Land Management Agencies: Revenue Sharing Payments to States and Counties
(Letter Report, 09/17/98, GAO/RCED-98-261).
Pursuant to a congressional request, GAO provided information on revenue
sharing programs that the federal land management agencies use to
compensate states for the tax exempt status of Federal lands within
their boundaries, focusing on: (1) the major differences among these
programs; (2) the processes that California, Oregon, and Washington use
to distribute the federal payments to the counties and the major
differences among them; and (3) the amount of federal compensation that
California, Oregon, and Washington received and distributed to their
counties compared with the amounts that the federal agencies calculated
as attributable to the receipts generated in the counties during fiscal
years 1995 through 1997.
GAO noted that: (1) 21 of the 22 revenue-sharing programs administered
by the land management agencies--the Forest Service, Bureau of Land
Management (BLM), Minerals Management Service, and Fish and Wildlife
Service--share the receipts derived from the use, extraction, or sale of
natural resources from federal lands located within the boundaries of
certain states, counties, or territories; (2) BLM also compensates
counties by providing payments in lieu of taxes that would have been
received by these jurisdictions if the federal lands were privately
owned; (3) nationwide, these payments total about $1 billion annually;
(4) many of the programs and payments are crosscutting; that is, more
than one agency is involved with the collection and distribution of
receipts, and in other cases, payments under certain programs are
offsets--deductions--from other programs; (5) California, Oregon, and
Washington have implemented laws, systems, and processes for
distributing federal revenue-sharing funds to their counties; (6) while
the states' distribution systems and processes are similar, numerous
differences exist among California, Oregon, and Washington laws; (7) in
some instances, the differences in the states' distribution
methodologies and requirements affected the amount of revenue-sharing
funds that the counties received and affected the purposes for which the
counties could use the distributed funds; (8) during fiscal years 1995
through 1997, the three states received about $660 million in total
federal compensation from the land management agencies; (9) Oregon
distributed 100 percent of the federal payments to its counties and paid
interest on these funds; (10) California counties, on the other hand,
received the lowest percentage of payments; the state distributed only
about 66 percent of the federal funds identified as having been
generated by designated counties; (11) Washington distributed about 98
percent of the federal funds to its counties; (12) in addition to these
state distributions, however, counties in these three states received
about $280 million during fiscal years 1995 through 1997 directly from
the federal agencies; (13) the federal distribution systems identify the
receipts generated in specific counties, while the states distribute
payments to the counties on the basis of state laws; (14) therefore,
while the federal distribution identifies the attributable county, few
federal laws require that the funds be distributed to those counties
generating the receipts; and (15) state laws control the actual amounts
distributed to the counties.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-98-261
TITLE: Land Management Agencies: Revenue Sharing Payments to
States and Counties
DATE: 09/17/98
SUBJECT: Federal/state relations
Land management
Federal property
Revenue sharing
State/local relations
Intergovernmental fiscal relations
Tax exempt status
State law
Revenue sharing payments
Comparative analysis
IDENTIFIER: California
Oregon
Washington
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Cover
================================================================ COVER
Report to the Honorable
Vic Fazio, House of Representatives
September 1998
LAND MANAGEMENT AGENCIES - REVENUE
SHARING PAYMENTS TO STATES AND
COUNTIES
GAO/RCED-98-261
Land Management Agencies Compensation to States
(141117)
Abbreviations
=============================================================== ABBREV
BIA - Bureau of Indian Affairs
BLM - Bureau of Land Management
FWS - Fish and Wildlife Service
GAO - General Accounting Office
MMS - Minerals Management Service
O&C - Oregon & California Grant Lands
OCSLA - Outer Continental Shelf Lands Act
OIG - Office of Inspector General
PILT - Payment in Lieu of Taxes
Letter
=============================================================== LETTER
B-280751
September 17, 1998
The Honorable Vic Fazio
House of Representatives
Dear Mr. Fazio:
Federal land management agencies within the Department of the
Interior and the Forest Service, within the U.S. Department of
Agriculture, administer numerous revenue-sharing programs to
compensate states and counties for the tax-exempt status of federal
lands within their boundaries. The Congress has enacted several
programs that add to a complex system for fully and fairly
compensating states and counties for the federal presence. Concerned
about the level of complexity of these programs as well as whether
counties are receiving their "fair share," you asked us to provide
information on these federal compensation programs.
Specifically, we agreed to provide information on (1) the programs
that the federal land management agencies use to compensate states
and counties and identify the major differences among these programs;
(2) the processes that California, Oregon, and Washington use to
distribute the federal payments to the counties and the major
differences among them; and (3) the amount of federal compensation
that California, Oregon, and Washington received and distributed to
their counties compared with the amounts that the federal agencies
calculated as attributable to the receipts generated in the counties
during fiscal years 1995 through 1997.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
Twenty-one of the 22 revenue-sharing programs administered by the
land management agencies--the Forest Service, Bureau of Land
Management, Minerals Management Service, and Fish and Wildlife
Service--share the receipts derived from the use, extraction, or sale
of natural resources from federal lands located within the boundaries
of certain states, counties, or territories. The Bureau of Land
Management also compensates counties by providing payments in lieu of
taxes that would have been received by these jurisdictions if the
federal lands were privately owned. Nationwide, these payments total
about $1 billion annually. Many of the programs and payments are
crosscutting. That is, more than one agency is involved with the
collection and distribution of receipts, and in other cases, payments
under certain programs are offsets--deductions--from other programs.
Moreover, these programs contain a multitude of differences, such as
the formulas for the distributions; the recipients of the payments;
and the timing, number, or specified uses of the payments. As a
result, the picture of all of the revenue-sharing programs together
is a complex one.
California, Oregon, and Washington have implemented laws, systems,
and processes for distributing federal revenue-sharing funds to their
counties. However, federal compensation laws generally provide the
states with wide latitude in retaining or distributing the land
management agencies' revenue-sharing payments to the states. While
the states' distribution systems and processes are similar, numerous
differences exist among California, Oregon, and Washington states'
laws, such as those specifying paying or not paying interest on the
funds distributed. In some instances, the differences in the states'
distribution methodologies and requirements affected the amount of
revenue-sharing funds that the counties received and affected the
purposes for which the counties could use the distributed funds.
During fiscal years 1995 through 1997, the three states received
about $660 million in total federal compensation from the land
management agencies. Oregon distributed 100 percent of the federal
payments to its counties and paid interest on these funds.
California counties, on the other hand, received the lowest
percentage of payments; the state distributed only about 66 percent
of the federal funds identified as having been generated by
designated counties. Washington distributed about 98 percent of the
federal funds to its counties. In addition to these state
distributions, however, counties in these three states received about
$280 million during fiscal years 1995 through 1997 directly from the
federal agencies. The federal distribution systems identify the
receipts generated in specific counties, while the states distribute
payments to the counties on the basis of state laws. Therefore,
while the federal distribution identifies the attributable county,
few federal laws require that the funds be distributed to those
counties generating the receipts. State laws control the actual
amounts distributed to the counties.
BACKGROUND
------------------------------------------------------------ Letter :2
Nationwide, the Forest Service, within the Department of Agriculture,
and the Department of the Interior's Bureau of Land Management (BLM),
Minerals Management Service (MMS), Fish and Wildlife Service (FWS),
Bureau of Reclamation, and National Park Service collectively manage
about 625 million acres for the benefit of the American people.
These lands are either public domain or acquired lands and include
national forests and grasslands, wildlife refuges, grazing lands, and
national parks.\1 From these federal lands, receipts are generated by
the sale or use of natural resources, such as timber, minerals,
recreation, or grazing permits.
Since the early 1900s, the Congress has enacted more than 20 laws
directing that a state or county be compensated for a federal
presence in the state. The compensation may be based on federal
acreage or a county's population, but in most instances, the payments
relate to a percentage--from 4 to 90 percent--of the receipts
generated on federal lands. Federal law governs the basis,
methodology, and timing of the compensation payments to the states
but frequently allows state law to govern the payments' ultimate use
and possible distribution to the counties within the state.
With the exception of the Bureau of Reclamation and the National Park
Service, the federal land management agencies that we reviewed
administer the various compensation programs enacted by the
Congress.\2 While the lands administered by the Bureau of Reclamation
and the National Park Service are used in one compensation program,
the receipts generated from these lands are deposited in the General
Fund of the U.S. Treasury if not otherwise authorized for use. Each
of the remaining land management agencies has established a system of
collecting and distributing the receipts generated to implement the
numerous federal laws enacted to compensate the states and counties.
The compensation to the states and counties by these land management
agencies totals in the hundreds of millions of dollars annually.
Most compensation is derived from agencies' receipts, while
compensation for some other programs is appropriated by the Congress.
Nationwide, these land management agencies distributed about $3.2
billion during fiscal years 1995 through 1997. Every state--as well
as most U.S. territories--receives some federal compensation for a
federal presence within its boundaries. Among the states receiving
the largest federal compensations are Wyoming, New Mexico, Oregon,
and California. Appendix I provides a listing of states and the
amount of compensation paid during fiscal year 1997.
--------------------
\1 Public domain lands are lands that have not left the ownership of
the federal government, and acquired lands are lands in federal
ownership that the government obtained by deed through purchase,
gift, exchange, or condemnation proceedings.
\2 We have excluded the programs of Interior's Bureau of Indian
Affairs because payments from them benefit special populations rather
than the general public.
LAND MANAGEMENT AGENCIES'
REVENUE-SHARING PROGRAMS
------------------------------------------------------------ Letter :3
Twenty-one of the 22 revenue-sharing programs administered by the
land management agencies share the receipts derived from the use,
extraction, or sale of natural resources from federal lands located
within the boundaries of certain states, counties, or territories.
BLM also compensates counties to provide payments in lieu of taxes
that would have been received by these jurisdictions if the federal
lands were privately owned. Our review of the agencies'
administration of these revenue-sharing programs showed that each of
the agencies had systems and procedures in place to make payments to
the states and counties.
Many of the programs and payments are crosscutting. That is, more
than one agency is involved with the collection and distribution of
receipts, and in other cases, payments under certain programs are
offsets-- deductions--from other programs. Moreover, these programs
contain a multitude of differences, such as the formulas for the
distribution of the payments; the recipients of the payments; and the
timing, number, or specified uses of the payments. As a result, the
picture of all of the revenue-sharing programs together is a complex
one.
Nationwide, payments to the states, counties, and territories by
these land management agencies total about $1 billion annually.
Table 1 portrays the payments to the states and counties by each of
the federal agencies for fiscal years 1995 through 1997.
Table 1
Federal Payments to States or Counties,
Fiscal Years 1995 Through 1997
(Dollars in thousands)
Forest
Fiscal year Service BLM MMS FWS Total
-------------------- -------- -------- -------- -------- --------
1995 $278,597 $182,547 $552,249 $15,014 $1,028,4
07
1996 260,364 191,413 546,892 17,426 1,016,09
5
1997 240,367 188,692 684,908 17,333 1,131,30
0
======================================================================
Total $779,328 $562,652 $1,784,0 $49,773 $3,175,8
49 02
----------------------------------------------------------------------
Sources: Forest Service, BLM, MMS, and FWS.
LAND MANAGEMENT AGENCIES
HAVE SYSTEMS IN PLACE TO
COLLECT AND DISTRIBUTE
REVENUES
---------------------------------------------------------- Letter :3.1
The land management agencies have automated systems and procedures in
place to collect and distribute receipts generated under 21 separate
programs. The Forest Service distributes receipts under six
programs. Three of Interior's agencies distribute receipts under the
remaining programs--11 by BLM, 3 by MMS, and 1 by FWS. In addition,
BLM makes payments in lieu of taxes to units of local government
(usually counties) that have certain federal lands within their
boundaries.
Overall, our review of the agencies' administration of these
revenue-sharing programs showed that each of the agencies had systems
and procedures in place to make payments to the states and counties
and to the General Fund of the U.S. Treasury. All disbursement
transactions are processed through the Treasury, whether they are
transfers between agencies, payments to the revenue-sharing
recipients, or special uses of appropriated funds in conjunction with
natural resources revenues. The timing of the payments is either
specified in the enabling legislation or is administratively
prescribed by the agency. The payments are distributed in accordance
with the agencies' procedures. For some payments, sanctions are
imposed on the agency in the form of added interest if the payments
are made to the revenue-sharing recipients after the due dates.
Appendix II provides a detailed presentation of each of the land
management agencies' revenue-sharing programs administered by the
Forest Service, BLM, MMS, and FWS. Appendix II includes the
statutory authority, general description of the payment, and the
methodology and process for calculating and distributing the
payments.
DIFFERENCES IN
REVENUE-SHARING PROGRAMS
---------------------------------------------------------- Letter :3.2
The revenue-sharing programs stem from a variety of complex statutes,
some of which date back to the early 1900s. Each of the individual
agencies has established administratively differing requirements for
implementing these programs. According to officials at each of the
agencies and our examination of the distribution processes, the
differing requirements have resulted in a multitude of differences in
the processes that the land management agencies use to distribute the
payments under the revenue-sharing programs. The following is a
listing of the more significant differences and examples of each of
the differences of specific programs. Table II.1 of appendix II
provides details on each payment and summarizes the major differences
in the payments.
-- Initial recipient of payment: Some payments, such as MMS'
Mineral Leasing payments for its Acquired Land, Public Domain
Land, and Off-Shore programs, are made to the states for their
use. Other payments, such as BLM's Oregon & California (O&C)
Grant Lands payments, are distributed directly to the counties
in which the receipts were generated. Finally, some payments go
to a county or city, depending on the location where the
receipts were generated, as occurs in BLM's Nevada Land Sales
program.
-- Specified use of the payment: Eight of the programs do not
specify the use of the payments. Among those that do require
specific uses, the most frequent was for roads and schools, as
required by the Forest Service's 25-Percent payment and
Arkansas' Smoky Quartz payments. The Forest Service's and BLM's
National Grasslands payments, however, require the payments to
be used for roads and/or schools--thus, benefits may be all for
roads, all for schools, or some combination of the two.
-- Basis of payment's distribution: Most of the distributions are
computed on the basis of some given percentage that ranges from
4 to 90 percent of the gross receipts or net receipts after
administrative expenses are deducted. For example, BLM's
Mineral Leasing payment is as high as 90 percent of gross
receipts and its Proceeds of Sale payment, as low as 4 percent
of gross receipts. MMS' Mineral Leasing on Public Domain Lands
payment is based on net receipts after a portion of MMS', BLM's,
and the Forest Service's costs to operate their minerals
programs are deducted from the gross receipts.\3
Other distributions are based on the average payments made over a
base period, tax bills submitted by the counties, or a multistep
formula. For example, the Forest Service's and BLM's Spotted Owl
payment is based on a different formula each year until 2003, when it
expires. BLM's Coos Bay Wagon Road payment was based on tax bills
submitted to the agency. FWS' Refuge Revenue Sharing payment is
based on a multistep formula and is different, depending on whether
the refuge is on acquired or public domain land. BLM's Payment in
Lieu of Taxes (PILT) is the most complex and is discussed in detail
in appendix III.
-- Source of funds for payments: While most payments are derived
from the sharing of receipts from federal programs, some come
from appropriations, while others are derived from a combination
of federal receipts and appropriations. The Forest Service's
Spotted Owl payment and BLM's Spotted Owl and PILT payments are
funded through annual appropriations. The PILT program is
permanent, but the Spotted Owl payments are due to expire in
2003. FWS' Refuge Revenue Sharing payment is derived from
receipts and appropriated funds.
-- Period used to calculate and make payments: Most payments are
made on a fiscal-year basis, while others are made on a
calendar-year, monthly, or semiannual basis. For example, the
Forest Service's and BLM's Grasslands payments are made on a
calendar-year basis, while the three MMS Mineral Leasing
payments and BLM's Mineral Leasing payment are made on a monthly
basis. But the annual settlement to six states is made once a
year by April 15. Finally, BLM's Red River Oklahoma and
National Petroleum Reserve payments are made on a semiannual
basis.
-- Payments from many, but not all, programs offset the PILT
payment: Under BLM's PILT payment, each county in the nation
that has federal land within its borders receives a payment that
is based on the federal acres within the county, the county's
population, and the county's prior payment history. However,
the PILT is "offset"--that is reduced--by most of the payments
made to the counties by the other land management agencies. A
few payments, however, are not offsets to PILT. For example,
BLM's Spotted Owl payment is not an offset, while the Forest
Service's Spotted Owl payment is an offset to be consistent with
the original treatment of the payment for the programs that they
replaced. In summary, all of the Forest Service's payments are
offsets to PILT, MMS' payments for onshore minerals are offsets,
about half of BLM's payments are offsets, and some of FWS'
payments are offsets, depending on whether the refuge is on
acquired or public domain land.
In addition, we noted two authorized federal land management
revenue-sharing payments that are offsets to PILT but have not been
used in recent years: The Act of June 20, 1910 (Enabling Act of
Arizona and New Mexico, 36 Stat. 557) and section 3 of the Act of
July 31, 1947 (Mineral Materials Act of 1947, 30 U.S.C. 603).
According to a BLM official, these acts are offsets to PILT but have
not been used by the Forest Service because no revenues have been
generated pursuant to these statutes. BLM, however, collects some
receipts under the Mineral Materials Act but includes them with the
Proceeds of Sales payments, which are offsets to PILT (see table II.
12). In the case of the Enabling Act, the lands' officials and the
persons responsible for calculating the payments for the Forest
Service and BLM do not remember the act's usage in recent years.
--------------------
\3 The Net Receipts Sharing Deduction, authorized in P.L. 103-66,
sec. 10201, is an annual calculation of a portion of MMS', BLM's,
and the Forest Service's costs to operate the Mineral Leasing
program. One-twelfth of the annual deduction is subtracted from the
monthly payments to the state and deposited in the General Fund of
the U.S. Treasury.
SIMILARITIES AND DIFFERENCES
EXIST IN THREE STATES'
DISTRIBUTION SYSTEMS
------------------------------------------------------------ Letter :4
Federal compensation laws generally provide the states with wide
latitude in retaining or distributing the land management agencies'
revenue-sharing payments to the states. California, Oregon, and
Washington have implemented similar systems and processes for
distributing federal revenue-sharing funds to their counties. In
addition, the states have enacted laws to implement the federal
statutes and have established methodologies and processes specifying
how the distribution systems are to function. While the states'
distribution systems are similar, numerous differences exist,
concerning, for example, whether or not a state should include the
interest that is earned on the federal funds in its distributions to
the counties. In some instances, the differences in the distribution
systems affected the amount of revenue-sharing funds that the states
distributed to the counties during fiscal years 1995 through 1997 and
limited the purposes for which the counties might have used the
funds.
DISTRIBUTION SYSTEMS' AND
PROCESSES ARE SIMILAR
---------------------------------------------------------- Letter :4.1
California, Oregon, and Washington enacted laws establishing how the
federal revenue-sharing funds are to be distributed to the counties,
to which counties the funds are to be distributed, how often the
funds are to be distributed, and for what purposes the counties are
to use the distributed funds. In addition, the states established
distribution methodologies and processes providing specific
direction, such as how the state treasurers are to manage the
revenue-sharing funds received from the federal agencies, how the
states are to verify the federal funds deposited in their accounts,
how the states are to calculate the funds to be distributed to each
county, and how the states are to notify the counties receiving the
distributions.
Each of the three states identified the state's treasurer as the
person responsible for receiving the federal revenue-sharing funds
and for maintaining the funds until distribution. To carry out their
fiscal responsibilities, each state treasurer established
interest-bearing accounts for depositing the federal revenue-sharing
funds. The federal agencies deposit the funds electronically to each
state on the basis of information on the account, such as account
numbers, that the state treasurers provided them with. After
receiving an appropriate state document, such as a claims schedule,
that describes the amount of funds to be distributed to the counties,
the state treasurer makes the funds in the interest-bearing accounts
available to the responsible state organization for distribution.
The states maintain documentation of their distribution methodologies
and processes.
DISTRIBUTION SYSTEMS'
DIFFERENCES AFFECTED AMOUNTS
DISTRIBUTED
---------------------------------------------------------- Letter :4.2
While the states' distribution systems are somewhat similar, numerous
differences exist in the specific requirements of the state laws and
the distribution methodologies and processes. The numerous
differences in the state laws affected whether counties would receive
funds at all, when the counties would receive the funds, and the
amount of funds that these counties would be receiving. Appendix II
provides a description of each state's specific distribution
processes implemented in response to the various federal
revenue-sharing laws.
The following examples illustrate some of the major differences in
the three states' distribution systems:
-- Payment of interest to counties: Oregon law requires that the
state pay interest to its counties for the period of time when
all federal revenue- sharing funds are held in the state
accounts before distribution to the counties. During fiscal
years 1995 through 1997, Oregon distributed to its counties a
total of about $569,723 in interest that had accrued during the
time the state held federal revenue-sharing funds. Washington
law, however, requires that the state pay its counties interest
only on the Forest Service's 25-Percent revenue-sharing funds
for the period of time that the state holds the funds before
distributing them to the counties. Finally, California law does
not require that the state pay its counties any interest for the
period of time that the state holds the federal funds before
distribution. Thus, while Oregon's counties received about
$569,723 more than the federal payments, California's counties
received nothing additional.
-- Deduction of processing fee: Oregon law provides for deducting
a $0.60 processing fee from each of the federal revenue-sharing
distributions the state makes to its counties. In addition,
although it has not been deducted, Oregon law provides for the
assessment of a transaction fee for each distribution made to a
county. California and Washington did not deduct a processing
fee from any of the federal revenue-sharing distributions they
made to their counties.
-- Use of Forest Service's 25-Percent revenue-sharing funds: While
federal law requires only that the funds be used to benefit
roads and schools, the states established specific sharing
requirements. California law requires that the counties
receiving the Forest Service's 25-Percent revenue-sharing funds
use 50 percent to improve public schools and 50 percent to
improve roads. Oregon law requires that its counties use 25
percent of the funds to improve public schools and 75 percent to
improve roads. Washington law requires that its counties use 50
percent of the funds to improve public schools and the remaining
50 percent to improve either public schools or roads.
-- Distribution of the Forest Service's 25-Percent revenue-sharing
funds: California, Oregon, and Washington distributed the
25-Percent revenue-sharing funds to their counties twice each
year--once in October and once in December. Washington made its
distributions within 2 working days after the Forest Service
deposited the funds in the state's interest-bearing account;
California took about 10 working days; and Oregon took from 8 to
12 working days.
The states differ in their approaches to notifying the counties of
expected payments. In late June or early July, the Forest Service
notifies California, Oregon, and Washington of the estimated payments
they will receive in October and December. Washington provides its
counties with this information to assist them in their budget
preparation processes and to help them make investment decisions.
California does not distribute this information to the counties
because the state does not believe it would benefit the counties.
Oregon does not provide the counties with the information because the
information is received after the counties have developed and adopted
their fiscal-year budgets.
-- Use of Taylor Grazing Act revenue-sharing funds: California law
requires that BLM's Section 3 and Section 15 Taylor Grazing
funds be distributed to the counties for them to use to improve
rangeland and to control predators. Oregon law requires that
the funds be expended only for range improvements in those
counties that have grazing districts; otherwise, the funds are
available for general government purposes in those counties that
have leased lands but no grazing districts. Washington does not
specify how the Taylor Grazing funds that they distribute to
their counties have to be used.
In distributing these funds, California makes single annual
distributions of the Taylor Grazing funds to its counties in early
February. Oregon makes single annual distributions of the Taylor
Grazing funds to its counties in late December. Washington includes
the Taylor Grazing funds in the general distribution of funds it
makes to its counties from the state's general fund. In calculating
these distributions, California distributes Section 3 Taylor Grazing
funds to the eight counties where grazing districts are located on
the basis of the proportion that the area of a grazing district
situated in a county bears to the total area of the grazing district.
Oregon distributes Section 3 Taylor Grazing funds to the counties
where the funds were generated as reported by BLM. Washington does
not receive Section 3 Taylor Grazing funds.
-- Distribution of BLM's Proceeds of Sales revenue-sharing funds:
California and Washington did not distribute these funds to
their counties during fiscal years 1995 through 1997 but kept
them for other state uses. Oregon law, on the other hand,
requires that the Proceeds of Sales funds be distributed to all
36 counties on a pro rata basis that is based on the total
number of square miles in each county compared with the total
number of square miles in the state. As a result, some counties
received funds even though no receipts were generated by the
counties. For example, in fiscal year 1997, 16 counties
received about $62,937, or about 23 percent, of BLM's Proceeds
of Sales funds even though none of the receipts were generated
in those counties. In addition, the county that generated the
largest receipt--$167,885--received only $4,572, or less than 3
percent of its receipts, from the state. Oregon law requires
that the counties use the funds for the repair and/or
construction of roads and bridges and therefore distributes the
funds to all counties in the belief that roads and bridges
benefit the entire state.
While neither California nor Washington distributed these funds to
the counties, California used the money for state school
expenditures, and Washington requires that the funds be deposited in
the state's common school construction fund and be allocated by the
superintendent of public instruction to individual school districts
in each county. In fiscal year 1997, California deposited about
$51,244 of Proceeds of Sales funds into its general fund, and
Washington deposited about $23,381 into its common school
construction fund.
-- Distribution and use of BLM's and MMS' Mineral Leasing
revenue-sharing funds: California requires that all but a small
portion of the Mineral Leasing funds received from BLM and MMS
either be deposited in specific state funds or be allocated to
specific school districts. In fiscal year 1997, for example,
only about 6 percent of the funds, or $3 million of the $53
million, received from MMS was distributed to those counties
from which the funds were generated. Oregon distributed, on a
quarterly basis, all Mineral Leasing funds received from BLM and
MMS to the counties in which the funds were generated because
the amount of the funds involved was insignificant. Washington
does not distribute the Mineral Leasing funds received from MMS
to its counties, and the state receives only about $10 in
Mineral Leasing funds from BLM for one county, which is
distributed to that county.
California law requires that a portion of MMS' geothermal Mineral
Leasing funds be distributed to its counties to be used for any of 11
specific purposes, including undertaking geothermal research and
development projects, collecting baseline geothermal data, and
conducting environmental monitoring. Oregon law specifies that the
BLM and MMS Mineral Leasing funds that it distributes to its counties
be used to support public schools or the construction or maintenance
of public roads. Washington law requires that the Mineral Leasing
funds be deposited in the state's common school construction fund to
be used exclusively for financing the construction of common school
facilities in the state's 39 counties.
COUNTIES RECEIVED VARYING
AMOUNTS OF FEDERAL
DISTRIBUTIONS
------------------------------------------------------------ Letter :5
During fiscal years 1995 through 1997, Oregon distributed 100 percent
of the federal payments to its counties and paid interest on these
funds. California counties, on the other hand, received the lowest
percentage of payments; the state distributed only about 66 percent
of the federal funds identified as having been generated by
designated counties. Washington distributed about 98 percent of the
federal funds to its counties. In addition to these state
distributions, however, counties in these three states received about
$280 million during fiscal years 1995 through 1997 directly from the
federal agencies.
While some counties question whether they receive their "fair share,"
state laws generally govern the uses of the federal funds and the
extent, if any, of the distributions to the local communities. The
federal distribution systems identify the receipts generated in
specific counties, while the states' distributions to the counties
rely on the individual state law. Therefore, while the federal
distribution systems identify the attributable counties, few federal
laws require that the funds be distributed to those counties
generating the receipts. State laws control the actual amounts
distributed to the counties.
Even in those instances where the federal agencies pay counties
directly, the amounts that the counties receive may not equate to the
results of the mathematical formulas that the federal agencies apply
because the Congress limits the amount of appropriations available
for these distribution programs. Such is the case with BLM's PILT
and FWS' Refuge Revenue Sharing payments. Thus, while counties may
believe that they are "entitled" to a certain level of funds, limited
appropriations and state laws influence the amount that they actually
receive.
PAYMENTS TO CALIFORNIA'S,
OREGON'S, AND WASHINGTON'S
COUNTIES
---------------------------------------------------------- Letter :5.1
For federal fiscal years 1995 through 1997, we compared the amounts
that the states received and distributed to their counties with the
federal distribution records. We also identified the amount of
federal funds paid directly to the counties for the same period.
Appendix IV provides a detailed presentation of the sources and
amounts received by each of California's, Oregon's, and Washington's
counties for fiscal year 1997. Table 2 presents the results of our
analysis.
Table 2
Total Federal Payments to the States of
California, Oregon, and Washington and
to Counties Directly, Fiscal Years 1995
Through 1997
(Dollars in thousands)
Total federal payments to
states State and federal payments to counties
------------------------------- ------------------------------------------------
Federal
payments Direct
State/ attribut Percenta federa Total
Forest able to State ge l county
fiscal Servic counties distributi distribu paymen payment\
year e BLM MMS Total\a \b ons\c ted ts\d c,e
------ ------ ------ ------ ------- -------- ---------- -------- ------ --------
California
-----------------------------------------------------------------------------------------
1995 $43,04 $229.5 $50,77 $94,048 $68,693. $46,312.2 67.4 $10,67 $56,983.
5.7 3.3 .5 5 1.7 9
1996 36,157 226.2 50,944 87,328. 62,382.4 39,303.1 63.0 12,180 51,483.7
.5 .5 2 .6
1997 33,962 166.6 52,883 87,012. 54,419.3 37,447.4 68.8 12,313 49,760.4
.9 .3 9 .0
Oregon
-----------------------------------------------------------------------------------------
1995 109,64 315.8 43.4 110,006 110,006. 110,253.8 100.2 79,585 189,839.
7.4 .6 6 .7 5
1996 95,239 583.9 62.8 95,885. 95,885.6 96,048.5 100.2 77,811 173,860.
.0 7 .6 1
1997 92,242 445.2 41.5 92,729. 92,729.3 92,886.3 100.2 74,830 167,717.
.5 3 .8 1
Washington
-----------------------------------------------------------------------------------------
1995 30,089 31.7 371.2 30,492. 30,292.3 30,139.5 99.5 5,426. 35,566.4
.1 0 9
1996 29,429 26.3 468.6 29,923. 29,923.9 29,475.5 98.5 2,928. 32,403.7
.0 9 2
1997 28,425 37.6 817.9 29,280. 29,280.7 28,455.1 97.2 3,515. 31,970.1
.1 7 0
-----------------------------------------------------------------------------------------
\a Total may not equal due to rounding.
\b MMS' payment to the state includes the amount of interest,
off-shore payments, and/or the settlement for the off-shore payments
that are not attributable to specific counties but are instead paid
directly to the state. For example, California received about $69
million in off-shore settlement payments during the period that MMS
paid directly to the state.
\c The state of Oregon also pays interest on the BLM and MMS Mineral
Leasing payments. During federal fiscal years 1995 through 1997,
Oregon paid about $2,400 more in interest to the counties on these
payments, which is not reflected in the above table. Because of the
differences in the state and federal fiscal years and the way
interest was calculated, allocating the amount attributable to the
individual counties for each of the 3 fiscal years could not be
easily done.
\d "Direct federal payments" includes those payments for the Forest
Service's Grasslands payments; BLM's PILT, O&C, and Coos Bay
payments; and FWS' Refuge Revenue Sharing payments.
\e "Total county payment" reflects the amount of the state
distributions plus the amounts that the federal agencies paid
directly to the counties.
The payments made directly to the counties are less than the amounts
derived by the mathematical formulas used by the federal agencies.
Both BLM and FWS must use a proration factor in allocating the moneys
paid directly to the counties because the annual appropriations do
not equal the results of the mathematical formulas that the agencies
use. In fiscal year 1997, BLM allocated about 53 percent, while FWS
allocated about 66 percent of the moneys calculated as due to the
counties. During fiscal years 1995 through 1997, the Congress
appropriated $104 million, $133.5 million, and $113.5 million for
BLM's PILT payments, respectively, while FWS received $12 million,
$10.8 million, and $10.8 million, respectively.
AGENCY COMMENTS
------------------------------------------------------------ Letter :6
We provided the Department of the Interior, the Forest Service, and
the states of California, Oregon, and Washington with a draft of this
report for review and comment. The Assistant Secretary, Land and
Minerals Management, Department of the Interior, and the Acting
Director, Financial Management, Forest Service, agreed that the
report accurately reflected the processes these agencies use to
compensate states and counties. California, Oregon, and Washington
officials also agreed that the report accurately reflected the
processes they use to distribute the federal moneys to the counties.
Both federal and state officials provided technical clarifications,
which we have included as appropriate.
---------------------------------------------------------- Letter :6.1
To respond to the assignment's objectives, we reviewed pertinent
legislation, agency guidance, and agency financial records at both
the federal and state levels. We spoke with federal representatives
of the Forest Service, BLM, MMS, and FWS and with state
representatives of California, Oregon, and Washington to determine
their processes for calculating and distributing the federal
payments. We conducted our work from January through August 1998 in
accordance with generally accepted government auditing standards.
Appendix V provides a detailed discussion of our scope and
methodology.
We are sending copies of this report to the Secretaries of
Agriculture and the Interior; the heads of the land management
agencies; the Director, Office of Management and Budget; and
appropriate congressional committees. We will also make copies
available to others upon request.
If you or your staff have any questions about this report, please
call me at (206) 287-4810. Major contributors to this report are
included in appendix VI.
Sincerely yours,
James K. Meissner
Associate Director, Energy,
Resources, and Science Issues
DEPARTMENT OF THE INTERIOR'S AND
FOREST SERVICE'S PAYMENTS TO
STATES AND U.S. TERRITORIES,
FISCAL YEAR 1997
=========================================================== Appendix I
States\a and Minerals Fish and
U.S. Forest Bureau of Land Management Wildlife
territories\b Service Management Service Service Total\c
------------- ------------ -------------- -------------- ------------ --------------
Alabama $964,419 $210,117 $14,037,447 $194,159 $15,406,142
Alaska 1,186,862 6,783,741 22,846,335 466,568 31,283,506
Arizona 2,214,865 9,752,226 47,732 103,128 12,117,951
Arkansas 5,954,224 1,659,709 999,992 804,604 9,418,529
California 33,963,060 11,311,230 52,886,705 1,168,244 99,329,239
Colorado 4,633,660 8,288,234 37,333,016 81,253 50,336,163
Connecticut 0 15,571 0 89,604 105,175
Delaware 0 10,640 0 88,824 99,464
District of 0 28,610 0 0 28,610
Columbia
Florida 1,007,027 1,508,642 16,332 728,791 3,260,792
Georgia 698,906 749,307 109 687,668 2,135,991
Hawaii 0 9,864 0 170,618 180,482
Idaho 14,270,215 8,003,814 2,201,242 65,806 24,541,077
Illinois 17,396 324,520 67,934 294,712 704,562
Indiana 25,819 231,050 0 38,104 294,973
Iowa 0 126,646 0 169,214 295,860
Kansas 632,708 353,228 1,329,434 52,482 2,367,853
Kentucky 451,945 749,573 122,655 864 1,325,037
Louisiana 2,948,816 149,105 27,448,582 1,519,175 32,065,678
Maine 29,963 99,415 0 200,986 330,364
Maryland 2,597 47,887 0 384,698 435,182
Massachusetts 0 42,025 0 368,615 410,640
Michigan 2,889,101 1,223,595 712,062 128,712 4,953,470
Minnesota 2,921,890 765,213 13,242 764,710 4,465,055
Mississippi 4,919,049 464,247 1,675,691 861,592 7,920,579
Missouri 1,149,263 1,172,840 1,273,353 110,505 3,705,961
Montana 8,558,090 9,546,367 20,360,965 234,517 38,699,939
Nebraska 35,722 342,654 15,909 217,432 611,718
Nevada 387,649 7,891,283 5,706,321 162,860 14,148,113
New Hampshire 440,060 501,314 0 144,717 1,086,091
New Jersey 0 39,173 0 501,676 540,849
New Mexico 931,918 11,751,494 188,659,666 196,547 201,539,625
New York 6,390 51,105 0 270,777 328,272
North 653,564 1,249,937 115 615,440 2,519,055
Carolina
North Dakota 3,537,978 590,611 3,894,112 437,644 8,460,345
Ohio 18,157 271,568 152,763 48,458 490,947
Oklahoma 1,901,985 863,304 2,137,305 88,554 4,991,148
Oregon 92,255,443 74,766,658 41,481 496,516 167,560,098
Pennsylvania 6,001,845 169,413 21,270 82,616 6,275,144
Rhode Island 0 4 0 110,576 110,580
South 1,292,387 219,745 0 444,520 1,956,652
Carolina
South Dakota 3,888,736 1,420,489 565,528 260,778 6,135,531
Tennessee 440,145 621,178 26 188,381 1,249,730
Texas 2,379,496 1,294,193 26,038,308 880,699 30,592,696
Utah 1,598,865 9,492,700 34,290,505 44,745 45,426,815
Vermont 225,878 249,660 0 11,241 486,779
Virginia 789,580 958,704 85,139 759,882 2,593,305
Washington 28,425,142 2,850,186 817,894 702,469 32,795,691
West Virginia 1,623,549 862,312 326,127 65,467 2,877,454
Wisconsin 1,861,111 288,965 432 277,315 2,427,822
Wyoming 2,209,236 8,285,926 238,782,189 510,340 249,787,691
U.S. 22,538 32,494 0 35,209 90,241
territories\b
Total $240,367,247 $188,692,486 $684,907,919 $17,333,012 $1,131,300,664
-----------------------------------------------------------------------------------------
\a These figures include the federal payments made directly to the
counties within the state.
\b The U.S. territories include American Samoa, Guam, Northern
Mariana, Puerto Rico, and the Virgin Islands. For ease of
presentation, we added the Forest Service's prior-year adjustment of
$11 to the U.S. territories' total.
\c Totals for individual states may not be exact because of rounding.
Source: Forest Service, Bureau of Land Management, Minerals
Management Service, and Fish and Wildlife Service.
DEPARTMENT OF THE INTERIOR'S AND
FOREST SERVICE'S PAYMENTS TO
STATES AND COUNTIES
========================================================== Appendix II
The following tables present detailed information about the various
compensation programs administered by the Department of the Interior
and the Forest Service. Table II.1 provides a summary matrix of the
payments, while tables II.2 through II.23 provide the details of the
programs, the agencies' methodology and process for calculating and
distributing the payments, and, where applicable, the process used by
California, Oregon, and Washington to distribute the federal payments
to their respective counties.
Table II.1
Summary Schedule of the Department of
the Interior's and the Forest Service's
Payments to States or Counties
Basis of
Calculatio distribution to
Payment's n Initial states or Offset Specified Table
name basis recipient counties to PILT use reference
---------- ---------- ---------- ----------------- ---------- ---------- ----------
Forest Service
-----------------------------------------------------------------------------------------
25- Fiscal State 25% of gross Yes Roads and II.2
Percent year receipts. schools
payment
Spotted Fiscal State Through fiscal Yes Roads and II.3
Owl year year 1998, a schools
payment declining
percentage of
fiscal years
1986-90 payments.
For fiscal years
1999-2003 greater
of Spotted Owl or
25% payment.
Grasslands Calendar County 25% of net Yes Schools II.4
payment year receipts. and/or
roads
Quinault Fiscal State 45% of gross Yes Roads and II.5
Special year receipts. schools
payment
Arkansas Fiscal State 50% of gross Yes Roads and II.6
Smoky year receipts from schools
Quartz quartz sales.
payment
Payments Fiscal State 3/4 of 1% of the Yes None II.7
to year appraised value
Minnesota of the land.
Bureau of Land Management
-----------------------------------------------------------------------------------------
Payment in Fiscal County Population or N/A None II.8
Lieu of year federal acreage.
Taxes
Mineral Monthly State 50% of gross Yes Planning, II.9
Leasing receipts in constructi
payment states other than on, and
Alaska. 90% to maintenanc
Alaska. e of
public
facilities
Outside Fiscal State 50% of gross Yes None II.10
Grazing year grazing receipts.
payment
Inside Fiscal State 12.5% of gross Yes None II.11
Grazing year grazing receipts.
payment
Proceeds Fiscal State 4% of gross No Educationa II.12
of Sales year receipts (5% of l purposes
payment net) from the or roads
sales of land and
materials.
O&C Grant Fiscal County Prior to 1991, No None II.13
Lands year 50% of gross
payment receipts. Until
2003, receive
Spotted Owl
payment.
Coos Bay Fiscal County Prior to 1994, No Schools, II.14
Wagon year 75% of gross roads,
Roads receipts bridges,
payment deposited to pay highways
property tax
bills. From 1994
through 2003,
receive Spotted
Owl payment.
Spotted Fiscal County Through fiscal No None for II.15
Owl year year 1998, a O&C
payment declining payments.
percentage of Schools,
fiscal years roads,
1986-90 payments. bridges,
For fiscal years and
1999-2003 greater highways
of Spotted Owl for Coos
payment or the Bay Wagon
O&C/Coos Bay Roads
payment.
Grasslands Calendar County 25% of net Yes Schools II.16
payment year receipts. and/or
roads
Nevada Fiscal State/ 10% of value of No General II.17
Land Sales year county/ the land sale to education,
payment city either Las Vegas acquisitio
or Clark County n, and
and 5% to the developmen
state of Nevada. t of
recreation
al lands
and
facilities
National Semiannual State 50% of gross No Planning, II.18
Petroleum ly receipts to the constructi
Reserve state of Alaska. on, and
payment maintenanc
e of
public
facilities
Red River, Semiannual State 37.5% of gross No Planning, II.19
Oklahoma ly receipts. constructi
payment on, and
maintenanc
e of
public
facilities
Minerals Management Service
-----------------------------------------------------------------------------------------
Mineral Monthly State 50% of net Yes Planning, II.20
Leasing-- receipts to constructi
Public states other than on, and
Domain Alaska. 90% to maintenanc
Lands Alaska. For e of
payment state-select public
lands, 90% of net facilities
receipts are paid
to the state.
Mineral Monthly State 25% of gross Yes The use is II.21
Leasing-- receipts on the same
Acquired acquired national as that
Lands forest lands. For for other
payment grasslands or receipts
refuges, money is from the
sent to BLM, FWS, lands on
or Forest Service which the
for distribution lease is
to counties. situated
Off-shore Monthly State 27% of gross No None II.22
Leasing receipts from the
Program 8(g) zone are
payment paid to the
states in
addition to a $65
million annual
payment to six
states from 1997
to 2001.
Fish and Wildlife Service
-----------------------------------------------------------------------------------------
Refuge Fiscal County For acquired No for None II.23
Revenue year lands, counties acquired
Sharing receive greater lands
payment of (1) 25% of net
receipts, (2) Yes for
0.75 of 1 percent reserved
of the appraised public
value of the domain
land, or (3) lands
$0.75 per acre.
However, payments
may not be less
than those made
in fiscal year
1977. For public
domain lands, 25%
of net receipts.
-----------------------------------------------------------------------------------------
Legend
BLM = Bureau of Land Management
FWS = Fish and Wildlife Service
MMS = Minerals Management Service
N/A = not applicable
O&C = Oregon and California Grant Lands
PILT = Payment in Lieu of Taxes (program)
Note: The payments by the Bureau of Indian Affairs are not included,
since their payments are made to special populations instead of the
general public.
Table II.2
Forest Service's 25-Percent Payment
--------------------------------------------------------------------------------
Agency: Forest Service
Name of payment: 25-Percent Payment to States/Forest Reserve Payment
Statutory authority: Act of May 23, 1908 (16 U.S.C. 500)
General description of payment:
Distribution to states of 25 percent of gross receipts generated on Forest
Service lands during the fiscal year. Payments are to be used to benefit public
schools and public roads of the county or counties in which the national forest
is situated.
Agency's methodology and process for calculating and distributing payment:
National forests report receipts generated from forest lands to the regions, and
the amounts are recorded on a national data system. The Forest Service's
Financial Management personnel, using several financial reports, calculate the
amounts of payments (25 percent of gross receipts) attributable to each county,
and the Forest Service makes a total payment to the state for further
distribution to the counties.
Payments to the states occur twice--an interim payment is made generally by
October 15 on the basis of the estimated third-quarter operating results, a
final payment, made in December, provides the balance of the fiscal-year
receipts due to the counties. For both payments, the Forest Service sends
letters to the states advising them of the amount of their payments and how much
each county is to receive.
The Forest Service notifies the U.S. Treasury of the amounts to be paid, and the
funds are electronically transmitted to the states.
California's process for allocating payment:
The Forest Service deposits the 25-Percent revenue-sharing funds into the
state's Federal Trust Fund interest-bearing account in October and December of
each year. After each of the two deposits, the state verifies the amount of each
deposit with information received from the Forest Service, then distributes the
funds to the counties in which the funds were derived as reported by the Forest
Service to the state.
The state uses the same process to make the two distributions in October and
December. First, the state transfers the funds to be distributed to the counties
from the Federal Trust Fund to the Forest Reserve Fund. Second, the state
prepares a schedule showing the amount to be distributed to each county. Third,
the state prepares the distribution checks and mails them to each county.
Finally, the state sends each county a formal notice of the reason for the
distribution and what the funds can be used for. Each distribution process takes
10 working days; 50 percent of the funds must be used for schools and 50 percent
for roads.
Oregon's process for allocating payment:
The Forest Service deposits the 25-Percent revenue-sharing funds into the
state's short-term treasury interest-bearing account in October and December of
each year. After each of the two deposits, the state verifies the amount of the
deposit with information received from the Forest Service, then electronically
distributes the funds to the counties in which the funds were derived as
reported by the Forest Service to the state.
The state uses the same process to make the two distributions in October and
December. First, the state establishes a distribution date. Second, the state
calculates the amount to be distributed to each county, including interest less
a 60-cent processing fee. Third, the state electronically distributes the funds
to the counties. Finally, the state sends each county a formal notice of the
reason for the distribution and what the funds could be used for. Each
distribution process takes 8 to 12 working days; 25 percent of the funds must be
used for schools and 75 percent for roads.
Washington's process for allocating payment:
The Forest Service deposits 25 percent of the revenue-sharing funds into the
state's interest-bearing account in October and December of each year. After
each of the two deposits, the state calls the Forest Service to verify the
amount of each deposit, then distributes the funds to the counties in which the
funds were derived as reported by the Forest Service to the state.
The state uses the same process to make the two distributions in October and
December. First, the state prepares a schedule of the amount to be distributed
to each county. Second, the state notifies the counties of when the
distributions are to be made and the amount of the distributions. Third, the
state distributes the funds to the counties electronically. Fourth, the state
prepares, for the Superintendent of Public Instruction, a schedule showing the
amount of funds distributed to each county that would be available for common
school expenditures. Finally, the state sends a notice to the counties informing
them of the reason for the distribution and what the funds are to be used for.
Each distribution process takes 2 working days; 50 percent of the funds must be
used for schools and 50 percent for roads or schools.
In January, the state makes a separate--that is, third--distribution to each
county to which the 25-Percent funds were distributed. The third distribution is
for the interest earned on the 25-Percent funds. The interest earned and
distributed is based on the average balance of the 25-Percent funds for the
period of time when they were held by the state before they were distributed to
the counties.
--------------------------------------------------------------------------------
Table II.3
Forest Service's Spotted Owl Payment
--------------------------------------------------------------------------------
Agency: Forest Service
Name of payment: Spotted Owl payment
Statutory authority: Omnibus Budget Reconciliation Act of 1993, as amended (Sec.
13982 of P.L. 103-66, as amended by P.L. 103-443)
General description of payment:
Distribution of gross receipts to states for the benefit of counties. This
special payment amount is in lieu of the amounts under the 25-Percent payment
for the states and is for selected counties to compensate them for the decline
in timber harvests due to the protection of the northern spotted owl's habitat.
The 25-Percent payment law specifies that the payments must be used for roads
and schools.
Agency's methodology and process for calculating and distributing payment:
For fiscal years 1991 and 1992, the annual appropriations laws stipulated that
the payments would be no less than 90 percent of the average payments for fiscal
years 1988-90 and fiscal years 1986-90, respectively. For fiscal year 1993, the
percentage was reduced to 85 percent. For fiscal years 1994-2003, a legislative
formula--with decreasing annual percentages--governs payments specifying the
amounts that the states are to receive. For fiscal years 1999-2003, payments are
the greater of the Spotted Owl payment or the 25-Percent payment.
As provided by the appropriations acts, in fiscal years 1991-93, the Forest
Service made the payments required by the spotted owl formula from its national
forest receipts as part of its 25-Percent payment. (See table II.2.) The Forest
Service also made its payments from its national forest receipts in fiscal years
1994-95 even though a special appropriation had been approved for fiscal years
1994-2003.\a Because of decreasing national forest receipts in fiscal year 1996
that would preclude the Forest Service from making all necessary payments from
its National Forest Fund, the Forest Service took steps to initiate and use the
special spotted owl appropriation for fiscal year 1996 and beyond.
As part of its calculations for the 25-Percent payment, the Forest Service
incorporated the special Spotted Owl payment formula to identify the amounts
that will be owed--in lieu of the 25-Percent payment--to the counties within 18
national forests--8 in Oregon, 6 in California, and 4 in Washington--affected by
the Spotted Owl payment. This payment is made as part of the 25-Percent payment
process and time frame; that is, an interim payment to the counties in October
and a final payment for the balance of the fiscal year funds in December.
For fiscal years 1995-97, the Spotted Owl payment exceeded the amount that would
have been required under the 25-Percent payment by about $279 million. These
special payments are due to expire in 2003.
California's process for allocating payment:
The Spotted Owl payment is combined with the 25-Percent payment for the rest of
the state and distributed in the same manner. (See table II.2.)
Oregon's process for allocating payment:
The Spotted Owl payment is combined with the 25-Percent payment for the rest of
the state and distributed in the same manner. (See table II.2.)
Washington's process for allocating payment:
The Spotted Owl payment is combined with the 25-Percent payment for the rest of
the state and distributed in the same manner. (See table II.2.)
--------------------------------------------------------------------------------
\a In our report, Forest Service: Unauthorized Use of the National
Forest Fund (GAO/RCED-97-216, Aug. 29, 1997), we said that the
Forest Service was required to use the special appropriation for
fiscal years 1994-95. Thus, we recommended that the Forest Service
take steps to rectify the inappropriate use of the National Forest
Fund and to use the correct appropriation for fiscal years 1994-95
and the future. The Forest Service had not implemented our
recommendation as of August 13, 1998. However, the Forest Service is
in the process of working with the U.S. Treasury and the Office of
Management and Budget on the methodology that should be used to
comply with our recommendation.
Table II.4
Forest Service's Grasslands Payment
--------------------------------------------------------------------------------
Agency: Forest Service
Name of payment: National Grasslands payment
Statutory authority: Bankhead-Jones Farm Tenant Act (7 U.S.C. 1012)
General description of payment:
Distribution to counties of net receipts from Forest Service grasslands.
The law stipulates that the funds must be used for roads and/or schools.
Agency's methodology and process for calculating and distributing payment:
Twenty-five percent of the gross receipts from grasslands (grazing receipts are
collected by the Forest Service and mineral receipts are collected by MMS, which
transmits the receipts to the Forest Service for distribution) is distributed to
the 80 counties containing Forest Service grasslands.
Grasslands managers (through local national forest offices) supply receipt data
to the Forest Service's Financial Management personnel, who, using several
financial reports, calculate the county payments.
Distributions are paid annually to the counties in March on a calendar-year
basis.
The Forest Service notifies the U.S. Treasury of the amounts to be distributed
to the counties, and the Treasury transmits the funds electronically to the
counties.
California's process for allocating payment:
Does not apply; payments are made directly to counties.
Oregon's process for allocating payment:
Does not apply; payments are made directly to counties.
Washington's process for allocating payment:
Does not apply; no grasslands are located in Washington.
--------------------------------------------------------------------------------
Table II.5
Forest Service's Quinault Special
Payment
--------------------------------------------------------------------------------
Agency: Forest Service
Name of payment: Quinault Special payment
Statutory authority: P.L. 100-638, sec. 4(b)(2) (102 Stat. 3327, 3328)
General description of payment:
Distribution of gross receipts from a special management area established to
compensate the Quinault Indian tribe and the state of Washington for land that
the Forest Service gave back to the tribe.
The payment must be used for roads and schools.
Agency's methodology and process for calculating and distributing payment:
From gross receipts generated on the special management area, 45 percent is
distributed to the state of Washington, 45 percent to the Quinault tribe, and 10
percent into a Forest Service timber management fund.
The Forest Service's headquarters combines this with the 25-Percent payment to
Washington State and makes one payment. The Olympic National Forest made the 45-
percent payment for the tribe to the Bureau of Indian Affairs, which forwards
the payment to the tribe.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply to Oregon.
Washington's process for allocating payment:
Washington distributes the amounts of Quinault payments to the counties as part
of its regular 25-Percent Forest Service payments. (See table II.2.)
--------------------------------------------------------------------------------
Table II.6
Forest Service's Arkansas Smoky Quartz
Payment
--------------------------------------------------------------------------------
Agency: Forest Service
Name of payment: Arkansas Smoky Quartz payment
Statutory authority: Department of the Interior and Related Agencies
Appropriations Act, 1989 (P.L. 100-446, sec. 323)
General description of payment:
Distribution to the state of Arkansas of 50 percent of the receipts from the
sale of quartz mined on the Ouachita National Forest in Arkansas.
The funds distributed to the state are to be used for public schools and public
roads in the counties in which the Ouachita National Forest are located.
Agency's methodology and process for calculating and distributing payment:
Fifty percent of the receipts from the sale of quartz from the Ouachita National
Forest are distributed to the state of Arkansas.
The Forest Service calculates these payments by subtracting the quartz receipts
from the total forest receipts and applying the 50-percent rate to these quartz
receipts. The quartz payment is then added to the state's 25-Percent payment and
distributed in one payment.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply to Oregon.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.7
Forest Service's Payments to Minnesota
--------------------------------------------------------------------------------
Agency: Forest Service
Name of payment: Payments to Minnesota
Statutory authority: Act of June 22, 1948 (16 U.S.C. 577g, 577g-1)
General description of payment:
Payment to the state of Minnesota for the fair appraisal value of Forest Service
lands in three counties--Cook, Lake, and St. Louis--to be distributed to those
counties.
The law does not stipulate how the payments are to be used.
Agency's methodology and process for calculating and distributing payment:
Three-quarters of 1 percent of the appraised value of national forest lands in
Cook, Lake, and St. Louis counties is paid to the state of Minnesota. The
appraised value of the lands is determined by the Secretary of Agriculture every
10 years.
This special payment replaces the 25-Percent payment to the states. The Forest
Service adds this amount to the 25-Percent payment to the remainder of Minnesota
and makes one payment to Minnesota. The state is to make the distribution to the
counties.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply to Oregon.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.8
Bureau of Land Management's Payment in
Lieu of Taxes
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Payment in Lieu of Taxes (PILT)
Statutory authority: Payments in Lieu of Taxes Act of 1976, as amended (31
U.S.C. 6901-6907)
General description of payment:
Distributions to local units of government designed to supplement other federal
land revenue-sharing payments that local governments receive. The PILT payment
is applicable to more counties than any of the other federal land management
revenue-sharing payments.
The law does not stipulate how the funds should be spent.
Agency's methodology and process for calculating and distributing payment:
The act authorizes BLM to make two types of annual payments. The first payment
under section 6902 is the traditional PILT payment to units of local government
(generally counties) that have certain federally owned "entitlement lands"
within the boundaries of the county. This payment represents 99 percent of the
total PILT payments in fiscal year 1997 and is calculated under a very complex,
multistep formula based primarily on the acres of federal land in the county,
the population of the county, and the previous year's payments made by other
federal agencies on the lands.
BLM obtains the population data from the Bureau of the Census and acreage data
from each of the federal agencies that have eligible acres within each county's
boundaries--about 595 million acres. However, the previous year's payments from
designated federal agencies are provided by the governor's office from each
state. BLM also obtains similar payment data from each of the land management
agencies as a check on the amounts the states provide.
The second payment under sections 6904 and 6905 authorizes payments of 1 percent
of the fair market value of certain county lands acquired by the National Park
Service and the Forest Service.
The combination of these payments represents the total calculated PILT payment.
However, since the payment is based solely on annual appropriations, if
sufficient funds are not appropriated, BLM prorates the payments to each of the
counties. During fiscal years 1995-97, the counties received about 77, 68, and
53 percent of their eligible payments, respectively. A detailed presentation of
the PILT program, the formula used, and an example of the payment calculation
for an individual county is provided in appendix III.
California's process for allocating payment:
Does not apply; payments are made directly to the counties.
Oregon's process for allocating payment:
Does not apply; payments are made directly to the counties.
Washington's process for allocating payment:
Does not apply; payments are made directly to the counties.
--------------------------------------------------------------------------------
Table II.9
Bureau of Land Management's Mineral
Leasing Act Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Mineral Leasing payment
Statutory authority: Mineral Leasing Act (30 U.S.C. 191)
General description of payment:
Distribution of gross receipts from oil and gas rights of way (for oil and gas
pipelines) to states. The funds are to be used for the planning, construction,
and maintenance of public facilities and for the provision of public service.
Agency's methodology and process for calculating and distributing payment:
For all states other than Alaska, 50 percent is distributed to the state, 40
percent is distributed to the Bureau of Reclamation, and 10 percent is
distributed to the General Fund of the U.S. Treasury. Alaska receives 90 percent
of the receipts, and the remaining 10 percent is distributed to the General Fund
of the U.S. Treasury.
BLM is required to make these payments to the states not later than the last
business day of the month of the revenues' receipt. Monthly, BLM calculates the
payments due to the states and initiates the authorization for payment. The U.S.
Treasury issues the payment to the states electronically, and BLM notifies the
states of the amount to be paid and how much is attributable to each county.
Annually, BLM transfers the amounts due to the Bureau of Reclamation and the
General Fund of the U.S. Treasury.
California's process for allocating payment:
The state deposits the BLM Mineral Leasing funds in the state's State School
Fund and does not distribute the BLM payments to the counties directly.
Oregon's process for allocating payment:
BLM deposits the Mineral Leasing revenue-sharing funds into the state's short-
term treasury interest-bearing account monthly. After each deposit, the state
verifies the amount of the deposit with information received from BLM. To make
the distributions, the state (1) calculates the amount to be distributed to each
county, including interest less a 60-cent processing fee; (2) electronically
distributes the funds to the counties; and (3) sends the counties a formal
notice of the reason for the distribution.
The state distributes the funds to the counties in which the funds were derived
as reported by BLM. The state distributes the funds on a quarterly basis--March
31, June 30, September 30, and December 31. The state law requires that the
moneys be used to support public schools or for the construction and maintenance
of public roads.
Washington's process for allocating payment:
The state receives only about $10 in Mineral Leasing revenue-sharing funds from
BLM. The funds are for one county, and the state distributes the funds to that
county.
--------------------------------------------------------------------------------
Table II.10
Bureau of Land Management's Section 15,
Outside Grazing Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Section 15--Outside Grazing Leases payment
Statutory authority: Taylor Grazing Act (43 U.S.C. 315i, 315m)
General description of payment:
Distribution of gross receipts paid to the states from grazing leases, located
outside grazing districts. The funds are to be used for the benefit of the
counties in which the lands producing the revenues are located; however, no
particular use is specified.
Agency's methodology and process for calculating and distributing payment:
From gross receipts, 50 percent is distributed to the Range Improvement Fund for
later appropriation to BLM for managing rangelands, and 50 percent is
distributed to the states from grazing permits in their states.
Payments are based on fiscal-year receipts and are made in two installments. BLM
processes the proposed payments through the U.S. Treasury, and BLM notifies the
states, by fax machine, of how much they will be receiving and which counties
generated the receipts. The payment for the first 11 months of the fiscal year
is made by September 30 and by mid-November for the 12th month. For the most
part, funds are transferred electronically.
California's process for allocating payment:
BLM deposits Section 15 revenue-sharing funds into the state's Federal Trust
Fund interest-bearing account in September and November of each year. After each
deposit, the state verifies the amount of the deposit with information received
from BLM. After both deposits have been made, the state (1) calculates the
amount to be distributed to each county, (2) transfers the funds to be
distributed to the counties from the Federal Trust Fund to the Federal Grazing
Fees Fund, (3) prepares and mails the distribution checks to the counties, and
(4) sends the counties a formal notice of the reason for the distribution and
what the funds are to be used for.
The state distributes the funds to the counties in which the funds were derived
as reported by BLM to the state. Distributions are made annually, usually around
the first of February. The funds are to be used to improve rangeland and control
predators.
Oregon's process for allocating payment:
BLM deposits Section 15 revenue-sharing funds into the state's short-term
treasury interest-bearing account in October and December of each year. After
each deposit, the state verifies the amount of the deposit with information
received from BLM. After the deposits are verified, the state (1) establishes a
distribution date; (2) calculates the amount to be distributed to each county,
including interest less a 60-cent processing fee; (3) electronically distributes
the funds to the counties; and (4) sends the counties a formal notice of the
reason for the distribution.
The state distributes the funds to the counties in which the funds were derived
as reported by BLM to the state. Distributions are made annually in December.
Oregon law requires that the funds be expended only for range improvements in
those counties that have grazing districts; otherwise, the funds are available
for general government purposes in those counties that have leased lands but no
grazing districts.
Washington's process for allocating payment:
BLM deposits Section 15 revenue-sharing funds into the state's General Fund
interest-bearing account in December. After each deposit, the state verifies the
amount of the deposit with information received from BLM. After each deposit is
verified, the state (1) verifies the amount to be distributed to the counties
according to BLM records, (2) distributes the funds to the counties
electronically, (3) sends the counties a formal notice of the reason for the
distribution, and (4) sends the counties an annual report showing the amount of
Section 15 funds distributed to each county.
The state distributes the funds to the counties in which the funds were derived
as reported by BLM to the state. The state makes the distributions in December
and does not specify how the funds must be used.
--------------------------------------------------------------------------------
Table II.11
Bureau of Land Management's Section 3
Inside Grazing Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Section 3--Inside Grazing Permits payment
Statutory authority: Taylor Grazing Act (43 U.S.C. 315b, 315i)
General description of payment:
Distribution to states of gross receipts collected by BLM as grazing permit fees
inside grazing districts. The funds are to be used for the benefit of the
counties in which the lands producing the revenues are located; however, no
particular use is specified.
Agency's methodology and process for calculating and distributing payment:
From gross receipts, 50 percent is distributed to the Range Improvement Fund for
later appropriation to BLM for managing rangelands; 37.5 percent is distributed
to the General Fund of the U.S. Treasury; and 12.5 percent is distributed to the
states from which the grazing receipts were earned.
Payments are based on fiscal-year receipts and are made in two installments.
Payments for the first 11 months are based on the receipts received by August
30. In mid-October, calculations for the 12th month are made.
BLM processes the proposed payments through the U.S. Treasury, and BLM notifies
the states, by fax machine, of how much they will be receiving and which
counties generated the receipts. The payment for the first 11 months of the
fiscal year is made by September 30 and for the 12th month by mid-November. For
the most part, funds are transferred electronically.
California's process for allocating payment:
BLM deposits Section 3 revenue-sharing funds into the state's Federal Trust Fund
interest-bearing account in September and November of each year. After each
deposit, the state verifies the amount of the deposit with information received
from BLM. After both deposits have been made, the state (1) calculates the
amount to be distributed to each county, (2) transfers the funds to be
distributed to the counties from the Federal Trust Fund to the Federal Grazing
Fees Fund, (3) electronically distributes the funds to the counties, and (4)
sends the counties a formal notice of the reason for the distribution and what
the funds are to be used for.
The state distributes the funds only to the eight counties from which the funds
were derived on the basis of the proportion of the acres of a grazing district
that are situated in each county to the total acres in the grazing district.
Distributions are made annually, usually around the first of February. Funds are
to be used to improve rangeland and control predators.
Oregon's process for allocating payment:
BLM deposits Section 3 revenue-sharing funds into the state's short-term
treasury interest-bearing account in October and December of each year. After
each deposit, the state verifies the amount of the deposit with information
received from BLM. After both deposits are made, the state (1) establishes a
distribution date; (2) calculates the amount to be distributed to each county,
including interest less a 60-cent processing fee; (3) distributes the funds
electronically to the counties; and (4) sends the counties a formal notice of
the reason for the distribution.
The state distributes the funds to the counties in which the funds were derived
as reported by BLM to the state. Distributions are made annually in December.
Oregon law requires that the funds be expended only for range improvements in
those counties that have grazing districts; otherwise, the funds are available
for general government purposes in those counties that have leased lands but no
grazing districts.
Washington's process for allocating payment:
Does not apply. No BLM Section 3 revenue-sharing funds are derived by any of the
counties in the state.
--------------------------------------------------------------------------------
Table II.12
Bureau of Land Management's Proceeds of
Sales Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Proceeds of Sales of Lands and Materials payment
Statutory authority: Department of the Interior Appropriations Act, 1952 (65
Stat. 252)
General description of payment:
Distribution to states of the net proceeds from the sale of lands and materials
on public domain lands in 16 reclamation states west of the Mississippi River
and outside reclamation states. Materials include such minerals materials as
sand or gravel, timber, salvage timber, or vegetative materials, such as plants,
mushrooms, and firewood.
The law specifies that payments are to be used for educational purposes or for
the construction of public roads and improvements. It does not specify that the
payments must be distributed to the counties for these purposes.
Agency's methodology and process for calculating and distributing payment:
For reclamation states, 76 percent of the gross receipts are distributed to the
Bureau of Reclamation's Reclamation Fund, 20 percent to the General Fund of the
U.S. Treasury, and 4 percent to the states. Ninety-six percent of the gross
receipts from salvage timber sales are distributed to BLM's Forest Ecosystem
Health Recovery Fund and 4 percent to the states.
For nonreclamation states, 96 percent of the gross receipts are distributed to
the General Fund of the U.S. Treasury and 4 percent to the states. Salvage sale
receipts are treated the same way as they are in reclamation states.
Distribution to the states is on a fiscal-year basis. The distribution for the
first 11 months is paid as of September 30 and for the 12th month as soon as
practical after September 30. BLM annually distributes the funds electronically
to the Bureau of Reclamation and the General Fund of the U.S. Treasury, usually
in the November/December time frame.
California's process for allocating payment:
The state does not distribute the Proceeds of Sales revenue-sharing funds
received from BLM to its counties. Instead, the state uses the funds for state
school expenditures.
Oregon's process for allocating payment:
BLM deposites Proceeds of Sales revenue-sharing funds into the state's short-
term treasury interest-bearing account in October and December of each year.
After each deposit, the state verifies the amount of the deposit with
information received from BLM. After both deposits for each year are made, the
state (1) establishes a distribution date, (2) calculates the amount to be
distributed to each county, including interest less a 60-cent processing fee,
(3) electronically distributes the funds to the counties, and (4) sends the
counties a formal notice of the reason for the distributions and what the
distributed funds are to be used for.
The state distributes the Proceeds of Sales funds to all 36 counties in the
state on a pro rata basis that is based on the total number of square miles in
each county compared with the total number of square miles in the state.
Distributions are made annually in December. The state requires that counties
use the funds for the repair and/or construction of roads and bridges.
Washington's process for allocating payment:
The state does not distribute the Proceeds of Sales revenue-sharing funds
received from BLM to its counties. Instead, the state deposits the funds in the
common school construction fund for allocation by the Superintendent of Public
Instruction to the school districts in each county.
--------------------------------------------------------------------------------
Table II.13
Bureau of Land Management's Oregon &
California Grant Lands Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Oregon and California (O&C) Grant Lands payments
Statutory authority: Act of August 28, 1937 (43 U.S.C. 1181f)
General description of payment:
Distribution to counties of gross receipts derived from the sale of timber and
other resources from the O&C grant lands that have been revested to the federal
government. Eighteen counties participate in this distribution.
The law does not stipulate how the counties should use the funds.
Agency's methodology and process for calculating and distributing payment:
BLM collects most of the receipts from the O&C lands; however, the Forest
Service administers some of the timber sales in this area and transfers the
receipts to BLM for distribution. MMS collects receipts from the sale of
minerals and makes distribution under the Mineral Leasing Act.
Prior to fiscal year 1991, BLM distributed 50 percent of the gross receipts to
the counties and 50 percent to the General Fund of the U.S. Treasury on a
fiscal-year basis. Payments were made for the 11-month period by the end of
September and the 12th month payment as soon as fiscal-year records were
completed. For fiscal years 1991-93, payments to the counties were based on 50
percent of the average payments for fiscal years 1986-90, not to exceed the
total receipts from the O&C lands, or 50 percent, if greater.
For fiscal years 1994-98, payments are a set amount that is based on the average
payment to a county during fiscal years 1986-90. For fiscal years 1999-2003, BLM
pays the higher of the special payment amount or what is due under the 50-
percent receipt calculation. In any case, only one payment is made. These
payments are made from the special spotted owl appropriation for fiscal years
1994-2003. (See table II.15.)
Annually, in September or earlier, BLM requests that the U.S. Treasury transfer
funds to cover the payments. BLM electronically transfers the payments to one
bank and specifies the amount due to each county. The bank breaks the total into
18 separate county accounts. BLM notifies the payees of the payment to be
received. BLM annually distributes the funds electronically to the General Fund
of the U.S. Treasury, usually in the November/December time frame except for the
salvage sale receipts, which go into BLM's Forest Ecosystem Health Recovery
Fund, and 2001 (k) (P.L. 104-19) timber sales receipts, which are distributed to
BLM and the Forest Service's Timber Pipeline Restoration Funds.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply; payments are made directly to the counties.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.14
Bureau of Land Management's Coos Bay
Wagon Road Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Coos Bay Wagon Road Grant Fund payment
Statutory authority: Act of May 24, 1939 (43 U.S.C. 1181f-1)
General description of payment:
Distribution of gross receipts to Coos and Douglas counties in Oregon derived
from the sale of timber and other resources from the reconveyed Coos Bay Wagon
Road Grant Lands. Payments to these counties are to compensate them for the
amounts of property taxes that would have been due to the counties if the lands
had not been reconveyed to the federal government.
Under the law that created the Coos Bay Wagon Road Grant Fund, payments must be
used for schools, roads, highways, bridges, and port districts.
Agency's methodology and process for calculating and distributing payment:
From the receipts (primarily timber receipts), 25 percent is distributed to the
General Fund of the U.S. Treasury, and 75 percent is distributed to the Coos Bay
Wagon Road Grant Fund.
Until 1994, BLM received tax bills from the counties four times a year. Actual
distributions from the fund covered only the tax bills received, and the
remainder stayed in the fund. Once every 10 years, any balance in the fund not
needed to cover the tax bills was transferred to the General Fund of the U.S.
Treasury. The balance of the fund in fiscal year 1998 is about $28 million,
which will be returned to the General Fund in 2000.
For fiscal years 1994-98, payments are a set amount based on a declining
percentage of the average tax bill for fiscal years 1986-90. For fiscal years
1999-2003, payments shall be the greater of the special payment amount or what
is due under the tax calculations. Payments are made from the special spotted
owl appropriation. (See table 11.15.) Receipts--other than from salvage sales--
are now deposited in the General Fund of the U.S. Treasury. Salvage sales
receipts are deposited in the BLM Forest Ecosystem Health Recovery Fund.
Annually, in September, BLM requests that the U.S. Treasury transfer funds to
the counties for the special spotted owl guarantee payment. BLM notifies the
payees of the payment to be received.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply; payments are made directly to the counties.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.15
Bureau of Land Management's Spotted Owl
Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Spotted Owl payment
Statutory authority: Omnibus Budget Reconciliation Act of 1993, as amended (sec.
13983 of P.L. 103-66 as amended by P.L. 103-443)
General description of payment:
Special payment to selected counties in lieu of the O&C Grant Lands payment and
the Coos Bay Wagon Road Grant Fund payment to compensate for the decline in
timber harvests for the protection of the northern spotted owl habitat.
Agency's methodology and process for calculating and distributing payment:
For fiscal years 1991 and 1992, the annual appropriations laws stipulated that
the payments to the O&C counties would be no less than 90 percent of the average
payments for fiscal years 1988-90 and 1986-90, respectively, but could not
exceed the total amount of the receipts generated in the O&C lands. In fiscal
year 1993, the percentage was reduced to 85 percent. In fiscal year 1994, the
law provided for a new payment calculation for the O&C and Coos Bay Wagon Road
lands on the basis of the decreasing annual percentages of payments received by
the counties for fiscal years 1986-90.
For fiscal years 1994-98, BLM paid this special payment amount. For fiscal years
1999-2003, payments in the formula must be compared with the amount that the O&C
counties and Coos Bay counties would have received on the basis of actual
receipts and tax payments, respectively. The counties receive the higher amount,
and BLM uses the special spotted owl appropriation to make the payments for both
the O&C Grant Lands payment (see table II.13) and the Coos Bay Wagon Roads
payment. (See table II.14.)
While BLM previously made two payments to the counties for the O&C payment and
four payments for the Coos Bay tax bill payments, it now makes only one payment
a year.
Before the end of the fiscal year, BLM requests that the U.S. Treasury make
available from the special appropriation the amount that will be needed to cover
both payments. BLM then notifies the Treasury of the amounts that will be due to
each county, and the payment is made by the end of September. For the O&C
payment, BLM pays one bank, and the bank prepares separate payments for each of
the 18 counties. For the Coos Bay payments, BLM has the Treasury make a payment
to each of the County Treasurers for Coos and Douglas counties.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply; payments are made directly to the counties.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.16
Bureau of Land Management's National
Grasslands Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: National Grasslands payment
Statutory authority: Bankhead-Jones Farm Tenant Act (7 U.S.C. 1012)
General description of payment:
Distribution of net receipts to counties from lands transferred to the
Department of the Interior for administration by BLM. Receipts are generally
from grazing and oil and gas leases.
The law stipulates that the payments must be used for roads and/or schools.
Agency's methodology and process for calculating and distributing payment:
From gross receipts, 50 percent is distributed to the Range Improvement Fund for
later appropriation to BLM for managing rangelands; 25 percent is distributed to
the General Fund of the U.S. Treasury; and 25 percent is distributed to counties
in which the receipts were earned.
BLM's districts collect the receipts for commodities other than oil and gas. MMS
collects the oil and gas receipts and transfers them monthly to BLM.
Payments to the counties are on a calendar-year basis and are generally made in
March for the prior calendar year. Counties are notified of the payments, and
copies of the payment reports are sent to both the county and state treasurers.
BLM is authorized to reduce the county payments by the cost of administering the
payments but has opted not to do so because the cost would be minimal.
California's process for allocating payment:
Does not apply; payments are sent directly to the counties.
Oregon's process for allocating payment:
Does not apply; payments are sent directly to the counties.
Washington's process for allocating payment:
Does not apply; payments are sent directly to the counties.
--------------------------------------------------------------------------------
Table II.17
Bureau of Land Management's Nevada Land
Sales Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: Nevada Land Sales payment
Statutory authority: Public Law 96-586 (94 Stat. 3381, 3382)
General description of payment:
Distribution to either the state of Nevada, city of Las Vegas, or Clark County
of gross receipts from the sale of certain lands within Clark County, Nevada.
The law stipulates that the payments to the state must be used for its general
education program and the payments to the county or municipality are to be used
for the acquisition and development of recreational lands and facilities.
Agency's methodology and process for calculating and distributing payment:
Of the gross receipts from land transactions, 85 percent is distributed to the
General Fund of the U.S. Treasury to purchase lands in the Lake Tahoe area; 10
percent is distributed to either the city of Las Vegas or Clark County
(depending on where the receipts were generated); and 5 percent is distributed
to the state of Nevada.
The BLM State Office prepares the land transactions, and the Las Vegas District
Office collects the moneys and notifies the BLM Business Center of whether the
proceeds from the transaction are payable to the state, county, or city of Las
Vegas.
Distributions are made annually, usually in the February/March time frame, to
the state and to Clark County or Las Vegas, depending on where the land
transactions occurred. BLM notifies the state treasurer of the amounts paid to
the county and city. Similar information is sent to the county treasurer.
The funds distributed to the General Fund of the U.S. Treasury are available to
the Forest Service to purchase lands in the Lake Tahoe area.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply to Oregon.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.18
Bureau of Land Management's National
Petroleum Reserves Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: National Petroleum Reserve in Alaska payment
Statutory authority: National Petroleum Reserves Production Act of 1976, as
amended (42 U.S.C. 6508)
General description of payment:
Distribution of gross receipts from the sales, rents, bonuses, and royalties
from oil and gas leases in the National Petroleum Reserve in Alaska.
The law states that the funds be used for the planning, construction,
maintenance, and operation of essential public facilities and other necessary
provisions of public service in Alaska.
Agency's methodology and process for calculating and distributing payment:
Fifty percent of the gross receipts from the National Petroleum Reserve are
distributed to the state of Alaska and 50 percent to the General Fund of the
U.S. Treasury.
The payment began in the mid-1970s, but no receipts were generated during fiscal
years 1995-97. When receipts were generated, MMS would collect the receipts and
transfer the moneys to BLM for semiannual distribution to the state.
BLM distributes the funds as soon as practical after March 31 and September 30
to the State Treasurer of Alaska and distributed them annually to the General
Fund of the U.S. Treasury as soon as practical after September 30.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply to Oregon.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.19
Bureau of Land Management's South Half
of Red River Payment
--------------------------------------------------------------------------------
Agency: Bureau of Land Management (BLM)
Name of payment: South Half of Red River Oklahoma/Oklahoma Royalties payment
Statutory authority: Department of the Interior Appropriations Act, 1952 (65
Stat. 248, 252)
General description of payment:
Distribution of gross receipts from royalties from oil and gas leases on lands
bordering the South Half of the Red River in Oklahoma to the Bureau of Indian
Affairs (BIA) and the state of Oklahoma.
Distributions to BIA are to benefit the Apache, Comanche, and Kiowa Indians of
Oklahoma. The law specifies that the payments must be used in accordance with
the Mineral Leasing Act, that is, for the planning, construction, and
maintenance of public facilities.
Agency's methodology and process for calculating and distributing payment:
From the royalties generated on these lands, 62.5 percent is distributed to BIA,
and 37.5 percent is distributed to the state of Oklahoma. MMS collects the
receipts and transfers them to BLM for distribution.
Payments to the state are made semiannually--generally, in April for the March
31 payment and in November for the September 30 payment.
Annual payments, which are based on fiscal-year royalties, are made to BIA
electronically as soon as practical after September 30.
California's process for allocating payment:
Does not apply to California.
Oregon's process for allocating payment:
Does not apply to Oregon.
Washington's process for allocating payment:
Does not apply to Washington.
--------------------------------------------------------------------------------
Table II.20
Minerals Management Service's Mineral
Leasing Payments for Public Domain Lands
--------------------------------------------------------------------------------
Agency: Minerals Management Service (MMS)
Name of payment: Mineral Leasing Payments for Public Domain Lands
Statutory authority: Mineral Leasing Act, as amended (30 U.S.C. 191)
General description of payment:
Distribution of net receipts generated from royalties, rents, and bonuses from
minerals leases on public domain lands. The law states that the funds are to be
used by the state and those subdivisions socially and economically affected by
the development of minerals for the planning, construction, and maintenance of
public facilities and for the provision of public service.
Agency's methodology and process for calculating and distributing payment:
From gross receipts, MMS subtracts costs--in the form of a net receipts-sharing
deduction\a--and makes monthly payments to the states on the receipts generated
from minerals leases on public domain lands. The public domain lands may include
lands designated as "state select lands," which results in a larger portion of
the receipts being distributed to the state.
For states other than Alaska, MMS distributes 50 percent of the net receipts to
the state, 40 percent to the Bureau of Reclamation's Reclamation Fund, and 10
percent to the General Fund of the U.S. Treasury. For receipts generated on
state select lands or in the state of Alaska, 90 percent of the receipts are
distributed to the state and 10 percent to the General Fund of the U.S.
Treasury.
Under the requirements of the Federal Oil and Gas Royalty Management Act of
1982, as amended, MMS must distribute the state's share of the receipts
generated by the last day of the month that the receipts are warranted--that is
deposited--at the U.S. Treasury. MMS collects the receipts on the BLM's, FWS'
Forest Service's, and various military branches' public domain lands; verifies
the lessee's payments; and processes the payment through the U.S. Treasury to
the states on a monthly basis. If MMS is late in making its payment to the
states, it is responsible for the additional cost of the interest that must be
paid to the states. MMS then sends the state a detailed record of the receipts
generated in the previous month as well as an identification of the county in
which the lease was located.
California's process for allocating payment:
The state distributes to the counties only a small portion of MMS Mineral
Leasing revenue-sharing funds. In fiscal year 1997, for example, only about 6
percent of the mineral leasing funds, or $3 million of $53 million, received
from MMS were distributed. All of the distributed funds were from a portion of
the geothermal-leasing receipts. The state deposits the remainder of the
geothermal funds, as well as all other MMS Mineral Leasing funds, in specific
state accounts--such as the general fund, the surface mining and reclamation
account, the state school fund, grants, the renewable resources investment fund,
and the teachers' retirement fund--or allocates them to two school districts.
MMS deposits all Mineral Leasing funds into the state's Federal Trust Fund
interest-bearing account each month. After each monthly deposit, the state (1)
verifies the amount of the deposit, (2) calculates the amount of the geothermal
funds to be distributed to each county, (3) transfers the funds to be
distributed to the counties from the Federal Trust Fund to the Geothermal
Resources Development Account, (4) prepares and mails the distribution checks to
the counties in which the funds were derived as reported by MMS to the state,
and (5) sends the counties a formal notice of the reason for the distribution
and what the funds are to be used for.
State law requires that the counties use the funds for any of 11 specific
purposes.
Oregon's process for allocating payment:
MMS deposits Mineral Leasing revenue-sharing funds into the state's short-term
treasury interest-bearing account monthly. After each deposit, the state
verifies the amount of the deposit with information received from MMS. On a
quarterly basis--March 31, June 30, September 30, and December 31--the state
distributes MMS Mineral Leasing funds to the counties. To make the
distributions, the state (1) calculates the amount to be distributed to each
county, including interest, less a 60-cent processing fee; (2) electronically
distributes the funds to the counties; and (3) sends the counties a formal
notice of the reason for the distribution.
The state distributes the funds to the counties in which the funds were derived
as reported by MMS. The state does not specify how the funds are to be used.
Washington's process for allocating payment:
The state does not distribute MMS Mineral Leasing funds to counties. Instead,
the state deposits the funds in the common school construction fund. The funds
are to be used for the construction of common school facilities in the 39
counties.
--------------------------------------------------------------------------------
\a The Net Receipts Sharing Deduction, authorized in P.L. 103-66,
sec. 10201, is an annual calculation of a portion of MMS', BLM's,
and the Forest Service's costs to operate the Mineral Leasing
program. One-twelfth of the annual deduction is subtracted from the
monthly payments to the state and is deposited in the General Fund of
the U.S. Treasury.
Table II.21
Minerals Management Service's Mineral
Leasing Payments for Acquired Lands
--------------------------------------------------------------------------------
Agency: Minerals Management Service (MMS)
Name of payment: Mineral Leasing Payments for Acquired Lands
Statutory authority: Mineral Leasing Act for Acquired Lands, as amended (30
U.S.C. 355)
General description of payment:
Distribution of gross receipts generated from rents, bonuses, and royalties from
minerals leases on acquired lands. The states are to use the payments for the
same purpose as designated by other revenue-sharing programs for the lands on
which the lease is situated.
Agency's methodology and process for calculating and distributing payment:
MMS collects receipts on acquired federal lands and on BLM's and the Forest
Service's grasslands and FWS's refuges. MMS, however, unless otherwise provided,
is prohibited from making payments directly to counties and therefore must
transmit the moneys to the appropriate agencies for actual distribution to the
counties. The cognizant agencies make the distribution of minerals receipts on
grasslands or refuges according to the grasslands and refuges distribution
statutes. (See tables II.4, II.16, and II.23.)
On a monthly basis, MMS instructs the U.S. Treasury to transfer 100 percent of
the receipts generated to BLM or FWS. MMS then sends the agencies detailed
reports on the source of the receipts and the counties where the leases are
located to enable the agencies to make the proper distribution. MMS does not
charge these federal agencies for collecting the receipts.
The Forest Service distributed receipts from acquired lands on national forests
to states through the end of fiscal year 1992. Beginning in fiscal year 1993,
however, MMS (pursuant to the Energy Policy Act of 1992) started distributing 25
percent of the minerals receipts generated on acquired national forest lands to
the states and 75 percent to the General Fund of the U.S. Treasury. MMS notifies
the Forest Service of the distributions made on its behalf.
California's process for allocating payment:
The state distributes to the counties only a small portion of MMS' Mineral
Leasing revenue-sharing funds. In fiscal year 1997, for example, only about 6
percent of the Mineral Leasing funds, or $3 million of $53 million, received
from MMS were distributed. All of the distributed funds were from a portion of
the geothermal-leasing receipts. The state deposits the remainder of the
geothermal funds, as well as all other MMS Mineral Leasing funds, in specific
state accounts--such as the general fund, the surface mining and reclamation
account, the state school fund, grants, the renewable resources investment fund,
and the teachers' retirement fund--or allocates them to two school districts.
MMS deposits all Mineral Leasing funds into the state's Federal Trust Fund
interest-bearing account each month. After each monthly deposit, the state (1)
verifies the amount of the deposit, (2) calculates the amount of the geothermal
funds to be distributed to each county, (3) transfers the funds to be
distributed to the counties from the Federal Trust Fund to the Geothermal
Resources Development Account, (4) prepares and mails the distribution checks to
the counties in which the funds were derived as reported by MMS to the state,
and (5) sends the counties a formal notice of the reason for the distribution
and what the funds are to be used for.
State law requires that the counties use the funds for any of 11 specific
purposes.
Oregon's process for allocating payment:
MMS deposits Mineral Leasing revenue-sharing funds into the state's short-term
treasury interest-bearing account monthly. After each deposit, the state
verifies the amount of the deposit with information received from MMS. On a
quarterly basis--March 31, June 30, September 30, and December 31--the state
distributes MMS' Mineral Leasing funds to the counties. To make the
distributions, the state (1) calculates the amount to be distributed to each
county, including interest, less a 60-cent processing fee; (2) electronically
distributes the funds to the counties; and (3) sends the counties a formal
notice of the reason for the distribution.
The state distributes the funds to the counties in which the funds were derived
as reported by MMS. The state does not specify how the funds are to be used.
Washington's process for allocating payment:
The state does not distribute MMS' Mineral Leasing funds to counties. Instead,
the state deposits the funds in the common school construction fund. The funds
are to be used for the construction of common school facilities in the 39
counties.
--------------------------------------------------------------------------------
Table II.22
Minerals Management Service's Offshore
Mineral Leasing Payment
--------------------------------------------------------------------------------
Agency: Minerals Management Service (MMS)
Name of payment: Off-shore Mineral Leasing payment
Statutory authority: Section 8(g) of the Outer Continental Shelf Lands Act of
1953, as amended (43 U.S.C. 1337(g))
General description of payment:
Distribution of gross receipts from off-shore leases within each state's payment
zone and annual settlement disbursements to the states.
The law does not specify what use the state must make of the funds.
Agency's methodology and process for calculating and distributing payment:
The Outer Continental Shelf Lands Act (OCSLA) Amendments of 1978 amended section
8(g) of the OCSLA by providing that the states were to receive a "fair and
equitable" division of revenues generated from the leasing of lands within 3
miles of a state's seaward boundary. However, the federal government and the
states could not agree on the meaning of the term "fair and equitable."
Congress resolved the dispute through the OCSLA Amendments of 1985 (P.L. 99-
272). The law provides for a series of annual settlement payments to be
disbursed to the states over a 15-year period from fiscal year 1987 through
fiscal 2001. The law also provides for recurring disbursements of 27 percent of
the gross receipts received within each of the states' section 8(g) zones. The
remaining receipts go to the General Fund of the U.S. Treasury.
MMS negotiates the minerals leases and collects the receipts, verifies the
lessee's payments, and processes the payment through the U.S. Treasury to the
states on a monthly basis. MMS is required to make these payments to the states
by the last day of the month following the month in which the receipts are
deposited in the Treasury. MMS sends the state a detailed record of the receipts
generated in the previous month.
Annually, the settlement payments are made to six states before April 15 of each
year. Since offshore receipts are not associated with or generated within a
county, the distributions are to the state.
California's process for allocating payment:
California distributes these payments to the General Fund of California, which
is the principal operating fund for the majority of governmental activities and
consists of all moneys received in the U.S. Treasury that are not required by
law to be credited to any other fund.
Oregon's process for allocating payment:
Oregon does not receive 8(g) payments.
Washington's process for allocating payment:
Washington does not receive 8(g) payments.
--------------------------------------------------------------------------------
Table II.23
Fish and Wildlife Service's Refuge
Revenue Sharing Payment
--------------------------------------------------------------------------------
Agency: Fish and Wildlife Service (FWS)
Name of payment: Refuge Revenue Sharing payment
Statutory authority: Refuge Revenue Sharing Act, as amended (16 U.S.C. 715s)
General description of payment:
Distribution of net receipts from FWS lands for various products or privileges,
such as grazing, oil and gas, forest products, and concession fees, to counties
in which FWS lands are located. Congress may add appropriations to make up any
difference between net receipts and the payments due.
The law does not stipulate how the counties should use the funds.
Agency's methodology and process for calculating and distributing payment:
From net receipts (FWS is allowed to deduct some administrative expenses from
gross receipts), counties receive 25 percent of the receipts collected on
reserved lands (BLM's public domain lands administered by FWS). For fee lands
(those acquired by FWS), the counties receive whichever is greater: (1) 25
percent of net receipts, (2) 0.75 percent of the appraised value of the lands
(updated every 5 years), or (3) $0.75 per acre. However, the land payments
cannot be less than those made in fiscal year 1977. Monthly, MMS collects the
minerals receipts on the refuges and transmits them to FWS for deposit into the
National Wildlife Refuge Fund.
FWS' payments to the counties are made from the National Wildlife Refuge Fund.
This fund receives the net receipts from the prior and current fiscal-year
appropriations. If the net receipts and appropriations are insufficient to pay
the full entitlement, the payments are distributed on a pro rata basis. When a
refuge spans over a number of counties, the distribution of the receipts
generated by that refuge is based upon the acreage within that refuge and is
prorated on the basis of the acreage of each county instead of on which county
generated the receipts.
Annually, in November, FWS' Finance staff send a data file containing basic
regional land data to each of its seven Regional Realty Offices for updating--
acquisitions, deletions, or increased land appraisals. On the basis of updated
data, FWS' Finance staff calculate the county payments and send the data back to
the regions for review.
After review by the regions, FWS' Finance staff request checks from the U.S.
Treasury. The Treasury checks are mailed to the regions for distribution to the
counties. The county payments--which may be hand carried to the county--are
usually made in the first quarter of the calendar year.
California's process for allocating payment:
Does not apply; payments are made directly to the counties.
Oregon's process for allocating payment:
Does not apply; payments are made directly to the counties.
Washington's process for allocating payment:
Does not apply; payments are made directly to the counties.
--------------------------------------------------------------------------------
OPERATIONAL OVERVIEW OF THE
PAYMENT IN LIEU OF TAXES PROGRAM
========================================================= Appendix III
The Payment in Lieu of Taxes (PILT) program is probably the most
complex but least understood of the land management compensation
programs. It has the broadest geographic coverage of the
revenue-sharing programs. PILT was authorized by the Payment in Lieu
of Taxes Act of 1976, as amended (31 U.S.C. 6901-6907). The Bureau
of Land Management (BLM) administers the program and is responsible
for calculating the payments according to formulas established by law
and for distributing the funds appropriated by the Congress to units
of local government, usually counties. Under current law, local
governments are compensated through various other revenue-sharing
programs for losses to their tax bases due to the presence of
federally owned land within their boundaries. PILT guarantees some
payment to most counties that have federal lands within their
boundaries. Since the first payments in 1977, payments have averaged
about $102 million annually, and, to date, over $2 billion in
payments have been made to local governments. These payments may be
used by the counties for any governmental purpose.
The PILT payment is composed of three separate formulas dealing with
(1) section 6902 payments to local governments (generally counties)
under two alternatives that are based on "entitlement lands" within
the county, (2) section 6904 payments to counties for lands acquired
for the National Park System or National Forest Wilderness Areas, and
(3) section 6905 payments to counties for lands owned by the federal
government in the Redwood National Park and those acquired in the
Lake Tahoe Basin.
SECTION 6902 PAYMENTS
------------------------------------------------------- Appendix III:1
Seven categories of federal land are eligible for PILT payments under
this section. The most significant categories of lands are those in
the National Forest System, those in the National Park System, and
lands administered by BLM and the Fish and Wildlife Service (FWS).
In total, about 595 million acres of federal land are covered under
this section. Under the act, calculating a county's payment first
requires determining the answers to several questions:
1. What is the population of the county?
2. How many acres of eligible lands are in the county?
3. What, if any, was the previous year's payment (offset) for
eligible lands under the other payment programs of federal agencies
for these lands?
The population data are provided by the Bureau of the Census, and the
acreage data are provided by each of the federal agencies that have
eligible acres within each county's boundaries. However, the
previous year's payments from designated federal agencies are
provided by the governor's office from each state. (App. II, table
II.1 shows a listing of the PILT offsets for the Forest Service, BLM,
the Minerals Management Service (MMS), and FWS. There are a few
other offsets, but these programs were not covered by our review.)
Moreover, the law contains a table that sets the maximum payment
(ceiling) that a county may receive on the basis of population. The
relationship between the population and ceiling is not linear, that
is, the ceiling increases in relation to the population until the
population reaches 50,000. Counties with a population of 50,000 or
more have the same ceiling, regardless of their population. The
fiscal year 1997 ceiling was $1.825 million (50,000 x $36.50).
The law also provides for minimum and standard payment rates that are
based on acreage. The fiscal year 1997 minimum rate was $0.18, and
the standard rate was $1.36 per acre. At the beginning of each
fiscal year, all of the variables above are adjusted for inflation on
the basis of the Consumer Price Index for the 12 months ending the
preceding June 30. Table III.1 shows the differences in ceilings and
the minimum and standard rates for fiscal years 1995-99.
Table III.1
Maximum Payments (Ceiling) Based on
Population and Minimum and Standard
Rates Based on Acreage, Fiscal Years
1995-99
Standard
Minimum rate rate
Population (dollars/ (dollars/
Fiscal year ceiling acre) acre)
---------------------------- ------------ ------------ ------------
1995 $1,237,500 $0.12 $0.93
1996 1,541,500 0.16 1.16
1997 1,825,000 0.18 1.36
1998\a 1,962,500 0.20 1.47
1999\a 2,200,000 0.22 1.65
----------------------------------------------------------------------
\a Not adjusted for inflation, since the payments have not been made.
CALCULATION
----------------------------------------------------- Appendix III:1.1
Once the answers to the three questions shown earlier are known, a
comparison of the results must be made:
Alternative A: Which is less--the county's eligible acreage times
the standard rate or the county's ceiling? Pick the lesser of these
two and from it, subtract the previous year's total payment for the
eligible land under the other payments or revenue-sharing programs of
the agencies that control the land (offset).
Alternative B: Which is less--the county's eligible acreage times
the minimum rate or the county's ceiling? Pick the lesser of these
two.
The county is eligible to receive whichever of the above
calculations--Alternative A or Alternative B--is greater. However,
under Alternative A, if the total calculated payment (eligible areas
x the standard rate) exceeds the ceiling, the deduction for the other
federal agencies' prior-year payments is made from the ceiling to
arrive at the Alternative A figure.
The following example shows how the section 6902 payment is computed
for a hypothetical county in 1997. Our example assumes that the
county has a population of 50,000, has an area of 200,000 acres, and
received payments totaling $60,500 from other land management
agencies in the previous year.
Table III.2
Example of a PILT Calculation for a
Section 6902 Payment
Example where Alternative A is greater than B
-------------------------------------------------- ------------------
Ceiling based on population (50,000 x $36.50) $1,825,000
Alternative A:
200,000 acres x $1.36 per acre 272,000
Deduction for prior-year payments\a (60,500)
Payment to county--Alternative A $211,500
Alternative B:
200,000 acres x $0.18 per acre $36,000
No deduction under this alternative 0
Payment to county--Alternative B $36,000
----------------------------------------------------------------------
\a Only the amount of federal land payments actually received by the
county in the prior fiscal year are deducted. If a county 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
other single- or special-purpose districts, such redistributed
payments are considered not to have been received by the county and
are not deducted from the section 6902 payment.
In this case, the county would receive $211,500. However, if the
ceiling were $200,000 because the population was much lower than
50,000 in this example, the Alternative A payment would be $139,500
($200,000 minus $60,500)
SECTION 6904 PAYMENTS
------------------------------------------------------- Appendix III:2
Section 6904 provides units of local government (generally counties)
with annual payments for any lands or interest therein within their
boundaries that were acquired after December 31, 1970, as additions
to the National Park System or National Forest Wilderness Areas.
These lands must have been subject to local real property taxes
within the 5-year period preceding their acquisition by the federal
government. Payments under this section are made in addition to
payments under section 6902. They are based on 1 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 when
acquired. Section 6904 payments for each acquisition are to be made
annually for 5 years following each acquisition.
SECTION 6905 PAYMENTS
------------------------------------------------------- Appendix III:3
Section 6905 provides units of local government (generally counties)
with annual payments for any lands or interest therein owned by the
federal 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 will continue beyond the 5-year
limitation. These payments will 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 full fiscal year before the fiscal year in which the property
was acquired by the federal government.
PAYMENTS BASED ON AVAILABILITY
OF APPROPRIATIONS
------------------------------------------------------- Appendix III:4
Total eligible payments to the counties are determined by combining
the amounts determined under sections 6902, 6904 and 6905. However,
if the Congress appropriated less than the amount needed for the full
payment, the percentage of the shortfall is prorated equally to each
of the eligible county payments. For example, in fiscal years
1995-97, the counties received about 77, 68, and 53 percent of their
eligible payments, respectively. BLM makes two annual payments to
the counties in September of each year. The first is the section
6902 payment, and the second payment is the combination of section
6904 and section 6905 payments. The section 6902 payment was 98
percent of the total payment for fiscal years 1995 and 1996 and 99
percent of the total fiscal year 1997 payment.
DISTRIBUTION OF FEDERAL PAYMENTS
TO CALIFORNIA'S, OREGON'S, AND
WASHINGTON'S COUNTIES FOR FISCAL
YEAR 1997
========================================================== Appendix IV
Federal payments to states\a Federal direct payment to counties
----------------------------------------------------------------------------------------- --------------------------------------------------------------
Forest Total Forest BLM's
Service's state FWS' Service' BLM's Coos
25- BLM's BLM's BLM's BLM's Minerals distributi Refuge s O&C Bay
State/ Percent Mineral Outside Inside Proceeds Management on to Revenue Grasslan BLM's Grant Wagon Total county
County Payment Leasing Grazing Grazing of Sales Service Total\d counties\b Sharing ds PILT Lands Road Total\d payments\c,d
---------- ---------- -------- -------- -------- -------- ---------- ------------- ---------- -------- -------- ---------- -------- -------- ---------- -------------
California
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alameda 0 0 0 0 0 0 0 0 119,847 0 1,756 0 0 121,603 121,603
Alpine 332,080 0 0 213 6 26 332,325 332,293 0 0 40,372 0 0 40,372 372,665
Amador 158,155 0 165 0 13 0 158,334 158,321 0 0 31,304 0 0 31,304 189,625
Butte 276,046 0 0 0 0 0 276,046 276,046 30,766 0 14,580 0 0 45,346 321,392
Calaveras 130,522 0 394 0 1,095 0 132,012 130,917 0 0 33,996 0 0 33,996 164,913
Colusa 159,857 0 88 0 0 0 159,946 159,946 134,341 0 27,051 0 0 161,392 321,338
Contra 0 0 0 0 0 6,545 6,545 0 17,295 0 3,381 0 0 20,676 20,676
Costa
Del Norte 1,832,443 0 0 0 0 0 1,832,443 1,832,443 204 0 44,303 0 0 44,507 1,876,950
El Dorado 1,006,949 1,067 238 0 9 0 1,008,263 1,007,187 0 0 191,525 0 0 191,525 1,198,712
Fresno 1,216,589 0 4,351 0 0 1,199,919 2,420,858 1,220,939 0 0 682,435 0 0 682,435 1,903,374
Glenn 450,670 6 180 0 0 1,737 452,593 450,849 108,655 0 19,270 0 0 127,925 578,774
Humboldt 1,298,600 107 1,550 0 97 0 1,300,354 1,300,150 19,101 0 864,284 0 0 883,385 2,183,535
Imperial 0 636 0 0 10,659 1,951,540 1,962,834 630,730 16,898 0 536,214 0 0 553,112 1,183,842
Inyo 252,321 0 182 965 4,396 2,748,006 3,005,870 1,207,498 0 0 497,636 0 0 497,636 1,705,134
Kern 262,920 3,182 8,583 3,655 5,965 6,387,530 6,671,835 273,291 26,248 0 717,432 0 0 743,680 1,016,971
Kings 0 172 1,034 0 5 16,812 18,022 1,034 0 0 6,621 0 0 6,621 7,655
Lake 630,279 0 34 0 24 2,238,786 2,869,124 1,416,346 0 0 36,610 0 0 36,610 1,452,956
Lassen 1,754,561 0 0 11,741 8,593 24,899 1,799,793 1,775,367 0 0 157,410 0 0 157,410 1,932,777
Los 495,995 2,041 11 0 0 370,968 869,015 496,006 0 0 430,538 0 0 430,538 926,544
Angeles
Madera 485,925 0 524 0 0 0 486,449 486,449 0 0 246,283 0 0 246,283 732,732
Marin 0 0 0 0 0 0 0 0 8,241 0 61,159 0 0 69,400 69,400
Mariposa 260,665 0 733 0 3 0 261,402 261,398 0 0 275,030 0 0 275,030 536,428
Mendocino 441,868 0 0 0 0 0 441,868 441,868 0 0 89,244 0 0 89,244 531,112
Merced 0 0 237 0 0 0 237 237 107,434 0 25,949 0 0 133,383 133,620
Modoc 2,071,948 851 554 3,287 31 0 2,076,672 2,075,241 33,390 0 162,657 0 0 196,047 2,271,288
Mono 309,101 0 0 2,837 313 565,160 877,410 504,630 0 0 168,327 0 0 168,327 672,957
Monterey 28,258 0 2,019 0 99 16,157 46,533 30,277 7,715 0 250,954 0 0 258,669 288,946
Napa 0 0 194 0 0 0 194 194 347 0 43,657 0 0 44,004 44,198
Nevada 420,425 0 81 0 481 0 420,987 420,506 0 0 81,441 0 0 81,441 501,947
Orange 28,920 0 0 0 0 0 28,920 28,920 0 0 32,143 0 0 32,143 61,063
Placer 767,886 8 0 0 375 0 768,270 767,886 0 0 151,337 0 0 151,337 919,223
Plumas 1,721,985 0 146 0 0 0 1,722,132 1,722,132 0 0 112,159 0 0 112,159 1,834,291
Riverside 75,090 5,357 657 0 6,084 0 87,188 75,747 70,650 0 952,635 0 0 1,023,285 1,099,032
Sacramento 0 0 0 0 0 4,641 4,641 0 13,743 0 5,429 0 0 19,172 19,172
San Benito 0 0 2,130 0 0 1,544 3,674 2,130 0 0 72,005 0 0 72,005 74,135
San 229,503 22,989 7,619 239 2,433 1,715,898 1,978,681 237,481 0 0 888,745 0 0 888,745 1,126,226
Bernardino
San Diego 135,666 1,039 3,093 0 0 1 139,798 138,759 239,264 0 300,707 0 0 539,971 678,730
San 0 0 0 0 0 0 0 0 0 0 1,711 0 0 1,711 1,711
Francisco
San 0 0 0 0 0 0 0 0 0 0 1,559 0 0 1,559 1,559
Joaquin
San Luis 17,584 168 6,419 0 0 26,185 50,356 24,003 0 0 315,169 0 0 315,169 339,172
Obispo
San Mateo 0 0 0 0 0 0 0 0 4,266 0 1,869 0 0 6,135 6,135
Santa 57,850 16 175 0 0 95,619 153,659 58,025 0 0 500,493 0 0 500,493 558,518
Barbara
Santa 0 0 28 0 203 0 231 28 18,358 0 1,795 0 0 20,153 20,181
Clara
Santa Cruz 0 0 0 0 0 38 38 0 7,510 0 9 0 0 7,519 7,519
Shasta 2,126,625 1,980 2,478 0 7,898 0 2,138,981 2,129,103 1,449 0 94,390 0 0 95,839 2,224,942
Sierra 907,469 0 0 0 0 3 907,473 907,469 0 0 41,431 0 0 41,431 948,900
Siskiyou 5,840,735 753 1,340 0 490 33,977 5,877,294 5,856,440 1,241 114 247,170 0 0 248,525 6,104,965
Solano 0 10 0 0 0 10,180 10,190 0 18,787 0 3,782 0 0 22,569 22,569
Sonoma 0 0 0 0 0 2,324,119 2,324,119 826,298 3,085 0 2,296 0 0 5,381 831,679
Stanislaus 0 0 430 0 46 0 476 430 38,079 0 2,903 0 0 40,982 41,412
Sutter 0 0 0 0 0 70 70 0 50,110 0 2 0 0 50,112 50,112
Tehama 1,238,114 291 2,503 0 70 0 1,240,978 1,240,617 56,163 0 42,644 0 0 98,807 1,339,424
Trinity 4,776,816 1,156 0 0 788 0 4,778,759 4,776,816 0 0 147,807 0 0 147,807 4,924,623
Tulare 636,647 0 1,217 131 0 0 637,995 638,323 10,617 0 780,146 0 0 790,763 1,429,086
Tuolumne 995,563 0 752 0 804 0 997,119 996,314 0 0 270,956 0 0 270,956 1,267,270
Ventura 52,390 305 16 0 4 546,040 598,756 52,407 4,440 0 404,004 0 0 408,444 460,851
Yolo 0 0 0 0 0 0 0 0 0 0 23,171 0 0 23,171 23,171
Yuba 77,926 0 7 0 258 0 78,191 77,933 0 0 4,740 0 0 4,740 82,673
====================================================================================================================================================================================
Total to 33,962,946 42,131 50,161 23,068 51,244 20,286,400 54,415,950 37,447,421 1,168,24 114 11,144,626 0 0 12,312,984 49,760,405
Counties 4
Other 0 0 0 0 0 32,596,918 32,596,918 0 0 0 0 0 0 0 0
Revenue\e
====================================================================================================================================================================================
State 33,962,946 42,131 50,161 23,068 51,244 52,883,318 87,012,869 37,447,421 1,168,24 114 11,144,626 0 0 12,312,984 49,760,405
Total 4
Oregon
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Baker 525,109 647 0 8,024 168 0 533,949 543,338 0 0 143,461 0 0 143,461 686,799
Benton 316,510 0 0 0 0 0 316,510 318,934 82,295 0 2,002 1,974,46 0 2,058,759 2,377,693
2
Clackamas 4,521,120 0 0 0 1,620 (442) 4,522,298 4,533,681 943 0 50,041 3,899,73 0 3,950,722 8,484,402
8
Clatsop 0 0 0 0 0 0 0 2,440 33,147 0 59 0 0 33,206 35,646
Columbia 0 0 0 0 0 0 0 1,920 2,635 0 0 1,447,47 0 1,450,105 1,452,025
0
Coos 512,632 0 0 0 16,351 0 528,983 518,040 13,495 0 6,537 4,145,66 491,094 4,656,793 5,174,833
7
Crook 482,702 201 293 5,076 80 0 488,352 497,478 0 0 90,017 0 0 90,017 587,495
Curry 3,590,220 0 0 0 162,885 0 3,753,104 3,601,201 0 0 56,801 2,564,69 0 2,621,493 6,222,694
2
Deschutes 3,072,339 2,030 386 4,957 522 33,222 3,113,455 3,126,036 0 0 137,258 0 0 137,258 3,263,294
Douglas 14,247,538 0 0 0 22,031 0 14,269,570 14,285,474 0 0 91,143 17,601,5 67,602 17,760,263 32,045,737
18
Gilliam 0 55 2,475 0 0 0 2,530 5,967 0 0 20,989 0 0 20,989 26,956
Grant 2,281,682 0 9,451 187 14,463 0 2,305,783 2,307,824 0 0 168,620 0 0 168,620 2,476,444
Harney 673,062 0 258 39,029 5,437 (2,139) 715,647 740,221 109,151 0 300,180 0 0 409,331 1,149,552
Hood River 1,841,677 0 0 0 0 0 1,841,677 1,846,237 0 0 19,692 0 0 19,692 1,865,929
Jackson 4,084,201 0 885 0 10,434 0 4,095,520 4,099,731 0 0 44,855 11,010,6 0 11,055,465 15,155,196
10
Jefferson 554,074 0 922 0 0 11,378 566,373 572,310 0 12,908 28,274 0 0 41,182 613,492
Josephine 1,960,760 0 16 0 27,512 0 1,988,287 1,968,631 0 0 33,616 8,488,07 0 8,521,693 10,490,324
7
Klamath 9,735,144 541 5,200 784 4,073 0 9,745,742 9,775,094 121,875 0 207,044 1,644,21 0 1,973,133 11,748,227
4
Lake 1,967,682 0 7 21,160 650 0 1,989,499 2,015,645 39,759 0 300,180 0 0 339,939 2,355,584
Lane 21,548,517 0 0 0 0 0 21,548,517 21,597,365 0 0 132,973 10,729,5 0 10,862,521 32,459,887
48
Lincoln 3,337,422 0 9 0 145 0 3,337,576 3,345,768 8,162 0 17,609 252,956 0 278,727 3,624,495
Linn 7,162,170 0 0 0 644 0 7,162,814 7,180,569 785 0 45,997 1,855,01 0 1,901,792 9,082,361
0
Malheur 3,281 222 0 64,113 1,002 0 68,618 95,862 0 0 681,167 0 0 681,167 777,029
Marion 2,706,152 0 0 0 0 (539) 2,705,614 2,713,462 24,544 0 19,730 1,025,87 0 1,070,151 3,783,613
7
Morrow 252,615 0 150 0 0 0 252,765 258,912 5,659 0 75,706 0 0 81,365 340,277
Multnomah 685,880 0 0 0 0 0 685,880 688,322 0 0 7,255 765,894 0 773,149 1,461,471
Polk 6,171 0 0 0 0 0 6,171 8,263 21,974 0 42 1,517,73 0 1,539,752 1,548,014
6
Sherman 0 178 1,333 0 0 0 1,512 3,844 0 0 37,341 0 0 37,341 41,185
Tillamook 1,774,919 0 0 0 1 0 1,774,920 1,781,023 4,564 0 8,925 393,487 0 406,976 2,187,999
Umatilla 681,988 191 680 0 209 0 683,068 693,027 677 0 199,869 0 0 200,546 893,573
Union 567,843 0 161 4 527 0 568,535 574,639 0 0 282,361 0 0 282,361 857,000
Wallowa 536,869 0 614 0 0 0 537,483 547,199 0 0 233,702 0 0 233,702 780,901
Wasco 1,904,381 146 2,498 0 0 0 1,907,025 1,916,915 0 0 20,471 0 0 20,471 1,937,386
Washington 0 0 0 0 0 0 0 2,032 26,129 0 1,619 442,673 0 470,421 472,453
Wheeler 214,520 0 3,022 0 576 0 218,118 222,709 0 0 29,174 0 0 29,174 251,883
Yamhill 493,356 0 0 0 0 0 493,356 496,184 722 0 2,476 505,912 0 509,110 1,005,294
====================================================================================================================================================================================
Total to 92,242,534 4,210 28,361 143,334 269,330 41,481 92,729,250 92,886,298 496,516 12,908 3,497,186 70,265,5 558,697 74,830,848 167,717,146
Counties 41
Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Revenue\e
====================================================================================================================================================================================
State 92,242,534 4,210 28,361 143,334 269,330 41,481 92,729,250 92,886,298 496,516 12,908 3,497,186 70,265,5 558,697 74,830,848 167,717,146
Total 41
Washington
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Adams 0 0 0 0 0 0 0 0 3,805 0 2,918 0 0 6,723 6,723
Asotin 94,832 0 356 0 16 0 95,204 95,241 50 0 39,861 0 0 39,911 135,152
Benton 0 0 61 0 3,779 16,998 20,838 61 5,241 0 26,042 0 0 31,283 31,344
Chelan 1,748,946 0 275 0 0 0 1,749,220 1,750,188 6,874 0 454,402 0 0 461,276 2,211,464
Clallam 1,519,303 0 0 0 0 0 1,519,303 1,520,143 15,455 0 51,816 0 0 67,271 1,587,414
Clark 9,415 0 0 0 0 0 9,415 9,421 58,490 0 372 0 0 58,862 68,283
Columbia 281,163 0 18 0 0 0 281,181 281,337 327 0 92,788 0 0 93,115 374,452
Cowlitz 273,087 0 0 0 0 0 273,087 273,238 5,656 0 3,268 0 0 8,924 282,162
Douglas 2 0 2,962 0 0 0 2,964 2,964 0 0 32,403 0 0 32,403 35,367
Ferry 620,116 0 678 0 0 0 620,794 621,137 0 0 177,065 0 0 177,065 798,202
Franklin 0 0 217 0 0 0 217 217 0 0 22,786 0 0 22,786 23,003
Garfield 168,287 0 7 0 0 0 168,295 168,388 0 0 57,655 0 0 57,655 226,043
Grant 0 0 (3,120) 0 0 0 (3,120) (3,120) 4,005 0 107,311 0 0 111,316 108,196
Grays 437,855 0 0 0 0 0 437,855 438,097 9,918 0 16,290 0 0 26,208 464,305
Harbor
Island 0 0 0 0 0 0 0 0 0 0 349 0 0 349 349
Jefferson 2,048,421 0 0 0 0 0 2,048,421 2,049,554 24,202 0 67,648 0 0 91,850 2,141,404
King 1,345,091 0 0 0 0 0 1,345,091 1,345,834 0 0 31,446 0 0 31,446 1,377,280
Kitsap 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Kittitas 655,645 0 466 0 0 (26,343) 629,768 656,473 0 0 126,456 0 0 126,456 782,929
Klickitat 116,017 0 989 0 0 60 117,066 117,070 93,171 0 4,154 0 0 97,325 214,395
Lewis 3,273,293 0 0 0 0 825,886 4,099,179 3,275,103 0 0 45,664 0 0 45,664 3,320,767
Lincoln 0 0 4,081 0 0 0 4,081 4,081 0 0 46,765 0 0 46,765 50,846
Mason 481,680 0 0 0 0 0 481,680 481,947 0 0 15,834 0 0 15,834 497,781
Okanogan 1,373,838 0 4,283 0 7,043 0 1,385,164 1,378,880 1,850 0 451,611 0 0 453,461 1,832,341
Pacific 0 0 0 0 0 0 0 0 112,448 0 2,433 0 0 114,881 114,881
Pend 633,487 0 0 0 16 0 633,502 633,837 896 0 130,518 0 0 131,414 765,251
Oreille
Pierce 498,258 0 0 0 0 0 498,258 498,533 4,530 0 100,901 0 0 105,431 603,964
San Juan 0 0 0 0 0 0 0 0 0 0 1,660 0 0 1,660 1,660
Skagit 838,040 0 0 0 0 0 838,040 838,504 0 0 145,658 0 0 145,658 984,162
Skamania 6,788,828 0 0 0 0 0 6,788,828 6,792,582 26,126 0 80,615 0 0 106,741 6,899,323
Snohomish 1,423,229 0 0 0 0 0 1,423,229 1,424,016 0 0 60,446 0 0 60,446 1,484,462
Spokane 0 0 173 0 2 0 176 173 57,235 0 1,384 0 0 58,619 58,792
Stevens 284,384 0 247 0 12,524 0 297,155 284,788 231,804 0 114,306 0 0 346,110 630,898
Thurston 2,477 0 0 0 0 0 2,477 2,478 16,571 0 60 0 0 16,631 19,109
Wahkiakum 0 0 0 0 0 0 0 0 11,486 0 1 0 0 11,487 11,487
Walla 4,289 10 0 0 0 0 4,299 4,291 3,101 0 14,738 0 0 17,839 22,130
Walla
Whatcom 1,342,954 0 0 0 0 0 1,342,954 1,343,697 0 0 223,913 0 0 223,913 1,567,610
Whitman 0 0 442 0 0 0 442 442 0 0 9,979 0 0 9,979 10,421
Yakima 2,162,205 0 2,090 0 0 1,293 2,165,588 2,165,490 9,228 0 51,053 0 0 60,281 2,225,771
====================================================================================================================================================================================
Total to 28,425,142 10 14,226 0 23,381 817,894 29,280,653 28,455,086 702,469 0 2,812,569 0 0 3,515,038 31,970,124
Counties
Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Revenue\e
====================================================================================================================================================================================
State 28,425,142 10 14,226 0 23,381 817,894 29,280,653 28,455,086 702,469 0 2,812,569 0 0 3,515,038 31,970,124
Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\a These payments reflect the amount of the total state payment
attributable to the various counties.
\b These payments reflect the amount of the federal payment that the
state actually distributed to the counties. In addition, the state
of Oregon also pays interest on the BLM and MMS Mineral Leasing
payments. During federal fiscal years 1995 through 1997, Oregon paid
about $2,400 more in interest to the counties on these payments which
is not reflected in the above table. Because of the differences in
the state and federal fiscal years, and the way interest was
calculated, allocating the amount attributable to the individual
counties for each of the 3 fiscal years could not be easily done.
\c This amount reflects the total amount paid to the counties by the
state and directly from the federal agencies.
\d Totals may not equal due to rounding.
\e Other revenue reflects MMS' off-shore minerals leasing payment,
interest, or the annual settlement paid to the state that is not
attributable to individual counties.
OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix V
Specifically, we agreed to provide information on (1) the programs
that the federal land management agencies use to compensate states
and counties and identify the major differences among these programs;
(2) the process that California, Oregon, and Washington use to
distribute the federal payments to the counties and the major
differences among the states' programs; and (3) the amount of federal
compensation that California, Oregon, and Washington received and
distributed to their counties compared with the amounts that the
federal agencies calculated as attributable to the receipts generated
in the counties during fiscal years 1995-97.
FEDERAL PROGRAMS
--------------------------------------------------------- Appendix V:1
To determine the land management agencies' methodology and processes
to calculate and distribute the federal revenue-sharing funds and to
identify the major differences between these programs, we obtained
and reviewed the laws authorizing the various compensation programs.
We held detailed discussions with the Forest Service, BLM, MMS, and
FWS representatives responsible for distributing payments under the
22 federal programs to the states and counties. We obtained and
reviewed the agencies' written guidance on the methodology they use
for each of these 22 programs and discussed the process and time
frames that they follow to make these payments to the states and the
counties. On the basis of these discussions and our review of
documents, we were able to identify the major differences between the
various agencies' programs, processes, and methodologies.
Because the amount of federal acreage is a critical component of the
federal compensation programs, we interviewed the Forest Service's
and FWS' headquarters "lands" representative as well as BLM's Oregon
State Office's representative to discuss their methodologies,
processes, and timing for updating and reporting changes to the
federal acreage totals and the lands valuations. We did not,
however, evaluate the accuracy of the land totals or valuations
developed because this was beyond the scope of our review.
We also obtained the agencies' year-end statistics for national
disbursements as well as detailed listings by state for the amounts
of receipts generated in each county in California, Oregon, and
Washington for fiscal years 1995-97. We relied on the agencies' data
on the amounts distributed to states and counties but did not
evaluate whether the agencies accurately implemented the methodology
established by law. We discussed the systems that the agencies used
to collect, calculate, and distribute the federal payments but did
not perform an in-depth analysis of these systems, since it was
beyond the scope of our agreements with the congressional requester,
nor did we verify the amounts distributed with the U.S. Treasury.
We did, however, verify with the states the amounts received from the
federal agencies.
We did not independently verify the reliability of the financial data
provided nor did we trace the data to the systems from which they
came. These systems were, in some cases, subject to audit procedures
by the Office of Inspector General (OIG) in connection with the
agencies' financial statement audits.
For fiscal years 1995-97 and previous fiscal years, the Department of
Agriculture's OIG reported that because of significant internal
control weaknesses in various accounting subsystems, the Forest
Service's accounting data were not reliable. Despite these
weaknesses, we used the data because they were the only data
available and are the data that the agency uses to manage its
programs.
For fiscal years 1995-97, the Department of the Interior's OIG issued
unqualified opinions on the financial statements of BLM, MMS, and
FWS. However, for fiscal year 1996, the OIG reported that there were
weaknesses in the general controls at the Bureau of Reclamation's
administrative service center, which processes financial information
for BLM and FWS, and that certain of these weaknesses still existed
in fiscal year 1997. Furthermore, for fiscal year 1997, the OIG
reported weaknesses in the general controls over the MMS Royalty
Management Program's automated information system.
STATE PROGRAMS
--------------------------------------------------------- Appendix V:2
To determine California's, Oregon's, and Washington's methodologies
and processes to calculate and distribute the federal revenue-sharing
funds to the counties within those states and to identify the major
differences between these programs, we met with the representatives
of each state responsible for implementing the state's distribution
program. We obtained and reviewed the states' laws and written
guidance on the distribution of federal revenue-sharing funds from
the land management agencies. Because Washington distributes a large
portion of its federal receipts to the state's school construction
fund for the benefit of all counties, we met with representatives of
the Superintendent of Public Instruction to discuss their process for
allocating moneys to the various school districts. On the basis of
these discussions and our review of documents, we were able to
identify the major differences between the various states' programs,
processes, and methodologies.
We also obtained the states' statistics reflecting the federal funds
received and the amounts disbursed to each county for fiscal years
1995-97. We relied on the states' data on the amounts distributed to
the counties but did not evaluate whether the states accurately
implemented the methodology established by their state law.
As with the federal programs, we relied on the representatives'
description of the systems used to calculate and distribute the
federal funds to the counties. Also, because it was beyond the scope
of our review, we did not contact individual counties to verify the
amount of federal payments they received or whether the counties were
using the federal funds in accordance with federal and state laws.
RECONCILIATION OF DISTRIBUTIONS
--------------------------------------------------------- Appendix V:3
To determine the amounts that each county in California, Oregon, and
Washington received compared with the amounts that the federal
agencies indicated were generated in those counties for fiscal years
1995-97, we analyzed the federal and state distribution records.
Because each of the states has a July 1 to June 30 fiscal year, we
aggregated each state's monthly or quarterly distribution records to
conform to the federal fiscal year (Oct. 1 to Sept. 30), which we
used as the basis of our comparison. In addition, because the states
record the receipts on a cash basis, we adjusted the state schedules
to reflect any federal payments made for the year or month of
September but received by the state in October or later to correctly
represent the amounts received by the state, reflective of a
specified fiscal year.
In comparing the federal amounts attributable to each county with the
state's distribution--or lack of distribution--to that county, we
reconciled the differences between the two amounts for each of the 3
fiscal years. In some instances, the state's methodology for
distributing the receipts was based on a ratio of that county's
acreage to the entire state or as part of the grazing acreage rather
than on a distribution of the moneys to the counties where the
receipts were generated. In other instances, one state paid interest
on all federal distributions, and another state paid interest on one
federal distribution. In these cases, the payments differed by the
amount of state interest paid. On the basis of these reconciliations
between the federal and state distributions, we were able to identify
the amounts distributed to the counties and to identify the reasons
why other federal disbursements were not distributed to the counties.
As agreed with the congressional requester, we included only the
comparison of fiscal year 1997 distributions by counties in this
report (see app. IV), since it was generally representative of all 3
fiscal years evaluated.
To ensure the accuracy of our data analysis, we provided each federal
and state representative an opportunity to review the individual
federal and state schedules that we prepared and requested that
he/she verify the amounts displayed. We conducted our review from
January to August 1998 in accordance with generally accepted
government auditing standards.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI
ENERGY, RESOURCES, AND SCIENCE
ISSUE AREA STAFF
Robert B. Arthur
June M. Foster
Linda L. Harmon
John S. Kalmar
John P. Murphy
Victor S. Rezendes
OFFICE OF THE GENERAL COUNSEL
Doreen S. Feldman
Kathleen A. Gilhooly
*** End of document. ***