Senators unveil bill to funnel oil-spill penalty money to Gulf

“This was hard,” Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.) told reporters Thursday, saying that there were many disagreements among senators about how best to distribute the money.

But Boxer, who helped craft the legislation, said the compromise bill represents an unusual example of bipartisanship at a time when Democrats and Republicans are battling over raising the debt ceiling.

“Every once in a while these magical moments happen,” Boxer said.

“Do you think we could become a model of finding the sweet spot on some other things we need to find the sweet spot on?” Sen. Bill Nelson (D-Fla.), a co-sponsor of the bill, said in reference to high-stakes debt negotiations.

Boxer said she hopes to vote on the bill in her committee before the August recess. Sen. Mary Landrieu (D-La.), the lead co-sponsor of the legislation, said she is confident that the bill will be signed into law by President Obama, adding that House lawmakers are working to build support for the bill.

Funneling a large portion of oil-spill penalty money to Gulf states has won the support of Obama, as well as the national oil-spill commission.

In total, 35 percent of the penalty money is evenly split among the five Gulf coast states under the legislation. Thirty percent goes to a Gulf Coast Ecosystem Restoration Council and another 30 percent is divvied up among states based on those most heavily affected by the spill. The remaining 5 percent will be allocated equally for Gulf science and fisheries programs.

BP and the other companies deemed responsible for the spill face billions of dollars in penalties. If BP is deemed negligent under the Clean Water Act by the courts, the company will have to pay $1,000 for every barrel of oil spilled into the Gulf. If the courts find that BP was grossly negligent, the company will have to pay $4,200 per barrel.

Last year's spill spewed about 4.9 million barrels of oil into the Gulf, meaning BP could have to fork over between $5.4 billion and $21.1 billion.

Sens. Landrieu and Richard Shelby (R-Ala.) are the lead sponsors of the bill. The legislation is co-sponsored by Sens. Nelson, David Vitter (R-La.), Jeff Sessions (R-Ala.), Thad Cochran (R-Miss.), Roger Wicker (R-Miss.), Marco Rubio (R-Fla.) and Kay Bailey Hutchison (R-Texas).