Payments Equal to Taxes
(CITE AS: 56 FR 42314)
NOTICES
DEPARTMENT OF ENERGY
Office of Civilian Radioactive Waste Management
PAYMENTS-EQUAL-TO-TAXES Provisions of the NUCLEAR WASTE Policy Act of 1982, as Amended; Interpretation and Procedures
AGENCY: Department of Energy.
ACTION: Notice of Interpretation and Procedures.
SUMMARY: The Department of Energy (DOE), Office of Civilian Radioactive Waste
Management (OCRWM), is publishing this Notice of Interpretation and Procedures
(Notice) for certain of the PAYMENTS-EQUAL-TO-TAXES (PETT) provisions of the
NUCLEAR WASTE Policy Act of 1982, as amended (NWPA) (42 U.S.C. 10101 et seq.).
This statute provides that DOE will make these payments to eligible States,
affected units of local government, and affected Indian Tribes for activities
related to siting, development, and operation of a high-level radioactive waste
and spent-fuel repository, and any monitored retrievable storage (MRS)
facility. The scope of this Notice is limited to site characterization
activities related to the repository or MRS facility. Development and
operational phases of the repository and MRS facility will be addressed at a
later date. The jurisdictions are eligible for payments equivalent to the
amount they would receive if authorized to tax the Federal site
characterization activities at such site. This Notice incorporates DOE's
response to public comments received on a Proposed Notice issued on March 7,
1990. Based on comments received and after further consideration, DOE has
revised its proposed interpretation and procedures by (1) modifying the
proposed geographical basis for determining which site characterization
activities are eligible for inclusion in PETT calculations, and (2) giving
eligible jurisdictions the opportunity to provide to DOE estimates of PETT,
including the basis for such calculations. DOE has the responsibility to
determine the amount of PETT, based in part, on the information provided by the
eligible jurisdictions. For submission of information relative to PETT, see
section IV.C, Administrative Procedures, in this Notice.
ADDRESSES: Copies of documents referred to in this Notice (unless otherwise
indicated) are available for public review (they may be photocopied for a fee)
at DOE Headquarters reading room, 1000 Independence Avenue SW., room 1E-190,
Washington, DC 20585, (202) 586-6020; Nevada Operations Office reading room,
2753 S. Highland, Las Vegas, NV 89109, (702) 295-1274; and the Richland
Operations Office reading room, 825 Jadwin Avenue, Richland, WA 99352, (509)
376-8583.
Estimates of PETT for jurisdictions in Nevada should be sent to: Carl Gertz,
Yucca Mountain Site Characterization Project Office, P.O. Box 98608, U.S.
Department of Energy, Las Vegas, NV 89193, (702) 794-7920.
Estimates of PETT for jurisdiction in Washington should be sent to: John
Anttonen, Richland Operations Office, 825 Jadwin Avenue, U.S. Department of
Energy, Richland, WA 98352, (509) 376-7591.
FOR FURTHER INFORMATION CONTACT:Allen Benson, Office of External Relations, RW-5, Office of Civilian Radioactive Waste Management, U.S. Department of Energy, Washington, DC 20585, (202) 586-2289.
SUPPLEMENTARY INFORMATION:
I. Introduction
The Department of Energy (DOE), Office of Civilian Radioactive Waste
Management (OCRWM), today gives notice of its interpretation of certain of the
PETT provisions of the NWPA, and of its general procedures for administering
its responsibilities under those provisions.
II. Background
The NWPA assigns to the Secretary the responsibility for managing the disposal
of spent nuclear fuel and high-level radioactive waste, and establishes the
OCRWM for that purpose. Section 116(c)(3) of the NWPA as originally enacted,
authorized PETT to those States and units of general local governments in which
a candidate site for a repository was approved under section 112(c) of the
NWPA.
Specifically, that language provided:
The Secretary shall also grant to each State and unit of general local
government in which a site for a repository is approved under section 112(c) an
amount each fiscal year equal to the amount such State and unit of general
local government, respectively, would receive were they authorized to tax site
characterization activities at such site, and the development and operation of
such repository, as such State and unit of general local government tax the
other real property and industrial activities occurring within such State and
unit of general local government. Such grants shall continue until such time
as all such activities, development, and operation are terminated at such site.
Section 118(b)(4) of the NWPA as originally enacted, authorized similar
payments to affected Indian Tribes where a candidate site was approved.
On December 22, 1987, the NUCLEAR WASTE Policy Amendments Act of 1987 was
signed into law as part of the Omnibus Budget Reconciliation Act of 1987 (Pub.
L. 100-203). Amendments to the NWPA that are of relevance to the PETT
provision include the following:
1. Section 116(c)(3) was amended to designate the State of Nevada and affected
units of local government as the only jurisdictions eligible for PETT.
2. Section 149 was added, to extend PETT provisions under sections 116 and 118
to States, affected Indian Tribes, and affected units of local government in
the case of a monitored retrievable storage facility in the same manner as for
a repository.
3. Section 2(31) now defines affected unit of local government as "* * * the
unit of local government with jurisdiction over the site of a repository or a
monitored retrievable storage facility. Such term may, at the discretion of
the Secretary, include units of local government that are contiguous with such
unit."
4. It should be noted that section 118(b)(4), which applies to affected Indian
Tribes, was not changed.
DOE has determined that DOE Order 2100.12, "Payments for Special Burdens and
in Lieu of Taxes," is not applicable to the implementation of PETT under the
NWPA. That order focuses on the calculation of payments by considering any
benefits, as well as any burdens, to the community resulting from the presence
of the DOE facility. The NWPA does not provide for any reduction of the burden
on the basis of other benefits to the community.
Numerous meetings and exchanges of correspondence have occurred between
DOE and the States, local governments, and Indian Tribes concerning PETT.
Beginning in 1986, DOE met quarterly with the then potentially affected
jurisdictions to discuss programmatic issues, including PETT. In addition,
meetings with interested parties specifically to discuss PETT issues took place
in Salt Lake City, Utah, in May 1987 and in Las Vegas, Nevada, in November
1987.
DOE published its Proposed Notice on March 7, 1990, for 60 days of public
comment, and received comments from 10 interested parties. These comments are
addressed and discussed in section III of this Notice. Consistent with the
Proposed Notice and the comments received, DOE has modified its interpretation
and general procedures, which are presented in section IV of this Notice.
III. Discussion of Issues Raised in Comments
In the Proposed Notice, DOE proposed to make payments equal to the taxes
eligible jurisdictions would be entitled to if they were authorized to tax the
federal site characterization activities occurring within the physical
boundaries of the candidate sites as defined in the Environmental Assessments.
The Proposed Notice described the criteria and guidance DOE would apply to
determine the amount of PETT, and specified the requirements that a
jurisdiction must meet to be eligible for PETT and the commencement and
termination dates for PETT eligibility.
The following organizations submitted comments on the Proposed Notice:
The State of Nevada, Agency for Nuclear Projects, NUCLEAR WASTE Project Office
The State of Washington, Office of the Governor
Nye County, Nevada, Department of Planning
Clark County, Nevada, Board of County Commissioners
Esmeralda County, Nevada, Board of County Commissioners
Lincoln County, Nevada, Board of County Commissioners
City of Caliente, Nevada, NUCLEAR WASTE Project
Mid-Columbia (Washington) Consortium of Governments
The State of New Mexico, Energy, Minerals, and Natural Resources Department,
Governor's Waste Isolation Pilot Plan (WIPP) Task Force
Carlsbad, New Mexico, Department of Development
Commenters addressed six basic issues:
A. Notice Process.
B. PETT Eligibility.
C. Computation of Payments.
D. Additional Meetings.
E. PETT Commencement and Termination.
F. Impact on Other Programs.
A. Notice Process
Commenters questioned the need for the Proposed Notice and DOE's proposed
procedures for determining the amount of PETT. The State of Nevada claimed that
provisions in the NWPA governing PETT are clear, and that DOE does not need to
interpret them. Lincoln County, Nevada, and the City of Caliente,
Nevada, claimed that DOE's intent to consider PETT applications on a case-by-
case basis leaves in doubt the need for a notice.
Clark County, Nevada, stated that DOE has the capability for determining
whether requests are consistent with Congressional authorizing legislation, but
the taxing jurisdictions have the responsibility for administering tax laws.
Lincoln County, Nevada, commented that under Nevada law, it is the State and
the affected units of local government that calculate tax liabilities,
distribute tax bills, and collect tax revenues. The City of Caliente, Nevada,
has concurred in Lincoln County's comments.
The NWPA requires that DOE make PAYMENTS EQUAL to TAXES to eligible
jurisdictions. These payments are not tax payments, but, are payments made by
DOE pursuant to statute and therefore DOE must determine the appropriate amount
of such payments. Although DOE could make such determinations on a case-by-
case basis, DOE believes that the process being followed will be helpful in
reaching consistent interpretations and application of the PETT provisions in
the NWPA.
B. PETT Eligibility
This Notice addresses an affected jurisdiction's eligibility for PETT, but,
does not address which units of local government contiguous to Nye County may
be considered, at the discretion of the Secretary, to be "affected." Some
commenters stated that DOE should reconsider its interpretation of which units
of government are eligible for PETT, and what constitutes an affected unit of
local government. Clark County, Nevada, and the New Mexico Governor's WIPP
Task Force stated that school districts and other special purpose taxing
districts should be eligible for PETT. A school district or other special
purpose taxing district would be eligible to receive PETT if these districts
have affected status and would have taxing authority over eligible site
characterization activities, if the site characterization activities were not
conducted by the Federal Government. DOE's interpretation and procedures allow
for affected parties to determine which jurisdictions would have taxing
authority over specific site characterization activities, if the site
characterization activities were not conducted by the Federal Government.
Affected parties will also determine if eligible activities should be
evaluated "as a collective unit" under relevant tax law. These considerations,
and all other bases used by the affected parties in computing PETT, will be
considered by DOE in its determination of PETT.
Many commenters disagreed with DOE's proposed position that only activities at
the candidates site should be eligible for PETT. Several commenters stated that
Congress intended to provide "full tax equivalence" for eligible jurisdictions,
and that DOE's definition of site is contrary to that intent. The commenters
disagreed with DOE's contention that the term "at such site" as stated in the
NEPA is the same as the "candidate site" depicted in the Environmental
Assessment for the three sites recommended for characterization. The State of
Washington stated that the use of "site" in other contexts and documents such
as the Environmental Assessments, Site Characterization Plan, and Mission Plan
refers to a much broader range of activities than only those carried out at the
candidate site. Commenters further claimed that DOE's narrow definition of
site would exclude site characterization work done off site, which should also
be included in PETT calculations.
Section 116(c)(3)(A) of the NWPA provides, in pertinent part:
[The] Secretary shall grant to the State of Nevada and any affected unit of
local government an amount each fiscal year equal to the amount such State or
affected unit or local government, respectively, would receive if authorized to
tax site characterization activities at such site, and the development and
operation of such repository, as such State or affected unit of local
government taxes the non-Federal real property and industrial activities
occurring within such State or affected unit of local government. (Emphasis
added).
In the March 7, 1990, Notice, DOE proposed to interpret "site
characterization activities at such site" to mean those site characterization
activities conducted within the area of land identified as a "candidate site"
by DOE in chapter 3 of the final Environmental Assessment issued in May 1986.
Upon a thorough review of this issue in light of the statements of commenters
DOE now believes that a better interpretation of the subject phrase is that it
means that PETT is available for site characterization activities associated
with a candidate site coextensive with the jurisdiction's taxing authority,
whether or not those activities are conducted on site.
When originally enacted in 1982, section 116(c)(3)(A) provided, in pertinent
part:
The Secretary shall also grant to each State and unit of general local
government in which a site for a repository is approved under section 112(c) an
amount each fiscal year equal to the amount such State and unit of general
local government, respectively, would receive were they authorized to tax site
characterization activities at such site, and the development and operation of
such repository, as such State and unit of general local government tax the
other real property and industrial activities occurring within such State and
unit of general local government. (Emphasis added).
Thus the phrase "at such site" has its antecedent in the 1982 NWPA. DOE has
reviewed the legislative history of the 1982 NWPA and now agrees that Congress
intended that PETT provide full tax equivalence for eligible jurisdictions.
For example, the United States House of Representatives, Committee on Interior
and Insular Affairs report on H.R. 3809, which contained a provision for PETT
similar to the provision enacted as section 116(c)(3), states as follows:
Paragraph (3) requires the Secretary to grant to states where sites are being
characterized or otherwise developed payment in lieu of taxes which would be
paid if the project or facility were taxed like other industrial activities of
the state. H. Rep. No. 97-491, Part 1, 97th Cong., 2d Sess., 56 (1982).
(Emphasis supplied.)
The highlighted language speaks to the "project" and the industrial activities
associated with it, and does not further imply any geographic specificity, such
as the interpretation proposed by DOE in the March 7, 1990, Notice.
In a similar vein, the report of the House Committee on Energy and Commerce,
reporting on H.R. 6598, states, in connection with a provision identical to
116(c)(3), that PAYMENTS EQUAL to TAXES would be made based on "site
characterization activities and the development and operation of a repository,
as such state and unit of local government taxes other real property and
industrial activity." H. Rep. No. 97-785, Part 1, 97th Cong., 2d Sess. 73
(1982). Again, the Report does not purport to limit the taxable activities to
the site itself.
Further evidence of Congress' intent that PETT was to be coextensive with the
jurisdictions' taxing authority over industrial activities which would be
subject to such authority, but for the federal government's immunity, is found
in a statement by Senator J. Bennett Johnston (ranking minority member of the
Senate Energy and Natural Resources Committee and one of the sponsors of the
legislation), at the time the NWPA was originally being considered for
passage. Senator Johnston stated, in relevant part, "that a State
should not be worse off by virtue of having one of these facilities in their
State than they would be in terms of taxes, at least." See 128 Cong. Rec.
S4132 (April 28, 1982).
These excerpts from the legislative history demonstrate that Congress
intended to provide a level of compensation for the affected jurisdictions that
would be coextensive with the amounts the taxing jurisdictions otherwise could
collect as taxes if site characterization activities were carried on by private
parties. Therefore, we believe that Congress did not intend to limit payments
only to those activities physically on site, but to include all activities
conducted in support of site characterization, as long as the jurisdiction has
taxing authority over the activities.
C. Computation of Payments
Six commenters stated that PETT funds should be disbursed under a process in
which (1) the eligible jurisdiction would prepare a grant request, (2) DOE
would review the request and make a grant based on that request, and (3)
resolution of disputes, if necessary, would be carried out in the same manner
as for a private entity.
DOE's original interpretation of the PETT funding process was based on an
analysis of the language of the NWPA. The payments approach outlined in this
final Notice responds to the desire of eligible jurisdictions to participate
actively in determining PETT, and yet still avoids the complexity of the grant
administration process. The payment method also appears to offer the least
complicated mechanism for transferring funds, and is consistent with the
language of the NWPA. Potential recipients are requested to provide to DOE
their estimate of DOE's PETT liability, and their bases for computing that
amount. DOE will compute its PETT based on the information provided, as well
as applicable DOE accounting directives and standards. DOE will document its
analysis of this information and calculation of the PETT. Ultimate authority
for determining PETT rests with DOE.
While this payment method combines the advantages of both payment and grant
processes, the comments underscored that a potential exists for differences
between the PETT estimates developed by the eligible jurisdictions and the
amount of the PETT calculated by DOE. Therefore, DOE has provided for an appeal
process through DOE's Office of Hearings and Appeals (OHA) for those
jurisdictions having disputes with DOE regarding PETT. As discussed below in
Section IV.D, OHA is a quasi-judicial body that reports to the Secretary of
Energy. DOE chose OHA to conduct the appeals process because of its expertise
in developing administrative records regarding economic issues. This Notice
provides that even though an appeal might be pending, DOE may nevertheless make
a preliminary payment. By accepting a payment from DOE, a jurisdiction will
not waive its right to appeal the amount of the payment. The appeal process in
section IV.D of this Notice is an integral part of the PETT process, and OHA's
decisions will serve as the final DOE action with respect to PETT.
D. Additional Meetings
Four commenters either requested or indicated a willingness to participate in
meetings to further discuss their views on the Proposed Notice. Another
commenter encouraged DOE to sponsor a meeting with interested jurisdictions in
New Mexico and potentially affected parties in Nevada. Clark County, Nevada,
requested a meeting with DOE on PETT issues and invited representatives of the
State of Washington and affected units of local governments in Nevada. A
meeting, sponsored by Clark County, was held on August 1, 1990, for the purpose
of clarifying their comments on the Proposed Notice. DOE will attempt to meet
with eligible jurisdictions at any time they desire. After publication of this
Notice, DOE plans to initiate meetings with eligible jurisdictions to discuss
PETT.
E. PETT Commencement and Termination
Some commenters expressed concern about the commencement date specified in
section III.C of the Proposed Notice. Clark County stated that the Proposed
Notice improperly disqualifies site characterization activities that were
underway before May 28, 1986. The Mid-Columbia Consortium of Governments (MCC)
claimed that site characterization activities were underway at the Hanford site
before it was recommended for site characterization. The commenters further
argued that since no specific commencement date was mentioned in the NWPA,
under the holding of Chevron, USA, Inc. v. Natural Res. Def. Council, 467 US
837 (1984), a Federal agency charged with the responsibility to administer the
law has the authority to fill any gaps in that law. The commenters added that
DOE's interpretation must be a reasonable one, and concluded that establishing
May 28, 1986, as the commencement date for PETT eligibility is unreasonable.
DOE disagrees with the commenters' contention that the date for commencement
of PETT eligibility, as stated in section III.C of the Proposed Notice, is
unreasonable, and that it improperly disqualifies activities that may have
occurred prior to May 28, 1986. DOE interprets May 28, 1986, as the starting
date of site characterization for the purposes of calculating PETT because that
was the date on which the President approved sites in Nevada, Texas, and
Washington as candidate sites for site characterization. Simultaneously, the
President rejected the other first repository States as candidate sites for
site characterization, and their eligibility for PETT never matured. (However,
because some activities related to site characterization carried out in Nevada
and Washington prior to May 28, 1986, may have resulted in improvement to real
estate for purposes of assessment valuation, PETT may be available for the
resulting increase in real estate value.)
The State of Washington and the MCC noted that the NWPA does not specify a
date for PETT to begin, and suggested that PETT eligibility started from the
beginning of site characterization activities, or the date on which Congress
enacted the NWPA for ongoing site characterization activities. The commenter
added that the definition of "site characterization" in section 2(21) of the
NWPA necessarily implies that some site characterization activities (e.g.,
activities undertaken to establish the parameters of the site) must occur
before the "site" was designated as a site and thus should be eligible for
PETT. The commenter concluded that Congress foresaw and approved ongoing site
characterization as of the date of enactment of the NWPA.
DOE disagrees with the comment that section 2(21) of the NWPA implies some
site characterization activities must occur prior to the site being designated
as a candidate site. Section 2(21) of the NWPA defines site characterization
as (a) siting research activities with respect to a test and evaluation
facility at a candidate site, and (b) activities, whether in the laboratory or
in the field, undertaken to establish the geologic condition and the ranges of
the parameters of a candidate site relevant to the location of a repository,
etc. Although various laboratory and field activities may have been underway
at the sites prior to the May 28, 1986, date, these activities were neither
related to a test and evaluation facility nor were they undertaken to establish
the geologic condition or the ranges of the parameters relevant to
the location of a repository. Even if some of the data collected before the
May 28, 1986, date were relevant to the overall characterization of the site,
that fact alone would not qualify the data collection process as "site
characterization" for purposes of the NWPA.
One commenter stated that the grants for Nye County, Nevada, and
Washington State should include interest since May 28, 1986, when the sites
were formally designated for characterization. DOE reiterates its intention,
as stated in the Proposed Notice, that "[l]ate payments, for initial and
subsequent payments shall include interest in accordance with the applicable
requirements of the taxing jurisdiction."
F. Impact on Other Programs
Two commenters from the State of New Mexico noted that land withdrawal
legislation for the WIPP site then pending before Congress provided for
payments equivalent to taxes on the WIPP site, and they expressed concern about
the potential impact of the Proposed Notice on the land withdrawal
legislation. The Carlsbad Department of Development observed that provisions
of the NWPA have been increasingly applied to WIPP legislative land withdrawal
proposals. The proposed interpretation of limiting PETT to activities "at such
site" has the potential effect of eliminating (from the proposed WIPP payments-
equivalent-to-taxes) all activities outside the WIPP site, such as offices in
Carlsbad and the TRUPAK manufacturing facility. The WIPP Task Force expressed
concern that DOE's action may establish an "onerous" precedent with respect to
the interpretation and implementation of proposed WIPP payments-equivalent-to-
taxes provisions for the WIPP site in New Mexico.
Without a WIPP legislative land withdrawal, it is impossible even to speculate
on whether DOE would be construing similar or dissimilar statutory
requirements.
IV. PETT Interpretation and Procedures
A. PETT Eligibility
The existence of site characterization activities occurring within a
particular jurisdiction does not in itself create an entitlement to PETT. A
right to PETT arises when DOE conducts activities at the site for which the
States, affected Indian Tribes and affected units of local government would
otherwise be authorized to impose taxes. An affected unit of local government
is defined in section 2(31) of the NWPA. Moreover, the NWPA authorizes DOE to
make payment only in an amount that is equal to that which private entities
would be required to pay in taxes. Taxes refer to any existing authorities to
levy taxes on real property and industrial or commercial activities. Thus,
PETT is (1) contingent upon the taxing jurisdiction having the requisite taxing
authority; and (2) limited in amount by the equivalency provision.
Accordingly, the general requirements for a jurisdiction to be eligible to
receive PETT for site characterization activities are interpreted by DOE as
follows:
1. (a) For the period May 28, 1986, to December 22, 1987, jurisdictions in,
and the States of Nevada, Texas, and Washington may be eligible for PETT;
(however, there were no Federal site characterization activities conducted in
Texas);
(b) After December 22, 1987, the State of Nevada, any affected unit of local
government, and affected Indian Tribes may be eligible for PETT;
2. The jurisdiction must have the requisite taxing authority; and
3. The jurisdiction must levy taxes applicable to non-Federal activities that
are similar to the site characterization activities conducted by the Federal
Government.
The NWPA provides for eligible jurisdictions (defined in section IV.A above)
to receive payments equal to the amount they "would receive if authorized to
tax site characterization activities at such site * * *." The NWPA defines site
characterization as:
1. Siting research activities with respect to a test and evaluation facility
at a candidate site.
2. Activities, whether the laboratory or in the field, undertaken to establish
the geologic condition and the ranges of the parameters of a candidate site
relevant to the location of a repository, including borings, surface
excavations, excavations of exploratory shafts, limited subsurface lateral
excavations and borings, and in situ testing needed to evaluate the suitability
of a candidate site for the location of a repository, but not including
preliminary borings and geophysical testing needed to assess whether site
characterization should be undertaken.
By this definition, activities undertaken by DOE to evaluate the geologic
suitability of the site that an eligible jurisdiction is authorized to tax if
it were undertaken by a taxpaying entity may be considered in the calculation
of PETT. These activities may include, but are not limited to, the following:
1. Activities that impact the assessed value of real property.
2. Activities carried out prior to May 28, 1986, but only to the extent that
the residual value of these activities after May 28, 1986, are treated as
improvements to real property, used in support of site characterization for
purposes of assessment valuation.
3. Ownership or possessory use of personal property.
4. Purchase or transfer of personal property acquired in one State for use in
an eligible State.
5. Use of motor vehicles.
6. Use of special fuels.
7. Payment of salaries to Federal employees.
8. Activities subject to business or income taxes.
Government contractor activities are not eligible for PETT, and are not within
the scope of this Notice.
B. Computation of Payments
Under the Supremacy Clause of the Constitution of the United States, States,
local jurisdictions and Indian Tribes cannot tax Federal property or activities
unless a waiver of sovereign immunity has been granted. The NWPA does not
provide such a waiver, but, rather requires DOE to grant to eligible
jurisdictions payments equal to the amounts they would receive if DOE's
activities were not tax-exempt.
DOE anticipates that taxes normally levied against real property and
industrial or commercial activities by eligible jurisdictions for general
purposes and under a general taxing authority will be relevant for
consideration in determining PETT liability. Federal site characterization
activities that might qualify for PETT are outlined in section IV.A above.
DOE will be guided by the following considerations in its evaluation of
PETT liability to a jurisdiction:
1. DOE's Accounting Directives (2200.xx Series), as supplemented by generally
accepted accounting principles, will guide the recordkeeping for PETT. Copies
of these documents will be available for examination in Washington, DC, by
contacting the Office of Financial Policy, CR-20, U.S. Department of Energy,
1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-4860; at the
Nevada Operations Office, by contacting the Director, Financial Management
Division, Nevada Operations Office, 2753 S. Highland, Las Vegas, NV 89109,
(702) 295-1061; and at the Richland Operations Office, by contacting the
Director, Financial Resources Division, Richland Operations Office,
825 Jadwin Avenue, Richland, WA 99352, (509) 376-8669.
2. To be eligible for PETT, a jurisdiction's tax must be constitutionally
valid.
3. Since the tax structures and practices of eligible jurisdictions will be
applied in the computation of PETT, it is necessary to identify for each
relevant tax:
a. Types of property and value measurements used to determine the taxable
basis.
b. Rates and/or classes of rates applicable to the taxable basis.
c. Exemptions and limits.
d. Scope of applicability.
e. Specific agent(s) of the taxing authority to whom payments and inquiries
should be addressed.
f. Types of activities.
C. Administrative Procedures
For the period beginning May 28, 1986 through calendar year 1990, eligible
jurisdictions should submit an estimated PETT to DOE within 120 days after
publication of this Notice. For years subsequent to calendar year 1990,
eligible jurisdictions should submit an estimated PETT to DOE within 120 days
after the end of their fiscal year. The estimated PETT analysis should include
the following:
1. Basis for eligibility showing how the jurisdiction meets the requirement
for eligibility as set forth in this Notice.
2. Citations of relevant tax rules, regulations, rates, and bases for applying
the rates.
3. Lists of Federal site characterization activities considered in estimating
the PETT.
4. Calculations supporting the estimates in sufficient detail to allow DOE to
verify the estimates.
5. Estimate of PETT liability for each tax type to which DOE's site
characterization activities are subject and estimates of PETT liability for
each tax type in accordance with the appropriate tax laws.
DOE will review these analyses to verify that they are complete and correct
regarding:
1. DOE's site characterization activities.
2. The assessed value of DOE's property used to support its site
characterization activities.
3. DOE's operational activities subject to tax.
4. The tax laws of the eligible jurisdiction.
In evaluating the analyses, DOE may confer with representatives of eligible
jurisdictions to obtain clarification and additional information, as
necessary. Additionally, DOE may request input from independent experts
concerning valuation of property, tax calculations, record-keeping, and other
technical issues arising from the PETT procedures.
The PETT disbursement mechanism will be tailored, to the maximum extent
possible, to accommodate the payment procedures and schedules of the eligible
jurisdictions. Late payments shall include interest, if appropriate, in
accordance with applicable requirements of the taxing jurisdictions.
Should an eligible jurisdiction choose not to submit the information requested
above within 120 days after publication of this Notice, then DOE will perform
the calculations to determine the PETT to that jurisdiction without the
submittal. Once DOE has completed its analysis, it will make payment to the
eligible jurisdiction. Documentation that presents DOE's analysis will
accompany PETT. For subsequent years, should eligible jurisdictions choose not
to submit their analysis, PETT estimate, and supporting documentation to DOE
within 120 days of the end of the eligible jurisdiction's fiscal year, then DOE
will perform the calculations necessary to determine the PETT to that
jurisdiction without the submittal. Information submitted after the 120-day
period will be considered to the extent practicable.
A record of the discussions between DOE and eligible jurisdictions will be
maintained sufficient to establish the positions of all parties. These
discussions will address:
1. Reporting procedures for DOE and eligible jurisdictions.
2. Specific PETT application procedures.
3. Channels and methods of communication.
4. Individuals and offices responsible for PETT within eligible jurisdictions.
5. Processes for estimating PETT.
6. Disbursement mechanisms.
D. Appeals Process
An appeals process is available for those jurisdictions which are challenging
the original DOE determination related to PETT. Appeals may be filed with the
Office of Hearings and Appeals (OHA), U.S. Department of Energy, 1000
Independence Avenue SW., Washington, DC 20585. The appeal must be filed within
45 days from the date of issuance of an original DOE determination related to
PETT. Appeals will be governed by procedures set forth in 10 CFR part 205
subpart H.
The OHA is a quasi-judicial body that reports to the Secretary of Energy and,
except as otherwise provided by law, is responsible for conducting the
adjudicative proceedings of DOE other than those which are subject to the
jurisdiction of the Federal Energy Regulatory Commission or the Board of
Contract Appeals. In connection with these duties, OHA holds hearings,
receives evidence, develops the record, and issues the final determination of
DOE, which is subject to review in the Federal courts.
E. PETT Commencement and Termination
May 28, 1986, the date the President approved sites in Nevada, Texas, and
Washington as candidate sites for site characterization, is the date of
commencement for PETT eligibility. Some activities related to site
characterization carried out before May 28, 1986, may be included, but only to
the extent that the residual value of those activities is treated as an
improvement to real estate for purposes of assessment valuation. December 22,
1987, the date on which the NWPA was amended to terminate site characterization
activities at the Texas and Washington sites, is the date of termination for
their PETT eligibility. None of the possible bases for PETT, for activities
subsequent to site characterization, i.e., the development and operation of a
repository, specified in the NWPA are applicable to the Texas and Washington
sites. No such development and operation activities were undertaken at the
Texas and Washington sites. The State of Nevada continues to be eligible to
receive PETT.
F. Federalism Impacts
Executive Order (E.O.) 12612, 52 FR 41685 (October 30, 1987), requires that
regulations, rules, legislation, and any other policy actions be reviewed for
any substantial direct effects on States, and on the distribution of power and
responsibilities among various levels of government. If there are sufficient
substantial direct effects, E.O. 12612 requires preparation of a federalism
assessment to be used in all decisions involved in promulgating and
implementing a rule or a policy of action. DOE has concluded that there are
not sufficient substantial direct effects to require preparation of a
federalism assessment.
G. Review Under Executive Order 12291
DOE reviewed this Notice under Executive Order 12291, and concluded that it
did not involve a "major rule." DOE submitted the Notice to the Office of
Management and Budget (OMB) under that Executive Order. OMB has completed its
review.
Issued in Washington, DC August 20, 1991.
John W. Bartlett,
Director, Office of Civilian Radioactive Waste Management.
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