OCR Text |
Show Federal Responsibility to the States Recommendation 76: To the extent that adjacent states can prove net burdens resulting from onshore or offshore operations, in connection with Federal mineral leases on the Outer Continental Shelf, compensatory impact payments should be authorized and negotiated. Revenue from mineral leasing on the Outer Continental Shelf is deposited to the credit of the General Fund in the Treasury of the United States. From the time of the enactment of the Outer Continental Shelf Lands Act, coastal states adjacent to mineral-producing areas of the Shelf have sought a share of the revenues. The legislative history of the Act, however, makes it clear that Congress considered that the Submerged Lands Act grant to states had satisfied adjacent state equities.18 With this, the Commission agrees. Because Outer Continental Shelf lands do not lie within the borders of any state, they do not represent any limitation on the property tax potential of a state. In this respect, they are unlike the onshore public lands. The considerations which prompt this Commission to recommend elsewhere a payments-in-lieu-of-taxes system for onshore public lands are, therefore, inapplicable to the Outer Continental Shelf. However, the rationale by which we arrived at the conclusion that revenues generated by resource sales onshore should not be shared with the states is equally applicable here. That rationale is based primarily on the fact that a percentage of uncertain revenue is in no way related to the burdens imposed by the Federal presence. We, therefore, conclude that adjacent states should not share in the revenues from Federal mineral leases on the Outer Continental Shelf. No evidence has been developed in the studies performed for us, or presented to the Commission by any coastal state, which demonstrates that there is a net burden to the states as a result of activities on the Federal Outer Continental Shelf. Shore installations supporting Shelf activities are subject to state taxation. People who work offshore, live onshore. Therefore, just like people who work in Federal buildings or installations but live "in town," they and their properties are subject to state and local taxation. The coastal states, and Louisiana in particular, 18 The Submerged Lands Act limited the area to 3 miles from the coastline of the states. Although the Act provided that states might establish entitlement to a larger area, the Supreme Court has found that only Florida and Texas have that entitlement. U.S. v. Florida, 363 U. S. 121 (1960); U. S. v. Louisiana, 363 U. S. 1 (1960). have, nevertheless, continued to assert a claim to a share of Shelf revenue on the grounds that Shelf development activity has placed burdens of education, roads, and public safety upon the states and their subdivisions, and that the states provide certain direct services, including radiation control and wildlife and fishery protection, to the Federal Government and its lessees through formal and informal cooperative agreements. It may be that states can prove a net burden. But proof should lie with the states and the local units of government having jurisdiction over the area which is burdened. The Commission rejects the suggestion that the states or their subdivisions be permitted to tax a possessory interest in facilities located on the Outer Continental Shelf as not being consistent with maintaining exclusive Federal jurisdiction. Research and Resource Development Recommendation 77: The Federal Government should undertake an expanded offshore program of collection and dissemination of basic geological and geophysical data. As part of that program, information developed under exploration permits should be fully disclosed to the Government in advance of Outer Continental Shelf lease sales. However, industry evaluations of raw data should be treated as proprietary and excluded from mandatory disclosure. Most of the information now available to the Federal Government concerning the value of leased and prospective leasing areas of the Shelf is derived from data gathered by industry. Exploration permits and leases have had provisions requiring the disclosure of certain geological information on a confidential basis. However, the existing disclosure requirements pertain to geological rather than geophysical information. Geophysical surveying does not require physical penetration or sampling of the crust of the earth through well holes as do geological surveys. Consequently, it is less expensive and more extensively employed for pre-lease evaluation. Because little Federal geological exploration is conducted, and because, even under the most recent regulations, the information required by the Government is obtained primarily from wells being drilled for production,19 such information can have only limited use for pre-lease evaluations, although the data will enhance the total knowledge of Shelf geology. Furthermore, since industry activities relate See 30 C.F.R. 250.38. 193 |