Congressman Rooney Introduces Bill to Improve Returns for Taxpayers on Federal Energy Resources

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Congressman Rooney Introduces Bill to Improve Returns for Taxpayers on Federal Energy Resources, September 18, 2019 | Chris Berardi (202-897-7700) | comments

Washington, D.C. – Today, Congressman Francis Rooney and Congressman Ben McAdams introduced the Taxpayer Fairness for Resource Development Act. This bill seeks to amend the Mineral Leasing Act to adjust the fiscal terms for fossil fuel development and to make reforms to improve returns to taxpayers for the development of Federal energy resources.

Congressman Rooney stated, “For far too long, the American taxpayers have not been getting the return on investment they deserve from onshore drilling. The current onshore fossil fuel royalty rate of 12.75% has not been adjusted in nearly a century and is considerably lower than the current offshore royalty rate of 18.75%. Our proposal seeks to provide parity in royalty rates for all drilling activities.”

Congressman McAdams stated, ““Revenue received for development of these publicly-owned resources is important non-tax revenue for the federal and state governments. It also brings in significant amounts for a rural water projects fund. After decades of inaction by the BLM, this measure brings royalty and rental rates in line with what states such as Utah are charging, ensuring the public receives a fair return in exchange for allowing commercial companies to drill.”

 

Specifically, this bill would:

  • Adjust onshore royalty rates to 18.75% for all new oil and gas and coal leases. The federal onshore royalty rate of 12.5% has been unchanged for nearly a century and is considerably below the federal offshore royalty rate and the royalty rates charged by states.
  • Change the current onshore oil and gas minimum bid from $2 to $5 and requires it to be indexed to inflation. The current minimum bid for onshore oil and gas leases has not been adjusted since 1987. 10% of net revenue would be paid to social security beneficiaries.
  • Adjust onshore rental rates for oil and gas leases. The current values of $1.50 for the first 5 years and $2 for the second five years would increase to $3 for the first 5 years and $5 for the second 5 years.

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