770 



44 



Section 308 (k) contains an additional provision for assistance to 

 the coastal States. This subsection pertains to oil and gas produced 

 on OCS lands and is a provision adopted in committee on the motion 

 of Senator Stevens. ITnder this provision the coastal State which is 

 adjacent to the Outer Continental Shelf lands from which such oil or 

 natural gas is being produced will receive an automatic grant if said 

 production is occurring on the first day of the relevant fiscal year and 

 if it exceeds 100,000 barrels of oil per day or, in the case of natural gas, 

 the energy equivalent of 100,000 barrels of oil, as determined by the 

 Secretary (NOAA). ("Adjacency shall be determined by regulations 

 of the Secretary" ( NOAA) . 



Also eligible for these automatic grants are coastal States which, as 

 of the first day of the relevant fiscal year, are permitting oil or natural 

 gas produced on the OCS adjacent to that State or adjacent to another 

 coastal State, to be landed (brought ashore) in its coastal zone, pro- 

 viding that such landing occurs as the first landing of that product as 

 a T-esult of its direct transportation thereto. In the event that a State 

 is adjacent to OCS lands where production occurs but is not landing 

 the oil or natural gas produced there, or in the opposite event that a 

 State is landing oil or natural gas produced adjacent to another State, 

 the grants shall be calculated at a rate half as great as that to which it 

 would be entitled if it were both adjacent to OCS production and 

 landing that oil or gas. In most cases, this will mean an equal sharing 

 between the adjacent State and the landing State. In some cases, how- 

 evei\ one State may not receive its half because it will not have met 

 the lOO.OOO-barrel-per-day requirement or it will have surpassed the 

 1-million-barrel-per-day limit. That circumstance does not interfere 

 with the right of the other State to receive its half of the grant as long 

 as that State has met tlie minimum and has not surpassed its limit. In 

 such cases, the grants shall only be in amounts of one-half that which 

 would be. made if tlie oil oi- gas liad been pi'oduced on adjacent OCS 

 lands. 



The 100,000-barrels-per-day to 1-million-barrels-per-day eligibility 

 criteria apply to the "landing State" as well. 



The funds made available under subsection (1) are to be expended, 

 pursuant to regulations adopted by the Secretary of Commerce 

 (NOAA) , for the purpose of reducing or ameliorating adverse impacts 

 resulting from exploration, development or production of energy re- 

 sources, including those on OCS lands, or from the location, construc- 

 tion or operation of related energy facilities consistent with the CZM 

 Act. If the coastal State does not expend the funds pureuant to the 

 purposes for which granted, the regulations and conditions acxiom- 

 panying such grants shall provide for their return to the U.S. 

 Treasury. 



Funds for this subsection do not come out of the "Coastal Energy 

 Facility Impact Funds" and the authorization for such funds, in this 

 subsection, are to be sufficient to provide the coastal States with grants 

 as follows (the amounts stated are those for the States adjacent to the 

 ])roduction and in which tlie oil or gas is landed) : 20 cents per barrel 

 in the first yeai- of pavments to that State, li^ cents in the second year 

 of pavments to that State, 10 cents in the third year of payments to 

 that State and. 8 cents in the succeeding yeai-s of pavments to that 

 State. Such authorized funds shall not exceed $50 million per year for 



