Deepwater Horizon Settlement

Floor Speech

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Mr. FLEMING. Mr. Speaker, I rise to correct the record regarding statements made by Congresswoman McCollum (D-MN-4) during debate on the Smith (MO) Amendment Number 85 to H.R. 5538, the Department of Interior, Environment, and Related Agencies Appropriations Act, 2017.

Congresswoman McCollum claimed during amendment debate that the Smith Amendment would block $500 million from the Deepwater Horizon settlement from being paid to Gulf States by the Office of Natural Resource Disaster Assessment at the Department of Interior.

Despite Congresswoman McCollum's claims, the Smith Amendment does not have any legal effect on the Deepwater Horizon settlement.

The Smith Amendment prevents the Department of Interior from using funds to carry out this sentence of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA): ``Sums recovered by the United States Government as trustee under this subsection shall be retained by the trustee, without further appropriation, for use only to restore, replace, or acquire the equivalent of such natural resources.''

However, the Deepwater Horizon spill fell entirely under the Oil Pollution Act, and was not prosecuted under CERCLA. No fines were assessed under CERCLA.

In addition, CERCLA contains an explicit exemption for petroleum products in Section 101(14). In fact, an environmental group that filed a lawsuit against BP under CERCLA and EPCRA lost their suit because of the petroleum exemptions in those laws.

Therefore, a legal analysis by the American Law Division of the Congressional Research Service confirmed that the Smith (MO) Amendment Number 85 would have had no legal effect on the NRDA process, the RESTORE Act funds, or any other payment from the Deepwater Horizon Settlement. The RESTORE Act already appropriates money from the settlement to the states.

To quote from the CRS memorandum: ``This memorandum finds that the Amendment, if approved and then made part of enacted legislation, would not have created a legal barrier to DOI's distribution of funds from the Deepwater Horizon settlement with the federal government and the Gulf States to address natural resources damages related to the incident.''

Instead, the Smith Amendment would have prevented executive branch agencies who collect fines under CERCLA from buying more federal land that is unrelated to the CERCLA violation without any Congressional oversight. The Amendment is designed to stop executive branch abuses and overreach, which has been a common theme for the Obama Administration. Congressional Research Service, Washington, DC, July 19, 2016. Memorandum From: Adam Vann, Legislative Attorney, 7-6978 Subject: Applicability of Failed Amend. 85 of H.R. 5538 to the Authority of the Department of the Interior to Distribute Deepwater Horizon Settlement Funds to Gulf States

You have asked us to analyze the impact that a proposed Amendment to H.R. 5538, the Department of the Interior, Environment, and Related Agencies Appropriations Act, 2017, would have on the legal authority of the Department of the Interior (DOI) to allocate funds to mitigate natural resources damages caused by the 2010 Deepwater Horizon incident. The proposed Amendment, listed as Amendment 85 in a Rules Committee Report on H.R. 5538, was not adopted. The Amendment would have provided that funds made available by H.R. 5538 could not be used to carry out a specific provision in Section 107(f)(1) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). This memorandum finds that the Amendment, if approved and then made part of enacted legislation, would not have created a legal barrier to DOI's distribution of funds from the Deepwater Horizon settlement with the federal government and the Gulf States to address natural resources damages related to the incident. However, CRS is not opining on whether the Amendment would have created practical administrative difficulties that might have impeded allocation of those funds. Background

The proposed Amendment 85 to H.R. 5538 read as follows:

None of the funds made available by this Act may be used to carry out the third sentence of section 107(f)(1) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9607(f)(1)) (relating to use of recovered sums by the United States Government without further appropriation).

Section 107(f)(1) of CERCLA addresses liability for injury to, destruction of, or loss of natural resources caused by a release or threatened release of hazardous substances, and designates the United States government as a trustee empowered to receive compensation for such damages. The third sentence of Section 107(f)(1) provides that ``[s]ums recovered by the United States Government as trustee under this subsection shall be retained by the trustee, without further appropriation, for use only to restore, replace, or acquire the equivalent of such natural resources.'' This grant of federal authority to act as trustee forms the legal foundation for DOI's Natural Resource Damage Assessment and Restoration program, which allows the agency to distribute funds to assess natural resources damages, and restore, replace or acquire the equivalent of the damaged resources.

A similar authority to collect and disburse funds to address natural resource damages is found at Section 1006 of the Oil Pollution Act (OPA). That section authorizes the United States government, as designated trustee, to ``develop and implement a plan for the restoration, rehabilitation, replacement, or acquisition of the equivalent'' of natural resources damages resulting from an oil spill. Section 1006(f) authorizes maintenance of a fund ``for use only to reimburse or pay costs incurred by the trustee . . . with respect to the damaged natural resources.'' After the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, the United States and the affected Gulf States entered into a Consent Decree with BP Exploration and Production, Inc. (BP) outlining BP's liability to the United States for the incident under federal statute, including liability for natural resources damages under the relevant provisions of OPA. Pursuant to the Consent Decree, DOI was tasked with managing the designated funds for the ``restoration, rehabilitation, replacement, or acquisition of the equivalent of injured or lost Natural Resources or natural resource services as provided in one or more restoration plans.'' Discussion

Staff at DOI previously stated that the passage and enactment of Amendment 85 as part of H.R. 5538 would have constrained DOI's ability to distribute funds for natural resources damages related to the Deepwater Horizon incident, as it is authorized to do by the Consent Decree. Upon review of the text of the Amendment as well as the relevant language in CERCLA, OPA and the Consent Decree, CRS cannot find any legal limitation in the Amendment that would have barred DOI from expenditure of funds for ``restoration, rehabilitation, replacement, or acquisition of the equivalent of injured or lost Natural Resources'' in the Gulf of Mexico related to the Deepwater Horizon incident pursuant to DOI's authority under OPA and the Consent Decree. However, CRS cannot opine as to whether administrative issues (e.g., commingling of CERCLA and OPA funds in one account) may have presented barriers to distribution of such funds if DOI had been barred from distributing CERCLA natural resource damage funds by the Amendment, as representatives of DOI have reportedly claimed. Analysis of accounting and related administrative concerns at DOI is outside the scope of this memorandum.

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