[Congressional Record Volume 143, Number 35 (Tuesday, March 18, 1997)]
[House]
[Pages H1057-H1062]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         OROVILLE-TONASKET CLAIM SETTLEMENT AND CONVEYANCE ACT

  Mr. HASTINGS of Washington. Mr. Speaker, by direction of the 
Committee on Rules, I call up House Resolution 94 and ask for its 
immediate consideration.
  The Clerk read the resolution, as follows:

                               H. Res. 97

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 1(b) of rule 
     XXIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 412) to approve a settlement agreement between 
     the Bureau of Reclamation and the Oroville-Tonasket 
     Irrigation District. The first reading of the bill shall be 
     dispensed with. General debate shall be confined to the bill 
     and shall not exceed one hour equally divided and controlled 
     by the chairman and ranking minority member of the Committee 
     on Resources. After general debate the bill shall be 
     considered for amendment under the five-minute rule. It shall 
     be in order to consider as an original bill for the purpose 
     of amendment under the five-minute rule the amendment in the 
     nature of a substitute recommended by the Committee on 
     Resources now printed in the bill. Each section of the 
     committee amendment in the nature of a substitute shall be 
     considered as read. At the conclusion of consideration of the 
     bill for amendment the Committee shall rise and report the 
     bill to the House with such amendments as may have been 
     adopted. Any Member may demand a separate vote in the House 
     on any amendment adopted in the Committee of the Whole to the 
     bill or to the committee amendment in the nature of a 
     substitute. The previous question shall be considered as 
     ordered on the bill and amendments thereto to final passage 
     without intervening motion except one motion to recommit with 
     or without instructions.

  The SPEAKER pro tempore. The gentleman from Washington [Mr. Hastings] 
is recognized for 1 hour.
  Mr. HASTINGS of Washington. Mr. Speaker, for the purpose of debate 
only, I yield the customary 30 minutes to the gentlewoman from New York 
[Ms. Slaughter], pending which I yield myself such time as I may 
consume. During consideration of this resolution, all time yielded is 
for the purpose of debate only.
  Mr. Speaker, the resolution provides for consideration of H.R. 412, 
the Oroville-Tonasket Claim Settlement and Conveyance Act under an open 
rule. The rule provides for 1 hour of general debate equally divided 
between the chairman and ranking member of the Committee on Resources. 
The rule makes in order the Committee on Resources amendment in the 
nature of a substitute now printed in the bill as an original bill for 
purposes of amendment. The amendment in the nature of a substitute 
shall be considered as read. The rule further provides for one motion 
to recommit with or without instructions.
  Mr. Speaker, H.R. 412 approves the settlement reached between the 
U.S.

[[Page H1058]]

Department of the Interior and the Oroville-Tonasket Irrigation 
District in order to avoid litigation concerning the construction of 
the Oroville-Tonasket Unit Extension in my district.
  This settlement was initiated by the Bureau of Reclamation and is 
widely supported by all concerned parties, including the Colville 
Indian Tribes. Under the terms of the settlement, legislation must be 
enacted prior to April 15 of this year or the proposed settlement is 
voided.
  We began work on this bill in the 104th Congress and, thanks to the 
support of the gentleman from Alaska [Mr. Young] and the gentleman from 
California [Mr. Doolittle], H.R. 412 was reported by voice vote out of 
the Committee on Resources on March 5.
  Mr. Speaker, the legislation we will consider today would ratify what 
I consider to be a very solid agreement. It is the result of a good 
faith effort by the Interior Department and my constituents to resolve 
a situation that both parties wish had never developed.
  This agreement will save taxpayers millions of dollars and avoid a 
lawsuit the Federal Government would almost surely lose. Members 
doubting that the Government would lose this should ask the question, 
Why would the Bureau of Reclamation have been so eager to initiate this 
proposed settlement if they had not thought that they would be on the 
losing end?
  Mr. Speaker, we had hoped to bring H.R. 412 to the House under a 
suspension of the rules. However, during full committee markup we 
learned for the first time of the gentleman from California's concern 
about the bill and, accordingly, we are pleased to request an open rule 
so that the gentleman from California [Mr. Miller] may put before the 
full House an amendment seeking to perfect the bill.
  Although I plan to oppose the gentleman's amendment, I look forward 
to its consideration in the Committee of the Whole later today.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may 
consume. I thank the gentleman for yielding the time to me.
  Mr. Speaker, this is an open rule that will allow full debate on this 
bill, and I ask my colleagues to support the rule so that we may 
proceed with consideration of the merits of the legislation.
  As my colleague has noted, H.R. 412 approves an agreement between the 
Bureau of Reclamation, an agency of the Department of the Interior, and 
the Oroville-Tonasket Irrigation District of Washington. This agreement 
would transfer the federally funded irrigation project to the 
irrigation district at no cost.
  Proponents of the measure note that the irrigation system does not 
work as planned and that operation costs are higher than projected. 
Several of my colleagues expressed concern, however, that this 
conveyance amounts to a giveaway of Federal assets, a giveaway that has 
had little to no congressional oversight. It is their strong belief 
that the district should be allowed to take possession of the project 
only after paying fair market value based on an independent appraisal.
  Furthermore, it is my understanding that the Department of Justice 
did not participate in this settlement agreement and thus opponents 
argue that Congress should have the opportunity to address the dispute 
in question and to reach an equitable settlement. Since this is an open 
rule, however, I urge my colleagues' support for the rule to allow full 
debate.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HASTINGS of Washington. Mr. Speaker, I yield back the balance of 
my time, and I move the previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. Pursuant to House Resolution 94 and rule 
XXIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the consideration of the bill, H.R. 412.

                              {time}  1508


                     In the Committee of the Whole

  Accordingly the House resolved itself into the Committee of the Whole 
House on the State of the Union for the consideration of the bill (H.R. 
412) to approve a settlement agreement between the Bureau of 
Reclamation and the Oroville-Tonasket Irrigation District, with Mr. 
Everett in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from California [Mr. Doolittle] and the 
gentleman from California [Mr. Miller] each will control 30 minutes.
  The Chair recognizes the gentleman from California [Mr. Doolittle].
  Mr. DOOLITTLE. Mr. Chairman, I yield myself such time as I may 
consume.
  H.R. 412, the Oroville-Tonasket Claim Settlement Act approves the 
settlement of a lawsuit filed by the Oroville-Tonasket irrigation 
district against the United States regarding an irrigation works poorly 
designed and shoddily constructed by the Bureau of Reclamation in north 
central Washington State. Despite literally decades of repairs and 
reconstruction, the system does not work as planned and is very 
expensive to operate and maintain.
  When the bureau notified the district that the project was 
substantially complete in 1990, thus triggering a repayment obligation 
under Federal reclamation law, the district sued for $51 million in 
damages and relief from its repayment obligation. The Bureau of 
Reclamation, the Justice Department and the district have negotiated a 
settlement agreement for this lawsuit, which must be ratified by law by 
the date of April 15, 1997. Under the agreement the district agrees to 
release all claims against the United States associated with the faulty 
irrigation system estimated by the bureau at $4.5 million plus an 
estimated $14 million requirement the U.S. Government presently has to 
repair deteriorating pipes, indemnify the United States from third 
party claims, pay $350,000 and release the United States from its 
obligation to remove existing dilapidated structures and accept limited 
power generation for irrigation water pumping.
  In return the United States agrees to transfer title to the defective 
irrigation system of the district and forgive the district's repayment 
obligation calculated by the bureau to have a present value of $4.2 
million.
  Mr. Chairman, the Justice Department in fact did participate, 
contrary to the representation that was earlier made. It recommends 
that this settlement be entered into. As we can see from the facts, the 
district has more in claims against the Government acknowledged as 
valid by the Bureau of Reclamation than it has those in the amount of 
money to be repaid under the contract.
  The district did not seek to take title to these irrigation works. 
That was a condition insisted upon by the Government itself. I would 
point out that the administration, even the Clinton administration 
supports this bill.
  Mr. Chairman, I reserve the balance of my time.
  Mr. MILLER of California. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I rise in opposition to H.R. 412, the Oroville-Tonasket 
Claim Settlement and Conveyance Act. This district has yet to pay a 
dime toward the $14 million that it owes the taxpayers to repay their 
investment in the Oroville-Tonasket project. Yet this legislation would 
transfer the projects to the district for free and commit the Federal 
Government to continue to provide cheap power for pumping water through 
the year 2040, 45 years of additional subsidies to an irrigation 
district that is seeking now to get the project for free.
  While this irrigation district argues that these problems of the 
project should be corrected, the need to repair the project certainly 
does not justify giving it away and having the taxpayers absorb the 
loss. The taxpayers have spent $88 million to build this project, and 
the power users in the region from Bonneville and others will subsidize 
this with power to the extent of somewhere around $75 million. What we 
are arguing here is over $14 million which the district owes and has 
refused to pay because they have not liked the design and the problems 
that we are having with the project. But the fact of the matter is that 
this district, this project has been delivering a benefit to

[[Page H1059]]

this irrigation district now for a number of years, and it certainly is 
envisioned that it will deliver a benefit to this district for the next 
50 years.
  Ordinarily what we would do in this situation is we would sit down 
and we would discuss whether or not they have got all of the benefit 
that they felt that they were deserving of. We have been through this 
in the central Arizona project, and we have been through it on other 
reclamation projects. But in this situation what we now see is the 
suggestion that they should pay nothing for what they got. The fact of 
the matter is, why do they not give the project back? It was suggested 
by the chairman of the subcommittee that this is a lemon law, that you 
have to give the car back. Well, you would, you would give the car back 
and you would cease making payments. Here they keep the project. They 
continue to get the water. They continue to get the economic benefit 
somewhere around 8,000 to 10,000 acres of orchards, and the fact of the 
matter is now they seek not to pay for it.
  What my amendment suggests and what I will offer later when the House 
reconvenes is an amendment that says we ought to have an appraisal. We 
ought to determine the fair market value, take into consideration their 
arguments and let them pay that for the project. That may be net 
present value. That may be some other figure, but the taxpayers are 
entitled to have something back for the benefit that they bestowed on 
these individuals.

                              {time}  1515

  Because the simple fact of the matter is that they are going to 
continue to get that benefit.
  Now, they will continue to get subsidized power. They will continue 
to get subsidized power for a long time. Why do we give people 
subsidized power? Because when we calculate these projects, the fact of 
the matter is that these farmers and others are not able to pay for 
this project.
  They could not have financed this back in 1962, they could not 
finance this in 1976, so what we do is we reach into the pockets of all 
of the other power users in the area and we say they have to pony up 
money so that these farmers can stay in business because they have to 
pay the Federal Government back.
  Now these people will not pay the Federal Government back, but they 
want to keep their hands in the pockets of the power users. Everybody 
else that gets subsidized power is in the business of paying the 
Government back. These people, in fact, are not going to pay the 
Government back.
  The point is that their costs are about the same as other districts 
in the region. Their O&M costs are about $35 an acre foot. That is 
consistent with what other projects in the region pay. So what is the 
extraordinary expense? What is the extraordinary detriment of this 
project that so diminishes the benefits that now the taxpayer is 
entitled to nothing from the beneficiaries of this project? I suspect 
what is so extraordinary is the Bureau of Reclamation is somewhat 
embarrassed by their design and the implementation of this plan. The 
farmers have them on a hook. They got into a room and they cut a fat 
hog in the rear.
  The point is that it is the public that is getting stuck. We are 
getting stuck because we are not getting repaid from the district. And 
those people who buy their power are paying higher rates for power 
because they are paying subsidized rates, they are dishing off 
subsidized rates to this district.
  This is not to punish this district, this is not to deny this 
district what they are fairly entitled to. It simply says before we 
give the project away, why do we not determine if, in fact, there is 
fair market value in this for the United States of America, which is 
financed by the taxpayers that we all represent.
  What we are saying is, have an appraisal, pick independent parties, 
let them make their determination and let the district decide whether 
or not they want to pay this. I think that is fairer to the taxpayers. 
I think it removes any notion of precedent by other projects that think 
that now maybe this is the way to do it. Just refuse to pay your bills 
and eventually the Federal Government says, ``Oh, forget it, you never 
were going to pay us so we will not collect anything from you.''
  All those people paying their taxes on April 15 would like to know 
they could get such a deal; that they could get such a deal if they 
refused to pay their taxes over a period of years and then the 
Government says, ``Forget it, you guys probably never were going to pay 
us.''
  So what do we do now? We bail out the deadbeats and the people that 
refuse to pay even though they are getting the benefit? I do not think 
that is what this Congress should be involved in. It is not a lot of 
money. It is $14 million. But it is $14 million, and if people are 
getting a benefit from that expenditure they should pay something back.
  We go after people on student loans who are in hardship, we go after 
people on welfare, we go after people on food stamps, we go after 
people who do not pay their taxes, but here we set up a structure and 
they decide ``We do not want to pay for this because we do not think it 
is worth it.'' They certainly thought it was worth it when they came to 
Congress in 1952, 1962, 1976, 1982, and in 1995 and 1996, and now in 
1997. They think there is something worth it here.
  What is worth it is that they continue to get water to their lands to 
grow their crops to economically benefit from. And they should pay back 
the venture capitalist, the people of the United States, that put the 
money in up front. They ought to pay them back for the benefit that 
they are receiving.
  If that benefit is not 100 percent of what they thought it should be, 
then let the appraisers make that determination. I think what we should 
do is get the interested parties out of the room of cutting this deal, 
put some independent parties into the room in determining what the 
value is, and let the taxpayers receive that.
  Mr. Chairman, I will be offering that amendment when the House 
reconvenes for that purpose. If that amendment is not accepted, I would 
urge people to vote against this legislation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. DOOLITTLE. Mr. Chairman, I yield such time as he may consume to 
the gentleman from Washington, [Mr. Hastings].
  Mr. HASTINGS of Washington. Mr. Chairman, I thank the gentleman for 
yielding me this time, and let me just give a little background on this 
bill from my perspective, and I want to respond to a few remarks that 
the gentleman from California made earlier.
  Mr. Chairman, this bill is a result of settlement negotiations 
between the U.S. Bureau of Reclamation and the Oroville-Tonasket 
irrigation district, which is located in my district in central 
Washington.
  As explained by my colleague from California, H.R. 412 transfers the 
title of the irrigation facilities to the local authorities and 
relieves the Bureau's responsibility for any repair, which is 
substantial, and future operational costs to the district. It also ends 
the current lawsuit against the Bureau of Reclamation.
  Let me assure my colleagues that this settlement is a fair solution 
for all parties involved. These facilities have not performed as the 
Bureau promised, and the district, after lengthy negotiations, has 
agreed to fix the current problems and pay for future operations of the 
facilities. To me, that is fair.
  The Bureau has said that they do not have the money to fix the 
problems of the Oroville-Tonasket irrigation district. They want the 
district to start paying for something that is not finished. That is a 
very important point, paying for something that is not finished. So we 
have a long court case ahead of us, and one that the Bureau, in all 
probability, would lose.
  I have seen the problems firsthand, and these are pictures of some of 
the work that was done and which is at issue. These are main water-
carrying pipes, 24- and 21-inch pipes that have broken in 2 different 
years after it was supposed to have been substantially complete. I can 
tell my colleagues, in an area where rainfall is approximately 10 to 12 
inches, to have a break of irrigation pipes in July and in April, at 
the time when the irrigation season has started and in the middle of 
the irrigation season, is not a very good situation.
  This is the work that is in dispute right now. There are other 
pictures here also to substantiate. This is a

[[Page H1060]]

blow-up of one of the other pictures I alluded to earlier.
  I have seen the project firsthand, and this project is a poorly 
constructed irrigation unit that has plagued farmers in my district, 
frankly, long enough. Right now, over 1,000 farms depend on these 
irrigation facilities. And I want to emphasize the point that the 
rainfall in that area is 10 to 15 inches. We need the irrigation.
  Apple, pear and cherry orchards, some of the most valuable and world 
renowned crops of Washington State, are jeopardized every time one of 
the Bureau's inadequate pipes explode. Every time the system cannot 
pump clean water and instead pumps mud, which has happened, as we can 
see the silt here, where it pumps mud through the farmers' pipes and 
out through their sprinkler heads, and that has happened, where they 
have had mud literally come out of the sprinkler heads, I can tell my 
colleagues that the trees they are trying to irrigate are in jeopardy.
  A perfect example of the problems associated with these facilities 
happened in 1990, and those were the pictures I just showed, where the 
main pipes exploded. I know some of my colleagues are not from farming 
districts, but I can assure them that those people who depend on water 
at the opportune time need to have this water when it is timely.
  What is the solution, then, after this problem that has built up over 
time? Clearly, the easiest solution would be to come back to Congress 
and ask for another appropriation to fix something that was mishandled 
in the first place. That costs money. It would probably waste 
taxpayers' dollars one more time. The irrigation district came to this 
conclusion also, and they started negotiations with the Bureau.
  So what we need to do is turn these facilities over to the irrigation 
district so they can upgrade the facilities and pump water, not mud, to 
the farmers of central Washington. Preferably, I would like to see them 
working in perfect order before the Bureau transfers them to the 
district but, frankly, that is not going to happen. The best that we 
can do is let the district replace the pipes and control the mud 
entering the system and get the Federal Government out of the Oroville-
Tonasket irrigation district.
  Let us stop mishandling this facility, let us end the potential $51 
million lawsuit against the U.S. Government, and help assure the 
farmers of my district a stable source of irrigated water for the 
future. I think this is a fiscally responsible solution. In fact, I 
might add, it is endorsed by the organization known as Citizens Against 
Government Waste, that all of us are familiar with.
  I want to respond to a few points that the gentleman from California, 
the distinguished ranking member, made. He opened his remarks by 
talking about this is a giveaway of $14 million. The $14 million that 
the gentleman is alluding to would be the potential payback if 
everything were set and the contract was fulfilled. This contract has 
not been fulfilled. So there is nothing there from that standpoint.
  We are not giving away anything other than air, and no one would want 
to pay for air if it was not performing correctly. That is really what 
the issue is.
  The gentleman also talked about the power issue. And I think the 
gentleman from California recognizes that in the West, when we started 
reclaiming land with the Bureau of Reclamation, irrigation always got 
first call at that power. That was the incentive to allow people to 
come out and to create new wealth. This was all part of reclamation 
law. It applies to Washington State, it applies to California, it 
applies to Colorado, it applies to Idaho and Oregon, and all the 
Western States. This is nothing unusual.
  As a matter of fact, when the gentleman suggests that we shift costs 
to the customers that are using the electricity, I might add that the 
people that use electricity are in the Northwest. We accept that.
  Finally, it has been alluded to that we should correct this lemon 
law. I will give an analogy that I think is appropriate in this case. I 
ask my colleagues to put themselves in the situation where they have a 
house and that house is substantially built and completed and paid for, 
with just the exception of maybe a small part of the mortgage and the 
contractor is asked to come in and build a guest room.
  As a result of going through that process, the contractor had to get 
into the house, change the roof, change the electricity, change the 
heating and all those sort of things. Now, there was an agreed-upon 
time line that this should be completed and all of a sudden the 
contractor says, Okay, I want to get paid because that was what was in 
the contract. At that time it rains and the discovery is made that the 
roof leaks, that the wiring may cause a fire, and the duct work does 
not work.
  Do any of my colleagues think they would want to pay that contractor 
for that work? Of course not. No one would do that. As a matter of 
fact, we would probably sue the contractor and try to get the thing 
corrected.
  That is precisely what is going on here with the Oroville-Tonasket 
irrigation district. It is nonperformance by the Bureau. And one of the 
reasons why this nonperformance and why this analogy works so well in 
my mind is the Bureau sees this makes sense. That is why they asked to 
enter into this agreement with the irrigation district.
  So, Mr. Chairman, this bill, I think, corrects something. It is a 
settlement bill. It is a bill that will transfer authority and 
obligations and whatever lawsuits that may come up in the future away 
from the Federal Government and put it back to the district.
  Now, as a result of that, the CBO has scored this and the CBO expects 
that the Federal Government would probably save money if this bill were 
enacted. CBO estimates that there would be no effect on 1997 spending 
and that any potential effect on 1998 spending would be savings 
relative to the current law.
  So this is budget neutral and makes perfectly good sense to me that 
this bill ought to be passed. And, as a matter of fact, in the long 
run, because if we avoid a lawsuit, it would save a potential easily of 
$50 million.
  So I urge my colleagues to support H.R. 412 when we vote on final 
passage. I would also urge my colleagues to vote against the amendment 
that will be offered by the gentleman from California, because if that 
amendment were to be adopted, it would, frankly, be a killer amendment 
on a bill that settles a potential claim.
  Mr. DOOLITTLE. Mr. Chairman, I yield myself such time as I may 
consume to note, in terms of the figures we have heard, the gentleman 
from California [Mr. Miller], represented that this is $14 million, but 
$13.9 million is the amount due the Government. But it is due over the 
next 45 years. It is not due today.
  So the present value, the accountants calculate that amount, $13.9 
million over 45 years, today's value of that, is $4.2 million. Now, the 
Bureau of Reclamation acknowledges the validity of the district's 
claims against the Federal Government in the amount of $4.5 million. So 
already there is $300,000 more dollars that is owed to the district 
than they owe to the Federal Government based on the present value.
  There is also another 14 million dollars worth of repairs to the 
pipes that the gentleman from Washington [Mr. Hastings], showed us in 
the pictures that are the obligation of the Federal Government. That 
obligation would be removed and would not be a burden on the taxpayer 
in this settlement.
  Mr. Chairman, I just want to make sure everybody understands that 
even the Government itself acknowledges that the district is owed 
money, more money from the Government than the district owes to the 
Government for this. Essentially, this disastrous project, which I 
called in the committee a lemon, has no worth.

                              {time}  1530

  It was not the district that seeks title; it was insisted that title 
be given, that the lemon be stuck with the recipient, because the 
Government does not want the lemon. They are the ones who insisted on 
that title transfer from the Federal Government to this Oroville-
Tonasket Irrigation District. This settlement saves the taxpayer money.
  Mr. Chairman, I reserve the balance of my time.
  Mr. MILLER of California. Mr. Chairman, I yield myself such time as I 
may consume.
  I appreciate the interpretation, the spin my learned colleagues would 
put

[[Page H1061]]

on my remarks. I said this is about $14 million. Nobody has suggested 
that the district pay $14 million. What I have suggested is that we 
have some independent voices and an appraisal of what this district 
ought to pay for the benefit it received.
  As I said, it is not that these lands now lie fallow. It is not that 
these orchards are out of production. They are in fact engaged in 
raising crops and engaged in an economic benefit. If it is $4.2 million 
in the net present value for this project, maybe that is what they 
ought to pay. They can have the project, if that is what they want, if 
they want to have the project. All I am asking is, should they not pay 
something for the benefit they are receiving? My colleagues are using 
two words over there. One argues it is sort of substantially completed, 
but not completed, and then it is of no value. It is somewhere in 
between. If it is substantially completed, then you have an obligation 
for $14 million. If it is somewhat less than that, then you have an 
obligation somewhat less than that. This is not about punishing the 
district. It is about protecting the taxpayers on the way out.
  The Bureau has never acknowledged that it is $14 million or that this 
whole pipeline has to be replaced. That is not here, and the Bureau has 
not put a value on this project. That is my reason for opposing this 
legislation and for offering the amendment, that in fact that we get a 
realistic value, that we get a true value.
  The fact that this money is not going to be paid over 45 years, what 
we normally do with these districts when they want to buy out the 
project, when they want to buy out their obligations, we let them claim 
net present value of the project because the Government gets the value 
of having the money sooner. Nobody has suggested that is not the case 
here or could not be the case.
  I appreciate that both of my colleagues are wonderful counsels for 
the plaintiff in this case and are making their case. It is just not 
clear that their case accurately reflects the interest of the taxpayers 
in the granting of this millions of dollars of relief to the district.
  If you were not to do this, if it turns out that the $14 million is 
needed to rebuild, although the Bureau has not acknowledged it, that 
would be an obligation of the district under current law. It is not 
like that is an obligation you relieve us of. There is a repayment 
obligation. I just think this is about taxpayer equity. I will offer my 
amendment later, but let us just be clear on the figures.
  Mr. Chairman, I reserve the balance of my time.
  Mr. DOOLITTLE. Mr. Chairman, I yield myself such time as I may 
consume.
  I will just observe that there are other claims as well that the 
district in the settlement will forgo against the Government. If we 
delay this settlement, in essence not delay it but we will abrogate the 
settlement by failing to pass this bill, the taxpayer is at far greater 
risk. Right now that $13.9 million of obligation for repayment by the 
district to the Federal Government is over 45 years. But, in fact, the 
net present value, which I think is undisputed of that $13.9 million, 
is $4.2 million. That is what the district is agreeing is the net 
present value and they are offsetting their payment to the Government 
of that $4.2 million against the $4.5 million that the Government 
acknowledges is valid in the district's claims against the Government. 
And then these other claims that are referenced in a CBO letter and 
that we have talked about, those other claims are also being forgone.
  So I think it is not fair to say the district is not paying anything. 
The district has been saddled with this thing for years. It does not 
work. The Government would not go ahead and admit that the claims by 
the district were valid if they did not feel that they had an 
overwhelming liability on their part.
  This is, after all, the Justice Department that is involved in this. 
The Clinton administration itself supports this. The Citizens Against 
Government Waste supports this bill. They are pretty good spokesmen, 
some think, for the taxpayers.
  I think, Mr. Chairman, that the bill of the gentleman from Washington 
[Mr. Hastings] is a very timely bill. We support this bill, precisely 
because it saves the taxpayers money. We are not seeking to give 
anything away here. We are seeking to save the taxpayers money that 
will otherwise have to be paid when this goes to court and when the 
full $51 million in claims by the district is asserted against the 
Federal Government. They stand a lot to lose. They know that. That is 
why the Clinton administration itself supports the Hastings bill.
  Mr. Chairman, I yield such time as he may consume to the gentleman 
from Washington [Mr. Hastings].
  Mr. HASTINGS of Washington. Mr. Chairman, I thank the gentleman for 
yielding me this time.
  We will discuss, I think, at length the amendment that will be 
offered, and that appears to be the crux of the argument that the 
gentleman from California is talking about, is that part of the fair 
value, and I think that is certainly something valid to debate. But I 
want to make this point. This irrigation district was started right 
after the turn of the century when all the reclamation projects in the 
West were started. Part of this settlement, which has already been 
paid, the $350,000, satisfies the repayment obligation back of the 
initial irrigation project. What is in dispute here is the extension 
unit. That is what is in dispute.
  The extension unit, of course, affects the whole district, and that 
is why the Bureau settled precisely this way with the irrigation 
district, by saying, OK, the whole thing really is in jeopardy. We 
acknowledge that you needed to fulfill your obligation earlier, which 
is part of this settlement.
  The irrigation district has some claims currently on the extension 
unit against the Bureau in excess of $4 million. The current value of 
the extension unit is slightly over $4 million. In other words, it is 
about a wash. When you sit down and negotiate these things, they say, 
OK, let us just kind of wash these things out.
  In return for that, of course, you have to assume all of the 
liabilities and all of the obligations heretofore, and if there are any 
claims against the irrigation district, you cannot come back to the 
Federal Government and ask for relief.
  So the irrigation district, after being under Federal Bureau law for 
all these years, is really assuming quite an obligation that could 
happen, because they are going to have to clean up this district, that, 
I might add, their operation and maintenance has increased by some 200 
percent over the period of time that this project started. So there has 
been a real time cost to those irrigators.
  I can tell you, if you are in cherries, you are in cherries and you 
are ready to harvest and all of a sudden a rainstorm comes. Believe me, 
your whole crop can be wiped out in one day. They roll the dice on this 
and unfortunately, I will not say unfortunately, I admire farmers 
because they do that. But within this district, they are assuming a 
responsibility in the future on this, and I think the fact that the 
Bureau in this dispute felt that they may in fact lose this suit, that 
is why they wanted to work out an accommodation with the irrigation 
district. I think that is why this is in the best interests, and I 
think that is why the Department of Interior and the President support 
this settlement claim.
  So I think that we can debate the merits of the gentleman's amendment 
when he brings it up later on, but I think for now, Mr. Chairman, that 
this bill, H.R. 412, needs to be adopted by this House so we can get 
this legislation passed, so that the claim can be settled before April 
15, 1997.
  Mr. DOOLITTLE. Mr. Chairman, I yield such time as he may consume to 
the gentleman from Washington [Mr. Nethercutt].
  Mr. NETHERCUTT. I thank the gentleman from California [Mr. Doolittle] 
for yielding me this time.
  Mr. Chairman, I rise in support of H.R. 412 and the American 
taxpayer. That is what really this bill is all about. I appreciate the 
leadership of the gentleman from California [Mr. Doolittle] and the 
gentleman from Washington [Mr. Hastings] on this issue.
  Frankly, I am very concerned about the future fiscal impact that 
rejecting this bill would have. The Congressional Budget Office has 
said that this bill

[[Page H1062]]

would have no effect on 1997 spending and that there would be a future 
savings to current law if this bill is passed. I think we need to look 
carefully at really the background of this case, as Congressman 
Doolittle and Congressman Hastings have set forth. This was a 
settlement agreement by the administration, the administration that the 
gentleman from California [Mr. Miller] I believe supports more often 
than not, and I find myself not always in agreement with this 
administration on matters of policy but in this one they are right.
  I have been practicing law for years and I know that a settlement is 
a good settlement if both parties agree, and it saves everybody a lot 
of time and effort and liability and exposure and money in the future, 
and that is really what this is about. We are going to have a savings 
of $51 million plus legal fees ranging up to $1 million. So I think 
that is something that all of us ought to take into great account as we 
decide whether this is a good bill or a bad.
  Another thing that is very important, in my judgment, is that if this 
irrigation district wins only a partial settlement the U.S. taxpayers 
are still liable for whatever the court decides. The Bureau of 
Reclamation has stated that they are probably liable for at least $4 
million, but that is only an estimate.
  My judgment is, let us get this settled, let us move on. If the 
United States were to win this lawsuit and not be liable for the $51 
million of exposure that they have, the taxpayers would still have to 
pay to maintain and operate these facilities. Taxpayer dollars can be 
better spent, Mr. Chairman, and the Colville Confederated Tribe in my 
district supports this, the Oroville-Tonasket Facilities District 
supports this, the Federal Government, Mr. Clinton, Mr. Babbitt support 
this. We should support it, too. Let the local officials of this 
irrigation district run this project. Repair the damage that exists and 
make it work for the farmers of this area.
  Mr. Chairman, I conclude certainly by saying this is a cost saver. 
This is a taxpayer saving by passage of this bill. I urge my colleagues 
to support it.
  Mr. YOUNG of Alaska. Mr. Chairman, I rise in strong support of H.R. 
412, Congressman Doc Hastings' bill to approve a settlement in a 
lawsuit filed by the Oroville-Tonasket Irrigation District against the 
Bureau of Reclamation.
  This is a lawsuit which should not have happened. The Bureau of 
Reclamation was charged with designing and building an irrigation 
system for the District in north-central Washington State. Although the 
original canal and flume system date from the early 1900's, Congress 
has authorized rehabilitation, repair, redesign, and construction of 
new works in 1962, 1976, and 1987 in ever increasing amounts. But the 
system has never worked as promised. In 1990, the Bureau told the 
District that it was washing its hands of the system and sought 
repayments of approximately $300,000 per year for the District's small 
share of the project. However, the District refused payment, arguing 
that the irrigation system does not work as planned and that the 
project operation and maintenance costs were much higher than the 
Bureau of Reclamation had led them to believe. The District has filed 
two lawsuits in this case, the latest seeking $51 million in damages 
and forgiveness of its repayment obligations.
  I don't blame the District for withholding payment, because as you 
can see from the photographs of the project displayed in the chamber, 
this project is a turkey. I am also embarrassed for the Bureau, which 
has had decades to make this irrigation system work and failed. The 
District believes it can make the system deliver usable water by 
repairing it at a lower cost than the Federal Government. The 
Government agrees and is also seeking to be relieved of what could be 
substantial liability for this faulty system.
  CBO believes enactment of H.R. 412 will probably save the U.S. 
Treasury and the taxpayers money. The vast majority of the project 
costs are not borne by the District, but the Bonneville Power 
Administration and by any calculation the District is foregoing much 
more in claims than is the Federal Government. This is not a give-away 
of a Federal asset, as some might have you believe.
  Therefore, I ask Members to support H.R. 412 as reported from the 
Committee on Resources. The bill has bipartisan support from Members, 
the Administration, and even Citizens Against Government Waste. Let's 
put an end to this public works nightmare and settle what could be an 
expensive, protracted lawsuit.
  Mr. DOOLITTLE. Mr. Chairman, I have no further requests for time, and 
I yield back the balance of my time.
  Mr. MILLER of California. Mr. Chairman, I have no further requests 
for time, and I yield back the balance of my time.
  Mr. DOOLITTLE. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly the Committee rose; and the Speaker pro tempore (Mr. 
Hastings of Washington) having assumed the chair, Mr. Everett, Chairman 
of the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration the bill (H.R. 412) 
to approve a settlement agreement between the Bureau of Reclamation and 
the Oroville-Tonasket Irrigation District, had come to no resolution 
thereon.

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