Payments in Lieu of Taxes (PILT): Section 6902 Payments

Payments in Lieu of Taxes (PILT): Section 6902 Payments

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Updated June 21, 2023
Payments in Lieu of Taxes (PILT): Section 6902 Payments
Introduction
Entitlement Land and Per Acre Payment Rates: Lands
Several federal programs exist to compensate local
eligible under PILT are referred to as entitlement lands in
jurisdictions for the presence of nontaxable federal lands.
statute (31 U.S.C. §6901) and include federal lands
The widest-ranging program is the Department of the
•
Interior’s (DOI’s)
in the National Park System;
Payments in Lieu of Taxes (PILT)
program. PILT compensates units of general local
• in the National Forest System;
government for selected lands administered by several
•
federal agencies. Units of general local government are
administered by the Bureau of Land Management;
generally referred to as counties, although a unit could be
• in the National Wildlife Refuge System withdrawn from
other than a county. In FY2023, PILT paid $578.8 million
the public domain;
to more than 1,900 counties across 49 states, the District of
•
Columbia, Guam, Puerto Rico, and the Virgin Islands.
dedicated to the use of federal water resources
development projects;
PILT funding is allocated through three payment
• used for certain dredge disposal areas;
mechanisms—Section 6902, Section 6904, and Section
6905—which are named for the sections of law in which
• located near Purgatory River Canyon and Piñon
they are authorized (31 U.S.C. §§6902, 6904, 6905).
Canyon, CO, that were acquired after December 31,
Section 6902 payments account for the majority of PILT
1981, to expand the Fort Carson military reservation;
payments and are available to the most counties. Section
• on which are located semi-active or inactive Army
6904 and 6905 payments account for less than 1% of PILT
installations used for certain purposes; and
payments, are supplementary to Section 6902 payments,
and are made to selected counties for specific purposes as
• acquired per the Southern Nevada Public Land
identified in statute. This CRS product discusses Section
Management Act (P.L. 105-263).
6902 payments.
The first step in calculating authorized payments is
Payment Formula
determining the number of entitlement acres within a
Section 6902 payments are made to counties pursuant to a
county, which is the responsibility of the various federal
formula provided in statute (Figure 1). Several factors are
agencies that administer the lands (Figure 1, Step A).
used to calculate the authorized PILT payment amount for a
Taking into account a population-based payment ceiling as
county: entitlement land and per acre payment rates,
described below (Figure 1, Step B), a county’s authorized
population-based payment ceilings, prior-year non-PILT
payment is calculated by multiplying the number of
payments, pass-through laws, and inflation. These factors
entitlement acres by one of two per acre payment rates—a
are described below. Additionally, the level of funding
higher rate offset by prior-year payments (Alternative A) or
available each year for PILT payments determines whether
a non-offset lower rate (Alternative B) (Figure 1, Step C).
counties receive the fully authorized payment amount or a
The higher amount is the authorized payment.
lesser, prorated amount.
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Payments in Lieu of Taxes (PILT): Section 6902 Payments
Figure 1. PILT Section 6902 Payment Formula, with FY2023 Rates

Source: CRS, with data from 31 U.S.C. §§6901 et seq. and DOI, FY2023 Payments in Lieu of Taxes National Summary, at https://www.doi.gov/pilt/
resources/annual-reports. Per acre payment rates are adjusted annual y for inflation (31 U.S.C. §6903(d)).
Population-Based Payment Ceiling: The law limits the
A and only when a state has not implemented pass-through
payment a county is authorized to receive based on a
laws as described below (Figure 1, Step C, Alternative A).
population-based payment ceiling. This ceiling is calculated
by multiplying a county’s population by a corresponding
Pass-Through Laws: States may have pass-through laws
per capita payment rate, as described below (Figure 1, Step
that require federal payments under selected compensation
B). As a county’s population increases, the per capita
programs to automatically pass through the county to
payment rate generally decreases, although the ceiling
specified local jurisdictions or districts (such as school
generally increases (Figure 2).
districts). Only prior-year payments under other programs
made at the county level are deducted during Alternative A
Figure 2. Population-Based Payment Ceiling, FY2023
calculations; payments subject to pass-through laws do not
count as prior-year payments and are not deducted.
Inflation: Per acre payment rates used in Alternatives A
and B and per capita payment rates used for population-
based payment ceilings are adjusted for inflation annually
based on the Consumer Price Index (31 U.S.C. §6903(d)).
Alternative A or Alternative B: A county’s authorized
payment is the higher of either Alternative A or Alternative
B. Alternative A has a higher per acre payment rate but
accounts for prior-year payments, which are subtracted
during the payment calculation. Alternative B has a lower
per acre rate, but prior-year payments are not subtracted.
Under both alternatives, if the product of multiplying the

number of entitlement acres by the per acre payment rate is
Source: CRS, with data from DOI, FY2023 Payments in Lieu of Taxes
greater than the population-based payment ceiling, the
National Summary, at https://www.doi.gov/pilt/resources/annual-
population-based ceiling is used to calculate a county’s
reports.
authorized payment (Figure 1, Step C).
For counties with a population of 5,000 or larger, the
Appropriations
population is rounded to the nearest 1,000. For counties
The DOI Office of the Secretary calculates authorized PILT
with populations smaller than 5,000, the actual population
payments each fiscal year pursuant to the statutory formula.
is multiplied by the per capita rate for a county with a
However, the amount available for disbursement ultimately
population of 5,000. Counties with populations greater than
depends on how much funding is appropriated for PILT
50,000 have the same ceiling as counties with populations
(Figure 1, Step D). Over the years, PILT has been funded
of 50,000.
through either discretionary or mandatory appropriations or
both. Appropriations have been equal to or very near the
Prior-Year Non-PILT Payments: The PILT formula
authorized amount in some years and substantially less than
accounts for counties receiving certain other federal land
the authorized amount in others. In years when funding for
based payments. Under Alternative A, PILT requires the
PILT payments is less than the authorized amount, county
amounts received in the prior year pursuant to these
payments typically have been prorated to accommodate the
payments to be subtracted from the payment amount
difference (Figure 1, Step E). The amount of proration
calculated. Prior-year payments are considered from several
depends on the difference between the authorized and
federal programs identified in statute (31 U.S.C. §6903(a)).
appropriated amounts. For example, a county’s prorated
Prior-year payments are subtracted only under Alternative
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Payments in Lieu of Taxes (PILT): Section 6902 Payments
payment can be substantially less than its authorized
PILT to be funded at the authorized amount for FY2023.
payment if there is a substantial difference between the
P.L. 117-328, Division G, provided additional stipulations,
authorized and appropriated amounts. A county’s prorated
including that up to $400,000 may be used for
payment can be nearly equal to the authorized payment
administration and payments may be prorated, if necessary.
when appropriated funding for county payments is only
DOI issued the FY2023 PILT payments in June 2023.
slightly less than the authorized amount, such as when the
deviation results only from a set-aside for program
For more information, see CRS Report R46260, The
administration.
Payments in Lieu of Taxes (PILT) Program: An Overview.
Annual discretionary appropriations laws also have
This product originally was authored by Katie Hoover,
provided requirements for PILT payments. For example,
former CRS Specialist in Natural Resources.
they have restricted county payments authorized for less
than $100, allowed payments to be prorated if appropriated
Carol Hardy Vincent, Specialist in Natural Resources
funding is insufficient to cover authorized amounts, and set
Policy
aside funding to be used for program administration.
IF11772
FY2023 Payments
Section 114 of Division G of the Consolidated
Appropriations Act, 2023 (P.L. 117-328), provided for

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