903 



17 



concept of "coastal energy activity" is based is whether the state may 

 be serving the national interest by locating and permitting to operate 

 those energy-related facilities which, by their very nature or technical 

 requirements, must be in the coastal zone. In other words, those facili- 

 ties which could conceivably be located inland from a state's coast 

 would not be included. While the first assistance program (section 308 

 (a)) would allow compensation for OCS-related activities only, the 

 second approach would include deepwater ports, liquefied natural gas 

 storage and conversion facilities, and non-OCS oil or coal loading 

 docks, terminals, and storage facilities. 



The concept of "net adverse impacts" is defined in the bill, and sev- 

 eral factors which the Secretary of Commerce is to consider in deter- 

 mining the amount of a grant are specified. Among the latter are bene- 

 fits which directly offset adverse impacts; efforts made by state and 

 local governments to minimize impacts and to internalize the costs asso- 

 ciated with the activity ; the availability of alternative sites for energy 

 activity which would minimize impacts ; and the receipt of other fed- 

 eral funds (including the annual automatic OCS payments) which 

 could be used to reduce adverse impacts. The task of determining the 

 appropriate level of funding is not unmanageable if these guidelines 

 are used, and adherence to these guidelines will prevent any possible 

 over-compensation to individual states. The impact fund as provided 

 in 308(b) would, in a sense, be a supplementary grant program, not a 

 substitute or duplicative grant scheme. 



Any grant allocated to a state under section 308(b) shall be used 

 for providing up to 80 percent of the cost of canying out projects or 

 programs designed to reduce or ameliorate any net adverse impacts 

 resulting from coastal energy activity. A separate provision in 308 

 (b)(1) would permit the Secretary to allocate 80 percent matching 

 grants to enable states to study and plan for the economic, social, and 

 environmental consequences of energy facilities which are impacting 

 or likely to impact the coastal zone. 



Funds authorized for appropriation in the second assistance pro- 

 gram would be $125 million for five fiscal years commencing with 

 fiscal year 1977. 



A provision in the bill which is applicable to both grant programs 

 in section 308 would have each coastal state receiving funds give 

 serious consideration to the allocation of such funds to any local gov- 

 ernment in the proportion which such local government has suffered 

 net adverse impacts resulting from OCS or coastal energy activities. 



The bill would further require that impact grants could be made 

 only to those coastal states which are either receiving development 

 grants under section 305 or are making satisfactory progress towards 

 the development of a coastal zone management program. Any funds 

 received under section 308 would have to be expended in a manner 

 which is consistent with the coastal zone management program of the 

 respective state. By inclusion of this important provision, the Com- 

 mittee is convinced that the necessary coordinated approach will take 

 place using the comprehensive coastal zone management programs 

 being developed by the respective states. 



65-319 O - 76 - 58 



