Pursuant to a congressional request, GAO commented on the validity of deductions made by the Bureau of Land Management (BLM) from payments made to a county in which federal lands were located. The payments were made under the Payment in Lieu of Taxes Act. The county maintained that the government payments, which resulted from property taxes paid to the county via the state, became state discretionary funds not subject to deduction. GAO noted that the funds did not become discretionary since they were not revenues collected by the state and, thus, were not exempt from applicable deductions. GAO concluded that, since they were not state discretionary funds, BLM properly reduced the payments.