Division of Local Government
1313 Sherman Street, Room 521
Denver, Colorado 80203
For many local governments, and particularly counties, payments received for non-taxable federal land, and production of materials on that land, make up a significant portion of their revenue. There are a number of Federal Acts that direct financial resources to local governments where those resources are developed; they include: the Mineral Leasing Act for Aquired Lands, the Taylor Grazing Act, the Bankhead-Jones Farm Tenant Act, the Department of Agriculture Appropriation Act (Forest Payments), the Secure Rural Schools and Community Self Determination Act of 2000, and others. All of these revenues additionally interact with the calculations of the Department of Interior's Payment in Lieu of Taxes which provides compensation to local governments based on the amount of non-taxable acreage within their boundaries.
Within Colorado, the most significant sources of revenue to local governments are derived from the Mineral Leasing Act, the Secure Rural Schools/Forest Payments Act, and the PILT distributions. The information on this page is supplied to help local governments understand the source of those funds and methodology in calculating amounts distributed to local governments.
Production of minerals, oil, and natural gas on federal lands is authorized under the Mineral Lands Leasing Act of 1920. Through that act each state receives a portion of the revenue from leasing activity. The State of Colorado distributes a portion of those revenues to local governments.
The dollars local governments receive from Mineral Leasing revenues impacts the calculation of the Department of Interior's Payment in Lieu of Taxes value for each qualifying entity. In Colorado, the "Direct Distribution" payment as it is known, to local governments, completed annually by the Department of Local Affairs has been determined to qualify as a "prior year payment" of Mineral Leasing Act revenue that is received by local governments. These payments to PILT eligible entities are reported in the "Statement of Federal Lands Payments" by the State annually for use in calculation of PILT distributions the following year.
In the 2011 Colorado Legislative Session, House Bill 11-1218 was passed which allowed counties to create a new "Federal Mineral Lease District". In the case where a county creates such a district, DOLA is required to forward the Direct Distribution Payment that would have otherwise gone to the county, to the FML District. To assist in understanding of district creation and operation, DLG staff has developed a Frequently Asked Questions document:
Forest Payments were created in 1908 and required that for any money received by the Forest Service off of timber receipts or leasing revenue (among other things), 25% of the receipts must be returned to the state and used to provide for county road and school purposes.
The Secure Rural Schools and Community Self-Determination Act of 2000 (SRS Act) provided another calculation method for distribution of Forest Payments to provide five years of transitional assistance to rural counties affected by the decline in revenue from timber harvests on federal lands. The 2000 act authorized payments through fiscal year 2006 and the act was reauthorized for one additional year with the Iraq Accountability Appropriations Act of 2007. In 2008 the act was again reauthorized as a part of the Emergency Economic Stabilization Act of 2008. This reauthorization provided authorization for the program from 2008 to 2011 . The program has been reauthorized for 2012 and again for 2013.
Eligible counties in Colorado had to make an election with each authorization in 2000, 2007, 2008 and most recently in December of 2013 to decide which method of calculation each county would like to receive (the traditional "25% payment" or the Secure Rural Schools "full payment amount" method). When a county selects the "25% payment" method, they may opt-in to the "full payment amount" method two years after the initial election. The next election for those that selected the "25% payment" will be in 2010. Additionally if a county selects the "full payment amount" method, they must set aside a certain percentage of funds for different types of forest improvement projects. The election of percentages set aside occur annually.
The State of Colorado mandates a certain amount of money received by the counties be provided for both allowed purposes of road and bridge and schools. The designated amount and process has changed in 2009 with the passage of House Bill 09 - 1250. We have developed a FAQ that helps to explain the changes that have come along with the passage of that bill, and it is avaliable below.
Note: Any Title III funds received in 2009, 2010, 2011, 2012 and 2013 payments which remain unobligated by September 30, 2014 must be returned to the US Treasury by that time. (Instructions here)
- A brief summary of Forest Payments and the requirements from both the Federal and State perspectives.
- FAQ to provide answers to frequently asked questions concerning the Forest Payment Program
Past payment values for the State of Colorado are included in the All Service Reports (ASR).
Year refers to Federal Fiscal Year, funds are received by counties in January of the following year (e.g. funds in 2008 ASR are received by counties in January of 2009).
ASR 10-3 Includes calculated totals for each county. The presentation is of total funds for counties that selected 25% payment method and total funds for those counties who selected the SRS (Full Payment Amount).
ASR 19-1 Includes calculated totals of Title I, II, and III payments for all counties that selected the SRS method of calculating payments.
From the Department of Interior website:
"Payments in Lieu of Taxes" (or PILT) are Federal payments to local governments that help offset losses in property taxes due to nontaxable Federal lands within their boundaries. PILT payments help local governments carry out such vital services as firefighting and police protection, construction of public schools and roads, and search-and-rescue operations. The payments are made annually for tax-exempt Federal lands administered by the BLM, the National Park Service, the U.S. Fish and Wildlife Service (all agencies of the Interior Department), the U.S. Forest service (part of the U.S. Department of Agriculture), and for Federal water projects and some military installations. PILT payments are one of the ways that the Federal government can fulfill its role of being a good neighbor to local communities.
The formula used to compute the payments is contained in the PILT Act and is based on each eligible entity's population, annual receipt of other lands payments, and the acerage of Federal land within an affected government. PILT payments in some cases are reduced by receipts of other Federal revenues (such as oil and gas leasing, livestock grazing, and timber harvesting) that the Federal Government transfers to units of local government.
PILT Calculations below are estimates for budgeting purposes. It is important to understand the underlying assumptions and to include additional information when it is avaliable to create the most accurate projections as possible.
PILT Calculation Projections - Updated for 2015 PILT Payment