942 



56 



transitional quarter (July 1, 1976-September 30, 1976) are to be con- 

 sidered fiscal year 1976 data. 



Section 308(a) (4) specifies and prioritizes fhe uses of OCS pay- 

 ment funds. First, the recipient coastal state must retire any bonds 

 which were issued and guaranteed under section 319 of the bill. If the 

 payment in a particular year is insufficient to retire both state and 

 local bonds, priority is to be given to local bonds. 



Bonds which are issued through normal revenue raising structure of 

 state or local governments and not guaranteed pursuant to section 319 

 do not fall within this requirement. 



If no state or local bonds were issued pursuant to section 319, or if 

 some OCS funds remained after retiring such bonds, the state may then 

 use the monies to plan and carry out projects or programs designed to 

 provide public services or facilities made necessary by OCS energy 

 activity.® 



The third and final purpose for whidh the state could use the funds 

 is to reduce or ameliorate any loss of ecological or recreational re- 

 sources which resulted from OCS activity. 



Paragraph (5) provides that any monies allocated to a coastal state 

 under this subsection not spent or committed for the purposes author- 

 ized under paragraph (4) are to be returned to the Treasury of the 

 United States. The Secretary is responsible for determining this each 

 year by utilizing the auditing provisions of section 313 (as redesig- 

 nated) of the Coastal Zone Management Act. 



Section 308(a) (6) establishes the authorization levels for the next 

 five years. The OCS payments are authorized at $50 million for fiscal 

 years 1977 and 1978 and escalate to $125 million in fiscal year 1981. 

 This accelerating level of authorization was adopted by the Committee 

 to indicate that the OCS payments are to benefit all affected coastal 

 states. As new "frontier" areas such as Alaska and the Atlantic coast 

 states begin to enter into the exploration and development phases of 

 OCS activity, the monies should increase to permit a more equitable 

 distribution of funds to those states which may have a previously lim- 

 ited or non-existent onshore infrastructure for dealing with OCS oil 

 and gas. 



Paragraph (7) states that, to the maximum extent practicable, 

 recipient coastal states should allocate all or a portion of the OCS pay- 

 ment funds to their local governments. The state should calculate how 

 much of each of its affected local governments will experience the 

 various levels of OCS activity and make thei'- allocation based on a 

 reasonable estimate of each unit's proportional share of these activi- 

 ties. With the approval of the Secretary, the coastal state may trans- 

 fer all or some of the payments to areawide, regional, or interstate 

 agencies. The state maintains the responsibility to see that their local 

 governments utilize the money in accordance with the purposes speci- 

 fied in paragraph (4). 



Energy facility planning and net adverse impact grants 



Subsections (b) through (f) of section 308 authorize energy facility 

 planning grants and impact grants and subsection (g) specifies the 

 conditions under which coastal states are eligible for either OCS 

 payments or impact grants. 



» See Appendix III, "Location of Onshore Impacts of Outer Continental Shelf Oil and 

 Gas Development." 



