Energy Management:

Payments in Lieu of Taxes for DOE Property May Need to Be Reassessed

RCED-94-204: Published: Jul 18, 1994. Publicly Released: Aug 17, 1994.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) compensation payments for property in lieu of state and local property taxes, focusing on: (1) how DOE identified communities for such payments and determined the payment amounts; (2) whether a 1987 revision of DOE payment policy was consistent with the Atomic Energy Act of 1954; and (3) the potential effect of DOE 1993 changes to the payment policy.

GAO found that: (1) 13 of the 16 approved communities have received payments that were calculated under a policy established by the Atomic Energy Commission, while payments to the remaining 3 have been calculated under a 1987 DOE policy that established an additional eligibility requirement; (2) none of the 7 communities that had applied for special burdens payments had been approved by the end of 1993; (3) although the 1987 DOE policy imposed more stringent requirements than generally had been applied to earlier applicants, it was consistent with the Atomic Energy Act of 1954; (4) the Atomic Energy Act of 1954 provides DOE with broad discretion in deciding whether to make payments for eligible property and in setting the terms and conditions applicable to any payments; (5) the 1993 DOE policy revision eliminated the 1987 eligibility requirement; (6) if all eligible communities receive payments, the 1993 policy change will increase annual costs from about $2.7 million to an estimated $10 million; (7) DOE is considering a major change in its policy on valuing property that could increase annual costs to about $20 million; and (8) although the recent policy initiatives are within DOE discretion, the initiatives are a major departure from the earlier payment policy and significantly increase payments at a time when the government is seeking ways to reduce its expenditures.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matters for Congressional Consideration

    Matter: Because it has been almost 50 years since the Atomic Energy Act of 1946 was enacted, Congress may wish to reassess the broad authority the act provided DOE to make payments in lieu of taxes.

    Status: Closed - Not Implemented

    Comments: No action has been initiated by Congress.

    Matter: Congress should consider retaining DOE existing discretionary authority.

    Status: Closed - Not Implemented

    Comments: No action has been initiated by Congress.

    Matter: Congress should consider providing additional guidance on whether current DOE initiatives are consistent with congressional priorities.

    Status: Closed - Not Implemented

    Comments: No action has been initiated by Congress.

    Matter: Congress should consider amending the Atomic Energy Act to either provide payments in lieu of taxes to all communities, including those not currently eligible, or eliminate payments to all communities if such action is deemed appropriate.

    Status: Closed - Not Implemented

    Comments: No action has been initiated by Congress.

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