S-2108-116
Placed on Senate Legislative Calendar under General Orders. Calendar No. 384.
Sponsored by Steve Daines (R-MT)
What it does
This bill would raise the maximum dollar amount that the federal government pays to local governments through the Payment In Lieu of Taxes (PILT) program. PILT payments compensate local governments for property tax revenue they cannot collect on federal lands within their borders. The increase in maximum payments would be proportionally larger for local governments serving populations below 4,500 people.
Who benefits
Small and rural county governments — especially those with populations under 4,500 — that contain large amounts of nontaxable federal land (such as national forests, parks, or Bureau of Land Management land). Local residents in those counties who depend on county-funded services such as roads, schools, emergency services, and public infrastructure. Western states, where federal land ownership is disproportionately concentrated, would see the greatest effect.
Who is hurt
Federal taxpayers broadly, as higher PILT payments would increase federal expenditures. Counties with populations above 4,500 would receive a smaller proportional increase than smaller counties, potentially widening the per-capita payment gap between small and mid-sized rural counties. No private individuals or businesses are directly regulated or penalized by this bill.
Supporters argue
Supporters argue that counties with large federal land holdings are structurally disadvantaged because they cannot tax that land to fund local services, yet they must still maintain roads, provide emergency response, and support infrastructure that federal land users rely on. The current PILT formula, they contend, undercompensates small counties relative to the actual burden federal land places on local budgets. Increasing the maximum payment ceiling — especially for the smallest counties — would restore a fairer balance between the federal government's land ownership and its financial responsibility to the communities that host that land. Without adequate PILT funding, these counties face chronic budget shortfalls that reduce services for residents who have no alternative revenue source.
Opponents argue
Opponents argue that raising PILT payment ceilings increases mandatory federal spending without a corresponding offset, adding to the federal deficit. They contend that the existing formula already accounts for population and acreage, and that selectively boosting payments for the smallest counties distorts the program's original intent of proportional compensation. Some argue that counties should pursue economic development or other revenue strategies rather than relying on expanded federal transfers. Others question whether the payment increases are calibrated to actual service costs or simply represent a spending increase without rigorous justification, and that scarce federal dollars could be directed to programs with broader national impact.
Constitutional context
PILT is authorized under Congress's Property Clause (Art. IV, §3, cl. 2), which grants Congress broad power to manage federal lands, and the Spending Clause (Art. I, §8). No significant constitutional challenge is anticipated for this type of direct federal payment to local governments. The Tenth Amendment is tangentially relevant — PILT payments are voluntary federal grants, not mandates on states, so anti-commandeering concerns (New York v. United States, Printz v. United States) do not apply. Post-Loper Bright (2024) deference shifts are not directly implicated, as this bill sets payment amounts by statute rather than delegating rulemaking authority to an agency.
Checks and balances
Congress retains direct control over PILT payment levels through statute, limiting executive discretion. This bill would modestly expand the legislative branch's role in setting specific payment ceilings rather than delegating that determination to the Department of the Interior. No significant shift in inter-branch power balance is created.
Historical precedent
The original PILT Act of 1976 (P.L. 94-565) established the federal payment framework. Congress has periodically reauthorized and adjusted PILT payment formulas, including the Secure Rural Schools and Community Self-Determination Act of 2000, which addressed similar rural county revenue shortfalls from federal land ownership.