[Congressional Record (Bound Edition), Volume 158 (2012), Part 1]
[Extensions of Remarks]
[Page 539]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            REVENUE ESTIMATE

                                 ______
                                 

                         HON. ALCEE L. HASTINGS

                               of florida

                    in the house of representatives

                       Tuesday, January 31, 2012

  Mr. HASTINGS of Florida. Mr. Speaker, on January 30, 2012, the Joint 
Committee on Taxation produced a revenue estimate for a bill that I 
introduced today. The Joint Committee estimates that my bill, which 
amends the Internal Revenue Code of 1986 to disallow a deduction for 
amounts paid or incurred by a responsible party relating to a discharge 
of oil, would save hardworking American taxpayers an average of $1.3 
billion per year.
  I revise and extend my remarks today to include that revenue estimate 
for the Record.

                                    Congress of the United States,


                                  Joint Committee on Taxation,

                                     Washington, DC, Jan 30, 2012.
     Hon. Alcee L. Hastings,
     House of Representatives,
     Washington, DC.
       Dear Mr. Hastings: This letter is in response to your 
     request, dated January 26, 2012, for a revenue estimate of a 
     proposal that would disallow the deductibility of amounts 
     paid or incurred by a responsible party relating to the 
     discharge of oil.
       Your proposal would amend Internal Revenue Code (the 
     ``Code'') section 162 by disallowing the ability to deduct 
     expenses incurred as a consequence of the discharge of oil 
     into navigable waters, other than an incident caused by an 
     act of God or an act of war. For definitional purposes, any 
     term used in the proposal that is also used in the Oil 
     Pollution Act of 1990 is to have the same meaning as in the 
     Oil Pollution Act of 1990. Based on our discussion with Ian 
     Wolf McCormick of your staff, we have assumed that the tax 
     base includes direct and indirect clean up costs, 
     compensatory and punitive damages, associated legal fees, and 
     other amounts associated with the discharge and paid by 
     responsible parties. In addition, any casualty losses 
     associated with the responsible party's own property incurred 
     as a result of the oil spill are not included in the tax base 
     nor are any of the responsible party's voluntary mitigation 
     payments.
       Your proposal would be effective for returns of tax the 
     extended due date of which is after the date of enactment 
     (regardless of whether any extension had been requested). For 
     purposes of the revenue estimate, we have assumed a date of 
     enactment of April 1, 2012.
       As incidents resulting in the discharge of oil of sizeable 
     proportions do not occur with a frequency that creates a 
     pattern that can be modeled, this estimate is primarily based 
     on known discharges of oil that have occurred as of this 
     date.

----------------------------------------------------------------------------------------------------------------
                                       Fiscal years, millions of dollars--
-----------------------------------------------------------------------------------------------------------------
      2012             2013            2014            2015            2016           2012-16         2012-22
----------------------------------------------------------------------------------------------------------------
       2,224            1,385           1,679           1,139             303           6,729          6,792
----------------------------------------------------------------------------------------------------------------
Note: Details do not add to totals due to rounding.

       I hope this information is helpful to you. If we can be of 
     further assistance in this matter, please let me know.
           Sincerely,
     Thomas A. Barthold.

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