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Congressional Update

County Payments Reauthorization Act Introduced in Senate

By Laura Garcia
TAC Deputy Legislative Director

Legislation that would fund the federal Payment in Lieu of Taxes (PILT) and Secure Rural Schools (SRS) programs for an additional five years has been introduced in the U.S. Senate. The County Payments Reauthorization Act of 2011 (S. 1692) is sponsored by Sen. Jeff Bingaman (D-New Mexico) and has 26 cosponsors thus far.

The PILT program provides financial support to eligible counties to help offset losses in property taxes due to nontaxable federal lands within their boundaries, while the SRS program provides funds to counties with national forest lands to support local public schools, county road improvement and maintenance projects, forestry projects and wildfire risk reduction programs. Many Texas counties are recipients of funding from these programs.

The legislation would guarantee continued full federal funding of the PILT program through 2017. It would also provide more than $1.5 billion to the SRS program, though there would be an annual reduction of 5 percent in payments each year. The bill has been referred to the Senate Committee on Energy and Natural Resources. The National Association of Counties (NACo) is encouraging affected counties to ask their senators to support the bill.

House Ways and Means Approves Repealing 3 Percent Withholding Mandate
A bill that would repeal the federal mandate requiring certain state and local governments to withhold 3 percent from certain payments was approved by the U.S. House Committee on Ways and Means on Oct. 13.

The legislation, H.R. 674, sponsored by Rep. Wally Herger (R-California), would repeal a provision of the Tax Increase Prevention and Reconciliation Act of 2005 that requires counties that spend $100 million or more annually to withhold 3 percent of their payments for certain goods and services and remit the amount to the Internal Revenue Service. This mandate is currently scheduled to take effect on Jan. 1, 2013. The bill presently has 269 cosponsors and is supported by several organizations, including NACo and the U.S. Chamber of Commerce.