ADDENDUM

Public Law 85-470 established the Outdoor Recreation Resources Review Commission in 1958. This bi-partisan Commission reported to the President and the Congress in 1962. Among their recommendations were the following:

1) A federal Grants-in-Aid Program to states should be established.

2)

The states should plan a pivotal role in making outdoor recreation opportunities available.

From this came the enactment by Congress in 1964 of the Land and Water Conservation Fund Program. This was followed in 1966 by the enactment of the National Historic Preservation Act, Public Law 89-665, which established a planning and grants program for historic preservation activities. Both of these programs were to be managed by the states. Both statutes contained a requirement that the states develop and maintain effective outdoor recreation and historic presevation planning programs.

During the decade of the 1970's, Congress enacted both National Scenic Rivers and Scenic Trails legislation as well as the Urban Parks and Recreation Recovery Grants Program, the latter being an outgrowth of the Urban Parks and Recreation Study directed by Congress. This Urban Parks program differed from the others in that the states were not included as partners in the planning and management of the grants program.

Initially the Land and Water Conservation Fund was to be funded through receipts from entrance and user permits with federal recreation areas. Secondary funding would come from receipts from the sale of federal surplus land and from the Federal tax on the sale of fuel sold to recreational boaters. However, it quickly became evident that these receipts had been over-estimated, and so in the early 1970's, Congress amended the law. This change assured that the differential between what these designated fund sources produced and the authorized ceiling level would be credited to the ledger of the Treasury Department from the receipts resulting from the leasing of Outer Continental Shelf lands for oil and gas exploration and production. This change thus assured the

availability of funds sufficient to meet the ceiling. The current authorized yearly ceiling for the Land and Water Conservation Fund is $900 million and $150 million for the Historic Presevation Fund.

But, neither the Land and Water Conservation Fund nor the Historic Preservation Fund is a true fund, as is the Highway Trust Fund. A true trust fund, whether it derives from the interest on the corpus or from receipts of a specified excise tax, is committed by law for a specific purpose. While Congress may elect not to appropriate all the income from a trust fund (even a trust fund is subject to yearly Congressional appropriation), Congress may not appropriate trust fund receipts to any other function without first amending the trust fund act.

Income for the Highway Trust Fund comes from federal excise taxes on the sale of gasoline, tires and other automotive supplies. Originally this fund could only be used for highway improvements, but the law has since been amended so that these funds may also be used for mass transit.

The federal Pittman-Robertson and Dingell-Johnson programs, which relate to wildlife activities, bear a resemblance to trust funds. The sources of the funds are federal excise taxes on the sale of hunting equipment (in the case of the PR program) and on fishing equipment (in the DJ program). So there is no endowment but only a requirement that tax receipts go to a specific purpose. They are, in effect, user taxes. Without these modified trust funds which send money to the states, most state wildlife programs would be in serious fiscal trouble.

The lessons here should be clear. Beneficial programs with stable funding sources resulting either from true trust funds (endowment from which interest is drawn) or mandated user or excise taxes (e.g., highway and wildlife) succeed, while programs predicated upon yearly appropriations from non-mandated sources often do not succeed simply because of the games which are played with them by those charged with the responsibility for making and adopting budgets.

A PROPOSAL

FOR DEVELOPMENT AND IMPLEMENTATION OF

A FEASIBILITY STUDY

AND

AN EDUCATIONAL PROGRAM

FOR A

NATURAL ASSETS TRUST FUND

Submitted by

TRUST FOR THE FUTURE

June, 1985

ABSTRACT

This proposal constitutes a request for money to undertake

a study of the feasibility of establishing and administering a Natural Assets Trust Fund and to develop an educational program for support of such a fund.

A project organization entitled, "Trust for the Future," has been incorporated in Tennessee to perform these two important projects. Its staff consists of the persons identified on the Project Organization Chart on page 4. Their duties are described on page 5 under the heading of, "The Project Team."

The Message From Charles A. Howell on page 6 gives the importance of establishing and administering a Natural Assets Trust Fund. Following this introduction, various research questions are raised on page 9 indicating the range of issues involved in the Natural Assets Trust Fund proposal. Scholarly

papers to be commissioned by the Trust for the Future to accomplish particular research objectives are also identified. The Project Outline for 1985-1987 begins on page 11. Ten work objectives are defined and the study needed to achieve each work objective is described.

also set for each study.

A completion target date is

It should also be noted that a questionnaire has been designed and sent to all states questioning them about their status on adoption of natural trust funds. Not all of the states

have responded, however, for this reason, the Project Team has

not been able to move on to Task 2 under Objective I.