969 

 83 



Distribution of OCS Revenues 



The Administration recognizes the concerns about OCS generated 

 fiscal impact problems which have led some coastal States to propose 

 that OCS revenues be shared with the States. This concern is reflected 

 in provisions of H.R. 1776 and H.R. 6090 which mandate that certain 

 portions of OCS oil and a gas revenue be spent to grant assistance to 

 potentially impacted or impacted coastal States to study and/or con- 

 trol the adverse effects of such impacts. The Administration currently 

 is actively studying several alternative proposals to deal with such 

 problems ranging from impact aid grants to formula-grant revenue 

 sharing. However, we have no recommendation to make at this time. 



To summarize, the bills before the Committee deal with the major 

 issues relating to use of the energy resources of the Outer Continental 

 Shelf. To meet our present energy needs, however, we believe that the 

 present OCS Lands Act and the Coastal Zone Management Act of 

 1972 provide a satisfactory framework and that further legislation 

 such as that before the Committee is undesirable or unnecessary. 



The Office of Management and Budget has advised that there is no 

 objection to the presentation of this report from the standpoint of the 

 Administration's program. 



Sincerely yours, 



RoTSTON C. Hughes, 

 Assistant Secretary of the Interior. 



Department of the Navy, 

 Office of Legislative Affaibs, 

 Washington^ D.C.^ June i, 1&75. 

 Hon. Lbonor K. Sullivan, 



Chairman., Committee on Merchant Marine and Fisheries^ House of 

 Repreesntatives^ Washington., D.C. 



Dear Madam Chairman : Your request for comment on H.R. 3981, 

 a bill "To amend the Coastal Zone Management Act of 1972 to author- 

 ize and assist the coastal States to study, plan for, manage, and control 

 the impact of energy resource development and production which 

 affects the coastal zone, and for other purposes," has been assigned to 

 this Department by the Secretary of Defense for the preparation of 

 a report expressing the views of the Department of Defense. 



H.R. 3981 would assist coastal states in coping with problems re- 

 lated to energy production and resource development. In addition, 

 sections 7(b) and 7(d) of the bill would amend the Coastal Zone 

 Management Act so as to include islands within the coastal zone. 



The Department of Defense has extensive operational responsi- 

 bilities on various islands within the coastal zone. Of course, these 

 responsibilities are subject to the policy that federal agencies will 

 cooperate with state governments to effectuate the purposes of the 

 act. 16 U.S.C. § 1456 (c) . At the same time, the Secretary of Commerce 

 has authority to exempt federal activities from strictures of the act 

 where necessary for national security. 16 U.S.C. § 1456(c) (3). In ad- 

 dition. Congress has specifically exchided from the coastal zone federal 

 lands "the use of which is by law subject solely to the discretion of or 



