926 



40 



be based for ea«h coastal state; the last two involve the number of 

 persons directly employed in and the amount of onshore capital invest- 

 ment made necessary by "outer continental shelf energy activities," 

 Section 308(a) (4) specifies the purposes for which the OCS payments 

 may be used by the recipient states and, in this regard, makes refer- 

 ence to the provision of public services and public facilities or the 

 amelioration of the unavoidable loss of ecological or recreational re- 

 sources resulting from "Outer Continental Shelf Energy Activity." 

 Section 319(b) stipulates that the Federal government may guarantee 

 bonds or other evidences of indebtedness issued by state or local gov- 

 ernments when the revenues which accrue from such issuance are to 

 be used for public services and public facilities made necessary by 

 "outer continental shelf energy activity," 



The first part of the definition makes reference to the exploration, 

 development or production of oil and gas resources from the Outer 

 Continental Shelf. "Outer Continental Shelf" refers to those lands 

 lying beyond state territorial waters owned and managed by the Fed- 

 eral government as defined in the Outer Continental Shelf Lands Act 

 of 1953 * and reaffirmed by United States vs. Maine, et alJ' 



The term "exploration" refers to the process of searching for OCS 

 oil and gas, including geophysical surveys and the drilling of explora- 

 tory and delineation wells. "Development" means those activities 

 which take place following the discovery of oil and natural gas and 

 are designed to produce such resources. "Production" refers to those 

 activities which take place after the successful completion of a devel- 

 opment well and are designed to transfer the resources to shore for 

 commercial use. 



Energy facilities made necessary by outer continental shelf explora- 

 tion or development are also included within the definition. The types 

 of facilities involved are specified in the next definition (k) with the 

 qualification in (j) that they be "made necessary" by OCS activity. In 

 other words, a refinery which may be located or operated in the coastal 

 zone and which does not process oil or gas from the outer continental 

 shelf would not be included within this definition. The criteria for 

 determining whether a particular facility is "made necessary by OCS 

 exploration or development should be specified by the Secretary of 

 Commerce when he promulgates regulations for the administration 

 of the amendments to the Coastal Zone Management Act. It is the 

 intent of the Committee that the main purpose of the location, con- 

 struction, expansion, or operation of the facility should be to support 

 or facilitate OCS exploration or development. If a facility specified 

 in subsection (k) is only partially used for OCS activity, grant pay- 

 ments Should be made on the basis of proportional calculations to the 

 extent such facility engages in operations made necessary by OCS 

 activity. 



New subsection (k) defines "enersry facilities." This definition is 

 applicable to four subsections of H.R. 3981. Section 305(b)(8) adds 

 an energy facility planning process of the program development work 



* Section 2 fa) of the Outer Continental Shelf Lands Act (Chapter 345, T^.S. Code. Public 

 Law 212) defines "outer continental shelf" as all submerRed lands lylnjr seaward and out- 

 side of the area of lands beneath navigable waters as defined In section 2 of the Submerged 

 Ljinds Act (Public Law 31. S3rd Congress, first session. 43 U.S.C.A. 1.301) and of which the 

 subsoil and seabed appertain to the United States and are subject to its jurisdiction and 

 control. 



5 420 U.S. 515 (1975). 



