IntroductionImplementing public policy often involves steps and procedures that can be challenging to digest for policy- makers themselves, researchers and laypeople alike. This fact sheet outlines the procedures for calculating the level of federal payment from the Payments in Lieu of Taxes (PILT) Program. Approximately 80% of Nevada’s total land acreage is federally administered, and local governments can’t legally tax these lands. Former Bureau of Land Management Director Jim Baca stated, “While federal lands provide important local recreational and economic opportunities, their tax-exempt status can have fiscal impacts on the governmental units that surround them. These payments are beneficial to local governments, especially for sparsely populated counties that contain large acreage of tax-exempt federal lands. These payments help provide vital services such as fire and police stations, search and rescue operations, and road construction.”1
For Churchill County, 100% of PILT payments, prior to their adjustments, were derived from Section 6902 payments. For all counties in Nevada, Section 6902 payments comprise 99% or more of PILT monies.
BackgroundIn 1976, Congress authorized federal land management agencies to share income with states and counties and provide the Payment in Lieu of Taxes (PILT) Program to help offset lost tax revenues (Public Law 94-565). Due to its distinction as the largest federal land management agency, the BLM was chosen by the Secretary of the Interior to administer the PILT Program.
The 1976 Act has undergone several changes since initial passage. In 1994, there were three sections in the Act that distributed money to the states: Section 6904, Section 6905 and Section 6902.
Section 6902 authorizes payment to local government entities for “entitlement land” using one of two alternative payment schemes. “entitlement lands” are lands within the county that are part of the National Forest System, National Park System or Bureau of Land Management, or are part of federal water resource development.
Section 6904 authorized payments for lands acquired after Dec. 31, 1970, that were additions to the National Park System or National Forest Wilderness Areas. These lands must have been subject to local real property taxes within the five-year period preceding the acquisition by the federal government. Payments are made annually for five years following the acquisition and are 1% of fair market value for these lands at the time of acquisition. The annual payments may not exceed the amount of taxes levied on the property during the year before the purchase. The Act stipulates those Section 6904 payments must be distributed to local governments and school districts that have incurred losses of real property taxes prior to the acquisition of these lands. Payments are distributed proportional to tax revenues that were levied by local governments and school districts in the year prior to the acquisition of these lands.
Section 6905 payments pertain to government-held interests in the Redwood National Park or Lake Tahoe Basin after the passage of (P.L. 96-586, 94 Stat. 3383) in 1980. These payments continue until they total 5% of the fair market value of the lands at the time of their acquisition and cannot exceed actual property taxes assessed and levied on the property during the fiscal year prior to federal government acquisition.
For the complete report, use the link below to download the PDF version.
T. R Harris, R Chicola, 2023, Payments in Lieu of Taxes (PILT) to Nevada Counties in 2021: Carson City, Extension, University of Nevada, Reno FS-23-16
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