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.

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

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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

change the disposition of revenue to: 37-1/2 percent to the State and 62-1/2 percent to the U.S. Treasury to be credited to miscellaneous

receipts, except that Alaska would receive 90 percent of the revenues from that State.

The accompanying table lists the distribution of revenues to the States from February 25, 1920, to June 30, 1971.

BUREAU OF LAND MANAGEMENT

TABLE 123.-Allocations to States from mineral leasing acts receipts,
February 25, 1920–June 30, 1971

Includes under Executive Order of November 6, 1958: Montana $96,540, New Mexico 84,964.
Includes 3391 for South half of Red River.

* Includes $1,644 under Executive Order of October 27, 1960.

NOTE. The acts of Feb. 25, 1920 (41 Stat. 437, 30 U.S.C. 181 et seq.), Oct. 2, 1917 (40 Stat. 297). and Feb. 7, 1927 (44 Stat. 1057, 30 U.S.C. 281 et seq.).

*Table #123 from 1971 Edition of Public Land Statistics,

Mr. LOESCH. Mr. Chairman, I talked longer than I intended to in trying to brief the lengthy statement I have. I am sorry about that, but that completes my presentation.

Senator Moss. Thank you very much, Secretary Loesch. That was helpful to have you summarize as much as possible.

You do have a very extensive and detailed statement here answering the questions and we appreciate that. We haven't had the opportunity of analyzing it in detail before this morning, and it may be that with more time to read it in detail we may have questions that we would like to submit to amplify or explain any part of it and that is extended to any member of the committee because there is a great deal in there that we must digest and understand.

I do have a few questions that occur to me now and I am sure my colleagues may have some questions.

So, we will proceed with that and see if we can wrap it up as soon as possible.

First of all, in dealing with your later question on the revenue sharing, as an alternative to OCS revenue sharing with the coastal States, what are the advantages or disadvantages of letting the coastal States collect the severance tax on OCS mineral production?

Mr. LOESCH. Well, of course, Mr. Chairman, let me say first of all that I feel some shyness in answering questions of deep economic significance because I am not an economist. But I would say that allowing States to levy a severence tax on the Federal Government's shore production would likely, in my mind, lead to more of an imbalance than a revenue sharing program as such.

It seems to me that there is a certain question, and here I am not speaking for the administration, but just my view.

It seems to me that there is a certain amount of justice in not allowing a State which happens, by a fortuitous circumstance, to have what in some areas is called a windfall, to take that windfall to the detriment of the other States.

I think this committee has recognized this, for instance, in the way it handled the Alaskan Native Claims Act, distributing the regional revenues among all the regions instead of just the region benefitting where the resource happened to be found.

Senator Moss. Regarding coal leases, what proportion of the coal leases on public land are now under production or in active development?

In your answer to question 5 you state the Department plans to incorporate terms and conditions on the outstanding leases upon their renewal in order to foster their development.

Doesn't the present law require development as a condition of the continuation of leases?

Mr. LOESCH. Yes.

To answer the first part of your question first, we think that-well, we know that 15 percent of present outstanding coal leases are under active production. Thirty-four percent are now producing or have at one time or another in the past produced. There is another percentage which is planned for production in an orderly mining plan development.

In other words, being held in orderly reserve at the present time. There is a substantial percentage of leases, however, which so far as