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Friday, August 9, 2013

Reauthorizing the Secure Rural Schools and Community Self-Determination Act of 2000

Katie Hoover
Analyst in Natural Resources Policy

Many counties are compensated for the tax-exempt status of federal lands. Counties with national forest lands and with certain Bureau of Land Management (BLM) lands have historically received a percentage of agency revenues, primarily from timber sales. However, timber sales have declined substantially—by more than 90% in some areas. Thus, Congress enacted the Secure Rural Schools and Community Self-Determination Act of 2000 (SRS; P.L. 106-393) as a temporary, optional program of payments based on historic, rather than current, revenues.

Authorization for SRS payments originally expired at the end of FY2006, but through several reauthorizations the program was extended through FY2012. Congressional debates over reauthorization considered the basis and level of compensation (historical, tax equivalency, etc.); the source of funds (receipts, a new tax or revenue source, etc.); the authorized and required uses of the payments; interaction with other compensation programs (notably Payments in Lieu of Taxes); and the duration of any changes (temporary or permanent). In addition, legislation with mandatory spending, such as SRS reauthorization, raises policy questions about increasing the deficit; current budget rules to restrain deficit spending typically impose a procedural barrier to such legislation, generally requiring offsets by additional receipts or reductions in other mandatory spending.

In 2008, the Emergency Economic Stabilization Act (P.L. 110-343) enacted a four-year extension to SRS authorization through FY2011, with declining payments, a modified formula, and transition payments for certain areas. In 2012, Congress enacted a one-year extension through FY2012, and amended the program by slowing the decline in payment levels and tightening requirements that counties select a payment option promptly (P.L. 112-141).

Section 302 of the Budget Control Act (P.L. 112-25, as amended by P.L. 112-240) requires the President to order a sequester, or cancellation, of budgetary resources for FY2013. The sequester order took effect on March 1, 2013, and affected the SRS payment for FY2012, although BLM and Forest Service implemented the order differently from each other.

With the expiration of SRS at the end of FY2012, county compensation is again the subject of congressional debates. County payments are set to return to a revenue-based system for FY2013, and are likely to be significantly lower than the previous years’ payments. However, payments for FY2013 have not yet been made, and Congress may consider extending SRS (with or without modifications and with or without addressing the sequester order), implementing other legislative proposals to address the county payments, or taking no action. No action would continue the revenue-based system that took effect upon the program’s expiration. Discussion in the 113
th Congress has focused on many of the same issues that were debated in 2006-2008 and again in 2012. On June 18, 2013, the Senate Energy and Natural Resources Committee ordered to be reported S. 783, the Helium Stewardship Act of 2013, which includes a one-year extension of SRS. On July 31, 2013, the House Committee on Natural Resources ordered to be reported H.R. 1526, the Restoring Healthy Forests for Healthy Communities Act, which includes a temporary extension of SRS.

Date of Report: August 5, 2013
Number of Pages: 23
Order Number: R41303
Price: $29.95

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