1040 



II. AUTOMATIC GRANT FUND FOB FUTURE ADVERSE IMPACTS, NOT PAST 



On S12817, Senator Jackson stated : 



"While I am opposed to any sharing of federal revenues from Outer Continental 

 Shelf activity with the states, I have consistently supported the concept of 

 federal impact aid to those states suffering adverse impacts from Federal 

 decisions to develop OCS oil and gas. * * * The Interior Committee bill also 

 contains an automatic impact aid provision based on a formula which is specif- 

 ically designed to provide funds to coastal states in so-called frontier areas — 

 those areas where there has been no Outer Continental Shelf oil and gas 

 deveopment in the past. I supported this approach." 



"And Senator Johnston on S12815 refers to : 



"* * * for projects designed to provide new and additional public facilities and 

 public services." 



Senator Johnston continuing further stated : 



"It misses the mark by far in terms of alleviating the impact on the adjacent 

 coastal States. * * *" 



Perhaps the Louisiana situation of 10,000 holes and production dropping was 

 what you had in mind but nowhere in the entire record can you find any intent 

 or reference to aid "dropping economic activity.'' On the contrary, the intent is 

 manifest throughout the record that there was no idea of compensating for an 

 already-established offshore development with the same drill, the same pipeline, 

 the same storage tank, no additional people and no additional adverse impact. 

 A bill to reward this would have had no chance of passage in the United States 

 Senate. 



III. FORMULA GRANT FUND FOR REAL AND REASONABLE IMPACT — NOT ABSOLUTE 



At S12816 Senator Johnston stated : 



"It is not a bribe at all * * * there is a real and reasonable impact." 



Senator Humphrey at S12814 : 



"S. 586, however, is not a give-away program. Coastal states must demon- 

 strate adverse impacts to receive assistance." 



Senator Rollings at S12811 : 



"* * * these automatic grants must be used to ameliorate adverse impacts of 

 energy resources development or related energy facilities ... it is not simply 

 a grant program." 



Quoting from the bill itself presented by Senator Johnston on S12815 : 



"1. Any funds provided to any state under this section not expended in ac- 

 cordance with the purposes authorized therein should be returned to the Treasury 

 by such state." 



IV. CLEAR UNDERSTANDING THAT AUTOMATIC GRANTS MUST FIRST BE APPLIED TO 



PAYING OFF LOANS 



Senator Stevens at S12813 : 



"The automatic grants * * * are used by the state and local governments to 

 retire the Federally guaranteed bonds." 



Senator Johnston at S12815 : 



"The bill also provides, Mr. President, that when a state is eligible for this 

 money that the money should be paid first to retire the locally issued bonds 

 previously approved by the Secretary of Commerce." 



V. APPROVAL OF THE SECRETARY OF COMMERCE CLEARLY SOUGHT AND 

 CLEARLY UNDERSTOOD 



Senator Stevens on S12813 states : 



"Let me emphasize that this is really a discretionary concept ; because, under 

 the provisions of this bill this money would revert to the Treasury if it is not 

 used to meet impacts that have been approved under the plan or used to repay 

 bonds guaranteed by the Secretary of Commerce. I th'nk the Secretary of 

 Commerce will have a great deal of discretion in administering this concept." 



Senator Johnston provided for a fund approved by the Secretary of Commerce 

 in S. .521 and many times in debate and prior to the vote on S12289 stated : 



"But the uses are also spelled out and must be related to these impacts subject 

 to the Secretary of Commerce. The uses are in three categories in this priority : 



"First, to pay off bonds previously approved by the Secretary of Commerce. * * * 



