Analysis - New law on BP spill fines raises stakes for Gulf states
(Reuters) - U.S. Gulf Coast states have a higher stake in the amount of money the U.S. government can wring out of BP Plc for the 2010 Deepwater Horizon oil spill due to a new law that would divert billions of dollars in potential BP fines to them.
The RESTORE Act, signed by President Barack Obama on July 6, directs that 80 percent of Clean Water Act penalties paid by BP be placed in a new trust fund for restoration efforts in the five coastal states damaged by the worst U.S. offshore oil spill: Louisiana, Alabama, Mississippi, Florida and Texas.
For Louisiana, the state hardest hit by the spill, the bill's pay day won't come until states and the U.S. government conclude a settlement with BP and its partners, or the courts weigh in on the question of whether BP was grossly negligent in the spill. BP has vehemently denied any claims of gross negligence or wilful misconduct, either of which could boost Clean Water Act fines considerably.
Without the bill, federal Clean Water Act fines would have gone straight to the US Treasury. Now, anywhere from $4 billion to $16.8 billion could flow into states' coffers.