This bill changes how the federal Payment in Lieu of Taxes (PILT) program calculates payments to very small counties and local governments that host federal land within their borders. PILT payments help offset the property tax revenue local governments lose because federal land isn't taxable, but the payment formula uses a per-person cap that scales with population, which has historically disadvantaged the smallest, most rural counties. The bill lowers the threshold for the smallest population tier from 5,000 people to 1,000 people and creates a new, more detailed payment schedule with higher per-capita rates for counties with populations between 1,000 and 50,000. This change primarily benefits small, rural counties with substantial federal land holdings, such as those in Western states with large amounts of public land, by increasing their PILT funding compared to current law. The bill does not specify a new funding timeline beyond amending the existing permanent PILT statute in title 31 of the U.S. Code, and it was reported out of the Senate Energy and Natural Resources Committee with an amendment in July 2026.
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