QQ. SHARED REVENUES

DESCRIPTION OF PROGRAM

Under a number of Federal acts, various Federal agencies administer public lands from which proprietory revenues are produced. These revenues are shared in varying degrees with the States and counties in which the lands are located. The use of revenues received by a county under such an arrangement is generally specified to be for the benefit of road and educational programs. Some of the States also receive Federal payments based on the acreage or the assessed value of Federal lands. A brief description of each shared revenue act follows:

Payments to the States from the national forest fund: Department of Agriculture, Forest Service. The act of May 23, 1908, as amended (16 U.S.C.A. 500) requires, with a few exceptions, that 25 percent of all money received from the national forests during any fiscal year be paid to the States in which the forests are located, for the benefit of public schools and public roads of the county or counties in which such national forests are situated. The amount of this appropriation varies each year in direct proportion to national forest receipts during the previous fiscal year. The 1963 fiscal year payment was about $27 million.

Payment to Minnesota (Cook, Lake, and St. Louis Counties) from the national forests fund: Department of Agriculture, Forest Service. The act of June 22, 1948, as amended (16 U.S.C.A. 577c-577h) provides that the Secretary of the Treasury, upon certification of the Secretary of Agriculture, shall pay to the State of Minnesota at the close of each fiscal year an amount equivalent to three-fourths of one percent of the fair appraised value of certain national forest lands in the counties of Cook, Lake, and St. Louis situated within the the Superior National Forest. The act further provides that payment to the State shall be distributed to each of these counties in conformity with the fair appraised value of such national forest lands in each county. The 1963 fiscal year payment was about $125,000.

Payments to Counties from National Grasslands: Department of Agriculture, Forest Service.-At the end of each calendar year, 25 percent of the revenues from the use of submarginal lands are paid to counties under the provisions of title III of the Bankhead-Jones Farm Tenant Act, approved July 22, 1937 (7 U.S.C.A. 1012). The 1963 fiscal year payment was about $425,000.

Payments to school funds, Arizona and New Mexico, act of June 20, 1910: Department of Agriculture, Forest Service.-Under the provisions of the act of June 20, 1910 (36 Stat. 562, 573) certain areas within national forests were granted to the States for school purposes. The percentage that these lands are of the total national forest area within the State is used in determining payments to the States. The receipts from all national forest land within the State are used as the basis for applying the percentage. For example, if total receipts for the State are $100,000 and if 10 percent of lands are in the "granted for school

purposes" category, the payment to the State would be $10,000. The amounts so paid are deducted from the net receipts before computing the 25 percent payments to States.

As soon after the close of the fiscal year as the receipts from national forests and the area of school lands in the States of Arizona and New Mexico are determined, the payments are made to the States. Estimated payments in fiscal year 1963 to Arizona were $80,142 and to New Mexico $320.

Payments to Oklahoma (royalties): Department of the Interior, Bureau of Land Management.-The State of Oklahoma is paid 371⁄2 percent of the Red River oil and gas royalties in lieu of State and local taxes on Kiowa, Comanche, and Apache tribal funds (65 Stat. 252), to be used for construction and maintenance of public roads and support of public schools. The 1963 fiscal year payment was $6,213.

Payments to Coos and Douglas Counties, Oreg., from receipts, Coos Bay Wagon Road Grant Lands: Department of the Interior, Bureau of Land Management. Out of receipts from the Coos Bay Wagon Road Grant Lands in Oregon, payments in lieu of taxes are made to Coos and Douglas Counties for schools, roads, highways, bridges, and port districts (53 Stat. 753-754). The 1963 fiscal year payment was $697,448.

Payments to Counties, Oregon and California Grant Lands: Department of the Interior, Bureau of Land Management.-Fifty percent of the receipts of the Oregon and California land-grant fund are paid the counties in which the lands are situated, to be used as other county funds (39 Stat. 218; 50 Stat. 876). The 1963 fiscal year payment was $15.4 million.

Payments to States (grazing fees): Department of the Interior, Bureau of Land Management.-The States are paid 33% percent of the fees from each grazing district on Indian lands ceded to the United States within the State's boundaries to be used for school and road purposes (43 U.S.C.A. 315j). The 1963 fiscal year payment was $917.

Payments to States (proceeds of sales): Department of the Interior, Bureau of Land Management.-The States are paid 5 percent of the net proceeds from sale of public land and public land products to be used for school and road purposes (31 U.S.Ĉ.A. 711). The 1963 fiscal year payment was $249,327.

Payments to States from Grazing Receipts, etc., Public Lands Outside Grazing Districts: Department of the Interior, Bureau of Land Management.-The States are paid 50 percent of the grazing fee receipts from public domain lands outside grazing districts to be used as the State legislature may prescribe (43 U.S.C.A. 315i, 315m). The 1963 fiscal year payment was $183,631.

Payments to States from Grazing Receipts, etc., Public Lands Within Grazing Districts: Department of the Interior, Bureau of Land Management.-The States are paid 1212 percent of grazing fee receipts from grazing district lands within their boundaries to be used as the State legislature may prescribe (43 U.S.C.A. 315b, 315i). The 1963 fiscal year payment was $200,445.

Payments to States from Grazing Receipts, etc., Public Lands Within Grazing Districts, Miscellaneous: Department of the Interior, Bureau of Land Management.-The States are paid specifically determined amounts from grazing fee receipts from miscellaneous lands

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within grazing districts when payment is not feasible on a percentage basis (43 U.S.C.A. 315). The 1963 fiscal year payment was $3,901. Payments to States from Receipts Under Mineral Leasing Act: Department of the Interior, Bureau of Land Management.-Alaska is paid 90 percent and other States 372 percent of the receipts from bonuses, royalties, and rentals resulting from development of mineral resources under the Mineral Leasing Act (30 U.S.C.A. 191), and from leases of potash deposits (30 U.S.C.A. 285), on public lands to be used for school and road purposes. The 1963 fiscal year payment was $47.1 million.

Payments to Counties, National Grasslands: Department of the Interior, Bureau of Land Management. Of the revenues received from the use of submarginal lands, 25 percent is paid to the counties in which such land is situated, for school and road purposes (7 U.S.C.A. 1012). The 1963 fiscal payment was $92,254.

Shared Revenues from Refuges: Department of the Interior, Bureau of Sport Fisheries and Wildlife.-Under the Migratory Bird Conservation Act (16 U.S.C.A. 715s) and the Bankhead-Jones Farm Tenant Act of 1937 (7 U.S.CA. 1012), 25 percent of the net revenues received from the use of the land and resources in Federal wildlife refuges is paid to the counties in which the land producing the revenue lies. These shared revenues are to be used by the counties for the improvement of public schools or roads or both within the recipient counties. The 1963 fiscal year payment was $1.3 million.

Shared Revenue: U.S. Army Corps of Engineers.-Seventy-five percent of the revenue derived by the Corps of Engineers from leasing lands acquired for flood control, navigation and allied purposes, including power, is paid to the States in which the property is situated to be spent for county schools and roads or any county expenses. The program is authorized under the Flood Control Act of 1954 (33 U.S.C.A. 701c-3). The 1963 fiscal year payment was about $1.6 million.

Shared Revenue under Federal Power Act: Federal Power Commission. Thirty-seven and one-half percent of the license fees collected by the Federal Power Commission from power projects located on national forest or other Federal lands is returned to the States. The program is authorized by section 17a of the Federal Power Act (16 U.S.C.A. 810). The 1963 fiscal year payment was about $58,000.

ORGANIZATION AND PLANNING REQUIREMENTS

In almost all cases the shared revenue payments are made to general purpose units of State and county government. Purposes of expenditures made from the shared revenues are specified in some cases, but no administrative checks or audits are carried out by the Federal Government. Particular types of State and county organization and particular types of planning processes are not required.

EVALUATION OF ORGANIZATION AND PLANNING REQUIREMENTS

The shared revenue payments are, in effect, simply regularized payments in lieu of taxes. The Federal Government is considered to "owe" this money to the States and counties. The payments properly strengthen general purpose units of government. Under these circumstances, special organization and planning requirements are inappropriate.

Appendix C

METHODOLOGICAL NOTE

This study is primarily based on an interview survey of Federal agencies responsible for 43 different programs of financial aid affecting urban development. The interview questions were designed to find out how and to what extent these Federal programs are: (1) coordinated with each other,

(2) coordinated with local planning and decisionmaking,

(3) administered through effective and responsible State and local recipients, and

(4) administered in accordance with the needs of whole urban areas rather than isolated parts of such areas.

Of special interest was the extent to which the Federal programs are designed to promote effective organization and effective planning procedures among the recipient governments. Other major interests were to identify Federal interagency coordinating procedures affecting these programs, and to identify the overall pattern of deficiencies and useful precedents in Federal requirements for administering urban development programs.

The survey did not attempt to provide a comprehensive study of Federal financial aids generally, or even of Federal aid to urban development. Rather, it seeks to examine across-the-board, and by individual program, two limited intergovernmental facets of such aids their impact on local government organization and the extent of coordination among these Federal aid programs and with local development decisions. Other fundamental questions relating to Federal grant programs such as the appropriateness of Federal financial intervention to achieve the program objectives indicated by the titles of the 43 aid programs studied, the impact on State government organization and finance, consideration of matching and equalization requirements, the desirability of periodic review of such programs, and the use of "project grants" as opposed to "formula grants"-are all appropriate for study by this Commission (some have already been so studied) but are not explored in this report.

In order to appraise each of the Federal programs of financial aid to urban development, answers to the following questions were sought for each of these programs.

1. "What are the Federal requirements, if any, with respect to the form and organization of the governmental agency administering the function being given assistance, including designations or limitations?" This question was designed to find out whether the assisted agency was a county, a municipality, some other general purpose unit of government, or a special purpose unit of government such as a special district responsible for only one or a very few governmental func

1 These interviews were held in the winter and spring of 1962-63 in Washington, D.C.

tions. For example: urban planning grants may be given to official State, metropolitan, and regional planning agencies, or other agencies, and instrumentalities designated by the Governor (or Governors in the case of interstate planning) and acceptable to the HHFA Administrator, which are empowered under State or local laws or interstate compact to perform metropolitan or regional planning.

2. "What is the geographic area of jurisdiction of the governinental agency administering the function being given assistance? What is the relationship of this geographic area to existing units of government?" The purpose here was to find out the extent to which individual programs recognized a need for areawide administration of the function being assisted. For example: local area redevelopment organizations generally have jurisdiction over the economic unit which may be a county, metropolitan area, labor market area, or region; thus, the geographic area may include all or part of one or more municipalities or counties.

3. "In what ways, if any, does the program encourage, discourage, permit, or require the joining together of the non-Federal units of government for financing or administration of the function being given assistance?" This question was aimed at finding out methods by which, and the extent to which, Federal requirements make it easier or harder for non-Federal units of government to use an areawide approach in performing functions which are federally aided. Examples are: 1. Sewage treatment construction grants given to individual communities may not exceed $600,000, but pooled grant funds not to exceed $2,400,000 will be given to communities to build joint treatment projects. 2. Under the public facility loan program, communities of 50,000 population or more (150,000 or more in ARA areas) are not eligible to receive such loans.

4. "What reviews and approvals does the activity or project being given financial assistance have to receive from State and local public agencies which have responsibilities (1) for related program activities, (2) for comprehensive planning, and (3) for carrying out the program?" This question gets at procedures of coordination that reach beyond the administering agency, both in terms of broadening the geographic area of jurisdiction considered, and in terms of broadening the number of functions considered together. Examples are: 1. Hospital grants must be approved by an official State "Hill-Burton" agency. 2. State highway departments must hold public hearings prior to determination of routes under the interstate highway program. 3. Urban renewal and public housing projects must be approved by the local governing body of the jurisdiction in which they are to be undertaken.

5. "What other requirements or incentives are provided with respect to the non-Federal organization, operation, or structure for coordination of the function being given assistance?" This is a catchall question to avoid missing any important coordination procedures of an organizational nature which might have been overlooked by the previous questions. For example: Housing and Home Finance Agency open-space grants may be increased by 10 percent if administered by public bodies with authority to acquire or participate in the acquisition of open-space land for an urban area as a whole.

It was also revealed of course that many of the programs were available to nongovernmental persons or organizations.