Wildlife Habitat Incentives Program: Status and Current Issues

. Wildlife Habitat Incentives Program: Status and Current Issues Megan Stubbs Analyst in Agricultural Conservation and Natural Resources Policy August 24, 2009 Congressional Research Service 7-5700 www.crs.gov R40051 CRS Report for Congress Prepared for Members and Committees of Congress c11173008 . Wildlife Habitat Incentives Program: Status and Current Issues Summary The Wildlife Habitat Incentives Program (WHIP) is a voluntary program that provides technical and financial assistance to eligible lands to improve and develop wildlife habitat and enhance wildlife populations. Participants enter into contracts, usually 5 to 10 years in duration, with the U.S. Department of Agriculture’s (USDA’s) Natural Resources Conservation Service (NRCS), which pays up to 75% of the contract implementation cost. Since its initial authorization in the 1996 farm bill, WHIP has enrolled more than 4.7 million acres through 29,000 contracts. Eligible acreage includes privately owned agricultural land, tribal land, and nonindustrial private forest land. Some selected issues for the 111th Congress include mandatory funding levels, a change in program eligibility requirements, a continuing backlog of unfunded applications, and speciesspecific funding. Congressional Research Service . Wildlife Habitat Incentives Program: Status and Current Issues Contents Program Overview ......................................................................................................................1 Eligibility and Program Requirements ...................................................................................1 Program Funding ..................................................................................................................2 Selected Issues ............................................................................................................................4 Mandatory Funding Levels....................................................................................................4 Program Eligibility................................................................................................................4 Unfunded Application Backlog .............................................................................................5 Species-Specific Funding ......................................................................................................6 Figures Figure 1. FY2008 WHIP Financial Assistance Obligated .............................................................5 Tables Table 1. WHIP Funding and Reductions, FY2003-FY2009..........................................................2 Table 2. Four Largest WHIP Allocation Recipient States, FY2003-FY2008 .................................3 Table 3. Funded and Unfunded WHIP Contracts, FY2003-FY2008 .............................................6 Contacts Author Contact Information ........................................................................................................7 Congressional Research Service . Wildlife Habitat Incentives Program: Status and Current Issues Program Overview The Wildlife Habitat Incentives Program (WHIP) was originally authorized in Section 387 of the 1996 farm bill (P.L. 104-127, 16 U.S.C. 3839bb-1) and was reauthorized and amended in both the 2002 and 2008 farm bills.1 The current WHIP authority extends through FY2012. The purpose of WHIP is to enable eligible participants to develop habitat for upland wildlife, wetland wildlife, threatened and endangered species, fish, and other types of wildlife of local, state, and national significance. USDA’s Natural Resources Conservation Service (NRCS) establishes national priorities that reflect national wildlife concerns. These priorities, along with other resource factors, are used at the national level to allocate funding to states. The current national priorities, set in 2009 by NRCS, are as follows: • promote the restoration of declining or important native wildlife habitats; • protect, restore, develop, or enhance wildlife habitat of at-risk species (candidate species, and state and federally listed threatened and endangered species); • reduce the impacts of invasive species on wildlife habitats; and • protect, restore, develop, or enhance declining or important aquatic wildlife species’ habitats. NRCS also works at the state and local levels to set wildlife priorities. Each state develops a WHIP Plan to establish priorities and coordinate NRCS activities with those of other agencies and groups. State technical committees advise NRCS state conservationists2 on WHIP priorities and the state WHIP Plan. This coordination also encourages the leveraging of other state, federal, and private sources of funding to address state and local wildlife concerns. Generally, states select two to six priority habitat types, which consistently include one or more upland and riparian habitats. Priorities set at the national, state, and local levels are factors in deciding which contracts will be accepted. Eligibility and Program Requirements Privately owned agricultural land, tribal land, and nonindustrial private forest land may be eligible under WHIP. Applicants must have control of the land under consideration. Applications can come from individuals, groups, or businesses. Prior to enactment of the 2008 farm bill, WHIP was unique among farm bill conservation programs in that eligible land was not required to be in agricultural production. The 2008 farm bill amended the purpose of WHIP to developing wildlife habitat on private agricultural land (see “Selected Issues” section, below). The number of acres that can be enrolled in WHIP is not limited. However, the total amount of individual payments made to a person or legal entity (both directly or indirectly) through WHIP may not exceed $50,000 per year. This payment limitation was also added in the 2008 farm bill. NRCS receives applications on a continuous basis throughout the year, but application selection and funding dates vary by state. Applications are ranked and selected at the state level, based on national and state priorities (as discussed above). Applicants work with NRCS to produce a 1 P.L. 107-171, Sec. 2502, and P.L. 110-246, Sec. 2602, respectively. The NRCS state conservationist is a high-ranking civil servant responsible for management and direction of all NRCS operations within a state. 2 Congressional Research Service 1 . Wildlife Habitat Incentives Program: Status and Current Issues wildlife development plan. The plan assesses the condition of wildlife habitat on the land, makes recommendations for habitat improvements through various practices, and becomes the basis of the contract between NRCS and the participant. Examples of practices authorized under WHIP include native grassland seeding, prescribed burns, hardwood planting, and fish passage structure installation. NRCS provides cost-share payments based on the implementation of practices identified in the contract. These payments can cover up to 75% of the cost of implementing the practice. Contracts usually vary in length from 5 to 10 years depending on the number and type of practices being installed. In FY2008, more than 640,000 acres were enrolled through more than 3,400 contracts. WHIP also provides additional cost-share (up to 100% of the cost) to landowners who are willing to enter into contracts of 15 years or longer for practices affecting essential plant and animal habitat. The 2002 farm bill limited funding for these contracts to no more than 15% of the amount authorized annually for WHIP. This limit was increased in the 2008 farm bill to no more than 25% of the authorized annual funding. NRCS reports that, on average, it reimburses participants approximately $16,300 for each long-term contract lasting 15 years or longer. Short-term contracts (less than 5 years) are also allowed, but only to install practices needed for a wildlife emergency (such as drought).3 Program Funding The 1996 farm bill authorized WHIP funding of $10 million annually from FY1996 through FY2002. The 2002 farm bill significantly increased the authorized funding level to a total of $345 million between FY2003 and FY2007.4 The 2008 farm bill increased the authorized funding levels further to a total of $425 million between FY2008 and FY2012. Funding under WHIP is mandatory (not subject to annual appropriations), and authorized amounts are received each year under the borrowing authority of USDA’s Commodity Credit Corporation (CCC).5 However, Congress has limited WHIP funding below authorized levels in the past, including a total reduction of $140 million between FY2003 and FY2009. Total funding approved between FY2003 and FY2009 was 27% below that of total authorized funding levels.6 Most reductions are requested annually through the President’s budget and adopted in annual agriculture appropriations bills. Table 1 compares the authorized and actual funding levels for WHIP. Table 1. WHIP Funding and Reductions, FY2003-FY2009 ($ in millions) Fiscal Year 2003 2004 2005 2006 2007 2008 2009 Total Authorized Funding Level $30 $60 $85 $85 $85 $85 $85 $515 Actual Funding $30 $42 $47 $43 $43 $85 $85 $375 $0 $18 $38 $42 $42 $0 $0 $140 Funding Reduction Source: CRS, based on historical Agriculture Appropriations Reports. 3 4 These short-term contracts can only be approved by the NRCS state conservationist. See Table 1 for annual amounts. 5 The CCC is administered by a Board of Directors from agencies of the Department of Agriculture. It has no staff, and all work on its behalf is performed by staff of agencies within USDA. For WHIP, NRCS provides staff. 6 For more information, see CRS Report R40000, Agriculture and Related Agencies: FY2009 Appropriations. Congressional Research Service 2 . Wildlife Habitat Incentives Program: Status and Current Issues Annual funding received by WHIP is allocated to the states by NRCS using a formula based on natural resource need, efficiency and performance measures, and regional equity. States that receive the largest WHIP allocations vary from year to year. Table 2 highlights these states and their funding between FY2003 and FY2008. Why these particular states receive the highest level of funding from year to year may be due to several different factors. One factor could be the regional equity provision in the 2002 farm bill, which mandates that each state receive annually a minimum aggregate amount of funding for specified conservation programs.7 In FY2007, all four states that received the highest level of funding fell under this provision. A second factor could be the location of species-specific initiatives. Since FY2004, NRCS has conducted a series of species-specific habitat initiatives that can increase funding in certain states.8 Table 2. Four Largest WHIP Allocation Recipient States, FY2003-FY2008 ($ in thousands) Fiscal Year Highest Allocation 2nd Highest Allocation 3rd Highest Allocation 4th Highest Allocation Total Allocation 2003 Rhode Island $830 Mississippi $619 South Carolina $619 Oklahoma $596 $21,184 2004 California $1,465 Alaska $1,149 Rhode Island $1,029 Washington $1,009 $27,828 2005 California $1,768 Alaska $1,582 Arkansas $1,565 New Hampshire $1,448 $34,860 2006 Rhode Island $1,805 New Hampshire $1,687 Alaska $1,472 Connecticut $1,450 $32,509 2007 Alaska $3,491 Rhode Island $3,354 Hawaii $2,777 New Hampshire $2,186 $39,916 2008 California $2,813 Massachusetts $2,574 Wisconsin $2,080 Texas $1,801 $57,811 Source: USDA, NRCS, WHIP Contract and Funding Information, http://www.nrcs.usda.gov/programs/whip/. Notes: Allocations in this table represent financial assistance allocated to states only. Technical assistance, administrative, and technology costs are not included. NRCS partners with local public agencies, nonprofit organizations, and other technical service providers to compound the amount of available funds for technical and financial assistance. Each state WHIP Plan (as described in the “Program Overview” section) seeks to leverage other state, federal, and private dollars in a coordinated effort to address wildlife habitat. In FY2007, according to NRCS, partners contributed over $762 million to assist WHIP participants with approved wildlife habitat improvement practices on enrolled acres. 7 The regional equity provision was first instituted in the 2002 farm bill (P.L. 107-171, Sec. 2701) and reauthorized in the 2008 farm bill (P.L. 110-246, Sec. 2703). The provision affects not only WHIP but also the Environmental Quality Incentives Program, Farmland Protection Program, and Grassland Reserve Program. The 2008 farm bill increased the minimum level of funding to each state for these combined four conservation programs from $12 million to $15 million. 8 The topic of species-specific initiatives is discussed further in the “Selected Issues” section. Congressional Research Service 3 . Wildlife Habitat Incentives Program: Status and Current Issues Selected Issues Mandatory Funding Levels The 2008 farm bill reauthorized WHIP through September 30, 2012, with a maintained authorized funding level of $85 million annually. As shown in Table 1, the authorized funding level has remained at $85 million annually since FY2005; however, annual appropriations acts have reduced the actual funding levels.9 With the 111th Congress facing tighter budget constraints, similar cuts to WHIP could be considered either in the appropriations process or if budget reconciliation is required. Program Eligibility The 2008 farm bill placed new limitations on lands eligible to be enrolled in WHIP, which will likely reduce the number of eligible acres in traditionally high participation states. Language was added requiring WHIP to be used “for the development of wildlife habitat on private agricultural land, nonindustrial private forest land, and tribal lands.” The addition of this language reverses the previous interpretation by NRCS, which extended eligibility to all privately owned land, tribal land, state/local government land, or federal land. 10 By previously offering support for wildlife habitat projects on all land and aquatic areas, WHIP provided an assistance option to landowners who were unable to meet the specific eligibility requirements of other USDA conservation programs. The new requirement of agricultural production will likely shift financial assistance for WHIP contracts away from the traditionally large allocation states (see Table 2 and Figure 1) to more agriculturally intensive states. The impact of the change in eligibility cannot fully be analyzed until NRCS releases funding obligation information for FY2009. 9 FY2008 is an exception because Congress passed several extension bills allowing the program to continue operation at full authorized funding levels until the 2008 farm bill passed. Funding levels authorized in extensions were not reduced by appropriations. Funding was not reduced in FY2009, though the Bush Administration did request a reduction and the Senate-reported agriculture appropriations bill (S. 3289) reduced WHIP to $74 million. This reduction was not included in the 2009 omnibus (P.L. 111-8). 10 State and local government land could only be used on a limited basis, and federal lands were only eligible when the primary benefit was on private lands and the project could not meet its objectives without involving the federal land. Congressional Research Service 4 . Wildlife Habitat Incentives Program: Status and Current Issues Figure 1. FY2008 WHIP Financial Assistance Obligated Source: USDA, NRCS, http://www.nrcs.usda.gov/programs/whip/FY08contract_info/m10405whip_dollar.gif. Unfunded Application Backlog As stated earlier, the 2002 farm bill significantly increased mandatory funding for WHIP. One reason for this funding expansion was the sizable number of pending applications that exceed available funding. Limitations on funding in annual appropriations have reduced this authorized increase and contributed to the continuing backlog of unfunded applications. 11 Table 3 shows the percentage of total contracts funded for FY2003-FY2008. Though the backlog gap is narrowing, WHIP continues to have a backlog of over 1,600 applications.12 Some considered the large unfunded application backlog a strong argument for additional funding in the 2008 farm bill; however, authorized levels remain at $85 million annually. If Congress again limits annual funding through appropriations or budget reconciliation, the actual level of funding could be significantly less than the authorized level and increase the backlog. On the other hand, the recent eligibility changes from the 2008 farm bill will reduce the number of eligible acres for WHIP and possibly reduce the backlog of unfunded applications. 11 The backlog of unfunded applications does not include applications that are incomplete or rejected. Applications in the backlog represent complete and eligible applications that could be ranked and funded at the state level if funding were available. 12 At the conclusion of FY2008, states with the highest average of unfunded applications are: Oklahoma (397), Iowa (143), Arkansas (136), Kentucky (103), and Alabama (103). Congressional Research Service 5 . Wildlife Habitat Incentives Program: Status and Current Issues Table 3. Funded and Unfunded WHIP Contracts, FY2003-FY2008 Total Contracts Funded Total Contracts Unfunded Percentage of Contracts Funded 2003 2,123 3,660 37% 2004 3,017 3,033 50% 2005 3,342 2,182 61% 2006 2,717 2,178 56% 2007 2,107 3,243 40% 2008a 3,495 1,688 67% Source: USDA, NRCS, WHIP Contract and Funding Information, http://www.nrcs.usda.gov/programs/whip/. a. In FY2008, WHIP was fully funded at the authorized level of $85 million. Congress passed several extension bills allowing the program to continue operation at full authorized funding levels until the 2008 farm bill was enacted. Species-Specific Funding Many wildlife organizations (e.g., Pheasants Forever and Ducks Unlimited) focus their efforts on certain species or habitat. Other organizations representing broader wildlife interests (e.g., Association of Fish and Wildlife Agencies) are supportive of localized priority funding levels with the occasional national species-specific focus. The interest of these organizations in additional species-specific or habitat-specific funding was partially addressed in the 2008 farm bill through additional language regarding priority for certain conservation initiatives. The farm bill encourages, but did not require, USDA to give priority to WHIP projects that address issues raised by state, regional, and national conservation initiatives.13 The farm bill’s conference report (H.Rept. 110-627) further directed USDA to consider the goals and objectives of wildlife conservation initiatives14 when establishing state and national program priorities, scoring criteria, focus areas, and other special initiatives, and to work with other state and federal agencies to complement wildlife conservation initiatives through USDA programs. The extent to which USDA will follow this directive language remains to be seen. However, any progress will likely be monitored by several interested wildlife organizations. 13 WHIP has a history of funding species-specific habitat initiatives beginning in FY2004 with a Salmon Habitat Restoration Initiative. National species-specific initiatives have dropped off in recent years, while state and local level initiatives have continued. 14 H.Rept. 110-627 listed examples of state, regional, and national conservation initiatives, including the “North American Waterfowl Management Plan, the National Fish Habitat Action Plan, the Greater Sage-Grouse Conservation Strategy, the State Comprehensive Wildlife Conservation Strategies (also referred to as the State Wildlife Action Plans), the Northern Bobwhite Conservation Initiative, and State forest resource strategies.” Congressional Research Service 6 . Wildlife Habitat Incentives Program: Status and Current Issues Author Contact Information Megan Stubbs Analyst in Agricultural Conservation and Natural Resources Policy mstubbs@crs.loc.gov, 7-8707 Congressional Research Service 7