How Revenue Works

OCS disbursements

The Office of Natural Resources Revenue disburses revenue to state and local governments for each of the Gulf of America OCS oil and gas producing states – Alabama, Louisiana, Mississippi, and Texas. The numbers below show the disbursements to the states and their local governments. Disbursements are made the year following the year of receipt and are subject to sequestration.

Disbursements

Recipient Fiscal Year 2026 Disbursement
State of Alabama $51,952,966
Baldwin County $6,088,406
Mobile County $6,899,836
Alabama Total $64,941,207

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About Gulf of America OCS disbursements

The OCS Lands Act (43 U.S.C. §1331 (note 2017)) (PDF) establishes the revenue-sharing model for Gulf states (Alabama, Louisiana, Mississippi, and Texas) to receive a portion of the revenue generated from leasing in the Outer Continental Shelf of the Gulf of America.

The Act also directs a portion of the revenue to the Land and Water Conservation Fund. This fund supports preservation, development, and access to outdoor lands for public recreation.

Purpose of funds

Funds are to be used for coastal conservation, restoration, and hurricane protection.

Phases

There are two phases of revenue sharing:

Phase I: Since 2007, 37.5% of all qualified Gulf of America revenues are shared among the four states and their coastal political subdivisions. Revenues are generated from leases in specific geographic areas defined in the Act. Additionally, 12.5% of revenues are disbursed to the Land and Water Conservation Fund.

Phase II: The second phase of revenue sharing started in fiscal year 2017. It expands the areas that qualify for revenue-sharing (PDF).

Phase II also imposes revenue-sharing caps on states and the Land and Water Conservation Fund. Overall state revenue-sharing caps, as adjusted from the One Big Beautiful Bill Act, are:

  • $375 million for fiscal years 2017–2019
  • $487.5 million for fiscal years 2020 and 2021
  • $375 million for fiscal years 2022–2024
  • $487.5 million for fiscal years 2025–2034
  • $375 million for fiscal years 2035–2055

The cap will be lifted beginning in fiscal year 2056.

Expanded leasing area

The Act stipulated 8.3 million acres be offered for oil and gas leasing shortly after the enactment of the statute. This acreage is included in the Central Gulf of America Planning Area and the Eastern Gulf of America Planning Area.

Extended moratorium

The moratorium covers a portion of the Central Gulf of America Planning Area (CPA), and, until 2022, most of the Eastern Gulf of America Planning Area (EPA). The specific locations restricted from leasing activities include that portion of the Eastern Planning Area within 125 miles of Florida, all areas in the Gulf of America east of the Military Mission Line (86°41’ west longitude), and the area within the Central Planning Area that is within 100 miles of Florida.

Although the moratorium has expired, this area was additionally withdrawn (PDF) from leasing through June 30, 2032, by the Trump Administration, using authority under Section 12(a) of the OCS Lands Act (43 U.S.C. §1341(a)).

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