Building Trust with sound coastal
investment policies

Endnotes

i http://coastal.la.gov/a-common-vision/2012-coastal-master-plan/

iiLocal Area Change in Coastal Louisiana from 1930 to 2010, http://pubs.usgs.gov/sim/3164/downloads/SIM3164_Pamphlet.pdf

iiiAmerica’s Wetlands, http://americaswetland.com

ivCRCL.org, Coalition to Restore Coastal Louisiana Case for Support

vBarras, J.A. 2009. Land area change and overview of major hurricane impacts in coastal Louisiana, 2004- 08. U.S. Geological Survey Scienti c Investigations Map 3080. <http://pubs.usgs.gov/sim/3080/>

viGroves, D., Fischbach, J., Knopman, D., Johnson, D., & Giglio, K. (2014). Strengthening coastal planning: How coastal regions could benefit from Louisiana's planning and analysis framework (p. 6). RAND Corporation.

viiGulf of Mexico Regional Ecosystem Restoration Strategy, http://archive.epa.gov/gulfcoasttaskforce/web/pdf/gulfcoastreport_full_12-04_508-1.pdf

viiiEconomic Evaluation of Coastal Land Loss in Louisiana, December 2015 http://coastal.la.gov/wp-content/uploads/2015/12/LSU-Rand_Report_on_Economics_of_Land_Loss-2.pdf

ixCenter on Globalization, Governance & Competitiveness, Duke University. 2011. “Restoring the Gulf Coast: New markets for established firms.” http://cggc.duke.edu/pdfs/CGGC_Gulf-Coast-Restoration.pdf.

xRestore America’s Estuaries. 2011. Jobs & Dollars: Big returns from coastal habitat restoration. http://www.estuaries.org/images/81103-RAE_17_FINAL_web.pdf.

xiLouisiana Workforce Commission. 2011. “Coastal Restoration Spending in Louisiana.” http://lwc.laworks.net/sites/LMI/GreenJobs/Reports/Coastal_Restoration_Spending_in_Louisiana.pdf.

xiiEstablished in the state treasury the Coastal Protection and Restoration Fund to provide a dedicated, recurring source of revenues for the development and implementation of a program to protect and restore Louisiana's coastal area.
(B)(1) After making the allocations provided for in Paragraph (A), the treasurer shall then deposit in and credit to the Coastal Protection and Restoration Fund any amount of mineral revenues that may be necessary to insure that a total of five million dollars is deposited into such fund for the fiscal year from this source; provided that the balance of the fund which consists of mineral revenues from severance taxes, royalty payments, bonus payments, or rentals shall not exceed an amount provided by law, but in no event shall the amount provided by law be less than five hundred million dollars.
(2) After making the allocations and deposits provided for in Paragraphs (A) and (B)(1) of this Section, the treasurer shall deposit in and credit to the Coastal Protection and Restoration Fund as follows:
(a) Ten million dollars of the mineral revenues in excess of six hundred million dollars which remain after the allocations provided for in Paragraph (A) are made by the treasurer.
(b) Ten million dollars of the mineral revenues in excess of six hundred fifty million dollars which remain after the allocations provided in Paragraph (A) are made by the treasurer.
However, the balance of the fund which consists of mineral revenues from severance taxes, royalty payments, bonus payments, or rentals shall not exceed an amount provided by law, but in no event shall the amount provided by law be less than five hundred million dollars.
Note: The constitution provides for certain fund balance limitations. This fund generates approximately $30m/year. This is the only state, predictable funding source (constitutional, statutory dedication, also $4m in from DOTD TTF). Also, note that this fund received a $2.2 m mid year cut, the first time in history that the fund was cut. The trust fund earns interest which remains in the fund until used, and has the same requirements for use.

xiiiCPRA Estimates $140M through 2055 based on xxx (what is the source for this information?) Department of Interior Estimates presented to the CPRA Board in 2013.

xivCWPPRA is a federal statutory dedication and the funding represents projected federal reimbursement for CWPPRA projects administered by CPRA where the state is initially incurring more than it’s 15% cost share during project implementation. Program expires in 2019 and policy makers are working on reauthorization.

xvProvides grant funds derived from Federal offshore lease revenues to oil-producing States for conservation, protection, or restoration of coastal areas, wildlife and natural resources. CIAP funds must be spent by December 31, 2016.

xviOf the total $2.544 billion directed to NFWF to fund projects benefitting the spill impacted natural resources of the Gulf Coast, Louisiana’s share of the criminal penalties is $1.272 billion. According to the terms of the agreement, the timeline for receipt of Louisiana’s share of the funds by NFWF is as follows:

April 2013 $79 million

February 2014 $176.5 million

February 2015 $169.5 million

February 2016 $150 million

February 2017 $250 million

February 2018 $447 million

xviiIn July 2015, BP announced that they had reached agreements in principle to settle all federal and state civil claims arising from the Deepwater Horizon accident and spill. It is important to note that this agreement in in principle and subject to the execution of definitive agreements that will include a Consent Decree with the U.S. and Gulf states with respect to the civil penalty and natural resource damages, a settlement agreement with five Gulf states with respect to state and local claims for economic and property losses, and release agreements with local government entities. Further, the Consent Decree is subject to public comment and final court approval. The Consent Decree and settlement agreement with the Gulf states are conditional upon each other and neither will become effective unless (1) there is final court approval for the Consent Decree and (2) local government entities execute releases to BP’s satisfaction. The executed agreement in principle is intended to settle all, including local claims, with up to $18.7 billion in payments to be spread over 18 years. Louisiana’s Share of the BP Settlement Agreement in Principle is $6.8 billion is comprised of the following components:

  • $5 billion for natural resource damages (includes $368 m in previously allocated early restoration), to be paid over 15 years beginning 12 months after the agreements are executed. CPRA estimates NRDA payments: 2017 - $319M, 2018 - $159M, 2019–2031 - $319M.

  • A minimum of approximately $787 million of Clean Water Act civil penalties distributed through the RESTORE Act (as illustrated above), to be paid over 15 years beginning 12 months after the agreements are executed. Louisiana’s funding amount of the RESTORE Council distributed funds has yet to be determined.

  • $1 billion for state economic damages to be paid over 15 years, beginning on [Has LFO or AG published their comments on this, yet? Not that I am aware of]. R.S. 39:91, requires the funds to be deposited into the Deepwater Horizon Economic Damages Collection Fund the allocates them as follows:

    • 45% to Budget Stabilization Fund, up to it’s cap (currently at $811 million, but will be recalculated by Treasury this Fall) (add footnote for Budget Stabilization Fund citation)

    • 45% to Medicaid Trust Fund for the Elderly RS 46:2691

    • 10% to Health Trust Fund 46:2731

    • Fund earnings allocated to higher education Act 396

xixThirty percent of the penalties ($1.56 billion) and half of all interest earned on Trust Fund investments make up the second component, the “Comprehensive Plan Component,” which is administered by the Gulf Coast Ecosystem Restoration Council (Council), a new independent Federal entity made up of the five Gulf Coast States and six Federal agencies or departments. These funds are intended to be used for projects and programs for the restoration of the Gulf Coast region, based on a comprehensive plan developed by the Council. Funds in this component will be allocated across the Gulf according to a Funded Priorities List (FPL). According to the Treasury, the amount currently available to the Council for distribution is $239 million. Funds in this component will be allocated across the Gulf according to a Funded Priorities List (FPL). CPRA estimates that Louisiana’s share is 40% or $620M. Project grants were submitted to the Council, the Council has published the FPL for review, and the public comment period closes on September 28, 2015. Projects submitted by the CPRA Board include:

West Grand Terre Beach for Engineering and Design – $7.2 million

River Reintroduction into Maurepas Swamp for Engineering and Design – $14.2 million

Biloxi Marsh Living Shoreline Engineering and Design – $3.2 million

Golden Triangle Marsh Creation – $4.3 million

Lowermost Mississippi River Management Evaluation – $16.1 million

xxThe third component of the Trust Fund distribution, the “Spill Impact Component”, also administered by the Gulf Coast Ecosystem Restoration Council, divides 30 percent among the five Gulf Coast States based on a formula to implement State Expenditure Plans, which require approval by the Council, and to be invested in projects, programs, and activities identified in an approved State Expenditure Plan. Per the Council, this is a two-phase application process. The first part of the application process is the submission of a planning State Expenditure Plan (SEP), which must be approved by the RESTORE Council Chairperson. The second part of the application process is the submission of grant application materials by the eligible entities.xxiii The grant application materials cannot be submitted until the SEP has been approved by the Chairperson. The Announcement for Spill Impact Component Planning Grants provides detailed information and requirements for both phases. Louisiana’s share, ($539.6 million), will be invested in the Coastal Master Plan, once State Funding Plan is approved.

xxiThe Centers for Excellence Research Grants Program, administered by the US Department of Treasury, will allocate the funds directly and equally to the five Gulf States for the establishment of a Gulf Coast Center of Excellence in each state. Louisiana’s share, estimated at $26 million, will be invested in the Water Institute of the Gulf, the state’s designated Center of Excellence. The Water Institute was selected through a competitive procurement process administered by CPRA. CPRA has submitted the grant to Treasury and it is currently under review. According to Treasury, the Centers of Excellence Research Grants Program currently has $4 million available for distribution to Louisiana.

xxiiSave Ourselves, Inc. et al. v. Louisiana Environmental Control Commission (452 So. 2d 1153, La. 1984)(May 14, 1984)

xxiiiAvenal, et al. v. State, 886 So 2d 1085, pp. 1101-1102 (La. 2004)(Oct. 19, 2004)

xxivAvenal, et al. v. State, 886 So 2d 1085, pp. 1101-1102 (La. 2004)(Oct. 19, 2004)

xxvAct 8 of the First Extraordinary Session of 2005

xxviAct 523 of the 2009 Regular Legislative Session

xxvii2017 Coastal Master Plan, Coastal.la.gov

xxviiiCoastal Protection and Restoration Authority Board Meeting – October 21, 2015 Resolution No. 2015-10-01

xxixBP Settlement Agreement in Principle

In July 2015, BP announced that they had reached agreements in principle to settle all federal and state civil claims arising from the Deepwater Horizon accident and spill. It is important to note that this agreement in in principle and subject to the execution of definitive agreements that will include a Consent Decree with the U.S. and Gulf states with respect to the civil penalty and natural resource damages, a settlement agreement with five Gulf states with respect to state and local claims for economic and property losses, and release agreements with local government entities. Further, the Consent Decree is subject to public comment and final court approval. The Consent Decree and settlement agreement with the Gulf states are conditional upon each other and neither will become effective unless (1) there is final court approval for the Consent Decree and (2) local government entities execute releases to BP’s satisfaction. The executed agreement in principle is intended to settle all, including local claims, with up to $18.7 billion in payments to be spread over 18 years.xxvi The $18.732 billion agreement includes the following damages and penalties for the U.S. and the five Gulf states:

  • $8.1 billion for natural resource damages (NRD): This amount includes $1 billion already allocated in the early restoration framework explained above.

  • $232 million to address unknown natural resource damages: BP will also set aside this amount at the end of the payment period to cover any further natural resources damages that are unknown at this time.

  • $5.5 billion for Clean Water Act civil penalties: These funds will be paid to the U.S. to resolve Clean Water Act civil penalties with a certain portion directed to the impacted Gulf states pursuant to the RESTORE Act subject to final approval by the RESTORE Act Council.

  • $4.9 billion for state economic losses: The funds will be paid to the impacted Gulf states to resolve their economic claims.

  • Up to $1 billion for local governmental economic losses: These funds will be paid to resolve economic claims of the vast majority of local governmental entities located in the impacted Gulf states.

  • $350 million to cover outstanding natural resource damage assessments and $250 million to cover the full settlement of outstanding response costs, False Claims Act claims, and royalties owed for the Macondo well.xxvi

The agreements do not cover the remaining costs of the 2012 class action settlements with the Plaintiff’s Steering Committee for economic and property damage and medical claims, claims by individuals and businesses that opted out of the 2012 settlements, and/or claims that were excluded from the settlements.

xxxLouisiana Legislative Fiscal Office

xxxiRS 39:99.26-44

xxxiiConst. Art. VII. § 39, 40

xxxiiiR.S. 49:214.6.3