"Payments in Lieu of Taxes" (PILT) are Federal payments to local governments that help offset losses in property taxes due to non-taxable Federal lands within their boundaries. The key law is Public Law 94-565, dated October 20, 1976. This law was rewritten and amended by Public Law 97-258 on September 13, 1982 and codified as Chapter 69, Title 31 of the United States Code. The law recognizes the inability of local governments to collect property taxes on Federally-owned land can create a financial impact.
PILT payments help local governments carry out such vital services as firefighting and police protection, construction of public schools and roads, and search-and-rescue operations. The payments are made annually for tax-exempt Federal lands administered by the Bureau of Land Management, the National Park Service, the U.S. Fish and Wildlife Service (all agencies of the Interior Department), the U.S. Forest Service (part of the U.S. Department of Agriculture), and for Federal water projects and some military installations. PILT payments are one of the ways the Federal Government can fulfill its role of being a good neighbor to local communities.
The Department of the Interior's (DOI) Office of the Secretary has administrative authority over the PILT program. In addition to other responsibilities, DOI calculates payments according to the formulas established by law and distributes the available funds. Applicable DOI regulations pertaining to the PILT program were published as a final rule in the Federal Register on December 7, 2004.
The formula used to compute the payments is contained in the PILT Act and is based on population, receipt sharing payments, and the amount of Federal land within an affected county. PILT payments are in addition to other Federal revenues (such as oil and gas leasing, livestock grazing, and timber harvesting) the Federal Government transfers to the States. The DOI has distributed more than $7.1 billion dollars in PILT payments to States (except Rhode Island) and the District of Columbia, Puerto Rico, Guam, and the Virgin Islands since these payments began in 1977.
For questions about the PILT program, please contact Dionna Kiernan at 202-513-7783.
FY 2016 News: Discretionary funding for the PILT program is continued at the 2015 rate, under Section 101(a)(13) of the Continuing Appropriations Act of 2016 (H.R. 719). This provision allows the Department to initiate the 2016 data collection process. States and Agencies should expect to see correspondence from the Department in the coming weeks requesting updated acreage and prior year payment data as of September 30, 2015.