On February 12, 2016, the RESTORE Act rule published by Treasury on December 14, 2015, became effective. The rule combines the comprehensive interim final rule and the Louisiana Parish Allocation Formula interim final rule, both of which were effective on October 14, 2014.
1. What is the RESTORE Act?
The Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies (RESTORE) of the Gulf Coast States Act of 2012(RESTORE Act; Subtitle F of Public Law 112-141), signed into law by the President on July 6, 2012, established a new Trust Fund in the Treasury of the United States, known as the Gulf Coast Restoration Trust Fund. Eighty percent of the administrative and civil penalties paid after July 6, 2012, under the Federal Water Pollution Control Act in connection with the Deepwater Horizon Oil Spill will be deposited into the Trust Fund and invested. Under terms described in the Act, amounts in the Trust Fund will be available for programs, projects, and activities that restore and protect the environment and economy of the Gulf Coast region.
2. What is the purpose of the RESTORE Act?
The RESTORE Act makes funds available for work under five components, and sets parameters for how these funds will be spent:
Direct Component: 35 percent of the Trust Fund is divided equally among the five Gulf Coast States and is dedicated to funding projects and programs for ecological and economic restoration of the Gulf Coast region. All of Florida’s allocation goes to 23 counties and 30 percent of Louisiana’s allocation goes to 20 parishes.
Comprehensive Plan Component: 30 percent of the Trust Fund and a portion of interest earned from the Trust Fund (50%) are dedicated to funding projects and programs selected by the Gulf Coast Ecosystem Restoration Council for the restoration and protection of the Gulf Coast region.
Spill Impact Component: 30 percent of the Trust Fund is available to the Gulf Coast States and is dedicated to funding activities in approved state expenditure plans. These funds will be allocated to the States based on criteria in the Act and a regulation published by the Gulf Coast Ecosystem Restoration Council.
NOAA RESTORE Act Science Program: 2.5 percent of the Trust Fund and a portion of interest earned from the Trust Fund (25%) are dedicated to funding marine and estuarine research, ecosystem monitoring and ocean observation, data collection and stock assessments, certain pilot programs, and cooperative research, among other purposes.
Centers of Excellence Research Grants Program: 2.5 percent of the Trust Fund and a portion of the interest earned from the Trust Fund (25%) are divided equally among the five Gulf Coast States and are dedicated to funding centers of excellence to conduct research on the Gulf Coast region.
3. How much money currently is available in the Gulf Coast Restoration Trust Fund?
The Gulf Coast Trust Fund Allocation Tables, located on Treasury’s RESTORE Act website, cite the allocations, and obligations and transfers, as applicable, for each of the five components. Periodically, Treasury posts new tables that include earned interest on the Trust Fund, any new deposits, and updated allocations available for distribution.
4. How much money will be deposited in the Gulf Coast Restoration Trust Fund by BP?
Pursuant to the terms of the proposed consent decree that the Department of Justice released for public comment on October 5, 2015, the portion of the BP civil penalties under the Clean Water Act that would be paid into the Gulf Coast Restoration Trust Fund, if the proposed consent decree is approved, would equal $4.4 billion. Under the proposed consent decree, funds would be deposited into the Trust Fund over 15 years, based on a published payment schedule.
The Department of Justice accepted public comments on the consent decree through December 4, 2015. The federal government and the five Gulf Coast states are considering the public comment and determining whether to seek court approval of the consent decree.
5. Who is responsible for administering each of the five components?
Under the Act and regulation,
Treasury administers the Direct Component and the Centers of Excellence Research Grants, including monitoring the Gulf Coast States’ use of funds for compliance with the Act and Treasury’s regulations. Treasury also has additional compliance responsibilities for funds used by the Gulf Coast States under the Comprehensive Plan Component and Spill Impact Component.
The Gulf Coast Ecosystem Restoration Council (the Council), established under the Act, administers the Comprehensive Plan Component and the Spill Impact Component, including compliance monitoring. The Council’s membership is comprised of governors from the five affected Gulf States, the secretaries from the U.S. Departments of the Interior, Commerce, Agriculture, Army, and Homeland Security (Coast Guard), and the Administrator of the U.S. Environmental Protection Agency.
The National Oceanic and Atmospheric Administration (NOAA) administers NOAA’s RESTORE Act Science Program, including compliance monitoring.
6. How will funds be provided to the Gulf Coast States and coastal political subdivisions, as set out in the Act?
The States of Alabama, Louisiana, Mississippi, and Texas and 23 Florida counties and 20 Louisiana parishes will receive funds in the form of grants awarded by Treasury under the Direct Component. Treasury awards grants to Alabama, Louisiana, Mississippi, Texas, and the Florida Institute of Oceanography for the Centers of Excellence Research Grants Program. The Council uses funds available under the Comprehensive Plan Component for projects and programs that it selects, and awards grants under the Spill Impact Component to the five Gulf Coast States. NOAA awards grants under the NOAA RESTORE Act Science Program. All grants must comply with the Act, Treasury’s regulations, and other federal laws applying to grants.
7. Is there an end date on the RESTORE Act?
The authority for the Trust Fund expires after all eligible civil and administrative penalties have been deposited into the Trust Fund, any amounts owed to the Trust Fund have been restored, and all funds have been expended.
8. How does Treasury interact with the RESTORE Council?
Treasury personnel attend the RESTORE Council meetings as observers, and interact informally with RESTORE Council staff to ensure coordination.
9. What is the RESTORE Act final rule?
On February 12, 2016, the RESTORE Act rule published by Treasury on December 14, 2015, became effective. This rule combines the comprehensive interim final rule and the Louisiana Parish Allocation Formula interim final rule, both of which were effective on October 14, 2014. This final rule takes into account the public comments that Treasury received regarding the comprehensive interim final rule. The preamble and the final rule include minor changes in response to public comments and that address necessary technical corrections.
10. What is the effective date of the RESTORE Act final rule?
The RESTORE Act final rule became effective on February 12, 2016, 60 days after its December 14, 2015 publication date.
11. What is the purpose of the final rule and why is it necessary?
Under the RESTORE Act, Treasury is responsible for establishing procedures, in consultation with the Interior and Commerce Departments, concerning the deposit and expenditure of amounts from the Trust Fund. The final rule fulfills this responsibility.
12. When must eligible applicants comply with the revised administrative costs definition in the RESTORE Act final rule?
As of February 12, 2016, the effective date of the RESTORE Act final rule, eligible applicants must use the revised definition of administrative costs when preparing budgets for their grant applications. This definition states:
Administrative costs means those indirect costs for administration incurred by the Gulf Coast States, coastal political subdivisions, and coastal zone parishes that are allocable to activities authorized under the Act. Administrative costs do not include indirect costs that are identified specifically with, or readily assignable to, facilities as defined in 2 CFR 200.414.
As explained in the preamble to the final rule, the revised administrative costs definition clarifies the interim final rule definition. To avoid confusion, Treasury removed the list of activities that may result in administrative costs found in the interim final rule definition and added a cross-reference to the Office of Management and Budget’s Uniform Administrative Requirement’s, Cost Principles, and Audit Requirement’s for Federal Awards. See 2 CFR Part 200.
13. Did Treasury make changes relating to the Centers of Excellence in the RESTORE Act final rule?
Under the RESTORE Act, each state may establish one or more Centers of Excellence. After Treasury awards the state a grant, the state will issue subawards to subrecipients. The final rule clarifies the requirement that each Gulf Coast State entity issuing grants must establish and implement a program to monitor compliance with its subaward agreements. See 31 CFR Part 34.701. At a minimum, these state rules and policies must include the competitive selection process and measures to guard against conflicts of interest. A state may rely on existing state statutes and regulations to meet the requirements under 34.703(b) and 34.703(c).
14. Did Treasury address requests for defining workforce development and job creation as eligible activities?
The legislative history of the RESTORE Act explains that workforce development “is intended to include non-profit, university, and community college-based workforce, career and technical training programs. This would also include the identification of projects, research, programs and partnerships with federal, state and local workforce agencies, industry and local stakeholders from economically and socially disadvantaged communities.” See Senate Report No. 112-100, at 8 (2011). This list of activities, quoted from the legislative history in the preamble to the final rule, while not exclusive, describes the kinds of activities that are eligible for funding under the Direct Component and the Spill Impact Component.
15. Did Treasury address whether county or local park improvements are eligible activities under the Act?
While the RESTORE Act provides that improvements to or on state parks located in coastal areas affected by the Deepwater Horizon oil spill are activities eligible for funding under the Direct Component and the Spill Impact Component, Treasury does not interpret that provision to apply to county and local parks. However, improvements to county and local parks, such as activities that restore and protect natural resources may fall under other RESTORE Act eligible activities.
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