113/s/564/Statement on introduction

March 14, 2013
Page: S1855

Mr. President, we often hear refrains of the need to make government policies more fair, clear, or simple--especially when these policies involve the collection of fees or taxes. Today I rise to introduce legislation to fix an inherently unfair policy by prohibiting the Federal Energy Regulatory Commission from charging land-use fees for hydropower projects that are no longer located on Federal land.

FERC is responsible for licensing private, municipal and state hydropower projects. Pursuant to the Federal Power Act, the Commission is authorized to collect fees from project owners for those hydro projects located on Federal lands. The rationale behind these land-use fees is to recompense the United States for the ``use, occupancy, or enjoyment'' of its Federal lands. The Federal Government is, in some sense, a landlord for these types of projects, and can collect just and reasonable rent from its tenants. The current level of these rents is a separate issue but today I am focused on how a technicality in Federal law allows the government to continue to collect land-use fees even when the land at issue has been transferred out of Federal ownership. Under current law, if the Federal Government sold the land underneath a hydropower project to the operator, or transferred it into state ownership, FERC can continue to assess full land use fees against the operator. This untenable situation is like a landlord continuing to collect rent from a tenant even after the tenant buys the house outright.

While the inherent unfairness of such a scenario is clear, the statutory and regulatory web that has created this snare is extremely complex. In addition to allowing for the collection of Federal land-use fees, the Federal Power Act also contains a section regarding Power Site Classifications, or PSCs. A PSC attaches to the land when a preliminary hydropower license application is made, and entitles the government, or its designees, to enter the associated land and develop a hydropower project if some other person or operation is occupying it. These classifications are similar to easements, in that they permanently attach to the title of the lands. The purpose of PSCs is to make sure that hydropower can be developed in the limited number of areas on Federal land that are suitable, and furthermore that once such an area is identified by a preliminary application, that the site is not then diverted to an alternate use.

However, FERC has interpreted the statutory fee collection provisions to give these PSCs another affect that is not in keeping with this purpose--to charge land-use fees from existing hydropower operators in cases where the Federal Government no longer owns the land. In such a case, there is no need for a PSC to preserve the hydropower value of land as it is already being used for power production. Nor is the Federal Government somehow missing out on other beneficial uses of the land, because it no longer owns the land at issue.

When I first learned of this issue, I asked FERC for a list of the hydropower projects for which it was collecting these PSC-based Federal land-use fees. I also asked the Department of the Interior, which maintains our Federal lands, for assistance. Unfortunately it appears that the government has not been diligent in keeping track of which projects are located on lands that have since been transferred away from Federal ownership as neither agency was able to produce a list of impacted projects.

Consequently, my staff attempted to survey the number of affected projects by consulting with both the National Hydropower Association and the Alaska Power Association. This search identified 15 possible projects subject to these PSC land use fee collections--11 of which are located in my home State of Alaska. While some may dismiss these fees as being relatively minor, I can tell you that these annual Federal fees for land not even owned by the Federal Government can represent a significant hardship for my constituents.

The bill I am introducing today would put a halt to this kind of fee collection. It simply says that when FERC is making fee determinations, it cannot take PSCs into account. Therefore, the only land that the Federal Government will be able to collect ``use, occupancy, and enjoyment'' fees for is land that it actually owns. I hope all of my colleagues can agree this treatment is a fair resolution of the issue and I ask for their support.