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Thank you for your February 27, 1991 letter requesting my views
on the impact assistance provisions contained in s. 341, the
"National Energy Security Act of 1991." These provisions concern
providing funds to coastal states and communities which are
impacted by Outer Continental shelf (OCS) oil and gas development
and production.
In regulations promulgated under the Coastal Zone Management
Act's Coastal Energy Impact Program (CEIP), it is clearly
recognized that States can reasonably expect to be exposed to
significant environmental, economic or social consequences as a
result of OCS activities. Because funds are no longer available
through the CEIP program for states to cope with impacts from OCS
oil and gas activities and they are still occurring, it is most
appropriate for states to share in the revenues generated from
these activities.

Use of the impact assistance funds should include state and local government participation in carrying out responsibilities under the OCS Lands Act. These responsibilities include participating in the administrative, policy, operational and managerial decisions relating to management of the oil and natural gas resources of the OCS.

Funds should also be used for other planning, construction and
maintenance of public facilities and provision of public service
for those areas of the state that are socially or economically
impacted by OCS activities.
Although I support the concept of impact assistance to coastal
states and communities, I plan to work with the Florida
Congressional Delegation in deciding the most appropriate formula
for determining funds available and the allocation of such funds.

The Honorable J. Bennett Johnston
Page Two

I appreciate the opportunity to comment on the impact assistance provisions of the "National Energy Security Act of 1991." Since I have not had the opportunity to review the other provisions of your bill, my support of the concept of impact assistance should not be construed as support for other portions of the Act.

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The Commonwealth of Massachusetts
Engguling,

ffice of Environmental Affairs
100 Cambridge Street, Boston, 02202

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Governor Weld has asked me to respond to your request express the views of the Commonwealth of Massachusetts on certain provisions of s. 341, the "National Energy Security Act of 1991." As I am sure you know, the Commonwealth of Massachusetts has strong commitment to the proper management of coastal and ocean resources and I appreciate the opportunity to comment on this very important issue.

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The Commonwealth supports the concept of Outer Continental Shelf (OCS) oil and gas revenue sharing provided it recognizes the involvement of all coastal states that have approved coastal programs pursuant to the federal Coastal Zone Management Act. The

of offshore non-renewable resources, as part of federal development program, affect more states than just those adjacent to the activity. Coastal states that do not have active ocs oil and gas activities, like Massachusetts, remain involved with the ocs Leasing Program by reviewing and commenting on multi-year lease sale plans and thus still incur administrative costs. In addition, they are often affected by the transportation and handling of the resource once it has been extracted.

For the reasons outlined above, I urge the Committee to amend Section 4 of S. 341 so that all coastal states with approved coastal programs would be eligible under the proposed Coastal state and Community Outer Continental Shelf Impact Assistance Fund.

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I hope things are going well for you this session. I received your letter concerning the provisions of Senate Bill 341 and am glad to know you are looking after the interests of our states regarding revenues from offshore oil and gas production. I appreciate your letting me know about this bill and giving me a chance to comment.

Since the federal government ceased funding the originai Coastal Energy Impact Program, the states have come up short in revenues from offshore oil and gas development and production. The State of Mississippi's position is that on-shore impacts should be considered, notwithstanding the court ruling which limited the federal coastal impact program. Therefore, I support your effort to address the need through direct production revenues rather than fund allocations, if those revenues are in addition to revenues provided under the provisions of the law, including section 8 (9) of the Outer Continental Shelf Lands Act, as amended.

I hope you are successful in getting this legislation passed and look forward to seeing you again before too long. Let me know if you need further comment on this issue, or if I may be of assistance in any way

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Sincerely,

"Mahin

RAY MABUS
Governor

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POST OFFICE BOX 139, JACKSON, MISSISSIPPI 39205. 601-359-3100

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The Honorable J. Bennett Johnston
Chairman
Senate Committee on Energy and Natural Resources
Washington, D.C. 20510-6150

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Dear Senator Johnston:

This letter responds to your request of February 27 for North Carolina's views on certain provisions of s. 341. Those provisions pertain to OCS revenue sharing with affected coastal states.

I was pleased to see that your bill embodies a concept that this state has long supported. We believe that OCS revenue sharing is long overdue. After CEIP funds dried up, the states were without federal assistance to offset the often significant impacts that occur from adjacent OCS activities. As Interior's new proposed 5-year ocs leasing program so clearly states, "the benefits of production for the most part accrue to the Nation a whole while the associated environmental costs are borne mostly by the coastal areas in proximity to production activity." I believe your bill has the potential to rectify this inequitable situation affecting coastal states.

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The amount to be paid into the Fund should be no less than 37.5%, the amount specified in your bill. The formulae for sharing revenues with the coastal states seem fair. I am particularly pleased that your bill allows the revenues to be passed to the states, which decide how sharing at the local level will occur.

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