Fall 2013 Overview of the Payment in Budget Lieu and of Taxes Appropriations (PILT) Program Outlook
About NACo The National Association of Counties (NACo) assists America's counties in pursuing excellence in public service by advancing sound public policies, promoting county solutions and innovations, fostering intergovernmental and public-private collaboration, and providing value-added services to save counties and taxpayers money Founded in 1935, NACo provides the elected and appointed leaders from the nation's 3,069 counties with the knowledge, skills and tools necessary to provide fiscally-responsible, quality-driven, and results-oriented policies and services for healthy, vibrant, safe and resilient counties WWW.NACO.ORG JUNE 2013 2
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Payment in Lieu of Taxes (PILT)
Payment in Lieu of Taxes Program The PILT program provides payments to counties and other local governments to offset losses in tax revenues due to the presence of substantial acreage of federal land in their jurisdictions. As local governments are unable to tax the property values or products derived from federal lands, these payments are essential to support essential government services (mandated by law) such as education, first responders, transportation infrastructure, law enforcement and healthcare in nearly 2,000 counties in 49 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.
Presentation Overview Federal Land Ownership What are Public Lands? PILT Legislative History Status Quo What s Next?
Federal Land Ownership
What Are Public Lands?
What Are Public Lands?
What Are Public Lands? The federal government owns roughly 635-640 million acres, 28% of the 2.27 billion acres of land in the United States. The BLM manages 248 million acres and is responsible for 700 million acres of subsurface mineral resources The USDA Forest Service manages 193 million acres The FWS manages 89 million acres of federal land The NPS manages 80 million acres
What Are Public Lands? PILT Entitlement Acres According to the formula established by the PILT law, there are three categories of entitlement lands: Federal lands in the National Forest System and the National Park System, lands administered by BLM, lands in Federal water resource projects, dredge areas maintained by the U.S. Corps of Engineers, inactive and semi-active Army installations, and some lands donated to the Federal government (section 6902 payments) Federal lands acquired after December 30, 1970, as additions to lands in the National Park System or National Forest Wilderness Areas (section 6904 payments) Federal lands in the Redwood National Park or lands acquired in the Lake Tahoe Basin near Lake Tahoe under the Act of December 23, 1980, (Section 6904 or 6905 payments).
PILT Payments to Counties
PILT Legislative History PILT History is NACo History In 1954, elected county officials from several western states joined together to develop a regional coalition of counties called the Interstate Association of Public Land Counties an organization that would ultimately evolve into the Western Interstate Region (WIR) of the National Association of Counties. The primary purpose of the organization was to educate policy makers in Washington, DC and advocate for Federal payments to counties in lieu of lost property tax revenue due to the presence of a vast Federal estate.
PILT Legislative History PILT Signed Into Law October 1976 After several years of growing pressure from county officials nationwide, the 94th Congress passed the Payment in Lieu of Taxes Act (PL 94-565). The PILT Act was codified in Chapter 69 of Title 31 of the United State Code. Applicable regulations are in Subpart 1881, Title 43 of the Code of Federal Regulations.
PILT Legislative History How to Fund the Annual Payments Payments are made directly to the counties unless the state government concerned chooses to receive the payments and, in turn, pass the money on to other smaller governmental units such as a township or city. (Wisconsin is the only state currently employing this option) Historically, payments were limited to an amount appropriated by Congress. Initially authorized at $100,000,000, that amount was appropriated annually during the first decade of the Act. During the 1980s there were attempts to zero out the amount in budgets, but Congress consistently restored the funds to the authorized level, such that the minimum amount was available each year.
PILT Legislative History PILT Reform in 1994 The Act was amended in 1994 to provide for a more equitable authorization level in light of disparities that existed between property values and current PILT payments. The law as amended, uses the consumer price index (CPI) to adjust the population limitation and the per acre dollar amounts. From 1994 on, the authorized level and the appropriated level began to diverge, since the authorization crept up by an amount equal to the CPI each year, while appropriations stayed almost constant. Initial payments were set at $0.75/acre (Alternative A) and $0.10/acre (Alternative B).
PILT Legislative History Payment History PILT is one of the few Federal funding programs that has a floating authorization. Most enabling acts set an authorized amount. Since the 1994 amendment that indexed individual payments, the total authorized for the program has grown from the $100 million to roughly $399 million (FY2013). Although annual authorized funding levels increased from 1994 to 2007, Congress failed to ever fully fund the program in spite of the ongoing pressure from counties nationwide.
PILT Legislative History PILT Reform in 2008 President Bush signed the Emergency Economic Stabilization Act (PL110-343) on October 3, 2008. Included in the Act was language which modified the PILT program from a discretionary program (subject to annual appropriations) to a fully funded mandatory entitlement program. Congress provided 5 years of mandatory funding for PILT (funded from FY 2008 to FY 2012).
Status Quo FY 2012 was the final year of mandatory funding provided by the Emergency Economic Stabilization Act (PL110-343). On July 6, 2012, President Obama signed into law PL 112-141, the Moving Ahead for Progress in the 21st Century Act (MAP-21). Included in the legislation was additional mandatory funding for PILT for FY 2013. Unless Congress acts, Counties will have received their last fully funded PILT disbursement in June of 2013. Without additional mandatory funding, PILT will revert to a discretionary program subject to the annual appropriations process. While the United States Senate and the House of Representatives may approach legislative solutions for funding the PILT program differently, NACo will continue to urge leadership on both sides of the isle to act in a spirit of bipartisan and bicameral cooperation and work together to move a final legislative solution to the President s desk.
What s Next? FY 2014 funding uncertainty Many counties have begun the budget process for 2014 Without congressional action, counties will begin planning budget contingency plans with significant cuts to critical government services Counties Need Congress to Act!
PILT Funding: A Local Perspective
Questions? Contact Us! For questions or more information, feel free to contact me Ryan R. Yates Associate Legislative Director National Association of Counties (202) 942-4207 ryates@naco.org NACo was named one of nine remarkable associations in the United States after a four-year study conducted by the American Society of Association Executives and The Center for Association Leadership because of its commitment to members and purpose
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