Tax-Exempt Federal Lands and Secure Rural Schools

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Western Governors’ Association
Policy Resolution 2017-03

Tax-Exempt Federal Lands and Secure Rural Schools


  1. The land ownership pattern in the West is a patchwork of federal, state, tribal and privately owned and managed lands.
  2. This ownership pattern results in part from the withdrawal of lands by the federal government for various federal purposes, including national parks, national forests, lands administered by the Bureau of Land Management, national wildlife refuges, national monuments, and military bases.
  3. The federally-owned lands are exempt from property taxes, and recognizing the costs to states and counties from the presence of tax-exempt federal lands within their borders, in 1976 Congress enacted Public Law 94-565 to create the Payments in Lieu of Taxes (PILT) program.
  4. Congress also enacted the Twenty Five Percent Fund Act of 1908 to share receipts from timber sales on U.S. Forest Service lands. Because of a dramatic decline in the amount of timber the U.S. Forest Service offered for sale starting in the late 1980s, Congress enacted the Secure Rural Schools and Community Self-Determination Act (Public Law 106-393) as an alternative mechanism to compensate states and counties for timber sold on federal lands. Congress recognized that communities adjacent to federal lands still need to provide infrastructure and services (schools, roads, emergency response, etc.) for residents and visitors, including land managers, as well as to protect wildlife and natural resources despite the loss of shared timber sales receipts. Attempting to provide SRS funding levels through the 1908 law alone would require a 400 percent increase in logging on federal lands using 2015 U.S. Forest Service receipts – an unachievable short-term outcome given current capacity planning and executing sales, appropriating sufficient funds, and local mill infrastructure.
  5. In recent years, funding for both of these historic federal-state-county agreements and programs has not kept pace with inflation, has been the target of budget cutbacks and has been subjected to sequestration under the Budget Control Act.
  6. Sustained and predictable payments to local government under these programs is vital to ensure continued support for federal ownership and management of lands within western states.


  1. Western Governors believe that the federal government must honor its historic PILT agreement with states and counties in the West to compensate them for tax-exempt federal lands within their borders.
  2. Western Governors believe it is incumbent that the federal government ensure counties and states continue to receive predictable and adequate payments under the Secure Rural Schools program. These payments are vital to providing state and county public goods and services, such as roads, emergency response, and wildlife and natural resources protection in communities adjacent to federal lands.
  3. Western Governors encourage continuation of three important programs under the Secure Rural Schools program: 1) active management and restoration of federal forests; 2) revenue sharing; and 3) collaborative processes (Title II & III) which facilitate gathering input from the general public, local government and other local community stakeholders to inform federal land management decisions.
  4. Payments to states and counties under these programs should not be subject to federal sequestration. Western Governors support legislation that clarifies the unique nature of these programs.


  1. The Governors direct WGA staff to work with Congressional committees of jurisdiction, the Executive Branch, and other entities, where appropriate, to achieve the objectives of this resolution.
  2. Furthermore, the Governors direct WGA staff to consult with the Staff Advisory Council regarding its efforts to realize the objectives of this resolution and to keep the Governors apprised of its progress in this regard.

pdfClick here to download a PDF of this policy. 

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