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1 ment, this Act. The Secretary shall hold a public hearing on

2 such proposed regulations.

3 (b) FINAL REGULATIONS.-As soon as practicable 4 after the effective date of this Act, but not later than three 5 months after such date, the Secretary shall consult with the 6 Secretary of Commerce (acting through the National Oceanic 7 and Atmospheric Administration), solicit the views of the 8 agency heads cited in section 109 (b), consider the comments 9 received during the public hearing required in subsection (a) 10 and any written statements on the proposed regulations re11 ceived by him, and promulgate such regulations as are re12 quired by, or are necessary and appropriate to implement, 13 this Act.

14

(c) Provisions of regulations concerning terms, restric15 tions, and conditions of licenses and permits, to the extent 16 practicable and taking into account differing characteristics 17 of the various areas of the deep seabed to which licenses 18 and permits would apply, shall be applied uniformly in es19 tablishing such terms, conditions, and restrictions included in 20 each license and permit.

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2220

223

ANNUAL REPORT

SEC. 402. The Secretary shall submit to the Congress

on or before October 31 of each year after 1977 a report on 24 the administration of this Act during the period covered by 25 the report. Such report shall contain, but not be limited to,

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1 the following information with respect to the reporting

2 period

3

4

5

6

7

8

9

10

11

12

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(1) the number of licenses and permits issued, suspended, revoked, relinquished, surrendered, or transferred; applications for licenses and permits denied; and activities under licenses and permits suspended;

(2) a description and evaluation of the exploration and commercial recovery activities undertaken, including, but not limited to, information setting forth the quantities of hard mineral resources recovered and the disposition of such resources;

(3) a description of, and estimate of the damage caused by, adverse effects on the quality of the marine environment resulting from such activities;

(4) the number and description of all civil and criminal proceedings; and

(5) such recommendations as the Secretary deems appropriate for amending this Act to further fulfill its purposes.

AUTHORIZATION FOR APPROPRIATIONS

SEC. 403. (a) FOR ADMINISTRATION.-There are au

22 thorized to be appropriated to the Secretary for each fiscal 23 year beginning after September 30, 1977, such sums as may

24 be necessary for the administration of this Act.

(b) FOR COMPENSATION.-To the extent that the

43

1 moneys in the Deep Seabed Mining Fund established pur2 suant to section 203 are not sufficient to pay compensation 3 awarded under section 202, there are authorized to be ap4 propriated to such fund for any fiscal year beginning after 5 September 30, 1977, such sums as may be necessary for 6 such payments.

7 (c) FOR ENVIRONMENTAL ASSESSMENT.-There are 8 authorized to be appropriated to the Secretary of Commerce 9 for each fiscal year beginning after September 30, 1977, 10 such sums as may be necessary to carry out the responsibili11 ties assigned to him in section 109.

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13

SEVERABILITY

SEC. 404. If any provision of this Act or any applica

14 tion thereof is held invalid, the validity of the remainder of 15 the Act, or of any other application, shall not be affected

16 thereby.

In view of the Subcommittee's scheduled hearings on S. 2053, the "Deep Sea Mineral Resources Act," we are submitting our views on the bill for your consideration. We submitted comments on March 24, 1977, on the original House version of the bill, H.R. 3350, and a copy of which is enclosed for your information.

S. 2053 poses a number of key issues. One of the points we stressed previously in connection with H.R. 3350 was that the bill addressed only investment-oriented questions without considering an overall framework within which other basic deep sea bed issues--relating to foreign policy, environmental safeguards, and the form of Federal management structure--could be properly addressed. S. 2053, we believe, contains a similarly narrow focus.

GAO is just completing a report on deep ocean mining issues which further confirms the need for a basic institutional arrangement being established prior to adoption of deep-ocean developmental programs. We note in this regard that S. 2053 would assign general administration of the Act to the Secretary of Interior, while the House version of the bill, H.R. 3350, assigns it to the Secretary of Commerce. Such a basic difference as to who should have program responsibility underlines the lack of a reasoned framework for guiding the Government's deep ocean activities. We are enclosing a copy of our report to aid Committee deliberations on organizational and other issues. Even though it is still with the agencies for comment and subject to change before final release, we do not expect that any substantial revisions will be required and believe that it could prove useful in its present form.

Another earlier point reinforced by the report is the clear need to coordinate deep ocean mining with overall foreign policy objectives. The report illustrates the potentially adverse effect deep ocean supply sources could have on existing mineral supply systems and the revenues earned by certain countries through established systems. Care should be taken

to insure that any future deep ocean activities are consistent with overall U.S. foreign policy objectives.

The question of what share of the revenues from deep ocean mining should accrue to the public also remains unresolved. Section 103 of S. 2053 would establish a system of issuing licenses on a first-come first-serve basis to firms that would then retain all of the financial benefits of deep sea mining. We believe there is a strong public interest in deep seabed resources and that a licensing system which would provide for only private financial benefit is not appropriate.

In our earlier comments on H.R. 3350, we stated our preference for an exploration and leasing system that would provide for payments to the Government for exploitation of public resources, much in the manner that oil and gas leases are now let on the Outer Continental Shelf.

Such a system should provide that:

--Exploration and actual commercial development are
explicitly distinguished.

--Permits to explore the deep ocean area be issued. These permits should be issued to any potential bona fide bidder who wants to explore. In order to avoid unnecessary duplication of exploration, any bona fide potential bidder should be able to "buy in" on the exploration information by paying a pro-rata share of the cost of exploration.

--Information obtained under exploration permits must
be shared with the Government. Such information should
help the Federal Government estimate the fair market
value of the resource to be leased.

--Following the exploration phase there be a call for
nominations of areas to be leased. In addition, the
Government should have the option of offering tracts
that it feels are potentially valuable even if no
nominations are received on those tracts.