To provide full funding for the payment in lieu of taxes program for the next five fiscal years, to protect local jurisdictions against the loss of property tax revenues when private lands are acquired by a Federal land management agency, and for other purposes.

To provide full funding for the payment in lieu of taxes program for the next five fiscal years, to protect local jurisdictions against the loss of property tax revenues when private lands are acquired by a Federal land management agency, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Property Tax Endowment Act of 2003'.

SEC. 2. FULL FUNDING FOR PAYMENTS IN LIEU OF TAXES.

Section 6906 of title 31, United States Code, is amended--

(1) by striking `Necessary' and inserting `(a) IN GENERAL- Necessary';

(2) by striking `Amounts' and inserting `Except as provided in subsection (b), amounts'; and

(3) by adding at the end the following new subsection:

`(b) FULL FUNDING- For fiscal years 2004 through 2008, amounts necessary to carry out this chapter shall be made available to the Secretary of the Interior, out of any funds in the Treasury not otherwise appropriated and without further appropriation, for obligation and expenditure in accordance with this chapter.'.

SEC. 3. PROTECTION OF LOCAL TAX BASE AS PART OF FEDERAL LAND ACQUISITION.

(a) Election of Payment to Offset Revenue Loss-

(1) NOTIFICATION OF LOCAL GOVERNMENT- Whenever a Federal land management agency acquires privately owned land by purchase, exchange, or donation, the head of the agency shall notify the unit of general local government within whose jurisdiction the land lies.

(2) ELECTION- If a unit of general local government is notified by a Federal agency under paragraph (1) regarding an acquisition of land by the Federal agency, the elected officials with authority under State law to govern the unit may within 90 days after that notification, elect to receive from the Federal land management agency a one-time payment in an amount sufficient to offset the long term revenue loss to the local government that will result from the acquisition of the land by the Federal agency.

(b) Treatment of Land After One-Time Payment-

(1) IN GENERAL- If a unit of general local government receives, pursuant to an election under subsection (a), a one-time payment with respect to land acquired by a Federal land management agency, the land shall not be treated as entitlement land for purposes of chapter 69 of title 31, United States Code, notwithstanding any changes that may thereafter occur in the value of the land, interest rates, taxation rates, or any other economic factor.

(2) CONFORMING AMENDMENT- Section 6901(1) of title 31, United States Code, is amended by adding at the end the following:

`Such term does not include any land with respect to which a unit of local government receives a one-time payment under the Property Tax Endowment Act of 2003.'.

(c) Application-

(1) IN GENERAL- This section shall apply to any land acquisition by a Federal land management agency completed after September 30, 1998.

(2) APPLICATION TO PRIOR ACQUISITION- For purposes of the application of this section to an acquisition of land by a Federal agency before the date of the enactment of this Act, the head of the agency is deemed to have notified the unit of general local government concerned in accordance with paragraph (1) on the date of the enactment of this Act.

(3) NO EFFECT ON TITLE- This subsection shall not affect any right, title, or interest of the United States in or to land.

SEC. 4. ONE-TIME PAYMENT.

(a) IN GENERAL- If a unit of general local government elects under section 3(a)(2) to receive a one-time payment with respect to land acquired by a Federal land management agency--

(1) the head of the Federal agency shall determine and make such payment in accordance with this section; and

(2) such acquisition may not occur before the date the payment is made.

(b) AMOUNT OF PAYMENT-

(1) IN GENERAL- The amount of such payment--

(A) shall be sufficient to yield a revenue stream in perpetuity equal to the property taxes currently required to be paid with respect to the land, determined as an annuity amount based on an interest rate equal to the current average yield on outstanding obligations of the United States with remaining periods of maturity of 10 years on the date of acquisition of the land by the Federal agency;

(B) shall be determined based on the rate of tax and land valuation in effect for the land under the property tax laws of the unit of general local government that apply in the local tax year in which the land is acquired by the Federal land management agency; and

(C) shall include amounts to offset property taxes that were attributable to--

(i) improvements on the acquired lands; or

(ii) the use of the lands for business enterprise.

(2) FEDERAL ACQUISITIONS FROM TAX-EXEMPT ENTITIES- If a Federal land management agency acquires lands by purchase, donation, exchange, or other means from a nongovernmental organization or other entity that is exempt from local taxation, paragraph (1) shall apply as if the land were acquired from the last person that owned the lands that was not exempt from such taxation.

(3) DEDUCTION OF PILT PAYMENTS- In the case of a payment under this section to a unit of general local government with respect to land that was acquired by a Federal land management agency before the date of the enactment of this Act, the head of the agency shall deduct, from the amount otherwise required to be paid, the amount of any payment made to the unit with respect to the land after September 30, 1998, under chapter 69 of title 31, United States Code.

(c) TIME FOR PAYMENT- The payment required under subsection (a) in connection with a land acquisition shall be made before the Federal land management agency takes possession of the land.

(d) USE OF PAYMENT-

(1) IN GENERAL- Amounts paid to a unit of general local government under this section shall be deposited into a trust fund established and administered by the unit of general local government.

(2) RESTRICTION OF USE OF PRINCIPAL- The principal of the trust funds may not be expended.

(3) USE OF INTEREST- Interest generated by the trust funds shall be available to the unit of general local governmental for any governmental purpose.

SEC. 5. RELATIONSHIP OF ONE-TIME PAYMENTS TO PAYMENTS IN LIEU OF TAXES.

A one-time payment received by a unit of general local government under this Act shall not be deducted or in any way used to offset payments required to be made to the unit under chapter 69 of title 31, United States Code.

SEC. 6. DEFINITIONS.

In this section:

(1) DONATION- The term `donation' includes any conveyance of land to the Federal Government that is required as a condition of receipt of any benefit under Federal law.

(2) FEDERAL LAND MANAGEMENT AGENCY- The term `Federal land management agency' means each of the following:

(A) The Forest Service.

(B) The Bureau of Land Management.

(C) The National Park Service.

(D) The United States Fish and Wildlife Service.

(3) UNIT OF GENERAL LOCAL GOVERNMENT- The term `unit of general local government' has the meaning given the term in section 6901(2) of title 31, United States Code.