[Congressional Record Volume 142, Number 36 (Friday, March 15, 1996)]
[Senate]
[Pages S2182-S2186]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BALANCED BUDGET DOWNPAYMENT ACT, II
The Senate continued with consideration of the bill.
Amendment No. 3547 to Amendment No. 3466
Mr. HATFIELD. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Oregon [Mr. Hatfield], for himself, Mr.
Hollings, Mr. Pell, Mr. Daschle and Mr. Kerry, proposes an
amendment numbered 3547 to No. 3466.
Mr. HATFIELD. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place, insert the following:
The appropriation for the Arms Control and Disarmament
Agency in Public Law 103-317 (108 STAT. 1768) is amended by
deleting after ``until expended'' the following: ``only for
activities related to the implementation of the Chemical
Weapons Convention'' : Provided, That amounts made available
shall not be used to undertake new programs or to increase
employment above levels on board at the time of enactment of
this Act.
Mr. HOLLINGS. Mr. President, we have been working with the other side
of the aisle to see if there was some way to get additional operating
resources for the Arms Control and Disarmament Agency or ``ACDA'' as it
is called. ACDA's appropriation in this bill has been reduced to
$35,700,000, down from its current level of $50,378,000, and far below
the President's request of $75,300,000.
This amendment frees up approximately $2,700,000 in prior year
appropriations that are earmarked in the fiscal year 1995 Commerce,
Justice, and State Appropriations Act for the Chemical Weapons
Convention. It allows these resources to be used instead for ACDA
salaries and expenses. The amendment stipulates that these funds not be
used to increase ACDA's staff. However, given the current funding
situation that I have outlined, adding staff does not appear to be a
viable option for this agency.
Mr. President, we have tried to find an acceptable offset or list of
offsets to provide ACDA with more than the $2,700,000 in this
amendment. I know that was the wish of our distinguished minority
leader, Senator Daschle, and Senator Pell, our former Foreign Relations
Committee chairman. I believe that was the hope of the chairman of our
committee, Senator Hatfield. However, this has not proven to be
possible and this amendment represents the best we can do at this time.
I urge adoption of the amendment.
Mr. HATFIELD. Mr. President, this amendment has been cleared on both
sides of the aisle.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 3547) was agreed to.
Mr. HATFIELD. I move to reconsider the vote, and I move to lay it on
the table.
The motion to lay on the table was agreed to.
Bonneville Power Administration Refinancing
Mr. HATFIELD. Mr. President, I would like to speak briefly on section
3303 of the bill we are now considering. Section 3303, on Bonneville
Power Administration refinancing, is bipartisan legislation which would
resolve permanently past interest rate subsidy criticisms regarding the
Federal Columbia River Power System [FCRPS] investments in a manner
that benefits Federal taxpayers while minimizing the impact of the
Bonneville Power Administration's [Bonneville] power and transmission
rates.
Section 3303 is substantially equivalent to legislation transmitted
to the Congress by the administration on September 15, 1994. Senator
Murray and I introduced the administration's proposal as S. 92 on
January 4, 1995. The Senate Committee on Energy and Natural Resources
reported S. 92 on July 11, 1995. This legislation has already passed
the Senate and the House as part of H.R. 2491, the 7-Year Balanced
Budget Reconciliation Act of 1995. The administration continues to
support this legislation and I urge the Senate to adopt it again.
This legislation is important to my region of the country because it
will enhance the long-term electric rate stability of the Bonneville
Power Administration and thereby better position Bonneville to retain
market share and thereby be better able to fund all of its
responsibilities, including the fish and wildlife duties under the
Northwest Power Act and the repayment obligations to the U.S. Treasury.
In exchange for providing enhanced certainty to Bonneville in terms of
its Treasury repayment responsibilities, the U.S. Treasury would
realize additional returns from Bonneville ratepayers and the Federal
budget deficit would be reduced by about $89 million over the current
7-year budget window. In short, section 3303 would provide long-term
rate stability benefits for Northwest ratepayers and increased revenues
for the U.S. Treasury. The Congress should again pass this legislation
and forward it to the President for final enactment.
Mr. President, Bonneville is at a crossroads. As a power marketer of
abundant inexpensive hydroelectric power from the Columbia River and
other river systems in the Pacific Northwest, Bonneville was for many
years unhampered by serious competitive pressure. Free for the most
part
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from the constraints that normally attend close competition, Bonneville
was able to use its economical resource mix to achieve revenues that
enabled it to pursue the ambitious mandates of the Pacific Northwest
Power Planning and Conservation Act of 1980, commonly referred to as
the Northwest Power Act. Whatever their views of Bonneville's mandated
programs, Bonneville's customers stayed because Bonneville was by a
substantial margin the low-cost provider, with a reliable and stable
bulk electric power system unequaled in the world. Indeed, low cost
Federal hydroelectric power was the key assumption underpinning the
Northwest Power Act.
That assumption must now yield to a new reality. The costs of
Bonneville's required fish mitigation efforts under the Endangered
Species Act and the Northwest Power Act, and Bonneville's resource
acquisitions, primarily nuclear energy and electric power conservation,
have driven Bonneville's price upward. At the same time, other factors
have aligned to drive down the costs of alternative sources of electric
power. New technology in the form of highly efficient combined cycle
gas turbines, declining gas prices caused by open competition and the
discovery and exploitation of huge gas deposits in Canada, and the
presence of surplus gas generation in California have combined to lure
long-term Bonneville customers away from Bonneville and Federal
hydroelectric power.
First and foremost Bonneville is a business enterprise. It must meet
the competition, and maintain a customer base sufficient to fund its
statutory responsibilities and to protect the billions of dollars
invested in the FCRPS by Federal taxpayers. To meet these
responsibilities, Bonneville has cut and continues to cut costs
dramatically through huge program deferrals, program elimination and
staff reductions. These severe cuts are essential to maintain an
adequately low product price. Nonetheless, the Congress has realized
that these measures may not be enough. To maintain a long-term customer
base, Bonneville must be rate stable, meaning it must be able to assure
its customers that they are insulated from important risks of cost
escalation.
For many years, several administrations have threatened to change
fundamentally the terms upon which Bonneville satisfies its obligation
to return the taxpayers' investment in the FCRPS. These proposals had
varying facets but in general would have increased substantially the
returns to the Treasury. The annual threats, elicited in Bonneville's
customers a grave concern that steeply increased returns to the
Treasury would ultimately be visited on them. Section 3303 will
eliminate this risk. Yet at the same time it will exact from ratepayers
a fair price for eliminating the uncertainty. Analogizing to a common
transaction relating to mortgages or other financial contracts, the
bill would have Bonneville and its ratepayers pay a charge to refinance
the contract to obtain other favorable terms. At the same time, the
bill acknowledges the new reality of the market-place and seeks to
strengthen Bonneville so that it is positioned in the long-run to
recoup the Federal investment in full.
The purpose of section 3303 is to assure power purchasers that
Bonneville will not be forced to raise its wholesale electric rates to
noncompetitive levels in order to satisfy possible future changes in
law or practice relating to the requirements under which Bonneville
presently repays the Federal capital investment funded by
appropriations in the FCRPS. In exchange for providing enhanced
certainty in the terms of Bonneville's repayment responsibilities, the
U.S. Treasury would realize additional returns from Bonneville
ratepayers because enactment of the bill would increase Bonneville's
payments in respect of the affected investments by a net present value
of $100 million.
Section 3303 would accomplish this by providing for reconstitution of
the outstanding repayment obligations of Bonneville for the
appropriated capital investments in the FCRPS. Section 3303 would reset
Bonneville's repayment obligation on all outstanding appropriated
Federal investments in the FCRPS, as of October 1, 1996. The interest
rates to repay the FCRPS investments would thus increase from their
relatively low imbedded levels, which average approximately 3.4
percent, to current Treasury interest rates. Treasury interest rates at
the time of the resetting of the principal amount of the investments
are expected to be substantially higher than the historically imbedded
rates.
The total principal amount outstanding on the appropriated investment
repayment responsibility, now approximately $6.7 billion, would be
reset to equal the sum of the net present value of the payments
Bonneville would be expected to make under current practice, plus an
increment of $100 million. The present value would be determined using
then current Treasury rates. The bill would lead Bonneville to recover
for return to the Treasury an additional $100 million in net present
value over that which would be returned under existing repayment
conditions. This supplement to the present value of Bonneville's
repayment obligation will cause a noticeable but tolerable increase in
the costs to be recovered in Bonneville's rates. As I indicated
previously, it would also result in favorable budget scoring effects.
Section 3303 would provide necessary certainty to Bonneville
customers, by requiring that Bonneville offer certain contract terms in
all future and existing contracts for the sale of electric power and
the provision of transmission services. These contract terms would be
intended to discourage a future Congress from amending law in a manner
that would exact further returns with respect to an investment once the
investment is repaid, or from taking returns on the investment in
addition to the principal and interest provided under the section 3303.
Mr. President, in summary I emphasize that section 3303 is bipartisan
legislation which passed the Congress in the 1995 reconciliation bill
and continues to be supported by the administration. The proposal would
satisfactorily resolve a longstanding disagreement in a manner that is
fair and provides certainty to both Pacific Northwest electric
ratepayers and Federal taxpayers. Section 3303 would also enhance the
long-term rate stability of the Bonneville Power Administration, better
position Bonneville to retain market share, and thereby improve
Bonneville's ability to fund all of its responsibilities, including the
fish and wildlife duties and Treasury repayment. I urge the Senate to
again pass this legislation.
Mr. President, I ask unanimous consent that the section-by-section
analysis that has been prepared to accompany section 3303 be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record; as follows:
Section 3303 Bonneville Power Administration Section-by-Section
Analysis
INTRODUCTION
The Bonneville Power Administration (BPA) markets electric
power produced by federal hydroelectric projects in the
Pacific Northwest and provides electric power transmission
services over certain federally-owned transmission
facilities. Among other obligations, BPA establishes rates to
repay to the U.S. Treasury the federal taxpayers' investments
in these hydroelectric projects and transmission facilities
made primarily through annual and no-year appropriations.
Since the early 1980's, subsidy criticisms have been directed
at the relatively low interest rates applicable to many of
these Federal Columbia River Power System (FCRPS)
investments. The purpose of Section 3303 is to resolve
permanently the subsidy criticisms in a way that benefits the
taxpayer while minimizing the impact on BPA's power and
transmission rates.
The legislation accomplishes this purpose by resetting the
principal of BPA's outstanding repayment obligations at an
amount that is $100 million greater than the present value of
the principal and interest BPA would have paid in the absence
of this Section 3303 on the outstanding appropriated
investments in the FCRPS. The interest rates applicable to
the reset principal amounts are based on the U.S. Treasury's
borrowing costs in effect at the time the principal is reset.
The resetting of the repayment obligations is effective
October 1, 1996, coincident with the beginning of BPA's next
rate period.
While Section 3303 increases BPA's repayment obligations,
and consequently will increase the rates BPA charges its
ratepayers, it also provides assurance to BPA ratepayers that
the Government will not further increase these obligations in
the future. By eliminating the exposure to such increases,
the legislation substantially improves the ability of BPA to
maintain its customer base, and to make future payments to
the U.S. Treasury on time and in full. Since Section 3303
will cause both BPA's rates and its
[[Page S2184]]
cash transfers to the U.S. Treasury to increase, it will aid
in reducing the Federal budget deficit by an estimated $89
million over the current budget window.
SUBSECTION (a) DEFINITIONS
This subsection contains definitions that apply to this
Section 3303.
Paragraph (1) is self-explanatory.
Paragraph (2) clarifies the repayment obligations to be
affected under Section 3303 by defining ``capital
investment'' to mean a capitalized cost funded by a Federal
appropriation for a project, facility, or separable unit or
feature of a project or facility, provided that the
investment is one for which the Administrator of the
Bonneville Power Administration (Administrator or BPA) is
required by law to establish rates to repay to the U.S.
Treasury. The definition excludes Federal irrigation
investments required by law to be repaid by the Administrator
through the sale of electric power, transmission or other
services; and, investments financed either by BPA current
revenues or by bonds issued and sold, or authorized to be
issued and sold, under section 13 of the Federal Columbia
River Transmission System Act.
Paragraph (3) defines new capital investments as those
capital investments that are placed in service after
September 30, 1996.
Paragraph (4) defines those capital investments whose
principal amounts are reset by Section 3303. ``Old capital
investments'' are capital investments whose capitalized costs
were incurred but not repaid before October 1, 1996, provided
that the related project, facility, or separable unit or
feature was placed in service before October 1, 1996. Thus,
the capital investments whose principal amounts are reset by
Section 3303 do not include capital investments placed in
service after September 30, 1996. The term ``capital
investments'' is defined in subsection (a)(2).
Paragraph (5) defines ``repayment date'' as the end of the
period that the Administrator is to establish rates to repay
the principal amount of a capital investment.
Paragraph (6) defines the term ``Treasury rate.'' The term
Treasury rate is used to establish both the discount rates
for determining the present value of the old capital
investments (subsection (b)(1)) and the interest rates that
will apply to the new principal amounts of the old capital
investments (subsection (c)). The term Treasury rate is also
used under subsection (g) in determining the interest rates
that apply to new capital investments, as that term is
defined.
In the case of each old capital investment, Treasury rate
means a rate determined by the Secretary of the Treasury,
taking into consideration prevailing market yields, during
the month preceding October 1, 1996, on outstanding interest-
bearing obligations of the United States with periods to
maturity comparable to the period between October 1, 1996,
and the repayment date for the old capital investment. Thus,
the interest rates and discount rates for old capital
investments reflect the Treasury yield curve proximate to
October 1, 1996. Likewise, in the case of each new capital
investment, the Treasury rate means a rate determined by the
Secretary of the Treasury, taking into consideration
prevailing market yields during the month preceding the
beginning of the fiscal year in which the related facilities
are placed in service, on outstanding interest-bearing
obligations of the United States with periods to maturity
comparable to the period between the beginning of the fiscal
year in which the related facilities are placed in service
and the repayment date for the new capital investment. Thus,
the interest rates for new capital investments reflect the
Treasury yield curve proximate to the beginning of the fiscal
year in which the facilities the new capital investment
concerns are placed in service.
The term Treasury rate is not to be confused with other
interest rates that Section 3303 directs the Secretary of the
Treasury to determine, specifically, the short-term (one-
year) interest rates to be used in calculating interest
during construction of new capital investments (subsection
(f)) and the interest rates for determining the interest that
would have been paid in the absence of Section 3303 on old
capital investments that are placed in service after the date
of enactment of Section 3303 but prior to October 1, 1996
(subsection (b)(3)(B)(ii)). These latter interest rates
reflect rate methodologies very similar to those specified by
the term Treasury rate, but apply to different features of
Section 3303.
It is expected that the Secretary of the Treasury will use
an interest rate formulation that the Secretary uses to
determine rates for federal lending and borrowing programs
generally.
SUBSECTION (b) NEW PRINCIPAL AMOUNTS
Subsection (b) establishes new principal amounts of the old
capital investments, which the Administrator is obligated by
law to establish rates to repay. These investments were made
by Federal taxpayers primarily through annual appropriations
and include investments financed by appropriations to the
U.S. Army Corps of Engineers, the U.S. Bureau of Reclamation,
and to BPA prior to implementation of the Federal Columbia
River Transmission System Act. In general, the new principal
amount associated with each such investment is determined
(regardless of whether the obligation is for the transmission
or generation function of the FCRPS) by (a) calculating the
present value of the stream of principal and interest
payments on the investment that the Administrator would have
paid to the U.S. Treasury absent this Section 3303 and (b)
adding to the principal of each investment a pro rata portion
of $100 million. The new principal amount is established on a
one-time-only basis. Although the new principal amounts
become effective on October 1, 1996, the actual calculation
of the reset principal will not occur until after October
1, 1996, because the discount rate will not be determined,
and BPA's final audited financial statements will not
become available, until later in that fiscal year.
As prescribed by the term ``old capital investment,'' the
new principal amount is not set for appropriations-financed
FCRPS investments the related facilities of which are placed
in service in or after fiscal year 1997; for Federal
irrigation investments required by law to be recovered by the
Administrator from the sale of electric power, transmission
or other services; or for investments financed by BPA current
revenues or by bonds issued or sold, or authorized to be
issued and sold, under section 13 of the Federal Columbia
River Transmission System Act.
The discount rate used to determine the present value is
the Treasury rate for the old capital investment and is
identical to the interest rate that applies to the new
principal amounts of the old capital investments. Thus, the
Secretary of the Treasury is responsible for determining the
interest rate and the discount rate assigned to each old
capital investment.
The discount period for a principal amount begins on the
date that the principal amount associated with an old capital
investment is reset (October 1, 1996) and ends, for purposes
of making the present value calculation, on the repayment
dates provided in this section. The repayment dates for
purposes of making the present value calculation are already
assigned to almost all of the old capital investments. For
old capital investments that will be placed in service after
October 1, 1994, but before October 1, 1996, no such dates
have been assigned. The Administrator will establish the
dates for these latter investments in accordance with U.S.
Department of Energy Order RA 6120.2--``Power Marketing
Administration Financial Reporting,'' as in effect at the
beginning of fiscal year 1995. These ideas are captured in
the definition of the term ``old payment amounts.''
The interest portion of the old payment amounts is
determined on the basis that the principal amount would bear
interest annually until repaid at interest rates assigned by
the Administrator. For almost all old capital investments,
these interest rates were assigned to the capital investments
prior to the effective date of Section 3303. (For old capital
investments that are placed in service after September 30,
1994, the interest rates to be used in determining the old
payment amounts will be a rate determined by the Secretary of
the Treasury proximate to the beginning of the fiscal year in
which the related project or facility, or the separable unit
or feature of a project or facility, was placed in service.
Subsection (b)(3)(B)(ii) provides the manner in which these
interest rates are established.) Thus, for purposes of
determining the present value of a given interest payment on
a capital investment, the discount period for the payment is
between October 1, 1996, and the date the interest payment
would have been made.
The pro rata allocation of $100,000,000 is based on the
ratio that the nominal principal amount of the old capital
investment bears to the sum of the nominal principal amounts
of all old capital investments. This added amount fulfills a
key financial objective of Section 3303 to provide the U.S.
Treasury and Federal taxpayers with a $100,000,000 increase
in the present value of BPA's principal and interest payments
with respect to the old capital investments. Since the
$100,000,000 is a nominal amount that bears interest at a
rate equal to the discount rate, the present value of the
stream of payments is necessarily increased by $100,000,000.
Subsection (b)(2) provides that with the approval of the
Secretary of the Treasury based solely on consistency with
Section 3303, the Administrator shall determine the new
principal amounts under subsection (b) and the assignment of
interest rates to the new principal amounts under subsection
(c). The Administrator will calculate the new principal
amount of each old capital investment in accord with
subsection (b) on the basis of (i) the outstanding principal
amount, the interest rate and the repayment date of the
related old capital investment, (ii) the discount rate
provided by the Secretary of the Treasury, and (iii) for
purposes of calculating the pro rata share of $100 million in
each new principal amount under subsection (b)(2)(B), the
total principal amount of all old capital investments. The
Administrator will provide this data to the Secretary of the
Treasury so that the Secretary can approve that the
calculation of each new principal amount is consistent with
this section and that the assignment of the interest rate to
each new principal amount is consistent with subsection (c).
The approval by the Secretary of the Treasury will be
completed as soon as practicable after the data on the new
principal amounts and the interest rates are provided by the
Administrator. It is expected that the approval by the
Secretary will not require substantial time.
SUBSECTION (c) INTEREST RATES FOR NEW PRINCIPAL AMOUNTS
Subsection (c) provides that the unpaid balance of the new
principal amount of each
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old capital investment shall bear interest at the Treasury
rate for the old capital investment, as determined by the
Secretary of the Treasury under subsection (a)(6)(A). The
unpaid balance of each new principal amount shall bear
interest at that rate until the earlier of the date the
principal is repaid or the repayment date for the investment.
SUBSECTION (d) REPAYMENT DATES
Subsection (d), in conjunction with the term ``repayment
date'' as that term is defined in subsection (a)(5), provides
that the end of the repayment period for each new principal
amount for an old capital investment shall be no earlier than
the repayment date used in making the present value
calculations in subsection (b). Under existing law, the
Administrator is obligated to establish rates to repay
capital investments within a reasonable number of years.
Subsection (d) confirms that the Administrator retains this
obligation notwithstanding the enactment of Section 3303.
SUBSECTION (e) PREPAYMENT LIMITATIONS
Subsection (e) places a cap on the Administrator's
authority to prepay the new principal amounts of old capital
investments. During the period October 1, 1996 through
September 30, 2001, the Administrator may pay the new
principal amounts of old capital investments before their
respective repayment dates provided that the total of the
prepayments during the period does not exceed $100,000,000.
SUBSECTION (f) INTEREST RATES FOR NEW CAPITAL INVESTMENTS DURING
CONSTRUCTION
Subsection (f) establishes in statute a key element of the
repayment practices relating to new capital investments.
Subsection (f) provides the interest rates for determining
the interest during construction of these facilities. For
each fiscal year of construction, the Secretary of the
Treasury determines a short-term interest rate upon which
that fiscal year's interest during construction is based. The
short-term interest rate for a given fiscal year applies to
the sum of (a) the cumulative construction expenditures made
from the start of construction through the end of the subject
fiscal year, and (b) interest during construction that has
accrued prior to the end of the subject fiscal year. The
short-term rate for the subject fiscal year is set by the
Secretary of the Treasury taking into consideration the
prevailing market yields on outstanding obligations of the
United States with periods to maturity of approximately one
year. These ideas are included in the definition of the term
``one-year rate.''
This method of calculating interest during
construction equates to common construction financing
practice. In this practice, construction is funded by
rolling, short-term debt which, upon completion of
construction, is finally rolled over into long-term debt
that spans the expected useful life of the facility
constructed. Accordingly, subsection (f) provides that
amounts for interest during construction shall be included
in the principal amount of a new capital investment. Thus,
the Administrator's obligation with respect to the payment
of this interest arises when construction is complete, at
which point the interest during construction is included
in the principal amount of the capital investment.
SUBSECTION (g) INTEREST RATES FOR NEW CAPITAL INVESTMENTS
Subsection (g) establishes in statute an important
component of BPA's repayment practice, that is, the
methodology for determining the interest rates for new
capital investments. Heretofore, administrative policies and
practice established the interest rates applicable to capital
investments as a long-term Treasury interest rate in effect
at the time construction commenced on the related facilities.
By contrast, subsection (g) provides that the interest rate
assigned to capital investments made in a project, facility,
or separable unit or feature of a project or facility,
provided it is placed in service after September 30, 1996, is
a rate that more accurately reflects the repayment period for
the capital investment and interest rates at the time the
related facility is placed in service. The interest rate
applicable to these capital investments is the Treasury rate,
as defined in subsection (a)(6)(B). Each of these investments
would bear interest at the rate so assigned until the earlier
of the date it is repaid or the end of its repayment period.
SUBSECTION (h) CREDITS TO ADMINISTRATOR'S REPAYMENT TO THE UNITED
STATES TREASURY
Subsection (h) provides that the Administrator shall
continue to receive certain credits to annual cash transfers
by the Administrator to the U.S. Treasury. The credits are
related to annual payments by the Administrator under a
settlement of certain claims against the United States by the
Confederated Tribes of the Colville Reservation, which claims
relate to the construction and operation of the Grand Coulee
Dam. The credits, together, with a lump-sum payment by the
United States to the Tribes, represent an equitable
allocation of the costs of the settlement between BPA
ratepayers and federal taxpayers.
The credits provided under this subsection (h) shall be
applied against interest or other payments to be made by the
Administrator to the U.S. Treasury. The payments to the U.S.
Treasury available for crediting include, without limitation,
interest and principal payments associated with capital
investments as reset under this Section 3303, on bonds issued
by BPA to the U.S. Treasury, and in connection with FCRPS
investment that are placed in service after September 30,
1996.
Subsection (h) also provides that it will apply
``notwithstanding any other law.'' This clause assures that
subsection (h) amends section 6 of the Confederated Tribe of
the Colville Reservation Grand Coulee Dam Settlement Act,
P.L. 103-436 (the ``Settlement Act''). Subsection (h) amends
section 6 of the Settlement Act solely by reshaping over time
the credits otherwise available to BPA under the Settlement
Act.
BPA's obligation to make payments to the Tribes under the
Settlement Agreement authorized in the Settlement Act would
not in anyway change with the enactment of subsection (h).
Likewise, BPA's payments to the Tribes under the Settlement
Agreement authorized in the Settlement Act, would in no
manner be conditioned on or subject to the availability or
application of the credits.
The new schedule of credits provided in subsection (h)
would also not affect the present value of the ratepayers' or
taxpayers' respective shares of the costs of the Settlement
Agreement. It does, however, enable the impacts of the
refinancing on BPA's rates to be ameliorated in the near
term.
SUBSECTION (i) CONTRACT PROVISIONS
Subsection (i) is intended to capture in contract the
purpose of this legislation to permanently resolve issues
relating to the repayment obligations of BPA's customers
associated with an old capital investment. With regard to
such investments, paragraph (1) of subsection (i) requires
that the Administrator offer to include in power and
transmission contracts terms that prevent the Administrator
from recovering and returning to the U.S. Treasury any return
of the capital investments other than the interest payments
or principal repayments authorized by Section 3303. Paragraph
(1) of subsection (i) also provides assurance to ratepayers
that outstanding principal and interest associated with each
old capital investment, the principal of which is reset in
this legislation, shall be credited in the amount of any
payment in satisfaction thereof at the time the payment is
tendered. This provision assures that payments of principal
and interest will in fact satisfy principal and interest
payable on these capital investments.
Whereas paragraph (1) of subsection (i) limits the return
to the U.S. Treasury of the Federal investments in the
designated projects and facilities, together with interest
thereon, paragraph (2) of subsection (i) requires the
Administrator to offer to include in contracts terms that
prevent the Administrator from recovering and returning to
the U.S. Treasury any additional return on those old capital
investments. Thus, the Administrator may not impose a charge,
rent or other fee for such investments, either while they are
being repaid or after they have been repaid. Paragraph (2) of
subsection (i) also contractually fixes the interest
obligation on the new principal obligation at the amount
determined pursuant to subsection (c) of Section 3303.
Paragraph (3) of subsection (i) is intended to assure BPA
ratepayers that the contract provisions described in
paragraphs (1) and (2) of subsection (i) are not indirectly
circumvented by requiring BPA ratepayers to bear through BPA
rates the cost of a judgment or settlement for breach of the
contract provisions. The subsection also confirms that the
judgment fund shall be available to pay, and shall be the
sole source for payment of, a judgment against or settlement
by the Administrator or the United States on a claim for a
violation of the contract provisions required by subsection
(i). Section 1304 of title 31, United States Code, is a
continuing, indefinite appropriation to pay judgments
rendered against the United States, provided that payment of
the judgment is ``not otherwise provided for.'' Paragraph 3
of subsection (i) of Section 3303 assures both that the
Bonneville fund, described in section 838 of title 16, United
States Code, shall not be available to pay a judgment or
settlement for breach by the United States of the contract
provisions required by subsection (i) of Section 3303, and
that no appropriation, other than the judgment fund, is
available to pay such a judgment.
Paragraph (4)(A) of subsection (i) establishes that the
contract protections required by subsection (i) of Section
3303 do not extend to Bonneville's recovering a tax that is
generally applicable to electric utilities, whether the
recovery by Bonneville is made through its rates or by other
means.
Paragraph (4)(B) of subsection (i) makes clear that the
contract terms described above are in no way intended to
alter the Administrator's current rate design discretion or
ratemaking authority to recover other costs or allocate costs
and benefits. This Section 3303, including the contract
provisions under subsection (i), does not preclude the
Administrator from recovering any other costs such as general
overhead, operations and maintenance, fish and wildlife,
conservation, risk mitigation, modifications, additions,
improvements, and replacements to facilities, and other costs
properly allocable to a rate or resource.
SUBSECTION (j) SAVINGS PROVISIONS
Paragraph (1) of this section assures that the principal
and interest payments by the Administrator as established in
this Section 3303 shall be paid only from the Administrator's
net proceeds.
Paragraph (2) confirms that the Administrator may repay all
or a portion of the principal associated with a capital
investment
[[Page S2186]]
before the end of its repayment period, except as limited by
subsection (e) of Section 3303.
Mr. BOND. Mr. President, I would like to bring one item of concern to
the attention of the chairman of the Appropriations Committee.
Specifically, I am concerned about a provision contained in the House-
passed version of this bill which would prohibit expenditure of any
funds to expand our Embassy in Vietnam or open new facilities beyond
those that were in place on July 11, 1995, unless the President makes a
number of certifications relating to the efforts to account for
soldiers missing in action from the Vietnam war.
Mr. President, this is an unnecessary provision which will do nothing
to support our Government's active, successful, on-going efforts to
resolve remaining MIA cases.
The Senate has not had the opportunity to speak on this particular
provision. The Senate last fall did, however, consider a proposal to
slow efforts to move forward on relations with Vietnam, and we rejected
it by an overwhelming margin. That vote certainly indicates that the
majority of the Senate supports moving forward in our relationship with
Vietnam.
I urge the chairman to recognize that there is strong opposition to
this provision in the Senate, and reject it in the House-Senate
conference.
Mr. HATFIELD. Mr. President, I am aware of the concerns of the
Senator from Missouri. I am further aware that those concerns are
shared by a large number of our colleagues, and I will make an effort
in conference to maintain the Senate position on this issue.
Mr. BOND. Mr. President, I thank the chairman and I assure him I will
be a vocal supporter of that position in conference.
Mr. KERREY. Mr. President, I join the Senator from Missouri in
expressing opposition to the provision contained in the House bill
which will restrict our ability to move forward in Vietnam. I believe
both the Senate and the President have clearly expressed their
opposition to this provision in the past.
The inclusion of this provision in the fiscal year 1996 Commerce-
State-Justice conference report was cited by the President as one of
the reasons for his veto of that legislation. Furthermore the President
has indicated that he intends to veto the Foreign Relations
Authorization Act in part because of the inclusion of this provision
that will limit his ability to further normalize relations with
Vietnam. Specifically, he warns this provision ``could threaten the
progress that has been made on POW/MIA issues * * *''
I strongly opposed this restriction last fall, and I will oppose it
just as strongly in this conference.
Mr. KERRY. Mr. President, I would like to address this issue as well.
The Senate has voted more than once on the question of how best to
promote the full accounting of Americans missing in action in Vietnam
and on the issue of moving forward in our relations with Vietnam. In
each case, this body has voted to take reciprocal steps toward Vietnam
as a means of achieving both these objectives. The provision contained
in the House bill, if included in the conference report, would be
contrary to the Senate's clear record and for that reason it should be
rejected by the conferees.
That is not the only reason it should be rejected, however. Working
with Vietnam, we have established an unprecedented process for
resolving outstanding POW/MIA cases. American and Vietnamese teams are
working together to conduct field exercises and to pursue other leads.
Even as we speak, a high-level Presidential delegation is in Hanoi
consulting with Vietnamese government officials on the progress of this
effort. The legislation contained in the House bill could jeopardize
this ongoing work and set back the progress we are making.
I think we should recognize this provision for what it is--a thinly
veiled attempt to undermine the administration's decision to normalize
relations with Vietnam. The majority of Members in this body was
indicated they support normalization. We should not allow the House to
put us on record otherwise.
Mr. McCAIN. Mr. President, I am very pleased that the Committee has
seen fit to strike the provision of the House-passed omnibus
appropriations bill which restricts the United States diplomatic
presence in Vietnam. I would like to join my colleagues in opposition
to the House provision.
The committee first dealt with this issue in response to a House
amendment to the CJS bill which passed without a recorded vote. That
amendment, as my colleagues may remember, prohibited funds for
expanding diplomatic relations with Vietnam. When the conference report
was approved by the Senate on December 7, 1995, it allowed for funding,
but conditioned funding on a Presidential certification involving
missing servicemen.
The President listed the Vietnam provision as one of his reasons for
vetoing the CFS bill. In his estimation, the restriction ``unduly
restricts his ability to pursue national interests in Vietnam.''
Nevertheless, the House has decided to revisit the issue. It has
included language in its Omnibus appropriation bill virtually identical
to the language which solicited to veto on CFS and just 2 days ago the
threat of another on the State Department reorganization bill.
I couldn't agree with the President more in this regard. He has made
a decision to normalize relations with Vietnam--a decision certainly
consistent with this constitutional authority, and he should not be
constrained in carrying it out. I commend the Senate committee for
acting in a manner which will allow United States-Vietnam relations to
move forward.
I am still hopeful that we can put this issue behind us. The Senate,
after all, has demonstrated time and again its lack of support for any
restrictions on our relations with Vietnam. It has done so once again
by striking the House Vietnam language in the bill before us. I
encourage the Senate conferees to honor the very clear sentiment of the
Senate and to hold firm.
Mr. HATFIELD. Mr. President, I thank all senators for their comments.
I look forward to working with my colleagues on the committee to try to
resolve this issue in a way that meets their concerns.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. GRAMS. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRAMS. Mr. President, I also ask unanimous consent to speak as if
in morning business for up to 15 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
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