[Senate Report 108-361]
[From the U.S. Government Publishing Office]
Calendar No. 720
108th Congress Report
SENATE
2d Session 108-361
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PILT AND REFUGE REVENUE SHARING PERMANENT FUNDING ACT
_______
September 28, 2004.--Ordered to be printed
_______
Mr. Domenici, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 511]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 511) to provide permanent funding for the
Payment In Lieu of Taxes program, and for other purposes,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill, as amended, do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``PILT and Refuge Revenue Sharing
Permanent Funding Act''.
SEC. 2. PERMANENT FUNDING.
(a) Payments in Lieu of Taxes.--
(1) In general.--Section 6906 of title 31, United States
Code, is amended to read as follows:
``Sec. 6906. Funding
``For fiscal year 2005 and each fiscal year thereafter, amounts
authorized under this chapter shall be made available to the Secretary
of the Interior, without further appropriation, for obligation or
expenditure in accordance with this chapter.''.
(2) Conforming amendment.--The table of sections for chapter
69 of title 31, United States Code, is amended by striking the
item relating to section 6906 and inserting the following:
``6906. Funding.''.
(b) Refuge Revenue Sharing.--Section 401(d) of the Act of June 15,
1935 (16 U.S.C. 715s(d)) is amended--
(1) by striking ``If the net receipts'' and inserting the
following:
``(1) If the net receipts''; and
(2) by adding at the end the following:
``(2) For fiscal year 2005 and each fiscal year thereafter, the
amount made available under paragraph (1) shall be made available to
the Secretary, without further appropriation, for obligation or
expenditure in accordance with this section.''.
Purpose of the Measure
The purpose of S. 511 is to is to amend the Payments in
Lieu of Taxes (PILT) Act and the Refuge Revenue Sharing Act to
provide for the authorized amounts for both programs to be made
available annually to the Secretary of the Interior without the
need for further appropriation.
Background and Need
The Payments in Lieu of Taxes Act (31 U.S.C. 6901 et seq.)
authorizes the Secretary of the Interior to make annual
payments to units of general local government (usually
counties) in which entitlement lands are located. The PILT Act
defines entitlement lands to include Federal lands administered
by the Forest Service, the Bureau of Land Management and
National Park Service; National Wildlife Refuges created from
the public domain; lands dedicated for Federal water resource
development projects; and certain local areas specifically
identified in the Act.
The purpose of the PILT program is to partially compensate
local governments for the loss of property taxes as a result of
the non-taxable Federal lands located within their boundaries.
The PILT Act uses a formula to determine the amount of
compensation factoring in Federal acreage, local population,
and receipt-sharing payments. In 1994, Congress amended the
formula and increased the authorized payments. Historically,
appropriations have been far less than the authorized amount,
although they have increased significantly in recent years.
The Refuge Revenue Sharing Fund was established in 1935 to
provide revenue sharing to units of local government that
contain national wildlife refuges. Under the Refuge Revenue
Sharing Act (16 U.S.C. 715s), local governments receive either
25 percent of the net receipts generated from refuge lands, \3/
4\ of 1 percent of adjusted purchase price of refuge lands, or
75 cents an acre for purchased lands, whichever is greater.
Under the 1976 amendments to the Act, the program was expanded
to include all lands administered by the Fish and Wildlife
Service (not just refuge lands) and authorization was provided
for additional appropriations to supplement payments, if refuge
revenues fell below the authorized payment level. Like the PILT
program, annual payments to local governments now fall far
below the authorized level. For FY 2001 the estimated
authorized level was approximately $32 million, while receipts
accounted for $4.3 million and another $11.4 was appropriated.
S. 511 would eliminate the need for annual appropriations,
while providing local governments with more certainty in
budgeting for annual revenues from the PILT and refuge revenue
sharing programs.
Legislative History
S. 511 was introduced by Senator Bingaman on March 4, 2003
for himself and Senators Baucus, Ensign, Feinstein, Leahy,
Reid, and Wyden. The Subcommittee on Public Lands and Forests
held a hearing on September 11, 2003. During the 107th
Congress, a similar bill, S. 454, sponsored by Senator Bingaman
and nine other Senator was heard in the Subcommittee on Public
Lands and Forests on May 9, 2002 and favorably reported from
the Energy and Natural Resources Committee on June 5, 2002. The
Committee on Energy and Natural Resources ordered S. 511 to be
favorably reported, as amended, at its business meeting on
September 15, 2004.
Committee Recommendation
The Senate Committee on Energy and Natural Resources, in
open business session on September 15, 2004, by a unanimous
voice vote, of a quorum present, recommends that the Senate
pass S. 511, if amended as described herein.
Committee Amendments
The amendment adopted by the Committee eliminated section 2
of S. 511 (as introduced) and reordered subsequent sections as
needed. The amendment eliminated the funding formula provision,
but retained the mandatory funding provisions for both PILT and
the U.S. Fish & Wildlife Refuge Revenue sharing payments.
Section-by-Section Analysis
Section 1 provides the short title.
Section 2 amends the Payment in Lieu of Taxes Act and The
Refuge Revenue Sharing Act to make authorized amounts available
to the Secretary of the Interior without further appropriations
for obligation or expenditure in accordance with the respective
Acts, beginning in fiscal year 2005.
Cost and Budgetary Considerations
The following estimate of costs of this measure has been
provided by the Congressional Budget Office.
S. 511--PILT and Refuge Revenue-Sharing Permanent Funding Act
Summary:
S. 511 would provide new direct spending authority for the
Secretary of the Interior to make payments to states and
counties under the payment in lieu of taxes (PILT) program and
the refuge revenue-sharing program. CBO estimates that enacting
S. 511 would increase direct spending by $376 million in 2005,
by about $2 billion over the 2005-2009 period, and by about
$4.2 billion over the 2005-2014 period. Enacting the bill would
not affect revenues.
By making PILT and refuge revenue-sharing payments fully
available without further appropriation action, S. 511 could
lead to savings in discretionary spending. Assuming that annual
appropriations are reduced accordingly, CBO estimates that
discretionary spending could be reduced by $243 million in
fiscal year 2005 and about $1.3 billion over the 2005-2009
period.
S. 511 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments. Enacting this legislation probably would benefit
local governments that receive payments under these two
programs.
Estimated Cost to the Federal Government:
For this estimate, CBO assumes that S. 511 will be enacted
near the start of fiscal year 2005. The estimated budgetary
impact of S. 511 is shown in the following table. The costs of
this legislation fall within budget function 800 (general
government).
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By fiscal year, in millions of dollars--
--------------------------------------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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DIRECT SPENDING
Mandatory Spending Under Current Law for PILT and
Refuge Revenue Sharing: 1
Estimated Budget Authority....................... 6 6 6 6 6 6 6 6 6 6 6
Estimated Outlays................................ 6 6 6 6 6 6 6 6 6 6 6
Proposed Changes:
PILT:
Estimated Budget Authority................... 0 337 342 348 354 360 367 373 380 387 394
Estimated Outlays............................ 0 337 342 348 354 360 367 373 380 387 394
Refuge Revenue Sharing:
Estimated Budget Authority................... 0 39 41 44 47 51 54 58 62 66 71
Estimated Outlays............................ 0 39 41 44 47 51 54 58 62 66 71
Total Changes:
Estimated Budget Authority................... 0 376 383 392 401 411 421 431 442 453 465
Estimated Outlays............................ 0 376 383 392 401 411 421 431 442 453 465
Mandatory Spending Under S. 511 for PILT and Refuge
Revenue Sharing:
Estimated Budget Authority 1..................... 6 382 389 398 407 417 427 437 448 459 471
Estimated Outlays................................ 6 382 389 398 407 417 427 437 448 459 471
CHANGES IN SPENDING SUBJECT TO APPROPRIATION 2
Estimated Authorization Level........................ 0 -243 -247 -250 -255 -259 -263 -269 -273 -278 -284
Estimated Outlays.................................... 0 -243 -247 -250 -255 -259 -263 -269 -273 -278 -284
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1 Includes the estimated mandatory portion of annual funding for refuge revenue-sharing payments under current law.
2 The changes in spending subject to appropriation represent discretionary savings that could occur under S. 511 beginning in 2005, when all PILT and
refuge revenue-sharing payments would become mandatory spending. A total of $239 million was appropriated for these payments in 2004, including $225
million for PILT and $14 million for refuge revenue sharing.
Basis of estimate: CBO estimates that enacting S. 511 would
increase direct spending for PILT and refuge revenue-sharing
payments by $376 million in 2005 and about $4.2 billion over
the 2005-2014 period. Enacting this legislation would reduce
the need for future appropriations for these programs, but any
resulting savings would depend on future appropriation actions.
Permanent funding for PILT
PILT is a payment program that compensates local
governments for losses in their tax bases due to the presence
of certain federal lands within their jurisdictions, which are
exempt from state and local taxation. The Department of the
Interior (DOI) calculates the PILT payment authorized for each
local jurisdiction based on population, the number of federal
acres present, and other federal payments received by the
jurisdiction. S. 511 would provide permanent funding for PILT
payments, which, under current law, are subject to
appropriation. According to DOI, the full authorization level
for PILT payments in fiscal year 2004 is $331 million.
(However, only $225 million was appropriated for those
payments.) CBO estimates that providing full funding for future
PILT payments would increase direct spending by $337 million in
2005, about $1.7 billion over the 2005-2009 period, and about
$3.6 billion over the next 10 years.
Refuge revenue-sharing payments
The Refuge Revenue Sharing Act authorizes the U.S. Fish and
Wildlife Service (USFWS) to make payments to counties where
national wildlife refuges and other USFWS-administered land is
located. Generally, the authorized level of such payments for
each county is equal to the greater of: (1) $0.75 per acre of
USFWS land located in the county, (2) 25 percent of net
offsetting receipts (if any) earned from commercial activities
on such land, or (3) three-fourths of one percent of the land's
fair market value. The annual payments are funded by a
combination of direct spending authority and discretionary
appropriations.
Over the last 20 years, refuge revenue-sharing payments
have been less than the authorized level, and each county's
payment has been reduced proportionately. Beginning in fiscal
year 2005, S. 511 would make available, without further
appropriation, the entire amount necessary to fund all payments
to counties at the authorized level. CBO estimates that the
bill would increase direct spending by $39 million in 2005,
$222 million over the 2005-2009 period, and $533 million over
the next 10 years.
Spending subject to appropriation
By making PILT and refuge revenue-sharing payments fully
available without further appropriation action, S. 511 would
reduce the need for future appropriations for these programs.
Assuming that annual appropriations are reduced accordingly,
CBO estimates that discretionary spending could be reduced by
$243 million in fiscal year 2005 and about $1.3 billion over
the 2005-2009 period. Those potential savings in spending
subject to appropriation are less than the estimated increase
in direct spending under S. 511 because, in recent years,
appropriations for PILT and refuge revenue-sharing payments
have been less than the full amounts authorized for such
payments. As a result, CBO's baseline for PILT and refuge
revenue-sharing payments assumes that, under current law,
appropriations would continue to fall short of authorized
levels of payments.
Intergovernmental and private-sector impact: S. 454
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments. Enacting this legislation probably would
benefit local governments that receive payments under these two
programs.
Estimate prepared by: Federal Costs: Megan Carroll and
Deborah Reis; Impact on State, Local, and Tribal Governments:
Marjorie Miller; and Impact on the Private Sector: Jean
Talarico.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Regulatory Impact Evaluation
In compliance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 511.
The bill is not a regulatory measure in the sense of
imposing Government-established standards or significant
economic responsibilities on private individuals and
businesses.
No personal information would be collected in administering
the program. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of S. 511.
Executive Communications
On September 11, 2003, the Committee on Energy and Natural
Resources requested legislative reports from the Department of
the Interior and the Office of Management and Budget setting
forth Executive agency recommendations on S. 511. These reports
had not been received when this report was filed. The testimony
provided by the Department of the Interior at the Subcommittee
hearing on S. 511 follows:
Statement of Chris Kearney, Deputy Assistant Secretary for Policy and
International Affairs, Department of the Interior
Mr. Chairman and members of the Committee, I am pleased to
have the opportunity to testify today on S. 511, a bill to make
the Bureau of Land Management's (BLM) Payments-in-Lieu of Taxes
(PILT) Program and the U.S. Fish and Wildlife Service's (FWS)
Refuge Revenue Sharing (RRS) Program mandatory. A hearing on
PILT took place last year on May 9, 2002, before this
Subcommittee. Our position on this bill remains unchanged. The
Administration strongly supports the PILT and RRS programs and
views them as high priorities, but the Administration is
strongly opposed to S. 511 because it would force the Federal
Government to either raise taxes or cut into other programs
that are integral to the President's budget and important for
the American people.
background
The PILT Act (P.L. 94-565) was passed by Congress in 1976
to provide payments to local governments in counties where
certain Federal lands are located within their boundaries. PILT
is based on the concept that these local governments incur
costs associated with maintaining infrastructure on Federal
lands within their boundaries but are unable to collect taxes
on these lands; thus, they need to be compensated for these
losses in tax revenues. The payments are made to local
governments in lieu of tax revenues and to supplement other
Federal land receipts shared with local governments. The
amounts available for payments to local governments require
annual appropriation by Congress. In the past, the BLM has
allocated payments according to the formula in the PILT Act.
The formula takes into account the population within an
affected unit of local government, the number of acres of
eligible Federal land, and the amount of certain Federal land
payments received by the county in the preceding year. These
payments are other Federal revenues (such as receipts from
mineral leasing, livestock grazing, and timber harvesting) that
the Federal Government transfers to the counties. In
recognition of the fact that this program is multi-bureau in
nature, beginning in FY 2004, funding and management of PILT
will be administered at the Department level.
The President's FY 2004 budget request demonstrates our
commitment to PILT. The Administration requested $165 million
in FY 2003 for PILT, and $200 million in FY 2004, an increase
of $35 million. Furthermore, while the total amount requested
for all programs by the Department for FY 2004 represents a 3.3
percent increase from the prior year, the request for PILT is
more than 21 percent over last year's request for this
important program, reflecting our continued commitment and
obligation to the PILT program even in the context of other
significant budget priorities. While we recognize the
importance of the PILT program, it should not be viewed in
isolation from other departmental and Federal programs that
bring or will bring benefits to counties in the future.
Examples include funding provided for rural fire assistance and
our efforts to work with Gateway Communities to increase
tourism opportunities.
This year, some counties received slightly reduced PILT
payments to adjust for increased revenue received during the
previous fiscal year under the Secure Rural Schools and
Community Self-Determination Act. This Act provides payments to
compensate certain counties for declining timber receipts. The
combination of PILT payments and payments under the Secure
Rural Schools Act, however, will result in a higher overall
payment to affected counties.
RRS (16 U.S.C. 715s), as amended, was enacted in 1935. It
authorizes payments to be made to offset tax losses to counties
in which the FWS fee and withdrawn public domain lands are
located. The original Act provided for 25 percent of the net
receipts from revenues from the sale or other disposition of
products on refuge lands to be paid to counties. The Act was
amended in 1964 to make it more like the PILT program. The new
provisions distinguished between acquired lands that are
purchased by the FWS and lands that are withdrawn from the
public domain for administration by the FWS. For fee lands, the
counties received \3/4\ of 1 percent of the adjusted value of
the land or 25 percent of the net receipts, whichever was
greater, with the value of the land to be reappraised every 5
years. They continued to receive 25 percent of the net receipts
collected on the withdrawn public domain lands in their county.
The RRS was amended again in 1978 in order to provide
payments that better reflected market land values to counties
with land administered by the FWS within their boundaries. The
method used to determine the adjusted cost of the land acquired
during the depression years of the 1930s (using agricultural
land indices) resulted in continuing low land values compared
to the land prices that existed in 1978. Also, other lands that
were purchased during periods of inflated land values were
found to be overvalued. The Congress decided that the payments
did not adequately reflect current tax values of the property.
It also recognized that national wildlife refuges are
established first and foremost for the protection and
enhancement of wildlife and that many produce little or no
income that could be shared with the local county.
In the 1978 amendments, Congress chose to distinguish
between lands acquired in fee and lands withdrawn from the
public domain, by recognizing that the financial impact on
counties tends to be greater when lands are directly withdrawn
from the tax rolls, rather than when the refuge unit is created
out of the public domain and has never been subject to a
property tax. The formula adopted then, and still in effect,
allows the FWS to pay counties containing lands acquired in fee
the greater of: 75 cents per acre, \3/4\ of 1 percent of the
fair market value of the land, or 25 percent of the net
receipts collected from the area. If receipts are insufficient
to satisfy these payments, appropriations are authorized to
make up the difference.
Counties can use funds for any government purpose and pass
through the funds to lesser units of local government within
the county that experience a reduction of real property taxes
as a result of the existence of FWS fee lands within their
boundaries. Counties with FWS lands that are withdrawn from the
public domain continue to receive 25 percent of the receipts
collected from the area and are paid under the provisions of
the PILT Act.
Section 2 would amend the funding formula for PILT found in
31 U.S.C. 6903(c)(2) by replacing the present limitation of
``$135.07 times the population'' with ``$265.68 times the
population'' and amending the table at the end of the section
to reflect corresponding increased or deceased amounts for each
population level. The Administration appreciates the bill's
intent to help compensate those counties with high public land
acreage and low population. Given the complexity of the PILT
formula and the intent of the program to compensate counties
for the inability to collect property taxes on Federal lands,
we must be careful to ensure that the compensation formula
compensates counties fairly and does not result in counties
actually receiving payments that are substantially different
than they otherwise would receive in order to achieve tax
equivalency. Accordingly, we need to further examine this issue
to determine the effect of increasing the population multiplier
value over all counties collectively. We are also concerned
that this proposed change would increase overall PILT
authorization levels significantly, thereby increasing the cost
of the bill even further. Again, this counsels in favor of a
more systematic evaluation of how to address issues with the
PILT formula within the current authorization levels.
We continue to engage in discussions with the National
Association of Counties concerning issues associated with the
allocation formula and we believe those issues should be
addressed before considering such a significant action as
converting these payments to permanent mandatory payments, or
making any changes to the formula. I would like to note that
many of the same concerns we have previously expressed
regarding PILT funding hold true for RRS funding as well.
Although the Administration supports the purpose of S. 511,
we must oppose it for the same reasons that we opposed a
similar bill last year in the 107th Congress. We support
protections for local governments against the loss of property
tax revenue when private lands are acquired by a Federal
agency. However, the Administration is strongly opposed to
creating a new mandatory spending category to fund the PILT
program because it would force the Federal government either to
raise taxes or cut into other programs that are integral to the
President's budget and important to the American public.
conclusion
The Administration recognizes that PILT and RRS payments
are important to local governments, sometimes comprising a
significant portion of their operating budgets. The PILT and
RRS monies have been used for critical functions such as local
search and rescue operations, road maintenance, law
enforcement, schools, and emergency services. These
expenditures often support the activities of people from around
the country who visit or recreate on Federal lands. The
Department looks forward to continuing to work cooperatively
with the communities on these important issues.
Mr. Chairman, this concludes my prepared statement. I would
be pleased to answer any questions that you or the other
members may have.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 511, as ordered reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
31 U.S.C. Sec. 6906
TITLE 31--MONEY AND FINANCE
Subtitle V--General Assistance Administration
CHAPTER 69--PAYMENT FOR ENTITLEMENT LAND
SEC. 6906. AUTHORIZATION OF APPROPRIATIONS.
[Necessary amounts may be appropriated to the Secretary of
the Interior to carry out this chapter. Amounts are available
only as provided in appropriation laws.] For fiscal year 2005
and each fiscal year thereafter, amounts authorized under this
chapter shall be made available to the Secretary of the
Interior, without further appropriation, for obligation or
expenditure in accordance with this chapter.
----------
16 U.S.C. 715
AN ACT
To amend the Migratory Bird Hunting Stamp Act of March 16,
1934, and certain other Acts relating to game and other
wildlife, administered by the Department of Agriculture, and
for other purposes
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
TITLE I--MIGRATORY BIRD HUNTING STAMP
* * * * * * *
TITLE IV--PARTICIPATION OF STATES IN REVENUE FROM CERTAIN WILDLIFE
REFUGES
* * * * * * *
``Sec. 401. (a) Beginning with the next full fiscal year
and for each fiscal year thereafter, all revenues received by
the Secretary of the Interior from the sale or other
disposition of animals, timber, hay, grass, or other products
of the soil, minerals, shells, sand, or gravel, from other
privileges, or from leases for public accommodations or
facilities incidental to but not in conflict with the basic
purposes for which those areas of the National Wildlife Refuge
System were established, during each fiscal year in connection
with the operation and management of those areas of the
National Wildlife Refuge System that are solely or primarily
administered by him, through the United States Fish and
Wildlife Service, shall be covered into the United States
Treasury and be reserved in a separate fund for disposition as
hereafter prescribed. Amounts in the fund shall remain
available until expended, and may be expended by the Secretary
without further appropriation in the manner hereafter
prescribed. The National Wildlife Refuge System (hereafter
referred to as the ``System'') includes those lands and waters
administered by the Secretary as wildlife refuges, wildlife
ranges, game ranges, wildlife management areas, and waterfowl
production areas established under any law, proclamation,
Executive, or public land order.
* * * * * * *
(d) Authorization of appropriations equal to difference
between amount of net receipts and aggregate amount of required
payments:
[If the net receipts] (1) If the net receipts in the
fund which are attributable to revenue collections for
any fiscal year do not equal the aggregate amount of
payments required to be made for such fiscal year under
subsection (c) of this section to counties, there are
authorized to be appropriated to the fund an amount
equal to the difference between the total amount of net
receipts and such aggregate amount of payments.
(2) For fiscal year 2005 and each fiscal year
thereafter, the amount made available under paragraph
(1) shall be made available to the Secretary, without
further appropriation, for obligation or expenditure in
accordance with this section.