818 



problems. Ever since the U.S. Supreme Court ruled that the Federal 

 Government had exclusive jurisdiction over the Outer Continental 

 Shelf beyond 3 miles, the States have been permitted very little input 

 into the accelerated OCS leasing plan. Consequently, in frustration, 

 some States have gone to court in an attempt to block and delay further 

 offshore leasing. Our Nation cannot afford these setbacks — we must 

 vigorously pursue our goal of energy self-sufficiency — but we cannot 

 disregard the States in this endeavor. 



One of the most important provisions in H.R. 3981 is section 308 — 

 the coastal energy activity impact program. 



This program would permit the Secretary of Commerce to allocate 

 funds to coastal States, adequately dealing with adverse impacts suf- 

 fered as a result of energy activities occurring offshore and within a 

 State's coastal zone. 



This problem, adopted by a unanimous vote of 36 to in our com- 

 mittee, is a well thought out approach to a complex problem. Outer 

 Continental Shelf impacts would be offset by a six-part formula des- 

 igned to measure the level of OCS activity occurring adjacent to and 

 within a coastal State. It has the distinct advantage of requiring mini- 

 mal administrative costs. Furthermore, adequate provisions are in- 

 cluded in the bill to prevent the expenditure of funds for other 

 purposes than those which are adverse in nature, and which occur as a 

 direct result of OCS energy activities. While the committee did con- 

 sider various revenue sharing approaches similar to the 37i/2 percent 

 revenue allocation scheme which the inland States enjoy, I must state 

 that the OCS payment concept in our bill is not revenue sharing. It is 

 subject to the annual appropriations process, and authorizations 

 escalate from $50 million to $125 million in the fifth and final year. The 

 first year authorizations represent less than 1 percent of the projected 

 revenues accruing to the Federal Government from the OCS leasing 

 program. 



The second part of the impact program would be a discretionary 

 fund allocated on a basis of demonstrated adverse impacts. This fund 

 would be restricted to energy related activities which, by their nature, 

 have to be located in the coastal zone. 



In a sense, this secondary assistance would be a supplemental grant 

 program to properly compensate for those energy related activities 

 not covered under the first OCS formula. Grants would only be given 

 to those coastal States which could demonstrate that an adverse im- 

 pact had occurred. Also, funds would have to be expended for specific 

 purposes related to such impacts. 



Additionally, the bill provides a Federal bond guarantee program 

 to State and local governments. This would permit the States to take 

 advantage of "self-help" mechanisms to ameliorate impacts suffered 

 as a result of Outer Continental Shelf energy activities. 



These three programs have been carefully designed to respond to the 

 needs of the coastal States which are or will be involved in the develop- 

 ment of new sources of energy for our country. I believe that they are 

 fiscally responsible, and that they take into proper account the Presi- 

 dent's conservative budgetary plan. The allocation or funds is based on 

 need, and provisions are included in the program to prevent unneces- 

 sary and frivolous expenditure of these funds. 



