749 



23 



impacts are certain and permanent impacts possible, impact funds 

 may be awarded as a loan with the stipulation that changed circum- 

 stances and additional information obtained at a future time will 

 entitle the Secretary of Commerce to forgive all or part of the loan 

 if permanent net adverse impacts become apparent. The case of the 

 proposed Brown and Root platform fabrication plant at Cape Charles, 

 Virginia, described earlier, appears to be exemplary of the circum- 

 stances in which a loan might be given. 



The bill specifies that impact grants will be made only when a State 

 can demonstrate that an energy facility or energy resource develop- 

 ment can be expected to produce a net balance of adverse impacts over 

 the course of its operational lifetime. Demonstration of net adverse 

 impacts is required in recognition of the fact that such a facility or 

 development generally can be expected to produce positive benefits, 

 such as increased tax revenues and assessed property values from land- 

 use changes and population increases, as well as negative effects, such 

 as environmental damage or increased demands on public facilities and 

 services. The purpose of the grant provision in the impact fund is to 

 offset any net amount by which the expected or actual costs exceed the 

 expected or actual benefits- 



A substantial but oft-criticized body of experience in determining 

 the positive and negative impacts of major facilities has been devel- 

 oped in the application of cost/benefit analysis to planning public 

 works projects. In developing criteria for eligibility for impact grants 

 and loans, the Secretary should draw upon the applicable portions of 

 this experience, making appropriate extensions and modifications 

 where needed to deal with the full range of potential costs and bene- 

 fits — including social and environmental costs often neglected in cost/ 

 benefit analyses — associated with energy facilities. In addition, the 

 Secretary should give consideration to the tax effort of each applying 

 State. 



The Committee is particularly anxious to insure thai the Coastal 

 Energy Facility Impact Fund will be administered in harmony with 

 the larger purposes and spirit of the Coastal Zone Management Act. 

 Thus, States must satisfy the Secretary of Commerce that they have 

 met two requirements in addition to documenting adverse impacts: 

 first, that they are engaged in comprehensive coastal zone planning 

 and management, and second, that they will use the impact fund 

 grants and/or loans which they receive in a manner that is consistent 

 with the goals and objectives of the Act and with any management 

 programs which they themselves develop pursuant to the Act. 



States may satisfy the first requirement in one of three ways: (1) 

 by receiving a program development grant pursuant to section 305 

 of the Act and making good progress toward program development; 

 (2) by making good progress in a similar development program under 

 State auspices; or (3) by having an approved coastal zone manage- 

 ment program pursuant to section 306 of the Act. The Committee 

 hopes that the eligible coastal States will continue their present 

 involvement in the Federally funded coastal zone management pro- 

 gram and will receive Secretarial approval for their individual pro- 

 grams, particularly in light of the control they will gain over their 

 coastal zones by application of the "Federal consistency" clause of the 

 Act, described above. 



