[Congressional Record Volume 144, Number 52 (Friday, May 1, 1998)]
[Senate]
[Page S4131]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

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                      SUPPLEMENTAL APPROPRIATIONS

 Mrs. HUTCHISON. Mr. President, the amendment I added to the 
conference version of the 1998 Supplemental Spending Bill deals with 
how oil is valued for the purpose of collecting royalties. This is not 
about royalty rates, but rather how that value is established.
  Under the Outer Continental Shelf Leasing Act and the Minerals 
Leasing Act, the Minerals Management Service (MMS) is required to value 
the oil where it is removed from the ground. The MMS wants, instead, to 
value the oil after the industry has added significantly to its value 
(through marketing and transportation costs). Such a change would have 
the effect of increasing the tax collected on any set amount of oil at 
a time when the oil prices are at an all time low. The economy and jobs 
will be affected by such an arbitrary increase in costs. And finally, 
the MMS wants to make this change in the law through regulation. Mr. 
President, changing the law is the job of Congress, not the MMS.
  My amendment prohibits the MMS from implementing this proposed change 
next month and prohibits the agency from acting before the end of the 
current fiscal year. This will give Congress time to weigh in on this 
matter, instead of letting the MMS arbitrarily change the law through 
the exercise of its rule-making authority.
  Last year, this Congress, in the FY 1998 Interior Appropriations Bill 
specifically directed MMS to report back to the committees prior to 
finalizing the new regulations after numerous members expressed 
concern. MMS has ignored this direction, and neither the Energy and 
Natural Resources Committee nor the Appropriations Committee was 
notified that MMS proposed to finalize the new rule this June.
  I support a valuation program that ensures the state and national 
governments receive all royalties due to them while maintaining 
fundamental principles of equity. I support the MMS in its efforts to 
simplify the valuation system and collect the government's fair share. 
However, it cannot be done at in a manner that changes federal 
law.

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