[House Report 107-688]
[From the U.S. Government Publishing Office]



107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-688

======================================================================



 
         PILT AND REFUGE REVENUE SHARING PERMANENT FUNDING ACT

                                _______
                                

 September 25, 2002.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Hansen, from the Committee on Resources, submitted the following

                              R E P O R T

                        [To accompany H.R. 1811]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 1811) to provide permanent funding for the payment in 
lieu of taxes program, and for other purposes, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          Purpose of the Bill

    The purpose of H.R. 1811 is to provide permanent funding 
for the payment in lieu of taxes program, and for other 
purposes.

                  Background and Need for Legislation


                    PAYMENTS IN LIEU OF TAXES (PILT)

    Congress enacted PILT (Public Law 94-565; 31 U.S.C. 6901-
6907) in 1976 as a mechanism for the federal government to make 
payments to local governments to offset losses in property 
taxes resulting from the presence of nontaxable federal lands 
within a locality's boundaries. PILT, which is administered by 
the Bureau of Land Management (BLM), provides a funding stream 
to local governments (typically counties) which provide a range 
of public services on federal lands, including public safety, 
transportation and social services. Payments are generally made 
directly to the counties and can be used for any governmental 
purpose.
    Lands qualifying for federal reimbursement (entitlement 
lands) under PILT include federal lands administered by the 
U.S. Forest Service, the National Park Service, BLM, dredge 
areas maintained by the Army Corps of Engineers, inactive and 
semi-active Army installations, U.S. Fish and Wildlife Service 
lands reserved from the public domain, and some lands donated 
to the federal government. Funds are allocated based on a 
complex statutory formula that takes into consideration such 
variables as the number of entitlement acres, the population of 
the eligible county, and the amount of money a county received 
during the previous year under non-PILT reimbursement programs 
like the Refuge Revenue Sharing Act, the Secure Rural Schools 
and Community Self-Determination Act, the National Forest Fund, 
the Mineral Leasing Act and others. A county's net-receipts 
under these non-PILT programs are subtracted from what a county 
would otherwise receive under PILT in the following year.
    The other primary determinant of a county's reimbursement 
under PILT is Congressional appropriations. While PILT's 
formula sets the authorization bar, Congressional 
appropriations have rarely equaled the formula's authorized 
levels. In Fiscal Year (FY) 2002, for example, Congress 
appropriated $210 million to PILT, but full payments to 
counties under the formula would have totaled approximately 
$351 million. In this case, as in most prior years, the amounts 
prescribed under the formula were reduced across-the-board on a 
pro rata basis, meaning all counties saw their allocation 
reduced by an identical amount. In FY 2002, this meant that 
counties received only 59.7% of the amount authorized by the 
PILT program.

                       Refuge Revenue Sharing Act

    The Refuge Revenue Sharing Act (RRSA, 16 U.S.C. 715s) was 
enacted in 1935 to authorize payments to be made to localities 
to offset tax losses to counties where the U.S. Fish and 
Wildlife Service (FWS) owns and manages nontaxable land. Like 
PILT, RRSA is funded according to a complicated formula through 
receipts from various FWS fees, including grazing, mineral 
development, sale of forest products, and other activities. To 
the extent that these fees do not cover outlays prescribed by 
the funding formulas, the RRSA authorizes the use of 
appropriations from the general fund to meet shortfalls. If fee 
and appropriated moneys still do not meet the formula's 
authorized levels, as has often been the case, then payments 
are reduced across-the-board on a pro rata basis, in a manner 
similar to PILT.
    Like PILT, RRSA appropriations have historically fallen 
well short of authorized levels. In FY 2002, Congress 
appropriated $17.3 million for RRSA, just 52% of the authorized 
level, at $33.5 million.
    Shortfalls in appropriated dollars to both PILT and RRSA 
over the years have had a debilitating impact on the scores of 
county governments, which rely heavily on these programs to 
fund local operations. These funding inadequacies adversely 
affect schools, roads, social services, and local police and 
fire departments. While the problem is most acute in western 
communities, where the federal government controls vast swaths 
of tax immune land, the pangs of inadequate funding have been 
felt in communities all across the nation.
    H.R. 1811 would solve this problem once and for all, by 
fully funding PILT and RRSA without further appropriation 
beginning in 2002.

                            Committee Action

    H.R. 1811 was introduced on May 10, 2001, by Congressman 
Scott McInnis (R-CO). It was referred to the Committee on 
Resources and within the Committee to the Subcommittees on 
Forests and Forest Health, National Parks, Recreation and 
Public Lands and Fisheries
    Conservation, Wildlife and Oceans. The Subcommittees held a 
legislative hearing on the bill on July 25, 2002. On September 
12, 2002, the Full Resources Committee met to consider the 
bill.
    The Subcommittees were discharged from further 
consideration by unanimous consent. No amendments were offered 
and the bill was ordered reported to the House of 
Representatives by unanimous consent.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures. According to the Congressional Budget Office, 
enactment of this bill will result in new direct spending.
    3. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to provide permanent funding for the 
payment in lieu of taxes program.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 19, 2002.
Hon. James V. Hansen,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1811, the PILT and 
Refuge Revenue Sharing Permanent Funding Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts for this 
estimate are Megan Carroll and Deborah Reis.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 1811--PILT and Refuge Revenue Sharing Permanent Funding Act

    Summary: H.R. 1811 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 H.R. 1811 would increase direct spending by $157 
million in 2002 and by $3.9 billion over the 2002-2012 period. 
Because the bill would affect direct spending, pay-as-you-go 
procedures would apply.
    By making PILT and refuge revenue sharing payments fully 
available without appropriation action, H.R. 1811 could create 
savings in discretionary spending. Assuming that annual 
appropriations are reduced accordingly, CBO estimates potential 
discretionary savings of $228 million in fiscal year 2003 and 
about $1.4 billion over the 2003-2007 period.
    H.R. 1811 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: The estimated 
budgetary impact of H.R. 1811 is shown in the following table. 
The costs of this legislation fall within budget function 800 
(general government).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2002     2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
                                                 DIRECT SPENDING

Mandatory spending under current law for PILT and refuge
 revenue sharing: \1\
    Estimated budget authority............................        7        7        8        8        8        8
    Estimated outlays.....................................        7        7        8        8        8        8
Proposed changes:
    Estimated budget authority............................      157      273      278      286      296      305
    Estimated outlays.....................................      157      273      278      286      296      305
Mandatory spending under H.R. 1811 for PILT and refuge
 revenues sharing:
    Estimated budget authority \1\........................      164      280      286      294      304      313
    Estimated outlays.....................................      164      280      286      294      304      313

                                CHANGES IN SPENDING SUBJECT TO APPROPRIATION \2\

Estimated authorization level.............................        0     -228     -233     -238     -242     -248
Estimated outlays.........................................        0     -228     -233     -238     -242     -248
----------------------------------------------------------------------------------------------------------------
\1\ These figures represent the estimated mandatory portion of annual funding for refuge revenue sharing
  payments under current law.
\2\ The changes in spending subject to appropriation represent savings that could occur under H.R. 1811
  beginning in 2003, when all PILT and refuge revenue sharing payments would become mandatory spending. A total
  of $224 million was approved for these payments in 2002, including $210 million for PILT and $14 million for
  refuge revenue sharing.

Basis of estimate

    CBO estimates that enacting H.R. 1811 would increase direct 
spending for PILT and refuge revenue sharing payments by $157 
million in 2002, $273 million in 2003, and about $3.7 billion 
over the 2003-2012 period. Enacting this legislation would 
reduce the need for future appropriations for these programs, 
but any resulting savings would depend on future appropriation 
actions. In 2002, funds provided in appropriations acts for 
these payments totaled nearly $230 million. The total estimated 
cost to fully fund the PILT and refuge revenue sharing program 
in 2002 in $391 million.
    This estimate is based on information provided by the 
Department of the Interior and on CBO baseline assumptions 
regarding future payments to local governments under certain 
other payment programs as well as continuing land acquisitions 
and increases in the fair market value of public lands. For 
this estimate, CBO assumes that H.R. 1811 will be enacted 
before the end of fiscal year 2002, and that payments would be 
made in this fiscal year. If the legislation were enacted in 
fiscal year 2003, we expect that amounts authorized for 200 
PILT payments would be made in 2003.
            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 Bureau of Land 
Management (BLM) 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. H.R. 1811 would provide permanent funding for 
PILT payments, which under current law are subject to 
appropriation. According to BLM, the full authorization level 
for PILT payments in fiscal year 2002 is $351 million, and the 
agency already has received appropriations totaling $210 
million for those payments. Hence, CBO estimates that fully 
funding the program this year would create direct spending of 
$141 million. We also estimate that H.R. 1811 would create PILT 
direct spending of $241 million in 2003 and about $3.3 billion 
over the 2003-2012 period.
            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 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 1 percent of the land's fair 
market value. The annual payments are funded by a combination 
of direct spending authority and discretionary appropriations. 
In the last 20 years, those two sources have not been 
sufficient to fully fund the entire authorized level of refuge 
revenue sharing payments, and each county's payment has been 
reduced proportionately. Beginning in fiscal year 2002, H.R. 
1811 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 $16 million in 2002, by $32 million in 2003, 
and by $442 million over the 2003-1012 period.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays that are subject to pay-as-you-go procedures 
are shown in the following table. For the purposes of enforcing 
pay-as-you-go procedures, only the effects through fiscal year 
2006 are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                         By fiscal year, in millions of dollars--
                                                                 ---------------------------------------------------------------------------------------
                                                                   2002    2003    2004    2005    2006    2007    2008    2009    2010    2011    2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays..............................................     157     273     278     286     296     305     315     465     478     492     507
Changes in receipts.............................................                                       Not applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 1811 
contains no intergovernmental or private-sector mandates as 
define 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.
    Previous CBO estimate: On June 20, 2002, CBO transmitted a 
cost estimate for S. 454 as ordered reported by the Senate 
Committee on Energy and Natural Resources on June 5, 2002. The 
two bills are very similar, and our cost estimates are the 
same.
    Estimate prepared by: Federal costs: Megan Carroll and 
Deborah Reis; Impact on State, local, and tribal governments: 
Marjorie Miller; Impact on the private sector: Cecil McPherson.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as 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):

              SECTION 6906 OF TITLE 31, UNITED STATES CODE


[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.]

Sec. 6901. Authorization of appropriations

  There is authorized to be appropriated such sums as may be 
necessary to the Secretary of the Interior to carry out this 
chapter. Beginning in fiscal year 2002 and each fiscal year 
thereafter, amounts authorized under this chapter shall be made 
available to the Secretary of the Interior, out of any other 
funds in the Treasury not otherwise appropriated and without 
further appropriation, for obligation or expenditure in 
accordance with this chapter.
                              ----------                              


                SECTION 401 OF THE ACT OF JUNE 15, 1935

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

  Sec. 401. (a)  * * *

           *       *       *       *       *       *       *

  (d) 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) 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. Beginning in fiscal year 
2002 and each fiscal year thereafter, such amount shall be made 
available to the Secretary, out of any other funds in the 
Treasury not otherwise appropriated and without further 
appropriation, for obligation or expenditure in accordance with 
this section.

           *       *       *       *       *       *       *


                                
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