Committee on Natural Resources

Explanation of the Amendment in the Nature of Substitute

HR 3058 -- “Public Land Communities Transition Act of 2007”

September 26, 2007

As introduced, HR 3058 would have provided payments to counties and schools by fully funding the Payment in Lieu of Taxes (PILT) program and creating new transition payments to counties with federal forest lands which received stable payments through the now expired Secure Rural Schools program. The Congressional Budget Office’s preliminary cost estimate for the bill as introduced is $3.62 billion over its five-year period.

Natural Resources Committee Chairman Rahall is committed to upholding the House Pay As You Go (PAYGO) principle when reporting legislation out of the Committee. To that end, any legislation requiring additional mandatory expenditures from the Treasury must be offset by new revenues or cost savings from existing programs. In this regard, the introduced version of the HR 3058 would have authorized the Interior Secretary to raise revenue from commercial activities under the department’s jurisdiction in order to offset the costs of the bill.

During Subcommittee consideration of H.R. 3058, several Members expressed concern over the bill’s proposed offset. Subcommittee Ranking Member Bishop proposed exploring the use of fees from a class of OCS oil and gas leases unduly enjoying royalty relief by virtue of not having price thresholds as a mutually agreeable offset for the legislation. The Congressional Budget Office estimates that these fees would generate $2.875 billion in revenues over the five year-period of the bill. These fees have been considered by the House three times this year as part of H.R. 6 during the 100-hour agenda, the farm bill, and the energy bill.

In order to report legislation out of Committee that is paid for by the OCS offset, the Substitute reduces the cost of the legislation by 1) authorizing PILT and forest county payments program for four years instead of five and 2) ramping up PILT payments to 100% of authorized levels in 2010 and 2011. These two changes result in a cost savings of over $800 million.

In addition, the Substitute addresses two other concerns expressed during subcommittee consideration of HR 3058. First, it ensures that counties in California, Louisiana, Oregon, Pennsylvania, South Carolina, South Dakota, Texas, and Washington do not experience a reduction in forest payments as a result of the new payment formula during the first year (hold harmless). Second, the ANS reauthorizes provisions of the original Secure Rural Schools legislation which provide a framework and incentive for community groups to collaborate with the Forest Service on forest management projects.