[Federal Register Volume 68, Number 101 (Tuesday, May 27, 2003)]
[Notices]
[Pages 28822-28823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13141]


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DEPARTMENT OF ENERGY


Payments in Lieu of Taxes Under the Atomic Energy Act of 1954; 
Guidelines

AGENCY: Office of Management, Budget and Evaluation/Chief Financial 
Officer, Department of Energy (DOE).

ACTION: Notice.

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SUMMARY: DOE publishes policy guidelines it uses to guide decisions 
with regard to applications by State or local jurisdictions for 
discretionary payments in lieu of taxes with regard to eligible real 
property that is not subject to State and local taxation because it is 
owned by the United States, is under the custody and control of DOE, 
and is used to carry out activities authorized by the Atomic Energy Act 
of 1954, as amended.

EFFECTIVE DATE: The guidelines in this Notice are effective May 27, 
2003.

FOR FURTHER INFORMATION: You may contact Mary L. Rosicky, ME-11, U.S. 
Department of Energy, 1000 Independence Avenue, SW., Washington, DC 
20585, telephone (202) 586-9354, e-mail, [email protected].

SUPPLEMENTARY INFORMATION: Pursuant to the Atomic Energy Act of 1954 
(AEA), DOE carries out a variety of national defense and energy 
research and development activities at sites that are located in 
various States and are owned by the United States Government. Section 
168 of the AEA (42 U.S.C. 2208) authorizes DOE to provide discretionary 
payments to State or local government authorities where AEA sites are 
located. These payments are in lieu of real property taxes that State 
and local jurisdictions may not collect because they are precluded by 
the United States Constitution from taxing real property owned by the 
Federal Government. These discretionary financial assistance payments 
in lieu of taxes, which are subject to the availability of funds, are 
commonly referred to as ``PILT payments''.
    In the past, DOE has decided, on a case-by-case basis, whether an 
application for PILT assistance should be approved and, if so, how much 
the annual PILT payments should be. In making such decisions, DOE has 
employed a policy consisting largely of internal procedures, 
application content criteria, evaluation criteria, and standard 
provisions for assistance agreements. The application content and 
evaluation criteria have either implemented requirements of section 168 
or have been the result of case-by-case decisions.
    The purpose of this notice is to state publicly, and without 
significant change, the policies regarding PILT payments that DOE has 
been applying to PILT applicants and recipients, and intends to 
continue to apply, on a case-by-case basis.
    The Secretary of Energy has approved issuance of this notice.

    Issued in Washington, DC on May 8, 2003.
James T. Campbell,
Acting Director, Office of Management, Budget and Evaluation/Acting 
Chief Financial Officer.

Guidelines for Payments in Lieu of Taxes Under the Atomic Energy Act of 
1954

I. Purpose and Scope

    These guidelines set forth policies that DOE intends to apply when 
making case-by-case determinations on applications for payments in lieu 
of taxes (PILT) under section 168 of the Atomic Energy Act of 1954 (42 
U.S.C. 2208). PILT is discretionary financial assistance that DOE may 
provide subject to the availability of funds. PILT is not an 
entitlement.

II. Authority

    These guidelines are authorized by sections 161 and 168 of the 
Atomic Energy Act of 1954 (42 U.S.C. 2201, 2208).

III. Applicability

    A. These guidelines apply to any DOE facility (including facilities 
of the National Nuclear Security Administration) located on real 
property owned by the United States, under the custody and control of 
DOE, and at which activities authorized or required under the Atomic 
Energy Act of 1954 are carried on, if the real property was subject to 
State and local taxation immediately prior to acquisition by the United 
States.
    B. These guidelines do not affect existing agreements between DOE 
and State or local governments that preclude PILT on all or part of 
real property under custody and control of DOE.
    C. These guidelines apply to an initial application for PILT that 
is submitted to DOE, and to an application or request to change the 
basis for or amount of a PILT payment under an existing agreement 
between DOE and a State or local government. DOE will treat any 
application or request to change the basis for or amount of a PILT 
payment under an existing agreement as an initial application under 
these guidelines.

IV. Definitions

    As used in these guidelines:
    A. ``Condition In Which It Was Acquired'' means the physical 
description, definition, and real property classification used to 
determine the assessed valuation of the real property in the last year 
that such property was on the State or local tax rolls prior to 
acquisition by the Federal Government.
    B. ``Revised PILT Payment'' means a change in PILT payment that is 
based on a reclassification of the property to a new tax classification 
or category, an increase or decrease in the amount of land used to 
calculate the PILT payment, or other significant change in the method 
of calculating the PILT payment. ``Revised PILT Payment'' does not mean 
a PILT payment that is changed solely because of Taxing Authority 
jurisdiction-wide adjustments to tax assessments or to tax rates.

[[Page 28823]]

    C. ``Taxing Authority'' means an entity empowered under State law 
to render a separate tax bill based on the value of real property.

V. Application Content Criteria

    In an application for PILT, DOE expects to see the following 
information:
    A. Basis for calculating the PILT amount being sought;
    B. Description of the real property, including non-Federal 
Government improvements existing at the time the Federal Government 
acquired the property and which still exist;
    C. Date that the Federal Government acquired the real property and 
the date the real property was removed from the tax rolls because of 
its acquisition by the Federal Government;
    D. Classification of real property by the Taxing Authority (if 
applicable) and zoning of such property in the last year it was on the 
tax rolls;
    E. Tax rate, assessment, and total PILT payment proposed, net of 
applicable exclusions or offsets under these guidelines;
    F. Current tax rate and assessment placed on real property with the 
same zoning and/or use classification, as reported by the Taxing 
Authority under paragraph V.D. of these guidelines;
    G. Other Federal Government payments received or expected to be 
received by the applicant Taxing Authority which may duplicate payments 
made under these guidelines for the same identifiable, discrete purpose 
and use by the Taxing Authority; and
    H. A statement that the Taxing Authority agrees to execute and 
deliver to DOE a valid and binding release or settlement of claims for 
payments related to DOE's land or property.

VI. Evaluation Criteria

    On a case-by-case basis, DOE plans to evaluate applications for 
PILT, and to calculate PILT payments, using the following guidelines:
    A. The real property for which a PILT payment is sought currently 
must be used for activities authorized by the Atomic Energy Act of 
1954;
    B. The real property must have been on the tax rolls of the 
applicant Taxing Authority immediately prior to acquisition of the real 
property by the Federal Government;
    C. DOE will not make PILT payments for any tax year prior to the 
tax year during which a complete application for PILT is filed with 
DOE;
    D. Approval of applications for PILT, as well as payments pursuant 
to an approved application, are subject to the availability of funds, 
and amounts available for PILT are subject to the same reductions or 
other budgetary restrictions that may be applied to other DOE programs;
    E. DOE will not make PILT payments that exceed the tax payment to 
which the Taxing Authority would be entitled if the real property had 
remained on the tax rolls in the Condition in Which It Was Acquired;
    F. Property value for real property addressed in an initial 
application or an application for a Revised PILT Payment will be 
determined on the basis of the highest and best use of the real 
property in the same zoning classification and Taxing Authority-
assigned-use classification at the time the real property was acquired 
by the Federal Government. The property value will exclude the value of 
improvements made after the Federal Government acquired the real 
property. The current tax rate and assessment values will be the same 
as those applied to comparable properties with the same use and/or tax 
classification in the jurisdiction of the Taxing Authority;
    G. In calculating PILT payments, DOE will deduct from a PILT 
payment otherwise calculated by the applicant Taxing Authority an 
amount equal to any payment(s) by the Federal Government that will be 
used by the State or local jurisdiction for the same identifiable, 
discrete purpose; and
    H. Such other relevant criteria as DOE deems appropriate in light 
of the information provided in the application for PILT. In order for 
DOE to approve or pay a Revised PILT Payment, a Taxing Authority must 
submit a complete application as if the Taxing Authority were a new 
applicant for PILT assistance, and all aspects of the application will 
be evaluated as if the Taxing Authority were a new applicant for such 
assistance.

VII. Intergovernmental Assistance Agreement

    A. Before a Taxing Authority may receive PILT payments from DOE, 
the Taxing Authority's application for PILT under these guidelines must 
be approved in writing by the DOE Chief Financial Officer who may not 
delegate this authority.
    B. Upon approval of an application for PILT by the DOE Chief 
Financial Officer and satisfaction of any conditions attached to such 
approval, and prior to making any PILT payments to the relevant Taxing 
Authority applicant, DOE will enter into an intergovernmental 
assistance agreement with the applicant Taxing Authority that is 
satisfactory to DOE under these guidelines.
    C. The standard terms of such an agreement should include, but are 
not limited to, provisions stating:
    1. That the agreement does not apply to any tax year prior to the 
tax year in which a complete application for PILT was filed with DOE;
    2. The date that the first payment is due;
    3. That PILT payments are subject to the availability of funds;
    4. That PILT payments are subject to legislative or administrative 
reductions in funding levels;
    5. That PILT payments are subject to suspension during the pendency 
of any lawsuit filed by the Taxing Authority which seeks from the 
Federal Government any real property taxes or their equivalent; and
    6. That PILT is not an entitlement, and, accordingly, nothing in 
the agreement and no conduct of DOE under or relating to the agreement 
shall be interpreted to preclude or place any limitations or conditions 
on the Secretary of Energy's exercise of his discretion under section 
168 of the Atomic Energy Act of 1954, including his discretion to 
unilaterally terminate the agreement with reasonable notice.
[FR Doc. 03-13141 Filed 5-23-03; 8:45 am]
BILLING CODE 6450-01-P