Land and Water Conservation Fund: Current Status and Issues

Land and Water Conservation Fund: Current Status and Issues

Order Code RS21503
Updated June 10, 2005
CRS Report for Congress
Received through the CRS Web
Land and Water Conservation Fund:
Current Status and Issues
Jeffrey A. Zinn
Specialist in Natural Resources Policy
Resources, Science, and Industry Division
Summary
The Land and Water Conservation Fund (LWCF) has been the principal source of
monies for four federal agencies — the National Park Service, Bureau of Land
Management, Fish and Wildlife Service, and Forest Service — to acquire recreational
lands since 1965. The LWCF also funds a matching grant program to assist states (and
localities) in acquiring recreational lands and developing facilities. The fund
accumulates $900 million annually from designated sources. Congress allocates these
funds through appropriations each year.
Current congressional issues include (1) deciding the amount to appropriate each
year to each of the four federal agencies, and to the state grant program; (2) identifying
which lands should be acquired; and (3) determining whether LWCF funds should be
appropriated for additional related purposes. The primary context for debating these
issues is Interior appropriations legislation, which is tracked in CRS Report RL32893.
This report will be updated periodically.
Introduction
The Land and Water Conservation Fund (LWCF) was created in 1964 and took
effect January 1, 1965.1 It has been the principal federal source of funds for acquiring
new recreation lands. Some supporters assert that it was originally intended to be a
revolving fund, but it has never operated as one. The fund’s basic purpose has not been
altered even though the authorizing legislation has been amended, mainly in the early
years, most notably to raise the funding ceiling and to mandate that offshore oil and gas
leasing revenues should make up any shortfall from other specified financing sources.
Appropriations have been made for (1) federal land acquisition; (2) grants to states;
and (3) related purposes (starting in FY1998). Most federal lands are acquired (and
managed) by four agencies — the Forest Service (FS) in the Department of Agriculture,
1 Act of Sept. 3, 1964; P.L. 88-578, 78 Stat. 897. 16 U.S.C. 460l-4, et seq.
Congressional Research Service ˜ The Library of Congress

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and the National Park Service (NPS), Fish and Wildlife Service (FWS), and Bureau of
Land Management (BLM) in the Department of the Interior, using funds appropriated
from the LWCF.2 These four agencies manage about 94% of all federally owned lands.
These agencies have used LWCF funds to acquire approximately 4.5 million acres, an
area slightly smaller than New Jersey. (Viewed in a different way, 4.5 million acres is
less than 1% of the almost 672 million acres owned by the federal government.) Another
portion of the LWCF, administered by the NPS, provides matching grants to states for
recreation planning, land acquisition, and facility development. These grants have funded
about 38,000 state and local projects. Recipients have acquired approximately 2.3 million
acres and have developed recreation facilities at about 27,000 of these projects.
Acquisitions funded through LWCF grants must remain in recreation use in perpetuity.
A final portion has been appropriated for other related federal purposes since FY1998.
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 annual 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 (and almost 100% in most recent years).
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 $900 million annually, but
Congress must appropriate funds; unappropriated funds remain in the U.S. Treasury and
can be spent for other federal activities. Interest is not accrued on the accumulated
unauthorized balance that has been credited to the LWCF account. In addition, the LWCF
is subject to earmarks and other directions from Congress during the annual
appropriations process. From FY1965 through FY2005, $28.1 billion has been credited
to the LWCF. However, only about half that amount — $14.3 billion — has been
appropriated.
Funding History
The $14.3 billion appropriated from the fund has been unevenly allocated among the
states, the four federal land management agencies, and for other purposes, as shown on
the chart on the next page. States have received less than 30% of the total, about $3.7
billion. In the early years, more funds went to state grants than to the four federal
agencies combined. State grants have declined as a portion of the total since the early
1980s and received no appropriations from FY1996 through FY1999. The four federal
agencies have received about two-thirds of the total, divided as follows: the NPS has
received $4.0 billion; the FS has received almost $2.5 billion; the FWS has received
2 For an introduction to these agencies and their responsibilities, see CRS Report RL32393,
Federal Land Management Agencies: Background on Land and Resource Management.
3 LWCF is technically a special account, rather than a trust fund, but in federal budgeting, the
only difference is the allocation of interest on unappropriated balances — interest on a trust fund
accrues to the fund, while interest on a special account accrues to the General Treasury.

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almost $2.2 billion; and the BLM has received around $0.7 billion. The remainder, about
$1.3 billion, has been appropriated for other purposes, starting in FY1998.
Total LWCF Appropriations: FY1965-2005
1200
State Grants
Federal Agencies
Other Purposes
1000
800
600
400
200
0
1965
1970
1975
1980
1985
1990
1995
2000
2005
Source: Data through FY2002 compiled by the National Park Service Budget Office, May 1,
2002. Date since FY2002 from conference committee reports and Interior appropriations laws.
Total annual appropriations from the LWCF have fluctuated widely over the past 35
years (see chart above). Except during the Carter Administration (FY1977-FY1980),
when appropriations exceeded $500 million each year, they have only approached or
exceeded the authorized level of $900 million in FY1998 and FY2001. Except for the
earliest decade, the lowest years were FY1996 and FY1997, when appropriations totaled
$138 million and $159 million, respectively.
Over the past decade, total annual appropriations have risen and fallen in multi-year
periods. Between FY1996 and FY2001, the total generally rose, with spikes in FY1998
and FY2001. FY1998 was the first year that appropriations exceeded $900 million; they
included $270 million in the usual funding titles for the four land management agencies,
an additional $627 million in a separate title, funding both the acquisition of the
Headwaters Forest in California and New World Mine outside Yellowstone National
Park, and $72 million for other activities that did not involve land acquisition. The total
(and, in general, the funding levels for each federal agency and the state grant program)
has declined every year since FY2001. The table below lists appropriations from FY2001
to FY2005 and shows this decline for each federal agency and the state grant program.

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LWCF Appropriations for Land Acquisition and State Grants,
FY2001-FY2005
(in millions of dollars)
Agency
FY2001
FY2002
FY2003
FY2004
FY2005
Forest Service
$150.9
$149.7
$133.8
$66.8
$61.0
National Park Service
$215.1
$274.1
$172.5
$141.5
$146.3
(State Grants)
($88.8)
($144.0)
($98.0)
($94.4)
($91.2)
Fish and Wildlife Service
$121.5
$99.1
$73.4
$43.3
$37.0
Bureau of Land Management
$47.3
$49.9
$33.5
$18.5
$11.2
Total
$534.5
$572.8
$413.2
$270.0
$255.5
Sources: Data for FY2001 and FY2002 from National Park Service Budget Office, May 1, 2002, and
data for FY2003 through FY2005 from conference committee reports.
Note: Appropriations for purposes other than land acquisition are not included in the table.
Congress appropriated LWCF funds for purposes other than land acquisition in
FY1998 and each year since FY2000. Appropriations for other purposes were much
higher in FY2001 than any other year, when they were used to fund programs in the
Clinton Administration’s Lands Legacy Initiative proposal. Most recently, for FY2005,
Congress provided approximately $204 million. The FWS has received more than $850
million of the $1.3 billion appropriated for other purposes since FY1998. The amounts
and purposes, by year, include:
! In FY1998, $72 million for critical maintenance needs to the four land
management agencies, and to the FS for the Beartooth Highway
(Montana) rehabilitation and maintenance;
! In FY2000, $20 million for programs administered by the NPS and FS;
! In FY2001, $456 million for several federal and state programs, such as
the Historic Preservation Fund and the Payment-in-Lieu-of-Taxes
Program;
! In FY2002, $135 million for three FWS programs;
! In FY2003, $197 million for four FWS programs;
! In FY2004, $223 million, predominantly for FWS and FS programs; and
! In FY2005, $204 million, predominantly for FWS and FS programs.
Congress is considering the Bush Administration’s FY2006 request for LWCF
appropriations. This overall request is for additional reductions. It includes $40.0 million
for the FS (a reduction of $21.0 million), $54.5 million for the NPS (a reduction of $91.9
million in total, which includes a reduction of $89.6 million for state grants and a
reduction of $2.3 million for federal land acquisition), $41.0 million for the FWS (an
increase of $4.0 million), and $13.4 million for the BLM (an increase of $2.2 million).
For information on appropriations in the current fiscal year, see CRS Report RL32893,
which is tracking these accounts through each step of the FY2006 appropriations process.

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Current Issues Associated with Appropriations
Appropriation Levels. Between FY1998 and FY2002, funding for land
acquisition generally returned to higher levels not seen since the Carter Administration.
It has subsequently declined each of the past four years, and is now closer to average
funding levels historically (when appropriations for other purposes is not included), as
shown in the figure on page 3. However, even if Congress started to provide $900 million
annually, and only for land acquisition, it would take more than a decade to address the
backlog of identified acquisitions, recently estimated to exceed $10 billion for the three
DOI agencies alone.
The concept of the fund enjoys widespread bipartisan support, led by resource
protection advocates who seek higher appropriations levels as well as stable and
predictable funding. These advocates join together to seek higher appropriations in
general. Many of them have more specific priorities, such as higher funding for one of
the four federal agencies or the state grant program, or for a specific site or area.
Others oppose higher levels based on concerns about further acquisition of privately
owned land by the federal government either generally or at specific sites, especially in
the West, where federal ownership is already concentrated. These concerns involve
preferences for private ownership, limits that federal agencies may place on uses of their
lands, and reduced local tax revenues that result from public ownership. Some opponents
believe that maintaining (and rehabilitating) the land and facilities that federal agencies
already own should take priority over further acquisitions. Since federal agencies can not
use LWCF funds for maintenance, supporters of this priority favor more funding to other
accounts that can be used for maintenance and less for LWCF.
Since the early 1990s, the appropriations debate has grown more complicated as
perspectives on resource protection have changed. One change is that alternatives to
acquisition that may provide potentially lower levels of protection but at less cost (such
as easements) have become more widely used by federal agencies. A second change is
that resource protection is discussed increasingly for either larger areas with multiple land
owners — such as ecosystems, landscapes, or watersheds — or for managing systems
where only a portion of the land is in public ownership. In these complex situations,
success depends on cooperation and partnerships, and the LWCF may be less critical.
Which Lands to Acquire. The annual budget submission from each of the four
federal agencies includes proposals of which lands the agencies seek to acquire with
requested funds. The four FY2006 requests, for example, identify a total of 54 sites.
Section 7 of the LWCF Act (16 U.S.C. 460l-9) provides that federal funds may be used
to acquire lands in national park, national forest, and national wildlife system units, and
for water development projects with recreational benefits. The large backlog of potential
acquisitions at these sites where LWCF spending is authorized provides each agency with
many options in its annual request. Congress reviews agency requests, then determines
the appropriations level and earmarks almost all appropriations to specific sites. In recent
years, Congress also has provided each agency with small amounts for “emergencies,”
“inholdings,” “hardships,” and “exchanges,” and a larger amount for acquisition
management. (Appropriations to the state grant program, by contrast, almost never
include earmarks or other directions to the NPS to guide how these funds should be
distributed or spent.)

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Spending for Other Purposes. Starting in FY1998, Congress has allocated
some LWCF appropriations to federal agencies for purposes other than land acquisition,
and in the past few years, the Bush Administration has requested LWCF funds for other
programs. The FY2006 budget request continues this trend. Section 7 (16 U.S.C. 460l-9)
on allocation of the fund for federal purposes, states that “moneys appropriated from the
fund for federal purposes shall, unless otherwise allotted in the appropriations Act making
them available, be allotted by the President for the following purposes and subpurposes.”
The listed purposes define which lands are eligible. Traditional fund beneficiaries have
expressed concern about expanding the uses of appropriations if it reduces the amount
available for federal land acquisition and state grants.
LWCF Funding in Recent Legislation
Legislation to fully fund the LWCF and to make it operate like a private sector trust
fund was first introduced near the end of the 105th Congress. Such proposals were revised
and reconsidered by every subsequent Congress. These proposals sought to divert
offshore oil and gas revenues to a Conservation and Reinvestment Act (CARA) Fund and
to permanently appropriate receipts credited to the LWCF, among other related purposes,
with total annual funding of approximately $3 billion in many of the proposals. In the
106th Congress, one CARA bill, H.R. 701, passed the House, the only time either
Chamber has approved it. That version would have provided an additional $900 million
annually from the CARA Fund to the LWCF, giving it a total of $1.8 billion annually.
(For details on the history of congressional deliberations of CARA, see CRS Report
RL30444, Conservation and Reinvestment Act (CARA) (H.R. 701) and a Related Initiative
in the 106th Congress., by Jeffrey Zinn and M. Lynne Corn.)
When it became clear that CARA legislation would not be enacted in 2001, as the
106th Congress was drawing to a close, it included aspects of CARA in FY2001
appropriations legislation. These provisions established the Conservation Spending
Category (CSC), and some referred to it as “CARA lite.” The LWCF is a major
component in the CSC. The CSC provisions set a target for total funding for all the
component programs in FY2001 at $1.6 billion, including $1.2 billion through Interior
appropriations and $400 million through Commerce appropriations. Under law, the target
increases each year until it reaches $2.4 billion in FY2006. However, while the Interior
Appropriations bill authorized the CSC through FY2006, the Commerce Appropriations
bill authorized it for only FY2001. (For more information on the CSC, including funding
by program, see CRS Report RS20471, The Conservation Spending Category: Funding
for Natural Resource Protection, by Jeffrey Zinn.)
Many LWCF proponents continue to support legislative proposals that would
provide full and certain funding to the LWCF each year both because the annual
appropriations process continues to be unpredictable, and because the maximum benefit
could be achieved with full funding. Opponents of these proposals believe that these
monies should be appropriated for other priorities, that further federal land acquisitions
should be limited, or that this funding should not be exempt from the annual
appropriations process. However, support for considering the CARA legislation appears
to have declined and the gap between the CSC target and actual funding has expanded,
possibly because of growing concern about federal budget deficits in future years or other
priorities such as the war on terrorism.