(c)(2)
Public domain lands in
NWRSc
25% of net receipts from
timber, grazing, and
mineral sales directly to
county; remaining 75% to
counties under other
formulas
Federal Energy
Regulatory
Commission
Federal Power Act
Act of June 10,
1920, (ch. 285,
§17)
41 Stat. 1072
16 U.S.C. §810
NF and public lands
with occupancy and
use for power
projects
37.5% of revenues from
licenses for occupancy &
use to states for counties
Payment Rate
Sources: 31 U.S.C. §6903(a)(1), Payments in Lieu of Taxes: National Summary FY2012, p. 13. The latter document has typographical errors which are corrected here, as
noted. Because the various payment laws are identified in some documents by title, in others by a U.S. Code citation, or still others by the Statutes at Large, or date, or
Public Law, all of these are cited here, where they exist.
a.
Payments in Lieu of Taxes: National Summary FY2012 erroneously states payment rate is 75% of appraised value.
b.
When payments are made for lands under the jurisdiction of the Forest Service for the Secure Rural Schools (SRS) program, the payments result in a reduction (offset)
in the following year’s PILT payment. However, if the lands are under BLM jurisdiction, no offset is made in the following year’s PILT payment. All BLM lands eligible for
SRS payments are in Oregon.
c.
Acquired lands in the National Wildlife Refuge System are not eligible for PILT payments. See text.
CRS-19
PILT (Payments in Lieu of Taxes): Somewhat Simplified
Author Contact Information
M. Lynne Corn
Specialist in Natural Resources Policy
lcorn@crs.loc.gov, 7-7267
Congressional Research Service
20