Alternatives for Achieving Greater Equities in Federal Land Payment Programs

PAD-79-64: Published: Sep 25, 1979. Publicly Released: Sep 25, 1979.

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Kenneth W. Hunter
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A variety of land payment programs have evolved over the years to compensate States and counties for tax exemptions on Federal land within their jurisdiction. GAO reviewed programs in eight Western States where 80 percent of the Federal land payments are made and found many inequities and inconsistencies.

The basic aim of Congress in enacting these programs was to compensate States and counties for lost tax revenues and the economic burdens of tax-exempt Federal land. As laws were designed and implemented, most programs pay States and counties a percentage of the annual receipts generated from the public lands, rather than on the basis of equivalent taxes that would have been paid if the land were privately owned. Because the payment bears no relationship to tax equivalency, States and counties do not receive equitable payments. Many States and counties are overpaid compared to tax equivalency, while others receive little or no payment. The Public Land Law Commission recommended in 1970 that counties receive one payment rather than a number of payments under the various receipt-sharing programs. Congress decided not to repeal the Federal land payment programs. Nevertheless, some counties that already received more in land payments than they would have in taxes for the same land received an additional bonus. In revising Federal land payments laws, Congress may find it useful to consider alternatives to the type of receipt-sharing approach now used, such as fee-per-acre, other types of revenue sharing, fee for service, and tax equivalency.

Matters for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The recommendation is still valid. However, because of the political impact, the act will not be changed and BLM will continue to operate as usual.

    Matter: If Congress decides to continue receipt-sharing payments and acreage payments under Public Law 94-565, it should take action to correct fundamental weaknesses in Public Law 94-565. The weaknesses in the law that allow States to influence the size of payments and that require BLM to use State data which have been unreliable could be corrected by amending Public Law 94-565 so that: (1) its payments are disassociated from receipt-sharing payments; (2) deductions for receipt-sharing payments are allocated to counties where receipts were earned; or (3) deductions for receipt-sharing payments are allocated to counties based on population or some other allocation method.

  2. Status: Closed - Not Implemented

    Comments: The recommendation is still valid. However, because of political impact, the act will not be changed and BLM will continue to operate as usual.

    Matter: Congress should delete special provisions for Oregon and California grant lands and Coos Bay Wagon Road grant lands, and include payments under those exempted statutes to correct the Public Law 94-565 problem of paying counties a minimum of 10 cents an acre when the county is already being compensated under receipt-sharing programs. This action is necessary to avoid making acreage payments to counties that already receive unusually large receipt-sharing payments under special legislation for revested lands.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To make corrections in past payments, the Bureau of Land Management should take steps to validate receipt-sharing deductions for fiscal years 1977 and 1978 payment computations to all States except for the eight States GAO reviewed. GAO has already given the Bureau correct data on those States.

    Agency Affected: Department of the Interior: Bureau of Land Management


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