To provide for the distribution to coastal States and counties of revenues collected under the Outer Continental Shelf Lands Act.

February 25, 2003

Mr. ROHRABACHER introduced the following bill; which was referred to the Committee on Resources

To provide for the distribution to coastal States and counties of revenues collected under the Outer Continental Shelf Lands Act.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Fair Disbursement of Offshore Oil Revenue Act of 2003'.

SEC. 2. FINDINGS.

The Congress finds that--

(1) the demand for energy in the United States is increasing and will continue to increase for the foreseeable future;

(2) domestic production of oil and gas is declining;

(3) the United States continues to be overly dependent on foreign sources of oil and gas;

(4) the Outer Continental Shelf contains significant quantities of oil and gas that should be developed to meet United States energy needs while safeguarding important environmental values;

(5) the exploration, development, and production of Outer Continental Shelf resources, and the siting of related energy facilities, may impact various State and local governments; and

(6) coastal States and counties should be provided with a share of the revenues derived from Outer Continental Shelf oil and gas leasing, exploration, development, and production activities.

SEC. 3. DEFINITIONS.

For purposes of this Act--

(1) the term `coastal State' means any State of the United States bordering on the Atlantic Ocean, the Pacific Ocean, the Arctic Ocean, or the Gulf of Mexico;

(2) the term `coastal county' means a unit of general government immediately below the level of State government, as determined by the Secretary under section 6, with jurisdiction over lands along the coast line;

(3) the term `coast line' has the meaning given such term under the Submerged Lands Act (43 U.S.C. 1301 et seq.);

(4) the term `Outer Continental Shelf' has the meaning given the term `outer Continental Shelf' under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.);

(5) the term `Secretary' means the Secretary of the Interior; and

(6) the term `revenues' means all bonuses, rents, royalties, and other moneys collected under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.), and interest thereon.

SEC. 4. COASTAL COMMUNITIES OUTER CONTINENTAL SHELF RECEIPT FUND.

(a) ESTABLISHMENT- There is established an interest bearing account in the Treasury of the United States to be known as the Coastal Communities Outer Continental Shelf Receipt Fund (hereafter in this Act referred to as `the Fund').

(b) PAYMENTS TO FUND- Beginning in fiscal year 2004, the Secretary shall pay into the Fund all revenues described in subsection (c) that are attributable to an Outer Continental Shelf lease, any part of which is within 200 geographical miles of the coast line. The Secretary may adjust amounts in the Fund at any time to account for overpayments, underpayments, and errors.

(c) NEW REVENUES- Subsection (b) shall apply only to--

(1) bonus revenues under a lease if no bonus revenues have been received by the Secretary under that lease before January 1, 2003;

(2) rent revenues under a lease if no rent revenues have been received by the Secretary under that lease before January 1, 2003;

(3) royalty revenues under a lease if no royalty revenues have been received by the Secretary under that lease before January 1, 2003; and

(4) other revenues under a lease if the lease was issued on or after January 1, 2003.

SEC. 5. DISPOSITION OF FUND.

(a) STATE SHARE- (1) Six months after the end of fiscal year 2004, and annually thereafter, the Secretary shall pay from the Fund to each coastal State one-half of such revenues paid into the Fund with respect to the fiscal year most recently completed, and any interest earned thereon, as may be attributable to that State.

(2) In order to determine to which State revenues are attributable for purposes of this Act, the Secretary shall delimit the lateral boundaries between the coastal States to a point 200 geographic miles seaward of the coast line. Such boundaries shall be set according to the following principles, listed in order of the priority of their application:

(A) Any judicial decrees or interstate compacts delimiting lateral offshore boundaries between coastal States.

(B) Principles of domestic and international law governing the delimitation of lateral offshore boundaries.

(C) The desirability of following existing lease boundaries and block lines on the Secretary's official protraction diagrams.

(3) Each coastal State, before receiving funds under this subsection, shall annually enact the necessary legislation to provide any State permits required for onshore facilities needed to support offshore oil or gas development or production in the area adjacent to that coastal State. If a State fails to enact such legislation, the funds attributable to that State shall not be disbursed, and the Secretary shall take into consideration that failure before offering any additional leases for sale in the offshore area adjacent to that State.

(b) COASTAL COUNTY SHARE- (1) At the same time that the Secretary pays revenues to coastal States under subsection (a), the Secretary shall pay to coastal counties within that State the remaining one-half of the revenues, and any interest earned on those revenues, in the Fund for that fiscal year attributable to that State.

(2) In order to determine to which coastal county revenues are attributable for purposes of this Act, the Secretary shall delimit the lateral boundaries between the coastal counties to a point 200 geographic miles seaward of the coast line. Such boundaries shall be set according to the following principles, listed in order of the priority of their application:

(A) Existing boundaries between coastal counties with valid supporting legal authority.

(B) The desirability of following existing lease boundaries and block lines on the Secretary's official protraction diagrams.

(C) The principle that, to the extent consistent with subparagraphs (A) and (B), the size of the coastal county's adjacent offshore area, as a percentage of all of that State's adjacent offshore areas, shall be based on a formula giving equal weight to--

(i) the coastal county's coast line as a percentage of the State's coast line, calculated using the same large-scale charts of the National Ocean Service that are used to delimit the territorial sea under international law; and

(ii) the coastal county's population as a percentage of the population of all coastal counties in the State, calculated by the Secretary using the best available national census data.

(3) Each coastal county, before receiving funds under this subsection, shall annually enact by county statute or ordinance the necessary legislation to provide the local permits required for onshore facilities needed to support offshore oil or gas development or production in the area adjacent to that coastal county, and the necessary legislation to expend such funds. If a county fails to enact such legislation, the funds attributable to that county shall not be disbursed, and the Secretary shall take into consideration that failure before offering any additional leases for sale in the offshore area adjacent to that county.

(c) USE OF FUNDS BY STATES- Each coastal State shall use funds received pursuant to subsection (a)--

(1) to pay for the administrative costs the State incurs in the leasing and permitting process as specified in the Outer Continental Shelf Lands Act;

(2) for such environmental and natural resource projects as the State determines; or

(3) for such educational projects as the State determines.

(d) COUNTY DISTRIBUTION OF FUNDS- Each coastal county shall develop a formula to allocate at least two-thirds of the funds received pursuant to subsection (b) to local communities within its jurisdiction based on the proximity of these communities to the coast, except that funds shall be withheld from communities that the Secretary determines have failed to issue permits required for onshore facilities needed to support offshore oil or gas development or production in the area adjacent to that coastal county.

SEC. 6. DESIGNATION OF COASTAL COUNTIES.

For the purposes of this Act, the Secretary, after consultation with the Governor of each coastal State, shall determine which counties, parishes, boroughs, tribal governments, or other units of general government immediately below the level of State government shall be designated as coastal counties.

SEC. 7. LIMITATIONS ON APPLICABILITY OF BOUNDARIES.

The boundaries and areas delimited under section 5 are solely for the purposes of this Act.

END