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27 May 2008
[Federal Register: May 27, 2008 (Volume 73, Number 102)]
[Proposed Rules]
[Page 30331-30340]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27my08-18]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
Minerals Management Service
30 CFR Part 219
[Docket ID: MMS-2007-OMM-0067]
RIN 1010-AD46
Allocation and Disbursement of Royalties, Rentals, and Bonuses--
Oil and Gas, Offshore
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The MMS proposes to amend the regulations on distribution and
disbursement of royalties, rentals, and bonuses to include the
allocation and disbursement of revenues from certain leases on the Gulf
of Mexico Outer Continental Shelf in accordance with the provisions of
the Gulf of Mexico Energy Security Act of 2006. The regulations would
set forth the formula and methodology for calculating and allocating
revenues to the States of Alabama, Louisiana, Mississippi, and Texas
and their eligible political subdivisions. This proposed rule seeks to
establish and ensure that the process for implementing the Gulf of
Mexico Energy Security Act of 2006 provisions and the resulting
distribution of revenues is accurate, transparent, and fully complies
with our statutory responsibilities.
DATES: Submit comments by July 28, 2008. The MMS may not fully consider
comments received after this date.
ADDRESSES: You may submit comments on the rulemaking by any of the
following methods. Please use the Regulation Identifier Number (RIN)
1010-AD46 as an identifier in your message. See also Public
Availability of Comments under Procedural Matters.
Federal eRulemaking Portal: http://www.regulations.gov.
Under the tab ``More Search Options,'' click Advanced Docket Search,
then select ``Minerals Management Service'' from the agency drop-down
menu, then click ``submit.'' In the Docket ID column, select MMS-2007-
OMM-0067 to submit public comments and to view supporting and related
materials available for this rulemaking. Information on using
Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site's ``User Tips'' link. The
MMS will post all comments to the docket.
Mail or hand-carry comments to the Department of the
Interior; Minerals Management Service; Attention: Regulations and
Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia
20170-4817. Please reference ``Allocation and Disbursement of
Royalties, Rentals, and Bonuses--Oil and Gas, Offshore, 1010-AD46'' in
your comments and include your name and return address.
FOR FURTHER INFORMATION CONTACT: Marshall Rose, Chief, Economics
Division, Offshore Minerals Management at (703) 787-1538.
SUPPLEMENTARY INFORMATION:
Background
President George W. Bush signed the Gulf of Mexico Energy Security
Act of 2006 (GOMESA) into law on December 20, 2006 (Pub. L. No. 109-
432, 120 Stat. 2922), as part of H.R. 6111, The Tax Relief and Health
Care Act of 2006, which also extended several energy tax programs that
encourage efficiency and conservation, as well as the production and
use of renewable energy sources. With regard to the Gulf of Mexico
(GOM) Outer Continental Shelf (OCS) provisions (Division C, Title 1,
120 Stat. 3000), GOMESA:
Lifted the congressional moratorium on oil and gas leasing
and development in a portion of the Central GOM and mandates lease
sales in two areas of the GOM (the 181 Area and 181 South Area as
defined by GOMESA) notwithstanding the omission of those two areas from
any OCS leasing program under section 18 of the OCS Lands Act (43
U.S.C. 1344);
Established a moratorium through June 30, 2022 in the vast
majority of the Eastern Planning Area and a small portion of the
Central Planning Area;
Provided for the establishment of a process to exchange
existing leases in the new moratorium areas for bonus or royalty
credits that may only be used in the GOM; and
Provided for the distribution of certain OCS revenues to
the Gulf producing States of Alabama, Louisiana, Mississippi, and
Texas, and to certain coastal political subdivisions within those
States.
This proposed rule sets forth how the Department of the Interior
plans to implement the GOMESA requirements related to the distribution
of OCS revenues to the Gulf producing States and their coastal
political subdivisions.
Summary
For each of the fiscal years from 2007 through 2016, GOMESA directs
the Secretary of the Treasury to deposit 50 percent of qualified OCS
revenues--bonuses, rents, and royalties--from OCS oil and gas leases in
areas designated as the 181 Area in the Eastern Planning Area and the
181 South Area into a special account in the United States Treasury.
The GOMESA directs the Secretary of the Interior, for each of these
fiscal years, to disburse 25 percent of the revenues in the special
account to the Land and Water Conservation Fund (LWCF) and the
remaining 75 percent to the States of Alabama, Louisiana, Mississippi,
and Texas (collectively identified as the ``Gulf producing States'')
and their eligible coastal political subdivisions. The revenues are to
be allocated among the Gulf producing States based on their inverse
proportional distance from the leases in the 181 Area in the Eastern
Planning Area and the 181 South Area and in accordance with regulations
established by the Secretary of the Interior. The GOMESA also provides
that in determining the individual Gulf producing States' share of the
qualified OCS revenues, no State, irrespective of the amount
established by the application of the inverse proportional distance
formula, shall receive less than 10 percent of the revenues to be
disbursed.
The GOMESA directs the Secretary of the Interior to disburse 20
percent of the funds allocated to each Gulf producing State to
political subdivisions within the State which are located in the
State's coastal zone and are within 200 nautical miles of the
geographic center of any OCS leased tract. Revenues are allocated to
the coastal political subdivisions based on their population, miles of
coastline, and their inverse proportional distance from designated
leases in the 181 Area in the Eastern Planning Area.
Revenue Distribution of Qualified OCS Revenues Under GOMESA 2007-2016
------------------------------------------------------------------------
Percentage of
Recipient of qualified OCS revenues qualified OCS
revenues
------------------------------------------------------------------------
U.S. Treasury........................................... 50.0
Land and Water Conservation Fund........................ 12.5
[[Page 30332]]
Gulf Producing States................................... 30.0
Eligible Coastal Political Subdivisions................. 7.5
------------------------------------------------------------------------
The GOMESA requires that each Gulf producing State and coastal
political subdivision use all amounts received for one or more of the
following purposes:
Projects and activities for the purposes of coastal
protection, including conservation, coastal restoration, hurricane
protection, and infrastructure directly affected by coastal wetland
losses.
Mitigation of damage to fish, wildlife, or natural
resources.
Implementation of a Federally-approved marine, coastal, or
comprehensive conservation management plan.
Mitigation of the impact of OCS activities through the
funding of onshore infrastructure projects.
Planning assistance and administrative costs not to exceed
3 percent of the amounts received.
The GOMESA establishes a separate revenue sharing provision to be
implemented for fiscal year 2017 and thereafter. This proposed rule and
the resulting final rule will apply to the fiscal years 2007 through
2016 time period only; the later period will be addressed in a
subsequent rulemaking.
The following sections provide specific information on the
applicable GOMESA provisions and how MMS proposes to implement them.
Definitions
The MMS proposes, in some instances, to clarify the GOMESA
definitions to make them more precise and consistent with MMS's
existing leasing, financial, and accounting practices. The MMS also
proposes to include additional definitions in the rule. The definitions
we propose to add or to expand in order to clarify the meaning are
discussed below. Other terms defined in proposed Sec. 219.411 of the
regulation have the exact same definition as stated in section 102 of
GOMESA.
181 Area--adopted directly from section 102 of GOMESA.
181 Area in the Eastern Planning Area--is comprised of the area of
overlap of the two geographic areas defined in GOMESA as the ``181
Area'' and the ``Eastern Planning Area.'' A map of the ``181 Area in
the Eastern Planning Area'' can be found with publicly available
information for GOM Eastern Sale 224 at: http://www.gomr.mms.gov/
homepg/lsesale/224/egom224.html.
181 South Area--adopted from section 102 of GOMESA. Means any area
located south of the 181 Area, west of the Military Mission Line and in
the Central Planning Area. A map of the 181 South Area can be found
with the Call for Information and Nominations, Central GOM Planning
Area South of Sale 181 Area at: http://www.gomr.mms.gov/homepg/lsesale/
208/cgom208.html.
Applicable Leased Tract--The term ``applicable leased tract'' means
a tract that is subject to a lease under section 6 or 8 of the OCS
Lands Act for the purpose of drilling for, developing, and producing
oil or natural gas resources and is located fully or partially in
either the 181 Area in the Eastern Planning Area or in the 181 South
Area
Central Planning Area--adopted directly from Section 102 of GOMESA.
Coastal Political Subdivision--The term ``coastal political
subdivision'' means a political subdivision of a Gulf producing State
any part of which political subdivision is:
(a) Within the coastal zone (as defined in section 304 of the
Coastal Zone Management Act of 1972 (16 U.S.C. 1453)) of the Gulf
producing State as of December 20, 2006; and
(b) Not more than 200 nautical miles from the geographic center of
any leased tract.
The only difference between this definition and the GOMESA
definition is that GOMESA refers to political subdivisions that were
within the coastal zone of a Gulf producing State ``as of the date of
enactment of this Act.'' The definition proposed for this rule would
refer to the actual date GOMESA was enacted.
Coastline--The term ``coastline'' means the line of ordinary low
water along that portion of the coast which is in direct contact with
the open sea and the line marking the seaward limit of inland waters.
This is the definition of the coastline used in section 2 of the
Submerged Lands Act (43 U.S.C. 1301) and refers to the same line as
that established for use in the Coastal Impact Assistance Program
(CIAP) by section 384 of the Energy Policy Act of 2005 (EPAct) codified
at 43 U.S.C 1356a.
Distance--The term ``distance'' means the minimum great circle
distance.
Eastern Planning Area--adopted directly from section 102 of GOMESA.
Gulf Producing State--adopted directly from section 102 of GOMESA.
Leased Tract--The term ``leased tract'' means a tract that is
subject to a lease under section 6 or 8 of the OCS Lands Act for the
purpose of drilling for, developing, and producing oil or natural gas
resources.
Military Mission Line--adopted directly from section 102 of GOMESA.
Qualified OCS Revenues
(a) IN GENERAL--The term ``qualified OCS revenues'' means, in the
case of each of fiscal years 2007 through 2016, all rentals, royalties,
bonus bids, and other sums received by the United States from leases
entered into on or after December 20, 2006, located in:
(1) The 181 Area in the Eastern Planning Area; and
(2) the 181 South Area.
(b) For applicable leased tracts intersected by the planning area
administrative boundary line (e.g., separating the GOM Central Planning
Area from the Eastern Planning Area), only the percent of revenues
equivalent to the percent of surface acreage in the 181 Area in the
Eastern Planning Area will be considered qualified OCS revenues.
(c) Exclusions--The term ``qualified OCS revenues'' does not
include:
(1) Rental revenues or user fees credited to MMS appropriated funds
through the annual Congressional appropriations process,
(2) Revenues from the forfeiture of a bond or other surety securing
obligations other than royalties,
(3) Civil penalties, and
(4) Royalties taken by the Secretary in-kind and not sold.
The proposed definition of ``qualified OCS revenues'' includes
several variations from the GOMESA definition. First, the GOMESA
definition refers to ``leases entered into on or after the date of
enactment of this Act.'' The definition proposed for this rule would
refer to the actual date GOMESA was enacted.
Second, in paragraph (a)(1), consistent with the way MMS has
interpreted a similar CIAP provision, MMS interprets the phrase ``due
and payable to'' to mean ``received by.'' The GOMESA definition of
qualified OCS revenues refers to ``* * * all rentals, royalties, bonus
bids, and other sums due and payable to the United States * * *,''
which could imply that the revenues to be allocated to the Gulf
producing States, coastal political subdivisions, and the LWCF for a
given fiscal year would be the amounts owed by lessees for the payment
of royalties in that fiscal year, whether or not the payments were
actually received by MMS during that fiscal year. This interpretation,
however,
[[Page 30333]]
is not consistent with MMS's system of collecting and disbursing
royalty revenues.
Royalties on oil and gas produced in 1 month are due and payable by
the end of the following month, e.g., royalties on oil and gas produced
in October must be paid by the end of November. The MMS does not
calculate royalty amounts owed and bill payors; rather, MMS accepts the
amounts payors report and pay subject to subsequent audit and other
verification procedures.
Royalty payors frequently make adjustments to previous months'
royalty payments as final data become available on sales, volumes,
prices, and the amount of allowable transportation or processing
deductions. The adjustments may result in payors paying additional
royalties or, if previous royalties were overpaid, claiming a credit
against their current royalty obligation. These adjustments may not
occur until several months after the payment was originally due. As a
result, payments made in 1 fiscal year may be adjusted in a subsequent
fiscal year.
The value of these adjustments for the leases that are subject to
the GOMESA revenue sharing provisions are not expected to be
substantial and, further, will in any event, tend to balance out over
time as both positive and negative adjustments are made from 1 fiscal
year to the next. Attempting to track all the adjustments and account
for them in the revenue allocation process would be labor intensive,
prohibitively costly, and require an uneconomic use of scarce Federal
resources. Consequently, for the purposes of this rule, MMS proposes to
use all rentals, royalties, bonus bids, and other sums traditionally
received and subsequently transferred to the Treasury General Fund
Miscellaneous Receipt Account as a proxy for revenues due and payable.
With the passage of the GOMESA, qualified OCS revenues will be
deposited into the Treasury General Fund Miscellaneous Receipt Account
(50 percent Federal share) and the Treasury Special Account (50 percent
LWCF-State-CPS share).
Third, in paragraph (c)(1), to maintain consistency with all
rentals, royalties, bonus bids, and other sums traditionally received
and subsequently transferred to the Treasury General Fund Miscellaneous
Receipt Account, this definition of qualified OCS revenues excludes any
rental revenues and cost recovery user fees that may be designated by
Congress to MMS through the annual appropriations process. Since 1993,
Congress has funded a significant part of MMS' operations with a
portion of the OCS rental revenue receipts and cost recovery fees.
The fiscal year 2009 President's Budget proposed appropriation
language allocates to MMS:
* * * an amount not to exceed $133,730,000, to be credited to
this appropriation and to remain available until expended, from
additions to [rental] receipts resulting from increases to rates in
effect on August 5, 1993.
This reference to the receipts resulting from increases to rates in
effect on August 5, 1993, provides a significant share of MMS
appropriated funds. These receipts are retained by MMS to fund current
operations.
The fiscal year 2009 President's Budget adds appropriations
language confirming GOMESA qualified OCS revenues do not include
Congress' appropriation of OCS rental receipts to MMS.
Provided further, that the term ``qualified Outer Continental
Shelf revenues'', as defined in section 102(9)(A) of the Gulf of
Mexico Energy Security Act, Division C of Public Law 109-432, shall
include only the portion of rental revenues that would have been
collected at the rental rates in effect before August 5, 1993.
Additionally, payments made by owners of applicable leases for
provision of special services are collected by MMS under the authority
based on the direct cost of providing that service to the lessees, and
are not considered receipts directly emerging from a lease's revenues
themselves. These fees are collected by MMS under the authority of the
Independent Office Appropriations Act and are consistent with the
Office of Management and Budget's Circular A-25. This revenue also
provides a significant share of MMS operating funds. For these reasons,
rentals and cost recovery fees designated by Congress as part of MMS
appropriations are not included as qualified OCS revenues.
Fourth, this definition of qualified OCS revenues omits GOMESA
subparagraph Sec. 102(9)(A)(ii), that defines qualified OCS revenues
for the period 2017, and thereafter because the allocation of qualified
OCS revenues during that period will be addressed in a regulation to be
issued later.
Fifth, this definition of qualified OCS revenues omits GOMESA
subparagraph Sec. 102(9)(B)(ii) (revenues generated from leases
subject to section 8(g) of the Outer Continental Shelf Lands Act (43
U.S.C. 1337(g)) since none of the applicable (GOMESA) leased tracts are
within the so-called 8(g) zone.
Sixth, GOMESA excludes from the definition of qualified OCS
revenues, revenues from the forfeiture of a bond or other surety
securing obligations other than royalties, civil penalties, or
royalties taken by the Secretary in-kind and not sold (which would
include oil taken in-kind and transferred into the Strategic Petroleum
Reserve).
Finally, for applicable leased tracts intersected by the planning
area administrative boundary line (e.g., separating the GOM Central
Planning Area from the Eastern Planning Area), only the percentage of
revenues equal to the percentage of acreage in the 181 Area in the
Eastern Planning Area will be considered qualified OCS revenues. This
is consistent with the distribution of revenues from tracts only
partially within the 8(g) zone. When a tract is only partially within
the 8(g) zone, States receive 27 percent of a percentage of bonuses,
rents, and royalties equal to the percentage of surface acreage within
the 8(g) zone.
We believe these elements of the definitions are consistent with
the intent of the GOMESA provisions and other applicable laws. We
welcome your comments and suggestions on the definitions as proposed by
MMS.
Disposition of Qualified OCS Revenues to Gulf Producing States
For the fiscal year 2007 through fiscal year 2016, GOMESA provides
that 50 percent of qualified OCS revenues are to be placed in a special
Treasury account from which the Secretary of the Interior shall
disburse:
75 percent to the Gulf producing States (of which 20
percent would subsequently be allocated to local eligible coastal
political subdivisions); and
25 percent to provide financial assistance to States in
accordance with section 6 of the LWCF.
The GOMESA provides that qualified OCS revenues shall be allocated
to each Gulf producing State in amounts that are inversely proportional
to the respective distances between the point on the coastline of each
Gulf producing State that is closest to the geographic center of the
applicable leased tract and the geographic center of the leased tract.
Implementation of this provision requires MMS to make three key sets of
determinations:
The points that are the geographic centers of each
applicable leased tract;
The point on the coastline of each Gulf producing State
that is closest to the geographic center of each applicable leased
tract; and
The distances between the two points for each applicable
leased tract.
Although the set of States and leases involved differs between the
two
[[Page 30334]]
programs, MMS proposes to use a similar methodology to calculate the
distances between the Gulf producing States and the geographic center
of the applicable leased tracts for GOMESA as it does for CIAP.
Likewise, the formula and methodology MMS will use to calculate the
Gulf producing States' shares of qualified OCS revenues is based on
their inverse proportional distance from the applicable leased tracts,
which is the same concept employed for the CIAP.
The GOMESA provides that in determining the individual Gulf
producing States' share of the qualified OCS revenues, no State,
irrespective of the amount established by the application of the
inverse proportional distance formula, shall receive less than 10
percent of the revenues to be disbursed.
Procedures for Distance Calculations
The following information describes how MMS proposes to calculate
the distances between the Gulf producing States and coastal political
subdivisions and applicable leased tracts which would be used in the
inverse proportional distance calculations to allocate the qualified
OCS revenues.
Determination of leased tract center points--From MMS databases, we
will identify all applicable leased tracts (i.e., all blocks that were
subject to an oil and gas lease either on the first or last day of the
fiscal year) in the 181 Area located in the Eastern Planning Area and
in the 181 South Area. The MMS will calculate, by mathematical methods,
the geographic center of each leased tract in the two areas using
standard accepted mapping software (ArcGIS). The center will be that
location which provides a balancing point in two-dimensional space. If
the leased tract is intersected by the planning area administrative
boundary line (administrative boundary between the Central Planning
Area and Eastern Planning Area), MMS will use the geographic center of
the entire leased tract to calculate the inverse distance. In the
unusual case where a lease is both awarded and relinquished between the
first and last days of the same fiscal year, we count the lease
revenues but not the lease's location in applying the distribution
formula.
Determination of measurement points on State coastlines--According
to the Submerged Lands Act (43 U.S.C. 1301), the term ``coast line''
means the line of ordinary low water along that portion of the coast
which is in direct contact with the open sea and the line marking the
seaward limit of inland waters. For purposes of both international and
domestic law, the boundary line dividing the land from the ocean is
called the baseline. The baseline is determined according to principles
described in the 1958 United Nations Convention on the Territorial Sea
and the Contiguous Zone and the 1982 United Nations Convention on the
Law of the Sea (LOS Convention), and is normally the low water line
along the coast, as marked on charts officially recognized by the
coastal nation.
In the United States, the definition has been further refined based
on Federal court decisions; the U.S. baseline is the mean lower low
water line along the coast, as shown on official U.S. nautical charts.
The baseline is the set of points and connected lines, representing the
mean lower low water line in direct contact with the open sea and
marking the seaward limit of open water. The baseline is drawn across
river mouths, the opening of bays, and along the outer points of
complex coastlines. The normal baseline from which the maritime zones
are charted can be considered synonymous with the coastline as defined
by the Submerged Lands Act.
We will use the latitudinal and longitudinal data for the baseline
data points in conjunction with the leased tract center point data to
identify the points on the States' coastlines that are closest to the
geographic center of the applicable leased tracts.
Measurement of distances from States to leased tracts--Using the
data identifying the geographic centers of the applicable leased tracts
and the above described points on the States' coastlines, we will find
the nearest coastline points to each applicable leased tract by
measuring the distances between all of the appropriate data points,
using calculated coastline-to-leased tract distances, and then
determining the pairs of points with the shortest distance for each
State/applicable leased tract pair.
The EPAct requires MMS to use the great circle distance to
establish the distances between the States' coastlines and the leased
tracts in the CIAP and MMS proposes to use the great circle distance
for the GOMESA program as well. The great circle distance is the
shortest distance between any two points on the surface of the Earth
measured along a path on the surface of the Earth. Between any two
points on a sphere which are not directly opposite each other, there is
a unique great circle. The two points separate the great circle into
two arcs. The length of the shorter arc is the great circle distance
between the points.
Calculation of Gulf Producing State Revenue Allocations
The MMS will calculate each Gulf producing State's share of the
qualified OCS revenues using the following proposed procedure:
(1) For each Gulf producing State, we propose to calculate and
total, over all applicable leased tracts, the mathematical inverses of
the distances between the points on the State's coastline that are
closest to the geographic centers of the applicable leased tracts and
the geographic centers of the applicable leased tracts.
(2) For each Gulf producing State, we would divide the sum of each
State's inverse distances, from all applicable leased tracts, by the
sum of the inverse distances from all applicable leased tracts across
all four Gulf producing States. We would multiply the result by the
amount of qualified OCS revenues to be shared, as shown below. In the
formulas, IAL, ILA, IMS, and ITX represent the sum of the inverses of
the closest distances between Alabama, Louisiana, Mississippi, and
Texas and all applicable leased tracts, respectively.
Alabama Share = (IAL / (IAL + ILA + IMS + ITX)) x Qualified OCS
Revenues
Louisiana Share = (ILA / (IAL + ILA + IMS + ITX)) x Qualified OCS
Revenues
Mississippi Share = (IMS / (IAL + ILA + IMS + ITX)) x Qualified OCS
Revenues
Texas Share = (ITX / (IAL + ILA + IMS + ITX)) x Qualified OCS Revenues
The following simplified example, involving only two applicable
leased tracts, illustrates the application of the steps above in
calculating the revenue allocations for the Gulf producing States and
also demonstrates how the inverse distance formulas work to reward
those closest to the sources of revenue.
Suppose there are two applicable leased tracts (t1 and
t2 ) and that the following table represents the closest
distance from each Gulf producing State to the geographic centers of
each applicable leased tract:
[[Page 30335]]
----------------------------------------------------------------------------------------------------------------
Applicable leased tracts
----------------------------------------------------------------
t1 t2 Sum of
Gulf producing state ---------------------------------------------------------------- inverse
Distance Distance distances
(nautical Inverse (nautical Inverse
miles) distance miles) distance
----------------------------------------------------------------------------------------------------------------
Alabama......................... 50 0.0200 70 0.0143 0.0343
Louisiana....................... 90 0.0111 80 0.0125 0.0236
Mississippi..................... 70 0.0143 60 0.0167 0.0310
Texas........................... 230 0.0043 210 0.0048 0.0091
-------------------------------------------------------------------------------
All States.................. 440 0.0497 420 0.0483 0.0980
----------------------------------------------------------------------------------------------------------------
Further, suppose that fiscal year qualified OCS revenues are $96
million, $12 million of which would go to the LWCF and $36 million of
which would be allocated to the Gulf producing States. Applying the
formulas above, the $36 million would be allocated to the Gulf
producing States as shown below.
Alabama Share = (0.0343 / 0.0980) x $36 million = $12,600,000.00
Louisiana Share = (0.0236 / 0.0980) x $36 million = $8,669,387.76
Mississippi Share = (0.0310 / 0.0980) x $36 million = $11,387,755.10
Texas Share = (0.0091 / 0.0980) x $36 million = $3,342,857.14
However, because Texas' share is less than $3.6 million or 10
percent of the allocation of $36 million, we would allocate a 10
percent share to Texas and recalculate the other Gulf producing States'
shares omitting Texas and its 10 percent share from the calculation as
shown below.
Alabama Share = (0.0343 / (0.0980-0.0091)) x $32.4 million =
$12,500,787.40
Louisiana Share = (0.0236 / (0.0980-0.0091)) x $32.4 million =
$8,601,124.86
Mississippi Share = (0.0310 / (0.0980-0.0091)) x $32.4 million =
$11,298,087.74
Total = $32,400,000
Texas Share = 10% x $36 million = $3,600,000
Adding the three States' shares to the Texas' 10 percent share sums
to $36,000,000.
Payments to Coastal Political Subdivisions
The MMS will pay 20 percent of the allocable share of each Gulf
producing State to eligible coastal political subdivisions of the Gulf
producing State. The coastal political subdivisions eligible for GOMESA
funds are shown in the table below.
Coastal Political Subdivisions Eligible for a Share of Qualified OCS
Revenues Under the Gulf of Mexico Energy Security Act
------------------------------------------------------------------------
Alabama Mississippi
counties Louisiana parishes counties Texas counties
------------------------------------------------------------------------
Baldwin, Mobile Assumption, Hancock, Arkansas,
Calcasieu, Harrison, Brazoria,
Cameron, Iberia, Jackson Calhoun, Cameron,
Jefferson, Chambers,
Lafourche, Galveston,
Livingston, Harris, Jackson,
Orleans, Jefferson,
Plaquemines, St. Kenedy, Kleberg,
Bernard, St. Matagorda,
Charles, St. Nueces, Orange,
James, St. John Refugio, San
the Baptist, St. Patricio,
Martin, St. Mary, Victoria, Willacy
St. Tammany,
Tangipahoa,
Terrebonne,
Vermillion
------------------------------------------------------------------------
In the allocation of revenues among the States' coastal political
subdivisions, GOMESA refers to the CIAP provisions in EPAct that amend
section 31 of the Outer Continental Shelf Lands Act (43 U.S.C. 1356a).
Specifically, GOMESA states that the funds shall be allocated to each
coastal political subdivision in accordance with subparagraphs (B),
(C), and (E) of section 31(b)(4) of the Outer Continental Shelf Lands
Act (43 U.S.C. 1356a(b)(4)) which provides that:
``(B) FORMULA.--Of the amount paid by the Secretary to coastal
political subdivisions under subparagraph (A)--
(i) 25 percent shall be allocated to each coastal political
subdivision in the proportion that--
(I) The coastal population of the coastal political subdivision;
bears to
(II) The coastal population of all coastal political subdivisions
in the producing State;
(ii) 25 percent shall be allocated to each coastal political
subdivision in the proportion that--
(I) The number of miles of coastline of the coastal political
subdivision; bears to
(II) The number of miles of coastline of all coastal political
subdivisions in the producing State; and
(iii) 50 percent shall be allocated in amounts that are inversely
proportional to the respective distances between the points in each
coastal political subdivision that are closest to the geographic center
of each leased tract, as determined by the Secretary.
(C) EXCEPTION FOR THE STATE OF LOUISIANA.--For the purposes of
subparagraph (B)(ii), the coastline for coastal political subdivisions
in the State of Louisiana without a coastline shall be considered to be
\1/3\ the average length of the coastline of all coastal political
subdivisions with a coastline in the State of Louisiana.
* * *
(E) EXCLUSION OF CERTAIN LEASED TRACTS.--For purposes of
subparagraph (B)(iii), a leased tract or portion of a leased tract
shall be excluded if the tract or portion of a leased tract is located
in a geographic area subject to a leasing moratorium on January 1,
2005, unless the lease was in production on that date.''
We will allocate 50 percent of the funds available to the coastal
political subdivisions based on the population formula (25 percent),
coastline formula (25 percent) and (B)(i) and (ii) above. To determine
coastal political subdivision coastline lengths for calculating the
coastline length shares, we will use standard geographical information
system software (ArcGIS). To determine the population shares, we will
make our
[[Page 30336]]
allocations using the latest official U.S. Census Bureau census
population data.
We will allocate the remaining 50 percent of the funds available to
the coastal political subdivisions ((B)(iii)) by calculating and
applying the inverse proportional distance ratios in the same way we do
for allocating revenues to the Gulf producing States in this proposed
rule, except we would exclude leased tracts in the 181 South Area due
to the provisions of paragraph (E) of section 31(b)(4) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1356a(b)(4)) as amended by the
Energy Poly Act of 2005. The 181 South Area was under a moratorium as
of January 1, 2005, and no lease has ever produced in this area, thus
those tracts cannot be included in the calculations for coastal
political subdivisions in accordance with paragraph (E). In calculating
the inverse proportional distances for States, we will use applicable
leased tracts in the 181 Area in the Eastern Planning Area and in the
181 South Area. For the coastal political subdivisions, however, we
will only use applicable leased tracts in the 181 Area in the Eastern
Planning Area.
There is a slight possibility that there could be a fiscal year in
which there are no applicable leased tracts in the 181 Area in the
Eastern Planning Area, so there would be no way to allocate the 50
percent funds to coastal political subdivisions based on their inverse
proportional distances to applicable leased tracts. This would only
occur if no leasing occurred in the 181 Area in the Eastern Planning
Area or all leases awarded in this area were relinquished at some point
before 2016. In the event this situation should occur, we propose to
allocate:
50 percent of the funds based on the proportion that each
coastal political subdivision's population bears to the coastal
population of all coastal political subdivisions in the Gulf producing
State; and
50 percent of the funds based on the proportion that each
coastal political subdivision's miles of coastline bears to the number
of miles of coastline of all coastal political subdivisions in the
producing State.
We believe this proposal is fair and is the alternative that is
most consistent with the GOMESA provisions. We welcome your suggestions
and recommendations about other alternatives to allocate funds among
coastal political subdivisions if there were no applicable leased
tracts in the Sale 181 Area in the Eastern Gulf of Mexico Planning Area
in the fiscal year for which funds are being disbursed.
Bonus or Royalty Credits for Relinquished Leases
Section 104(c) of GOMESA authorizes the Secretary of the Interior
(Secretary) to issue a bonus or royalty credit for use only in the Gulf
of Mexico for the exchange of certain leases located offshore of the
State of Florida. The proposed regulations for Bonus or Royalty Credits
authorized under GOMESA can be found in the proposed rule RIN 1010-
AD44, Bonus or Royalty Credits for Relinquishing Certain Leases
Offshore, published February 1, 2008 (FR 73 6073). The statute does not
exclude these credits from being applied to bonus or royalty
obligations for leases subject to GOMESA revenue sharing provisions. To
the extent this occurs, the United States would receive less qualified
OCS revenues than if the bidders or lessees had paid in cash. It
necessarily follows that any distribution of royalty or bonus payments
to a State or coastal political subdivision would result in a
corresponding reduction from what it would have been had the entire
payment been made in cash.
The MMS projects the effect of section 104(c) on GOMESA revenue
sharing during fiscal years 2007 through 2016 to be very limited. Since
the GOMESA distribution requirements apply only to revenues derived
from new leases issued in the portion of the 181 Area located in the
Eastern Planning Area and to the 181 South Area, production, and hence
royalty, from such leases likely will not occur anytime soon. Further,
MMS allocates the portion of qualified OCS revenues paid to Gulf
producing States between those States based on an inverse distance
formula. This effect on a particular State from a reduction in a
particular bonus payment for a new lease in the subject areas, because
of use of a bonus credit, would be minimal. Finally, given the
thousands of other leases to which the credits may be applied, the
credits are more likely to be used to pay bonus and royalty obligations
on leases that are not subject to revenue sharing provisions.
Timing of Annual Disbursements to States and Coastal Political
Subdivisions
Per Section 105(c) of GOMESA, funds are required to be made
available during the fiscal year immediately following the applicable
fiscal year.
For the portion of qualified OCS revenues represented by bonuses
and rental payments, the calculation of the revenue sharing
distribution on applicable leased tracts can be finalized relatively
quickly once the computational software is operational. In the case of
the royalty portion, additional time can be expected. However, it will
likely be several years before there are any royalties paid on GOMESA
leases subject to revenue sharing during 2007-2016. Accordingly, MMS
expects that during the first few years of the 2007-2016 revenue
sharing period, before there are any producing leases, revenue sharing
funds can be distributed within the first half of the following fiscal
year.
Procedural Matters
Regulatory Planning and Review (Executive Order (E.O.) 12866)
This proposed rule is not a significant rule as determined by the
Office of Management and Budget (OMB) and is not subject to review
under E.O. 12866.
(1) This proposed rule would not have an annual effect of $100
million or more on the economy. It would not adversely affect in a
material way the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities. The GOMESA directs the Secretary to
disburse a portion of qualified OCS revenues to the Gulf producing
States, coastal political subdivisions, and the LWCF. This proposed
rule describes the formula and methodology MMS would use to allocate
the revenues among the Gulf producing States and the coastal political
subdivisions. The transfer of revenues from the Federal Government to
State and local governments would not impose additional costs on any
sector of the U.S. economy, and would not have any appreciable effect
on the National economy. Internal estimates in June 2007, made for
official budget projections, indicate that the annual transfers will
total less than the $100 million annual threshold because of the
relatively small OCS area whose bonus, rental, and royalty payments are
subject to revenue sharing.
(2) This proposed rule would not create any serious inconsistency
or otherwise interfere with an action taken or planned by another
agency. No other agency is affected by the disbursements mandated by
GOMESA.
(3) This proposed rule would not alter the budgetary effects of
entitlements, grants, user fees, or loan programs or the rights or
obligations of their recipients.
(4) This proposed rule does not raise novel legal or policy issues.
This proposed rule would merely provide formulas and methods to
implement an Act of Congress. Previously, section 8(g) of the OCS Lands
Act and section 384 of the Energy Policy Act of 2005 have provided for
the distribution of a
[[Page 30337]]
portion of OCS revenues to coastal States and local governments with
distributions under the latter statute using essentially the same
formulas and methods proposed in this rule.
Regulatory Flexibility Act
The Department of the Interior (DOI) certifies that this proposed
rule would not have a significant economic effect on a substantial
number of small entities under the Regulatory Flexibility Act (5 U.S.C.
601 et seq.). The provisions of this proposed rule specify how
qualified OCS revenues would be allocated to certain States and
eligible coastal political subdivisions. The proposed rule would have
no effect on the amount of royalties, rents, or bonuses owed by
lessees, operators, or payors regardless of size and, consequently,
would not have a significant economic effect on offshore lessees and
operators, including those classified as small businesses. Small
entities may benefit from expenditures funded by these shared revenues,
but it is not possible to estimate that effect since under the statute,
States, and political subdivisions will be receiving such revenues.
Your comments are important. The Small Business and Agriculture
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were
established to receive comments from small businesses about Federal
agency enforcement actions. The Ombudsman will annually evaluate the
enforcement activities and rate each agency's responsiveness to small
business. If you wish to comment on the actions of MMS, call 1-888-734-
3247. You may comment to the Small Business Administration without fear
of retaliation. Disciplinary action for retaliation by an MMS employee
may include suspension or termination from employment with the DOI.
Small Business Regulatory Enforcement Fairness Act
This proposed rule is not a major rule under 5 U.S.C. 804(2) of the
Small Business Regulatory Enforcement Fairness Act. This proposed rule:
a. Would not have an annual effect on the economy of $100 million
or more. The provisions of this proposed rule specify how qualified OCS
revenues would be allocated to States and coastal political
subdivisions. The proposed rule would have no effect on the amount of
royalties, rents, or bonuses owed by lessees, operators, or payors
regardless of size and, consequently, would not have a significant
adverse economic effect on offshore lessees and operators, including
those classified as small businesses. The Gulf producing States and
coastal political subdivision recipients of the revenues would likely
fund contracts that would benefit the local economies, small entities,
and the environment. These effects are projected to be less than $100
million annually.
b. Would not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, local government
agencies, or geographic regions.
c. Would not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises. The
effects, if any, of distributing revenues to the States and coastal
political subdivision are projected to be beneficial.
Unfunded Mandates Reform Act
This proposed rule would not impose an unfunded mandate on State,
local, or tribal governments or the private sector of more than $100
million per year. The proposed rule would not have a significant or
unique effect on State, local, or tribal governments or the private
sector. A statement containing the information required by the Unfunded
Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required because the
proposal is not a mandate. It merely provides the formulas and methods
to implement an allocation of revenue to certain States and eligible
coastal political subdivisions, as directed by Congress. Further, the
statute allows 3 percent of funds allocated to Gulf producing States
and coastal political subdivisions to be used for planning and
administrative activities.
Takings Implication Assessment (E.O. 12630)
Under the criteria in E.O. 12630, this proposed rule does not have
significant takings implications. The proposed rule is not a
governmental action capable of interference with constitutionally
protected property rights. A takings implication assessment is not
required.
Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this proposed rule does not have
sufficient federalism implications to warrant the preparation of a
Federalism Assessment. This proposed rule would not substantially and
directly affect the relationship between the Federal and State
governments. To the extent that State and local governments have a role
in OCS activities, this proposed rule would not affect that role,
though it may fund activities that mitigate local challenges attributed
to OCS exploration and development. A Federalism Assessment is not
required.
Civil Justice Reform (E.O. 12988)
This proposed rule complies with the requirements of E.O. 12988.
Specifically, this proposed rule:
(a) Meets the criteria of section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation; and
(b) Meets the criteria of section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
Consultation With Indian Tribes (E.O. 13175)
Under the criteria in E.O. 13175, we have evaluated this proposed
rule and determined that it has no potential effects on federally
recognized Indian tribes. There are no Indian or tribal lands in the
OCS or tribes that qualify as GOMESA revenue sharing recipients.
Paperwork Reduction Act
The proposed revisions do not contain any information collection
subject to the Paperwork Reduction Act (PRA) and does not require a
submission to OMB for review and approval under section 3507(d) of the
PRA.
National Environmental Policy Act
This proposed rule does not constitute a major Federal action
significantly affecting the quality of the human environment. The MMS
has analyzed this rule under the criteria of the National Environmental
Policy Act (NEPA) and 516 Departmental Manual 6, Appendix 10.4C(1). The
MMS completed a Categorical Exclusion Review for this action and
concluded that the rulemaking is categorically excluded from NEPA
because it involves ``issuance and modification of regulations * * *
for which the impacts are limited to administrative, economic, or
technical effects * * *.'' Therefore, preparation of an environmental
analysis or environmental impact statement will not be required.
Data Quality Act
In developing this proposed rule we did not conduct or use a study,
experiment, or survey requiring peer review under the Data Quality Act
(Pub. L. 106-554, app. C Sec. 515, 114 Stat. 2763, 2763A-153-154).
Effects on the Energy Supply (E.O. 13211)
This proposed rule is not a significant energy action under the
definition in
[[Page 30338]]
E.O. 13211. A Statement of Energy Effects is not required.
Clarity of This Regulation
We are required by E.O. 12866, E.O.12988, and by the Presidential
Memorandum of June 1, 1998, to write all rules in plain language. This
means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us
comments by any of the methods listed in the ADDRESSES section. To
better help us revise the rule, your comments should be as specific as
possible. For example, you should tell us the numbers of the sections
or paragraphs that you find unclear, which sections or sentences are
too long, the sections where you feel lists or tables would be useful,
etc.
Public Availability of Comments
Before including your address, phone number, e-mail address, or
other personal identifying information in your comment, you should be
aware that your entire comment--including your personal identifying
information--may be made publicly available at any time. While you can
ask us in your comment to withhold your personal identifying
information from public review, we cannot guarantee that we will be
able to do so.
List of Subjects in 30 CFR Part 219
Government contracts, Indian--lands, Mineral royalties, Oil and gas
exploration, Public lands--mineral resources.
Dated: March 25, 2008.
C. Stephen Allred,
Assistant Secretary--Land and Minerals Management.
For the reasons stated in the preamble, the Minerals Management
Service (MMS) proposes to amend 30 CFR part 219 as follows:
PART 219--DISTRIBUTION AND DISBURSEMENT OF ROYALTIES, RENTALS, AND
BONUSES
1. The authority citation for part 219 is revised to read as
follows:
Authority: Section 104, Pub. L. 97-451, 96 Stat. 2451 (30 U.S.C.
1714), Pub. L. No. 109-432, Div C, Title I, 120 Stat. 3000.
2. Amend part 219 by adding a new Subpart D--Oil and Gas, Offshore,
to read as follows:
Subpart D--Oil and Gas, Offshore
Sec.
219.410 What does this subpart contain?
219.411 What definitions apply to this subpart?
219.412 How will the qualified OCS revenues be divided?
219.413 How will the coastal political subdivisions of Gulf
producing States share in the qualified OCS revenues?
219.414 How will MMS determine each Gulf producing State's share of
the qualified OCS Revenues?
219.415 How will bonuses and royalty credits effect revenues
allocated to Gulf producing States?
219.416 How will the qualified OCS revenues be allocated to coastal
political subdivisions within the Gulf producing States?
219.417 How will MMS disburse qualified OCS revenues to the coastal
political subdivisions if, during any fiscal year, there are no
applicable leased tracts in the 181 Area in the Eastern Gulf of
Mexico Planning Area?
219.418 When will funds be disbursed to Gulf producing States and
eligible coastal political subdivisions?
Sec. 219.410 What does this subpart contain?
The Gulf of Mexico Energy Security Act of 2006 directs the
Secretary of the Interior to disburse a portion of the rentals,
royalties, bonus, and other sums derived from certain Outer Continental
Shelf (OCS) leases in the Gulf of Mexico to the States of Alabama,
Louisiana, Mississippi, and Texas (collectively identified as the Gulf
producing States); to eligible coastal political subdivisions within
those States; and to the Land and Water Conservation Fund. This subpart
sets forth the formula and methodology MMS will use to determine the
amount of revenues to be disbursed and the amount to be allocated to
each Gulf producing State and each eligible coastal political
subdivision.
Sec. 219.411 What definitions apply to this subpart?
Terms in this subpart have the following meaning:
181 Area means the area identified in map 15, page 58, of the
Proposed Final Outer Continental Shelf Oil and Gas Leasing Program for
1997-2002, dated August 1996, of the Minerals Management Service,
available in the Office of the Director of the Minerals Management
Service, excluding the area offered in OCS Lease Sale 181, held on
December 5, 2001.
181 Area in the Eastern Planning Area is comprised of the area of
overlap of the two geographic areas defined as the ``181 Area'' and the
``Eastern Planning Area''.
181 South Area means any area--
(1) located--
(i) south of the 181 Area;
(ii) West of the Military Mission Line; and
(iii) in the Central Planning Area;
(2) excluded from the Proposed Final Outer Continental Shelf Oil
and Gas Leasing Program for 1997-2002, dated August 1996, of the
Minerals Management Service; and
(3) Included in the areas considered for oil and gas leasing, as
identified in map 8, page 37 of the document entitled ``Draft Proposed
Program Outer Continental Shelf Oil and Gas Leasing Program 2007-
2012'', dated February 2006.
Applicable Leased Tract means a tract that is subject to a lease
under section 6 or 8 of the Outer Continental Shelf Lands Act for the
purpose of drilling for, developing, and producing oil or natural gas
resources and is located fully or partially in either the 181 Area in
the Eastern Planning Area or in the 181 South Area.
Central Planning Area means the Central Gulf of Mexico Planning
Area of the outer Continental Shelf, as designated in the document
entitled ``Draft Proposed Program Outer Continental Shelf Oil and Gas
Leasing Program 2007-2012'', dated February 2006.
Coastal political subdivision means a political subdivision of a
Gulf producing State any part of which political subdivision is--
(1) Within the coastal zone (as defined in section 304 of the
Coastal Zone Management Act of 1972 (16 U.S.C. 1453)) of the Gulf
producing State as of December 20, 2006; and
(2) Not more than 200 nautical miles from the geographic center of
any leased tract.
Coastline means the line of ordinary low water along that portion
of the coast which is in direct contact with the open sea and the line
marking the seaward limit of inland waters. This is the same definition
used in section 2 of the Submerged Lands Act (43 U.S.C. 1301).
Distance means the minimum great circle distance.
Eastern Planning Area means the Eastern Gulf of Mexico Planning
Area of the Outer Continental Shelf, as designated in the document
entitled ``Draft Proposed Program Outer Continental Shelf Oil and Gas
Leasing Program 2007-2012'', dated February 2006.
Gulf Producing State means each of the States of Alabama,
Louisiana, Mississippi, and Texas.
[[Page 30339]]
Leased Tract means any tract that is subject to a lease under
section 6 or 8 of the Outer Continental Shelf Lands Act for the purpose
of drilling for, developing, and producing oil or natural gas
resources.
Military Mission Line means the north-south line at 86[deg]41' W.
longitude.
Qualified OCS Revenues--
(1) The term ``qualified OCS revenues'' means, in the case of each
of fiscal years 2007 through 2016, all rentals, royalties, bonus bids,
and other sums received by the United States from leases entered into
on or after December 20, 2006, located:
(i) In the 181 Area in the Eastern Planning Area; and
(ii) In the 181 South Area.
(2) For applicable leased tracts intersected by the planning area
administrative boundary line (e.g., separating the GOM Central Planning
Area from the Eastern Planning Area), only the percent of revenues
equivalent to the percent of surface acreage in the 181 Area in the
Eastern Planning Area will be considered qualified OCS revenues.
(3) Exclusions to the term ``qualified OCS revenues'' include:
(i) Rental revenues or user fees credited to MMS appropriated funds
through the annual Congressional appropriations process;
(ii) Revenues from the forfeiture of a bond or other surety
securing obligations other than royalties;
(iii) Civil penalties; and
(iv) Royalties taken by the Secretary in-kind and not sold.
Sec. 219.412 How will the qualified OCS revenues be divided?
For each of the fiscal years 2007 through 2016, 50 percent of the
qualified OCS revenues will be placed in a special United States
Treasury account from which 75 percent of the revenues will be
disbursed to the Gulf producing States and 25 percent will be disbursed
to the Land and Water Conservation Fund. Each Gulf producing State will
receive at least 10 percent of the qualified OCS revenues available for
allocation to the Gulf producing States each fiscal year.
Revenue Distribution of Qualified OCS Revenues Under GOMESA
------------------------------------------------------------------------
Percentage of
Recipient of qualified OCS revenues qualified OCS
revenues
------------------------------------------------------------------------
U.S. Treasury.......................................... 50
Land and Water Conservation Fund....................... 12.5
Gulf Producing States.................................. 30
Eligible Coastal Political Subdivisions................ 7.5
------------------------------------------------------------------------
Sec. 219.413 How will the coastal political subdivisions of the Gulf
producing States share in the qualified OCS revenues?
Of the revenues allocated to a Gulf producing State, 20 percent
will be distributed to the coastal political subdivisions within that
State.
Sec. 219.414 How will MMS determine each Gulf producing State's share
of the qualified OCS revenues?
(a) The MMS will determine the geographic centers of each
applicable leased tract and, using the great circle distance method,
will determine the closest distance from the geographic centers of each
applicable leased tract to each Gulf producing State's coastline.
(b) Based on these distances, we will calculate the qualified OCS
revenues to be disbursed to each Gulf producing State using the
following proposed procedure:
(1) For each Gulf producing State, we will calculate and total,
over all applicable leased tracts, the mathematical inverses of the
distances between the points on the State's coastline that are closest
to the geographic centers of the applicable leased tracts and the
geographic centers of the applicable leased tracts. For applicable
leased tracts intersected by the planning area administrative boundary
line, the geographic center used for the inverse distance determination
will be the geographic center of the entire lease as if it were not
intersected.
(2) For each Gulf producing State, we would divide the sum of each
State's inverse distances, from all applicable leased tracts, by the
sum of the inverse distances from all applicable leased tracts across
all four Gulf producing States. We would multiply the result by the
amount of qualified OCS revenues to be shared, as shown below. In the
formulas, IAL, ILA, IMS, and ITX represent the sum of the inverses of
the closest distances between Alabama, Louisiana, Mississippi, and
Texas and all applicable leased tracts, respectively.
Alabama Share = (IAL / (IAL + ILA + IMS + ITX)) x Qualified OCS
Revenues
Louisiana Share = (ILA / (IAL + ILA + IMS + ITX)) x Qualified OCS
Revenues
Mississippi Share = (IMS / (IAL + ILA + IMS + ITX)) x Qualified OCS
Revenues
Texas Share = (ITX / (IAL + ILA + IMS + ITX)) x Qualified OCS Revenues
(3) If in any fiscal year, this calculation results in less than a
10 percent allocation of the qualified OCS revenues to any Gulf
producing State, we will recalculate the distribution. We will allocate
10 percent of the qualified OCS revenues to the State and recalculate
the other States' shares of the remaining qualified OCS revenues
omitting the State receiving the 10 percent minimum share and its 10
percent share from the calculation.
Sec. 219.415 How will the use of bonus and royalty credits effect
revenue allocation to Gulf producing States?
If bonus and royalty credits issued under Section 104(c) of the
Gulf of Mexico Energy Security Act are used to pay bonuses or royalties
on leases in the 181 Area located in the Eastern Planning Area and the
181 South Area, then there will be a corresponding reduction in
qualified OCS revenues available for distribution.
Sec. 219.416 How will the qualified OCS revenues be allocated to
coastal political subdivisions within the Gulf producing States?
The MMS will disburse funds to the coastal political subdivisions
in accordance with the following criteria:
(a) Twenty-five percent of the qualified OCS revenues will be
allocated to a Coastal producing State's coastal political subdivisions
in the proportion that each coastal political subdivision's population
bears to the population of all coastal political subdivisions in the
producing State;
(b) Twenty-five percent of the qualified OCS revenues will be
allocated to a Coastal producing State's coastal political subdivisions
in the proportion that each coastal political subdivision's miles of
coastline bears to the number of miles of coastline of all coastal
political subdivisions in the producing State. Except that, for the
State of Louisiana, proxy coastline lengths for coastal political
subdivisions without a coastline will be considered to be one-third the
average length of the coastline of all political subdivisions within
Louisiana having a coastline.
(c) Fifty percent of the revenues will be allocated to a Coastal
producing State's coastal political subdivisions in amounts that are
inversely proportional to the respective distances between the
geographic center of each applicable leased tract and the point in each
coastal political subdivision that is
[[Page 30340]]
closest to the geographic center of each applicable leased tract.
Except that, an applicable leased tract will be excluded from this
calculation if any portion of the tract is located in a geographic area
that was subject to a leasing moratorium on January 1, 2005, unless the
leased tract was in production on that date.
Sec. 219.417 How will MMS disburse qualified OCS revenues to the
coastal political subdivisions if, during any fiscal year, there are no
applicable leased tracts in the 181 Area in the Eastern Gulf of Mexico
Planning Area?
If, during any fiscal year, there are no applicable leased tracts
in the 181 Area in the Eastern Gulf of Mexico Planning Area, MMS will
disburse funds to the coastal political subdivisions in accordance with
the following criteria:
(a) Fifty percent of the revenues will be allocated to a Coastal
producing State's coastal political subdivisions in the proportion that
each coastal political subdivision's population bears to the population
of all coastal political subdivisions in the State; and
(b) Fifty percent of the revenues will be allocated to a Coastal
producing State's coastal political subdivisions in the proportion that
each coastal political subdivision's miles of coastline bears to the
number of miles of coastline of all coastal political subdivisions in
the State. Except that, for the State of Louisiana, proxy coastline
lengths for coastal political subdivisions without a coastline will be
considered to be \1/3\ the average length of the coastline of all
political subdivisions within Louisiana having a coastline.
Sec. 219.418 When will funds be disbursed to Gulf producing States
and eligible coastal political subdivisions?
The MMS will disburse allocated funds in the fiscal year after MMS
collects the qualified OCS revenues. For example, MMS will disburse
funds in fiscal year 2010 from the qualified OCS revenues collected
during fiscal year 2009.
[FR Doc. E8-11709 Filed 5-23-08; 8:45 am]
BILLING CODE 4310-MR-P