SENATE BILL REPORT

SB 5576

BYSenators Sutherland, Metcalf, Owen and DeJarnatt; by request of Joint Select Committee on Marine and Ocean Resources

Modifying distribution of funds from offshore oil and gas activity.

Senate Committee on Environment & Natural Resources

Senate Hearing Date(s):February 7, 1989

Senate Staff:John Korvell (786-7473)

AS OF FEBRUARY 2, 1989

BACKGROUND:

When the federal government leases tracts of outer continental shelf land for oil and gas exploration, it may receive bonus bids from the firms wishing to perform the exploration.  If production of oil or gas begins, the producer pays a royalty to the federal government.

If the oil/gas lease occurs in the area of from three to six miles of the coast, the federal government pays 27 percent of its royalty to the state.  This royalty payment enters the general fund.

SUMMARY:

Revenue sharing from federal oil and gas leasing activity on the outer continental shelf shall be distributed 30 percent to the Department of Community Development, 40 percent to the recreation, fish, and wildlife permanent fund, and 30 percent to the general fund.

The money going to the Department of Community Development will be distributed in grants to local and tribal governments for use in planning, social service delivery, capital construction, environmental review and monitoring, and program administration.

Income to the recreation, fish and wildlife permanent fund will be administered by the Interagency Committee for Outdoor Recreation (IAC).  IAC will distribute the interest from the account to state and local governments and nonprofit organizations.  The money may be used for projects that improve access to fish and wildlife resources, protect or enhance fish or wildlife habitat, or provide enhanced recreational opportunities.

Criteria are provided for allocating the funds administered by IAC and the Department of Community Development.

Appropriation:    none

Revenue:    none

Fiscal Note:      requested February 1, 1989