WASHINGTON (AP) -- Responding to the massive BP oil spill, Congress is getting ready to quadruple -- to 32 cents a barrel -- a tax on oil used to help finance cleanups. The increase would raise nearly $11 billion over the next decade.
The tax is levied on oil produced in the U.S. or imported from foreign countries. The revenue goes to a fund managed by the Coast Guard to help pay to clean up spills in waterways, such as the Gulf of Mexico...
The Oil Spill Liability Trust Fund has about $1.5 billion available. Under current law, only $1 billion can be spent from the fund on a single incident. The bill would increase the spending limit to $5 billion....
Guith said the tax could be passed on to consumers, depending on the ability of oil companies to raise gas prices in response to a tax increase.
Lawmakers felt the tax increase, to 32 cents a barrel, was reasonable, said Democratic Rep. Sander Levin, chairman of the tax-writing House Ways and Means Committee.
"We just decided to take a look at what we thought would be a reasonable increase," Levin said.
The American Petroleum Institute has not taken a position on the tax increase, though a spokeswoman said Congress should study the ramifications before acting.
We understand we need to have an insurance policy in order to cover people in the event of a spill," said the spokeswoman, Cathy Landry. "At the same time we need to have a vital oil and gas industry."
The bill does not address a federal law that caps liability at $75 million for economic damages beyond direct cleanup costs. Democratic Senators tried to pass a bill last week that would have increased the cap to $10 billion, but they were blocked by Republicans.
The oil industry says such a high cap would make it difficult, if not impossible, to insure oil rigs.
BP said Monday its costs for responding to the spill had grown to about $760 million.
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