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SEC. 6903. PAYMENTS. (a) In this section

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(b)(1) A payment under section 6902 of this title is equal to the greater of

(A) [75 cents for each acre of entitlement land] 93 cents during fiscal year 1995, $1.11 during fiscal year 1996, $1.29 during fiscal year 1997, $1.47 during fiscal year 1998, and $1.65 during fiscal year 1999 and thereafter, for each acre of entitlement land located within a unit of general local government (but not more than the limitation determined under subsection (c) of this section) reduced (but not below 0) by amounts the unit received in the prior fiscal year under a payment law; or (B) [10 cents for each acre of entitlement land] 12 cents during fiscal year 1995, 15 cents during fiscal year 1996, 17 cents during fiscal year 1997, 20 cents during fiscal year 1998, and 22 cents during fiscal year 1999 and thereafter, for each acre of entitlement land located in the unit (but not more than the limitation determined under subsection (c) of this section).

(2) The chief executive officer of a State shall submit to the Secretary of the Interior a statement on the amounts of payments the State transfers to each unit of general local government in the State out of amounts received under a payment law.

(c)(1) The limitation for a unit of general local government with a population of not more than 4,999 [is $50 times the population.] the highest dollar amount specified in paragraph (2).

(2) The limitation for a unit of general local government with a population of at least 5,000 is the following amount (rounding the population off to the nearest thousand):

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The roll call vote on reporting the measure was 18 yeas, 2 nays,

as follows:

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During the consideration of S. 455, the Committee adopted eight amendments. Seven of the eight amendments are technical and conforming which correct the effective dates of the PILT payment schedules. The other amendment adopted by the Committee amends section 4 of the bill to ensure that a unit of general local government does not lose Federal PILT payments as a result of mutually beneficial land exchanges involving State and Federal lands. Section 6902(b) of title 31, United States Code, provides that the Federal Government may not make PILT payments on lands that were exempt from real estate taxes when the land was conveyed to the United States. When a State exchanges lands with the Federal Government, a unit of general local government loses PILT payments on the Federal lands the State acquires as a result of the exchange and a unit of general local government is ineligible for PILT payments on the former State lands because these lands were not subject to real estate taxes. As a result, the entitlement land base under the PILT program has eroded for units of general local government that must still provide services when lands are transferred into Federal ownership. This amendment would allow a unit of general local government that is losing a portion of its entitlement land base, because of an exchange involving State and Federal lands, to continue to receive PILT payments on the lands transferred to the State by the Federal government.

The amendment also makes a technical correction to reflect an amendment to the PILT law made by the Utah Schools and Lands Improvement Act of 1993.

SECTION-BY-SECTION ANALYSIS

Section 1 entitles the bill the "Payments in Lieu of Taxes Act." Section 2(a) amends 31 U.S.C. 6903(b)(1) to increase PILT payments for the number of acres of entitlement lands. The amount to be paid to each unit of general local government is the higher amount of two formulas. Subsection 2(a) changes the first formula used to calculate such payments from 75 cents per acre to 93 cents during fiscal year 1995, $1.11 per acre during fiscal year 1996, $1.29 per acre during fiscal year 1997, $1.47 per acre during fiscal year 1998, and $1.65 per acre during fiscal year 1999. The subsection changes the second formula used to calculate such payments from 10 cents per acre to 12 cents per acre during fiscal year 1995, 15 cents per acre during fiscal year 1996, 17 cents per acre during fiscal year 1997, 20 cents per acre during fiscal year 1998, and 22 cents per acre during fiscal year 1999.

Subsection (b) amends 31 U.S.C. 6903(c) to raise the ceiling of PILT payments by amending the table that caps payments according to population. The subsection replaces the limit of "$50 times the population" with "the highest dollar amount specified in paragraph (2)" and amends the table to increase amounts for each population level.

Section 3 adds a new subsection to 31 U.S.C. 6903 that requires the Secretary of the Interior, on October 1 of each year after the date of enactment of the Act, to adjust the dollar amounts specified in the formulas for calculating PILT payments in subsection (b) and in the table in subsection (c) to reflect changes in the Consumer Price Index for the year ending the preceding June 30. Section 4 amends 31 U.S.C. 6902(b) to ensure that a unit of general local government does not lose Federal PILT payments as a result of land exchanges involving State and Federal lands. Section 6902(b) of title 31, United States Code, provides that the Federal Government may not make PILT payments on lands that were exempt from real estate taxes when the land was conveyed to the United States. When a State exchanges lands with the Federal Government, a unit of general local government loses PILT payments on the Federal lands the State acquires as a result of the exchange and a unit of general local government is ineligible for PILT payments on the former State lands because these lands were not subject to real estate taxes. As a result, the entitlement land base under the PILT program has eroded for units of general local government that must still provide services when lands are transferred into Federal ownership. This amendment allows a unit of general local government that is losing a portion of its entitlement land base, because of an exchange involving State and Federal lands, to continue to receive PILT payments on the lands transferred to the State by the Federal government.

This section also makes a technical correction to reflect an amendment to the PILT law made by the Utah Schools and Lands Improvement Act of 1993.

Section 5 (a) provides that, except for section 2(b)(2), the effective date for this Act shall be October 1, 1994. The effective date for the amendment made by section 2(b)(2) shall be October 1, 1999.

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