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Peterson, Smith, Gosar Introduce Local Government Taxpayer Fairness Act

 

October 19, 2020



Today, Representatives Collin C. Peterson (D-MN), Adrian Smith (R-NE) and Congressional Western Caucus Chairman Paul Gosar (R-AZ), introduced the bipartisan Local Government Taxpayer Fairness Act that would require the U.S. Fish and Wildlife Service to pay local property taxes like a private landowner on land acquired by the agency following the enactment of the legislation.

“The Fish and Wildlife Service continues to squeeze taxpayers in rural communities each time they take productive land off the tax rolls. My bill will ensure that worthy conservation projects don’t come at the expense of rural schools, police and other essential services.” said Peterson. “The Fish and Wildlife Service already owns more land than it can manage, and the agency should prioritize using new Land and Water Conservation Fund (LWCF) funds to improve wildlife habitat on its current landholdings. If the agency must acquire more land it needs to fully compensate struggling townships and counties.”

“Over a fourth of the land in the United States is owned and managed by the federal government," said Smith. "This bill encourages the federal government to maintain these lands and provide proper stewardship rather than overextending resources and buying more land without local communities getting proper compensation.”

“For too long the Payments In Lieu of Taxes (PILT) program has shortchanged our communities, while I believe we should move to a permanent PILT program, fixing local payments is critical. Too often the lack of payment by federal agencies leave our communities short changed to meet the needs of our schools, police and emergency services. I am proud to join my friend today in moving to protect local communities and promote conservation,” said Gosar.

"Federal Payments In Lieu of Taxes help counties provide essential services that support untaxable federal public lands, including emergency response, search and rescue, fire prevention and infrastructure maintenance,” said National Association of Counties Executive Director Matthew Chase. “Unfortunately, newly acquired National Wildlife Refuge lands are not eligible for Payments In Lieu of Taxes, placing undue burdens on counties and local taxpayers. The Local Government Taxpayer Fairness Act will help public lands counties stabilize their budgets and improve essential service delivery to residents and visitors alike. We applaud Congressman Peterson for sponsoring this bill and hope to see Congress pass it swiftly.”

Counties across the state of Minnesota depend on federal Payments in Lieu of Taxes (PILT) to make up for lost property tax base due to federal land holdings. For some Minnesota counties, the federal government owns more than 50% of the entire county’s available land. While counties are grateful for Congress’ support of PILT payments, it is important to note that there is no guarantee that these payments match the true value of the land and require constant legislative attention just to keep up with inflation. AMC is appreciative and supportive of Rep. Peterson’s efforts to create fairness and dependability surrounding the loss of revenue due to federal land holdings. Without a dependable tax base, rural communities are faced with levy pressures, reductions in services, and threats to community viability.

BACKGROUND

Under current law, federal land management agencies like the Fish and Wildlife Service are not eligible for taxation by state or local governments. As federal agencies acquire land, local units of government lose the annual property tax revenue that would be generated if the land was privately owned. This loss of revenue shifts the tax burden onto local taxpayers who must cover any local budget shortcomings.

Existing federal programs designed to compensate local governments for federal land holdings either do not apply to Fish and Wildlife Service land, or have been underfunded in recent years. Because of this, local governments with Fish and Wildlife Service land in their jurisdiction do not receive revenues equivalent to what private landowners would pay in property taxes.

In August, the Great American Outdoors Act was enacted, providing permanent full funding of $900 million annually for the Land and Water Conservation Fund (LWCF). This funding can be used by land management agencies to better maintain land, but also to acquire additional federal land. The Land and Water Conservation Fund is a principal source of funding for land acquisitions by the Fish and Wildlife Service.

The Local Government Taxpayer Fairness Act would give local governments the ability to treat the Fish and Wildlife Service like a private landowner for tax purposes on any lands acquired after the bill is enacted. Local governments would have the option to send an annual tax bill to the Department of Interior for payment. If the Department does not make all payments within one year, the agency will be prohibited from acquiring additional land until all payments have been made.

 

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