Academic journal article Energy Law Journal

Report of the Legislation Committee

Academic journal article Energy Law Journal

Report of the Legislation Committee

Article excerpt

This report provides a summary of select federal energy legislative activities occurring during the 1st Session of the 113th Congress, from January 1, 2013, through August 1, 2013.


In one of its final acts, the 112th Congress on January 2, 2013, passed the American Taxpayer Relief Act of 2012, P.L. 112-240, which included extensions (both prospective and retroactive) for a number of energy tax provisions.1 Among the more important energy provisions extended were credits for energy-efficient homes, appliances, alternative fuels and refueling property, certain biofuels, and energy produced from certain renewable sources.2

In February 2013, the House Ways and Means Committee announced the formation of eleven tax reform working groups, including one focused on the energy industry. 3 The energy tax reform working group held a series of meetings with stakeholders in the spring of 2013. The working group also invited interested parties to submit statements by April 15, 2013, with their views on energy tax reform. 4 A wide array of interested parties submitted their views to the working group.5

On April 25, 2013, the staff of the Senate Finance Committee released a paper discussing, in very broad terms, possible options for tax reform with respect to energy tax issues.6 This paper, along with several others, represented a synthesis of ideas presented at several dozen hearings held over several years on the subject of tax reform. This tax reform initiative appears to have stalled when the Chairman of the Senate Finance Committee, Senator Max Baucus of Montana, announced that he would not seek reelection.7 In June 2013, Chairman Baucus and Ranking Member Hatch requested that their senatorial colleagues submit-by July 26, 2013-their views on tax reform, beginning with a "blank slate."8


On June 28, 2013, the House passed the Offshore Energy and Jobs Act (H.R. 2231) by a vote of 235 to 186.9 The bill would require the Administration to develop a new lease plan by 2015 for new offshore energy production, including the Atlantic and Pacific coasts.10 The bill specifically directs the Administration to hold new lease sales off the Virginia, South Carolina, and California coasts.11 It also requires the Secretary of the Interior to conduct oil and natural gas lease sales and creates a new revenue sharing program for all coastal states.12 Finally, the bill addresses the reorganization of the Interior Department, including formally abolishing the Minerals Management Service and replacing it with three distinct new agencies: the Bureau of Ocean Energy, the Ocean Energy Safety Service, and the Office of Natural Resources Revenue.13

While many individual senators express an interest in offshore drilling and some introduced legislation, no legislation advanced significantly in committee by late July 2013. However, the Fixing America's Inequities with Revenues (FAIR) Act (S. 1273) received a hearing in the Senate Energy and Natural Resources Committee on July 23, 2013.14 The FAIR Act seeks to provide states with a share of revenue from energy developed on federal land and waters. Coastal states would be entitled to 27.5% of revenue from offshore energy developments, including fossil, wind, and wave energy, and an additional 10% if they establish funds to support clean energy and energy conservation programs.15 The remaining 62.5% would go to the federal treasury.16

The FAIR Act would change current law, which allots 50% of revenue from fossil energy developed on federal lands inside their borders, while coastal states receive less than 5% of federal offshore energy revenue.17 The bill also seeks to expand revenue-sharing to renewable energy, giving interior states 50% of revenue from renewable energy production on federal lands within their borders.18 The Administration's testimony at the hearing indicated strong opposition to the bill, citing an anticipated net loss of federal revenues and the lack of "clear conservation or energy policy outcomes. …

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