Q: What is the status of the Treasury Department regulations?

A: On September 6, 2013, the U.S. Department of the Treasury issued a proposed regulation containing draft procedures for the expenditure of RESTORE Act funds. The proposed regulation was open for public comment for 60 days, until November 5, 2013. You can view the proposed regulation here.

The RESTORE Act called upon the Treasury to establish procedures for administering RESTORE Act funds and for assessing the compliance of funded projects by January 2, 2013. The Treasury has stated that it anticipates publishing binding procedures soon after the close of the 60-day comment period.

Q: Where do things stand with the RESTORE Council?

Latest update: The Council released an updated Initial Comprehensive Plan and Programmatic Environmental Assessment on August 21, 2013 and voted to approve the plan on August 28, 2013.

The Gulf Coast Ecosystem Restoration Council (Council) was created by the RESTORE Act and is composed of federal officials and the governors of the five Gulf states. The Council is tasked with developing and implementing a science-based plan to restore the natural resources and ecosystems of the Gulf Coast region. On January 29, 2013, the Council released a proposed comprehensive plan, and during the following months solicited public input online and through meetings. On May 23, 2013, the Council released its Draft Initial Comprehensive Plan and Draft Programmatic Environmental Assessment. The plan incorporates the recommendations and findings of the Gulf Coast Ecosystem Restoration Task Force, as contained in its Gulf of Mexico Regional Ecosystem Restoration Strategy; establishes the Council’s restoration goals; and outlines the Council’s framework for carrying out region-wide restoration in the Gulf. The Draft Initial Comprehensive Plan was initially open for public comment through June 24, but the deadline for submitting comments was later extended to July 8. After responding to the comments received on the draft plan, the Council released a Final Initial Comprehensive Plan and Final Programmatic Environmental Assessment on August 21, 2013. The Council unanimously approved the plan on August 28, 2013.

Q: What is the BP criminal plea agreement?

A: On November 15, 2012, the U.S. Department of Justice and BP announced an agreement to resolve all criminal charges against BP resulting from the Deepwater Horizon oil disaster. In the agreement, BP agreed to plead guilty to 14 counts of criminal action and agreed to pay $4.0 billion. The bulk of this money will go to the Oil Spill Liability Trust Fund ($1.15 billion) to pay for cleanup of future oil spills and to the National Fish and Wildlife Foundation ($2.394 billion) for natural resources restoration in the Gulf. BP will also be on probation for five years and will be required to make a number of improvements to its operations, including adopting a specific oil spill response training program, revising its Oil Spill Response Plan and developing deepwater safety technologies.

This agreement only addresses criminal charges, not civil claims, and is only applicable to BP—it does not address any other corporations or individuals implicated in the disaster. In addition, the agreement must be approved by the court. For more details about this agreement, see ELI’sfact sheet on the criminal plea agreement.

Q: What is the current status of the RESTORE Act?

A: Congress passed a version of the RESTORE the Gulf Coast States Act as part of the surface transportation bill on June 29, 2012. President Obama signed the Act into law on July 6, 2012. The RESTORE Act will direct 80% of any Clean Water Act civil penalties associated with theDeepwater Horizon oil spill to Gulf Coast restoration and recovery. The final RESTORE Act is similar to previous RESTORE Act bills introduced in the U.S. Senate and House of Representatives, but the Act differs from prior bills in a few important respects.  For instance, previous versions of RESTORE included funding for a National Oceans Endowment and a Fisheries Endowment, which the final Act does not contain. The RESTORE Act creates a Gulf Coast Ecosystem Restoration Council, which must propose a comprehensive plan for how to spend its portion of RESTORE Act funds by January 2013. For additional information, seeELI’s resources on the Clean Water Act and RESTORE.

Q: What is the difference between “principal” and “interest” expenditures under the RESTORE Act?

A: The RESTORE Act creates a Gulf Coast Restoration Trust Fund. Eighty percent of any Clean Water Act civil and administrative penalties associated with the Deepwater Horizon oil spill will be deposited into the Trust Fund. The sum of money that is deposited into the Trust Fund, called the “principal,” will be invested to earn additional income, which is called “interest.” (This process is similar to how money grows while sitting in a savings bank account.) Both the principal funds and any interest income earned will be available to fund Gulf restoration and recovery. According to the RESTORE Act, each fiscal year, an amount equal to the interest income earned in the previous year will be spent in the following way:

• 25% of the interest income shall go to the Restoration Science and Monitoring Program;
• 25% of the interest income shall go to the Centers of Excellence Grant Program; and
• 50% of the interest income shall go to a federal and stateEcosystem Restoration Council to carry-out natural resource protection and restoration projects.

Past drafts of the RESTORE Act legislation sought to dedicate interest income to a national Oceans Endowment or a Fisheries Endowment, but those endowments are not present in the final version of the RESTORE Act, which became law on July 6, 2012. The RESTORE Act also details how the principal funds will be divided between the five Gulf states and the three programs mentioned above. For more information on how the principal will be allocated, see ELI’s summary of the RESTORE Act.

Q: How much RESTORE Act money will be spent each year?

A: The RESTORE Act does not detail how much money will be spent from the Gulf Coast Restoration Trust Fund each year; the Act only describes how the money that is spent in any given year must be divided between the five Gulf states, the interstate Ecosystem Restoration Council, and the Act’s two scientific research programs. According to the RESTORE Act, the U.S. Department of the Treasuryis responsible for promulgating procedures that will establish how money will be deposited into and expended from the Trust Fund. The Department of Treasury’s procedures ultimately may clarify specifics like how much may be spent from the Trust Fund in any year, the frequency of deposits into the Trust Fund, the frequency of interest income payment, or a project funding schedule. Before finalizing its procedures, the Department of Treasury must provide public notice, solicit comments from members of the public about its draft procedures, and respond to the public’s comments. The Treasury’s final procedures are due by January 2013.

Q: What is involved in a settlement process?

A: Some of the legal processes described in other parts of the website may be resolved through a settlement agreement rather than a full trial. Any settlement must be submitted to the trial court for review; if the court approves the parties’ agreement, it will issue a consent decree noting so. The structure and content of a settlement agreement may vary. NRDA settlements must follow the requirements set out in NOAA’s regulations, which specify that the trustees may reach a settlement if the agreement “is adequate in the judgment of the trustees to satisfy the goal of OPA and is fair, reasonable, and in the public interest, with particular consideration of the adequacy of the settlement to restore, replace, rehabilitate, or acquire the equivalent of the injured natural resources and services.” It also limits the use of settlement funds to implementation of a publicly reviewed restoration plan. For the economic damages and medical benefits settlement agreements currently being considered by BP, the PSC, and Judge Barbier, a fairness hearing has been set for November 8, 2012.

Q: What is the “multidistrict litigation” or “MDL”?

A: The multidistrict litigation (MDL) for the Deepwater Horizon incident,MDL No. 2179, is a consolidation of hundreds of lawsuits related to the explosion and oil spill. While the lawsuits within the MDL raise different types of legal claims, such as personal injury, contract, tort, and environmental claims, the different claims will require a court to answer related factual questions. For this reason, the U.S. Judicial Panel on Multidistrict Litigation determined that it would be efficient to create an MDL. The Panel assigned Judge Carl J. Barbier of the U.S. District Court for the Eastern District of Louisiana to oversee the Deepwater Horizon MDL. Cases filed in any federal court that are related to the oil spill ordinarily will be transferred into the MDL. Judge Barbier appointed fifteen law firms and two liaison counsel to a Plaintiffs’ Steering Committee (PSC), which is tasked with enhancing coordination between the numerous individual and business plaintiffs in the MDL. The MDL trial was originally set to begin on February 27, 2012, but was postponed pending finalization of the settlements on economic damages and medical benefits between BP and the Plaintiffs’ Steering Committee.  The new anticipated trial date is January 14, 2013.

Q: What are the economic damages claims?

A: The Oil Pollution Act requires that individuals, businesses, and governments be compensated for economic injuries and losses suffered as a result of an oil spill. Depending on the claim, the claimant, and what the claimant has already received, claims can be filed through an established claims process, with the responsible party, through the Oil Spill Liability Trust Fund, and/or by filing a lawsuit. The Gulf Coast Claims Facility (GCCF), run by Kenneth Feinberg, was established to handle Deepwater Horizon damages claims from individuals and businesses. On March 2, 2012, BP and the Plaintiffs’ Steering Committee reached a consensus on the key terms of agreements to settle the majority of the economic loss and medical claims. On March 8, 2012, the GCCF was officially terminated and a transitional court-supervised claims process was established. If the court approves the settlement, a new court-supervised process for handling economic claims will be created.

On May 2, 2012, the court granted preliminary approval of two settlement agreements that cover the majority of economic loss, property damages, and medical claims. The settlements will not affect state and local government claims, or the Department of Justice’s Clean Water Act and Oil Pollution Act claims. The court held a final fairness hearing on November 8, 2012, and granted final approval of the economic loss claims and medical claims on December 21, 2012 and January 11, 2013, respectively.