[Senate Hearing 105-727]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 105-727


 
           MONTANA FISH AND WILDLIFE CONSERVATION ACT OF 1998

=======================================================================

                             FIELD HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                                   ON

                                S. 1913

 A BILL TO REQUIRE THE SECRETARY OF THE INTERIOR TO SELL LEASEHOLDS AT 
 THE CANYON FERRY RESERVOIR IN THE STATE OF MONTANA AND TO ESTABLISH A 
     TRUST AND FUND FOR THE CONSERVATION OF FISH AND WILDLIFE AND 
  ENHANCEMENT OF PUBLIC HUNTING AND FISHING OPPORTUNITIES IN THE STATE

                   FEBRUARY 17, 1998--HELENA, MONTANA

                               __________

  Printed for the use of the Committee on Environment and Public Works



                               


                      U.S. GOVERNMENT PRINTING OFFICE
 49-520 cc                   WASHINGTON : 1998
_______________________________________________________________________
           For sale by the U.S. Government Printing Office, 
 Superintendent of Documents, Congressional Sales Office, Washington, DC 20402



               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                       ONE HUNDRED FIFTH CONGRESS

                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho               FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas             BARBARA BOXER, California
WAYNE ALLARD, Colorado               RON WYDEN, Oregon
JEFF SESSIONS, Alabama
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                     JUNE 7, 1998--HELENA, MONTANA

                                                                   Page

                           OPENING STATEMENT

Baucus, Hon. Max, U.S. Senator from the State of Montana.........     1

                               WITNESSES

Orsello, William, Montana Wildlife Federation....................    11
    Prepared statement...........................................    60
Robinson, Robert J., Canyon Ferry Recreation Association.........     4
    Prepared statement...........................................    54
Trenk, Peggy, on behalf of Hon. Rick Hill, U.S. Representative 
  from the State of Montana......................................     4
    Prepared statement of Representative Hill....................    53
Vashro, Michael, Prickly Pear Sportsmen..........................    10
    Prepared statement...........................................    59

                          ADDITIONAL MATERIAL

S. 1913, Montana Fish and Wildlife Conservation Act..............    42
Letters:
    Alexander, Gil R.............................................    64
    Ammon, George A..............................................    67
    Blacker, John and Julie......................................    64
    Carroll, Robert E............................................    64
    Crowe, Guy and Betty.........................................    66
    Erving, Dan..................................................    65
Statements:
    Alexander, Gil, Canyon Ferry Reservoir leaseholder...........    37
    Beneventi, Mary, Canyon Ferry Reservoir leaseholder..........    29
    Bishop, Mike, Helena, MT.....................................    29
    Blacker, John, Canyon Ferry Reservoir leaseholder............    39
    Blacker, Julie, Canyon Ferry Reservoir leaseholder...........    21
    Blanford, Lisa, Canyon Ferry Reservoir leaseholder...........    22
    Budewitz, Tom, Broadwater County Commissioner................    25
    Eggum, Lyle, Canyon Ferry Reservoir leaseholder..............    30
    Foreman, Dorothy, Billings, MT...............................    22
    Frasier, Stan, Montana Wildlife Federation...................    32
    Grant, John, Canyon Ferry Reservoir leaseholder..............    28
    Griffith, Mike, Lewis and Clark County Commissioner..........    35
    Harper, Hal, Montanta State Representative...................    23
    Helfert, Lanny...............................................    19
    Janecke, Bill, Anaconda, MT..................................    29
    Kretchmer, Dwayne, Havre, MT.................................    22
    LaRock, Larry................................................    20
    Larson, John, Canyon Ferry Recreation Association............    39
    Martinez, Eluid L., Commissioner, Bureau of Reclamation, 
      Department of the Interior.................................    61
    Masolo, Gay Ann, Montana State Representative................    24
    McCarthy, Charlie............................................    21
    McCullough, Steve, Broadwater County Commissioner............    32
    Pyfer, Clark, Canyon Ferry Reservoir leaseholder.............    33
    Rothschiller, Margery, Great Falls, MT.......................    23
    Sedlock, Mike................................................    30
    Simons, Bill, Helena, MT.....................................    35
    Trumly, Bill, Butte, MT......................................    34
    Wilson, John, Trout Unlimited................................    38



           MONTANA FISH AND WILDLIFE CONSERVATION ACT OF 1998

                              ----------                              


                          SUNDAY, JUNE 7, 1998


                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                   Helena, Montana.
    The committee met, pursuant to notice, at 12:00 noon in the 
Judicial Room, Colonial Inn, 2301 Colonial Drive, Helena 
Montana, Hon. Max Baucus, presiding.
    Present: Senator Baucus.

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. Good morning, everybody. I apologize for 
having the hearing on a Sunday. On the other hand, maybe we're 
blessed, because it's raining; which means the turnout is 
probably a little bit greater than it otherwise might be. It 
means we have the opportunity to have an even more engaging 
discussion on the Canyon Ferry project.
    I appreciate your taking the time. This is a hearing on a 
bill that I've introduced, cosponsored by Senator Burns, S. 
1913, called the Montana Fish and Wildlife Conservation Act. I 
apologize on behalf of Conrad and Rick that they're unable to 
be here today. I know they wanted to attend, but their 
schedules prevent their participating today.
    We, however, have a court reporter/stenographer. Cheryl 
Romsa very ably is taking a record of the entire hearing. This 
is an official public hearing of the Senate Committee on 
Environment and Public Works. Everything will be on the record. 
I'll report to Conrad and Rick about what I've picked up at the 
hearing today. I know each of you will, too, in the ways that 
you feel most appropriate. Of course, they'll have access to 
the record.
    Peggy Trenk, who works for Representative Rick Hill, is 
here. When I finish my brief introductory remarks, Peggy will 
give a statement on behalf of Congressman Hill.
    Some preliminary matters--the testimony of each witness 
will be made part of the record. I suspect that some of the 
witnesses will have more extended printed written testimony 
that will be part of the record. But I'm going to ask that the 
first panel of witnesses to confine their remarks to about 5 
minutes each. If you go a few minutes over, that's no big deal. 
When you're finished, I'll ask some questions. We want this to 
be quite informational, so if some of you have some questions 
of each other, too, feel free to ask those as well.
    At the conclusion of that portion of the hearing, then I'll 
turn it over to all or any of you who wish to speak. There's a 
sign-up sheet in the back of the room. I'd like each of you who 
wish to speak to sign up there so that we can have a list of 
all those who do wish to speak. Holly Luck, from my office--a 
lot of you know Holly--will be giving the names of the people 
that are on the list, just announcing the names. When she 
mentions your name, go to the microphone and speak.
    Each of you who speaks in that portion of the hearing 
should confine your remarks to about 2 minutes to leave time 
for others. We want to be fair to everybody.
    We're very honored to have with us here today witnesses who 
are very involved in the issue: Bob Robinson, of the Canyon 
Ferry Recreation Association. He's front and center here. Next 
to him, Mike Vashro, with the Prickly Pear Sportsmen's 
Association. He's seated at my left. Bill Orsello, with the 
Montana Wildlife Federation, is seated at my right. When 
they've finished, each of you who wishes to speak can line up 
there at the microphone and say what's on your mind.
    I introduced this bill because I believe it will benefit 
Montanans for generations to come; not just those of you who 
are here and your immediate families, but also for our future 
generations. I hope this bill presents a common sense solution 
to a number of ongoing conflicts in our State.
    As we know, the public is finding it more difficult to 
access public lands. Private lands that once were accessible to 
are now often posted ``no trespassing.'' While this problem 
occurs throughout our State, it is also occurring in some 
degree in Helena and in nearby areas.
    Recreation, hunting and fishing have become ever more a 
part of our State and local economies. Public access will help 
restore one of the legs of our economy. It's critical, 
therefore, that we maintain adequate access to our public lands 
in areas such as the Canyon Ferry Reservoir.
    In addition to the problems caused by access, growth in our 
State has eliminated important fish and wildlife habitat. Some 
areas that were once vibrant with fisheries or elk herds have 
been negatively affected by development. Once again, given the 
importance of hunting and fishing to our State and local 
economies, we should make the investments today to ensure that 
our children and our grandchildren can experience the great 
hunting and fishing opportunities that we presently enjoy.
    The Montana Fish and Wildlife Conservation Act of 1998 is 
designed to address two problems--to improve access to public 
lands and to conserve important fish and wildlife habitat. The 
Act does this by creating two trusts to help acquire access to 
public lands and to protect our State's hunting and fishing.
    The first trust is a local fund, called the Canyon Ferry-
Missouri River Trust. As the name suggests, this trust would be 
used to improve public access to Canyon Ferry Reservoir and 
upstream along the Missouri River and to conserve fish and 
wildlife in these areas. As more and more people use these 
areas for hunting, fishing, and recreation, it's important that 
we have the tools necessary to provide sufficient public access 
to help conserve our fish and wildlife resources.
    The second trust is a statewide fund, called the Montana 
Hunter and Fisherman Access Fund. Like the local trust, this 
fund would also be used to improve access to public lands and 
to conserve fish and wildlife. But unlike the Canyon Ferry-
Missouri River Trust, this fund can be used throughout Montana.
    What, you may ask, does this matter have to do with the 
cabin sites at the Canyon Ferry Reservoir? The cabin sites are 
the mechanism by which this bill will fund or pay for these 
trusts. In Montana, we have a long tradition of exchanging 
public lands with other lands that support our public values. 
As one example of this, the members of the congressional 
delegation and I have been working for the past year on the 
Gallatin II land exchange, near Bozeman. That's an exchange 
that trades Forest Service lands for critical wildlife lands.
    S. 1913 is a land exchange process known as a land/trust 
exchange. This is a process whereby public lands are used to 
establish a land trust that in turn is used to acquire 
additional lands for public use. In this case, the cabin sites 
at Canyon Ferry are used to establish trusts to acquire other 
lands that improve public access and conserve fish and wildlife 
at Canyon Ferry Reservoir and throughout our State.
    Currently, there are 265 cabin sites at Canyon Ferry 
Reservoir. These sites are fully developed, with cabins, yards, 
carports, fences, driveways. Although these cabins have 
provided benefits to the families that have leased these sites 
from the Federal Government over the last 40 years, the cabin 
sites are not otherwise used by the public at large.
    The lease arrangements between the cabin owners and the 
Bureau of Reclamation have been a constant source of 
frustration, as I'm sure all the cabin owners here today can 
attest, over how high the lease payments should be. They drove 
down the lake one day, and on the basis of that one little 
cruise down the lake, they arrived at the high appraisal. All 
of the owners have secured another appraisal, which I 
understood took a couple of weeks and is very thorough and 
comes out with a much more accurate number.
    Two years ago, I brought out Mr. Dan Beard. Dan Beard, as 
you know, was then the Commissioner of Reclamation. I brought 
him to Canyon Ferry in an effort to help resolve this. I know 
that some of you attended that meeting with Commissioner Beard. 
While relations with the Bureau have improved since that time, 
I think there's still many questions as to whether the Bureau 
should be playing landlord for these 265 cabin sites.
    Frankly, I don't think the current arrangement works. It 
doesn't work for the current cabin site lessees, and I don't 
think it works for the public. I think, therefore, that we 
should to try to find a solution that solves that.
    If we can find a proposal that consists of the following 
objectives, then I think it's a proposal worth pursuing: first, 
it should eliminate the current conflict between the cabin 
owners and the Federal Government; second, maintain existing 
public access to the reservoir and along the shoreline near the 
cabin sites; next, improve access to public lands, both at the 
reservoir and around the State; and finally, enhance hunting 
and fishing. If we can do that, I think we'll come up with 
something that's going to work.
    That's what today's hearing is about, taking a look at the 
bill that I've introduced with Senator Burns. I'm asking for 
you to examine that bill, to examine it; and in addition to 
express any concerns that you might have, so we can incorporate 
them into the legislation.
    The bottom line is that I believe that we have a good 
opportunity to help our State. Because all of you are here and 
your ideas and advice are going to really help shape this bill 
into a good solution for Montana.
    So with that, I'll turn to Peggy, who I think is going to 
give a statement on behalf of Congressman Rick Hill.

  STATEMENT OF PEGGY TRENK, ON BEHALF OF HON. RICK HILL, U.S. 
            REPRESENTATIVE FROM THE STATE OF MONTANA

    Ms. Trenk. I'd like to read from a letter because Rick 
wasn't able to attend today, but appreciates the chance to 
offer a few comments.
    First, I'd like to thank Senator Baucus for holding this 
important hearing. I would also like to thank the witnesses and 
others gathered here today for their efforts to address this 
important issue.
    The Montana congressional delegation has agreed on the 
value of selling 265 leases on Canyon Ferry. This sale would 
allow current householders the opportunity for permanent 
ownership, while paying fair market value to the benefit of the 
taxpayer.
    While we all share the common goal of providing more 
funding for conservation, I believe it is very important that 
we also make sure Lewis and Clark and Broadwater Counties have 
a stronger say in how their backyard will be managed. For this 
reason, I strongly support using the proceeds of this sale for 
not only land and water conservation measures, but also for 
giving these counties the resources to help make long-term 
recreational improvements on the lake.
    I'm confident the Montana congressional delegation and all 
the interested parties will come together to resolve the issue 
of what the sale of the leases will benefit. Be assured that 
legislation I have introduced in the House of Representatives 
on this matter will be one of my highest priorities in the 
remainder of this Congress. This hearing will assuredly help 
move us forward for the benefit of all Montanans.
    Again, thank you, Senator Baucus, for your efforts here 
today.
    Senator Baucus. Thank you, Peggy, and thank you, 
Congressman Hill.
    All right, let's begin with--well, first on the list, I 
guess it's you, Bob, representing the Canyon Ferry Recreation 
Association. It's all yours.

   STATEMENT OF ROBERT J. ROBINSON, CANYON FERRY RECREATION 
                          ASSOCIATION

    Mr. Robinson. On behalf of the Canyon Ferry Recreation 
Association, and as chairman of the Acquisition Subcommittee, 
I'd like to thank you, Senator, for working so hard on Senate 
Bill 1913, as both the primary sponsor of the bill and for 
holding this hearing.
    I'm today accompanied by Larry LaRock and Stephen Browning. 
Larry is a member of the Acquisition Subcommittee. He is also a 
long-time member of the Board of Directors of the Canyon Ferry 
Recreation Association. Steve Browning, as you know, a former 
member of your staff, is our legal counsel on this particular 
bill.
    I'd also like to go on record as thanking Senator Burns and 
Congressman Hill. Both have been closely in touch with our 
association, as have you, and both have been working towards 
reconciliation of some differences and to get a bill that we 
can all support and that meets all the needs of the people in 
the area. I'd specifically like to recognize the efforts of 
Holly Luck. Holly has done an excellent job of keeping us 
informed, listening to our complaints, trying to identify for 
us issues before they became a problem. She is always an open 
ear and a real good support for our association.
    Senator Baucus. You can say that again. I've heard a lot 
from Holly on your behalf.
    Mr. Robinson. Good. Keep it up, Holly.
    Brian Kuehl, also on your staff, has just done an excellent 
job in terms of working with the details of the bill and 
working with the congressional delegation staff back in 
Washington, DC. We really do appreciate his technical efforts 
as well.
    We've prefiled our testimony, which is pretty long, longer 
than the 5 or 10 minutes that you've given me, although Holly 
said earlier maybe 15 if we stretched it. But I'll try to be 
shorter than that.
    Senator Baucus. Holly said what?
    Mr. Robinson. Holly just left.
    That testimony is pretty straightforward, it's factual, we 
think it's balanced, and we think it addresses the expected 
issues with regard to the proposed transfer. My testimony is 
going to be more from the heart. I represent a family who has 
been a lessee since 1960.
    You can look around this room, and there are a ton of 
people we know who have been lessees from the late 1950's to 
the 1960's. The interesting thing about this is, we have a 
community out there. This is a community of 265 lessees who all 
have kids and grandkids and great grandkids out there and all 
who know each other. We know our neighbors out there. This 
isn't like some other places where we don't know our neighbors, 
we don't know what's going on. We are a community. I mean, they 
even built their own church out there. They utilize the same 
little stores. They see each other in various recreation 
aspects. So we're talking about what's happening to a 265-home 
community out there.
    I want to really make it clear that this bill is 
desperately needed by these 265 lessees, and more importantly, 
or as important, for the other people in southwestern Montana. 
Some of these people, and you can look around, there's a few 
people out here with more gray hair than I, and they've been 
dealing with this issue since 1968. The first record that we 
were able to discover is that Canyon Ferry Recreation 
Association was in touch with Senator Mansfield, trying to 
address this issue in 1968.
    The two driving issues behind this bill and, and our 
proposal is that the Department of the Interior and the Bureau 
of Reclamation has a policy to eventually eliminate the leased 
cabin sites at Canyon Ferry, and we'll talk a little bit later 
about that policy; and most recently, in the last 10 to 15 
years, a continuous upward spiral in the lease rates that are 
pushing people, literally, off the land.
    I think these issues must be addressed now. They can be 
addressed by the Baucus/Burns bill. In addressing the issues 
that are affected by the 265 leaseholders, we can address some 
other issues that should have been taken care of when Canyon 
Ferry Dam was constructed and some other issues related to 
habitat, to other recreation opportunities in southwest Montana 
and, as you've modified the bill, in all of Montana. So Canyon 
Ferry Recreation Association wants to go on record as strongly 
supporting the bill is it's currently written.
    I want to tell you about the cabin site lessees. They're 
not wealthy individuals or out-of-State owners, like you see at 
Flathead Lake or Seeley Lake or at Whitefish Lake. These are 
people primarily from Helena and Butte, Boulder, Bozeman, White 
Sulphur Springs, even some from, I think from Billings and 
Missoula, but primarily from southwestern Montana. These are 
people who are teachers, they're lawyers, they're dentists, 
they're smelter workers, they're craftsmen, they're telephone 
company employees. These are people who are not considered 
wealthy on the scheme of real wealth, even here in Montana. 
They are people who have raised their kids here. They are 
people who pay taxes out there, they pay taxes on a home in 
their communities as well.
    They're also not just 265 individuals. I hate to use my 
family as an example, but my mother and father had seven kids. 
We all use that cabin. We're all married, we've all got a bunch 
more kids. This summer, we may have the fourth generation of 
Robinsons out there.
    Senator Baucus. How many is that?
    Mr. Robinson. I'm afraid to ask. I think we'd be talking in 
the 30's. So there's some 30 people that have a direct interest 
in the outcome of this bill. That happens all the way up and 
down the lake. That's not just on Cabin Site 8. We can go up 
and down the shoreline and find dozens and dozens of families 
whose grandfathers and fathers and brothers and sisters and 
kids are now using those sites.
    The other thing that happens out there is that those sites 
become a magnet for a whole bunch of other people in the 
community that aren't lessees--friends, office parties--
whatever happens out there. Those cabin sites are a recreation 
resource in and of themselves.
    So we're facing some pretty serious problems. But we think 
we've got a solution here, and we think there's some 
extraordinary benefits in terms of how to utilize the funds. We 
think, as the bill is currently drafted, there are no losers in 
this legislation. We've been through this since 1968. Every 
time there's a loser involved in this legislation, or in this 
process, the process gets stymied and stops. We think we've got 
a process, with your bill, where there aren't losers. There's 
gainers on all sides.
    I want to give you a little bit of background on this. 
We're relying on a man by the name of Steve Clark, who used to 
be a Bureau of Reclamation employee in Helena and did a 
Master's thesis on leases at Canyon Ferry Reservoir.
    The dam was completed in 1954. It was primarily for flood 
control, power production, and irrigation. But when that dam 
was discussed in Congress, and was promoted, they also talked 
about the multipurpose use of it, and part of that multipurpose 
use was recreation. As Clark says, what better way to show 
multipurpose use than to allow cabin sites along the shoreline 
of the lake.
    Before the cabin sites were, were authorized between 1958 
and 1960, the Bureau of Reclamation identified the prime public 
recreation spots on the north end of Canyon Ferry Reservoir. 
They segregated those so that there wouldn't be any cabin sites 
on those spots. So the best sites were reserved for the public 
back in 1956, '57, before any permits were issued.
    Then those first 265 sites were, were authorized by 
lottery. They weren't 265 in one fell swoop, I think they went 
in two or three lottery cycles. The deal was at the time, and 
the requirement of the lease, was that if somebody received a 
cabin site by lottery, they had 2 years in which to build a 
permanent structure on that site, so the Bureau of Reclamation 
could go back to Congress and say, ``Look, we've established 
the multipurpose use of this thing. We have cabin sites out 
there, we've got public recreation sites.'' So the deal was, 
you build a permanent structure, we'll give you a reasonable 
lease, and we meet our obligation.
    What's happened since then is the Federal cabin site policy 
has vacillated. It's gone from one of overt and open promotion 
of cabin sites to discouragement of cabin sites to kind of 
leaving the cabin sites alone for a while, when it was managed 
by the Department of Fish, Wildlife and Parks, now to a 
proposed phase-out. I would refer you to the Inspector 
General's Report dated May of 1995--and we submitted that with 
our testimony--on pages 10 and 11, where they speak 
specifically to why hasn't the Bureau of Reclamation activated 
its plan to phase out the cabin sites and then they conclude 
that they haven't activated their plan because the Bureau of 
Reclamation could not prove at that point that the sites were 
needed for public use. I think that's going to be pretty 
important when we refer to the maps here in a little bit. But 
we believe that the purchase of the sites will eliminate that 
contention and give us a whole lot of other benefits.
    I'd like to refer to this (indicating map), and Larry will 
point out what we want to show you. The north end of the lake 
is in Lewis and Clark County. The economic benefit from the tax 
base has accrued entirely to Lewis and Clark County at this 
point. Roughly, 20 percent of the lake, or maybe a little less, 
is in Lewis and Clark County.
    On the south end of the lake, the undeveloped end, about 80 
percent of it, Broadwater County. Broadwater County really 
hasn't seen economic much benefit from this lake.
    The dark spots you can see on, on the map there, those are 
where the cabin sites are located. You've been out there, you 
know that.
    Senator Baucus. Right.
    Mr. Robinson. But an important point to recognize is that 
about 3 miles from the dam back to the first cabin sites is 
public land; lots of public recreation opportunities occur 
there. Interspersed within the cabin sites, as you can see on 
the south side, and on both sides, the prime land was earmarked 
for public recreation sites. Those in fact do exist. There are 
much fewer of them on the south end of the lake.
    We'll refer you to the other map now. Keep Larry on the 
move here. This is a map prepared in some of the work that 
we're doing with our reappraisals. If you take a look at that, 
this is a micro-section of the cabin site section over here 
(indicating illustration).
    The green area that encompasses all of the shoreline in 
front of and between the cabins are in fact Bureau of 
Reclamation land and, by this proposal, would remain Bureau of 
Reclamation land. None of the cabin sites are on the lakeshore. 
We all have lakeshore access, but we don't directly front the 
lakeshore--our property lines are generally in an area of ten 
vertical feet above high water level at the lake, which pushes 
you back quite a bit from the shoreline. I think that's 
something that's real important for everybody to understand all 
the way along here, that if these cabin sites are sold, the 
lakeshore, the recreation opportunities from the lakeshore are 
not lost to the public.
    With the sale, there is no loss of the current recreation 
opportunities. In fact, there are new recreation opportunities 
that will result from the sale.
    We'd like to call it a land exchange, but it's not quite 
that, in that we don't have land to, to transfer. But what it 
is, is an exchange of money, maybe estimated at $15 to $20 
million, if you look at all of the cabin sites; and that money, 
in your bill, would be split 45 percent to the Canyon Ferry-
Missouri Trust and 45 percent to the fund for public land 
access and 10 percent to the, to the Bureau of Reclamation.
    I think the good thing about this is that in times of tight 
Federal money, we are developing new public use dollars that 
can provide significant opportunities for recreation and 
habitat enhancement in the area. Most of that money, or most of 
the Missouri River-Canyon Ferry Trust would be used in 
Broadwater County. I mean, that's where the opportunities are, 
and that's where most of the adverse impact from the dam 
occurred. Lewis and Clark County would receive an increased tax 
base to the extent that that $15 to $20 million is now, in 
property value is privately held. That goes onto the tax base. 
Lewis and Clark County benefits. East Helena schools, the 
Helena public high schools benefit from that.
    The whole idea of a trust is not new. I'm sure you're aware 
of Montana Power's Missouri-Madison Trust that was created to 
do exactly the same thing we're talking about. But they left 
the hole in the doughnut. They go from Hebgen Dam down to 
Toston Dam, pick up at the bottom of Canyon Ferry, and go down 
to Great Falls. Because the Bureau of Reclamation owns the 
Canyon Ferry Reservoir, we don't have any Missouri River Trust 
here. This is the way we can fill that in, and I think it's a 
perfect match for Montana Power's Missouri-Madison Trust.
    There are other trusts in Montana. I'm sure that in your 
days of watching the Bonneville power line go across Montana, 
you remember the Rock Creek Trust that was established to 
mitigate the impacts there. Montana Power and Bonneville Power 
put $1 million up to mitigate that. That's working wonderfully 
over there in the Rock Creek drainage.
    I want to make sure that you understand, and that the 
public understands, that this is not a sweetheart deal for the 
cabin site owners. The language in the bill and the concept 
embodied by yourself and the other Congressmen are that fair 
market value, based on a current, valid appraisal, has to be 
the minimum price that the cabin owners would pay for their 
sites. In exchange, we would obtain the title to the land, an 
easement access from the main road to the cabin site, and an 
easement for one boat dock per cabin site and recreation 
opportunity on the shoreline. Again, I want to emphasize, the 
shoreline remains public property.
    The bidding process is a little bit complicated. We've gone 
back and forth on that. We can support the bidding process as 
it now stands, with the safeguards that allow the current 
lessee to match the highest bidder or allow the current lessee 
to continue to lease until the current lease expires in the 
year 2014. We recognize and support the requirement that you 
people see in Congress to ensure that fair market value is 
obtained.
    I'm just about winding up here.
    We received a letter from the Montana Wildlife Federation 
not too long ago, in fact, shortly after we were talking about 
the Sweetgrass Hills. The Montana Wildlife Federation, I 
thought, had a great sentence in there that said that: Canyon 
Ferry public lands have lost their historic public wildlife 
value as a result of habitat alterations and destruction. If 
those lands are permanently taken out of the public domain, 
then we believe they must be replaced by lands that aim to 
provide the public with wildlife and recreation opportunities 
that once existed.
    I can tell you that our cabin site didn't have a whole lot 
of animals around there when we first got there, but what was 
really lost was the riparian habitat on the river bottom. We 
really do believe that this trust fund that could be used to 
acquire other public lands or new public lands on the Missouri 
upstream from Canyon Ferry and the conservation easements from 
willing sellers--we don't want to get in the position of 
anybody thinking anybody is bullying anybody around with this 
fund, but always from willing sellers and willing 
participants--we think that we can replace that lost riparian 
habitat to some extent with preserving some public land 
upstream of the river.
    I think, Senator, this bill is good for all of the 
stakeholders. It can pass--given where we are in little old 
Montana, it can only pass if all of our congressional 
delegation is dead behind this thing and works hard to ensure 
its passage.
    We're pleased with the progress. We appreciate the work 
that you've done very much. We also appreciate the work of 
Representative Hill and Congressman Burns--or Senator Burns. 
Boy, I'll be in trouble now. We commit our efforts, our 
Committee and the Association, to helping you get this bill 
passed. We really appreciate it. Thank you.
    Senator Baucus. You bet, Bob. Thank you very much. That was 
a very good statement. I'm glad, frankly, that you spoke more 
than 5 minutes to give a full explanation.
    Okay, Mike, you can have another few minutes, too.

      STATEMENT OF MICHAEL VASHRO, PRICKLY PEAR SPORTSMEN

    Mr. Vashro. Mine won't be near that long.
    We thank you, Senator Baucus, for this opportunity to speak 
this afternoon on the Montana Fish and Wildlife Conservation 
Act of 1998. My name is Mike Vashro, and I'm representing the 
Prickly Pear Sportsmen's Association.
    The Prickly Pear Sportsmen's Association is a greater 
Helena area rod and gun club dedicated to the conservation and 
enhancement of fish and wildlife resources in Montana. The 
sportsmen and women of our organization are active hunters and 
anglers, and our club frequently engages in efforts to improve 
and protect fish and wildlife habitat on public and private 
lands.
    The idea of creating a fish and wildlife habitat trust fund 
from assets now held by the public around Canyon Ferry 
Reservoir came from within our organization. Members of our 
organization have considerable experience in the creation and 
administration of fish and wildlife conservation trust funds.
    The lands in question around Canyon Ferry Reservoir are 
presently a public asset of considerable economic value. 
Although their value as wildlife habitat have been diminished, 
their value as an asset with the potential to positively impact 
wildlife habitat, the preservation of agricultural land, and 
the retention of open space protection remains substantial.
    The representatives of our organization shared the concept 
of a wildlife habitat/land conservation trust fund with the 
Canyon Ferry property owners as a way of converting a publicly 
held land asset, the cabin lease lands, into a land trust 
dedicated to the preservation and enhancement of wildlife 
habitat. This concept met the needs of the property owners and, 
in the opinion of the Prickly Pear Sportsmen's Association, 
also met the trust--the public trust responsibility associated 
with publicly held assets.
    We appreciate the attention this proposal has received from 
the Montana congressional delegation. You have all been very 
responsive. Our enthusiasm for this idea remains high and is 
anchored in two features that must be retained as this 
legislation moves through Congress: The first, the purpose of 
the trust must remain focused on protection of fish and 
wildlife habitat; and the second is, the trustees of the fund 
likewise need to be representatives clearly dedicated to the 
purpose of the trust.
    The Prickly Pear Sportsmen's Association also supports the 
idea in the legislation advanced by Senators Max Baucus and 
Conrad Burns to create a second trust dedicated to gaining 
access to public lands. The access trust, like the land trust, 
must be focused and administered similar to the terms outlined 
for the land conservation trust. If these conditions are 
guaranteed, our organization believes that the public interest 
will be served; wildlife habitat, agricultural land, and open 
space will be protected; and the property ownership around 
Canyon Ferry will be equitably resolved.
    Our organization's commitment to the principles outlined in 
this testimony is not casual. We recognize that there will only 
be one chance to deal with this public asset now held by the 
Federal Government at Canyon Ferry. To put this asset at risk 
by being either casual or vague about the use of the funds to 
be generated by sale of the cabin sites is a risk our 
organization is not willing to take.
    Therefore, we offer our support to the effort being made in 
this legislation sponsored by Senators Baucus and Burns. We 
suggest the language in the legislation addressing the purpose 
of these trusts and the makeup of the entities that will 
administer them be given close and constant attention as the 
legislative process continues. Thank you.
    Senator Baucus. Thank you, Mike. You've got more time. Do 
you want to use it?
    Mr. Vashro. That's it.
    Senator Baucus. Bill Orsello?

   STATEMENT OF WILLIAM ORSELLO, MONTANA WILDLIFE FEDERATION

    Mr. Orsello. I wish to first thank Senator Max Baucus for 
being present. I wish to also thank him for the invitation and 
the opportunity to testify on the Montana Fish and Wildlife 
Conservation Act of 1998, Senate Bill 1913. The presence of 
Senator Baucus here demonstrates his concern for the lessees, 
wildlife conservation, and the interests of Montana sportsmen.
    My name is Bill Orsello, and I am here as a representative 
of the Montana Wildlife Federation, comprised of 7,500 members 
and 21 affiliate clubs. I am also here as a concerned hunter, 
angler, parent, and outdoor recreationist.
    The Montana Wildlife Federation recognizes the complexity 
of drafting legislation that attempts to solve a problem, the 
loss of wildlife habitat and the concerns of the lessees, that 
has existed since the 1950's. The Montana Wildlife Federation 
applauds and supports the Senator's bill for the exchange of 
these public lands.
    We feel that Senate Bill 1913's success depends on five 
features: 1) the exchange of public lands that have had their 
wildlife value diminished by the construction of cabins, 
elaborate homes, and landscaping for the ability to acquire 
lands, access, and conservation easements that have equal or 
greater wildlife and recreational values. 2) non-developed 
recreational opportunities have been lost, and they should not 
be replaced by developed recreational opportunities. Primitive 
habitat was lost, and it should not be replaced with developed 
habitat. This must be a land related values exchange. 3) the 
creation of two endowments or trust funds that will only be 
used to guarantee the preservation of wildlife habitat and 
wildlife recreational opportunities in Montana. 4) that any 
trust funds developed from this exchange be administered by 
Montana representatives dedicated to the perpetuation and 
conservation of wildlife, public access to public resources, 
and the preservation of our hunting and fishing heritage. 5) we 
believe that Montana's wildlife and sports persons are best 
served by decisions formulated at the local and State level for 
the dispersal of the funds generated by the endowments. The 
intimate, on-the-ground knowledge of local wildlife and sports 
persons' needs would only be diluted by transferring the 
decision-making process to a national influence.
    We feel uncompromisingly that this bill must stay on track 
with its original intent to create an exchange of degraded 
public properties with properties that will have a long-term 
benefit to the public and the preservation of wildlife habitat.
    Any attempt to modify this bill or redirect monies 
generated from the exchange for programs, like the Land and 
Water Conservation Fund, or projects not benefiting the 
enhancement of wildlife habitat and the greater public wildlife 
oriented recreational opportunities, will create many 
adversaries. We feel this proposal has a delicate balance; it 
only works if it is an exchange of diminished wildlife value 
land for useful public lands with high wildlife values. This 
bill must ensure that the funds generated from lost publicly 
held assets are used to replace those assets with accessible 
lands, benefits to wildlife, and public recreational 
opportunities within the immediate geographical area.
    The Montana Wildlife Federation remains enthusiastic toward 
the passage of Senate Bill 1913 and feels the bill will help 
preserve Montana's hunting and fishing heritage for future 
generations, if it is held intact and uncompromised.
    I reiterate, this proposal must ensure that funds generated 
from the exchange of our public lands, our public assets, must 
be used to replace those assets with publicly accessible lands 
in Montana, wildlife habitat in Montana, and public wildlife 
opportunities in Montana, preferably in the immediate 
geographical area.
    Again, we applaud and thank Senator Baucus for his efforts.
    Senator Baucus. Thank you very much, Bill.
    I'd like to first turn to you, Bob, and ask a couple of 
questions about how the Association, and particularly the 
members, would acquire the land.
    Originally, I had thought that the legislation should have 
some kind of mechanism where the leaseholders themselves would 
be able to directly acquire their sites at fair market value. 
It was later suggested that there be an auction and bidding 
process, and the bill now provides for that, for a bid process. 
The thought is that someone, some entity could then bid on the 
package, on the sites. If the Association has the highest bid, 
then the Association would own the sites and the cabin owners 
would then be able to own their sites.
    Now, the question obviously arises, what happens if 
somebody else comes in with a higher bid, and particularly, if 
it's much higher? The range of appraisals right now is around 
$18 million, up to $20 million perhaps. What happens if 
somebody comes in, if someone were to come in, I don't know, 
say, $40 million, and wants to acquire the sites?
    We've tried to protect against that in the bill by, first, 
giving the Association the first right of refusal. But that 
would mean the Association would have to raise and spend the 
$40 million. The second set of protections, as you know, 
written into the bill are that whoever purchases or gets the 
highest bid has to honor the current lease arrangements and the 
lessees will be able to extend their leases for, I guess 
another 5 years, and then there's two options to do that, an 
option to buy, and if they don't buy, the leaseholders are 
compensated for improvements that they've made, et cetera.
    But if I were a cabin site lessee, I'd be concerned about 
this. I just want to ask you how you foresee this working and 
what happens if, say, somebody were to come in with a much 
higher bid than $18 million.
    Mr. Robinson. Senator, I think the bill addresses that. 
Obviously, our earlier discussions, the very first discussions 
of this bill talked about the cabin site lessees being able to 
purchase those just directly at fair market value from the 
Bureau of Reclamation. But as you know the machinations of 
congressional negotiations back there, the--it was made at 
least clear to us that in order to have all of the 
congressional delegation supporting this bill, that there had 
to be some kind of a bid process in order to ensure that other 
Congressmen outside of Montana were convinced that this wasn't 
a sweetheart deal.
    I think the current process will work, though. First of 
all, I think the provisions in the bill that require one entity 
to bid on all 265 lots turns away a whole bunch of would-be 
bidders. But there still may be one of those would-be bidders 
out there. If that in fact did happen, the other two 
safeguards--actually, three safeguards, I think that are in the 
bill really protect the cabin site owners, or at least we think 
it does.
    First, that whatever that individual or that entity is that 
was the higher bidder than the Canyon Ferry Recreation 
Association was, or whatever they bid, they would have to be 
able--or the Canyon Ferry lessees would have the right to 
purchase their particular cabin site from the successful bidder 
at the amount that that bidder bid. In the case of my mother's 
cabin, say, the fair market value was $40,000 and somebody came 
in and bid them all up by 20 percent, 25 percent and that was 
$50,000. Well, then, we would have the right to match that 
proportional share, that $50,000, and my mother could get that 
site.
    I think that's the first safeguard. The second safeguard is 
that if that person pushed that price up too high, then the 
cabin site owners could exercise their option to continue the 
lease until 2014 at something similar to the current Bureau of 
Reclamation lease rates. Well, if the person--the successful 
bidder puts up too much money, and ends up with a lease rate 
that doesn't recover his or her costs, or its costs, then I 
think that's a bad business decision for the next 16 years by 
that particular entity.
    Last, but not least, and I think a real important point in 
here that we sometimes overlook, maybe these cabin sites would 
be more valuable if somebody was going to put up a Hilton Hotel 
out there. But the bill requires that those cabin sites be 
utilized in the future by the purchaser with their historic 
property boundaries and their historic use. Those are 
individual homes. So we don't think that there's going to be an 
entity that comes in there that wants to buy up all those 
sites.
    The other, the other problem with that is, that entity who 
buys up all those sites that's not Canyon Ferry, the Bureau of 
Reclamation would have the obligation, if we desired, as 
lessees, to buy our improvements on that property at fair 
market value. So not only are they going to overprice the land, 
but then they've got to turn around and look at buying 265 
cabins and associated septic systems and wells. That's probably 
not an economic--a good economic decision.
    We think the safeguards are there. It would sure be a lot 
cleaner if we were to say, you know, the current lessees buy it 
right directly from the Bureau of Reclamation at fair market 
value.
    Senator Baucus. It would be a lot cleaner. I'm curious, I 
mean, how concerned are you about the current the arrangement 
as proposed in the bill, compared with the cleaner, direct 
purchase? You say that you think that the current safeguards 
are sufficient, and I'm just trying to get a sense of how much 
comfort you have with all of this.
    Mr. Robinson. Well, I don't know how much comfort everybody 
else has or the Association has, but we really do--you know, we 
would have preferred the direct purchase, but if that doesn't 
fly in Congress----
    Senator Baucus. Well, let's assume that Congress doesn't 
care.
    Mr. Robinson. Then that's the way to go.
    Senator Baucus. But again, do the arrangements in the 
current bill give you--on a scale of 1 to 10, are you about 80 
percent comfortable or are you----
    Mr. Robinson. I've got to see how comfortable these guys 
are (indicating).
    Mr. LaRock. Ninety.
    Mr. Robinson. Ninety percent.
    Senator Baucus. About 90, okay.
    Mr. Robinson. There's a risk. Obviously, there is some risk 
there.
    Senator Baucus. Do the rest of you think it's 90?
    [Negative response.]
    Senator Baucus. I want to make sure that we have the right 
temperature here on this question. We don't want to be buying a 
problem if we don't have to. The current provision of the bill 
which provides for the auction doesn't have to be in the final 
bill. That could be deleted.
    Mr. Robinson. Correct.
    Senator Baucus. I'm here to determine how comfortable are 
you with the current provisions. That would help me to know how 
hard to try to delete this auction portion and move toward a 
direct, fair-market-value purchase.
    Mr. Robinson. Senator, I think that's almost a political 
decision that you have to work out with the other Congressmen. 
Because, you know, your original draft and our draft----
    Senator Baucus. That's right.
    Mr. Robinson. ----had a straight purchase by the cabin 
site----
    Senator Baucus. But I'm asking the question partly as if 
they were sitting right here, so you could tell them how 
comfortable or uncomfortable you are with the----
    Mr. Robinson. Well, there's a little discomfort, as you can 
tell from the group. There are some that are more concerned 
than, than probably others. But it would sure be a lot cleaner 
going the straight purchase route.
    Senator Baucus. Do you think you could come up with $18 or 
$20 million?
    Mr. Robinson. As long as we got a fair appraisal out 
there--and we've got a couple of surveys of the cabin site 
owners that said that probably 95 percent of those people would 
buy their cabin sites if it was a fair evaluation of the value 
of the property.
    Senator Baucus. How many would?
    Mr. Robinson. About 95 percent, 96 percent, something on 
that order.
    Senator Baucus. ``Fair'' means what number?
    Mr. Robinson. Well, that the appraisal fairly represented 
the value of that particular cabin site. I think that there's 
been some appraisals with regard to lease rates that 100 
percent of the cabin site owners said are a little out of 
whack. We think that there is, a valid reappraisal would 
probably be a little bit lower than the current prices. But, 
you know, when it came down to a fair value, we think we have 
95, 96 percent.
    Senator Baucus. I understand. But I have no idea what the 
current appraisal is----
    Mr. Robinson. We don't know what they are.
    Senator Baucus. ----but say it's between $16 and $20 
million. Do you think you can handle that, the Association can?
    Mr. Robinson. We've had some discussions with some 
financing entities, usually large banks or other financial 
institutions that we would work with on an individual basis to 
set up loans, or some individuals may want to cash them out. 
But with the lead time, if the bill passed, we could put the 
financing together. We've been advised by local banks that that 
would be possible.
    Senator Baucus. Could you describe in a little bit more 
detail the Rock Creek Trust, how that's set up.
    Mr. Robinson. Well, I don't know all of the details----
    Senator Baucus. Just roughly.
    Mr. Robinson. ----but, when Bonneville Power extended the 
Colstrip power line from Townsend and took it to the Bell 
Station over on the western side of the State, that line had a 
number of environmental impacts. At the time that that line was 
being placed, in the Missoula area, there were a number of Area 
Two study areas. The line had to cross a few of those.
    The compromise with the environmental community over there 
was, sure, that line could cross or skirt a couple of these 
Area Two study areas only in exchange for some compensation for 
the environmental impact. I think it was $1.2 million, but you 
can't hold me to that number--it was something in that area--
that the Montana Power and Bonneville Power Administration put 
up into the Rock Creek Trust. That money has been held in 
trust. I think it's managed by a committee of recreationists. 
Maybe the Wildlife Federation people can tell us better. But 
it's pretty much managed by people who are interested in the 
resource in the Rock Creek area. To my understanding, it's 
acquired some conservation easements up and down that creek to 
protect that drainage.
    Senator Baucus. Let me ask Mike and Bill about the access 
provisions. I heard you to say in your testimony that you're 
comfortable with the two trusts, with proceeds that are to be 
used to buy easements or access, or lands, private lands, to 
give more access to hunters and fishermen in our State. Do you 
feel that this bill does that enough, or not?
    Mr. Vashro. Can I just revert to your last question about 
the Rock Creek Trust?
    Senator Baucus. Sure.
    Mr. Vashro. Our past immediate president was active in the 
creation and administration of the Rock Creek Trust. His name 
is Jim Posewitz. Unfortunately, he can't be here today. He 
could have answered questions very intimately.
    Yes, we do feel comfortable about that.
    Senator Baucus. You, in your statement, though, said that, 
if I heard you correctly, that you want to make sure that the 
trust does protect fish and wildlife and the proceeds are 
clearly dedicated to the purposes for which they're stated. I 
wasn't sure, when I listened to you, whether you thought they 
could be sharpened up or not or whether you thought that you 
just didn't want any changes that would dilute that.
    Mr. Vashro. We don't want any dilution. We want to make 
sure that the language in the bill is kept true. As you know, 
language does tend to get diluted.
    Senator Baucus. Bill.
    Mr. Orsello. I think we'd say the same thing. The bill, as 
it is now formed, meets our needs. What we're concerned about 
is a dilution of the purpose, that being wildlife related 
access, wildlife related conservation easements or purchases. 
We would hate to see this money redirected for large-scale, 
modernized recreational facilities, things that don't have land 
related values: boat docks, picnic tables, campgrounds. There's 
other funding mechanisms, we think, available for those 
improvements and that this should be generated only for land-
related value.
    Senator Baucus. Could you expand on that a little bit, 
because I think there are some people who would like to see the 
proceeds used for some of that, you know, boat docks, picnic 
tables, and so forth.
    Mr. Orsello. I'm sure there are. I think that's a very 
delicate balance. Montana sportsmen have traditionally been 
against selling public assets. Basically, that's how we would 
see those improvements, would be a product of money generated. 
We think that this can only work, from our point of view, if 
they're land-related values, if the values that come from these 
public lands and the lands that were lost are replaced by other 
land-related values that benefit the public and wildlife.
    There are several venues available to provide those other 
public assets. I don't think this is the appropriate one. 
That's the Wildlife Federation's position, and one that our 
members cling to very dearly. We had a board meeting yesterday, 
and that was one thing that came up immediately, was that this 
has to be an exchange of land for land, or land-related values.
    Senator Baucus. Do you know what's happening in other 
situations, like the Rock Creek Trust? Is there a similar 
situation there?
    Mr. Orsello. I think the focus on the Rock Creek Trust was 
narrowed down to where that was the only thing that it was used 
for; that those land-related values were written in and that 
the people that directed that fund, the board that oversees it, 
were predominantly members of the conservation community, so 
that the intent and the direction couldn't be changed.
    Senator Baucus. You heard Bob say that, you know, that with 
the present cabin sites not directly on the shore, but 10 
vertical feet back, and the further provisions of the bill, 
that he felt there's sufficient public access. I mean, would 
you agree with that statement?
    Mr. Orsello. I think there's probably the perception of the 
public that they wouldn't want to have a picnic in Bob's front 
yard, even though it is available.
    Senator Baucus. Bob doesn't mind that.
    Mr. Orsello. No. Well, you know, there hasn't been a 
problem with that. I don't think the public in general thinks 
in those terms, that they're going to lose anything. But it 
wouldn't change from the conditions that now exist. The 
safeguards of access to the lake in areas adjacent to these 
properties, I think are protected in the bill. That's important 
to many people.
    I think one of the things in our focus is that we believe 
that what was lost here--There were many things gained, there 
was a cold water fishery and impoundment that came, the 
recreational aspects, water skiing, boating, cabin sites. What 
was lost was 20 some miles of riparian area, wildlife habitat, 
bottom land, farmland, that we've put campgrounds on this lake. 
We've created recreational access. We've done a lot of these 
things. What we really haven't done with Bureau of Reclamation 
money was compensated for what was lost as far as wildlife 
habitat and opportunity.
    My father used to hunt ducks up by the Canton Bridge. My 
grandfather used to sit up on the North Fork of Deep Creek, 
broiling on a dryland grain farm, wishing that he was down 
there in that bottom land that he'd homesteaded 10 years 
earlier. Those are all gone. They're under 60 feet of water 
now. But we have the opportunity to take that money and protect 
other parts of the wild river that runs up to the confluence, 
and I think that that's very admirable to hold.
    Senator Baucus. Yes, I think probably most of the 
leaseholders, potential landowners would not want a lot of 
camping in their front yard.
    Mr. Orsello. No, and I think the lake is large enough and 
the opportunities can be, you know, created.
    Senator Baucus. All right. The composition of the trusts, 
that is, how the trustees are appointed and the powers that 
they have, are you satisfied? Are you comfortable, all of you, 
with all of that, or not?
    Bob?
    Mr. Robinson. I think Canyon Ferry Recreation Association 
steps out of that because we don't want to be viewed as having 
a beneficial interest. So we intentionally did not put a Canyon 
Ferry Recreation Association member in our original proposal. 
So it's really a discussion that comes down to who is on it--
are they conservationists, are there some local government 
people? I think that's where the issue is. I think we prefer to 
step out of that debate and let the conservationists and local 
government deal with that.
    Senator Baucus. What about this other issue about use of 
proceeds, though, does the Association have a position on that? 
Because Bill and Mike are concerned, quite legitimately, that 
any proceeds from this should go back to access and not for 
non-land purposes.
    Mr. Robinson. Well, I think there's probably a pretty 
strong feeling among the Canyon Ferry Recreation Association 
members that replacing----
    Senator Baucus. Can everybody hear back there?
    Mr. Robinson. I think there's a fairly strong feeling among 
most of the Canyon Ferry Recreation Association members, at 
least the Acquisition Committee and the board of directors, at 
our discussions, that we would support habitat acquisition, 
whether they're conservation easements, outright purchase of 
the property in, you know, the upriver area. We think that 
there is a lot of area, if you look at the map, on the edge of 
the Canyon Ferry Reservoir that's undeveloped and real hard to 
get to. We think that maybe some easements could be acquired 
that would----
    Senator Baucus. Like down by the silos, for example.
    Mr. Robinson. Yes, from there all the way up to White Earth 
or even up through the back side of the Spokane Hills there. An 
awful lot on the other side as well.
    Senator Baucus. Right.
    Mr. Robinson. It's difficult for people to get on land from 
the highway down to the lake. Maybe there's an opportunity to 
acquire some easements across private land to the lakeshore 
which would enhance recreation opportunities on the lake. 
Because we think there will be a need in the future for flat 
water recreation.
    We don't necessarily sign on to building a bunch of marinas 
and those kinds of things there. But we need to do something 
about getting people to the lake to let them have some 
opportunities on the lake.
    Senator Baucus. So the Association is in support of access 
and not in support of, of capital improvements, docks, boat 
landings, and so forth.
    Mr. Robinson. I think there'd probably be some discussion 
of that among the members of the Canyon Ferry Recreation 
Association. But, but we think that the makeup of the board 
isn't going to ignore entirely recreation opportunities on the 
lake for the betterment of everything upstream.
    Senator Baucus. Do any of you want to say something that 
hasn't been addressed? Is there some question that I should 
have asked but haven't that you want to respond to?
    Mr. Robinson. Senator, I'd just like to have the people in 
the audience who appreciate your efforts and the work that 
you've done on this bill stand up, so you know how many people 
out here really do appreciate what you've been doing for us 
here.
    [Applause.]
    Senator Baucus. We're in all in this together.
    Mr. Orsello. Senator Baucus, I would like to thank you for 
the formatting. I think this is something that we had to 
discuss a lot, the idea of an endowment versus a land-for-land 
exchange. But the possibilities of the perpetuity of an 
endowment, the creation of money, and the ability to leverage 
off of it is a tremendous asset. Buying another piece of 
property is always beneficial, but then you have that piece of 
property and all the ramifications that come with managing it 
and developing it. This way, it provides a vehicle to fund 
acquisitions, conservation easements, access that we can 
continue this on, not this generation, but in generations to 
come.
    Senator Baucus. I agree. I think we have a real opportunity 
here. Like all of you, I have a lot of fond memories of the use 
of the reservoir and the lake as a little kid. I remember 
watching those big cranes come down and build the dam. It was 
quite a sight. Then later on, a good friend of mine, John 
Marlow was his name--a really industrious little fellow. He 
enlisted me--I was a bit of a sucker at the time--to build a 
cabin there on the lake. We had to do it from scratch, so we 
went up toward McDonald Pass here with a flatbed truck. We 
sawed down some trees. I don't know how legal it was at the 
time.
    Well, we had to peel the bark off the trees and haul them 
up on the flatbed. The first mistake we made was the trees were 
too big. We couldn't lift them up and put them on the flatbed. 
So we went off and cut a couple smaller ones. We put them on 
the truck and hauled them down to the lake. I remember peeling 
all the bark off.
    Then we had to make the foundation. We were mixing all this 
concrete for the foundation for the little cabin. Then we built 
a deck on it. I have no idea what's ever happened to John 
Marlow's cabin. Maybe some of you know about it or where it is.
    Audience Member. It's still there.
    Senator Baucus. Is it still there? It's still there.
    So we had a lot of fun out there. We had parties out there 
on the deck. I've done a lot of ice fishing on the lake.
    So it's a great opportunity for a lot of people. I agree, 
if we could keep it for our kids in the future, it would make a 
huge difference and something we can all be very proud of.
    Thank you, all of you, very much.
    Let's give everybody here that testified a round of 
applause.
    [Applause.]
    Senator Baucus. We asked the Bureau of Reclamation to 
testify, but they couldn't be here. It was rather short notice. 
So if some of you were wondering why they're not here, that's 
the reason. But they'll certainly have an opportunity to 
comment on all this and we'll take those comments into 
consideration, as well as all of yours here.
    All right, now the next portion of the hearing, for those 
of you who want to go on the record here, have your name and 
comments indelibly printed for posterity, Holly is going to 
call off from the sign-up sheet, I guess in the order of people 
who signed in.
    Ms. Luck. I'll call in blocks of three, and if you'll 
please line up behind the microphone, to make it as quickly as 
possible.
    Lanny Helfert, Larry LaRock, Julie or John Blacker.

                   STATEMENT OF LANNY HELFERT

    Mr. Helfert. Good day, sir.
    Senator Baucus. Hi. Lanny, right?
    Mr. Helfert. Lanny Helfert is my name, yes. I would to like 
to first thank you for being here to give us this opportunity 
to voice our opinions in this forum. I'd also like to thank 
Representative Hill and Senator Burns for all their work that 
has been put into this, as well as the people from Canyon Ferry 
Recreation and all the organizations that are involved here.
    I don't know if being the first is good here or not. 
Sometimes the first fighter doesn't have a chance, you know. 
But I will start off by saying that we've been on the lake 
since 1957, I believe. I grew up there, my brother grew up 
there, my children have grown up there, and hopefully this 
summer, like Bob, I may have a grandson up there spending some 
time.
    We feel strongly that we have helped develop the lake, the 
cabin owners and lessees, through the past 40 years, and we 
naturally would like to see this come our way. We would like to 
own those pieces of property. We feel that the monies that are 
going to be generated from this probably would not be available 
from any other source except this, this exchange.
    There's going to be some good come, from everybody's 
aspect, I believe. I think it's a win/win situation. Of course, 
I'm prejudiced, but Mr. Orsello and Mr. Vashro are probably 
prejudiced, too. They have their agendas, as does everybody. 
But it's an all-win situation. We feel that if it's done 
properly, and I think the congressional delegation would feel 
the same way, if we can get the rest of the people in the 
United States and all of Montana to go with us, it would be a 
good deal.
    Again, I thank you, sir, for being here. I'll pass it on to 
Dr. LaRock.
    Senator Baucus. Thanks, Lanny, very much. Appreciate your 
comments.

                   STATEMENT OF LARRY LAROCK

    Mr. LaRock. I'm Larry LaRock. First of all, I want to thank 
you. A couple of months ago, you may remember, I was in 
Washington, DC, talking to you about another issue. Towards the 
end of the conversation, I mentioned Canyon Ferry, and you 
brought Brian Kuehl down right away, and we spent more time 
talking about Canyon Ferry than what I showed up for in the 
first place. I appreciate that.
    I'd like to make one or two comments about the bid. As you 
know, we worked on the wording on the bid process in the 
legislation with Brian and staff members from Senator Burns's 
and Representative Hill's offices. The language that is there, 
I think we feel comfortable with, our attorneys feel 
comfortable with.
    Obviously, there's a comfort level, though, a comfort zone 
that would be nice if it weren't there. I think it would make 
us all feel better if it were just a nice, clean, clean, 
situation, maybe a cleaner situation. But at the same time, we 
worked with your staff on this, and the other staff members, 
and our attorneys assure us that this is a fairly comfortable 
position that we're in with the bid process. Again, maybe 
comfort level would be a little bit higher if it were worded a 
little differently.
    One of the things I'd like to correct for the record--and 
this was actually taken care of when I was at your office in 
Washington, DC a few months ago. I was talking with Brian. The 
initial trust makeup, as far as who is on the board of 
trustees, did have CFRA listed as a member. We discussed it at 
that time at your office, and I said, ``We don't need to be 
there. We have no reason to be there.'' And so our name was 
taken off. I want to clarify that point. We don't have any 
reason to be on that trust because we don't envision that any 
of the money from that trust would go to benefit any of the 265 
cabin sites. Thank you.
    Senator Baucus. Thank you, Larry.

 STATEMENT OF JULIE BLACKER, CANYON FERRY RESERVOIR LEASEHOLDER

    Ms. Blacker. Senator Baucus, my name is Julie Blacker. My 
family has had a cabin site out there for well over 40 years. 
They were original cabin site owners at that spot. We consider 
that spot home, and we desperately want that opportunity to 
purchase that land, if possible. We support all your efforts 
and thank you for all the work you're doing on behalf of us.
    Senator Baucus. Thank you, Julie, very much.
    Ms. Luck. Charlie McCarthy, Dwayne or Lilly Kretchmer, Lisa 
Blanford.
    Senator Baucus. Hi, Charlie.

                 STATEMENT OF CHARLIE MCCARTHY

    Mr. McCarthy. Hi, Senator. Thank you for coming. I am a 
office holder in the Prickly Pear Sportsmen's Association and 
the Montana Wildlife Federation. I think Mike Vashro did a good 
job for Prickly Pear and Bill Orsello did a good job for the 
Wildlife Federation.
    As an individual, I'd like to say that I'm a little 
troubled by the fact that we don't have our companion piece 
from the House here. I know Representative Hill has the 
intention of introducing it, but I haven't seen it. I'm worried 
that what might come back at us, after you go to back to 
Washington and start negotiating with this bill, that it might 
look like something different. So all I'm saying is, I'm for 
the bill the way it's currently proposed.
    As I understand an endowment, we would be spending the 
interest or whatever we would gain off of this, not that we 
would go and spend the whole endowment right away. So we're not 
talking about a lot of money here. Prickly Pear just did an 
outhouse out at our range. $25,000 for a two-hole outhouse was 
the bid we got. So it's not going to take a lot of money--or a 
lot of time or effort to spend this money real quick out there 
if we go into building boat ramps and outhouses and picnic 
tables and that sort of thing.
    I'd like to emphasize the word ``wildlife'' that appears in 
here all the time, ``hunting, angling, and wildlife recreation 
opportunities.'' I'm a little bit concerned about all the jet 
boats, that kind of thing that goes on out there. Yes, it 
brings money. Yes, it does this and does that, but what does it 
do for the gull or the pelican or the eagle or the osprey or 
whatever else are out there?
    Thank you again for the opportunity.
    Senator Baucus. Well, that's a good point, Charlie; these 
trusts are permanent endowment trusts. So it would be the 
income from the trust that would be used for access or 
acquisition, and not the principal. So you get a $9 million 
trust at, say, 7 percent. That's about $566,000. Get the math 
right here. How does that work?
    Audience Member. It's $600,000.
    Senator Baucus. It's $600,000, yes, would be potentially 
available. That's not a lot of money when it comes to buying 
significant easements and land acquisition. So that's a very 
good point that you made. Thank you.

            STATEMENT OF DWAYNE KRETCHMER, HAVRE, MT

    Mr. Kretchmer. Senator Baucus, my name is Dwayne Kretchmer, 
my wife Lilly here (indicating). We're from Havre, Montana. We 
have a home at 3908 East Shore Drive--and we're very proud of 
it and we love it--ever since 1982.
    I didn't realize when I signed my name and my wife's name--
--
    Senator Baucus. That you were going to have to say 
something.
    Mr. Kretchmer. Right. So I'm really trying----
    Senator Baucus. You don't have to say anything.
    Mr. Kretchmer. ----trying my best. However, as long as 
you're putting it that way, when it was mentioned about all the 
Canyon Ferry cabin sites are owned by people from Helena and 
East Helena and Butte and Bozeman and Livingston and Billings 
and Great Falls, Havre is also part of Montana.
    Senator Baucus. Okay. Very good. I like the sweatshirt 
you're wearing, too
    Mr. Kretchmer. That is Havre.
    Senator Baucus. Yes, right.
    Mr. Kretchmer. Now, all I want to do is say, in the best 
words that I can, that we very much support your efforts and 
thank you very much.
    Senator Baucus. You're welcome. Thanks, Dwayne, very much.

 STATEMENT OF LISA BLANFORD, CANYON FERRY RESERVOIR LEASEHOLDER

    Ms. Blanford. Good afternoon, Senator Baucus. My name is 
Lisa Blanford.
    Senator Baucus. Hi, Lisa.
    Ms. Blanford. I'm a leaseholder, I also have a cabin, third 
generation. We would really appreciate any opportunity to be 
able to purchase the land and to continue our recreational 
opportunities out there. Our preference would be to have a 
possibility of direct purchase of the cabin, but we'll support 
the efforts of the Association and any, any efforts it takes in 
order for us to be able to purchase that land. Thank you.
    Senator Baucus. Thank you, Lisa.
    Ms. Luck. Dorothy Foreman, Margery Rothschiller, 
Representative Harper.

           STATEMENT OF DOROTHY FOREMAN, BILLINGS, MT

    Ms. Foreman. Senator Baucus, I'm Dorothy Foreman. We live 
in Billings. We came here over 20 years ago. Even though we 
have, of course, a city like Billings, and opportunities, we 
have nothing like what we have here in the Canyon Ferry 
Recreation Area. We came here with the hope in our, you know, 
our golden years, that we would be able to take advantage of 
and really enjoy those last years here. We found, after we 
signed on the dotted line, too, that the lease arrangement gave 
us a lot of trouble. You know, we would really like to have the 
opportunity to buy this land. Thank you.
    Senator Baucus. Thank you.
    Now, if any of you have heard anything that you would like 
to comment on, either in response to questions I've asked or 
answers that others have given, that is, Mike and Bob and Bill, 
when you're speaking up here, feel free to comment on or react 
to anything else that's occurred thus far in addition to your 
own direct personal views. I mean, take advantage of the 
opportunity, if you want to.

       STATEMENT OF MARGERY ROTHSCHILLER, GREAT FALLS, MT

    Ms. Rothschiller. I'm Margery Rothschiller. On behalf of my 
husband Vern, we're from Great Falls, and we've been cabin 
owners since 1982. We're not pioneers, but sometimes we think 
we are when we're out there. We bought our cabin on Valentine's 
Day, by the way, and it has been a labor of love ever since.
    One little thing on the lighter side that I might want to 
say, you know how bad Montana needs rain right now. Senator 
Baucus, I want you to know that we knew you were going to come 
to the race yesterday, and we said, ``One beautiful day, 
please.'' And by the 6,000 people in the race, evidently, the 
Man Upstairs was paying good attention to us. So anyway, we 
were glad that you were here to make the race with us.
    Senator Baucus. Thank you.
    Ms. Rothschiller. But we've been really good stewards of 
our land out there and have felt that it's been a privilege to, 
to be there and have met a lot of good people, and have become 
good shoppers in Helena in fact. So anything that anybody else 
has said in front of me already is, we're ditto.
    I do want to say, there is wildlife out there. If somebody 
comes and looks at my shrubberies, the beautiful grooming job 
on them, you'll know that we're not hurting for wildlife. Could 
use a few more fish, though.
    Senator Baucus. Thank you, Margery.
    Hal?

     STATEMENT OF HAL HARPER, MONTANTA STATE REPRESENTATIVE

    Mr. Harper. Good afternoon, Max, cabin owners, I'll be real 
brief. I've got to go prepare a bid for an outhouse for 
Charlie, I think.
    Max, thanks for your work on this issue. We've worked on a 
lot of similar issues in the Legislature, and they're very 
difficult. We know that you have a very long and difficult road 
ahead of you, and we wish you success.
    I'm very much in favor of the concept, the endowment 
concept. I guess I would like to reiterate the cautions that 
most of the people have voiced, that is, please don't exchange 
developed land for development. That especially means capital 
improvements. Use this opportunity to restore these lands to 
their original purpose, that is, primarily fish and wildlife 
habitat. So I would say go heavy on that, go easy on certain 
aspects of access.
    My people in this district are very concerned about the 
loss of quality of life that we are experiencing in the State. 
Other States in the western part of the country have been 
transformed by outside pressures. This particular endeavor 
gives us an opportunity to begin to mitigate and maybe turn of 
those pressures around, increase fish and wildlife 
opportunities and access.
    Thank you, Senator.
    Senator Baucus. Hal, do you think that the composition of 
the, of the trustees is sufficient to protect, you know, as 
much as one reasonably can, those concerns of yours?
    Mr. Harper. Well, that is something that you're going to 
have to work on. It's going to be tough, Max. You've got to 
balance that. But who you choose, of course, is going to depend 
on how the money is spent and whether it's spent. That's one 
thing that bothers me. But still, I don't think there is any 
other way to accomplish what we need to accomplish. If you can 
get the right people in charge of that endowment, we're in good 
shape and I think our minds can be at rest.
    Senator Baucus. Thank you.
    Ms. Luck. Representative Gay Ann Masolo, Tom Budewitz, John 
Grant.

   STATEMENT OF GAY ANN MASOLO, MONTANA STATE REPRESENTATIVE

    Ms. Masolo. Good afternoon, Senator.
    Senator Baucus. Hi, Gay Ann.
    Ms. Masolo. Thank you for coming. I am Gay Ann Masolo, and 
I represent York and Canyon Ferry area, all of Broadwater 
County, all of Meagher County, and parts of Cascade.
    I was going to talk to you about this in the race 
yesterday, but I didn't really want to run that slow. Now that 
I have that on the record, you know I'm just joshing.
    Senator Baucus. I beg your pardon.
    Ms. Masolo. I'm sure you're going to listen to me now, 
right?
    Senator Baucus. What was your timing?
    Ms. Masolo. I haven't even had the nerve call and ask.
    Actually, I want to tell you, I did write a letter in 
support of this. I am very much for the sale of the cabins, 
because I had these families, I had their children in school 
for 25 years and I can attest to them being wonderful families, 
and I want to keep them in this area.
    Also, Bob Robinson might think he's a little historic, but 
I'm a Sullivan from Canton Valley, and I lived on those 
ranches. I knew all those ranches that gave up their places 
that are below the lake now. So I'm kind of here on their 
behalf, too. Because I was a little girl, and I'll never forget 
my father had a Bureau of Reclamation guy come out to him and 
say, ``Hey, Dan,'' as the water was coming up on our ranch, 
``have you got webbed feet yet?'' And my dad, being the little 
wily Irishman he was, kicked off his irrigation boot and said, 
``Yes.'' My dad had webbed feet, had webbed toes. He said it 
was the first time he ever saw a government official 
speechless.
    So I did live through all that. We did have wonderful 
pheasant hunting and wonderful fishing and wonderful families.
    Now, the way they sold that to Broadwater County was that 
Broadwater County would benefit from it economically. So I 
think it's extremely important that you take Broadwater County 
into consideration with this money, and I believe you should 
have a member of our county commissioners on the board, because 
80 percent of this is in Broadwater County. I think it's very 
important that you take it into consideration. Thank you.
    Senator Baucus. Would there be other sources of money to 
help address some of the development questions? It is a risk to 
start down the slippery slope of taking proceeds from public 
lands and then using them to construct capital improvements. I 
understand the concerns of those who are interested, like 
Broadwater County, for example, about the lack of capital 
improvements. I was wondering if you've given some thought to 
another way to deal with that problem.
    Ms. Masolo. Well, we do have one of our county 
commissioners here, and we do have our next speaker who might 
address this, because he's been in on it more than I have. But 
I know that they are real concerned that they do receive some 
of these funds to help them with their area. Of course, we 
don't want to go to the property owners for more taxes.
    Senator Baucus. Thank you, Gay Ann. Next year, I'll try to 
run slower for you--or I'll try to run faster for you.

   STATEMENT OF TOM BUDEWITZ, BROADWATER COUNTY COMMISSIONER

    Mr. Budewitz. I've seen her run, and I don't think that 
what she said is true.
    Mr. Chairman, my name is Tom Budewitz. I'm an attorney, and 
I represent the Broadwater County Commissioners. I'm here 
because I've been involved on their behalf since about 1993, in 
various aspects of Canyon Ferry.
    As Gay Ann alluded to, there were 36 family farms that 
where flooded when Canyon Ferry was built. It's easy to forget 
that after almost 50 years now. As more time goes on, the fewer 
people there are around to remember. But just last year, when 
the water level at Canyon Ferry was extremely low, if you were 
to have walked around the shoreline along the south end of the 
lake, you would have seen the foundations of a number of old 
farmhouses and homesteads still poking up through the shallow 
water at that time.
    As Gay Ann said also, it's my understanding that there were 
promises made back in the 1940's and 1950's, when Canyon Ferry 
was being planned and was being built, that Broadwater County 
would be the recipient of funds and other assistance for 
economic development to replace the resources that were being 
lost. It hasn't happened.
    You've asked the question whether there were other sources 
of funding. So far, there have not been. Now, that doesn't mean 
that there aren't. But at least to this point, the agencies 
that have been involved in Canyon Ferry have not been willing 
to either spend the money that they have available or seek 
other funds. That's despite the fact that the county 
commissioners, at least since 1993, since I've been involved in 
this, have been willing to participate, to share in the costs 
at least through some in-kind contributions.
    In 1993, there was a study commissioned by the Department 
of Interior and by the State Department of Fish, Wildlife and 
Parks, which resulted in a draft management plan and 
environmental assessment prepared by some local environmental 
consultants. I have a copy of the plan, as a matter of fact, in 
my file. It's about an inch and a half thick.
    It contained a very detailed study of Canyon Ferry and a 
detailed study of the current uses and future prospects for the 
facility. It proposed about $10 million worth of development, 
or improvements, which may or may not be accurately described 
as development, around the lake. The expenditure was projected 
to be over a period of 10 years, so about $1 million a year.
    At the time that the study was commissioned, I only became 
involved during the public hearing process of that plan. But it 
appeared at the time that there was never any discussion about 
where this money was going to come from. You know, it was one 
of these things that, ``Gee, let's commission a study and see 
what ought to done out there, and then maybe somebody will come 
up with the money later.'' Didn't happen. The plan died. The 
study is gathering dust in somebody's closet somewhere. I 
managed to retrieve mine out of a file several days ago in 
anticipation of this hearing.
    Some of the proposals contained in that study included 
additional campgrounds, additional access, improvement of some 
of the roads, things as minor as additional picnic tables and 
outhouses and some major things. One of the things at the time 
that the Broadwater County Commissioners suggested was the 
deepening of one of the bays at the silos.
    One of the problems on the south end of the lake is that 
there is no place on the south end to dock or tie up a boat. 
Although the silos is only about 6 miles from the city of 
Townsend proper, if one lives in Townsend, one has to go about 
35 miles, up to Goose Bay, around the east side of the lake, in 
order to tie up a boat. One of the things that's required at 
the silos in order to do that is the deepening of one of the 
bays. I don't know the cost of that, but I'm sure it would be 
substantial. The commissioners are willing to participate in 
that. But up to this point at least, no one has been willing to 
pay the burden of taking it on.
    Again in 1993, Congressman Williams proposed a House 
resolution which contemplated the creation of a partnership 
between the two agencies of the Department of Interior, BLM and 
BOR, as well as the State Department of Fish Wildlife and Parks 
and local agencies, which presumably would have included the 
counties, both Broadwater and Lewis and Clark. That resolution 
provided, in part, that the fees generated, the income 
generated at the site would be spent for maintenance and 
operation of the facilities itself and the development of 
additional facilities for hunting, fishing, and recreation.
    That resolution died, primarily because of what I perceived 
as a turf war between the two Interior Bureaus. Finally, the 
State Department of Fish, Wildlife and Parks, out of 
frustration, withdrew its interest entirely. It ultimately 
withdrew its interest in managing the facility.
    So when the question is asked or when the statement is made 
suggesting that there are other funding mechanisms, Mr. 
Chairman, we are doubtful that other funding mechanisms, 
although they may exist, will ever be utilized at Canyon Ferry, 
because they've never been utilized in the past.
    We see this legislation as an opportunity for a one-time 
generation of funds which could in fact be used for additional 
improvements at Canyon Ferry Lake. Now, we support the concept 
in general of selling these cabin sites and creating this fund 
of money. We support the 10 percent going back to the 
Department, we support the 45 percent going for the statewide 
access fund, and we support generally the 45 percent that would 
go to the proposed Canyon Ferry-Missouri River Trust Fund.
    The concern we have is with the establishment provisions of 
that trust fund, which are very narrowly drafted and do not 
include--and probably at the request of the Wildlife 
Federation, as Mr. Orsello suggested today--that they not 
include anything other than the acquisition of land. Well, let 
me tell you a couple of things that we think ought to be 
appropriate expenditures of this money.
    Number one, Highway 284, on the east of end of the lake, 
which provides access from Highway 12 along the east side to 
Confederate and Goose Bay, which is the only area on the east 
side of the lake in Broadwater County with docking facilities, 
is badly in need of repair. Generally speaking, that road 
provides access to the lake and, generally speaking, as 
proposed, might be included in the expenditures as contemplated 
by this establishment clause. But we think it needs to be more 
specific so that some of that money could be used for that 
purpose, to maintain that road.
    We also believe that there should be other roads developed 
within the existing BLM property, not only at the silos and the 
other areas, but perhaps an expansion of those roads between 
the silos and White Earth. We believe that money should be 
spent for the deepening of the bay at the silos. We're not 
suggesting that money should be spent for the development of a 
marina. We think that should be done with private funds 
primarily. But at least if the bay is deepened, then access is 
improved and increased to the lake in general, particularly on 
the south end.
    We believe also, Mr. Chairman, that the membership of the 
board of trustees of the fund should be revised, either by 
changing the, the proposed makeup to include representation 
from the local county commissions--at least the Broadwater 
County Commission, and perhaps Lewis and Clark, if they're 
interested--or to expand membership. The existing proposal 
doesn't need to be changed except to expand to include 
additional representation by the local government agencies.
    With those types of changes, the county commissioners would 
be satisfied, to the extent that they ever will be, that this 
opportunity to provide a one-source generation, one-time 
generation of funds will not be lost. Thank you.
    Senator Baucus. Thank you, Tom. You raise good points. 
There's always a way to skin a cat. I think the goal here is to 
try to keep the public access, but also address the Broadwater 
County economic development and other capital improvement 
concerns that, that many have.
    One thought that comes to my mind--and I don't know if this 
could be put together or not--Congress just passed a new 
highway bill which gives Montana a lot more money than we've 
been receiving over the past years. Over the last 6 years, 
we've received in Montana about $162 million per year from the 
Highway Trust Fund. Over the next 6 years, we're going to get a 
60 percent increase of about $260 million per year from the 
Highway Trust Fund, without any increase in gasoline taxes.
    Although these are Federal dollars, to be used primarily 
for interstate and primary road purposes, I wonder if there 
might be a way to use some of these dollars for access. I don't 
know, because there aren't specific provisions in the bill that 
passed, whether any of this could be used for capital 
improvements. I don't think that that's possible now.
    But anyway, that's a potential source of some money. My 
hope would be that all of us together and others also look for 
other sources. Just because, you know, the plans you mentioned 
in the past didn't materialize and the BOR/BLM joint 
partnership didn't materialize, it doesn't mean that there's 
not some other way we can work this out. But recognizing the 
legitimate concerns of Montanans who want access, I encourage 
all of us to keep looking for ways. I just mentioned one 
possible way, and that is the Highway Trust Fund.
    Mr. Budewitz. Mr. Chairman, we understand that there may be 
other sources of funds available. But unfortunately, after a 
period of time, in this case almost 50 years, one's patience 
begins to run thin and we're now looking at our second or third 
or fourth generation of county commissioners in Broadwater 
County who have been exposed to the same problems and the same 
difficulties in attempting to finance the improvements at 
Canyon Ferry.
    I want to add also that, point out that while the comment 
has been made that the money should be spent only for the 
replacement of riparian habitat, we should point out that at 
the south end of the lake, there is perhaps the only place on 
the lake where riparian and wildlife habitat has in fact been 
increased.
    Behind the dikes at the south end of the lake, there is a 
tremendous wildlife habitat. In fact, I can tell you, while 
we're mindful of jogging yesterday, I have been chased by 
osprey on one of the dikes while jogging at that end of the 
lake. I can tell you that the wildlife down there is 
incredible. If you haven't been there, I invite you to come 
down there and run the dikes, because you'll see some 
incredible things.
    There has been a replacement of wildlife habitat. It has 
not all been lost by the construction of the lake. It certainly 
hasn't all been lost by the existence of the cabin sites. 
Again, I think that points out further the additional impact on 
Broadwater County. We've got the wildlife. What we'd like to 
have is a replacement of the economic impact, negative economic 
impact which occurred through the loss of those farms almost 50 
years ago.
    Senator Baucus. You make some very good points. I 
appreciate it very much. Thank you, Tom.

  STATEMENT OF JOHN GRANT, CANYON FERRY RESERVOIR LEASEHOLDER

    Mr. Grant. My name is John Grant, and I want to thank you, 
also, for having this hearing. I would like to correct a 
statement that I think has been made where we've been referred 
to as lessees. When we purchased our cabin and moved out there, 
we were lessees. The Bureau of Reclamation then came in and 
made us permitees. We're out there as long as they permit us to 
be. My fear is that my children will not be there for another 
30 years. We very much appreciate your efforts to allow us to 
purchase these properties.
    Senator Baucus. You bet. Thank you, John.
    Ms. Luck. Bill Janecke--I apologize if I pronounced it 
wrong--Mary Beneventi, Mike Bishop.

            STATEMENT OF BILL JANECKE, ANACONDA, MT

    Mr. Janecke. Good afternoon, Senator Baucus. I'm Bill 
Janecke, from Anaconda. I'm representing myself, as well as 
George Grant Chapter of Trout Unlimited. I would like to point 
out, as we've seen from our friend from Havre, that this is 
more than a regional interest, it's a statewide interest. I 
think the crowd here today reflects that to some extent, too.
    With respect to how we proceed, we feel it's crucial that 
the bill that you currently have, with the endowments or trusts 
for wildlife habitat and access remain as they are. I would 
point out, too, a little discussion we had earlier as to the 
reason why. Wildlife doesn't use $2,500 outhouses. So we feel 
that any redirection of these funds is really going to be a 
failure and a shortcoming.
    I would like to thank you very much for your efforts to be 
here. We really appreciate it, and we're wonderfully happy to 
have the opportunity to comment.
    Senator Baucus. Thank you, Bill.

STATEMENT OF MARY BENEVENTI, CANYON FERRY RESERVOIR LEASEHOLDER

    Ms. Beneventi. Hi, Max.
    Senator Baucus. Hi.
    Ms. Beneventi. I'm Mary Beneventi, and I've lived at Canyon 
Ferry Lake on the West Shore since 1978. I wish to thank not 
only Max, but the rest of the congressional delegation. I 
looked for my children for years and couldn't find them. They 
were at the lake. I didn't have a cabin then. Finally, I was 
able to get a cabin when the last one was in high school. But 
I'm spending my retirement time there, and I love it. Please 
let us buy that cabin. Thank you.
    Senator Baucus. Thank you very much.

              STATEMENT OF MIKE BISHOP, HELENA, MT

    Mr. Bishop. Senator Baucus, I'm Mike Bishop, I'm from 
Helena. I had the opportunity to thank you yesterday personally 
for your leadership as you were so kindly handing out the 
medals for the special needs children, of which one was my son.
    I feel that we're a group with special needs here, too. A 
lot of effort and expense has gone into getting to this point 
that might allow us this opportunity to purchase these 
properties. I would just like to convey our thanks to you and 
the rest of the congressional delegation, and just urge you to 
please hang with us and to see this through and to allow us to 
come to fruition this time. Because I don't know what hardship 
we might have in front of us if we're not successful at this 
point in time.
    So again, thank you very much for all your efforts and for 
the efforts of the Recreational Association and the other 
resource groups that have been present today.
    Senator Baucus. Mike, you make a very good point, thank 
you.
    That raises another point, the joint efforts we're all 
going to have to undertake if we want to get this legislation 
passed this year. There are not a lot of days left in this 
Congress, believe it or not, even though it's June. 
Theoretically, you'd think that we have over half a year left, 
but we don't. There are, I would guess, no more than 50, 
perhaps 60 legislative days left this year. After the election 
this fall, it will be a whole new Congress next year, and who 
knows what will happen. We may have to start all over again.
    So what I'm saying is this: I urge all of us to urge all of 
us; the second thing is to get the congressional delegation to 
move on this forthrightly, to keep moving and not let up. There 
are going to be a couple wrinkles that we're going to have to 
work out, but follow this legislation very closely in both the 
House and the Senate. Call all our offices. Call us weekly to 
keep abreast of what's going on and ask where it is, ask what 
the latest provisions are, so that you're involved.
    But the main thing is that we've got to work hard and we 
have to work together to put this thing together on a 
bipartisan basis--Republicans and Democrats. It also has to be 
done bicamerally--both the House and the Senate--so it can pass 
this year. It's going to take a joint effort on the part of all 
of us. You can help us very much by calling us frequently and 
urging us to resolve it, not only along the lines that you 
want, but also to compromise where you think that that's 
appropriate to get this passed this year.
    Ms. Luck. Lyle Eggum, Mike Sedlock, Jeff Doggett.

  STATEMENT OF LYLE EGGUM, CANYON FERRY RESERVOIR LEASEHOLDER

    Mr. Eggum. Senator, I'm Lyle Eggum, and I am one of the 
permitees, as John so aptly put it, on the East Shore. My 
purpose here today is to say to you that we certainly 
appreciate three Montana guys working together, forgetting 
party lines, seeing a problem, and helping us solve it. We're 
in support. Please help us. Thank you.
    Senator Baucus. That's a good statement. It's right to the 
point. Thank you, Lyle.

                   STATEMENT OF MIKE SEDLOCK

    Mr. Sedlock. Good afternoon, I'm Mike Sedlock. I don't want 
anybody confusing me with Walleyes Unlimited at this point, 
because that's where most of you know me from. But I am 
speaking on my own behalf today as a general angler.
    I sympathize with the position that you people are in. I 
wouldn't want to be there myself. I know many of you, and I 
hope everything comes out for you. I'm not opposed or 
supportive of the sale or the leases be continued at this point 
because I'm observing all the process. But I would like to let 
you know, as a general angler, living here in Helena, my view.
    I go to Canyon Ferry quite often, along with Hauser, 
Holter. I fish all over the State, as a matter of fact. It's 
about a 20-minute drive from my house out to the lake. When you 
people and the process has shown that, you know, the best 
access sites are other parts on the lake, I don't really agree 
with that statement.
    The only access sites that we have on the north end of the 
lake at this point is Shannon, Chinaman, and a little boat ramp 
up on the dam end. If you've ever been out there on a weekend 
and tried to get your boat in, you're lined up on places that 
there's one concrete ramp. Chinaman and Shannon have no boat 
ramps. You're trying to load on dirt banks, gravel banks, 
getting your truck stuck. The camping sites are limited. There 
is no opportunity to expand any of those sites at all for 
public use. I do believe that this reservoir is for public use.
    The next site, closest one for me to travel to when I'm 
backed up, trying to get in and out on boat ramps to do a 
little fishing and enjoy the lake myself, is Hellgate. Hellgate 
has had some improvements. There again, a single-lane boat 
ramp, a gravel road, three miles of gravel, rough road that 
tears a boat trailer apart, the transom and stuff on vehicles. 
If any of you ever purchased a $30,000 truck and a $20,000 
boat, it's expensive to keep them up on roads like that.
    I feel that we need some better access on the north end of 
that lake for the general public. Where it is, I'm not sure. I 
know that I would like to see it somewhere between Kim's Marina 
and Magpie Bay. I'm sorry if you don't agree with me on this, 
because you have homes there. Like I say, I do sympathize with 
you. But this is public land. Once it is sold, we will not have 
access to it.
    I think that the bill needs to involve people being able to 
retain these accesses, make improvements on the lake for the 
general recreationists. I don't agree with the Montana Wildlife 
Federation or Prickly Pear Sportsmen's Association of the 
monies only going to land use, of buying more access. We need 
more recreation for us people that are unfortunate enough to be 
living in the town and not having homes on lakes or cabins up 
in the mountains and stuff like that. So I would appreciate you 
giving us some thought, too.
    I hope that however it comes out, on the sale or your 
leases are continued, that everything works out fine for you.
    Senator Baucus. Mike, you say you think the best new access 
could be between Magpie and where?
    Mr. Sedlock. Kim's Marina. That would be south towards 
Magpie.
    If you look at a lot of the rest of the lake, down to the 
south end of the lake, it's mainly all cliffs or shallow areas. 
There are a few bays there that access could be put into. It 
would be very expensive to put roads into it. Crittenton, the 
bays north of White Earth, et cetera, it's a lot of ground with 
very little access. Like I say, just like Tom Budewitz was 
saying, on the site down at the silos, in order to get a decent 
boat docking area in, you'd have to dig out one of the bays. 
That would be a very expensive process.
    You know, when you got a $20,000 boat and stuff, it gets a 
little rough jamming it into a rocky shoreline all the time to 
try and dock it to even get out to go get your truck to come 
down to load your boat up.
    Senator Baucus. How much would it cost? Because there's 
always a big bill that goes to the Congress that generally 
involves the Army Corps of Engineers. I was thinking of all the 
dredge and fill operations this country undertakes, 
particularly along the Mississippi and down in Louisiana and 
other ports and so forth. We don't have big seaports and we 
don't have the big barge traffic in our State, but, you know, 
maybe there's an opportunity here. Has anybody done any 
assessment on how much it would cost to deepen one of those 
bays down by the silos?

 STATEMENT OF STEVE MCCULLOUGH, BROADWATER COUNTY COMMISSIONER

    Mr. McCullough. We don't have a cost estimate. There's----
    Senator Baucus. Will you stand up and give your name, 
please, for Cheryl.
    Mr. McCullough. Steve McCullough, Broadwater County 
Commissioner.
    There's 75,000 yards of material that would need to be 
removed out of that bay. We don't have a cost estimate on it. 
Broadwater County would provide some of the equipment to remove 
that.
    Senator Baucus. So 75,000 yards.
    Mr. McCullough. Yes.
    Senator Baucus. Any contractor with us that can tell us how 
much it takes to remove 75,000 yards from the bay?
    Mr. McCullough. Hal left, I think.
    Senator Baucus. Oh, Hal left. He's out bidding on the 
outhouses.
    Mr. McCullough. Broadwater County put in an outhouse for 
$5,800, not 25,000.
    Senator Baucus. Could you speak up a little bit. Cheryl is 
having a hard time if you don't speak directly into the 
microphone.
    Mr. McCullough. The rodeo club just put in a outhouse, 
self-contained, a nice outhouse, built in Three Forks, all 
concrete vaults, for $5,800. So $25,000 is just a waste of 
taxpayers' money.
    Senator Baucus. Do you know how much the outhouse up in 
Glacier Park cost?
    Mr. McCullough. We can build a lot of those.
    Mr. Sedlock. I believe what Steve is saying is that us 
organizations can do things at a much more reasonable and 
sensible cost than what the Government generally can.
    But I do support the Broadwater County Commissioners and 
their efforts down there to get improvements done. I would like 
to see them on my end of the lake, too, instead of having to 
drive the extra 20 or 30 miles all the time to go down to other 
boat ramps that are still sticking out of the water because 
it's been lowered 30 feet.
    Senator Baucus. I hear you. Thanks, Mike.
    Ms. Luck. Stan Frasier, Heidi Yakawich, Clark Pyfer.

     STATEMENT OF STAN FRASIER, MONTANA WILDLIFE FEDERATION

    Mr. Frasier. Good afternoon, I'm Stan Frasier, from Helena, 
President of the Montana Wildlife Federation. I want to 
reiterate that the Montana Wildlife Federation's support for 
this proposal is contingent upon this money being used to 
replace public lands. We are opposed to the sale of public 
lands, and we only supported this because this money was 
designed to be put into a fund which would then buy other 
public lands.
    With the increasing population, there is always greater 
demand for recreation, greater demand for access to public 
lands. We are going to oppose this bill if it is diluted by the 
provisions that Peggy mentioned earlier that Congressman Hill 
has in his bill. We are opposed to this money going into the 
Land and Water Conservation Fund, and we are opposed to this 
money being under the control of politicians. I think we would 
all agree that money is at risk anytime it's controlled by 
politicians.
    This is, I think a real opportunity to help these people 
that have these cabin sites. I know that this whole thing has 
been up in the air for a long time. I think it was a mistake to 
build the dam in the first place, and it was a mistake to lease 
those cabin sites and allow those cabins to be built on that 
public land. But we're stuck with that. If we can get out of 
this and help those people own those sites and exchange that 
public land for other public lands and other wildlife habitat 
and other recreational opportunity, we think that's the best 
possible solution. Thank you.
    Senator Baucus. Thank you, Stan.
    Audience Member. Heidi had to leave. She said she supports 
the legislation, but she had another appointment.
    Senator Baucus. Okay, thank you.

  STATEMENT OF CLARK PYFER, CANYON FERRY RESERVOIR LEASEHOLDER

    Mr. Pyfer. Thank you, Senator Baucus, I really appreciate 
it. My name is Clark Pyfer, and we have a cabin at 175 on the 
lake. I'm the first generation, but I think we're into about 
the third or fourth out there now.
    But I just want to be sure that we all appreciate what this 
delegation has done on a bipartisan basis. It isn't easy to get 
both Republicans and Democrats on the same page.
    I'm terribly distressed by the last three or four speakers, 
because I know, I've been around legislation long enough that 
you have just seen a deal breaker. Because if we do not present 
a totally united front, if the county commissioners in Lewis 
and Clark County and in Broadwater insist that there be changes 
made in this bill, I guarantee you that nothing will be passed 
this Legislature, this Congress, and I'll guarantee you that 
we'll probably not be, the older ones of us, around to see it 
done.
    So let's present a united front. I defer to Gay Ann as far 
as my good friend, her dad, Dan Sullivan, having been there 
when the water came up and a long time before. My family lived 
at Canton, and my father and his father went broke there on the 
dry land. So we go back a few years, too.
    We've been on the lake there in a cabin now since 1960. I 
recognize all of the questions and so on that have been raised. 
However, keep in mind, if there isn't a sale, all of this is 
academic. If this bill does not go through, if the cabin sites 
are not put up for sale, then you aren't going to have any 
arguments about whether the commissioners use it in Broadwater 
County or whether they use it in Lewis and Clark County. So 
let's present a united front.
    I can see our friends at BOR and the BLM rubbing their 
hands together. When you can get people like my friend Mike 
come up here and say, ``We've got to change the bill,'' or 
Budewitz get up here and say, ``We've got to make changes to 
the bill,'' you know as well as I do, Senator, if they start 
making changes to this bill, it's dead in the water.
    So let's present a united front. I say that we should 
support it 99 percent, even if we don't like every part of it. 
Thank you very much, Senator.
    Senator Baucus. Actually, Clark makes a very good point; 
that is, the more this bill that's been introduced, 
particularly in the Senate--all deference to Rick's bill, but I 
say the Senate bill because it does provide where the proceeds 
are going to be used and spent, whereas Congressman Hill's 
bill--Peggy, correct me if I'm wrong--is silent on expenditure. 
But if we don't support the basic bill close to 99 percent, 
it's going to slow down and impede passage of the bill. The 
more there are splits and differences, the more someone who 
doesn't like it is going to take advantage of those splits and 
differences. You know, it's divide and conquer.
    Clark makes a very good point: we've got to come together 
here. If we all are together, the congressional delegation and 
the groups together push the same bill, then we can go to the 
committee members in both the House and the Senate and say, 
``We're all united on this. We've got to get this through.'' 
Otherwise, there's no reason for committee members, House 
members, and other Senators to really pay any attention to 
this. If they think this is good for everybody and there's no 
significant difference of opinion in Montana on this, then 
they'll say, ``Oh, okay, let's just pass it and go on.''
    On the other hand, if they hear one group wants this, 
another group wants that, then different groups will tend to go 
to different House members and Senators and slow things down 
and gum up the works.
    So it's like most things. It reminds me a little bit of a 
photo cartoon, ``We met the enemy, and he is us.'' The solution 
is in this room. It's by and large among all of us here. If we 
want it, we need to get together. I think the bill that has 
been introduced is the combination of the efforts of a lot of 
different groups. So we need to get behind a single bill.
    I'm open for changes. That's the whole point of this 
hearing. But I give us a little bit of a warning that the more 
we start making changes and the more we tend to get split 
apart, then the more nothing is going to pass. We don't want 
that.
    Now, some concerns have been raised on other issues, on 
other legislation or other avenues. I think Tom has said well--
nothing has really worked out in the past years. Well, I don't 
want to sound presumptuous, but, I've not worked on it in the 
past. I'd like to think that I can help find some solution here 
that's generally satisfying. But anyway, heed Clark's words, 
they're very important.
    Ms. Luck. The final three from the list are Bill Trumly, 
Bill Simons, Commissioner Mike Griffith.

              STATEMENT OF BILL TRUMLY, BUTTE, MT

    Mr. Trumly. Senator Baucus, my name is Bill Trumly. I'm out 
at Cabin Site 77.
    Senator Baucus. 77, where is that?
    Mr. Trumly. It's on the East Shore, Magpie Bay.
    Senator Baucus. Okay.
    Mr. Trumly. I'm from Butte. I really just came here to be 
brief. I wanted to thank you and the rest of the delegation on 
this proposal. Really, more than anything, anything that I 
think about is I want to be able to purchase this lease land at 
fair market value. I hope the proceeds of this sale can benefit 
others in the State of Montana. However it's used, I don't 
really care. I just want this to happen. I really hope that 
this bill passes, and I thank you for your continued support.
    I also have a statement right here. I have a fellow cabin 
owner who couldn't make it here today, but he just wanted to 
get his two bits in as well. He's also from Butte. He just 
really reads, ``Dear Senator Baucus, thank you for proposing 
the Canyon Ferry cabin site sale. We're extremely hopeful of 
its passage and your continued support of its passage. 
Sincerely, Rich and Karen McLaughlin.'' They're Cabin Site 84, 
and they're also from Butte. Thank you very much.
    Senator Baucus. Thank you, Bill. Appreciate it.

              STATEMENT OF BILL SIMONS, HELENA, MT

    Mr. Simons. Senator Baucus, I'd like to thank you for all 
of the work you've done on this bill. I'm in strong support 
of----
    Senator Baucus. You're Bill?
    Mr. Simons. Bill Simons, from Helena, via Shelby.
    I would like to address pride of ownership and what that 
brings to taking care of the land. My heritage is my mother is 
a Basque immigrant, and they took homestead land in the Shelby 
area. Many of the Basque people sacrificed everything to come 
to this country because of ownership. They have farmed up there 
now for 80, 90 years.
    I can tell you that when you own, that you become a steward 
of the land, you take care of it better. It's been very 
difficult owning a cabin at Canyon Ferry for 10 years, trying 
to decide if you're really going to own it or if you're even 
going to have a lease. The BOR has been very difficult to work 
with.
    A lot of funds that would have gone into stewardship of the 
land have not reached the land because of the insecurity of all 
the leaseholders. There's no doubt in my mind that pride of 
ownership will increase the funds for erosion, weed control, 
and all the other things that everybody is waiting on, not 
sure. You know, it's like quicksand, you're not sure what 
you're going to have in the end.
    So I hope everybody comes together and passes this bill. 
There's no doubt in my mind, it's the American way, and God 
bless America.
    Senator Baucus. Thank you, Bill.
    Mike.

STATEMENT OF MIKE GRIFFITH, LEWIS AND CLARK COUNTY COMMISSIONER

    Mr. Griffith. Senator, welcome home.
    Senator Baucus. Thank you.
    Mr. Griffith. Gay Ann Masolo talked about the historic 
character of this lake. I thought it was Lake Sewell in fact 
that used to lap at her father's doorstep, and Clark's.
    Senator, I'm here as a representative of Lewis and Clark 
County Board of County Commissioners. The board of county 
commissioners earlier went on the record to support your 
legislation. We appreciate very much your leadership. We 
applaud it, and we hope that you'll continue to maintain it, 
for not only the residents of the local Canyon Ferry community, 
but the greater good of the residents of the State of Montana.
    Senator, I'm also here representing Montana Power in a 
sense. Montana Power asked me to speak on behalf of the 
Madison-Missouri River Corridor, which is part of the process 
of re-permitting the Montana Power dams. I'm a representative, 
one of the members of the steering committee of the Montana 
Power effort in the repermitting process.
    Bob Robinson referred to the hole in the doughnut that 
exists with Canyon Ferry Lake relative to the entire corridor, 
Madison-Missouri River Corridor that extends from Hebgen Dam to 
Ryan Dam in Great Falls. Montana Power, in partnership with the 
Bureau of Land Management, Fish, Wildlife and Parks, the Forest 
Service, other Federal agencies, is involved in a very major 
conservation/recreational effort for the entire area extending, 
again, from Hebgen to Ryan Dams. The only exception in the 
corridor, the Madison-Missouri River Corridor, is in fact 
Canyon Ferry, and that is because of the fact that Canyon Ferry 
is outside of that purview of Montana Power dams.
    But about a year ago, Montana Power did invite the Canyon 
Ferry involvement, and Broadwater County. Broadwater County is 
represented now on the steering committee. The people, the very 
few people who have expressed any concern here today in respect 
to the lack of recreational access to the, to the corridor, 
particularly at Canyon Ferry Lake, I feel can relax to some 
extent because I believe that Montana Power is, is very much 
involved, very dedicated to maintaining access throughout this 
entire corridor, the Madison-Missouri River Corridor. That will 
include, as much as possible, Canyon Ferry Lake.
    People may be aware of a very major effort on the part of 
the Bureau of Land Management below Canyon Ferry on Hauser Lake 
at Devil's Elbow, which will come about hopefully beginning in 
about the year 2000.
    As far as the trust account, Senator, and with the trust 
funds, I, too, would encourage, as Tom mentioned over here, in 
respect to the infrastructure, the road network. I think it is 
one thing to protect the, the wildlife and other riparian 
interests, wildlife, fish, et cetera. But unless we have a very 
strong and ongoing transportation network--and that means 
Highway 284 Tom referred to in Broadwater County. Likewise, 
Lewis and Clark County would go on record as supporting the 
continued improvement or the ongoing improvement and 
maintenance of Highway 284.
    Clark, with respect to the three-mile corridor extending 
from Broadwater County into Lewis and Clark County, from 
Confederate Gulch to Magpie Gulch: Lewis and Clark County is 
likewise very interested in seeing that three-mile stretch of 
road improved. Lewis and Clark County is under the same dilemma 
as every other local government agency--the lack of funding.
    Whether it is through the Highway Trust Fund, Federal 
Highway Trust Fund, or through this trust fund, Senator, I 
would encourage, in this particular case, rather than monies 
being allocated from the Federal trust fund, that there be a 
mechanism set aside so that funding of the ongoing improvements 
and maintenance to this highway or the road network that Canyon 
Ferry depends upon, that it possibly come from these trust 
dollars.
    That concludes my remarks. Again, I appreciate very much 
your dedication, Max, to this project, and we'll continue to 
support it. Thank you.
    Senator Baucus. Thanks, Mike, very much.
    Now, since we began, we have more who want to speak. More, 
I guess have signed up or just indicated they wanted to speak. 
I think Holly has those.
    Ms. Luck. There are four on the list, if they all just want 
to come up to the microphone, Gil Alexander, Mary Doggett, John 
Wilson, John Larson.
    Senator Baucus. That's not to restrict anybody else. We are 
going to end the hearing soon, but if others want to stand up 
and say something because someone else has said something 
that's so outrageous it has to be addressed, here's your 
chance.

 STATEMENT OF GIL ALEXANDER, CANYON FERRY RESERVOIR LEASEHOLDER

    Mr. Alexander. Max, I'm Gil Alexander.
    Senator Baucus. Hi, Gil.
    Mr. Alexander. I operate a science institute out at Canyon 
Ferry Lake, as well as I am one of the leaseholders and 
permitees. I did prepare some remarks. I'm speaking in support 
of your proposed legislation to allow the 265 cabin sites 
located along the shoreline to be sold to the highest bidder at 
an auction.
    I believe that your bill encompasses the necessary language 
to allow for fair disposition of this property, and at the same 
time, it protects and enhances the rights of all citizens to 
use Canyon Ferry as a prime recreation site. Further, your bill 
will reduce conflicts that could arise between the existing 
management agency--you know who that is--and the cabin owners, 
thereby reducing administrative time that is presently spent in 
conflict management as opposed to producing power and water. In 
short, your bill should result in a win/win situation for all 
parties.
    I appreciate your efforts and the efforts that your staff 
have made to resolve the issue and especially appreciate the 
many hours that Holly Luck has spent meeting with cabin owners 
and others to help structure the bill.
    Those were the prepared statements, but since that time, 
there have been some other things that I think are worth 
addressing. First of all, I know that you have worked very hard 
with other States up and down the Missouri River to acquire 
some of the funding from the Pick-Sloan money that was 
initially allocated for both recreation and transportation. As 
we all know, the upstream States have never received their fair 
share of recreation money. Those monies could be used for 
enhancement of camping facilities and could be used for access 
to the lake.
    Likewise, as you addressed, the money that is available 
through the Highway Act that you were responsible for could 
also work to improve the Highway 284 along the northeast side 
of the lake, as well as that section of road between Canyon 
Ferry and York, which will, over the next 7 years receive 
increased traffic because of the interest in the Lewis and 
Clark Bicentennial.
    I would like to suggest also that monies could be available 
through the fishing tackle sales dollars that are available to 
each State that are specifically allocated for fishing 
improvement and fishing access locations. But those have not 
been used, to my knowledge, on the Canyon Ferry Lake.
    There are many, many other opportunities, I suspect, for 
funding without subterfuge of this particular bill as it 
stands. I know that there are many, many people in this nation 
who want to ensure that whatever happens, that the Federal 
Government and the people of the United States receive market 
value. So regarding any particular comfort level, I think most 
of us are willing to undergo a little more discomfort in order 
to see that the process goes forward. Thank you.
    Senator Baucus. Thank you, Gil. That's a very good 
statement, thank you.

           STATEMENT OF JOHN WILSON, TROUT UNLIMITED

    Mr. Wilson. Senator, my name is John Wilson, and I am Vice 
Chairman of the State Council of Trout Unlimited. I'm here 
representing the State Council of Trout Unlimited. We represent 
over 3,000 anglers across the State and about 13 chapters. 
We're dedicated to the preservation and rehabilitation of cold 
water fisheries in Montana.
    We're here in strong support of your Senate Bill 1913. We 
feel that we're unified with the cabin owners, cabin holders on 
this bill in terms of the direction of how the funding is going 
to go and what's going to happen. We, too, have grave concerns 
when people come in and start to peck around the edges of these 
things. I think Hal said it well, Representative Harper, that 
we should not exchange development for development. It's 
conservation for conservation at this particular point.
    There are a couple little tweaks. I mean, we don't want to 
pick around the edges, but we see these as administrative 
things. In there right now, there's a representative from a 
fishing conservation organization. We think that that should 
delineate a Montana fishing organization or a statewide fishing 
organization, so that it doesn't end up being a national or 
someone outside of Montana. That's just a little tweak.
    Secondly, we think it would maybe be wise to expand the 
geographic region of the area that the trust could be used to 
include downstream. We might----
    Senator Baucus. You mean the first trust.
    Mr. Wilson. The first trust, yes, perhaps to Cascade. 
Because there's high usage in that area, recreational usage, 
there's high development pressure in that area. Although Mike 
pointed out that in the FERC licensing processing process, 
there will potentially be a Madison-Missouri Corridor Trust, 
that's not a reality right now. That's not the case, and it 
hasn't been decided, and that hasn't happened.
    Similarly, or maybe in addition, as Montana Power divests, 
through the deregulation of their generating facilities, 
there's a great deal of land along these rivers that is 
currently owned by Montana Power that we're uncertain about the 
ultimate disposition of those lands, which is now available to 
the public generally, but may not be in the future.
    So we think it might be wise, if it doesn't disrupt the 
bill, to expand the geographic area, not just from Three Forks 
down to the Canyon Ferry Dam, but to go all the way down to 
Cascade, for the trust purposes. So we'd ask that you take a 
look at it. But our support is unified with the cabin owners, 
and we commend you for taking the time to do all this. Thanks.
    Senator Baucus. You bet, John, thank you.

 STATEMENT OF JOHN LARSON, CANYON FERRY RECREATION ASSOCIATION

    Mr. Larson. Senator Baucus, I'm John Larson, Cabin 126. I'm 
Chairman of the Canyon Ferry Recreation Association's Appraisal 
Committee. Just, I'm here for your information. On May 18, we 
signed a settlement agreement with the BOR to do a new 
appraisal, and we put a process together that's agreed upon 
between both the BOR and the Canyon Ferry Recreation 
Association. So what I'm doing here is, any of that information 
that you or your staff or Senator Burns needs or would like to 
review, if that information will help you in any way, I can get 
that to you.
    Senator Baucus. That will be very helpful, John. Thank you 
very much.
    Mr. Larson. Thank you for all your great work, and thanks 
to Senator Burns and Mr. Hill, too.
    Senator Baucus. You bet. I'll pass that on.
    Is there anybody else that wants to . . .
    John.

                   STATEMENT OF JOHN BLACKER

    Mr. Blacker. Thank you, Senator. My name is John Blacker. 
My wife spoke earlier. She was the prettier one of the family. 
I did want to clear up a couple of issues that have been 
brought forth. I also wanted to thank you, on a side issue, 
being a Department of Transportation administrator, for the 
highway funding bill that just came to Montana. I don't believe 
people understand how truly significant it's going to be for 
transportation in Montana.
    Senator Baucus. It really is a big deal for the State.
    Mr. Blacker. Yes. It's unbelievable. It has our heads 
spinning at this point really. There's plenty of needs, there's 
plenty of places it needs to go. I would hope, before we 
consider clouding up this particular piece of legislation with 
transportation type issues in that manner, that we get the 
opportunity at least to decipher where everything is at. I've 
heard the word Highway 284, which is a Federal aid secondary, 
which is eligible for those Federal aid type funds.
    Again, we're talking some major type monies here. From our 
standpoint, from a transportation standpoint, it's going to be 
a ramping-up effect. Although I've heard you say $260 million a 
year for up to 6 years, it takes a little bit of time to move 
into that. I think the first year for us is roughly--which is 
the current year right now, roughly, we don't have exact 
figures, it's going to be about $220 million, $210 million; the 
following year, about $235 million.
    Senator Baucus. But still, that's a lot more than we've 
been getting.
    Mr. Blacker. Well, by the end of the bills, we'll be at 
$300 million-plus annual bid lettings. Now, that's 
unbelievable. When you throw that in with the State dollars and 
stuff, that's double what we've done at any time in the past.
    Now, the good news is, we're going to have a lot better 
highways, they're going to be a lot nicer. The bad news is, you 
people that don't like to travel through work zones, you're 
going to see them double over. There's only so much opportunity 
to do something.
    So on that issue, I want to thank you for that. I would 
hope that we don't cloud this issue with trying to get in some 
transportation or highway type funding issues with that.
    Secondly, I think, the other thing I just wanted to say 
was, I've always--I'm 46 years old, and I've been at Canyon 
Ferry for 40 years. So for the best part of my life, I've been 
around Canyon Ferry. My folks started there, and both have 
passed on and have left me somewhat into trust the family 
cabin. I take care of it for myself, my sisters, my families. I 
have two grown daughters who have since left the State, but 
they come back every year for their vacations. They could go 
anywhere. They come back every year and spend their vacations 
at the family cabin.
    With those issues, I've always thought of Canyon Ferry as 
being a joint effort. It didn't have to be for the cabin owners 
only or the recreationists only. I think it takes both of those 
groups to make it a successful operation. Some people say, 
``Oh, gee whiz, it's kind of crowded, it might be too 
crowded.'' You know, I've been there a long time. I don't see 
those crowds. But, you know, part of having people around doing 
things and watching people enjoy life, that's what makes it fun 
to go to those places.
    The NBA playoffs are on right now. I don't think anybody 
would get excited if there was only ten people at the game. 
They like the crowd. They like the ambience of having things 
going on.
    So I think there's a joint effort here. I heard somebody 
else say it earlier, it's a win/win for everybody. I appreciate 
and I want to thank you very much for everything you're doing.
    Senator Baucus. Thank you, John, very much. Appreciate it.
    Well, those words that encourage everybody to cooperate 
together, I think is a good way to end this hearing.
    I first want to thank all of you very much. You've sat here 
for a couple hours at least. I appreciate it. Thank you on 
behalf of yourselves and others that you're working with.
    Second, we will take this testimony and questions that 
you've posed to Congressman Hill and Senator Burns. We'll meet 
together and talk this out so that we can get it wrapped up and 
on a fast track.
    Your efforts will be very helpful; that is, calling us, 
writing us letters, talking to us. Don't forget, you're in 
charge. I mean, you're the employers, we're the employees. 
You've got to act like employers, you've got to give us our 
directions, our marching orders, what you want, recognizing 
that only one bill is going to pass here and we've got to agree 
on the provisions of the bill; but also recognizing, as I 
mentioned earlier, there are lots of ways to solve problems. 
That is, perhaps we can solve some problems that need to be 
solved--and I'm talking about recreation and capital 
improvements--not as much in this bill as some would like, but 
in another bill.
    When I'm saying that, I don't mean to pass the buck, at 
all. I'm just saying that if we don't, we run the risk of 
nothing. We want something. The something we want to is address 
all the concerns. As I said, I feel quite confident that are a 
lot of ways to solve all of these concerns. The longer I've 
been around, the more I realize that there's a lot of different 
ways to accomplish something. It's not always the first way 
that comes to mind. I mean, there's a totally different way to 
reach the objective which turns out to be just as easy.
    Finally, I want to thank a lot of people working very hard 
at this, not only those of you, Bob and Bill and Mike, who have 
worked so hard, but I want to particularly thank some people 
who are not really recognized as much as they should be for all 
the work that they do. They're our staff people. So I'll have 
them all stand and stay standing until I call all their names, 
so we can all give them a big round of applause.
    I'll start with Peggy Trenk, who works for Congressman 
Hill. I understand Michael Harris, who works for Senator Burns, 
is here. Michael is standing back there. I want to particularly 
thank Doug Mitchell, who works on my staff, as well as Bill 
Lombardi, who works for me. Chris Niedermeier is my Chief of 
Staff, and she's standing back there. But even for me 
personally, the most important person, who has really worked 
hardest on this, is Holly Luck. So Holly, could you stand, 
please.
    Let's give them all a big round of applause.
    [Applause.]
    Senator Baucus. I forgot Cheryl. Cheryl, our stenographer. 
Can you stand, Cheryl?
    [Applause.]
    Senator Baucus. Okay, thanks, everybody, and we'll take it 
from here.
    [Whereupon, at 2:39 p.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
    [The bill, S. 1913, and additional material submitted for 
the record follows:]
























       Statement of Hon. Rick Hill, U.S. House of Representatives
    First I'd like to thank Senator Baucus for holding this important 
hearing. I would also like to thank the witnesses and others gathered 
here today for their efforts to address this important issue.
    The Montana congressional delegation has agreed on the value of 
selling 265 leases on Canyon Ferry. This sale would allow current 
householders the opportunity for permanent ownership, while paying fair 
market value to the benefit of the taxpayer.
    While we all share the common goal of providing more funding for 
conservation, I believe it is very important that we also make sure 
Lewis and Clark and Broadwater Counties have a stronger say in how 
their backyard will be managed. For this reason, I strongly support 
using the proceeds of this sale for not only land and water 
conservation measures, but also for giving these counties the resources 
to make long-term recreational improvements on the lake.
    I'm confident the Montana congressional delegation and all the 
interested parties will come together to resolve the issue of what the 
sale of the leases will benefit. Be assured that legislation I have 
introduced in the House of Representatives on this matter will be one 
of my highest priorities in the remainder of this Congress. This 
hearing will assuredly help move us forward for the benefit of all 
Montanans.
    Again, thank you Senator Baucus for your efforts here today.
                                 ______
                                 
     Statement of Bob Robinson, Canyon Ferry Recreation Association
    Good afternoon Senator Baucus. My name is Bob Robinson. I am the 
designated spokesman for the Canyon Ferry Recreation Association 
(CFRA). I serve as the Chair of the CFRA Cabin Site Acquisition sub-
committee.
    I am accompanied today by Larry LaRock, who is a fellow member of 
CFRA's Cabin Site Acquisition subcommittee. I will present a summary of 
CFRA's written testimony, and Dr. LaRock will join me in answering any 
questions that you might have regarding CFRA's interest in this 
legislation.
    I should begin by thanking you, Senator Baucus, for holding this 
hearing and sponsoring S. 1913, the bill that is the subject of this 
hearing. I would also like to extend my thanks to the other two 
distinguished members of the Montana Congressional delegation who are 
working with you on Canyon Ferry legislation. Senator Burns (who is co-
sponsoring S.1913 with you) and his staff have been most helpful to 
CFRA in answering our many questions and in assisting on this important 
legislation. Additionally, Congressman Rick Hill, who is a sponsor of a 
companion piece of legislation (HR 3963), has been most responsive in 
listening to the needs expressed by CFRA and other members of the 
public concerned about the best use of Federal resources at Canyon 
Ferry.
    While extending thanks, I want also to single out the excellent 
staff work performed by the staff of the Montana congressional 
delegation on this legislative effort. Holly Luck, from Senator 
Baucus's Helena office, consistently attends the myriad meetings called 
on Canyon Ferry matters and has been most attentive to questions and 
concerns raised by CFRA members and the public who are so concerned 
about Canyon Ferry matters. Brian Kuehl, Senator Baucus's legislative 
assistant for natural resources in Washington D.C., has also been 
enormously attentive to details relative to the policy issues 
associated with S. 1913. Mr. Kuehl deserves special recognition for his 
efforts to work out the differences among the various groups that have 
a stake in the issues touched upon by S. 1913. There are many other 
interested parties to thank, but since the legislative process for the 
Baucus-Burns proposal is still in the formative stages, I prefer to 
wait until this bill (and its companion measure in the House--HR 3963) 
advances further in Congress before I thank others in the supporting 
cast who deserve public recognition for their efforts to improve and 
enact this important proposal.
    As far as my personal involvement with this legislation, I am 
simultaneously humbled, excited and burdened in my appearance before 
you today. I am humbled by the opportunity to present the CFRA position 
to the Senate Environment and Public Works Committee. As member of a 
family holding a lease, an avid outdoors man and an active member of 
the Helena regional community, I am also excited about the potential 
that your legislative proposal offers to the cabin site lessees and the 
broader recreational community served by the Missouri River/ Canyon 
Ferry drainage. Finally, I feel seriously burdened by the 
responsibilities placed on us to implement the concepts embodied in S. 
1913.
    With those preliminary thoughts expressed, let me turn briefly to 
the public benefit of the proposed legislation itself. As CFRA sees it, 
the Baucus/Burns proposal authorizes an exchange of Federal land for 
significant private resources ($15-20 million from the lease holders 
for the full market purchase price of their leased lots). The 
substantial sums of money potentially generated by this proposal can 
bestow far greater public benefit than what the 150 cabin site acres 
currently represent. Further, the Baucus-Burns proposal maintains all 
existing public access and improve public access opportunities at 
Canyon Ferry Reservoir and create a mechanism by which additional 
access and easements could be developed. S. 1913 improves wildlife 
habitat and related opportunities for hunting, fishing, wildlife 
viewing and other recreational resources in the Canyon Ferry and 
southern Missouri River drainages. It will provide benefits to 
Broadwater County since 80 percent of the lake and Missouri-River 
tributaries up to Tosten are in Broadwater County. Lewis and Clark 
County will benefit from the increased tax base that ownership will 
provide. For the 265 cabin site leaseholders, it would provide the 
security that only ownership can provide.
    These Important public benefits will be generated in the following 
manner. The bill authorizes a process that permits the Federal 
Government to transfer ownership of the underlying fee interests for 
the 265 cabin lots at Canyon Ferry in exchange for substantial sums of 
money that would permanently endow the perpetual acquisition of the 
public benefits previously identified above.
Background Facts Regarding Canyon Ferry Legislation
    Permit me to offer some background information about the Canyon 
Ferry Reservoir and the 265 cabin sites that are the subject of this 
legislation. The public perception may be that cabin sites cover all of 
the banks of Canyon Ferry. but the contrary is true. The reservoir is 
26 miles long with a shoreline of 76 miles. (Dr. LaRock is pointing to 
the relatively small portion of the lake devoted to the cabins.) Please 
note that none of the 265 cabin site lots contain shoreline, but all 
are near the shoreline. The 265 cabin site lots, with a total area of 
less than 150 acres, sit on land that is adjacent to less than 8.2 
percent of the reservoir shoreline or 6.7 miles. All of the cabin lots, 
which average about one half acre per site, are located at the north 
end of the reservoir, and all are situated in Lewis and Clark County. 
The sites start about three miles from the dam and extend about three 
miles on each side, with numerous public facilities developed at the 
appropriate sites best suited for public use.
    Here are a few facts about Broadwater County as it relates to 
Canyon Ferry. Roughly 80 percent of the shoreline of Canyon Ferry is in 
Broadwater County, but as noted earlier, no cabin site lots are in 
Broadwater County. The reservoir is shallower at the south end of the 
lake, which is near Townsend. This fact will be discussed later in my 
testimony when we get to the subject of environmental impacts. However, 
I do want to note at this point that the high water level of the 
reservoir is 3,800 feet, which is the height of the dam spillways. All 
cabin sites are above 3,810 feet, and for comparison, the Townsend 
county courthouse steps are reported to be 3,820 feet. Raising the 
level of the dam would create quite a problem for Townsend
    I want to emphasize that, should S.1913 become law. as currently 
proposed, existing public access would remain the same. Additionally, 
if section 5 of S. 1913 (which provides for a Canyon Ferry-Missouri 
River trust) were enacted into law, significant additional public 
access can be provided through land or easement purchases near the 
Reservoir. This Trust is perpetual, thus providing these benefits 
forever as they are needed or as the opportunity arises.
    It should be remembered that when the land at the North end of 
Canyon Ferry was leased to private permit holders (a process that began 
more than forty years ago), the current 265 lots that are now developed 
were raw and completely undeveloped land. When BOR began leasing these 
lots, permit holders legally obligated themselves to build cabins on 
their lots as a written condition of BOR's permit. Tents or trailers 
did not satisfy BOR's condition. Instead, the minimum BOR requirement 
was for the permit holders to build a permanent foundation for a 
structure of at least 600 square feet.
    Many permit holders, who met the conditions of their lease 
requirements, have continued to improve their properties at their own 
expense, including drilling wells, installing septic systems, 
constructing access roads and the like. Further, it has not been 
uncommon to see dozens of trees planted by the permit holders, along 
with other valuable landscaping and erosion control activities all at 
their own expense.
    While I will provide additional background information to this 
Senate Committee on the history of the project and the history of the 
cabin sites, my most important assignment is to identify and articulate 
the myriad public benefits that would enure from the enactment of S. 
1913. What are those benefits? They are summarized as Congressional 
findings in Section 2 of S. 1913, which provides that:
    (1) it is in the interest of the United States for the Secretary of 
the Interior to sell leaseholds at Canyon Ferry Reservoir in the State 
of Montana for fair market value if the proceeds from the sale are 
used----
    (A) to establish a trust to provide a permanent source of funding 
to acquire access or other property interests from willing sellers to 
conserve fish and wildlife and to enhance public hunting and fishing 
opportunities at the Reservoir and along the Missouri River:
    (B) to establish a fund to be used to acquire access or other 
property interests from willing sellers to increase public access to 
Federal land in the State of Montana and to enhance hunting, and 
fishing opportunities; and (C) to reduce the Pick-Sloan project debt 
for the Canyon Ferry Unit:
    A first benefit of the legislation (listed in ``A'' of the proposed 
Congressional findings) would be to provide improved access at Canyon 
Ferry and the Missouri River basin upriver to Three Forks. These 
benefits would occur from the implementation of the Canyon Ferry-
Missouri River trust that is authorized under section 5 of the bill. 
Similar trusts are currently in place that provide public benefits for 
lands adjacent to the Missouri River sites both downstream from Canyon 
Ferry and upstream from Tosten Dam. While the Canyon Ferry section of 
the Missouri does not currently have a such a trust in place, this bill 
would help create and fund this important public benefit.
    An associated benefit would be the development of wildlife habitat 
at Canyon Ferry and upriver to the Tosten Dam. Again, these benefits 
would come as a result of the spending expected to be generated by the 
proposed Canyon Ferry-Missouri River Trust. When the Canyon Ferry dam 
was built in the early 1950's, there were no Federal programs in place 
to mitigate adverse environmental impacts, such as the loss of wildlife 
habitat. Were this dam to be built today. such protections would 
protect against such losses. However, the proposed Canyon Ferry-
Missouri River Trust, as proposed in S. 1913. could help mitigate the 
more than four decade loss of important wildlife habitat that was 
destroyed when the Reservoir began to fill in 1954.
    A second public benefit generated by S. 1913 (see ``B'' of the 
Congressional findings) would be a State-wide fund for increasing 
public access to Federal land in the State of Montana. This benefit 
will be discussed in greater detail by witnesses who will testify later 
in the hearing.
    The third benefit from the legislation (see ``C'' of the 
Congressional findings) is that BOR would receive 10 percent of the 
proceeds from the transfer of the cabins to the lease holders. While 
the total value of the transfer has not yet been determined, it could 
be more than $20 million, and if it reached that level, BOR would 
receive $2 million, which could be used to pay down the current debt on 
the Canyon Ferry Dam, a debt that now approaches $37 million. It should 
also be remembered that the Canyon Ferry Dam was built from funds lent 
by the Federal Government. In enacting the ``Pick Sloan'' loan program, 
Congress contemplated that power and irrigation revenues pay project 
debt, and there is little evidence to suggest that Congress anticipated 
the prospect of debt repayment through the use of recreational lands 
that were increased in value due to the creation of a public lake, but 
that is certainly a benefit that S. 1913 would generate.
    It should also be emphasized that none of the proceeds of the 
proposed Canyon Ferry Trust is contemplated for use on the 265 lots. In 
other words, the use of those lots would remain essentially unchanged. 
Those lots are now occupied by private permit holders, and the 
recreational amenities available to those permit holders are not 
contemplated to change under this legislation.
    In preparing this testimony, CFRA's Cabin Site Acquisition 
Committee drew upon numerous historical documents that we are now 
providing to the committee for the public record. Listed below are the 
following documents that have been supplied to the Committee staff for 
inclusion in the hearing the record:
    Exhibit A: A masters thesis entitled ``Private Use of Public Lands: 
Canyon Ferry Lake and Cabin Lease Sites'', by Stephen Ray Clark. a 
professional paper in partial fulfillment of the requirements for the 
degree of Masters of Public Administration at Montana State University 
in Bozeman, MT. August 1987.
    Exhibit B: ``Canyon Ferry Lake-Recreation and Conservation 
Management Reserve'', a proposal presented to United States Bureau of 
Reclamation and Montana Department of Fish. Wildlife & Parks. The 
proposal was prepared by American Public Land Exchange Company Inc. of 
Missoula, MT and was presented in May 1985. Attached to the report is a 
document entitled ``Helena Valley Canyon Ferry Land Exchange Background 
Information'', prepared at the request of Canyon Ferry Recreation Users 
Association by American Public Land Exchange Company Inc., dated 
September 12, 1984.
    Exhibit C: Canyon Ferry State Park ``Proposed'' Management Plan by 
the Canyon Ferry Master Advisory Committee, the Montana Department of 
Fish. Wildlife & Parks. and the U.S. Bureau of Reclamation. 1993.
    Exhibit D: United States Department of Interior Office of Inspector 
General Final Audit Report on Reclamation Management Activities at 
selected sites, May 17, 1995.
    Exhibit E: List of cabin site owners at Canyon Ferry Reservoir.
    Exhibit F: Rock Creek Fund Trust Agreement and related documents.
    Exhibit G: Missouri-Madison Rivers Comprehensive Recreation 
Management Plan and related Revolving Trust Fund documents.
History of Canyon Ferry Reservoir
    I would like to present to the Committee a brief history of the 
Canyon Ferry Reservoir. In preparing this history. CFRA relied 
extensively upon the 1987 thesis of Steven Ray Clarke, a BOR employee 
at the Canyon Ferry project. Mr. Clark prepared this thesis for a 
Master Degree in Public Administration from Montana State University. 
He is still working for the Bureau of Reclamation.
    Canyon Ferry Lake was formed when Canyon Ferry Dam was completed in 
1954 as a part of the Pick-Sloan Missouri Basin Program. Recreation 
homesite leases at Canyon Ferry were first issued in 1958 as a result 
of a direct promotion by BOR. The Bureau supplied to the Montana 
Highway Commission drafts of recommended lease agreements. boat permits 
and licenses for docks. The State of Montana issued these permits 
pursuant to a State-Federal management agreement. Newspaper articles at 
the time noted that, prior to the identification of potential cabin 
sites, BOR first reserved the preferred public recreation sites around 
the Reservoir's shoreline. According to Mr. Clarke's thesis, an 
important reason for leasing summer home sites was the ``multi-purpose 
authorization of the Canyon Ferry project and other Bureau projects 
built at that time.'' Clarke then observed:
    ``What better way to demonstrate the multi-purpose implementation 
and development than to lease 265 cabin or summer home sites and 
rapidly develop their recreational aspects of the multi-purpose 
authorization?''
    By May 1958, summer home sites were leased, and 29 sites already 
had cabins constructed on them.
    Initial leases for the cabin sites were for a period of 10 years 
with an option to extend for an additional 10 years. A practice began 
to occur where the ten year renewals were provided on a virtually 
automatic basis. Additionally. improvements were allowed to be sold by 
lessees to different persons, and new leases were drawn up to begin a 
new ten year lease term for owners of cabins.
    According to Mr. Clarke's thesis, the following changes have 
evolved in BOR's leasing policy:
    ``The leasing policy in the Department of the Interior for private 
use of recreational lands has vacillated during the past thirty years. 
The policy has gone from one of open encouragement, to open 
discouragement, to status-quo, to support of a phase-out.''
    These precipitous changes in policy by the Federal Government, 
which continue to this day, have prompted CFRA members to seek 
ownership of their leased properties. According to Mr. Clarke. the 
Canyon Ferry Recreation Association first asked the Montana 
congressional delegation more than thirty years ago for authorization 
to purchase the land upon which their cabins are located.
    In addition to the problems faced by the cabin owners. there have 
been a variety of other problems confronted by the public at Canyon 
Ferry. From the 1950's to the early 1980's, considerable dust was 
generated at the south end of the reservoir particularly. when the lake 
reached low levels. This dust caused considerable problems for Townsend 
area residents. In response. BOR spent roughly $14 million to abate the 
dust by retaining more water at the southern end of the lake and 
providing more habitat for wildlife.
    The dust abatement project is noteworthy, because the original 
design of the dam and the resulting reservoir ignored the negative 
impacts on the wildlife and the environment. This was so. because 
Federal environmental laws did not then require any assessment of the 
environmental impact of federally financed projects, such as Canyon 
Ferry Dam. Further. the primary purpose of the Canyon Ferry project was 
to generate electricity, improve irrigation and provide flood control. 
While recreation was later described by BOR as one of the multiple 
purposes of the project, it was then a relatively minor purpose.
    Beginning in May 1958, once the leases were issued to private 
parties, who agreed to build cabins on BOR lands. certain additional 
requirements were established. First, it was required that a permit fee 
be paid each year for the lease. Further, the cabin owners were 
required to provide unobstructed public access to the lake. Over the 
years, because of changes in BOR policy, there have been numerous 
modifications in the lease documents. Cabin site leases have become 
increasingly restrictive and for shorter terms. Initially, these leases 
were for ten year periods with ten year renewal periods. In 1987, new 
leases were issued for 5 years with a 5-year renewal. The associated 
rent payments charged for the leases increased on an accelerated basis 
due to a combination of factors, including a change in BOR policy, and 
the recognition of increased values of the underlying land where the 
lease holders had built their cabins. The current leases for the cabin 
site properties expire in 2004, but they may be renewed for up to two 
consecutive five-year terms, or until the year 2014.
    It should also be noted that the lease holders do not pay property 
tax on the land (since that land is owned by the BOR) but they do pay 
State and local property taxes for the value of all their improvements. 
Additionally, BOR pays to Lewis and Clark County a payment in lieu of 
taxes.
    Most of the cabins on the leased sites can only be used in the 
summer, as they lack insulation for colder weather. Most lessees are 
not inclined to make substantial improvements due to the potential 
termination of their leases, including the requirement that the lessee 
must remove all improvements upon termination. However, private land 
ownership should generate substantial capital improvements, thereby 
increasing associated property tax revenue. which is yet another public 
benefit.
    Further, it should be noted that CFRA and its members have been 
working with Lewis and Clark County in recent years to insure that 
waste water disposal systems (i.e. septic tanks and/or holding tanks) 
are in place and in conformance with applicable environmental 
requirements.
CFRA and BOR
    CFRA's dealings with BOR over the years have generally been 
amicable and productive. While disputes have arisen in a few instances, 
much of that controversy has been associated with the increased annual 
lease payments for the permits for the 265 leased properties. Some of 
the cabin owners have experienced as much as eight-fold increases in 
their annual lease payments over the past 10 years. Such increases have 
caused CFRA to dispute BOR on the valuation of the underlying 
properties. Fortunately, the most recent dispute on the BOR's appraisal 
procedure was recently settled by CFRA and BOR. The new settlement 
procedure comes at a propitious time for several reasons. First, it may 
provide a basis for determining the fair market value of the cabin site 
lots to be transferred under this legislation. Second. the settlement 
minimizes the uncertainty that might otherwise constrain the transfer 
of lands associated with disputed property values. The phasing-out of 
leased land has greatly concerned the leaseholders and threatens their 
investment, work. time and memories that have been built up over almost 
four generations for many leaseholders.
A Brief Analysis of S. 1913
    In its simplest form, the bill authorizes the U.S. Department of 
Interior to sell all of the cabin sites. as a group. to the highest 
bidder under a sealed bid process. The legislation also requires the 
successful bid to equal or exceed the appraised fair market value of 
the 265 lots combined. In the event that CFRA bids on the sites, and 
its bid is exceeded by another bidder, we have the right to match the 
highest bid. Whoever the high bidder is. it must sell the specific site 
at market value to the then permittee, assuming the permittee elects to 
purchase its lot. If the permittee does not want to buy the land on 
which their cabin sits, the permittee can continue to lease the cabin 
site for a period not to exceed the current terms allowed under it's 
permit with BOR. In the event that the cabin owner chooses not to buy 
their lot, and doesn't want to keep leasing, the high bidder must buy 
the cabin improvements at a market value price set by appraisal.
    CFRA is generally pleased with the current form of this bill. Our 
association has carefully avoided taking positions on exactly how the 
proceeds of the transfer are to be used, except we believe that much of 
the public benefits to be generated by the exchange should stay within 
the Canyon Ferry/Missouri River area. Further, we are seeking to avoid 
any appearance that these monies would be used in any way to benefit 
the cabin owners directly.
    We are pleased that our recommendation to create a trust to benefit 
the Canyon Ferry/Missouri River area were accepted by Senators Baucus 
and Burns, who included this concept in their bill. Our ideas in that 
regard were strongly influenced by the Missouri-Madison Trust and the 
Rock Creek Trust.
    I would also note that our organization has worked closely with the 
county commissioners of the two counties encompassing the Reservoir. 
Broadwater County contains approximately 80 percent of the shoreline of 
Canyon Ferry Reservoir, and Lewis and Clark County contains the 
balance. While all the cabins are located in Lewis and Clark County, 
CFRA is concerned that the proceeds of the sale generated by the 
transfer of the cabin-site lots should in some way provide benefit to 
the residents of Broadwater County who have arguably not received from 
BOR as many financial and recreational benefits from the lake as have 
Lewis and Clark County residents.
    There are scheduled to be witnesses at this hearing representing 
various wildlife, hunting and fishing organizations. No doubt those 
witnesses will provide a full and compelling explanation of the various 
benefits that will occur to wildlife and fish habitat and associated 
recreational access and activities.
    The experience of CFRA over the past four decades in working on the 
problems associated with leased lands at Canyon Ferry suggest to us 
that perceptions of public benefit are as varied as the members of the 
public who express their views about public needs and benefits. In that 
regard, I would highlight a statements recently communicated to CFRA by 
the President of the Montana Wildlife Federation:
    ``Canyon Ferry public lands have lost historic public wildlife 
value as a result of habitat alterations and destruction . . . . If 
those lands are to be permanently taken out of the public domain, then 
we believe that they must be replaced by lands that aim to provide the 
public with wildlife and recreational opportunities that once 
existed.'' We generally agree with the theme of the MWF statement, but 
we would also observe that the distribution of public benefits is best 
accomplished by representative legislative bodies, such as Congress. 
These bodies follow proven procedures for involving the public at all 
levels. Further, if experience is any guide, additional changes will 
likely be made to this legislation, as it advances through the 
legislative process. We hope that all parties now supporting this 
important legislation will continue to be able to support it.
    In times of limited public budgets, it is a welcome sight to see 
another important source of funding that will allow greater public 
benefits to be bestowed. We at CFRA hope that we are given the 
opportunity to provide that funding through the implementation of your 
legislation.
    Thank you. Senator Baucus for giving us the opportunity to present 
this testimony and we look forward to answering any questions you might 
have about the proposal from the standpoint of the 265 site owners at 
Canyon Ferry.
                                 ______
                                 
         Statement of the Prickly Pear Sportsmen's Association
    The Prickly Pear Sportsmen's Association is a greater Helena area 
rod and gun club dedicated to the conservation and enhancement of the 
fish and wildlife resources of Montana. The sportsmen and women of our 
organization are active hunters and anglers and our club frequently 
engages in efforts to improve and protect fish and wildlife habitat on 
public and private lands. The idea of creating a fish and wildlife 
habitat trust fund from assets now held by the public around Canyon 
Ferry Reservoir came from within our organization. Members of our 
organization have considerable experience in the creation and 
administration of fish and wildlife conservation trust funds.
    The lands in question around Canyon Ferry Reservoir are presently a 
public asset of considerable economic value. Although their value as 
wildlife habitat may have been diminished, their value as an asset with 
the potential to positively impact wildlife habitat, the preservation 
of agricultural land and the retention of open space protection remains 
substantial.
    Representatives of our organization shared the concept of a 
wildlife habitat/land conservation trust fund with Canyon Ferry 
property owners as a way of converting a publicly held land asset (the 
cabin lease lands) into a land trust dedicated to the preservation and 
enhancement of wildlife habitat. This concept met the needs of the 
property owners and in the opinion of the Prickly Pear Sportsmen's 
Association also met the public trust responsibility associated with 
publicly held assets.
    We appreciate the attention this proposal has received from the 
Montana Congressional delegation. You have all been responsive. Our 
immediate past president was active in the creation and administration 
of: The Rock Creek Trust Fund (a combination State/private managed 
effort) and the Forever Wild Endowment (a private non profit 
conservation organization).
    Enthusiasm for this idea remains high and it is anchored in two 
features that must be retained as this legislation moves through 
Congress. The first is:

      the purpose of the trust must remain focused on the 
protection of fish and wildlife habitat, and the second is,
      the trustees of the fund likewise need to be 
representatives clearly dedicated to the purpose of the trust.

    The Prickly Pear Sportsmen's Association also supports the idea in 
the legislation advanced by Senators Max Baucus and Conrad Burns to 
create a second trust dedicated to gaining access to public lands. The 
access trust. like the land trust must be focused and administered 
similar to the terms outlined for the land conservation trust. If these 
conditions are guaranteed our organization believes:

      the public interest will be served,
      wildlife habitat and agricultural open space protected, 
and
      a property ownership around Canyon Ferry equitably 
resolved.

    Our organization's commitment to the principles outlined in this 
testimony is not casual. We recognize that there will be only one 
chance to deal with the public asset now held by the Federal Government 
at Canyon Ferry. To put this asset at risk by being either casual or 
vague about the use of the funds to be generated by sale of the cabin 
sites is a risk our organization is not willing to take. Therefore, we 
offer our support to the effort being made in the legislation sponsored 
by Senators Baucus and Burns. We suggest the language in the 
legislation addressing the purposes of both trusts and the make up of 
the entities that will administer them be given close and constant 
attention as the legislative process continues.
                                 ______
                                 
              Statement of the Montana Wildlife Federation
    I wish to first thank Sector Max Baucus for being present, I wish 
to also thank him for the invitation and the opportunity to testify on 
the Montana Fish and Wildlife Conservation Act of 1998 (S. 1913). The 
presence of Senator Baucus here demonstrates his concern for the 
leasee's, wildlife conservation and the interests of Montana sportsmen.
    My name is Bill Orsello and I am here as a representative of the 
Montana Wildlife Federation comprised of 7500 members and 21 affiliate 
clubs. I am also here as a concerned hunter, angler, parent and outdoor 
recreationist.
    The Montana Wildlife Federation recognizes the complexity of 
drafting legislation that attempts to come a problem, the loss of 
wildlife habitat and the concerns of lessees, that has existed since 
the 1950's The MWF applauds and support the Senator's bill for the 
exchange of these public lands.
    We feel Senate bill 1913's success depends on five features.
    1. The exchange of public lands that have had their wildlife value 
diminished by the construction of cabins, elaborate homes, and 
landscaping for the ability to acquire lands access ? conservation 
easements Bat have equal or greater wildlife and recreational values.
    2. Non-developed recreational opportunities have been lost and they 
should not be replaced by developed recreational opportunities 
Primitive habitat was lost and it should not be replaced with developed 
habitat. This must be a land-related values exchange.
    3. The creation of two endowments or trust funds that will only be 
used to guarantee the preservation of wildlife habitat and wildlife 
recreational opportunities in Montana.
    4. That any trust funds developed from this exchange be 
administered by Montana representatives dedicated to Be perpetuation 
and conservation of wildlife, public access to public resources and the 
preservation of our hunting & fishing heritage.
    5. We believe that Montana's wildlife and sports persons are best 
served by decisions at the local and Sate level for the dispersal of 
funds generated by the endowments. The intimate, on-the-ground, 
knowledge of local wildlife and sports person, needs would only be 
diluted by transferring the decision making process to a national 
influence.
    We feel (uncompromisingly) this bill must stay on track with its 
original intent to create an exchange of degraded public properties 
with properties that will have a long-term benefit to the public and 
the preservation of wildlife habitat.
    Any attempt to modify this bill or redirect monies generated from 
the exchange for programs, like the Land & Water Conservation Fund or 
projects not benefiting the enhancement of wildlife habitat and the 
greater public wildlife oriented recreational opportunities, will 
create many adversaries. We feel this proposal As a delicate balance, 
it only works if it is an exchange of diminished wildlife value land 
for useful public lands ninth high wildlife values. This bill must 
insure that the funds generated from lost publicly had asset' are used 
to replace these assets with accessible lands, benefits to wildlife, 
and public recreational opportunities within the immediate geographical 
area.
    The Montana Wildlife Federation reman enthusiastic toward the 
passage of S. 1913 and feels the bill will help preserve Montana's 
hunting and fishing heritage for future generations, if it is held 
intact and uncompromised.
    I reiterate, this proposal must insure that funds generated from 
the exchange of our public lads, our public assets, must be used to 
replace these assets with publicly accessible lands in Montana wildlife 
habitat in Montana, and public wildlife opportunities in Montana--
preferably in the immediate geographical area.
    Again, we applaud and thank Senator Baucus for his effort,.
    Thank you.
                                 ______
                                 
 Statement of Eluid L. Martinez, Commissioner, Bureau of Reclamation, 
                       Department of the Interior
    Mr. Chairman and members of the committee, thank you for the 
opportunity to submit the Administration's views on S. 1913, the 
Montana Fish and Wildlife Conservation Act of 1998. The Bureau of 
Reclamation supports efforts to improve public access to rivers and 
lakes throughout the west. However, S. 1913 would grant exclusive 
private use of lake front property at Canyon Ferry Reservoir to a few 
beneficiaries, would foreclose future use of the land for project or 
other purposes, and would lead to a loss in future Federal receipts. 
The bill also would make management of the land at Canyon Ferry more 
difficult, without reducing the need for future Federal expenditures. 
In addition, S. 1913 is unclear on several critical questions of intent 
and procedure. Moreover, we do not believe there is a need for this 
legislation given that Reclamation and the Canyon Ferry Recreation 
Association recently agreed on a key issue concerning rental fees. For 
these reasons, the Administration strongly opposes S. 1913.
    S. 1913 would direct the Secretary of the Interior to sell at fair 
market value all right, title and interest of the United States to 
leaseholds for the 265 cabin sites at Canyon Ferry Reservoir in 
Montana, along with easements for vehicular access to the leaseholds, 
docks, and boathouses.
    The leaseholds and easements would be sold by auction, with the 
minimum bid established by the Secretary and based on a fair market 
appraisal, excluding the value of improvements made to a site. As 
drafted, it is unclear whether S. 1913 contemplates individual auctions 
for each leasehold or intends that all 265 be sold to a single 
purchaser.
    Under S. 1913, the Canyon Ferry Recreation Association, (CFRA) a 
Montana corporation, would have the right to match any bid received and 
purchase the leaseholds. Any purchaser would be required to offer to 
sell to existing leaseholders the leasehold for fair market value. It 
is important for the Committee to understand that CFRA is a relatively 
small group of beneficiaries of this project that does not represent 
all taxpayers, all beneficiaries of the project, or even all existing 
lessees at Canyon Ferry Reservoir.
    Under S. 1913, the United States would receive 10 percent of the 
purchase price paid for the leaseholds, while the remaining 90 percent 
would be equally divided between the Canyon Ferry-Missouri River Trust 
and the Montana Hunter and Fisherman Access Fund established in S. 
1913. The Canyon Ferry-Missouri River Trust would provide a permanent 
revenue source of monies for the acquisition of land for fish and 
wildlife conservation, fishing, hunting, and recreation opportunities 
at specific sites at Canyon Ferry Reservoir and along the Missouri 
River. The Montana Hunter and Fisherman Access Fund would be dedicated 
to enhancing public hunting and fishing opportunities in Montana.
    Mr. Chairman, the Canyon Ferry Unit was authorized and constructed 
by the Bureau of Reclamation as a part of the Pick-Sloan Missouri Basin 
Program as a multiple purpose project for irrigation, recreation, and 
hydroelectric power and it is Reclamation's role to balance these 
competing demands for the resources. Canyon Ferry Reservoir was formed 
when the Canyon Ferry Dam was completed in 1954. Reclamation and the 
State of Montana were land managing partners for 37 years until 1994, 
when the State terminated its role. Most of the cabin site permits were 
originally issued in the late 1950's, and lessees were given the option 
to renew the leases every 10 years.
    Reclamation and the Bureau of Land Management now share the land 
management responsibility, except for the task of administering the 
cabin site leasing program which exclusively Reclamation's 
responsibility. The 265 cabin sites occupy scenic lakeshore areas 
around the northern end of the reservoir. The lot sizes vary from .2 
acre to 1.4 acres, with the average size about lo acre. These sites are 
unconsolidated scattered tracts within the reservoir lands. There is no 
large block of consolidated sites.
    In the last few years, there has been controversy surrounding the 
rental fees at Canyon Ferry. The controversy centers on attempts to 
determine and charge fair market value for rental fees. Under 43 CFR 
Part 429.6(f), Reclamation is required to collect fair market value for 
the right to use Reclamation project lands. In 1986, the State raised 
the rental fees to approximately 1/3 of the then fair market value. The 
fees remained unchanged until 1995 when Reclamation raised the fees 
based on an increase in the Consumer Price Index. Reclamation also 
initiated an independent appraisal in 1995 to determine a new fair 
market value. Presently the cabin lessees are paying an average of 
about $1,000 per site per year, significantly less than the fair market 
value of $2,701 determined in the 1995 appraisal.
    Reclamation committed to phase in a rate increase over a 5-year 
period beginning in 1997. However, the CFRA challenged the 1995 
appraisal through the Department of the Interior's Office of Hearing 
and Appeals. CFRA had conducted a second appraisal which showed the 
value of the leases to be about 60 percent of that indicated in 
Reclamation's appraisal. That appraisal amount is still about 1.5 times 
the amount which had been collected prior to 1997. While Reclamation 
believes that the 1995 appraisal was properly conducted and accurately 
reflected the current market price, Reclamation, for the sake of 
goodwill and improving relations, recently agreed to a settlement with 
CFRA whereby Reclamation and CFRA would collaborate and conduct a third 
appraisal. It was agreed that the findings in the third appraisal will 
be the new basis for the fee increase. With this settlement, 
Reclamation and the cabin site lessees are working together to set fair 
and acceptable rental fees. As such, no current controversy exists that 
requires legislation.
    Not only is the legislation unnecessary, it is not clearly drafted. 
As mentioned above, the bill is ambiguous as to whether the sites will 
be sold individually or in one bundle. In addition, S. 1913 is very 
unclear as to exactly what the Secretary is directed to sell and what, 
if anything, might remain in the hands of Reclamation. S. 1913 provides 
for the sale of the ``leasehold'' for these sites. While the bill fails 
to provide a definition of leasehold, it appears to be something less 
than fee simple title.
    Canyon Ferry Reservoir, one of the most scenic and popular flat 
water recreation areas in Montana, is located within two hours of the 
five largest cities in Montana. The area is already overcrowded during 
peak visitation periods at several campgrounds and day-use areas. This 
legislation could exacerbate this situation by reducing the public 
access to additional areas of this reservoir.
    We are concerned that if the intent of S. 1913 is to sell the 
leaseholds only, Reclamation's role would shift from that of a public 
agency managing public land, to that of a public agency managing 
private leaseholdings. If it is the intent of S. 1913 to sell the cabin 
sites on a fee simple basis, then Reclamation's role changes to that of 
a public agency managing private inholdings in public lands.
    Further, actual or effective private fee simple ownership of these 
lands would complicate administration and management of the Canyon 
Ferry Project. The legislation would likely exacerbate existing 
difficulties around such issues as lake fluctuations, land use, and 
water quality concerns related to septic systems. In the past, lessees 
of cabin sites have complained about degradation of scenic qualities 
when the lake level declined due to operational constraints. Given that 
Canyon Ferry is a multipurpose project, we are concerned that this 
legislation could lead to an increase in disputes and hamper 
Reclamation's ability to balance operations at Canyon Ferry reservoir 
for all the authorized project purposes, especially in dry years.
    The bidding process proposed in S. 1913 is inequitable and is 
unlikely to result in a bid that is higher than the minimum required. 
Section 4(c)(3) would give to the Canyon Ferry Recreation Association a 
preference over anyone else. If someone other than the CFRA is the 
highest bidder, CFRA would have the right to match the highest bidder 
and purchase the leasehold. thereby providing little incentive for 
anyone but CFRA to submit a bid.
    In addition, Section 4(d)(3)(A) would reduce any incentive to bid 
up the price above the minimum appraised price by requiring the 
successful bidder to offer each of the existing lessees an option to 
purchase their leaseholds at the minimum allowable bid. Any bidder 
offering more would lose money if the individual lessees takes the 
option to purchase the leasehold.
    Furthermore, Section 4(c)(2) provides that a minimum bid will be 
set ``in consultation with interested bidders.'' It is unclear why 
interested parties should be invited into the process of making an 
objective determination of fair market value by a third party 
appraiser. This appears designed to skew the process.
    Presently, the United States collects approximately $290,000 per 
year in rental income from the cabin sites at Canyon Ferry Reservoir. 
By 2001, the receipts are expected to be approximately $700,000 per 
year. It is estimated that the total value of the existing leaseholds 
is approximately $21 million. Under S. 1913, the revenues that the 
United States presently receives and would receive in the future 
through the cabin site leasing program would be foregone and only 10 
percent of proceeds from the auction would be paid to the United 
States. While 55 percent of the purchase price would be deposited in 
the Treasury, the bulk of this would be deposited in a new interest-
bearing account established in Section 6. Because this section also 
directs the spending of the ``earnings'' from this account without 
further appropriations, the funds deposited in this new account would 
not have the effect of reimbursing the Federal Government for costs it 
has incurred for the project lands and cabin sites.
    Reclamation plans to seek a non-Federal managing partner to manage 
the recreation opportunities and lands at Canyon Ferry. Reclamation law 
provides for such managing partners to be able to utilize user fees and 
other receipts from the use of the public lands that they manage to 
operate and maintain existing facilities, and to enhance public 
recreation or fish and wildlife benefits. Without the revenues 
generated by the cabin site leases, the ability to attract a managing 
partner would be significantly diminished. This will result in the need 
for continued Federal appropriations for recreational management.
    In addition to those issues raised above, Reclamation has a number 
of technical concerns I would like to briefly highlight.
    1) The legislation fails to address who will pay for maintenance 
activities that Reclamation is currently paying for such as road 
maintenance and law enforcement once the leaseholds are granted or the 
fee simple titles to the lands are sold. The County should bear some 
responsibility for these costs, especially if the County is able to 
secure tax revenues as the result of the lands becoming subject to 
local taxes. It is unclear how local tax revenues would be generated 
from the leaseholds if the United States will continue to own the lands 
at Canyon Ferry.
    2) Under the existing arrangement at Canyon Ferry, licenses for 
boat docks are currently issued to cabin site lessees, but not to 
private landholders on other areas of the lake. If the cabin sites were 
sold, the question of whether to issue licenses would have to be 
addressed. S. 1913 is silent on the issue of boat dock licenses.
    3) Section 2(1)(C) presents as a finding that it is in the interest 
of the Secretary to reduce the Pick-Sloan project debt for the Canyon 
Ferry Unit. Yet, the bill does not provide for any debt reduction.
    4) Section 2(4) says the sale of leaseholds will reduce Federal 
payments in lieu of taxes. If fee simple title is not granted to the 
purchasers, payments in lieu of taxes (PILT) may continue to be 
required. If it is fee simple title that is to be auctioned, then the 
legislation should explicitly state that PILT payments will be 
discontinued. If it is only the leases that are to be sold, then absent 
legislative language, PILT payments would likely continue to be paid by 
the United States. In either case, it is not clear why PILT should 
continue.
    5) Section 3(3) would extend the benefits of the legislation to 
parties who do not hold a current lease and may not have legal claim to 
the use of the cabins.
    6) The issue of liability is not addressed. If S. 1913 proposes 
that it is fee simple title that is to be auctioned, then all liability 
for this land should be conveyed to the purchasers. If only the lease 
is to be auctioned, as we believe the bill to currently read, then 
unless otherwise stated, the liability remains with the United States--
thereby eroding whatever benefit is to be gained for the United States 
in this legislation.
    7) Section 4(b)(1)(B) calls for small parcels contiguous to the 
leaseholds to be conveyed in order to eliminate inholdings and 
facilitate administration of surrounding land remaining in Federal 
ownership. The bill assumes that the Secretary and the purchasers will 
be able to agree on each of these parcels. A public process should be 
undertaken to determine the size and shape of these parcels. Also, the 
fair market value of these areas should be determined.
    8) In Section 4(c)(3) the word ``than'' appears to be missing 
following the clause, ``If the highest bidder is other'' and before the 
word ``CFRA.''
    9) Section 4(d)(3)(B)(ii) says that the purchaser shall compensate 
the lessee for the ``full'' market value of the improvements. It is not 
apparent whether the term ``fair'' should be substituted for ``full'' 
as occurs throughout the bill.
    10) Section 5 fails to describe whether the members of the Canyon 
Ferry-Missouri River Trust will be compensated for their efforts, who 
will appoint them as members, and what their responsibilities will 
entail.
    S. 1913 would affect direct spending or receipts and therefore be 
subject to the ``pay-as-you-go provisions of the Omnibus Budget 
Reconciliation Act of 1990.
    Again, Mr. Chairman, while we appreciate the interest of this 
Committee and the Montana delegation, we strongly oppose S. 1913 and do 
not believe this legislation is necessary.
                                     3888 East Shore Drive,
                            Helena, MT 59602, June 7, 1998.

    Senator Max Baucus,
    Senate Hart Building,
    Washington, DC 20510-2603.

    Dear Max: I'm speaking in support of your proposed legislation to 
allow the 265 cabin sites located along the shoreline of Canyon Ferry 
Reservoir, Montana, to be sold to the highest bidder at auction.
    I believe that your bill encompasses the necessary language to 
allow a fair disposition of this property and, at the same time, 
protects and enhances the rights of all citizens to use Canyon Ferry as 
a prime recreation site. Further, your bill will reduce future 
conflicts that could arise between the existing managing agency and the 
cabin owners; thereby, reducing administrative time presently spent in 
conflict management. In short, your bill should result in a win-win 
situation for all parties.
    I appreciate the efforts you and your staff have made to resolve 
this issue and especially appreciate the many hours Holly Luck has 
spent in meeting with cabin owners and others to help structure this 
bill.
            Sincerely,
                                           Gil R. Alexander
                                 ______
                                 
                                    John and Julie Blacker,
                                     2615 Gold Rush Avenue,
                                          Helena, MT 59601.

    Senator Max Baucus,
    Senate Hart Building,
    Washington, DC 20510-2602.

    Dear Senator Baucus: We again wanted to thank you for all your hard 
work and support of Senate Bill 1913. As you may know we are current 
lease holders at canyon ferry and sincerely wish to purchase the land 
that we now lease.
    Our family has been the only lease holder of this site for over 
forty years, and in accordance with the lease agreement have added many 
improvements to this site. It would be easy to say that this site is 
now home. It has also been a long term goal of our family to someday 
purchase this site to preserve the memories and wonderful times our 
families have shared there.
    We will continue to work toward our goal and support your efforts 
in this worthwhile bill. We are also aware that this bill offers many 
other opportunities and benefits with the trust funds that will be 
created.
    Thank you again.
            Sincerely,
                                    John and Julie Blacker.
                                 ______
                                 
                                         801 Knight Street,
                               Helena, MT 59601-2669, June 6, 1998.

    Senator Max Baucus,
    Hart Senate Office Building,
    Washington, DC 20510.

    Senator Baucus, Ladies & Gentlemen: My family and I support Senate 
Bill 1913, the Montana Fish and Wildlife Conservation Act. It will 
alleviate a problem that has aggravated all parties involved for nearly 
half a century. I don't own property at Canyon Ferry, but in any given 
year I spend around 30 days on or around the reservoir. Being somewhat 
handicapped, I find that Canyon Ferry is one of the diminishing number 
of places I can still access successfully.
    In Friday's Independent Record, an issue was raised concerning 
campgrounds. Believe me, there are innumerable bays and coves suitable 
for development, on both sides of the upper end of the reservoir, 
should more campgrounds become necessary in the future. As noted in the 
article, the present campgrounds are only hill three weekends a year: 
Memorial Day, Fourth of July and Labor Day. One of the beauties of 
Canyon Ferry is that its size accommodates both the few and the many in 
any given month of the year.
    Obviously S. 1913 has been carefully crafted to accomplish the 
greatest, and fairest, good to the greatest number and thereby has 
gained the support of our entire congressional delegation, no small 
feat in itself! The Federal agencies involved should be reminded their 
job is to carry out the will of Congress, not vice versa.
    Two critical aspects of the bill are the Canyon Ferry-Missouri 
River Endowment and the Montana Hunter and Fisherman Access Fund 
endowment. Those features make the proposal a win-win situation. 
Refinements in terms of guaranteed shoreline public access and 
enhancement of the considerable wildlife habitat necessities could 
improve the concept. Tough language should protect the funds generated 
from being raided for other purposes, and leaseholders should have the 
right of first refusal.
    Senate Bill 1913 is a golden opportunity to fix a festering 
problem, I urge the public, and Congress, to support it.
            Sincerely,
                                          Robert E. Carroll