1075 

 25 



these purposes. These loans and guarantees would be made, pursuant 

 to an allotment for each coastal state, for the purpose of financing new 

 or improved public facilities and public services which are required 

 as a result of new or expanded coastal energy activity. 



Formula grants will be made to coastal states on the basis of a stat- 

 utory formula that relates to state and local needs resulting directly 

 from new or expanded outer Continental Shelf energy activity. The 

 conference substitute follows the House amendment in authorizing 

 a total of $400 million over eight years for such formula grants. The 

 formula in the conference substitute also contains built-in incentives 

 for coastal states to assist in achieving the underlying national objec- 

 tive of increased domestic oil and gas production. The formula follows 

 the House amendment. Under it, one-third of each coastal state's for- 

 mula grant will be based on the amount of new OCS acreage 

 leased adjacent to all of the coastal states in that year; one-sixth 

 will be based on the volume of oil and natural gas produced in such 

 year from such acreage adjacent to such state by comparison with the 

 total such production from such acreage adjacent to all of the coastal 

 states; one-sixth will be based on the volume of such production which 

 is first landed in such state in such year by comparison with the total 

 first landings of such production in such year in all of the coastal 

 states; and one-third will be based on the number of individuals resid- 

 ing in such state in the immediately preceding fiscal year who obtain 

 new employment in such year as a result of new or expanded outer 

 Continental Shelf energy activities by comparison with the total num- 

 ber of individuals residing in all of the coastal states in such year who 

 obtain new employment in such year as a result of such outer Con- 

 tinental Shelf energy activities. Formula grant payments which are 

 not used for the purposes specified in the conference substitute must 

 be returned to the Secretary. 



The fornmla, as so constructed, provides incentives to coastal states 

 (if they are interested in increasing their share of the funds appropri- 

 ated for this purpose) to encourage and facilitate the achievement of 

 the basic national objective of increasing domestic energy production. 

 This provision would be in harmony with sound coastal zone manage- 

 ment principles because Federal aid Avould be available only for states 

 acting in accord with such principles. For example, since the grant is 

 based on new leasings, production, first landings, and new employment, 

 it is to the state's interest to apply the "consistency" provisions and 

 related processes to the issuance of oil exploration, development and 

 production plans, licenses, and permits as quickly as possible rather 

 than to postpone decision-making for the statutory 6-month period. 



Coastal energy impact assistance would be available under the con- 

 ference substitute (as under the Senate bill and the House amendment) 

 to any coastal state which (1) has a coastal zone management 

 program which has been approved under section 306; (2) is receiving 

 a grant under section 305 (c) or (d) or (3) is, in the judgment of the 

 Secretary, making satisfactory progress toward the development of a 

 management program consistent with the policies set forth in 

 section 303. 



Thus, under the conference substitute, all Federal financial assist- 

 ance for energy impacts is specifically related to needs resulting from 

 specified energy activities. The conferees believe that such a nexus is 



