[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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