information on persons effectively controlling Federal leases for nuclear minerals is recorded by the Department. (e) Adequate information on the progress of development and amount and value of production from Federal leases is obtained through supervision of operations by the Geological Survey. For oil and gas, summary records are widely available on new developments, new completion of wells, the production from all Federal lands and royalty value by county and State. Similar summary records for other leasable energy minerals are available. QUESTION 14 - Does oil and gas exploration, development and production on the Outer Continental Shelf impose a net economic or fiscal burden on the adjacent coastal state? Should this burden, if any, be compensated by granting the coastal states a share of OCS mineral leasing revenues? - ANSWER 14 The arguments have been made that (1) OCS activity has an adverse fiscal impact on the adjacent state(s), (2) mineral production from the OCS does not yield any royalties or severance taxes to state governments, (3) yet the governments of adjacent states and localities must provide public services to OCS workers and their families, and (4) to help pay for these services, OCS revenues should be shared with adjacent states. These arguments ignore the fact the OCS activity currently provides considerable revenues to adjacent states at present. Employees engaged in the various aspects of OCS activity are subject to state income tax, state general and selective sales taxes, state license fees, and state and local property taxes. Businesses located onshore serving offshore facilities are subject to state corporate income taxes, state sales taxes, and state and local property taxes. The question thus becomes one of determining whether the additional state and local revenues attributable to OCS activity exceed or are equal to additional state and local expenditures because of OCS activity and, if not, whether this provides a rationale for sharing OCS revenues to make up the difference. For the average state, it is likely that revenues will exceed or equal expenditures for the following reasons. Offshore workers and onshore workers in support of offshorè facilities have incomes at average to above average levels compared to average per capita and family income in the adjacent states off which OCS activity has occurred. Subsequently, they, on average, pay more per capita in state sales and income taxes than the average resident of the state (these taxes accounted for 84 percent of all state tax collections in 1970). They will also on average pay more personal property tax to local governments. Onshore facilities serving OCS activity are major components of the property tax base of the communities where they are located. Hence, OCS activity provides, in most cases, greater than average shares of state and local revenues. The expenditure picture on the whole is more cloudy since the impact of OCS activity on various state and local functions varies widely. Additional expenditures per capita for education for OCS-associated employees and their families are likely to be slightly greater than the statewide average, given a preponderance of OCS-associated employees with children of school age. Additional expenditures per capita for transportation for OCS activities could be more or less, depending on location. With the exception of most of the Alaskan OCS areas, the OCS areas of the Nation having a high potential for oil and gas production have well developed transportation networks in the coastal regions of the adjacent 85-197 O 73-6 states. Additional expenditure per capita for welfare programs attributable to OCS activity is likely to be substantially less than the statewide average. Additional total expenditures per capita attributable to OCS activity is therefore not likely to be significantly greater than average state expenditure per capita. On average, OCS activity would, therefore, not be likely to impose a net fiscal burden upon adjacent states. The likely single exception to this would come in those states which depend upon royalties and severance taxes for substantial proportions of state revenue. States adjacent to current or potential OCS activity in this category are Louisiana, Texas, and Alaska (once North Slope production begins). Those states which by the good fortune of natural endowment have substantial mineral production on which they can levy royalties and severance taxes have a source of revenue not available to most states. This enables them to have either greater expenditures with identical sales, income, and property taxes per $1000 of personal income (a typical measure of revenue effort) or the same amount of expenditures with lower sales, income, and property taxes per $1000 of personal income than those states which by reason of natural endowment cannot levy a severance tax. On the basis of equal revenue efforts on those tax sources available to all states for similar levels of expenditure, there would be little empirical evidence for a net fiscal burden resulting from OCS activity. QUESTION 15 - What funds have been paid to states under the revenue sharing provisions of the Mineral Leasing Act of 1920? What is the basis in policy for such sharing of revenues? With respect to public lands states other than Alaska is there any reason why such a revenue sharing policy should not be perpetuated in any subsequent legislation related to mineral leasing? ANSWER 15 - As of June 30, 1971, approximately $880 million have been paid to states under the revenue sharing provisions of the Mineral Leasing Act of 1920. The revenue is distributed with 37-1/2 percent to the State where mineral production occurred, 52-1/2 percent to the Reclamation Fund, and 10 percent to the United States Treasury to be credited to miscellaneous receipts. No payment is made to the Reclamation Fund from revenues in Alaska, and in that State an additional 52-1/2 percent is paid to the State. The basis in policy for the States sharing in the revenue was to help fund the construction and maintenance of public roads or for the support of public schools or other public educational institutions as the legislature of the State may direct. The 52-1/2 percent was allocated to help fund the Reclamation Act of June 17, 1902. With regard to any subsequent legislation related to mineral leasing, the Administration's bill to reform the Mineral Leasing Laws proposes to |