Bonus Depreciation Extension to Create Jobs Act

Mr. President, today I am pleased to introduce the Outer Continental Shelf Reform Act of 2010. This act takes a number of important steps to ensure that the Outer Continental Shelf will be managed in a balanced, prudent, and vigilant way, to ensure energy production, safety, and protection of the environment. Its goal is to create a culture of excellence in this endeavor that benefits those who work in the oil industry, those who depend on other marine resources, and all Americans who care deeply about our oceans and coastal environment.

This legislation is being introduced against the backdrop of oil still gushing into the Gulf of Mexico more than 60 days after the initial explosion of the Deepwater Horizon rig. As the Congress formulates its overall response to this disaster, its first order of business must be to continue to care for the families of those who lost their lives in the rig explosion and those Gulf residents who are suffering every day through loss of livelihood and of places and wildlife that they love. Several Senate committees have important roles to play in formulating legislation in that regard.

At the same time, it also is essential that we look to the future, and to creating a better structure and system within the regulatory agency. That is a particular responsibility of the Committee on Energy and Natural Resources. One goal must be, of course, to prevent future disasters. But we can and must do more than that.

Congress should create organizational resources and a set of principles and requirements that will have safety, environmental protection, and innovation at its core. We should require that both industry and agency employees have the expertise, experience, and commitment to quality necessary to handle the complex issues involved. If we do this right, it is my hope that we can see tangible results on all fronts, and a shift away from the cascade of failures that led to the Deepwater Horizon accident and towards work of the highest quality.

Thus, this bill clarifies the multiple responsibilities of the Department of the Interior in managing the Outer Continental Shelf-- appropriate energy and other economic development and the protection of human health and safety and the marine and coastal environment. It reforms the structure of the regulatory apparatus of the Department consistent with these responsibilities. The new organizational structure requires that the Department avoid organizational conflicts of interest between its revenue-raising missions and its planning, permitting, and regulatory missions.

The bill increases the safety requirements for drilling wells, focusing on best available technology, a systems analysis, risk assessment, an evidentiary safety case, and a full engineering review. In furtherance of the development of these standards and their evolution of new and better technology, it requires new research programs within the Department, independent of the leasing program, whose data must be considered by the regulators. It provides dedicated funding for the highest priority research, including in the areas of well control and spill response, and an independent science advisory board outside the agency to provide oversight.

It establishes new requirements for investigation of all accidents and the public sharing of data from those reviews so that all can learn from mistakes before they become major problems. It allows the National Transportation Safety Board to provide an independent and highly skilled investigation of any accident at the request of the Secretary.

In order to fully enforce the safety requirements, the bill imposes an inspection fee on industry participants to fully fund enough well- trained inspectors to perform real and meaningful inspections more often. It also increases the sanctions on poor operators, including increased civil and criminal penalties applicable to those who violate the law, and the financial responsibility requirements to ensure that those who participate in development of the Outer Continental Shelf can afford to pay for any damage they cause.

The bill provides the Department of the Interior with adequate time to carry out necessary reviews, clarifies the issues that need to be addressed, and makes the input of other Federal agencies occur in a transparent way. In this way, the process will have more predictability and all stakeholders will have greater understanding of what is under consideration. The result will be better decisions that will be capable of being implemented with greater certainty.

Finally, the bill takes steps to ensure that the taxpayers will get a fair return for development of energy resources. The Secretary will be required to regularly review the amounts of royalties and other charges applicable to those developing the Outer Continental Shelf, compare them to charges levied by States and other countries, and consider whether adjustments are necessary to achieve fair fiscal policies.

I believe these policies and resources can set us on a new and constructive path toward managing the incredible natural resources of the Outer Continental Shelf. I welcome ideas from others that may enhance our ability in this regard. We must commit ourselves to the goal of excellence in this important endeavor. We start today.

I am pleased to be joined by Senator Murkowski, ranking Republican on the Energy and Natural Resources Committee, and Senator Dorgan, as original cosponsors of this bill.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, over the past several months, we have seen some improvement in our economy.

One year ago, in the first quarter of 2009, GDP was declining at an annual rate of more than 6 percent. Just 1 year later, in the first quarter of 2010, GDP grew at an annual rate of 3 percent.

This marks the third consecutive quarter of real economic growth.

It is not just the GDP that is growing. Consumer spending has risen at an annual rate of 3.5 percent this year. Manufacturing output rose 9 percent over the first 4 months of the year. Businesses have increased spending on equipment and boosted their inventory investments.

But one economic indicator continues to lag behind--employment.

The national unemployment rate stands at 9.7 percent. Over the course of this Great Recession, the American economy has lost more than 8 million jobs. In total, 15 million Americans remain out of work.

We must act to create jobs and get Americans back to work.

We began creating jobs with the 2009 Recovery Act. The nonpartisan Congressional Budget Office reports that last year's Recovery Act added 1.2 to 2.8 million people to America's payrolls.

In March, Congress passed the HIRE Act. The HIRE Act, which includes a payroll tax exemption for new hires, should help to bolster job creation in the coming months.

This week, we are considering the American Jobs and Closing Tax Loopholes Act. That bill will create jobs by providing tax cuts and certainty to American businesses. It will create jobs by improving our nation's infrastructure. And it will create jobs by making direct investments in jobs for young adults and needy families.

After we consider the American Jobs and Closing Tax Loopholes Act, the Senate will consider a small business jobs bill. The Finance and Small Business committees are currently writing that bill.

Today, I am introducing another important jobs bill. This bill will extend bonus depreciation through 2010. I am introducing this extension as a stand-alone bill because of the unique ability of bonus depreciation to help businesses and create jobs.

In 2008, Congress temporarily allowed businesses to recover the costs of certain capital expenditures more quickly than under ordinary depreciation schedules. The 2008 law allowed businesses to immediately write off 50 percent of the cost of depreciable property placed in service in 2008.

The Recovery Act extended bonus depreciation. But the provision expired at the end of 2009.

My bill would extend bonus depreciation to property placed in service in 2010.

Bonus depreciation provides a double benefit. It helps two sets of businesses. It helps the business that purchases the equipment. It helps the business that sells the equipment.

The businesses that purchase equipment can write off those purchases more quickly.

This provides a significant tax savings. That savings makes equipment more affordable and encourages purchases.

The savings gained from expensing, rather than the slower depreciation, allows businesses to use that money to invest in the business itself. Businesses can use those savings to hire employees.

The more purchases that are made, the more other businesses are helped. This proposal will help manufacturers and suppliers to retain and hire employees as their businesses rebound.

I have heard from a number of business owners in Montana that bonus depreciation has been extremely helpful for their business.

An extension of bonus depreciation will boost economic activity by hundreds of millions of dollars. It will create hundreds of jobs in my home state of Montana.

Bonus depreciation is a cost-effective provision that provides real relief for businesses. Bonus depreciation creates jobs.

I urge my Colleagues to support this important bill.

Mr. President, over the past several months, we have seen some improvement in our economy.

One year ago, in the first quarter of 2009, GDP was declining at an annual rate of more than 6 percent. Just 1 year later, in the first quarter of 2010, GDP grew at an annual rate of 3 percent.

This marks the third consecutive quarter of real economic growth.

It is not just the GDP that is growing. Consumer spending has risen at an annual rate of 3.5 percent this year. Manufacturing output rose 9 percent over the first 4 months of the year. Businesses have increased spending on equipment and boosted their inventory investments.

But one economic indicator continues to lag behind--employment.

The national unemployment rate stands at 9.7 percent. Over the course of this Great Recession, the American economy has lost more than 8 million jobs. In total, 15 million Americans remain out of work.

We must act to create jobs and get Americans back to work.

We began creating jobs with the 2009 Recovery Act. The nonpartisan Congressional Budget Office reports that last year's Recovery Act added 1.2 to 2.8 million people to America's payrolls.

In March, Congress passed the HIRE Act. The HIRE Act, which includes a payroll tax exemption for new hires, should help to bolster job creation in the coming months.

This week, we are considering the American Jobs and Closing Tax Loopholes Act. That bill will create jobs by providing tax cuts and certainty to American businesses. It will create jobs by improving our nation's infrastructure. And it will create jobs by making direct investments in jobs for young adults and needy families.

After we consider the American Jobs and Closing Tax Loopholes Act, the Senate will consider a small business jobs bill. The Finance and Small Business committees are currently writing that bill.

Today, I am introducing another important jobs bill. This bill will extend bonus depreciation through 2010. I am introducing this extension as a stand-alone bill because of the unique ability of bonus depreciation to help businesses and create jobs.

In 2008, Congress temporarily allowed businesses to recover the costs of certain capital expenditures more quickly than under ordinary depreciation schedules. The 2008 law allowed businesses to immediately write off 50 percent of the cost of depreciable property placed in service in 2008.

The Recovery Act extended bonus depreciation. But the provision expired at the end of 2009.

My bill would extend bonus depreciation to property placed in service in 2010.

Bonus depreciation provides a double benefit. It helps two sets of businesses. It helps the business that purchases the equipment. It helps the business that sells the equipment.

The businesses that purchase equipment can write off those purchases more quickly.

This provides a significant tax savings. That savings makes equipment more affordable and encourages purchases.

The savings gained from expensing, rather than the slower depreciation, allows businesses to use that money to invest in the business itself. Businesses can use those savings to hire employees.

The more purchases that are made, the more other businesses are helped. This proposal will help manufacturers and suppliers to retain and hire employees as their businesses rebound.

I have heard from a number of business owners in Montana that bonus depreciation has been extremely helpful for their business.

An extension of bonus depreciation will boost economic activity by hundreds of millions of dollars. It will create hundreds of jobs in my home state of Montana.

Bonus depreciation is a cost-effective provision that provides real relief for businesses. Bonus depreciation creates jobs.

I urge my Colleagues to support this important bill.

Mr. President, I rise to introduce legislation requiring BP and other oil companies to set aside ample funding in an escrow account controlled--not by the company but by the Federal Government-- to address the damage and claims from a major catastrophic oil spill like the current Gulf of Mexico spill.

Twenty-one years ago, the oil tanker Exxon Valdez ran aground, gushing an estimated 11 million gallons of crude oil into Alaska waters. This was the worst oil spill in American history, with oil hitting 1,300 miles of shoreline and killing hundreds of thousands of birds and marine mammals. Thousands of hard-working Alaskans, just like the residents of the Gulf, lost millions of dollars as their livelihoods collapsed.

To add insult to injury, for nearly two decades Exxon fought the legitimate claims of Alaskans harmed by the spill for nearly two decades. The case went all the way to the Supreme Court when in 2008, the Court issued a final judgment, reducing Exxon's punitive liability to just 10 percent of what the original court had ordered. During those 19 years, hundreds of Alaskans entitled to damages had died; thousands of others' lives were forever harmed.

We Alaskans learned many lessons from the Exxon Valdez spill. One of the most important was to set up a system as early as possible to guarantee that those affected by oil spills are justly compensated. That is what my bill is designed to do. I am certainly pleased BP has agreed to set up an escrow account voluntarily, but I believe Congress should underscore their commitment in law and to protect Americans from future spills.

This bill, the Guaranteed Oil Spill Compensation Act of 2010, requires BP or any other party responsible for an oil spill interested in future Federal oil and gas leases to deposit into an escrow account held by the U.S. Government enough money to compensate those affected by a spill. In the event of a spill, the Secretary of Interior can make an assessment of outstanding liability under provisions of the Federal legislation passed in the aftermath of the Exxon Valdez, the Oil Pollution Act of 1990, OPA 90. The spiller must then deposit funds equal to the total liability minus the liability established for incident by OPA 90 into a separate fund to be administered by the Secretary for claims and costs related to that spill. Unexpended funds would be returned to the spiller at the earlier of 5 years after the date of deposit or the date the Secretary determines all Federal, State, and civil claims have been satisfied. The measure would have no affect on other liability.

I believe this legislation achieves what many of us want: ensuring Americans damaged by this oil spill and future catastrophic spills are fairly compensated in a timely way. This didn't happen to Alaskans with the Exxon Valdez. We must ensure it does happen for our Americans in the Gulf of Mexico. This is another tool as Congress works on liability reform designed to make those injured whole again, while at the same time allowing responsible companies to provide oil our country needs.

The Guaranteed Oil Spill Compensation Act of 2010 is the first of a package of bills I intend to introduce designed to make oil companies financially responsible for the cost of oil spills; expand scientific research, especially in the Arctic; provide a steady source of Federal funding for additional science and resources needed in the Far North to deal with oil and gas development; and provide greater citizen involvement in oil development.

Mr. President, I rise today to join with my colleagues Senator Mark Udall and Chairman Jeff Bingaman of the Senate Energy Committee to introduce the Department of the Interior Research and Technologies for Oil Spill Prevention and Response Act of 2010. Legislation intended to make sure we have the proper resources available to respond to future oil spills.

While we are still getting to the bottom of what caused the Deepwater Horizon disaster in the Gulf, one thing is absolutely clear: BP was totally unprepared to respond, contain and clean-up this kind of spill.

From ``junk shots'' to containment domes that failed to work at depth, BP was caught totally flat footed by this spill. Even BP's CEO, Tony Hayward, admitted that BP didn't ``have the tools in the toolbox'' to respond to this spill.

The oil and gas industry has poured significant sums of money into developing technologies to find and produce oil and gas, but when I asked oil executives at a recent Energy Committee hearing what they've done in the way of research and development to respond to and clean up oil spills the response I got was: little to nothing.

The technologies being used today in the Gulf are the same technologies we used twenty years ago to clean-up the Exxon Valdez spill. The oil and gas industry needs to do better. Since they won't do it themselves, they can pay the government to lead on research and development. We need to have updated, innovative, and effective technologies at the ready to clean up after any oil spill--large or small.

We have to make sure that--through proper research and development-- we are prepared to prevent and respond to future oil spills. And that is what my legislation is intended to do.

The legislation I am introducing today with Senators Udall and Bingaman does the following:

It creates a new Oil Spill research and development program

within the Interior Department to focus on research and

development technologies to respond to, contain and clean up

oil spills and ensure we're prepared to respond to future

spills.

It establishes an independent Scientific Advisory Board to

identify gaps and focus the research and development program

on priority areas. We know the concerns of the scientists

were ignored leading up to the Deepwater Horizon explosion.

This provision will make sure their important voices are

heard.

It makes the oil and gas industry pay for this critical

research and development. In order to make sure this import

effort has the resources it need to be successful, my

legislation creates a dedicated funding source to pay for

this research and development, and

this funding will come entirely from royalties, rent, and

bonuses from domestic oil and gas producers.

This legislation is one part of a broader effort to ensure that we are prepared for future oil spills and that the catastrophe in the Gulf never happens again.

I look forward to working with my colleagues to incorporate this legislation into comprehensive legislation the Senate is crafting to respond to the Deepwater Horizon spill and reform the federal agency responsible for oil and gas development in the outer continental shelf. I urge my colleagues to support this legislation so that we can ensure we are prepared to handle future oil spills.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.