The Payments in Lieu of Taxes (PILT) Program: An Overview

March 9, 2020 – July 10, 2023 R46260

The Payments in Lieu of Taxes (PILT) Program: July 10, 2023
An Overview
Carol Hardy Vincent
The Department of the Interior’s (DOI’s) Payments in Lieu of Taxes (PILT; 31 U.S.C. §§6901-
Specialist in Natural
6907) program provides compensation for certain tax-exempt federal lands, known as entitlement
Resources Policy
lands. PILT payments are made annually to units of general local government—typically

counties—that contain entitlement lands. PILT is only one of several federal programs that exist
to compensate counties and other local jurisdictions for the presence of federal lands within their

boundaries. However, PILT applies to the broadest array of land types. PILT entitlement lands
include most federal lands administered by the Bureau of Land Management, the National Park Service, and the U.S. Fish
and Wildlife Service, all in DOI, and by the U.S. Forest Service in the Department of Agriculture; federal water projects;
dredge disposal areas; and some military installations. In FY2023, the PILT appropriation was $579.2 million, and DOI
distributed $578.8 million in PILT payments to more than 1,900 counties across 49 states, the District of Columbia, Guam,
Puerto Rico, and the Virgin Islands.
PILT comprises three separate payment mechanisms, named after the sections of law in which they are authorized: Section
6902 (31 U.S.C. §6902), Section 6904 (31 U.S.C. §6904), and Section 6905 (31 U.S.C. §6905). Section 6902 payments are
the broadest of the three payment mechanisms; they account for nearly all of the funding disbursed under the PILT program
and are made to most of the counties receiving PILT funding. In contrast, Section 6904 and Section 6905 payments are
provided only under selected circumstances, account for a small fraction of PILT payments, and are made to a minority of
counties (most of which also receive Section 6902 payments). In addition, whereas Section 6902 payments are provided each
year based on the presence of entitlement lands, most payments under Section 6904 and Section 6905 are provided only for a
limited duration after certain land acquisitions.
Section 6902 payments are determined based on a multipart formula (31 U.S.C. §6903). Payments are calculated according to
several factors, including (1) the number of acres of entitlement land present within the unit of local government’s
jurisdiction; (2) a per-acre calculation determined by one of two alternatives (Alternative A, also called the standard rate, or
Alternative B, also called the minimum provision); (3) a population-based maximum payment (ceiling); (4) selected prior-
year payments made to the counties pursuant to certain other federal compensation programs; and (5) the amount
appropriated to cover the payments. Section 6904 and Section 6905 payments are provided to counties after the federal
acquisition of specific types of entitlement lands (Section 6904) or entitlement lands located in specific areas (Section 6905)
and are based on the fair market value of the acquisitions. If the appropriated amount is insufficient to cover the total
payment amounts authorized in Sections 6902, 6904, and 6905, payments are prorated in proportion to the authorized rate.
Before FY2008, PILT was funded through the annual discretionary appropriations process. In some of those years, the
appropriation was less than the authorized full funding level, so each county received a prorated payment in those years.
Since FY2008, PILT has been funded entirely through mandatory appropriations for all years except three (FY2015, FY2016,
and FY2017). In FY2015, PILT was funded through both mandatory and discretionary funding. In FY2016 and FY2017,
PILT was funded entirely through discretionary appropriations.
PILT is of perennial interest to many Members of Congress and stakeholders throughout the country, and many local
governments consider PILT payments to be an integral part of their annual budgets. Congress has considered topics and
legislation related to the eligibility of various federal lands for entitlement under PILT (such as Indian lands or other lands
currently excluded from compensation), amendments to the formula for calculating payments (especially under Section
6902), and issues related to funding PILT, among other matters.
Congressional Research Service

link to page 9 The Payments in Lieu of Taxes (PILT) Program: An Overview

Payments in Lieu of Taxes (PILT) Introduction
The Department of the Interior’s (DOI’s) Payments in Lieu of Taxes (PILT) program provides
compensation for certain entitlement lands that are exempt from state and local taxes.1 These
include most federal lands administered by the Bureau of Land Management, the National Park
Service, and the U.S. Fish and Wildlife Service, all in DOI, and by the U.S. Forest Service in the
Department of Agriculture; federal water projects; dredge disposal areas; and some military
installations.2 Enacted in 1976,3 PILT is the broadest—in terms of federal land types covered—of
several federal programs enacted to provide compensation to state or local governments for the
presence of tax-exempt federal lands within their jurisdictions.4
PILT was enacted in response to a shift in federal policy from one that prioritized disposal of
federal lands—in which federal ownership was considered to be temporary—to one that
prioritized retention of federal lands, in perpetuity, for public benefit.5 This shift began in the late
19th century and has continued. Along with this shift came the understanding that, because these
lands were exempt from state and local taxation and were no longer likely to return to the tax base
in the foreseeable future, some compensation should be provided to the impacted local
governments. Following several decades of commissions, studies, and proposed legislation, PILT
was enacted to ameliorate this hardship at least in part.6 PILT payments generally can be used for
“any governmental purpose,”7 which may include assisting local governments with paying for
local services, such as “firefighting and police protection, construction of public schools and
roads, and search-and-rescue operations.”8

1 The Department of Energy also implements a separate Payments in Lieu of Taxes (PILT) program, as authorized by
the Atomic Energy Act of 1954 (P.L. 83-703, 42 U.S.C. §2208), not discussed in this report. This report also does not
discuss the payments made to PILT counties through the Local Assistance and Tribal Consistency Fund (LATCF),
established in the American Rescue Plan (P.L. 117-2, Sec. 9901). Receiving PILT payments was one factor for
determining eligibility to receive a payment through the LATCF. Under the LATCF, eligible counties received $750
million in FY2022 and FY2023. In addition, certain eligible consolidated local governments are to receive $10.5
million in FY2023 and FY2024. For more information, see the Department of the Treasury’s LATCF website at
https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/local-assistance-
and-tribal-consistency-fund.
2 31 U.S.C. §§6901-6907. PILT implementing regulations are provided at 43 C.F.R. Part 44. See “Entitlement Lands”
for more detail on the categories of entitlement lands.
3 PILT originally was enacted in 1976 through P.L. 94-565. In 1982, PILT was “revised, codified, and enacted” in Title
31 of the U.S. Code pursuant to Chapter 69 of P.L. 97-258. Subsequently, PILT has been amended multiple times.
4 Although PILT is the broadest of these compensatory programs, it is not the oldest, and PILT provides compensation
for defined entitlement lands only (31 U.S.C. §6901(1)). Other programs may include additional lands as defined by
those programs. Several of those programs may be partially offset in PILT through the consideration of prior-year
payments. Those programs are listed at 31 U.S.C. §6903(a)(1).
5 For more information, see Public Land Law Review Commission, One Third of the Nation’s Land: A Report to the
President and to the Congress, June 1970, pp. 235-241. This report was produced pursuant to P.L. 88-606.
6 For more information, see U.S. Congress, House Committee on Interior and Insular Affairs, Payments In Lieu of
Taxes Act, report to accompany H.R. 9719, 94th Cong., 2nd sess., May 7, 1976, H.Rept. 94-1106; and U.S. Congress,
Senate Committee on Interior and Insular Affairs, Providing for Payments to Local Governments Based upon the
Amount of Certain Public Lands Within the Boundaries of Each Such Government, report to accompany H.R. 9719,
94th Cong., 2nd sess., September 20, 1976, S.Rept. 94-1262.
7 31 U.S.C. §6902(a), 31 U.S.C. §6904(b), and 31 U.S.C. §6905(a) and (b)(3). Neither the law nor implementing
regulations define “governmental purpose.” However, both §6904 and §6905 require that certain funds provided
through these sections are made available to school districts and other local governmental units within the local
jurisdiction.
8 For more information, see Department of the Interior (DOI), Fiscal Year 2023 Payments In Lieu of Taxes, National
Summary, available at https://www.doi.gov/pilt (hereinafter, National Summary FY2023).
Congressional Research Service
1

link to page 9 The Payments in Lieu of Taxes (PILT) Program: An Overview

The Office of the Secretary in DOI is responsible for the calculation and disbursement of
payments under PILT.9 Payments under PILT are made annually to units of general local
government—typically counties, though other types of governmental units also may be used
(hereinafter, counties refers to units of general local government)—containing entitlement lands.
PILT comprises three separate payment mechanisms: Section 6902, Section 6904, and Section
6905 payments, all named for the sections of law in which they are authorized.10 Section 6902
payments account for nearly all payments made through PILT. The Section 6902 amount for each
county is calculated according to a statutory formula that is subject to a maximum payment based
on the county’s population (see “PILT Payments Under Section 6902”).11 The remaining
payments are provided through Section 6904 and Section 6905 under selected circumstances and
typically are limited in duration. Through FY2023, PILT payments have totaled approximately
$11.4 billion.12
This report provides an overview of the PILT payment program and includes sections on
• PILT’s authorization and appropriations, which discusses the history of how
Congress has provided funding for PILT;
• Section 6902 payments, which includes a breakdown of how Section 6902
payments are calculated;
• Section 6904 and Section 6905 payments, which outlines what situations result in
payments under these mechanisms; and
• issues for Congress, which discusses several topics that have been or may be of
interest to Members of Congress when considering the PILT program.
Selected Terms Used in This Report
Authorized payment: the amount a county is eligible to receive based on the formula/requirements specified in
statute, prior to any reductions for administrative costs or due to insufficient appropriations.
Entitlement lands: statutorily defined federally owned lands that are exempt from state and local taxes and are
eligible to be the basis for determining a county’s eligibility for PILT payments. This term is defined in statute at 31
U.S.C. §6901(1).
Full statutory calculation: the sum of authorized payments under Section 6902, Section 6904, and Section 6905 for all
counties in a given year.
Inflation: used here to refer to the statutorily required annual adjustment to the per-acre payment rates and the
population payment rate. The adjustment is made to reflect changes in the Consumer Price Index published by the
Bureau of Labor Statistics of the Department of Labor for the previous 12 months ending June 30. This provision
is required pursuant to 31 U.S.C. §6903(d).
Per-acre payment rates: one of the two dol ar amounts that are multiplied by the number of acres of entitlement land
as part of the formula to calculate the authorized payment under Section 6902 (31 U.S.C. §6903(b)(1)). These rates
are adjusted annually for inflation. In FY2023, the per-acre payment rates were $3.15 per acre for Alternative A and
$0.45 per acre for Alternative B.
Population-based ceiling: the maximum payment a county is eligible to receive under Section 6902. This figure is
calculated by multiplying the county’s population (as rounded or not rounded, pursuant to statute [31 U.S.C.
§6903(c)(1)]) by the applicable population payment rate.

9 Although the DOI Office of the Secretary administers the payments, it relies upon data from federal agencies within
and outside of DOI (e.g., the federal land management agencies and the Census Bureau in the Department of
Commerce) and state agencies to calculate the annual payments.
10 These sections refer to 31 U.S.C. §§6902, 6904, and 6905.
11 PILT payments may be subject to additional requirements provided in appropriations laws. For example, provisions
for unit, set-aside, and minimum payments were all included in Title I of Division G in P.L. 117-328 for FY2023.
12 Figure in current dollars. National Summary FY2023, p. 5.
Congressional Research Service
2

link to page 7 The Payments in Lieu of Taxes (PILT) Program: An Overview

Population payment rate: the dol ar amount that is multiplied by a county’s population to determine the population-
based ceiling, as provided in statute (31 U.S.C. §6903(c)(2)). The population payment rate declines with increasing
population. This rate is adjusted for inflation.
Prior-year payments: payments received by a county for federally owned lands in its jurisdiction through certain
federal compensation programs other than PILT. These programs refer to one of the “payment law[s]” listed in
statute (31 U.S.C. §6903(a)(1)).
Prorated payment: the actual payment received by a county when appropriated funds are insufficient to cover the
authorized payments. The prorated payment is determined by the amount appropriated for PILT that is available to
cover payments and is proportional to the authorized payment for each county.
Units of general local government (hereinafter, referred to as county): jurisdictional entity eligible to receive payments
under PILT. These entities are most often counties but may include other jurisdictional units such as parishes,
boroughs, census areas, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands. This term is defined
in statute at 31 U.S.C. §6901(2).
Notes: These terms are defined as used in this report and may be used differently elsewhere. Further, these
terms may not be defined in statute, except where noted.
PILT Authorizations and Appropriations
PILT has been funded through both discretionary and mandatory appropriations at various times.
PILT was funded through discretionary appropriations from its enactment in 1976 through
FY2007 and in FY2015 (in part) and FY2016-2017. In other years, PILT received mandatary
appropriations, namely for FY2008-FY2014, FY2015 (in part), and FY2018-FY2023.
More specifically, beginning in FY1976, the authority for PILT to receive discretionary
appropriations read as follows: “There are authorized to be appropriated for carrying out the
provisions of this Act such sums as may be necessary: Provided, That, notwithstanding any other
provision of this Act no funds may be made available except to the extent provided in advance in
appropriation Acts.”13 In 1982, PILT was amended to provide an “Authorization of
Appropriations” heading, which stated that “necessary amounts may be appropriated to the
Secretary of the Interior to carry out [PILT]” and specified that “amounts are available only as
provided in appropriation laws.”14
In 2008, legislation was enacted to provide mandatory appropriations for PILT for FY2008-
FY2012. The legislation changed the heading of the program’s funding from “Authorization of
Appropriations” to “Funding” and amended the text to read
For each of fiscal years 2008 through 2012-
(1) each county or other eligible unit of local government shall be entitled to payment under
this chapter; and
(2) sums shall be made available to the Secretary of the Interior for obligation or
expenditure in accordance with this chapter.15
Subsequently, PILT’s funding provision (31 U.S.C. §6906) was amended several times. For
instance, for each of FY2018 through FY2023, appropriations laws provided funding for PILT by
amending the authority provided in 31 U.S.C. §6906. This was treated as mandatory spending.
Table 1 shows PILT appropriations over the 10 years from FY2014 through FY2023. The total
payments to counties often were slightly different from the appropriations shown, in part because

13 P.L. 94-565, §7.
14 P.L. 97-258, §6906.
15 P.L. 110-343, Div. C, Title VI, §601(c)(1).
Congressional Research Service
3

link to page 8 The Payments in Lieu of Taxes (PILT) Program: An Overview

relatively small amounts of the total appropriations were authorized for program administration.
For instance, of the $579.2 million appropriation for FY2023, $0.4 million was authorized for
program administration. DOI distributed $578.8 million to counties for FY2023.
Table 1. PILT Appropriations, FY2014-FY2023
(nominal dollars)
Fiscal
Appropriation
Year
Statute
Funding Type
(millions)
FY2014
P.L. 113-79
Mandatory
$437.3
FY2015
P.L. 113-235
Discretionary ($372.0
$439.5
mil ion)

P.L. 113-291
Mandatory ($33.0 mil ion
—
and $34.5 mil ion)a
FY2016
P.L. 114-113
Discretionary
$452.0
FY2017
P.L. 115-31
Discretionary
$465.0
FY2018
P.L. 115-141
Mandatory
$553.2
FY2019
P.L. 116-6
Mandatory
$515.1
FY2020
P.L. 116-94
Mandatory
$515.1
FY2021
P.L. 116-260
Mandatory
$529.7
FY2022
P.L. 117-103
Mandatory
$549.8
FY2023
P.L. 117-328
Mandatory
$579.2
Source: CRS, with data from listed public laws and relevant annual DOI reports, available at
https://www.doi.gov/pilt/resources/annual-reports.
Notes: Appropriated amounts may include rescissions as provided in relevant statutes and adjustments from
prior years. Figures are presented in nominal dol ars, though note that the PILT payment formula incorporates
an annual inflation adjustment.
For FY2018 through FY2023, PILT funding was provided by amending 31 U.S.C. §6906 (“Funding”) each fiscal
year. As a result, the funding for PILT was treated as mandatory spending in these years. These amendments
required funding for PILT for each of these years to be provided at the amount of the ful statutory calculation.
a. For FY2015, the mandatory appropriations in P.L. 113-291 totaled $70.0 mil ion. This appropriation was
split, with $33.0 mil ion to be provided in FY2015 and $37.0 mil ion to be available in October 2015 (for
FY2015 payments, although paid in FY2016). Of the $70.0 mil ion in mandatory appropriations, the $37.0
mil ion available in October 2015 was subject to sequestration, which reduced the appropriated amount to
$34.5 mil ion.
Figure 1 shows the authorizations and appropriations for PILT from FY1993 to FY2023. For
many of the earlier years during this period, PILT received discretionary appropriations that were
not at the full authorized level (e.g., FY1995-FY2007). In contrast, for most years when PILT
received mandatory appropriations, the appropriations essentially were at the full level calculated
under the statute (e.g., FY2018-FY2023).16 In addition, since FY2008, PILT appropriations have
been provided through both one-year and multiyear appropriations.

16 An exception is FY2013, when PILT appropriations were impacted by sequestration pursuant to the Balanced Budget
and Emergency Deficit Control Act (2 U.S.C. §§900 et seq.), as amended by the Budget Control Act of 2011 (P.L. 112-
25).
Congressional Research Service
4

link to page 8

The Payments in Lieu of Taxes (PILT) Program: An Overview

Figure 1. PILT Authorizations and Appropriations, FY1993-FY2023
(in current and inflation-adjusted estimated FY2023 dollars)

Source: CRS, with data from PILT National Summaries, FY1993 through FY2023.
Notes: The authorized and appropriated figures shown in bars reflect current (nominal) dol ars. The line reflects
inflation-adjusted estimated FY2023 dol ars using the Office of Management and Budget’s GDP Chained Price
Index. The FY2013 and part of the FY2015 appropriations were subject to sequestration pursuant to the
Balanced Budget and Emergency Deficit Control Act (2 U.S.C. §§900 et seq.), as amended by the Budget Control
Act of 2011 (P.L. 112-25).
In addition to appropriating funding for the program, through the annual appropriations process
Congress typically provides other guidance to DOI on implementing PILT. Such guidance has
included minimum payment thresholds, set-asides for program administration, and provisions for
prorating payments.17 When appropriated funding is insufficient to cover the full amount of
authorized payments under Sections 6902, 6904, and 6905, counties typically receive a
proportional payment known as a prorated payment. (Figure 1 shows the disparity between the
authorized amount and the appropriated amount in certain years.) Even in years in which
appropriations are set equal to 100% of the full statutory calculation, payments to counties may
be prorated if funding is set aside for purposes other than payments, such as administration.
Some stakeholders and policymakers have expressed concern about changes over time in the
appropriations authority and processes for PILT, due to the uncertainty that may accompany such
changes. Changes that have given rise to concerns include switching between discretionary and
mandatory appropriations, partial and full funding, and one and multiyear appropriations. Such
changes may have implications for counties that rely on PILT funding as part of their annual
budgets.

17 For example, in FY2023, provisions were included in P.L. 117-328, Division G, Title I, that barred payment if the
authorized payment is less than $100; authorized DOI to retain up to $400,000 for administrative expenses from the
authorized payment; directed that payments be reduced proportionally if the appropriated amount is insufficient; and
authorized corrections for prior over- or underpayments. Although similar provisions have been included in other
appropriations acts, the specific text of these provisions has varied over the years.
Congressional Research Service
5

The Payments in Lieu of Taxes (PILT) Program: An Overview

PILT Payments Under Section 6902
Section 6902 payments are provided to counties across the United States to compensate for the
presence of entitlement lands within their boundaries. Section 6902 payments are provided to
states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.18 Section 6902
payments account for nearly all of the payments made under PILT. In FY2023, 99.92% of all
PILT payments were made through Section 6902.19 The payments generally can be used for any
governmental purpose, as noted.20 Further, more counties are eligible for Section 6902 payments
than either Section 6904 or Section 6905 payments.
Entitlement Lands
There are nine categories of federal lands identified as entitlement lands in the PILT statute.21
1. Lands in the National Park System (administered by the National Park Service, in
DOI)
2. Lands in the National Forest System (administered by the U.S. Forest Service, in
the U.S. Department of Agriculture (USDA))
3. Lands administered by the Bureau of Land Management (BLM)
4. Lands in the National Wildlife Refuge System (NWRS) that are withdrawn from
the public domain (administered by the U.S. Fish and Wildlife Service, in DOI)22
5. Lands dedicated to the use of federal water resources development projects23
6. Dredge disposal areas under the jurisdiction of the U.S. Army Corps of Engineers
7. Lands located in the vicinity of Purgatory River Canyon and Piñon Canyon, CO,
that were acquired after December 31, 1981, to expand the Fort Carson military
reservation
8. Lands on which are located semi-active or inactive Army installations used for
mobilization and for reserve component training
9. Certain lands acquired by DOI or the USDA under the Southern Nevada Public
Land Management Act (P.L. 105-263)
Some of these categories largely account for all of the lands managed by the relevant
administering agencies (e.g., categories 1-3). The U.S. Fish and Wildlife entitlement acreage
excludes lands that were purchased as additions to the NWRS and lands that are not included in
the NWRS. Some of the other categories are lands tied to specific laws or actions (e.g., categories

18 31 U.S.C. §6901(2).
19 National Summary FY2023, p. 8.
20 31 U.S.C. §6902(a).
21 31 U.S.C. §6901(1).
22 Public domain lands “refers to public lands the United States obtained title to through treaty, purchase, or annexation
that have never left federal ownership.” For more information on public domain and acquired lands, see U.S. Fish and
Wildlife Service, Statistical Data Tables for Fish &Wildlife Service Lands (as of 9/30/2022), available at
https://www.fws.gov/library/collections/national-wildlife-refuge-system-annual-lands-reports.
23 This includes lands administered by the U.S. Army Corps of Engineers and the Bureau of Reclamation. National
Summary FY2023, p. 3.
Congressional Research Service
6

link to page 11 The Payments in Lieu of Taxes (PILT) Program: An Overview

7 and 9) or may not include all, or even the majority of, lands administered by particular agencies
or departments (e.g., category 8).24
Calculating Section 6902 Payments
Section 6902 payments are determined based on a multipart formula (see Figure 2). The DOI
Office of the Secretary calculates PILT payments according to several factors, including
• the number of entitlement acres;
• a per-acre calculation determined by one of two alternatives (Alternative A, also
called the standard rate, or Alternative B, also called the minimum provision);
• a population-based payment (ceiling);
• certain prior-year payments pursuant to other compensation programs; and
• the amount available to cover PILT payments.
To calculate a particular county’s PILT payment, the DOI Office of the Secretary first must
collect data from several federal agencies and the county’s state to answer the following
questions:
• How many acres of eligible lands are in the county?
• What is the population of the county?25
• What was the increase in the Consumer Price Index for the 12 months ending the
preceding June 30?
• What were the prior year’s payments, if any, to the county under the other
payment programs of federal agencies?26
• Do any state laws require payments under other federal land compensation laws
to be passed through to other local government entities, such as school districts,
rather than stay with the county government?

24 For FY2023, there were a total of 606.7 million entitlement acres, as shown in the National Summary FY2023, p.
304.
25 At 31 U.S.C. §6903(a)(2), PILT requires that population is “determined on the same basis that the Secretary of
Commerce determines resident population for general statistical purposes.” Pertinent regulations, at 43 C.F.R.
§44.21(a)(3), specify that the U.S. Census Bureau provides statistics on the population of each local government.
County population data in the National Summary FY2023 reflect the latest count by the U.S. Census Bureau, according
to DOI (p. 116).
26 Prior-year payment programs that may affect PILT payments are listed at 31 U.S.C. §6903(a)(1).
Congressional Research Service
7

link to page 13 link to page 11 link to page 11 link to page 13

The Payments in Lieu of Taxes (PILT) Program: An Overview

Figure 2. Steps in Calculating PILT Section 6902 Payments (FY2023 Rates)

Sources: CRS, based on PILT statute (31 U.S.C. §§6901-6907). Payment rates for FY2023 can be found in
Department of the Interior, Fiscal Year 2023 Payments In Lieu of Taxes, National Summary, June 2023, pp. 9-11,
available at https://www.doi.gov/pilt.
Note: For more information on Box B (ceiling payments), see Figure 3.
The first step in calculating a county’s Section 6902 payment is to determine the number of
entitlement acres within the county (Figure 2, Box A). The acreage figures are reported to DOI
by the various federal agencies that administer the entitlement lands.
The next step is to calculate the population-based ceiling by multiplying the county’s population
by the population payment rate (Figure 2, Box B). County population data are provided by the
U.S. Census Bureau. The population number for this calculation differs based on the county’s
population level (Figure 3):
Congressional Research Service
8

link to page 13 The Payments in Lieu of Taxes (PILT) Program: An Overview

• For counties with populations fewer than 5,000, the county’s actual population is
used in the calculation.
• For counties with populations equal to or greater than 5,000, the county’s
population is rounded to the nearest 1,000, and this rounded population is used in
the calculation.
• All counties with populations greater than 50,000, regardless of their actual
populations, are considered to have a population equal to 50,000 for the purposes
of calculating the ceiling.
The population payment rate is adjusted annually for inflation based on the change in the
Consumer Price Index for the 12 months ending on the preceding June 30.27 The population
payment rate generally declines as population increases in 1,000-person increments. (Figure 4).28
However, this is not always the case. For example, in FY2023, payment rates for several
populations were the same despite increasing populations, such as the rates for populations of
26,000; 27,000; and 28,000, which are all $107.94 per person. For FY2023, the population
payment rates ranged from $212.03 per person for counties with populations of less than 5,000 to
$84.81 per person for counties with populations of 50,000 or greater.29
Some payment ceilings do not increase with increasing populations. For example, counties with
populations of 50,000 have a lower ceiling than those with populations of 49,000 (49,000 ×
FY2023 payment rate of $86.75 = $4,250,750; and 50,000 × FY2023 payment rate of $84.81 =
$4,240,500, or $10,250 less for the more populous county).

27 31 U.S.C. §6903(d).
28 31 U.S.C. §6903(c)(2). Even though the population payment rate generally declines as county population size
increases, payment ceilings generally are higher for counties with larger populations. For example, in FY2023, the
population payment rate for a population of 5,000 was $212.03 and the rate for a population of 6,000 was $198.56, a
decrease of $13.47 in the rate for the more populous county. When multiplied by the population, however, the ceiling is
higher for the county with the larger population: 5,000 × $212.03 = $1,060,150, versus 6,000 × $198.56 = $1,191,360,
or $131,210 more for the more populous county. National Summary FY2023, p. 15.
29 The per capita payment rates are included in the PILT national summary each year. For example, the National
Summary FY2023, p. 15, includes the payment rates for FY2023.
Congressional Research Service
9

link to page 11

The Payments in Lieu of Taxes (PILT) Program: An Overview

Figure 3. PILT Population-Based Ceiling Calculation

Source: CRS, with information from 16 U.S.C. §6903.
Figure 4. FY2023 PILT Population-Based Ceilings

Source: CRS, with data from Department of the Interior, Fiscal Year 2023 Payments In Lieu of Taxes, National
Summary, p. 15, available at https://www.doi.gov/pilt.
Notes: Ceiling calculations for counties with populations greater than 5,000 are based on the county’s
population rounded to the nearest 1,000 (e.g., a county with a population of 8,499 would be credited with a
population of 8,000, whereas a county with a population of 8,500 would be credited with a population of 9,000).
Counties cannot be credited with a population above 50,000 (i.e., all counties with populations greater than
50,000 are, for the purposes of the ceiling calculation, treated as if they have a population of 50,000). The
National Summary FY2023 contains the per capita payment rates for the FY2023 payments.
The next step is to calculate the payment level under Alternatives A and B (Figure 2, Box C).
Alternative A has a higher per-acre payment rate than Alternative B, but Alternative A is subject
Congressional Research Service
10

link to page 11 link to page 15 link to page 11 link to page 11 The Payments in Lieu of Taxes (PILT) Program: An Overview

to a deduction for prior-year payments. For FY2023, the per-acre payment rates were $3.15 per
acre of entitlement land for Alternative A and $0.45 per acre of entitlement land for Alternative B.
For calculations under Alternative A, DOI deducts certain prior-year payments. Qualifying prior-
year payments are those payments from the federal payment programs listed in statute:30
• the Act of June 20, 1910 (ch. 310, 36 Stat. 557);
• Section 33 of the Bankhead-Jones Farm Tenant Act (7 U.S.C. §1012);
• the Act of May 23, 1908 (16 U.S.C. §500), or the Secure Rural Schools and
Community Self-Determination Act of 2000 (16 U.S.C. §§7101 et seq.);31
• Section 5 of the Act of June 22, 1948 (16 U.S.C. §§577g–577g-1);
• Section 401(c)(2) of the Act of June 15, 1935 (16 U.S.C. §715s(c)(2));
• Section 17 of the Federal Power Act (16 U.S.C. §810);
• Section 35 of the Act of February 25, 1920 (30 U.S.C. §191);
• Section 6 of the Mineral Leasing Act for Acquired Lands (30 U.S.C. §355);
• Section 3 of the Act of July 31, 1947 (30 U.S.C. §603); and
• Section 10 of the Act of June 28, 1934 (known as the Taylor Grazing Act) (43
U.S.C. §315i).
However, if a state has a pass-through law that requires some or all of these prior-year payments
to be paid directly to a sub-county recipient (e.g., a school district), the amount passed through
from these payments is not deducted from subsequent PILT payments in the following year.32
As noted, Alternative B is calculated without deducting prior-year payments, but it uses a lower
per-acre payment rate.
Once each alternative is calculated, the greater of the two is the Section 6902 authorized payment
for the county (Figure 2, Box D). However, if the per-acre calculated Section 6902 authorized
payment is greater than the population-based ceiling, then the population-based ceiling replaces
the per-acre calculated amount.33
The Section 6902 authorized payments are calculated for every county, and this amount is added
to the Section 6904 and Section 6905 authorized payments (for more information on Sections
6904 and 6905, see “PILT Payments Under Sections 6904 and 6905”). This summed amount is
the full statutory calculation for a given fiscal year (Figure 2, Box E). DOI compares the full
statutory calculation with the amount appropriated and available for PILT payments to determine
whether Congress has provided funding to cover the full statutory calculation (Figure 2, Box

30 31 U.S.C. §6903(a)(1).
31 For more information, see CRS Report R41303, The Secure Rural Schools and Community Self-Determination Act:
Background and Issues.
32 National Summary FY2023, p. 10. According to DOI
Only the amount of Federal land payments actually received by units of government in the prior fiscal year is
deducted. If a unit receives a Federal land payment but is required by State law to pass all or part of it to
financially and politically independent school districts, or to any other single or special purpose district,
payments are considered to have not been received by the unit of local government and are not deducted from
the Section 6902 payment.
33 If the population-based ceiling replaces the per-acre calculation under Alternative A, prior-year payments are then
deducted from the population-based ceiling to determine the final amount for Alternative A.
Congressional Research Service
11

link to page 11 link to page 6

The Payments in Lieu of Taxes (PILT) Program: An Overview

F).34 If sufficient funding is available, each county receives its authorized amount;35 if funding is
insufficient, each county receives a prorated payment that is proportional to its authorized
payment (Figure 2, Box G).36
The full statutory calculation and the amount available for PILT payments determine proration.
Although there are additional adjustments made in the PILT proration calculation resulting from
small idiosyncrasies related to the requirements for PILT payments—namely, the requirement of a
minimum threshold of $100 for PILT payments37—the proration is fundamentally the ratio of the
appropriated funding available for PILT payments to the full statutory calculation:

As a result, counties may receive less than their authorized PILT payment in years when
appropriated funding is insufficient to cover the full statutory calculation. This scenario can occur
even when total PILT appropriations match the full statutory calculation; this has been the case in
years with mandatory appropriations, when part of the appropriated amount is set aside for a use
other than county payments. For example, laws providing appropriations for PILT routinely have
allowed DOI to retain a small portion of PILT appropriations for administrative expenses.38
PILT Payments Under Sections 6904 and 6905
Section 6904 and Section 6905 payments account for a small fraction of total PILT payments.39 In
FY2023, these payments accounted for 0.08% of PILT payments ($481,628 of $578.8 million in
total payments made).40 When a county receives Section 6904 and/or Section 6905 payments, it is
to disburse the funds to governmental units and school districts within the county in proportion to
the amount of property taxes lost because of the federal ownership of the entitled lands, as
enumerated under these sections.41 The funds generally may be used for any governmental
purpose, as noted.42

34 Congress provides funding for PILT through either discretionary or mandatory appropriations, or both, in any given
year. See “PILT Authorizations and Appropriations” for more information.
35 Payments may be subject to any additional provisions included in appropriations language, such as minimum
payment thresholds or adjustments for under- or overpayments in previous years. PILT provisions in appropriations
laws generally have required a minimum payment threshold of $100. For example, the FY2023 appropriations act
included a $100 minimum payment clause (P.L. 117-328, Division G, Title I).
36 The provision for a prorated payment is not included in the PILT statutory language (31 U.S.C. §§6901-6907), but it
has been included in certain appropriations laws for PILT. See, for example, P.L. 117-328, Division G, Title I.
37 The requirement of a minimum threshold of $100 for PILT payments typically is included in appropriations language
related to PILT (e.g., for FY2023, P.L. 117-328, Division G, Title I). It also is in regulation (43 C.F.R. §44.51).
38 For example, DOI is allowed to retain up to $400,000 of the appropriations for PILT for administrative expenses in
FY2023 (P.L. 117-328, Division G, Title I).
39 31 U.S.C. §§6904 and 6905.
40 National Summary FY2023, p. 8. This source reports §6904 and §6905 payments together, and further disaggregation
is not possible from the information provided.
41 43 C.F.R. §44.50.
42 31 U.S.C. §6904(b) and §6905(a) and (b)(3).

Congressional Research Service
12

link to page 6 link to page 6 The Payments in Lieu of Taxes (PILT) Program: An Overview

Section 6904 Payments
Section 6904 authorizes the Secretary of the Interior to make payments to counties that contain
certain lands, or interests in lands, that are part of the National Park System and National Forest
Wilderness Areas.43 However, Section 6904 specifies that these lands, or interests, are eligible
only if (1) they have been acquired by the U.S. government for addition to these systems and (2)
they were subject to local property taxes in the five-year period prior to this acquisition.44
Payment under Section 6904 is calculated as 1% of the fair market value of the land at the time it
was acquired, not to exceed the amount of property taxes levied on the property during the fiscal
year prior to its acquisition.45 Further, Section 6904 payments are made annually only for the five
fiscal years after the land, or interest, is acquired by the U.S. government, unless otherwise
mandated by law.
Section 6905 Payments
Section 6905 authorizes the Secretary of the Interior to make payments to counties that contain
lands, or interests in lands, that are part of the Redwood National Park and are owned by the U.S.
government or that are acquired by the U.S. government in the Lake Tahoe Basin under the Act of
December 23, 1980.46 Section 6905 payments are paid at a rate of (1) 1% of the fair market value
of the acquired land or interests or (2) the amount of taxes levied on the land in the year prior to
acquisition, whichever is less. Payments on these lands continue for five years or until payments
have totaled 5% of the fair market value of the land, whichever is later.47
Issues for Congress
PILT is of perennial interest to many Members of Congress and to stakeholders throughout the
country. In particular, county governments are interested in the degree of certainty of PILT
payments and how payments are calculated, because many consider PILT payments to be an
integral part of their annual budgets. Congressional and stakeholder interests include questions of
how PILT should be funded, what lands should be included as entitlement lands, and how
authorized payment levels are calculated under PILT, among others.
Congress annually addresses questions of how funding should be provided to PILT. Congress has
funded PILT through both discretionary and mandatory appropriations (see “PILT Authorizations
and Appropriations”). PILT funding typically has been provided through the discretionary
appropriations process for one fiscal year at a time, even when the funding has been considered
mandatory spending. Although PILT has received funding each year since its enactment, the
appropriations process has created uncertainty among some stakeholders about the level of annual

43 31 U.S.C. §6904. For more information on the National Park System, see CRS Report R41816, National Park
System: What Do the Different Park Titles Signify?. For more information on wilderness areas, see CRS Report
RL31447, Wilderness: Overview, Management, and Statistics.
44 31 U.S.C. §6904(a).
45 31 U.S.C. §6904(c).
46 31 U.S.C. §6905. The Act of December 23, 1980, is P.L. 96-586.
47 43 C.F.R. §44.40. Payments may extend beyond five years when taxes levied in the year prior to acquisition account
for less than 1% of the fair market value of the acquired land. However, any portion of a payment not made because
Congress did not appropriate sufficient funds is not deferred to later payments.
Congressional Research Service
13

link to page 9 The Payments in Lieu of Taxes (PILT) Program: An Overview

funding. Stakeholders have expressed a desire for more certainty in terms of both the guarantee of
funding and the amount of funding (i.e., the full statutory calculation).48
Members of Congress typically contemplate the implications and tradeoffs of discretionary versus
mandatory spending and may have different views than the counties that receive PILT payments.
Congress, for example, may weigh the flexibility of having discretion to review and fund PILT on
an annual basis through the appropriations process against the certainty of funding for specific
activities that accompany mandatory appropriations.49 In recent Congresses, bills have been
introduced to amend how PILT is funded. For example, legislation was introduced in the 116th
Congress that would have required mandatory funding for PILT, either for a set period of time
(e.g., 10 additional years) or indefinitely.50
The question of which lands should be eligible for PILT payments is also of interest to many
Members and stakeholders. In law, entitlement lands are restricted to the listed federal land types
(see “Entitlement Lands”). However, this definition does not fully encompass the types of lands
that are held by the federal government, nor does it account for the full suite of lands that are
exempt from state and local taxes. Although counties may receive compensation for some of
these other lands through other federal programs, not all federal lands exempt from taxation are
covered by a federal compensation program. This might contribute to financial hardships for
counties that otherwise might receive revenue from that land through taxation. To address this
concern, some Members of Congress have proposed amending the definition of entitlement lands
under PILT. Among other proposals, in past Congresses, Members have introduced legislation
that would have amended PILT by expanding the definition of entitlement land to include
• land “that is held in trust by the United States for the benefit of a federally
recognized Indian tribe or an individual Indian”;51
• lands under the jurisdiction of the Department of the Defense, other than those
already included in PILT;52
• lands acquired by the federal government for addition to the National Wildlife
Refuge System;53 and
• lands administered by the Department of Homeland Security, 54 among others.
Amending the definition of entitlement lands could have several implications. Adding acres of
entitlement lands could increase the authorized amount of payments under PILT for the counties
in which those lands are located. Depending how the definition was amended, these additional
entitlement lands may be eligible for compensation under other federal compensation programs.
In turn, this could further affect PILT payment calculations through the adjustment for prior-year
payments deducted from Alternative A.

48 National Association of Counties (NACo), Provide Full Mandatory Funding for the Payments in Lieu of Taxes
(PILT) Program, February 1, 2023, at https://www.naco.org/resources/provide-full-mandatory-funding-payments-lieu-
taxes-pilt-program.
49 For more information, see CRS Report R44582, Overview of Funding Mechanisms in the Federal Budget Process,
and Selected Examples.
50 For example, S. 2480 would have required mandatory PILT funding through FY2029, and H.R. 3043 would have
required mandatory PILT funding indefinitely. Both bills were introduced in the 116th Congress.
51 For example, H.R. 7251 in the 110th Congress.
52 For example, H.R. 4710 in the 113th Congress.
53 For example, S. 2626 in the 113th Congress.
54 For example, H.R. 543 in the 112th Congress.
Congressional Research Service
14

The Payments in Lieu of Taxes (PILT) Program: An Overview

The authorized payment level under Section 6902, which accounts for nearly all payments under
PILT, is calculated pursuant to the statutory requirements. This section has remained largely
unchanged since the requirement to adjust for inflation was added in 1994, among other
changes.55 The inflation adjustment clause has resulted in increasing payment and ceiling rates
since that time. Congress at times has considered whether the current formula is the best means of
calculating payments under PILT or whether the formula should be amended. For example, in the
116th Congress, bills were introduced that would have adjusted the payment structure for counties
with a population of less than 5,000.56 This adjustment would have had implications for how
population would be incorporated into calculating PILT payments. In the 117th Congress, bills
were introduced that would have directed the Secretary of the Interior to develop, study, and
report on a modeling tool to calculate tax equivalency payments.57
In addition to the above issues, Congress may consider other issues related to PILT and how the
program fits into the landscape of federal programs that compensate for the presence of tax-
exempt federal lands.58

Author Information

Carol Hardy Vincent

Specialist in Natural Resources Policy

Acknowledgments
Katie Hoover, former CRS Specialist in Natural Resources, was the previous author of this report.

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.

55 P.L. 103-397 amended 31 U.S.C. §6903 in several ways, including to add a requirement to adjust for inflation. Since
then, §6903 has been amended once. Specifically, P.L. 106-393 amended the definition of payment law at 31 U.S.C.
§6903(a)(1)(C) to add the Secure Rural Schools and Community Self-Determination Act of 2000 (16 U.S.C. §§7101 et
seq.) to the list of payment laws, which are included in determining prior-year payments.
56 For example, S. 2108 and H.R. 3716 in the 116th Congress.
57 For example, S. 1008 and H.R. 2755 in the 117th Congress.
58 For more discussion on these issues, see CRS Report R42439, Compensating State and Local Governments for the
Tax-Exempt Status of Federal Lands: What Is Fair and Consistent?.
Congressional Research Service
R46260 · VERSION 14 · UPDATED
15

Download PDF

Download EPUB

Revision History

Jul. 10, 2023

HTML · PDF

7% changed

Apr. 18, 2023

HTML · PDF

58% changed

Mar. 17, 2020

HTML · PDF

1% changed