Allocation and Disbursement of Royalties, Rentals, and Bonuses-Oil and Gas, Offshore, 81454-81463 [2015-32787]

Agencies

• DEPARTMENT OF THE INTERIOR
• Office of Natural Resources Revenue
• Bureau of Ocean Energy Management

[Federal Register Volume 80, Number 250 (Wednesday, December 30, 2015)]
[Rules and Regulations]
[Pages 81454-81463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32787]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Part 519

RIN 1010-AD65

Office of Natural Resources Revenue

30 CFR Part 1219

[Docket ID: ONRR-2011-0024; DS63610000 DR2PS0000.CH7000 156D0102R2]
RIN 1012-AA11


Allocation and Disbursement of Royalties, Rentals, and Bonuses--
Oil and Gas, Offshore

AGENCY: Bureau of Ocean Energy Management and Office of Natural 
Resources Revenue, Interior.

ACTION: Final rule.

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SUMMARY: In this final rule, the Department of the Interior moves the 
Gulf of Mexico Energy Security Act of 2006's Phase I regulations from 
the Bureau of Ocean Energy Management's (BOEM) title 30 of the Code of 
Federal Regulations (CFR) chapter V to the Office of Natural Resources 
Revenue's (ONRR) title 30 CFR chapter XII and clarifies and adds minor 
definition changes to these current revenue-

[[Page 81455]]

sharing regulations. Additionally, ONRR amends these regulations 
concerning the distribution and disbursement of qualified revenues from 
certain leases on the Gulf of Mexico's Outer Continental Shelf, under 
the provisions of the Gulf of Mexico Energy Security Act of 2006. These 
regulations set forth formulas and methodologies for calculating and 
allocating revenues to the States of Alabama, Louisiana, Mississippi, 
and Texas; their eligible coastal political subdivisions; the Land and 
Water Conservation Fund; and the United States Treasury.

DATES: Effective: January 29, 2016.

FOR FURTHER INFORMATION CONTACT: For questions, contact Karen Osborne, 
Supervisory Management & Program Analyst, Office of the Deputy 
Director, ONRR, at karen.osborne@onrr.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    President George W. Bush signed the Gulf of Mexico Energy Security 
Act of 2006 (GOMESA or Act) into law on December 20, 2006 (Pub. L. 109-
432, 120 Stat. 2922; 43 U.S.C. 1331 note), as part of H.R. 6111, The 
Tax Relief and Health Care Act of 2006. With regard to the Gulf of 
Mexico (GOM) Outer Continental Shelf (OCS) provisions (Division C, 
Title 1, 120 Stat. 3000), GOMESA:
     Provided for sharing of leasing revenues with Gulf 
producing States, coastal political subdivisions (CPSs) within those 
States, and the Land and Water Conservation Fund (LWCF), for coastal 
protection, conservation, and restoration projects.
     Lifted the congressional moratorium on oil and gas leasing 
and development in a portion of the Eastern and Central GOM.
     Mandated lease sales for 8.3 million acres in the Eastern 
and Central GOM, including 5.8 million acres in the Central GOM 
previously under Congressional moratoria.
     Barred, until June 30, 2022, oil and gas leasing within 
125 miles of the Florida coastline in the Eastern Planning Area, and 
100 miles of the Florida coastline in the Central Planning Area, as 
well as in all areas in the GOM east of the Military Mission Line 
(86[deg]41' W. longitude).
     Established a process for lessees to exchange with the 
Federal Government certain existing leases in moratorium areas for 
bonus or royalty credits to use on other GOM leases.
    This final rule sets forth the Department of the Interior's (DOI, 
hereafter ``We'') plan to implement the second phase of GOMESA revenue 
sharing in fiscal year 2017 and beyond. In addition, we add several 
clarifications and conforming modifications to the GOMESA Phase I 
revenue-sharing regulations, currently available in BOEM's regulations 
at part 519, subpart D, of 30 CFR chapter V. We add these changes to 
differentiate between the two GOMESA revenue-sharing phases. We also 
move the Phase I regulations from 30 CFR chapter V, part 519, subpart 
D, to ONRR's regulations at 30 CFR chapter XII.
    We published a final rule (73 FR 78622, December 23, 2008) in the 
Federal Register on the allocation and disbursement of qualified 
revenues from two designated areas in the Gulf of Mexico, known as the 
181 Area in the Eastern Planning Area and the 181 South Area. That 
final rule addressed such allocation and disbursement for each of 
fiscal years 2007 through 2016, to which we refer as ``GOMESA Phase I'' 
revenue sharing. You can find depictions of the 181 Area and the 181 
South Area on the map available at www.boem.gov/Map-Gallery. The 
majority of this new final rule covers revenue sharing from the 181 
Area, the 181 South Area, and the 2002-2007 Planning Area subject to 
GOMESA--for fiscal year 2017 and thereafter--to which we refer as 
``GOMESA Phase II'' revenue sharing. To avoid confusion between the two 
GOMESA revenue-sharing phases, we are adding a new subpart E in the 
regulations for GOMESA Phase II. The differences between GOMESA Phase I 
and Phase II include the calculation methodology, revenue-sharing 
areas, and the imposition of a cap on shared revenues in Phase II. 
Moving the GOMESA Phase I regulations to 30 CFR chapter XII and 
modifying the definitions does not change the existing revenue-sharing 
methodology applicable to GOMESA Phase I.
    We have drawn on the experience that we gained during the first few 
years of GOMESA Phase I revenue sharing, along with comments and 
questions that we received, to refine the definitions. We have worked 
to eliminate any uncertainty, consistent with the Secretary's authority 
under GOMESA.
    For each of the fiscal years 2017 and thereafter, GOMESA directs 
the Secretary of the Interior to deposit 50 percent of qualified OCS 
revenues (Phase II) that we receive on or after October 1, 2016, from 
certain OCS oil and gas leases in the 181 Area, the 181 South Area, and 
the 2002-2007 Planning Area, into a special account in the U.S. 
Treasury. From that account, we distribute 25 percent of the qualified 
revenues to the LWCF and distribute the remaining 75 percent to the 
States of Alabama, Louisiana, Mississippi, and Texas (which we 
collectively identify as the ``Gulf producing States'') and their 
eligible CPSs. Under GOMESA Phase II, we share the revenues from leases 
that the Department issued on or after December 20, 2006, in the 181 
Area, the 181 South Area, and the 2002-2007 Planning Area. You can find 
the definition of these Phase II revenue-sharing areas in Section 102 
of GOMESA, and you can also locate them on the map available at 
www.boem.gov/Map-Gallery.
    We allocate the GOMESA Phase II qualified OCS revenues among the 
Gulf producing States based upon proportional inverse distance 
calculations from applicable leased tracts (Phase II) in the 181 Area 
and the 181 South Area, as well as historical lease sites in the 2002-
2007 Planning Area, in accordance with GOMESA. The result of this 
inverse distance calculation is that States closest to the most 
applicable leased tracts (Phase II)--as well as historical lease 
sites--will receive the greatest share of revenues. In determining each 
individual Gulf producing State's share of the GOMESA Phase II 
qualified OCS revenues, GOMESA provides that no State receives less 
than 10 percent of the revenues that we disburse to the Gulf producing 
States, regardless of the amount that the application of the 
proportional inverse distance formula establishes. Additionally, the 
shared revenues from certain GOMESA Phase II areas are subject to a cap 
of $500 million for each of fiscal years 2016 through 2055.
    The CPSs located in the States' coastal zone and within 200 
nautical miles of the geographic center of any OCS leased tract receive 
20 percent of the qualified OCS revenues (Phase II) that GOMESA 
allocates to the State. We allocate revenues to the CPSs based upon 
their in-State relative population, coastline length, and proportional 
inverse distance from applicable leased tracts (Phase II) in the 181 
Area and historical lease sites in the 2002-2007 Planning Area.
    There are a few substantive differences between GOMESA Phase I and 
Phase II revenue sharing. First, the GOM acreage and resulting 
qualified revenues will be greater in GOMESA Phase II because Phase II 
acreage consists of the entire 181 Area, the 181 South Area, and the 
2002-2007 Planning Area, whereas Phase I acreage consists of only the 
181 Area in the Eastern Planning Area and the 181 South Area. Second, 
GOMESA Phase II requires that the proportional inverse

[[Page 81456]]

distance calculations be from both applicable leased tracts in the 181 
Area and the 181 South Area and historical lease sites in the 2002-2007 
Planning Area, rather than only from applicable leased tracts. 
Additionally, under GOMESA Phase II, we must update the group of 
historical lease sites in the 2002-2007 Planning Area once every five 
years. The result of the five-year periods between updates is that each 
Gulf producing State's subset of inverse distances to historical lease 
sites remains static for five years following each update. Third, 
GOMESA Phase I ends with the disbursement of fiscal year 2016 qualified 
OCS revenues. GOMESA Phase II begins with the disbursement of fiscal 
year 2017 qualified OCS revenues. Fourth, for Phase II, GOMESA directs 
a $500 million annual cap on the majority of shared revenues, which 
equates to a $375 million annual cap among the four Gulf producing 
States and their eligible CPSs, and a $125 million annual cap to the 
LWCF for each of fiscal years 2016 through 2055.

Revenues Shared Under GOMESA Phase II

    Qualified OCS revenues under GOMESA Phase II are revenues from 
leases that the Department issued after the passage of GOMESA (December 
20, 2006) in the 181 Area, the 181 South Area, and the 2002-2007 
Planning Area, as GOMESA delineates.

Excluded Acreage

    Selected acreage in the De Soto Canyon Protraction Area does not 
fall within the 181 Area, the 181 South Area, or the 2002-2007 Planning 
Area, as defined by GOMESA. You can locate the 21 blocks in the De Soto 
Canyon Protraction area bordering the Eastern Planning Area and not 
covered under GOMESA on the ``Call for Information and Nominations Map, 
Central Planning Area Lease Sale 213,'' available at www.boem.gov/Oil-and-Gas-Energy-Program/Leasing/Regional-Leasing/Gulf-of-Mexico-Region/Lease-Sales/213/index.aspx.

II. Comments on the Proposed Amendments

    ONRR and BOEM published the proposed rule on March 31, 2014 (79 FR 
17948), with a 60-day comment period. We received two comment letters 
on the proposed rule: One from a Gulf producing State, and one from a 
coastal political subdivision. We have analyzed the comments contained 
in the letters and discuss them below:

Specific Comments on 30 CFR Part 1219--Subpart E--Offshore Oil and Gas, 
GOMESA Phase II Revenue Sharing

(1) Definition of ``Qualified Outer Continental Shelf Revenues'' 
(Section 1219.511)
    (a) Public Comment: Jefferson Parish, Louisiana, commented that the 
exclusion in the proposed regulation of (1) user fees and (2) lease 
revenues explicitly excluded from GOMESA revenue sharing by statute or 
appropriations law is contrary to GOMESA's requirements.
    ONRR Response: As we discussed in the preamble of the proposed 
rule, the definition of ``qualified Outer Continental Shelf revenues 
(Phase II)'' is consistent with the regulations that we published for 
GOMESA Phase I revenue sharing (RIN 1010-AD46). In addition, this 
definition is consistent with other laws that appropriate OCS leasing 
revenues and fees by excluding any leasing revenues and fees that 
Congress may authorize DOI to retain in appropriations legislation or 
that are otherwise precluded from GOMESA revenue sharing.
    Beginning in Fiscal Year 2009, the Appropriations Acts for the 
Department of the Interior have contained language that excludes 
certain rental receipts from GOMESA qualified OCS revenues, which 
Congress has appropriated to fund certain Departmental operations. 
Appropriations legislation for Fiscal Year 2012 made that exclusion 
permanent.
    Additionally, we collect fees for cost recovery of special 
services, such as the transfer of a record title, based on the cost of 
providing those services. We collect these fees under the authority of 
the Independent Offices Appropriations Act (31 U.S.C. 9701) and the 
Office of Management and Budget's Circular A-25. We do not derive these 
fees from the lease. For these reasons, Congress designates such fees 
as part of the Department's appropriation, and they do not qualify as 
qualified OCS revenues under GOMESA. See Pub. L. 111-88, October 30, 
2009.
    (b) Public Comment: The State of Louisiana commented that we should 
revise the definition of qualified OCS revenues to include all funds 
due and payable to the United States, rather than only funds that ONRR 
receives. Louisiana expressed concern that including only funds 
received as qualified OCS revenues suggests that the United States (and 
therefore the Gulf-producing States and their CPSs) may not receive 
monies owed, and that ONRR may be perceived as having no obligation to 
collect monies owed.
    ONRR Response: ONRR's mission is ``to collect, disburse and verify 
Federal and Indian energy and other natural resource revenues on behalf 
of all Americans.'' The Secretary entrusts ONRR with a fiduciary role, 
and we ensure timely receipt of all revenues that payors owe. All 
qualified rentals, royalties, bonus bids, and other sums that ONRR 
receives within a fiscal year and subsequently transfers to the 
appropriate receipt account establish the amount of revenues due and 
payable for that fiscal year. We believe that this definition is 
consistent with the intent of the GOMESA provisions and other 
applicable laws.
(2) GOMESA $500,000,000 Cap and ONRR Disbursement of Qualified OCS 
Revenues (Phase II) (Section 1219.512)
    Public Comments: Jefferson Parish, Louisiana, commented that it is 
concerned with what it believes is an arbitrary annual cap of five 
hundred million dollars ($500,000,000.00) per year.
    The State of Louisiana requested that States and their CPSs be 
allowed to direct all or a specified portion of their payments directly 
to a trustee.
    ONRR Response: GOMESA is explicit about the annual cap. GOMESA 
states that, for each of fiscal years 2016 through 2055, the total 
amount that the Department shares with the States, CPSs, and the LWCF 
cannot exceed $500,000,000 annually. ONRR does not have the authority 
to alter the application of the cap.
    GOMESA specifically enumerates the four States, CPSs, and the LWCF 
as the recipients of GOMESA revenue-sharing funds. ONRR's standard 
practice is to disburse revenue-sharing funds to the Government entity 
with which the Department shares the revenues. In order to maintain 
consistency between this standard practice and the revenue sharing 
under GOMESA, ONRR will disburse revenues to the States, CPSs, and the 
LWCF, and not directly to trustees.
(3) ONRR Allocates the Qualified OCS Revenues (Phase II) to Coastal 
Political Subdivisions Within the Gulf Producing States (Section 
1219.514)
    Public Comment: Jefferson Parish, Louisiana, commented that the 
portion of the allocation formula based upon proportionate coastline 
lengths for CPSs in Louisiana results in an inequity for Jefferson 
Parish, since parishes without a coastline in Louisiana receive greater 
allocations than Jefferson Parish, which has a coastline.
    ONRR Response: GOMESA specifically states in Section

[[Page 81457]]

105(b)(3)(B) that allocations to coastal political subdivisions will be 
made in accordance with paragraphs (B), (C), and (E) of section 
31(b)(4) of the OCSLA. Paragraph (B) specifies that 25 percent of the 
allocation be based on the number of miles of coastline a CPS has in 
proportion to the total number of miles of coastline of all CPSs within 
each State. For the State of Louisiana, paragraph (C) specifies a proxy 
coastline length for CPSs without a coastline. GOMESA does not provide 
an option to adjust the coastline length of any CPSs in Louisiana that 
have a coastline shorter than the proxy coastline length. Although 
Jefferson Parish does receive a smaller portion of revenues relative to 
CPSs without a coastline, GOMESA does not provide the Department with 
the authority to address this issue without a legislative change.
(4) ONRR Disbursement of Funds to Gulf Producing States and Eligible 
Coastal Political Subdivisions (Section 1219.516)
    Public Comment: The State of Louisiana commented that we should 
make the disbursement of allocated funds as quickly as practicable, but 
not later than March 31st of the year following the fiscal year of 
qualified OCS revenues.
    ONRR Response: ONRR intends to disburse funds as quickly as 
practicable, but we cannot guarantee that we will do so before March 
31st of the following fiscal year. GOMESA requires that ONRR disburse 
funds within the following fiscal year--or by September 30th. ONRR's 
intent is to make the disbursements as soon as possible, but the 
disbursements may depend on factors outside of ONRR's authority. ONRR 
has modified the final rule to include language that states that we 
will disburse as soon as authorized and practicable each year.
    This final rule also makes non-substantive technical or clarifying 
changes to the proposed rule. In the interim, between development of 
the proposed rule and the final rule, we made a technical update in 
Sec.  1219.102 due to the United States Department of the Treasury 
disbursing monies only by Electronic Funds Transfer (EFT).

III. Procedural Matters

Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order (E.O.) 12866 provides that the Office of 
Information and Regulatory Affairs (OIRA) of the Office of Management 
and Budget (OMB) will review all significant rulemakings. OIRA 
determined that this rule is not significant.
    Executive Order 13563 reaffirms the principles of E.O. 12866, while 
calling for improvements in the Nation's regulatory system to promote 
predictability; to reduce uncertainty; and to use the best, most 
innovative, and least burdensome tools for achieving regulatory ends. 
E.O. 13563 directs agencies to consider regulatory approaches that 
reduce burdens and maintain flexibility and freedom of choice for the 
public where these approaches are relevant, feasible, and consistent 
with regulatory objectives. E.O. 13563 emphasizes further that 
regulations must be based on the best available science and that the 
rulemaking process must allow for public participation and an open 
exchange of ideas. We have developed this rule in a manner consistent 
with these requirements.

Regulatory Flexibility Act

    DOI certifies that this rule will 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.). This rule specifies the 
formulas and methodologies for distributing DOI-collected shared 
revenues to the qualified Gulf producing States, their CPSs, and the 
LWCF. This rule has no effect on the amount of royalties, rents, or 
bonuses that lessees, operators, or payors owe, regardless of size and, 
consequently, does not have a significant economic effect on offshore 
lessees or operators, including those classified as small businesses. 
Small entities may be the beneficiaries of contracts that GOMESA 
revenues fund and that Gulf producing States or CPSs manage for coastal 
protection, conservation, or restoration services, but that is solely 
at the local government entity's discretion rather than the Federal 
Government's discretion. It is not possible to estimate GOMESA's 
ultimate effect on small entities since, under the statute, States and 
CPSs will be the entities disbursing the shared revenues for one or 
more of the five GOMESA-authorized uses.

Small Business Regulatory Enforcement Fairness Act

    This rulemaking is not a major rule under 5 U.S.C. 801 et seq. of 
the Small Business Regulatory Enforcement Fairness Act. This rule:
    (a) Does not have an annual effect on the economy of $100 million 
or more. This rule's provisions specify how we will allocate qualified 
OCS revenues to States and CPSs during the second phase of GOMESA 
revenue sharing. This rule has no effect on the amount of royalties, 
rents, or bonuses that lessees, operators, or payors owe, regardless of 
size and, consequently, does not have a significant adverse economic 
effect on offshore lessees or operators, including those classified as 
small businesses. The Gulf producing States and CPS recipients of the 
revenues will likely fund contracts that will benefit the local 
economies, small entities, and the environment. We believe that these 
annual effects will be less than $100 million.
    (b) Does not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, local government 
agencies, or geographic regions.
    (c) Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
United States-based enterprises to compete with foreign-based 
enterprises. We project that the effects, if any, of distributing 
revenues to the States and CPSs, will be beneficial.

Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
Tribal governments or the private sector of more than $100 million per 
year. This rule does not have a significant or unique effect on State, 
local, or Tribal governments or the private sector. We are not required 
to provide a statement containing the information that the Unfunded 
Mandates Reform Act (2 U.S.C. 1501 et seq.) requires because this rule 
is not a mandate. This rule merely provides the formulas and methods to 
implement an allocation of revenue to certain States and eligible CPSs, 
as Congress directed.

Takings (E.O. 12630)

    Under the criteria in section 2 of E.O. 12630, this rule does not 
have significant takings implications. This rule will not be a 
governmental action capable of interference with constitutionally 
protected property rights. This rule does not require a Takings 
Implication Assessment.

Federalism (E.O. 13132)

    Under the criteria in section 1 of E.O. 13132, this rule does not 
have sufficient federalism implications to warrant the preparation of a 
Federalism summary impact statement. This rule does 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 rule does not affect that role.

[[Page 81458]]

Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    a. Meets the criteria of section 3(a), which requires that all 
regulations undergo review to eliminate errors and ambiguity and are 
written to minimize litigation.
    b. Meets the criteria of section 3(b)(2), which requires that we 
write regulations in clear language using clear legal standards.

Consultation With Indian Tribes (E.O. 13175)

    The Department of the Interior strives to strengthen its 
government-to-government relationship with Indian Tribes through a 
commitment to consultation with Indian Tribes and recognition of their 
right to self-governance and Tribal sovereignty. Under the Department's 
consultation policy and the criteria in E.O. 13175, we have evaluated 
this rule and determined that it has no substantial direct effects on 
Federally recognized Indian Tribes.

Paperwork Reduction Act

    This rule:
    (1) Does not contain any information collection requirements.
    (2) Does not require a submission under the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.).

National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. We are not required to 
provide a detailed statement under the National Environmental Policy 
Act of 1969 (NEPA) because this rule qualifies for categorical 
exclusion under 43 CFR 46.210(c) and (i) and the DOI Departmental 
Manual, part 516, section 15.4.D: ``(c) Routine financial transactions 
including such things as . . . audits, fees, bonds, and royalties . . . 
(i) Policies, directives, regulations, and guidelines: That are of an 
administrative, financial, legal, technical, or procedural nature.'' We 
have also determined that this rule is not involved in any of the 
extraordinary circumstances listed in 43 CFR 46.215 that require 
further analysis under NEPA. This rule does not alter, in any material 
way, natural resources exploration, production, or transportation.

Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in E.O. 13211. A Statement of Energy Effects is not required.

List of Subjects

30 CFR Part 519

    Government contracts, Mineral royalties, Oil and gas exploration, 
Public lands--mineral resources.

30 CFR Part 1219

    Government contracts, Mineral royalties, Oil and gas exploration, 
Public lands--mineral resources.

Janice M. Schneider,
Assistant Secretary--Land and Minerals Management.
Kristen J. Sarri,
Principal Deputy Assistant Secretary--Policy, Management and Budget.

Authority and Issuance

    For the reasons stated in the preamble, under the authority 
provided by the Reorganization Plan No. 3 of 1950 (64 Stat. 1262) and 
Secretarial Order Nos. 3299, 3302, and 3306, the Department of the 
Interior amends part 519 of title 30 CFR chapter V and part 1219 of 30 
CFR chapter XII as follows:

Chapter V--Bureau of Ocean Energy Management, Department of the 
Interior

Subchapter A--Minerals Revenue Management

PART 519 [REMOVED AND RESERVED]

0
1. Remove and reserve part 519

Chapter XII--Office of Natural Resources Revenue, Department of the 
Interior

Subchapter A--Natural Resources Revenue

0
2. Revise part 1219 to read as follows:

PART 1219--DISTRIBUTION AND DISBURSEMENT OF ROYALTIES, RENTALS, AND 
BONUSES

Subpart A--[Reserved]
Subpart B--[Reserved]
Subpart C--Oil and Gas, Onshore
Sec.
1219.100 What is ONRR's timing of payment to the States?
1219.101 What receipts are subject to an interest charge?
1219.102 What is ONRR's method of payment to the States?
1219.103 How will ONRR manage payments to Indian accounts?
1219.104 What are Explanation of Payments to the States and Indian 
Tribes?
1219.105 What definitions apply to this subpart?
Subpart D--Oil and Gas, Offshore, GOMESA Phase I Revenue Sharing
1219.410 What does this subpart contain?
1219.411 What definitions apply to this subpart?
1219.412 How will ONRR divide the qualified OCS revenues (Phase I)?
1219.413 How will ONRR determine each Gulf producing State's share 
of the qualified OCS revenues (Phase I) from leases in the 181 Area 
in the Eastern Planning Area and the 181 South Area?
1219.414 How will ONRR allocate the qualified OCS revenues (Phase I) 
to coastal political subdivisions within the Gulf producing States?
1219.415 How will ONRR allocate qualified OCS revenues (Phase I) 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?
1219.416 When will ONRR disburse funds to Gulf producing States and 
eligible coastal political subdivisions?
Subpart E--Oil and Gas, Offshore, GOMESA Phase II Revenue Sharing
1219.510 What does this subpart contain?
1219.511 What definitions apply to this subpart?
1219.512 How will ONRR divide the qualified OCS revenues (Phase II)?
1219.513 How will ONRR determine each Gulf producing State's share 
of the qualified OCS revenues (Phase II) from leases in the 181 
Area, the 181 South Area, and the 2002-2007 Planning Area?
1219.514 How will ONRR allocate the qualified OCS revenues (Phase 
II) to coastal political subdivisions within the Gulf producing 
States?
1219.515 How will ONRR update the group of ``historical lease 
sites'' and ``applicable leased tracts (Phase II)'' used for 
determining the allocation of shared revenues?
1219.516 When will ONRR disburse funds to Gulf producing States and 
eligible coastal political subdivisions?

    Authority: Section 104, Pub. L. 97-451, 96 Stat. 2451 (30 U.S.C. 
1714), Pub. L. 109-432, Div. C, Title I, 120 Stat. 3000.

Subpart A--[Reserved]

Subpart B--[Reserved]

Subpart C--Oil and Gas, Onshore


Sec.  1219.100  What is ONRR's timing of payment to the States?

    ONRR will pay a State's share of mineral leasing revenues to the 
State not later than the last business day of the month in which the 
U.S. Treasury issues a warrant authorizing the disbursement, except for 
any portion of such revenues which is under challenge and placed in a 
suspense account pending resolution of a dispute.


Sec.  1219.101  What receipts are subject to an interest charge?

    (a) Subject to the availability of appropriations, the Office of 
Natural Resources Revenue (ONRR) will pay the

[[Page 81459]]

State its proportionate share of any interest charge for royalty and 
related monies that are placed in a suspense account pending resolution 
of any matters that may disallow distribution and disbursement. Such 
monies not disbursed by the last business day of the month following 
receipt by ONRR will accrue interest until paid.
    (b) Upon resolution of any matters that may disallow distribution 
and disbursement, ONRR will disburse the suspended monies found due in 
paragraph (a) of this section, plus interest, to the State, under the 
provisions of Sec.  1219.100.
    (c) ONRR will apply paragraph (a) of this section to revenues that 
ONRR cannot disburse to the State because the payor/lessee provided to 
ONRR incorrect, inadequate, or incomplete information, which prevented 
ONRR from identifying the proper recipient of the payment.


Sec.  1219.102  What is ONRR's method of payment to the States?

    ONRR will disburse monies to a State by Electronic Funds Transfer 
(EFT).


Sec.  1219.103  How will ONRR manage payments to Indian accounts?

    ONRR will transfer mineral revenues received from Indian leases to 
the appropriate Indian accounts that the Bureau of Indian Affairs (BIA) 
manages for allotted and Tribal revenues. These accounts are 
specifically designated Treasury accounts. ONRR will transfer these 
revenues to the Indian accounts at the earliest practicable date after 
such funds are received, but in no case later than the last business 
day of the month in which ONRR receives these revenues.


Sec.  1219.104  What are Explanation of Payments to the States and 
Indian Tribes?

    (a) ONRR will describe the payments to States and BIA, on behalf of 
Indian Tribes or Indian allottees, discussed in this part, in ONRR-
prepared Explanation of Payment reports. ONRR will prepare these 
reports at the lease level and will include a description of the type 
of payment made, the period covered by the payment, the source of the 
payment, sales amounts upon which the payment is based, the royalty 
rate, and the unit value. If any State or Indian Tribe needs additional 
information pertaining to mineral revenue payments, the State or Tribe 
may request this information from ONRR.
    (b) ONRR will provide these reports to:
    (1) States, not later than the 10th day of the month following the 
month in which ONRR disburses the State's share of royalties and 
related monies.
    (2) BIA, on behalf of Tribes and Indian allottees, not later than 
the 10th day of the month following the month in which ONRR disburses 
the funds.
    (c) ONRR will not include in these reports revenues that we cannot 
distribute to States, Tribes, or Indian allottees because the payor/
lessee provided incorrect, inadequate, or incomplete information about 
the proper recipient of the payment, until the payor/lessee has 
submitted to ONRR the missing information.


Sec.  1219.105  What definitions apply to this subpart?

    Terms that ONRR uses in this subpart will have the same meaning as 
in 30 U.S.C. 1702.

Subpart D--Oil and Gas, Offshore, GOMESA Phase I Revenue Sharing


Sec.  1219.410  What does this subpart contain?

    (a) The Gulf of Mexico Energy Security Act of 2006 (GOMESA) directs 
the Secretary of the Interior to disburse a portion of the rentals, 
royalties, bonus bids, and other sums derived from certain Outer 
Continental Shelf (OCS) leases in the Gulf of Mexico (GOM) to the 
States of Alabama, Louisiana, Mississippi, and Texas (collectively 
identified as the Gulf producing States); to eligible coastal political 
subdivisions (CPSs) within those States; and to the Land and Water 
Conservation Fund (LWCF). Shared GOMESA revenues are reserved for the 
following purposes:
    (1) Projects and activities for the purpose of coastal protection, 
including conservation, coastal restoration, hurricane protection, and 
infrastructure directly affected by coastal wetland losses;
    (2) Mitigation of damage to fish, wildlife, or natural resources;
    (3) Implementation of a federally-approved marine, coastal, or 
comprehensive conservation management plan;
    (4) Mitigation of the impact of OCS activities through the funding 
of onshore infrastructure projects; and
    (5) Planning assistance and administrative costs not-to-exceed 3 
percent of the amounts received.
    (b) This subpart sets forth the formula and methodology ONRR uses 
to determine the amount of revenues allocated and disbursed to each 
Gulf producing State and each eligible CPS for each of fiscal years 
2007 through 2016. Leasing revenues disbursed under this subpart 
originate from leases issued on or after December 20, 2006, in the 181 
Area in the Eastern Planning Area and the 181 South Area, subject to 
restrictions identified in GOMESA. We collectively refer to the revenue 
sharing from these areas for these fiscal years as GOMESA Phase I 
revenue sharing. For questions related to the revenue-sharing 
provisions in this subpart, please contact: Program Manager, Financial 
Management, Office of Natural Resources Revenue, P.O. Box 25165, Denver 
Federal Center, Building 85, Denver, CO 80225-0165.


Sec.  1219.411  What definitions apply to this subpart?

    For purposes of this subpart:
    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, 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 
Bureau of Ocean Energy Management; and
    (3) Included in the areas considered for oil and gas leasing, as 
identified in map 8, page 84, of the document entitled, ``Revised Outer 
Continental Shelf Oil and Gas Leasing Program 2007-2012,'' approved 
December 2010.
    Applicable leased tract (Phase I) means a tract that is subject to 
a lease under section 8 of the Outer Continental Shelf Lands Act 
(OCSLA), 43 U.S.C. 1337, for the purpose of drilling for, developing, 
and producing oil or natural gas resources, issued on or after December 
20, 2006, and 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, ``Revised Outer Continental Shelf Oil and Gas Leasing Program 
2007-2012,'' approved December 2010.
    Coastal political subdivision means a political subdivision of a 
Gulf producing State, any part of which 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

[[Page 81460]]

    (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, ``Revised Outer Continental Shelf Oil and Gas Leasing Program 
2007-2012,'' approved December 2010.
    Gulf producing State means each of the States of Alabama, 
Louisiana, Mississippi, and Texas.
    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 (Phase I) means--
    (1) In the case of each of the fiscal years 2007 through 2016, all 
rentals, royalties, bonus bids, and other sums received by the United 
States from leases issued on or after December 20, 2006, located:
    (i) In the 181 Area in the Eastern Planning Area.
    (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 (Phase 
I).
    (3) Exclusions from the term qualified OCS revenues (Phase I) are:
    (i) Revenues from the forfeiture of a bond or other surety securing 
obligations other than royalties;
    (ii) Civil penalties;
    (iii) Royalties ``taken by the Secretary in-kind and not sold.'' 
(Pub. L. 109-432, Dec. 20, 2006);
    (iv) Revenues generated from leases subject to section 8(g) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1337(g));
    (v) User fees; and
    (vi) Lease revenues explicitly excluded from GOMESA revenue sharing 
by statute or appropriations law.


Sec.  1219.412  How will ONRR divide the qualified OCS revenues (Phase 
I)?

    For each of the fiscal years 2007 through 2016, the Secretary of 
the Treasury will deposit 50 percent of the qualified OCS revenues 
(Phase I) into a special U.S. Treasury account, from which ONRR will 
disburse 75 percent to the Gulf producing States and 25 percent to the 
Land and Water Conservation Fund (LWCF). Of the revenues disbursed to a 
Gulf producing State, we will disburse 20 percent directly to the CPSs 
within that State. Each Gulf producing State will receive at least 10 
percent of the qualified OCS revenues (Phase I) available for 
allocation to the Gulf producing States each fiscal year. The following 
table summarizes the resulting revenue shares (adding to 100 percent):

   Revenue Distribution of Qualified OCS Revenues Under GOMESA Phase I
------------------------------------------------------------------------
                                                          Percentage of
          Recipient of qualified OCS revenues             qualified OCS
                                                             revenues
------------------------------------------------------------------------
U.S. Treasury (General Fund)...........................             50
Land and Water Conservation Fund.......................             12.5
Gulf Producing States..................................             30
Gulf Producing State Coastal Political Subdivisions....              7.5
------------------------------------------------------------------------

Sec.  1219.413  How will ONRR determine each Gulf producing State's 
share of the qualified OCS revenues (Phase I) from leases in the 181 
Area in the Eastern Planning Area and the 181 South Area?

    (a) ONRR will determine the great circle distance between:
    (1) The geographic center of each applicable leased tract (Phase 
I); and
    (2) The point on the coastline of each Gulf producing State that is 
closest to the geographic center of each applicable leased tract (Phase 
I).
    (b) Based on these distances, we will calculate the qualified OCS 
revenues (Phase I) to disburse to each Gulf producing State as follows:
    (1) For each Gulf producing State, we will calculate and total, 
over all applicable leased tracts (Phase I), 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 
(Phase I), and the geographic centers of the applicable leased tracts 
(Phase I). For applicable leased tracts intersected by the planning 
area administrative boundary line, we will use the geographic center of 
the entire lease for the inverse distance determination.
    (2) For each Gulf producing State, we will divide the sum of each 
State's inverse distances from all applicable leased tracts (Phase I) 
calculated under paragraph (1), by the sum of the inverse distances 
from all applicable leased tracts (Phase I) across all four Gulf 
producing States. In the formulas below, IAL, ILA, IMS, and ITX 
represent the sum of the inverses of the shortest distances between 
Alabama, Louisiana, Mississippi, and Texas and all applicable leased 
tracts (Phase I), respectively. We will multiply the result by the 
amount of shareable, qualified OCS revenues (Phase I).

Alabama Share = (IAL / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase I)
Louisiana Share = (ILA / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase I)
Mississippi Share = (IMS / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase I)
Texas Share = (ITX / (IAL + ILA + IMS + ITX)) x qualified OCS revenues 
(Phase I)

    (3) If, in any fiscal year, this calculation results in less than a 
10-percent allocation of the qualified OCS revenues (Phase I) to any 
Gulf producing State, we will recalculate the distribution. We will 
allocate 10 percent of the qualified OCS revenues (Phase I) to the 
affected State and recalculate the other States' shares of the 
remaining qualified OCS revenues (Phase I), omitting from the 
calculation the State receiving the 10-percent minimum share.


Sec.  1219.414  How will ONRR allocate the qualified OCS revenues 
(Phase I) to coastal political subdivisions within the Gulf producing 
States?

    (a) Of the qualified OCS revenues (Phase I) allocated to a Gulf 
producing State's CPSs, ONRR will allocate 25 percent based on the 
proportion that each CPS's population bears to the population of all 
CPSs in the State.
    (b) Of the qualified OCS revenues (Phase I) allocated to a Gulf 
producing State's CPSs, we will allocate 25 percent based on the 
proportion that each CPS's miles of coastline bears to the total miles 
of coastline across all CPSs in the State. However, for the State of 
Louisiana, we will deem CPSs without a coastline to each have a 
coastline one-third the average length of the coastline of all CPSs 
within Louisiana that have a coastline.
    (c)(1) Of the qualified OCS revenues (Phase I) allocated to a Gulf 
producing State's CPSs, we will allocate 50 percent in amounts that are 
inversely

[[Page 81461]]

proportional to the respective distances between:
    (i) The point in each CPS that is closest to the geographic center 
of each applicable leased tract (Phase I); and
    (ii) The geographic center of each applicable leased tract (Phase 
I).
    (2) However, we will exclude distances to an applicable leased 
tract (Phase I) 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.  1219.415  How will ONRR allocate qualified OCS revenues (Phase I) 
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, ONRR will 
allocate revenues to the CPSs in accordance with the following 
criteria:
    (a) Of the qualified OCS revenues (Phase I) allocated to a Gulf 
producing State's CPSs, we will allocate 50 percent based on the 
proportion that each CPS's population bears to the population of all 
CPSs in the State.
    (b) Of the qualified OCS revenues (Phase I) allocated to a Gulf 
producing State's CPSs, we will allocate 50 percent based on the 
proportion that each CPS's miles of coastline bears to the total miles 
of coastline across all CPSs within the State. However, for the State 
of Louisiana, we will deem CPSs without a coastline to each have a 
coastline one-third the average length of the coastline of all CPSs 
within Louisiana that have a coastline.


Sec.  1219.416  When will ONRR disburse funds to Gulf producing States 
and coastal political subdivisions?

    ONRR will disburse GOMESA revenues as soon as authorized and 
practicable within the fiscal year following the year that we collect 
qualified OCS revenues (Phase I).

Subpart E--Oil and Gas, Offshore, GOMESA Phase II Revenue Sharing


Sec.  1219.510  What does this subpart contain?

    (a) GOMESA directs the Secretary of the Interior to disburse a 
portion of the rentals, royalties, bonus bids, and other sums derived 
from certain OCS leases in the GOM to the States of Alabama, Louisiana, 
Mississippi, and Texas (collectively identified as the Gulf producing 
States); to eligible CPSs within those States; and to the LWCF. GOMESA 
directs the Gulf producing States and CPSs to use the shared revenues 
for the following purposes:
    (1) Projects and activities for the purpose of coastal protection, 
including conservation, coastal restoration, hurricane protection, and 
infrastructure directly affected by coastal wetland losses;
    (2) Mitigation of damage to fish, wildlife, or natural resources;
    (3) Implementation of a federally-approved marine, coastal, or 
comprehensive conservation management plan;
    (4) Mitigation of the impact of OCS activities through the funding 
of onshore infrastructure projects; and
    (5) Planning assistance and administrative costs not-to-exceed 3 
percent of the amounts received.
    (b) This subpart sets forth the formula and methodology ONRR will 
use to determine the amount of revenues allocated and disbursed to each 
Gulf producing State and each eligible CPS for fiscal year 2017 and 
each fiscal year thereafter. Leasing revenues disbursed under this 
subpart (also referred to as GOMESA Phase II) originate from leases 
issued on or after December 20, 2006, in the 181 Area, the 181 South 
Area, and the GOM 2002-2007 Planning Area, subject to restrictions and 
caps identified in GOMESA. For questions related to the revenue-sharing 
provisions in this subpart, please contact: Program Manager, Financial 
Management, Office of Natural Resources Revenue, P.O. Box 25165, Denver 
Federal Center, Building 85, Denver, CO 80225-0165, or at (303) 231-
3217.


Sec.  1219.511  What definitions apply to this subpart?

    For purposes of this subpart:
    181 Area is defined at Sec.  1219.411.
    181 South Area is defined at Sec.  1219.411.
    ``181 Area in the Central Planning Area'' is comprised of the area 
of overlap of the two geographic areas defined at Sec.  1219.411 as the 
``181 Area'' and the ``Central Planning Area.''
    2002-2007 Planning Area means any area--
    (1) Located in--
    (i) The Eastern Planning Area, as designated in the ``Proposed 
Final Outer Continental Shelf Leasing Program 2002-2007,'' dated April 
2002;
    (ii) The Central Planning Area, as designated in the ``Proposed 
Final Outer Continental Shelf Leasing Program 2002-2007,'' dated April 
2002; or
    (iii) The Western Planning Area, as designated in the ``Proposed 
Final Outer Continental Shelf Leasing Program 2002-2007,'' dated April 
2002; and
    (2) Not located in--
    (i) An area in which no funds may be expended to conduct offshore 
preleasing, leasing, and related activities under sections 104 through 
106 of the Department of the Interior, Environment, and Related 
Agencies Appropriations Act, 2006 (Pub. L. 109-54; 119 Stat. 521) (as 
in effect on August 2, 2005);
    (ii) An area withdrawn from leasing under the ``Memorandum on 
Withdrawal of Certain Areas of the United States Outer Continental 
Shelf from Leasing Disposition,'' from 34 Weekly Comp. Pres. Doc. 1111, 
dated June 12, 1998; or
    (iii) The 181 Area or 181 South Area.
    Applicable leased tract (Phase II) means a tract that is subject to 
a lease under section 8 of the OCSLA, for the purpose of drilling for, 
developing, and producing oil or natural gas resources, issued on or 
after December 20, 2006, and located fully or partially in either the 
181 Area or the 181 South Area.
    Central Planning Area is defined at Sec.  1219.411.
    Coastal political subdivision is defined at Sec.  1219.411.
    Coastline is defined at Sec.  1219.411.
    Distance is defined at Sec.  1219.411.
    Eastern Planning Area is defined at Sec.  1219.411.
    Gulf producing State is defined at Sec.  1219.411.
    Historical lease site means any tract in the 2002-2007 Planning 
Area leased on or after October 1, 1982, under section 8 of the OCSLA, 
for the purpose of drilling for, developing, and producing oil or 
natural gas resources.
    Leased tract is defined at Sec.  1219.411.
    Military Mission Line is defined at Sec.  1219.411.
    Qualified OCS revenues (Phase II) means--
    (1) In the case of fiscal year 2017 and each fiscal year 
thereafter, all rentals, royalties, bonus bids, and other sums received 
by the United States from leases that lessees enter(ed) into on or 
after December 20, 2006, located:
    (i) In the 181 Area;
    (ii) In the 181 South Area;
    (iii) In the 2002-2007 Planning Area.
    (2) Exclusions from the term ``Qualified OCS revenues (Phase II)'' 
are:
    (i) Revenues from the forfeiture of a bond or other surety 
instrument securing obligations other than royalties;
    (ii) Civil penalties;
    (iii) Royalties ``taken by the Secretary in-kind and not sold'' 
(Pub. L. 109-432, Dec 20, 2006);
    (iv) Revenues generated from leases subject to section 8(g) of the 
Outer Continental Shelf Lands Act (43 U.S.C. 1337(g));

[[Page 81462]]

    (v) User fees; and
    (vi) Lease revenues explicitly excluded from GOMESA revenue sharing 
by statute or appropriations law.
    (3) The term ``Qualified OCS revenues (Phase II)'' consists wholly 
of the two subsets defined as ``Qualified OCS revenues (Phase II--
capped)'' and ``Qualified OCS revenues (Phase II--uncapped).''
    (i) Qualified OCS revenues (Phase II--capped) means, in the case of 
fiscal year 2017 and each fiscal year thereafter, the subset of 
qualified OCS revenues (Phase II) received by the United States from 
leases that lessees enter(ed) into on or after December 20, 2006, 
located:
    (A) In the 181 Area in the Central Planning Area; or
    (B) In the 2002-2007 Planning Area.
    (ii) Qualified OCS revenues (Phase II--uncapped) means, in the case 
of fiscal year 2017 and each fiscal year thereafter, the subset of 
qualified OCS revenues (Phase II) received by the United States from 
leases that lessees enter(ed) into on or after December 20, 2006, 
located:
    (A) In the 181 Area in the Eastern Planning Area, or
    (B) In the 181 South Area.


Sec.  1219.512  How will ONRR divide the qualified OCS revenues (Phase 
II)?

    (a) For fiscal year 2017 and each fiscal year thereafter, the 
Secretary of the Treasury will deposit 50 percent of the qualified OCS 
revenues (Phase II--uncapped) into a special U.S. Treasury account, 
from which ONRR will disburse 75 percent to the Gulf producing States 
and 25 percent to the LWCF. Of the revenues disbursed to a Gulf 
producing State, we will disburse 20 percent directly to the CPSs 
within that State. Each Gulf producing State will receive at least 10 
percent of the qualified OCS revenues (Phase II--uncapped) available 
for allocation to the Gulf producing States each fiscal year. The 
following table summarizes the resulting revenue shares (adding to 100 
percent):

   Revenue Distribution of Qualified OCS Revenues (Phase II--Uncapped)
                          Under GOMESA Phase II
------------------------------------------------------------------------
                                                          Percentage of
          Recipient of qualified OCS revenues             qualified OCS
                                                             revenues
------------------------------------------------------------------------
U.S. Treasury (General Fund)...........................             50
Land and Water Conservation Fund.......................             12.5
Gulf Producing States..................................             30
Gulf Producing State Coastal Political Subdivisions....              7.5
------------------------------------------------------------------------

    (b) For fiscal year 2017 and each fiscal year thereafter, the 
Secretary of the Treasury will deposit 50 percent of the qualified OCS 
revenues (Phase II--capped) into a special U.S. Treasury account. The 
total amount of qualified OCS revenues (Phase II--capped) deposited in 
the special U.S. Treasury account and available for allocation to the 
Gulf producing States, the CPSs and the LWCF, under this subpart, 
cannot exceed $500,000,000 for each of the fiscal years 2017 through 
2055. After applying the cap, if applicable, ONRR will disburse 75 
percent to the Gulf producing States and 25 percent to the LWCF. Of the 
revenues disbursed to a Gulf producing State, we will disburse 20 
percent directly to the CPSs within that State. Each Gulf producing 
State will receive at least 10 percent of the qualified OCS revenues 
(Phase II--capped) available for allocation to the Gulf producing 
States each fiscal year.


Sec.  1219.513  How will ONRR determine each Gulf producing State's 
share of the qualified OCS revenues (Phase II) from leases in the 181 
Area, the 181 South Area and the 2002-2007 Planning Area?

    (a) ONRR will determine the great circle distance between:
    (1) The geographic center of each applicable leased tract (Phase 
II) or historical lease site; and
    (2) The point on the coastline of each Gulf producing State that is 
closest to the geographic center of each applicable leased tract (Phase 
II) or historical lease site.
    (b) Based on a specific subset of these distances, we will 
calculate the qualified OCS revenues (Phase II--uncapped) to disburse 
to each Gulf producing State as follows:
    (1) For each Gulf producing State, we will calculate and total, 
over all applicable leased tracts (Phase II) located in the 181 Area in 
the Eastern Planning Area or the 181 South Area, 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 (Phase II) located in the 181 Area in the Eastern Planning Area 
or the 181 South Area, and the geographic centers of the applicable 
leased tracts (Phase II) located in the 181 Area in the Eastern 
Planning Area or the 181 South Area.
    (2) For each Gulf producing State, we will divide the sum of each 
State's inverse distances from all applicable leased tracts (Phase II) 
located in the 181 Area in the Eastern Planning Area or the 181 South 
Area calculated under paragraph (1), by the sum of the inverse 
distances from all applicable leased tracts (Phase II) located in the 
181 Area in the Eastern Planning Area or the 181 South Area across all 
four Gulf producing States. In the formulas below, IAL, ILA, IMS, and 
ITX represent the sum of the inverses of the shortest distances between 
Alabama, Louisiana, Mississippi, and Texas and all applicable leased 
tracts (Phase II), respectively. We will multiply the result by the 
amount of shareable, qualified OCS revenues (Phase II--uncapped).

Alabama Share = (IAL / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase II--uncapped)
Louisiana Share = (ILA / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase II--uncapped)
Mississippi Share = (IMS / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase II--uncapped)
Texas Share = (ITX / (IAL + ILA + IMS + ITX)) x qualified OCS revenues 
(Phase II--uncapped)

    (3) If, in any fiscal year, this calculation results in less than a 
10-percent allocation of the qualified OCS revenues (Phase II--
uncapped) to any Gulf producing State, we will recalculate the 
distribution. We will allocate 10 percent of the qualified OCS revenues 
(Phase II--uncapped) to the affected State and recalculate the other 
States' shares of the remaining qualified OCS revenues (Phase II--
uncapped), omitting from the calculation the State receiving the 10-
percent minimum share.
    (c) Based on a specific subset of these distances, we will 
calculate the qualified OCS revenues (Phase II--capped) to disburse to 
each Gulf producing State as follows:
    (1) For each Gulf producing State, we will calculate and total, 
over all applicable leased tracts (Phase II) located in the 181 Area in 
the Central Planning Area and historical lease sites, 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 (Phase II) located in the 181 Area in the Central Planning Area 
and historical lease sites, and the geographic centers of the 
applicable leased tracts (Phase II) located in the 181 Area in the 
Central Planning Area and historical lease sites.
    (2) For each Gulf producing State, we will divide the sum of each 
State's inverse distances from all applicable leased tracts (Phase II) 
located in the 181 Area in the Central Planning Area and historical 
lease sites calculated under paragraph (1), by the sum of the inverse 
distances from all applicable leased tracts (Phase II) located in the

[[Page 81463]]

181 Area in the Central Planning Area and historical lease sites across 
all four Gulf producing States. In the formulas below, IAL, ILA, IMS, 
and ITX represent the sum of the inverses of the shortest distances 
between Alabama, Louisiana, Mississippi, and Texas and all applicable 
leased tracts (Phase II) and historical lease sites, respectively. We 
will multiply the result by the amount of shareable, qualified OCS 
revenues (Phase II--capped).

Alabama Share = (IAL / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase II--capped)
Louisiana Share = (ILA / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase II--capped)
Mississippi Share = (IMS / (IAL + ILA + IMS + ITX)) x qualified OCS 
revenues (Phase II--capped)
Texas Share = (ITX / (IAL + ILA + IMS + ITX)) x qualified OCS revenues 
(Phase II--capped)

    (3) If, in any fiscal year, this calculation results in less than a 
10-percent allocation of the qualified OCS revenues (Phase II--capped) 
to any Gulf producing State, we will recalculate the distribution. We 
will allocate 10 percent of the qualified OCS revenues (Phase II--
capped) to the affected State and recalculate the other States' shares 
of the remaining qualified OCS revenues (Phase II--capped), omitting 
from the calculation the State receiving the 10-percent minimum share.


Sec.  1219.514  How will ONRR allocate the qualified OCS revenues 
(Phase II) to coastal political subdivisions within the Gulf producing 
States?

    (a) Of the qualified OCS revenues (Phase II) allocated to a Gulf 
producing State's CPSs, ONRR will allocate 25 percent based on the 
proportion that each CPS's population bears to the population of all 
CPSs in the State.
    (b) Of the qualified OCS revenues (Phase II) allocated to a Gulf 
producing State's CPSs, we will allocate 25 percent based on the 
proportion that each CPS's miles of coastline bears to the total miles 
of coastline across all CPSs in the State. However, for the State of 
Louisiana, we will deem CPSs without a coastline to each have a 
coastline one-third the average length of the coastline of all CPSs 
within Louisiana that have a coastline.
    (c)(1) Of the qualified OCS revenues (Phase II) allocated to a Gulf 
producing State's CPSs, we will allocate 50 percent in amounts that are 
inversely proportional to the respective distances between:
    (i) The point in each CPS that is closest to the geographic center 
of the applicable leased tract (Phase II) or historical lease site; and
    (ii) The geographic center of each applicable leased tract (Phase 
II) or historical lease site.
    (2) However, we will exclude distances to an applicable leased 
tract (Phase II) 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.  1219.515  How will ONRR update the group of ``historical lease 
sites'' and ``applicable leased tracts (Phase II)'' used for 
determining the allocation of shared revenues?

    (a) As GOMESA directs, ONRR will update the group of historical 
lease sites in the 2002-2007 Planning Area as follows:
    (1) On December 31, 2015, we will freeze the group of historical 
lease sites, subject to the adjustment under paragraph (a)(2) of this 
section.
    (2) Beginning January 1, 2022, and every fifth year thereafter, we 
will extend the ending date for determining the group of historical 
lease sites for an additional five calendar years by adding any new 
historical lease sites to the existing group.
    (b) Each year we will update the group of applicable leased tracts 
(Phase II) to include only leases that were in effect at any time 
during the previous fiscal year.


Sec.  1219.516  When will ONRR disburse funds to Gulf producing States 
and coastal political subdivisions?

    ONRR will disburse GOMESA revenues as soon as authorized and 
practicable within the fiscal year following the year that we collect 
qualified OCS revenues (Phase II).

[FR Doc. 2015-32787 Filed 12-29-15; 8:45 am]
BILLING CODE 4335-30-P