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WYDEN COSPONSORS LEGISLATION
TO FULLY FUND COUNTY PAYMENTS LAW
Baucus bill would head off controversial
public land sale scheme
March 30, 2006
Washington, DC – U.S.
Senator Ron Wyden (D-Ore.) today announced he is cosponsoring
legislation introduced by U.S Senator Max Baucus (D-Mont.) that
will fully fund a reauthorization of the Secure Rural Schools
and Community Self Determination Act of 2000, commonly known as
the county payments law, by closing a tax loophole that allows
government contractors to avoid their tax obligations. In 2005
Wyden, along with U.S. Senator Larry Craig (R-Idaho), introduced
a bill to reauthorize the county payments law at its full funding
level for another seven years; the original law is due to expire
at the end of this year. Recently, the Bush administration proposed
cutting funding for the Act by 60 percent and funding the remainder
with a controversial Federal land sale scheme that has received
bipartisan criticism from Congress.
“Rural communities throughout the country rely on these
payments for top quality schools and infrastructure year in and
year out” said Wyden. “We cannot abandon them, and
this legislation finds a fiscally responsible way of extending
this successful law. I look forward to a bipartisan effort to
ensure its passage.”
The Baucus legislation would provide a revenue stream for the
county payments law by ensuring that taxes are withheld from payments
by the Federal government for goods and services delivered by
government contractors at a rate of three percent of the payment
amounts. Payments by the government to tax exempt entities for
goods and services would be exempt from the law. Under current
law, the Federal government does not withhold taxes owed from
government contractors that provide goods and services to the
Federal government. As a result, there is rampant non-compliance
by contractors with Federal tax law. This proposal, included in
the President’s 2007 budget as a revenue generator, would
close the tax gap created by that non-compliance.
The county payments law, first enacted
in 2000 in legislation authored by Wyden and Craig, established
a six year payment formula for counties that receive revenue sharing
payments for the USFS and Bureau of Land Management (BLM) lands.
Based on historical timber receipts, the formula established a
stable source of revenue to be used for education, roads and various
other county services in rural areas.
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