County joins lawsuit for federal compensation
Flathead County is joining a class-action lawsuit that seeks to recover money the court has determined the federal government owes local governments for underpayment of payments-in-lieu-of-taxes compensation for nontaxable federal land.
The commissioners on Monday voted 2-1, with Commissioner Gary Krueger dissenting, to complete an opt-in notice for the Kane County, Utah versus United States lawsuit, in order to have a right to any money recovered in the lawsuit.
Kane County claimed the federal government was required to pay in full the amounts due to units of local government under the Payments In Lieu of Taxes Act in fiscal years 2015, 2016 and 2017. The lawsuit contended the federal government underpaid units of local governments in those years, and that all class members are entitled to recover the underpayment amounts.
The government denied the assertion, but a court ruling obligates the federal government to pay eligible units of local government the full amounts calculated by a formula set forth in the federal law, even though Congress failed to appropriate sufficient funds to do so in fiscal years 2015 through 2017.
The court, however, has not yet determined the amount by which the class as a whole, or any individual class member, was underpaid in those years.
The Montana Association of Counties estimated Flathead County is due a total of $100,419 in further payments-in-lieu compensation for the three-year period listed in the lawsuit, Flathead County Administrator Mike Pence said. The county would be obligated to pay attorney fees, which would take about one-third of the compensation, leaving Flathead County with roughly $66,000 once the case is settled.
According to information from the U.S. Court of Federal Claims, the class counsel and counsel for the government have agreed on the amount of underpayment for 2015 and 2016, and anticipate reaching agreement on the amount of underpayment in fiscal year 2017.
The court’s decision is subject to appeal.
Flathead County recently received $3.4 million in payments-in-lieu of taxes for fiscal year 2018, about $840,000 more than in 2017. Its annual allocation is the largest among Montana counties because about 70 percent of Flathead County’s 2.44 million acres is federally owned.
Each year Flathead County earmarks $500,000 of the payments-in-lieu money to the road department. In recent years the county also has set aside a portion of the payments-in-lieu money for construction of a new jail. The money typically is saved for infrastructure projects.
Lincoln County also has joined the class-action lawsuit, and expects an estimated $25,373 from the anticipated settlement.
Features Editor Lynnette Hintze may be reached at 758-4421 or lhintze@dailyinterlake.com.