(a) Payment amounts

Except as provided in section 7113 of this title, the Secretary of the Treasury shall pay to—

(1) a State or territory of the United States an amount equal to the sum of the amounts elected under subsection (b) by each county within the State or territory for—

(A) if the county is eligible for the 25-percent payment, the share of the 25-percent payment; or

(B) the share of the State payment of the eligible county; and

(2) a county an amount equal to the amount elected under subsection (b) by each county for—

(A) if the county is eligible for the 50-percent payment, the 50-percent payment; or

(B) the county payment for the eligible county.

(b) Election to receive payment amount

(1) Election; submission of results

(A) In general

The election to receive a share of the State payment, the county payment, a share of the State payment and the county payment, a share of the 25-percent payment, the 50-percent payment, or a share of the 25-percent payment and the 50-percent payment, as applicable, shall be made at the discretion of each affected county by August 1, 2013 (or as soon thereafter as the Secretary concerned determines is practicable), and August 1 of each second fiscal year thereafter, in accordance with paragraph (2), and transmitted to the Secretary concerned by the Governor of each eligible State.

(B) Failure to transmit

If an election for an affected county is not transmitted to the Secretary concerned by the date specified under subparagraph (A), the affected county shall be considered to have elected to receive a share of the State payment, the county payment, or a share of the State payment and the county payment, as applicable.

(C) Effect of late payment for fiscal years 2014 and 2015

The election otherwise required by subparagraph (A) shall not apply for fiscal year 2014 or 2015.

(D) Payments for each of fiscal years 2017 through 2020

The election otherwise required by subparagraph (A) shall not apply for each of fiscal years 2017 through 2020.¹

(2) Duration of election

(A) In general

A county election to receive a share of the 25-percent payment or 50-percent payment, as applicable, shall be effective for 2 fiscal years. If such two-fiscal year period included fiscal year 2013, the county election to receive a share of the 25-percent payment or 50-percent payment, as applicable, also shall be effective for fiscal years 2014 and 2015 and for each of fiscal years 2017 through 2020.

(B) Full funding amount

If a county elects to receive a share of the State payment or the county payment in 2013, the election shall be effective for all subsequent fiscal years through fiscal year 2015 and for each of fiscal years 2017 through 2020.

(3) Source of payment amounts

The payment to an eligible State or eligible county under this section for a fiscal year shall be derived from—

(A) any amounts that are appropriated to carry out this chapter;

(B) any revenues, fees, penalties, or miscellaneous receipts, exclusive of deposits to any relevant trust fund, special account, or permanent operating funds, received by the Federal Government from activities by the Bureau of Land Management or the Forest Service on the applicable Federal land; and

(C) to the extent of any shortfall, out of any amounts in the Treasury of the United States not otherwise appropriated.

(c) Distribution and expenditure of payments

(1) Distribution method

A State that receives a payment under subsection (a) for Federal land described in section 7102(7)(A) of this title shall distribute the appropriate payment amount among the appropriate counties in the State in accordance with—

(A) the Act of May 23, 1908 (16 U.S.C. 500); and

(B) section 13 of the Act of March 1, 1911 (36 Stat. 963; 16 U.S.C. 500).

(2) Expenditure purposes

Subject to subsection (d), payments received by a State under subsection (a) and distributed to counties in accordance with paragraph (1) shall be expended as required by the laws referred to in paragraph (1).

(d) Expenditure rules for eligible counties

(1) Allocations

(A) Use of portion in same manner as 25-percent payment or 50-percent payment, as applicable

Except as provided in subparagraph (D), if an eligible county elects to receive its share of the State payment or the county payment, not less than 80 percent, but not more than 85 percent, of the funds shall be expended in the same manner in which the 25-percent payments or 50-percent payment, as applicable, are required to be expended.

(B) Election as to use of balance

Except as provided in subparagraph (C), an eligible county shall elect to do 1 or more of the following with the balance of any funds not expended pursuant to subparagraph (A):

(i) Reserve any portion of the balance for projects in accordance with subchapter II.

(ii) Reserve any portion of the balance for projects in accordance with subchapter III.

(iii) Return the portion of the balance not reserved under clauses (i) and (ii) to the Treasury of the United States.

(C) Counties with major distributions

In the case of each eligible county to which $350,000 or more is distributed for any fiscal year pursuant to paragraph (1)(B) or (2)(B) of subsection (a), the eligible county shall elect to do 1 or more of the following with the balance of any funds not expended pursuant to subparagraph (A):

(i) Reserve any portion of the balance for projects in accordance with subchapter II.

(ii) Reserve not more than 7 percent of the total share for the eligible county of the State payment or the county payment for projects in accordance with subchapter III.

(iii) Return the portion of the balance not reserved under clauses (i) and (ii) to the Treasury of the United States.

(D) Counties with minor distributions

In the case of each eligible county to which less than $100,000 is distributed for any fiscal year pursuant to either or both of paragraphs (1)(B) and (2)(B) of subsection (a), the eligible county may elect to expend all the funds in the same manner in which the 25-percent payments or 50-percent payments, as applicable, are required to be expended.

(E) Effect of late payment for fiscal year 2014

The election made by an eligible county under subparagraph (B), (C), or (D) for fiscal year 2013, or deemed to be made by the county under paragraph (3)(B) for that fiscal year, shall be effective for fiscal years 2014 and 2015.

(F) Payments for each of fiscal years 2017 through 2020

The election made by an eligible county under subparagraph (B), (C), or (D) for fiscal year 2013, or deemed to be made by the county under paragraph (3)(B) for that fiscal year, shall be effective for each of fiscal years 2017 through 2020.¹

(2) Distribution of funds

(A) In general

Funds reserved by an eligible county under subparagraph (B)(i) or (C)(i) of paragraph (1) for carrying out projects under subchapter II shall be deposited in a special account in the Treasury of the United States.

(B) Availability

Amounts deposited under subparagraph (A) shall—

(i) be available for expenditure by the Secretary concerned, without further appropriation; and

(ii) remain available until expended in accordance with subchapter II.

(3) Election

(A) Notification

The Governor of each eligible State shall notify the Secretary concerned of an election by an eligible county under this subsection not later than September 30, 2012, and each September 30 thereafter for each succeeding fiscal year.

(B) Failure to elect

If the Governor of an eligible State fails to notify the Secretary concerned of the election for an eligible county by the date specified in subparagraph (A)—

(i) the eligible county shall be considered to have elected to expend 80 percent of the funds in accordance with paragraph (1)(A); and

(ii) the remainder shall be available to the Secretary concerned to carry out projects in the eligible county to further the purposes described in section 7122(b) of this title, section 7123(c) of this title, or section 7124(a)(5) of this title.

(C) Effect of late payment for fiscal year 2014

This paragraph does not apply for fiscal years 2014 and 2015.

(D) Payments for each of fiscal years 2017 through 2020

This paragraph does not apply for each of fiscal years 2017 through 2020.¹

(e) Time for payment

The payments required under this section for a fiscal year shall be made as soon as practicable after the end of that fiscal year.

(f) Treatment as supplemental funding

(1) In general

None of the funds made available to an eligible county under this chapter may be used in lieu of, or to otherwise offset, a State funding source for a local school, facility, or educational purpose.

(2) Continuation of direct payments

Payments to States made under this chapter and 25-percent payments made to States and Territories under the Acts of May 23, 1908, and March 1, 1911 (16 U.S.C. 500), shall continue to be made as direct payments and not as Federal financial assistance.