Overview
Title
To modify the disposition of certain outer Continental Shelf revenues and to open Federal financial sharing to heighten opportunities for renewable energy, and for other purposes.
ELI5 AI
S. 373 is a bill that wants to change how the money made from using the ocean's bottom (like for wind energy) is shared, so some of it can help make more clean energy. It also wants to make sure money is shared fairly between states and is spent on important projects, but some rules might be a little confusing or seem unfair to some states.
Summary AI
S. 373 seeks to modify the distribution of revenues from the outer Continental Shelf and aims to promote federal financial sharing to boost renewable energy opportunities. The bill proposes changes to the National Oceans and Coastal Security Fund, including new revenue allocation methods and restrictions on fund expenditures. It establishes specific criteria for awarding grants for coastal and infrastructure projects and ensures equitable state revenue-sharing from offshore wind projects. Additionally, the bill revises reporting requirements for states receiving funds and removes administrative fees under the Mineral Leasing Act.
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AnalysisAI
The bill titled "Reinvesting In Shoreline Economies and Ecosystems Act of 2023" (“RISEE Act of 2023”) seeks to modify how revenues from the outer Continental Shelf are handled, specifically focusing on renewable energy opportunities and other related uses. It aims to address the management and allocation of funds with an eye toward improving National Oceans and Coastal Security and ensuring revenue sharing for offshore wind energy. The legislation also addresses financial aspects related to the Gulf of Mexico outer Continental Shelf and removes administrative fees under the Mineral Leasing Act.
General Summary of the Bill
This legislation aims to update the way certain revenues from the outer Continental Shelf are distributed, particularly those related to offshore wind projects. It seeks to create a fairer system of financial distribution to states and to ensure that more funds are available for supporting environmental and renewable energy initiatives. The bill modifies existing legislation to ensure that offshore wind revenue is shared with states in proximity to these projects, and sets guidelines on how these funds can be used, including for coastal protection and environmental restoration. Additionally, it changes how funds related to the Gulf of Mexico are reported and used and eliminates an administrative fee under the Mineral Leasing Act.
Significant Issues
One significant issue with the bill is its complexity, particularly in how it outlines the distribution of wind energy revenue (Section 2(g)). This could make it difficult for states to interpret and effectively implement, potentially impacting their financial planning. The elimination of the administrative fee, without a clear rationale, also raises concerns about federal revenue losses.
Another concern is the bill's restrictions on the use of funds for litigation against the federal government and the creation of marine protected areas (Section 905(c)), which may limit states’ abilities to address their unique regional challenges. Additionally, the reliance on matching funds might disadvantage smaller or less wealthy communities, exacerbating inequalities (Section 906(b)(3)).
There's also a lack of clarity and potential disputes over what types of projects can be considered non-entertainment-related infrastructure, which could lead to inconsistent use and understanding of funds (Section 3(a)). The bill does not provide a detailed explanation for the repeal of appropriations for past fiscal years, potentially leading to concerns or confusion.
Public Impact
For the general public, this bill's focus on directing funds towards environmental restoration and resilience projects could lead to long-term benefits, such as improved coastal protection and infrastructure that might better withstand environmental challenges. However, the complexity in funding distribution might slow down these impacts.
For specific stakeholders, eligible states stand to gain substantially from additional funding for renewable projects. However, smaller communities might find it challenging to compete for grants due to optional matching fund requirements that favor those with more resources. Furthermore, the limits and guidance on fund usage might leave states feeling restricted in addressing local priorities effectively.
Overall, while the bill aims to boost environmental initiatives and promote equitable distribution of renewable energy revenues, its complex structure might pose challenges in implementation and stir concerns about state autonomy and equitable access to funds.
Financial Assessment
The bill, S. 373, addresses several financial aspects concerning the distribution and use of revenues and funds related to the outer Continental Shelf and renewable energy projects. Here's a detailed look at the financial elements and associated issues:
National Oceans and Coastal Security Fund
The bill proposes amendments to the National Oceans and Coastal Security Fund. It specifies that if $34,000,000 or less is deposited into the Fund for a fiscal year, no more than 5% of these funds can be used for administrative expenses. Any remaining funds are reserved for grant awards. If more than $34,000,000 is allocated, the same 5% cap on administrative expenses applies, with at least $34,000,000 set aside for grants, and any excess funds are divided, with up to 75% for additional grants under another section and 20% preserved for grants specified under section 906(c).
This structured financial planning aims to ensure that significant funds are channeled directly into projects rather than being consumed by administrative costs. However, the distribution method introduces potential complexities. For instance, the cap on administrative expenses might be perceived as burdensome by some, aligning with the identified issue that the bill’s detailed allocation structure might impose complex and potentially burdensome administrative requirements.
Offshore Wind Revenue Sharing
The bill also introduces a formula for distributing revenues from offshore wind projects. Of the revenues, 50% is directed to miscellaneous receipts in the Treasury, 12.5% to the National Oceans and Coastal Security Fund, and 37.5% to a special account in the Treasury for disbursal to eligible states based on proximity to the project site.
This formula aims to foster equitable sharing of offshore wind revenues. However, the complex formula, as noted in the issues section, may pose challenges for states trying to interpret and implement the revenue distribution. This could complicate financial planning and lead to disputes over fairness and resource allocation, particularly where the legislation lacks explicit guidance or leaves room for interpretation.
Grant Allocations
The bill outlines the criteria for grant allocations to coastal states. 70% of available funds are distributed equally among coastal states, 15% are allocated based on the ratio of a state's tidal shoreline to all coastal states, and 15% are distributed according to the coastal population density. However, no single state can receive more than 5% of the total funds, ensuring a capped distribution.
This allocation attempts to balance equality and need, but may lead to concerns of inequity, particularly from larger states that might feel disadvantaged by the 5% cap. The issue of perceived inequities is highlighted in the analysis, suggesting that states with more extensive shorelines or larger coastal populations might consider the cap unfair.
Restrictions and Prohibitions
A notable restriction is that funds cannot be used for litigation against the Federal Government or the creation of marine monuments, among other purposes, which might limit the flexibility of states in using these funds. This restriction might raise concerns about state sovereignty and limit their ability to address local environmental challenges effectively.
Optional Matching Funds Requirement
The bill includes an optional provision for matching funds, encouraging, but not mandating, grant applicants to supplement federal grants with non-federal funds. This could disadvantage smaller or less wealthy communities unable to secure additional funding, potentially exacerbating inequalities in access to grant resources.
Reporting Requirements
The legislation requires states to report on the use of amounts received, with these reports made publicly available. While promoting transparency, this could lead to concerns about the disclosure of proprietary or sensitive state information.
Overall, while S. 373 outlines a clear financial framework for revenue sharing from outer Continental Shelf activities, certain elements—such as the complexity of revenue sharing formulas and potential inequities of fixed caps—might lead to challenges in implementation and perceptions of unfairness among different stakeholders.
Issues
The complex formula for distribution of offshore wind revenue in Section 8(p)(2) of the Outer Continental Shelf Lands Act, as described in Section 2(g), could be difficult for states to interpret and implement. This might impact eligible states' financial planning and the equitable distribution of resources.
The elimination of the administrative fee under the Mineral Leasing Act in Section 4(a) lacks a clear explanation, potentially leading to a loss of federal revenue and raising questions about the rationale behind this decision.
The prohibition on the use of funds for litigation or creation of certain marine projects in Section 905(c) may limit states’ flexibility in addressing regional environmental issues, affecting state sovereignty and potentially raising legal conflicts.
The repeal of appropriations for fiscal years 2017, 2018, and 2019 in Section 908 without explanation may cause confusion or concern regarding past fund usage and accountability, which could impact public trust.
The amendments introduced in Section 2 concerning definitions and funding structures in the National Oceans and Coastal Security Act could introduce complexity and potentially burdensome administrative requirements, as reflected in Sections 2(a), 2(b), and 905.
The detailed allocation formula and cap for grant money in Section 906(b) and Section 906(b)(2) could lead to perceived inequities among states, as larger states may feel disadvantaged by the 5% cap.
The language describing the condition that projects must not be 'primarily for entertainment purposes' in Section 3(a) is vague. This could lead to disputes and inconsistent interpretations among stakeholders.
The optional requirement for matching funds in Section 906(b)(3) might disadvantage smaller or less wealthy communities from accessing grants, exacerbating inequalities in funding access and opportunity.
The public availability requirement for reports submitted by eligible states in Sections 8(p)(2)(vi)(II) and 105(g)(2) introduces potential privacy or proprietary information concerns for the states.
The lack of specific criteria or guidelines for evaluating programs and activities eligible for funding in Section 905(b) could lead to inconsistencies in resource allocation and potential favoritism.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of the bill states the official short title as the "Reinvesting In Shoreline Economies and Ecosystems Act of 2023," abbreviated as the "RISEE Act of 2023."
2. National Oceans and Coastal Security Fund; parity in offshore wind revenue sharing Read Opens in new tab
Summary AI
The bill amends the National Oceans and Coastal Security Act to redefine certain terms, adjust fund management and grant distribution, and clarify limitations on fund usage. It also introduces updates to revenue sharing from offshore wind projects, specifying how the funds are distributed and used by eligible states for coastal protection and environmental initiatives.
Money References
- “(1) $34,000,000 OR LESS.—If $34,000,000 or less is deposited in, or appropriated or otherwise made available for, the Fund for a fiscal year, in that fiscal year— “(A) not more than 5 percent of such amounts may be used by the Administrator and the Foundation for administrative expenses to carry out this title; and “(B) any remaining amounts shall be used only for the award of grants under section 906(c).
- “(2) MORE THAN $34,000,000.—If more than $34,000,000 is deposited in, or appropriated or otherwise made available for, the Fund for a fiscal year, in that fiscal year— “(A) not more than 5 percent of such amounts may be used by the Administrator and the Foundation for administrative expenses to carry out this title; “(B) not less than $34,000,000 shall be used for the award of grants under section 906(c); and “(C) of any amounts exceeding $34,000,000— “(i) not more than 75 percent may be used for the award of grants under section 906(b); and “(ii) not more than 20 percent may be used for the award of grants under section 906(c). “(3) DIVISION OF AMOUNTS FOR ADMINISTRATIVE EXPENSES.—The amounts referred to in paragraphs (1)(A) and (2)(A) shall be divided between the Administrator and the Foundation pursuant to an agreement reached and documented by both the Administrator and the Foundation.”; and (4) in subsection (e)(2), by striking “section 906(a)(1)” and inserting “section 906(a)”. (c) Eligible uses of amounts in the National Oceans and Coastal Security Fund.—Section 905 of the National Oceans and Coastal Security Act (16 U.S.C. 7504) is amended to read as follows: “SEC. 905.
905. Eligible uses Read Opens in new tab
Summary AI
The section explains that funds can be used to support programs aimed at improving understanding and use of ocean and coastal resources, including activities like scientific research and habitat protection. However, it prohibits using these funds for litigation against the Federal Government or creating national marine monuments or marine protected areas.
3. Gulf of Mexico outer Continental Shelf revenues Read Opens in new tab
Summary AI
The bill amends the Gulf of Mexico Energy Security Act of 2006 to specify that infrastructure projects funded by the Act cannot be primarily for entertainment, removes limits on the amount of shared revenues, and introduces reporting requirements for Gulf states receiving funds, ensuring transparency on how the funds are used. If a state fails to submit a report, future funding will be withheld until compliance.
4. Elimination of administrative fee under the Mineral Leasing Act Read Opens in new tab
Summary AI
The section eliminates the administrative fee under the Mineral Leasing Act by amending several related subsections, removing specific provisions, and updating references in other related acts to reflect these changes.