Payments to States in Lieu of Real Estate Taxes

The Department of the Army distributes annual payments to states under 33 U.S.C. 701c-3 (Assistance Listing 12.112) to compensate local taxing units for foregone property tax revenue on federally acquired lands used for flood control, navigation, and hydroelectric power development, with no application required and automatic distribution occurring at fiscal year end.

This is a mandatory pass-through program, not a competitive grant opportunity. The Army receives lease revenues from federally owned real property acquired for flood control and allied purposes, deposits 75 percent of those revenues into the Treasury, and automatically distributes the collected funds to the states where the properties are situated. No applicant submission, award competition, or discretionary selection process exists; distribution is automatic and formulaic based on revenue collection and property location.

Eligible recipients are state governments in which federal lands are situated. Funds flow to the state level, and state legislatures control expenditure. Allowable uses include benefit to public schools and public roads in the county where property is located, defraying county government expenses, and public obligations of levees and drainage districts for flood control and drainage improvements. The program is excluded from OMB Circular A-110 coverage and from cost accounting standards under A-87.

This program does not solicit applications, post grant opportunities, or conduct competitive award cycles. Districts report collections to CERM-F (the Army Corps of Engineers Modernization Framework) by state and county. The source provides no recent award data, recent opportunities, award magnitudes, or funding trends; it documents a statutory entitlement mechanism, not an active competitive grants portfolio.

Pursuit should be directed toward state government bodies and county administrators in jurisdictions containing federally acquired flood control or navigation properties, as those are the automatic recipients. This is not a program to which organizations apply; it is a mandatory state revenue distribution tied to Army Corps property holdings.