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PAYMENTS IN LIEU OF TAXES 

OVERSIGHT HEARING 

BEFORE THE

SUBCOMMITTEE ON NATIONAL PARKS, FORESTS 

AND PUBLIC LANDS 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

Friday, October 14, 2011 

Serial No. 112-71 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html 

or 

Committee address: http://naturalresources.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

DOC HASTINGS, WA, Chairman 

EDWARD J. MARKEY, MA, Ranking Democrat Member 

Don Young, AK 

John J. Duncan, Jr., TN 

Louie Gohmert, TX 

Rob Bishop, UT 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Paul C. Broun, GA 

John Fleming, LA 

Mike Coffman, CO 

Tom McClintock, CA 

Glenn Thompson, PA 

Jeff Denham, CA 

Dan Benishek, MI 

David Rivera, FL 

Jeff Duncan, SC 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Steve Southerland II, FL 

Bill Flores, TX 

Andy Harris, MD 

Jeffrey M. Landry, LA 

Charles J. ‘‘Chuck’’ Fleischmann, TN 

Jon Runyan, NJ 

Bill Johnson, OH 

Dale E. Kildee, MI 

Peter A. DeFazio, OR 

Eni F.H. Faleomavaega, AS 

Frank Pallone, Jr., NJ 

Grace F. Napolitano, CA 

Rush D. Holt, NJ 

Rau ́l M. Grijalva, AZ 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Dan Boren, OK 

Gregorio Kilili Camacho Sablan, CNMI 

Martin Heinrich, NM 

Ben Ray Luja ́n, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

Pedro R. Pierluisi, PR 

John Garamendi, CA 

Colleen W. Hanabusa, HI 

Vacancy 

Todd Young, Chief of Staff 

Lisa Pittman, Chief Counsel 

Jeffrey Duncan, Democrat Staff Director 

David Watkins, Democrat Chief Counsel 

SUBCOMMITTEE ON NATIONAL PARKS, FORESTS AND PUBLIC LANDS 

ROB BISHOP, UT, Chairman 

RAU ́ L M. GRIJALVA, AZ, Ranking Democrat Member 

Don Young, AK 

John J. Duncan, Jr., TN 

Doug Lamborn, CO 

Paul C. Broun, GA 

Mike Coffman, CO 

Tom McClintock, CA 

David Rivera, FL 

Scott R. Tipton, CO 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Bill Johnson, OH 

Doc Hastings, WA, ex officio 

Dale E. Kildee, MI 

Peter A. DeFazio, OR 

Rush D. Holt, NJ 

Martin Heinrich, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

John Garamendi, CA 

Edward J. Markey, MA, ex officio 

(III) 

CONTENTS 

Page 

Hearing held on Friday, October 14, 2011 ............................................................ 1 

Statement of Members: 

Bishop, Hon. Rob, a Representative in Congress from the State of Utah ... 1 

Prepared statement of ............................................................................... 3 

Gosar, Hon. Paul A., a Representative in Congress from the State of 

Arizona, Prepared statement of ................................................................... 50 

Grijalva, Hon. Rau ́l M., a Representative in Congress from the State 

of Arizona ...................................................................................................... 4 

Prepared statement of ............................................................................... 4 

Statement of Witnesses: 

Corn, M. Lynne, Ph.D., Specialist in Natural Resources Policy, 

Congressional Research Service, Library of Congress ............................... 7 

Prepared statement of ............................................................................... 9 

Haze, Pamela K., Deputy Assistant Secretary, Office of Budget, Finance, 

Performance and Acquisition, U.S. Department of the Interior ............... 5 

Prepared statement of ............................................................................... 6 

Yonk, Ryan M., Assistant Professor of Political Science, Southern Utah 

University ...................................................................................................... 28 

Prepared statement of ............................................................................... 29 

Additional materials supplied: 

Gila County Board of Supervisors, Letter to The Honorable Paul Gosar 

dated October 13, 2011, submitted for the record ..................................... 41 

National Association of Counties, Statement submitted for the record ....... 51 

(1) 

OVERSIGHT HEARING ON ‘‘PAYMENTS IN 

LIEU OF TAXES.’’ 

Friday, October 14, 2011 

U.S. House of Representatives 

Subcommittee on National Parks, Forests and Public Lands 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittee met, pursuant to call, at 10:07 a.m., in Room 

1324, Longworth House Office Building, The Honorable Rob Bishop 

[Chairman of the Subcommittee] presiding. 

Present: Representatives Bishop, Lamborn, Coffman, McClintock, 

Tipton, and Grijalva. 

Also present: Representative Gosar. 

Mr. BISHOP. The Subcommittee will be in order. The Chairman 

notes the presence of a quorum; grateful for all of you who are 

here. 

The Subcommittee on National Parks, Forests and Public Lands 

is meeting today to hear testimony on the Payment in Lieu of 

Taxes programs initiative. It is very important to all constituents 

of the West. 

Under the Committee Rules, opening statements are limited to 

the Chairman and the Ranking Member of the Subcommittee; however, I ask unanimous consent to include any Members’ opening 

statements in the hearing record if submitted to the Clerk by close 

of business today. And hearing no objections, we will do that. 

I also ask unanimous consent that any member of the Subcommittee or the full committee wishing to participate in today’s 

hearing be allowed to participate from the dais. Even though that 

doesn’t apply to anybody, but we will make that a UC anyway. OK, 

no objections; we are doing it. 

STATEMENT OF THE HONORABLE ROB BISHOP, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF UTAH 

Mr. BISHOP. Today we are going to hear testimony on the history 

and the construction of PILT and how PILT payments are configured and how they impact Federal lands and Federal land management decisions that we have in our communities. 

2 

While PILT is enacted to compensate local governments for the 

loss of property tax revenues for nontaxable Federally owned land, 

it has never fully accounted for the numerous management proscriptions that accompany that particular land. Not all Federal 

public lands are created equal. PILT does not adjust for variations 

in land-use designation, especially if moving from accessible 

multiple-use to a more restrictive or non-impairment management 

status. 

PILT has become an essential lifeline for many rural communities and counties. And since more than half of all the land in the 

West is unfortunately owned and managed by the Federal 

Government, PILT has a significant impact on all rural economies 

of western states. 

PILT is not an equalizer. While PILT is a necessary source of 

funds for rural and primarily western counties, although almost 

every county benefits in some way throughout this country from it, 

it often does not accurately reflect the economic opportunities that 

would be available through active management and use of the Federal public lands. 

When land management decisions reduce access or utilization of 

natural resources, local economies bear the brunt, and too often 

vital economic opportunities and resources, including traditional 

and renewable energy sources, are lost. And again, PILT cannot 

and does not fill that void. PILT alone is not adequate reimbursement for an absentee Federal landlord, especially one that pushes 

additional reductions in access and multiple use on our public 

lands. 

Contrary to claims by the Administration and others, the designation of monuments and wilderness are not a boon to local 

economies but rather a detriment in most scenarios. And I look forward to hearing about the work of Dr. Yonk and his colleagues 

which clearly calls into question the validity of recent testimony 

this Subcommittee had from the Director of Headwaters 

Economics. 

America is in the midst of a recession with elevated unemployment, yet the Obama Administration continues to push a 

wilderness agenda that competes with our natural priorities of job 

creation and domestic energy independence. This is counterproductive. 

At a time when the budgets are tight around the nation, particularly in the rural West, the Obama Administration needs to closely 

evaluate the real impact of advancing a wilderness agenda. To lock 

out millions of acres of public lands in the West without Congressional approval and restricting access for energy production, recreation and other job-creating activities would devastate these rural 

communities that unfairly bear the brunt of the restrictive land 

management designations. 

With the expiration of the full funding of PILT looming in Fiscal 

Year 2012, the interests and livelihoods of all the residents and 

stakeholders should be considered and protected when making land 

use decisions. Land use designations, such as national monuments 

and wilderness, should be initiated at the local level, not out of 

pressure from Washington without adequate understanding of the 

3 

impact on local communities, who are too often left shouldering the 

heavy burden of these dictates. 

The Majority in Congress understands that we are at a critical 

juncture when it comes to managing our national assets and the 

current state of economic mandates that we do more with less. It 

is imperative that we begin to manage our Federal lands and natural resources for maximum returns on conservation, economic and 

public benefit, and improved management of our Federal lands and 

resources will create much-needed jobs, amplify conservation 

efforts and make America more self-reliant. This approach will help 

to keep PILT-reliant counties productive and viable. 

I look forward to hearing from our witnesses today. And I recognize the Ranking Member for his opening statement. 

[The prepared statement of Mr. Bishop follows:] 

Statement of The Honorable Rob Bishop, Chairman, 

Subcommittee on National Parks, Forests and Public Lands 

Today we will hear testimony on the history and construction of PILT, how PILT 

payments are configured and the impact federal land management decisions have 

on surrounding communities. 

While PILT was enacted to compensate local governments for lost property tax 

revenues on non-taxable federally owned land, it never fully accounted for the numerous management prescriptions that accompany that land. 

Not all federal/public lands are created equal. PILT does not adjust for variations 

in land use designations, especially if moving from accessible multiple-use to a more 

restrictive or non-impairment management status. 

PILT has become an essential lifeline for many rural counties. Since more than 

half of all the land in the West is owned and managed by the federal government, 

PILT has a significant impact on the rural economies of Western States. 

PILT is not an equalizer. While PILT is a necessary source of funds for rural, primarily western counties, it often does not adequately reflect the economic opportunity available through active management and use of federal public lands. 

When land management decisions reduce access and utilization of natural resources, local economies bear the brunt and too often vital economic opportunities 

and resources, including traditional and renewable energy resources are lost. Again, 

PILT cannot and does not fill that void. 

PILT alone is not adequate reimbursement for an absentee federal landlord, especially one that pushes additional reductions in access and multiple-use on our public 

lands. 

Contrary to claims by the administration and others, the designation of monuments and wilderness are not a boon to local economies, but rather a detriment in 

most scenarios. 

I look forward to hearing more about the work Dr. Yonk and his colleagues have 

done that clearly calls into question the validity of recent testimony before this Subcommittee by the Executive Director of Headwaters Economics. 

America is in the midst of a recession with elevated unemployment, yet the 

Obama Administration continues to push a ‘‘wilderness agenda’’ that competes with 

our national priorities of job creation and domestic energy independence. This is 

counter-productive. 

At a time when budgets are tight around the nation and particularly in the rural 

West, the Obama Administration needs to closely evaluate the real impact of advancing a ‘‘wilderness agenda.’’ 

To lock-up millions of acres of public lands in the West, without Congressional 

approval, and restricting access for energy production, recreation, and other job-creating economic activities would devastate these rural counties that unfairly bear the 

brunt of these restrictive land management designations. 

With the expiration of full funding for PILT looming in fiscal year 2012, the interests and livelihoods of all residents and stakeholders should be considered and protected when making land use decisions. 

Land use designations such as national monuments and wilderness should be initiated at the local level, not out of pressure from Washington without adequate understanding of the impact on local communities who are too often left shouldering 

the heavy burden of these dictates. 

4 

The Republican Majority in Congress understands that we are at a critical juncture when it comes to managing our nation’s assets and the current state of our 

economy mandates that we do more with less. 

It is imperative that we begin to manage our federal lands and natural resources 

for a maximum return on conservation, economic and public benefit. 

Improved management of our federal lands and resources will create much-needed 

jobs, amplify conservation efforts and make America more self-reliant. This approach will help to keep PILT-reliant counties productive and viable. 

I look forward to hearing from our witnesses today. 

STATEMENT OF THE HONORABLE RAU ́ L M. GRIJALVA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ARIZONA 

Mr. GRIJALVA. Thank you, Mr. Chairman. I am sorry I was tardy, 

and I apologize to the witnesses as well. 

Mr. Chairman, in 1976 Congress created the Payment In Lieu of 

Taxes or PILT program to ensure that county governments receive 

compensation for the presence of public lands within their county 

boundaries. The amounts provided under the PILT program are 

over and above the revenues generated on Federal lands, which are 

shared with local governments. 

Since 1976, under Democratic Majorities, the PILT program has 

been fully funded. When the Republicans took the Majority in 

1994, PILT was under-funded, with appropriations between 40 and 

70 percent of the authorized amount. And it took a Democratic 

Majority in 2008 to restore full funding for PILT as a mandatory 

spending program for the next five years. 

But starting in 2013, PILT will again need to be authorized and 

appropriated by Congress. I am worried that history is about to 

repeat itself with the Republican Majority either allowing PILT to 

expire or targeting the program for significant cuts in funding. 

Just like the Secure Rural Schools program, which the Republicans allowed to expire in the 109th Congress, the Republican 

Majority will have to decide next year what the future is of PILT. 

If programs like PILT and Secure Rural Schools are truly vital to 

our rural communities throughout the West, then we must find 

ways to fully fund them. 

What we must not do is cut PILT and then use the cut as an 

excuse to degrade our environmental safeguards on our public 

lands. Our public lands provide substantial benefits to states and 

local counties from travel and tourism dollars. Our public lands are 

the backbone of the outdoor recreation economy, which generates 

over $730 billion in economic activity, 6.5 million jobs and $88 billion in annual state and Federal tax revenue. 

We need to find bipartisan solutions to helping our rural counties 

meet their budgetary needs. We stand ready to work with the 

Majority on an effective long-term funding solution for PILT. 

I want to thank the witnesses for joining us today and look forward to their thoughts on these proposals. Thank you, and I yield 

back. 

[The prepared statement of Mr. Grijalva follows:] 

Statement of The Honorable Rau ́l Grijalva, Ranking Member, 

Subcommittee on National Parks, Forests and Public Lands 

Mr. Chairman, in 1976, Congress created the Payment in Lieu of Taxes, or PILT, 

program to ensure that county governments receive compensation for the presence 

of public lands within their county boundaries. The amounts provided under the 

5 

PILT program are over and above the revenues generated on federal lands which 

are shared with local governments. 

Since 1976, under Democratic majorities, the PILT program had been fully funded. When the Republicans took the majority in 1994, PILT was underfunded, with 

appropriations between 40 and 70 percent of the authorized amount. And, it took 

a Democratic majority in 2008 to restore full funding for PILT as a mandatory 

spending program for the next five years. 

But starting in 2013, PILT will again need to be authorized and appropriated by 

Congress. I am worried that history is about to repeat itself with the Republican 

Majority either allowing PILT to expire or targeting the program for significant cuts 

in funding. 

Just like the Secure Rural Schools program, which the Republicans allowed to expire in the 109th Congress, the Republican majority will have to decide next year 

what the future of PILT will be. 

If programs like PILT and Secure Rural Schools are truly vital to our rural communities throughout the West, then we must find ways to fully fund them. 

What we must not do is cut PILT, and then use that cut as an excuse to degrade 

our environmental safeguards on public lands. 

Our public lands provide substantial benefits to states and local counties from 

travel and tourism dollars. Our public lands are the backbone of the outdoor recreation economy, which generates over $730 billion in economic activity, 6.5 million 

jobs, and $88 billion in annual state and federal tax revenue. 

We need to find bipartisan solutions to helping our rural counties meet their 

budgetary needs. And, we stand ready to work with the Majority on an effective, 

long-term funding solution for PILT. 

I thank the witnesses for joining us today and look forward to their thoughts on 

these proposals. 

Mr. BISHOP. All right. As I said, we are going to have some problems here. But we may have time, I think we do have time, to get 

at least the first two witnesses’ testimony in. Then we are going 

to have to take a break to go back to votes, and then we will come 

back and finish this panel. 

So, like all of our witnesses, your written testimony will appear 

in the record. We want to hear your oral testimony here, and we 

want you to keep it as best you can to five, this time we need you 

to keep it to five minutes. 

The lights in front of you indicate green, you are still going fine; 

yellow, you have one minute left; please stop when it hits red. 

And with that, we will start with Ms. Pamela Haze, who is the 

Deputy Assistant Secretary for the Office of Budget, Finance, Performance and Acquisition at the Department of the Interior. Ms. 

Haze, please. 

STATEMENT OF PAMELA K. HAZE, DEPUTY ASSISTANT 

SECRETARY, OFFICE OF BUDGET, FINANCE, PERFORMANCE 

AND ACQUISITION, UNITED STATES DEPARTMENT OF THE 

INTERIOR 

Ms. HAZE. Good morning. As you said, I am the Deputy Assistant 

Secretary for Budget, Finance, Performance and Acquisition, and 

executing the Payments In Lieu of Taxes is in my portfolio of programs. 

I have here with me today from the Department of the Interior 

Jason Buckner, Adrienne Moss and Brian Yost. I just wanted to 

mention their names. So, good morning. Thank you for inviting me 

to be a part of this panel this morning. I have a formal statement, 

and I just have a few brief comments, a quick overview of the program if you will and how we manage the program. Many of you are 

6 

already very knowledgeable about the program and its history, so 

hopefully I am not repeating things you already know. 

The Payments in Lieu of Taxes program makes annual payments 

to counties to help offset the costs of services and infrastructure 

that are incurred by these local jurisdictions where certain Federal 

lands are located. Payment eligibility is reserved for local governments that contain nontaxable Federal lands, and these jurisdictions provide services related to public safety, housing, social services, transportation and other services. 

PILT payments are made to counties that have lands within 

them. This includes lands that are in the National Forest System, 

the National Park System, lands managed by the Bureau of Land 

Management, lands affected by the Corps of Engineers and the Bureau of Reclamation Water Resource Development projects. 

We use a formula in allocating PILT. We use a formula that is 

provided in the PILT Act. The annual payment to each county is 

computed based on the number of acres of Federal entitlement land 

within that jurisdiction, and population serves as a cap on the formula. 

The PILT Act also requires that we consider prior-year revenue 

payment amounts from a select number of revenue-sharing programs in the calculation of the payment. 

Since the inception of the program, the Act was passed in 1976, 

the first payment was made in 1977. So, since 1977 and through 

2011, with the last payment we made in June of 2011, the Department of the Interior has made payments totaling $5.5 billion. From 

1977 through 2008, funding for the PILT program was included in 

annual discretionary appropriations, so we sought funding through 

our annual budget request, and it was considered as part of the Appropriations process. 

In 2008, the Emergency Economic Stabilization Act authorized a 

five-year program of mandatory funding for PILT payments. So, beginning in 2008, we made full entitlement payments to the counties 

and have through 2011. In 2011 we made payments of $375 million 

to about 1900 counties. This authorization expires in 2012, as you 

have already mentioned. 

So, a brief overview of the administration of the program. Payments are distributed to counties in June. To ensure they receive 

funding on a timely manner, in most cases the counties have a fiscal year that begins in July, as you know. So, we are trying to accommodate their need to get the money before the end of the fiscal 

year. We use approximately $400,000 to administer the program on an 

annual basis. This is about 0.1 percent of the total program funding. We use a portion of this to make adjustments to prior-year 

payments when counties come in and give us new information or 

Federal agencies change acreage. 

With that, I am going to conclude my remarks. Thank you. 

[The prepared statement of Ms. Haze follows:] 

Statement of Pamela K. Haze, Deputy Assistant Secretary for Budget, 

Finance, Performance and Acquisition, U.S. Department of the Interior 

Mr. Chairman and members of the Committee, I am pleased to have the opportunity to testify today on the Department of the Interior’s Payments-in-Lieu of 

Taxes (PILT) Program. The Administration strongly supports ways that the Federal 

7 

government can fulfill its role of being a good neighbor to local communities, such 

as PILT. 

Background 

The PILT Act (P.L. 94–565) was passed by Congress in 1976 to provide payments 

to local governments in counties where certain Federal lands are located within 

their boundaries. PILT is based on the concept that these local governments incur 

costs associated with maintaining infrastructure on Federal lands within their 

boundaries but are unable to collect taxes on these lands; thus, they need to be compensated for these losses in tax revenues. The payments are made to local governments in lieu of tax revenues and to supplement other Federal land receipts shared 

with local governments. The Department has distributed more than $5.5 billion dollars in PILT payments since these payments began in 1977. 

The annual PILT payments to local governments are computed based on the number of acres of Federal entitlement land within each county or jurisdiction. Federal 

entitlement lands include lands within the National Forest and National Park Systems, those managed by the Bureau of Land Management (BLM), those affected by 

Corps of Engineers and Bureau of Reclamation water resources development 

projects, and certain other Federal lands. The formula for calculating PILT payments takes into account the population within an affected unit of local government, 

the number of acres of eligible Federal land, and the amount of certain Federal land 

payments received by the county in the preceding year. These payments are made 

from Federal revenue generating programs (such as receipts from mineral leasing, 

livestock grazing, and timber harvesting) that the Federal Government transfers to 

the counties. 

Prior to 2008, the amounts available for PILT payments to local governments required an annual appropriation by Congress. In 2007, the last year that PILT funding was subject to appropriation, PILT payments were 64.7 percent of the full authorized level for counties. 

The Emergency Economic Stabilization Act of 2008 (Public Law 110–343) converted PILT to a mandatory program under which counties have received the full 

PILT entitlement level. In 2011, a total of $375.2 million was distributed to approximately 1,850 local government units (mostly counties) in 49 States, the District of 

Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. 

The amount authorized for the program in FY 2011 was $375.6 million, comprising $375.2 million for payments to counties and other local governments and 

$400,000 for expenses to administer the program. 

Conclusion 

The Administration recognizes that PILT is important to local governments, sometimes comprising a significant portion of their operating budgets. The PILT monies 

have been used for critical functions such as local search and rescue operations, 

road maintenance, law enforcement, schools, and emergency services. These expenditures often support the activities of people from around the country who visit or 

recreate on Federal lands. 

As we look forward to reauthorization of the program, the Department hopes to 

continue to work to ensure an efficient and effective program. 

Mr. Chairman, this concludes my prepared statement. I would be pleased to answer any questions that you or the other members may have. 

Mr. BISHOP. Ms. Haze, thank you very much for your testimony. 

We can get one other witness in here easily within our time limit 

before we run out of time for the votes, so I will ask that Dr. Corn, 

who is a Specialist in Natural Resources Policy with the Congressional Research Service, Library of Congress, address us now. 

Same thing, five minutes, please, ma’am. 

STATEMENT OF M. LYNNE CORN, PhD, SPECIALIST IN 

NATURAL RESOURCES POLICY, CONGRESSIONAL RESEARCH 

SERVICE—RSI, LIBRARY OF CONGRESS 

Dr. CORN. Good morning, Mr. Chairman. I have been asked by 

the Subcommittee to describe how the program works for Payments 

in Lieu of Taxes. I have submitted written testimony in the form 

8 

of a CRS report that I updated recently. With the help of some 

slides from that report, I will describe this program. 

The original program was designed as an overlay rather than a 

substitute for Federal payment programs already in existence for 

national forests, BLM lands, wildlife refuges and a few other specified areas. The emphasis was on, one, providing at least some payment to counties whose Federal lands produced little or no revenue 

from Agency payment programs and two, paying proportionately 

more to counties with very low populations that might be less able 

to provide government services. 

The result was a formula that capped payments based on population, subtracted out specified prior-year payments and set a certain minimum payment so that every county with eligible lands got 

at least some PILT payment regardless of prior-year payments 

from other agencies. 

There was no adjustment for inflation. The program relied on 

discretionary spending, and Congress appropriated 90 percent or 

more of the full authorized amount in all but one year from 1977 

to 1994. All states have at least some acreage eligible for PILT payments, but most of the acreage is in western States. 

As the years passed, counties receiving PILT payments raised a 

variety of concerns, particularly the erosion in the value of the payments due to inflation. Some counties also wanted to see more categories of Federal lands or Indian lands become eligible for payments or to move to a system of tax equivalency. 

In 1994, Senator Hatfield held PILT hearings in the Committee 

on Energy and Natural Resources, and many different views were 

expressed as virtually all proposed changes would have helped 

some counties and hurt others. A compromise was reached to raise 

payment rates and then adjust rates in later years for inflation. 

As my next slide shows, the authorization levels rose rapidly. 

The program continued to rely on annual appropriations. So, even 

though appropriations rose rapidly, they did not keep up with the 

authorization level, and counties tended to focus on the gaps between these two sets of bars. 

However, as my next slide shows, whether measured by current 

dollars or by constant inflation-adjusted dollars, the payments did 

go up. The reliance on discretionary spending ended in 2008 with 

Public Law 110-343. This law provided for mandatory spending authority for PILT from Fiscal Year 2008 through Fiscal Year 2012. 

The payment next summer is the last under this provision, and 

after 2012 the program will return to annual appropriations unless 

Congress changes the law. 

To calculate the PILT payment for any given county, you need 

to know the answers to these five questions. One, how many acres 

of eligible lands are in the county? The PILT statute specifies 

which lands are eligible, and I have shown these on page 4 in my 

written testimony. 

Two, what is the population of the county? As my next slide 

shows, no matter how many acres, and regardless of prior-year 

payments, a county’s payments are limited by the population of the 

county, and no county is credited with having more than 50,000 

people. 

9 

Third, what were the previous year’s payments, if any, for all of 

the eligible lands under other payment programs of Federal agencies? In the next slide, note that as prior-year payments, shown 

there on the X axis, increase, the next year’s payments under 

PILT, shown on the Y axis, decrease. Only those payments named 

in the PILT statute produce any offset. Any prior-year payment 

that is not named in PILT as requiring an offset doesn’t count. I 

have shown these prior-year payments that result in an offset in 

Table A-3 in my written testimony. 

Four, does the state have any laws requiring the payments from 

other Federal agencies to be passed through to other independent 

local government entities, such as school districts, rather than 

staying with the county government itself? If they do and the county government never actually receives the funds, then those funds 

don’t count against that county in calculating the next year’s PILT 

payment. 

And five, what was the increase in the consumer price index during the year? My next slide shows a very complicated flow chart 

as to how this calculation is worked out. I would be happy to go 

through the steps in this if the Committee wishes. 

And with that, let me thank you for your invitation to appear 

today, and I would be pleased to answer your questions on this program. 

[The prepared statement of Dr. Corn follows:] 

Statement of M. Lynne Corn, Specialist in Natural Resources Policy, 

Congressional Research Service, Library of Congress 

I have been asked by the Subcommittee to testify on the program known as Payments in Lieu of Taxes (PILT). With this memorandum, I am attaching my written 

testimony—CRS Report RL31392 PILT (Payments in Lieu of Taxes): Somewhat 

Simplified, a report I recently updated on this program. I appreciate this opportunity to testify on this program, and will be pleased to answer your questions. 

PILT (Payments in Lieu of Taxes): Somewhat Simplified 

M. Lynne Corn 

Specialist in Natural Resources Policy 

September 28, 2011 

CRS Report for Congress 

Prepared for Members and Committees of Congress 

Summary 

Under federal law, local governments are compensated through various programs 

for reductions to their property tax bases due to the presence of most federally 

owned land. These lands cannot be taxed, but may create demand for services such 

as fire protection, police cooperation, or simply longer roads to skirt the federal 

property. Some of these programs are run by specific agencies and apply only to that 

agency’s land. The most widely applicable program, administered by the Department of the Interior (DOI), applies to many types of federally owned land, and is 

called ‘‘Payments in Lieu of Taxes,’’ or PILT. The authorized level of PILT payments 

is calculated under a complex formula. This report addresses only the PILT program 

administered by DOI. There is no PILT-like program generally applicable to military lands, but a small fraction of military lands are eligible for the DOI PILT program. Furthermore, PILT does not apply to Indian-owned lands, virtually none of 

which are subject to local taxes. 

This report explains PILT payments, with an analysis of the five major factors 

affecting the calculation of a payment to a given county. It also describes the effects 

of certain changes in PILT in 2008. Previously, annual appropriations were necessary to fund PILT, but a 2008 provision (in P.L. 110–343) for mandatory spending 

10 

ensured that, beginning with FY 2008 and continuing through the payment to be 

made in 2012, all counties will receive 100% of the authorized payment. Efforts have 

begun to convert the temporary mandatory spending into a permanent feature of 

PILT. However, given current attention to debt and deficits on the one hand, and 

the fiscal pressures on local governments on the other, extension of the mandatory 

spending feature seems likely to be controversial. If the provision is not extended, 

the program would return to funding through annual appropriations. 

Other issues have been the inclusion of additional lands under the PILT program, 

particularly some or all Indian lands, which are not now eligible for PILT. Most categories of Indian-owned lands cannot be taxed by local governments, though they 

generally enjoy county services. In some counties, this means a very substantial portion of the land is not taxable. The remaining tax burden (for roads, schools, fire 

and police protection, etc.) therefore falls more heavily on other property owners. To 

help compensate for this burden, some counties have proposed that Indian lands 

(variously defined) be included among those eligible for PILT payments. Other lands 

mentioned from time to time for inclusion include those of the National Aeronautics 

and Space Administration, and the Departments of Defense and Homeland Security. 

In addition, some counties would like to revisit the compensation formula and emphasize a payment rate more similar to property tax rates (which vary widely 

among counties), a feature that would be a major change in counties with high property values. Finally, for lands in the National Wildlife Refuge System (NWRS), some 

would argue that all lands of the system should be eligible for PILT, rather than 

limiting the PILT payments to lands reserved from the public domain and excluding 

PILT payments for acquired lands. The exclusion of NWRS-acquired lands affects 

primarily counties in eastern states. 

Contents 

Introduction 

Changes to PILT in the 110th Congress 

How PILT Works: Five Steps to Calculate Payment 

Step 1. How Many Acres of Eligible Lands Are There? 

Step 2. What Is the Population in the County? 

Step 3. Are There Prior-Year Payments from Other Agencies? 

Step 4. Does the State Have Pass-Through Laws? 

Step 5. What Is This Year’s Consumer Price Index? 

Putting It All Together: Calculating a County’s Payment 

National Totals 

From Authorization to Appropriation 

Current Issues 

Inclusion of Indian Lands 

Inclusion of Urban Lands and Tax Equivalency 

National Wildlife Refuge Lands 

Figures 

Figure 1. Total PILT Payments, FY1993–FY2011: Appropriations in Current and Inflation-Adjusted Dollars (to 2010) 

Figure 2. Total PILT Payments, FY1993–FY2011 Authorized Amount and Appropriation 

Figure 3. Ceiling Payments Based on County Population Level, FY2011 

Figure 4. PILT Payment Level as a Function of Specific Prior Payments (FY2011) 

Figure 5. Steps in Calculating PILT for Eligible Federal Lands 

Tables 

Table 1. PILT Payments to Selected Urban Counties, FY2011 

Table 2. NWRS Acres Eligible for PILT in Selected States, FY2010 

Table A–1. Total PILT Payments, FY1993–FY2011: Appropriations in Current and 

Inflation-Adjusted Dollars (to 2010) 

Table A–2. Total PILT Payments, FY1993–FY2011, Authorized Amount and Appropriation 

Table A–3. Prior-Year Payment Laws That Are Offset Under Next PILT Payment 

Appendixes 

Appendix. PILT Data Tables 

Contacts 

Author Contact Information. 

11 

Introduction 

Generally, federal lands may not be taxed by state or local governments unless 

the governments are authorized to do so by Congress. Because local governments 

are often financed by property or sales taxes, this inability to tax the property values or products derived from the federal lands may affect local tax bases, sometimes 

significantly. Instead of authorizing taxation, Congress has usually chosen to create 

various payment programs designed to compensate for lost tax revenue. These programs take various forms. Many pertain to the lands of a particular agency (e.g., 

the National Forest System or the National Wildlife Refuge System). 1 The most 

wide-ranging payment program is called ‘‘Payments in Lieu of Taxes’’ or PILT. 2 It 

is administered by the Department of the Interior and affects most acreage under 

federal ownership. Exceptions include most military lands and lands under the Department of Energy (DOE lands have their own smaller payment program). 3 In 

FY2011, the PILT program covered 606.9 million acres, or about 94% of all federal 

land. 

The Payments in Lieu of Taxes Act of 1976 (P.L. 94–565, as amended, 31 U.S.C. 

§§ 6901–6907) was passed at a time when U.S. policy was shifting from one of disposal of federal lands to one of retention. The policy meant that the retained lands 

would no longer be expected to enter the local tax base at some later date. Because 

of that shift, Congress agreed with recommendations of a federal commission that 

if these federal lands were never to become part of the local tax base, some compensation should be offered to local governments to make up for the presence of 

non-taxable land within their jurisdictions. 4 Moreover, there was a long-standing 

concern that some federal lands produced large revenues for local governments, 

while other federal lands produced little or none. Many Members, especially those 

from western states with a high percentage of federal lands, felt that the imbalance 

needed to be addressed. The resulting law authorizes federal PILT payments to local 

governments that may be used for any governmental purpose. 

Many of the issues addressed when PILT was created have continued. One issue 

is the appropriate payment level, complicated by later erosion of the purchasing 

power of the payments due to inflation. For many years, counties held that payments were effectively declining because of inflation. Then PILT was amended in 

1994. The authorized payment level went up and was to be adjusted annually for 

inflation, but was still subject to annual appropriations. Figure 1 shows a major increase in the actual and inflation-adjusted dollars appropriated for PILT from 

FY1993 to 

12 

But the 1994 amendments, designed to overcome years of erosion due to inflation, 

caused the authorized payment level to increase still faster. (See Figure 2.) 

Critics of PILT cite examples of what they view as its ‘‘quirkiness.’’ First, while 

there is no distinction between acquired and public domain lands 6 for other categories of eligible lands, acquired lands of the Fish and Wildlife Service (FWS) are 

not eligible for PILT—to the consternation of many states in the East and Midwest, 

where nearly all FWS lands were acquired. Second, while payments under the Secure Rural Schools (SRS) program 7 require an offset in the next year’s PILT payment for certain lands under the jurisdiction of the Forest Service, if the eligible 

lands are under the jurisdiction of the Bureau of Land Management (BLM), no reduction in the next year’s PILT payment occurs. 8 Third, while payments under the 

Bankhead-Jones Farm Tenant Act (7 U.S.C. § 1012) require a reduction in the next 

year’s PILT payment if the lands are under BLM, no such reduction occurs if 

Bankhead-Jones payments are for lands under the Forest Service. Fourth, some of 

the ‘‘units of general local government’’ 9 that receive large payments have other 

substantial sources of revenue, while some of the counties receiving little are relatively poor. Fifth, a few counties which receive very large payments from other federal revenue-sharing programs (because of valuable timber, mining, recreation, and 

other land uses) nonetheless are also authorized to receive a minimum payment 

($0.33 per acre) 10 from PILT, thus somewhat cancelling out the goal of evening payments across counties. Sixth, in some counties the PILT payment greatly exceeds 

the amount that the county would receive if the land were taxed at fair market 

value, while in others it is much less. Given such problems, and the complexity of 

federal land management policies, consensus on substantive change in the PILT law 

has been elusive, particularly when Congress has a stated goal of reducing federal 

expenditures. 


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Changes to PILT in the 110th Congress 

The Continuing Appropriations Act, 2009 (P.L. 110–329), provided the FY2008 

level ($228.9 million) through March 6, 2009; if this had been the full-year appropriation, it would have constituted roughly 61% of the figure estimated for full payment of the FY2009 authorized level. However, Section 601(c) of Title VI of 

P.L. 110–343 (the Emergency Economic Stabilization Act of 2008) provided for mandatory spending of the full authorized level for five years—FY2008-FY2012. For 

FY2008, an additional payment was made to raise the FY2008 level to the full authorized amount, and for FY2009–FY2012, the payments are at 100% of the authorized amount. 

How PILT Works: Five Steps to Calculate Payment 

Calculating a particular county’s PILT payment first requires answering several 

questions: 

1. How many acres of eligible lands are in the county? 

2. What is the population of the county? 

3. What were the previous year’s payments, if any, for all of the eligible lands 

under the other payment programs of federal agencies? 11

4. Does the state have any laws requiring the payments from other federal 

agencies to be passed through to other local government entities, such as 

school districts, rather than staying with the county government? 

5. What was the increase in the Consumer Price Index during the year? 

Each of these questions will be discussed below. Finally, their use in the computation of each county’s payment is described. 


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Step 1. How Many Acres of Eligible Lands Are There? 

Nine categories of federal lands are identified in the law as eligible for PILT payments: 12

1. lands in the National Park System; 

2. lands in the National Forest System; 

3. lands administered by the Bureau of Land Management; 

4. lands in the National Wildlife Refuge System that are withdrawn from the 

public domain; 

5. lands dedicated to the use of federal water resources development projects; 13

6. dredge disposal areas under the jurisdiction of the U.S. Army Corps of Engineers; 

7. lands located in the vicinity of Purgatory River Canyon and Pin ̃ on Canyon, 

Colorado, that were acquired after December 31, 1981, to expand the Fort 

Carson military reservation; 

8. lands on which are located semi-active or inactive Army installations used 

for mobilization and for reserve component training; and 

9. certain lands acquired by DOI or the Department of Agriculture under the 

Southern Nevada Public Land Management Act (P.L. 105–263). 

In addition, if any lands in the above categories were exempt from real estate 

taxes at the time they were acquired by the United States, those lands are not eligible for PILT, except in three circumstances: 

1. land received by the state or county from a private party for donation to the 

federal government within eight years of the original donation; 

2. lands acquired by the state or county in exchange for land that was eligible 

for PILT; or 

3. lands in Utah acquired by the United States if the lands were eligible for 

a payment in lieu of taxes program from the state of Utah. 

Only the nine categories of lands (plus the three exceptions) on this list are eligible for PILT payments; other federal lands—such as military bases, post offices, federal office buildings, and the like—are not eligible for PILT. The exclusion of lands 

in the National Wildlife Refuge System that are acquired is an interesting anomaly, 

and may reflect nothing more than the House and Senate committee jurisdictions 

at the time P.L. 94–565 was enacted. 14


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Step 2. What Is the Population in the County? 

The law restricts the payment a county may receive based on population. Under 

the schedule provided in 31 U.S.C. Section 6903, counties are paid at a rate that 

varies with the population; counties with low populations are paid at a high rate 

per person, and populous counties are paid less per person. For example, for 

FY2011, a county with a population of 1,000 people will not receive a PILT payment 

over $162,980 ($162.98 per person); a jurisdiction with a population of 30,000 will 

not receive a payment over $2,445,300 ($81.51 per person). And no county is credited with a population over 50,000. Consequently, in FY2011, at the authorized payment level of $65.20 per person, no county may receive a PILT payment over 

$3,260,000 (50,000 x $65.20/person) regardless of population. Figure 3 shows the relationship between the population of a county and the maximum PILT payment. 

Step 3. Are There Prior-Year Payments from Other Federal Agencies? 

Federal land varies greatly in revenue production. Some lands have a large volume of timber sales, some have recreation concessions such as ski resorts, and some 

generate no revenue at all. Some federal lands have payment programs for state or 

local governments, and these may vary markedly from year to year. To even out the 

payments among counties and prevent grossly disparate payments, Congress provided that the previous year’s payments on eligible federal lands from specific payment programs to counties would be subtracted from the PILT payment of the following year. So for a hypothetical county with three categories of eligible federal 

land, one paying the county $1,000, the second $2,000, and the third $3,000, then 

$6,000 would be subtracted from the following year’s PILT payment. Most counties 

are paid under this offset provision, which is called the standard rate. In Figure 4, 

the standard rate is shown by the sloping portion of the line, indicating that as the 

sum of the payment rates from other agencies increases, the PILT payment rate declines on a dollar-for-dollar basis. 


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At the same time, Congress wanted to ensure that each county got some PILT 

payment, however small, even if the eligible lands produced a substantial county 

payment from other agencies. If the county had payments from three federal payment programs of $1,000, $2,000, and $1 million, for instance, subtracting $1.003 

million from a small PILT payment would produce a negative number—meaning no 

PILT payment to the county at all. In that case, a minimum rate applies, which 

does not deduct the other agencies’ payments. In Figure 4, the flat portion to the 

right shows that, after the other agencies’ payments reach a certain level ($2.42 per 

acre in FY2011), the rate of the PILT payment remains fixed (at $0.33 per acre in 

FY2011). 

The payments made in prior years that count against future PILT payments are 

specified in law (16 U.S.C. § 6903(a)(1)). Any other payment programs beyond those 

specified would not affect later PILT payments. These specified payments are shown 

in Table A–3. Eligible lands under some agencies (e.g., National Park Service and 

Army Corps of Engineers) have no payment programs that affect later PILT payments. 

Step 4. Does the State Have Pass-Through Laws? 

Counties may receive payments above the calculated amount described above, depending on state law. Specifically, states may require that the payments from federal land agencies pass through the county government to some other entity (typically a local school district), rather than accrue to the county government itself. 

When counties in a ‘‘pass-through’’ state are paid under the formula which deducts 

their prior year payments from other agencies (e.g., from the Refuge Revenue Sharing Fund (RRSF; 16 U.S.C. § 715s of FWS), or the Forest Service (FS) Payments to 

States (16 U.S.C. § 500) 15), the amount paid to the other entity is not deducted from 

the county’s PILT payments in the following year. According to DOI: 

Only the amount of Federal land payments actually received by units of government in the prior fiscal year are deducted. If a unit 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 any other single or special purpose 

district, payments are considered to have not been received by the unit of local 

government and are not deducted from the Section 6902 payment. 16

For example, if a state requires all counties to pass along some or all of their 

RRSF payments from FWS to the local school boards, the amount passed along is 

not deducted from the counties’ PILT payments for the following year (31 U.S.C. 

§ 6907). Or if two counties of equal population in two states each received $2,000 

under the FS Payments to States, and State #1 pays that amount directly to the 

local school board, but State #2 does not, then under this provision, the PILT payment to the county in State #1 will not be reduced in the following year, but that 

of the county in State #2 will drop by $2,000. State #1 will have increased the total 

revenue coming to the state and to each county by taking advantage of this feature. 17


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Consequently, the feature of PILT that was apparently intended to even out payments among counties (at least of equal population size) may not have that result 

if the state takes advantage of this pass-through feature. 18 Under 31 U.S.C. Section 

6903(b)(2), each governor gives the Secretary of the Interior an annual statement 

of the amounts actually paid to each county government under the relevant federal 

payment laws. DOI checks each governor’s report against the records of the payment programs of federal agencies. 

In addition, there is a pass-through option for the PILT payment itself. A state 

may require that the PILT payment itself go to a smaller unit of government, contained within the county (typically a school district) (16 U.S.C. § 6907). If so, one 

check is sent by the federal government to the state for distribution by the state 

to these smaller units of government. The distribution must occur within 30 days. 

As of FY2011, Wisconsin is the only state to have selected this feature of PILT. 

Step 5. What Is This Year’s Consumer Price Index? 

A provision in the 1994 amendments to PILT adjusts the authorization levels for 

inflation. The standard and minimum rates, as well as the payment ceilings, are 

adjusted each year. Under 31 U.S.C. Section 6903(d), ‘‘the Secretary of the Interior 

shall adjust each dollar amount specified in subsections (b) and (c) to reflect changes 

in the Consumer Price Index published by the Bureau of Labor Statistics of the Department of Labor, for the 12 months ending the preceding June 30.’’ This is an unusual degree of inflation adjustment; no other federal land agency’s payment program has this feature. But as will be shown below, increases in the authorization 

do not necessarily lead to a commensurate increase in the funds received by the 

counties. 

Putting It All Together: Calculating a County’s Payment 

Knowing the answers to these questions, one can then make two comparisons to 

calculate the authorized payment level for a county. (Figure 5 shows a flow chart 

of the steps in these comparisons.) All charts and comparisons in this report are 

based on FY2011 payment levels. 

Alternative A. Which is less: the county’s eligible acreage times $2.42 per acre or 

the county’s ceiling payment based on its population? Pick the lesser of these two 

numbers. From it, subtract the previous year’s total payments for these eligible 

lands under specific payment or revenue-sharing programs of the federal agencies 

that control the eligible land. 19 The amount to be deducted is based on an annual 

report from the governor of each state to DOI. This option is called the standard 

provision. 

Alternative B. Which is less: the county’s eligible acreage times $0.33 per acre or 

the county’s ceiling payment? Pick the lesser of these two. This option is called the 

minimum provision, and is used in the counties that received relatively large payments (over $2.09 per acre for FY2011) from other federal agencies in the previous 

year. 

The county is authorized to receive whichever of the above calculations—(A) or 

(B)—is greater. This calculation must be made for all counties individually to determine the national authorization level. From the program’s inception through 

FY2007, the authorized payments were subject to annual appropriations, and if appropriations were insufficient for full funding, each county received a pro rata share 

of the appropriation. After passage of P.L. 110–343, each county receives the full 

authorized amount for FY2008–FY2012. 

The combination of specific payments and PILT in the standard option means that 

reductions (or increases) in those other payments in the previous year could be exactly offset by increases (or reductions) in PILT payments. However, provided that 

the county’s population is not so low as to affect the outcome, PILT payments cannot fall below $0.33 per acre for FY2011 (see Alternative B, above), so the full offset 

occurs only when the other federal payments in the previous year total less than 

$2.09 per acre (i.e., the maximum payment of $2.42 per acre minus the $0.33 per 

acre minimum payment from PILT). 20

18 

The standard option, with its offset between agency-specific payments and PILT 

payments, still does not guarantee a constant level of federal payments to counties, 

because of the time lag in determining PILT payments. Federal payments for a 

given fiscal year are generally based on the receipts of the prior year. PILT payments of the following fiscal year are offset by these payments. 

To illustrate, consider a county whose only eligible federal lands are under the 

jurisdiction of FWS. If the federal receipts on the FWS lands drop in FY2011 (compared to FY2010), payments in FY2012 from the FWS Refuge Revenue Sharing 

Fund will fall. PILT payments will therefore increase to offset the drop—in FY2013. 

(This example assumes that the PILT payment is calculated under the standard option.) The counties will be authorized to receive at least $2.42 per acre from RRSF 

and PILT payments combined, 21 but the two payments would not come in the same 

year. Consequently, if RRSF payments fall from year to year, the combined payments in the given year would be less than $2.42 per acre, but if RRSF payments 

rise, the authorized combined payment in the given year would be more than $2.42 

per acre. 

National Totals 

Information from all counties with eligible land is needed on a national scale before an aggregate figure for the nation can be calculated precisely, and consequently 

no precise dollar figure can be given in advance for each year’s PILT authorization 


70721.006.eps
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level. 22 However, because the amount for full authorization for FY2011 has been 

calculated, and because major changes in the factors stated above are not likely to 

decrease the payments at the national level, the full authorization level for FY2012 

seems likely to be similar to the amount shown for full authorization in FY2011, 

which was $375.5 million, even though individual counties’ payments may vary. 

From Authorization to Appropriation 

Until about 1994, the full amount authorized under the law’s formula had generally been appropriated, with a few exceptions such as sequestration under the 

Gramm-Rudman-Hollings Act (Title II of P.L. 99–177). But the buying power of the 

payments fell due to inflation. In response, Congress amended the law in 1994 

(P.L. 103–397). 

The amendment focused on increasing the total payments, building in inflation 

protection, and making certain additional categories of land eligible. 23 After the 

amendments passed, the increasing discrepancy between appropriations and the 

rapidly rising authorization levels led to even greater levels of frustration among 

local governments, and prompted intense interest among some Members in increasing appropriations, until the passage of P.L. 110–343. (See Figure 2, above.) Whether Congress will make the mandatory spending authority permanent remains to be 

seen. 

Current Issues 

While the enactment of five years of mandatory spending put the issue of full 

funding to rest for the time being, no doubt county governments will strongly support continuing mandatory spending for PILT. This question has been the biggest 

issue facing the program in the 112th Congress, particularly given congressional debate over spending levels in general. Three other issues are also being debated: inclusion of Indian or other categories of lands; tax equivalency, especially for eligible 

urban lands; and payments affecting the National Wildlife Refuge System. 

Inclusion of Indian Lands 

While the inclusion of other lands (e.g., military lands generally or those of specific agencies such as the National Aeronautics and Space Administration) under 

the PILT program has been mentioned from time to time, some counties with many 

acres of non-taxable Indian lands within their boundaries have long supported adding Indian lands to the list of lands eligible for PILT. The primary arguments made 

are that these lands receive benefits from the county, such as road networks, but 

Indian residents do not pay for them with property taxes; on the other hand, the 

federal government does not actually own these lands. 

The complexity of the PILT formula makes it very difficult to calculate the consequences of such a move, either for authorization levels or appropriation levels. Additionally, Congress would have to decide what sorts of ‘‘Indian lands’’ would be eligible for such payments and a variety of other complex issues. 24 Once the eligible 

categories were determined, Congress might wish to limit payments to counties with 

more than some minimum percentage of Indian lands within their borders. Regardless, even a very restrictive definition of ‘‘Indian lands’’ seems likely to add many 

millions of acres to those already eligible. Once the criteria for eligibility were fixed, 

it would still be difficult to determine the effect on authorization levels. To paint 

an extreme example, if all of the eligible Indian lands were in counties whose PILT 

payments were already capped due to the population ceiling, inclusion of Indian 

lands would have no effect on PILT authorization levels. 

As long as mandatory spending is in place, appropriations would go up to fund 

the newly eligible lands. If mandatory spending expires and annual appropriations 

are less than the authorized level, each county would receive a pro rata share of 

the full authorized payment level. Individual counties whose eligible acres had 

jumped markedly with the inclusion of Indian lands might receive substantially 

more than in the past. Other counties (particularly those with few or no eligible Indian acres) would receive a smaller fraction of the authorized amount as limited dollars would be distributed among more lands. 

Inclusion of Urban Lands and Tax Equivalency 

Some observers have wondered whether urban federal lands are included in the 

PILT program. The response is that urban lands are not excluded from PILT under 

the current law. For example, in FY2011, the counties in which Sacramento, Chicago, and Cleveland are found, as well as the District of Columbia, all received PILT 

payments (see Table 1), though the property tax on similar, but non-federal, lands 

would likely have been substantially greater. 

20 

Eastern counties, which tend to be small, rarely have large populations and large 

eligible acreage in the same county. On the other hand, western counties tend to 

be very large and may have many eligible acres, and some, like Sacramento, may 

have large populations as well. Furthermore, as the cases of Arlington and the District illustrate, PILT payments are by no means acting as an equivalent to property 

tax payments, because if the 6,963 acres in the District or the 27 acres in Arlington 

were owned by taxable entities, those entities would surely pay much more than 

$25,087, or $0, respectively, in property taxes. 

Because the formula in PILT does not reflect an amount commensurate with property taxes, counties such as these might support a revised formula that would approach property tax payments. 

National Wildlife Refuge Lands 

As noted above, lands in the National Wildlife Refuge System (NWRS) that were 

withdrawn from the public domain are eligible for PILT, and those that were acquired are not. In addition, the National Wildlife Refuge Fund (NWRF, also called 

the Refuge Revenue-Sharing Fund, or RRSF) relies on annual appropriations for full 

funding. For FY2011, payments for NWRF are approximately 38% of the authorized 

level. For refuge lands eligible for PILT, some or perhaps all of the NWRF payment 

will be made up for in the following year’s PILT payment, but for acquired lands, 

this will not occur because they are not eligible for PILT. Congress may consider 

making all refuge lands eligible for PILT, and/or providing mandatory spending for 

NWRF, as it has for PILT. Eastern counties could be the largest beneficiaries of 

such a change, although some western states may also have many NWRS acres that 

are not currently eligible for PILT. (See Table 2 for selected state examples.) Adding 

the 10.9 million acres of NWRS lands currently ineligible for PILT would increase 

PILT lands by 1.8%. 

Appendix. PILT Data Tables 

The first two tables below show the data presented in Figures 1 and 2. The third 

shows the agency payments that offset payments under PILT in the following year. 


70721.007.eps 70721.008.eps
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70721.012.eps
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ENDNOTES 

1For more information on some of these agency-specific payment programs, see CRS 

Report RL30335, Federal Land Management Agencies’ Mandatory Spending Authorities, coordinated by Ross W. Gorte; and CRS Report R41303, Reauthorizing 

the Secure Rural Schools and Community Self-Determination Act of 2000, by 

Ross W. Gorte. The program under the Department of Energy is described in 

U.S. General Accounting Office [now Government Accountability Office], Energy 

Management: Payments in Lieu of Taxes for DOE Property May Need to Be Reassessed, GAO/RCED–94–204 (Washington, DC: July 1994). 2 U.S. Department of the Interior, Office of Budget, Payments in Lieu of Taxes: National Summary Fiscal Year 2010, Washington, DC, 2010. A similar document 

is issued every year; each contains tables for payments and acreage by state 

and county. To query data from the most recent fiscal year, see http:// 

www.doi.gov/pilt/. 3 A program to support local schools for the presence of children of federal employees, including military dependents, provides some support to local governments, 

however, and to some extent compensates for lost property tax revenue when 

military families live on federally owned land. For more information, see CRS 


70721.013.eps
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Report RL33960, The Elementary and Secondary Education Act, as Amended by 

the No Child Left Behind Act: A Primer, by Rebecca R. Skinner. 4Public Land Law Review Commission, One third of the Nation’s Land: A Report 

to the President and to the Congress, Washington, DC, June 1970, pp. 235–241. 

FY2011. 5 Inflation adjustments in this report use the implicit price deflator for the Gross 

Domestic Product. See http://faq.bea.gov/cgi-bin/bea.cfg/php/enduser/ 

std_adp.php?p_faqid=513. 6 Acquired lands are those which the United States obtained from a state or individual. Public domain lands are generally those which the United States obtained from a sovereign nation. 7See CRS Report R41303, Reauthorizing the Secure Rural Schools and Community 

Self-Determination Act of 2000, by Ross W. Gorte. 8 All of the BLM lands eligible for SRS payments are in Oregon. 

9 Unit of general local government is defined in the law (31 U.S.C. § 6901(2)) as ‘‘a 

county (or parish), township, borough, or city where the city is independent of 

any other unit of general local government, that (i) is within the class or classes 

of such political subdivisions in a State that the Secretary of the Interior, in 

his discretion, determines to be the principal provider or providers of governmental services within the State; and (ii) is a unit of general government as determined by the Secretary of the Interior on the basis of the same principles 

as were used on January 1, 1983, by the Secretary of Commerce for general statistical purposes’’ plus the District of Columbia, Puerto Rico, Guam, and the 

Virgin Islands. To avoid the use of the unwieldy unit of general local government, the word county will be used in the rest of this report, and must be understood here to be equivalent to the above definition. This shorthand is often 

used by DOI. 10This and subsequent references to payment rates and ceilings are based on 

FY2011 figures unless otherwise noted. 11 Regardless of how many agencies have jurisdiction over eligible lands in a county, 

all of the payments specified in 31 U.S.C. § 6903(a)(1) are added together and 

deducted from the following year’s single PILT payment. Any other federal 

lands payments the county may get that are not specified in that provision are 

not deducted. The formula in 31 U.S.C. § 6903 sets a cap on the total PILT payment for all of the eligible land in the county. 12See 31 U.S.C. § 6901. The law refers to these nine categories of lands as ‘‘entitlement lands,’’ and the term is used throughout the act. However, because entitlement is a word which is used in a very different, and potentially confusing, context in the congressional budget process, these lands will be called eligible lands 

in this report. 13These lands are under the jurisdiction of the Bureau of Reclamation, for the most 

part. 14 At the time, jurisdiction over the National Wildlife Refuge System (NWRS) generally was in one committee, while jurisdiction over public domain lands was 

within the jurisdiction of a different committees. This was true in both the 

House and Senate. The committees considering PILT had no jurisdiction over 

the acquired lands within the NWRS. 15 Under 16 U.S.C. § 500, these payments are made to the states or territories, and 

must be used for schools or roads in the counties where the national forests are 

located. Each state has its own rules on the mechanics of that transfer, on the 

proportion to be used for roads and the proportion for schools. Some states direct that the education portion be given directly to school boards. For more information see CRS Congressional Distribution Memo, Forest Service RevenueSharing Payments: Distribution System, by Ross W. Gorte, Nov. 19, 1999. 16 U.S. Dept. of the Interior, Payments in Lieu of Taxes: National Summary, Fiscal 

Year 2010, p. 11. 17 Note that even though a county as a whole may benefit from this provision, the 

county government itself will not, because it forgoes the revenues given directly 

to its school system. 18 However, the Supreme Court has held that states cannot direct counties to spend 

their PILT payments (i.e., payments under the DOI-managed program described 

in this report) for particular purposes, once they have actually received their 

PILT payment. Lawrence County v. Lead-Deadwood School District, 469 U.S. 

256 (1985). 19Payments under the Secure Rural Schools program for Forest Service lands (but 

not Bureau of Land Management lands) are included among those prior year 

payments to be deducted. See CRS Report R41303, Reauthorizing the Secure 

27 

Rural Schools and Community Self-Determination Act of 2000, by Ross W. 

Gorte. 20To illustrate more concretely, imagine each county as a large bucket, whose sides 

are marked off in ‘‘$/acre.’’ PILT, in effect, checks the payment already in the 

bucket from other agencies, then adds at least enough money to the bucket to 

bring it to the $2.42/acre mark. Moreover, if the bucket is already above the 

$2.09/acre mark, PILT adds 33¢/acre, regardless of the amount in the bucket 

already. The money bucket could reach levels of $15/acre or more, with the last 

33¢ added by PILT. The county population ceilings might then be thought of 

as holes in the sides of some of the buckets that prevent the buckets from filling 

beyond a certain level for that bucket (i.e., county). 21 An exception would occur if the county’s population is so small that the county 

is affected by the PILT ceiling on payments due to population. 22DOI does not include estimated full payment levels in its annual budget justification to Congress, and confines itself to the Administration’s request for the year. 

However, DOI’s annual report of current year PILT payments to counties includes this information. 23Other important issues in 1994 were the question of the equity of the payments 

and the balance struck in the payment formula (a) between heavily and sparsely populated communities, (b) between those with federal lands generating large 

revenues and those with lands generating little or no revenue, and (c) between 

the amounts paid under PILT and the amounts that would be paid if the lands 

were simply taxed at fair market value. But these issues were not addressed 

in the 1994 amendments and have scarcely been mentioned in the debate since 

then. 24The many classifications of ‘‘Indian lands’’ include trust lands, restricted lands, 

and fee (private) lands, both on and off reservations. Trust lands are lands held 

by the federal government in trust for an Indian tribe or individual. Restricted 

lands are lands held by an Indian tribe or individual but subject to federal restrictions on alienation (e.g., sale) or encumbrance (e.g., mortgaging). Most, but 

by no means all, Indian trust and restricted lands are on Indian reservations. 

Trust and restricted lands, whether on or off reservations, are not subject to 

state or local land taxes. On-reservation Indian fee lands may or may not be 

subject to state and local land taxes, depending on the federal statute under 

which the land was fee-patented. Off-reservation Indian fee lands are generally 

subject to state and local land taxes. (Indian reservations may also include nonIndian fee lands, which are subject to state and local taxation.) Alaskan Native 

corporation lands (none of which are trust lands) are affected by the Alaska Native Claims Settlement Act’s limits on state taxation. Congress would have to 

decide which of these many classifications of Indian lands would be subject to 

PILT benefits. Further, Congress might choose to distinguish between Indian 

lands which have never been taxed by a county or state versus those Indian 

lands that were once taxable but which were acquired into non-taxable status 

after some specified date. 

Mr. BISHOP. Dr. Corn, thank you. And thank you for keeping 

within the five minutes. I know that was a lot of material to cover 

in that short period of time. 

We are now going to call a recess to go vote. There are only a 

couple, so I am estimating maybe 15 minutes, 20 at the most unless something weird happens on the Floor. 

So, I would ask you if you would just be kind enough to do that 

when we come back. Dr. Yonk, we will take your testimony, and 

then we will turn to the Committee for questions. 

[Recess.] 

Mr. BISHOP. OK. The Committee will come back to order. I apologize once again for the length of our delay. Let us just say something weird happened on the Floor. 

So, with that, we thank the two panelists who have spoken already. We have yet to hear the testimony from Dr. Ryan Yonk from 

Southern Utah University. Go, Thunderbirds. And your old coach 

is not related. So, we are happy to hear your testimony if you 

would, please. 

28 

STATEMENT OF RYAN M. YONK, ASSISTANT PROFESSOR OF 

POLITICAL SCIENCE, SOUTHERN UTAH UNIVERSITY 

Dr. YONK. Great. Chairman Bishop, Ranking Member Grijalva 

and members of the Subcommittee, I appreciate the opportunity to 

share with you the results of a number of studies conducted by 

some colleagues of mine at Utah State University and myself, 

Brian Steed, who is here with me today, and then Dr. Randy Simmons. 

As I said, as you introduced, my name is Ryan Yonk, and I am 

Assistant Professor of Political Science at Southern Utah University, with a primary emphasis in the issues that surround public 

lands and how they impact rural communities. 

I will skip the background in PILT that we have received from 

the other witnesses today other than to say that the fundamental 

logic of PILT funds was to prevent the systematic disadvantaging 

of counties where vast Federal land holdings would be forever excluded from the taxable land base. And this initial recognition of 

the potential harms of these large, permanent Federal ownership 

has unfortunately given way to claims that suggest this ownership 

imposes not a cost to local communities but a benefit regardless of 

the types of lands that are owned. 

Questions about the effectiveness and importance of PILT should 

explore the tradeoffs that occur when large tracts of land are Federally owned and the opportunity costs that arise from these sorts 

of holdings. 

Beginning in 2004, the Center for Public Lands and Rural Economics at Utah State University began a series of studies funded 

by the Department of Agriculture to investigate the effects these 

public lands have on rural communities. These studies have focused on healthcare markets, social services, education, the effect 

of wilderness on life quality and on the economic conditions, and 

all share similar results, suggesting that across a wide variety of 

policy areas, the presence of public lands has a non-positive effect 

on rural communities at best and a negative effect at worst. 

For example, we find with regards to education that one of the 

effects of large Federal ownership is an increase in the size of the 

county and school district, resulting in increased costs of administration and a reduction due to the Federal land ownership in the 

tax base available to provide the service. 

One other short example suggests that public-lands counties are 

disadvantaged directly in their economic conditions. Our research 

indicates that communities with 25 percent of their gross acreage 

held by the Federal Govqernment have an average household income that is between $741 and $1450 per year less than their nonpublic-lands counterpart. 

This is not to say that these funds are not an essential portion, 

these PILT funds, but rather that they are not the panacea that 

corrects for the myriad of other effects of large-scale Federal land 

ownership. Indeed, counties with substantial public lands are severely disadvantaged when PILT payments are reduced or delayed. 

We have sort of three examples to present that call into question 

the idea that in fact Federal lands are a net positive for the communities. 

29 

1Language directly taken from the Department of the Interior Website www.doi.gov/pilt/summary.html 

The first is a study that was conducted on the Grand StaircaseEscalante Monument in Utah, designated in 1996 by President Bill 

Clinton. And our evaluation of the monument focused on the most 

basic assertion presented by those who supported that designation, 

that the protection of those lands should have resulted in increased 

tourism dollars and a net positive impact on the communities in 

Kane and Garfield Counties. We find no evidence of any positive 

result other than a single statistical test that indicates the possibility of increased tax revenue in a single year. 

Our second study that speaks to this is a study of wilderness 

areas, and wilderness, to sort of cut to the chase of it, there are 

lots of other things here in my written testimony. Wilderness, 

when you control for other factors that influence county economic 

conditions, wilderness designation is associated with lower per-capita income, lower total payroll and lower total tax receipts in counties where it is present. 

There is a third example that I am happy to answer questions 

about that is incurred. It is called the Treasured Landscapes 

Memorandum that came out from President Obama’s Administration, and we look at the opportunity costs that are there. 

To conclude, our research suggests that the reality of Federal 

land ownership and the effects of those lands can be best summed 

up with two core economic concepts. First, tradeoffs. Every policy 

action necessarily chooses to do something and not to do others. 

The second is opportunity costs. Anytime land is removed from 

the active economic base, there will, in fact, be costs that are difficult to estimate and that counties, where these lands are protected, have to bear. 

Thank you. 

[The prepared statement of Dr. Yonk follows:] 

Statement of Ryan M. Yonk PhD, Assistant Professor, 

Southern Utah University 

Chairman Bishop and members of the Subcommittee, I appreciate the opportunity 

to share with you the results of a number of studies conducted by myself and my 

colleagues Dr. Randy T. Simmons and Dr. Brian C. Steed of Utah State University. 

My Name is Ryan Yonk and I am an assistant professor of political science at 

Southern Utah University. My primary area of research is focused on issues surrounding public lands and the effects they have on rural communities. 

Understanding PILT and its role in Local Communities: 

The Department of the Interior describes the PILT Program as, ‘‘Payments in 

Lieu of Taxes (or PILT) are federal payments to local governments which help offset 

losses in property taxes due to nontaxable federal lands within their boundaries. 

PILT was passed at a time when US policy was shifting from one of disposal of federal lands to one of retention. With that shift, Congress agreed with recommendations of a federal commission that if these federal lands were never to become part 

of the local tax base, then some compensation should be offered to local governments 

to make up for the presence of non-taxable lands within their jurisdictions. The DOI 

has distributed more than $5.5 billion dollars in PILT payments (on average, $157 

million annually) to each State (except RI) plus the District of Columbia, Puerto 

Rico, Guam and the Virgin Islands since the program began in 1977.’’ 1

PILT legislation was put into place to help local governments avoid the negative 

financial impact resulting from their inability to collect property taxes on federallyowned land. Congress appropriates PILT payments each year according to a formula 

that includes population and the amount of federal land within an affected county. 

Payments are made annually for tax-exempt federal lands administered by the 

30 

BLM, the National Park Service, the U.S. Fish and Wildlife Service, the U.S. Forest 

Service and for federal water projects and for some military installations. 

The fundamental logic of the establishment of PILT funds was to prevent the systematic disadvantaging of counties where vast federal land holdings would forever 

be excluded from taxable land base. This initial recognition of the potential harms 

of large permanent federal ownership of large portions of rural primarily western 

counties has unfortunately given way to claims that suggest this ownership imposes 

not a cost to local communities but a benefit regardless of the type of lands owned. 

Questions about the effectiveness and importance of PILT should explore the tradeoffs that occur when large tracts of land are federally owned and the opportunity 

costs that arise from those holdings. 

The Current State of Public Lands Counties: 

Beginning in 2004 the Center for Public Lands and Rural Economics began a series of studies funded by the Department of Agriculture to investigate the effect of 

public lands on rural communities. These studies, which focused on Health, Social 

Services, Education, The effect of Wilderness on Life Quality, and on economic conditions all share similar results. These results suggest that across the wide variety 

of policy areas the presence of public lands has a non-positive effect on rural communities at best and a negative effect in the worst case. 

For example, we find with regards to education that one of the effects of large 

federal ownership of areas is an increase in the size of the county and school district. Large blocks of federal ownership increase costs as local communities attempt 

to provide educational service for students. Transportation costs were of particular 

concern for public officials in Nevada for example. They complain that millions of 

miles are put on school buses without adequate compensation from the federal government. Similar stories and costs are expressed across the west where federal 

lands cross-sect counties leading to smaller populations dispersed over an increasingly large area. 

We further find that areas with large federal lands holdings face market conditions for health care services that lead to higher prices as a result of those lands 

holdings and that public lands that cross sect rural communities lead to changes 

in the way in which hospital markets are defined. 

One last example illustrates the current state of public lands counties namely 

their economic conditions. Our research indicates that communities with 25% of 

their gross acreage held by the federal government have on average household incomes that are between $741 dollars and $1450 less than their non-public lands 

counterparts. Further despite the logic of PILT payments we find no effect on the 

budgetary processes and decisions of public lands counties as a result of those funds. 

This is not to say that these funds are not an essential portion of any single counties budget but rather that they are not the panacea that corrects the other effects 

of large scale federal land ownership. Indeed counties with substantial public lands 

are severely disadvantaged when PILT payments are reduced or delayed. 

Our work in these areas have attempted to provide a clear understanding of the 

problems faced by public counties but does not take into account the opportunity 

costs imposed on these counties by large scale federal ownership. Indeed attempting 

to estimate these costs is problematic because we have no clear example of whole 

sale transfers of public to private lands in the recent past. We do find, however, examples where lands are transferred from one category of protection to another and 

those transfers can help illustrate the potential costs of excluding lands from active 

commercial use. 

Example One: The Grand Staircase 

One example that provides a clear opportunity to test the effect of these transfers 

is the Establishment of the Grand Staircase-Escalante National Monument. 

The Grand Staircase-Escalante National Monument was created by President 

Clinton in 1996. The Monument spans nearly 1.9 million acres in south-central 

Utah along the Arizona border. The monument resides completely within Utah, and 

as can be seen in Figure 1 below, occupies the majority of Kane County and much 

of Garfield County. Each of these counties already contained a vast majority of public land. Much of this land had been placed in protected status. Bryce Canyon National Park, for instance, straddles Kane and Garfield Counties. Capitol Reef National Park crosses into eastern Garfield County, and much of Southern Kane County contains the Glen Canyon Dam National Recreation Area. 

Located in a geologically diverse region, the Grand Staircase contains a treasure 

trove of mineral deposits. The area contains an estimated 62 billion tons of coal— 

estimated to be worth hundreds of billions of dollars. The area also contains large 

oil deposits, estimated at around 270 million barrels of oil. In the early 1990s, 

31 

2The fact that the President did not enter Utah in making the announcement was not lost 

on the local residents and further fueled the resentment regarding the creation of the 

Monument. 3 It should be pointed out that the NPS does not manage the Grand Staircase Escalante. Due 

to its size, the service declined management, leaving management decisions to the Bureau of 

Land Management. The Grand Staircase was the first National Monument not managed by the 

NPS. 

Andalex Resources Company, a Dutch based coal mining company, had acquired 

permits to mine coal from the area. Conoco Oil, PacifiCorp, and various other companies had also acquired permission to develop mineral extraction activities in the 

area. 

In 1996, President Clinton stood atop the South Rim of the Grand Canyon in Arizona to make the announcement regarding the creation of the Monument.2 In making the announcement, the President alluded to the vast mineral deposits found 

within the Grand Staircase. He stated, ‘‘[m]ining jobs are good jobs, and mining is 

important to our national economy and to our national security. But we can’t have 

mines everywhere, and we shouldn’t have mines that threaten our national treasures’’ (1996 1787). The national treasures contained in the Grand Staircase identified by the President included the area’s aesthetic quality, geology, archeological artifacts, fossils, biology, and its history. Each of these items provides recreational opportunities for explorers and research opportunities for geologists, archeologists, biologists, and historians. 

The Grand Staircase-Escalante National Monument became the largest National 

Monument in the United States. Due to its size, the President established a new 

management regime for the park. Although all National Monuments up to that date 

had been managed by the National Park Service, the determination was made that 

the Grand Staircase would remain under the management of the Bureau of Land 

Management. 

Many local officials complained bitterly about the dramatic negative economic impact that the designation would have. One newsmagazine reported in 1996 regarding the sentiments expressed by Kane County Commissioner Joe Judd: 

‘‘Kane Commissioner Joe Judd fumed, ‘The most powerful politician in the 

world just kicked me in the teeth.’ Judd figures he can kiss goodbye the 

900 jobs and millions in tax revenue promised by a coal mine that Andalex 

Resources Corp., a Dutch company, had planned for the sandstone bluffs 

and wind-carved buttes of the Kaiparowits Plateau.’’ (Glick and Begley 

1996) 

In direct contrast to Commissioner Judd’s view, many academics, environmentalists, and federal government officials have alleged that large federal land holdings 

and protected lands help generate economic growth. The Sonoran Institute, for example, recently noted: 

[T]he presence of public lands is good for the economy. Personal income, adjusted for inflation, grows faster in counties with significant percentages of 

their land base in public ownership. What’s more, counties with protected 

lands—land set aside for conservation—show an even more marked increase in personal income (2006). 

National Park Service (NPS) data seems to bolster the finding that the National 

Park and Monument System contributes greatly to local economies.3 2008 data from 

all units administered by the NPS generated the following findings: 

[P]ark visitors spent $11.56 billion in the local region surrounding the 

parks in 2008. Local residents account for 9.8% of this spending. Visitors 

staying in motels and lodges outside the park account for 55% of the total 

spending, while non-local visitors on day trips contribute 21% of all spending (Stynes 2009). 

All of this spending resulted in over 200,000 jobs with 4.4 billion dollars in labor 

income, and 6.9 billion dollars of value added. The industries most benefitted from 

this activity include lodging, restaurants, retail trade, and amusements (Stynes 

2009). The Federal Government may also add to the local economy where parks 

exist by employing various workers to maintain the infrastructure or otherwise conduct the activities of the park. 

Our evaluation of the monument focuses on one of the most basic assertion presented by proponents of protected land designation, including those who advocated 

the creation of the monument, that protection of physical lands should over time increase economic prosperity in communities where the protected land is located. This 

theory runs counter to other approaches that have generally focused on the consumptive extraction of resources in order to power economic development. 

32 

We sought to test which assessment of the effect of the designation was correct 

and we found that we could identify a particular effect of the designation. The single 

result where the designation appears to have an effect is in Kane County where the 

designation appears to have provided between 5 and 16 million dollars in additional 

tax revenues in comparison with the match counties for Kane. However the evidence 

for increased payroll which is a measure of the gross economic activity shows no 

such effect. As well in Grand County we see no effect with relation to the comparison counties, and as we cannot reject the null find no evidence that the designation 

of the monument is either helping or hurting the Economy of Grand County. 

The net of our evaluation of the designation of the Grand Staircase-Escalante National Monument is that like general protection, this specific designation has had 

little or no effect on the economic situation of the host counties. Only with respect 

to tax revenues in a single model can we identify a statistically significant effect 

of the monument, and taken on sum these results confirm our broader results. 

Example Two: Wilderness Areas 

Wilderness, so designated pursuant to the Wilderness Act of 1964, is the most 

restrictive of all federal land-use designations. The Wilderness Act protects areas 

‘‘untrammeled by man’’ that have not been developed for other human uses. To preserve wild characteristics, the Wilderness designation prohibits roads, road construction, mechanized travel, and the use of mechanized equipment. Wilderness also 

impacts extractive industries such as mining, logging, and grazing. The stringent requirements of the Wilderness Act also disallow the construction of telecommunication towers, facilities for power generation, transmission lines, and energy 

pipelines. 

Due to these restrictions, local officials frequently complain that Wilderness 

harms local economies by limiting the opportunities for economic development. The 

State of Utah, for instance, recently passed House Joint Resolution 10 which requested that the U.S. Congress not designate any additional Wilderness in Utah. 

Through a vote by a supermajority of members, the state legislature asserted that 

Wilderness’ limitation of multiple uses causes substantial economic hardship for the 

state. 

Environmentalists counter that the presence of Wilderness actually attracts residents and businesses to nearby communities. Wilderness is claimed to increase 

property values and create a higher quality of life in those communities. Environmentalists also claim that Wilderness contributes to a healthy tourism industry. 

The Wilderness Society notes ‘‘[d]esignated wilderness areas on public lands generate a range of economic benefits for individuals, communities, and the nation— 

among them, the attraction and retention of residents and businesses.’’ The Sonoran 

Institute similarly finds, ‘‘protected natural places are vital economic assets for 

those local economies in the West that are prospering the most.’’ The Sonoran Institute further notes, ‘‘Wilderness, National Parks, National Monuments, and other 

protected public lands, set aside for their wild land characteristics, can and do play 

an important role in stimulating economic growth—and the more protected, the 

better.’’ 

Despite these differing views, Congress has continued creating Wilderness Areas. 

There are 759 Wilderness Areas currently in the United States, totaling 109,663,992 

Acres (Gorte 2010). Wilderness is managed by four federal agencies: the National 

Forest Service, the National Park Service, the Fish and Wildlife Service, and the 

Bureau of Land Management. Wilderness Areas dramatically vary in size from the 

Pelican Island Wilderness in Florida, which occupies a mere six acres, to the 

9,078,675-acre Wrangle Island Wilderness in Alaska. Due to the stringent requirements laying out Wilderness characteristics, the majority of Wilderness Areas are 

found within largely rural and lightly populated counties within Alaska, California, 

Colorado, Montana, New Mexico, Nevada, Oregon, Utah, and Washington. Only six 

states contain no Wilderness: Connecticut, Delaware, Iowa, Kansas, Maryland, and 

Rhode Island. 

Understanding the Economic Impact of Wilderness 

To provide better evidence of economic impacts, we use longitudinal statistical 

analysis over every county in the United States dating back to 1995. The panels 

each contain measurements of economic conditions taken every five years. We selected three uniformly applicable variables as proxies for county economic conditions: average household income, total payroll, and total tax receipts. Average 

household income and total tax receipts are gathered by the U.S. Census Bureau. 

Total payroll figures are gathered by the Bureau of Labor Statistics. 

Average household income is calculated by dividing the sum of all income of the 

residents over the age of 18 in each household by number of households. Average 

33 

household income has the advantage of specifically addressing how individual 

households are on average affected by Wilderness designation in these counties. It 

has the disadvantage of being self-reported to the U.S. Census Bureau and, accordingly, may not be as valid as more direct measures. 

Total payroll is a broader metric that captures those under the age of 18 and commuters who may live outside but work within a county. Further, it is a measure 

of the economic situation of individuals rather than households. Total payroll is not 

a perfect proxy because it does not capture the capital investment, county residents 

who work outside the county, or most importantly, retirees who do not receive payroll. Nevertheless, the data are readily available and considered a reliable metric 

for local economic conditions. 

County tax receipts present two advantages over the others measures. First, the 

data are largely complete; local governments are required by state and federal statute to report tax receipts correctly. These requirements provide some confidence in 

the data that self-reporting does not provide. Second, tax receipts represent all taxable transactions in the county. This provides a useful metric of economic activity. 

Tax receipts, however, are not a perfect proxy as there are significant institutional 

differences across states, regions, and often counties themselves about how, when, 

and why taxes may be collected. 

Although none of our dependent variables is a perfect proxy for economic conditions, taken together, they paint a relatively complete picture of the economic situation. We expect that the presence of Wilderness would have similar effects on each 

variable. To ensure that it is the effect of Wilderness and not simply federal land 

ownership that harms economic conditions we include control variables for each of 

the federal agencies that manage public land. We also include variables that control 

for the significant differences among counties. These variables include population, 

land area, number of households, birth rate and school enrollment, and infant death 

rate. Further, we include variables indicated by the economic development literature 

as likely important in determining outcomes: high school graduates, median household income, poverty rate, crime rate, government employment, unemployment rate, 

and social security recipients. 

Controlling for other factors influencing county economic conditions, the Wilderness designation is significantly associated with lower per capita income, lower total 

payroll, and lower total tax receipts in counties. These results indicate that Wilderness impacts both households and counties. Average household income within Wilderness Counties is estimated to be $1,446.06 less than Non-Wilderness Counties. 

Total payroll in Wilderness Counties is also estimated to be $37,500 less than in 

Non-Wilderness Counties. County Tax Receipts in Wilderness Counties is estimated 

to be $92,910 dollars less than in Non-Wilderness Counties. 

The argument often stated by the environmental community that Wilderness is 

good for local economies is simply not supported by the data. When comparing Wilderness and Non-Wilderness Counties, Wilderness Counties are at an economic disadvantage to their Non-Wilderness counterparts. Accordingly, if the test for whether 

or not to designate Wilderness is economic, Wilderness fails. But economics did not 

underlie the Wilderness Act or any of the Wilderness Areas established since the 

Act was passed. Wilderness is established for emotional, ecological, and cultural 

purposes. Our results show that those purposes are accomplished at a cost to local 

economies. 

A variety of factors could lead to the negative relationship between Wilderness 

and economic conditions. Arguably, areas ‘‘untrammeled by man’’ have less existing 

economic activity and reducing the potential for future economic development by 

designating those areas as Wilderness will not, on net, be economically positive. It 

is also possible that different types of Wilderness may have different implications 

for economic conditions. As noted, four federal agencies currently manage Wilderness Areas, and different agencies may have different economic impacts on counties. 

Wilderness within National Parks, for instance, may more effectively attract tourists 

than Wilderness on Bureau of Land Management or National Forest Service lands. 

Finally, it is probable that the location of Wilderness has an impact on the direction and magnitude of its economic impact. Phillips (2004), for instance, found that 

Wilderness designation in the Green Mountains of Vermont had a positive impact 

on private land values in that area of Vermont. We should assume that some Wilderness can, in fact, have positive economic impacts, even though our findings indicate that this is not the general rule. 

While there may be other legitimate, non-economic reasons for the designation of 

Wilderness, the tradeoff will likely impose an economic burden on local families and 

businesses. The benefits and costs from Wilderness are unevenly distributed between local and non-local communities, with local communities incurring a larger 

34 

4These suits leave us skeptical whether production of large scale shale projects will be allowed 

on any federal lands. 

burden of the costs. This provides a good reason why local officials often rally 

against and adamantly oppose Wilderness. 

When environmentalists and national agencies consider the creation of Wilderness 

designations in the future, they should pay attention to the interests of local communities. This paper illustrates the adverse economic costs of Wilderness on local 

economies. By working together with local communities to address their concerns, 

environmentalists can help develop balanced policy that genuinely acknowledges the 

local economic costs associated with Wilderness. 

Example Three: Treasured Landscapes 

In 2011 we conducted a review of the fifteen areas identified by the ‘‘Treasured 

Landscapes’’ memorandum evaluating the likely boundaries, interested parties and 

most significantly, the energy production potential of each proposed area. The focus 

of this study was on whether there are substantial opportunity costs to imposing 

increased legal protection in these areas. To explore this question we use data from 

the US Department of the Interior, US Department of Agriculture, local environmental groups, energy development companies, and state agencies. 

Summary of Results 

In conducting the inventory of energy potential for each site we focused on both 

traditional fossil fuel energies, and the renewable potential of each site. In conducting this review we found that relatively few of the sites identified as candidates 

by the DOI had significant fossil fuel reserves, although many had the potential for 

shale extraction, including oil shale. Our review indicates that only the Berryessa 

Snow Mountains and the Vermillion Basin have readily identifiable oil production 

possibilities. Similarly only the San Rafael Swell and Montana’s Northern Prairie 

have a high likelihood of coal production. Natural gas production appears possible 

only in Montana’s Northern Prairie, the Heart of the Great Basin, and the 

Vermillion Basin. 

While these fossil fuel resources appear only in a handful of the potential monuments, over half have shale formations likely to enable commercial fossil fuel production. While these areas have identifiable potential for shale production the development of shale fields is highly controversial and the subject of a number of ongoing 

environmental reviews and lawsuits. 4

These findings while interesting tell only part of the energy development story. 

We also evaluated the possibility of renewable energy development in each of these 

potential monuments. Most of the potential monuments have significant renewable 

energy possibilities that would be foreclosed by increased protections. Twelve of the 

fifteen potential monuments have the potential for multiple types of renewable energy development, and only the San Rafael Swell has no renewable energy potential. 

Developing renewable energy has been a priority of the DOI, environmental groups 

and energy production companies and has been deemed a national priority by President Obama. The reality, however, is that should these monuments be created, renewable energy production on a significant scale and across a variety of landscapes 

will be foreclosed. 

These results paint a difficult picture for those, including the authors, who in 

many instances support both the preservation of landscapes like those proposed in 

the ‘Treasured Landscapes’ memorandum, and who also support increased production of renewable energy. Indeed the most significant lesson we draw from this data 

is that conflicts between priorities, including environmental priorities, will inevitably require trade-offs. Indeed the potential monuments pose significant costs to renewable energy production if the preservationist impulse is to be followed. 

Conclusion 

Our research suggests that the reality of federal land ownership and the effects 

of those lands can be best summed up in two core economic concepts. First, tradeoffs, every policy action necessarily chooses to do something and not others. In the 

case of federal lands local communities face the realities of the decisions of federal 

policy makers. These decisions often represent choices which place other interests 

above those of local communities. These sorts of choices suggest that the potential 

tradeoffs need to be thoroughly evaluated and considered. It is not simply enough 

to claim that any decision leads to better outcomes and thus the choice can only 

help local communities. Our research finds no evidence that this assertion can be 

supported by the data. Second when considering these trade-offs opportunity costs 

must be appropriately accounted for in the decision making process. Often the 

35 

trade-offs of large federal land ownership are not about precluding currently active 

projects and activities but rather about prevention future opportunities from being 

developed. These costs are and substantial and should be considered carefully in 

making decisions about federal lands. 

A final observation is rooted in the nature of federally owned public lands. These 

lands have varying potential and treating each as having identical trade-offs and 

opportunity costs as the current PILT system does fails to recognize the context that 

each community and public lands area functions within and arbitrarily assigns a 

value that independent of that context. 

Mr. BISHOP. Thank you, Dr. Yonk, I appreciate it. I appreciate 

the testimony of all three witnesses. I will now turn to questions. 

I will go last. 

Mr. Tipton, you were here in the earlier session. Do you have 

questions for these witnesses? 

Mr. TIPTON. Thank you, Mr. Chairman. And I would like to 

thank our panel for taking the time to be able to be here. 

I guess I would like to ask Ms. Haze first, understanding that 

PILT is fully funded for one more year, does the Administration to 

the best of your knowledge plan to maintain full funding in their 

presentations for PILT for the 2013 budget? 

Ms. HAZE. I don’t think I can answer that. That would be 

predeciding what we are going to do in future budgets. So, I am 

not really able to say that at this point. 

Mr. TIPTON. OK. You know in your testimony you had mentioned 

that the payments are typically made in June. 

Ms. HAZE. Right. 

Mr. TIPTON. There was a decision that was made to delay payments without providing any notice, was it this last year? 

Ms. HAZE. There was a delay this past year, yes, to the 2011 payment. 

Mr. TIPTON. You know, that creates a lot of problems. I come 

from a small rural county that has a lot of public lands. We have 

one county in my district where 98 percent of the entire county is 

public lands or Federal lands. And the real issue is that does create 

a real problem for those communities. What are your plans going 

forward in terms of making sure that the counties are compensated 

properly? 

Ms. HAZE. I am glad you brought that up. I actually would tell 

you we learned a lot last year about probably how to better communicate with the counties and the states and the members. We didn’t 

send our notification out soon enough, so we know we need to do 

that. 

And we were able to accelerate the process and make the payment before the end of June, so we ended up really only being 

about a week later than normal. But we assured the counties at 

that point, and the Secretary was very engaged as well, that we 

would do earlier notifications and we would just try very hard not 

to have a delay and we would stick to that early June date. 

Mr. TIPTON. Great. Can you expand on this for me a little bit 

more in terms of the entitlement acres where counties don’t receive 

payments for some acreage that they currently have? Can you explain some of that inequity for me? 

Ms. HAZE. So, we make payments for certain lands, the lands 

that are in the Forest System and the Park System. And there are 

36 

some lands for which we don’t make payments. And I am a little 

sheepish to tell you, I don’t specifically know the distinction, but 

Dr. Corn does. 

Mr. TIPTON. OK. Dr. Corn? 

Dr. CORN. Under the PILT statute, the lands that receive compensation are specified in the statute. So, if there is a category of 

land, DOD or whatever, that is not specified in the statute, it will 

not receive compensation. 

So, if there is a category, let us say, of Forest Service land that 

does not get compensation under the PILT statute, then it won’t. 

That is not discretionary with the Department of the Interior. 

Mr. TIPTON. OK. You know, I guess the question that I have, and 

it goes back a little bit to Mr. Yonk’s comments, and if I could 

maybe get you to comment. It seems that we are at cross-purposes. 

Education is very important for me, for my family, for our entire 

communities. And we have had restrictions in terms of being able 

to get in and harvest timber as an example, access to some minerals to be able to provide resources back into our communities. 

We see that PILT has only been fully funded I think—I just did 

a couple of sketches there. If we go back to the beginning, it looks 

like it has been underfunded to the tune of about $1.5 billion since 

its inception in generic round numbers. 

Are some of the restrictions that we are going to be putting on 

going to further impact our ability to make payments that is going 

to be able to provide for schools, provide for public safety and the 

building of highways in your estimation? 

Dr. CORN. Do you mean under PILT? 

Mr. TIPTON. Yes. 

Dr. CORN. The factor that would relate to that is any effect in 

the prior-year payments. In other words, to the extent that you reduce a prior-year payment or increase a prior-year payment, you 

may—and you will remember I had a very complex formula up 

there for this calculation—but you may reduce a given county’s 

PILT payment or you may increase it. And it is difficult to tell 

what the net effect would be. 

Mr. TIPTON. Talking about that, and I am about to run out of 

time here, we have counties like Hinsdale County in my district, 

which is 98 percent Federal land with a very small population, but 

they received less. 

But if our friends from New York come out to their public lands 

and drive off the end of the road, they want to have public services 

there to be able to provide those services. In your estimation, is 

that fair simply to have that part of the calculation, population, or 

should it be strictly on the size? 

Dr. CORN. As you know, it is difficult for CRS to deal with that 

sort of question. Let me just say that this is not discretionary with 

the PILT statute. In other words, they receive whatever the statute 

calls for. 

Mr. TIPTON. I was just going to ask for a comment in terms of 

fairness, but I understand. Thank you. 

Mr. Chairman, I yield back. 

Mr. BISHOP. Thank you, thank you. What is for you guys a hypothetical unfortunately is for us a reality. 

Mr. Grijalva. 

37 

Mr. GRIJALVA. Thank you. Ms. Haze, there have been some suggestions that the formula for PILT payments results in some inequities. Some units of local governments that are already fairly 

well off receive large PILT payments while some areas that have 

very limited resources do not receive as much from the PILT program. Does the Department have any suggestions on how the program might be reformed so that we more fairly allocate this funding? 

Ms. HAZE. That is a great question. I anticipated you would ask 

me that and struggled with what I would say. 

I hesitate to suggest anything. The formula was so extensively 

discussed while they were putting the Act together many years ago, 

and I have gone back and looked at all of that, and there were so 

many different options they looked at before they settled on what 

they enacted. So, I really don’t have a better way to build that 

mousetrap. 

Mr. GRIJALVA. Thank you. The other question if I may, Ms. Haze. 

The Department of the Interior shares receipts from resource-development activities on public lands with the units of local government. Can you give us some examples of various programs that 

have revenue sharing? 

Ms. HAZE. I sure can. Many of our revenue-sharing programs 

share the receipts with states as opposed to going directly to the 

counties, but their formulas are very diverse across all of the programs. 

So, for example, mineral revenue payments to states for onshore mineral production, we share $2 billion a year with the states. 

There is also the—let me think what else we have. Of course there 

is offshore, which has nothing to do with PILT. Grazing revenues. 

So, there are a number of them. 

Mr. GRIJALVA. And that would be a significant transfer of funds, 

would it not? 

Ms. HAZE. It is. It is a significant transfer of funds. On an an- nual basis, we are sharing about $8 billion a year. 

Mr. GRIJALVA. Thank you. Ms. Corn, according to CRS data, how 

did the amount of funding authorized for the PILT program compare to the amount actually appropriated between 1976 and 1994? 

Dr. CORN. Congressman, the first payment was made in 1977, so 

between then and 1994, the range was between 100 percent down 

to 88 percent in 1979. All of the rest of them were over 90 percent, 

generally over 94 percent. 

Even then, in the early years, it was difficult to figure out what 

a 100 percent payment was because the baseline data were so confused. In other words, counties didn’t know accurately the Federal 

land, or the Agency did not, or how much they had received in the 

previous year. 

Mr. GRIJALVA. And do the same comparison if you would for 2008 

to the current year. 

Dr. CORN. Between, wait, 2008 did you say? 

Mr. GRIJALVA. Yes. 

Dr. CORN. That is 100 percent. 

Mr. GRIJALVA. And it appears that there was a period from 1995 

to 2007 when the amounts appropriated to the program fell short 

of the authorized levels. 

38 

Dr. CORN. That is true. 

Mr. GRIJALVA. I will not ask you which party was in Majority 

from 1995 to 2006. I will leave that for people to figure it out. 

Let me ask if I could, Professor, one question. In your written 

testimony you suggest an analysis of opportunity costs that would 

be useful in evaluating the merits of Federal land ownership. In 

other words, we should estimate what is being lost because a coal 

mine, a uranium mine, another extraction activity is not in place 

on those lands. 

Would an analysis of these opportunity costs as you see it deduct 

the potential costs for mitigation, cleanup of any waste or pollution 

that was caused as associated with these projects? Would that deduction be fair, part of the opportunity scale? 

Dr. YONK. Absolutely. A good measure of opportunity costs would 

have to take into account the costs both of production and then 

post-production timelines. But again, it should be something that 

is appropriately included and estimated. 

Mr. GRIJALVA. My time is up. I yield back. 

Mr. BISHOP. Thank you. Mr. McClintock. 

Mr. MCCLINTOCK. Dr. Yonk, how much of the State of Nevada, 

for example, is owned by the Federal Government? Do you have figures on that? 

Dr. YONK. Sure, if I were sitting in my office, I could tell you. 

It is well into 90 percent. 

Mr. MCCLINTOCK. How about of California, my home state? 

Dr. YONK. I do not know the answer in California. 

Mr. MCCLINTOCK. I represent the northeast corner, and we do 

have counties of which the Federal Government owns 70 to 80 percent of the land area, which stuns me when we reflect on the fact 

that Washington, D.C., the Federal District of Columbia, with all 

of its government buildings, the National Malls, all of the memorials and parks, the Federal Government owns about 25 percent of 

land area of the Federal District of Columbia. 

What happened? How was it that the Federal Government seized 

the vast proportions of the western United States away from the 

local people? 

Dr. YONK. That is quite a question. The short answer is that you 

had a period where you had divestment occurring in the United 

States, where you had land holdings that were held by the Federal 

Government that were being in large measure privatized. And that 

era ended prior to the introduction of the PILT program, that it 

was no longer interested in doing those sorts of things. And so it 

was sort of a default setting as we came out of the Homestead Era 

when what did you do with the balance of the land? Well, that land 

was held by in most cases the Federal Government and was not 

fully allocated. 

Mr. MCCLINTOCK. Well, what we have found in the northeastern 

corner of California is the Federal Government is a lousy landlord 

and an even worse neighbor. We are watching these Federal agencies shutting down community events that had been exercised in 

these communities in some cases for generations, driving grazing 

operations out, forcing people to abandon cabins that had been in 

their families for generations. It really is a lousy neighbor. 

39 

What do we do about all of this? Not only are they consuming 

vast proportions of land that would otherwise be going for productive use, but they have become an active impediment to simple 

commerce and activity in these mountain communities. 

Dr. YONK. I think the short answer to your question is that that 

is a fundamentally political question that is left in your capable 

hands. But there needs to be a recognition that the costs are real 

to these communities. And it is far too often that those costs are 

discounted or even suggested that the results are positive, that you 

should be grateful to have increased levels of protection because 

you will see increased tourism dollars. Our work does not bear out 

that that is consistently the case. 

Mr. MCCLINTOCK. The Ranking Member has pointed out that 

there have been years when the Federal Government has been unwilling or unable even to match the current authorization for PILT, 

which is very low. And of course, as we all know, the Federal cupboard is bare. We are actually borrowing that money, and I am not 

entirely sure how much more China is going to loan us. 

Shouldn’t PILT be funded by simply selling off these excess Federal land holdings? Shouldn’t we set perhaps a 25 percent limit on 

the amount of a land area of any state or locality that the Federal 

Government, certainly any state, that the Federal Government can 

own considering the fact that it does just fine owning just 25 percent of the land area of the Federal District of Columbia? 

Dr. YONK. Again, I think that is a fundamentally political question that this body will have to decide. There are real costs, especially as you cross that 25 percent threshold, and as those land 

holdings expand, there are increasing costs. 

Mr. MCCLINTOCK. If we were selling off this excess land, it seems 

to me two things would happen. If we were using that to fund 

PILT, that would provide a source of revenues to provide relief to 

these communities without tapping a Treasury that is deeply in 

debt and at the same time would begin reducing the problem by 

restoring this land from unproductive Federal holding to productive 

local holding. 

Dr. YONK. I think one of the interesting things in response to 

that is that PILT is not the solution for these public lands counties. 

I mean, we have heard testimony today that it has typically been 

funded at over 90 percent, and yet public lands counties still lag 

behind their non-public lands counterparts in a variety of measures. And so I think the more fundamental question that you are 

asking is an interesting policy question: Should we be divesting 

public lands? 

Mr. MCCLINTOCK. So, there is a solution then that would create 

jobs throughout these regions, would create additional tax revenues 

throughout these regions because of productive activity and would 

still leave the Federal Government holding far more of the land 

area of these states than it does of its own Federal District of Columbia. Thank you. 

Dr. YONK. The short answer if I may is—— 

Mr. BISHOP. Five seconds. 

Dr. YONK.—maybe that would happen. Thanks. 

Mr. BISHOP. You did that in less than five, good job. Mr. Coffman. 

40 

Mr. COFFMAN. Thank you, Mr. Chairman. And thank you, Chairman Bishop, for holding this important briefing. I would also like 

to thank the witnesses for testifying, giving this Committee the information it needs on the program. 

As a Member from Colorado, I understand how vital the PILT 

program is to my District, to Colorado and to other western States. 

Specifically, Douglas County in my District is slotted to receive 

nearly $300,000 in PILT payments. 

Mr. Yonk, right now we have a continued budgetary problem on 

the Federal level, but there is a significant need for PILT funding 

on the local level. So, how can the Department of the Interior increase flexibility for the local communities to extract more dollars 

from their lands and therefore become less reliant on Federal PILT 

dollars? 

Dr. YONK. Again I refer to part of sort of my written testimony, 

that as you increase the levels of protection, particularly as it expands beyond simple Federal ownership, and many of these PILT 

counties have large areas that are protected at some level greater 

than the standard just ownership, and when that occurs, you see 

increased costs to those communities. 

And so one of the potential avenues would be to reduce some of 

those levels of protection that could potentially have a positive outcome depending on the context. Now there were a lot of 

‘‘potentiallys’’ in that statement because estimating what would 

happen gets to be very difficult, and it becomes dependent on what 

resources actually are available on which public lands. 

Mr. COFFMAN. Thank you, Mr. Yonk, Professor. Ms. Corn, you 

testified that the addition of Indian lands to the PILT program is 

a current issue of debate. But my question is how the addition of 

these lands will affect the decision to continue the five-year mandatory authorization in the future, and how will this addition affect 

local communities’ ability to earn revenue from these lands and become less reliant on PILT funding? 

Dr. CORN. Congressman, this was an issue that was brought up 

extensively in 1994 in the hearings that were held in the Senate. 

The biggest difficulty that I recall was that defining Indian lands 

all by itself was a monumental task. There were multiple categories: reservation lands, trust lands that may or may not be on 

a reservation, allotments, land holdings that were once owned by 

other entities and acquired. So, it was practically impossible they 

felt at the time to determine exactly what should be included. That 

was the big stumbling block. 

In some counties, I don’t recall where, but in some counties, the 

holdings by, let us say a Federally recognized tribe on a reservation, are a very substantial fraction of that county’s land. And since 

they are not taxable, then the burden, the tax burden falls that 

much more heavily in terms of property taxes on the non-reservation land. And some counties have complained that this is a very 

severe burden. 

Having said that, the reservation lands do sometimes receive important county services, such as fire protection, emergency services 

and so on. It could vary quite a lot from one county to another. 

Mr. COFFMAN. Mr. Chairman, thank you. I yield back. 

41 

Mr. BISHOP. Thank you. Dr. Gosar, we welcome you to our Committee. Do you have any questions? 

Dr. GOSAR. I do. Mr. Chairman, I ask permission to have included in the record a letter from Ms. Tommie Martin, Board of Supervisors from Gila County, Arizona. And because of the staggering 

amount of Federal land in Gila County, Supervisor Martin reports 

that Gila County property owners now shoulder over 90 percent of 

the burden of the county’s budget. 

Mr. BISHOP. Without objection, it will be added to the record. 

[The letter from Ms. Martin follows:] 


70721.015.eps
42 

Dr. GOSAR. So, Professor Yonk, I am curious to hear your views 

on something that is really affecting my District. District 1 is 

roughly 70 percent Federal lands, and we know how the PILT is 

calculated. It is the eligible lands divided by or times by a dollar 

amount received. And this actually is a substitute for the lost property taxes, and that is important. So, here comes my question. 

Let me ask you, does PILT compensate localities when natural 

disasters caused by mismanagement of Federal lands, like forest 

fires, require the services of local firefighters, policemen and emergency responders? 

Dr. YONK. One of the things we do see in public lands counties 

is that their budgets, when you compare them to non-public lands 

counties, they spend more on average on public safety and the very 

things that you are describing than their non-public lands counterparts. So, it would appear that there is at least a cost of having 

public lands in the county. 

Dr. GOSAR. So, do you know if they compensate for natural disasters? That they are inherently—you know, take for example, we 

have a big, old fire like the Wallow Wildfire. So, this is the biggest 

fire in Arizona history, and it is directly related to our management of the forests. And yet the counties are impugned by this, and 

there is no way of compensating back for that. 

Dr. YONK. It is difficult to answer that question because PILT in 

my estimation and what we found, it does not cover the day-to-day 

operations; it is not a full replacement of property tax revenue in 

every case. And so, based on that logic, the answer to your question 

is no. But I can’t say that conclusively based on any data or study. 

Dr. GOSAR. But it is asking a requirement. The Federal Government is asking a requirement for these Federal lands that they do 

maintain these on a day-to-day basis yet not compensate it on a 

day-to-day basis. Is that not true? 

Dr. YONK. That sounds correct. 


70721.016.eps
43 

Dr. GOSAR. So, I know that my counterpart from Arizona brought 

up a compensation mechanism, you know, the minerals. Ms. Haze, 

is it not true that those mineral allocations are determined by the 

state Constitution in their allocation? 

Ms. HAZE. I don’t know about the state Constitution. 

Dr. GOSAR. I do. So, let us go back to Arizona. 

Ms. HAZE. OK. 

Dr. GOSAR. Just so the record states, those monies for compensation for mineral royalties goes to the Land Department, which goes 

strictly to education. Nothing else, nothing more. So, let me ask 

you another question, Ms. Corn. Is there any way in a procedural 

way that counties have the ability or states have the ability to either increase or decrease the numbers of lands in regards to compensation for PILT? 

Dr. CORN. No, because that provision is defined in statute. In 

other words, the eligibility of a Federal land holding to receive a 

PILT payment is defined in statute. So, any change in a county 

would require a change in the statute. 

Dr. GOSAR. So, we would have to do it here. 

Dr. CORN. Yes, barring, now let me just say, one exception. If 

some lands were to be acquired let us say to fill in an in-holding 

in a national forest, then that would become National Forest land 

and would therefore be eligible for a PILT payment. But the status 

of the land is fixed in the statute. In other words, the types of land 

that can receive payment are fixed in the statute. 

Dr. GOSAR. So, you brought up another question for me in the 

definition of Indian lands. So, let us say, for example, that a tribe 

buys a piece of property that is considered part of their holdings. 

If it was a part of a PILT, does it then become a non-PILT? 

Dr. CORN. In effect, you are suggesting that the tribe has acquired some type of Federal holding and it has changed from Federal land that was eligible for PILT into land that is now part of 

the reservation. I haven’t heard of that happening. I am afraid I 

can’t answer that. I don’t know what the result would be. 

Dr. GOSAR. The reason I ask is that we spent the better part of 

100 years trying to get criminal law with native tribes and us fairly 

similar, and it is fairly similar. But we have yet to touch civil actions in regards to the tribes. 

And that is why I have a number of big tribes, Indian tribes in 

my District, and we have an example of this possibly occurring. 

And so what we have to do is look at the ramifications because I 

have some of those holdings where a big tribe has a lock on the 

land ownership within a county but still drives a lot of those maintenance. And there is no way they can actually compensate or 

maintain. There is just no way. Navajo County is an example. 

What those people do is heroic all the way around. The emergency 

responders, law enforcement, it is just unbelievable what they do 

at the expense of the Federal Government. 

So, I yield back my time. 

Mr. BISHOP. Thank you. In fact, I have more questions that have 

come to my mind as I have been listening to the discussion going 

on here. So, Ms. Haze, let me start with you if I could. I first want 

to say it was troubling, very troubling, to hear your answer to one 

of the other questions, that you don’t know if the Department will 

44 

be requesting full funding for PILT in the 2013 budget year proposal. I understand that may be at a pay grade different than 

yours to make that statement or that decision, but it is troubling 

that the Department has not determined to do that and is willing 

to publicly say they are determined to do that. Can I ask a question simply about the payment schedule though? Is there statutorily a date certain when PILT payments must go out the door? 

Ms. HAZE. Yes. The statutory requirement is that they need to 

go out the door before the end of the fiscal year, the Federal fiscal 

year. 

Mr. BISHOP. So, there is a cutoff date; there is not a date that 

it has to be done. 

Ms. HAZE. Correct. 

Mr. BISHOP. Will the Department of the Interior then this year 

in PILT payments, will they be made to the county before that 

date? 

Ms. HAZE. They will. 

Mr. BISHOP. OK. I appreciate you being that definitive in some 

time. Can you tell me what then the specific reason was when you 

all announced the expected delay in the 2010 payment? 

Ms. HAZE. We had received some information from a state that 

impacted our calculation of the payments to the counties, and it 

had to do with the way Dr. Corn described it as the pass-through 

money. And it was a new procedure that they had put into the 

state; the State Assembly had passed new legislation. And so a set 

of prior-year deductions we would have ordinarily considered in the 

formula—— 

Mr. BISHOP. So, it was an accounting problem you had within the 

Department of the Interior. 

Ms. HAZE. I think I am understanding your question, but if not, 

ask me again. So, it was a delay in trying to understand what happened in the state and get legal clarification around whether we 

should deduct those payments or not. So, it was a legal interpretation of the new process. 

Mr. BISHOP. If there is a statute that tells you that you have to 

make a payment by this date, then why did you tell the state you 

may break that statute in order to do the internal calculations? 

Ms. HAZE. There is a statute that requires that we make the payment by the end of the Federal fiscal year, September 30. We try 

to make the payment early June. We had gotten initial information 

in from the state later than we normally ask for it. We normally 

get the information in from the states in December. We didn’t get 

it until later in the spring, and then we had additional clarification 

discussions with that state that went on for a while. 

Mr. BISHOP. Thank you. I appreciate that. I think it would probably be helpful for the counties if there was a specific date on 

which they could depend, not when it has to be done as an end 

date, but there was a specific date on which those payments had 

to be going out at some time. And I realize that there is not a statute that demands that particular thing. 

I am also under the impression, and correct me if I am wrong, 

the Department of the Interior does not have the ability to increase 

or add categories of land or to adjust valuations of land statutorily. 

That has to be done in a legislative change within the basic bill, 

45 

within the basic program itself statutorily. The Department of the 

Interior does not have, am I right, the flexibility to change classifications of land, categories of land, ceiling payments, population 

payments, those type of things? 

Ms. HAZE. Correct. As Dr. Corn explained, there is a set definition for which lands are subject and get PILT payments and lands 

that do not. 

Mr. BISHOP. Thank you. Let me turn to Dr. Corn then if I could 

for a few questions. And I think you have already said this. Are 

there county payments that are not counted against future PILT 

payments for some counties but not others? 

Dr. CORN. The PILT provides for—— 

Mr. BISHOP. Actually, Doctor, I am going to run out of time before I get through you with all of these. I will come up with that 

one later on what counties get and what counties don’t. 

Dr. CORN. Sure. OK. 

Mr. BISHOP. Mr. Grijalva, you have sat here through the Republicans; you are the only one on your side. Do you want another 

round, another question set this round? 

Mr. GRIJALVA. I thought I would get one after each one of you. 

[Laughter.] 

Mr. BISHOP. I am not that nice, but you can go now if you would 

like. 

Mr. MCCLINTOCK. You can have my other 32 seconds. 

Mr. GRIJALVA. Thank you, appreciate it. Professor, let me ask 

you a followup on a question. I believe that the wildfire was the 

result of a lightning strike. Had that land been all private, OK, 

who would bear the costs for fighting that fire? 

Dr. YONK. I don’t have any specific information about Arizona’s 

laws, but it would have been borne most likely by whatever level 

of government is assigned in Arizona primary responsibility for 

fighting those fires. 

Mr. GRIJALVA. And you know, on page 5 of your testimony, let 

me quote, ‘‘The designation of the Grand Staircase-Escalante National Monument has had little or no effect on the economic situation of the host counties.’’ Is that correct? 

Dr. YONK. We can find no statistically significant impact of the 

designation of the monument in either Kane or Garfield Counties. 

Mr. GRIJALVA. So, the designation of that monument has had little or no effect on the economies of Kane and Garfield? 

Dr. YONK. That is what the data and our study has led us to. 

Mr. GRIJALVA. Well, thank you. It is a relief to have that question resolved once and for all. I appreciate it. And with that, I yield 

back. 

Mr. BISHOP. Thank you. Mr. Tipton, do you have other questions? 

Mr. TIPTON. Thank you, Mr. Chairman. I have just one more. Mr. 

Yonk, it is kind of disturbing since we have so many public lands 

throughout the West, and I come from an area that is typically economically depressed, and unfortunately right now we have better 

than double-digit unemployment in many of our counties. Going off 

of some of your analysis, and I would like to be able to actually see 

that full report, if lands are further designated that becomes more 

restricted, do you see further negative economic impact? Because I 

46 

am hearing testimony, I just held a public hearing out in one of my 

communities, and one of the contentions is that we are able to actually see positive economic impact off of some designations, but 

you seem to be indicating to the contrary. 

And if you see more restricted designation, we understand not all 

regulations ever go away. As long as it is BLM land, as long as it 

is Forest Service lands, there are going to be protections that are 

going to be in place. But if it gets more restrictive, is there more 

negative economic impact, or does it stay the same? 

Dr. YONK. In response to that, so this notion that there is a positive effect, in none of our studies have we found a consistent positive effect of increasing designation. 

We do find, especially in the case if you designate wilderness 

areas, a greater negative effect on those communities. Now, as we 

go beyond that, it becomes less clear. For example, the monument 

study of the Grand Staircase, it is not that it is a positive; we can 

find no effect where when the claims were that the effect would be 

this great boon to those two counties through recreation dollars. So, 

it is a little bit of a mixed bag in answer to your question. There 

are clearly costs as you restrict the uses of lands. 

Mr. TIPTON. OK, great. Ms. Haze, would you like to comment on 

that at all? Do you have any studies? 

Ms. HAZE. No, I am not prepared to do economic study comments. Thank you though. 

Mr. TIPTON. Any sort of comment on that? CRS have anything, 

Doctor, on that? 

Dr. CORN. No, I am afraid not. Well, nothing that I am aware 

of. 

Mr. TIPTON. OK, thank you. I yield back, Mr. Chairman. 

Mr. BISHOP. All right. Dr. Corn, can I start over this one again 

here? So, what I was trying to ask is, are there county payments 

that are not counted against future PILT payments in some counties but are in other counties? 

Dr. CORN. Yes. Where states have laws that require this passthrough—in other words, this is a feature where a state may say 

the payments resulting from BLM must go straight to this entirely 

separate entity, a school board for example, does not go to the 

county government. In that case, that payment, let us say $10,000, 

would not be counted as having gone to the county government. So, 

it would not be deducted from the following year’s payment. 

Mr. BISHOP. So, let me give you another hypothetical just along 

that same line, different issue. So, we have already established 

some counties will be treated differently according to those passthroughs. 

Dr. CORN. Right. 

Mr. BISHOP. So, for example, on Secure Rural School payments, 

are they always deducted from the prior year’s payments? The following year’s payments. 

Dr. CORN. They would be for National Forest lands. 

Mr. BISHOP. So, is that going to be uniform in all counties? For 

example, let us talk about ONC counties, an ONC county in the 

West. Secure Rural School payments would go there. Would they 

also have PILT payments as well? 

47 

Dr. CORN. In the case of ONC lands, the Secure Rural Schools 

provision does not apply. In other words, if we are talking about 

National Forest lands, then any prior-year payment under Secure 

Rural Schools is deducted from the following year’s PILT payment. 

If, on the other hand, the land in question, an ONC county, has 

chosen Secure Rural Schools, that payment under Secure Rural 

Schools would not be deducted from the following year’s PILT payment. 

Now bear in mind that this is an incredibly complicated problem 

simply because some of those counties will be limited by the population ceiling, so it wouldn’t make any difference anyway. Or some 

of those counties may be receiving the minimum 33-cents-per-acre 

payment, so it still wouldn’t make any difference. But at least potentially there would be a distinction between ONC lands versus 

Forest Service lands. 

Mr. BISHOP. It could be, and I appreciate that. And I also appreciate you saying that 33-cent figure. 

Usually I don’t want to ask the question unless I know the answer; I have no clue what this answer is. When that dollar figure 

was established, why? Was there a specific reason or matrix that 

we used? We talk about how the formula goes out based on the 

amount of land and a certain dollar figure attached to it. Was there 

a matrix used to come up with that figure? 

Dr. CORN. In the original law, the dollar figures were 75 cents 

per acre and 10 cents per acre. 

Mr. BISHOP. Why? 

Dr. CORN. You know, I just tried to look that up quite recently. 

I looked at the hearing records in the House and Senate, the committee reports. I haven’t looked at the Floor debate yet, but that 

number just pops out. And in the House Report it says that instead 

of choosing, and then it lists various options, the Committee selected 75 cents per acre. 

Mr. BISHOP. So, it could well be then that if states were allowed 

to charge a tax levy based on their own standard, they would be 

getting significantly more money from the Federal Government 

than they will get in PILT because we have those arbitrary numbers that are there. 

Dr. CORN. As long as you bear in mind that some might be getting significantly less, yes, that is possible. 

Mr. BISHOP. OK. That is theoretically—in my own mind, I can’t 

envision that scenario, but it is theoretically possible. Could I also 

ask one other question too just on the history of it? I know population is included as a figure. Historically why? 

Dr. CORN. The reason at the time for including population was 

that they did not want to give counties that had very large population resources. In other words, in the West, the counties tend to 

be really big geographically. And some of them—I am thinking of 

Sacramento for instance—are both big counties, a fair amount of 

public land, and they also have substantial population. 

In contrast, there may be other counties just as large, also with 

a fair amount of public land, but they have very small populations. 

It was felt that the county that had the very small population 

needed proportionately more assistance than a presumably more 

48 

resourceful if that is the word I want county like one like Sacramento. That was where that started. 

Mr. BISHOP. All right. Once again, it seems like once again we 

made maybe an entirely appropriate decision, but it was a fairly 

subjective decision. 

Dr. CORN. The numeric figures for the 75 cents, 10 cents and the 

actual county ceiling numbers, I have not found a specific justification for those. And in fact, shortly after the PILT law was passed 

in 1978, there was a study by the Council on Inter-Governmental 

Relations which asserted looking back at that 75-cent figure that 

there was, and I am nearly quoting, no fiscal reason that they 

could determine for having chosen that number. 

Mr. BISHOP. Thank you. Like I said, I didn’t know the answer to 

that. You have given me an answer. I have to admit it is a troubling answer, but it is a good answer. Thank you, Dr. Corn. 

Dr. Yonk, if I could ask you a couple of questions, and let us go 

on to this. I think in your written testimony you gave a sentence 

in there that I thought was interesting and that the idea of PILT 

was tied to a change in the attitude we had about public lands in 

the first place. Would you want more time to just reinforce why you 

said that? 

Dr. YONK. Sure. So, the logic of PILT was that there was a 

change happening in this orientation toward what public lands 

were meant to do and increasing Federal oversight of what was occurring on those Federal lands. And so part of what PILT was desiring to do, especially those that had advocated very strongly for 

it, was to prevent the systematic disadvantaging of those counties 

with large public land holdings based on this change and this new 

focus on conservation at sort of that time and we might term it 

environmentalism today. But it was designed with the recognition 

that there would be costs to these areas with this change. 

Mr. BISHOP. So, you have given us another avenue of attacking 

this problem if we look outside the box in some way. Are you familiar with Headwater Economics and their analysis on the impact to 

national monuments? 

Dr. YONK. I am. 

Mr. BISHOP. Can you just tell me why your conclusions differ so 

starkly from their conclusions? 

Dr. YONK. The Headwater Economics analysis uses a simple 

growth model where they take in Time A what the value of some 

specific measure was, compare it against Time B, holding constant 

the dollars for, they used 2009, and they create this notion that 

there has been an increase. That is great, but it is possible that 

the increase has happened everywhere. 

Our approach suggests that we look at it by controlling for what 

the other factors are and comparing it against the counties that 

were most like the counties where a monument was designated, in 

our case, Grand and Kane, at the time the designation happened. 

And then we want to see what happens in the intervening years. 

And so it is simple to look and say yes, there are in fact larger 

household incomes in 2011 than there were in, like he uses I think 

it is 1995. Yes, the household incomes are larger. But there is no 

clear discussion in that report about why you would see the increase. And the assumption made and the implication that is made 

49 

in that report that has been taken from it is that it is the national 

monument that has led to that. Our work finds no evidence that 

that is the case. 

Mr. BISHOP. So, in your answer to Mr. Grijalva, when you said 

there is no impact, what you are saying in practical terms is tourists were not flocking to that designation, dropping money on the 

streets as they went there. 

Dr. YONK. Correct. 

Mr. BISHOP. But in your study, though, did you include economic 

opportunities that were lost by those designations? 

Dr. YONK. No. In this case, there are two primary reasons. The 

main opportunity cost that has been identified in the Grand Staircase-Escalante monument is the Andalex Mine. We have serious 

questions about whether that mine would have been operative in 

the period based on the regulatory environment. 

So, an estimation of what that effect would be we felt was inappropriate, primarily because we have serious doubts about whether 

or not it would have been open today. Someday would it have been 

open? Perhaps. But the regulatory environment, which is a whole 

other discussion, would likely have prevented it. 

Mr. BISHOP. Let me finish off with three questions to you, and 

then I will let you all go. To what extent do PILT payments reimburse counties that are blessed with wilderness or monument designations? 

Dr. YONK. At some level, less than the costs of those designations. 

Mr. BISHOP. States, like my State of Utah, have productive or try 

to do with productive state lands, especially School Trust lands. Do 

you evaluate the economic benefits from state-owned lands as opposed to similarly Federally owned lands? 

Dr. YONK. We do include a control for those state-owned lands 

because we want to make sure we are not inappropriately ascribing 

the impacts of those lands to the Federal lands. But we have not 

done a full-scale study of what those impacts would be. 

Mr. BISHOP. Do you have an assumption—no, that is unfair—of 

what you would find out? If I had an assumption of what you 

would find out, would that be fair? Never mind, that is not a real 

question. 

One last one I would like to do. After our last hearing, and I 

would just like a quick reaction from you, there was a survey that 

was done by an interest group that was published in one of the 

Salt Lake papers that said basically people are loving the Grand 

Staircase-Escalante monument. 

I want to read what the question was to you. And the question 

that was given was, ‘‘The Grand Staircase-Escalante National 

Monument protects public lands between Bryce and Capital Reef in 

southern Utah. The national monument allows for continued public 

use for grazing and recreation, including hunting, but prohibits 

new development. Do you think the Grand Staircase-Escalante National Monument is good or bad for Utah?’’ 

In their survey, they asked one person who lived in Garfield 

County, one person who lived in Kane County, one in Wayne, nobody in Piute, and then went five miles by car away and asked 132 

people in Salt Lake City. 

50 

As somebody who works in the academic area, what kind of validity would you give to that type of survey, both the question and 

the survey sample? 

Dr. YONK. Having not seen the actual sampling methodology, the 

question is clearly both vague and provides direction to the answer. 

We just recently completed a survey of broadband internet penetration in Utah, and one of our primary concerns was if we simply 

draw a random sample in Utah, we are going to get a large majority from the Wasatch Front Counties of Salt Lake, Davis and 

Weber. And if that is the only people we ask, we can identify what 

the result of that survey will be. They will in fact almost all have 

access to high-speed internet. So, we had to use a different sampling methodology to ensure that you got geographic representation 

in the sample. And so that would be our approach to dealing with 

those potential problems. 

Mr. BISHOP. I appreciate that very much except those three counties are all in my District, so they are good people, they are good 

people. 

I want to thank the witnesses who have been here to give their 

testimony and thank the Members who have shown up to ask questions. I want to make public, the hearing record will be open for 

10 days to receive responses if anyone here wants to add to their 

testimony or if we send you those other responses. 

Sometimes I think just for me, I have found this very illuminating. Ms. Haze, I think it would be very helpful if there were 

some specific deadlines or dates on when those checks need to be 

going out, and I appreciate your answers to the reason for the 

delay that was announced at one time. 

Dr. Corn, I appreciate your historical insight. If you can tell me 

why 75 cents was picked sometime, good for you, and I would actually appreciate that data. 

Dr. Yonk, I appreciate your being here, and I appreciate the 

studies you have had on the impacts these lands have on the people who live in those areas. I thank you for your testimony. 

With that, this Subcommittee hearing is adjourned. 

[Whereupon, at 11:46 a.m., the Subcommittee was adjourned.] 

[Additional material submitted for the record follows:] 

Statement of The Honorable Paul Gosar, a Representative 

in Congress from the State of Arizona 

Chairman Bishop and Ranking Member Grijalva, thank you for orchestrating this 

important hearing, to examine the Payment in Lieu of Taxes or PILT program. 

From the very beginning of our nation’s history, we have recognized that states and 

localities are unable under the principles of federalism to tax federal land. In states 

such as my state and the Ranking Member’s state of Arizona, where the majority 

of land is federally owned, the inability to impose local property tax on federal land 

has real world consequences for states and localities that still have to provide all 

the public safety and education services that citizens count on with a greatly reduced tax base. Additionally, federal workers, contractors and concessionaries, as 

well as their families utilize local schools and services. Without programs like the 

PILT program, which provides a payment to local counties in lieu of the property 

taxes that cannot otherwise be assessed, local school districts and counties shoulder 

the entire financial burden for the impact of federal land within their locality. 

The positive impact of PILT in Western states particularly, and more specifically 

in Arizona’s First District, cannot be stated enough. My district boasts an array of 

federal forest land, and federal parks that are counted among our nation’s treasures. 

In fact, the majority of land in my district is owned and managed by the United 

51 

States government. This state of affairs unfortunately limits the economic development potential of western states, and also requires the county officials in my district 

to manage a delicate balancing act to find the revenues that every community needs 

to pay for essential services. PILT is a crucial part of this balancing act and failing 

to reauthorize it at the end of this fiscal year would jeopardize the health, safety, 

and prosperity of all eight counties in Arizona’s First District. PILT is not a giveaway, it is not an entitlement, and it is not an earmark. It is a crucial portion of 

the agreement that the federal government has made in exchange for its ownership 

of land in the West. A staggering 28 million acres in Arizona alone is eligible for 

PILT, and yet the PILT program yielded only slightly more than $31 million for Arizona counties in Fiscal Year 2011. 

In Graham County, Arizona, for example nearly 40% of the county’s land is owned 

by the Bureau of Land Management and the Forest Service combined. Only 10% of 

the county’s land is private land, subject to property tax. The PILT program is a 

vital source of revenue for a county like Graham, providing 14% of the county’s 

budget. Local officials tell me that PILT is ‘‘live or die’’ for Graham County—and 

what many do not realize is, that local officials must still budget for law enforcement and public safety services for anything that happens on federal land. For example, in Navajo County Arizona, only 14% of the county’s land mass is subject to 

property tax. This state of affairs, combined with state budget reductions, make the 

PILT program more important than ever. I cannot envision a scenario for Arizona’s 

counties that doesn’t involve the PILT program. 

In other instances before the Natural Resources Committee, I have made the argument that the future of the PILT program is a question to be considered within 

the broader question affecting my district every day. Does the federal government 

own too much land altogether, particularly in the West? Could some of these lands 

be better managed than they are, and provide more opportunities for economic development that might compensate localities more fairly for the services they provide 

on federal land? I believe the answers to these questions are a firm yes and no respectively—but until we can meaningfully tackle these questions, the Payment in 

Lieu of Taxes program is a vital program. We must reauthorize PILT and we must 

continue to provide the support these counties and communities need. 

Thank you and I look forward to hearing the witnesses’ testimony. 

Statement submitted for the record by the National Association of Counties 

Chairman Bishop, Ranking Member Grijalva, we appreciate the subcommittee 

scheduling the hearing on Payments in Lieu of Taxes (PILT) held on Friday, October 14th 2011. Thank you for giving counties and the National Association of Counties (NACo) the opportunity to submit testimony for the record. 

The PILT program provides payments to counties and other local governments to 

offset losses in tax revenues due to the presence of substantial acreage of federal 

land in their jurisdictions. Since local governments are unable to tax the property 

values or products derived from federal lands, these payments are essential to support essential government services (mandated by law) such as education, first responders, transportation infrastructure, law enforcement and healthcare in nearly 

2,000 counties in 49 states, the District of Columbia, Guam, Puerto Rico, and the 

U.S. Virgin Islands. 

HISTORY 

In 1954, elected county officials from several western states joined together to develop a regional coalition of counties called the Interstate Association of Public Land 

Counties—an organization that would ultimately evolve into the Western Interstate 

Region of the National Association of Counties. The primary purpose of the organization was to educate policy makers in Washington, DC and advocate for Federal 

payments to counties in lieu of lost property tax revenue due to the presence of a 

vast Federal estate. 

The organization grew and incorporated membership from counties in the fifteen 

western states and enlisted support from other public land counties in other regions 

of the United States through what was then the National Association of County Officials. After several years of growing pressure from county officials nationwide, the 

94th Congress passed the Payment in Lieu of Taxes Act (PL 94–565). The PILT Act 

was codified in Chapter 69 of Title 31 of the United State Code. Applicable regulations are in Subpart 1881, Title 43 of the Code of Federal Regulations. 

The impetus for its passage in 1976 was the passage of the Federal Land Policy 

and Management Act (FLPMA), specifically FLPMA established that disposal of 

public lands would largely cease. In lieu of a future in which lands could continue 

52 

to pass from Federal ownership to private ownership (such as the Homestead Act), 

Congress opted to reimburse local governments for land that would remain in Federal ownership ‘‘in lieu’’ of paying direct property taxes. 

Congress established national formulas which took into account population, existing revenue-sharing payments for resources harvested or extracted from public 

lands, and base acreage of the Federal estate within the jurisdiction. With a few 

exceptions in New England and Wisconsin, states determined that counties were the 

jurisdictions that would receive payments. 

Local governments (usually counties) which provide services such as public safety, 

environment, housing, social services and transportation and have non-taxed federal 

land within their jurisdiction, are eligible for annual payments. 

Payments are made directly to the counties unless the state government concerned chooses to receive the payments and, in turn, pass the money on to other 

smaller governmental units such as a township or city. (Wisconsin is the only state 

currently employing this option) 

Historically, payments were limited to an amount appropriated by Congress. Initially authorized at $100,000,000, that amount was appropriated annually during 

the first decade of the Act. During the 1980s there were attempts to zero out the 

amount in budgets, but Congress consistently restored the funds to the authorized 

level, such that the minimum amount was available each year. 

The Act was amended in 1994 to provide for a more equitable authorization level 

in light of disparities that existed between property values and current PILT payments. The law as amended, uses the consumer price index to adjust the population 

limitation and the per acre dollar amounts used to calculate alternative ‘‘A’’ and ‘‘B’’ 

under Section 6902. However, an individual county’s payment from one year to the 

next may not necessarily increase since the total amount of money available under 

the PILT program is set by Congress each year in the Department of the Interior 

and Related Agencies Appropriations Bill. Payments also vary with changes in 

‘‘prior-year’’ payments. 

From 1994 on, the authorized level and the appropriated level began to diverge, 

since the authorization crept up by an amount equal to the CPI each year, while 

appropriations stayed almost constant. Initial payments were set at $0.75/acre (Alternative A) and $0.10/acre (Alternative B). 

PILT is one of the few Federal funding programs that has a ‘‘floating’’ authorization. Most enabling acts set an authorized amount. Since the 1994 amendment that 

indexed individual payments, the total authorized for the program has grown from 

the $100 million to over $375 million (FY2011) since the authorized level flows directly from a summation of each county’s indexed maximum payment level. 

Until the passage of PL110–343, appropriation levels had never reached authorized levels. The table below shows the national levels of authorization and appropriation since 2000. There was a large increase in FY 2001, and steady increases 

until FY 2006. In FY 2008, the DOI submitted two payments—the first payment 

in June was fixed at the FY 2007 level by Continuing Resolution, less a 1.6% rescission. The second payment was paid following the signing of the Emergency Economic Stabilization Act (PL110–343) on October 3, 2008—which modified the PILT 

program from a discretionary program (subject to annual appropriations) to a fully 

funded mandatory entitlement program. PILT has been fully funded from FY 2008 

to FY 2012. 

53 

HOW ARE PAYMENTS CALCULATED 

Payments under each section of the Act are calculated as follows: 

Section 6902 payments: 

Alternative A: 

$2.42 (in fiscal year 2011) times the number of acres of qualified federal 

land in the county, reduced by the amount of funds received by the county 

in the prior fiscal year under certain other federal programs. 

($2.42 X [number of acres of qualified federal land])—[prior year funds received] 

OR 

Alternative B: 

Thirty three cents (in fiscal year 2011) times the number of acres of qualified federal land in the county, with no deduction for prior year payments. 

$0.33 X [number of qualified acres] 

Payments under either alternative are subject to population payment limitations. 

Section 6904 and 6905 payments— 

Payments on Federal lands acquired after December 30, 1970 as additions to 

lands in the National Park System or National Forest Wilderness Areas (Section 

6904) and payments on Federal lands in the Redwood National Park or lands acquired in the Lake Tahoe Basin near Lake Tahoe under the Act of December 23, 

1980 (Section 6905) are computed by taking one percent of the fair market value 

of the purchased land and comparing the results to the amount of property taxes 

paid on the land in the year prior to federal acquisition. The payment to the county 

is the lesser of the two. 


70721.014.eps
54 

Section 6904 Payments are made for a period of five years following each acquisition. 

Section 6905 Payments are made each year from the date the land was purchased by the federal government until an amount equal to 5% of the fair market 

value at the time of acquisition is fully paid. However, the yearly payment may not 

exceed the lesser of one percent of the fair market value or the property taxes assessed prior to federal acquisition. 

DEFINITIONS 

Federal entitlement acreage 

All Federally held lands in all States, Commonwealths and Territories are counted with the exception of those lands that are part of Department of Defense installations and withdrawals. Nationally the following lands are counted: 

a. All land administered by the United States Forest Service 

b. All land administered by the National Park Service 

c. All land administered by the Bureau of Land Management 

d. All land withdrawn from public lands administered as part of the National 

Wildlife Refuge System (acquired land is not included) 

e. All dredge and flood control land administered by the Corps of Engineers 

f. Project lands withdrawn and administered by the Bureau of Reclamation 

g. Lands in Colorado acquired after Dec. 31, 1981 to expand Ft. Carson 

h. Land on which are located semi-active or inactive Army installations for ‘‘use 

for mobilization and for reserve component training’’ 

i. Land in Utah acquired for the inter-basin water transfer (URC land) project 

Prior Year Payments 

Prior year payments are payments to local government under programs other 

than PILT during the previous fiscal year. These payments include those made 

under: 

a. the Refuge Revenue Sharing Fund, 

b. the National Forest Fund (‘‘25% Fund’’) 

c. the Taylor Grazing Act, 

d. the Mineral Leasing Act for acquired lands, 

e. the Federal Power Act, 

f. Titles I and III of the Secure Rural Schools and Community Self-Determination Act. 

The PILT Act requires each state to report these payments to the Department of 

the Interior each year. 

DISBURSEMENTS 

In 2010, the Department of the Interior announced a decision to delay the annual 

PILT payments. This decision caused widespread panic and confusion for counties 

nationwide as local governments have historically received annual PILT payments 

in June of each year and plan their budgets accordingly. The DOI last minute decision to delay payments without providing any notice was problematic, and placed 

countless public lands counties in difficult financial hardship. 

Many counties begin their fiscal year July 1 and rely on the June PILT payment 

to be available as net working capital available to the county general fund. For example, in the state of Oregon, property taxes are primarily received in November. 

The PILT payment being received in June allows for adequate operating funds to 

provide services to the community until the tax revenue flows again. In counties 

that are heavily encumbered by Federal lands, the PILT payment represents anywhere from 50–80% of the counties beginning cash balance. 

Another problem created by the DOI decision to delay payments has to do with 

violating individual state budget laws. In a number of states, counties operate on 

a cash basis, which requires posting of revenue once it is received. In counties whose 

fiscal year ends June 30th, without the PILT payment those counties could be in 

violation of state budget law. 

NACo and a bipartisan list of United States Senators and members of the House 

of Representatives requested Secretary Salazar take every effort to disburse payments to counties prior to June 30, 2010 in order to avert substantial financial distress in public lands counties across the nation. 

Ultimately, the DOI resolved the problem in time and released the payments in 

late June, 2010. In light of the payment disbursement conflict, Senators Ensign (R– 

NV), Tom Udall (D–NM), and Begich (D–AK) introduced Payment in Lieu of Taxes 

Amendments Act of 2010 (S. 3730). The legislation would require the Department 

of the Interior to issue payments to counties not later than May 1 of each fiscal 

55 

year. While the legislation was not enacted, the DOI received a very strong message 

from Congress and NACo that payments need to be made in a timely fashion. 

STATUS QUO 

On October 3, 2008, Congress enacted the Emergency Economic Stabilization Act 

of 2008 (PL 110–343) which authorized counties to receive their full PILT entitlement from 2008 through 2012. The amount authorized for the program in FY 2011 

was $375.6 million. 

Currently, the Department of the Interior has one remaining payment that will 

be disbursed in June 2012. Congress will be required to act in order to maintain 

mandatory funding for fiscal years FY 2013 and beyond. Currently, only one piece 

of legislation has been introduced in the 112th Congress to provide continued funding for the PILT program. Senator(s) Jeff Bingaman (D–NM) and Lisa Murkowski 

(R–AK) introduced S. 1692 the County Payments Reauthorization Act of 2011 on 

October 12, 2011. The proposal would provide continued mandatory funding for 

PILT for FY 2013 through FY 2017. 

While the United States Senate and the House of Representatives may approach 

legislative solutions for funding the PILT program differently, NACo will continue 

to urge leadership on both sides of the isle to act in a spirit of bipartisan and bicameral cooperation and work together to move a final legislative solution to the 

President’s desk. 

POTENTIAL MODIFICATIONS TO PILT 

NACo believes several policy modifications should be explored by Congress to 

identify ways to make payments to counties more equitable. A range of possible alternatives should be considered to more evenly distribute PILT funds to counties to 

provide more budget certainty. 

Over time, some programmatic anomalies have become evident. Among these are 

the non-inclusion of Federal acquisitions, substantially reduced payments to jurisdictions with large Federal estates, and the inability of current formulas to account 

for externally induced costs resulting from Federal land use by persons originating 

from outside the jurisdiction. 

Some suggest, population (up to 50,000 persons) may not be the most appropriate 

method for providing fair allocation. The 1994 amendments primarily changed the 

method of establishing the annual authorization level, but left the basic distribution 

formulas intact. Revenue sharing programs identified as prior year payments have 

provided some additional funding to county governments, such as the Secure Rural 

Schools program. However, increases in these other payment programs have reduced the amount of PILT funding annually in many resource dependant counties. 

Such payments have generally evolved downward as Federal land use has shifted 

from revenue-producing use to public outdoor recreation use. Such shifts have not 

only reduced or altered the inflow of revenue sharing; they have also created cost 

impacts to jurisdictions to provide services such as emergency search and rescue, 

law enforcement and increased road maintenance, among other impacts. 

PILT is not only an important element to county funding, the fact that it is indexed to inflation and is paid to counties for general purposes is critically important 

so as to assure it retains its character as a property tax payment and can be utilized 

for any general fund purpose, and we believe it should retain this basic character. 

Counties with extensive Federal estates, however, receive PILT payments which 

neither reflect the local government costs resulting from that estate, or the payment 

is not fully reflective of the vastness of such estate within the jurisdiction. 

National formulas inadequately account for all the factors present. NACo has reviewed a number of possible formula changes, but as with any formula there are 

‘‘winners and losers.’’ We agree that PILT should count acres first and consider local 

population last, if at all. We believe that more fair distributions can result through 

modifications to the current formula to reflect not only acreage and current revenue 

payments, but also other factors such as external use pressures that may be present 

within some of the jurisdictions. 

CONCLUSION 

Again, NACo appreciates the opportunity to provide testimony before the House 

Natural Resources Subcommittee on Parks, Forests and Public Lands. We look forward to working with members of the Committee to pass legislation that will continue the historic partnership between Federal and county government by extending 

continued mandatory funding for the Payment in Lieu of Taxes program for fiscal 

years 2013 and beyond. Please contact Ryan R. Yates, Associate Legislative Director 

for the National Association of Counties for more information. 

Æ