The U.S. Government Accountability Office (GAO) plans in September to release a report on the Energy Department’s payment in lieu of taxes (PILT) to communities surrounding its national laboratories and nuclear cleanup sites.
The report will analyze how PILT payments are calculated across sites and how have they varied over time, according to the GAO.
The study will also consider to what extent these payments meet program goals of compensating localities for land held by the federal government since the days of the Manhattan Project and the Cold War. Payments in lieu of taxes are meant to compensate local governments for property that cannot be taxed or developed for new business.
Rep. Mike Simpson (R-Idaho) alluded to the report during comments May 21 in the House Appropriations Committee markup of the fiscal 2020 energy and water development funding bill.
“There are 17 national laboratories and all of them operate differently as far as PILT payments,” Simpson said during the session. For example, the Idaho National Laboratory covers 890 square miles, but there is no assurance that communities near the large site will get large payments, he said.
Simpson has previously criticized DOE over PILT payments, saying the agency’s criteria is not transparent and individual site payments can range from a few thousand dollars to more than $6 million.
“It is up to the site manager whether they want to participate in the PILT payment or not,” so if you have a “friendly one” then the localities get more funding, Simpson said.
Furthermore, any money the Energy Department pays out for PILT is siphoned away from funds that would otherwise be devoted to environmental remediation at nuclear sites, Simpson said.
“We either do the same and uniform across the complex, or we don’t do it at all,” Simpson said. He added he is not opposed to PILT, because the extra personnel and facilities connected with DOE projects can strain local schools, utilities, and roadways.
At the same time, localities around DOE nuclear sites already get the benefit of good paying jobs from the federal government, Simpson said.
The Government Accountability Office has looked at PILT policy at DOE previously in 1994. The Atomic Energy Act of 1946 authorized payments for lost tax revenue for nuclear facilities. The report notes a 1987 change in PILT policy said communities are only eligible for such funding if the loss of tax revenue outweighs the economic benefit of the DOE facility.
Simpson sought the review of PILT policies in a report accompanying the fiscal 2018 energy and water appropriations bill. While he chaired the House Appropriations energy and water subcommittee in the last Congress, before Democrats retook the majority in the House, the panel sought to terminate existing PILT agreements. The Energy Communities Alliance, which represents localities around DOE sites, opposed the move.
The Washington, D.C., organization says it is not opposed to a fresh look at PILT policy. The eventual language included in the March 2018 appropriations bill language did not seek to end existing deals, but called for the GAO study.
In the Senate, New Mexico Democrats Tom Udall and Martin Heinrich want to support the PILT system to make it more predictable by setting up a deficit-neutral reserve fund.
In 2018, Benton County, Wash., where DOE’s Hanford Site is located, sought about $9.3 million in payments in lieu of taxes and received about two-thirds of that amount, according to staff for Rep. Dan Newhouse (R-Wash.). However, Benton County revised its methodology and the 2019 bill to DOE is less than half of 2018’s at about $4.1 million.
These payments continue to be “an essential program to provide support” for communities near Hanford, which encompasses 586 square miles, half size of state of Rhode Island, that cannot be privately developed, Newhouse said during the recent markup.
