FACTBOX - How would Gulf Coast states use BP spill funds?

Sat Jul 14, 2012 7:58pm IST

Workers remove oil soaked grass from a marshland, one year after the BP Oil Spill, in Bay Jimmy near Myrtle Grove, Louisiana in this April 20, 2011 file photo. REUTERS/Lee Celano/Files

Workers remove oil soaked grass from a marshland, one year after the BP Oil Spill, in Bay Jimmy near Myrtle Grove, Louisiana in this April 20, 2011 file photo.

Credit: Reuters/Lee Celano/Files

Related Topics

Border Security Force (BSF) soldiers ride their camels as they rehearse for the "Beating the Retreat" ceremony in New Delhi January 27, 2015. REUTERS/Ahmad Masood

"Beating The Retreat" Rehearsals

Rehearsals are on for "Beating the Retreat" ceremony which symbolises retreat after a day on the battlefield, and marks the official end of the Republic Day celebrations.  Slideshow 

(Reuters) - On July 6 President Barack Obama signed the RESTORE Act, legislation that spells out how five Gulf Coast states would share fines assessed against BP Plc for the 2010 Deepwater Horizon oil spill.

The federal Clean Water Act lets the U.S. government seek fines up to $1,100 per barrel of oil spilled. Assuming that 4.9 million barrels were spilled, a fine could reach $5.4 billion. But if gross negligence or willful misconduct is found, the fine would rise to $4,300 a barrel. The resulting bill would be $21 billion.

Gulf Coast lawmakers and governors sought to ensure the money was spent to help the region, so they negotiated the RESTORE Act, whose name is an acronym for Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States.

The law could spur states like Louisiana to push the federal government to obtain the largest possible deal at the negotiating table rather than accept a settlement anytime soon.

Once a settlement is reached, or a judge rules on the issue, the law directs 80 percent of the money be put into a trust fund established by the Treasury Department. Here's how that fund will be managed:


+ 35 percent of the money will be divided equally between the five states: Louisiana, Alabama, Mississippi, Florida and Texas.

+ The money can be spent on environmental projects, job creation and training, flood protection, tourism promotion and infrastructure such as ports.

* For Florida: 75 percent will go to the eight hardest-hit counties.

* For Louisiana: 70 percent will go to the state, 30 percent to coastal parishes with land use plans, based on a formula that takes damage, population and size into account.


* 30 percent of the money will be managed by the Gulf Coast Ecosystem Restoration Council.

* The council will be made up of the five Gulf states' governors and six federal officials from the Interior, Commerce, Agriculture departments, the Army, the Environmental Protection Agency and the Coast Guard.

* Money will be spent on big ecosystem projects with broad impact.

* The council will have 180 days to submit its initial plan, with a more comprehensive version a year later.

* Will incorporate information from the President's Gulf Coast Restoration Task Force, which reported in December 2011.


* 30 percent of the money will be allocated to states based on a formula that approximates how badly each was damaged by the oil spill.

* Formula based on average oiled shoreline, proximity to the spill, and average population in coastal counties, with a minimum of 5 percent.

* Louisiana, which had the most miles of oiled shorelines, is expected to get the largest share of this pot, while Texas is expected to receive the smallest share.

* States can spend the money on environmental projects, job creation and training, flood protection and tourism promotion.

* There is a "soft cap" of 25 percent on infrastructure funding from this pot, although governors can overrule this by showing the investment is needed for recovery.


* Split between a fish stocks monitoring program and research centers.

(Reporting by Roberta Rampton; Editing by Alden Bentley)


After wave of QE, onus shifts to leaders to boost economy

DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.

World Wrap

Reuters Showcase

Facebook Earnings

Facebook Earnings

Facebook tops Wall Street revenue target in 4th quarter.  Full Article 

Japanese Hostage

Japanese Hostage

Jordan prisoner swap on hold, fate of Japanese IS hostage unclear.  Full Article 

Cricket World Cup

Cricket World Cup

Batting holds key for team India in World Cup  Full Article 

Australian Open

Australian Open

Djokovic, Wawrinka set up epic showdown, ill Serena through  Full Article 

India's Male Tenor

India's Male Tenor

India's lone male tenor aims to sing opera in local key  Full Article 

Rohingya Muslims

Rohingya Muslims

Rohingya refugees say traffickers in Malaysia abuse and kill.  Full Article 

U.S. Blizzard

U.S. Blizzard

Blizzard hits Boston and New England, spares New York despite forecasts.  Full Article 

Spying Row

Spying Row

Spying program leaked by Snowden is tied to campaign in many countries.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage