WASHINGTON – Secretary of the Interior Dirk Kempthorne today announced that more than $232.1 million is being distributed in 2006 to approximately 1,850 local governments with jurisdictions containing tax-exempt federal lands.  The funds, which are channeled to localities under the federal Payments in Lieu of Taxes (PILT) Program, add up to $5.7 million more than the $226.4 million in payments in 2005.

"These important dollars help states offset the loss of tax revenues to counties that contain federal lands," the Secretary said. "We recognize the impact of federal land management on local communities and this money will help pay for essential services such as firefighting, search-and-rescue operations and a host of other badly needed on-the-ground services."

Kempthorne noted that this year's distribution payments under the Payment In Lieu of Taxes Act compensate local governments for tax revenue lost because of the federal land in their jurisdictions.

The amount appropriated for the PILT program in FY 2006 was $232.5 million.  This includes $232.1 million for payments to counties and other local governments and the balance for expenses to administer the program.

The Interior Department collects revenues of $3 to $4 billion annually from commercial activities on federal lands, such as oil and gas leasing, livestock grazing and timber harvesting. A portion of these revenues are shared with states and counties in the form of revenue-sharing payments with the balance deposited in the  U.S. Treasury, which in turn pays for a broad array of federal activities, including payments to counties.
PILT payments to county governments may be used for any governmental purpose.  By law, PILT payments are to be disbursed by the Interior Department on or before September 30th of each year. Like last year, the 2006 payments are going out in June.  For the fifth year, Interior will issue the payments before June 30 to make payments available to counties in a time frame consistent with their fiscal year schedules.

The PILT funds have been used to help improve local school, water, and road systems. Payment eligibility is reserved for local governments (usually counties) that provide services such as those related to public safety, environment, housing, social services and transportation and that contain nontaxable federal lands.

The annual PILT payments to local governments are computed based on the number of acres of federal entitlement land within each county or jurisdiction with a cap based on population.  Federal entitlement lands include Department of the Interior lands and water projects (National Park System, Bureau of Land Management, U.S. Fish and Wildlife Service and Bureau of Reclamation) as well as those of the U.S. Army Corps of Engineers and U.S. Department of Agriculture national forest lands.

Individual county payments may increase or decrease from the previous year as a result of changes to acreage data, which is updated annually by the federal agency administering the land and population data updated by the Census Bureau. 

By statute, the per-acre and population variables used in the formula to compute payment amounts are subject to annual inflationary adjustments using the Consumer Price Index.  The requirement for annual inflationary adjustments to the per-acre and population variables was included in the 1994 amendments to the PILT Act.  For purposes of calculating the 2006 payment, the per-acre amounts are adjusted from the 2005 payment of $2.09 per acre and 29 cents per acre to $2.15 and 30 cents per acre, and the population variables are adjusted from $55.98 - $139.93 to $57.66 - $144.13 per capita.  The 2006 payment will fund 67.4 percent of the authorized level of $344.3 million. 

The computation also adjusts the payment for the level of prior-year revenue payments and the amount that a county receives under Sections 6904 and 6905 of the PILT Act.  Revenue payments are federal payments made to local governments under programs other than PILT during the previous year and include those made under the Refuge Revenue Sharing Fund, the National Forest Fund, the Taylor Grazing Act, the Mineral Leasing Act, the Federal Power Act, and the Secure Rural Schools and Community Self-Determination Act of 2000.  Sections 6904 and 6905 provide additional payments for additions to the National Park System and national forest wilderness areas.

As a result of substantial increases in Forest Service timber payments, reductions in PILT entitlement land and expiration of section 6904/5 payments, the total 2006 PILT payments to Arizona, Arkansas, Connecticut, District of Columbia, Florida, Missouri, New Jersey, North Dakota, Ohio, Pennsylvania, Virgin Islands, Virginia and West Virginia are lower than the 2005 payments. 

In addition, the FY 2006 PILT payments to Bayfield County, Wisc.; Cooke County, Tex., Navajo County, Ariz., and Boise County, Idaho were reduced as a result of negative adjustments needed to correct for inaccurate acreage or prior-year payment data reported by federal agencies in a previous fiscal year.
 
The state-by-state list of PILT payments follows.

Payments in Lieu of Taxes
Fiscal Year 2006
Summary by State