[Congressional Record Volume 159, Number 156 (Tuesday, November 5, 2013)]
[Senate]
[Pages S7830-S7831]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. SCHATZ (for himself, Mr. Alexander, and Mr. Coats):
S. 1652. A bill to amend the National Energy Conservation Policy Act
to provide guidance on utility energy service contracts used by Federal
agencies, and for other purposes; to the Committee on Energy and
Natural Resources.
Mr. SCHATZ. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1652
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page S7831]]
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Utility Energy Service
Contracts Improvement Act of 2013''.
SEC. 2. FINDINGS.
Congress finds that--
(1) the Federal government is the largest consumer of
energy in the United States;
(2) Federal agencies are expected to meet, by law,
Executive order, and mandate, stringent energy efficiency and
conservation targets;
(3) the utility energy service contract (referred to in
this section as ``UESC'') was developed to provide Federal
agencies an effective means to implement energy efficiency,
renewable energy and water efficiency projects, and has been
used successfully to invest nearly $2,700,000,000 in property
at Federal facilities;
(4) the General Services Administration, which manages more
than 9,600 Federal properties and is the lead agency for
procuring utility services for the Federal government, has
determined that UESCs may extend beyond a 10-year period
under the law;
(5) the Federal Energy Management Program, which oversees
the UESC program and is a principal office guiding agencies
to use funding more effectively in meeting Federal and
agency-specific energy and resource management objectives,
has determined that UESCs may extend beyond a 10-year period
under the law;
(6) extensive precedent exists for Federal agencies to
contract for energy saving services using contracts with term
limits of more than 10 years but not to exceed 25 years;
(7) a number of Federal agencies, contrary to congressional
intent, have sought to limit UESC term limits to periods of
less than 10 years; and
(8) greater flexibility with UESCs will help reduce the
operational cost of Federal agencies, ultimately saving money
for taxpayers.
SEC. 3. UTILITY ENERGY SERVICE CONTRACTS.
Part 3 of title V of the National Energy Conservation
Policy Act is amended by adding after section 553 (42 U.S.C.
8259b) the following:
``SEC. 554. UTILITY ENERGY SERVICE CONTRACTS.
``(a) In General.--Each Federal agency may use, to the
maximum extent practicable, measures provided by law to meet
energy efficiency and conservation mandates and laws,
including through utility energy service contracts.
``(b) Contract Period.--The term of a utility energy
service contract entered into by a Federal agency may have a
contract period that extends beyond 10 years, but not to
exceed 25 years.
``(c) Requirements.--The conditions of a utility energy
service contract entered into by a Federal agency shall
include requirements for measurement, verification, and
performance assurances or guarantees of the savings.''.
______
By Mr. REED (for himself and Mr. Grassley)
S. 1654. A bill to amend the Internal Revenue Code of 1986 to deny
tax deductions for corporate regulatory violations; to the Committee on
Finance.
Mr. REED. Mr. President, today I am introducing, along with Senator
Grassley, the Government Settlement Transparency and Reform Act. This
bill closes a loophole that allows corporations to reap tax benefits
from payments made to the government stemming from settling corporate
misdeeds. So this bill aims to end the subsidization of illegal
corporate behavior by taxpayers.
Corporations accused of illegal activity routinely settle legal
disputes with the government out of court because it allows both the
company and the government to avoid the time, expense, and uncertainty
of going to trial. Under Federal law, money paid to settle corporate
civil or criminal penalties is not deductible. But under the tax code,
offending companies may often write off any portion of a settlement
that is not paid directly to the government as a penalty or fine for
violation of the law. Corporations exploit this provision by later
characterizing settlement penalties as restitution and a tax-deductible
business expense.
I think it is common sense that, for example, a corporation should
not agree to pay the government $500 million in criminal or civil fines
and then when they file their taxes count those fines as a business
expense and take a tax windfall. Corporations that do this are
effectively using taxpayer money to subsidize their illegal behavior.
In 2005, the Government Accountability Office found that of the 34
companies and $1 billion in settlements they examined, 20 companies
took a tax deduction for some or all of the money it paid to the
government. Those settlements were silent on whether that $1 billion to
the government counted as penalties or restitution. According to GAO,
in 2 of those settlements, company representatives said they made a
mistake in deducting civil penalty payments totaling $1.9 million and
said they would amend their tax returns.
The Reed-Grassley bill would address these practices by amending
162(f) of the tax code and requiring the government and the settling
party to reach pre-filing agreements on how the settlement payments
should be treated for tax purposes. The bill also clarifies the rules
about what settlement payments are punitive and therefore non-
deductible. Furthermore, it increases transparency by requiring the
government to file a return at the time of settlement to accurately
reflect the tax treatment of the amounts that will be paid by the
offending party.
Over a 10 year budget window, this legislation is estimated to raise
between $200 to $300 million in revenue.
With this legislation we can close this tax loophole that flies in
the face of sensible and fair tax policy. The tax code should not be
used to subsidize illegal activity by corporations--when a fine is
levied that fine should not be construed as a legitimate business
expense. Instead, it should be paid in full, with no tax deduction
taken.
I want to thank Senator Grassley for working with me on this
legislation. I would also thank Chairman Baucus who introduced similar
legislation in previous Congresses. They have long championed closing
this loophole. I urge our colleagues to join us by cosponsoring this
legislation and seeking its passage.
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