Several Democrats said during debate that they support the 2012 agreement between the U.S. and Mexico. But they pointed out that the legislation includes language that would waive a provision of Dodd-Frank that requires companies to disclose payments made to foreign governments.
Republicans said this waiver is needed because Mexico has not decided how it would receive royalties from energy development under the agreement.
"This would create a potential conflict because Mexico has yet to decide how they will collect royalties and could potentially set regulatory measures that prohibit disclosure of payments," House Natural Resources Committee Chairman Doc HastingsRichard (Doc) Norman HastingsCongress just resolved a 20-year debate over Neolithic remains Boehner hires new press secretary GOP plots new course on Endangered Species Act reform MORE (R-Wash.) said. "This would then block American workers from being able to develop these resources.
"Waiving the Dodd-Frank requirement is necessary in order to help protect jobs American jobs and American-made energy in this instance," he added. "Without it, foreign-controlled energy companies could develop this American energy resource, and the royalty payments to Mexico would still be undisclosed and kept private."
Democrats rejected this and called it an attempt to dismantle Dodd-Frank. Rep. Peter DeFazio (D-Ore.) said the language is "totally unnecessary" and added that the provision waives Dodd-Frank's reporting rules for all offshore energy deals between the U.S. and a foreign government.
"They actually want to repeal totally this section of Dodd-Frank for any future agreements with any other nations on a transboundary basis, which could certainly include Canada and, likely with the conflicts that are looming over the Arctic Ocean and the resources up there, with Russia," he said.
"Now I get pretty nervous when I start thinking that U.S. companies are going to start negotiating secret agreements with Russia, and somehow these are going to protect our taxpayers," he said. "They're going to protect our shareholders, they're going to protect our public interest."
DeFazio and other Democrats argued that the Senate would never pass the House bill as written and said the Dodd-Frank language delays an agreement that both parties want to see implemented. "You're messing up a good agreement," Rep. Maxine Waters (D-Calif.) said.
The Obama administration said Tuesday that it "cannot support" the bill as written because of the Dodd-Frank portion, although it stopped short of saying President Obama would veto the bill. "The provision directly and negatively impacts U.S. efforts to increase transparency and accountability, particularly in the oil, gas, and minerals sectors," the White House said.
Just before the final vote, the House just barely rejected an amendment from Rep. Alan GraysonAlan Mark GraysonDeSantis tops Crist, Fried in poll of Florida governor race Florida Rep. Val Demings officially enters Senate race against Rubio Demings raises Democrats' hopes in uphill fight to defeat Rubio MORE (D-Fla.) aimed at ensuring the bill does not infringe on the rights of a state to block energy exploration and development beneath its navigable waters.
Republicans argued that this amendment — the only one made in order — was irrelevant because offshore activities under the U.S.-Mexico agreement would be far from state boundaries in the Gulf of Mexico. Several Republicans supported it, but the House rejected it in a rare tied vote, 213-213.