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97-792: Land and Water Conservation
Fund: Jeffrey Zinn Updated March 16, 2001 Summary The Land and Water Conservation Fund (LWCF), a special account created in 1964, has been the principal federal source of monies to acquire new recreation lands. Four federal agencies--the Park Service, Bureau of Land Management, Fish and Wildlife Service, and Forest Service--receive a portion of these funds. The remainder is a matching grants program to assist states (and localities) in acquiring and developing recreation sites and facilities. The fund accumulates revenues from designated sources. These monies become available only after Congress appropriates them. The concept of the fund has always enjoyed widespread support. One policy issue for the fund has been the size of and the need for an annual appropriation. A second issue has been the congressional role in deciding which lands federal agencies should acquire. The context for debating these issues in the 106th Congress was legislative proposals, known as CARA, that would provide full appropriations and could make funding mandatory, and the annual Interior Appropriations bill. The House passed a version of CARA, H.R. 701, while the Senate completed committee action. Appropriators provided additional funding through the Clinton Administration's "Lands Legacy Initiative." Sponsors have reintroduced H.R. 701. The Bush Administration has not announced a position on this proposal, but it has called for full LWCF funding in FY2002. This report will be updated as event warrant. A Brief History of the Fund The Land and Water Conservation Fund (LWCF) was created in September 1964 and took effect January 1, 1965.(1) Since its inception, it has been the principal source of funds for acquiring new recreation lands. It was originally intended to be a revolving fund, and the initial legislation required it to repay advanced appropriations in the 10th year of operation. However, it has never operated as a revolving fund. The authority has been amended frequently, most notably to increase the authorized funding level, and to mandate that offshore oil and gas leasing revenues should make up any shortfall from other authorized financing sources. The fund's basic purpose has never been altered. Most appropriations in recent years have been to the four major federal land management agencies -- the Forest Service in the Department of Agriculture, and the National Park Service, Fish and Wildlife Service, and Bureau of Land Management in the Department of the Interior.(2) These agencies have purchased or acquired through exchange about 4.5 million acres, an area approaching the size of New Jersey. The Park Service also has administered a program providing matching grants to states for recreation planning, land acquisition, and facility development. The state-side grant program has funded more than 37,000 projects and helped conserve approximately 2.3 million acres. Recreation facilities have been developed at about 27,000 of these projects. Acquisitions funded through LWCF grants must remain in recreation use in perpetuity. How the Fund Works The LWCF is a "trust fund"(3) that accumulates revenues from federal outdoor recreation user fees, the federal motorboat fuel tax and surplus property sales. To supplement these sources to reach the authorized level of $900 million, it accumulates revenues from oil and gas leases on the Outer Continental Shelf (OCS). During the past decade, the OCS revenues have accounted for more than 90% of the deposits each year. The LWCF is not a true trust fund in the way "trust fund" is generally understood in the private sector. The fund is credited with revenues totaling to $900 million annually, but Congress must authorize appropriations; if appropriations are not made from the fund, the revenues remain in the U.S. Treasury and can be spent for other federal activities. If these funds are spent for other activities, no interest is accrued in the LWCF account. In addition, because the fund goes through the annual appropriations process, the funds are subject to earmarks and other more precise directions from Congress each year. "Deposits" to the LWCF are thus, in effect, only an authorization of expenditures that accumulate if the funds are not appropriated. Through FY2001, the total amount that could have been appropriated over the years was $24.5 billion, but only $11.4 billion has been appropriated. Funding History Annual appropriations from the LWCF have fluctuated widely over the past 30 years, as shown on the chart on the next page. Except during the Carter Administration, when appropriations exceeded $500 million each year, and reached a high of $805 million in FY1978, they have not approached the authorized level of $900 million. In fact, they have not approached $500 million before or since until FY2000.(4) Over the past 20 years, annual appropriations have generally ranged between $200 million and $300 million. The $11.4 billion appropriated for the fund has been unevenly allocated among the states and the four federal agencies. Less than 30% of the total, more than $3.2 billion, has gone to the state-side grant program. In the early years more funds went to state grants than to the four federal agencies, combined, almost every year. But state grants have declined as a portion of the total since the early 1980s, and received no funds from FY1995 through FY1999. The remaining funds have been unevenly distributed among the four federal agencies: the Park Service has received $3.7 billion; the Forest Service has received almost $2.1 billion; the Fish and Wildlife Service has received almost $1.5 billion; and the Bureau of Land Management has received almost $628 million. The remainder, about $300 million has been spent on administrative costs. The chart at the top of the next page shows that appropriations generally declined during the early 1990s. The lowest years since FY1974 were FY1996 and FY1997, when appropriations totaled $138.2 million and $149.4 million, respectively. But since FY1996, the total has risen each year. The table below the chart shows that the Administration requested a substantial increase to $600 million in FY2001, and Congress provided $540 million, which was a significant increase over the $420 million provided in FY2000 and the $329 million provided in FY1999. Funding for land acquisition in FY2001 was located both in the allocations for each of the four land acquisition agencies and in a new Title VIII in the Interior appropriations legislation (P.L. 106-291). The allocations for the four agencies in their regular appropriations total $310.9 million, and includes $41 million for the state-side grant program.(5) Title VIII, which was added during a final conference and funds numerous programs that were a part of the Clinton Administration's Lands Legacy Initiative, provides an additional total of $229.0 million for land acquisition, increasing total LWCF funding to $540 million. The Bush Administration announced that it will seek full funding for the LWCF. Half these funds, $450 million, would be appropriated to the four federal land management agencies in FY2002, and an identical amount would go to the state grant program. The Administration also proposes to dedicate $50 million from the federal portion for grants to states to help landowners who wish to enhance habitat for rare species "while continuing to engage in traditional land management practices." An additional $10 million of the federal portion would be dedicated to a new stewardship grant program to support local, private conservation activities. More details on these proposals and the Bush Administration position on related legislative proposals are anticipated. Land and Water Conservation Fund
Appropriations in Recent Years
Current Issues Major issues are whether to provide full and/or certain funding for the LWCF (including how much funding should be provided for the state-side grant program), and the congressional role deciding which projects will be funded. Overall funding came under pressure in the early and mid 1990s as part of the effort to address the federal budget deficit. The Department of the Interior has estimated that the overall backlog for acquisitions that await funding exceeds $10 billion. Funding has rarely been debated as a question of merit; most interests involved in recreation or resource protection support higher funding levels, and the concept of this fund. However, some interests oppose providing funds for additional federal land acquisition, especially in the interior West. During the 1990s, the funding debate has become more complicated as perspectives on recreation and resource protection have changed. Alternatives to outright acquisition, such as the purchase of easements, have become more widely used by the federal land management agencies in some circumstances. At the same time, generic concerns about further acquisition of privately owned land by the federal government, as well as concern about expanded public ownership at specific sites, have grown more visible, especially in regions of the country where federal ownership is concentrated. These concerns involve preferences for public or private ownership, as well as the effects of public ownership on local tax revenues. The debate also has become more complicated as resource protection is discussed increasingly in terms of both considering larger areas, such as ecosystems, landscapes, or watersheds, rather than smaller sites or components, and managing systems where only a portion of the land is anticipated to be in public ownership. Managing larger areas under multiple ownerships usually involves a greater number of interests, and successful efforts depend on cooperation and partnerships. Another complicating factor is that some believe that maintaining (and rehabilitating) the land and facilities that federal agencies already own, especially the heavily-used sites of the Park Service, should be a higher funding priority than further acquisition. Since LWCF funds can not be used for maintenance by federal agencies, some Members have favored more funding to other accounts that can be used for maintenance and less for LWCF. These changes in the debate generally mean that resource protection is more complicated than deciding an order of priorities for land acquisition. Funding in the Future The most prominent issues remain whether or how to secure a larger allocation annually, possibly at the authorized level of $900 million, and whether or how to create more dependable funding from year to year. Supporters wish to make the LWCF a true trust fund. The annual appropriations process has proven to be unpredictable. During the years in which Congress and the Administration were trying to reduce the deficit, Congress made only limited funds available and earmarked almost all appropriations to specific projects or sites. (The annual budget submissions also propose earmarks.) Opponents of these proposals believe that any surplus should be spent on other priorities, that further federal land acquisitions should be limited, or that this funding should not be exempt from the annual appropriations process. With the deficit now replaced by a surplus, the discussion of solutions has increased, and supporters believe that change is possible. Near the end of the 105th Congress, bills were introduced that would have diverted offshore oil and gas revenues to a Conservation and Reinvestment Act Fund (CARA Fund) to fully fund the LWCF (making it a true trust fund), and for other purposes. In the 106th Congress, several bills to accomplish the same goal for LWCF were introduced. One of these bills, H.R. 701, passed the House and the Senate Committee on Energy and Natural Resources reported an amended version. H.R. 701, as passed by the House, would have provided a total of $900 million annually from the CARA Fund. It would not have replaced the old LWCF, but rather been in addition to it, giving the LWCF a total of $1.8 billion annually. The CARA Fund portion would have been split equally with the federal agencies and the state-side grant program each receiving $450 million. The federal portion of the fund would have been fully earmarked and could only be spent on projects that were specified in appropriations legislation. It would have made the state grant portion a true fund. Acquisition could occur only when the seller concurs and the purchase has been approved by Congress. The Senate-reported version was generally similar, but it would have replaced the old LWCF, and would not have provided funds for state grants until after the federal agency acquisitions had been approved. (For details on provisions in these proposals, see CRS Report RL30444 (pdf), Conservation and Reinvestment Act (CARA) (H.R. 701) and a Related Initiative in the 106th Congress; to learn about the Lands Legacy Initiative and the provisions of the major bills, see CRS Issue Brief IB10015, Protection Natural Resources and Managing Growth in the 107th Congress) A portion of the support for the CARA proposals is a response to no funding for state grants from FY1995 through FY1999. During this period, both the Senate Energy and Natural Resources Committee and the House Resources Committee held oversight hearings where supporters described the accomplishments and benefits of the state program and continuing needs. In FY2000, the Clinton Administration did not request any appropriations, but Congress provided $41 million; $21 million was added through floor amendments in both the House and Senate in the initial Interior appropriations bill, and another $20 million was added in a new Title VI, which was subsequently amended to the bill by the conference committee to fund the Clinton Administration's Lands Legacy Initiative programs. In FY2001, the Clinton Administration requested $150 million, and Congress provided $91 million. H.R. 701 addresses future state grant funding. It would provide $450 million annually. Of this amount, 30% would be apportioned equally and 70% would be apportioned based on population. No state could receive more than 10% of the total. Each state would make a sum equal to at least half its apportionment available to local governments. Each state would base its spending priorities on a State Action Agenda, which it would have 5 years to develop, and then must update every 4 years. Federal Acquisition Decisions Congress currently earmarks almost all LWCF appropriations to federal agencies for specific acquisitions. These earmarks are based on a combination of recommendations by the agencies and other sources. Whether Congress retains a role and how that role might function are questions that will likely receive considerable attention in any debate over the legislative proposals that would remove the LWCF from the annual appropriations process. The question of the congressional role becomes more contentious when more money would be available for acquisition, as the Bush administration is proposing, especially to those who oppose further federal land acquisitions. Footnotes 1. (back)Act of Sept. 3, 1964; P.L. 88-578, 78 Stat. 897. 16 U.S.C. 460l-4, et seq. 2. (back)For an introduction to these agencies and their missions, organizations, and responsibilities, see CRS Report 95-599 ENR, The Major Federal Land Management Agencies: Management of Our Nation's Lands and Resources. 3. (back)LWCF is technically a special account, rather than a trust fund, but in federal budgeting, the only difference is the allocation of interest in unappropriated balances -- interest on a trust fund accrues to the fund, while interest on a special account accrues to the General Treasury. 4. (back) In FY1998, a one-time allocation of $699 million under the 1997 budget deal, most of which was provided to acquire Headwaters Forest in California and New World Mine outside Yellowstone National Park, is not considered to be an appropriation from the fund. 5. (back) Appropriations for the state grant program are made through the National Park Service. |