Reauthorizing the Secure Rural Schools and
Community Self-Determination Act of 2000
Katie Hoover
Analyst in Natural Resources Policy
February 26, 2013January 21, 2015
Congressional Research Service
7-5700
www.crs.gov
R41303
CRS Report for Congress
Prepared for Members and Committees of Congress
Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
Summary
Many counties are compensated for the tax-exempt status of federal lands. Counties with national
forest lands and with certain Bureau of Land Management (BLM) lands have historically
received a
percentage of agency revenues, primarily from timber sales. However, timber sales
have declined
substantially—by more than 90% in some areas—which had led to substantially
reduced payments to the counties. Thus, Congress enacted the Secure Rural
Schools and
Community Self-Determination Act of 2000 (SRS; P.L. 106-393) as a temporary,
optional optional
program of payments based on historic, rather than current, revenues.
Authorization for SRS payments originally expired at the end of FY2006, but through several
reauthorizations the program was extended through FY2012. Congressional debates over
reauthorization considered the basis and level of compensation (historical, tax equivalency, etc.);
the source of funds (receipts, a new tax or revenue source, etc.); the authorized and required uses
of the payments; interaction with other compensation programs (notably Payments in Lieu of
Taxes); and the duration of any changes (temporary or permanent). In addition, legislation with
mandatory spending, such as SRS reauthorization, raises policy questions about increasing the
deficit; current budget rules to restrain deficit spending typically impose a procedural barrier to
such legislation, generally requiring offsets by additional receipts or reductions in other
mandatory spending.
In 2008, the Emergency Economic Stabilization Act (P.L. 110-343) enacted a four-year extension
to SRS authorization through FY2011, with declining payments, a modified formula, and
transition payments for certain areas. In 2012, Congress enacted a one-year extension through
FY2012, and amended the program by slowing the decline in payment levels and tightening
requirements that counties select a payment option promptly (P.L. 112-141).
With the expiration of SRS at the end of FY2012, county compensation is again the subject of
congressional debates. County payments are set to return to a revenue-based system for FY2013,
and are likely to be significantly lower than the previous years’ payments. Congress may consider
extending SRS, with or without modifications, implementing other legislative proposals to
address the county payments, or taking no action (thus continuing the revenue-based system that
took effect upon the program’s expiration). To date, no legislative action has occurred in the 113th
Congress. Discussion in the 113th Congress may focus on many of the same issues that were
debated in 2006-2008 and again in 2012the program was
extended through FY2013 by several reauthorizations, starting with a one-year reauthorization for
FY2007 (P.L. 110-28). In 2008, the Emergency Economic Stabilization Act (P.L. 110-343)
enacted a four-year extension to SRS authorization through FY2011, with declining payments, a
modified formula, and transition payments for certain areas. In 2012, Congress enacted a oneyear extension through FY2012, and amended the program to slow the decline in payment levels
and to tighten requirements that counties select a payment option promptly (P.L. 112-141). In
2013, Congress again enacted a one-year extension through FY2013 (P.L. 113-40). SRS payments
are disbursed after the fiscal year ends, so the FY2013 SRS payment—the last authorized
payment—was made in FY2014.
Congressional debates over reauthorization have considered the basis and level of compensation
(historical, tax equivalency, etc.); the source of funds (receipts, a new tax or revenue source, etc.);
the authorized and required uses of the payments; interaction with other compensation programs
(notably Payments in Lieu of Taxes); and the duration of any changes (temporary or permanent).
In addition, legislation with mandatory spending, such as SRS reauthorization, raises policy
questions about congressional control of spending. Current budget rules to restrain deficit
spending typically impose a procedural barrier to such legislation, generally requiring offsets by
additional receipts or reductions in other spending.
SRS expired at the end of FY2013. County payments are set to return to a revenue-based system
for FY2014. On January 15, 2015, the Forest Service announced that the revenue-sharing
payment to be disbursed in February 2015 will be $50.4 million, which is significantly lower than
the previous years’ SRS payments. The 114th Congress may consider extending SRS (with or
without modifications), implementing other legislative proposals to address the county payments,
or taking no action.
Congressional Research Service
Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
Contents
Background ...................................................................................................................................... 1
Receipt-Sharing Program Concerns and Responses ............Payment History: Declining Revenue-Sharing Payments Leads to Enactment of SRS ............ 2
SRS and Other Federal Compensation Programs ............................................................ 5
Concerns .................... 5
Revenue-Sharing Program Concerns and Responses ...................................................................... 6
Declining Timber Receipts .................................................... 5
Historical Proposals to Change the Receipt-Sharing System .................................................... 6
Legislative History of the Secure Rural Schools and Community Self-Determination Act
of 2000, as Amended Annually Fluctuating Payments................................................................................................. 6
Linkage ................... 7
Reauthorization Efforts in the 110th Congress ........................................................................... 7
Four-Year Extension Enacted in the 110th Congress........................................ 7
Legislative History of the Secure Rural Schools and Community Self-Determination Act
of 2000, as Amended .......................... 8
Full Funding .......................................................................................... 7
Reauthorization Efforts in the 110th Congress .............................. 8
Calculated Payments ............................................. 8
Four-Year Extension through FY2011 Enacted in the 110th Congress ................................ 9
One-Year Extension Through FY2012 Enacted in the 112th Congress................................ 9
Transition Payments.... 11
Legislative Activity in the 113th Congress ............................................................................... 11
One-Year Extension Through FY2013 Enacted in the 113th Congress ............................ 10
Title II and Title III Activities ... 12
FY2014 Reauthorization Efforts ......................................................................................... 10
Income Averaging 12
Legislative Issues .............................................................................................................. 10
Payments in Lieu of Taxes (PILT)............. 12
Offsets for New Mandatory Spending ..................................................................................... 10
Reauthorization Efforts in the 112th Congress 13
Geographic Distribution of SRS and PILT Payments.............................................................. 13
Lands Covered ...................... 11
One-Year Extension Enacted in the 112th Congress ................................................................ 11
Legislative Issues .............................................. 15
Basis for Compensation ............................................................................. 11
Offsets for New Mandatory Spending .............................. 16
Source of Funds ....................................................... 11
Lands Covered ................................................................ 16
Authorized and Required Uses of the Payments ............................................................... 12
Basis for Compensation ......... 17
Duration of the Programs ........................................................................................................ 13
Source of Funds18
Figures
Figure 1. Forest Service Cut Volume and Cut Value (2013 dollars) ................................................... 3
Figure 2. FS Total Payments and Estimated Payments .................................................................... 13
Authorized and Required Uses of the Payments ..5
Figure 3. PILT and Forest Service Payments, FY2013................................................................... 14
Duration of the Programs 14
Figure 4. Source and Distribution of FS Payments......................................................................... 17
Tables
Table 1. SRS Payments, FY2000-FY2013 ............................... 15
Figures
Figure 1. Forest Service Cut Volume and Cut Value (2012 dollars) ....................................................... 2
Figure 2. FS Total Payments and Estimated Payments 4
Table 2. SRS Legislative History ..................................................................... 3
Figure 3. Source and Distribution of FS Payments.................................. 8
Table 3. FY2013 SRS and PILT Payments, by State ...................................................................... 14
Tables 14
Table A-1. FY2006 and FY2009 FS and O&C Payments Under SRS, by State ........................... 19
Congressional Research Service
Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
Appendixes
Appendix A. SRS Payments in FY2006 and FY2009 ...............................1. FY2012 FS, O&C, and PILT Payments, by State .............................................................. 4
Table A-1.FY2006 and FY2009 FS and O&C Payments Under SRS, by State . 19
Appendix B. Historical Proposals to Change the Revenue-Sharing System ................................ 16
Appendixes
Appendix. SRS Payments in FY2006 and FY2009. 21
Appendix C. FY2013 Sequestration Issues ....................................................................... 16
Congressional Research Service
Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000............ 23
Contacts
Author Contact Information........................................................................................................... 1725
Acknowledgments ......................................................................................................................... 1725
Congressional Research Service
Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
M
any counties are compensated for the tax-exempt status of federal lands within those
counties. Counties with national forest lands and with certain Bureau of Land
Management (BLM) lands have historically received a percentage of agency revenues,
F
ederally owned lands cannot be taxed by state or local governments, but may create
demand for services from state or local entities, such as fire protection, police cooperation,
or longer roads to skirt the property. Under federal law, local governments are compensated
through various programs due to the presence of federal lands. Counties with national forest lands
and with certain Bureau of Land Management (BLM) lands have historically received a
percentage of agency revenues, primarily from timber sales. However, timber sales have declined
substantially since the historic
high cut values in 1989—by more than 90% in some areas—which
had led to substantially reduced payments to the counties. Congress enacted the Secure Rural
Schools and Community Self-Determination Act of 2000 (SRS, P.L. 106-393))1 to provide a
temporary, optional
system to supplant the revenue-sharing programs for the national forests,
managed by the Forest
Service (FS) in the Department of Agriculture, and for certain public lands
administered by the
BLM in the Department of the Interior.
The law authorizing these payments
(SRS) originally expired at the end of FY2006, but was
extended an additional seven years through several reauthorizations. The 109th Congress
considered the program, but did not enact
reauthorizing legislation. The 110th Congress extended
the payments for one year, through FY2007, and then enacted
legislation to reauthorize the
program for four years with declining payments, and to modify the formula for allocating the
payments. The authorization for payments was set to expire again after payments were made for
FY2011, but the 112th Congress extended the program for one more year through FY2012, and
amended the program by slowingto slow the decline in payments. The authorization expired after
payments were made for FY2012. Currently, payments for FY2013 will revert to a percentage of
113th Congress again enacted a oneyear extension, reauthorizing the program through FY2013, but did not reauthorize the program
for FY2014. SRS payments are disbursed after the fiscal year ends, so the FY2013 payment was
made in FY2014.
Without additional congressional action, payments for FY2014 (to be made in FY2015) will
revert to a percentage of agency revenues, primarily from timber sales and recreation fees. This
report explains the
changes enacted for the program by the amendments in 2008 and 2012, and then describes the
issues that Congress has debated and that the 113th Congress may again debate and the
effect of the FY2013 sequester order on the FY2012 payments. It then describes the issues that
Congress has debated and may continue to debate in the 114th Congress.
Background
In 1908, the FS began paying 25% of its gross receipts to the states for use on roads and schools
in in
the counties where the national forests are located; receipts come from sales, leases, rentals, or
other other
fees for using national forest lands or resources (e.g., timber sales, recreation fees, and
communication site leases).12 This mandatory spending program was enacted to compensate local
governments for the tax-exempt status of the national forests, but the selected compensation rate
(10% of
gross receipts in 1906 and 1907; 25% of gross receipts since) was not discussed in the
1906-1908
debates. This revenue- or receipt-sharing program is called FS Payments to States, because each state
allocates the funds to
(also referred to as the 1908 payment, or the 25% payment), because each state must spend the
funds on road and school programs, although states have no discretion in assigning the funds to
the county: the FS determines the amount to be
spent in allocated to each county based on the acreage of each national forestnational
forest acreage in each county. The states
cannot retain any of the funds; they must be passed through to local governmental entities for use
at the county level (but not necessarily to county governments) for authorized road and school
programs. State law sets forth how the payments are to be allocated between road and school
projects
1
P.L. 106-393, 16 U.S.C. §§7101-7153.
Act of May 23, 1908, 16 U.S.C. §500. For more on these and other county-compensation programs with mandatory
spending for federal lands, see CRS Report RL30335, Federal Land Management Agencies’ Mandatory Spending
Authorities.
2
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Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
through to local governmental entities for use at the county level (but not necessarily to county
governments themselves) for authorized road and school programs. State law sets forth how the
payments are to be allocated between road and school projects, and the state laws differ widely,
generally ranging from 30% to 100% for school programs, with a few states providing substantial
local discretion on the split.
Congress has also enacted numerous programs to share receipts from BLM lands for various
types of resource use and from various classes of land, but one. One program—the Oregon and
California California
(O&C) payments—accounts for the vast majority (more than 95%) of BLM receiptsharing.2 The receipt-sharing.3 The
O&C payments are made to the counties in western Oregon containing the revested
Oregon and
California grant lands that were returned to federal ownership for failure of the states to fulfill the
terms of
the grant. The O&C counties receive 50% of the receipts from these lands. These mandatory
mandatory payments go directly to the counties for any local governmental purposes. Concerns about, and
1
16 U.S.C. §500. For more on these and other county-compensation programs with mandatory spending for federal
lands, see CRS Report RL30335, Federal Land Management Agencies’ Mandatory Spending Authorities.
2
For more information, see CRS Report R42951, The Oregon & California Railroad Lands (O&C Lands): Issues for
Congress.
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Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
about, and proposals to alter, FS receiptrevenue-sharing payments also typically include the O&C
payments, because
both are substantial payments derived largely from timber receipts.
At their pre-SRS peaks in FY1989, FS
Payment History: Declining Revenue-Sharing Payments Leads to
Enactment of SRS
FS revenue—and consequently, revenue-sharing payments—peaked in the late 1980s. The
FY1989 FS 25% payments totaled $362 million, while O&C payments
totaled $110 million. FS
and O&C receipts have declined substantially since FY1989, largely
because of declines in
federal timber sales (see Figure 1), but also due to a variety of factors. The decline began in the
Pacific Northwest,
owing in part to efforts to to a combination of forest management policies and practice, efforts to
protect northern spotted owl habitat, increased planning and procedural requirements, changing
public preferences, economic and industry factors, and other values. and other values.3 Provisions in the
Omnibus Omnibus
Budget Reconciliation Act of 19934 directed FS payments for 17 national forests in
Washington,
Oregon, and California and BLM payments to the O&C counties at a declining
percentage (beginning at 85% in FY1994 and declining by 3 percentage points annually) percentage of the
average payments for FY1986-FY1990.5 Declining federal timber sales in other areasregions led to the
nationwide SRS program replacing these “safety net” or “owl” payments in 2000.
Similar to the owl payments for the Pacific Northwest, the SRS program was an optional payment
that counties could elect to receive instead of receiving the 25% receipt-sharing payment. As
originally enacted, the SRS payment was calculated as an average of the three highest payments
between FY1986 and FY1999. With the extension in FY2007, the SRS payment calculation was
modified to also consider county population and per capita income, and established a declining
payment level.
3
For more information, see CRS Report R42951, The Oregon and California Railroad Lands (O&C Lands): Issues for
Congress.
4
P.L. 103-66 §13982-3.
5
The payment amount began at 85% of the average FY1986-FY1990 payment, and declined by 3 percentage points
annually.
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Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000 or “owl” payments in 2000.
14.0
$3,500
12.0
$3,000
10.0
$2,500
8.0
$2,000
6.0
$1,500
4.0
$1,000
2.0
$500
0.0
$0
Cut Volume
2012 Dollars (millions)
Volume (BBF)
Figure 1. Forest Service Cut Volume and Cut Value (2012 dollars)
Cut Value (2012 dollars)
Source: FY1977-FY20122013 dollars)
Sources: FY1977-FY2014 data: U.S. Forest Service, Forest Cut and Sold Reports, http://www.fs.fed.us/
forestmanagement/products/sold-harvest/cut-sold.shtml, accessed November 16, 2012December 17, 2014. FY1940-FY1976 data:
U.S. Forest Service legislative affairs office.
Note: mmbf= million board feet.
Payments under SRS are substantial (see Table 1), and significantly greater than the receiptsharing payments currently would be. The FS payment rose from $194 million in FY2000 (all
figures in nominal dollars) to a $346 million SRS payment in FY2001.6 For the initial six years
SRS was authorized, the average FS SRS payment was $360 million annually, more than $130
million above the average annual FS payment for the six years prior to the enactment of SRS
(FY1995-FY2000). Over the life of the program, the FS SRS payment averaged $356 million,
and the BLM SRS payment averaged $85.3 million.7 Figure 2 shows a comparison of the FS
actual payments to estimates of what the payments would have been had SRS not been enacted.
For example, FS receipts (for revenue-sharing purposes) in FY2012 totaled $230 million.8 If
revenue-sharing had been used rather than SRS payments, then the payments would have been
around $58 million.9 However, the payments under SRS actually totaled $274 million. Similarly,
BLM timber receipts from western Oregon (which includes some non-O&C lands) totaled $28
million in FY2012.10 If 50% payments had been used, then approximately $14 million would
6
Unless otherwise specified, “SRS payment” means the payment made to counties under SRS Title I and Title III
payments, but does not include SRS Title II payments, which remain with the agency. Data from annual Forest Service
report, All Service Receipts: Title I, II, and III Region Summary (ASR-18-3), available from http://www.fs.usda.gov/
main/pts/home.
7
BLM data from annual Official Payments Made to Counties reports, available from http://www.blm.gov/or/rac/
ctypaypayments.php.
8
Data provided by the Forest Service Legislative Affairs office, February 21, 2013.
9
Estimated 25% payments data available from http://www.fs.usda.gov/main/pts/securepayments/projectedpayments.
10
U.S. Dept. of the Interior, Bureau of Land Management, Public Land Statistics,2012, Table 3-12,
(continued...)
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have been transferred to the counties, compared to SRS payments of $34 million. If SRS had not
been reauthorized for FY2013, FS estimated that the revenue-sharing payment would have been
approximately $54 million and BLM estimated the O&C payment would have been $12 million.
The FS SRS payment for FY2013 was $259 million, and the BLM SRS payment was $36
million.11 With the expiration of SRS, FY2014 payments will again be based on a percentage of
agency receipts (25% for national forest lands; 50% for O&C lands. The FS announced that the
FY2014 FS revenue-sharing payment will be $50.4 million.12
Table 1. SRS Payments, FY2000-FY2013
(dollars in millions)
FS Payment
BLM Payment
Total SRS Payment
FY2001
$346.2
$102.0
$448.2
FY2002
$343.5
$102.3
$445.7
FY2003
$356.2
$103.3
$459.5
FY2004
$360.8
$104.5
$465.4
FY2005
$371.3
$107.1
$478.4
FY2006
$376.7
$108.9
$485.6
FY2007
$381.6
$111.9
$493.5
FY2008
$422.5
$96.7
$519.2
FY2009
$466.1
$87.2
$553.3
FY2010
$373.8
$78.0
$451.9
FY2011
$291.2
$36.3
$327.5
FY2012
$274.0
$34.3
$308.3
FY2013
$259.0
$36.3
$295.3
Source: FS FY2001-FY2005, FY2007 data: FS legislative affairs office. FS FY2006, FY2008-FY2013 data: annual
Forest Service report, All Service Receipts: Title I, II, and III Region Summary (ASR-18-3), available from
http://www.fs.usda.gov/main/pts/home. BLM data from annual Official Payments Made to Counties reports, available
from http://www.blm.gov/or/rac/ctypaypayments.php.
Notes: The data presented include SRS Title I and Title III payments, but do not include SRS Title II payments,
FS revenue-sharing payments, or other miscellaneous county payments authorized through various FS payment
programs not discussed in this report, such as payments from land utilization projects.
(...continued)
http://www.blm.gov/public_land_statistics/pls12/pls2012-web.pdf.
11
SRS payments reported here only include the Title I and Title III payments made to the counties, and do not include
Title III payments retained by the agency or the payments to the counties that opted to receive revenue-sharing
payments.
12
Forest Service, Forest Service announces payments to States to support local schools and roads, January 15, 2015,
http://www.fs.fed.us/news/releases/forest-service-announces-payments-states-support-local-schools-and-roads.
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Figure 2. FS Total Payments and Estimated Payments
Source: CRS. FS total payments are from the annual Forest Service report, All Service Receipts: Final Payment
Summary Report PNF (ASR-10-01), available from http://www.fs.usda.gov/main/pts/home. The estimated FS
payments if SRS had not been enacted for FY2001-FY2007 are from an unpublished spreadsheet received from
Rick Alexander, Secure Rural Schools Act National Program Manager, U.S. Forest Service, on November 30,
2011. The estimated payments for FY2008-FY2013 are from an FS spreadsheet available at
http://www.fs.usda.gov/main/pts/home.
Notes: The data presented include payments under the 25% Payments to States and SRS Title I and Title III
programs, but do not include SRS Title II payments and miscellaneous county payments authorized through
various other FS payment programs not discussed in this report, such as payments from land utilization projects.
SRS and Other Federal Compensation Programs
In addition to the FS and BLM receipt-sharing programs, Congress has enacted other programs to
compensate for the presence of federal land. The most widely applicable program, administered
by the Department of the Interior, is the Payments in Lieu of Taxes (PILT) Program.13 PILT
payments to counties are calculated in dollars per acre and are based on eligible federal lands, as
specified in statute. The eligible lands include national forests and O&C lands in each county (but
total amounts are restricted in counties with very low populations). PILT payments are reduced
(to a minimum payment per acre) by other payment programs—including FS Payments to States
but not including BLM’s O&C payments—so increases in FS payments may decrease a county’s
payments under PILT (and vice versa). This helps to explain why FY2012 PILT payments to
Colorado were double the PILT payments to Oregon, even though there is more federal land in
Oregon (32.6 million acres) than in Colorado (23.8 million acres).
Before 2008, annual appropriations were necessary to fund PILT. When the appropriations were
less than the authorized total payments, each county received its calculated pro rata share of the
appropriation. However, the 2008 and 2012 SRS amendments also made PILT payments
13
Payments in Lieu of Taxes Act of 1976 (P.L. 94-565 as amended, 31 U.S.C. §§6901-6907). For more information,
see CRS Report RL31392, PILT (Payments in Lieu of Taxes): Somewhat Simplified.
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Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
mandatory spending for FY2008-FY2012. P.L. 112-141 extended mandatory spending to FY2013
and P.L. 113-79 extended payments to FY2014. Thus, for those fiscal years, each county received
100% of its authorized PILT payment.
For FY2015 and FY2016, P.L. 113-291 (Section 3096 of the National Defense Authorization Act
(NDAA), FY2015) appropriated $70 million in mandatory spending for PILT. Of this amount,
$33 million will be made available in FY2015; the remaining $37 million will be made available
after the start of FY2016 on October 1, 2015. In addition, P.L. 113-235 (Consolidated and Further
Continuing Appropriations Act, 2015) provided $372 million in discretionary spending. Together,
the two provisions provide $405 million for the payment expected in June 2015. This amount
would have been sufficient for 92.7% of full funding in FY2014; with PILT’s required correction
for inflation, it would be a somewhat lower fraction of full funding for FY2015.14 It is unclear
whether the additional $37 million made available after October 1, 2015, by the NDAA will be
issued to counties as a supplemental check in October, or whether it would form part of the
FY2016 payment that will be issued in 2016.
Revenue-Sharing Program Concerns and Responses
Congress, the affected counties, and other observers have raised three principal concerns about
FS and O&C revenue-sharing programs.15 These are the decline in FS and O&C receipts due to
the decline in timber sales, the annual uncertainty about payment amounts, and the linkage
between timber revenue and county payments.
Declining Timber Receipts
A primary concern about the revenue-sharing programs is how counties are responding to
declining revenue. National forest receipts (subject to sharing) declined from their peak of $1.44
billion in FY1989 to $230 million in FY2012—a drop of 84%. In some areas, the decline was
even greater; for example, payments to the eastern Oregon counties containing the Ochoco
National Forest fell from $10 million in FY1991 to $309,000 in FY1998—a decline of 97% in
seven years. The impact of these declining revenues to individual counties is varied, ranging from
minimal to substantial. Some counties in Oregon, for example, have begun exploring alternative
options to generating revenue to replace the loss of timber receipts and declining SRS payments.16
Annually Fluctuating Payments
Another concern has been annual fluctuations in the payments based on revenue generated. Even
in areas with modest declines or increases in recent decades, payments varied widely from year to
14
FY2014 full funding was $436.9 million, and if (a) inflation is the major factor raising each year’s annual total, and
(b) inflation is about 2%, then the FY2015 full funding level would be about $446 million, or about $41 million more
than the two bills provide. Based on these assumptions, the two bills would provide about 91% of full funding for the
payment expected in June 2015.
15
Forest Counties Payments Committee, Recommendations for Making Payments to States and Counties: Report to
Congress (Washington: GPO, 2003). The committee was established in §320 of the FY2001 Interior and Related
Agencies Appropriations Act, P.L. 106-291.
16
See http://www.seattlepi.com/news/science/article/Curry-County-Ore-rejecting-public-safety-tax-4955794.php.
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Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000
year. From FY1985 to FY2000, the payments from each national forest fluctuated an average of
nearly 30% annually—that is, on average, a county’s payment in any year was likely to be nearly
30% higher or lower than its payment the preceding year. Such wide annual fluctuations imposed
serious budgeting uncertainties on the counties.
Linkage
A third, longer-term concern is referred to as linkage. Some observers have noted that, because
the counties receive a portion of receipts, they are rewarded for advocating receipt-generating
activities (principally timber sales) and for opposing management that might reduce or constrain
such activities (e.g., designating wilderness areas or protecting commercial, tribal, or sport fish
harvests). County governments have thus often been allied with the timber industry, and opposed
to efforts of environmental and other interest groups to reduce timber harvests, in debates over FS
management and budget decisions. This source of funds was deemed appropriate when the FS
program was created (albeit, prior to creation of federal income taxes). Some interests support
retaining the linkage between county compensation and agency receipts; local support for receiptgenerating activities is seen as appropriate by these constituencies, because such activities usually
also provide local employment and income, especially in rural areas where unemployment is
often high. Others assert that ending the linkage is important so that local government officials
can be independent in supporting whatever management decisions benefit their locality, rather
than having financial incentives to support particular decisions.
Legislative History of the Secure Rural Schools and
Community Self-Determination Act of 2000,
as Amended
In 2000, Congress enacted the Secure Rural Schools and Community Self-Determination Act
(SRS)17 after extensive debates and several different bill versions. (See Appendix B for an
overview of historic proposals to change the revenue-sharing system prior to the enactment of
SRS.)
The act established an optional alternative payment system for FY2001-FY2006. At each
county’s discretion, the states with FS land and counties with O&C land received either the
regular receipt-sharing payments or 100% of the average of the three highest payments between
FY1986 and FY1999. Title I of the act directed that counties receiving less than $100,000 under
the alternative system could distribute the entire payment to roads and schools in the same
manner as the 25% payments. However, counties receiving over $100,000 under the alternative
system were required to spend 15%-20% of the payment on (1) federal land projects proposed by
local resource advisory committees and approved by the appropriate Secretary (Secretary of
Interior or Secretary of Agriculture) if the projects met specified criteria, including compliance
with all applicable laws and regulations and with resource management and other plans
(identified in Title II of the act) or (2) certain county programs18 (specified in Title III of the act).
17
P.L. 106-393, 16 U.S.C. §§7101-7153.
The authorized uses for Title III funds included search, rescue, and emergency services; community service work
(continued...)
18
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Funds needed to achieve the full payment were mandatory spending, and came first from agency
receipts (excluding deposits to special accounts and trust funds) and then from “any funds in the
Treasury not otherwise appropriated.”
SRS was originally enacted as a temporary program, expiring after payments were made for
FY2006. However, SRS has been reauthorized four times, extending the payments an additional
seven years (see Table 2). The following sections describe each reauthorization process and any
program modifications.
Table 2. SRS Legislative History
Statute
Duration
Authorized Payment Level
Major Changes
P.L. 106-393
FY2001-FY2006
Determined by formula; average annual
payment was $500 million nationally
Established program
P.L. 110-28
FY2007
$525 million
None
P.L. 110-343
FY2008-FY2011
$500 million FY2008; FY2009-FY2011,
90% of previous year fundinga
Established a declining full funding
amount; modified payment
calculation formula; phased out
transition payments; modified
payment allocations; 25% payment
based on rolling 7-year average
P.L. 112-141
FY2012
95% of FY2011 level ($346 million)
Modified the declining full funding
amount
P.L. 113-40
FY2013
95% of FY2012 level ($329 million)
None
Notes: The payments were authorized as mandatory spending, with a portion of the payment derived from
agency revenue and the balance from the General Treasury.
a.
The transition payments for specific states authorized in P.L. 110-343 for FY2008-FY2010 resulted in the
total payment amount exceeding the “full funding” amount defined in the act.
Reauthorization Efforts in the 110th Congress
SRS expired at the end of FY2006, with final payments made in FY2007. Legislation to extend
the program was considered in the 110th Congress; various bills would have extended the program
for one or seven years. The Emergency Supplemental Appropriations Act for FY200719 extended
SRS for one year, but the bill was vetoed by President George W. Bush. However, Congress
passed a new version of the Emergency Supplemental Appropriations for FY2007,20 which
included a one-year extension of SRS payments. P.L. 110-28 authorized payments of $100
million from receipts and of $425 million from appropriations, to “be made, to the maximum
extent practicable, in the same amounts, for the same purposes, and in the same manner as were
(...continued)
camps; easement purchases; forest-related educational opportunities; fire prevention and county planning; and
community forestry projects.
19
110th Congress, H.R. 1591, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability
Appropriations Act, 2007.
20
110th Congress, H.R. 2206.
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made to States and counties in 2006 under that Act.”21 Thus, preliminary FY2007 payments were
made at the end of September 2007, with final payments made at the end of December 2007.
Four-Year Extension through FY2011 Enacted in the 110th Congress
In October 2008, Congress passed the Emergency Economic Stabilization Act,22 which extended
SRS payments for four years and made several changes to the program, including providing “full
funding” that declined over four years; altering the basis for calculating payments; providing
transition payments for certain states; and modifying the use of SRS funds for Title II and Title III
activities. These are discussed in more detail below. In addition, Section 601(b) modified the
original FS 25% payment program (under which counties can get compensation in lieu of SRS
payments and for payments after SRS expires).
The act also provided five years of mandatory spending for the PILT program, FY2008-FY2012.
This meant that eligible counties received the full calculated PILT payment for those five years—
a significant increase in PILT payments, since appropriations averaged less than two-thirds of the
calculated payments over the past decade. PILT was further extended in subsequent bills through
the FY2015 payment (and a supplemental payment for FY2016).
Full Funding
The act defined full funding for SRS in Section 3(11). For FY2008, full funding was defined as
$500 million; for FY2009-FY2011, full funding was 90% of the previous year’s funding.
However, total payments exceeded the full funding amount in the first two years; payments under
SRS totaled $572.9 million in FY2008 and $612.8 million in FY2009. This occurred because the
calculated payments (discussed below) are based on full funding, as defined in the bill, but the act
also authorized transition payments (discussed below) in lieu of the calculated payments in eight
states. Since the transition payments exceeded the calculated payments for those states, the total
payments were higher than the full funding amount.
Calculated Payments
SRS payments to each state (for FS lands) or county (for O&C lands) differed significantly from
the payments made under the original SRS; Table A-1 shows the dollars and share of total SRS
payments in each state in FY2006 and FY2009. Payments under Section 102 were based on
historic revenue-sharing payments (like SRS), but modified based on each county’s share of
federal land and relative income level. The payment calculations required multiple steps:
•
Step 1. Determine the three highest revenue-sharing payments between FY1986
and FY1999 for each eligible county, and calculate the average of the three.23
•
Step 2. Calculate the proportion of these payments in each county (divide each
county’s three-highest average [Step 1] by the total of three-highest average in all
eligible counties, with separate calculations for FS lands and O&C lands).
21
P.L. 110-28 Title V, Chapter 4, Section 5401.
P.L. 110-343, Section 601(a).
23
Eligible counties are those that choose to receive payments under this program; counties that choose to continue to
receive payments under the original revenue-sharing programs are excluded from these calculations.
22
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, and significantly greater than the receipt-sharing payments
would be. For example, the average annual total SRS payment for FY2001 through FY2011 was
$383 million. In contrast, under the receipt-sharing system prior to the enactment of SRS, the
average annual total payment was $273 million from FY1990 through FY2000. Figure 2 shows a
3
The decline in timber harvests is attributable to a variety of factors, including a combination of forest management
policies and practice, increased planning and procedural requirements, changing public preferences, economic, and
industry factors.
4
P.L. 103-66 §13982-3.
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comparison of the FS actual payments to estimates of what the payments would have been had
SRS not been enacted. FS receipts (for receipt-sharing purposes) in FY2011 totaled $323
million.5 If receipt-sharing had been used rather than SRS payments then the 25% payments
would have been less than $80 million. However, FY2011 payments under SRS actually totaled
$308 million. Similarly, BLM timber receipts from western Oregon (which includes some nonO&C lands) totaled $22 million in FY2011.6 If 50% payments had been used, then $11 million
would have been transferred to the counties, compared to SRS payments of $40 million in
FY2011. If SRS is not reauthorized, FY2013 payments will again be based on a percentage of
agency receipts, estimated to be $85 million for the Forest Service portion of the payment.7
Figure 2. FS Total Payments and Estimated Payments
Source: CRS. FS total payments are from the annual Forest Service report, All Service Receipts: Final Payment
Summary Report PNF (ASR-10-01), available from http://www.fs.usda.gov/main/pts/home. The estimated FS
payments if SRS had not been enacted for FY2001-FY2007 are from an unpublished spreadsheet received from
Rick Alexander, Secure Rural Schools Act National Program Manager, U.S. Forest Service, on November 30,
2011. The estimated payments for FY2008-FY2011 are from an FS spreadsheet available at
http://www.fs.usda.gov/main/pts/home.
Notes: The data presented includes payments under the 25% Payments to States and SRS Title I and Title III
programs, but does not include SRS Title II payments and miscellaneous county payments authorized through
various other FS payment programs not discussed in this report, such as payments from land utilization projects.
In addition to these receipt-sharing programs, Congress enacted the Payments in Lieu of Taxes
(PILT) Program.8 PILT payments to counties are based on “eligible” federal lands, including
national forests and O&C lands, in each county (but are restricted in counties with very low
populations). PILT payments are reduced (to a minimum payment per acre) by other payment
5
Data provided by the Forest Service Legislative Affairs office, February 21, 2013.
U.S. Dept. of the Interior, Bureau of Land Management, Public Land Statistics, 2011, Table 3-12,
http://www.blm.gov/public_land_statistics/pls11/pls2011.pdf.
7
Forest Service, FY2013 Budget Justification, pp. 12-40, http://www.fs.fed.us/aboutus/budget/.
8
See CRS Report RL31392, PILT (Payments in Lieu of Taxes): Somewhat Simplified.
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programs—including FS Payments to States and BLM’s O&C payments—so changes to these
latter programs may also affect a county’s payments under PILT. This also explains why FY2012
PILT payments to Colorado were double the PILT payments to Oregon, even though there is more
federal land in Oregon (32.6 million acres) than in Colorado (23.8 million acres).
As enacted, PILT requires annual appropriations. If the appropriations are less than the authorized
total payments, each county gets its calculated pro rata share of the appropriations. However, the
2008 and 2012 SRS amendments also made PILT payments mandatory spending for FY2008FY2012. Thus, for those fiscal years, each county received 100% of its authorized PILT payment.
One issue of concern to Congress is the geographic allocation of the FS, O&C, and PILT
payments. Table 1 shows the payments for FY2012. The largest FS and O&C payments are in
Oregon, which received nearly 35% of the total payments. The next-largest payments are in
California, which received just over 10% of the total payments. PILT payments are more evenly
distributed, with no state receiving more than 10% of the total payments.
Table 1. FY2012 FS, O&C, and PILT Payments, by State
(in thousands of dollars)
FS &
O&C
Alabama
PILT
PILT
$3,630.3
$23,917.8
$546.7
$1,800.9
$0.0
$99.4
$10,264.3
$34,917.8
$18.8
$152.3
$1,902.5
$4,030.5
$0.6
$1,418.4
$1,844.2
$805.2
Alaska
$13,878.3
$26,894.5
New Hampshire
Arizona
$13,080.4
$32,886.6
New Jersey
Arkansas
$6,653.1
$5,277.0
New Mexico
California
$35,777.1
$40,272.0
New York
Colorado
$13,053.1
$27,724.6
North Carolina
Connecticut
$0.0
$29.6
North Dakota
Delaware
$0.0
$18.3
Ohio
$268.4
$521.9
Florida
$2,340.7
$4,891.7
Oklahoma
$916.7
$2,740.2
Georgia
$1,549.6
$2,242.6
Oregon – FS
$63,015.5
$0.0
$335.0
Oregon – O&C
$36,046.4
Idaho
$26,628.3
$26,560.2
Oregon - Total
$99,061.9
$14,005.0
Illinois
$253.9
$1,140.8
Pennsylvania
$3,330.6
$610.8
Indiana
$269.0
$465.8
Rhode Island
$0.0
$0.0
Iowa
$0.0
$466.9
South Carolina
$1,772.3
$406.0
Kansas
$0.0
$1,131.4
South Dakota
$1,600.5
$5,363.8
Kentucky
$1,586.5
$1,835.8
Tennessee
$1,149.6
$1,826.5
Louisiana
$1,734.5
$610.0
Texas
$2,331.1
$4,644.6
$71.5
$316.0
Utah
$10,579.8
$36,038.6
Maryland
$0.0
$102.4
Vermont
$334.1
$942.2
Massachusetts
$0.0
$114.4
Virginia
$1,625.1
$3,113.1
$3,826.0
$4,150.5
$20,094.8
$15,340.0
Hawaii
Maine
Michigan
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FS &
O&C
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FS &
O&C
PILT
Minnesota
$8,477.5
$1,944.1
Mississippi
$5,552.0
Missouri
$3,352.7
Montana
Nebraska
FS &
O&C
PILT
West Virginia
$1,788.6
$2,953.2
$2,736.8
Wisconsin
$1,903.0
$1,087.2
$2,7346.8
Wyoming
$4,309.9
$25,315.3
$19,746.9
$26,152.0
Othera
$147.2
$63.9
$196.8
$1,131.4
Total
$291,402.7
$381,647.9
Sources: FS: U.S. Dept. of Agriculture, Forest Service, “All Service Receipts (ASR), Final Payment Summary
Report PNF (ASR-10-01),” http://www.fs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb5407120.pdf. O&C: U.S.
Dept. of the Interior, Bureau of Land Management, FY2012 Secure Rural Schools Act Payments, http://www.blm.gov/
or/rac/files/rac-payments.pdf. PILT: U.S. Dept. of the Interior, Payments in Lieu of Taxes (PILT) Payments by State,
http://www.doi.gov/pilt/state-payments.cfm?fiscal_yr=2012.
a.
“Other” includes the District of Columbia, Guam, Puerto Rico, and the Virgin Islands
Receipt-Sharing Program Concerns and Responses
Concerns
The counties and other observers have raised three concerns about FS and O&C receipt-sharing
payments.9 The primary focus has been on the decline in FS and O&C receipts due to the decline
in timber sales, particularly in Oregon (Figure 1). National forest receipts (subject to sharing)
declined from their peak of $1.53 billion in FY1989 to $266 million in FY2003—a drop of 83%
from the FY1989 level. Estimated receipts for FY2012 were $340 million. In some areas, the
decline was even greater; for example, payments to the eastern Oregon counties containing the
Ochoco National Forest fell from $10 million in FY1991 to $309,000 in FY1998—a decline of
97% in seven years.
Another concern has been annual fluctuations in the payments. Even in areas with modest
declines or increases, the payments varied widely from year to year. From FY1985 to FY2000,
the payments from each national forest had fluctuations of an average of nearly 30% annually—
that is, on average, a county’s payment in any year was likely to be nearly 30% higher or lower
than its payment the preceding year. Such wide annual fluctuations imposed serious budgeting
difficulties on the counties.
A third, longer-term concern is referred to as linkage. Some observers have noted that, because
the counties receive a portion of receipts, they are rewarded for advocating receipt-generating
activities (principally timber sales) and for opposing management that might reduce or constrain
such activities (e.g., designating wilderness areas or protecting commercial, tribal, or sport fish
harvests). County governments have thus often been allied with the timber industry, and opposed
to environmental and other interest groups, in debates over FS management and budget decisions.
This source of funds was deemed appropriate when the FS program was created (albeit, prior to
creation of federal income taxes). Some interests support retaining the linkage between county
9
Forest Counties Payments Committee, Recommendations for Making Payments to States and Counties: Report to
Congress (Washington, DC: U.S. GPO, 2003). The committee was established in §320 of the FY2001 Interior and
Related Agencies Appropriations Act, P.L. 106-291.
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compensation and agency receipts; local support for receipt-generating activities is seen as
appropriate by these constituencies, because such activities usually also provide local
employment and income, especially in rural areas where unemployment is often high. Others
assert that ending the linkage is important so that local government officials can be independent
in supporting whatever management decisions benefit their locality, rather than having financial
incentives to support particular decisions.
Historical Proposals to Change the Receipt-Sharing System
Concerns about the FS and BLM programs have led to various proposals over the years to alter
the compensation system. Most have focused on some form of tax equivalency—compensating
the states and counties at roughly the same level as if the lands were privately owned and
managed. Many acknowledge the validity of this approach for fairly and consistently
compensating state and county governments. However, most also note the difficulty in developing
a tax equivalency compensation system, because counties and states use a wide variety of
mechanisms to tax individuals and corporations—property taxes, sales taxes, income taxes, excise
taxes, severance taxes, and more. Thus, developing a single federal compensation system for the
tax-exempt status of federal lands may be very difficult if not impossible.
In his 1984 budget request, President Reagan proposed replacing the receipt-sharing programs
with a tax equivalency system, with a guaranteed minimum payment. The counties argued that
the proposal was clearly intended to reduce payments, noting that the budget request projected
savings of $40.5 million (12%) under the proposal. The change was not enacted. The FY1986 FS
budget request included a proposal to change the payments to 25% of net receipts (after deducting
administrative costs). Legislation to effect this change was not offered.
In 1993, President Clinton proposed a 10-year payment program to offset the decline in FS and
O&C timber sales, and thus payments, resulting from efforts to protect northern spotted owls and
other values in the Pacific Northwest. Congress enacted this program in §13982 of the 1993
Omnibus Budget Reconciliation Act (P.L. 103-66). These “spotted owl” payments began in 1994
at 85% of the FY1986-FY1990 average payments, declining by 3 percentage points annually, to
58% in 2003, but with payments after FY1999 at the higher of either this formula or the standard
payment.
In his FY1999 budget request, President Clinton announced that he would propose legislation “to
stabilize the payments” by extending the spotted owl payments formula to all national forests.
The proposal would have directed annual payments from “any funds in the Treasury not
otherwise appropriated,” at the higher of (1) the FY1997 payment, or (2) 76% of the FY1986FY1990 average payment. This approach would have increased payments in areas with large
payment declines while decreasing payments in other areas, as well as eliminating annual
fluctuations in payments and de-linking the payments from receipts. The Administration’s
proposed legislation was not introduced in Congress. The FY2000 and FY2001 FS budget
requests contained similar programs, but no legislative proposals were offered.
The National Association of Counties (NACo) proposed an alternative in 1999.10 The NACo
proposal would have provided the counties with the higher of (1) the standard payment, or (2) a
10
National Association of Counties, NACo Resolution in Support of a Forest Counties "Safety Net.", Washington, DC,
April 21, 1999.
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replacement payment determined by the three highest consecutive annual payments for each
county between FY1986 and FY1995, indexed for inflation. NACo also proposed “a long-term
solution ... to allow for the appropriate, sustainable, and environmentally sensitive removal of
timber from the National Forests” by establishing local advisory councils. The NACo approach
would have maintained or increased the payments and might have reduced the annual
fluctuations, but would likely have retained the linkage between receipts and payments in at least
some areas.
Legislative History of the Secure Rural Schools and
Community Self-Determination Act of 2000, as
Amended
Several bills were introduced in the 106th Congress to alter FS and O&C payments. After
extensive debates, Congress enacted the Secure Rural Schools and Community SelfDetermination Act of 2000 (SRS, P.L. 106-393). The act established an alternative payment
system for FY2001-FY2006. At each county’s discretion, the states with FS land and counties
with O&C land received either the regular receipt-sharing payments or 100% of the average of
the three highest payments between FY1986 and FY1999. Counties receiving less than $100,000
under the alternative system could distribute the entire payment to roads and schools in the same
manner as the 25% payments. However, counties receiving at least $100,000 under the alternative
system were required to spend 15%-20% of the payment on (1) federal land projects proposed by
local resource advisory committees and approved by the appropriate Secretary if the projects met
specified criteria, including compliance with all applicable laws and regulations and with
resource management and other plans (identified in Title II of the act) or (2) certain county
programs (specified in Title III of the act). Funds needed to achieve the full payment were
permanently appropriated, and came first from agency receipts (excluding deposits to special
accounts and trust funds) and then from “any funds in the Treasury not otherwise appropriated.”
With the enactment of SRS, the total payment to counties rose from $194 million in FY2000 (in
nominal dollars) to $363 million in FY2001 (Figure 2). For the initial six years SRS was
authorized, the average payment was $370 million annually, more than $130 million above the
average annual payment for the six years prior to the enactment of SRS (FY1995-FY2000).
Reauthorization Efforts in the 110th Congress
SRS expired at the end of FY2006, with final payments made at the end of December 2006.
Legislation to extend the program was considered in the 110th Congress; various bills would have
extended the program for one or seven years, and one specified funding it with a miniscule
(0.00086%) rescission of “any [FY2007] non-defense discretionary account.” An amendment to
the FY2007 continuing resolution (H.R. 2) to extend the program for one year was offered and
then withdrawn.
The debate continued in the Emergency Supplemental Appropriations Act for FY2007 (H.R.
1591, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability
Appropriations Act, 2007). The House included a one-year extension of the program. The Senate
amended the bill (S.Amdt. 709) to extend the program for five years (FY2008-FY2012) and
significantly change the formula for allocating funds to the counties; the change was to address
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the concentration of payments in certain areas by spreading payments more broadly (as discussed
below). The conference agreed to the House-passed version (a one-year extension), but the bill
was vetoed by President George W. Bush.
A new version of Emergency Supplemental Appropriations for FY2007 (H.R. 2206) was
introduced on May 8, 2007. This bill also included a one-year extension of SRS payments, and it
was signed into law as P.L. 110-28 on May 25, 2007. Title V, Chapter 4, §5401, authorized
payments of $100.0 million from receipts and of $425.0 million from appropriations, to “be
made, to the maximum extent practicable, in the same amounts, for the same purposes, and in the
same manner as were made to States and counties in 2006 under that Act.” Thus, preliminary
FY2007 payments were made at the end of September 2007, with final payments made at the end
of December 2007.
Another bill—the Public Land Communities Transition Assistance Act (H.R. 3058)—was
introduced in July 2007 to extend, modify, and phase out the SRS payments; it was similar to the
2007 Senate Amendment to H.R. 1591. The House Natural Resources Committee held a
subcommittee hearing on the bill on July 26, 2007, and a committee markup on September 26,
2007. The committee ordered the bill reported, amended, by voice vote. The bill was brought up
on the House floor under suspension of the rules procedures, but did not garner the two-thirds
vote needed to pass under this procedure, and it wasn’t brought up later under other procedures.
Four-Year Extension Enacted in the 110th Congress
On October 1, 2008, the Senate passed H.R. 1424, the Emergency Economic Stabilization Act,
with a provision similar to the 2007 Senate Amendment to H.R. 1591 in §601 (in Title VI—Other
Provisions, Division C—Tax Extenders and Alternative Minimum Tax Relief). The House agreed
to the Senate amendments on October 3, 2008, and President H.W. Bush signed P.L. 110-343 into
law.
Section 601(a) of H.R. 1424 extended the SRS payment program with several changes: “full
funding” that declines over four years; the basis for calculating payments; transition payments for
certain states; and the use of SRS funds for Title II and Title III activities. In addition, §601(b)
modified the original FS 25% payment program (under which counties can get compensation in
lieu of SRS payments and for payments after SRS expires). Finally, §601(c) provided five years
of mandatory spending for the PILT program.
Full Funding
The act defined full funding for SRS in §3(11). For FY2008, full funding was $500 million; for
FY2009-FY2011, full funding was 90% of the previous year’s funding. However, total payments
exceeded the full funding amount in the first two years; payments under SRS totaled $562.8
million in FY2008 and $509.7 million in FY2009. This occurred because the calculated payments
(discussed below) are based on full funding, as defined in the bill, but the act also authorized
transition payments (discussed below) in lieu of the calculated payments in eight states. Since the
transition payments exceeded the calculated payments for those states, the total payments were
higher than the full funding amount.
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Calculated Payments
SRS payments to each state (for FS lands) or county (for O&C lands) differed significantly from
the payments made under the original SRS; Table A-1 shows the dollars and share of total SRS
payments in each state in FY2006 and FY2009. Payments under §102 were based on historic
revenue-sharing payments (like SRS), but modified based on each county’s share of federal land
and relative income level. The payment calculations required a multiple-step process:
•
Step 1. Determine the three highest revenue-sharing payments between FY1986
and FY1999 for each eligible county, and calculate the average of the three.11
•
Step 2. Calculate the proportion of these payments in each county (divide each
county’s three-highest average [Step 1] by the total of three-highest average in all
eligible counties, with separate calculations for FS lands and O&C lands).
•
Step 3. Calculate the proportion of FS and O&C lands in each eligible county
(divide each county’s FS and O&C acreage by the total FS and O&C acreage in
all eligible counties, with separate calculations for FS lands and O&C lands).
•
Step 4. Average these two proportions (add the payment proportion [Step 2] and
the acreage proportion [Step 3] and divide by 2, with separate calculations for FS
lands and O&C lands). This is the base share for counties with FS lands and the
50% base share for counties with O&C lands.
•
Step 5. Calculate each county’s income adjustment by dividing the per capita
personal income in each county by the median per capita personal income in all
eligible counties.
•
Step 6. Adjust each county’s base share [Step 4] by its relative income (divide
each county’s base share or 50% base share by its income adjustment [Step 5]).
•
Step 7. Calculate each county’s adjusted share or 50% adjusted share as the
county’s proportion of its base share adjusted by its relative income [Step 6] from
the total adjusted shares in all eligible counties (divide each county’s result from
Step 6 by the total for all eligible counties [FS and O&C combined]).
In essence, the amendmentnew formula differed from the original SRS by basing half the payments on historic
historic revenues and half on proportion of FS and O&C land, with an adjustment based on relative
relative county income. This was done because of the concentration of payments under the
original SRS
to Oregon, Washington, and California (more than 75% of payments in FY2006; see
Table A-1).
Several counties opted out of the amended SRS system, while others opted in,
because of the
altered allocation. For example, in FY2006 100% of the payments to Pennsylvania
were under
SRS, but in FY2009 only 54% of the payments to Pennsylvania were under SRS.
Conversely, in
FY2006 none of the payments to New Hampshire and only 29% of the payments to Michigan
were under SRS, but in FY2009, 44% of the payments to New Hampshire and 78% of the
payments to Michigan were under SRS.
11
Eligible counties are those that choose to receive payments under this program; counties that choose to continue to
receive payments under the original revenue-sharing programs are excluded from these calculations.
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44% of the payments to New Hampshire were under SRS.
In addition, the act set a full payment amount allocated among all counties that chose to
participate in the program (eligible counties). Thus, the fewer counties that participated (i.e., the
more that opted for the original, revenue-sharing payment programs), the more each participating
county received.
Transition Payments
In lieu of the calculated payments under §102, the Section 102, counties in eight states—California,
Louisiana,
Oregon, Pennsylvania, South Carolina, South Dakota, Texas, and Washington—received
received transition payments for three fiscal years, FY2008-FY2010. These counties were
included in the
calculations, but received payments of a fixed percentage of the FY2006
payments under SRS,
instead of their calculated payments. The schedule in the act specified
FY2008 payments equaling
90% of FY2006 payments, FY2009 payments at 81% of FY2006
payments, and FY2010
payments at 73% of FY2006 payments. Because the transition payments
were higher than the
calculated payments (using the multi-step formula, above), total payments
have been greater than
the “full funding” defined in the act.
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Title II and Title III Activities
As with the original SRS, the amended version allowed counties with less than $100,000 in
annual payments to use 100% of the payments for roads and schools (or any governmental
purpose for O&C counties). However, it modified the requirement that counties with “modest
distributions” (annual payments of more thanover $100,000 but less than $350,000) use 15%-20% of
the funds
for Title II projects (reinvestment in federal lands). Instead, these counties could use the
required required
15%-20% either for Title II projects or for Title III projects (county projects). Counties
with with
payments of more than $350,000 were limited to a maximum of 7% of the payments for Title III
programs.
The amendment also modified the authorized uses of Title III funds, deleting some authorized
authorized uses (e.g., community work centers) while expanding authorized uses related to community
community wildfire protection.24
Income Averaging
Section 601(b) of the act altered the FS 25% Payment to StatesThe extension also altered the FS revenue-sharing (25% payment) program. It changed the payment
payment from 25% of current-year gross receipts to 25% of average gross receipts over the past seven
seven years—essentially a seven-year rolling average of receipts. This reduced the annual
fluctuation in
payments, providing more stability in the annual payments. Thus payments increase
more slowly
than in the past when and where national forest receipts are rising, but decline more
slowly when
and where receipts are falling. This change immediately affected counties with FS
land that chose
not to participate in the SRS payment program, and will affect all counties with
FS land in
FY2013 (unless SRS is reauthorized or some other alternative is enacted).
Payments in Lieu of Taxes (PILT)
Section 601(c) of the act provided mandatory spending for the PILT program for five years,
FY2008-FY2012. This meant that eligible counties received the full calculated PILT payment for
those five years—a significant increase in PILT payments, since appropriations averaged less than
two-thirds of the calculated payments over the past decade. After FY2012, PILT would again
require annual appropriations, unless Congress extends mandatory spending for the program.
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Reauthorization Efforts in the 112th Congress
SRS expired at the end of FY2011, with final payments made at the end of December 2011.
Legislation to extend the program for five years was considered in the 112th Congress. The
County Payments Reauthorization Act of 2011 (S. 1692 and H.R. 3599) would have extended
SRS through 2016 and included provisions to slow the decline of the full funding levels to 95%
of the preceding fiscal year. Neither the Senate nor the House version was reported out of
committee.
One-Year Extension Enacted in the 112th Congress
On April 24, 2012, the Senate passed S. 1813, the Moving Ahead for Progress in the 21st Century
Act (MAP-21), with a one-year extension for SRS. The companion legislation in the House did
not contain the extension, but the House agreed to the Senate amendments on June 29, 2012. On
July 6, 2012, President Obama signed P.L. 112-141 into law.
Section 100101 of P.L. 112-141 extended the SRS program through FY2012 with funding at 95%
of the FY2011 level, and included requirements for the counties to select their payment option in
a timely manner. The program expired on September 30, 2012, meaning that payments will revert
to the original 25% receipt-sharing formula for FY2013, absent further action by Congress.
Legislative Issues
Congress may consider extending SRS, with or without modifications, implementing other
legislative proposals to address the county payments, or taking no action (thus continuing the
revenue-based system that took effect upon the program’s expiration). Generally, six issues
commonly have been raised about compensating counties for the tax-exempt status of federal
lands: the lands covered; the basis for compensation; the source of funds; the authorized and
required uses of the payments; interaction with other compensation programs; and the duration of
the new system. In addition, any new mandatory spending in excess of the baseline that would
result in an increase in the deficit may be subject to budget rules, such as congressional pay-asyou-go (PAYGO) rules, which generally require budgetary offsets.12
Offsets for New Mandatory Spending
One policy issue concerns legislation with mandatory spending that would increase federal
expenditures, and whether such spending should be offset so as not to increase the deficit.
Congress has enacted a set of budget rules requiring that most legislation that creates new or
extends existing mandatory spending (in excess of the baseline) be balanced—offset—by
increases in receipts or decreases in other mandatory spending. The budget rules may be waived
or set aside in particular instances, but the increased deficit spending remains a consideration.
12
For an overview of federal budget procedures, see CRS Report 98-721, Introduction to the Federal Budget Process.
For background on PAYGO rules, see CRS Report RL34300, Pay-As-You-Go Procedures for Budget Enforcement.
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Legislation to reauthorize the Secure Rural Schools and Community Self-Determination Act of
2000 (with or without other modifications), or to enact a different alternative, would require an
offset—increased revenues or decreased spending from other mandatory spending accounts—or a
waiver to the budget rules. In 2000, Congress provided such a waiver by including a specific type
of provision, called a reserve fund, in the budget resolution.
In 2006, to fund a six-year reauthorization of SRS, the Bush Administration proposed selling
some federal lands. To fund the O&C payments, the BLM would have accelerated its land sales
under § FY2015 (unless SRS is reauthorized or some other alternative is enacted).
One-Year Extension Through FY2012 Enacted in the 112th Congress
SRS was set to expire at the end of FY2011, with final payments made at the end of December
2011 (FY2012). Legislation to extend the program for five years was considered in the 112th
Congress.25 However, the Moving Ahead for Progress in the 21st Century Act (MAP-21),26
contained a one-year extension for SRS. MAP-21 authorized a FY2012 SRS payment set at 95%
of the FY2011 level (approximately $346 million) and included requirements for the counties to
select their payment option in a timely manner.
Legislative Activity in the 113th Congress
The 113th Congress considered several options for extending, modifying, or reforming SRS (and
other county payment programs, such as PILT). Several bills were introduced and both the Senate
and House held legislative hearings.27 The 113th Congress also conducted oversight on the SRS
24
A 2012 GAO report found inconsistencies among agency (FS and BLM) oversight and county use of SRS Title III
funds. U.S. Government Accountability Office, Payments to Counties: More Clarity Could Help Ensure County
Expenditures Are Consistent with Key Parts of the Secure Rural Schools Act, GAO-12-755, July 16, 2012,
http://www.gao.gov/products/GAO-12-775.
25
The County Payments Reauthorization Act of 2011 (S. 1692 and H.R. 3599) would have extended SRS through 2016
and included provisions to slow the decline of the full funding levels to 95% of the preceding fiscal year. Neither the
Senate nor the House version was reported out of committee.
26
P.L. 112-141, §100101.
27
For example, U.S. Congress, Senate Energy and Natural Resources Committee, Keeping the Commitment to Rural
(continued...)
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program, particularly regarding the decision to sequester the FY2012 SRS payment (see
Appendix C).28
The President’s FY2015 budget request for the Forest Service and the BLM proposed a five-year
reauthorization of SRS, with mandatory funding, starting at $279 million for FY2014 and
declining to $101 million by FY2018.29 The President’s proposal also would have decreased the
Title I and Title III allocation while increasing the Title II allocation.
One-Year Extension Through FY2013 Enacted in the 113th Congress
SRS was again set to expire at the end of FY2012, with final payments made in February 2013
(FY2013). In the first session of the 113th Congress, Congress enacted the Helium Stewardship
Act of 2013,30 which included a one-year extension of SRS through FY2013 at 95% of the
FY2012 SRS payment (approximately $329 million). The payments were disbursed in early 2014.
FY2014 Reauthorization Efforts
SRS expired after the FY2013 payments were made in early 2014. Although the 113th Congress
considered options for reauthorizing or modifying SRS for FY2014, the program was not
reauthorized prior to adjournment.
The House passed the Restoring Healthy Forests for Healthy Communities Act,31 which would
have directed the FS and BLM to distribute a payment to eligible counties in February 2015,
essentially a FY2014 SRS payment. The payment amount would have been equal to the FY2010
payment for the counties receiving FS payments. For the O&C counties, the payment amount
would have been $27 million less than the FY2010 payment. After that payment had been made,
county payments would have returned to a revenue-sharing system. The bill would have
established Forest Resource Revenue Areas within at least half of the National Forest System, and
created a fiduciary responsibility to generate revenue by removing forest products for the
beneficiary counties. The bill also would have changed the calculation for the FS revenue-sharing
payment. It would have changed the payment from 25% of average gross receipts over the past
seven years back to the original calculation of 25% of current-year gross receipts. The Senate did
not take up the measure.
Legislative Issues
Congress may consider extending SRS, with or without modifications, implementing other
legislative proposals to address the county payments, or taking no action (thus continuing the
(...continued)
Communities, 113th Cong., 1 sess., March 19, 2013, pp. http://www.energy.senate.gov/public/index.cfm/2013/3/fullcommittee-hearing-funding-programs-for-rural-communities.
28
House Natural Resources Committee, press release, November 5, 2013, http://naturalresources.house.gov/news/
documentsingle.aspx?DocumentID=360388.
29
U.S. Forest Service, FY2015 Budget Justification, pp. 11-1, http://www.fs.fed.us/aboutus/budget/.
30
P.L. 113-40.
31
113th Congress, H.R. 1526, §501 et seq.
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revenue-based system that took effect upon the program’s expiration). Seven issues commonly
have been raised about compensating counties for the tax-exempt status of federal lands: the
geographic distribution of the payments; the lands covered; the basis for compensation; the
source of funds; the authorized and required uses of the payments; and the duration of the new
system. In addition, any new mandatory spending in excess of the baseline that would result in an
increase in the deficit may be subject to budget rules such as congressional pay-as-you-go
(PAYGO) rules, which generally require budgetary offsets.32 Although SRS has previously been
authorized as mandatory spending, Congress may consider funding the program through the
regular annual appropriations process.
Offsets for New Mandatory Spending
The original SRS authorization—and all subsequent reauthorizations—have been for mandatory
spending. One policy issue concerns legislation with mandatory spending that would increase
federal expenditures, and whether such spending should be offset so as not to increase the deficit.
Congress has enacted a set of budget rules requiring that most legislation that creates new or
extends existing mandatory spending (in excess of the baseline) be balanced—offset—by
increases in receipts or decreases in other spending. Congress may choose to waive or set aside
these rules in particular instances, but the increased deficit spending remains a consideration.
Legislation to reauthorize SRS (with or without other modifications), or to enact a different
alternative, would require an offset—increased revenues or decreased spending from other
mandatory spending accounts—or a waiver to the budget rules. In 2000, Congress provided such
a waiver by including a specific type of provision, called a reserve fund, in the budget resolution.
In 2006, to fund a six-year reauthorization of SRS, the Bush Administration proposed selling
some federal lands. To fund the O&C payments, the BLM would have accelerated its land sales
under Section 203 of the Federal Land Policy and Management Act of 1976 (FLPMA; 43 U.S.C.
§1713). For the FS payments, estimated at $800 million, the FS would have sold approximately
300,000 acres of national forest land. This would have required legislation, as the FS currently
has only very narrow authority to sell any lands. The Administration offered draft legislation to
authorize these land sales, but no bill to authorize that level of national forest land sales was
introduced in the 109th Congress. Instead, Congress again included a reserve fund for SRS
payments in the budget resolution.
In 2007, the Bush Administration again proposed selling
national forest lands to fund a phase-out
of SRS payments, with half of the land sale revenues to
be used for other programs (including
land acquisition and conservation education). Again, no
legislation to authorize national forest
land sales was introduced.
Lands Covered
SRS includes payments only for national forests and for the O&C lands. Some observers have
noted that these compensation programs provide substantial funding for the specified lands, while
other federal lands that are exempt from state and local taxation receive little or nothing. The
easiest comparison is with the national grasslands. Some have questioned the logic of
compensating national forest counties with 25% of gross receipts and protecting these counties
from declines in receipts under SRS, while compensating national grassland counties with 25% of
net receipts and excluding them from SRS. Both forests and grasslands are part of the National
Forest System, although the laws authorizing their establishment differ.
More significantly, many other tax-exempt federal lands provide little compensation to local
governments. The BLM has numerous compensation programs, but generally the payments are
land sales was introduced.
Geographic Distribution of SRS and PILT Payments
An issue for Congress is the geographic allocation of the SRS and PILT payments (see Figure 3).
Table 3 shows the payments for FY2013. The only BLM SRS payment is made to Oregon for the
O&C lands, and Oregon receives the largest FS SRS payment. With a total SRS payment of
approximately $97 million, Oregon received nearly one-third of the total SRS payments made in
FY2013. The next-largest SRS payments are in California and Idaho, which both received just
32
For an overview of federal budget procedures, see CRS Report 98-721, Introduction to the Federal Budget Process.
For background on PAYGO rules, see CRS Report RL34300, Pay-As-You-Go Procedures for Budget Enforcement.
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under 10% of the total payment that year. PILT payments are more evenly distributed, with no
state receiving more than 10% of the total payments.
Figure 3. PILT and Forest Service Payments, FY2013
Source: Prepared by CRS from data reported in Table 3. See sources listed for that table.
Notes: The Forest Service Payment includes the revenue-sharing payment, FS SRS Title I and Title III payments,
and BLM Title I and Title III payments.
The preponderance of payments going to western states is mostly due to the large percentage of federal lands
located in those states.
Table 3. FY2013 SRS and PILT Payments, by State
(in thousands of dollars)
SRS
PILT
$1,707.0
$901.1
Alaska
$12,173.6
$26,458.5
Nevada
Arizona
$13,025.7
$32,203.9
New Hampshire
Arkansas
$6,135.6
$5,840.9
New Jersey
California
$28,784.2
$41,445.2
New Mexico
Colorado
$9,566.0
$0.0
$31,986.3
New York
Alabama
Connecticut
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$28.9
Nebraska
North Carolina
SRS
PILT
$193.1
$1,120.6
$3,496.7
$197.4
$23,331.9
$0.0
$97.3
$9,512.7
$34,693.0
$17.8
$144.5
$1,766.3
$3,997.2
$1,767.3
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SRS
PILT
SRS
PILT
$0.0
$17.8
$0.4
$1,374.4
Florida
$2,300.8
$4,968.3
Ohio
$241.0
$554.8
Georgia
$2,286.1
Hawaii
$1,454.2
$0.0
Oklahoma
$914.9
$2,794.6
$97,058.2
$15,578.8
Idaho
$25,203.8
$26,326.2
Pennsylvania
$993.6
$0.0
$685.6
Illinois
$31.4
$1,120.0
Rhode Island
Indiana
$252.2
$0.0
$489.6
South Carolina
$1,678.2
$470.4
$453.9
South Dakota
$1,650.1
$5,669.8
$0.0
$1,104.6
Tennessee
$1,113.8
$1,877.0
Kentucky
$1,665.1
$1,949.7
Texas
$2,255.9
$4,804.0
Louisiana
$1,633.1
$634.3
Utah
$9,899.6
$35,391.1
$67.2
$0.0
$299.8
Vermont
$317.1
$944.4
$1,461.9
$3,263.8
$0.0
$111.2
$18,989.2
$17,222.8
Michigan
$2,855.7
$4,187.9
West Virginia
$1,735.4
$2,892.6
Minnesota
$2,204.5
$1,975.0
Wisconsin
$1,701.0
$1,305.0
Mississippi
$5,334.3
$1,580.4
Wyoming
$25,340.6
Missouri
$3,259.3
$3,079.1
Othera
$3,782.4
$141.2
Montana
$18,607.4
$26,497.1
Total
$295,298.3
$401,756.1
Delaware
Iowa
Kansas
Maine
Maryland
Massachusetts
$326.9
$99.6
North Dakota
Oregon
Virginia
Washington
$0.0
$62.5
Sources: SRS: U.S. Dept. of Agriculture, Forest Service, “All Service Receipts (ASR), Final Payment Summary
Report PNF (ASR-10-01),” http://www.fs.usda.gov/Internet/FSE_DOCUMENTS/stelprdb3795399.pdf., and U.S.
Dept. of the Interior, Bureau of Land Management, FY2013 Secure Rural Schools Act Payments, http://www.blm.gov/
or/rac/ctypaypayments.pdf. PILT: U.S. Dept. of the Interior, Payments in Lieu of Taxes (PILT) Payments by State,
http://www.doi.gov/pilt/state-payments.cfm?fiscal_yr=2013.
Notes: The SRS payment only includes the SRS Title I and Title III payments, and does not include amounts paid
in Title II. The Oregon payment includes $36.3 million paid to the O&C counties under SRS Title I and Title III.
a.
“Other” includes the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.
Lands Covered
SRS includes payments only for national forests and for the O&C lands. These compensation
programs provide substantial funding for the specified lands, while other federal lands that are
exempt from state and local taxation receive little or nothing. The easiest comparison is with the
counties that contain national grasslands, which receive 25% of net receipts and were excluded
from SRS. Both forests and grasslands are part of the National Forest System, although the laws
authorizing their establishment differ. However, it is unclear why national forest counties are
compensated with 25% of gross receipts and were protected from declines in receipts under SRS,
while national grassland counties are compensated with 25% of net receipts and did not receive
the option of receiving SRS payments.
More significantly, many other tax-exempt federal lands provide little compensation to local
governments. The BLM has numerous compensation programs, but generally the payments are
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quite small. (The O&C payments account for about 95% of BLM compensation payments, but
O&C lands are only about 1% of BLM lands.) The National Park Service has two small
compensation programs related to public schooling of park employees’ children at two parks.
PILT provides some compensation for most federal lands, but many lands—inactive military
bases, Indian trust lands, and certain wildlife refuge lands, for example—are excluded, and the
national forests and O&C lands get PILT payments in addition to other compensation. In 1992,
the Office of Technology Assessment recommended “fair and consistent compensation for the tax
exempt status of national forest lands and activities.”13 This concept of fair and consistent
compensation could be extended to all tax-exempt federal lands. Others argue that the limited
costs imposed on local governments by federal land ownership may lead to overcompensating
state and local governments.
13
U.S. Congress, Office of Technology Assessment, Forest Service Planning: Accommodating Uses, Producing
Outputs, and Sustaining Ecosystems, OTA-F-505 (Washington: U.S. GPO, Feb. 1992), p. 8.
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related to extending a compensation program to all tax-exempt federal lands, although
determining a fair and consistent compensation level would likely generate significant debate
Basis for Compensation
The legislative histories of the agriculture appropriations acts establishing the FS payments to
states (the last of which, enacted on May 23, 1908, made the payments permanent) indicate that
the intent was to substitute receipt-sharing for local property taxation, but no rationale was
discussed for the level chosen (10% in 1906 and 1907; 25% in 1908 and since). Similarly, the
rationale was
not clearly explained or discussed for the Reagan tax-equivalency proposal, for the spotted owl
owl payments (a declining percent of the historical average), or for the legislation debated and enacted
enacted by the 106th Congress (generally the average of the three highest payments during a specified
specified historical period). The proposals’ intents were generally to reduce (Reagan
Administration) or
increase (more recently) the payments.
The geographic basis is alsohas been raised as a potential problem for FS payments. FS revenue-sharing
payments (25% payments) are made to
the states, but are calculated for each county with land in
each national forest.1434 Depending on the
formula used—the average of selected historical
payments from each national forest or to each
county or each state—the calculations could result
in different levels of payments in states with
multiple national forests.1535 (This is not an issue for
O&C lands, because the O&C payments are
made directly to the counties.)
Source of Funds
As noted above, the FS revenue-sharing payments (25% payments) are permanently appropriated
from agency receipts, and
were established prior to federal income taxes and substantial federal
oil and gas royalties. Most
of the proposals for change also would establish mandatory payments;
lacking a specified funding
source, mandatory spending source, funds would come from the General Treasury. SRS directed
payments first
from receipts, then from the General Treasury. Figure 34 shows the breakdown of
FS SRS funding
between receipts and the General Treasury. Critics are concerned that retaining
the linkage
between agency receipts (e.g., from timber sales) and county payments (albeit less
directly than
for the 25% payments) still encourages counties to support timber sales over other
FS uses.
14
Another concern is the reliance on General Treasury funds, given the current fiscal
33
U.S. Congress, Office of Technology Assessment, Forest Service Planning: Accommodating Uses, Producing
Outputs, and Sustaining Ecosystems, OTA-F-505 (Washington: GPO, February 1992), p. 8.
34
There was no discussion in the legislative history of why the payments were made to the states, and not directly to
the counties.
1535
The complexity of this situation is shown using Arizona as an example in out-of-print CRS Report RL30480, Forest
Service Revenue-Sharing Payments: Legislative Issues (available from the author).
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climate and some Members’ desire to reduce government spending. On the other hand, recipients
of these funds argue that it is fair compensation for the presence of these lands in their
jurisdiction.
Figure 4Figure 3. Source and Distribution of FS Payments
(dollars in thousands)
Source: CRS. Data from Forest Service, FY2010-FY2013 Budget Justifications, available from
http://www.fs.fed.us/
aboutus/budget/.
Notes: FS SRS Title I and Title III payments are passed through the state to the counties to use for specified
purposes. SRS Title II payments are heldretained by the Forest Service for use on approved National Forest projects
in the same county.
Authorized and Required Uses of the Payments
SRS modified how the counties could use the payments by requiring (for counties with at least
$100,000 in annual payments) that 15%-20% of the payments be used for other specified
purposes: certain local governmental costs (in Title III); federal land projects recommended by
local advisory .
Authorized and Required Uses of the Payments
The FS 25% payments can be spent only on roads and schools in the counties where the national
forests are located. State law dictates which road and school programs are financed with the
payments, and the state laws differ widely, generally ranging from 30% to 100% for school
programs, with a few states providing substantial local discretion on the split. The O&C payments
are available for any local governmental purpose.
SRS modified these provisions by requiring (for counties with at least $100,000 in annual
payments) that 15%-20% of the payments be used for other specified purposes: certain local
governmental costs (in Title III); federal land projects recommended by local advisory
committees and approved by the Secretary (under Title II); or federal land projects
as determined
by the Secretary (under § 402). Use of the funds for federal land projects has been
touted as
“reinvesting” agency receipts in federal land management, but opponents argue that this “relinks
“re-links” county benefits with agency receipt-generating activities and reduces funding for local
schools and roads. The Forest Counties Payments Committee recommended granting local
governments more flexibility in their use of the payments.36 The committee also recommended that
that the federal government prohibit the states from adjusting their education funding allocations
because of the FS payments.16
16
Some states include FS payments allocated for education in their calculations allocating state education funds to the
counties.
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36
Forest Counties Payments Committee, Recommendations for Making Payments to States and Counties: Report to
Congress (Washington: GPO, 2003). The committee was established in §320 of the FY2001 Interior and Related
Agencies Appropriations Act, P.L. 106-291.
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Duration of the Programs
The questions Congress may consider are (1) how often should Congress review the payment
systems (these or all county compensation programs, or the lack thereof) to assess whether they
because of the FS payments.37 In practice, such a prohibition could be difficult to enforce. The
O&C payments are available for any local governmental purpose.
Duration of the Programs
Other policy questions that arise from the SRS payments include (1) how often should Congress
review the payment systems (these or any other county compensation programs) to assess
whether they still function as intended; and (2) what options are available (e.g., a sunset
provision) to induce
future Congresses to undertake such a review? The FS 25% revenue-sharing
payments and the O&C payments are
permanently authorized. The FS 25% payments were established in 1908 (after having been
enacted as a one-year program in 1906 and again in 1907). The O&C payments were established
in 1937. The owl payments were a 10-year program, enacted in 1993. SRS was originally enacted
as a six-year program that expired on September 30, 2006, but was extended an additional six
years through September 30, 2012. The Forest Counties Payments Committee recommended a
permanent change based on SRS, with some adjustments.
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SRS was originally enacted as a six-year program that expired on September 30, 2006, but was
extended an additional seven years through four separate reauthorizations. As noted earlier, SRS
expired on September 30, 2013, with the final payment made in FY2014. The last two
reauthorizations have been for one year. The annual uncertainty about the continuation and level
of the program concerns those interested in providing a consistent and predictable payment for
local governments.
37
Some states include FS payments allocated for education in their calculations allocating state education funds to the
counties.
38
The FS 25% payments were established in 1908 (after having been enacted as a one-year program in 1906 and again
in 1907). The O&C payments were established in 1937. The owl payments were to be a 10-year program, enacted in
1993.
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Appendix A. SRS Payments in FY2006 and FY2009
As described in the text, under “Four-Year Extension through FY2011 Enacted in the 110th
Congress,” the SRS
payment formula was modified in the extension to include federal acreage and relative
income in
each county, as well as transition payments in some states. The result was a change in the
the payments and the allocation of total payments in the modified formula. These changes are shown
shown in Table 2. Note, however, that the change in the payment formula led some counties that had
had chosen 25% payments for FY2006 to opt for SRS payments for FY2009, and vice versa.
Some of
the increase in SRS payments in FY2009 is due to more counties opting for SRS
payments in
some states, such as Michigan, New Hampshire, Ohio, Puerto Rico, and Wisconsin.
In at least
one state—Pennsylvania—a portion of the decline is due to some counties opting for
25%
payments in FY2009.
Table A-1. FY2006 and FY2009 FS and O&C Payments Under SRS, by State
(in thousands of dollars and percent of total SRS funding for all of U.S.)
FY2006
FY2009
FY2006
Dollars
Percent
Dollars
Percent
AL
2,133.8
0.44%
2,236.2
0.44%
AK
9,377.2
1.92%
18,760.5
AZ
7,289.8
1.50%
AR
6,568.0
CA
FY2009
Dollars
Percent
Dollars
Percent
NY
16.9
<0.01%
29.5
0.01%
AK
9,377.2
1.92%
18,760.5
3.68%
NC
1,020.9
0.21%
2,326.6
0.46%
AZ
7,289.8
1.50%
16,688.2
3.27%
ND
0.0
0.00%
0.8
<0.01%
AR
6,568.0
1.35%
8,309.6
1.63%
OH
68.8
0.01%
339.7
0.07%
CA
65,279.3
13.44%
50,125.6
9.83%
OK
1,238.9
0.26%
1,192.4
0.23%
CO
6,338.7
1.31%
14,641.3
2.87%
OR-FS
149,153.3
30.72%
121,316.4
23.80%
FL
2,504.5
0.52%
2,862.3
0.56%
ORO&C
108,852.0
22.42%
87,175.0
17.10%
GA
1,304.6
0.27%
1,864.1
0.37%
ORTotal
258,005.3
53.13%
208,491.4
40.91%
ID
21,173.5
4.36%
34,900.0
6.85%
PA
6,491.6
1.34%
2,505.6
0.49%
IL
304.2
0.06%
107.6
0.02%
PR
0.0
0.00%
184.7
0.04%
IN
130.2
0.03%
337.4
0.07%
SC
3,288.2
0.68%
2,498.4
0.49%
KY
682.1
0.14%
2,596.9
0.51%
SD
3,823.4
0.79%
2,931.1
0.58%
LA
3,726.1
0.77%
2,620.1
0.51%
TN
560.3
0.12%
1,428.4
0.28%
ME
41.4
0.01%
99.3
0.02%
TX
4,688.8
0.97%
3,655.9
0.72%
MI
789.8
0.16%
3,397.1
0.67%
UT
1,872.5
0.39%
14,177.0
2.78%
MN
1,468.8
0.36%
3,330.1
0.65%
VT
392.3
0.08%
400.7
0.08%
MS
8,287.2
1.71%
7,705.7
1.51%
VA
925.2
0.19%
2,093.7
0.41%
MO
2,767.2
0.57%
4,681.7
0.92%
WA
42,293.9
8.71%
33,990.9
6.67%
MT
12,934.8
2.66%
24,523.6
4.81%
WV
2,006.3
0.41%
2,356.8
0.46%
NE
55.6
0.01%
584.4
0.11%
WI
577.6
0.12%
2,730.1
0.54%
NV
408.8
0.08%
5,174.2
1.02%
WY
2,387.4
0.49%
4,357.6
0.85%
FL
GA
Congressional Research Service
16Dollars
FY2009
Percent
Dollars
Percent
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FY2006
FY2009
FY2006
NH
0.0
0.00%
275.2
0.05%
NM
2,383.6
0.49%
18,185.9
3.57%
Total
485,567.7
FY2009
509,667.8
Sources: FS: U.S. Dept. of Agriculture, Forest Service, “All Service Receipts (ASR), Final Payment Summary
Report PNF (ASR-10-01),” unpublished reports. O&C: U.S. Dept. of the Interior, Bureau of Land Management,
FY2011 Budget Justification, p. X-6, http://www.doi.gov/budget/2011/data/greenbook/
FY2011_BLM_Greenbook.pdf.
Note: Counties could choose to receive the regular 25% FS payments or 50% O&C payments, rather than the
SRS payments, and in many cases opted for the 25% in FY2006 or FY2009, and sometimes in both fiscal years.
Thus, a change in the SRS payments in the table might not reflect the total change in FS payments to that state.
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Appendix B. Historical Proposals to Change the
Revenue-Sharing System
Concerns about the FS and BLM programs have led to various proposals over the years to alter
the compensation system. Most have focused on some form of tax equivalency—compensating
the states and counties at roughly the same level as if the lands were privately owned and
managed. Many acknowledge the validity of this approach for fairly and consistently
compensating state and county governments. However, most also note the difficulty in developing
a tax equivalency compensation system, because counties and states use a wide variety of
mechanisms to tax individuals and corporations—property taxes, sales taxes, income taxes, excise
taxes, severance taxes, and more. Thus, developing a single federal compensation system for the
tax-exempt status of federal lands may be very difficult if not impossible.
In his 1984 budget request, President Reagan proposed replacing the receipt-sharing programs
with a tax equivalency system, with a guaranteed minimum payment. The counties argued that
the proposal was clearly intended to reduce payments, noting that the budget request projected
savings of $40.5 million (12%) under the proposal. The change was not enacted. The FY1986 FS
budget request included a proposal to change the payments to 25% of net receipts (after deducting
administrative costs). Legislation to effect this change was not offered.
In 1993, President Clinton proposed a 10-year payment program to offset the decline in FS and
O&C timber sales, and thus payments, resulting from efforts to protect various resources and
values including northern spotted owls in the Pacific Northwest. Congress enacted this program
in Section 13982 of the 1993 Omnibus Budget Reconciliation Act (P.L. 103-66). These “owl”
payments began in 1994 at 85% of the FY1986-FY1990 average payments, declining by 3
percentage points annually, to 58% in 2003, but with payments after FY1999 at the higher of
either this formula or the standard payment.
In his FY1999 budget request, President Clinton announced that he would propose legislation “to
stabilize the payments” by extending the owl payments formula to all national forests. The
proposal would have directed annual payments from “any funds in the Treasury not otherwise
appropriated,” at the higher of (1) the FY1997 payment, or (2) 76% of the FY1986-FY1990
average payment. This approach would have increased payments in areas with large payment
declines while decreasing payments in other areas, as well as eliminating annual fluctuations in
payments and de-linking the payments from receipts. The Administration’s proposed legislation
was not introduced in Congress. The FY2000 and FY2001 FS budget requests contained similar
programs, but no legislative proposals were offered.
The National Association of Counties (NACo) proposed an alternative in 1999.39 The NACo
proposal would have provided the counties with the higher of (1) the standard payment, or (2) a
replacement payment determined by the three highest consecutive annual payments for each
county between FY1986 and FY1995, indexed for inflation. NACo also proposed “a long-term
solution ... to allow for the appropriate, sustainable, and environmentally sensitive removal of
timber from the National Forests” by establishing local advisory councils. The NACo approach
39
National Association of Counties, NACo Resolution in Support of a Forest Counties “Safety Net,” Washington, DC,
April 21, 1999.
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would have maintained or increased the payments and might have reduced the annual
fluctuations, but would likely have retained the linkage between receipts and payments in at least
some areas.
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Appendix C. FY2013 Sequestration Issues
Section 302 of the Budget Control Act (BCA)40 required the President to sequester, or cancel,
budgetary resources for FY2013, in the event that Congress did not enact a specified deficit
reduction by January 15, 2012.41 Congress did not enact such deficit reduction by that date, and
on March 1, 2013, the Office of Management and Budget (OMB) determined the amount of the
total sequestration for FY2013 to be approximately $85 billion.42
Under the BCA, half of the total reduction for FY2013 was allocated to defense spending, and the
other half to non-defense spending.43 Within each half, the reductions were further allocated
between discretionary appropriations and direct spending.44 Discretionary appropriations are
defined in the BCA as budgetary resources provided in annual appropriations acts.45 In contrast,
direct spending was defined to include budget authority provided by laws other than
appropriations acts.46 The BCA further required OMB to calculate a uniform percentage reduction
to be applied to each program, project, or activity within the direct spending category.47 For the
direct spending category, OMB determined this percentage to be 5.1% for FY2013.
Section 102(d)(3)(e) of SRS directed that payments for a fiscal year were to be made to the state
as soon as practicable after the end of that fiscal year, meaning that the FY2012 payment was
made in FY2013.48 Because the authority to make these payments is not provided in an annual
appropriations act, such payments are not discretionary spending for purposes of the BCA. These
payments were classified as non-defense, direct spending for purposes of sequestration.49 The
BCA exempts a number of programs from sequestration; however, the payments under SRS were
not identified in the legislation as exempt.50 Consequently, these payments were subject to
sequestration as non-defense, direct spending. However, BLM and FS managed the sequestration
of the FY2013 payments in different ways.
BLM Sequestration of SRS Funds
BLM issues SRS payments only for the O&C lands in Oregon. In February 2013, BLM
distributed $36 million to the 18 O&C counties in Oregon for FY2012 SRS payments. However,
DOI had held back 10% of the scheduled payments across all three titles in anticipation of the
40
P.L. 112-25, as amended by P.L. 112-240.
2 U.S.C. §901A. The sequester was originally supposed to be ordered on January 2, 2013, but was delayed by the
American Taxpayer Relief Act of 2012, P.L. 112-240, until March 1, 2013. For more information on sequestration
issues, see CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions.
42
This amount was identified based on a formula set forth in §302 of the BCA.
43
2 U.S.C. §901A(4).
44
2 U.S.C. §901A(6).
45
2 U.S.C. §900(7).
46
2 U.S.C. §900(8). Budget authority is further defined as “the authority provided by Federal law to incur financial
obligations.” 2 U.S.C. §622.
47
Although not relevant here, additional restrictions are placed on the degree by which Medicare payments in the direct
spending category may be reduced. 2 U.S.C. §901a(8).
48
16 U.S.C. §7112(e).
49
2 U.S.C. §900(8).
50
2 U.S.C. §905.
41
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possibility of sequestration. The reduction to DOI’s SRS program required by sequestration was
5.1% of the total payment, or $2.0 million.51 Since the sequestered amount was less than the
amount withheld, DOI-BLM owed an additional SRS payment for the difference. In May 2013,
BLM distributed the remaining 4.9% of the payment, resulting in a total of $38 million for the
SRS payment to the O&C counties for FY2012.52
Forest Service Sequestration of SRS Funds
The Forest Service distributed the full FY2012 SRS payments in January and February 2013,
without withholding any amount in preparation for the potential sequester order. On March 19,
2013, the Forest Service announced it would seek to recover from the states the 5.1% of the
payments that were subject to sequestration.53 In letters sent to each affected governor, the Forest
Service outlined two repayment options and asked for the states to respond by April 19, 2013,
with how they planned to repay. Invoices for repayment were not included. In addition to
repaying the 5.1%, the FS offered the states the option of having the full sequestered amount
taken out of Title II funds (for those states with enough Title II money). Three states—Alaska,
Washington, and Wyoming—publicly indicated their intention not to repay the SRS funds.54 In an
April 16, 2013, hearing before the Senate Committee on Energy and Natural Resources, the FS
indicated that invoices for the repayment would be sent in late April 2013.
On August 5, 2013, the Forest Service sent additional letters which included invoices for the
repayment to the governors of the 18 states with insufficient Title II money to cover the
sequestered amount.55 The invoices outlined three options for the affected states to take within 30
days: pay the debt in full; agree to a payment plan; or petition for administrative review of the
debt. The invoices also included a Notice of Indebtedness to the U.S. Forest Service and Intent to
Collect by Administrative Offset, which describes the basis of the indebtedness and the Forest
Service’s intent to offset future payments—without assessing penalties—from future Forest
Service and Department of Agriculture state payments. As of May 21, 2014, two states had
remitted an SRS sequester-related payment—New Hampshire paid $27,884.17 and Maine paid
$3,648—and no collection efforts have been initiated by the Forest Service or Treasury
Department in the remaining 16 states.56 On August 20, 2013, the Forest Service sent additional
letters to the governors of the 22 states that had sufficient Title II money to cover the sequestered
amount.57 The letters informed the governors that the Title II allocations were reduced by the
sequestered amount.
51
Testimony of DOI Deputy Assistant Secretary Pamela K. Haze, in U.S. Congress, Senate Committee on Energy and
Natural Resources, Keeping the Commitment to Rural Communities, hearing, 113th Cong., 1st sess., March 19, 2013.
52
Personal communication with BLM Legislative Affairs office, June 19, 2013.
53
Testimony of Forest Service Chief Thomas Tidwell, in U.S. Congress, Senate Committee on Energy and Natural
Resources, Keeping the Commitment to Rural Communities, hearing, 113th Cong., 1st sess., March 19, 2013. SRS
payments are made from the Forest Service to the states, which then distribute the payment to the eligible counties.
54
Phil Taylor, “Hastings probes Forest Service’s withholding of timber payments,” E&E News, May 21, 2013.
55
The following states did not have sufficient Title II funds to cover the sequester and received invoices: AL, AR, GA,
IL, IN, ME, MN, MO, NC, ND, NE, NH, NY, OH, PA, PR, TN, VT, and VA. WA received a letter and invoice to
collect money from a special act payment, but the letter also indicated the total SRS Title II reduction.
56
WA paid $317.15 to reimburse for the sequester-related overpayment of a special act payment. Personal
communication with Katherine Armstrong, Legislative Affairs Specialist, Forest Service, November 13, 2013.
57
The following states had the sequester withheld entirely from their Title II funds: AK, AZ, CA, CO, FL, ID, KY, LA,
MI, MS, MT, NM, NV, OK, OR, SC, SD, TX, UT, WI, WV, and WY.
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To date, the last congressional action on the issue was a House Committee on Natural Resources
oversight hearing on January 14, 2014.
Author Contact Information
Katie Hoover
Analyst in Natural Resources Policy
khoover@crs.loc.gov, 7-9008
Acknowledgments
Ross Gorte, retired CRS Specialist in Natural Resources Policy, made important contributions to earlier
versions of this .
Author Contact Information
Katie Hoover
Analyst in Natural Resources Policy
khoover@crs.loc.gov, 7-9008
Acknowledgments
Ross Gorte, retired CRS Specialist in Natural Resources Policy, made important contributions to this
report.
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