HR-8257-119
Referred to the House Committee on Natural Resources.
Sponsored by Jeff Hurd (R-CO)
What it does
This bill would amend the federal Payments in Lieu of Taxes (PILT) program by adding new, lower population tiers for counties with fewer than 500 residents. Currently, the smallest population tier in the PILT formula starts at 5,000 residents; this bill would lower that floor to 500 and restructure the per-capita payment table to include tiers as small as 500 people. The result would be higher per-capita PILT payments for very small, low-population counties that contain federal land.
Who benefits
Very small, rural counties (under 5,000 residents) that contain significant amounts of federal land and currently receive lower per-capita PILT payments than the new formula would provide — particularly those under 500 residents. County governments in these areas that rely on PILT funds to pay for roads, schools, emergency services, and other local needs. Residents of those counties who depend on locally funded public services. Western states such as Colorado, Montana, Wyoming, Nevada, Utah, and Idaho, which tend to have large amounts of federally owned land and many low-population counties.
Who is hurt
The federal Treasury, which would pay out more in PILT funds under the revised formula. Taxpayers broadly, to the extent increased payments are not offset elsewhere. Larger counties that receive PILT payments but would not benefit from the new lower-tier rates. If total PILT appropriations remain fixed, other PILT-eligible counties could see reduced payments as funds are redistributed toward smaller counties.
Supporters argue
Supporters argue that the current PILT formula systematically underpays the smallest counties because its lowest population tier — 5,000 residents — is far too large to capture the fiscal reality of counties with only a few hundred people. These counties often have the highest share of untaxable federal land relative to their tax base, yet receive the least per-capita compensation. They contend that a county of 300 people faces fixed costs for roads, emergency services, and infrastructure that are not proportionally smaller than a county of 5,000, making the per-capita disparity especially harmful to local government solvency.
Opponents argue
Opponents argue that expanding PILT tiers for very small counties increases federal spending without a clear offset, adding to the deficit at a time of fiscal pressure. They contend that the counties most affected — those with fewer than 500 residents — represent an extremely narrow population, raising questions about whether a targeted federal payment adjustment is the most efficient use of limited funds. Critics may also argue that the bill addresses a symptom rather than the underlying policy question of whether the federal government should hold so much land in states where it constrains local tax bases.
Constitutional context
The PILT program is a straightforward exercise of Congress's spending power under Article I, Section 8. No significant constitutional tension exists here — Congress has broad authority to appropriate funds and set the terms of federal payments to local governments, and modifying an existing statutory formula raises no novel constitutional questions under the Commerce Clause, Takings Clause, or major questions doctrine.
Checks and balances
Congress holds authority over PILT payment formulas and appropriations; the Department of the Interior administers payments; annual appropriations acts serve as the primary check on total PILT outlays.
Historical precedent
The PILT program was established by the Payment in Lieu of Taxes Act of 1976 (P.L. 94-565) and has been amended multiple times, including a 2008 reauthorization that temporarily increased payment levels before reverting to formula-based payments.