PILT (Payments in Lieu of Taxes):
Somewhat Simplified

M. Lynne Corn
Specialist in Natural Resources Policy
November 7, 2013
Congressional Research Service
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RL31392
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PILT (Payments in Lieu of Taxes): Somewhat Simplified

Summary
Under federal law, local governments are compensated through various programs for reductions
to their property tax bases due to the presence of most federally owned land. These lands cannot
be taxed, but may create demand for services such as fire protection, police cooperation, or
simply longer roads to skirt the federal property. Some of these programs are run by specific
agencies and apply only to that agency’s land. The most widely applicable program, administered
by the Department of the Interior (DOI), applies to many types of federally owned land, and is
called “Payments in Lieu of Taxes,” or PILT. The authorized level of PILT payments is calculated
under a complex formula. No precise dollar figure can be given in advance for each year’s PILT
authorization level. This report addresses only the PILT program administered by DOI. There is
no PILT-like program generally applicable to military lands, but a small fraction of military lands
are eligible for the DOI PILT program. Furthermore, PILT does not apply to Indian-owned lands,
virtually none of which are subject to local taxes.
This report explains PILT payments, with an analysis of the five major factors affecting the
calculation of a payment to a given county. It also describes the effects of certain legislative
changes in PILT in 2009 and 2012. Before 2008, annual appropriations were necessary to fund
PILT, but a provision in P.L. 110-343 for mandatory spending ensured that, beginning with
FY2008 and continuing through the payment to be made in 2012, all counties would receive
100% of the authorized payment. Then on July 6, 2012, the President signed P.L. 112-141,
containing a provision extending mandatory spending to FY2013. The Budget Control Act (P.L.
112-25) provided for a sequestration of 5.1% of PILT payments for FY2013.
Since the creation of PILT in 1976, various changes in the law have been proposed. One proposal
has been to include additional lands under the PILT program, particularly Indian lands, which are
not now eligible for PILT. Most categories of Indian-owned lands cannot be taxed by local
governments, though they generally enjoy county services. In some counties, this means a very
substantial portion of the land is not taxable. The remaining tax burden (for roads, schools, fire
and police protection, etc.) therefore falls more heavily on other property owners. To help
compensate for this burden, some counties have proposed that Indian lands (variously defined) be
included among those eligible for PILT payments. Examples of other lands mentioned for
inclusion are those of the National Aeronautics and Space Administration, and the Departments of
Defense and Homeland Security. Another proposal from some counties would revisit the
compensation formula to emphasize a payment rate more similar to property tax rates (which vary
widely among counties), a feature that would be a major change in counties with high property
values. Finally, for lands in the National Wildlife Refuge System (NWRS), some have argued that
all lands of the system should be eligible for PILT, rather than limiting the PILT payments to
lands reserved from the public domain and excluding PILT payments for acquired lands. The
exclusion of NWRS-acquired lands affects primarily counties in eastern states.
With PILT’s mandatory spending having expired in FY2013, the program will be subject to the
annual appropriations process for the payment to be made in 2014. Over the next few years, the
larger debate for Congress might then be summarized as three decisions: (1) whether to approve
future extensions of mandatory spending (either temporary or permanent); (2) whether to make
the diametrically opposed choice of reducing the program through appropriations or by changing
the PILT formula; and (3) whether to add or subtract any lands to the list of those now eligible for
PILT payments. Background on all three issues is discussed here.
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PILT (Payments in Lieu of Taxes): Somewhat Simplified

Contents
Introduction ...................................................................................................................................... 1
Changes to PILT in the 110th and 112th Congresses ......................................................................... 4
How PILT Works: Five Steps to Calculate Payment ....................................................................... 4
Step 1. How Many Acres of Eligible Lands Are There? ........................................................... 4
Step 2. What Is the Population in the County? .......................................................................... 6
Step 3. Are There Prior-Year Payments from Other Federal Agencies? .................................... 6
Step 4. Does the State Have Pass-Through Laws? .................................................................... 8
Step 5. What Is This Year’s Consumer Price Index? ................................................................. 9
Putting It All Together: Calculating a County’s Payment ................................................................ 9
National Totals ......................................................................................................................... 11
From Authorization to Appropriation ............................................................................................ 12
Current Issues ................................................................................................................................ 12
Inclusion of Indian Lands ........................................................................................................ 12
Inclusion of Urban Lands and Tax Equivalency ...................................................................... 13
National Wildlife Refuge System Lands ................................................................................. 14
County Uncertainty and Fiscal Effects on Counties ................................................................ 15
Congressional Interest.................................................................................................................... 15

Figures
Figure 1. Total PILT Payments, FY1993-FY2013: Appropriations in Current and
Inflation-Adjusted 2012 Dollars ................................................................................................... 2
Figure 2. Total PILT Payments, FY1993-FY2013 Authorized Amount and Appropriation ........... 3
Figure 3. Ceiling Payments Based on County Population Level, FY2013 ...................................... 7
Figure 4. PILT Payment Level as a Function of Specific Prior Payments (FY2013) ...................... 7
Figure 5. Steps in Calculating PILT for Eligible Federal Lands .................................................... 10

Tables
Table 1. Authorized PILT Payments to Selected Urban Counties, FY2013 ................................... 13
Table 2. NWRS Acres Eligible for PILT in Selected States, FY2012 ............................................ 14
Table A-1. Total PILT Payments, FY1993-FY2013: Appropriations in Current and
Inflation-Adjusted 2012 Dollars ................................................................................................. 17
Table A-2. Total PILT Payments, FY1993-FY2013: Authorized Amount and
Appropriation .............................................................................................................................. 18
Table A-3. Prior-Year Payment Laws That Are Offset Under Next PILT Payment ....................... 19

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PILT (Payments in Lieu of Taxes): Somewhat Simplified

Appendixes
Appendix. PILT Data Tables .......................................................................................................... 17

Contacts
Author Contact Information........................................................................................................... 21

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PILT (Payments in Lieu of Taxes): Somewhat Simplified

Introduction
Generally, federal lands may not be taxed by state or local governments unless the governments
are authorized to do so by Congress. Because local governments are often financed by property or
sales taxes, this inability to tax the property values or products derived from the federal lands may
affect local tax bases, sometimes significantly. If the federal government controls a significant
share of the property, then the revenue-raising capacity of the county may be compromised
because federal lands are not subject to state and local taxes. Instead of authorizing taxation,
Congress has usually chosen to create various payment programs designed to compensate for lost
tax revenue. These programs take various forms. Many pertain to the lands of a particular agency
(e.g., the National Forest System or the National Wildlife Refuge System).1 The most wide-
ranging payment program is called “Payments in Lieu of Taxes” or PILT.2 It is administered by
the Department of the Interior and affects most acreage under federal ownership. Exceptions
include most military lands and lands under the Department of Energy (DOE lands have their
own smaller payment program).3 In FY2013, the PILT program covered 606.4 million acres, or
about 94% of all federal land.
The Payments in Lieu of Taxes Act of 1976 (P.L. 94-565, as amended, 31 U.S.C. §§6901-6907)
was passed at a time when U.S. policy was shifting from one of disposal of federal lands to one of
retention. The policy meant that the retained lands would no longer be expected to enter the local
tax base at some later date. Because of that shift, Congress agreed with recommendations of a
federal commission that if these federal lands were never to become part of the local tax base,
some compensation should be offered to local governments to make up for the presence of non-
taxable land within their jurisdictions.4 Moreover, there was a long-standing concern that some
federal lands produced large revenues for local governments, while other federal lands produced
little or none. Many Members, especially those from western states with a high percentage of
federal lands, felt that the imbalance needed to be addressed. The resulting law authorizes federal
PILT payments to local governments that may be used for any governmental purpose.
Many of the issues addressed when PILT was created have continued. One issue is the appropriate
payment level, complicated by later erosion of the purchasing power of the payments due to
inflation. For many years, counties held that payments were effectively declining because of
inflation. When PILT was amended in 1994, the authorized payment level went up (adjusted

1 For more information on some of these agency-specific payment programs, see CRS Report RL30335, Federal Land
Management Agencies’ Mandatory Spending Authorities
, by M. Lynne Corn and Carol Hardy Vincent; and CRS
Report R41303, Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000, by Katie
Hoover. The program under the Department of Energy is described in U.S. General Accounting Office [now
Government Accountability Office], Energy Management: Payments in Lieu of Taxes for DOE Property May Need to
Be Reassessed
, GAO/RCED-94-204 (Washington, DC: July 1994).
2 U.S. Department of the Interior, Office of Budget, Payments in Lieu of Taxes: National Summary Fiscal Year 2013,
Washington, DC, 2012. A similar document is issued every year; each contains tables for payments and acreage by
state and county. To query data from the most recent fiscal year, see http://www.doi.gov/pilt/.
3 A program, commonly referred to as Impact Aid, supports local schools based on the presence of children of federal
employees, including military dependents. It provides some support to local governments, however, and to some extent
it compensates for lost property tax revenue when military families live on federally owned land. For more information,
see CRS Report RL33960, The Elementary and Secondary Education Act, as Amended by the No Child Left Behind
Act: A Primer
, by Rebecca R. Skinner.
4 Public Land Law Review Commission, One Third of the Nation’s Land: A Report to the President and to the
Congress
, Washington, DC, June 1970, pp. 235-241.
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annually for inflation), but continued to be subject to annual appropriations. Figure 1 shows a
major increase in the actual and inflation-adjusted dollars appropriated for PILT from FY1993 to
FY2013.5 But the 1994 amendments, designed to overcome years of erosion due to inflation,
caused the authorized payment level to increase still faster. (See Figure 2.)
Figure 1. Total PILT Payments, FY1993-FY2013:
Appropriations in Current and Inflation-Adjusted 2012 Dollars
($ in millions)

Source: Current dollars from annual Payments in Lieu of Taxes: National Summary. Inflation adjustment is based
on chain-type price index. Adjustment for 2013 is based on the index for the first two quarters of the year.
Note: For the same data in tabular format, see Table A-1.
Critics of PILT cite examples of what they view as its idiosyncrasies. First, while there is no
distinction between acquired and public domain lands6 for other categories of eligible lands,
acquired lands of the Fish and Wildlife Service (FWS) are not eligible for PILT—which works to
the detriment of many counties in the East and Midwest, where nearly all FWS lands were
acquired. Second, while payments under the Secure Rural Schools (SRS) program7 require an
offset in the following year’s PILT payment for certain lands under the jurisdiction of the Forest
Service, if the eligible lands are under the jurisdiction of the Bureau of Land Management
(BLM), no reduction in the next year’s PILT payment occurs.8 Third, while payments under the
Bankhead-Jones Farm Tenant Act (7 U.S.C. §1012) require a reduction in the following year’s

5 Inflation adjustments in this report use the implicit price deflator for the Gross Domestic Product. See
http://www.bea.gov//national/nipaweb/DownSS2.asp, Table 1.1.9. Data for FY2013 used the implicit price deflator for
the first two quarters of the year.
6 Acquired lands are those which the United States obtained from a state or individual. Public domain lands are
generally those which the United States obtained from a sovereign nation.
7 See CRS Report R41303, Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000, by
Katie Hoover.
8 All of the BLM lands eligible for SRS payments are in Oregon.
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PILT payment if the lands are under BLM, no such reduction occurs if Bankhead-Jones payments
are for lands under the Forest Service. Fourth, some of the “units of general local government”
(counties)9 that receive large payments have other substantial sources of revenue, while some of
the counties receiving little are relatively poor. Fifth, a few counties which receive very large
payments from other federal revenue-sharing programs (because of valuable timber, mining,
recreation, and other land uses) are also authorized to receive a minimum payment ($0.35 per
acre)10 from PILT, thus somewhat cancelling out the goal of evening payments across counties.
Sixth, in some counties the PILT payment greatly exceeds the amount that the county would
receive if the land were taxed at fair market value, while in others it is much less. Given such
issues, and the complexity of federal land management policies, consensus on substantive change
in the PILT law has been elusive, particularly when Congress has a stated goal of reducing federal
expenditures.
Figure 2. Total PILT Payments, FY1993-FY2013
Authorized Amount and Appropriation
($ in millions)

Source: Annual Payments in Lieu of Taxes: National Summary.
Note: For the same data in tabular format, see Table A-2.

9 Unit of general local government is defined in the law (31 U.S.C. §6901(2)) as “a county (or parish), township,
borough, or city where the city is independent of any other unit of general local government, that (i) is within the class
or classes of such political subdivisions in a State that the Secretary of the Interior, in his discretion, determines to be
the principal provider or providers of governmental services within the State; and (ii) is a unit of general government as
determined by the Secretary of the Interior on the basis of the same principles as were used on January 1, 1983, by the
Secretary of Commerce for general statistical purposes” plus the District of Columbia, Puerto Rico, Guam, and the
Virgin Islands. For simplicity, the word county will be used in the rest of this report to refer to a unit of general local
government
, and must be understood here to be equivalent to the above definition. This shorthand is often used by DOI.
10 This and subsequent references to payment rates and ceilings are based on FY2013 figures unless otherwise noted.
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Changes to PILT in the 110th and 112th Congresses
The Continuing Appropriations Act, 2009 (P.L. 110-329), provided the FY2008 level ($228.9
million) through March 6, 2009; if this had been the full-year appropriation, it would have
constituted roughly 61% of the figure estimated for full payment of the FY2009 authorized level.
However, Section 601(c) of Title VI of P.L. 110-343 (the Emergency Economic Stabilization Act
of 2008) provided for mandatory spending of the full authorized level for five years—FY2008-
FY2012. For FY2008, an additional payment was made to raise the FY2008 level to the full
authorized amount, and for FY2009-FY2012, the payments were at 100% of the authorized
amount.
Then, on July 6, 2012, the President signed P.L. 112-141, in which Section 100111 extends
mandatory spending for PILT to FY2013, without making any other changes to the law. Under the
Budget Control Act (P.L. 112-25), PILT is categorized as a non-exempt, non-defense mandatory
spending program. As such, it was subject to a 5.1% sequestration of the payments scheduled for
FY2013 or $21.5 million from an authorized payment of $421.7 million.11
How PILT Works: Five Steps to Calculate Payment
Calculating a particular county’s PILT payment first requires answering several questions:
1. How many acres of eligible lands are in the county?
2. What is the population of the county?
3. What were the previous year’s payments, if any, for all of the eligible lands under
the other payment programs of federal agencies?12
4. Does the state have any laws requiring the payments from other federal agencies
to be passed through to other local government entities, such as school districts,
rather than staying with the county government?
5. What was the increase in the Consumer Price Index during the year?
Each of these questions will be discussed below. Finally, their use in the computation of each
county’s payment is described.
Step 1. How Many Acres of Eligible Lands Are There?
Nine categories of federal lands are identified in the law as eligible for PILT payments:13

11 OMB Report to the Congress on the Joint Committee Sequestration for Fiscal Year 2013, p. 36 gave a slightly
smaller initial estimate, based on a lower projected authorized level. Available at http://www.whitehouse.gov/sites/
default/files/omb/assets/legislative_reports/fy13ombjcsequestrationreport.pdf. The figures here are the final figures,
and are taken from the Payments in Lieu of Taxes: National Summary Fiscal Year 2013, p. 9.
12 Regardless of how many agencies have jurisdiction over eligible lands in a county, all of the payments specified in
31 U.S.C. §6903(a)(1) are added together and deducted from the following year’s single PILT payment. Any other
federal lands payments the county may get that are not specified in that provision are not deducted. The formula in 31
U.S.C. §6903 sets a cap on the total PILT payment for all of the eligible land in the county.
13 See 31 U.S.C. §6901. The law refers to these nine categories of lands as “entitlement lands,” and the term is used
(continued...)
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1. lands in the National Park System;
2. lands in the National Forest System;
3. lands administered by the Bureau of Land Management;
4. lands in the National Wildlife Refuge System that are withdrawn from the public
domain;
5. lands dedicated to the use of federal water resources development projects;14
6. dredge disposal areas under the jurisdiction of the U.S. Army Corps of Engineers;
7. lands located in the vicinity of Purgatory River Canyon and Piñon Canyon,
Colorado, that were acquired after December 31, 1981, to expand the Fort Carson
military reservation;
8. lands on which are located semi-active or inactive Army installations used for
mobilization and for reserve component training; and
9. certain lands acquired by DOI or the Department of Agriculture under the
Southern Nevada Public Land Management Act (P.L. 105-263).

Section 6904/6905 Payments
Two sections of the PILT law (31 U.S.C. §6904 and §6905) provide special payments for limited categories of land, for
limited periods. These are described in the FY2013 Payments in Lieu of Taxes: National Summary (p. 13) as follows:
Section 6904 of the Act authorizes payments for lands or interests therein, which were acquired after
December 31, 1970, as additions to the National Park System or National Forest Wilderness Areas. To
receive a PILT payment, these lands must have been subject to local real property taxes within the five year
period preceding acquisition by the Federal government. Payments under this section are made in addition
to payments under Section 6902. They are based on one percent of the fair market value of the lands at the
time of acquisition, but may not exceed the amount of real property taxes assessed and levied on the
property during the last full fiscal year before the fiscal year in which [they were] acquired. Section 6904
payments for each acquisition are to be made annual y for five years fol owing acquisition, unless otherwise
mandated by law....
Section 6905 of the Act authorizes payments for any lands or interests in land owned by the Government in
the Redwood National Park or acquired in the Lake Tahoe Basin under the Act of December 23, 1980 (P.L.
96-586, 94 Stat. 3383). Section 6905 payments continue until the total amount paid equals 5 percent of the
fair market value of the lands at the time of acquisition. However, the payment for each year cannot exceed
the actual property taxes assessed and levied on the property during the last ful fiscal year before the fiscal
year in which the property was acquired by the Federal government.
In the FY2013 payments, the Section 6904/6905 payments totaled $602,330 or 0.14% of the total program. California
counties received the largest amount ($107,044, before sequestration). Sixteen states and territories had no counties
receiving payments under these two sections in FY2013. These states and territories were Connecticut, Delaware,
Illinois, Iowa, Kansas, Mississippi, New Jersey, North Dakota, Oklahoma, Rhode Island, South Dakota, Utah, Vermont,
and Guam, Puerto Rico, and the Virgin Islands.
The payments under Section 6904 cease five years after acquired land is incorporated into a national park unit or a
National Forest Wilderness Area. As a result, counties experience a sudden drop in their PILT payment after five
years.

(...continued)
throughout the act. However, because entitlement is a word which is used in a very different, and potentially confusing,
context in the congressional budget process, these lands will be called eligible lands in this report.
14 These lands are under the jurisdiction of the Bureau of Reclamation, for the most part.
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In addition, if any lands in the above categories were exempt from real estate taxes at the time
they were acquired by the United States, those lands are not eligible for PILT, except in three
circumstances:
1. land received by the state or county from a private party for donation to the
federal government within eight years of the original donation;
2. lands acquired by the state or county in exchange for land that was eligible for
PILT; or
3. lands in Utah acquired by the United States if the lands were eligible for a
payment in lieu of taxes program from the state of Utah.
Only the nine categories of lands (plus the three exceptions) on this list are eligible for PILT
payments; other federal lands—such as military bases, post offices, federal office buildings, and
the like—are not eligible for PILT. The exclusion of lands in the National Wildlife Refuge System
that are acquired is an interesting anomaly, and may reflect nothing more than the House and
Senate committee jurisdictions at the time P.L. 94-565 was enacted.15
Step 2. What Is the Population in the County?
The law restricts the payment a county may receive based on population. Under the schedule
provided in 31 U.S.C. §6903, counties are paid at a rate that varies with the population; counties
with low populations are paid at a high rate per person, and populous counties are paid less per
person. For example, for FY2013, a county with a population of 1,000 people will not receive a
PILT payment over $171,110 ($171.11 per person); a jurisdiction with a population of 30,000 will
not receive a payment over $2.6 million (30,000 x $85.58 per person). And no county is credited
with a population over 50,000. Consequently, in FY2013, at the authorized payment level of
$68.45 per person, no county may receive a PILT payment over $3.4 million (50,000 x
$68.45/person) regardless of population. Figure 3 shows the relationship between the population
of a county and the maximum PILT payment.
Step 3. Are There Prior-Year Payments from Other
Federal Agencies?
Federal land varies greatly in revenue production. Some lands have a large volume of timber
sales, some have recreation concessions such as ski resorts, and some generate no revenue at all.
Some federal lands have payment programs for state or local governments, and these may vary
markedly from year to year. To even out the payments among counties and prevent grossly
disparate payments, Congress provided that the previous year’s payments on eligible federal
lands from specific payment programs to counties would be subtracted from the PILT payment of
the following year. So for a hypothetical county with three categories of eligible federal land, one
paying the county $1,000, the second $2,000, and the third $3,000, then $6,000 would be
subtracted from the following year’s PILT payment. Most counties are paid under this offset
provision, which is called the standard rate. In Figure 4, the standard rate is shown by the
sloping portion of the line, indicating that as the sum of the payment rates from other agencies
increases, the PILT payment rate declines on a dollar-for-dollar basis.

15 At the time, jurisdiction over the National Wildlife Refuge System (NWRS) generally was in one committee, while
jurisdiction over public domain lands was within the jurisdiction of different committees. This was true in both the
House and Senate. The committees considering PILT had no jurisdiction over the acquired lands within the NWRS.
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Figure 3. Ceiling Payments Based on County Population Level, FY2013

Source: Calculations based on Payments in Lieu of Taxes: National Summary FY2013, p. 15.
Figure 4. PILT Payment Level as a Function of Specific Prior Payments (FY2013)


At the same time, Congress wanted to ensure that each county got some PILT payment, however
small, even if the eligible lands produced a substantial county payment from other agencies. If the
county had payments from three federal payment programs of $1,000, $2,000, and $1 million, for
instance, subtracting $1.003 million from a small PILT payment would produce a negative
number—meaning no PILT payment to the county at all. In that case, a minimum rate applies,
which does not deduct the other agencies’ payments. In Figure 4, the flat portion to the right
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shows that, after the other agencies’ payments reach a certain level ($2.54 per acre in FY2013),
the rate of the PILT payment remains fixed (at $0.35 per acre in FY2013).
The payments made in prior years that count against future PILT payments are specified in law
(16 U.S.C. §6903(a)(1)). Any other payment programs beyond those specified would not affect
later PILT payments. These specified payments are shown in Table A-3. Eligible lands under
some agencies (e.g., National Park Service and Army Corps of Engineers) have no payment
programs that affect later PILT payments.
Step 4. Does the State Have Pass-Through Laws?
Counties may receive payments above the calculated amount described above, depending on state
law. Specifically, states may require that the payments from federal land agencies pass through
the county government to some other entity (typically a local school district), rather than accrue
to the county government itself. When counties in a “pass-through” state are paid under the
formula which deducts their prior year payments from other agencies (e.g., from the Refuge
Revenue Sharing Fund (RRSF; 16 U.S.C. §715s) of FWS, or the Forest Service (FS) Payments to
States (16 U.S.C. §500)),16 the amount paid to the other entity is not deducted from the county’s
PILT payments in the following year. According to DOI:
Only the amount of Federal land payments actually received by units of government in the prior
fiscal year is deducted. If a unit receives a Federal land payment, but is required by State law to
pass all or part of it to financially and politically independent school districts, or any other single
or special purpose district, payments are considered to have not been received by the unit of local
government and are not deducted from the Section 6902 payment.17
For example, if a state requires all counties to pass along some or all of their RRSF payments
from FWS to the local school boards, the amount passed along is not deducted from the counties’
PILT payments for the following year (31 U.S.C. §6907). Or if two counties of equal population
in two states each received $2,000 under the FS Payments to States, and State #1 pays that
amount directly to the local school board, but State #2 does not, then under this provision, the
PILT payment to the county in State #1 will not be reduced in the following year, but that of the
county in State #2 will drop by $2,000. State #1 will have increased the total revenue coming to
the state and to each county by taking advantage of this feature.18
Consequently, the feature of PILT that was apparently intended to even out payments among
counties (at least of equal population size) may not have that result if the state takes advantage of
this pass-through feature.19 Under 31 U.S.C. §6903(b)(2), each governor gives the Secretary of

16 Under 16 U.S.C. §500, these payments are made to the states or territories, and must be used for schools or roads in
the counties where the national forests are located. Each state has its own rules on the mechanics of that transfer, on the
proportion to be used for roads and the proportion for schools. Some states direct that the education portion be given
directly to school boards. For more information see CRS Report R40225, Federal Land Management Agencies:
Background on Land and Resources Management
, coordinated by Ross W. Gorte.
17 U.S. Dept. of the Interior, Payments in Lieu of Taxes: National Summary, Fiscal Year 2013, p. 11.
18 Note that even though a county as a whole may benefit from this provision, the county government itself will not,
because it forgoes the revenues given directly to its school system.
19 However, the Supreme Court has held that states cannot direct counties to spend their PILT payments (i.e., payments
under the DOI-managed program described in this report) for particular purposes, once they have actually received
their PILT payment. Lawrence County v. Lead-Deadwood School District, 469 U.S. 256 (1985).
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the Interior an annual statement of the amounts actually paid to each county government under
the relevant federal payment laws. DOI checks each governor’s report against the records of the
payment programs of federal agencies.
In addition, there is a pass-through option for the PILT payment itself. A state may require that the
PILT payment itself go to a smaller unit of government, contained within the county (typically a
school district) (16 U.S.C. §6907). If so, one check is sent by the federal government to the state
for distribution by the state to these smaller units of government. The distribution must occur
within 30 days. As of FY2013, Wisconsin is the only state to have selected this feature of PILT.
Step 5. What Is This Year’s Consumer Price Index?
A provision in the 1994 amendments to PILT adjusted the authorization levels for inflation. The
standard and minimum rates, as well as the payment ceilings, are adjusted each year. Under 31
U.S.C. §6903(d), “the Secretary of the Interior shall adjust each dollar amount specified in
subsections (b) and (c) to reflect changes in the Consumer Price Index published by the Bureau of
Labor Statistics of the Department of Labor, for the 12 months ending the preceding June 30.”
This is an unusual degree of inflation adjustment; no other federal land agency’s payment
program has this feature. But as will be shown below, increases in the authorization do not
necessarily lead to a commensurate increase in the funds received by the counties.
Putting It All Together:
Calculating a County’s Payment

Knowing the answers to these questions, one can then make two comparisons to calculate the
authorized payment level for a county. (Figure 5 shows a flow chart of the steps in these
comparisons.) All charts and comparisons in this report are based on FY2013 payment levels.
Alternative A. Which is less: the county’s eligible acreage times $2.54 per acre or the county’s
ceiling payment based on its population? Pick the lesser of these two numbers. From it, subtract
the previous year’s total payments for these eligible lands under specific payment or revenue-
sharing programs of the federal agencies that control the eligible land.20 The amount to be
deducted is based on an annual report from the governor of each state to DOI. This option is
called the standard provision.
Alternative B. Which is less: the county’s eligible acreage times $0.35 per acre or the county’s
ceiling payment? Pick the lesser of these two. This option is called the minimum provision, and is
used in the counties that received relatively large payments (over $2.19 per acre for FY2013)
from other federal agencies in the previous year.

20 Payments under the Secure Rural Schools program for Forest Service lands (but not Bureau of Land Management
lands) are included among those prior year payments to be deducted. See CRS Report R41303, Reauthorizing the
Secure Rural Schools and Community Self-Determination Act of 2000
, by Katie Hoover.
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Figure 5. Steps in Calculating PILT for Eligible Federal Lands
(FY2013 payment levels)

Note: The payments (marked *) are the specific payments for federal lands. The amount subtracted is reduced
in states with pass-through laws. Also, mandatory spending continues through FY2013; under current law, the
PILT program returns to annual appropriations in FY2014.
Source: Prepared by CRS, based on PILT statute (31 U.S.C §§6901-6907).
The county is authorized to receive whichever of the above calculations—(A) or (B)—is greater.
This calculation must be made for all counties individually to determine the national
authorization level. From the program’s inception through FY2007, the authorized payments were
subject to annual appropriations, and if appropriations were insufficient for full funding, each
county received a pro rata share of the appropriation. After passage of P.L. 110-343 and P.L. 112-
141, each county received the full authorized amount for FY2008-FY2012; as a result of
sequestration (P.L. 112-25), each county received 94.8% of the authorized amount for FY2013.
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The combination of specific payments and PILT in the standard option means that reductions (or
increases) in those other payments in the previous year could be exactly offset by increases (or
reductions) in PILT payments. However, provided that the county’s population is not so low as to
affect the outcome, PILT payments cannot fall below $0.35 per acre for FY2013 (see Alternative
B, above), so the full offset occurs only when the other federal payments in the previous year
total less than $2.19 per acre (i.e., the maximum payment of $2.54 per acre minus the $0.35 per
acre minimum payment from PILT).21
The standard option, with its offset between agency-specific payments and PILT payments, still
does not guarantee a constant level of federal payments to counties, because of the time lag in
determining PILT payments. Federal payments for a given fiscal year are generally based on the
receipts of the prior year. PILT payments of the following fiscal year are offset by these payments.
To illustrate, consider a county whose only eligible federal lands are under the jurisdiction of
FWS. If the federal receipts on the FWS lands dropped in FY2013 (compared to FY2012),
authorized payments in FY2014 from the FWS Refuge Revenue Sharing Fund would fall.
Authorized PILT payments will therefore increase to offset the drop—in FY2014. (This example
assumes that the PILT payment is calculated under the standard option.) The counties will be
authorized to receive at least $2.54 per acre from RRSF and PILT payments combined,22 but the
two payments would not come in the same year. Consequently, if RRSF payments are falling
from year to year, the combined payments in the given year would be less than $2.54 per acre, but
if RRSF payments are rising, the authorized combined payment in the given year would be more
than $2.54 per acre.
National Totals
Information from all 2,130 counties with eligible land is needed on a national scale before an
aggregate figure for the nation can be calculated precisely, and consequently no precise dollar
figure can be given in advance for each year’s PILT authorization level.23 However, because the
amount for full authorization for FY2013 has been calculated, and because major changes in the
factors stated above are not likely to decrease the payments at the national level, the full
authorization level for FY2014 seems likely to be similar to, or slightly larger than, the amount
for the full authorization in FY2013 ($421.7 million), even though individual counties’ payments
may vary.

21 To illustrate more concretely, imagine each county as a large bucket, whose sides are marked off in “$/acre.” PILT,
in effect, checks the payment already in the bucket from other agencies, then adds at least enough money to the bucket
to bring it to the $2.54/acre mark. Moreover, if the bucket is already above the $2.19/acre mark, PILT adds 35¢/acre,
regardless of the amount in the bucket already. The money bucket could reach levels of $15/acre or more, with the last
35¢ added by PILT. The county population ceilings might then be thought of as holes in the sides of some of the
buckets that prevent the buckets from filling beyond a certain level for that bucket (i.e., county).
22 An exception would occur if the county’s population is so small that the county is affected by the PILT ceiling on
payments due to population.
23 DOI does not include estimated full payment levels in its annual budget justification to Congress, and confines itself
to the Administration’s request for the year. However, DOI’s annual report of current year PILT payments to counties
includes this information.
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From Authorization to Appropriation
Until about 1994, the full amount authorized under the law’s formula had generally been
appropriated, with a few exceptions such as sequestration under the Gramm-Rudman-Hollings
Act (Title II of P.L. 99-177). But the buying power of the payments fell due to inflation. In
response, Congress amended the law in 1994 (P.L. 103-397) to adjust for inflation.
The amendment focused on increasing the total payments, building in inflation protection, and
making certain additional categories of land eligible.24 After the amendments passed, the
increasing discrepancy between appropriations and the rapidly rising authorization levels led to
even greater levels of frustration among local governments, and prompted intense interest among
some Members in increasing appropriations. Eventually, the result was the passage of P.L. 110-
343 and P.L. 112-141. (See Figure 2, above.)
Current Issues
While the enactment of six years of mandatory spending put the issue of full funding to rest for a
time, county governments now strongly support continuing mandatory spending for PILT. This
question was the biggest issue facing the program in the 112th Congress and remains so in the
113th Congress. At the same time, with the congressional debate over spending levels in general,
there may be proposals to modify or even eliminate PILT in later years as a means of reducing
federal deficits. Several more specific issues are also being debated in Congress or within county
governments. Among them are the inclusion of Indian or other categories of lands; tax
equivalency, especially for eligible urban lands; and payments affecting the National Wildlife
Refuge System.
Inclusion of Indian Lands
While the inclusion of other lands (e.g., military lands generally or those of specific agencies such
as the National Aeronautics and Space Administration) under the PILT program has been
mentioned from time to time, some counties with many acres of non-taxable Indian lands within
their boundaries have long supported adding Indian lands to the list of lands eligible for PILT.
The primary arguments made are that these lands receive benefits from the county, such as road
networks, but Indian residents do not pay for them with property taxes; on the other hand, the
federal government does not actually own these lands.
The complexity of the PILT formula makes it very difficult to calculate the consequences of such
a move, either for authorization levels or appropriation levels. Additionally, Congress would have
to decide what sorts of “Indian lands” would be eligible for such payments and a variety of other
complex issues.25 If some categories of Indian lands were to be added to those lands already

24 Other important issues in 1994 were the question of the equity of the payments and the balance struck in the payment
formula (a) between heavily and sparsely populated communities, (b) between those with federal lands generating large
revenues and those with lands generating little or no revenue, and (c) between the amounts paid under PILT and the
amounts that would be paid if the lands were simply taxed at fair market value. But these issues were not addressed in
the 1994 amendments and have scarcely been mentioned in the debate since then.
25 The many classifications of “Indian lands” include trust lands, restricted lands, and fee (private) lands, both on and
(continued...)
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eligible, Congress might wish to limit payments to counties with more than some minimum
percentage of Indian lands within their borders. Regardless, even a very restrictive definition of
“Indian lands” seems likely to add many millions of acres to those already eligible. Even if the
criteria for eligibility were determined, it would still be difficult to determine the effect on
authorization levels. To paint an extreme example, if all of the eligible Indian lands were in
counties whose PILT payments were already capped due to the population ceiling, inclusion of
Indian lands would have no effect on PILT authorization levels.
As long as mandatory spending is in place, appropriations would go up to fund the newly eligible
lands. If mandatory spending expires and annual appropriations are less than the authorized level,
each county would receive a pro rata share of the authorized full payment level. Individual
counties whose eligible acres had jumped markedly with the inclusion of Indian lands might
receive substantially more than in the past. Other counties (particularly those with few or no
eligible Indian acres) would receive a smaller fraction of the authorized amount as limited dollars
would be distributed among more lands.
Inclusion of Urban Lands and Tax Equivalency
Some observers have wondered whether urban federal lands are included in the PILT program.
The response is that urban lands are not excluded from PILT under the current law. For example,
in FY2013, the counties in which Sacramento, Chicago, and Cleveland are found, as well as the
District of Columbia, all received PILT payments (see Table 1), though the property tax on
similar, but nonfederal, lands would likely have been substantially greater.
Table 1. Authorized PILT Payments to Selected Urban Counties, FY2013
County
Eligible Acres
FY2013 Authorized Payment ($)
Sacramento County (CA)
9,621
24,437
Cook County (IL)
139
353
Cuyahoga County (OH)
2,592
6,584
Arlington County (VA)
27
0a
District of Columbia
6,959
17,843
Source: U.S. Dept. of the Interior, Payments in Lieu of Taxes: National Summary, FY2013.
a. Under the PILT formula, Arlington County’s 27 eligible acres (all under the National Park Service) would
generate a payment of $69. However, under the law, no payment is made for amounts under $100.

(...continued)
off reservations. Trust lands are lands held by the federal government in trust for an Indian tribe or individual.
Restricted lands are lands held by an Indian tribe or individual but subject to federal restrictions on alienation (e.g.,
sale) or encumbrance (e.g., mortgaging). Most, but by no means all, Indian trust and restricted lands are on Indian
reservations. Trust and restricted lands, whether on or off reservations, are not subject to state or local land taxes. On-
reservation Indian fee lands may or may not be subject to state and local land taxes, depending on the federal statute
under which the land was fee-patented. Off-reservation Indian fee lands are generally subject to state and local land
taxes. (Indian reservations may also include non-Indian fee lands, which are subject to state and local taxation.)
Alaskan Native corporation lands (none of which are trust lands) are affected by the Alaska Native Claims Settlement
Act’s limits on state taxation. Congress would have to decide which of these many classifications of Indian lands would
be subject to PILT benefits. Further, Congress might choose to distinguish between Indian lands which have never been
taxed by a county or state versus those Indian lands that were once taxable but which were acquired into non-taxable
status after some specified date.
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Eastern counties, which tend to be small, rarely have both large populations and large eligible
acreage in the same county. On the other hand, western counties tend to be very large and may
have many eligible acres, and some, like Sacramento, may have large populations as well.
Furthermore, as the cases of Arlington County and the District of Columbia illustrate, PILT
payments are by no means acting as an equivalent to property tax payments, because if the 6,959
acres in the District of Columbia or the 27 acres in Arlington County were owned by taxable
entities, those acres would result in much more than $17,339, or $0, respectively, in property
taxes.
Because the formula in PILT does not reflect property taxes, counties such as these might support
a revised formula that would approach property tax payments.
National Wildlife Refuge System Lands
As noted above, lands in the National Wildlife Refuge System (NWRS) that were withdrawn
from the public domain are eligible for PILT, and those that were acquired are not. In addition, the
National Wildlife Refuge Fund (NWRF, also called the Refuge Revenue-Sharing Fund, or RRSF)
relies on annual appropriations for full funding. For FY2013, payments for NWRF were
approximately 23% of the authorized level. For refuge lands eligible for PILT, some or perhaps
all of the NWRF payment will be made up for in the following year’s PILT payment, but for
acquired lands, this will not occur because they are not eligible for PILT. Congress may consider
making all refuge lands eligible for PILT, and/or providing mandatory spending for NWRF, as it
has for PILT. Eastern counties could be the largest beneficiaries of such a change, although some
western states may also have many NWRS acres that are not currently eligible for PILT. (See
Table 2 for selected state examples.) Adding the 9.7 million acres of NWRS lands under the
primary jurisdiction of FWS, but currently ineligible for PILT would increase PILT lands by
about 1.6%.
Table 2. NWRS Acres Eligible for PILT in Selected States, FY2012
NWRS Acres Reserved from
Percent Eligible
State
Public Domain
Total NWRS Acres
for PILT
Alabama 0 71,386
0.0
Arizona 1,553,465
1,743,674 89.0
Iowa 334 119,056
0.3
Maine 0 69,416
0.0
Montana 433,135
1,496,823 28.9
Ohio 77 9,234
0.8
Oregon 268,360
591,534 45.4
Source: Compiled from Annual Report of Lands Under Control of the U.S. Fish and Wildlife Service As of September
30, 2012
(the most recent year available).
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County Uncertainty and Fiscal Effects on Counties26
The PILT program, as a mandatory spending program, has provided a relatively certain flow of
funds to recipient jurisdictions. Some observers and policy makers are concerned that returning
PILT to discretionary spending or eliminating the program completely would destabilize the fiscal
structure of some jurisdictions receiving PILT payments. Nationally, however, the relative size of
the PILT payments would seem to mitigate the impact and PILT reductions would not seem to
have a measurable fiscal impact on most county budgets that receive PILT transfers. Locally, the
impacts may be greater, perhaps substantially.
The reliance on property taxes is important for most counties. Nationwide, in FY2011, local
property taxes (which includes counties, cities, and special districts) comprised roughly 47.4% of
own-source revenue or just over $429 billion.27 However, in FY2013, the PILT program is very
much smaller: the authorized $422 million in PILT payments is roughly 0.09% of property tax
revenue nationally.28 For counties that receive a significantly larger PILT payment, however, the
impact would be greater. First, for the 14 counties that received over $3 million in 2013, the
government services provided by the county could be adversely affected in the near term, though
restructuring the property tax could likely compensate for the reduced federal payment. Second,
smaller payments would also be important in low-property value, low-population counties with
relatively greater shares of federally owned land.
Congressional Interest
Congressional interest, after the 1994 revisions to PILT, has focused on the three areas cited
above: (1) whether to approve mandatory spending (either temporary or permanent); (2) whether
to make the diametrically opposed choice of reducing the program through appropriations or
through changing the PILT formula; and (3) whether to add or subtract any lands to the list of
those now eligible for PILT payments. PILT payments for FY2013 totaled $399.8 million in
mandatory spending;29 in contrast, the annual appropriation for the Department of the Interior for
FY2013 was $10.7 billion, or about 27 times the PILT program. However, for a relatively small
fraction of the federal or even departmental budget, PILT garners considerable attention for local
reasons: (1) according to the FY2013 Payments in Lieu of Taxes: National Summary, 2,130
counties were eligible for PILT payments; (2) the average payment per county (many of which
are sparsely populated) was $187,900; (3) while some counties received no payment (because
they have very few federal lands and PILT makes no payments under $100), many received over

26 This section prepared by Steven Maguire, Section Research Manager, Government Finance and Taxation Section (7-
7841, smaguire@crs.loc.gov).
27 Own-source revenue is all revenue that is not a transfer from the state or federal government. Data are from the
Barnett, Jeffery L., and Phillip M. Vidal, “State and Local Government Finance Summary: 2011,” Appendix Table A-
1, Governments Division Briefs, U.S. Census Bureau, July 2013. The report is available at the following:
http://www2.census.gov/govs/local/summary_report.pdf.
28 It is important to note that 30% of all counties in the country have no lands eligible for PILT and thus the two figures
are not entirely comparable. Specifically, it is not clear what fraction of the own-source revenue is produced in the 70%
of counties with lands eligible for PILT payments. For more on the number of counties by state, see U.S. Census
Bureau, “2012 Census of Governments: Organization Component Estimates.”
29 A total of $421.7 million was authorized under the PILT formula; from this figure, $21.5 million was deducted for
sequestration, and $0.4 million was deducted for administrative expenses.
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$1 million and 14 received over $3 million.30 The resulting impact on budgets of local
governments helps generate interest despite the comparatively small size of the PILT program.
With the termination of mandatory spending, counties with large federal land holdings face
significant fiscal uncertainty.

30 Payments in Lieu of Taxes: National Summary, FY2013. The 14 counties were in eight states: AK (1), AZ (3),
CA (3), CO (1), NV (2), NM (1), UT (1), and WY (2).
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Appendix. PILT Data Tables
The first two tables below show the data presented in Figure 1 and Figure 2. The third shows the
agency payments that offset payments under PILT in the following year.
Table A-1. Total PILT Payments, FY1993-FY2013:
Appropriations in Current and Inflation-Adjusted 2012 Dollars
($ in millions)
Inflation-Adjusted
Year Appropriation
Appropriation
1993 103.2
149.8
1994 104.1
148.0
1995 101.1
140.8
1996 112.8
154.3
1997 113.1
152.1
1998 118.8
158.0
1999 124.6
163.4
2000 134.0
171.8
2001 199.2
249.7
2002 209.4
258.5
2003 218.6
264.6
2004 224.7
264.7
2005 226.8
258.9
2006 232.5
257.5
2007 232.5
250.8
2008 367.2
388.5
2009 381.6
400.7
2010 358.1
371.5
2011 375.2
381.8
2012 393.0
393.0
2013 400.2
395.5
Source: Current dollars from annual Payments in Lieu of Taxes: National Summary. Inflation adjustment is based
on chain-type price index. Adjustment for 2013 is based on the index for the first two quarters of the year.
Notes: For the same data in a bar chart, see Figure 1.

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Table A-2. Total PILT Payments, FY1993-FY2013:
Authorized Amount and Appropriation
($ in millions)
Year
Authorized
Appropriated
1993 103.2 103.2
1994 104.4 104.1
1995 130.5 101.1
1996 165.1 112.8
1997 212.0 113.1
1998 260.5 118.8
1999 303.7 124.6
2000 317.6 134.0
2001 338.6 199.2
2002 350.8 209.4
2003 324.1 218.6
2004 331.3 224.7
2005 332.0 226.8
2006 344.4 232.5
2007 358.3 232.5
2008 367.2 367.2
2009 381.6 381.6
2010 358.1 358.1
2011 375.2 375.2
2012 393.0 393.0
2013 421.7 400.2
Source: Annual Payments in Lieu of Taxes: National Summary.
Notes: For the same data in a bar chart, see Figure 2.

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Table A-3. Prior-Year Payment Laws That Are Offset Under Next PILT Payment
Federal Agency
Short Title of Law or
Lands Eligible for
Making Payment
Common Name
P.L. or Date
U.S. Stat.
U.S. Code
Payments Payment
Rate
Forest Service
“25% payments” or
Act of May 23,
35 Stat. 260
16 U.S.C. §500
Al NF lands
25% of gross receipts to
“Payments to states”
1908 (ch. 192,
state for roads and
§13)
schools in counties

None
Act of June 20,
36 Stat. 557, §6
not codified
NF lands in AZ and
Proportion of lands in
1910 (ch. 310)
NM
National Forests (NFs)
reserved for schools
times proceeds from
sales in NF

None
Act of June 22,
62 Stat. 570, 70
16 U.S.C. §577g,
Lands in Superior NF,
0.75% of appraised value
1948 (ch. 593, §5);
Stat. 328
§577g-1
MN
(in addition to 25%
Act of June 22,
payments above)a
1956 (ch. 425, §2)

Mineral Leasing Act for
Act of Aug. 7,
61 Stat. 915
30 U.S.C. §355
NF lands with mineral
50% of mineral leasing
Acquired Lands (§6)
1947
leasing
revenues to states for
counties

Material Disposal Act
Act of July 31,
61 Stat. 681
30 U.S.C. §603
Net revenues from
Varies depending on type
1947 (§3)
sale of land and
of receipt and agency
materials

Secure Rural Schools and
P.L. 106-393, as
114 Stat. 1607, as
16 U.S.C. §7101 et
NF lands (but not
Complex formula, see
Community Self-
amended
amended
seq.
lands under Land
CRS Report R41303,
Determination Actb
Utilization Program
Reauthorizing the Secure
(LUP) or National
Rural Schools and
Grasslands), if this
Community Self-
option is chosen by
Determination Act of 2000
county instead of 25%
payments
Bureau of Land
Mineral Lands Leasing Act Act of February
41 Stat. 450
30 U.S.C. §191
Public lands
50% of leasing revenues
Management
25, 1920 (ch. 85,
to states for counties
§35)

Taylor Grazing Act
Act of June 28,
48 Stat. 1273
43 U.S.C. §315i
Public lands
12.5% of grazing receipts
1934 (ch. 865,
to states for counties
§10)
Bankhead-Jones
Farm
Act of July 22,
50 Stat. 526
7 U.S.C. §1012
National Grasslands
25% of revenues for use
Tenant Act
1937 (ch. 513,
and LUP lands
of lands to states
§33)
managed by BLM
CRS-19


Federal Agency
Short Title of Law or
Lands Eligible for
Making Payment
Common Name
P.L. or Date
U.S. Stat.
U.S. Code
Payments Payment
Rate

Mineral Leasing Act for
Act of Aug. 7,
61 Stat. 915
30 U.S.C. §355
Public lands with
50% of mineral leasing
Acquired Lands (§6)
1949
mineral leasing
revenues to states for
counties

Material Disposal Act
Act of July 31,
61 Stat. 681
30 U.S.C. §603
Net revenues from
Varies depending on type
1947 (§3)
sale of land and
of receipt and agency
materials
Fish and Wildlife
Refuge Revenue Sharing
Act of June 15,
49 Stat. 383
16 U.S.C.
Public domain lands in
25% of net receipts from
Service
Act
1935 (ch. 261,
§715s(c)(2)
NWRSc
timber, grazing, and
§401(c)(2))
mineral sales directly to
county; remaining 75% to
counties under other
formulas
Federal Energy
Federal Power Act
Act of June 10,
41 Stat. 1072
16 U.S.C. §810
NF and public lands
37.5% of revenues from
Regulatory
1920, (ch. 285,
with occupancy and
licenses for occupancy &
Commission
§17)
use for power
use to states for counties
projects
Sources: 31 U.S.C. §6903(a)(1), Payments in Lieu of Taxes: National Summary FY2013, p. 14. The latter document has typographical errors which are corrected here, as
noted. Because the various payment laws are identified in some documents by title, in others by a U.S. Code citation, or stil others by the Statutes at Large, or date, or
Public Law, all of these are cited here, where they exist.
a. Payments in Lieu of Taxes: National Summary FY2013 erroneously states payment rate is 75% of appraised value. The error first appeared in the FY2000 Summary, and
has not been corrected.
b. When payments are made for lands under the jurisdiction of the Forest Service for the Secure Rural Schools (SRS) program, the payments result in a reduction (offset)
in the following year’s PILT payment. However, if the lands are under BLM jurisdiction, no offset is made in the following year’s PILT payment. All BLM lands eligible for
SRS payments are in Oregon.
c. Acquired lands in the National Wildlife Refuge System are not eligible for PILT payments. See text.

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Author Contact Information

M. Lynne Corn

Specialist in Natural Resources Policy
lcorn@crs.loc.gov, 7-7267


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