Senators Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) recently reintroduced a bill to amend several federal statutes that govern the treatment of revenues collected by the federal government from entities that hold leases for the exploration, development and production of energy resources. Sens. Murkowski and Landrieu originally introduced a version of the bill in March 2013.
The “Fixing America’s Inequities with Revenues Act of 2013” (or “FAIR Act”) would amend the Outer Continental Shelf Lands Act by requiring the Department of the Interior (Interior) to deposit 37.5 percent of all revenues received in connection with offshore energy development activities into a special account. Interior would distribute 27.5 percent of the collected revenues to coastal states, with the remaining 10 percent to those coastal states that have established funds to support the development of alternative energy research programs. The state of Alaska, and any state along the Atlantic Ocean, Pacific Ocean, or Gulf of Mexico whose coastline is not subject to a leasing moratorium, would qualify to receive revenues through this program. Revenues eligible for allocation to coastal states may come from exploration and development activities for both traditional and alternative energy sources. The revenue sharing program would go into effect beginning in fiscal year 2014.
The bill would also amend the Gulf of Mexico Energy Security Act of 2006 by gradually increasing the $500 million cap on revenues that may be allocated to states along the Gulf of Mexico. The cap would be raised $100 million each year between fiscal years 2015 through 2024, and the cap would be abandoned starting in fiscal year 2025.
In addition, the bill would amend the Mineral Leasing Act to remove the distinction between traditional and alternative energy sources with regard to revenue sharing for onshore energy development. Under current law, 50 percent of the revenues derived from payments to the federal government in connection with onshore exploration and development of traditional energy sources are allocated to the states within which such projects are located. The bill would expand this program to include renewable and alternative energy sources.
The Senate Energy and Natural Resources Committee will conduct a hearing on the bill on Tuesday, July 23.