M. Lynne Corn
Specialist in Natural Resources Policy
Many counties are compensated for the tax-exempt status of federal lands. Counties with lands under the primary jurisdiction of the Fish and Wildlife Service (FWS) are compensated through the National Wildlife Refuge Fund (NWRF). Counties have argued that the program is underfunded; in some instances, counties raise lack of funding as an argument against the establishment of new refuges. Congress has begun to examine the program for possible changes.
Lands eligible for NWRF are largely in the National Wildlife Refuge System, but certain other FWS lands are included as well. Under the 1935 Refuge Revenue Sharing Act (16 U.S.C. §715s), NWRF was conceived as a program to share revenues from activities such as grazing or timber harvest on refuge lands, and such receipts are permanently appropriated to the fund. However, revenue-generating activities were (and are) often incompatible with refuge purposes, and many refuges generate no revenue. In such situations, counties received no compensation from the federal government for the presence of the federal land, and to address this perceived gap in the program, the law was amended in 1978 to add other payment criteria. It became apparent almost immediately that revenues were not sufficient to meet the payment formula specified in the amended law. Congress has repeatedly appropriated additional funds to supplement the revenue stream. But the additional amounts appropriated have not met the formula level, particularly in the last decade. Recent Administration proposals for substantial funding reductions have intensified congressional interest. The Administration argues that the savings are justified and that refuges add few costs to counties and provide economic benefits from increased tourism.
Under NWRF, payments are distributed through a complex formula to counties with FWS lands, with different formulas for lands reserved from the public domain (that is, obtained from a sovereign power) and acquired lands (that is, those purchased from or donated by any entity other than a sovereign power). In turn, public domain lands in the System are also eligible for Payments in Lieu of Taxes (PILT; 31 U.S.C. §6901), which provides additional payments to local governments. Acquired FWS lands are not eligible for PILT.
When NWRF is not fully funded, some state and local governments may be reluctant to see lands within their boundaries acquired for addition to the System due to lost property tax revenues. As Congress debates changes in NWRF, several issues stand out as part of the debate:
- The NWRF payment formula is causing a rapid increase in authorized payment levels.
- Current NWRF receipts are sufficient to provide only a small fraction of the authorized formula, even without the increase in payment levels.
- PILT payments, at least through FY2013, are mandatory spending, while NWRF payments are dependent on annual appropriations for the bulk of the program.
- PILT payments are provided only for public domain lands within the System, and not for other FWS lands.
This report gives further details on NWRF, its compensation formula, receipts, payment levels, interaction with PILT, and options for modifying the program.
Date of Report: November 1, 2012
Number of Pages: 18
Order Number: R42404
Price: $29.95
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