[Congressional Record Volume 140, Number 61 (Tuesday, May 17, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. DORGAN (for himself and Mr. Daschle):
S. 2118. A bill to improve the national crime database and create a
Federal cause of action for early release of violent felons; to the
Committee on the Judiciary.
violent crime intervention act of 1994
Mr. DORGAN. Mr. President, I am today offering, on behalf of myself
and Senator Daschle, from South Dakota, legislation dealing with crime.
I wanted to say a few words about it before I introduce it.
Mr. President, as the Senate-House conference committee works on a
final crime bill, I would like to address two of the major reasons our
Nation is facing a crime epidemic and propose what the Federal
Government can do to stop it.
As we heard on this floor last November when the Senate debated our
crime bill, America's violent crime rate has risen to unprecedented
levels. In 1992, the Federal Bureau of Investigation [FBI] reported
that 23,760 murders occurred in the United States. That's 10 times the
homicide rate of Japan or France, 13 times the homicide rate of
England, and 5 times the rate of our neighbors to the north, Canada.
And this picture is not limited to homicides. The FBI also reported
that 109,062 forcible rapes, 676,478 robberies, and 1,126,974
aggravated assaults occurred in the United States in 1992. These
numbers translate into a 19-percent increase in violent crime since
1988. Even more troubling, roughly half of the violent crimes in this
country are not reported to law enforcement and therefore are excluded
from these FBI statistics.
These shocking statistics are no surprise to most Americans. Almost
all of us have been affected by violent crime. It's no wonder that
controlling violent crime has become the most important issue for our
constituents.
A major reason we face this epidemic is that our State criminal
justice systems put violent criminals back onto our streets and into
our communities before they have served their full sentence. Parole and
other early release programs allow convicted criminals to commit
additional crimes against innocent victims. According to a Brookings
Institution study, the typical violent offender commits 12 serious
crimes--not including drug crimes--every year they are on the street.
Is it any wonder that we have one of the highest violent crime rates in
the world?
Even if a violent criminal is arrested, prosecuted, convicted, and
sentenced, he or she probably will spend only a fraction of that
sentence behind bars. Nationwide, violent offenders receive an average
sentence of almost 8 years, but actually serve less than 3. For the
ultimate violent crime, murder, the average sentence imposed by State
courts is 17 years. But killers serve only 7. An average of 7 years in
prison seems insufficient for a crime in which the victim's sentence
quite literally is life.
Mr. President, I understand there are many sources of this desperate
situation. Drug abuse, broken families, lack of job opportunities--we
are all familiar with the long sad list. We have to address those
problems, but we can't wait until they're solved. Unless the States
start to keep violent prisoners locked up for their full sentence,
violent crime will continue.
A large number of violent criminals are back in the community because
State laws or fiscal priorities actually promote their early release.
Some fault for the current situation also lies in the poor reliability
of criminal records. Violent criminals often get off with light
sentences or are released early because a sentencing judge or parole
board lacked a complete picture of the individual's criminal history.
Most criminal justice is dispensed at the State level. More than 90
percent of criminal offenders are prosecuted in State courts and
sentenced to State prisons. Unlike the Federal system, where criminals
generally serve most of their sentences behind bars, States often
release their violent criminals after serving only a fraction of their
sentences.
But violent crime in this country cannot be defined as simply a State
problem. Violent crime does not respect State boundaries. Just look at
the violent crime against tourists in Florida. The victims are not
Florida residents, they are from other States and other countries.
However, they became the victims of Florida's failure to make its
violent offenders serve their full sentences. Most of the recent
attacks on tourists were committed by criminals who should have been
serving time for a previous violent crime.
Mr. President, the Senate and House crime bills demonstrate the depth
of concern at the Federal level about violent crime. Anyone who thinks
that Washington is not serious about trying to stop violent crime
should look at the level of funding--between $22 and $28 billion--that
Congress and the administration are willing to spend on crime
prevention, even as we try to cut spending dramatically and reduce the
national debt.
I vigorously supported the Senate crime bill, which contains several
amendments from a crime bill I had introduced last fall. These include
a provision to change the current presumption allowing Federal
prisoners automatically to receive good-time credit regardless of their
actual behavior in prison. A second provision would convert closed
military bases into prisons for nonviolent offenders to free up State
prison space for violent criminals.
While the crime bill will be an important step in fighting crime, it
does not deal with the State responsibility for maintaining most
criminal records and for sentencing violent criminals. Until the States
work with the Federal Government to meet these responsibilities, there
will be major gaps in the crime bill. Today, I am introducing
legislation that would help fill in these gaps.
Mr. President, my legislation first would address the need for an
accurate, up-to-date, and complete national criminal record database.
It would establish Federal standards for the system and require the
States to comply with these standards within 2 years. If they didn't,
they would pay a user fee each time they wanted to use the Federal
system.
Every day, States and localities flood the FBI's Interstate
Identification Index [III] with approximately 85,000 requests for
criminal record checks. III is an essential tool for all aspects of law
enforcement, from routine traffic stops to sentencing violent
criminals. Despite this great need, neither III nor any other record
system can provide complete and accurate information. Of the 50.5
million criminal records in this country, only 9.2 million--less than
20 percent--include case dispositions, are computerized, and are
accessible to law enforcement nationwide through the III.
My legislation would establish a complete and accurate national
criminal history database. It would require States to file their arrest
reports and final disposition orders in criminal cases with their
record repository within 21 days. State repositories would then have to
enter these reports and records into the State database within 14 days.
And every State database would be required to be connected to the III.
Mr. President, my legislation adopts a carrot-and -stick approach to
encourage every State to join the III within 2 years so that the system
can provide accurate and up-to-date information about the State's
criminals
The bill would authorize $100 million in grants to States to
establish or upgrade their criminal record systems so they can link up
with the III. States that do not meet the recommended guidelines for
interconnecting with the III would not be shut off from using the III
system. That could hurt law enforcement. But they no longer could take
a free ride by using the III while not providing full and complete
information to the system. States that are not full participants in the
III would be required to pay a user fee each time they use the system.
The second problem my legislation addresses is the early release of
violent criminals. I firmly believe, as I suspect most Americans
believe, that violent criminals should serve their full sentences. That
is just not happening today.
There are almost 3 million criminal offenders currently on probation
or parole. That's more than three times the number individuals
currently locked up in prison. And according to the Bureau of Justice
Statistics, 60 percent of the violent criminals released early from
prison will be rearrested within 3 years, and half of those will be
rearrested for a violent offense.
These repeat violent offenders are responsible for many of the most
shocking crimes in the country. From young Polly Klass's murderer in
California, to the two young men who murdered Michael Jordan's father
in North Carolina while he napped in his car at a rest stop. this
country is besieged by violent crimes that wouldn't have happened if
the criminals had been serving their full sentence for a prior violent
crime.
Mr. President, States simply must keep violent offenders behind bars
for their full sentence, or face the consequences of their decisions to
release them. The legislation I am introducing today would do this.
Under my legislation, States would be liable to victims of violent
felonies committed by a criminal the State had released prior to
serving his or her full prison sentence for a previous violent crime.
But a State that has a law requiring those convicted of a violent crime
to serve their entire, original term of imprisonment behind bars would
not be liable to victims. This liability would force the States to
consider the real costs that early release imposes on society. While
States still would be free to release violent criminals whenever they
wish, they no longer would be able to shift the cost of that decision
to innocent victims.
Mr. President, the legislation I am introducing today would
complement the crime bill we are currently negotiating. It would create
incentives for the States to update their criminal records and to make
them available to law-enforcement nationwide. It would strongly
encourage States to keep violent criminals locked up for their full
sentences. Together, these would be a significant step toward
controlling violent crime in this Nation. I urge my colleagues to
support this important measure.
I ask unanimous consent the text of the bill be printed in the Record
at the conclusion of my remarks.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2118
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Violent Crime Intervention
Act of 1994''.
TITLE I--NATIONAL CRIMINAL RECORDS DATABASE
SEC. 101. FINDINGS.
The Congress finds that--
(1) nationwide--
(A) many State criminal record systems are not up to date
and contain incomplete or incorrect information; and
(B) less than 20 percent of all criminal records are fully
computerized, include court dispositions, and are accessible
through the Interstate Identification Index of the Department
of Justice; and
(2) a complete and accurate nationwide criminal record
database is an essential element in fighting crime and
development of such a database and is a national urgent
priority.
SEC. 102. STATE CRIMINAL RECORD UPGRADES.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Attorney General shall issue
guidelines establishing specific requirements for a State to
qualify as a fully participating member of the Interstate
Identification Index.
(b) Minimum Requirements.--The guidelines referred to in
subsection (a) shall require--
(1) that all arrest reports and final disposition orders
are submitted to the State records repository within 21 days;
(2) the State repository to enter these records and orders
into the State database not more than 14 days after the
repository receives the information;
(3) the State to conduct audits, at least annually, of
State criminal records to ensure that such records contain
correct and complete information about every felony arrest
and report the results of each audit to the Attorney General;
(4) the State to certify to the Attorney General, on
January 1 of each year, that the law enforcement agencies,
courts, and records officials of the State are in compliance
with this section; and
(5) such other conditions as the Attorney General
determines are necessary.
(c) Fees.--A State that does not qualify as a fully
participating State, pursuant to the guidelines referred to
in subsection (a), within 2 years after the date on which the
Attorney General issues such guidelines shall pay a user fee
for each identification request made to the Interstate
Identification Index in an amount equal to the average cost
of a single Federal database inquiry, as determined by the
Attorney General each year.
SEC. 103. AUTHORIZATION.
There are authorized to be appropriated $100,000,000 for
fiscal years 1995 and 1996 to the Attorney General for grants
to States to establish or improve their criminal record
databases to qualify as a fully participating member of the
Interstate Identification Index.
TITLE II--LIABILITY FOR EARLY RELEASE OF VIOLENT FELONS
SEC. 201. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds that--
(1) violent criminals often serve only a small portion of
their original sentences;
(2) a significant proportion of the most serious violent
crimes committed in the United States are committed by
criminals who have been released early from a sentence for a
previous violent crime;
(3) violent criminals who are released early from prison
often travel to other States to commit additional violent
crimes;
(4) the crime and threat of crime committed by violent
criminals released early from prison affects tourism,
economic development, use of the interstate highway system,
federally owned or supported facilities, and other commercial
activities of individuals; and
(5) the policies of one State regarding the early release
of criminals sentenced in that State for a violent crime
often affects the citizens of other States, who can influence
those policies only through Federal law.
(b) Purpose.--The purpose of this title is to reduce
violent crime by requiring States to bear the responsibility
for the consequences of releasing violent criminals before
they serve the full term for which they were sentenced.
SEC. 202. CAUSE OF ACTION.
(a) In General.--The victim (or in the case of a homicide,
the family of the victim) of a violent crime shall have a
Federal cause of action in any district court against a State
if the individual committing the crime--
(1) previously had been convicted by the State of a violent
offense;
(2) was released from incarceration prior to serving his or
her full sentence for such offense; and
(3) committed the violent crime before the original
sentence would have expired.
(b) Exception.--A State shall not be liable under
subsection (a) if the State requires a violent criminal to be
incarcerated for the entire term of imprisonment to which the
criminal is sentenced.
(c) Definition.--As used in this title, the term ``crime of
violence'' has the same meaning as in section 16 of title 18,
United States Code.
(d) Damages.--A State shall be liable to the victim in an
action brought under this title for the actual damages
resulting from the violent crime, but not for punitive
damages.
______
By Mr. BREAUX (for himself, Mr. Lott, Ms. Mukulski, Mr. Inouye,
Mr. Stevens, Mr. D'Amato, and Mr. Moynihan):
S. 2119. A bill to prohibit the imposition of additional fees for
attendance by United States citizens at the United States Merchant
Marine Academy; to the Committee on Commerce, Science, and
Transportation.
prohibition of fees on attendees of the merchant marine academy
Mr. BREAUX. Mr. President, the bill I am introducing today along with
my distinguished colleagues, Mr. Lott, Ms. Mikulski, Mr. Inouye, Mr.
Stevens, Mr. D'Amato, and Mr. Moynihan, would maintain existing policy
and would prohibit the imposition of additional charges or fees for
attendance by U.S. citizens at the U.S. Merchant Marine Academy.
I am introducing this bill in response to a recommendation in the
administration's National Performance Review [NPR], which was released
last fall, that proposes to begin charging tuition and fees at the
Academy at Kings Point, NY, beginning with the 1995-96 academic year.
Currently, all costs at the Academy, including tuition, fees,
uniforms, are paid by the Federal Government just as they are at the
other Federal service academies such as the Air Force Academy and the
Coast Guard Academy. As a condition of their appointment to the
Merchant Marine Academy, individuals are obliged, upon graduation to:
maintain a license as an officer in the U.S. merchant marine for at
least 6 years; apply for an appointment to, and accept if tendered, an
appointment to a reserve unit of an armed force of the United States
for at least 6 years following graduation; and to serve in the foreign
and domestic commerce and the national defense of the United States for
at least 5 years following graduation. While the proposal in the NPR
calls for the possible imposition of tuition at the Academy, it does
not change the service commitment that is required as a condition of
acceptance.
The Academy is an indispensable contributor to the U.S. maritime
industry. In fact, 72 percent of the Academy's graduates from the last
20 years are still employed in the maritime industry.
Cutting the Academy budget in half would require that tuition of
$15,000 to $16,000 be charged to make up the difference. It is unlikely
that most individuals could pay that amount, since they would be unable
to afford the cost of this tuition. The end result of this proposal
would, therefore, ultimately be closure of the Academy. This loss would
be devastating to our Nation's merchant marine, which has been already
experiencing more than its share of hardships in recent years and may
not be able to survive any further setbacks such as this.
Mr. President, I ask unanimous consent that the text of the bill I am
introducing along with my statement be printed in the Congressional
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2119
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PROHIBITION ON IMPOSITION OF ADDITIONAL CHARGES OR
FEES FOR ATTENDANCE AT THE UNITED STATES
MERCHANT MARINE ACADEMY.
(a) Prohibition.--Except as provided in subsection (b), no
charge or fee for tuition, room, or board for attendance by
United States citizens at the United States Merchant Marine
Academy may be imposed.
(b) Exception.--The prohibition specified in subsection (a)
shall not apply with respect to any item or service provided
to midshipmen at the United States Merchant Marine Academy
for which a charge or fee is imposed as of the date of the
enactment of this Act. The Secretary of Transportation shall
notify the Congress of any change made by the United States
Merchant Marine Academy in the amount of a charge or fee
authorized under this subsection.
Ms. MIKULSKI. Mr. President, I am happy to join Senator Breaux today
as a cosponsor of this important legislation. I am a staunch supporter
of the U.S.-flag Merchant Marine and of the maritime industry in
general. The industry is of vital importance to our Nation's economic
and defense capabilities. Kings Point is vital to the industry.
Kings Point produces highly trained transportation specialists who
know how to interact with the Armed Forces to meet our logistics
requirements. Graduates have gone on to become leaders in
transportation technology. They have been responsible for technological
advances such as containerization, piggy backing containers on rail
cars, and intelligent systems which enhance cargo handling
efficiencies. With 300,000 people working in our maritime industry, we
must ensure that these industries are supplied with innovative leaders
for the next century.
The maintaining of full funding for Kings Point will assure that a
highly qualified student body will continue to offer at least 8 years
of national service in transportation and defense in exchange for their
education. It will assure that the United States will have merchant
marine officers and transportation managers who are trained to preserve
and protect the environment. Finally, it will reaffirm our country's
conviction that the sea-link is most certainly crucial to the Nation's
transportation infrastructure. We must be willing to invest in manpower
for this sector.
______
By Mr. INOUYE (for himself, Mr. Hollings, Mr. Stevens, Mr. Kerry,
Mr. Packwood, Mr. Breaux, Mr. Mathews, Mr. Akaka, Mr. Bingaman,
Mr. Dodd, Mr. Durenberger, Mr. Gorton, Mr. Graham, Mr.
Hatfield, Mr. Kennedy, Mr. Levin, Ms. Mikulski, Mrs. Murray,
Mr. Reid, and Mr. Wofford):
S. 2120. A bill to amend and extend the authorization of
appropriations for public broadcasting, and for other purposes; to the
Committee on Commerce, Science, and Transportation.
public broadcasting act of 1994
Mr. INOUYE. Mr. President, today, I am introducing the Public
Broadcasting Act of 1994. This legislation authorizes funding for the
Corporation for Public Broadcasting [CPB] for fiscal years 1997 through
1999. It continues the tradition of advance funding for the Public
Broadcasting System so that key long-term planning decisions can be
made. This advance-year funding is critical to the overall stability of
our Nation's Public Broadcasting system.
In 1967, the Corporation for Public Broadcasting was established by
congress ``* * * [to] help make public broadcasting available to all
citizens * * * and to afford maximum protection to such broadcasting
from extraneous interference and control.'' In the 25 years since its
creation, the Public Broadcasting System has grown and matured. Even
with the increased number of programming services, it is largely
responsible for much of the high-quality, educational, informational,
and entertainment radio and television programming we have today.
The CPB and public broadcasters have built a nationwide system in
which close to 90 percent of the American households have access to a
Public Radio signal and nearly 100 percent of households have access to
a public television signal.
The legislation I am introducing today reauthorizes funding for the
CPB in the amount of $425 million for fiscal years 1997 through 1999.
This amount is identical to the level authorized for the CPB for fiscal
year 1996.
Unlike most previous years, this legislation does not increase the
authorized funding levels for the CPB. This legislation will, however,
allow public broadcasting stations to maintain the level of high-
quality programming they provide today. I believe that this legislation
properly balances the needs of Public Broadcasters with the need to
show fiscal responsibility.
The CPB supports the production and distribution of nationally
recognized radio and television programs such as, ``All Things
Considered,'' ``Sesame Street,'' ``American Playhouse,'' ``Great
Performances,'' and ``The MacNeil/Lehrer Newshour.'' These programs
have and will continue to make significant contributions to our
society.
The CPB allocates a large percentage of its funds to enhance
programming by and for minorities and traditionally unserved areas. By
supporting the Independent Television Service [ITVS] and the five
minority consortia, Public Broadcasting has enabled Americans to
explore important social issues and experience a wide variety of
opinions and ideas. I encourage the CPB and its member stations to
continue their commitment to these entities.
Public Broadcasting has a history of innovation that has broadened
the reach of television to many of our Nation's citizens. For instance,
Public Television provides closed-captioning for the hearing-impaired,
and descriptive video services [DVS], an optional audio narration track
for the sight-impaired. And for Spanish-speaking citizens, the
``MacNeil/Lehrer News Hour'' airs in many communities with a Spanish
language soundtrack. Innovative services like these are important as
our society becomes more diverse.
Public Broadcasting's efforts in education, advanced technology, and
program development continue to set the standard for commercial
broadcasting. For instance, in the area of education, Public Television
has shown itself to be one of the most economical and efficient
mechanisms for distributing educational information to our homes and
schools. Public Television stations are providing their local schools
and State educational institutions with technical expertise and quality
programs to supplement classroom instruction. Nationwide, Public
Television is the largest contributor of video and televised
instructional materials for schools, colleges, and home viewers in the
country. Public Television reaches over 29 million students in nearly
70,000 schools, grades K through 12. Close to 2 million teachers use
Public Educational Services provided by Public Television.
The Satellite Educational Resources Consortium [SERC] is another
example of how Public Broadcasting is using its resources for
education. SERC is a 23-state partnership of educators and public
broadcasters that helps schools to meet the needs of their students
through live interactive satellite delivered courses. Because of
efforts like these, two-thirds of America's colleges now use Public
Broadcasting System courses and 2 million adults have earned college
credit from Public Television.
Furthermore, the Public Broadcasting System plans to devote
considerable efforts to develop and implement programs and activities
as required by the Ready-to-Learn Act.
The CPB coordinates systemwide planning and conducts research to help
the Public Broadcasting System keep up with new technologies and
fluctuating financial conditions. For instance, many Public Radio and
Television stations are exploring new ways to manage their
administrative and technical processes to achieve greater efficiencies.
Some are discussing ways to consolidate their stations and share
resources. I applaud the efforts of these stations to become more
efficient and eliminate duplicate program coverage.
I also encourage the stations to give serious thought to the 1993
report of the Twentieth Century Fund. The Twentieth Century Fund formed
a task force to examine the mission, role, funding and accountability
of Public Television in the 1990's and beyond. The task force compiled
a list of recommendations for how to maintain a strong public
television system. I urge public broadcasting stations to move forward
on the recommendations included in this report.
In 1992, Congress directed the CPB to increase public participation
in noncommercial broadcasting. In response to this mandate, the CPB
launched ``open to the public,'' a series of mechanisms--public
hearings, town meetings, national polls and regional surveys, a
dedicated post-office box and a toll-free number--for measuring and
assessing public perceptions of Public Broadcasting. It is designed to
provide easily accessible conduits through which the American people
can share their comments and express their concerns about Public
Broadcasting. I support these measures and I urge the CPB to continue
to seek ways to provide an open and accountable decisionmaking process.
Mr. President, I thank you for the opportunity to renew my support
for Public Broadcasting. I believe this legislation wisely allocates
Federal funding to assist the CPB. I urge my colleagues on both sides
of the aisle to join me in supporting the reauthorization for the
Corporation for Public Broadcasting.
______
By Mr. JOHNSTON (by request):
S. 2121. A bill to promote enterpreneurial management of the National
Park Service, and for other purposes; to the Committee on Energy and
Natural Resources.
National park service entrepreneurial management reform act
Mr. JOHNSTON. Mr. President, at the request of the Department of the
Interior, I send to the desk a bill to promote entrepreneurial
management of the National Park Service, and for other purposes''.
I ask unanimous consent that the bill, the communication, and a
summary prepared by the National Park Service which accompanied the
proposal be printed in the Congressional Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 2121
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Park Service
Entrepreneurial Management Reform Act''.
SEC. 2. FINDINGS.
(a) Findings.--In furtherance of the Act of August 25, 1916
(39 Stat. 535), as amended (16 U.S.C. 1, 2-4), which directs
the Secretary of the Interior to administer ares of the
National Park System in accordance with the fundamental
purpose of conserving the scenery, wildlife, natural and
historic objects, and providing for their enjoyment in a
manner that will leave them unimpaired for the enjoyment of
future generations, the Congress finds that--
(1) management of the National Park System requires
entrepreneurial strategies that will enable the National Park
Service to meet the increasing demands placed on the System
by the American public; and
(2) in order to preserve the natural and cultural resources
of the System for future generations and provide for
appropriate enjoyment of those resources, the National Park
Service must increase revenues by reforming the nature, level
and collection of fees, and increasing voluntary donations
and partnerships.
SEC. 3. DEFINITIONS.
As used in this Act, the term--
(1) ``park'' means a unit of the National Park System; and
(2) ``Secretary'' means the Secretary of the Interior.
SEC. 4. FEES.
(a) Admission Fees.--
(1) In general.--The Secretary shall establish reasonable
admission fees to be charged at units of the National Park
System where the Secretary determines that such fees are
appropriate and feasible.
(2) Annual passes.--For admission or entrance into any unit
of the National Park System designated by the Secretary
pursuant to this section, or into several specific units
located in a particular geographic area, or for entrance to
all units where an admission fee is charged, the Secretary is
authorized to make available annual admission permits for
reasonable fees to be determined by the Secretary.
(3) Single visits.--The Secretary shall establish
reasonable admission fees for a single visit at any unit of
the National Park System designated by the Secretary pursuant
to this section for persons who choose not to purchase an
annual pass.
(b) Recreation Use Fees.--The Secretary shall establish
reasonable fees for specialized outdoor recreation sites,
facilities, equipment, or services that are provided or
furnished at Federal expense.
(c) Special Park Uses.--The Secretary shall establish
reasonable fees for uses of park units that require special
arrangements including permits. The fees shall cover all
costs of providing necessary services associated with special
uses and shall be credited to the appropriation current at
that time.
(d) Retention of Fees.--(1) Except as provided below, fees
collected pursuant to subsections 4 (a) and (b) of this Act
shall be deposited in the special fund account established in
Section 4 of the Land and Water Conservation Fund Act of 1965
(16 U.S.C. 460 1-6a(i)(4))
(2) Notwithstanding any other provision of law, beginning
in fiscal year 1995 and thereafter, an amount equal to 15
percent of the total fees collected in the immediate
preceding fiscal year pursuant to subsections 4 (a) and (b)
shall be deducted from the current year collections and shall
be deposited into a special fund established in the Treasury
of the United States titled ``Fee Collection Support--
National Park System'' and shall be available to the
Secretary without further appropriation to cover the costs of
collection of the fees, to remain available until expended.
(3) Notwithstanding any other provision of law, beginning
in fiscal year 1996 and thereafter, 50 percent of the
difference in additional receipts collected during the
immediate preceding fiscal year as compared to total receipts
collected in fiscal year 1993 shall be deducted from the
current year collections and shall be covered into a special
fund established in the Treasury of the United States titled
``National Park Renewal Fund'', and shall be available to the
Secretary without further appropriation for infrastructure
needs at parks, including but not limited to facility
refurbishment, repair and replacement, resource protection,
interpretive/educational media (exhibits), and other
infrastructure projects beneficial to park resources, to
remain available until expended.
(4) In fiscal year 1995 only, fees authorized to be
collected pursuant to subsections 4 (a) and (b) of this Act
may be collected only to the extent provided in advance in
appropriations acts and shall be credited to the appropriate
special fund accounts described in this Act. In addition,
said fees shall be available for the purposes of this Act
only to the extent provided in advance in appropriations acts
and are authorized to be appropriated to remain available
until expended. In fiscal year 1996 and thereafter, fees
collected as authorized to be collected pursuant to
subsections 4 (a) and (b) of this Act may be collected as
authorized by this Act and shall be available as provided in
this Act without further provision in appropriations acts.
(e) Use of Fees.--The Secretary shall develop procedures
for the use of these receipts that ensure accountability and
demonstrated results consistent with the purposes of this
act. The Secretary shall report annually to Congress on the
expenditure of funds from fees collected, beginning after the
first full fiscal year following enactment of this Act.
(f) Discounts.--In establishing the fees authorized in this
section, the Secretary shall establish appropriate discounts
for educational groups, persons sixty-two years of age or
older, or persons who are blind or permanently disabled. The
Secretary may also establish criteria when the fees may be
waived for these groups or individuals.
(g) Criteria.--All fees established pursuant to this
section shall be fair and equitable, taking into
consideration the direct and indirect cost to the Government,
the benefits to the recipient, the public policy or interest
served, the comparable fees charged by non-Federal public and
private agencies, the economic and administrative feasibility
of fee collection and other pertinent factors. The Secretary
shall from time to time review the fees for consistency with
the provisions of this subsection and provide timely public
notice of any proposed changes in the fees.
SEC. 5.--DONATIONS.
(a) Requests for Donations.--In addition to other
authorities the Secretary may have to accept the donation of
lands, buildings, other property, services, and moneys for
the purposes of the National park System, the Secretary is
authorized to solicit donations of money, property, and
services from individuals, corporations, foundations and
other potential donors who the Secretary believes would wish
to make such donations as an expression of support for the
national parks. Such donations may be accepted and used for
any authorized purpose or program of the National Park
Service, and donations of money shall remain available for
expenditure without fiscal year limitation. Any employees of
the Department to whom this authority is delegated shall be
set forth in regulations issued by the Secretary pursuant to
paragraph (d).
(b) Employee Participation.--Employees of the National Park
Service may solicit donations only if the request is
incidental to or in support of, and does not interfere with
their primary duty of protecting and administering the parks
or administering authorized programs, and only for the
purpose of providing a level of resource protection, visitor
facilities, or services for health and safety projects,
recurring maintenance activities, or for other routine
activities normally funded through annual agency
appropriations. Such requests must be in accordance with
guidelines issued pursuant to paragraph (d).
(c) Prohibitions.--(1) A donation may not be accepted in
exchange for a commitment to the donor on the part of the
National Park Service or which attaches conditions
inconsistent with applicable laws and regulations or that is
conditioned upon or will require the expenditure of
appropriated funds that are not available to the Department,
or which compromises a criminal or civil position of the
United States or any of its departments or agencies or the
administrative authority of any agency of the United States.
(2) In utilizing the authorities contained in this section
employees of the National Park Service shall not directly
conduct or execute major fund raising campaigns, but may
cooperate with others whom the Secretary may designate to
conduct such campaigns on behalf of the National Park
Service.
(d) Regulations and Guidance.--(1) The Secretary shall
issue regulations setting forth those positions to which he
has delegated his authority under paragraph (a) and the
categories of employees of the National Park Service that are
authorized to request donations pursuant to paragraph (b).
Such regulations shall also set forth any limitations on the
types of donations that will be requested or accepted as well
as the sources of those donations.
(2) The Secretary shall publish guidelines which set forth
the criteria to be used in determining whether the
solicitation or acceptance of contributions of lands,
buildings, other property, services, moneys and other gifts
or donations authorized by this section would reflect
unfavorably upon the ability of the Department of the
Interior or any employee to carry out its responsibilities or
official duties in a fair and objective manner, or would
compromise the integrity or the appearance of the integrity
of its programs or any official involved in those programs.
The Secretary shall also issue written guidance on the extent
of the cooperation that may be provided by National Park
Service employees in any major fund raising campaign which
the Secretary has designated others to conduct pursuant to
paragraph (c)(2).
SEC. 6.--CHALLENGE COST-SHARE AGREEMENTS.
(a) Agreements.--The Secretary is authorized to negotiate
and enter into challenge cost-share agreements with
cooperators. For purposes of this section, the term--
(1) ``challenge cost-share agreement'' means any agreement
entered into between the Secretary and any cooperator for the
purpose of sharing costs or services in carrying out
authorized functions and responsibilities of the Secretary
with respect to the National Park System; and
(2) ``cooperator'' means any State or local government,
public or private agency, organization, institution,
corporation, individual, or other entity.
(b) Use of Federal Funds.--In carrying out challenge cost-
share agreements, the Secretary is authorized, subject to
appropriation, to provide the Federal funding share from any
funds available to the National Park Service.
SEC. 7.--COST RECOVERY FOR DAMAGE TO PARK RESOURCES.
Any funds payable to United States as restitution on
account of damage to park resources or property shall be paid
to the Secretary. Any such funds, and any other funds
received by the Secretary as a result of forfeiture,
compromise, or settlement on account of damage to park
resources or property shall be available without
appropriation and may be expended by the Secretary without
regard to fiscal year limitation to improve, protect, or
rehabilitate any park resources or property which have been
damaged by the action of a permittee or any unauthorized
person.
SEC. 8--CONSISTENCY WITH OTHER LAWS.
(a) Except as provided in subsection (b), to the extent
that the provisions of this Act are inconsistent with section
4 of the Land and Water Conservation Act of 1965 as amended
(16 U.S.C. 4601-6a) or any other provision of law, including
any provision that prohibits or limits the charging of a
reasonable recreation or other fee, the provisions of this
Act shall prevail.
(b) The following sections of the Land and Water
Conservation Act of 1965 as amended (16 U.S.C. 4601-6a) will
apply to this Act:
(1) Rules and regulations; establishment; enforcement
powers; penalty for violations.--In accordance with the
provisions of this section, the Secretary may prescribe rules
and regulations for areas under his or her administration for
the collection of any fee established pursuant to this
section. Persons authorized to enforce any such rules or
regulations issued under this subsection may, within areas
under the administration or authority of the Secretary and
with or, if the offense is committed in his presence, without
a warrant, arrest any person who violates such rules and
regulations. Any person so arrested may be tried and
sentenced by the United States magistrate judge specifically
designated for that purpose by the court by which he was
appointed, in the same manner and subject to the same
conditions as provided in subsections (b), (c), (d), and (e)
of section 3401 of title 18. Any violations of the rules and
regulations issued under this subsection shall be punishable
by a fine of not more than $1000.
(2) Criteria, posting and uniformity of fees.--Clear notice
that a fee has been established pursuant to this section
shall be prominently posted at each area and at appropriate
locations therein and shall be included in publications
distributed at such areas.
(3) Contracts with public or private entities for visitor
reservation services.--The Secretary, under such terms and
conditions as he deems appropriate, may contract with any
public or private entity to provide visitor reservation
services. Any such contract may provide that the contractor
shall be permitted to deduct a commission to be fixed by the
agency head from the amount charged the public for providing
such services and to remit the net proceeds therefrom to the
contracting agency.
(4) Federal and state laws unaffected.--Nothing in this Act
shall authorize Federal hunting or fishing licenses or fees
or charges for commercial or other activities not related to
recreation, nor shall it affect any rights or authority of
the States with respect to fish and wildlife, nor shall it
repeal or modify any provision of law that permits States or
political subdivisions to share in the revenues from Federal
lands or any provision of law that provides that any fees or
charges collected at particular Federal areas shall be used
for or credited to specific purposes or special funds as
authorized by that provision of law.
(5) Selling of permits and collection of fees by volunteers
at designated areas; collecting agency duties; surety bonds;
selling of annual admission permits by public and private
entities under arrangements with collecting agency head.--
When authorized by the Secretary, volunteers at designated
areas may sell permits and collect fees authorized or
established pursuant to this section. The Secretary shall
ensure that such volunteers have adequate training
regarding--
(a) the sale of permits and the collection of fees,
(b) the purposes and resources of the areas in which they
are assigned, and
(c) the provision of assistance and information to visitors
to the designated area.
The Secretary shall require a surety bond for any such
volunteer performing services under this subsection. Funds
available to the collecting agency may be used to cover the
cost of any such surety bond. The head of the collecting
agency may enter into arrangements with qualified public or
private entities pursuant to which such entities may sell
(without cost to the United States) annual admission permits
(including Golden Eagle Passports) at any appropriate
location.
____
Department of the Interior,
Office of the Secretary,
Washington, DC, April 14, 1994.
Hon. Albert Gore,
President of the Senate, Washington, DC.
Dear Mr. President: Enclosed is a draft bill, ``To promote
entrepreneurial management of the National Park Service, and
for other purposes.''
We strongly recommend that the bill be introduced, referred
to the appropriate committee for consideration, and enacted.
Enactment of the enclosed bill would enable the National
Park Service and the Department of the Interior to carry out
the recommendations of the National Performance Review.
Specifically, the Review proposed management reforms for the
National Park Service to ``Promote Entrepreneurial Management
of the National Park Service.'' In general, the
recommendations would give the Park Service increased fiscal
flexibility by authorizing the collection of increasing
receipts and earmarking increases for park needs. Legislation
is necessary to bring about this result.
The enclosed bill would establish a new legislative basis
for managing receipts taken in by the National Park Service:
The Secretary would be authorized to set admission,
recreation and special use fees at reasonable rates and
subject to broad policy guidelines, expanding the possibility
and discretion to collect fees at all parks regardless of
existing statutory or other limitations. Admission and
recreation fees would be available for appropriation back to
the National Park Service, except that the cost of collection
and 50 percent of any additional receipts over and above FY
1993 levels may be placed in the National Park Renewal Fund
and Fee Collection Support accounts for use by parks without
further appropriation. With a portion of increased revenues
made directly available to parks to cover the cost of
collection and pressing infrastructure needs, this will
provide an entrepreneurial incentive to park superintendents
to maximize fee collection year-round.
Challenge cost-share grants would be authorized, wherein
the National Park Service could match donated funds for park
projects.
The authority for National Park Service employees to seek
donations would be clearly spelled out.
Monetary damages payable to the United States on account of
damage to park property and resources would be available to
the National Park Service for rehabilitation work.
The bill would give the National Park Service flexibility
in responding to management needs and would provide critical
funds to supplement rather than supplant existing
appropriations, resulting in a stable funding base from which
to address the immense backlog of real needs in the parks.
Additional receipts that accrue will be displayed in annual
National Park Service budget requests.
The effect of this draft bill on the deficit is:
FISCAL YEARS
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1995-1998
----------------------------------------------------------------------------------------------------------------
Outlays........................................ -1.6 -39.3 -19.4 -15.3 -75.6
----------------------------------------------------------------------------------------------------------------
The Omnibus Budget Reconciliation Act (OBRA) requires that
all revenue and direct spending legislation meet a pay-as-
you-go requirement. That is, no such bill should result in an
increase in the deficit; and if it does, it must trigger a
sequester if it is not fully offset. This bill would decrease
direct spending. Considered alone, this bill meets the pay-
as-you-go requirement of OBRA.
The Office of Management and Budget has advised that
enactment of the enclosed draft bill would be in accord with
the program of the President.
Sincerely,
B. Cohen.
Assistant Secretary--Policy, Management and Budget.
____
Summary of Proposed National Park Service Entrepreneurial Management
Reform Act
Purpose: In order to meet the increasing demands placed on
the National Park System and to ensure preservation of the
natural and cultural resources of the System, entrepreneurial
strategies are required that will, among other things,
increase revenues by reforming the nature, level and
collection of fees, recover costs from damage to park
resources and increase voluntary partnerships.
Fees: The Secretary would be authorized to establish fees
for admission, special recreational uses, and special park
uses, subject to broad policy guidance. Net fees from
admission and special recreational uses would be deposited in
a special account and allocated, subject to appropriation, to
the parks for any operations. The Secretary may withhold the
cost of collecting the fees and 50 percent of the additional
receipts over and above the FY 1993 levels, for
infrastructure needs at parks, without further appropriation.
Donations: The Secretary and certain National Park Service
employees would be authorized to seek donations for park and
program purposes, subject to limitations established by
guidelines.
Challenge Cost-Share Agreements: The Secretary would be
authorized to carry out challenge cost-share agreements by
using any funds appropriated for the operation of the
National Park Service.
Cost Recovery for Damage to Park Resources: The Secretary
is authorized to recover restitution on account of damage to
park resources or property. Settlement money would be
available without appropriation to improve, protect, or
rehabilitate park resources or property, which have been
damaged by authorized or unauthorized use .
______
By Mr. COHEN:
S. 2122. A bill to improve the public and private financing of long-
term care and to strengthen the public safety net for elderly and
nonelderly disabled individuals who lack adequate protection against
long-term care expenses, and for other purposes.
public-private long term care partnership act of 1994
Mr. COHEN. Mr. President, while health care reform is being debated
in the Nation's Capital and in the homes of every American family, we
must not overlook one of the most critical issues to the elderly and
nonelderly disabled Americans--access to affordable and appropriate
long-term care services. With an estimated 10 million persons in need
of some long-term care services, we cannot miss the opportunity that
national health care reform presents to make some very real
improvements to our current long-term care systems.
Today I am introducing legislation to correct some of the serious
problems in the financing and delivery of long-term care. This proposal
would create a strong public-private partnership to help individuals
anticipate and pay for their long-term care needs. For those without
the resources to finance their own care, this proposal would improve
our public safety net to better protect low-income families against the
catastrophic expense of long-term care services.
While approximately 38 million people lack basic health insurance,
almost every American family is exposed to the devastating costs of
long-term care. In fact, less than 3 percent of all Americans have
insurance to cover long-term care. With average nursing home costs
nearing $40,000 per year and home health care costing from $50 to $200
per day, long-term care expenses can quickly wipe out the lifetime of
savings of a disabled individual and his or her family.
Moreover, as the population ages, the human and financial costs
associated with long-term care will accelerate dramatically. As ranking
minority member of the Special Committee on Aging, I hear countless
stories of families struggling to provide 24-hour-a-day caregiving to a
loved one in need. Despite their best efforts, some families are
literally torn apart or pushed to the brink of financial disaster due
to the devastating costs of long-term care.
For example, in a recent hearing of the Aging Committee, we heard
riveting testimony from Angela Chapman, a 13-year-old girl whose father
is suffering from Alzheimer's disease. She and her mother endure the
round-the-clock task of caregiving and are now being forced to sell
their home to pay for his care. While they desperately want to keep
their family together as long as possible, they can hardly bear the
financial and emotional strain of constant caregiving, with little or
no respite or assistance.
In my home State of Maine, a 35-year-old woman from Westport had been
struggling to remain in her home for years with a chronic and disabling
form of multiple sclerosis. She was able to get by, using her
disability insurance payments and support from her family. When her
disease progressed and her insurance ran out, her family was unable to
provide her care and placed her in a nursing home, even though she
could have continued to stay at home at a lower cost to government
programs.
For years, long-term care has been only an after-thought, or
stepchild, of health care reform. Our current system is a maze of
fragmented, inequitable Federal and State programs. While we spend
millions of Medicaid dollars to provide nursing home and some home
care, the system is falling under its own weight: Long term care is the
fastest growing segment of State Medicaid expenses, and State budgets
are breaking due to the exploding costs.
As a Nation we do not have satisfactory ways to help families
anticipate and pay for their long-term care needs. Instead, families
are too often left on their own to juggle caregiving needs with their
own jobs, or are forced to institutionalize their elderly parents or
disabled children when they desperately want to keep them at home,
simply because there is no other affordable care available to them.
In earlier days, when Federal deficits did not loom so large over our
economy, the solution would have been relatively simple: just create a
new open-ended entitlement program. Today, however, we can no longer
afford to constuct new, unrestrained non-means-tested programs. Such an
approach is not only fiscally irresponsible, but also impedes the
creation of a private long-term care insurance market and fails to
encourage individuals who are financially able to plan and save for
their own future long-term care needs.
As we undertake health care reform, we must make it easier for
individuals to financially plan for their future long-term care needs.
Individuals should consider the need for long-term care a normal risk
of growing old, and plan for this risk just as they plan their
retirement, purchase life insurance to protect their families, purchase
health, or car insurance. A strong private long-term care market will
not only give individuals greater financial security for their future,
but will ease the financial burden on the Federal Government for years
to come, as our population ages and more elderly persons need long-term
care services.
The legislation I am introducing today provides important tax
incentives for the purchase of long-term care insurance and places
consumer protections on long-term care insurance policies so quality
products will be affordable and accessible to more Americans. It allows
States to develop programs under which individuals can keep more of
their assets and still qualify for Medicaid if they take steps to
finance their own long-term care needs, allows individuals to make tax
free withdrawals from their individual retirement accounts without
penalty if they purchase private long-term care insurance, and provides
for consumer education to help families decide how to best plan for
their own particular circumstances.
While long-term care insurance can be very affordable when purchased
at a younger age, we must recognize that steps should be taken to help
those elderly individuals today who have not insured themselves for
long-term care, and those at lower incomes who are unable to afford
private insurance coverage. Even a strong private sector insurance
market will not replace the need for public programs to provide a
safety net for the millions of American families who cannot afford
insurance.
The proposal we are offering today would work to improve our public
safety net to better protect those at low-income levels against the
catastrophic expense of long-term care services. The bill eliminates
the current bias in our system toward nursing home care and sets up
criteria allowing individuals with income levels up to 150 percent of
the poverty level to qualify for home care benefits. Far too often,
elderly or disabled individuals are forced to enter nursing homes
prematurely simply because this is the only care that is covered under
Medicaid. While there will always be those who require
institutionalized care, for many others home and community-based care
can be a less expensive alternative, saving millions of dollars for the
overall system.
Finally, the bill provides for demonstration projects and establishes
a commission to explore ways to better integrate long-term care with
the rest of the health care system. These initiatives will work to
create a more balanced and integrated delivery system that will meet
people's needs over the years. In a recent hearing held before the
Senate Select Committee on Aging, the General Accounting Office
testified that we could bring about better long-term care services
without spending more money by simply focusing greater attention to
individual needs and through more flexible programs. I strongly believe
that we can and must do better to serve individuals in need of long-
term care, without placing more pressure on State and Federal budgets.
Mr. President, while we spend the next few months debating the merits
of such issues as managed competition, health care alliances, the
amount of regulation necessary, and who should pay for each proposal,
we must keep in mind that the ultimate measure of reform for each
American will be, ``What will health care reform mean for me?'' For a
senior citizen with Parkinson's disease, a young mother with multiple
sclerosis, and their families, making long-term care more affordable
and accessible is not a fringe issue, but rather a key test for health
care reform legislation.
Last September I held a hearing in Augusta, ME, on long-term care
that was attended by over 500 senior citizens, caregivers, health care
providers, and policymakers. The interest and enthusiasm of the
participants sent me a clear message on the need to correct many of the
deficiencies in our long-term care system.
The legislation I am introducing today, takes several significant
steps to accomplish this goal and will provide some meaningful relief
to families facing exorbitant long-term care costs.
I am extremely pleased that several other bills before Congress such
as the administration's Health Security Act, Senator Chafee's HEART
proposal, and Senator Packwood's secure choice bill contain important
long-term care provisions. While I believe my legislation offers a
reasonable alternative, I am supportive of initiatives which expand
appropriate home and community-based services to those most in need and
improve private sector participation in the financing of long-term
care.
I urge my colleagues to support this long-term care legislation that
creates a strong public-private partnership and I look forward to
working together to ensure health care reform makes improvements in the
way long-term care services are provided for disabled individuals both
now and in the future.
Mr. President, I ask unanimous consent that a section-by-section
analysis of the bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Section By-Section Summary--Public-Private Long-Term Care Partnership
Act of 1994
Purpose: This bill is designed to build a public-private
partnership for the payment and planning of long-term care
services for elderly and non-elderly disabled. An emphasis is
placed on removing tax barriers and creating incentives which
encourage individuals and their families to finance their
future long-term care needs. The bill creates consumer
protection standards for long-term care insurance, and
provides incentives and public education to encourage the
purchase of private long-term care insurance. For those
individuals who cannot afford long-term care insurance or
those who are already disabled, the bill expands the public
safety net for long-term care under Medicaid.
Title I.--Tax Treatment of Long-term Care Insurance
Sec. 101. Qualified long-term care services treated as medical expenses
Section 213 of the Internal Revenue Code is amended to
allow qualified individuals to deduct out-of-pocket long-term
care services as medical expenses subject to a floor of 7.5
percent of adjusted gross income. Qualified long-term care
services include necessary diagnostic, preventive,
therapeutic, rehabilitative, maintenance and personal care
performed in either a residential or nonresidential setting.
Qualified individuals must be determined by a licensed
professional or qualified community case manager to be unable
to perform without substantial assistance at least two
activities of daily living (ADLs) or suffer from a moderate
cognitive impairment.
Sec. 102. Treatment of long-term care insurance
Section 213 is also amended to allow qualified long-term
care insurance premiums to be deducted as medical insurance
subject to the 7.5 percent-of-adjusted-gross-income-floor.
Qualified long-term care insurance premiums are also
deductible as a business expense and employer-provided long-
term care insurance is excluded from an employee's taxable
income. A qualified long-term care insurance policy must meet
the regulatory standards as established in Title II. The
provision would apply to taxable years beginning after
December 31, 1995.
Sec. 103. Treatment of benefits under qualified long-term care policies
Benefits paid under qualified long-term care
insurance policies would be excluded from income under
section 105(c) ``Payments Unrelated to Absence from
Work'', and employer-paid long-term care insurance would
be a tax free employee fringe benefit.
The daily benefit cap for all long term care policies would
be established at $150 per day and indexed for inflation. All
payments above the established cap are treated as income.
Private long-term care insurance is exempt from the
continuation of coverage requirements created by COBRA. In
addition, long-term care will be considered a ``qualified
benefit'' that may be included in a cafeteria plan.
The provision would apply to policies issued after December
31, 1995
Sec. 105. Tax treatment of accelerated death benefits under life
insurance contracts
Clarifies that an accelerated death benefit received by an
individual on the life of an insured who is terminally ill
individual (expected to die within 12 months) is excluded
from taxable income as payment by reason of death.
Title II.--Standards for long-term care insurance
Sec. 201. Policy requirements
Insurers are required to meet the National Association of
Insurance Commissioners (NAIC) January 1, 1993 standards for
long-term insurance. Additional requirements include: a
mandatory offer of nonforfeiture benefits, rate
stabilization, minimum rate guarantees, limits and
notification of increases on premiums and reimbursement
mechanisms for long-term care policies. Policies that do not
meet these consumer protection standards would be denied the
favorable tax treatment described in Section I.
Sec. 202. Additional requirements for issuers of long-term care
insurance policies
A penalty of $100 per day per policy shall be imposed on
long-term care issuers failing to meet the NAIC model
standards as outlined in this section.
Sec. 203. Coordination with State requirements.
A State retains the authority to apply additional standards
or regulations that provide greater protection of
policyholders of long-term care insurance.
Sec. 204. Uniform language and definitions
The NAIC is directed to no later than January 1, 1995 issue
standards for the use of uniform language and definitions in
long-term care insurance policies, with permissible
variations to take into account differences in state
licensing requirements for long-term care providers.
Sec. 205. Effective dates
The provisions would apply to policies issued after
December 31, 1995
title iii.--incentives to encourage the purchase of private insurance
Sec. 301. Public Information and education programs
The Secretary of Health and Human Services is directed to
establish a program designed to educate individuals on the
risks of incurring catastrophic long-term care costs and the
coverage options available to insure against this risk.
Education should increase consumers knowledge of the lack of
coverage for long-term care in Medicare, Medigap and most
private health insurance policies and explain the various
benefits and features of private long-term care insurance.
Sec. 302 Assets or resources disregarded under the Medicaid Program
Amends Section 1917(b) of the Social Security Act, related
to Medicaid Estate Recoveries, to allow for states to
establish asset protection programs for individuals who
purchase qualified long-term care insurance policies, without
requiring states to recover such assets upon a beneficiaries
death. This provision is aimed at encouraging more middle-
income persons to purchase long-term care insurance by
allowing individuals to keep a limited amount of assets and
still quality for Medicaid, if they have purchased long-term
care insurance.
States that develop asset protection programs to encourage
private insurance purchase are required to conform with
uniform reporting and documentation requirements established
by the Secretary of Health and Human Services.
Sec. 303. Distributions from individual retirement accounts for the
purchase of long-term care insurance coverage
Individuals above 59\1/2\ are allowed tax-free
distributions from an IRA or an individual retirement annuity
for the purchase of a long-term policy. Also allows
individuals below the age of 59\1/2\ to withdraw from their
individual retirement account without penalty in order to
purchase a qualified long-term care plan. Individuals who
obtain tax-free distributions from their IRA or individual
retirement annuity would be restricted from deducting
their long-term care insurance premium as a medical
expense under Title I of this act. The amendments made by
this section apply to taxable years beginning after
December 31, 1995.
title iv.--Improved public safety net for long-term care
Sec. 401. References in title
All references in this title apply to the Social Security
Act.
Sec. 402. Spend-down eligibility for nursing facility residents
Requires states to expand eligibility for nursing facility
residents who are determined to be ``medically needy.'' Such
individuals are those with incomes below the SSI poverty
level when expenses for medical care are deducted from their
income.
Sec. 403. Increase in personal needs allowance for institutionalized
individuals
Amends Medicaid by increasing to $50 per month (from $30)
the amount of funds an individual residing in a nursing
facility is able to retain for personal needs.
Sec. 404. Increased resource disregard for nursing facility residents
Amends Medicaid to allow states to disregard up to $8,000
in assets by an unmarried, institutionalized individual.
Sec. 405. Informing nursing home residents about availability of
assistance for home and community-based services
Requires that an individual who is a resident of a nursing
facility or an intermediate care facility for the mentally
retarded, receive at the time of application and periodically
thereafter, information on the range of home and community-
based services available in the State.
Sec. 406. Establishment of State programs furnishing home and community
based services to certain individuals with disabilities
This provision expands Medicaid by adding an optional
state-administered, means-tested program to cover home
care services for low income individuals with severe
disabilities. Beginning in 1997, those persons eligible
for benefits with less than $8,000 in assets and incomes
below 90 percent of poverty would qualify for home and
community-based services under this program. In calendar
year 1998, the coverage will increase to 110 percent of
poverty; 1999: 130 percent; and 2000: 150 percent of
poverty. Individuals with incomes above these levels could
qualify for benefits once they have spent down their
assets and income to allowable amounts.
To be eligible, individuals must be unable without
significant assistance to perform two or more activities of
daily living such as eating, dressing, transferring, toilet,
bathing, and continence, have profound mental retardation, or
be assessed as severely disabled child under the age of six
who would otherwise need institutionalized care.
Significant flexibility is given to the states to design
their long-term care program. All individuals will receive
personal assistance services, however states can cover any
appropriate service including: homemaker assistance, respite
services, assistive devices, adult day care services,
habilitation and rehabilitation, and skilled home health care
services.
All states will be matched up to 75 percent for services
covered under this section, with a maximum matching rate
fixed at 88 percent. States will have the option to require
minimal copayments for services from individuals above 100
percent of poverty based on a sliding scale.
Sec. 407. Require Secretary of HHS to report to Congress on long-term
care programs
Directs the Secretary to make interim and final reports to
Congress on the effectiveness of the new long-term care
program and growth and developments in the private market for
long-term care insurance.
Requires the Secretary of HHS to report on the feasibility
of integrating acute and long-term care services and the cost
of including institutional and community based long-term care
as a standard benefit under a comprehensive benefit plan for
all Americans.
Sec. 408. Establish a chronic care commission
For purposes of this title chronic care refers to: the
ongoing provision of medical, functional, psychological,
environmental, social and medical services that enable
chronically ill individuals to optimize their functional
independence. Chronic care includes an integrated continuum
of primary prevention, acute, transitional, and long-term
care services.
The President shall, in consultation with Congress,
establish a bipartisan, national Commission on Chronic Care
Reform. The Commission shall consist of 11 individuals. The
membership of the Commission shall include representatives of
chronically ill individuals; providers who furnish primary,
acute, institutional services, and home and community-based
services, health insurance industry; and Federal and State
health programs. The Commissions shall work under the
leadership of the Secretary of HHS, and in consultation with
national demonstration on integrating acute and long-term
care. The Commission shall have the following duties:
Make legislative recommendations to Congress no later than
July 1, 1997 which simplify and improve care for chronically
ill individuals. The recommendations should: encourage health
care providers to establish community based networks of care
which furnish a full range of individualized chronic care
services including primary care, hospital, nursing home, and
community-based services; reduce the escalation of cumulative
costs across time and setting; outline service delivery
reform which simplifies systems for administration; identify
barriers to integration of services as established by
existing legislation, regulation, and administrative
practices; and maintain a private sector, community based
approach to furnishing services to such individuals.
Sec, 409. Demonstration on acute and long-term care integration
The national demonstration on acute and long-term care
integration directs the Secretary of Health and Human
Services to implement a 7-year national demonstration, at not
more than 25 sites, which seeks to develop new integrated
approaches to the financing, administration, and delivery of
services for the chronically ill or individuals with
disabilities. The Secretary must evaluate demonstration
projects and make interim and final reports to Congress.
______
By Mr. DORGAN (for himself and Ms. Mikulski):
S. 2123. A bill to prohibit insured depository institutions and
credit unions from engaging in certain activities involving derivative
financial instruments.
derivatives limitations act of 1994
Mr. DORGAN. Madam President, I have an Associated Press dispatch in
my hand that says that the Federal Reserve Board met a few hours ago,
locked the door, closed the room and once again in secret took action
to increase short-term interest rates by one-half of 1 percent.
The Federal Reserve Board met today on Tuesday, and the American
people lost again. I know that the Federal Reserve Board wants to be
seen as fearless inflation fighters. The fact is that the Federal
Reserve Board has a hair trigger on inflation issues and has clay feet
on issues that affect economic growth and opportunity in this country.
The Federal Reserve Board is increasing interest rates now the fourth
time saying we have inflation just over the horizon.
I say to the Federal Reserve Board what inflation? What inflation?
Last week Thursday, the Producer Price Index came out. You know what
it showed? Down one-tenth of 1 percent. Friday the Consumer Price Index
came out. You know what it says? Up only one-tenth of 1 percent.
So I ask the Federal Reserve Board what inflation are you talking
about? Why do you impose this tax on the American people. Every
American family will pay a higher interest rate as a result of behavior
of the Federal Reserve Board.
Yes, this is good politics for the Federal Reserve Board. They served
their constituency, the big money center banks. I guarantee you it is
not good monetary policy for this country.
I hope others in the Chamber will share that view and make that known
to the Federal Reserve Board.
The Federal Reserve Board is applying the brakes to this country's
economy at precisely the wrong time. Increasing interest rates will
slow down the American economy at exactly the time when we need more
economic growth, more jobs and more opportunity. That is a fact. The
Fed is uniquely capable--it demonstrated again today--of taking the
wrong action at exactly the wrong time.
Madam President, in addition to my displeasure with the Federal
Reserve Board, let me indicate to my colleagues that I just introduced
a piece of legislation to prohibit banks in this country from engaging
in proprietary trading in derivatives. That all sounds like a foreign
language. But, this week the General Accounting Office will release a
major report on a new threat to the taxpayers and the economy of this
Nation.
The threat is not from foreign competition, or Government deficits or
regulation. It is from Wall Street, and a new form of sophisticated
financial bingo called derivatives. Even Fortune magazine--hardly a
carping business critic--is warning that derivatives could swamp our
economy in a sea of red ink.
Fortune estimates the new derivatives game at some $16 trillion,
which is more than twice our Nation's total economic output. A single
default, the magazine said, could ignite a chain reaction that runs
rampant through the financial markets. ``Inevitably, that would put
deposit insurance funds, and the taxpayers behind it, at risk.''
That is a risk that Congress must not permit. Already the taxpayers
of this country are footing the bill for the $500 billion bailout of
the savings and loan industry. A gang of financial high-fliers tried to
get rich quick on junk bonds and inflated real estate loans, and the
taxpayers had to clean up the mess. Congress learned a lesson, or
should have, at least.
That is why I am introducing today a bill to protect the taxpayers of
this country from a replay of the savings and loan fiasco.
Specifically, my bill would prevent banks and other institutions with
Federal insurance from playing roulette in the derivatives market. If
an institution has deposits insured by the Federal Government, it
should not be involved in trading risky derivatives for its own
account. Such proprietary trading involves a degree of risk that is
totally out of step with safe and sound banking practices. It will not
occur if my bill is enacted.
What investors do with their own money is their own business. But
what they do with money insured by the American taxpayers, is the
business of Congress. The purpose of deposit insurance is to encourage
saving. It is to promote a pool of capital that is available to build
homes and businesses and jobs. Deposit insurance is not supposed to
underwrite rampant speculation on Wall Street, and my bill will help
prevent that from happening.
Derivatives are essentially a form of bet. Investors stake a position
that interest rates, or the dollar, or commodities, or whatever, will
rise or fall. Up to a point, this is simply a form of hedging risk.
Banks and corporations have hedged in this manner for many years, and
my bill would not affect these traditional and conservative hedging
transactions.
But Wall Street passed the point of innocuous risk-protection long
ago. Far from hedging risk, derivatives today have become a form of
risk. Some nations define them as gambling, which is what they are. In
the words of Henry Kaufman, the investment advisor, they mean that
``more credit is available to people who may have no business getting
it.''
This is not idle doomsaying. Already, the Kidder-Peabody investment
firm has lost some $350 million. Proctor & Gamble Co. has taken a $157
million bath, and investment analysts warn that many more such losses
lay buried in the balance sheets of corporations and investment firms
alike. Orange County, CA, had to meet a $140 million collateral call
because some derivative speculations started going bad. This raises the
specter that local taxpayers may end up holding the bag as well.
Derivatives are the latest episode in a daisy chain of financial
mismanagement, in which the bankers and financiers of this Nation have
tried to cover their bad investments with worse ones. First came the
foolish third world loans. Then the junk bonds and fatuous real estate
investments of the eighties. Now we have derivatives, which up the risk
ante to new heights, and spread nitroglycerine over the debt structure
of the entire Nation.
The three biggest players in the derivatives game are New York
banks--Chemical Bank, Bankers Trust, and Citicorp. Together, these
three banks are into this market for over $6 trillion; Chemical Bank
alone is in for $2.5 trillion. All of these banks have Federal deposit
insurance. The purpose of my bill is to make sure that the banks don't
have to use it.
In the late 1980's Congress prohibited Savings and Loans from
investing in junk bonds. The bill came too late to prevent the S&L
fiasco. But at least it applied a tourniquet to stop the bleeding. Now
we have a chance to prevent a crisis instead of rushing belatedly to
staunch it.
Banks ought not to be involved in proprietary trading on derivatives.
That is gambling with taxpayers' money and we ought to take action to
stop it. That is the purpose of introducing the bill today, and I urge
my colleagues to support this legislation.
I ask unanimous consent that the full text of this bill be included
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2123
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Derivatives Limitations Act
of 1994''.
SEC. 2. INSURED DEPOSITORY INSTITUTIONS.
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.)
is amended by adding at the end the following new section:
``SEC. 44. DERIVATIVE INSTRUMENTS.
``(a) Derivatives Activities.--
``(1) General prohibition.--Except as provided in paragraph
(2), neither an insured depository institution, nor any
affiliate thereof, may purchase, sell, or engage in any
transaction involving a derivative financial instrument for
the account of that institution or affiliate.
``(2) Exceptions.--
``(A) Hedging transactions.--An insured depository
institution may purchase, sell, or engage in hedging
transactions to the extent that such activities are approved
by rule, regulation, or order of the appropriate Federal
banking agency issued in accordance with paragraph (3).
``(B) Separately capitalized affiliate.--A separately
capitalized affiliate of an insured depository institution
that is not itself an insured depository institution may
purchase, sell, or engage in a transaction involving a
derivative financial instrument if such affiliate complies
with all rules, regulations, or orders of the appropriate
Federal banking agency issued in accordance with paragraph
(3).
``(C) De minimis interests.--An insured depository
institution may purchase, sell, or engage in transactions
involving de minimis interests in derivative financial
instruments for the account of that institution to the extent
that such activity is defined and approved by rule,
regulation, or order of the appropriate Federal banking
agency issued in accordance with paragraph (3).
``(D) Existing interests.--During the 3-month period
beginning on the date of enactment of this section, nothing
in this section shall be construed--
``(i) as affecting an interest of an insured depository
institution in any derivative financial instrument which
existed on the date of enactment of this section; or
``(ii) as restricting the ability of the institution to
acquire reasonably related interests in other derivative
financial instruments for the purpose of resolving or
terminating an interest of the institution in any derivative
financial instrument which existed on the date of enactment
of this section.
``(3) Issuance of rules, regulations, and orders.--The
appropriate Federal banking agency shall issue appropriate
rules, regulations, and orders governing the exceptions
provided for in paragraph (2), including--
``(A) appropriate public notice requirements;
``(B) a requirement that any affiliate described in
subparagraph (B) of paragraph (2) shall clearly and
conspicuously notify the public that none of the assets of
the affiliate, nor the risk of loss associated with the
transaction involving a derivative financial instrument, are
insured under Federal law or otherwise guaranteed by the
Federal Government or the parent company of the affiliate;
and
``(C) any other requirements that the appropriate Federal
banking agency considers appropriate.
``(b) Definitions.--For purposes of this section--
``(1) the term `derivative financial instrument' means--
``(A) an instrument the value of which is derived from the
value of stocks, bonds, other loan instruments, other assets,
interest or currency exchange rates, or indexes, including
qualified financial contracts (as defined in section
11(e)(8)); and
``(B) any other instrument that an appropriate Federal
banking agency determines, by regulation or order, to be a
derivative financial instrument for purposes of this section;
and
``(2) the term `hedging transaction' means any transaction
involving a derivative financial instrument if--
``(A) such transaction is entered into in the normal course
of the institution's business primarily--
``(i) to reduce risk of price change or currency
fluctuations with respect to property which is held or to be
held by the institution; or
``(ii) to reduce risk of interest rate or price changes or
currency fluctuations with respect to loans or other
investments made or to be made, or obligations incurred or to
be incurred, by the institution; and
``(B) before the close of the day on which such transaction
was entered into (or such earlier time as the appropriate
Federal banking agency may prescribe by regulation), the
institution clearly identifies such transaction as a hedging
transaction.''.
SEC. 3. INSURED CREDIT UNIONS.
Title II of the Federal Credit Union Act (12 U.S.C. 1781 et
seq.) is amended by adding at the end the following new
section:
``SEC. 215. DERIVATIVE INSTRUMENTS.
``(a) Derivative Activities.--Except as provided in
subsection (b), neither an insured credit union, nor any
affiliate thereof, may purchase, sell, or engage in any
transaction involving a derivative financial instrument.
``(b) Applicability of Section 44 of the Federal Deposit
Insurance Act.--Section 44 of the Federal Deposit Insurance
Act shall apply with respect to insured credit unions and
affiliates thereof and to the Board in the same manner that
such section applies to insured depository institutions and
affiliates thereof (as those terms are defined in section 3
of that Act) and shall be enforceable by the Board with
respect to insured credit unions and affiliates under this
Act.
``(c) Derivative financial instrument.--For purposes of
this section, the term `derivative financial instrument'
means--
``(1) an instrument the value of which is derived from the
value of stocks, bonds, other loan instruments, other assets,
interest or currency exchange rates, or indexes, including
qualified financial contracts (as defined in section
207(c)(8)(D)); and
``(2) any other instrument that the Board determines, by
regulation or order, to be a derivative financial instrument
for purposes of this section.''.
SEC. 4. BANK HOLDING COMPANIES.
Section 3 of the Bank Holding Company Act of 1956 (12
U.S.C. 1842) is amended by adding at the end the following
new subsection:
``(h) Derivatives Activities.--
``(1) In general.--A subsidiary of a bank holding company
may purchase, sell, or engage in any transaction involving a
derivative financial instrument for the account of that
subsidiary if it--
``(A) is not an insured depository institution or a
subsidiary of an insured depository institution; and
``(B) is separately capitalized from any affiliated insured
depository institution.
``(2) Applicability of section 44 of the federal deposit
insurance act.--Section 44 of the Federal Deposit Insurance
Act shall apply with respect to bank holding companies and
the Board in the same manner that those such subsections
apply to an insured depository institution (as defined in
section 3 of that Act) and shall be enforceable by the Board
with respect to bank holding companies under this Act.
``(3) Derivative financial instrument.--For purposes of
this subsection, the term `derivative financial instrument'
means--
``(A) an instrument the value of which is derived from the
value of stocks, bonds, other loan instruments, other assets,
interest or currency exchange rates, or indexes, including
qualified financial contracts (as defined in section
207(c)(8)(D)); and
``(B) any other instrument that the Board determines, by
regulation or order, to be a derivative financial instrument
for purposes of this subsection.''.
Mr. DORGAN. Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator speaking as the Senator from
Maryland would like to be included as a cosponsor.
Without objection, it is so ordered.
______
By Mr. CAMPBELL (for himself and Mr. Brown):
S. 2124. A bill to provide for private development of power at the
Mancos project and for other purposes; to the Committee on Energy and
Natural Resources.
mancos project private power development authorization
Mr. CAMPBELL. Mr. President, I am sending legislation to the desk
that will allow the construction of a hydropower plant at the Jackson
Gulch Reservoir in southwestern Colorado. The legislation will also
allow the Mancos Water Conservancy District to receive the power
revenues.
This legislation is necessary because while the Jackson Gulch
Reservoir is a Federal project, the Bureau of Reclamation is not
permitted to issue a permit, under the terms of the district's project
repayment contract and the Water Conservation and Utilization Act of
1939, that would allow the district to use revenues from the hydropower
project to operate and maintain its facilities.
In other words, while the Bureau could issue a Lease of Power
Privilege, the revenues would return to the Federal treasury--not to
the district, which would construct, operate and maintain the
hydropower project just as it already operates and maintains the Mancos
irrigation project without cost to the Federal Government. To ask the
district to build a project to defray these costs, then take away the
revenues, isn't fair.
A feasibility report and an engineering and construction report for
the Jackson Gulch Reservoir and hydroelectric project have been
submitted to the Colorado Division of Wildlife and the U.S. Fish and
Wildlife Service.
The Colorado Division of Wildlife has concluded that based on these
documents, the volume, timing and temperature of the flows from the
reservoir will not be altered and that no adverse impact to the fish
and wildlife resources is anticipated.
The U.S. Fish and Wildlife has made a similar finding, and added that
the proposed project is not likely to cause any adverse impact to
endangered or candidate species, nor will it pollute or deplete any
water in the San Juan River Basin.
Mr. President, this bill should be viewed as a housekeeping measure
because it clarifies what our policy ought to be with respect to
hydropower development at projects authorized by the Water Conservation
and Utilization Act of 1939. These projects are now more than 50 years
old. Local sponsors should be encouraged to ensure these projects
continue to provide multiple benefits for another generation of farming
families.
I hope my colleagues will agree with me that this is the right
approach and I now ask unanimous consent that several documents be
placed in the Record along with my statement--a copy of the bill;
letters of support from the Montezuma County commissioners, the Mancos
Water Conservancy District and the town of Mancos; a brief description
of the history and economics of the Jackson Gulch Reservoir that was
prepared by the irrigation district staff; letters from the Colorado
Division of Wildlife and the U.S. Fish and Wildlife Service; and
finally, a copy of the Department of the Interior's Associate Solicitor
memorandum concerning hydropower development at Water Conservation and
Utilization Act Projects.
Mr. President, I ask unanimous consent that a copy of the bill and
supporting materials be included in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 2124
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This bill may be cited as the ``Mancos Project Private
Power Development Authorization Act of 1994.''
SEC. 2. FINDINGS.
Congress finds that--
(a) Development of hydroelectric power at the Mancos
Project consistent with the Feasibility Report and
Engineering and Construction Report for the Jackson Gulch
Reservoir Hydroelectric Project dated April 19, 1991, and
revised on May 13, 1992 and February 10, 1993, by the Mancos
Water Conservancy District
(1) will be without cost to the United States;
(2) will not impair the efficiency of the project for
irrigation purposes;
(3) will not alter the volume, timing or temperatures of
flows from the reservoir; and
(4) is not likely to cause any new or increased adverse
impacts to any federally listed or candidate species.
(b) That the Mancos Water Conservancy District is currently
operating and maintaining facilities at the Mancos Project
and that the development of hydroelectric power at the Mancos
Project consistent with the Feasibility Report and
Engineering and Construction Report for the Jackson Gulch
Reservoir Hydroelectric Project dated April 19, 1991, revised
on May 13, 1992, and February 10, 1993, by the Mancos Water
Conservancy District will not increase operation and
maintenance costs of the federal government.
(c) That any lease of power privileges issued by the
Secretary pursuant to this Act does not constitute a
``contract'' under section 202(1) of Public Law 97-293 (96
Stat. 1261; 43 U.S.C.A section 390bb) and that nothing in
this Act is intended to make applicable any section of Public
Law 97-293 (96 Stat. 1261; 43 U.S.C.A section 390aa et. seq.)
that would not previously apply.
SEC. 3. AUTHORIZATION TO LEASE POWER PRIVILEGES.
Notwithstanding the provisions of the Water Conservation
and Utilization Act (16 U.S.C. sections 90y-590z-11) or any
relevant provision of the repayment contract Ilr-384, dated
July 20, 1942, as amended December 22, 1947, the Secretary is
authorized to enter into a lease of power privileges at the
Mancos Project, Colorado, with the Mancos Water Conservancy
District.
SEC. 4. LEASE CONDITIONS.
Any such lease of power privileges issued pursuant to
Section 3 of this Act shall not exceed a period of forty
years and shall be consistent with rates charged by the
Federal Energy Regulatory Commission for comparable sized
projects. Moneys derived from such lease shall be covered
into the reclamation fund in accordance with relevant parts
of federal reclamation law, the Act of June 17, 1902, and
Acts supplementary thereto and amendatory thereof (43 U.S.C.
371).
SEC. 5. REVENUES DERIVED FROM POWER DEVELOPMENT.
Notwithstanding the provisions of the Water Conservation
and Utilization Act (16 U.S.C. sections 590y-590z-11) or any
relevant provision of the repayment contract Ilr-384, dated
July 20, 1942, as amended December 22, 1947, the Mancos Water
Conservancy District may receive revenues from the sale of
the power generated pursuant to such lease of power
privilege.
____
Montezuma County
Board of Commissioners,
Cortez, CO, May 13, 1994.
Hon. Senator Ben Nighthorse Campbell,
Hon. Senator Hank Brown,
Senate Office Building, Washington, DC.
Dear Senators, On behalf of the Board of County
Commissioners for Montezuma County I would like to take this
opportunity to express our strong support for legislation
that will allow the installation of a small hydro-electric
plant at Jackson Gulch Dam which was built in the 1940s, by
Bureau of Reclamation project for the Mancos Conservancy
District.
The Mancos Valley still has a viable agricultural community
which depends on this project. In order to properly operate
and maintain a project this old, it is necessary to find new
and innovative ideas to derive revenue for the continued
upkeep of project facilities.
The Mancos Water Conservancy District conceived and
designed this project at their own expense and initiative.
The revenues derived from the hydro-electric plant are an
integral part of keeping the cost of water to the Mancos
Valley at a level that will continue to sustain the
agricultural community.
This project also supplies water through a rural water
system to many residents in the Mancos Valley as well as the
Town of Mancos. These domestic users will also benefit from
the improved maintenance that the hydro project will allow.
We certainly appreciate the congressional support for this
project and remain willing to assist in any way to see that
this project receives proper legislation.
If you have any questions, please don't hesitate to give me
a call.
Sincerely,
Thomas K. Colbert,
Chairman, Montezuma County Commissioners.
____
Mancos Water
Conservancy District,
Mancos, CO, May 16, 1994.
Hon. Ben Nighthorse Campbell,
Hon. Hank Brown,
U.S. Senate, Washington, DC.
Dear Senator: The Mancos Water Conservancy District is in
strong support of this legislation for a number of reasons.
The project is deteriorating and in need of extensive
repairs. The yearly revenue we collect simply cannot keep up
with the 1990's cost of repair and yet we cannot raise the
rates for our water users beyond their means as this would
drive many of them out of the valley which in turn would
strongly hurt the local economy which relies heavily on the
water provided by the project.
Ironically, the potential for the increased revenue is
easily accessible except for the need to change the wording
of the project authorization language (Water Conservation and
Utilization Act) of the federal government. In order to do
this, we are forced to seek legislative language permitting
us to proceed with a hydropower plant. We have never
requested any federal money nor do we ever intend to request
federal money to build this plant. We have prepared the
studies and feasibility work ourselves. We cannot stress
enough how badly these revenues are needed to prolong the
life of our project so that it can continue to serve it's
original purpose.
The Mancos Project was approved for construction by the
President of the United States on December 19, 1941. On July
20, 1942, the Mancos Water Conservancy District entered into
a contract with the United States. On January 1, 1963, the
Bureau of Reclamation transferred the operations of the
project over to the Mancos Water Conservancy District who are
still in charge of the operations and maintenance of the
project to date.
Water from Jackson Gulch Reservoir serves 13,746 acres.
8,208 of these acres are currently in agricultural
production. The remaining acres are urban and suburban use,
dry dropped, idle fallow or grazed and gardened. Current
population is estimates at 2,087. Along with irrigation, it
serves as municipal water for the Town of Mancos, the Rural
water company of the Mancos Valley and Mesa Verde National
Park.
The District has an annual income of $76,000. This covers
administration, insurance, operations and maintenance of the
project, operations and maintenance of district equipment and
facilities as well as wages. The project features and
equipment are 45 years old. This equipment requires much
repair.
Routine maintenance of the dam, tunnel and structures below
the dam are absolutely necessary for the fitness and safety
of the dam. The cost of one repair, especially one that was
not predicted, can wipe out the entire budget. Administrative
costs are continually increasing due to the additional
regulations required of water districts and other such
entities every year.
The valley currently has a low to middle economic base
compared to the cost of living standards being set today
across the nation. Water rates are reasonable and comparable
to the current cost of living standards within the valley.
The income derived for the District is fair but certainly not
enough to keep up with the rapid increase in the cost of
maintenance, routine and emergency. Again, it is considered
crucial to the District and the people it serves to maintain
water rates within the reasonable means of the people who use
it while continuing the routine and emergency maintenance of
the entire project.
This District finally received confirmation that they could
not move forward with the hydro development with this
language and must seek legislation to change the language to
allow said development on November 12, 1993. Cost to build
the power plant increased each passing year while awaiting
this decision. The District cannot stress enough the need to
build as soon as possible to take advantage of today's
interest rates and dollar stability or the importance of the
continued success and maintenance of the project for the
overall economic well-being of this entire valley and her
residents!
Thank you on behalf of the District. We hope that you can
see our cause as just and we ask if there is anything that we
can assist in to expedite this matter please let us know. We
cannot say enough how much this would help our District.
Sincerely,
Mancos Water Conservancy District
Board of Directors.
____
Town of Mancos
Mancos, CO, May 16, 1994.
Hon. Hank Brown,
U.S. Senate, Washington, DC.
Re Jackson Lake hydro power project.
Dear Honorable Hank Brown: The Town of Mancos would like to
express it's support for the proposed Jackson Lake Hydro-
Power Project.
Jackson Lake is the main water supplier for the Mancos
Valley and has been since 1950.
Jackson Lake provides irrigation water, municipal water and
recreation in boating and fishing. With adding hydro-power to
Jackson it only increases it's usefulness to the Mancos
Valley.
Sincerely,
Jay Dotzenko,
Town of Mancos Public Works Director.
____
Mancos Water Conservancy District Jackson Gulch Reservoir History and
Economics
The Mancos Valley was basically settled by miners followed
by ranching and timber production on private and public
lands. Irrigation began in 1876 but crop success depended on
the rain fall and the previous winter snow fall which
dictated the runoff of the Mancos River which was very low.
The river was also the primary water source of the valley,
including domestic use for the town and the rural homes.
Ranching and farming dominated the valley's economic base.
The railroad opened up the valley in 1892 and brought with
the first commercial freight facilities. This also brought
more people to the valley making claim to the water. This and
the late season water shortages caused the people to see the
need for a supplemental water supply. The Bureau of
Reclamation started investigation on what was called the
Mancos Project in October, 1936.
The Mancos Project was authorized under the Water
Conservancy and Utilization Act of August 11, 1939, as
amended, and was approved for construction by the President
of the United States on December 19, 1941. Construction of
the project was started in July of 1941. The project
consisted of 4.8 miles of canal and one dam with a reservoir
capacity of 9980 acre feet of storage. This is one of the few
off-river storage projects constructed. On July 20, 1942, the
Mancos Water Conservancy District entered into a contract
with the United States to pay $600,000 toward the repayment
of the construction cost of the Jackson Gulch Dam and
Reservoir, inlet and outlet canals. An amendment contract
made December 22, 1947, raised the repayment obligation to
$900,000 to be repaid in 60 successive installments of
$15,000 annually beginning in December, 1954. On January 1,
1963, the Bureau of Reclamation transferred the operations of
the project over to the Mancos Water Conservancy District who
are still in charge of the operations and maintenance of the
project to date.
Water from Jackson Gulch Reservoir serves 13,746 acres.
8,208 of these acres are currently in agricultural
production. The remaining acres are urban and suburban use,
dry cropped, idle fallow or grazed and gardened. Current
population is estimated at 2,087. Alfalfa hay averaged 2.1
tons per acre at $105.00/ton. Grass hay averaged 2.4 tons per
acre at $95.00/ton. Pasture acreage consisted of 3.8 animal
units per acre at $11.25/acre per animal unit. Average yield
of project water was .8 acre feet per acre.
Along with irrigation, Jackson Gulch water serves as
municipal water for the Town of Mancos and the rural Mancos
Valley. Mesa Verde National Park has storage rights within
the reservoir. The original water plant facility for the park
is established at the foot of the dam.
The District has an annual income of $76,000. This covers
administration, insurance, operations and maintenance of the
project, operations and maintenance of district equipment and
facilities as well as wages. The project features and
equipment are 45 years old. This equipment requires much
repair.
The project has 1.5 miles of concrete flume and the natural
environment has taken its toll (rocks falling, ground moving,
freeze-thaw cycles, etc.). The District has done many things
to preserve the flumes but even with constant repair
replacement of these structures is inevitable and are being
planned for 15 to 20 years from now. The replacement cost of
the flume at todays rates would run around 1.5 million
dollars. The project has been plagued with land slide
problems above the canals. These slides have reduced in
activity but are still a threat. The slides generally occur
during the spring runoff and require immediate attention
because spring is the only time the water is diverted into
the reservoir. To remove slide material becomes an emergency
situation which requires immediate attention thereby
increasing the cost of such removal since it requires more
equipment and more personnel than the usual repair which in
most cases is done in a timely manner by the manager, the
district's only full-time employee.
In addition to the concrete flumes there are 3.3 miles of
earthen canal. The lower section of the earthen inlet canal
will need major repair in the form of erosion control. This
will require up-to-date equipment or a contractor will have
to be hired and will have to be done 5 to 10 years from now.
In either case, the cost of the repair will be expensive
(rough estimates run between $30,000-$100,000).
With each passing year, the increase of the cost to repair
the existing structures prioritize repairs on a crucial to
severe basis. In 1994, a repair on the inlet canal stilling
basin structure is going to cost the District approximately
$5,000.00. This is the only repair which could be scheduled
within the budget for this year. Any repair beside this one
will be considered only if it is an emergency.
The headquarters were built in 1942 as bunk houses,
offices, etc., as temporary structures to house the men who
built the dam. Some were remodeled in 1948 to serve as the
manager's residence, machine shop and warehouses. These are
the same buildings in use today. In 1990, the electrical and
water system were redone and upgraded within the residence to
bring them to safety standards. The machine shop and storage
units have not been up-graded due to lack of funds throughout
the years. These will and do require much maintenance, repair
or replacement or they will soon crumble.
Administrative costs are continually increasing due to the
additional regulations required of water districts and other
such entities every year. In order to use the pesticides
needed to keep brush and weeds off the canals as required by
the Bureau of Reclamation, a license is required and it is
necessary to have the proper equipment. The office had to be
upgraded with modern equipment in order to more efficiently
process the ever increasing paper work to make the most of
time so that efforts can be directed to the rest of the
project. Insurance is now a major budget item that as of four
years ago was a minimum budget figure. Here is an approximate
estimate of expenditures in a year for this district:
Expenditures:
Insurance.....................................................$15,000
Manager's wages................................................20,000
Debt Retirement................................................18,000
Administrative..................................................9,000
Operations and Maintenance.....................................14,000
__________
Total Income.................................................76,000
The operations and maintenance balance has to cover the
cost of repairs to the aging equipment, aging structures such
as buildings, and aging structures such as the canals.
Routine maintenance of the dam, tunnel and structures below
the dam are absolutely necessary for the fitness and safety
of the dam and are also included in this category. The cost
of one repair, especially one that was not predicted, can
wipe out the entire budget figure.
The valley currently has a low to middle economic base
compared to the cost of living standards being set today
across the nation. Water rates are reasonable and comparable
to the current cost of living standards within the valley.
The income derived for the District is fair but certainly not
enough to keep up with the rapid increase in the cost of
maintenance, routine and emergency. It is considered crucial
to the District and the people it serves to maintain water
rates within the reasonable means of the people who use it
while continuing the routine and emergency maintenance of the
entire project. To raise the rates to compensate for the cost
of operations of the District every year would be a dramatic
increase which will soon result in many of the rural water
users losing their business and homes along with them. This
would be a great loss for the entire valley and it's economic
system. The last few years have seen a subdivision of the
large land holdings, causing an influx of people. The
importance of this reservoir system is as great, if not
greater, at the present time than it was in the early 40's.
The Board felt they needed to look for an alternative to
raise revenues rather than a drastic increase in the water
rates. Hydro power seemed the most promising. Lemon Dam and
Pine River Dam, both in the area, had successfully
established small power plants which were proving to be
economically feasible. Development of hydro-power on this
project was first considered in 1984 by a private developer
who dropped his F.E.R.C. license due to financial problems
within his corporation (1988). The Board took up the
investigation to develop the power themselves taking into
consideration the Ames Plant which is still in operation
after 90 years. Tours of the two projects mentioned above
were made, looking into feasibility, construction costs, etc.
In 1990, the Board hired an engineering/construction firm to
do a feasibility study on a hydro-power project on Jackson
Gulch Reservoir. The preliminary results were that a hydro-
power plant would be feasible for the District and would
accomplish their revenue goal. The power plant the Board was
considering will raise approximately $30,000 per year in
today's dollars after debt service which is 15 years from
now; a time when those dollars will be most needed.
In April, 1990, the District requested a license to
generate electrical power from a hydro-power plant from the
Bureau of Reclamation. The District's Board met with the
Bureau to determine what would be required from an
administrative viewpoint from the Bureau. At that time, the
Board specifically informed the Bureau that it would proceed
under the Reclamation Licensing Jurisdiction and were
informed that they (the District) could proceed under the
Bureau's jurisdiction. The Board had obtained financial
backing for the project insuring that they could construct a
power plant without Federal government money. On September
10, 1991, the District was officially informed by the Bureau
of Reclamation that a Lease of Power Privilege could not be
provided due to language in the Project Repayment Contract
and later in the Water Conservation and Utilization Act of
1939. The District was in the final design stages of the
project at this time with construction scheduled immediately.
This District finally received confirmation that they could
not move forward with the hydro development with this
language and must seek legislation to change the language to
allow said development on November 12, 1993. In the interim,
numerous trips not included in the District's budget were
made to Salt Lake City, Washington D.C., and surrounding area
offices talking with head officials and solicitors from the
Bureau of Reclamation, the Department of Interior, Colorado
Senators and Congressmen and many others in an effort to
expedite the decision so construction could begin. Cost to
build the power plant increased each passing year while
awaiting this decision. The District cannot stress enough the
need to build as soon as possible to take advantage of
today's interest rates and dollar stability or the importance
of the continued success and maintenance of the project for
the overall economic well-being of this entire valley and her
residents!
____
State of Colorado, Department of Natural Resources,
Division of Wildlife,
Durango, CO, May 26, 1992.
Gary Kennedy,
Superintendent, Mancos Water Conservancy District, Mancos,
CO.
Dear Mr. Kennedy: The Colorado Division of Wildlife has
reviewed the Feasibility Report and Engineering and
Construction Report for the Jackson Gulch Reservoir
Hydroelectric Project. I also discussed the project with you
on the telephone today. Since volume, timing, and temperature
of the flows from the reservoir will not be altered by the
project, we do not anticipate any negative impacts.
Thank you for the opportunity to comment.
Sincerely,
Gary T. Skiba,
Wildlife Biologist.
____
U.S. Department of the Interior, Fish and Wildlife
Service, Ecological Services,
Grand Junction, CO, October 26, 1993.
memorandum
To: Max J. Stodolski, Projects Manager, Bureau of
Reclamation, Durango Projects Office, 835 East 2nd Avenue,
P.O. Box 640, Durango, Colorado 81302-0640
From: Assistant Field Supervisor, Ecological Services, Grand
Junction, Colorado, Mail Stop 65412
Subject: Proposed Hydroelectric project at Jackson Gulch Dam,
Mancos Project, Colorado (Endangered Species)
This responds to your letter of October 20, 1993,
requesting review of the plan to increase the hydroelectric
capacity of the Jackson Gulch Dam in the Mancos Project.
The Fish and Wildlife Service (Service) feels that the
proposed project is not likely to cause any new or increased
adverse impacts to any federally listed or candidate species.
Your report indicates that the project will not pollute and/
or deplete any water from the San Juan River basin, and since
the endangered river fish do not occur in the project area,
there should not be any adverse effect on these species. The
plan was also analyzed for possible impacts to any other
listed or candidate species and none were found.
We appreciate the opportunity to review this plan. If the
Service can be of further assistance, please contact Michael
Tucker at the letterhead address.
Keith L. Rose.
____
U.S. Department of the Interior,
Office of the Solicitor,
Washington, DC.
Memorandum to: Deputy Commissioner.
From: Associate Solicitor, Division of Energy and Resources.
Subject: Hydropower Development at Water Conservation and
Utilization Act Projects.
This is in response to your request, dated April 19, 1993,
for an opinion interpreting section 9 of the Water
Conservation and Utilization Act (WCUA), 16 U.S.C. Sec. 590z-
7. You have asked whether title in and revenues from
facilities provided for surplus power must remain in the
United States. More specifically, you inquired whether
authority exists to amend the contract to allow a non-federal
party to retain the revenue from the sale of electricity
generated by a hydropower project constructed with non-
federal funds. This opinion concludes that, although the WCUA
reserves power development to the federal government, even if
non-federal power development were authorized, the use of
revenues would be restricted by the language of the WCUA.
a. background
The Bureau of Reclamation (Reclamation) constructed the
Mancos Project under general authority of the WCUA. The
specific determination to proceed with the Mancos Project is
found in a letter from Secretary of the Interior Harold Ickes
dated October 21, 1940, and approved by President Franklin D.
Roosevelt on October 24, 1940. At that time, Reclamation
found hydropower development not to be feasible and no costs
were allocated to power. To our knowledge, no other WCUA
project includes hydropower facilities.1
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\1\ The Federal Energy Regulatory Commission (FERC) issued a
license for non-federal hydropower development on the Jackson
Gulch Dam on December 29, 1986, to Prodek, Inc. On May 23,
1988, Prodek filed an application to surrender its license.
FERC issued an order accepting surrender of the license on
August 31, 1988.
---------------------------------------------------------------------------
The Mancos Water Conservancy District (Mancos) has
requested the right to develop non-federal power on project
facilities. Under the proposal, Mancos would construct
hydropower generation facilities on Jackson Gulch Dam. In
order for the project to be economically viable, Mancos needs
to receive the revenue from the sale of electricity
generated by the project.
Section 9 of the WCUA authorizes the Secretary to make
``provisions, including contrasts of sale * * * for
developing and furnishing'' surplus power. 16 U.S.C.
Sec. 590z-7. It further provides that ``[a]ll right, title,
and interest in the facilities provided for such * * *
surplus power and the revenue derived therefrom shall be and
remain in the United States.'' Id.
The existing repayment contract with Mancos contains
language which reserves all hydropower rights to the United
States. Article 16(a) of the contract states:
The District shall have the perpetual right to the use of
all water that becomes available through the construction and
operation of the Project Works, delivered at the lower end of
the outlet canal for irrigation, domestic, municipal, and
industrial purposes exclusive of the development of hydro-
electric power as hereinafter excepted. (Emphasis added.)
In addition, subarticle 16(b)(4)(ii) reserves to the United
States the right--
[t]o use the Project Works and Water supply for the
development of hydro-electric power * * * as provided in
subdivision (a) of this article. Revenues from any such power
development shall be the property of the United States * * *.
(Emphasis added.)
b. statutory authorities
Authority to develop the hydropower potential of federally-
owned dams or sites must originate with the Congress.
Congress possesses the authority to regulate hydropower
development under the Commerce Clause.
1. Town Sites and Power Development Act of 1906--In section
5 of the Town Sites and Power Development Act of 1906,
Congress granted the Bureau of Reclamation authority to
develop the hydropower potential of government dams, or to
license private development through a lease of power
privilege:
Whenever a development of power is necessary for the
irrigation of lands under any project undertaken under the
said reclamation Act, or an opportunity is afforded for the
development of power under any such project, the Secretary of
the Interior is authorized to lease for a period not
exceeding ten years, giving preference to municipal purposes,
any surplus power or power privilege, and the moneys derived
from such leases shall be covered into the reclamation fund
and be placed to the credit of the project from which such
power is derived: Provided, That no lease shall be made of
such surplus power or power privileges as will impair the
efficiency of the irrigation project * * * . 34 Stat. 117; 43
U.S.C. Sec. 522 (Emphasis added.)
2. Reclamation Project Act of 1939.--In 1939, Congress
enacted the Reclamation Project Act (1939 Act) which effected
a significant reauthorization of the Reclamation program. It
granted broad authorities to the Secretary with respect to
curing repayment and accounting problems and provided new
authorities to the Secretary with respect to contracting.
Section 9(c) of the 1939 Act provides authority for
furnishing municipal water supplies and provides new terms
for contracting for electric power and leases of power
privileges:
The Secretary is authorized to enter into contracts to
furnish water for municipal water supply or miscellaneous
purposes * * * . Any sale of electric power or lease of power
privileges, made by the Secretary in connection with the
operation of any project or division of a project, shall be
for such periods, not to exceed forty years, and at such
rates as in his judgment will produce power revenues at least
sufficient to cover an appropriate share of the annual
operation and maintenance costs, interest on an appropriate
share of the construction investment at not less than 3 per
centum per annum, and such other fixed charges as the
Secretary deems proper: Provided further, That in said sales
or leases preference shall be given to municipalities and
other public corporations or agencies; and also to
cooperatives and other nonprofit organizations financed in
whole or in part by loans made pursuant to the Rural
Electrification Act of 1936. Nothing in this subsection shall
be applicable to provisions in existing contracts, made
pursuant to law, for the use of power and miscellaneous
revenues of a project for the benefit of users of water from
such project. The provisions of this subsection respecting
the terms of sales of electric power and leases of power
privileges shall be in addition and alternative to any
authority in existing laws relating to particular projects.
No contract relating to municipal water supply or
miscellaneous purposes or to electric power or power
privileges shall be made unless, in the judgment of the
Secretary, it will not impair the efficiency of the
project for irrigation purposes. 53 Stat. 1194; 43 U.S.C.
Sec. 485h(c) (Citation omitted.) (Emphasis added.) Thus,
the 1906 Town Sites and Power Development Act provides
explicit authorization to the Secretary to develop the
power potential of a Reclamation project and leave the
surplus power or to enter into leases of power privilege
to enable non-federal hydropower development. The 1939 Act
elaborates on the terms of such leases of surplus power or
power privileges.\2\
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\2\ It can be argued that the 1939 Act did not provide new
authority to enter contracts for the lease of surplus power
or power privileges, it merely provided additional terms to
be included in contracts when authority otherwise existed to
enter such contracts. In section 9, Congress selected
different language with respect to furnishing water for
municipal water supply or miscellaneous purposes and in
determining contract terms for sale of electric power or
lease of power privileges. In the case of municipal and
miscellaneous water supplies, Congress expressly
``authorized'' the Secretary to enter contracts. On the topic
of providing electric power, Congress did not authorize the
Secretary to ``enter contracts.'' Rather, Congress specified
terms which could apply to ``[a]ny sale of electric power or
lease of power privileges.''
On the other hand, several previous Solicitor's opinions
list, without analysis, the 1939 Act as authority for
hydropower development on Reclamation projects. See, e.g.,
Memorandum from Associate Solicitor, Energy and Resources to
Commissioner, Bureau of Reclamation (Jan. 31, 1985)
(discussing the Grand Valley Project); Memorandum from
Solicitor Tarr to Commissioner, Bureau of Reclamation (July
16, 1986) (discussing Hoover Powerplant modifications).
Because this opinion turns on the specific limitation in
section 9 of the WCUA, the issue of whether the 1939 Act
constitutes independent authority to lease power privileges
is not decided here. Nor does this opinion decide the issue
of the continuing applicability or scope of the 1906 Town
Sites Act following enactment of the 1920 Federal Power Act
and, in particular, the 1935 amendments thereto.
---------------------------------------------------------------------------
3. Water Conservation and Utilization Act.--One week after
enacting the 1939 Act Congress enacted the WCUA. Congress
amended the WCUA in 1940, adding sections 9 and 10 among
other changes. 53 Stat. 1418; 54 Stat. 1119. The WCUA
authorizes the construction of small projects which
generally would have been infeasible under the Reclamation
program. Section 9 of the WCUA addresses hydropower
development specifically:
In connection with any project undertaken pursuant to this
act, provisions, including contracts of sale, may be made for
furnishing municipal or miscellaneous water supplies, or for
developing and furnishing power in addition to the power
requirements of irrigation: Provided, * * * That no contract
relating to a water supply for municipal or miscellaneous
purposes or to electric power shall be made unless, in the
judgment of the Secretary, it will not impair the efficiency
of the project for irrigation purposes. On any project where
such provisions are made, the Secretary shall allocate to
municipal or miscellaneous water purposes or to surplus power
the part of the estimated construction costs of the project
which he deems properly so allocable; and such allocations
shall not be included in the reimbursable construction costs
covered by the repayment contract or contracts required under
section 4 [codified at 16 U.S.C. Sec. 590z-2. All right,
title, and interest in the facilities provided for such
municipal or miscellaneous water supplies or surplus power
and the revenues derived therefrom shall be and remain in the
United States. Contracts for such municipal or miscellaneous
water supplies or for such surplus power shall be at such
rates as, in the Secretary's judgment, will produce revenues
at least sufficient to cover the appropriate share of the
annual operation and maintenance cost of the project and such
fixed charges, including interest, as the Secretary deems
proper. Contracts for the sale of surplus power shall be for
periods not to exceed forty years . . . And provided further,
That in sales or leases of such power, preference shall be
given to municipalities and other public corporations or
agencies; and also to cooperatives and other nonprofit
organizations financed in whole or in part by loans made
pursuant to the Rural Electrification Act of 1936. 16 U.S.C.
Sec. 590z-7 (emphasis added.) Thus, in contrast to the Town
Sites Act which explicitly authorizes the lease of power
privileges for non-federal development, section 9 of the WCUA
explicitly authorizes the Secretary to develop hydropower and
furnish the surplus power through sale or lease, subject to
several conditions.
c. analysis
It has been argued that section 9 of the WCUA is not a
prohibition against development of power by private parties
for non-project purposes and that section 10 of the WCUA
provides general authority for non-federal power
development at WCUA projects. Section 10 of the WCUA
provides that the ``Secretary shall have the same
authority, with regard to the utilization of lands owned
by the United States * * * as he has in connection with
projects undertaken pursuant to the Federal reclamation
laws: * * *'' 16 U.S.C. Sec. 590z-8(a). Under this
analysis, the Town Sites and Power Development Act would
authorize non-federal power development at WCUA projects,
and the provision on retention of revenue by the United
States contained in the WCUA would not apply.
While that argument has some appeal, according to accepted
methods of statutory interpretation we believe that the
better view is that section 9 of the WCUA controls hydropower
development at WCUA projects and that section 9 does not
authorize Reclamation to issue the necessary leases of power
privilege to enable non-federal power development. Even if
non-federal power development is authorized, we believe that
the revenue and title restrictions would apply. Finally, it
is our opinion that FERC does not have authority to license
non-federal power development at WCUA projects.
1. Section 9 of the WCUA governs hydropower development at
WCUA projects.--Unless there is a clear intention otherwise,
a specific provision will not be controlled or nullified by a
general one. See, e.g., Crawford Fitting Co. v. J.T. Gibbons,
Inc. 482 U.S. 437, 444-45 (1987) (rejecting the claim that
general authority to allow the payment of costs authorized
payment of expert witness fees in excess of limitations
contained in the specific witness fee provision). Of special
relevance here is Uncompahgre Valley Water Users Ass'n v.
Federal Energy Regulatory Comm'n, 785 F.2d 269, 275-76 (10th
Cir.), cert. denied sub nom. Town of Norwood v. Uncompahgre
Valley Water Users Ass'n, 479 U.S. 829 (1986), which held
that a specific statute granting authority to the Department
of the Interior to contract with private entities for the
development and sale of surplus power at a Reclamation
project takes precedence over the general licensing authority
of the Federal Energy Regulatory Commission (FERC) under the
Federal Power Act.\3\ ``[W]e believe that our conclusion is
supported by the principle of construction that the more
specific legislation covering the given subject-matter will
take precedence `over the general language of the same or
another statute which might otherwise prove controlling,' ''
Id. at 276 (quoting Kepner v. United States, 195 U.S. 100,
125 (1904)).
---------------------------------------------------------------------------
\3\ Moreover, the Uncompaghre court had before it the
language and legislative history of the 1906 Act and found
that the Secretary's authority to develop hydropower rested
on the project-specific statute which authorized the project.
785 F.2d at 275-76.
---------------------------------------------------------------------------
Section 9 of the WCUA establishes a comprehensive statutory
framework specifically addressing hydropower development at
WCUA projects. The command of the section is inclusive: the
Secretary may make ``provisions'' for the development of
hydropower. There is absolutely no indication in the
structure of the statute itself or in its legislative history
that Congress intended section 10 to override the
restrictions contained in section 9 for a certain class of
hydroelectric power projects. Without foundation in the
statutory scheme or legislative history, such interpretation
would render meaningless the revenue and title restrictions
in section 9 with regard to private hydropower development at
WCUA projects. In addition, the structure of the power
provisions of the 1906 and 1939 Acts, which address federal
and non-federal power development together in the same
section, reinforces the interpretation that section 9
provides the complete authority for power development under
the WCUA.
2. Section 9 does not authorize Reclamation to permit
nonfederal power development at WCUA projects.--Section 9
expressly authorizes the Secretary to include production of
surplus power in projects developed under the WCUA, subject
to several conditions. However, we find that it does not
expressly or impliedly authorize Reclamation to issue leases
of power privilege at WCUA projects. Instead, we find that
hydropower development at WCUA projects is reserved to the
federal government.\4\
---------------------------------------------------------------------------
\4\ This interpretation of the WCUA is not inconsistent with
any other opinion issued by the Solicitor's Office. however,
we note that a memorandum from the Commissioner of the Bureau
of Reclamation to Reclamation's regional directors listed the
WCUA as general authority for the development of hydropower
at Reclamation projects, and stated that hydropower is
authorized to the extent found feasible in reports submitted
to the President and Congress. Memorandum from Commissioner,
Bureau of Reclamation, to Regional Directors and Assistant
Commissioner, Engineering and Research (Oct. 23, 1986)
(entitled ``Criteria for Determining Federal vs. Non-Federal
(FERC) Hydropower Development at Bureau of Reclamation
Facilities''). The memorandum further stated that ``[i]n the
event we are not seeking Federal financing to develop the
hydropower potential of the site, we would be willing to
enter into a lease of power privilege under which a non-
Federal entity would develop the site under Reclamation law
using non-Federal funding.'' Id. at 2. However, this did not
represent a legal opinion of this office and, in fact,
deviated from a memorandum dated three months earlier from
the Solicitor to the Commissioner discussing the same
analytical approach but which did not include the WCUA as a
basis for private hydropower development. See Memorandum from
Solicitor Tarr to the Commissioner, Bureau of Reclamation 11
(July 16, 1986), (relating to modifications to the Hoover
Powerplant).
---------------------------------------------------------------------------
As the Supreme Court recently noted, ``[n]ot every silence
is pregnant.'' Burns v. United States, ---- U.S. ----, 111
S.Ct. 2182, 2186 (1991) (quoting State of Illinois Dept. of
Public Aid v. Schweiker, 707 F.2d 273, 277 (7th Cir. 1983)).
The inference drawn from congressional silence will be
interpreted in light of other textual and contextual evidence
of congressional intent. Id.
Section 9 of the WCUA authorizes the Secretary to make
``provisions, including contracts of sale * * * for
developing and furnishing'' surplus power. While taken alone,
this could be interpreted to authorize leases of power
privilege, the section goes on to refer exclusively to the
sale or lease of surplus power. Thus, there is no textual
evidence that Congress intended section 9 to authorize leases
of power privileges.
Nor is there contextual evidence to support authority for a
lease of power privilege under section 9. No legislative
history supports such implication, and there is no support
for the idea that omission of reference to leases of power
privileges was simply an oversight. This omission is in
direct contrast to the 1906 and 1939 Acts. The 1906 Town
Sites Act explicitly authorizes the lease of ``surplus power
or power privileges.'' Similarly, the 1939 Act specifically
references the ``sale of electric power or lease of power
privileges.'' Under the longstanding tenet of statutory
construction of expressio unius est exclusio alterius, Where
Congress has considered an issue and has included in the
enacted legislation a provision explicitly addressing that
issue, there is an implied exclusion of other term not
mentioned. See, e.g., Malone v. White Motor Corp., 435 U.S.
497, 505 (1978); Public Serv. Co. of Colo. v. Federal Energy
Regulatory Comm'n., 754 F.2d 1555, 1567 (10th Cir. 1985). In
light of the careful attention paid by Congress in the prior
statutes to including specific reference to leases of power
privileges, Congress surely would have made explicit
reference here had such authority been intended at WCUA
projects.\5\
---------------------------------------------------------------------------
\5\ This conclusion is bolstered by the stated purpose of the
WCUA. While not intended to be identical, the legislative
history of the WCUA indicates that its purpose was to
establish procedures for authorizing small projects more like
that of the Reclamation Project Act, enacted just fourteen
months earlier. See Hearings before the Committee on
Irrigation and Reclamation, House of Representatives, 76th
Cong., 3rd Sess. 29-30 (1940) (testimony of Dr. H.H. Barrows,
chairman, Northern Great Plans Committee).
In fact, the WCUA does contain most of the same provisions
relating to hydropower development as are contained in the
1939 Act, such as the stipulation that irrigation will not be
impaired, the 40-year limitation on contracts or leases, the
requirement that rates must produce power revenues at least
sufficient to cover an appropriate share of O&M and fixed
costs, and the preference for municipalities. Since the WCUA
was intended to be modeled after the 1939 Act, yet unlike the
1939 Act omits any reference to leases of power privileges,
we conclude that Congress intended power development at WCUA
projects to be reserved to the federal government.
---------------------------------------------------------------------------
Accordingly, we cannot assume that a lease of power
privilege is authorized.
3. Even if the WCUA permits non-federal power development,
the restriction on revenues would apply.--Further, even if
the mandate to make ``provisions for development''
encompasses non-federal hydropower development, the express
language of the WCUA provides that the United States must
retain title to all project works and all revenue from the
development of hydropower facilities at projects constructed
under its authority. The proposed contract amendment would
not be consistent with the statute under which the project
was authorized and now operates.
The most persuasive evidence that neither section 9 nor
section 10 authorizes private interests to retain power
revenues is found in the purpose of the WCUA and the
repayment structure it established. Enacted in the Depression
era, the WCUA authorized small projects that would not have
been considered feasible under reclamation laws but which
aided local employment through use of Work Projects
Administration (WPA) and Civilian Conservation Corps (CCC)
labor. See 16 U.S.C. Sec. Sec. 590y to 590z. Local water
users were required to repay only the costs allocated to
irrigation. See 16 U.S.C. Sec. Sec. 590z-1 to Sec. Sec. 590z-
2. Unlike projects under the 1939 Act which generally
required the water users to repay all costs except those
allocated to navigation and flood control, see 43 U.S.C.
Sec. 485h(a), the U.S. Treasury absorbed much of the cost for
WCUA projects in nonreimbursable labor costs.\6\ At Mancos,
water users were obligated to repay only $900,000 of the
approximately $2 million total cost of the project; the
remainder was nonreimbursable and financed by U.S.
taxpayers. This supports the notion that Congress intended
that revenues from power production and municipal water
supply should remain with the United States to recoup
these reimbursed expenditures.
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\6\ The Secretary could find a project feasible under the
WCUA if the water users could repay the part of the costs
allocated to irrigation. See 16 U.S.C. Sec. 590z-1. Under the
1939 Act, however, the Secretary could find a project
feasible if the total estimated costs of construction could
be allocated to irrigation, power, municipal water supply or
other miscellaneous purposes, flood control, or navigation.
See 43 U.S.C. Sec. 485h(a).
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4. FERC does not have authority to license non-federal
power development at WCUA projects.--Thus, it is our opinion
that Reclamation does not have authority to issue leases of
power privilege at WCUA projects. Furthermore, under
Uncompahgre Valley Water Users Ass'n. v. Federal Energy
Regulatory Comm'n., 785 F.2d 269, 275-76 (10th Cir.). cert.
denied sub nom. Town of Norwood v. Uncompahgre Valley Water
Users Ass'n: 479 U.S. 829 (1986), FERC lacks such authority
at WCUA projects. In Uncompahgre, the Tenth Circuit Court of
Appeals ruled that specific statutory authority regarding
hydropower development at Reclamation projects divested FERC
of jurisdiction under the Federal Power Act. Id. at 275-76.
Here, the WCUA provides the specific statutory authority for
the Mancos project. By the same reasoning, the WCUA divests
FERC of jurisdiction to license non-federal development by
reserving hydropower production to the federal government.\7\
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\7\ This comports with the conclusion of a 1980 opinion from
this office finding that ``[W]here Congress has expressly
authorized [Reclamation] to develop the hydropower potential
of a project feature, the Commission's licensing authority is
withdrawn, and it may not license non-Federal development of
the same facility.'' Memorandum from Associate Solicitor,
Division of Energy and Resources, to Commissioner, Water and
Power Resources Service 5 (July 28, 1980). Likewise, the MOU
between Reclamation and FERC provides that FERC is not
authorized to issue licenses for hydroelectric power plants
utilizing federal dams where hydroelectric power has been
reserved exclusively for federal development. MOU, supra note
3.
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Please feel free to contact me if you have any further
questions regarding this matter.
Patricia J. Beneke.
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