WASHINGTON — A bipartisan agreement on a farm bill includes a one-year extension of funding for the federal payments in lieu of taxes program through fiscal 2014.
The final bill, known as the Agricultural Act of 2014, was announced late Monday. The House is expected to pass the bill on Wednesday, and Senate is expected to take it up shortly thereafter. President Obama is expected to sign the bill, House and Senate agriculture leaders said in a conference call on Tuesday.
Under the PILT program, the federal government makes payments to local governments to help offset the losses in property tax revenues that occur because of the presence of federal lands in their jurisdictions. It is a key source of funding for counties and local governments, particularly in the western United States where there is a heavy amount of federal land ownership.
The Interior Department calculates the amount of the payments, and distributes them annually in June. Without an extension of funding, local governments would not receive payments this year. About 1,900 local governments were allocated a total of about $400 million in PILT payments in fiscal 2013, which ended on Sept. 30.
Counties treat the payments as property tax revenue and put it in their general funds. A lack of PILT payments could lead some counties to have their credit ratings hurt, default on their obligations or even file for bankruptcy, National Association of Counties associate legislative director Ryan Yates said.
Lawmakers wanted to include a PILT extension in the farm bill in light of the fact that funding for the program was not included in the omnibus spending law passed earlier this month. In addition to the PILT funding extension, the farm bill also provides funding for rural development programs.
"The farm bill as it stands tonight is a major win for the nation's counties and the residents we serve," said NACo President Linda Langston, a member of the Linn County, Iowa board of supervisors. "It cannot be overstated how important 2014 PILT program funding and reauthorization of county-supported rural development programs are to local economies as we work to emerge from years of recession and slow economic growth."
Yates said that while NACo is happy to see the one-year extension of PILT funding, "the toughest thing for counties is going year to year." The organization will work with Congress to permanently fund the PILT program, Yates said.
Earlier this month, identical bills were introduced in the House and the Senate to make the PILT program permanent. The sponsor of the Senate bill, Sen. Mark Udall, D-Colo., called the one-year extension of PILT funding "a major victory," but added that he "will keep fighting to fully fund the PILT program past 2014 and remove these funds from the annual uncertainty of the federal budget process."
