Copyright 1999 Federal News Service, Inc.
Federal News Service
MARCH 10, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
2149 words
HEADLINE: PREPARED STATEMENT OF
GOVERNOR
THOMAS R. CARPER
THE NATIONAL GOVERNORS' ASSOCIATION
BEFORE THE
HOUSE COMMITTEE ON RESOURCES
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
SUBJECT - REINVESTMENT OF OCS REVENUES
BODY:
Good morning, Mr. Chairman and members of the
committee. My name is Tom Carper. It is a pleasure to return to these hallowed
halls not as a member of Congress, but as the Governor of Delaware and the
chairman of the National Governors' Association (NGA). I am testifying on behalf
of the nation's Governors, but I want to note that my statement also represents
the thinking of the Coastal States Organization (CSO). The chair of the CSO is
Sarah Cooksey, Administrator of the Delaware Coastal Management Programs, and
the positions of NGA and CSO have been carefully coordinated.
I am
especially pleased to testify today concerning H.R. 701 and H.R. 798. These
bills are very important not just to Delaware and its coastal areas, but to all
states. I want to give special thanks to Mr. Young, Mr. Dingell, and Mr. Miller
for their hard work in developing these bills in the kind of bipartisan and
inclusive process that is so necessary to move forward on the nation's business.
We sincerely hope that this spirit of bipartisanship and cooperation will enable
you to come together in support of one bill that you can send to the President
for signature this year.
Both bills are predicated on two very important
premises: first, the oil and gas resources lying under the sea on the outer
continental shelf belong to .all Americans; and second, as the nation depletes
these nonrenewable resources, it ought to invest the revenues it derives in
assets of permanent value to all Americans. These assets include, for example,
better air and water quality in coastal areas, park and recreation lands and
facilities in all states, and fish and wildlife resources everywhere. As the oil
and gas resources belonging to all Americans are produced and used, there should
remain in their stead a lasting legacy of protected lands; a restored
environment; a strong infrastructure of park, recreation, and cultural
resources; and healthy communities of fish and wildlife. The Governors have long
supported this principle of reinvesting revenues from the development of
nonrenewable resources.
Equally important is the principle that a
significant share of these investments should be made by state governments
rather than by the federal government. Under the current system, these OCS
revenues are simply swallowed up in the federal budget. The pending legislation
will ensure that a significant share of OCS mineral leasing revenues is invested
in assets important to our people, by officials who live among them and are
directly accountable for their decisions. These investment decisions should be
made from the bottom up, with appropriate citizen involvement, rather than top
down from Washington, and the Governors, close to home and close to the
resources to be protected, will know better than Washington bureaucrats how to
invest these OCS revenues. For this reason, the Governors strongly support the
provisions of the bills that entrust state officials to make investment
decisions, with appropriate accountability.
For reasons of accountability
the Governors also believe it is important that funds under the bills come
directly to the Governor for investment in the natural resource priorities of
the state. It is the Governor who has the best view of the state's needs and who
is ultimately accountable for addressing those needs. This is equally true for
impact assistance under Title I, investment in park and recreation facilities
under Title II, and for fish and wildlife priorities under Title III.
We
believe the bill should afford the Governor the flexibility to target the
state's investments to its unique natural resource priorities, with appropriate
involvement of citizens and local elected officials, for purposes including but
not limited to:
- Coastal protection, restoration, and impact assistance;
- Park, recreation, and cultural resource investments; and
- Investments
in wildlife conservation and education.
This flexibility should include but
not be limited to the ability to shift funds among the purposes outlined in the
bill's three titles.
We note that under both bills funds will be made
available in future years without the need for further appropriation. We also
note that the President pledged to work with the Congress to create a permanent
funding stream for purposes similar to those in these bills, as part of his
lands legacy initiative. Making funds available in the future
without the need for further appropriation provides much needed stability and
certainty in funding. However, it is absolutely essential that important budget
problems associated with this approach be resolved. In particular; it is
critical that the funds provided to states under this legislation not come at
the expense of any other federally supported state programs. The Governors urge
you to work with your colleagues on the budget committee to avoid all budget
offsets that would be required under the budget act for such automatic
appropriations. Our final support of any reinvestment legislation will depend on
a satisfactory resolution of this concern.
The policy recently adopted by
the National Governors' Association recommends that OCS reinvestment legislation
should not provide incentives to slates for additional exploration or
development in the OCS, or affect current moratoria. For the record, I reject
the argument that states would support additional exploration and production or
undercut current moratoria on the basis of sharing in OCS revenues. You may be
assured that our decisions on such matters are not and have never been "for
sale," and that the sharing of OCS revenues does not provide any incentive for
additional activity on the OCS.
This view is supported by the January 1999
report by the Congressional Research Service. This report notes that the
corporate decision to lease on the OCS is driven by economics. The report also
notes that:
It is difficult to envision a grant to a state overwhelming the
energy economics intrinsic in a given lease tract...no state has given any
indication that it would Seek new production in environmentally sensitive areas
just to get a fractional interest in royalty revenue.
H.R. 701 addresses
this issue by ensuring that no funds from any activity in an area covered by a
moratorium in existence on the first of this year will be directed towards the
pool of funds that is shared with states, unless the lease was issued before the
moratorium was established and was in production on the first of this year. This
provision goes a very long way to addressing our recommendation about this
issue, and we look forward to working with you to ensure that appropriate
language is included in the final bill.
Mr. Chairman, I want to dispel any
notion that this bill is a "get rich quick" scheme for states. For one thing,
and without endorsing the particular allocation formulas in the bill, we would
like to highlight the fact that much of the money under the bill is directed to
coastal areas that have been severely burdened by development impacts,
infrastructure needs, and environmental pressures associated with resource
development on the outer continental shelf. Those OCS development decisions are
entirely beyond the control of the affected states. To that extent, much of
these bills would simply help those areas remain whole in the wake of the
enormous needs stemming from mineral production activities off their coasts.
Even the coastal areas off which there is no mineral production face
enormous needs for coastal protection and restoration. One of the things we need
to do in Delaware is beach replenishment. Delaware's beaches are the state's
most heavily utilized outdoor recreation resource. Some of the beaches, such as
Rehoboth and Bethany beaches, are highly developed with residential and
commercial development. The pine forests, large dunes, and extensive marshes of
other parts of the shoreline have been made into state parks or fish and
wildlife management areas that protect critical habitats. These public lands,
natural areas, and conservation lands provide aesthetically pleasing resources
and recreation for both Delawareans and visitors. We need OCS revenues to help
us maintain Delaware's beaches. An estimated 4-6 million dollars of annual costs
are projected for each of the next 10 years, with costs rising thereafter. The
state share of initial construction costs of planned federal projects amounts to
$3,190,000 for Rehoboth-Dewey and $7,733,000 for Bethany-South Bethany. Beach
nourishment projects have a high multiplier effect in protecting public
infrastructure and aesthetic resources and in maintaining a thriving tourist
economy.
With respect to the other titles of the bill, the magnitude of our
needs for investment also is enormous. Since enactment of the Outer Continental
Shelf Lands Act in 1954, federal offshore lands' have produced more than $122
billion in government revenue. However, for years the Congress has failed to
provide states with their statutory share of monies under the Land and Water
Conservation Fund (LWCF), and the backlog of pent-up demand for park,
recreation, and cultural resources is overwhelming. The National Recreation and
Parks Association estimated that between 1990 and 1994, state and local
governments needed $37 billion to catch up on their backlog of land acquisition,
park development and rehabilitation needs. Since little money has been available
from the LWCF, that backlog continues to grow.
Close to my home is Bellevue
State Park, an example of the kinds of projects supported by the LWCF. I jog
there regularly. Land & Water Conservation Fund assistance was used in 1973
to acquire the park. For this I am thankful. Since the acquisition, the Division
of Parks & Recreation has used LWCF assistance to develop a bikeway, ball
fields, fishing access, picnic areas and restrooms accessible to the disabled.
For me, these and other outdoor recreation facilities at Bellevue make it a
great park. It is popular among local residents and is a major asset in
attracting visitors along the eastern seaboard.
I recognize that special
sensitivity is needed with respect to the federal side of the LWCF, and that the
equity of private property owners must be respected in the implementation of
conservation and recreation plans. It may be necessary to draw distinctions by
region, or to recognize the large federal holdings in a number of states. But
the federal side of the LWCF is also important to all Americans, and should not
be inappropriately restricted. I refer you to NGA Policy NR-14, Recreation
Resources, which is attached.
When it comes to wildlife, the reinvestment of
()CS revenues will give states the opportunity to be proactive in ensuring that
we bequeath to our children and grandchildren healthy populations of unique and
beautiful species. Among other things, these monies will allow us to get ahead
of the curve on the Endangered Species Act, and take appropriate steps before
species are listed as threatened or endangered. Such nonregulatory conservation
efforts that preclude the need to list species .just makes good biological and
economic sense.In summary, the earmarking of monies to states under these bills
does not represent a misappropriation of funds or a "rip-off' of the federal
treasury. These funds represent a reimbursement for some of the costs borne by
areas impacted by the on-shore infrastructure wear and tear and environmental
stresses associated with activities on the OCS. And they represent a sound
investment in important assets of lasting value to the nation for this
generation and generations yet to come.
Mr. Chairman, in closing it is
important to mention a different issue not directly connected with the bills we
have been discussing today, but related to the reinvestment of nonrenewable
resource revenues.' The issue concerns the large accumulated balance in the
Abandoned Mine Land Trust Fund. As I am. sure you know, for many years the
federal government has been collecting a tax on coal production that ostensibly
is returned to states to remediate abandoned mined lands. Those funds are not
being spent. We believe that this represents a basic violation of the "trust" in
the trust funds, and we ask that you address this issue by working with your
colleagues to ensure that all of these funds are used for the purposes for which
they are collected.
Mr. Chairman, I have attached a copy of NGA Policy
NR-24, entitled "Reinvesting Nonrenewable Resource Revenues," and ask that it be
made a part of this statement. The adoption of this policy at the recent NGA
Winter Meeting reflects the importance the Governors place on these issues. The
nation's Governors pledge to do all that we can to work with you and other
members of Congress and the administration, to move legislation forward and see
it signed into law.
Thank You.
END
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March 14, 1999 
