The Natural Resources and Environment Function in the FY1999 Budget: A Description of Programs and Funding

98-294 ENR Updated June 9, 1998 CRS Report for Congress Received through the CRS Web The Natural Resources and Environment Function in the FY1999 Budget: A Description of Programs and Funding David M. Bearden Environmental Information Analyst Environment and Natural Resources Policy Division Summary Function 300 of the federal budget includes activities related to natural resources and the environment and funds five subfunctions for water resources, conservation and land management, recreational resources, pollution control and abatement, and othe r activities such as research and technical support. For these activities, the Administratio n has requested $23.73 billion in budget authority for FY1999, and projects outlays o f $23.24 billion. On April 2, 1998, the Senate passed the FY1999 budget resolution, S. Con. Res. 86, which sets budget authority for Function 300 at $23.40 billion and project s $23.40 billion in outlays. On June 5, 1998, the House passed H. Con. Res. 284, which sets budget authority for Function 300 in FY1999 at $22 .60 billion and projects $22.80 billion in outlays. Issues to be resolved in conference include: the level of budge t authority and amount of outlays for Function 300, differences in funding assumptions, and the sense of the Senate expressed in S. Con. Res. 86 on global climate chang e research, the Kyoto Protocol to limit greenhouse gases, the Landowner Incentiv e Program, and the Land and Water Conservation Fund, which are not included in H. Con . Res. 284. This report will be updated as legislative action occurs. Introduction The federal budget is organized according to 20 spending and revenue functions . Function 300 of the budget includes activities related to natural resources and th e environme nt and funds five subfunctions for water resources, conservation and lan d management, recreational resources, pollution control and abatement, and other activi ties such as research and technical support. For these activities, the Administration ha s requested $23.73 billion in budget authority for FY1999, which is about 1% of tota l budget authority of $1.75 trillion and roughly $630 million below the FY1998 fundin g level of $24.36 billion. The President's budget projects outlays of $23.24 billion fo r Function 300 in FY1999, which is about 1% of total outlays of $1.73 trillion. (For a history of budget authority since FY1988 and the share of F Y1999 funding requested for each subfunction, refer to Figures 1 and 2 respectively on page 2.) Congressional Research Service ˜ The Library of Congress CRS-2 Figure 1. Budget Authority for Natural Resources and Environment FY1988-FY1999 Request $ billions 30.00 25.00 21.29 16.99 20.00 18.15 21.64 23.11 22.69 21.03 24.36 23.73 21.61 19.23 15.38 15.00 10.00 5.00 0.00 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Request Prepared by the Congressional Research Service with data from the Office of Management and Budget. Figure 2. FY1999 Request for Natural Resources and Environment Total Request = $23.73 billion Researcch, Technical Support, and Other Activities $2.97 billion 12.5% Conservation and Land Management $5.41 billion 22.8% Recreational Resources $3.30 billion 13.9% 17.1% Water Resources $4.06 billion 33.7% Pollution Control and Abatement $7.99 billion Prepared by the Congressional Research Service with data from the Office of Management and Budget. CRS-3 Following procedures established in the Congressional Budget and Impoundmen t Control Act of 1974 (P.L. 93-344), t he House and Senate Budget Committees develop a concurrent resolution on the budget that sets funding levels for the 20 budget functions and establishes guidelines for spending and revenue. On April 2, 1998, the Senate passe d the FY1999 budget resolution, S. Con. Res. 86, which sets budget authority for Function 300 at $23.40 billion, $330 million less than the Administration's request. It also project s $23.40 billion in o utlays for Function 300, $160 million more than the Administration's projection. The House passed its version of the FY1999 budget resolution on June 5 , 1998, H. Con. Res. 284, which sets budget authority for Function 300 at $22.60 billion, $800 million less than the Senate's amount and $1.13 billion below the Administration's request. It also projects outlays of $22.80 billion for Function 300, $600 million below the Senate's level and $440 million less than the Administration's projection. Issues to b e resolved in conference include: the level of budget authority and amount of outlays fo r Function 300, differences in funding assumptions , and the sense of the Senate expressed in S. Con. Re s. 86 on global climate change research, the Kyoto Protocol to limi t greenhous e gases, the Landowner Incentive Program, and the Land and Wate r Conservation Fund, which are not included in H. Con. Res. 284. Based on amounts in th e budget resolution, the House and Se nate Appropriations Committees are responsible for allocating funding to each federal agency in the 13 annual appropriations bills. 1 This report describes the activities under each subfunction of Function 300, indicate s the Administration's request for FY1999, lists the federal agencies that implement variou s programs, identifies potential funding issues, and discusses relevant provisions in th e FY1999 budget resolution. Funding for Defense-related Environmental Activities Function 300 does not include the roughly $10 billion for defense-relate d environmental programs. Instead, this funding falls under Function 50 for National Defense. The Department of Defense operates six environmental programs to addres s cleanup, compliance, mi litary base closures, pollution prevention, conservation, and environmental technology. The Department of Energy manages defense nuclear wast e and remediates contaminated sites. For further discussion of defense-relate d environmental programs, refer to CRS Report 97-790 ENR. Water Resources The FY1999 request of $4.06 billion for water resourc es, 17.1% of the total request for Function 300, is $777 million less than the FY1998 funding level of $4.84 billion. Thi s subfunction includes activities under the Army Corps of Engineers and the Department o f the Interior's Bur eau of Reclamation. 2 The Corps constructs and maintains facilities for flood control, commercial navigation, and hydroelectric power. Congress traditionall y authorizes funding for Corps projects every 2 years under a Water Resource s Development Act. The most recent authorization was in 1996, and the second sessio n 1 For further discussion of the federal budget process, refer to CRS Report 96-912 GOV. 2 To track appropriations for these agencies, refer to CRS Report 98-207 ENR. CRS-4 may consider such legislation for 1998. The Bureau of Reclamation operates diversion dams and reservoirs that provide water for irrigation, hydroelectric powe r, and municipal and industrial uses in the western United States. Numerous water projects, such as th e Garrison Dam Diversion in North Dakota, are controversial because of the potentia l difficulty in diverting water to meet public needs in arid areas while maintaining wate r quality and protecting habitat. As passed, S. Con. Res. 86 assumes full funding of $1.4 billion in budget authority and $1.2 bil lion in outlays for the Corps' general construction account in FY1999, whereas the President's budget would provide $700 million less i n budget authority an d $300 million less in outlays. The Senate's resolution also assumes full funding for the Corp's other accounts and priority projects such as the Portland Harbo r Project in Maine. As passed, H. Con. Res. 284 assumes that funding for the Ar my Corps of Engineers in FY1999 will remain at the FY1998 level. The House Republican Budg et Plan, released on May 12, 1998, proposed to fund non-power operations of the Tennesse e Valley Authority primarily with fees c ollected from commercial barges under the Inland Waterways Trust Fund rather than from direct appropriations. However, the House did not include this language in H. Con. Res. 284, as passed. Conservation and Land Management The FY1999 request of $5.41 billion for conservation and land manageme nt, 22.8% of the total request for Function 300, is $158 million lower than the funding level of $5.5 6 billion for FY1998. The Department of Agriculture's Forest Service and the Department of the Interior's Bureau of Land Management, National Park Service, and Fish and Wildlif e Service manage the majority of public lands. 3 The Fish and Wildlife Service works w ith the Department of Commerce's National Marine Fisheries Service to p rotect wildlife and fishery populations. 4 The Department of Agriculture's Natural Resources Conservation Service assists farmers in managing their lands, and under the Wetlands Reserve Program , compensa tes farmers for removing certain portions of their land from production t o protect wetlands. 5 Some of the potential issues related to conservation and lan d management are: restoring watersheds and wetlands, improving forest health, constructin g roads in national forests and across lands administered by the Bureau of Lan d Management, charging grazing fees on rangelands, acquiring additional public lands , reauthorizing and implementing the Endangered Species Act, protecting ocean and coasta l resources, and restoring water quality in nationally significant ecosystems. As passed, S. Con. Res. 86 assumes the President's reduction of $699 million fo r priority acquisitions of federal lands. The 1997 balanced budget agreement provided a total of $700 million for major land ac quisitions, all of which Congress appropriated for FY1998. For the Fish and Wildlife Service's resource management programs, the Senate' s resolution assumes $595 million in budget authority and $594 million in outlays. It also expresses the sense of the Senate that public land sales should not be the sole source of funding for the Landowner Incentive Program if subsequent legislation provides othe r sources and that programs supported by the Land and Water Conservation Fund should be funded at the authorized level. The House Republican Budget Plan proposed to reduc e 3 To track appropriations for these agencies, refer to CRS Report 98-206 ENR. 4 To track appropriations for this agency, refer to CRS Report 98-209 E. 5 To track appropriations for this agency, refer to CRS Report 98-201 ENR. CRS-5 bureaucracy in the Department of the Interior and the Natural Resource Conservatio n Service by eliminating or decreasing funding for certain offices, but the House did no t adopt this provision in H. Con. Res. 284, as passed. Recreational Resources The FY1999 request of $3.30 billion for recreational resources, 13.9% of the total request for Function 300, is $514 million below the FY1998 funding level of $3.81 billion . The Department of Agriculture's Forest Service and the Department of the Interior' s Bureau of Land Management, National Park Service, and Fish and Wildlife Servic e manage federal lands that provide outdoor recreational opportunities. 6 Some of th e potential issues related to recreational resources are: maintaining pa rks to meet increased public demands, managing new park units, reducing the backlog of construction an d maintenance projects, expanding partnerships between the public and private sectors to protect certain recreational areas, and providing federal aid to states for managin g recreational fisheries. As passed, S. Con. Res. 86 assumes full fund ing of the President's request for $1.3 billion in budget authority and $1.2 billion in outlays for the National Par k System in FY1999. The House Republican Budget Plan proposed to consolidate th e Bureau of Land Management, Fish and Wildlife Service, and Forest Service to provid e savings that would allow funding increases for the National Park Service. However, the House did not adopt this language in H. Con. Res. 284, as passed. Pollution Control and Abatement The FY1999 request of $7.99 billion for po llution control and abatement, one-third and the largest portion of the total request for Function 300, is $650 million above th e funding level of $7.34 billion for FY1998. The Environmental Protection Agency (EPA ) enforces federal environmental laws, oversees national regulations, and assists state, local , and tribal governments in controlling pollution. 7 The Department of Agriculture assists rural communities in developing water infrastructure. 8 Some of the potential issues relate d to pollution control and abatement are: 1) reauthorizing the Superfund program to clean up the nation's most hazardous waste sites and 2) meeting public needs for wate r infrastructure to ensure safe drinking water and adequate treatment of wastewater. The President's budget would devote the increase of $650 million in EPA's budget to completing cleanup at 136 Superfund sites in 1999. However, it would decrease EPA' s state revolving funds for water infrastructure by $310 million from $3.21 billion fo r FY1998 to $2.90 billion for FY1999. As passed, S. Con. Res. 86 would reject th e President's proposal to reduce funding for EPA's water infrastructure program, and i t assumes additional spending of $200 million annually from FY1999 to FY2003 for the Superfund program. This additional funding would cover orphan shares of cleanup costs , contingent upon reauthorization, if the extra spending does not raise the f ederal deficit or reduce the budgetary surplus. (Cleanup costs for whic h responsible parties are unable to pay are referred to as orphan shares.) The Senate's resolution also expresses the sense tha t 6 To track appropriations for these agencies, refer to CRS Report 98-206 ENR. 7 To track appropriations for this agency, refer to CRS Report 98-204 EPW. 8 To track appropriations for this agency, refer to CRS Report 98-201 ENR. CRS-6 federal grants for technologies, research, and methods to reduce greenhouse g ases should be made available through competitive, merit-based awards that focus on cost effectiveness, and it expresses the sense that funding should not be provided to reduc e greenhouse gases under the Kyoto Protocol prior to Senate ratification. 9 Research and Technical Support The FY1999 request of $2.97 billion for research and technical support, 12.5% and the smallest portion of the total request for Function 300, is $168 million more than the FY1998 funding level of $2.81 billion. Under the Department of the Interior, the U.S . Geological Survey conducts research on land, water, and mineral resources and natura l hazards. 10 Under the De partment of Commerce, the National Oceanic and Atmospheric Administration conducts research on coastal resources, air quality, climate change, an d ozone depletion. 11 It also administers the National Weat her Service, which issues public weather forecasts and warnings. As passed, S. Con. Res. 86 assumes full funding of the President's request for the National Oceanic and Atmospheric Administration, whic h would provide $2.3 billion in budget authority and $2.1 billion in outlays for FY1999. Tax Revenues and Incentives Major sources of federal revenue under Function 300 include timber sales , recreational fees, park concessions, grazing fees, mineral royalties from onshore sites, an d bonuses and royalties from offshore oil and gas leases. Superfund taxes are anothe r source, but taxing authority expired on December 31, 1995. Reinstating them is a prominen t issue in the Superfund reauthorization debate, and the President's budge t assumes revenues of nearly $1.8 billion in FY1999 based on their renewal. The President' s budget also proposes to reinstate the oil spill excise tax and assumes revenues of $23 8 million in FY1999. As passed, S. Con. Res. 86 assumes the reinstatement of Superfund taxes to offset additional spending of $200 million annually from FY1999 to FY2003 for orphan shares of cleanup costs. As passed, H. Con. Res. 284 does not include fundin g assumptions based on the reinstatement of Superfund taxes. Current tax incentives under Function 300 would total $1.74 b illion in FY1999. Of this amount, state and local governments would receive a tax break of $600 million t o construct private waste disposal facilities with tax-exempt bonds, and the timber i ndustry would receive tax credits of roughly $600 million. Tax incentives for the mining industr y would total about $400 million. To reduce certain greenhouse gases, the President' s budget proposes $6 million in tax credits for recycling perfluorocarbons (PFCs) an d hydrofluorocarbons (HFCs) and replacing circuit breakers that leak sulfur hexafluorid e (SF6). As passed, S. Con. Res. 86 expresses the sense that tax credits to lower greenhous e gases should be offered for using alternative technologies that are as effective as th e technologies for which tax credits are available. 9 For a summary of agreements under the Kyoto Protocol, refer to CRS Report 98-2 ENR, and fo r a discussion of global climate change issues, refer to CRS Issue Brief 89005. 10 To track appropriations for this agency, refer to CRS Report 98-206 ENR. 11 To track appropriations for this agency, refer to CRS Report 98-209 E.