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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.
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