[Congressional Record Volume 158, Number 83 (Tuesday, June 5, 2012)]
[Senate]
[Pages S3731-S3732]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MURKOWSKI:
  S. 3265. A bill to amend the Federal Power Act to remove the 
authority of the Federal Energy Regulatory Commission to collect land 
use fees for land that has been sold, exchanged, or otherwise 
transferred from Federal ownership but that is subject to a power site 
reservation; to the Committee on Energy and Natural Resources.

[[Page S3732]]

  Ms. MURKOWSKI. Mr. President, we often hear refrains of the need to 
make government policies more fair, clear, or simple--especially when 
these policies involve the collection of fees or taxes. Today I rise to 
introduce legislation to fix an inherently unfair policy by prohibiting 
the Federal Energy Regulatory Commission from charging land-use fees 
for hydropower projects that are no longer located on federal land.
  FERC is responsible for licensing private, municipal and state 
hydropower projects. Pursuant to the Federal Power Act, the Commission 
is authorized to collect fees from project owners for those hydro 
projects located on federal lands. The rationale behind these land-use 
fees is to recompense the United States for the ``use, occupancy, or 
enjoyment'' of its federal lands. The Federal Government is, in some 
sense, a landlord for these types of projects, and can collect just and 
reasonable rent from its tenants. The current level of these rents is a 
separate issue--which I encourage all of my colleagues to examine as 
well since FERC is seeking to change its collection methodology and 
increase those fees--but today I am focused on how a technicality in 
federal law allows the government to continue to collect land-use fees 
even when the land at issue has been transferred out of federal 
ownership. Under current law, if the Federal Government sold the land 
underneath a hydropower project to the operator, or transferred it into 
state ownership, FERC would continue to assess full land use fees 
against the operator. This untenable situation is like a landlord 
continuing to collect rent from a tenant even after the tenant buys the 
house outright!
  While the inherent unfairness of such a scenario is clear, the 
statutory and regulatory web that has created this snare is extremely 
complex. In addition to allowing for the collection of federal land-use 
fees, the Federal Power Act also contains a section regarding Power 
Site Classifications, or PSCs. A PSC attaches to the land when a 
preliminary hydropower license application is made, and entitles the 
government, or its designees, to enter the associated land and develop 
a hydropower project if some other person or operation is occupying it. 
These classifications are similar to easements, in that they 
permanently attach to the title of the lands. The purpose of PSCs is to 
make sure that hydropower can be developed in the limited number of 
areas on federal land that are suitable, and furthermore that once such 
an area is identified by a preliminary application, that the site is 
not then diverted to an alternate use.
  However, FERC has interpreted the statutory fee collection provisions 
to give these PSCs another affect that is not in keeping with this 
purpose--to charge land-use fees from existing hydropower operators in 
cases where the Federal Government no longer owns the land. In such a 
case, there is no need for a PSC to preserve the hydropower value of 
land as it is already being used for power production. Nor is the 
Federal Government somehow missing out on other beneficial uses of the 
land, because it no longer owns the land at issue. But FERC's current 
interpretation of the FPA is that a PSC qualifies as a significant 
enough interest in the associated land to justify the collection of 
full land-use fees.
  When I first learned of this issue, I asked FERC for a list of the 
hydropower projects for which it was collecting these PSC-based federal 
land-use fees. Apparently, while FERC has been perfectly capable of 
collecting these fees, it has been less diligent in keeping track of 
which projects are located on lands that 2 have since been transferred 
away from federal ownership. Despite numerous requests from my office, 
FERC was unable to produce even a possible list of impacted projects. 
Consequently, my staff attempted to survey the number of affected 
projects by consulting with both the National Hydropower Association 
and the Alaska Power Association. This search identified 15 possible 
projects subject to these PSC land use fee collections--10 of which are 
located in my home state of Alaska. While some may dismiss these fees 
as being relatively minor, I can tell you that these annual federal 
fees for land not even owned by the Federal Government can represent a 
significant hardship for my constituents.
  The bill I am introducing today would put a halt to this kind of fee 
collection. It simply says that when FERC is making fee determinations, 
it cannot take PSCs into account. Therefore, the only land that the 
Federal Government will be able to collect ``use, occupancy, and 
enjoyment'' fees is for land that it actually owns. I hope all of my 
colleagues can agree this treatment is a fair resolution of the issue 
and I ask for their support.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3265

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. REMOVAL OF AUTHORITY TO COLLECT LAND USE FEES FOR 
                   CERTAIN LAND.

       Section 10(e)(1) of the Federal Power Act (16 U.S.C. 
     803(e)(1)) is amended in the first sentence by inserting 
     after ``enjoyment of its lands or other property'' the 
     following: ``(which, for purposes of this section, shall not 
     include land that has been sold, exchanged, or otherwise 
     transferred from Federal ownership, but that is subject to a 
     power site reservation under section 24)''.

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