S-1175-119
Committee on Energy and Natural Resources Subcommittee on Public Lands, Forests, and Mining. Hearings held.
Sponsored by Steve Daines (R-MT)
What it does
This bill would amend the Payment in Lieu of Taxes (PILT) program by adding new population tiers for counties with fewer than 1,000 residents and restructuring the per-capita payment formula for all counties up to 50,000 residents. Currently, the lowest population tier begins at 5,000 residents; this bill would lower that threshold to 1,000, creating finer-grained tiers and generally higher per-capita payment rates for the smallest counties. PILT payments compensate local governments for tax revenue they cannot collect on federally owned land within their borders.
Who benefits
Small and rural counties — particularly those in western states like Montana, Idaho, Nevada, Colorado, and Alaska — that contain large amounts of federally owned land and have populations under 5,000. County governments that would receive higher per-capita PILT payments, allowing more funding for local services. Residents of those counties who depend on county-funded services such as roads, schools, emergency services, and law enforcement. Local government employees whose positions are funded by county revenues.
Who is hurt
The federal Treasury, which would pay out higher PILT amounts. Taxpayers broadly, who fund the increased payments. Larger counties (above 50,000 residents) that contain federal land and are not addressed by this bill's changes. Counties that currently receive PILT payments under the existing formula may see no change or a relatively smaller benefit compared to the smallest counties, potentially widening disparities between county sizes within the program.
Supporters argue
Supporters argue that the current PILT formula systematically underpays the smallest counties, which often have the highest proportion of federally owned land relative to their tax base and the fewest alternative revenue sources. A county of 500 people with 90% federal land ownership has virtually no private property to tax, yet must still maintain roads, provide emergency services, and fund schools — costs that do not scale proportionally with population. The bipartisan, multi-state sponsorship (including senators from Montana, Idaho, Nevada, Colorado, and Alaska) reflects that this is a structural equity issue affecting communities across the political spectrum.
Opponents argue
Opponents argue that expanding PILT payment tiers increases mandatory federal spending without addressing the underlying policy question of whether the federal government should hold such large land portfolios in the first place. They contend that the revised per-capita rates in the reported amendment are lower than those in the original bill — for example, the rate for a population of 1,000 dropped from $394.15 to $325.74 — suggesting the formula adjustments are fiscally driven rather than based on a principled assessment of actual county costs, and that the program's payment levels remain arbitrary rather than tied to verifiable local fiscal need.
Constitutional context
No significant constitutional issue is presented. Congress has broad authority under the Property Clause (Art. IV, §3, cl. 2) to manage federal lands and make payments related to them, and PILT is a long-established exercise of that authority. The Commerce Clause and Spending Clause also provide a basis for intergovernmental fiscal transfer programs of this kind.
Checks and balances
Congress controls PILT payment levels through statute; the Department of the Interior administers payments to counties; no new executive discretion is created, as payment amounts are set by the statutory formula.
Historical precedent
The PILT program was established by the Payment in Lieu of Taxes Act of 1976 (P.L. 94-565) and has been reauthorized and amended multiple times, including a permanent reauthorization in the Omnibus Public Land Management Act of 2009, which adjusted payment formulas in ways structurally similar to this bill.