750 



24 



The second requirement is designed to prevent the impact fund it- 

 self from becoming an instrument of adverse impacts in the coastal 

 zone. The Committee believes it will also prevent the use of Federal 

 funds for frivolous purposes, not related to Congress' intent to amelio- 

 rate adverse coastal impacts of energy resource development and/or 

 energy facilities. An unfettered revenue-sharing program, derived 

 from a certain percentage of Federal royalties and bonuses received 

 from OCS leases, would lack this assurance of fiscal responsibility. 



S. 586 leaves to the Secretary of Connnerce the important task of 

 developing criteria and regulations for determining eligibility for 

 grants and loans under the impact fund. Included in the Secretary's 

 task will be the development of methodolgies for determining the pres- 

 ence or absence of "temporary adverse impacts" and "net adverse im- 

 pacts," and for measuring the magnitude of these impacts. Also in- 

 cluded will be an evaluation of the various purposes to which Federal 

 loans or grants might be put. The Secretary is directed to consult with 

 a range of public and private interest groups in the development of 

 criteria. 



In actually evaluating specific applications for grants or loans 

 under the Coastal Energy Facility Impact Fund, the Secretary will be 

 required to consider — and. it is hoped, in most cases follow — the recom- 

 mendations of a Coastal Impacts Review Board. The board is to have 

 representation from State governments as well as Federal agencies. 

 Inclusion of the review board in S. 586 resulted from an amendment 

 proposed by Senator Stevens during the Committee's deliberations. 



Recognizing that Federal OCS oil and gas development and energy 

 facilities — and their resulting adverse coastal impacts — predate the 

 present action to prov^ide impact funds, S. 586 contains a provision 

 (section 308(g)) permitting retroactive compensation for such im- 

 pacts. States wishing such retroactive grants or loans must meet the 

 same eligibility requirements as those seeking amelioration of present 

 or future impacts. Retroactive compensation is permitted only during 

 the first 5 years after enactment of section 308(g). The Committee 

 believes that the States must bear the burden of proving past impacts 

 for retroactive compensation. Existing studies do not appear sufficient 

 for this purpose. 



The Committee does not wish to create a bureaucratic maze or wind- 

 fall profits for consulting firms in the process of requiring documenta- 

 tion of adverse impacts as a prerequisite for eligibility for grants or 

 loans under the impact fund. To permit the States to group together 

 the cumulative impacts of smaller magnitudes and avoid documenta- 

 tion of each and every one, S. 586 assumes that a valid claim of ad- 

 verse impacts could be made by every State which is adjacent to OCS 

 lands where oil or gas is produced, or which is permitting oil or gas 

 produced on OCS lands to be landed in the State's coastal zone, or 

 both. Such States shall, under the provisions of section 308 (k), be 

 eligible to receive an automatic annual grant of an amount tied to 

 (1) the volume of oil or gas landed in the State and/or produced on 

 adjacent OCS lands; and (2) the number of years these activities 

 have occurred and, by assumption, have affected the State's coastal 

 zone. The formula for allocating automatic grants is related to the 

 number of barrels of oil (or the natural gas equivalent) produced 

 and/or landed each day, multiplied by the number of days in the 



