945 



59 



coastal state must demonstrate that the site selected for a coastal 

 energy activity is one in which there will be minimum social and 

 environmental as well as economic "costs'". Alternative sites for the 

 locus of this activity must be investigated. A key dimension to inter- 

 preting this criterion in relation to net adveree impact determinations 

 is one of "unavoidability". 



The coastal zone location of potentially dangerous LNG facilities, 

 for example, should be subject to strict environmental and safety con- 

 siderations prior to site selection. This requirement should be fully 

 integrated into the state's present program development efforts par- 

 ticularly with regard to the section 305 provisions which require a 

 definition of permissible land and water uses and a designation of 

 areas of particular concern within the coastal zone. 



Additionally, it should be noted that the Committee was concerned 

 about the residual governmental demands placed on state and local 

 governments if anticipated coastal energy activity does not material- 

 ize, or should it do so, after it has ceased. Therefore, such grants may 

 be used for the purpose of reducing or ameliorating the impact of 

 coastal energy activity, including, but not limited to, the goverimiental 

 services required for the orderly phasing out of energy activity and 

 the transition from an energy-related to a nonenergy-related economy. 



It is the intent of the Committee that the impact grants be distrib- 

 uted only on the basis of actual demonstrated coastal energy activity 

 impact without regard to comparative state populations, miles of 

 coastline or any other criteria used to determine eligibility for federal 

 assistance in any other section of this or any other Act. The funds are 

 to be distributed according to demonstrated impact without regard 

 to the proportion of grants going to any single state or group of states. 

 The criteria promulgated by the Secretary shall provide for the dis- 

 tribution of net adverse impact grants in proportion to the relative 

 demands on government made by the various types and stages of 

 energy activity. 



Subsection (d) of section 308 establishes the Coastal Energy Activ- 

 ity Impact Fund which is to be used by the Secretary as a revolving 

 fund. Administrative expenses for carrying out the OCS payments 

 subsection and/or the impact fund subsection may be charged to the 

 fund. $125 million for each fiscal year from 1977 through 1981 are 

 authorized to be appropriated to the fund by subsection (e) . 



Section 308(f) authorizes coastal states which have received plan- 

 ning or impact grants to allocate all or a portion of those funds to their 

 affected local governments and, with the approval of the Secretary, to 

 areawide, regional, or interstate agencies. 



P'inally, subsection (g) establishes the conditions under which a 

 coastal state is eligible for OCS payments or impact grants. The state 

 must be receiving a program development grant under section 305, an 

 administrative grant under section 306, or be making satisfactory 

 progress, as determined by the Secretary, toward the development of 

 a coastal zone management program. It is not necessary, therefore, 

 that a state be receiving a section 305 or 306 grant to be eligible for 

 section 308 funds. It is necessary, however, that the state be making 

 progress toward the development of a coastal zone management pro- 

 gram and that the section 308 funds received be used in a manner con- 

 sistent with such program. It is the intent of the Committee that the 



