[Senate Report 104-396]
[From the U.S. Government Publishing Office]
Calendar No. 590
104th Congress Report
SENATE
2d Session 104-396
_______________________________________________________________________
UNORGANIZED BOROUGHS IN ALASKA
_______
October 2, 1996.--Ordered to be printed
_______________________________________________________________________
Mr. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 1010]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 1010) to amend the ``unit of general
local government'' definition for Federal payments in lieu of
taxes to include unorganized boroughs in Alaska, 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. DEFINITION OF LOCAL GOVERNMENT.
Section 6901(2) of title 31, United States Code, is amended to read
as follows:
``(2) `unit of general local government' means:
``(A) 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
by the Secretary of Commerce on January 1,
1983, for general statistical purposes.
The term `governmental services' includes, but is not
limited to, those services that relate to public
safety, the environment, housing, social services,
transportation, and governmental administration;
``(B) any area in Alaska that is within the
boundaries of a census are used by the Secretary of
Commerce in the decennial census, but that is not
included within the boundary of a governmental entity
described under subparagraph (A);
``(C) the District of Columbia;
``(D) the Commonwealth of Puerto Rico;
``(E) Guam; and
``(F) the Virgin Islands.''.
SEC. 2. PAYMENT IN LIEU OF TAXES.
Section 6902(a) of title 31, United States Code, is amended to read
as follows:
``(a)(1) Except as provided in paragraph (2), the Secretary of the
Interior shall make a payment for each fiscal year to each unit of
general local government in which entitlement land is located as set
forth in this chapter. A unit of general local government may use the
payment for any governmental purpose.
``(2) For each unit of general local government described in
section 6901(2)(B), the Secretary of the Interior shall make a payment
for each fiscal year to the State of Alaska for entitlement land
located within such unit as set forth in this chapter. The State of
Alaska shall distribute such payment to home rule cities and general
law cities (as such cities are defined by the State) located within the
boundaries of the unit of general local government for which the
payment was received. Such cities may use monies received under this
paragraph for any governmental purpose.''.
Purpose of the Measure
The purpose of S. 1010, as ordered reported, is to amend
the Federal Payment in Lieu of Taxes Act of 1976 to include the
unorganized borough in Alaska within the definition of ``unit
of general local government.''
Background and Need
The Federal Payment in Lieu of Taxes (PILT) Act of 1976
(P.L. 94-565 as amended) provides for payments to local
governments which have tax-exempt Federal lands within their
boundaries. the funding is designed to help relieve the fiscal
burden which Federal lands impose on local governments through
a reduced property tax base.
The PILT Act authorizes and directs the Secretary of the
Interior (the ``Secretary'') to make payment for each fiscal
year to each unit of general local government in which
entitlement land is located. In Alaska, a borough is the
approximate equivalent unit of local government to a county.
The current law provides for payments to ``boroughs existing in
Alaska on October 20, 1976.'' This language, however, is silent
on payments for entitlement lands where organized local
governments do not exist. In Alaska, many rural towns and 60
percent of the Federal lands are located outside the boundary
of an organized borough. As a result, some of these rural
communities that are surrounded by Federal lands receive no
PILT payments.
Under current criteria, Alaska ranks tenth in total
disbursement payments for eligible states. If fully
appropriated, authorizing the unorganized borough to receive
PILT payments would result in added expenditures of
approximately $3 million per year. S. 1010 would affect the
definition of entitlement lands only as it relates to Alaska.
Legislative History
S. 1010 was introduced on June 30, 1995 by Mr. Stevens on
behalf of himself and Mr. Murkowski. The Senate Energy and
Natural Resources held a hearing on June 11, 1996. At the
business meeting on September 12, 1996, the Committee on Energy
and Natural Resources ordered S. 1010, as amended, favorably
reported.
Committee Recommendations and Tabulation of Votes
The Committee on Energy and Natural Resources, in open
business session on September 12, 1996, by unanimous voice vote
of a quorum present, recommends that the Senate pass S. 1010,
if amended as described herein.
Committee Amendments
During the consideration of S. 1010, the Committee adopted
an amendment that providing that in considering Alaska's
unorganized borough for eligibility for PILT payments, the
decennial census areas of the unorganized borough used by the
Secretary of Commerce shall be used to calculate the level of
payment.
Section-by-Section Analysis
Section 1 amends 31 U.S.C. 6901(2), which defines ``unit of
general local government'', to recognize the unorganized
borough in Alaska as a unit of general local government for the
purposes of eligibility to receive funds under PILT.
Section 2 amends 31 U.S.C. 6902(a) to provide for the
distribution of the entitlement money of the unorganized
borough to the State of Alaska for further distribution to the
home rule cities and general law cities (as such cities are
defined by the State) located within the boundaries of the
unorganized borough. It also provides that such cities may use
monies received under this paragraph for any governmental
purpose.
Cost and Budgetary Considerations
The following estimate of the cost of this measure has been
provided by the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 20, 1996.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed S. 1010, a bill to amend the ``unit of local
government'' definition for federal payments in lieu of taxes
to include unorganized boroughs in Alaska, as reported by the
Senate Committee on Energy and Natural Resources on September
13, 1996. We estimate that enacting S. 1010 would not affect
direct spending or receipts; therefore, pay-as-you-go
procedures would not apply to the bill. Enacting the bill could
increase federal discretionary spending by about $6 million in
fiscal year 1997 and about $43 million over the period 1997-
2002, assuming appropriation of the estimated amounts.
S. 1010 would define ``unit of local government'' to
include any land which is within a census area in Alaska, and
which is not within the boundaries of a governmental entity
such as a county, township, borough, or a city independent of
any other unit of general local government. Enacting this bill
would make about 11 census areas in Alaska eligible for federal
payments in lieu of taxes (PILT). If the Congress appropriated
the full amount for which these additional units of local
government, as currently organized, would be eligible under the
PILT formula, then enacting the bill would increase federal
discretionary spending by about $6 million in fiscal year 1997.
However, annual appropriations for PILT may not allow for full
funding of the PILT for which local governments are eligible,
and in such years the payments are prorated among all eligible
local governments out of amounts appropriated. In fiscal year
1996, for example, the Bureau of Land Management estimates it
is paying about 70 percent of the PILT that would be required
if full payments were made as calculated under the formula in
current law. If S. 1010 were enacted and the Congress did not
increase the total appropriation for PILT, then the agency
would have to reduce the apportionments to local government
units that are currently eligible for PILT because the bill
would increase the total number of eligible local governments
sharing the appropriation.
S. 1010 contains no private-sector or intergovernmental
mandates as defined in the Unfunded Mandates Reform Act of 1995
(Public Law 104-4). This bill would benefit the local
jurisdictions in Alaska by making them eligible for PILT
payments totaling about $6 million in fiscal year 1997 and $43
million over the 1997-2002 period. If appropriations were not
increased to accommodate the newly eligible areas, however, the
bill would result in a redistribution of PILT payments from all
other recipients to these newly eligible jurisdictions.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Victoria V.
Heid and John Righter (for federal costs), and Marjorie Miller
(for the state and local impact).
Sincerely,
June E. O'Neill, Director.
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. 1010. 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. 1010, as ordered reported.
Executive Communications
On, June 7, 1996, 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. 1010. These
reports had not been received at the time the report on S. 1010
was filed. When the reports become available, the Chairman will
request that they be printed in the Congressional Record for
the advice of the Senate. The testimony provide by the
Department of the Interior at the Committee hearing follows:
Statement of Gwen Mason, Assistant Director, External Affairs, Bureau
of Land Management, U.S. Department of the Interior
Mr. Chairman and members of the Committee, I am pleased to
have the opportunity to testify today on S. 1010, a bill to
amend the Payments in Lieu of Taxes Act (PILT Act) (31 U.S.C.
Sec. 6901-6907). The PILT program was created by Congress in
1976 to provide Federal funds to local governments to help
compensate for tax revenues they cannot collect on certain
Federal lands located within their boundaries.
The payments are made to local governments from the Federal
government ``in lieu'' of tax revenues the local governments
cannot collect. Since 1977, the Bureau of Land Management (BLM)
has distributed $1.9 billion in PILT monies, $83.5 million of
this to units of local government in Alaska. In fiscal year
1995, the BLM distributed a total of $100.9 million to units of
local government, $4.7 million of this to units of local
government in Alaska.
The BLM strongly supports the PILT program. We are well
aware of how important these payments have become to local
government, often comprising a significant portion of their
operating budget. PILT monies have been used for such critical
functions as local search and rescue operations, road
maintenance, law enforcement, schools, and emergency services.
It is the BLM's responsibility to calculate the payments
according to formulas set by law, and distribute the funds. It
is not our role to determine which entities receive the funds.
Therefore, we have analyzed S. 1010, but do not feel it
appropriate to take a position. However, we would not support a
change that would have the effect of expanding the scope of the
PILT program, and perhaps lead to an increased need for annual
appropriations at the expense of higher priorities.
Subsection 6901(2) of the PILT Act defines a ``unit of
general local government'' eligible for Federal payments in
lieu of taxes as: a county (or parish), a township, a borough,
a city where the city is independent of any other unit of
general local government, the District of Columbia, the
Commonwealth of Puerto Rico, Guam, and the Virgin Islands.
Section 1 of S. 1010 would amend this definition to include the
State of Alaska, for land which is not within the boundaries of
a government entity (county, parish, township, borough, or
city).
Only one half of the land area in the State of Alaska is
included in organized boroughs, of which there are sixteen. The
remainder of the State is categorized as a single, unorganized
borough. Services to the unorganized borough are paid for from
the State's General Fund. Under current law, Federal
entitlement land in the unorganized borough located outside the
boundaries of an organized city does not qualify for PILT
payments.
Subsection 6902(a) of the PILT Act directs the Secretary of
the Interior to make payments for each fiscal year to each unit
of general local government in which entitlement land is
located. These units of general local government may use the
payments for any governmental purpose. Section 2 of S. 1010
would provide an exception for the State of Alaska, and direct
the State to distribute any payment received as a result of
this bill to home rule and general law cities within Alaska.
Therefore, the funds would not be distributed to the
unorganized borough, but the acreage of the unorganized borough
would be used to generate additional money for those
communities already eligible to receive PILT payments in their
own right.
In fiscal year 1995, local governments in Alaska received
$4.7 million in PILT payments. Under this legislation, PILT
payments to Alaska would increase by approximately $1.5 to $2.5
million annually.
Funds appropriated by the Congress each year for the PILT
program may or may not be equal to the amount of funds
authorized for all qualifying units of local government. If
sufficient funds are not appropriated, each recipient's share
is reduced proportionally. This legislation would not add to
the total level of PILT payments. It would, however, increase
the amounts paid to Alaska and its boroughs, and reduce
correspondingly the payments to all other units of local
government receiving PILT payments.
It is not possible to precisely calculate the dollars
effect this legislation would have on any specific unit of
local government now eligible for PILT funds. However, we
estimate that it would reduce the total amount to be
distributed to the other units of local government by roughly
$1.5 to $2.5 million.
This concludes my prepared comments. I will be happy to
answer any questions.
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. 1844, 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):
SEC. 6901. DEFINITIONS.
* * * * * * *
``(2)'' `unit of general local government' means:
``(A) 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 by the Secretary of Commerce on
January 1, 1983, [on January 1, 1983, by the Secretary
of Commerce] for general statistical purposes. The term
`governmental services' includes, but is not limited
to, those services that relate to public safety, the
environment, housing, social services, transportation,
and governmental administration;
``(B) any area in Alaska that is within the
boundaries of a census area used by the Secretary of
Commerce in the decennial census, but that is not
included within the boundary of a governmental entity
described under subparagraph (A);
``[(B)] (C) the District of Columbia;
``[(C)] (D) the Commonwealth of Puerto Rico;
``[(D)] (E) Guam; and
``[(E)] (F) the Virgin Islands.''.
SEC. 6902. AUTHORITY AND ELIGIBILITY.
``(a)(1) Except as provided in paragraph (2), the [The]
Secretary of the Interior shall make a payment for each fiscal
year to each unit of general local government in which
entitlement land is located[,] as set forth in this chapter. A
unit of general government may use the payment for any
governmental purpose.
``(2) For each unit of general local government described
in section 6901(2)(B), the Secretary of the Interior shall make
a payment for each fiscal year to the State of Alaska for
entitlement land located within such unit as set forth in this
chapter. The State of Alaska shall distribute such payment to
home rule cities and general law cities (as such cities are
defined by the State) located within the boundaries of the unit
of general local government for which the payment was received.
Such cities may use monies received under this paragraph for
any governmental purpose.''.