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U. S. Department of Energy ORDER
Washington, D.C. DOE O 143.1

Approved: 5-8-03
Certified: 1-31-07

This directive was reviewed and certified as current and necessary by
James T. Campbell, Acting Director, Office of Management, Budget and
Evaluation/Acting Chief Financial Officer, 5-08-03.

SUBJECT: PAYMENTS IN LIEU OF TAXES

1. PURPOSE. To establish general Department of Energy (DOE) procedures and
responsibilities with regard to processing applications for payments in lieu of taxes
(PILT) to certain State and local governments under the authority of section 168 of the
Atomic Energy Act of 1954, as amended (42 U.S.C. 2208). The policies and defined
terms related to these payments are contained in Attachment 1, "Payments In Lieu of
Taxes Under the Atomic Energy Act of 1954; Guidelines," Fed. Reg. 28822 (2003).

2. CANCELLATION. DOE 2100.12A, PAYMENTS FOR SPECIAL BURDENS AND IN
LIEU OF TAXES, of 6-9-92.

3. EXCLUSIONS. This Order does not apply to sites where payments are made to State and
local governments under the Atomic Energy Community Act of 1955, as amended; the
Uranium Mill Tailings Radiation Control Act of 1978, as amended; or the Nuclear Waste
Policy Act of 1982, or to payments made by DOE under those laws.

4. APPLICABILITY. To ensure overall consistency in exercising the statutory authorities
that are vested in the Secretary as head of DOE, the Departmental guidance established in
this Order is applicable to all Departmental elements, including the National Nuclear
Security Administration (NNSA).

5. REFERENCES.

a. Section 168 of the Atomic Energy Act of 1954, as amended (42 U.S.C. 2208),
which provides for PILT payments to State and local governments.

b. Fed. Reg. 28822 (2003), which publishes, without significant change, policy
guidelines DOE uses to guide decisions with regard to applications by State or
local governments for discretionary PILT payments with regard to real property
that is not subject to State or local taxation because it is owned by the United
States; was taken off the tax rolls upon acquisition by the United States; and is
used to carry out activities authorized by the Atomic Energy Act of 1954.

c. Atomic Energy Community Act of 1955, 42 U.S.C. 2301, et seq., which provides
for termination of Government ownership and management of communities
owned by the Atomic Energy Commission.

d. Nuclear Waste Policy Act of 1982, 42 U.S.C. 10101, et seq., which provides for
payments equal to taxes to jurisdictions affected by proposed or selected nuclear
waste sites.

e. Uranium Mill Tailings Radiation Control Act of 1978, as amended, 42 U.S.C.
7901, et seq., which authorizes a program of assessment and remedial action at
inactive uranium mill tailings sites.

f. Public Law No.103-382, 20 U.S.C. 7702, which provides for payments to
Federally impacted school districts.

g. Office of Management and Budget (OMB) Circular A-11, "Preparation,
Submission, and Execution of the Budget," which contains instructions relating to
apportionments and reports on budget execution.

6. BACKGROUND. The Atomic Energy Act of 1954 gives the Secretary of Energy broad
authority in making PILT payments. The amounts, the timing, and the terms of the
payments are at the discretion of the Secretary.

7. RESPONSIBILITIES.

a. Director, Office of Management, Budget and Evaluation/Chief Financial Officer shall:

(1) Approve, for the Secretary, applications for new PILT payments or
Revised PILT Payments after obtaining the concurrence of the Office of
General Counsel. For PILT applications or payments relating to real
property controlled or under the direct jurisdiction of NNSA, if the
Director, Office of Management, Budget and Evaluation/Chief Financial
Officer, and the Administrator, NNSA, disagree on whether a PILT
application should be approved or PILT payment made, the decision on
whether to approve the application or make the payment will be made by
the Deputy Secretary;

(2) Review and determine appropriate action on recommendations from Heads
of Program Offices regarding new PILT applications or Revised PILT
applications;

(3) Ensure that funding for approved PILT payments, as requested by Heads
of Program Offices, is included in DOE's budget submission to OMB and
to Congress;

(4) Ensure that appropriated and apportioned funds for PILT payments are
properly allotted; and

(5) Maintain an inventory database of DOE real property that is subject to the
provisions of section 168 of the Atomic Energy Act of 1954.

b. General Counsel shall:

(1) Review and concur or nonconcur in recommendations for action regarding
applications for new PILT payments or Revised PILT Payments. General
Counsel's review shall include consideration of the information provided
by Field Counsel pursuant to subparagraph 7c(1) of this Order;

(2) Review and concur or nonconcur on the eligibility of the applicant
requesting PILT payments to receive such payments;

(3) Review and concur or nonconcur on intergovernmental agreements
between DOE and each Taxing Authority requesting PILT payments; and

(4) Provide legal advice on other matters relating to PILT applications and
payments.

c. Field Counsel shall:

(1) Review applications for new PILT payments or Revised PILT Payments
and provide a written opinion verifying that the information presented by
the applicant is consistent with DOE PILT policy guidelines. Field
Counsel's opinion shall also report on the tasks assigned in subparagraphs
7c(2) and 7c(3);

(2) Review and concur or nonconcur on the eligibility of the applicant
requesting PILT payments to receive such payments;

(3) Review and concur or nonconcur on intergovernmental agreements
between DOE and each Taxing Authority requesting PILT payments; and

(4) Provide legal advice on other matters relating to PILT applications and
payments.

d. Heads of Field Elements shall:

(1) Manage the administration of PILT payments;
(2) Analyze requests for new PILT payments or Revised PILT Payments to
ensure that approval of the application will be consistent with DOE's PILT
policy guidelines;

(3) Prepare recommendations on applications for new PILT payments or
Revised PILT Payments and submit the recommendations to the Head of
Program Office who is responsible for budgeting for PILT payments;

(4) Ensure that PILT payments are made in accordance with duly executed
intergovernmental agreements;

(5) Ensure that legal documentation for DOE's real property for which the
Field Element has cognizance is maintained as complete and current; and

(6) Monitor DOE's real property inventory database for property (all real
property, not just section 168 property) for which the Field Element has
cognizance to ensure that the database is complete and accurate.

e. Heads of Program Offices shall:

(1) Review and forward a positive or negative recommendation regarding
applications for new PILT payments and Revised PILT Payments to the
Director, Office of Management, Budget and Evaluation/Chief Financial
Officer; and

(2) Ensure that funding is available when approval is recommended for
applications for new PILT payments or Revised PILT Payments, and
ensure that amounts for future PILT payments are included in Program
Office budget requests.

f. Procurement Officers shall:

(1) Execute separate intergovernmental agreements consistent with DOE's
PILT policy guidelines with each Taxing Authority that has been approved
to receive PILT payments. The agreement will set forth the terms and
procedures for billing, making payments, and revisions.

(2) Submit intergovernmental agreements to Field Counsel and General
Counsel for concurrence prior to execution.

8. PROCEDURES.

a. A recommendation from the Head of Field Element concerning an application for
new PILT payments or Revised PILT Payments must contain an evaluation of the
application, including the following:

(1) A determination whether or not the subject real property meets the
eligibility criteria for PILT payments established by the Atomic Energy
Act of 1954, as amended;

(2) An assessment of the information provided by the applicant relative to
other Federal payments received or expected which may be for the same
identifiable, discrete purpose as PILT payments proposed to be made
under 42 U.S.C. 2208;

(3) An examination of the tax rates and assessments applied to similar proper-
ties elsewhere in the same Taxing Authority's jurisdiction to assure that
PILT payment requests are fair and consistent; and

(4) The work papers and other information sufficient to support the
recommendation concerning the application. If approval is recommended,
the information will include:

(a) The amount to be paid;

(b) The date first payment is to be made; and

b. A recommendation from the Head of Program Office concerning an application
for new PILT payments or Revised PILT Payments must contain:

(1) An evaluation of the facts warranting approval or nonapproval of the
application, as appropriate;

(2) A statement that funding is available when approval of an application is
recommended; and

(3) A statement that amounts for future PILT payments to the applicant(s) will
be included in Program Office budget requests.

c. Once authorized, payments may continue subject to the availability of funds or
modifications by intergovernmental agreement.

d. The intergovernmental agreement serves as the obligating document.
9. FUNDS FOR PAYMENTS. Funds must be available for payments recommended for
approval. Funds budgeted for future payments must be specifically identified in the
documentation supporting budget requests. In accordance with OMB Circular A-11,
Part 4, "Instructions on Budget Execution," PILT payments are recorded as obligations
in the period in which they are authorized to be paid and due.

10. CONTACT. Contact the Office of Financial Policy at (202) 586-4860 for additional
information and guidance regarding this Order.

SPENCER ABRAHAM
Secretary of Energy

ATTACHMENT 1

68 Fed. Reg. 28822 (2003) 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.

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, S.W., Washington, D.C. 20585, telephone
(202) 586-9354, e-mail, marylou.rosicky@hq.doe.gov.

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, D.C., 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.

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.