[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
H.R. 706 and H.R. 1870
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LEGISLATIVE FIELD HEARING
before the
SUBCOMMITTEE ON WATER AND POWER
of the
COMMITTEE ON RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
FIRST SESSION
__________
December 10, 2001 in Las Vegas, Nevada
__________
Serial No. 107-77
__________
Printed for the use of the Committee on Resources
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______
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COMMITTEE ON RESOURCES
JAMES V. HANSEN, Utah, Chairman
NICK J. RAHALL II, West Virginia, Ranking Democrat Member
Don Young, Alaska, George Miller, California
Vice Chairman Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana Dale E. Kildee, Michigan
Jim Saxton, New Jersey Peter A. DeFazio, Oregon
Elton Gallegly, California Eni F.H. Faleomavaega, American
John J. Duncan, Jr., Tennessee Samoa
Joel Hefley, Colorado Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland Solomon P. Ortiz, Texas
Ken Calvert, California Frank Pallone, Jr., New Jersey
Scott McInnis, Colorado Calvin M. Dooley, California
Richard W. Pombo, California Robert A. Underwood, Guam
Barbara Cubin, Wyoming Adam Smith, Washington
George Radanovich, California Donna M. Christensen, Virgin
Walter B. Jones, Jr., North Islands
Carolina Ron Kind, Wisconsin
Mac Thornberry, Texas Jay Inslee, Washington
Chris Cannon, Utah Grace F. Napolitano, California
John E. Peterson, Pennsylvania Tom Udall, New Mexico
Bob Schaffer, Colorado Mark Udall, Colorado
Jim Gibbons, Nevada Rush D. Holt, New Jersey
Mark E. Souder, Indiana James P. McGovern, Massachusetts
Greg Walden, Oregon Anibal Acevedo-Vila, Puerto Rico
Michael K. Simpson, Idaho Hilda L. Solis, California
Thomas G. Tancredo, Colorado Brad Carson, Oklahoma
J.D. Hayworth, Arizona Betty McCollum, Minnesota
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana
Allen D. Freemyer, Chief of Staff
Lisa Pittman, Chief Counsel
Michael S. Twinchek, Chief Clerk
James H. Zoia, Democrat Staff Director
Jeff Petrich, Democrat Chief Counsel
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SUBCOMMITTEE ON WATER AND POWER
KEN CALVERT, California, Chairman
ADAM SMITH, Washington, Ranking Democrat Member
Richard W. Pombo, California George Miller, California
George Radanovich, California Peter A. DeFazio, Oregon
Greg Walden, Oregon, Calvin M. Dooley, California
Vice Chairman Grace F. Napolitano, California
Michael K. Simpson, Idaho James P. McGovern, Massachusetts
J.D. Hayworth, Arizona Hilda L. Solis, California
C.L. ``Butch'' Otter, Idaho Brad Carson, Oklahoma
Tom Osborne, Nebraska
Jeff Flake, Arizona
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C O N T E N T S
----------
Page
Hearing held on December 10, 2001................................ 1
Statement of Members:
Calvert, Hon. Ken, a Representative in Congress from the
State of California........................................ 1
Gibbons, Hon. Jim, a Representative in Congress from the
State of Nevada............................................ 3
Prepared statement of.................................... 4
Skeen, Hon. Joe, a Representative in Congress from the State
of New Mexico.............................................. 2
Prepared statement of.................................... 3
Statement of Witnesses:
Keys, John W., III, Commissioner, Bureau of Reclamation, U.S.
Department of the Interior................................. 5
Prepared statement on H.R. 706........................... 7
Prepared statement on H.R. 1870.......................... 8
Mackedon, Mike, City Attorney, City of Fallon, Nevada........ 9
Mowles, Sherry, El Paso, Texas............................... 17
Prepared statement on H.R. 706........................... 18
Tedford, Hon. Ken, Mayor, City of Fallon, Nevada, prepared
statement.................................................. 11
Ward, Charles C., President, Elephant Butte/Caballo
Leaseholders Association................................... 12
Prepared statement on H.R. 706........................... 15
LEGISLATIVE HEARING ON H.R. 706, TO DIRECT THE SECRETARY OF THE
INTERIOR TO CONVEY CERTAIN PROPERTIES IN THE VICINITY OF THE ELEPHANT
BUTTE RESERVOIR AND THE CABALLO RESERVOIR, NEW MEXICO; AND H.R. 1870,
TO PROVIDE FOR THE SALE OF CERTAIN REAL PROPERTY WITHIN THE NEWLANDS
PROJECT IN NEVADA, TO THE CITY OF FALLON, NEVADA.
----------
Monday, December 10, 2001
U.S. House of Representatives
Subcommittee on Water and Power
Committee on Resources
Las Vegas, Nevada
----------
The Subcommittee met, pursuant to call, at 11 a.m., the
Commission Chambers, Clark County Government Center located at
500 South Grand Central Parkway, Las Vegas, Nevada, Hon. Ken
Calvert [Chairman of the Subcommittee] presiding.
STATEMENT OF HON. KEN CALVERT, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mr. Calvert [presiding]. Hearing will come to order. It is
delightful to be here in Las Vegas, Nevada. It is a beautiful
facility that they have built here since the last time I had a
hearing here.
First, we will have a field hearing on H.R. 706 and H.R.
1870. Many of the early reclamation projects were constructed
at a time when there were no local communities and utilities
nearby. As the West became more populated and the urbanization
of these areas, the Bureau of Reclamation now owns and operates
public facilities and land that would be owned or operated and
funded by private corporations or a local government agency if
they were constructed today.
The Department of Interior has announced that reclamation
would transfer responsibly for a significant number of
facilities to state, local governments and other entities. To
date, few of them have been forwarded to the Congress and
passed. Transfers of these facilities out of Federal ownership
remains a high priority, and expeditious steps must be found to
facilitate them.
I look forward to hearing from our witnesses today
regarding two land transfer bills, one in Nevada and the other
in New Mexico. But before we go into that, we have the
gentleman from New Mexico who is senior member of the House and
an appropriator, Interior Appropriations Chairman, Mr. Joe
Skeen. Would you like to have an opening statement?
STATEMENT OF THE HON. JOE SKEEN, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEW MEXICO
Mr. Skeen. Mr. Chairman, I want to take the opportunity to
extend my very warm regards to you for holding this hearing
today. I know how busy the Subcommittee is, especially with
respect to the, quote, ``little California'' bill. My intent is
to keep my testimony short so that the witnesses seated next to
me have the opportunity to explain to you and the members of
this fine Subcommittee the Elephant Butte story.
The Elephant Butte Reservoir story begins in the 1930's as
the Government offered people the opportunity to build
recreational homes on land leased from the U.S. Bureau of
Reclamation. The covenants in the lease agreements required
leaseholders to make substantial investments on the 400 sites
released under the program. It was every leaseholder's hope
that the Government would someday privatize the leased land and
offer it for sale through a purchase option. Unfortunately,
this has not yet happened. The Bureau, throughout most of the
20th Century, apparently felt that someday they might need this
land if the dams were ever modified or enlarged. Needless to
say, we now believe that modifications or enlargement will
never occur.
While legislation enacted by Congress in 1984 allowed the
leaseholders of Lake Sumner--another Bureau of Reclamation
project where recreational homes existed--the opportunity to
purchase their lots, the residents of Elephant Butte remain in
a lease-only situation. Despite my previous efforts, including
the introduction of prior year legislation, and established
patterns of Government transfers, we appear before you to make
our request once again.
There are three issues that had to be resolved with the
Bureau of Reclamation in order to facilitate a successful
transfer. These include property appraisals, the number of lots
that would be sold, and the issue of where the money would go.
My bill, H.R. 706, addresses each of these issues in a fair and
equitable manner. In effect, current leaseholders would have
the opportunity to purchase the land on which their homes
currently exist at an unimproved, lakefront property appraised
value. Proceeds would be deposited in the reclamation fund on
behalf of the Rio Grande Project and would be distributed under
existing statues. Finally, the bill guarantees continued public
access to water.
This legislation is carefully crafted to resolve these
issues. We must not lose track of the fact that this is really
a story about people, their lives and the role of the
Government in the settling of the West. In closing, Mr.
Chairman, I would like you and the Committee to do what is
right by passing this legislation, and you are known for your
fairness. It is time that we offer these fine people the
opportunity to purchase the land that many have leased for over
60 years.
I would like my statement to be--
Mr. Calvert. Without objection, the full statement will be
entered into the record.
Mr. Skeen. Thank you.
[The prepared statement of Mr. Skeen follows:]
Statement of Hon. Joe Skeen, a Representative in Congress from the
State of New Mexico
Mr. Chairman, I want to take this opportunity to extend my very
warm regards to you for holding this hearing today. I know how busy the
subcommittee is, especially with respect to the ``little California''
bill. My intent is to keep my testimony short so that the witnesses
seated next to me have the opportunity to explain to you and the
members of this fine subcommittee the Elephant Butte Story.
The Elephant Butte Reservoir story begins in the 1930's as the
Government offered people the opportunity to build recreational homes
on land leased from the U.S. Bureau of Reclamation. The covenants in
the lease agreements required leaseholders to make substantial
investments on the four-hundred sites released under the program. It
was every leaseholder's hope that the Government would someday
privatize the leased land and offer it for sale through a purchase
option. Unfortunately, this has not yet happened. The Bureau,
throughout most of the 20th Century, apparently felt that someday they
might need this land if the dams were ever modified or enlarged.
Needless to say, we now believe that modifications or enlargement will
never occur.
While legislation enacted by Congress in 1984 allowed the
leaseholders of Lake Sumner (another Bureau of Reclamation project
where recreational homes existed), the opportunity to purchase their
lots, the residents of Elephant Butte remain in a lease-only situation.
Despite my previous efforts, including the introduction of prior year
legislation, and established patterns of Government transfers, we
appear before you today to make our request once again.
There are three issues that had to be resolved with the Bureau of
Reclamation in order to facilitate a successful transfer. These include
property appraisal, the number of lots that would be sold, and the
issue of where the money would go. My bill, H.R. 706 addresses each of
these issues in a fair and equitable manner. In effect, current
leaseholders would have the opportunity to purchase the land on which
their homes currently exist at an unimproved, lakefront-property
appraised value. Proceeds would be deposited in the reclamation fund on
behalf of the Rio Grande Project and would be distributed under
existing statues. Finally, the bill guarantees continued public access
to the water.
This legislation is carefully crafted to resolve these issues. We
must not lose track of the fact that this is really a story about
people, their lives, and the role of the Government in the settling of
the west. In closing Mr. Chairman, I ask you and the committee to do
what is right by passing this legislation. It is time that we offer
these fine people the opportunity to purchase the land that many have
leased for over sixty years.
______
Mr. Calvert. And we thank the Chairman for coming out here
today to offer some assistance on good legislation. And with
that, also we have up today H.R. 1870 that is sponsored by the
gentleman from Nevada, whose home State we are in, and we are
grateful for your wonderful hospitality. And if you would like
to speak to H.R. 1870, you are recognized.
STATEMENT OF HON. JIM GIBBONS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF NEVADA
Mr. Gibbons. Thank you very much. Mr. Chairman, thank you
and I want to welcome you. I want to welcome my colleague, Mrs.
Napolitano, from California here was as well, as well as my
good friend Mr. Skeen from New Mexico. And I want to thank you
for having this hearing today and having this hearing in Nevada
on this piece of legislation, as part of your Committee's field
hearing that you are holding today.
H.R. 1870 is a bill to provide the city of Fallon, Nevada
the exclusive right to purchase approximately 6.3 acres of
public land located in the downtown area of that city. The
Fallon Rail Freight Loading Facility Transfer Act--if you can
say that quickly, you are better than I am--will enable the
city of Fallon to make the necessary long-term investments to
ensure the future viability of this important municipal asset.
Now, the city of Fallon is a rural, agricultural community
of 8,700 residents located in northern Nevada, approximately 70
miles east of Reno. Since 1984, the city has leased
approximately 6.3 acres of property from the U.S. Bureau of
Reclamation that it utilizes as a rail freight yard and loading
facility. The city, the State of Nevada, the U.S. Department of
Transportation and the Southern Pacific Railroad have all
collectively invested a significant amount of money in this
facility, thus providing approximately 400 jobs in that
community.
On January 1, 2000, the long-term lease agreement between
the city of Fallon and the Bureau of Reclamation expired. It
was not terminated; it simply expired. And as negotiations
began for a new long-term lease, the city of Fallon and the
Bureau came to the conclusion that it would be in the best
interest of both parties to have ownership of this property
transferred to the city of Fallon. The city would be able to
make those long-term investments to a facility that it owned
without having to worry about renegotiating new leases and the
possibility of losing access to the property at some future
date.
The Bureau of Reclamation would be able to divest itself
from an asset that no longer serves a purpose to its core
mission allowing more of its scarce resources then to be
focused on the traditional roles of the Bureau of Reclamation.
Of course, Mr. Chairman, this transfer will be contingent on
the satisfactory conclusion of all necessary environmental
reviews and will be purchased by the city at fair market value.
The Fallon Rail Freight Loading Facility Transfer Act is a win-
win situation for all of the affected parties.
And, finally, Mr. Chairman, this bill has strong support
from Nevada's bipartisan congressional delegation. Along with
the city of Fallon, we look forward to further consideration of
this legislation and, ultimately, its passage. And again, Mr.
Chairman, welcome to Nevada and thank you for providing the
city of Fallon and Nevada with this opportunity.
[The prepared statement of Mr. Gibbons follows:]
Statement of the Hon. Jim Gibbons, a Representative in Congress from
the State of Nevada
Mr. Chairman, welcome back to my home state of Nevada. I want to
thank you for allowing this legislation, H.R. 870, to be considered
today as part of your committee's field hearing.
H.R. 1870 is a bill to provide the City of Fallon, Nevada the
exclusive right to purchase approximately 6.3 acres of public land
located in the downtown area of the City.
The Fallon Rail Freight Loading Facility Transfer Act will enable
the City of Fallon to make the necessary long-term investments to
ensure the future viability of this important municipal asset.
Fallon is a rural, agricultural community of 8,700 residents
located in northern Nevada--approximately 70 miles east of Reno.
Since 1984 the City has leased approximately 6.3 acres of property
from the U. S. Bureau of Reclamation that it utilizes as a rail freight
yard and loading facility.
The City, the State of Nevada, the U.S. Department of
Transportation and the Southern Pacific Railroad have collectively
invested a significant amount of money in this facility--thus providing
over 400 jobs in the community.
On January 1, 2000 the long-term lease agreement between the City
of Fallon and the Bureau of Reclamation expired.
As negotiations began for a new long term lease, the City of Fallon
and the Bureau came to the conclusion that it would be in the best
interest of both parties to have ownership of this property transferred
to the City of Fallon.
The City would be able to make long-term investments to a facility
that it owned without having to worry about renegotiating new leases
and the possibility of losing access to the property.
The Bureau of Reclamation would be able to divest itself from an
asset that no longer serves a purpose to its core mission allowing more
of its scarce resources to be focused on the traditional roles of the
Bureau.
Of course, this transfer will be contingent on the satisfactory
conclusion of all necessary environmental reviews and will be purchased
by the City at fair market value.
The Fallon Rail Freight Loading Facility Transfer Act is a win-win
situation for all of the affected parties.
Finally, Mr. Chairman, this bill has strong support from Nevada's
bipartisan congressional delegation. Along with the City of Fallon, we
look forward to further consideration of this legislation, and
ultimately, its passage.
Again, Mr. Chairman, welcome to Nevada--and thank you for providing
the City of Fallon with this opportunity.
______
Mr. Calvert. I thank the gentleman. And with that, I think
we will get into our first panel. And we are pleased that
Commissioner John Keys is with us today, with the Bureau of
Reclamation, Department of Interior. And, Mr. Keys, you are
recognized. We are on a 5-minute rule here. I don't think we
are that strict about that. We will try to keep the testimony
to about 5 minutes, and we will have more time for questions.
STATEMENT OF JOHN W. KEYS III, BUREAU OF RECLAMATION,
DEPARTMENT OF INTERIOR
Mr. Keys. Mr. Chairman, thank you very much. It is a
pleasure to be here with you today and to testify on H.R. 706
and 1870. I would ask that my full statements on both of these
bills be included in the record.
Mr. Calvert. Without objection, so ordered.
Mr. Keys. Mr. Chairman, H.R. 706 provides for the
conveyance to private ownership of 403 residential lots at
Elephant Butte and Caballo Reservoirs in New Mexico. The
Department supports this legislation with a few technical
modifications.
In the late 1940's, quarter- and half-acre lots along
Elephant Butte and Caballo Reservoir shorelines were made
available for public lease on a short-term basis for part-time
recreational use. There are 348 lots at Elephant Butte and 55
lots at Caballo. Over time, the temporary structures that were
put there became permanent, and the leaseholders want to
purchase and acquire title to the individual leased lands. The
Bureau of Reclamation has done a resource management plan for
the two reservoirs and has done the necessary environmental
impact statement for that plan.
As I said earlier, the Department supports H.R. 706 with a
few modifications. The first one is there is a few of those
lots that may create some inholdings and may be needed for
future consideration. We are certainly willing to work with the
leaseholders and with you on determining which ones of those
and how significant that is. The second issue is fair market
value. As the lands are really used, should be used for their
valuation. Proceeds from the sales of the lots should be
properly credited, and time limits and the costs of surveys and
appraisals need to be revisited. We will look forward to
working with you on accomplishing these few technical changes
and then the passage of the legislation and conveyance of those
lots at the two reservoirs.
H.R. 1870 provides for the conveyance of the 6.3 acres of
land, otherwise known as the Fallon Freight Loading Facility or
the Fallon Freight Yards, within the Newlands Project in Nevada
to the city of Fallon. Since the facilities no longer serve the
needs of the project, the Bureau supports the conveyance. The
Department supports H.R. 1870 with a few technical
modifications also.
The Fallon Freight Yard was acquired by the Bureau of
Reclamation for the Newlands Project in 1920. The acquisition
cost was allocated to the Truck E. Carson Irrigation District
who has since repaid that obligation. For many years, the city
of Fallon leased the facilities for industrial uses. While that
lease was terminated in January of 2001, the city wants to
acquire the lands, and we certainly support that. Truckee-
Carson Irrigation District, the project beneficiary, has stated
that it doesn't want or need those lands for its operation.
As I said before, the Department supports H.R. 1870 with a
few technical clarifications. The first of those is the
Comprehensive Environmental Response Compensation and Liability
Act--most of us that work with that call it CERCLA--and
reclamation policy that requires that all liability issues,
including environmental liability, be resolved before title
transfer. We have conducted a Phase I site assessment and
identified 13 conditions on those lands that need to be further
investigated and cleaned up. The Phase II assessment must be
done and then accomplished. We have a contract and a work plan,
and we are working with Fallon to get that done. The conveyance
should not be done until these conditions are resolved.
Second, since Truckee-Carson Irrigation District has repaid
the allocated costs for these lands, we feel that the proceeds
from the sale should go to reimburse the Newlands Project.
Third, some details of the appraisals need to be worked out,
and, fourth, since the leases ran out, the city of Fallon has
leased some of those lands to another company, there were some
funds involved, and we are working with them to get that
straightened out. And, certainly, I don't see any problem with
any of those.
Mr. Chairman, in summary, Reclamation strongly supports
transferring ownership of all of these facilities--at Elephant
Butte, at Caballo and at the Fallon Freight Yard--with the
above-mentioned modifications or some work on those. We would
look forward to resolving the issues and then completing the
transfers. Look forward to working with you and your staffs on
the legislation, and I would certainly answer any questions
that you might have.
[The prepared statements of Mr. Keys follow:]
Statement of John W. Keys, III, Commissioner, Bureau of Reclamation,
U.S. Department of the Interior on H.R. 706
Mr. Chairman and members of the Subcommittee, I am John Keys. I am
Commissioner of the U.S. Bureau of Reclamation (Reclamation). I
appreciate the opportunity to appear today to present the
Administration's views on H.R. 706, the Lease Lot Conveyance Act of
2001. H.R. 706 provides for the transfer and disposal of residential
leased lots located on federal properties at Elephant Butte and Caballo
Reservoirs near Truth or Consequences, New Mexico.
In the late 1940s, small quarter-acre and half-acre lots along the
shoreline of Elephant Butte and Caballo Reservoirs were made available
for the public to lease and occupy on a short-term basis. Individuals
were permitted to place tents, campers, or construct temporary
structures on the site for the duration of their stay. Although the
original intent of the lease lot program was to provide lots for part-
time recreational use, over the years permanent structures and other
improvements have replaced initial recreational facilities with many of
the structures now used as full-time residences.
H.R. 706, as introduced, would convey ownership of 403 lease lots
at Elephant Butte and Caballo Reservoirs to the lessees for ``fair
market value.'' However, rather than appraise these lots at their
actual value the legislation requires that the lease lots be appraised
as unimproved land, as though they were vacant building lots, and the
proceeds be deposited in the Reclamation Fund on behalf of the Rio
Grande Project and made immediately available to the subject Irrigation
Districts under subsection I of the Fact Finders Act.
The Administration supports the effort to convey certain lands and
facilities to private entities--in particular, those that are no longer
necessary for managing either the dam or the recreation areas. However,
we have concerns about a number of provisions in the bill, and cannot
support it as currently written. We would appreciate the opportunity to
work with the Committee to address the various technical provisions
necessary to facilitate this land transfer.
Section 7 should be modified to direct proceeds from the sale of
lots on acquired lands to the Reclamation Fund pursuant to existing
laws and of lots on withdrawn lands to the general Treasury pursuant to
existing law. Approximately 57 percent of the land in question is
public land that was withdrawn from the public domain for the project
by the Bureau of Reclamation from the Bureau of Land Management and as
such, the districts have not paid anything toward acquisition costs.
The remaining 43 percent of the lots are located on lands acquired by
the Bureau of Reclamation for construction of the Project. However, in
1937 the Districts were relieved of their obligation to repay any
portion of the costs of acquired lands or the cost of constructing
Elephant Butte Dam and Reservoir and all payments made up to that time
were returned to the districts as credit. All costs of constructing
Caballo Dam and Reservoir were charged to flood control. Also, in
continuing litigation during the past 10 years, Reclamation has
contended that these revenues, as well as other similar project
revenues, are not one of the three types of revenues covered by
subsection I Since the proceeds of this sale would not be credited or
subject to treatment under subsection I, the reference to this
subsection is inappropriate and should be deleted. We believe the bill
should be amended to clarify issues regarding the disposal of withdrawn
(as distinct from acquired) lands, and would like to work with the
Committee to develop legislative language.
Section (3)(1), as drafted requires that the lots be appraised as
if they are unimproved lands. Since the existing lots are prime
lakefront recreational home sites, are the only such properties in this
area of southern New Mexico and have fully developed roads and access
to all necessary utilities to sustain full-time residency, such an
appraisal would seriously understate their value. This section should
be modified to require that fair market value be established by an
appraisal in conformance with the Uniform Appraisal Standards for
Federal Land Acquisitions and with currently accepted industry
appraisals techniques.
Other issues that merit further consideration are the time limits
contained in this act and the need to include administrative, survey
and appraisal costs for conveyance of the lots from the government to
the purchaser in Section (5)(a)(2), Administrative Costs. Surveys could
take from 3 to 6 months to complete and appraisals requiring sufficient
time for review and approval would take another 4 to 5 months, most
likely exceeding the timing proposed in Section 5(d). These survey and
appraisal costs should be borne by the beneficiaries.
In summary, while Reclamation generally supports legislation to
privatize certain leased lots at Elephant Butte and Caballo Reservoirs,
we have concerns about some provisions in H.R. 706, and the
Administration cannot support it as written. We would appreciate the
opportunity to work with the Committee to address these concerns.
______
Statement of John W. Keys, III, Commissioner, Bureau of Reclamation,
U.S. Department of the Interior on H.R. 1870
I am John Keys, Commissioner of the Bureau of Reclamation, and I am
here today to present the Administration=s views on H.R. 1870, the
Fallon Rail Freight Loading Facility Transfer Act. This bill provides
for the sale of about 6.3 acres of real property within the Newlands
Project, Nevada, to the city of Fallon, Nevada. Reclamation supports
conveyance of this acreage to the city of Fallon; however, four issues
B credit of sale proceeds, appraisal, liability, payment to Reclamation
of certain revenues B remain to be addressed. We cannot support the
bill as written, but we look forward to working with the Subcommittee
to resolve these issues so the work of conveying this land to the city
of Fallon can proceed.
The land to be conveyed to the city of Fallon is part of the
Newlands Project. It was acquired in 1920 by the United States
government. The proceeds of the sale of this land to the city of Fallon
should reimburse the Newlands Project. Therefore, Section 2(b) of H.R.
1870 should be amended to state that the amount paid by the city of
Fallon should be credited to the Newlands Reclamation Project fund in
the Treasury, in accordance with section 204(c), of the Federal
Property and Administrative Services Act of 1949 (40 U.S.C. 485(c)).
The fair market value of the real property should be determined by
an independent appraiser approved by the Commissioner of Reclamation,
in accordance with regulations concerning disposal of real property.
[43 CFR 402.6] H.R. 1870 should be amended to state that the appraisal
under section (b) be conducted at the city of Fallon=s expense by an
independent appraiser approved by the Commissioner of Reclamation.
As required by law (the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA), as amended, 42 U.S.C. ' 9601
et seq.) and Reclamation policy, all liability issues, including
environmental liability, need to be resolved before conveyance of title
to the city. The city of Fallon leased this land for some time--its
lease was terminated on January 31, 2001. During the lease period, the
city of Fallon used the site for various purposes, including: storage
of electrical equipment such as transformers and capacitors; storage of
gasoline and diesel fuel; and construction and operation of a truck to
railroad transfer structure. A Phase I Environmental Site Assessment
(completed under contract by Tetra Tech Environmental Management, Inc.,
in accordance with ASTM Practice E 1527) revealed 13 recognized
environmental conditions that will need to be investigated and, if
verified, cleaned up. Reclamation is working with the city of Fallon on
a work plan to perform this investigation.
Finally, the city of Fallon must pay to Reclamation revenues it has
improperly received from Premier Chemical, the company using the Fallon
Rail Freight Loading Facility for freight loading purposes. Since April
3, 2001, the city of Fallon has had no legal interest in the property;
nonetheless it has received revenues from Premier Chemical for its use
of the property. In a recent conversation with the Reclamation manager
in Carson City, the city has committed to promptly pay those revenues
to Reclamation.
In summary, Reclamation supports the proposed conveyance, but
cannot support the bill until certain technical modifications are made.
H.R. 1870 should be amended to address the four issues listed above
with special attention to the condition that the conveyance shall not
occur until the Commissioner of Reclamation certifies that all
liability issues relating to the property (including issues of
environmental liability) and all revenue issues relating to revenue
improperly retained by the city of Fallon have been resolved.
______
Mr. Calvert. I thank the gentleman. If it is OK with the
Commissioner, I think we will go ahead and recognize the second
panel, and then we can open it for questions for everybody to
participate.
In panel two, we have several witnesses. Mike Mackedon will
be speaking on H.R. 1870. He is the city attorney, the city of
Fallon. We have Charles C. Ward from Elephant Butte, New
Mexico, and Mrs. Sherry Mowles, both of which will be speaking
toward H.R. 706. With that, Mike, you are recognized. Again, we
are on a 5-minute rule, more or less, and you may begin any
time you like.
STATEMENT OF MIKE MACKEDON, CITY ATTORNEY, CITY OF FALLON,
NEVADA
Mr. Mackedon. Thank you, Mr. Chairman. It is a pleasure for
me to be here, but as you have indicated, I am here to speak
and give the testimony of Mayor Ken Tedford who could not be
here for himself today. But I am knowledgeable on this matter
and be able to answer questions after I have read his
statement. This is the statement he would have given had he
been here, and I am quite sure it will fall within the 5-minute
category.
Chairman Calvert, members of the Subcommittee, my name is
Ken Tedford--and that is the Mayor of the city of Fallon. Had
he been here today, he would have told you how pleased he would
have been to have the opportunity to appear before the
Subcommittee and to testify in favor of the passage of H.R.
1870. He says in the statement, ``I am particularly mindful
that this hearing is being held at a time when the Congress and
our Nation's leadership face unique and extraordinary
challenges and, yet continues to do the people's business in
the face of those challenges.'' And he thanks you.
If enacted into law, H.R. 1870 will enable the city of
Fallon to acquire, through purchase at appraised value, a 6-
acre parcel of federally owned land that the city leased from
the Bureau of Reclamation originally in 1984. This parcel is
located, as our congressman has told you, entirely within the
corporate limits of the city itself.
The city is aware that the U.S. Government, through the
U.S. Reclamation Service, predecessor of the Bureau of
Reclamation, acquired the freight yard property in 1920. It
appears that from 1920 until the mid-1980's the Bureau of
Reclamation conducted operations thereon related to the
Newlands Project, which included but were not limited to the
electrical generation and distribution utility, which was
operated by the Bureau of Reclamation and the Truckee-Carson
Irrigation District.
Federal use of the property ended in the early 1980's. And
I think, in truth, that the Federal use of the properties
probably ended in 1968 or 1969, although Federal ownership was
discontinued--or has continued, I should say. But it was in
1968, I believe, that the Bureau of Reclamation and the
Truckee-Carson Irrigation District discontinued the operation
of its electrical utility, outgrew the need for this particular
yard. And from that point forward, the property has been used,
although owned by the Bureau of Reclamation, but used by the
parties, including the city of Fallon.
The lease anticipated--that is the lease with the city--
construction of the present railroad loading facility, which
was accomplished in 1990 by virtue of lease between the city
and the Bureau of Reclamation. That was a 10-year lease.
Earlier this year, during negotiations to extend the city's
lease of the property, which has not been concluded, the Bureau
advised the city that it was their preference that the city
assume fee ownership of the property rather than continuing to
lease it. The city manifested the same intent. This is the
city's desire, and as a result, we asked Representative Jim
Gibbons to introduce this legislation to authorize the Bureau
to sell the parcel to the city. We believe a companion measure
has been introduced in the Senate by our Senator Harry Reid.
The city's construction and operation of the freight yard
facility under a lease arrangement has been financially
encouraged and supported by the State of Nevada and the
Southern Pacific Railroad, pursuant to an operating agreement
dated July 5, 1990. The United States Department of
Transportation also participated financially through the
operation agreement, funding certain grants designed to assist
and promote local railroad service.
Accordingly there is a significant financial investment in
the freight yard facility by Federal and state governments and
private industry. The city has expended approximately $150,000,
the State of Nevada approximately $75,000, and the U.S.
Department of Transportation approximately $500,000.
Additionally, Southern Pacific Railroad has funded capital
improvements to upgrade and maintain approximately 20 miles of
track necessary for the operation of the facility. Accordingly,
the combined investment in this facility is well in excess of
$1 million. This cooperative funding demonstrates the
importance to the community and the State for the continued
viable operation of this facility by the city.
For more than 10 years the freight yard facility has served
as an anchor for the railroad spur which extends through the
city limits. The railroad spur would have been discontinued and
taken out of service were it not for this facility. And very
importantly, the facility serves as a railhead for a mining
company located in the small town of Gabbs, 70 miles to the
east and south of Fallon. Mining is that community's only
industry, and maintaining a railhead is essential to the
economy of the town.
I should say, or the Mayor would tell you, that the revenue
that the city might receive from the freight yard facility and
the rent that it has paid to the Bureau for the use of the
property are insignificant as compared to the regional economy
that the facility and the railroad spur generate and support.
I should tell you that since the railroad spur was improved
and this facility was developed, a number of other companies
have now located and are using this facility. So it has
fulfilled--this is an occasion where the project that was the
joint project of the Federal Government, the State of Nevada
and the city, has worked very well for our economy.
Before concluding, Mr. Chairman, I would like to touch
briefly on the environmental condition of the property. Because
the property has been used for industrial purposes for more
than 75 years--for the bulk of that time as an electrical
utility maintenance, storage and operations area--we and the
Bureau both believe that an environmental assessment should be
completed prior to a transfer. To that end, Phase I and Phase
II environmental assessments have been completed. Soil samples
have been taken, a laboratory analyses conducted. While things
generally look good, or we believe they do, from the
information we have, additional investigation is clearly
necessary and needs to be completed before it can be determined
if the property is environmentally clean or whether some sort
of remediation will be required and how that cost of
remediation should be allocated.
This concludes the Mayor's statement. I would be happy to
answer questions when that opportunity comes.
[The prepared statement of Mayor Ken Tedford follows:]
Statement of Hon. Ken Tedford, Mayor, Fallon, Nevada
Chairman Calvert, Members of the subcommittee, my name is Ken
Tedford and I am here today in my capacity as the Mayor of the City of
Fallon, Nevada. I am pleased to have this opportunity to appear before
the subcommittee and testify in favor of the passage of H.R. 1870. I am
particularly mindful that this hearing is being held at a time when the
Congress and our Nation's leadership face unique and extraordinary
challenges and, yet, you continue to do the people's business in the
face of these challenges. Thank you.
If enacted into law, H.R. 1870 will enable my City to acquire
through purchase at appraised value a six (6) acre parcel of federally
owned land that the City currently leases from the Bureau of
Reclamation. This parcel is located inside the corporate limits of the
City. The City is aware that the United States government, through the
U.S. Reclamation Service, predecessor of the Bureau of Reclamation,
acquired the freight yard property in 1920. It appears that from 1920
until the mid-1980's the Bureau of Reclamation conducted operations
thereon related to the Newlands Project, including but not limited to
the electric generation and distribution utility operated by the Bureau
of Reclamation and the Truckee-Carson Irrigation District. Federal use
of the property ended in the early 1980's. The first agreement for the
City's use of the property was a five (5) year lease in 1984 between
the Bureau of Reclamation and the City. That lease anticipated
construction of the present railroad loading facility, which was
accomplished pursuant to the 1990 lease between the City and the Bureau
of Reclamation.
Earlier this year, during negotiations to extend the City's lease
of the property, the Bureau advised the City that it was their
preference that the City assume fee ownership of the property rather
than continuing to lease it. This is the City's desire as well. As a
result, we asked Representative Jim Gibbons to introduce this
legislation to authorize the Bureau to sell the parcel to the City. A
companion measure has been introduced in the Senate by Senator Harry
Reid.
The City's construction and operation of the freight yard facility
under the existing lease has been financially encouraged and supported
by the State of Nevada and the Southern Pacific Railroad pursuant to an
Operating Agreement dated July 5, 1990. The United States Department of
Transportation also participated financially through the Operation
Agreement, funding certain grants designed to assist and promote local
railroad service. Accordingly there is a significant financial
investment in the freight yard facility by federal and state
governments and private industry. The City of Fallon has expended
approximately $150,000.00, the State of Nevada has expended
approximately $75,000.00, and the U.S. Department of Transportation has
expended approximately $500,000.00 on the facility. Additionally,
Southern Pacific Railroad has funded capital improvements to upgrade
and maintain approximately 20 miles of track necessary for the
operation of the facility. Accordingly the combined investment in this
facility is well in excess of $1,000,000.00. This cooperative funding
demonstrates the importance to the community and the State of Nevada
for the continued viable operation of this facility by the City of
Fallon.
For more than ten years the freight yard facility has served as an
anchor for the railroad spur which extends through the City limits. The
railroad spur would have been discontinued and taken out of service
were it not for this facility. The facility serves as a railhead for a
mining company located in the small town of Gabbs, seventy miles to the
east and south of Fallon. Mining is that community's only industry and
maintaining a railhead is essential to the economy of the town.
The revenue that the City receives from the freight yard facility
and the rent that it pays to the Bureau of Reclamation for the use of
the property are insignificant as compared to the regional economy that
the facility and the railroad spur generate and support.
Before concluding, Mr. Chairman, I would like to touch briefly on
the environmental condition of the property. Because the property has
been used for industrial purposes for more than 75 years--for the bulk
of that time as an electrical utility maintenance, storage and
operations area--we the Bureau both believe that an environmental
assessment should be completed prior to a transfer. To that end, Phase
I and Phase II Environmental Site Assessments have been completed at
the site. Soil samples have been taken and laboratory analyses
conducted. While things generally look good, some additional
investigations will need to be completed before it can be determined if
the property is environmentally clean or whether some sort of
remediation will be required.
Mr. Chairman, this concludes my statement but I would be happy to
answer any questions that you or the other Members may have. Thank you
again for allowing me to testify in support of this legislation.
______
Mr. Calvert. Appreciate the gentleman's testimony.
Mr. Mackedon. Thank you.
Mr. Calvert. Next, Mr. Charles C. Ward, from Elephant
Butte, New Mexico in regards to H.R. 706. Mr. Ward, you are
recognized.
STATEMENT OF CHARLES C. WARD, PRESIDENT, ELEPHANT BUTTE/
CARBALLO LEASEHOLDERS ASSOCIATION
Mr. Ward. Thank you, Mr. Chairman. Mr. Chairman and
distinguished Committee members, my name is Charlie Ward. I am
the president of the Leaseholders' Association at Caballo and
Elephant Butte Reservoirs. I have with me here today two
members of our Board of Directors: Mr. Mike Mowles and Mr.
Jerry Stagner.
Mr. Mowles is one of the leaseholders whose lease lot was
not recommended for privatization in the draft resource
management plan and the environmental impact statement. Mr.
Stagner is not a leaseholder, but he is one of the civic
leaders of our community and has volunteered to serve on our
board. He is the president of the State Bank, a member of the
Economic Development Committee and a member of the Work Force
Development Board of Truth or Consequences, New Mexico, which
is a companion town to Elephant Butte.
We are here today representing the leaseholders of Elephant
Butte and Caballo Reservoirs. Thank you for allowing us the
opportunity to address your Committee on behalf of the Elephant
Butte and Caballo Leaseholders' Association. And I think that
is extremely important. We appreciate you taking the time out
in a year that we have had a lot of unusual events happening in
Washington, D.C. And we are very proud of our Congress for
carrying on the business under these trying conditions.
Our association is a non-profit organization formed to
achieve the purchase of what are referred to as the lease lots
at Elephant Butte and Caballo Reservoirs. On behalf of the
association, I would like to thank Representative Joe Skeen for
his continued support of our efforts to privatize the lots we
are leasing and for introducing H.R. 706, The Lease Lot
Conveyance Act, which allows for the privatization of the lease
lots. Senator Dominici has also assured us of his support and
has given us his commitment to introduce a companion bill in
the Senate.
We would also like to take this opportunity to thank
Senator Bingaman and Representatives Wilson and Udall, of the
State of New Mexico, for their support of the legislation.
Also, our thanks is extended to the Bureau of Reclamation, in
particular, Mr. Clay McDermeit, who invited our association to
have a representative on the Working Group Committee, formed to
provide input into the resource management plan and the
environmental impact statement. I would say that plan is in its
final phases now.
Although the final documents have not been released, the
draft plan and the EIS released for comments recommended only
378 of the 400 lease lots be privatized. However, our
association supports H.R. 706, introduced by Representative
Skeen, which provides for the privatization of all the lease
lots. These lease lots are in the State of New Mexico, along
the shores of Elephant Butte and Caballo Reservoirs. The
Elephant Butte Reservoir was dedicated in 1916 and is near the
small community of Truth or Consequences, New Mexico. As time
has progressed, a small community of homes and businesses have
resulted in New Mexico's 101st city, Elephant Butte,
incorporated in 1999.
Caballo Reservoir was built around 1930 as a flood control
and holding area. It is about 15 miles south of Truth or
Consequences. The reservoirs are about 2 hours to the south of
Albuquerque and about 2 hours to the north of El Paso, Texas,
which are the closest, largest cities in our area.
The first lease lots became available in the 1940's. In
spite of the $10 per year lease fee, it took a good 40 years
before all lots were leased. In those times, lessees were avid
fishermen or people who treasured the quiet and solitude the
reservoirs offered. The leaseholders pioneered the development
of these lease lots, actually encouraged to do so by the
Government. In leases of old, leaseholders were told unless
improvements were made to the lots, the leases would revert
back to the Government. Leaseholders got busy and established
roads, poured foundations for their cabins or trailers, brought
in electricity and either had water piped in or drilled wells.
Drainage and retaining walls were built, septic tanks were
installed and other upgrades were made including utilities. All
of these improvements were a result of the sweat, labor and
equity of the leaseholders.
It is important to note, all improvements were approved by
the Government, and, insofar as we know, no funds whatsoever
have been expended by the State of New Mexico nor the Federal
Government for the benefit of the lease lots. However, Sierra
County does maintain roads for public access to the beaches.
Some leaseholders have improved their lease lots, and even
built homes, but the majority of lease lots still reflect the
general populations' status of retiree or those on a limited
income. Original cabins have been upgraded or replaced with
manufactured homes.
Collectively, we now feel somewhat threatened for two
reasons. First of all, the State of New Mexico has increased
our lease fees, and as time progresses we must anticipate even
more increases. Leaseholders fear they will be priced out of
their homes. These are the people who moved here because of
affordability, many of whom are considered to be at poverty
level or below. More than 75 percent of the lease lot holders
are over age 55, and about 70 percent of these are over age 65.
The majority of these senior citizens are on fixed incomes.
Most are retired and having an affordable place to live, on
land they themselves have worked and nurtured, is an
opportunity they should be secure in.
Second, our hold on the lease lots we call home is tenuous,
at best. We are all acutely aware we can be removed at any time
due to a clause in our lease agreement which states, if the
Government determines there is a greater need for these lots,
they can give us a 60-day notice, and we must return our lease
lots to their original condition.
There are 403 lots, but far more people will be affected by
the outcome of this legislation. Every lease lot has a family
associated with it and is often used by several generations.
There are many families in which the father acquired the lot.
He raised his kids with the Butte as an integral part of their
upbringing. That tradition continues today in the lives of his
grandkids and great grandkids. Every lot touches the lives of a
family, and many hundreds of people call these lots home.
Elephant Butte and Caballo Reservoir boundaries, including
the lakes, encompass approximately 78,000 acres. The lease lots
occupy only approximately 250 acres, or 0.3 percent, of the
land within the area. Therefore, more than 99.5 percent, or
77,750 acres, of the area are, and will be, available for full
public utilization. These lots are not an issue with regard to
public recreation. There are more than 200 miles of shoreline
available for public utilization around the two reservoirs.
Lease lots do not encroach upon or otherwise affect public
utilization of shorelines around the reservoirs.
Currently, the majority of leaseholders are reluctant to
make major improvements on their lease lots due to the land
title questions. Private ownership of lease lots will not only
sustain existing economic conditions, but will also provide
owners the security to invest in permanent structure and
improvements. It will add needed jobs to the community,
increase economic stability, increase revenue to the county
through property taxes and to the surrounding community through
gross receipts taxes.
Truth or Consequences, Williamsburg, Caballo and Elephant
Butte have grown and are prospering with the increased
population. If leases are terminated, a significant negative
impact to the local economy and loss of sustainability will
occur. Most significantly, a large number of elderly people,
many of whom cannot afford to live elsewhere, would be uprooted
or displaced.
The important point I want to make today is our
association, the State of New Mexico, its congressional
delegation and the surrounding communities, as reflected in
Representative Skeen's bill, believe all the lease lots should
be privatized. We believe all the lots are equally important to
those currently leasing them. There is no effect to the public
by allowing the lots to be purchased by their leaseholders. In
the past four to five decades, these lots have been leased,
there has been no conflict with public users and no loss of use
by the public. Therefore, we encourage you to pass
Representative Skeen's bill, as written, to include
privatization of the 403 lease lots.
Our process has been long and arduous. We have been working
for more than two decades toward the purchase of our lots. It
is impossible to condense into a 5-minute presentation lifetime
experiences such as a kid's first fish, a widow living on a
fixed income or a neighbor whose wife is in the final stages of
cancer.
We are thankful to finally be before you today and thank
you for your time, and hopefully for your support of
Representative Skeen's bill, 706. Please feel free to ask me or
one of the other board members any questions you might have. We
would be happy to answer those, and I would like to say that we
would be happy to cooperate with you Committee or the Bureau of
Reclamation in any changes that might be necessary. Thank you,
Mr. Chairman.
[The prepared statement of Mr. Ward follows:]
Statement of Charles C. Ward, President, Elephant Butte/Caballo
Leaseholders Association
Mr. Chairman and distinguished Committee Members, my name is
Charlie Ward, I am the president of the Elephant Butte/Caballo
Leaseholder's Association. I have with me today two members of our
board of directors: Mr. Mike Mowles and Mr. Jerry Stagner.
Mr. Mowles is one of the leaseholders whose lease lot was not
recommended for privatization in the draft resource management plan and
the environmental impact statement. Mr. Stagner is not a leaseholder
but he is one of the civic leaders of our community and has volunteered
to serve on our board. He is the president of the State National Bank,
a member of the economic development committee and a member of the work
force development board.
We are here today representing the leaseholders of Elephant Butte
and Caballo Reservoirs. Thank you for allowing us the opportunity to
address your Committee on behalf of the Elephant Butte/Caballo
Leaseholders Association. Our association is a non-profit organization
formed to achieve the purchase of what are referred to as the lease
lots at Elephant Butte and Caballo Reservoirs.
On behalf of the association, I would like to thank Representative
Joe Skeen for his continued support of our efforts to privatize the
lots we are leasing, and for introducing H.R. 706, the Lease Lot
Conveyance Act, which allows for the privatization of the lease lots.
Senator Dominici has, also, assured us of his support and has given us
his commitment to introduce a companion bill in the Senate. We would
also like to take this opportunity to thank Senator Bingaman and
Representatives Wilson and Udall for their support of this legislation.
Also, our thanks is extended to the Bureau of Reclamation, in
particular Clay McDermeit, who invited our association to have a
representative on the working group committee formed to provide input
into the resource management plan and the environmental impact
statement.
Although the final documents have not been released, the draft plan
and the EIS released for comments recommended only 378 of 403 lease
lots be privatized. However, our association supports H.R. 706,
introduced by Representative Skeen, which provides for the
privatization of all the lease lots.
These lease lots are in the State of New Mexico, along the shores
of Elephant Butte and Caballo Reservoirs. Elephant Butte Reservoir was
dedicated in 1916 and it is near the small community of Truth or
Consequences, New Mexico. As time has progressed, a small community of
homes and businesses have resulted in New Mexico's 101st city, Elephant
Butte, incorporated in 1999.
Caballo Reservoir was built around 1930 as a flood control and
holding area. It is about 15 miles south of Truth or Consequences. The
reservoirs are about two hours to the south of Albuquerque, New Mexico
and about two hours north of El Paso, Texas, which are the closest
large cities to our area.
The first lease lots became available in the 1940's. In spite of
the $10.00 a year lease fee, it took a good 40 years before all of the
lots were leased. In those times, lessees were avid fishermen or people
who treasured the quiet and solitude the reservoirs offered.
The lease holders pioneered the development of these lease lots,
actually encouraged to do so by the government. In leases of old, lease
holders were told unless improvements were made to the lots, the leases
would revert back to the government. Leaseholders got busy and
established roads, poured foundations for their cabins or trailers,
brought in electricity and either had water piped in or drilled wells.
Drainage and retaining walls were built, septic tanks were installed
and other upgrades were made including utilities. All of these
improvements were a result of the sweat, labor and equity of the lease
holders.
It is important to note, all improvements were approved by the
government, and, insofar as we know, no funds whatsoever have been
expended by the state of New Mexico nor the Federal government for the
benefit of the lease lots. However, Sierra County does maintain roads
for public access to the beaches.
Some lease holders have improved their lease lots, and even built
homes, but the majority of lease lots still reflect the general
populations'' status of retiree or those on a limited income. Original
cabins have been upgraded or replaced with manufactured homes.
Collectively, we now feel threatened for two reasons. First of all,
the State of New Mexico has increased our lease fees and as time
progresses, we must anticipate even more increases. Leaseholders fear
they will be ``priced out'' of their homes.
These are the people who moved here because of affordability; many
of who are considered to be at poverty level or below. More than 75
percent of the lease lot holders are over age 55, and about 70 percent
of these are over age 65. The majority of these senior citizens are on
fixed incomes. Most are retired, and having an affordable place to
live, on land they themselves have worked and nurtured, is an
opportunity they should be secure in.
Secondly, our hold on the lease lots we call ``home'' is tenuous,
at best. We are all acutely aware we can be removed at any time due to
a clause in our lease agreement which states, if the government
determines there is a greater need for these lots, they can give us a
60 day notice and we must return our lease lots to their original
condition.
There are 403 lots, but far more people will be affected by the
outcome of this legislation. Every lease lot has a family associated
with it and is often used by several generations. There are many
families in which the father acquired the lot. He raised his kids with
``the butte'' as an integral part of their upbringing. That tradition
continues today in the lives of his grandkids and great grandkids.
Every lot touches the lives of a family. Many hundreds of people call
these lots home.
Elephant Butte and Caballo Reservoir's boundaries, including the
lakes, encompass approximately 78,000 acres. The lease lots occupy only
250 acres, or 0.3 percent of the land within this area. Therefore, more
than 99.5 percent, or 77,750 acres of the area are, and will be,
available for full public utilization. The lease lots are not an issue
with regard to public recreation.
There are more than 200 miles of shoreline available for public
utilization around the two reservoirs. Lease lots do not encroach upon
or otherwise affect public utilization of shorelines around the
reservoirs.
Currently, the majority of leaseholders are reluctant to make major
improvements on their lease lots due to the land title questions.
Private ownership of lease lots will not only sustain existing economic
conditions, but will also provide owners the security to invest in
permanent structure and improvements. It will add needed jobs to the
community, increase economic stability, increase revenue to the county
through property taxes and to the surrounding community through gross
receipts taxes.
Truth or Consequences, Williamsburg, Caballo and Elephant Butte
have grown and are prospering with the increased population. If leases
are terminated, a significant negative impact to the local economy and
loss of sustainability will occur. Most significantly, a large number
of elderly people, many of whom cannot afford to live elsewhere, would
be uprooted or displaced.
The important point I want to make today is our association, the
State of New Mexico, its Congressional delegation and the surrounding
communities, as reflected in Representative's Skeen's bill, believes
all the lease lots should be privatized. We believe all the lots are
equally important to those currently leasing them. There is no effect
to the public by allowing the lots to be purchased by their lease
holders. In the past 4 to 5 decades these lots have been leased, there
has been no conflict with public users and no loss of use by the
public. Therefore, we encourage you to pass Representative Skeen's
bill, as written, to include privatization of 403 lease lots.
Our process has been long and arduous. We have been working for
more than 2 decades towards the purchase of our lots. It is impossible
to condense into a five minute presentation lifetime experiences such
as a kid's first fish, a widow living on a fixed income or a neighbor
whose wife is in the final stages of cancer.
We are thankful to finally be before you today, and thank you for
your time, and hopefully for your support of Representative Skeen's
bill, 706. Please feel free to ask me or one of the other board members
any questions you might have. We would be happy to answer your
questions.
______
Mr. Calvert. I thank the gentleman for his testimony, and I
am sure we will have some questions. Next, Mrs. Sherry Mowles--
is that how it is pronounced? Sherry, you are recognized for 5
minutes.
STATEMENT OF SHERRY MOWLES, EL PASO, TEXAS
Ms. Mowles. Mr. Chairman, and honorable Committee members,
I would like to submit my full statement into the hearing
record. Thank you for giving me--
Mr. Calvert. Without objection, so ordered.
Ms. Mowles. --this opportunity. I am Sherry Mowles, and I
have spent my entire life in the Rio Grande Valley where my
husband and I own a home on land that is leased from the
Government. I have my Master's Degree in architecture with an
emphasis on planning, park design and historic presentation
from the University of New Mexico with a special emphasis on
planning, park design, and historic preservation.
The BoR November 19, 1999 Resource Management Plan
recommends, ``that all present leaseholders be provided the
opportunity to secure a lease lot through privatization. Three
hundred and seventy-eight could remain at their present
location and secure ownership of that lot. The remaining 25
could obtain ownership of a relocated lot,'' the keyword being
``relocated.'' With the release of RMP, 25 leaseholders were
left with homes no one would purchase on land no one would pay
to transfer.
The majority of these families are retired, on fixed
incomes, and this is their only home. These families cannot
afford to purchase another lot, make site improvements and
build another home while still paying a mortgage on their
existing ``phased out'' home. Our home is one of the first of
the 25 to be phased out, and I was chosen by these 25 families
to represent them here today.
First of all, I would like to explain why lease lot holders
made significant investments and built homes on land they
leased from the Government; the Government's role in this
matter, and why we thought all lots would someday be
privatized. As Mr. Ward mentioned, the lease lot program began
in the 1930's to promote recreation in the area. The leasehold
regulation, Attachment A, required lessees to make significant
investments within 1 year or risk termination of the lease. The
agreement required permanent construction built to code,
landscaped and minimum square footages. The Bureau of
Reclamation approved all building permits and allowed the
leases to be easily renewed or transferred.
Second, in previous legislation, specifically Lake Sumner
in New Mexico, and Canyon Ferry, all lease lots were
privatized. Congressman Skeen introduced H.R. 1232, which
afforded all of the leaseholders in our area to purchase our
lease property. Due to a dispute over where the revenue would
be allocated, not the lease lots, it did not pass. We
especially had no reason to believe any lots would be excluded
when it came to privatization.
I have read the RMP and the documents it referenced,
attended public hearings and presented boards diagraming
inaccuracies in reference to these 25 excluded lots. These
inaccuracies have not been addressed. The RMP says that these
lots might be needed for future recreation, yet they do not
meet the recreational development criteria defined in the RMP.
These homes do not impede public access or water operations
in any way. They are not located on the shore where recreation
occurs. All lots are inspected annually for compliance with
State and Federal environmental standards. Any necessary
improvements are paid for by the leaseholders. The RMP states
that the homes on Water Tank Hill are isolated and difficult to
access, yet the whole area is directly adjacent to State
Highway 51. My door is less than 50 feet, and we are less than
two miles from Truth or Consequences, population 6,000.
Furthermore, we are puzzled by the fact as to how 25 minute
homes that occupy less 10 acres are at issue. My lot is one-
eighth of an acre, or 5,100 square feet. The support of New
Mexico for all lots to be privatized is overwhelming. Our
representatives in Washington, the state legislature, Governor,
lieutenant Governor, Sierra and Socorro County officials,
numerous private organizations and Congressman Skeen and Jim
Hughes, whom we are proud to have represent us.
These 25 families, like their neighbors, have significant
financial and emotional investments at stake. We ask for one
thing, and that is to be provided the equal opportunity, as our
neighbors, to purchase the property at fair market value, which
the foundation of our families and homes lie. Please recommend
support for H.R. 706, the Lease Lot Conveyance Act, which
includes privatization of all 403 lots, with none being
excluded. And I would be happy to answer any questions, and I
have two boards, if I could take a minute to show.
Mr. Calvert. Go ahead.
Ms. Mowles. On this board here, the RMP states that the
homes at Water Tank Hill are rustic cabins or temporary
structures, yet the document referenced in the RMP states that
they are New Mexico cultural resources and are possibly
eligible for the National Historic Register. Many of the 25
homes are important to the history of the New Mexico. Some of
them were built before the lake was built in the late 1800's.
And here are some pictures from the museum. And here is a
home that originally was built in the late 1800's, and it is
surrounded by lots recommended for privatization. It is
approximately 300 feet away from the other homes. I think there
are over 250, and it is no closer--this home is no closer to a
shore than these homes are, but it hasn't been recommended for
privatization. And none of these homes are temporary
structures. They have been there for a long time with permanent
puttings and are part of the history of the area.
[The prepared statement of Ms. Mowles follows:]
Statement of Sherry Mowles, Leaseholder at Elephant Butte
Mr. Chairman, and honorable committee members, I would like to
submit my full statement into the hearing record. I appreciate this
opportunity and thank you for inviting me to speak. My name is, Sherry
Mowles, and I have spent my entire life in the Rio Grande Valley. I
have my Master's Degree in Architecture from the University of New
Mexico with a special emphasis on planning, park design, and historic
preservation. I received an Award of Honor at the International Urban
Studies and Architecture Seminar in New York City and an American
Society of Landscape Architects Award for a park in Gallup, New Mexico.
My husband and I own a home located on land that is leased from the
government at Elephant Butte Reservoir. On November 19, 1999 the Bureau
of Reclamation released the Elephant Butte and Caballo Reservoirs
Resource Management Plan Draft Environmental Impact Statement
(hereafter referenced as the RMP). The RMP included recommendations
``that all present leaseholders be provided the opportunity to secure a
lease lot through privatization...a total of 378 could remain at their
present location and secure ownership of that lot through
privatization. The remaining 25 could obtain ownership of a RELOCATED
lot through privatization.'' The key word in this statement is
RELOCATED. With the release of this document 25 leaseholders were left
with homes no one would purchase located on land no one would pay to
transfer. The majority of these families are retired, on fixed incomes,
and this is their only home. The emotional and financial impact has
been devastating. These families cannot afford to purchase another lot
and build another home while still paying a mortgage on their existing
``phased out'' home. My home is one of the first, of the twenty-five,
to be phased out. I have been chosen by these twenty-five families to
represent them here today.
First of all, I would like to explain why lease lot holders made
significant investments and built homes on land that is leased from the
government; the government's role in this matter, and why we thought
all lots would someday be privatized. As Mr. Ward mentioned, the lease
lot program began in the 1930's to promote recreation in the area. The
governments Leasehold Regulations Attachment ``A'', requires lessees to
make significant investments within one year or risk possible
termination of their lease. The agreement requires all buildings to be
built to code, to be permanent structures with minimum square footage
(no temporary buildings or coverings),to be landscaped, etc. The Bureau
of Reclamation approved all building permits and allowed the leases to
be easily renewed or transferred. See Attachment A.
Secondly, in previous legislation, specifically Lake Sumner, New
Mexico, and Canyon Ferry, Montana, ALL lease lots were privatized. The
Lake Sumner Transfer Title in 1991 allowed leaseholders to buy their
20,000 square foot lots. Canyon Ferry lots are being privatized and
many of these lots are located directly on the water. None of the
twenty-five homes within this proposal are located on the water.
Congressman Skeen introduced H.R. 1232, the Reclamation Facilities
Transfer Act, which afforded all the leaseholders in the Elephant Butte
and Caballo Reservoir areas the opportunity to purchase the property
our homes are located on. Due to a dispute over where the revenue would
be allocated, the legislation did not pass. We had no reason to believe
any lots would be excluded when it came to privatization.
I have read the RMP and many of the documents it referenced, which
was written by an environmental engineering firm located in Utah. I
attended the public hearings and presented boards diagraming
inaccuracies in reference to these twenty-five lease lots. The Bureau
of Reclamation has not addressed these inaccuracies.
1. These homes do not impede public access or water operations in
any way. They are not located on the shore where recreation occurs.
There are 200 miles of shoreline available and these lots are adjacent
to .001%.
2. The RMP says that these lots are going to be needed for future
recreation. These lots do not even meet the Recreational Development
Criteria defined in the RMP on page 2-5. The RMP states ``any ONE or
more of the following resource factors made an area less suitable for
development of recreational facilities.'' Most of the lots do not meet
three out of the seven criteria.
3. The area these twenty-five lots occupy is negligible. The
Bureau of Reclamation has 78,000 acres of land. The twenty-five lots
comprise less than 10 acres or approximately .0015% of the total land
acreage. My lot is 1/8th of an acre or 5,100 square feet.
4. The RMP states on page 3-92 that the homes in my area, Water
Tank Hill, are ``isolated and difficult to access.--My neighbors home
is located on State Highway 51 and the rest of our homes are less than
60 ft. from the highway. They are less than two miles from Truth or
Consequences, population 7,500. See Attachment B.
5. The homes at Three Sisters are all located on a paved road.
6. Cow Camp is 300 paces from the lots the RMP has recommended for
privatization. This is also one area where lots would be offered for
the twenty-five to relocate. Unfortunately, the house at Cow Camp
cannot be moved. The Bureau of Reclamation approved a recent $ 20,000
dollar addition to that house. See Attachment C.
7. All lots are inspected annually for compliance with state and
federal environmental standards. Any necessary improvements are paid
for by the leaseholders.
8. The RMP states that the homes in our area, Water Tank Hill, are
``rustic cabins or removable structures.'' Not only are all of our
homes permanent, but according to the document referenced in the RMP
``Class III Cultural Resources Survey of Elephant Butte'', these homes
are New Mexico Cultural Resources and are possibly eligible for the
National Historic Register. See Attachment D.
9. Many of these twenty-five homes were built before the lease lot
program began and are an important part of the history of the area.
One, recently restored, is on the State Historic Register and had been
nominated for the National Historic Register. See Attachment E.
10. The RMP proposes four alternatives. In alternatives A; B and D
all lease lots are treated equally. The RMP states on page 2-6 [that
in] each alternative the major goals and objectives are met.'' Yet,
they selected the only Alternative where 25 lease lots are not treated
fairly.
11. Increased valuation of the lease lots is primarily due to
capital investment and labor by the leaseholder. The government has not
spent any money on the lease lot improvements.
The support of New Mexico for ALL lots to be privatized has been
overwhelming. Last summer I met with the New Mexico Representatives
offices in Washington, where they all voiced their support. We have
received a letter of support from Bill Richardson. The New Mexico State
Legislature supporting the privatization of ALL lease lots passed a
1999 and 2000 Memorial. We have letters of support from the Governor
and Lieutenant Governor of New Mexico, and from Sierra and Socorro
county officials. Many organizations support us including the Cattle
Growers Association, Wool Growers Association, Coalition of Counties,
and the Southwest Environmental Association. Numerous supportive
articles have run in local newspapers. Our greatest support has come
from Congressman Skeen, Jim Hughes, and their office, whom we are proud
to have representing us here in Washington.
These families like their neighbors, all have significant financial
and emotional investments at stake. We love this land; many of the
families were here before anyone else was interested in the properties.
Lessees often assist stranded campers and boaters, administer first
aid, and give tips to visitors on good fishing and camping spots. My
children and I routinely pick up any trash that is left in our
surrounding area.
Privatization will not only benefit the leaseholders but the
economic stability of the surrounding community, which is the second
poorest county in New Mexico, and supports all lots being privatized.
The increased tax base would benefit Sierra County.
Water operations and recreation are important to this area, and our
homes do not interfere with these operations. The land they occupy is
negligible. We ask for one thing, and that is to be provided the same
opportunity as our neighbors to purchase, at fair market value the
property on which the foundations of our families and homes lay. Please
recommend support for H.R. 706 the Lease Lot Conveyance Act and allow
these families security and serenity.
______
Mr. Calvert. OK. Thank you. Thank you for your testimony. I
think we may give an opportunity for Mr. Keys to respond to--
you indicated your support of this legislation. Are you
supportive of privatization of all of these properties,
including this 25 that Mrs. Mowles has referred to?
Mr. Keys. Mr. Chairman, the 378 lots, there is no question
that we would support the transfer to private ownership. The
other 25, we would certainly be willing to work with you and
those folks to try to make that happen.
Mr. Calvert. OK. Well, that is encouraging. Because it
would seem to me, based upon this testimony, there is no
reason, as far as a hazard to the property or any encroachment
on the reservoir, any real reason for this not to go forward,
to be privatized.
Mr. Keys. Mr. Chairman, I think at times we are victims of
looking too far in the future. At times we try to figure what
if a development has to be expanded or that sort of thing, and
I think some of our folks may have been looking too far into
the future to say at some time there may be a need there or
those inholdings that are created there may be a problem. We
are certainly willing to work with you and those folks to make
that happen.
Mr. Calvert. Good. Another question I have regarding the
city of Fallon. One indication, I guess, if there is a problem,
would be any environment assessments that is taking place right
now, both the--you indicated there was a Phase I and a Phase
II, and there was little or no problem, or is there a problem?
Mr. Keys. Mr. Chairman, Phase I environmental site review
has been done. There were 13 separate things that needed to be
looked at. Certainly, as the mayor said, they don't look to be
serious, but still we need to do the site II evaluation and
carry forth. We have the contractor lined up who has presented
a plan to do that.
Mr. Calvert. I guess the next question would be who is
responsible for the cost of any clean-up? Is there a shared
responsibility, since it seems there have been several
leaseholders over a period of time or is the Federal Government
taking that responsibility?
Mr. Keys. Mr. Chairman, my understanding is that it is a
shared responsibility between the Government and the city.
Mr. Calvert. If you would like to respond to that, Mr.
Mackedon.
Mr. Mackedon. I think that is correct.
Mr. Calvert. OK. So there is no dispute on how that shared
responsibility would take place, that you pretty much have an
understanding of the percentages and costs and--
Mr. Mackedon. Well, there is room for dispute there, I
suppose, because we haven't completely--I have indicated we
have done Phase II, and I believe that we have--that is
technically accurate. We have--I say we, neither the Bureau nor
the city has proceeded to go underground here, which clearly
needs to be done, but there are--it has got a fairly
complicated history, not nearly as complicated as some
properties. The information we have now I think would lead us
to believe that we are going to be successful with remediation
and relatively soon. Who shares will depend on--hasn't been
settled because we don't know whether there is contamination of
a serious nature and when it might have occurred and who the
responsible parties are. But the idea that it is a shared
responsibility I think is correct.
Mr. Calvert. I guess the last comment I would make, I don't
know if it is necessary at this point to have that pinned down
as far as remediation. This legislation could go through, be
enacted and the transfer take place, and within that transfer
can have that detailed as far as who is responsible and the
shared costs and responsibilities of that, what your intent is
going to be.
Mr. Mackedon. I agree with that.
Mr. Calvert. We would like to get this taken care of, and
then we will just work on that.
Mr. Mackedon. The city would not want to receive the
property until it was clean. I am sure the Bureau wouldn't want
to transfer it until it was clean. And if we could not come to
terms on that, then--that doesn't affect the principle of
whether they should support the transfer, which I think the
Committee should do.
Mr. Calvert. I understand. Mr. Skeen, you are recognized.
Mr. Skeen. I just want to thank Mr. Keys for his
willingness to work with us on the legislation. We will work
closely with the Bureau of Reclamation. I have no further
questions this afternoon. It has been a marvelous working day.
Mr. Calvert. Good. All right. Thank you very much. Oh, he
needs to change his tape, so we will recess here for just a
minute while he changes tapes. Ms. Napolitano?
Ms. Napolitano. Thank you, Mr. Chairman. I was interested
in the testimony that was given by you in regard to the use of
the property, and of course the issue is whether or not it is
going to be cleaned up before the transfer is effective. There
was a staging area, am I correct, and they had transformers, so
it was electrical use and--it was several uses of that property
and there were companies utilizing the property. Am I correct?
Mr. Mackedon. Yes.
Ms. Napolitano. OK. And were there lease payments or were
there rental payments from these other companies, and to whom,
what amounts, and where did that money go to?
Mr. Mackedon. That raises the issue of how rent was paid
and during what term. The city had no--did not occupy the
property and had no relation to the property prior to 1984. I
believe between 1968 and 1984 there were agreements between the
Truckee-Carson Irrigation District and the Bureau and Sierra
Pacific Power Company, by way of example. I have no knowledge
nor do I think it is important to your question, but I want to
make it clear for the record--
Ms. Napolitano. Prior to that, understood.
Mr. Mackedon. --yes, what that--from 1984 until most
recently, the city leased the property under a written
agreement from the Bureau of Reclamation, and the city paid an
annual lease to the Bureau of Reclamation, and the city
received rental income essentially from one revenue source,
that is Premier Trucking Company. That is who has it now. So
the city paid an annual rental payment to the Bureau and
received the rental payments from the use of a loading
facility.
Our lease was expired, we were a tenant, as we saw it,
holding over. We continued to receive the payments from the
trucking company. We received a letter then from the--because
we couldn't agree on one term of the lease, and that still
isn't settled, we received a demand from the Bureau for the
payment of the past year's rent, and we paid it. Now we are on
another year, it is still not settled in terms of the lease,
and the question--and the trucking company has continued to pay
the city. And here, very recently, the Bureau has asked,
saying, ``Well, that is improper or illegal for you, as a city,
to continue to receive these payments.'' I think that is--I
don't agree with that characterization, because we believe we
were entitled to a lease, and they didn't provide the lease.
That debate aside, we either owe the Bureau--we either
reimburse the Bureau for the revenues that we have received
from the trucking company since the lease was terminated in the
mind of the Bureau and don't pay rent or we receive the
revenues and pay rent. We clearly are not trying to have it
both ways. And the revenues--our rent was about $9,000 a year.
The revenues are a little more than that. So it is--
Ms. Napolitano. How much more?
Mr. Mackedon. Well, I think it is--I have the numbers here,
but I think it is about $11,000 in some year, or $13,000. What
the spur has done is generated--what the freight yard has done
has been the anchor for the railroad 20-mile line, and we have
other--SMI Joyce has now come to town, and there is the 400
jobs that our congressman--
Ms. Napolitano. No, I understand the connection. I am not
concerned, I am trying to figure out how much revenue the city
is actually generating.
Mr. Mackedon. Oh, we can report that to the Committee
through the congressman without any problem.
Ms. Napolitano. Mr. Keys?
Mr. Keys. Mr. Chairman, Ms. Napolitano, we are comfortable
with what is going on here.
Ms. Napolitano. OK.
Mr. Keys. We are negotiating with those folks. Certainly,
it is something that we can clean up before the title transfer
goes ahead.
Ms. Napolitano. OK. That is it.
Mr. Calvert. Thank you. Mr. Gibbons?
Mr. Gibbons. Thank you, Mr. Chairman, and, again, thank all
of your for your testimony here today. Appreciate you taking
the time out of your busy schedules to be here for us.
Mr. Keys, I have read your statement, and it looks like,
and from your testimony, that you are very willing to work with
the city of Fallon, and the city of Fallon has indicated its
willingness to work with you. I guess my question is, reading
your testimony, you can support the bill if technical
amendments are made. Can your office provide my office with
those technical amendments that you want to be made to this
bill within, say, the next 30 to 60 days?
Mr. Keys. Mr. Chairman, Mr. Gibbons, we could give them to
you tomorrow, because we have been working closely with this
thing, and we know what it would take to do that. So I would
tell you that we could have them to you by the first of the
year with no problem.
Mr. Gibbons. OK. Well, then we will expect to see your
suggested amendments to this bill around the first of the year.
Mr. Keys. Yes, sir. And those changes certainly are
something that we would work with the city of Fallon to be sure
that they were OK with them.
Mr. Gibbons. OK. Mr. Mackedon, I know the lease is outside,
literally, the consideration of this bill, because this is a
transfer of title and interest. My thought to you was, is
during the time the evolution of this, from the end or the
expiration of the original lease that the city had and the
Bureau of Reclamation, there seemed to have been some
conditions that were attempted to be imposed upon the city
which were less than satisfactory to the city, and I presume
that it is with the issue of liability. Can you explain some of
those issues of liability that the city disagreed with that
perhaps the lease suggested that brought us to the point where
we now are in this point where we have to consider the transfer
of title rather than the lease of this property?
Mr. Mackedon. Thank you, Congressman Gibbons. Quickly, I
think I characterize it correctly when I say that the city was
prepared to enter into a lease agreement and proposed to enter
into a lease agreement 6 months prior to the expiration of the
other agreement. After we had negotiated and discussed this
with the Bureau, there was one clause that, for very important
reasons to the city, we felt--or the mayor and council felt it
could not agree with. And without reading--there has been
variations of it--generally speaking, where the point of
disagreement occurred was this: Is that the lease--backing up
the prior lease--by the terms of the prior lease, the city was
entitled, the phrase, to a new lease, and that is about as
technical and fine as it was written. We could have expected
more maybe on both sides, but that is how it read, and we were
obligated as a city to notify the Bureau 6 months prior to the
expiration of that lease that we intended to renew, and we
expected to renew.
It came down to one clause, and that clause required the
city of Fallon to abide by all environmental rules and certain
other conditions of the Federal, State and local--all
applicable Federal, State and local laws and regulations and
reclamation policies and instructions, existing or after
promulgated, concerning any hazardous material that would be
used, produced, transferred, stored and disposed of on or in
lands, waters or facilities owned by the United States or
administered by Reclamation.
Mr. Gibbons. So Mr. Mackedon, let me explain that what that
clause required you to do is be responsible for environmental
conditions outside of the property as the subject of this
because of the vague, broad language of lands owned by the
United States, which could mean 110,000 square miles of Nevada.
Mr. Mackedon. Well, I don't whether it could, but that--
Mr. Gibbons. Theoretically.
Mr. Mackedon. --but that is literally where we are. But our
point was that we certainly were obligated and would certainly
sign an agreement that obligated us to meet all those laws and
rules as to our use and occupation of this property.
Mr. Gibbons. So you weren't necessarily unwilling to enter
the lease, and you didn't expect to get anything from the
Government. There was a justifiable and bona fide disagreement
as to the interpretation of terms of this lease that was
provided by you.
Now, the lease they provided you to sign, was that a take
it or leave it lease?
Mr. Mackedon. Well, the latest indication would be it
sounds like take it or leave it, but I have heard from Mr. Keys
today that--
Mr. Gibbons. But up until that time--I mean I have actually
got the letter.
Mr. Mackedon. You have read the letter and the proposed
lease.
Mr. Gibbons. And so they did say, ``You must immediately
sign this lease,'' and they provided you with the lease. And
that is where we are today.
Mr. Mackedon. That is where we are today.
Mr. Gibbons. So I think what we have got here, Mr.
Chairman, is two parties willing to enter into an agreement
that I think is in the best interest of both parties, the
transfer of title and interest for fair market value, based on
certain conditions, technical requirements, that both the city
and the Bureau of Reclamation are willing to look at and
negotiate in good faith. And I think once we work those
problems out, that we will have a bill that this Committee can
act on. And I want to thank you again and thank both of you for
being here today.
Mr. Calvert. Thank the gentleman. In closing, I think that
H.R. 1870 and H.R. 706 are both bills that are worthy of
passage. I pledge to work with both Mr. Skeen and Mr. Gibbons
and the Administration to make the technical modifications that
are necessary, and we will move this legislation as soon as
possible to the President for execution. So hopefully we can do
that the first part of next year, and the good people of New
Mexico and the good people of Nevada will have a couple less
problems to worry about.
Ms. Napolitano. Mr. Chair?
Mr. Calvert. The gentlelady from California.
Ms. Napolitano. Thank you, Mr. Chair. I had some questions
in regard to the--actually, the 706, the New Mexico property.
Mr. Calvert. The gentlelady is recognized.
Ms. Napolitano. Thank you. One of the things that I had not
heard, because I heard a lot that the major portion of the
current people living on those properties are elderly, fixed
income. Can you give me a percentage of how many of them are?
Mr. Mackedon. Yes. We did a survey. It has been about 5
years ago. We sent out a questionnaire to all the people. It
came in that for elderly there is like--I think it is 75--let
me go back to my notes here. It is around 75 percent--75
percent are over age 55. And of those 75 percent, 70 percent of
those are over age 65. So they will run from the late 50's up
into the 90's. We have a few in that age. But there is--so of
the 403 lease lots, we would expect to see about 300 of those
would be senior citizens.
Ms. Napolitano. And the others?
Mr. Mackedon. The others would be a distribution of some
relatively young people and up to the 55, 60 years old.
Ms. Napolitano. Because 55 is still young.
Mr. Mackedon. Well, it is really getting--
Ms. Napolitano. Once you turn 65, I am telling you, 55 is
young.
Mr. Mackedon. --it is young for me.
[Laughter.]
Ms. Napolitano. Other question would be is what are the
yearly lease costs?
Mr. Mackedon. They vary from lot to lot, but currently I
would say the average is probably in the $500 to $550.
Ms. Napolitano. Per?
Mr. Mackedon. Per year. So they are relatively modest, but
that is your--you are talking about a county which the--I don't
have the specific numbers, but the median income for Sierra
County is very, very low. It is in the--around $18,000 per
year. And for the least productive--not productive, but the
poorest county, we are No. 1--I mean No. 2. The county up
North, Mora County, I believe it is, they are the poorest; we
are second in line. That doesn't say everybody who is on lease
lots are in that condition--that category, but the majority are
drawing Social Security. Some of them have a little bit of
supplemental retirement. And there are some there that are
probably relatively wealthy. So it doesn't mean that--
Ms. Napolitano. Yes. It changes. Then the question would be
what would happen after the death of those individuals that
would be given the right to that land, to purchase that land?
Mr. Mackedon. I am sorry?
Ms. Napolitano. If an individual--you say that a number of
them are in their 70's. After their death, what happens to that
property, and what would be the sale value of that property?
Mr. Mackedon. Well, it would depend on the improvements
that they have made, but the property--of course, if you got a
clear title to the property, a deed of trust, it would be just
like any other private property. It would be sold on the open
market for whatever the market value is. And as the legislation
is written, we will pay the fair market value for the
unimproved land, because that is what we are buying is the
unimproved--the improvements on there is--
Ms. Napolitano. Without the property, in other words, just
the land, basically.
Mr. Mackedon. Yes. Just the land, yes.
Ms. Napolitano. There was a statement that I read that
indicated that the leaseholders sold their property. They
couldn't have sold the property; they sold the improvements.
Mr. Mackedon. Improvements on the property, yes.
Ms. Napolitano. OK.
Mr. Mackedon. Yes. So we have no--there is no one on the
lease lot that has a title or deed to their property. All you
have is the lease agreement between the--the lease is--the land
is leased now from the Bureau of Reclamation to the State of
New Mexico, and it is part of the State park, and I believe
that lease runs through 2023, I think is correct. And we pay
our lease fee to the State of New Mexico, and they have a lease
agreement between them and the Federal Government.
Ms. Napolitano. And I guess I am fishing. I am trying to,
in my mind, establish something that--because I hopefully will
be retiring again one of these days, and the fact that you have
individuals who have done great improvements on the property,
on lease property, knowing full well that the Government could
well reclaim them at any moment, being able to pay $500 a year
for their lease and be able to have their estate sell it for
$20,000, $30,000, $50,000, I have no idea with the loans would
be worth. Any of that money going to be assigned to the general
fund for the increase in the benefit of the sale of that land?
Mr. Mackedon. Currently, no. That would be a transaction
between two parties, two private parties.
Ms. Napolitano. In other words, it would go back to the
estate or the people--
Mr. Mackedon. That is correct, ma'am.
Ms. Napolitano. OK. Thank you. I just want to clarify that.
Mr. Calvert. Well, we certainly thank all of you for coming
out on such a fine day. We will try to expedite this
legislation as soon as possible. We are going to recess for
about a half an hour and get into something probably a little
more controversial--the Colorado River. With that, good day.
Mr. Keys. Mr. Chairman, thank you very much for allowing us
to be here.
[Whereupon, at 12:05 p.m., the Subcommittee was recessed,
to reconvene at 12:30 p.m.]