HR5983-119

What This Bill Does

The National Resilience and Recovery Fund Act links disaster-resilience funding to oil and gas tax revenue. It creates a National Resilience and Recovery Fund in the Treasury and appropriates to it amounts equivalent to three revenue streams: a new 13 percent tax on crude oil and natural gas produced from Federal submerged lands on the outer Continental Shelf in the Gulf of Mexico, the portion of the section 4611 crude-oil and petroleum environmental tax attributable to a new National Resilience and Recovery Fund financing rate, and a new crude-oil windfall profits tax. Fund amounts are available, subject to appropriations Acts, for FEMA's Hazard Mitigation Grant Program, Building Resilient Infrastructure and Communities program, and Safeguarding Tomorrow Revolving Loan Fund Program. The bill broadens crude oil for section 4611 tax purposes to include bitumen, tar sands-derived oil, oil shale-derived oil, and other pipeline-, vessel-, railcar-, or tanker-truck-transported fuels that the Secretary finds consistent with the Oil Pollution Act definition and hazardous in a discharge. It adds a 10-cent-per-barrel financing rate for the Fund after 2024. It creates a windfall profits excise tax on covered taxpayers extracting or importing more than 300,000 barrels per day, calculated as 50 percent of the excess of the average Brent crude price over the 2015-2019 average, with cost-of-living adjustments after 2025. It also creates a 13 percent removal-price tax on Gulf of Mexico OCS crude oil or natural gas, allows a credit for Federal royalties up to the tax amount, treats the producer as liable, defines removal price and related-party constructive pricing, and requires Treasury rules for withholding, deposits, returns, records, information reporting, valuation adjustments, and regulations.

Who Benefits and How

FEMA hazard mitigation and resilience programs benefit because the new trust fund is dedicated to mitigation grants, BRIC, and Safeguarding Tomorrow loans. State and local governments seeking disaster mitigation grants benefit from a new revenue-backed funding source for resilience projects. Communities vulnerable to hurricanes, floods, and other disasters benefit if more mitigation and revolving-loan funds are available for protective infrastructure. Construction and engineering firms specializing in resilient infrastructure benefit from grant-funded project demand. Federal disaster budget planners benefit from a dedicated fund tied to oil and gas tax receipts.

Who Bears the Burden and How

Major crude oil producers and importers above the 300,000-barrel-per-day threshold must pay the windfall profits excise tax and keep records, returns, and information reports. Gulf of Mexico offshore oil and gas producers must pay a 13 percent removal-price tax, net of allowable Federal royalty credits. Tar sands, oil shale, bitumen, and other nonconventional petroleum producers and importers face broader crude-oil and petroleum tax coverage. Treasury and IRS tax administrators must administer withholding, deposits, returns, valuation adjustments, cost-of-living adjustments, and regulations for the new taxes. FEMA administrators must use appropriated Fund amounts across the eligible mitigation and resilience programs.

Key Provisions

• Establishes the National Resilience and Recovery Fund in Treasury for FEMA mitigation and resilience programs.
• Makes Fund amounts available for the Hazard Mitigation Grant Program, BRIC, and Safeguarding Tomorrow Revolving Loan Fund.
• Broadens crude oil for section 4611 to include tar sands, oil shale, bitumen-derived oil, and other hazardous fuel products designated by Treasury.
• Adds a 10-cent-per-barrel National Resilience and Recovery Fund financing rate after 2024.
• Creates a windfall profits excise tax for crude oil producers and importers above the 300,000-barrel-per-day threshold.
• Creates a 13 percent removal-price tax on Gulf of Mexico outer Continental Shelf crude oil and natural gas, with Federal royalty credits.
• Requires Treasury withholding, deposit, return, recordkeeping, information-reporting, valuation, and regulatory rules.