It originated as a revolving fund supported by the proceeds of the sale of land and water in the western United States. Over time it, has been amended to receive proceeds from a number of disparate sources, including power generation and mineral leasing. Barring major changes by Congress in the form of increased appropriations from the fund or a redirection of its receipts, the fund's balance is expected to continue to increase. The Reclamation Fund was established as a special fund within the U.S. Treasury and was designated to receive receipts from the sale of federal land in the western United States. … shall be, and the same are hereby, reserved set aside, and appropriated as a special fund in the Treasury to be known as the "reclamation fund, " to be used in the examination and survey for and the construction and maintenance of irrigation works for the storage, diversion, and development of waters for the reclamation of arid and semiarid lands in the said States and Territories, and for the payment of all other expenditures provided for in this Act. The Reclamation Fund was not adequate to fund many of Reclamation's large investments in water infrastructure. By the end of the 1930s, most major Reclamation projects under construction were financed by the General Fund of the Treasury. Congress made the fund subject to annual appropriations in 1914, and directed additional receipts toward the Reclamation Fund over time, including those from revenues associated water and power uses and from sales, leases, and rentals of federal lands and resources (e.g., oil, gas, and minerals) in the 17 western states. The amendment provided that revenues associated with irrigation projects' power features be deposited into the Reclamation Fund. Beginning in the mid-1990s, the fund's balance began to increase significantly as revenues from power sales and natural resource royalties significantly exceeded appropriations from the fund. 111-5 ) appropriated funding for Reclamation from the Reclamation Fund. As of the end of FY2012, the fund had a balance in excess of $10.8 billion. Some, including water users and others benefitting from Reclamation projects, note that the Reclamation Fund was intended to benefit water resource projects in western states, and spending its balance on the fund's intended purposes is a logical use of the fund. In Title X of the Omnibus Lands Act of 2009 ( P.L. 111-11 ), Congress redirected a portion of Reclamation Fund receipts for Indian water rights settlement projects. The bill established a separate fund (known as the Reclamation Water Settlements Fund) in the Treasury and directed the Secretary of the Treasury to transfer into the new fund up to $120 million annually between FY2020 and FY2034 that would otherwise go to the Reclamation Fund. More recently, a bill in the Senate in the 113 th Congress, the Authorized Rural Water Projects Completion Act ( S. 715 ), proposes to establish a new fund for rural water projects (similar to the Water Settlements Fund referenced above) that would receive, without further appropriation, approximately $80 million per year in funding that would otherwise revert to the Reclamation Fund.
The 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 FY2012, collections deposited into the Reclamation Fund totaled more than $40 billion, while total appropriations from the fund totaled more than $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. At the end of FY2012, the fund had a balance of more than $10.8 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 113th Congress, a bill before the Senate (S. 715) proposes to redirect funding that would otherwise go to the Reclamation Fund for the construction of rural water projects. Major changes to the Reclamation Fund may have scoring implications in the annual budget and under congressional pay-as-you-go rules.