V. Stern Specialist in Natural Resources Policy
Reclamation Fund was established in 1902 to fund the development of irrigation
projects on arid and semiarid lands of the 17 western states. It
originated as a revolving fund for construction projects and was supported
by the proceeds of the sale of land and water in the western United States.
Over time, it was amended to receive proceeds from a number of other sources.
It is currently derived from repayments and revenues associated with
federal water resources development as well as the sales, rentals, and
leases (including natural resource leasing) of federal land in the western
United States. Portions of the fund’s balance are appropriated annually by Congress
for multiple purposes, including some of the operational expenditures of the
Bureau of Reclamation (Reclamation) and the Power Marketing
Administrations. Through FY2011, collections deposited into the
Reclamation Fund totaled more than $40 billion, while total appropriations
from the fund totaled approximately $30 billion.
The Reclamation Fund did not finance all Reclamation investments in the western
United States. As a result of limited funding availability, a number of
large dams and other Reclamation investments were financed by the General
Fund of the U.S. Treasury. Notwithstanding advances to the Reclamation
Fund by Congress in 1910 and 1931, deposits into and appropriations out of the
fund have been roughly equal over time. From the 1940s until the 1990s, the
fund maintained a small, relatively stable balance. Beginning in the
mid-1990s, balances in the fund began to increase significantly as
receipts from mineral leasing and power sales increased, while appropriations
from the fund largely remained static. By the end of FY2011, the fund had a balance
of more than $9.6 billion, and it is expected to continue to grow.
Receipts deposited into the Reclamation Fund are made available to Reclamation
by Congress through annual discretionary appropriations bills, which are
subject to congressional budgetary allocations. Some have proposed that
Congress appropriate some portion of the surplus balance in the
Reclamation Fund to reclamation activities in western states, including new
water storage projects or the rehabilitation of existing projects. These
interests argue that the Reclamation Fund was set up to benefit western
states and should now be used to increase investments in these areas.
As the balance of the Reclamation Fund continues to increase, Congress may reevaluate
the Reclamation Fund’s status, including its financing of new or ongoing
activities. The Omnibus Lands Act of 2009 (P.L. 111-11) included
provisions that will transfer $120 million per year from the fund from
FY2020 through FY2034, without further appropriation, to a separate fund that provides
for Indian Water Settlement construction projects. In the 112th Congress, a
bill before the Senate (S. 3385) proposes to transfer another $80 million
per year that would otherwise go to the Reclamation Fund from FY2013
through FY2029 for the construction of rural water projects. Major changes
to the fund’s mechanics may have scoring implications in the annual budgetary context
and under congressional pay-as-you-go rules.
Date of Report: July 24, 2012
Number of Pages: 10 Order Number: R41844 Price: $29.95
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