Land and Water Conservation Fund

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Congressional Research Service
Report for Congress

97-792: Land and Water Conservation Fund:
Current Status and Issues 

Jeffrey Zinn
Senior Analyst in Natural Resources Policy
Environment and Natural Resources Policy Division 

Updated November 29, 1999 

Summary 

The Land and Water Conservation Fund, 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 these funds. A portion of the fund has been administered by the Park Service as 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 bipartisan support. 

The policy issues for the fund have changed little in recent years. One issue has been the size of and the need for an annual appropriation. A second issue has been whether and how to revive the state-side grant program, last funded in FY1995. However, the context for debate changed after legislative proposals for permanent and full appropriations were introduced in the 106th Congress. The House Resources Committee reported out its version of this legislation, H.R. 701, on November 10, 1999. The Clinton Administration supports many of these proposed changes in its "Lands Legacy Initiative," introduced in January 1999. 


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 level of the fund, and to mandate that offshore oil and gas leasing revenues should make up any shortfall from other authorized financing sources. However, the fund's basic purpose has not 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. 

Congress considered, but did not act on, many proposals for change that were introduced before the 106th Congress. These proposals responded to changing views about the federal role in helping to meet recreational needs and to widely-publicized calls to meet those needs. For example, the most recent national commission examining outdoor recreation, President Reagan's Commission on Americans Outdoors, recommended increasing the LWCF from $900 million to a minimum of $1 billion per year and converting it to a "true trust fund" which would generate interest on any unappropriated balance and would help insure greater certainty that the money would available each year.(3) 

How the Fund Works 

The LWCF is a "trust fund"(4) 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, 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, and more than 99% in some 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 up to the ceiling of $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 accumulates if the funds are not appropriated. Through FY1999, the total amount that could have been appropriated over the years was $22.9 billion, but only almost $10.4 billion has been appropriated. 

Funding History 

The fund is authorized at $900 million annually. However, annual appropriations from the LWCF have fluctuated widely over the past 30 years, as shown on the chart at the top of the next page. During the Carter Administration, appropriations exceeded $500 million each year, reaching a high of $805 million in FY1978. They had never approached $500 million before or since until FY2000.(5) Over the past two decades, annual appropriations have generally ranged between $200 million and $300 million. 

The more than $10 billion appropriated for the fund has been unevenly distributed among the states and the four federal agencies. Approximately one-third of the total has gone to the state-side grant program. In the early years more funds went to state grants than to the federal agencies almost every year. But state grants have declined as a portion of the total since the early 1980s, and received no funds between FY1995 and FY1999. The remaining funds have not been evenly distributed among the four federal agencies. The Park Service has received $3.4 billion, while the Forest Service has received more than $1.8 billion, the Fish and Wildlife Service has received almost $1.4 billion, and the Bureau of Land Management has received more than $500 million. 

The chart at the top of the next page shows that appropriations generally declined during the early 1990s. The two 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 significantly. The table below the chart shows that the Administration funding proposal for FY2000 was $410 million, and that appropriations of $ 420.1 million exceeded the requested amount. 

Funding for land acquisition in FY2000 is located in the allocations for each of the four major land acquisition agencies and in a new Title VI in the Interior appropriations legislation (P.L. 106-113, Consolidated Appropriations for FY2000). The allocations for the four agencies total $265.3 million, including $21 million for the state-side grant program. The new Title VI, which was added during a final conference when all the appropriations bills that had not been enacted were combined and negotiated together, provides a total of $197.5 million to fund the Clinton Administration's Lands Legacy Program. Most, but not all, of these funds were earmarked and are to be used for land acquisition. This title allocates $20 million to the state-side program. Funding that will not go to land acquisition includes $5 million for the Forest Legacy Program, which purchases easements, $5 million for maintenance in the National Park System, $10 million for the Elwha River ecosystem restoration, and $19.5 million to purchase mineral rights in the Grand Staircase-Escalante National Monument. In addition, the four agencies received a total of $35 million that was not earmarked for specific sites. But before these unearmarked funds can be used, the agencies must submit a list of projects for the approval of the House and Senate Appropriations Committees. 

Land and Water Conservation Fund Appropriations in Recent Years
(in millions of dollars) 

Current Issues 

Major issues are whether to provide full and/or certain funding for the LWCF and funding for the state-side grant program. Funding came under pressure in the early and mid 1990s as part of the effort to address the overall deficit. The Department of the Interior estimates 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 funding, and the concept behind the 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 have become far more acceptable for 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. These concerns involve preferences for public or private ownership, as well as the effects of public ownership on local tax income. Also, resource protection is couched increasingly in terms of considering large systems, such as ecosystems or watersheds, rather than smaller sites or components, and managing systems where only a portion of the land is in public ownership has presented new challenges. Managing larger areas also requires more cooperation and partnerships. Finally, maintaining the land and facilities that are already in the federal estate, especially in sites under the jurisdiction of the Park Service, is becoming a higher priority than more acquisition, according to some. These changes in the debate generally mean that resource protection is less expensive but often more complicated, and in this new world, Congress may consider changes to the LWCF that extend beyond funding issues. 

Funding in the Future 

The most prominent issues have been 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 through which the fund must pass has proven to be unpredictable. During the years in which Congress and the Administration were trying to reduce the deficit, Congress responded by making only limited funds available and by earmarking almost all annual 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 higher priorities or that further federal land acquisitions should be limited. 

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, Senator Landrieu and Representative Young introduced similar bills that would have diverted about $1.5 billion annually from offshore oil and gas revenues to a combination of the LWCF (making it a true trust fund), energy impact assistance for coastal communities, and wildlife programs. In the 106th Congress, several bills to accomplish the same goal for LWCF have been introduced. One of these bills, H.R. 701 sponsored by Representative Don Young, was reported by the House Resources Committee on November 10, 1999, while S. 25, sponsored by Senator Landrieu, may be the basis for action on the Senate side. 

H.R. 701 would provide $2.825 billion plus interest earned on those funds to several purposes. Under Title II, the LWCF would be made a true fund and receive $900 million annually. Half the total, $450 million, would go to the four federal agencies. The remainder would fund the state-side grant program. Federal funds would be fully earmarked and could only be spent on projects that are specified in appropriations legislation. Acquisition could occur only when the seller concurs and the purchase has been approved by Congress. 

Other legislative proposals include identical wide-ranging bills that have been introduced by Senator Boxer (S. 446) and Representative George Miller (H.R. 798). These bills include many proposals that the Clinton Administration put forth in its Lands Legacy Initiative. Costing an estimated $2.3 billion a year, these bills would permanently appropriate funding for the LWCF, the Urban Parks and Recreation Recovery Program, and the National Historic Preservation Fund; increase funding for several other small programs that protect resources; and create several new programs. Other proposals that only address funding the LWCF have been introduced as well. (For detailed information on provisions in these proposals, see CRS Report RL30133, Resource Protection and Recreation: A Comparison of Bills to Increase Funding, and to learn more about the Clinton Administration proposal, and the specific provisions of the major bills, see CRS Issue Brief IB10015, Conserving Land Resources: The Clinton Administration Initiatives and Legislative Action.) 

Reviving the State Grants 

State grants were not funded between FY1995 and FY2000, and the Administration did not request any appropriations for states in FY2000. Congress, however, provided $41 million for this program; $21 million was added as a result of floor amendments in both the House and Senate in the initial Interior appropriations bill, and an another $20 million was added in Title VI which was subsequently amended to the bill in conference to fund the Lands Legacy Initiative. This funding is a culmination of congressional reviews to determine how this program might be reinvigorated. Both the Senate Energy and Natural Resources Committee and the House Resources Committee held oversight hearings where the accomplishments and benefits of the state program were summarized, but congressional efforts to secure limited funding in the budget agreement during the early summer of 1997 and in the FY1999 budget failed. 

Future funding is addressed in H.R. 701, which would provide $450 million to state-side grants 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 has 5 years to develop, and which it must update at least once every 4 years thereafter. The legislation also lays out the limited circumstances under which property purchased with LWCF funds could be converted to non-recreational uses. 

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)President's Commission on Americans Outdoors. Report and Recommendations to the President of the United States. Washington, DC: 1986. 

4. (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. 

5. (back) In FY1998, a one-time allocation of $699 million under the 1997 budget deal is not considered to be an appropriation from the fund. 

This document was produced by the Congressional Research Service. The National Council for Science and the Environment (NCSE) has made these reports available to the public at large, but the CRS is not affiliated with the NCSE or the National Library for the Environment.
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