Congressional Research Service Comparison of CARA Bills

This is a reformatted copy of the Congressional Research Service's report on the various legislative versions of CARA, which has previously been easily publicly accessible only as a PDF file (321k) sent out by the American Land Rights Association. (PDF file reader available from Adobe Acrobat).

This CRS report was issued on June 12, 2000 and so includes in its comparisons the version of H.R.701 as passed by the House on May 11, 2000 (PDF file 191k) , but not the Senate version of H.R.701 (PDF file 98k) -- the so-called Murkowski-Bingaman substitute -- as approved by the Senate Energy Committee on July 25, and which is more onerous than either the House version or Murkowski's original Senate version (S.25). This reformatted copy also does not include the extensive tables in the last half of the report. [There is also an automatic gohtm.com translation of the full CRS report with all the tables, which does not require a PDF reader and which is almost entirely readable -- although not quite in a few places.]

Nevertheless this report provides a comprehensive comparison of the enormous power, uncertainties and complications in CARA being fought over in Washington. It reveals that CARA is in fact a massive land acquisition funding bill and that contrary to the shrill disinformation by the establishment press in Maine attacking property rights defenders, no version of CARA has any provision even remotely precluding the use of CARA funds to establish a massive new National Park Service unit in Maine, or its equivalent by any other name.

The full text of each of the bills discussed in the CRS report is available at the Thomas web site.

The legislative analysts who prepared the CRS report described the legal text within the provisions of the bills; they acknowledge the controversy over the serious problem of protecting private property rights but do not explore the political implications of the provisions in CARA, i.e., how these concepts actually work against property owners in the reality of the political context.




Order Code RL30444





CRS Report for Congress

Received through the CRS Web



Resource Protection:

A Comparison of H.R. 701/S. 2567 and Three

Other Senate Bills (S. 25, S. 2123, and S. 2181)

with Current Law




Updated June 12, 2000



Jeffrey Zinn and M. Lynne Corn
Senior Analyst and Specialist in Natural Resource Policy
Resources, Science, and Industry Division
Congressional Research Service -- The Library of Congress







ABSTRACT

Legislation to allocate revenues from Outer Continental Shelf (OCS) oil and gas activities for federal and state resource acquisition and protection, urban recreation, wildlife protection, and related purposes has passed the House and may be considered by the Senate. This report compares bills addressing these topics in a side-by-side format, including : (a) H.R. 701, which passed the House (amended) on May 11, 2000 and an identical Senate bill (S. 2567); (b) S. 2123, a bill that is identical to H.R. 701 as reported by the House Resources Committee; (c) S. 25 and S. 2181, two other Senate bills that also may receive further consideration; and (d) current law. Some provisions in these bills are also elements in the Clinton Administration's "Lands Legacy Initiative," proposed in its FY2000 and FY2001 budget submissions. Opponents worry that enacting these bills could increase pressure to expand development in the OCS, increase the rate at which the federal government acquires private lands, or remove significant funding decisions from the annual appropriations process. Supporters believe that more dependable federal funding in larger amounts for diverse resource protection purposes is long overdue, and argue that the revenues generated by depletion of one resource (development of offshore oil and gas) should be used to augment efforts to conserve other resources. This report may be updated as relevant bills move through the legislative process.






Resource Protection: A Comparison of

H.R. 701/S.2567 and Three Other Senate Bills
(S. 25, S. 2123, and S. 2181) with Current Law



Summary

This report compares H.R. 701, as passed by the House on May 11, 2000, by a vote of 315-102 (and identical legislation subsequently introduced in the Senate, S. 2567), and S. 25, S. 2123, and S. 2181 with current law in a side-by-side format.

These bills would fund, largely without further appropriation, various land and resource acquisition and protection activities. With passage in the House, supporters are pressing the Senate to act. (To track the legislative process on these bills and related issues in more detail, see CRS Issue Brief IB10015, Conserving Land Resources: Legislative Proposals in the 106 th Congress.) These bills originated, in part, from efforts to provide higher and more certain funding for resource protection programs, from desires to fund the state grant portion of the Land and Water Conservation Fund (LWCF) and to fund the entire LWCF each year, and from an interest in dedicating a large portion of offshore oil and gas revenues to resource protection. Support for this legislation has grown and diversified as: (a) the budget deficit has been replaced with a surplus; (b) protecting natural resources has become viewed as part of efforts to address sprawl; (c) local pressure has expanded to secure federal funding for resource protection; and (d) efforts have strengthened to increase funding levels for an expanding list of federal resource protection programs. A key feature of these bills is to provide secure funding by bypassing the appropriations process. While strongly supported by the bills' advocates, this feature is opposed by those who hold other priorities for federal spending, want to limit overall federal spending, or believe such funding should be sought through the annual appropriations process. Opposition has also been raised by advocates of private property rights who fear that additional funding will lead to accelerated public acquisition of private lands.

The bills address numerous topics. All the bills would provide funds to coastal states and communities to mitigate impacts associated with offshore energy development, fund an urban program to develop recreation facilities, and provide funds for wildlife protection and restoration. All would fund the state grant portion of the LWCF at a guaranteed level, but only S. 25, and S. 2181 would also fund the federal LWCF at a guaranteed level. S. 25 is limited to the various several purposes, while S. 2181 funds two dozen programs. All funding for the proposals would come from revenues derived from Outer Continental Shelf (OCS) oil and gas activities, which now go into the federal treasury where they fund the general functions of the federal government. Some environmental interests worry that support for more funding could increase pressure to expand OCS activities into areas where moratoria are currently in place; each bill includes provisions to blunt such incentives.

The Administration's Lands Legacy Initiative, which was first proposed in January 1999, is not included in this comparison, since it was never developed as legislation. This initiative is being implemented primarily within the annual appropriations process. S. 2181 is most like the Lands Legacy proposals.




Key CRS Staff

Name Area(s) of Expertise Phone

Pamela Baldwin Legal Issues 7-8597 Eugene Buck Marine Wildlife Conservation and 7-7262
Restoration Programs
M. Lynne Corn Terrestrial Wildlife Conservation, 7-7267
Restoration Programs, Payment in
Lieu of Taxes, Refuge Revenue
Sharing Fund
David Koitz Social Security 7-7322
Larry Kumins OCS Oil and Gas Activities 7-7250
Sandy Streeter Federal Budget Process 7-8653
David Whiteman Urban Park and Recreation Recovery, 7-7786
Historic Preservation Programs
Jeffrey Zinn Land and Water Conservation Fund, 7-7257
Coastal Management, Easements

Acronyms




CONTENTS

Introduction ................................................ 1

Coverage of Report .......................................... 1

Other Legislative Proposals in the 106 th Congress .......... 2

Forces Behind these Proposals ............................... 3

Fully Funding the LWCF ................................... 4

Backlog of Pending Land Acquisitions ..................... 4

Increasing Overall Resource Protection Funding ........... 5

Funding State Programs For Non-Game Species .............. 5

Increasing Federal Payments to Local Governments ......... 5

Expanding the Ways That LWCF Funds Can Be Spent .......... 6

Offshore Energy Development and Coastal Effects .......... 6

Growing OCS Revenues ..................................... 7

Funding the Proposals ....................................... 8

Where the Funds Would Go .................................... 9

Major Issues ............................................... 12

Federal Budget Implications ............................. 12

Debt Reduction, Social Security, and Medicare ........ 12

Dual Funding for LWCF under H.R. 701 ................. 13

Federal LWCF: Permanent or Not? ...................... 14

Farmland Protection Grants ........................... 16

Sunset Provisions .................................... 16

Property Rights ......................................... 16

OCS Leasing and Moratoria ............................... 17

Funding for County Payments ............................. 19

Other Amendments to H.R. 701 ............................... 21

General Provisions ......................................... 22

[The following tables are omitted from this
non-PDF formatted version]


Side by Side Comparison -- Provisions in H.R. 701
(as passed)/S. 2567, S. 25, S. 2123 and S. 2181 with Current Law ........................................... 25

Impact Assistance and Coastal Conservation
(Coastal Assistance) Overview ........................... 25

Land and Water Conservation Fund (LWCF) Overview ........ 31

Wildlife Conservation and Restoration Overview .......... 41

Urban Park and Recreation Recovery Program (UPARR)
Overview ................................................ 45

Historic Preservation Fund Allocation ................... 48

Federal and Indian Lands Restoration (Land Restoration)
Overview ................................................ 49

Conservation Easements Overview ......................... 51

Endangered and Threatened Species Recovery
(Species Recovery) Overview ............................ 54

Payments in Lieu of Taxes (PILT) and Refuge Revenue
Sharing Fund (RRSF) Overview ............................ 57

Protection of Social Security and Medicare Benefits ..... 58

Other Programs .......................................... 59






RESOURCE PROTECTION:



A COMPARISON OF H.R. 701/S. 2567 AND THREE

OTHER SENATE BILLS (S. 25, S. 2123, AND S. 2181)

WITH CURRENT LAW

Introduction


Omnibus bills to greatly expand federal financial support for various land and resource protection, acquisition, and restoration programs have been introduced in the 106 th Congress. In recent congressional sessions, legislation with multiple components and proposals for significant additional federal expenditures might have been less likely to receive serious consideration because of the budget deficit and the difficulty of offsetting any new spending with reductions elsewhere. But with the emergence of a budget surplus, endorsement (at least in concept) by a broad political constituency, and an apparent groundswell of grassroots support, these proposals are receiving greater congressional attention.

The House passed H.R. 701 on May 11, after 2 days of debate during which it considered 24 amendments and adopted 7 of them. H.R. 701 was cosponsored by more than 300 members and passed the House by a vote of 315-102. Passage was supported by a majority of both the Republicans and Democrats. The amendments and the technical corrections made after the bill was approved by the House Resources Committee change the bill in several potentially significant ways, which are discussed below in the text and identified in the side-by-side using a different font. With completion of action in the House, supporters of the legislation are pressing the Senate to act quickly so that the legislative process can be completed before the 106 th Congress ends. The Senate Environment and Public Works Committee held a hearing on these proposals on May 24, at which it heard from 15 witnesses, including 7 Senators and Representatives.

Coverage of Report

This report compares existing law with H.R. 701, as passed by the House and an identical bill, S. 2567 that was subsequently introduced by Senator Boxer; S. 25, sponsored by Senator Landrieu; S. 2123, sponsored by Senator Landrieu and identical to H.R. 701 as reported by the House Resources Committee; and S. 2181, sponsored by Senator Bingaman. Each of these bills would create a new coastal energy impact assistance program, amend the Land and Water Conservation Fund Act of 1965 (LWCF Act), fund the Urban Park and Recreation Recovery Program, and increase


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funding for wildlife conservation.1 Some of the bills would fund different combinations of additional programs to protect natural and cultural resources, as well as permit an increase of payments to counties due to the presence of federal lands. How these bills equate with each other is shown in the table below.
Table 1. Relationship between Identical House and Senate Bills

House: H.R. 701 H.R. 701 H.R. 701 ----- -----
(as introduced) (as reported) (as passed)

Senate: ----- S.2123 S.2567 S.25 S.2181

These programs would be funded using revenue from Outer Continental Shelf (OCS) oil and gas activities in federal waters. Funding requirements for H.R. 701/S. 2567 and S. 2123 are estimated to be $2.85 billion annually, and the state in which the largest amount would be spent is California.2 It is estimated that S. 25 would provide $1.4 billion, based on hypothetical OCS annual receipts of $2.8 billion, and the state in which the largest amount would be spent is Louisiana.3 Funding requirements for S. 2181 are estimated to be approximately $2.9 billion annually, and the state in which the largest amount would be spent is California.

Other Legislative Proposals in the 106 th Congress

Several other closely-related bills are not discussed further in this report. Two of these bills, S. 446, sponsored by Senator Boxer, and H.R. 798, sponsored by Representative George Miller, are identical. Their provisions draw on many components of the Clinton Administration Lands Legacy Initiative, announced in January 1999 and submitted to Congress in the Administrations FY2000 and FY2001 budget requests.4 However, Rep. Miller has cosponsored and voted for H.R. 701 and Sen. Boxer introduced one of the other bills compared in this report.5

Two other bills, H.R. 452 and S. 532, also have been introduced. H.R. 452, sponsored by Representative Campbell, would only amend the LWCF. This bill would take the LWCF off-budget, and would exempt this fund from any general



1 See the list of acronyms, which follows the summary, for fuller citations of the laws discussed in this report.
2 Based on cost estimates posted on the Committee on Resources web site (www.house.gov/resources).
3 Cost estimates prepared by Representative Millers staff based on data provided by the Department of the Interior, February 23, 1999.
4 See Budget of the United States; Fiscal Year 2000, Wash. D.C., U.S. Govt. Print. Off. p. 189-190. The Administration has not submitted actual legislation to authorize many of these proposals.
5 Most recently, Senator Boxer stated at the May 24, 2000 hearing that she had introduced S. 2567 because she believes it would be the fastest way to pass legislation and was concerned that the legislative calender for this Congress was growing short. She also commented that she did not necessarily endorse all the provisions in H.R. 701, as passed. Representative Miller strongly supports H.R. 701

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budget limitation. Also, it would require that at least half the annual LWCF funding be provided to the states. Current law requires that at least 40% go to federal agencies.

S. 532 is sponsored by Senator Feinstein. She described S. 532 as a "moderate alternative" to S. 446, which she supports. It would amend the LWCF Act and the Urban Parks and Recreation Recovery Program (UPARR). It would permanently appropriate the entire annual authorized amount, $900 million. It also would allocate 50% of this amount to federal agencies, 40% to states, and 10% to local governments through UPARR. This bill also would amend UPARR in several ways.

Forces Behind these Proposals

Widespread interest in and support of aspects of these legislative proposals may reflect the confluence of several interrelated factors. Various interests and combinations of interests have proposed changes in current laws and programs: (1) to fully fund the LWCF; (2) to address the increased backlog of pending federal land acquisitions that the LWCF addresses; (3) to increase overall resource protection funding; (4) to fund state programs for species that are not hunted, fished, threatened, or endangered; (5) to reduce the chronic underfunding of federal land payment programs to local governments; (6 ) to expand the ways that LWCF funds can be spent; (7) to address resource management needs in coastal areas, especially those affected by offshore energy development, and; (8) to allow states and counties to draw further on OCS revenues, which grew during the 1990s. The bills respond to each of these forces in different ways; some of the bills do not address some of the forces at all. Each of these elements are discussed below.

The Clinton Administration supports the general concepts behind these legislative proposals through its Lands Legacy Initiative. This initiative was first proposed with the FY2000 budget, and has been reintroduced with the FY2001 submission. As this initiative is proposed with the budget, the Administration must resubmit it each year within the budget requests for the Departments of the Interior, Commerce, and Agriculture. The FY 2001 proposal calls for almost a doubling of funding, to $1.4 billion for the more than 20 programs included in this initiative. The legislative proposals reviewed in this report include various combinations of the programs in the initiative.6

Overall support for these bills is widespread, and comes out of a large and diverse coalition of many interests. Members favoring the legislation frequently point out that more than 4,500 groups, from conservation organizations to governors and other public entities have expressed support for this legislation. Opponents counter that almost all of these groups would directly benefit if this legislation were enacted. While some probably want the overall legislation enacted, most interests benefit from one or more titles or programs rather than the entire bill.



6 For more information on this initiative, see CRS Issue Brief IB10015, Conserving Land Resources: Legislative Proposals in the 106 th Congress, and for information on the funding levels for programs in the initiative, see CRS Report RS20471, The Administrations Lands Legacy Initiative in the FY2001 Budget Proposal -- A Fact Sheet.

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Fully Funding the LWCF. A growing number in Congress are advocating fully and predictably funding the LWCF.7 Under current law, $900 million is authorized to be appropriated annually through FY2015. Unappropriated balances are available to be appropriated in subsequent years. Appropriations during the 1990s have averaged less than one third of the authorized level. Since the fund started in 1965, its accumulated authorization is more than $22.7 billion (through FY1999). However, only $10.4 billion has been appropriated, leaving a cumulative balance of $12.3 billion that was authorized but not appropriated. Since the early 1980s, OCS revenues have gone into the General Treasury and been used for other government functions.

All four bills guarantee the availability (and predictability) of funding without further appropriations for the various programs in the bills, with the exception of restrictions contained in (a) sec 5(g) of H.R. 701/S. 2567 regarding Social Security, Medicare and debt reduction, and (b) H.R. 701/S. 2567 and S. 2123 for the federal portion of LWCF. The goal of this language, which varies among the bills, is to enable programs to avoid the annual appropriations process. However, the procedural hurdles can be formidable.8 Providing funding without further appropriations is already used for some natural resource programs such as sport fish and game restoration, acquisition of migratory bird habitat, reforestation, and some soil conservation programs. The language used in these bills and its possible effects are discussed in detail in the section below titled "Federal Budget Implications."

The current LWCF provides money for five purposes; one is the grant program for states for acquisition and development of recreation sites (administered by the National Park Service), and the others are for acquisitions for the National Forest System, the National Wildlife Refuge System, the National Park System, and areas authorized for recreation by the Secretary of the Interior (including lands managed by the Bureau of Land Management). The lack of funding for the state grant program starting in FY1995 led to hearings in the Senate and House in 1997. As pressure has increased to fund the state grants, it has also grown to fund two other federal programs; the Urban Park and Recreation Recovery Program and the Historic Preservation Act programs. The Historic Preservation Act, like the LWCF, is funded with OCS revenues, and has a significant unappropriated balance.

Backlog of Pending Land Acquisitions. Fully funding the LWCF would allow federal agencies to address a growing backlog of potential acquisitions. Resource protection advocates believe that the pressure to make additional acquisitions increases with growing population and expanding development, so limited funding has contributed to the expanding gap between available funds and possible acquisitions. Proponents of these proposals have cited federal agency data that the estimated backlog for acquisition is more than $10 billion. Opponents counter that the federal government should not be acquiring more land, that many of the places federal



7 For general background on the LWCF, see CRS Report 97-792 ENR, Land and Water Conservation Fund: Current Status and Issues, last updated on November 29, 1999.
8 For more information, see CRS Report 97-684 GOV, The Congressional Appropriations Process: an Introduction, or CRS Report 97-947 GOV, The Appropriations Process and the Congressional Budget Act.

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agencies are considering or already own do not have the values that warrant federal ownership, or that more funds should be devoted to maintenance or better management of lands already in federal ownership rather than additional purchases. The maintenance backlog has been estimated to be as high as more then $20 billion, according to material submitted during the FY2001 appropriations process by the Departments of the Interior and Agriculture, and has been growing.

Increasing Overall Resource Protection Funding. Various organizations supporting conservation have initiated campaigns to increase resource protection funding for programs that have received little or no funding in recent years. These campaigns seek to increase funding for non-game species that are not threatened or endangered (discussed below), farmland, and coastal resources, among others. These efforts have been pursued independently in appropriations and authorizing legislation, and have met with little success in recent years, especially when they have encountered arguments that the federal budget deficit needs to be reduced.

Funding State Programs For Non-Game Species. Funds for game and fished species already are provided through matching grants to support state programs under the Wildlife Restoration Program (also known as the Pittman-Robertson program) and the Sport Fish Restoration Program (also known as the Dingell-Johnson or Wallop-Breaux program). Both are permanently appropriated to the extent of receipts. More limited grants are also available for programs to conserve species listed as threatened and endangered under the ESA.

No similar program exists to support state conservation efforts for the vast majority of species, i.e., those which are not hunted, fished, threatened, or endangered. For at least 20 years, Congress has considered such support, but lack of funding has always been the major obstacle. Recent efforts, particularly a lobbying effort called "Teaming with Wildlife", led by the International Association of Fish and Wildlife Agencies, have focused on enacting a tax on certain outdoor equipment to fund grants to states for conservation of non-game species. Congressional reluctance to create any new taxes has caused most of the wildlife interest groups to shift their efforts to seeking funding through these legislative proposals.

Increasing Federal Payments to Local Governments. Local governments have complained that federal payment programs that compensate them for the presence of federal land are inadequate. Lands owned by the federal government cannot be taxed by state and local governments. In some jurisdictions, federal lands are a significant fraction of total property, and therefore local governments have claimed financial harm as a result of their inability to collect property taxes on this portion of the land base. The lands of all four major federal land managing agencies, as well as of some smaller federal landowners, are subject to one or more payment programs to provide some measure of federal government compensation to local governments for the presence of their lands. Two of these payment programs are not permanently appropriated: (a) the Payments in Lieu of Taxes (PILT), affecting 11 categories of federally owned land, though the program is administered entirely by the


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Bureau of Land Management; and (b) the Refuge Revenue Sharing Fund (RRSF), entirely for the National Wildlife Refuge System.9

Annual appropriations for both of these programs have fallen consistently below the amounts specified in the two laws formulas. Counties now receive about 41% of the formula amounts for PILT and about 60% for RRSF. As a result of these shortfalls, local governments have repeatedly called on Congress to fund these programs at the full authorization levels, and these legislative proposals provide additional opportunities to make up this shortfall.

Expanding the Ways That LWCF Funds Can Be Spent. Federal agencies may use these funds only for land acquisition under current law. Federal agencies now identify an acquisition backlog exceeding $10 billion.10 At the same time, some interests have sought to expand the purposes for which LWCF funds can be spent to address the growing backlog of maintenance and restoration needs on federally-owned lands. This backlog is estimated to be as high as $15 billion, and continues to grow. Supporters of broadening the uses of the fund argue that protecting and maintaining the resources already in federal ownership should be a higher priority than adding to the federal estate. Others argue that states and localities also should have greater flexibility in spending their state grants from the LWCF, such as also being able to use these funds to maintain or restore facilities, and point out that the Administration sought to provide strong guidance on how the FY2000 allocations could be spent.

LWCF funds also could provide more wide-spread resource protection, according to some, if they could be used to apply a range of policy tools that are less expensive alternatives to full-fee land acquisition (purchasing land outright). Two decades ago, it was widely believed that the only way to protect land or a resource adequately was to acquire full-fee title, and that federal acquisition would provide a more certain level of protection than ownership by other entities. Today, many forms of protection that are less than full-fee ownership, such as easements or alternatives to public ownership, are widely accepted under some circumstances, and most of the legislative proposals fund some of these forms under some circumstances. Also, ownership at state and local levels, and by private organizations such as land trusts, is more widely viewed as an effective protection option.

Offshore Energy Development and Coastal Effects. Interests in some coastal states, especially Louisiana, have increased the pressure to return a portion of the money currently paid to the federal government by private companies who lease and develop oil and gas resources on the OCS to states. These funds would be used to



9 RRSF is funded without further appropriations to the extent of receipts, but receipts are insufficient to fund the amounts in the formula. Thus, annual appropriation levels determine whether the full authorized formula is paid. For further information on RRSF, see CRS Rept. 90-192ENR, Fish and Wildlife Service: Compensation to Local Governments. For further information on PILT, see CRS Rept. 98-574ENR, Payments in Lieu of Taxes (PILT): Somewhat Simplified.
10 Senate Committee on Energy and Natural Resources. Fiscal Year 2000 Budget Request for the Department of the Interior. Hearing, March 2, 1999. p. 31.

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address the adverse onshore effects of these energy activities. Currently, adjacent states and communities do not directly receive any revenue from offshore oil and gas activities in federal waters. A program of loans and grants to coastal states to help them address impacts from offshore and coastal energy activities was briefly implemented through the federal coastal zone management program during the energy crisis in the late 1970s; however, it was ended when the crisis had passed.

Supporters of a payment program associated with OCS oil and gas activities point out that, in contrast, revenue from onshore energy production on federal lands is shared with most states as follows; 50% is allocated to the state in which the lease is located, 40% is earmarked for the Reclamation Fund, and 10% goes to the federal treasury.11 In addition, state and local governments currently receive shared revenues from many activities, such as logging, grazing, and some mining, on the Forest Service, Bureau of Land Management, and Fish and Wildlife Service lands. The amount and percentage of the shares depends on the history of the land and the type of activities generating the revenues. Others may counter that some coastal states will have a large influx of new federal funds, and that provisions in bills are insufficient to insure that these funds are spent only for projects that are compatible with long-term management of coastal resources.

Growing OCS Revenues. The resource protection proposals in the bills would be funded from income derived from OCS energy activities, which averaged about $2.5 billion annually in the early 1990s, then increased rapidly to a record $5.1 billion in FY1997. Currently, those portions of OCS revenues that are not spent on LWCF are used for the general spending of the federal government. To the extent that they would be redirected under these proposals, they would no longer be available to fund other federal programs.

Advocates for these bills view the increase in OCS revenues through FY1997, combined with the change from federal budget deficit to surplus, as an opportunity to dedicate more money to the activities contained in these bills. However, OCS revenues subsequently declined to an estimated $3.3 billion in FY1999. This decline reflected record low prices for oil, affecting royalties and bonus bids for newly-leased tracts during the 1997-1999 period. Three questions about these proposals, if enacted, would arise if OCS revenues decline substantially: (1) How would program funding be reduced?; (2) Could other sources of funding to offset such reductions be located? and; (3) Could pressures to expand offshore leasing to increase revenues result, and if so, could they be contained?

Future OCS revenue levels are as uncertain as the future price of crude oil. Department of the Interior projections made internally to support its FY2001 budget submission are based on a much lower price scenario than the $30 per barrel world market price prevailing at the start of 2000 might suggest. For FY2000, the Department currently projects revenues of $3.55 billion; the FY2001 figure of $5.08 billion includes about $1.8 billion held in escrow from settlement of a border dispute




11 One exception is Alaska, where the state receives 90%, with 10% deposited in the federal treasury. The Reclamation Fund supports the Bureau of Reclamations water resources projects.

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with Alaska. In subsequent years, steadily declining revenues are forecast, reflecting lower prices and gradual depletion of OCS hydrocarbon fields. FY2002 is estimated to yield $3.33 billion, and this figure will fall to $2.01 billion in FY2010. 12 Analysts do not agree on either how fast or how far revenues will fall in the future.

Total OCS revenues may give an inaccurate impression of the amounts that will be available to fund these proposals. All the bills limit the source of revenues to fund these proposals to specified portions of the OCS that are currently producing in order to discourage expanding OCS activities to fund these programs. Many of the fields which will be sources of revenue to fund this suite of programs have been in production for decades, and the amounts extracted from some of these fields may start to decline. Over time, revenues generated from the segment of the OCS that will fund these programs may become a declining portion of the total revenue generated from all OCS production.

Funding the Proposals

All these bills would use revenues from offshore oil and gas fields under federal waters to fund the proposals. Section 3(12) of H.R. 701/ S. 2567 and S. 2123, sec 102 of S. 25, and sec 202(a) of S. 2181 would define qualified revenues to include all OCS revenues (royalty, rental, and bonus revenues) from oil and gas leases where the center of the lease lies within 200 miles of a states coastline. All these bills would exclude monies paid to states that are derived from leases of deposits that lie in both state and federal lands offshore. The law that governs how these deposits are to be treated is in sec 8(g) of the Outer Continental Shelf Lands Act (OCSLA).

Section 5 of H.R. 701/ S. 2567 and S. 2123 would establish the Conservation and Reinvestment Act Fund (CARA Fund). The CARA Fund would receive a maximum of $2.825 billion annually from qualifying OCS revenues and previously undispersed funds, to be distributed in specified amounts among 7 programs. S. 25 would allocate funds for its programs as a percentage of OCS revenues; with 27% of these revenues being placed in a new coastal impact assistance fund, 16% (up to a ceiling of $900 million) being placed in the LWCF (including UPARR); and 7% being spent on wildlife conservation and restoration. S. 2181 allocates a total estimated at $2.9 billion annually from qualified OCS revenues, to be distributed among 24 different funds. Section 5(c) of H.R. 701/S. 2567 and S. 2123 would require that funding be reduced proportionately for each program if less than $ 2.825 billion is deposited, while S. 25 would not provide for a minimum level of funding. Section 5 (e) of H.R. 701/ S. 2567 and S. 2123 would require that any necessary OCS royalty refunds would be paid proportionately from the Fund. S. 25 has a similar provision in sec 203(a)(3), while S. 2181 does not address this possibility.

The CARA Fund would also generate additional revenue through interest earned, as described in 5(d), so that the total amount available to the fund is actually estimated to be slightly more than $3 billion annually. Interest would be earned by



12 Personal communication with Mineral Management Service budget staff, February 22, 2000.

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depositing OCS revenues into the fund during a fiscal year, investing them appropriately, and paying them out the following year. Interest income, up to $200 million annually, would be dedicated to funding two federal programs that make payments to local governments, the Payment in Lieu of Taxes Program (PILT) and the Refuge Revenue Sharing Fund (RRSF), and interest earned on revenues dedicated to Title III (on wildlife) would go to implement the North American Wetlands Conservation Act.13

A potential major impediment to all these proposals has been how they would be treated under the budget caps. If Congress were required to offset these funds with savings elsewhere, enactment would be more difficult, as those who support the programs that would be reduced might oppose this legislation. Since most of the current OCS revenues are currently available to fund any federal government activity, opposition to these bills from those with concerns about the budget is likely to be significant. The Congressional Budget Office informed Resources Committee Chair Don Young in a letter that it believes that the Office of Management and Budget, which would make the final determination, would not "choose to adjust the caps" (require an offset) if H.R. 701/S. 2567 or S. 2123 were enacted "because creating new direct spending authority does not constitute a change in budgetary concepts or definitions."14 H.R. 701/S. 2567 and S. 2123 would still be subject to enforcement provisions of the Budget Act by creating new mandatory spending. However, the rule (House Res. 497) for House consideration of H.R. 701 waived these procedural safeguards.

Where the Funds Would Go

Funds would be distributed among the recipient programs based on amounts and formulas in existing law or as specified in each bill. Table 2, on the next page, shows how the funds would be distributed by activity, and table 3, on the following page, shows the total funding that is forecast to be distributed, by state. These projections were affected, in some cases, by subsequent amendments; some of the amendments may have altered the allocation formulas or total revenues from the OCS.

H.R. 701/S. 2567, S. 2123, and S. 2181 would provide just over twice as much annually as S. 25, under the scenarios used to make these estimates. However, the patterns of distribution would vary, so that while monies flowing into some states would be about twice the amount under the larger bills as under the other, in others it would not. For example, $312 million would be spent in Louisiana under H.R. 701/S. 2567 and S. 2123, and more than two thirds of that amount (and the most of any state), $217 million, under S. 25, but only $77 million would be spent there under S. 2181. Under H.R. 701/S. 2567 and S. 2123, $324 million would be spent in California and $322 million would be spent in California under S. 2183. However, only $109 million would be spent there under S. 25. The states where the next largest amounts would be spent under each of the bills would be Texas, Alaska, and Florida.



13 Interest earned on Pittman-Robertson funds is currently directed to the North American Wetlands Conservation Program
14 Letter to Rep. Don Young from Dan Crippen, Director of CBO, October 14, 1999.

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Table 1. Funding by Topic or Program under each Proposal
($ in millions)

Topic or Program H.R. 701/ S. 25 a S.2181
S.2567/
S. 2123

Land and Water $450 b $405 $450
Conservation Fund
- Federal

Land and Water $450 $405 $450
Conservation Fund
- State Non-Federal Lands $125
of Regional or
National Interest

Coastal Impact $1,000 27% of OCS $100
Assistance revenues

Coastal $250
Stewardship
Program

Wildlife $350 7% of OCS $350
Conservation and revenues
Restoration

Urban Park and Recreation
Recovery Program $125 $90 $75

Historic
Preservation Fund $100 $135

HPF - Battlefield $15
Protection

Land Restoration $200 $150

Conservation $100 $50
Easements
Farm Land

Conservation $50
Easements
- Ranch Land

Endangered
Species Recovery $50 $50

PILT & Refuge $200 or less $300
Revenue Sharing (variable);
Fund PILT only

Marine Enforcement $25
Grants

Fisheries Research $75
and Management
Grants

Coral Reef $30
Conservation (2 programs)

Urban and Community $50
Forestry Assistance

Forest Legacy $50
Program

Youth Conservation $60
Corps

Forest Service $50
Rural Community (2 programs)
Assistance

a. Amounts will vary under S. 25 since they are percentages of qualified OCS receipts, although the two LWCF accounts and the Urban Park and Recreation Recovery Program can not exceed the amounts shown in the table.
b. H.R. 701/S. 2567 would provide larger amounts for federal and state LWCF, as explained in the section titled Overall Funding Levels for LWCF, below.


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Table 2. Estimated Distribution of Funding, by State
($ in millions)

State HR701/S2567 S25 S2181
and S2123

....

Maine 36 19 38

....



CRS-12 Major Issues

A number of themes have become apparent in the controversies over the proposals encompassed in these bills: federal budget implications, property rights and federal ownership, OCS leasing moratoria, and federal land payments. Each of these issues is described below, emphasizing how they are addressed in the bills. The views of major interests also are identified.

Federal Budget Implications

All four bills guarantee the availability (and predictability) of funding without further appropriations for the various programs in the bills, with the exception of restrictions contained in (a) sec 5(g) of H.R. 701/S. 2567 regarding Social Security, Medicare and debt reduction, and (b) H.R. 701/S. 2567 and S. 2123 for the federal portion of LWCF. This feature of permanent appropriation is already enjoyed by some existing natural resource programs, e.g., sport fish and game restoration, acquisition of migratory bird habitat, reforestation, and some soil conservation programs. Providing funds without further appropriations enables programs to avoid the annual appropriations process. To accomplish this, legislation typically contains the phrase "without further appropriation", or a similar phrase, thereby making available annually whatever amount is specified. Traditionally, appropriations and budget committees, as well as Members who strongly support congressional oversight of all spending, have strongly opposed this approach to funding. Moreover, procedural hurdles to passage of such proposals can be formidable. Some of the bills contain provisions which amend LWCF, leaving major portions intact, as well as supplementing its funding under annual CARA appropriations. All but one of the bills also contain sunset provisions, so that funding would cease in FY2016 unless Congress acted to extend the programs.

Debt Reduction, Social Security, and Medicare. Two provisions addressing these topics were added to H.R. 701 during consideration by the House. A new Section 5(g) of this bill contains a provision precluding the transfer of funds to the CARA Fund in any fiscal year unless a number of conditions are met. This provision, a floor amendment offered by Representative Shadegg, passed the House by 216-208 on Roll Call vote 163 on May 10. The CBO director must certify that enough "on-budget" surplus has been reserved to cause elimination of the publicly-held federal debt by 2013, and that there is not an "on budget" deficit for that year ("on-budget" refers to federal budget totals excluding the financial operations of Social Security and the postal service). In addition, the Social Security and Medicare Hospital Insurance (HI) trustees must certify that outlays from their respective trust funds will not exceed their revenues during the five fiscal-year period following each year of transfer. Since the most recent trustees' reports for the two programs (issued in March 2000) project that outlays will exceed the revenues in both programs at some point during the next 20 years, it is possible that this provision will preclude the transfer of funds to the CARA Fund during the latter part of the period in which it would be in effect.

However, if the term "revenues" (as used in the bill) refers only to the tax receipts of the programs (and not to the interest credited to the trust funds semi-annually), the trustees' reports suggest that outlays from the Social Security Disability Insurance (DI) Trust Fund would exceed its revenues somewhat earlier, in or around



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FY 2007. For the HI Trust Fund, the same is projected to occur in FY 2009, and for the Social Security Old Age and Survivors Insurance (OASI) Trust Fund, it would happen sometime between 2015 and 2020.

Thus, at least in principle, Congress would not decide annually whether the CARA-supported programs would be funded in competition with all other discretionary spending. Rather, other discretionary spending would first become law in appropriations bills, and the results would then be measured against the goals in sec 5(g) for reducing the debt and protecting Social Security and Medicare. If the goals are met, the CARA programs would be funded automatically.15 Based on current projections for the Social Security and Medicare trust funds, and barring major changes in economic conditions or enactment of legislation inhibiting achieving the goals of 5(g), it would appear that the CARA programs initially would be funded as proposed, but would begin to be at risk in roughly a decade, depending on the meaning of the term "revenues" in the bill.

A new Title VIII of H.R. 701 was added as a floor amendment, proposed by Representative DeFazio and adopted by a recorded vote of 413-3 just before final passage. This title provides that no funds can be expended under the Act if doing so would diminish Social Security or Medicare benefit obligations. Representative Defazio characterized his amendment as an effort to strengthen the Shadegg amendment. This amendment appears to be a general safeguard only. As passed by the House, there are no explicit provisions in the bill altering Social Security or Medicare benefits, and none of the expenditures authorized under the bill would interact with the benefit calculations or administration of the Social Security or Medicare program as now provided under the Social Security Act. As a result, CARA expenditures are unlikely to be affected by this title.

Dual Funding for LWCF under H.R. 701. As approved by the House, the LWCF appears to provide potentially more, rather than less money, for federal land acquisition. Section 202 of H. R. 701/S/ 2567 amends sec 2(c) of the LWCF to provide $450 million annually for federal acquisition from the CARA fund. These funds would be subject to annual appropriations because language (sec 7) exempting these funds from the budget process was deleted as part of the technical corrections made after committee approval but prior to floor action. The annual appropriations process would apply as it does today.

In addition, sec 203 of this bill amends sec 3 of the LWCF to provide up to $900 million, under existing law 16 , which is not repealed, subject to annual appropriations. As amended, $450 million of this total would be available for federal land acquisition, as sec 204 of the bill amends the LWCF Act to state that half the total will be available for federal purposes, and the other half will be provided to states as grants. This state competitive grants program in, sec 206(d), would allow states to submit proposals for projects of national or regional significance involving one or more states. This bill also adds a number of new controls limiting how any federal funds (whether through



15 The portion of CARA allocated to federal LWCF would continue to require action in annual appropriations bills, however. 16 Current provisions of LWCF make it clear that $900 million goes from OCS revenues to the fund, but are somewhat vague about how much is authorized to be taken from it.

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CARA or the LWCF as amended by CARA) can be spent and increases the role of Congress in making these decisions. These controls are discussed in the section titled Property Rights, below, and in the discussion on permancy of appropriations that follows.

Federal LWCF: Permanent or Not? As noted, one significant exception to mandatory spending is the funding for the federal portion of LWCF in S. 2123 and in H.R. 701/S.2567. S. 2123 will be discussed first, followed by H.R. 701/S. 2567, and finally S. 2181. The S. 2123 LWCF provisions first make $450 million from CARA 17 available "without further appropriation" for federal LWCF and then place several limits on spending. (See discussion on property rights, above.) How likely is it that the specified amount will actually be available, and how does that likelihood compare to the current situation? While many external factors (e.g., deficits or surpluses, the state of the economy, tax cuts, interest rates, changes in federal land acquisition policy, etc.) could affect whether Congress would actually appropriate funds for federal land acquisition, three provisions of S. 2123 are particularly important to federal LWCF: sec 7; sec 203; and sec 205. 18

In S. 2123, sec 7 states that spending under CARA will not count as "new budget authority, outlays, receipts, or deficit or surplus" for the President's budget request, for the congressional budget, or for the Balanced Budget and Emergency Deficit Control Act of 1995, and is exempt from other specified limits on outlays. Section 203 makes CARA funds transferred to LWCF available "without further appropriation." Section 205 amends LWCF to require that the federal portion of CARA ($450 million) and any additional funding potentially added from LWCF alone "may not be obligated or expended by the Secretary of the Interior or the Secretary of Agriculture for any acquisition except those specifically referred to, and approved by Congress, in an Act making appropriations for the Department of the Interior or the Department of Agriculture, respectively." On their faces, sec 203 and sec 205 appear to contradict each other, with one requiring permanency, and the other requiring annual congressional action. While sec 205 does make the federal funds subject to annual appropriations, sec 7 greatly reduces any fiscal incentives to withhold the funding, since CARA spending would not count against the committees total spending. This interpretation must be understood in the context of current processes.

Each appropriations subcommittee currently is allocated a fixed cap for spending under sec 302(b) of the Budget Act. Therefore, to the extent that the Interior Appropriations Subcommittees now allocate less spending to LWCF, more is available for any other program within their jurisdiction. (The fact that LWCF funds nominally come from OCS revenues is irrelevant to sec 302(b).) Also, at least since the early 1980s, the reports accompanying the appropriations acts have usually placed earmarks on the great majority of money spent for federal land acquisition under the



17 It also permanently appropriates current payments into LWCF from the sale of assets and from a motorboat fuels tax. Under current law, these funds, like all OCS funds, require annual appropriations. In FY1998, the combined total from these two sources of revenue was $2.02 million. 18 The federal LWCF portion of these bills is much more likely to be influenced by such factors as budget deficits or surpluses than other parts of these bills since it would be considered discretionary spending, while the rest of the bill would be considered mandatory spending.

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LWCF. While agencies are not necessarily bound by the report language that is not incorporated into the funding law, they may be constrained politically in what parcels they purchase.

If S. 2123 were to become law, sec 7 would separate all CARA funding from the Interior Subcommittee's sec 302(b) allocation. Any federal LWCF funding derived from CARA, from zero to $450 million, would have no effect on the Committee's funding for other programs. Thus, a major factor - perhaps the major factor - constraining current LWCF spending would not be present for CARA federal funds.19 Since the Congress (and the Subcommittee) would still need to approve the acquisitions, it could continue to allocate funding according to its own priorities or requests from the Administration or other Members. Requests for increased federal land acquisition from Members might grow, since no other spending programs in the Subcommittees jurisdiction would decrease if these requests were granted. The appropriations committees would retain the final choice over federal agency acquisitions.

In contrast, in H.R. 701/S. 2567, sec 7 was deleted. Given that the bill retains the requirement for approval by Congress, federal LWCF funding would be treated as it is now: it would be considered discretionary spending, and would count against the Interior Subcommittees annual over all spending ceiling (the sec 302(b) allocation under the Budget Act).20 It would continue to be subject to annual appropriations, and would likely vary from year to year, as it does under current law.21 For federal LWCF, the chief budgetary differences between H.R. 701/S. 2567 and current law and practice are the following:




19 If Congress chose to appropriate any funds under the pre-existing (non-CARA) provisions of LWCF, it could continue to do so, but such spending would be constrained by the 302(b) allocation. 20 Personal communication with Deborah Reis, budget analyst, Congressional Budget Office, May 9, 2000. 21 The new sec 5(g) affects funding not only for this portion of the bill but for the entire bill. For more on the effects of sec 5(g) see Debt Reduction, Social Security, and Medicare above. With the addition of sec 5(g), other factors besides budget and appropriations committee procedures could limit funding, not only for federal LWCF but for the entire bill.

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Finally, the third Senate bill, S. 2181, takes a very different approach. For many of the programs that it funds without further appropriations - including federal LWCF - it requires that the Administration submit a list of priority projects to be funded with each year's budget submission to Congress. That list would be funded automatically 15 days after the congressional session adjourns, unless Congress enacts a different list of priorities. If Congress does enact a different list and those projects would cost less than the authorized amount, the difference would be automatically expended on the Administration's list of projects in order of priority. Under this system, specific funding levels are assured, and Congress could specify individual federal acquisitions if it chose to do so.

Farmland Protection Grants. Conservation easement provisions in all the bills except S. 25 would make certain private non-profit or charitable organizations eligible to compete with state and local governments for federal funds to purchase easements. These provisions would provide the first opportunity for organizations who meet these qualifications to compete directly with units of government for federal funds to protect resources. Competition between public and private organizations for federal grant funds occurs in some programs in other sectors, such as social programs, but has not existed in natural resource protection programs.

Sunset Provisions. H.R. 701 /S. 2567, S. 2123 and S. 25 sunset the entire Act on September 30, 2015. This is also the date on which authorization for placing additional OCS revenues in the LWCF would sunset under current law. S. 2181, by contrast, does not include a sunset date.

Property Rights

[See comments on the political implications of the provisions]

Advocates of private property owners' rights have raised concerns that the availability of additional funds will increase pressure to acquire more federal land, and that further acquisition is likely to center on areas where federal ownership is already concentrated. Section 10 of H.R. 701/S. 2567 and sec 11 of S. 2123 state that property rights will be respected, that property may not be taken without compensation, and that land uses on private land may not be regulated by federal agencies prior to acquisition unless authorized by Congress. The committee report indicates that regulation of private property must be "specifically authorized" by Congress.22 S. 2181 includes no provisions to protect private property rights beyond the protections already in current law.

H.R. 701/S. 2567 contains several provisions in Title II that may respond to concerns about federal land acquisition and property rights. One change, made as a technical correction prior to House consideration and mentioned above, would retain the requirement that the federal portion of the LWCF be subject to annual appropriations. Current law and other changes in the various bills include:



22 It is not likely that exemption from regulation under the Clean Water Act or the Clean Air Act, for example, is intended, but the meaning of the provision is unclear.

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H.R. 701/S. 2567, S. 2123 and S. 25 contain numerous other provisions that allow federal agencies using CARA funds to acquire land only after environmental analyses, public participation, specified notifications, and other processes. S. 25 also includes a provision in sec 203(b)(1) that requires federal agencies to spend two thirds of the LWCF monies they receive east of the 100 th meridian. Nonetheless, these provisions have not assuaged property rights advocates, who are continuing to voice their concerns. In sum, H.R. 701/S. 2567 offers a package of protections to property owners that exceed those available in current law. These protections might be offset by authorizing more funds for federal acquisitions under the LWCF, but funding levels would still be controlled through the annual appropriations process.

OCS Leasing and Moratoria

Some environmental interests fear that this legislation would provide incentives to expand OCS activities. Much of the OCS total acreage is currently subject to a ban on new leasing and production because of concerns that sensitive marine and coastal environments could be damaged by OCS-related activities. With these bans in place, leases currently can be offered only in the Central and Western Gulf of Mexico and a few areas off Alaska. Three separate restrictions on leasing in environmentally sensitive areas currently exist:


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H.R. 701/S. 2567 and S. 2123 would address the moratorium issue in sec 3(12), by defining "qualified Outer Continental Shelf revenues" so as to exclude revenues from tracts in areas subject to a moratorium on January 1, 1999, unless the lease was issued before the moratorium was established and was in production on January 1, 1999. S. 2181 adopts a similar approach, but requires production to begin before January 1, 2000. S. 25 would address the moratorium in a new sec 701(12) to be added to the OCSLA, which states that this title, called the Coastal Conservation and Impact Assistance Act of 1998, is not to be interpreted "to repeal or modify any existing moratoria" or "to encourage the development of Federal OCS resources" into new areas.

A central concern is that these bills might undermine support for offshore moratoria by creating a constituency that desires or becomes accustomed to receiving OCS moneys. Were the OCS revenue stream subsequently to decline to the point that the authorized activities could not be fully funded, those accustomed to receiving funding might seek replenishment by supporting leasing of tracts that had been off-limits to development. Supporters of the underfunded programs and projects could come together as new pro-leasing constituencies.24 They would have had such an opportunity periodically under sec 101(b)(2) of H.R. 701/S. 2123, which provided that the state shares for impact assistance be recalculated every 5 years. The House



23 Preleasing involves all the planning activities and analysis that are conducted prior to the actual sale of leases. These activities, which can take several years, are such a large commitment of resources that some believe that it would be difficult for the government to halt the lease process by the time that the sale is scheduled to occur, or to halt development after the sale. This has been a central issue in numerous court cases and administrative appeals under the Coastal Zone Management Act's federal consistency provision, which requires that all federal actions in or affecting the coastal zone of a state with a federally-approved program be consistent with that program.
24 Analogous situations have occurred in rural communities that are dependent on mining or timber activities.

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approved an amendment, sponsored by Representative Boehlert, deleting this provision.25

Some hold that the three approaches to moratoria already provide ample protection against leasing environmentally sensitive tracts. It is also asserted that producers' interest in OCS tracts is limited to those that can be economically developed; for would-be producers, environmental opposition is an economic drawback as well as a political and public relations liability. Others counter that the moratoria, while occurring in three places, are only temporary, having no permanent basis in law, and a new Administration or Congressional makeup could lead to change.

Funding for County Payments

As passed by the House, sec 5(d) of H.R. 701 (S. 2567) provides that PILT matching funds from CARA are available if the annual appropriation for PILT under the regular appropriations bill exceeds $100 million.26 Thus, if Congress appropriates $99 million for PILT, no CARA funds are spent; if it appropriates $135 million for PILT, then an additional $135 million would be spent from CARA for PILT matching. For RRSF, CARA matching funds are available only if funds from other sources exceed $15 million.27 If the total from the other sources were $15 million, CARA would provide an additional $15 million in matching money. However, the CARA add-on cannot bring the total spending on either program above the authorization level for that program. These levels were $301 million for PILT and $28 million for RRSF in FY1999. If the CARA add-on would provide more funding than authorized under either RRSF or PILT for that year, the excess funds would be available, first for the other program (RRSF or PILT), and second for other CARA programs. The entire $200 million available under sec 5(d) is not likely to be sufficient to provide for the full payment for these two programs in the future, if amounts made available in annual appropriations bills remain at current levels. This insufficiency would be exacerbated because PILT requires annual adjustments in its formula to compensate for inflation. Table 4 shows the result that would have occurred in FY1999 (the most recent fiscal year for which full data are available for both programs) had this version of sec 5(d) been in effect. As shown in the table, RRSF would have been funded at 100% of the formula, and PILT would have been funded at 84.8% of its formula.



25 The Boehlert amendment also added language requiring that the state plans used as a basis for describing how coastal impact funds would be spent should describe both how the plan will address environmental concerns, and how the state will evaluate the plan's effectiveness. 26 The FY2000 appropriation was $135 million. Full funding for PILT would have required $303.7 million in FY1999 (the most recent year for which an estimate is available).
27 Total annual and permanent appropriations under existing law for RRSF were $16.5 million in FY2000. Full funding for RRSF would have required $27.9 million in FY2000 (the most recent year for which an estimate is available).

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Table 4. Amounts that would have been added under H.R. 701 (as passed by the House) to the Refuge Revenue Sharing Fund (RRSF) and Payments in Lieu of Taxes (PILT). ($ in thousands)

Program FY1999 FY1999 Amount Unfunded
appropriation authorization that would authorization
have been
added by
H.R. 701

RRSF 16,664 28,000 11,336 a 0
PILT 125,000 301,182 130,328 b 45,854

a. CARA could match the $16,664,000, but only $11,336,000 is needed to bring RRSF to full funding of the amount authorized in the formula. The additional $5,328,000 is therefore made available to the PILT portion of the CARA Fund match.

b. CARA provides a direct match of $125 million. Since this results in $250 million (still less than the full authorized amount in the formula), then the surplus of $5,328,000 from RRSF is transferred to PILT. The total ($255,328,000) would have left PILT funded at 84.8% of the authorized amount for FY1999, rather than at 41.0% as actually occurred.

S. 2123 would increase federal payments to local governments in jurisdictions where the federal government owns lands. Like H.R.701 as passed, 5(d) would use the interest on monies in the CARA Fund to create a matching fund for any appropriations that result from the annual appropriations process 28 , up to a combined ceiling of $200 million for the two programs. But unlike that version, S. 2123 would have no required floor below which it would not operate. It is difficult to predict what effect this proposal may have on total PILT payments. Like the previous bill, it could encourage Congress to appropriate greater funds for PILT and RRSF, since each dollar would be matched by funds from this interest on CARA funds. However, Congress might respond by cutting the existing appropriations for these two programs (and using the savings in other programs under the jurisdiction of the same appropriations subcommittees), arguing that matching payments from CARA could make up the shortfall.

S. 25 contains no provisions concerning PILT or RRSF. S. 2181 has no provisions concerning RRSF, but it permanently appropriates from qualified OCS revenues such sums as may be necessary, to provide for full funding of PILT in Title X. In FY2001, this would be roughly $300 to $350 million.



28 In the case of RRSF, from the existing small permanent appropriation as well.

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Other Amendments to H.R. 701 The House approved four amendments to H.R. 701(and which appear in S. 2567) in addition to those mentioned above.

GENERAL PROVISIONS

The initial 11 sections of H.R. 701/S. 2567 and 12 sections of S. 2123 contain general provisions. S. 25 and S. 2181 do not have a similar set of sections with general provisions, although some comparable provisions are scattered throughout both bills. Section 3 of H.R. 701/S. 2567 and S. 2123 would define 14 terms; in S. 25 and S. 2181, many identical or very similar definitions are found in the sections in which they apply. S. 25 would define 13 terms in its coastal impact assistance title, while S. 2181 would define 2 terms in the comparable section, for example. These definitions are discussed in the relevant portions of the side-by-side analysis, which follows.

Section 4 of H.R. 701/ S. 2567 and S. 2123 would require each state to submit an annual report describing all funded projects and activities to the Secretary of Agriculture or Secretary of the Interior, as appropriate, by June 15. The Secretary of the Interior, in conjunction with the Secretary of Agriculture, would submit a report to Congress each January 1 summarizing those reports and documenting how all moneys from the CARA Fund have been spent. S. 25 and S. 2181 have reporting requirements in some titles, which are identified in the side-by-side analysis.

Section 5 of H.R. 701/S. 2567 and S. 2123 would create the CARA Fund. As discussed earlier, this Fund would receive up to $2.825 billion each year from OCS revenues starting in FY2001. If the total deposits would be less than $2.825 billion,


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the amounts transferred to each of the 7 funded programs would be reduced proportionately. The only variation in funding is that H.R. 701/S. 2567 provide $100 million to the Secretary of Agriculture and $50 million to the Secretary of the Interior under Title VII, while S. 2123 provides all $150 million under that title to the Secretary of the Interior. Interest accrued by the CARA Fund, up to $200 million annually, would provide additional funds to supplement current annual appropriations for 3 existing programs: Payments in Lieu of Taxes (PILT); Refuge Revenue Sharing Fund (RRSF); and the North American Wetlands Conservation Fund. Any interest earned beyond that limit would be placed in the Fund. For PILT and RRSF, the language provides a matching fund for any other appropriations that may be provided for these programs, discussed above. Under H.R.701/S. 2567, this match would be available only if appropriations for each from other sources exceed specified minimum levels. (For more discussion, see Funding for County Payments, above.)This section also specifies that refunds of royalties to entities that hold offshore leases would be paid out of the CARA Fund. S. 25 addresses reductions in payments due to royalty refunds in each title of the bill. The refund subsection in H.R. 701/S. 2567 includes the National Park Service appropriations and social security and medicare solvency language (the Souder and Shadegg amendments, respectively), discussed above. S. 2181 does not address federal refunds.

Section 6 of H.R. 701/S. 2567 and S. 2123 would limit administrative expenses to no more than 2% of the amount made available for each program. No money from the Fund could be used to administer the wildlife provisions in Title III; the law which this title amends already provides funding for administration.

Section 7 of S. 2123 states that the receipts and disbursements of the CARA Fund, or any portion of it, would "not be counted" as new budget authority, outlays, receipts, or deficit or surplus, under the President's budget, the congressional budget, or the Balanced Budget and Emergency Deficit Control Act of 1985. The receipts and disbursements would also be exempt from any general budget limitation. It was deleted from H.R. 701/S. 2567, and the effects of deleting it are discussed above, in Federal Budget Implications.

Section 7 of H.R. 701/S. 2567 and 8 of S. 2123 would assign the Secretary of the Interior, in consultation with the Secretary of Agriculture, the lead in establishing record- keeping and auditing rules for state and local governments as they receive and spend these funds.

Section 8 of H.R. 701/S. 2567 and 9 of S. 2123 would prohibit any state or local government from receiving funds under this Act if its expenditures for these programs decline from the preceding year, unless that reduction is the result of an across-the-board reduction that affects all State agencies. Funding provided to state and local governments would be used to supplement, and where ever possible, to increase the level of non-federal dollars that are committed to the programs. State or local governments would treat all CARA Fund monies as federal funds, and could not use these monies as their non-federal match for other federal programs. Under provisions added to H.R. 701/S. 2567, the Secretary would make this determination


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by comparing proposed expenditures to expenditures from the second preceding fiscal year.

Section 9 of H.R. 701/S/ 2567 and sec 10 of S. 2123 would terminate this law on September 30, 2015, which is the same date for the LWCF sunset under current law.

Section 10 of H.R. 701/S/ 2567 and sec 11 of S. 2123 contain the private property provisions, discussed earlier.

Section 11 of H.R. 701/S. 2567 and sec 12 of S. 2123 states that a beneficiary of federal assistance under the CARA Fund must recognize that assistance on a sign erected at an entrance or public focal point. The Secretary of the Interior would develop standards and guidelines for such signs.

The remainder of the report is a side-by-side comparison. H.R. 701/S. 2567 are listed together with S. 2123 in the first column, although H.R. 701 was amended in several ways before being approved by the House. The changes which make H.R. 701/S. 2567 different from S. 2123 are noted in a different font at the end of the appropriate entries. Some of these provisions have been described in more detail above.





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