Print

Congressman Engel and Congressman Welch Introduce the Offending Oil Polluters Act to Prevent American Taxpayers from Subsidizing Corporate Wrongdoing

Congressman Engel and Congressman Welch Introduce the Offending Oil Polluters Act to Prevent American Taxpayers from Subsidizing Corporate Wrongdoing

Washington, D.C. – Congressman Eliot Engel and Congressman Peter Welch, members of the House Energy and Commerce Committee, have introduced H.R. 3760, The Offending Oil Polluters Act, legislation aimed at preventing companies from deducting losses that result from spilling oil or hazardous substances.

Federal tax law currently prevents companies from deducting penalties paid as a result of breaking the law from their corporate taxes. However, money classified as something other than a penalty—including restitution, reimbursement, or compensatory payments to damaged parties—is deductible as an ordinary cost of doing business.

Earlier this month, BP and the Justice Department reached a $20.8 billion settlement for damages caused by the 2010 Deepwater Horizon oil spill. But under the current law, up to 75 percent of BP’s bill is tax deductible, thus forcing the American taxpayer to cover more than $5 billion of the settlement’s cost.

The Offending Oil Polluters Act would prevent companies from deducting losses that result from spilling oil or hazardous substances, including deductions for the direct costs of clean-up, legal fees resulting from the discharge of oil or hazardous substances, payments or restitution related to the discharge, and any cost penalties that are required by Federal law, regulations, or certified in a settlement by Federal courts.

“BP made an absolute mess in the Gulf, and the idea that they can somehow pawn the bill off on the American taxpayer is disgusting,” Congressman Engel said. “Those who do significant harm to our environment need to be held accountable to the public for their actions, not the other way around. The current laws provide too many escape hatches for polluters to use in order to avoid paying for the damage they’ve done. This needs to end, which is why we are introducing this piece of legislation to protect the American taxpayer from financial liability.  I urge my colleagues in Congress to support The Offending Oil Polluters Act so that we can close this egregious loophole.”  

“Allowing a financial institution that has damaged the environment and harmed consumers the benefit of writing off related penalties is offensive and adds insult to injury to the taxpayer,” Congressman Welch said. “This legislation is a no brainer and Congress should act on it promptly to protect the American taxpayer.”