GOP member proposes bill blocking possible tax break for BP

By Pete Kasperowicz - 10/29/12 08:53 AM ET

Rep. Jo Bonner (R-Ala.) has proposed legislation that would prevent BP from getting a tax break from the fines it has to pay for the Deepwater Horizon spill in 2010.

"More than two and half years after the worst man-made disaster to ever strike the Gulf Coast, BP is reportedly in final negotiations with the Justice Department that would allow the company to get a gigantic tax write-off for some of its penalty payments," Bonner said Friday. "The mere thought that Eric Holder's Justice Department would cut any deal that allows BP to benefit from its recklessness, irresponsible and deadly behavior is simply outrageous."

Bonner's bill, H.R. 6579, is a reaction to press reports that say BP and the Justice Department may be preparing a settlement agreement under which some of the BP fine might be paid as part of a Natural Resources Damage Assessment (NRDA). Fines paid under NRDA would be controlled by the federal government, and companies paying these fines can partially write them off as a business expense.

In contrast, Bonner and other Gulf state member want most or all of the fine to be paid under the Clean Water Act (CWA). Those fines would be subject to the RESTORE Act, which says that 80 percent of the fines collected are to be given to Gulf states to pay for environmental restoration.

Bonner's bill would make NRDA fines less appealing to BP by preventing companies from writing off these fines for "any person or government entity on account of the April 20, 2010, explosion and sinking of the offshore drilling unit Deepwater Horizon."

In early October, Bonner told The Hill that he believes the Obama administration may be trying to take control of the BP fines in order to direct more of that money to Florida, a critical swing state in this year's presidential election.

"The timing of this move certainly begs the question of whether the administration is attempting to structure a settlement agreement to influence votes in Florida at the expense of Alabama, Mississippi and the other Gulf states," Bonner said.