1074 

 24 



The conferees believe (1) that there is a real possibility of delay 

 or disruption in Federal plans for needed new and expanded OCS oil 

 and gas production unless coastal states and coastal communities 

 are assured of the means of copino- with and amelioratino; the impacts 

 from such activities; (2) that the coastal states are concerned about 

 furtherin^j national energy objectives; (3) that a strenfrthened coastal 

 zone management program, with full participation by the states, is 

 vital to the protection and proper management of irreplaceable coas- 

 tal resources and is the best means of dealing with impacts from new 

 or expanded coastal energy activity; (4) that the Federal Govern- 

 ment, because of the national need to increase domestic energy pro- 

 duction to reduce reliance on imports, should provide assurance of 

 timely and practicable financial assistance related and tailored to 

 these needs; (5) that the coastal states and localities, which are closer 

 to and more cognizant of the situation, should make the basic deci- 

 sions as to the particular needs which result from such new or ex- 

 panded energy activity; and ((>) that the discretion of the Secretary 

 of Commerce and other Federal officials should be correspondingly 

 limited. 



The conference substitute, like the House amendment, does not pro- 

 vide for formula grants to coastal states based solely on OCS oil and 

 gas production and first landings of such production, because produc- 

 tion-related payments per se might not be distributed in time to meet 

 the total needs of recipients. Instead, the conference substitute would 

 provide formula grants based on a formula which follows criteria set 

 forth in the Senate bill and the House amendment. The conference 

 substitute, like the Senate bill, does not provide for all Federal finan- 

 cial assistance to be in the form of grants or guarantees, because ordi- 

 nary taxation by the states and localities affected may be adequate to 

 pay for, over a reasonable period of time, the cost of new or improved 

 (expanded or renovated to meet the new requirements) public facili- 

 ties and public services. For example, new energy employment and 

 related populations will create a need for such facilities and services, 

 but they will also increase the total amount of tax revenues collected 

 in or from the impacted area, on the basis of which the cost of these 

 facilities and services can be amortized. 



The primary impact assistance would be provided through a re- 

 volving account in tlie Treasurv of the T"^nited States which shall be 

 known as the Coastal Energy Impact Fund. The Fund will be based 

 on annual appropriations (together with miscellaneous receipts in the. 

 form of fees, etc.). 



Under the conference substitute, the bulk of tlie Federal energy im- 

 pact assistance is authorized to be a]^propriated to the Fund for 

 (1) Federal loans to coastal states, and units of general purpose local 

 government in coastal states; (2) Federal guarantees of bonds and 

 other indebtedness issued or entered into by such states and units; (3) 

 backup or adjustment grants to be awarded when the states and 

 localities cannot meet their obligations under these loans and guar- 

 antees with ordinary tax revenues; and (4) special grants for (i) the 

 prevention, reduction or amelioration of unavoidable losses of environ- 

 mental and recreational resources, and for (ii) the study and planning 

 for the consequences of energv-related activity in tlie coastal zone. A 

 total of $800 million is authorized to be appropriated to the Fund, for 



