HR 3972 -- 10/15/98

October 15, 1998

H.R. 3972 - Outer Continental Shelf Lands Act Amendment
(Rep. Pickett (D) VA and 6 cosponsors)

The Administration opposes H.R. 3972, which would waive the fee for Outer Continental Shelf (OCS) sand, gravel, and shell available for certain beach nourishment and wetlands restoration projects undertaken by State or local governments. The Administration, however, supports the limited waiver, as passed by the Senate in S. 2131, the "Water Resources Development Act of 1998," since it would waive fees for those Federal projects jointly undertaken by the Army Corps of Engineers in partnership with State and local sponsors.

The Outer Continental Shelf Lands Act authorizes the Secretary of the Interior to charge a reasonable fee for OCS sand, gravel, and shell when conveyed noncompetitively. This fee is based on both the value of the resources and the public benefits gained and, typically, represents only a small fraction of a project's total cost. More important, the fee represents the Federal government's commitment to provide a fair return to the Nation for the use of public resources, while ensuring that those States and localities needing OCS sand, gravel, and shell can receive those resources and pay a price that reflects the public interest served. Enactment of H.R. 3972, however, would thus deny the American taxpayer a fair return for the use of this public resource, as well as fuel the demand for OCS sand, gravel, and shell and competitively disadvantage private onshore sand and gravel suppliers.