H.J.R. 21

             1     

JOINT RESOLUTION ON THE SOVEREIGN CHARACTER

             2     
OF PILT--PAYMENT IN LIEU OF TAXES

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Ken Ivory

             6     
Senate Sponsor: David P. Hinkins

             7     
             8      LONG TITLE
             9      General Description:
             10          This joint resolution of the Legislature strongly urges the United States Congress to
             11      fully and permanently fund Payment In Lieu of Taxes (PILT) and transfer to the state of
             12      Utah the federally controlled public lands within the state.
             13      Highlighted Provisions:
             14          This resolution:
             15          .    urges and directs the United States Congress to use every exertion in its power, by
             16      reason, argument, and persuasion, to induce the United States to fully fund, on a
             17      perpetual and mandatory basis, Payments In Lieu of Taxes (PILT), which the state
             18      and its subdivisions would otherwise collect if the federal government honored the
             19      same statehood enabling act terms that it honored with all states east of Colorado;
             20      and
             21          .    demands, if Congress cannot or will not fully fund PILT at the full assessed value of
             22      similarly situated lands within Utah's counties on a mandatory, permanent, and
             23      perpetual basis, that Congress transfer title to the public lands, as was done
             24      previously for similarly impacted states east of Colorado, directly to the state of
             25      Utah so that Utah and its subdivisions can generate tax and other revenues from
             26      these lands to fund education, police, fire, sanitation, social welfare, and other
             27      essential public services.


             28      Special Clauses:
             29          None
             30     
             31      Be it resolved by the Legislature of the state of Utah:
             32          WHEREAS, the United States Congress elected to not fund the Payment In Lieu of
             33      Taxes (PILT) Act in its most recent $1.1 trillion Omnibus Spending Bill of 2014;
             34          WHEREAS, Congress instead included funding for its PILT obligations for only one
             35      year in the Farm Bill of 2014;
             36          WHEREAS, PILT was imposed by Congress in 1976 to compensate states for the loss
             37      of tax and other revenues that states would generate if Congress had honored its nearly
             38      200-year-old obligation to transfer title to the public lands;
             39          WHEREAS, Congress originally promised that PILT would be mandatory and
             40      perpetual because it was intentionally imposed as a substitute for what the congressional
             41      Committee on the Public Lands referred to in 1828 as "a power incident to all sovereign states
             42      of taxing the soil to confer benefits";
             43          WHEREAS, in 1976, Congress enacted the Federal Land Policy Management Act of
             44      1976, or FLPMA, which unilaterally changed the obligation of the federal government to
             45      transfer title to the public lands in favor of a policy to "forever retain public lands in federal
             46      ownership";
             47          WHEREAS, as a palliative to the affected states for usurping this "power incident to all
             48      sovereign states of taxing the soil" through FLPMA, Congress also imposed the new PILT
             49      program;
             50          WHEREAS, as a result of the federal government's failure or refusal to transfer title to
             51      the public lands, some counties in Utah have as little as 5% taxable lands to fund education,
             52      police, fire, sanitation, social welfare, and other essential public services;
             53          WHEREAS, an analysis by the Legislature's Office of Legislative Fiscal Analyst
             54      reveals that the amounts previously funded by Congress as PILT to Utah counties amounts only
             55      to approximately 13 cents on the dollar of the average taxable value for similarly situated
             56      lands;
             57          WHEREAS, PILT more accurately represents "Pennies In Lieu of Trillions," in light of
             58      the fact that the Institute for Energy Research estimated in 2013 that there is more than $150


             59      trillion in mineral value locked up in federally controlled lands;
             60          WHEREAS, the United States Government Accountability Office estimated in 2012
             61      that there is more recoverable oil in the federally controlled lands in Utah, Colorado, and
             62      Wyoming than the rest of the world combined;
             63          WHEREAS, as a result of having such a minimal amount of lands subject to taxation or
             64      other revenues because of federal retention of these lands, Utah counties are dependent upon
             65      the promise of PILT for as much as 40% of their total county budgets to fund education, police,
             66      fire, sanitation, social services, and other essential public services;
             67          WHEREAS, a one-year appropriation for PILT in the Farm Bill of 2014 disregards
             68      entirely the uniquely sovereign character of PILT--putting PILT on par with other line items of
             69      federal expense like funding the study of excess alcohol on prostitutes in China--rather than
             70      honoring PILT as a mandatory and perpetual substitute for the "power incident to all sovereign
             71      states of taxing the soil";
             72          WHEREAS, a mere one-year PILT appropriation denies state and local governments of
             73      budgetary certainty to meet fundamental public obligations like funding education, police, fire,
             74      sanitation, social welfare, and other essential public services;
             75          WHEREAS, the federal government has not passed a budget for more than five years,
             76      has accumulated a national debt exceeding $17 trillion, overspends at the rate of nearly $1
             77      trillion a year, has unfunded obligations for Medicare, Medicaid, Social Security, and others in
             78      excess of $87 trillion, and is creating money at the rate of tens of billions of dollars per month;
             79          WHEREAS, the United States Government Accountability Office regularly declares
             80      that the financial statement of the United States is "unsustainable";
             81          WHEREAS, history reflects that Congress previously delayed for decades disposing of
             82      as much as 90% of the lands in states such as Illinois, Indiana, Missouri, Arkansas, Louisiana,
             83      Alabama, Mississippi, and Florida, depriving these states of the ability to tax or generate
             84      revenues from their lands;
             85          WHEREAS, lacking the ability to tax or generate revenues from their lands, the 1828
             86      congressional Committee on the Public Lands indicated "in vain may the People of these States
             87      expect the advantages of well settled neighborhoods, so essential to the education of youth . . .
             88      Those states will, for many generations, without some change, be retarded in endeavors to
             89      increase their comfort and wealth, by means of works of internal improvements, because they


             90      have not the power, incident to all sovereign States, of taxing the soil, to pay for the benefits
             91      conferred upon its owner";
             92          WHEREAS, upon raising their collective demand to Congress, the congressional
             93      Committee on the Public Lands found with respect to their admission as states that "when these
             94      States stipulated not to tax the lands of the United States until they were sold, they rested upon
             95      the implied engagement of Congress to cause them to be sold, within a reasonable time. No
             96      just equivalent has been given those States for a surrender of an attribute of sovereignty so
             97      important to their welfare, and to an equal standing with the original States";
             98          WHEREAS, ultimately, the collective and persistent demands of these states resulted in
             99      the transfer of their public lands by Congress;
             100          WHEREAS, Congress's obligation to transfer title to the public lands to the states is
             101      included in the Enabling Act for Utah's admission as a state--an agreement the United States
             102      Supreme Court refers to as a "bi-lateral" and "solemn compact";
             103          WHEREAS, the terms of Utah's Enabling Act, with respect to the transfer of public
             104      lands, are in all material respects similar to the enabling acts of most of the newly created states
             105      east of Colorado and west of the original 13 states; and
             106          WHEREAS, legal analysis by the Federalist Society concludes that the Enabling Act is
             107      "a compact and promise made between two sovereigns where the federal government
             108      committed itself to disposal and promised that it would exercise its disposal obligations in a
             109      manner (and with an understanding that respects the expectation by the State that the federal
             110      government would dispose of such lands) so that both a percentage of the proceeds from the
             111      sales would be shared with the State and the State thereafter would have the capacity to tax
             112      such lands when disposed . . .":
             113          NOW, THEREFORE, BE IT RESOLVED that until the federal government honors the
             114      promise made at statehood to transfer title to the public lands, the Legislature of the state of
             115      Utah urges and directs, in the most strenuous terms within the power of a sovereign and
             116      independent state, that the senators and representatives of the United States Congress use every
             117      exertion in their power, by reason, argument, and persuasion, to induce the United States to
             118      fully fund, on a perpetual and mandatory basis, Payments In Lieu of Taxes (PILT), which the
             119      state and its subdivisions would otherwise collect if the federal government honored the same
             120      statehood enabling act terms that it honored with all states east of Colorado.


             121          BE IT FURTHER RESOLVED that if Congress cannot or will not fully fund PILT at
             122      the full assessed value of similarly situated lands within Utah's counties on a mandatory,
             123      permanent, and perpetual basis, the Legislature of the state of Utah demands that Congress
             124      transfer title to the public lands, as was done previously for similarly impacted states east of
             125      Colorado, directly to the state of Utah so that Utah and its subdivisions can generate tax and
             126      other revenues from these lands to fund education, police, fire, sanitation, social welfare, and
             127      other essential public services.
             128          BE IT FURTHER RESOLVED that a copy of this resolution be sent to the Majority
             129      Leader of the United States Senate, the Speaker of the United States House of Representatives,
             130      the United States Department of the Interior, and the members of Utah's congressional
             131      delegation.




Legislative Review Note
    as of 2-12-14 7:50 AM


Office of Legislative Research and General Counsel


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