LandCAN

National Pollution Funds Center

While not specific to Mississippi, the National Pollution Funds Center administers the Oil Spill Liability Trust Fund, which may be a source of funding for personal damages and ecosystem restoration in Mississippi and other Gulf states in the wake of the BP Deepwater Horizon debacle. Discharges of oil into the aquatic environment can be extremely disruptive, causing both direct and indirect injury to living resources and their habitat, with subsequent loss of associated services (e.g., biological productivity and diversity, recreation, sediment trapping, and shoreline stabilization) and economic values.

Many natural resources are “trust resources” under the stewardship of various state and federal agencies, as well as of Indian tribes. These trustee agencies are empowered by the Oil Pollution Act of 1990 "OPA" to seek compensation for injury to trust resources from the owner or operator of a facility from which oil is discharged, that is responsible parties.

Under the OPA, responsible parties are liable for the costs associated with the containment or cleanup of the spill and any damages resulting from the spill. The EPA's first priority is to ensure that responsible parties pay to clean up their own oil releases. However, when the responsible party is unknown or refuses to pay, funds from the Oil Spill Liability Trust Fund can be used to cover removal costs or damages resulting from discharges of oil. 

The Fund can provide up to $1 billion for any one oil pollution incident, including up to $500 million for the initiation of natural resource damage assessments and claims in connection with any single incident. A natural resource damage assessment is the process of analysis and decision-making that documents the extent of damage to the natural resources and the actions, along with their associated costs, necessary to restore the resources.

Types of Claims Covered

  • Real and personal property damage: damage or economic loss related to the destruction or 
  • harm of real or personal property.
  • Loss of profits and earning capacity due to injury or loss of real property, personal property, or natural resources
  • Loss of Government Revenue or Increased Public Services: State and local governments may apply for loss of taxes or other revenue due to injury or destruction of loss of real property, personal property, or natural resources. 
  • Natural Resources: ONLY Federal, state or foreign and Indian tribal governments may apply for damag or loss of natural resources, including land, fish, drinking water, and air.

The claims process requires that before filing a claim with NPFC, individuals, businesses, and local governments must first file a claim with BP as the Responsible Party. States may choose to file claims directly with NPFC. If BP denies the claim or the claim goes unsettled for 90 days, claimants may then apply to the NPFC. Parties will NOT be able to file a claim with the NPFC without first applying to BP. 

The primary source of revenue for the Oil Spill Liability Trust Fund is a five-cents per barrel fee on imported and domestic oil. Collection of this fee ceased on December 31, 1994 due to a "sunset" provision in the law. Other revenue sources for the fund include interest on the fund, cost recovery from the parties responsible for the spills, and any fines or civil penalties collected. The Fund is administered by the U.S. Coast Guard's National Pollution Funds Center (NPFC).