[Congressional Record Volume 146, Number 134 (Tuesday, October 24, 2000)]
[Senate]
[Pages S10926-S10931]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS OF INTRODUCED BILLS AND JOINT RESOLUTIONS

      Mr. EDWARDS (for himself, Mr. Jeffords, and Mr. Leahy):
  S. 3228. A bill to promote the development of affordable, quality 
rental housing in rural areas for low-income households; to the 
Committee on Banking, Housing, and Urban Affairs.


                  THE RURAL RENTAL HOUSING ACT OF 2000

  Mr. EDWARDS. Mr. President, I rise to introduce legislation to 
promote the development of affordable, quality rental housing for low-
income households in rural areas. I am pleased, along with Senator 
Jeffords and Senator Leahy, to introduce the ``Rural Rental Housing Act 
of 2000.''
  There is a pressing and worsening need for quality rental housing for 
rural families and senior citizens. As a group, residents of rural 
communities are the worst housed of all our citizens. Rural areas 
contain approximately 20 percent of the nation's population as compared 
to suburbs with 50 percent. Yet, twice as many rural American families 
live in bad housing than in the suburbs. An estimated 2,600,000 rural 
households live in substandard housing with severe structural damage or 
without indoor plumbing, heat, or electricity.
  Substandard housing is a particularly grave problem in the rural 
areas of my home state of North Carolina. Ten percent or more of the 
population in five of North Carolina's rural counties live in 
substandard housing. Rural housing units, in fact, comprise 60 percent 
of all substandard units in the state.
  Even as millions of rural Americans live in wretched rental housing, 
millions more are paying an extraordinarily high price for their 
housing. One out of every three renters in rural America pays more than 
30 percent of his or her income for housing; 20 percent of rural 
renters pay more than 50 percent of their income for housing.
  Most distressing is when people living in housing that does not have 
heat or indoor plumbing pay an extraordinary amount of their income in 
rent. Over 90 percent of people living in housing in the worst 
conditions pay more than 50 percent of their income for housing costs.
  Unfortunately, our rural communities are not in a position to address 
these problems alone. They are disproportionately poor and have fewer 
resources to bring to bear on the issue. Poverty is a crushing, 
persistent problem in rural America. One-third of the non-metropolitan 
counties in North Carolina have 20 percent or more of their population 
living below the poverty line. In contrast, not a single metropolitan 
county in North Carolina has 20 percent or more of its population 
living below the poverty line. Not surprisingly, the economies of rural 
areas are generally less diverse, limiting jobs and economic 
opportunity. Rural areas have limited access to many forces driving the 
economy, such as technology, lending, and investment, because they are 
remote and have low population density. Banks and other investors, 
looking for larger projects with lower risk, seek metropolitan areas 
for loans and investment. Credit in rural areas is often more expensive 
and available at less favorable terms than in metropolitan areas.
  Given the magnitude of this problem, it is startling to find that the 
federal government is turning its back on the situation. In the face of 
this challenge, the federal government's investment in rural rental 
housing is at its lowest

[[Page S10927]]

level in more than 25 years. Federal spending for rural rental housing 
has been cut by 73 percent since 1994. Rural rental housing unit 
production financed by the federal government has been reduced by 88 
percent since 1990. Moreover, poor rural renters do not fair as well as 
poor urban renters in accessing existing programs. Only 17 percent of 
very low-income rural renters receive housing subsidies, compared with 
28 percent of urban poor. Rural counties fared worse with Federal 
Housing Authority assistance on a per capita basis, as well, getting 
only $25 per capita versus $264 in metro areas. Our veterans in rural 
areas are no better off: Veterans Affairs housing dollars are spent 
disproportionately in metropolitan areas.
  To address the scarcity of rural rental housing, I believe that the 
federal government must come up with new solutions. We cannot simply 
throw money at the problem and expect the situation to improve. 
Instead, we must work in partnership with State and local governments, 
private financial institutions, private philanthropic institutions, and 
the private and nonprofit sectors to make headway. We must leverage our 
resources wisely to increase the supply and quality of rural rental 
housing for low-income households and the elderly.
  Senator Jeffords, Senator Leahy, and I are proposing a new solution. 
Today, we introduce the Rural Rental Housing Act of 2000 to create a 
flexible source of financing to allow project sponsors to build, 
acquire or rehabilitate rental housing based on local needs. We demand 
that the federal dollars to be stretched by requiring State matching 
funds and by requiring the sponsor to find additional sources of 
funding for the project. We are pleased that over 70 housing groups 
from 26 states have already indicated their support for this 
legislation.
  Let me briefly describe what the measure would do. We propose a $250 
million fund to be administered by the United States Department of 
Agriculture (USDA). The funds will be allotted to states based on their 
shares of rural substandard units and of the rural population living in 
poverty. We will leverage federal funding by requiring states or other 
non-profit intermediaries to provide a dollar-for-dollar match of 
project funds. The funds will be used for the acquisition, 
rehabilitation, and construction of low-income rural rental housing.
  The USDA will make rental housing available for low-income 
populations in rural communities. The population served must earn less 
than 80 percent area median income. Housing must be in rural areas with 
populations not exceeding 25,000, outside of urbanized areas. Priority 
for assistance will be given to very low income households, those 
earning less than 50 percent of area median income, and in very low-
income communities or in communities with a severe lack of affordable 
housing. To ensure that housing continues to serve low-income 
populations, the legislation specifies that housing financed under the 
legislation must have a low-income use restriction of not less than 30 
years.
  The Act promotes public-private partnerships to foster flexible, 
local solutions. The USDA will make assistance available to public 
bodies, Native American tribes, for-profit corporations, and private 
nonprofit corporations with a record of accomplishment in housing or 
community development. Again, it stretches federal assistance by 
limiting most projects from financing more than 50 percent of a project 
cost with this funding. The assistance may be made available in the 
form of capital grants, direct, subsidized loans, guarantees, and other 
forms of financing for rental housing and related facilities.
  Finally, the Act will be administered at the state level by 
organizations familiar with the unique needs of each state rather than 
creating a new federal bureaucracy. The USDA will be encouraged to 
identify intermediary organizations based in the state to administer 
the funding provided that it complies with the provisions of the Act. 
These intermediary organizations can be states or state agencies, 
private nonprofit community development corporations, nonprofit housing 
corporations, community development loan funds, or community 
development credit unions.
  This Act is not meant to replace, but to supplement the Section 515 
Rural Rental Housing program, which has been the primary source of 
federal funding for affordable rental housing in rural America from its 
inception in 1963. Section 515, which is administered by the USDA's 
Rural Housing Service, makes direct loans to non-profit and for-profit 
developers to build rural rental housing for very low income tenants. 
Our support for 515 has decreased in recent years--there has been a 73 
percent reduction since 1994--which has had two effects. It is 
practically impossible to build new rental housing, and our ability to 
preserve and maintain the current stock of Section 515 units is 
hobbled. Fully three-quarters of the Section 515 portfolio is more than 
20 years old. Currently $60 million of the $115 million appropriation 
in fiscal year 2000 is used to preserve existing stock.
  The time has come for us to take a new look at a critical problem 
facing rural America. How can we best work to promote the development 
of quality rental housing for low-income people in rural America? My 
colleagues and I believe that to answer this question, we must comply 
with certain basic principles. We do not want to create yet another 
program with a large federal bureaucracy. We want a program that is 
flexible, that fosters public-private partnerships, that leverages 
federal funding, and that is locally controlled. We believe that the 
Rural Rental Housing Act of 2000 satisfies these principles and will 
help move us in the direction of ensuring that everyone in America, 
including those in rural areas, have access to affordable, quality 
housing options.
  Mr. President, I request that the text of the legislation be included 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 3228

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Rural Rental Housing Act of 
     2000''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) There is a pressing and increasing need for rental 
     housing for rural families and senior citizens:
       (A) Two-thirds of extremely low-income and very low-income 
     rural households do not have access to affordable rental 
     housing units.
       (B) More than 900,000 rural rental households (10.4 
     percent) live in either severely or moderately inadequate 
     housing.
       (C) Substandard housing is a problem for 547,000 rural 
     renters, and approximately 165,000 rural rental units are 
     overcrowded.
       (2) Many rural United States households live with serious 
     housing problems, including a lack of basic water and 
     wastewater services, structural insufficiencies, and 
     overcrowding:
       (A) 28 percent, or 10,400,000, rural households in the 
     United States live with some kind of serious housing problem.
       (B) Approximately 1,000,000 rural renters have multiple 
     housing problems.
       (C) An estimated 2,600,000 rural households live in 
     substandard housing with severe structural damage or without 
     indoor plumbing, heat, or electricity.
       (3) One-third of all renters in rural America are paying 
     more than 30 percent of their income for housing:
       (A) 20 percent of rural renters pay more than 50 percent of 
     their income for housing.
       (B) 92 percent of all rural renters with significant 
     housing problems pay more than 50 percent of their income for 
     housing costs, and 60 percent paying more than 70 percent of 
     their income for housing.
       (4) Rural economies are often less diverse, and therefore, 
     jobs and economic opportunity are limited:
       (A) Factors existing in rural environments, such as 
     remoteness and low population density, lead to limited access 
     to many forces driving the economy, such as technology, 
     lending, and investment.
       (B) Local expertise is often limited in rural areas where 
     the economies are focused on farming and/or natural resource-
     based industries.
       (5) Rural areas have less access to credit than 
     metropolitan areas:
       (A) Banks and other investors, looking for larger projects 
     with lower risk, seek metropolitan areas for loans and 
     investment.
       (B) Often, credit that is available is insufficient, 
     leading to the need for interim or bridge financing.
       (C) Credit in rural areas is often more expensive and 
     available at less favorable terms than in metropolitan areas.
       (6) The Federal Government investment in rural rental 
     housing has dropped during the last 10 years, as--
       (A) Federal spending for rural rental housing has been cut 
     by 73 percent since 1994; and

[[Page S10928]]

       (B) Rural rental housing unit production financed by the 
     Federal Government has been reduced by 88 percent since 1990.
       (7) To address the scarcity of rural rental housing, the 
     Federal Government must work in partnership with State and 
     local governments, private financial institutions, private 
     philanthropic institutions, and the private sector, including 
     nonprofit organizations.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Eligible rural area.--The term ``eligible rural area'' 
     means a rural area with a population of not more than 25,000, 
     as determined by the most recent decennial census of the 
     United States, and located outside an urbanized area.
       (2) Eligible project.--The term ``eligible project'' means 
     a project for the acquisition, rehabilitation, or 
     construction of rental housing and related facilities in an 
     eligible rural area for occupancy by low-income families.
       (3) Eligible sponsor.--The term ``eligible sponsor'' means 
     a public agency, an Indian tribe, a for-profit corporation, 
     or a private nonprofit corporation--
       (A) a purpose of which is planning, developing, or managing 
     housing or community development projects in rural areas; and
       (B) that has a record of accomplishment in housing or 
     community development and meets other criteria established by 
     the Secretary by regulation.
       (4) Low-income families.--The term ``low-income families'' 
     has the meaning given the term in section 3(b) of the United 
     States Housing Act of 1937 (42 U.S.C. 1437a(b)).
       (5) Qualified intermediary.--The term ``qualified 
     intermediary'' means a State, a State agency designated by 
     the Governor of the State, a private nonprofit community 
     development corporation, a nonprofit housing corporation, a 
     community development loan fund, or a community development 
     credit union, that--
       (A) has a record of providing technical and financial 
     assistance for housing and community development activities 
     in rural areas; and
       (B) has a demonstrated technical and financial capacity to 
     administer assistance made available under this Act.
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Agriculture.
       (8) State.--The term ``State'' means the States of the 
     United States, the Commonwealth of Puerto Rico, the District 
     of Columbia, the Commonwealth of the Northern Mariana 
     Islands, Guam, the Virgin Islands, American Samoa, the Trust 
     Territories of the Pacific, and any other possession of the 
     United States.

     SEC. 4. RURAL RENTAL HOUSING ASSISTANCE.

       (a) In General.--The Secretary may, directly or through 1 
     or more qualified intermediaries in accordance with section 
     5, make assistance available to eligible sponsors in the form 
     of loans, grants, interest subsidies, annuities, and other 
     forms of financing assistance, to finance the eligible 
     projects.
       (b) Applications.--
       (1) In general.--To be eligible to receive assistance under 
     this section, an eligible sponsor shall submit to the 
     Secretary, or a qualified intermediary an application in such 
     form and containing such information as the Secretary shall 
     require by regulation.
       (2) Affordability restriction.--Each application under this 
     subsection shall include a certification by the applicant 
     that the house to be acquired, rehabilitated, or constructed 
     with assistance under this section will remain affordable for 
     low-income families for not less than 30 years.
       (c) Priority for Assistance.--In selecting among applicants 
     for assistance under this section, the Secretary, or a 
     qualified intermediary, shall give priority to providing 
     assistance to eligible projects--
       (1) for very low-income families (as defined in section 
     3(b) of the United States Housing Act of 1937 (42 U.S.C. 
     1437a(b)); and
       (2) in low-income communities or in communities with a 
     severe lack of affordable rental housing, in eligible rural 
     areas, as determined by the Secretary; or
       (3) applications submitted by public agencies, Indian 
     tribes, private nonprofit corporations or limited dividend 
     corporations in which the general partner is a non-profit 
     entity whose principal purposes include planning, developing 
     and managing low-income housing and community development 
     projects.
       (d) Allocation of Assistance.--In carryout out this 
     section, the Secretary shall allocate assistance among the 
     States, taking into account the incidence of rural sub-
     standard housing and rural poverty in each State and the 
     State's share of the national total of such indices.
       (e) Limitations on Amount of Assistance.--
       (1) In general.--Except as provided in paragraph (2), 
     assistance made available under this Act may not exceed 50 
     percent of the total cost of the eligible project.
       (2) Exception.--Assistance authorized under this Act shall 
     not exceed 75 percent of the total cost of the eligible 
     project, if the project is for the acquisition, 
     rehabilitation, or construction of not more than 20 rental 
     housing units for use by very low-income families.

     SEC. 5. DELEGATION OF AUTHORITY.

       (a) In General.--The Secretary may delegate authority for 
     distribution of assistance to one or more qualified 
     intermediaries in the State. Such delegation shall be for a 
     period of not more than 3 years, and shall be subject to 
     renewal, in the direction of the Secretary, for 1 or more 
     additional periods of not to exceed 3 years.
       (b) Solicitation.--
       (1) In general.--The Secretary may, in the discretion of 
     the Secretary, solicit applications from qualified 
     intermediaries for a delegation of authority under this 
     section.
       (2) Contents of application.--Each application under this 
     subsection shall include--
       (A) a certification that the application will--
       (i) provide matching funds from sources other than this Act 
     in an amount that is not less than the amount of assistance 
     provided to the applicant under this section; and
       (ii) distribute assistance to eligible sponsors in the 
     State in accordance with section 4; and
       (B) a description of--
       (i) the State or the area within a State to be served;
       (ii) the incidence of poverty and substandard housing in 
     the State or area to be served;
       (iii) the technical and financial qualifications of the 
     applicants; and
       (iv) the assistance sought and a proposed plan for the 
     distribution of such assistance in accordance with section 4.

     SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

       There is authorized to be appropriated to carry out this 
     Act $250,000,000 for each of fiscal years 2001 through 2005.

  Mr. LEAHY. Mr. President, I rise today to offer my support for the 
Rural Rental Housing Act of 2000. This bill takes a much needed step 
toward reestablishing the federal government's commitment to quality 
affordable housing in rural areas and I am proud to be a cosponsor of 
this legislation.
  The need for a new federal matching grant program to encourage the 
production, rehabilitation and acquisition of rural rental housing has 
never been more evident than it is today. Families across the country 
in small towns, where property is often high and resources scarce, are 
finding themselves with fewer and fewer options for a safe and 
affordable place to live. In my home state of Vermont, like many other 
states across the country, we are in the middle of an affordable 
housing crisis. Housing costs are soaring and rental vacancy rates are 
alarmingly low. For those fortunate enough to find an apartment it is 
increasingly difficult to afford the rent that the market demands. 
Recent studies suggest that while the need for rental units continues 
to grow in Vermont, estimated production levels are drastically 
inadequate to meet demand.
  Despite this trend, the federal government has consistently scaled 
back their commitment to production and rehabilitation of rental 
housing. Rural rental production has dropped nearly 88% since 1990, and 
the funding for subsidized housing has fallen by 73% since 1994. This 
decline has made it difficult to produce new housing and maintain the 
current obligations and existing stock. In Vermont roughly 4,091 rental 
units were produced with federal assistance between 1976 and 1985, but 
during the next ten years this number fell to under two thousand--
nearly half of what was produced the decade before, despite the rising 
need.
  Nationally it is estimated that 2.6 million households live in 
substandard housing with severe structural damage or without indoor 
plumbing, heat, or electricity. Unfortunately, rural areas often have 
less appeal for investment from financial institutions and are often 
isolated from social services that are more accessible in urban areas 
to help address these problems.
  The Rural Rental Housing Act will provide $250 million dollars for a 
matching federal grant program to be administered by the United States 
Department of Agriculture to address this situation. These funds will 
complement existing programs run by the Rural Housing Service at USDA 
and will be used in a variety of ways to increase the supply, the 
affordability, and the quality of housing for the most needy residents, 
the lowest income families and the elderly. Most importantly the 
program is designed to be administered at the state and local level and 
to encourage public-private partnerships to best address the unique 
needs of each state.
  I encourage my colleagues to support this legislation and am 
committed to work with Senator Edwards to reintroduce this bill in the 
107th Congress.
                                 ______
                                 
      Mr. KERREY:
  S. 3229. A bill to amend the Internal Revenue Code of 1986 to allow a 
tax credit for the cost of certain equipment

[[Page S10929]]

used to convert public television broadcasting from analog to digital 
transmission; to the Committee on Finance.


 to establish a tax credit for public television digital transmission 
                              conversions

  Mr. KERREY. Mr. President, we often use the tax code as a tool to 
reward certain taxpayer behaviors. Today, I am pleased to introduce a 
bill that would reward the behavior of individuals or groups who step 
forward to help finance the digital transmission conversions of the 348 
public television stations across the United States.
  Mr. President, public television is an extremely important public 
good, which brings creative, non-commercial TV programming of the 
highest quality to citizens in all 50 states, Puerto Rico, the U.S. 
Virgin Islands, Guam and American Samoa. Public television is available 
to 99 percent of American homes--and serves nearly 100 million people 
each week.
  Throughout the U.S., 171 noncommercial, educational licensees operate 
348 PBS member stations. Of the 171 licensees, 87 (51%) are community 
organizations, 55 (32%) are colleges or universities, 21 (12%) are 
state authorities and 8 (5%) are local educational or municipal 
authorities.
  As my colleagues may remember, regulations promulgated by the FCC, 
pursuant to the Telecommunications Act of 1996, require all public 
television stations to convert their analog transmission equipment and 
systems to digital transmission by May 1, 2003. This is a very 
expensive--though important--Federal government mandate. The mandate is 
particularly burdensome for public television stations because, as non-
profit entities, they rely primarily on the charitable donations of 
their viewers for financial sustenance.
  In some states, all of the public television transmission equipment 
is operated and managed by an umbrella organization. In Nebraska, for 
example, Nebraska Educational Telecommunications (NET) operates nine 
transmitters and seventeen translators across the state. The cost of 
simultaneously replacing all of this equipment in a large, but sparsely 
populated, state is particularly burdensome.
  I have been working with public broadcasters in the State of Nebraska 
to reduce the financial burden imposed by this government mandate. The 
legislation I am introducing today is the product of our discussions.
  This legislation will provide a tax credit to individuals or groups 
that provide funding for the purchase or construction of qualified 
conversion equipment for a qualified public TV digital conversion 
project. Qualified conversion equipment would include: transmission 
towers, transmission equipment, production equipment (including 
cameras, recorders, software and editing systems), retransmission 
equipment, and transformers. The proposed tax credit is equal to the 
full cost of the conversion equipment, but the taxpayer will be limited 
to \1/6\th of the credit each year over a six-year period. The 
individuals or groups who fund these conversions would not be able to 
charge rents for use of the equipment or claim depreciation for the 
equipment--the tax credit would be the sole benefit.
  I am confident that citizens and groups across the United States 
would take advantage of this tax credit for the benefit of their local 
public television stations. While time is running out for action on 
this legislation during the 106th Congress, I am hopeful that the 107th 
Congress will work together with the next Administration to alleviate 
the financial burden on public television stations through the 
enactment of this legislation.
                                 ______
                                 
      Mr. KYL (for himself and Mr. McCain):
  S. 3231. A bill to provide for adjustments to the Central Arizona 
Project in Arizona, and for other purposes; to the Committee on Energy 
and Natural Resources.


                 ARIZONA WATER SETTLEMENTS ACT OF 2000

  Mr. KYL. Mr. President, on behalf of Senator McCain and myself I am 
introducing legislation today that would codify the largest water 
claims settlement in the history of Arizona. The affected parties have 
been negotiating for several years, and they are getting very close to 
finalizing these settlement agreements. They still have much work to 
do; but I am confident that a comprehensive settlement of these issues 
will be achieved. Therefore, we are introducing this bill today so that 
all interested Arizonans and others can have time to analyze the 
proposed language and make suggestions for changes that will enable us 
to submit a consensus bill early in the next session of Congress.
  There are a few major issues that have not been resolved. To the 
extent that the parties are close to agreement on certain issues, we 
have included language in the bill that attempts to capture the essence 
of where the negotiations stand at the moment. For example, although 
differences remain, the parties are relatively close to agreement on 
the process to be followed in negotiating intergovernmental agreements. 
The legislation will have to be changed, therefore, before it is 
reintroduced in the next Congress, to precisely reflect the agreement 
reached between the parties. In addition, the timing of the waivers to 
be issued by the Gila River Indian Community is tied to, among other 
things, a transfer of a minimum amount of federal funds from the Lower 
Colorado River Basin Development Fund into the Gila River Indian 
Community Settlement Development Trust Fund. The relevant parties 
recognize that the settlement agreement needs more definition of uses 
of the funds and the precise timing of the transfers, and that the 
ultimate legislative language will reflect that consensus.
  There are other issues that have not been resolved. For example, 
Section 213 of the bill has been left open for the resolution of the 
``Upper Gila Valley'' (including the City of Safford) issues. Those 
negotiations are continuing, but have not progressed enough to produce 
language that can be included in this version of the bill. In addition, 
Title IV of the bill has been left open for a possible settlement of 
the claims of the San Carlos Apache Tribe. We will work with the 
parties over the next few months to ensure that, prior to its 
reintroduction next year, the bill is modified to reflect the ultimate 
resolution of these issues. Of course, if those parties choose to 
litigate their differences, rather than settle them by negotiation, we 
will not include titles for them in the final bill.
  Mr. President, I am submitting for the Record a statement supporting 
this legislation signed by all eight members of the Arizona 
Congressional delegation. I am also submitting a letter of support from 
Arizona Governor Jane Dee Hull. I ask unanimous consent that these 
statements be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Statement of the Arizona Congressional Delegation Regarding the Arizona 
            Water Settlements Act of 2000, October 24, 2000

       We are pleased to announce that legislation was introduced 
     today to resolve issues relating to the repayment obligations 
     of the State of Arizona for construction of the Central 
     Arizona Project (CAP), allocation of remaining CAP water 
     (including the use of nearly 200,000 acre-feet of water to 
     satisfy the water rights claims of the Gila River Indian 
     Community, the Tohono O'odham Nation, and other Arizona 
     Indian tribes), and other issues, including final settlement 
     of all claims to waters of the Gila River and its 
     tributaries.
       Legislation is needed to codify several aspects of the 
     settlement of these various water related issues. Although 
     not all water users have reached agreement on all issues, 
     negotiations are continuing at a rapid pace. We, therefore, 
     expect that all of the remaining differences will be resolved 
     and settlement agreements will be signed by the parties in 
     the next two months. When final agreements are signed, we 
     intend to introduce the final version of legislation to 
     effectuate those settlements. In the meantime, we have 
     introduced this first version of legislation to demonstrate 
     our commitment to the settlement process, and to allow all 
     interested parties the time to suggest changes to precisely 
     reflect the terms of the settlement.
       One of the purposes of this legislation is to implement the 
     settlement (in lieu of adjudication) of all of the water 
     rights claims to the Gila River and its tributaries. Once 
     this legislation is enacted, and the presiding judge approves 
     the settlement, water litigation over rights to the waters of 
     the Gila River, which has been ongoing since 1978, will be 
     terminated. Resolution of this case, and of other issues 
     addressed in the settlement agreements, will help to ensure 
     that there is a more stable and certain water supply for the 
     various water users. This is a significant benefit to the 
     citizens of Arizona, the tribes, and the United States.

[[Page S10930]]

       The legislation will also resolve several issues. For 
     example, it will effectuate a settlement of litigation 
     between the state and federal government over the state's 
     repayment obligation for construction of the Central Arizona 
     Project. It also amends the Colorado River Basin Project Act 
     of 1968 to authorize the Secretary of the Interior to expend 
     funds from the Lower Colorado River Basin Development Fund to 
     construct irrigation distribution systems to deliver CAP 
     water to the Gila River Indian Community and other CAP water 
     users.
       In addition, this legislation authorizes the reallocation 
     of 65,647 acre-feet of CAP water for use by Arizona 
     communities, and the reallocation of nearly 200,000 acre-feet 
     for the settlement of Indian water claims.
       We compliment the parties for their hard work and their 
     commitment to resolving these difficult and sometimes 
     contentious issues. We hope and expect that all parties will 
     continue to negotiate in good faith to resolve the remaining 
     issues.
       Since the parties have not yet completed their 
     negotiations, this bill is, of necessity, also a work in 
     progress. We point out that some of the provisions in the 
     bill may have to be modified (e.g. Section 207 has not been 
     totally agreed to by all interested parties), and other 
     provisions will have to be added (e.g. resolution of 
     conflicts involving water users in the Upper Gila Valley, the 
     City of Safford, and the San Carlos Apache Tribe).
       We note that, while Interior staff have been active in the 
     ongoing negotiations and have served on the committees 
     drafting the bill, the Department of the Interior has not had 
     an opportunity to vet some sections of this draft prior to 
     its introduction. One reason for introducing this bill now 
     rather than waiting until the final settlement agreement has 
     been completed, is to enable Secretary Babbitt to analyze and 
     comment upon the draft legislation before he leaves office in 
     January. Secretary Babbitt has been a major participant in 
     the negotiations over the last two years; and his input into 
     the final legislation will be very important to the 
     successful conclusion of the process.
       In summary, our intention is to initiate public discussion 
     of the issues and elicit constructive comments on this bill. 
     Our plan is to reintroduce a modified form of this bill early 
     in the 107th Congress. We expect that the necessary 
     settlement agreements will be complete and signed prior to 
     reintroduction. In relation to the Gila River Indian 
     Community Settlement, we expect that all of the participants 
     named in the attached list will support the settlement 
     agreement, and the implementing legislation. Section 213 has 
     been left open for additional parties to the agreement.
       We hope that agreement can be reached to settle the claims 
     of the San Carlos Apache Tribe. Title IV has been left open 
     for this purpose. However, if the San Carlos Tribe cannot 
     reach agreement with the other parties, including the United 
     States, it is our intention to proceed without Title IV. A 
     separate San Carlos settlement will have to be pursued at a 
     later date.
       We pledge our continuing effort to work with the parties to 
     successfully conclude these historic settlements.
         John McCain, U.S. Senator; Bob Stump, Member of Congress, 
           Jon Kyl, U.S. Senator; Jim Kolbe, Member of Congress; 
           Ed Pastor, Member of Congress; Matt Salmon, Member of 
           Congress; J.D. Hayworth, Member of Congress; John 
           Shadegg, Member of Congress.
                                  ____



                        settlement participants

       Gila River Indian Community.
       United States--Department of the Interior; Department of 
     Justice.
       State of Arizona/Arizona Department of Water Resources.
       Central Arizona Water Conservation District.
       Salt River Project.
       Roosevelt Water Conservation District.
       ASARCO.
       Phelps Dodge.
       City of Mesa.
       City of Chandler.
       City of Scottsdale.
       City of Peoria.
       City of Glendale.
       City of Phoenix.
       Maricopa Stanfield Irrigation and Drainage District.
       Central Arizona Irrigation and Drainage District.
       San Carlos Irrigation and Drainage District.
       Town of Coolidge.
       Hohokam Irrigation and Drainage District.
       Gila Valley Irrigation District.
       Franklin Irrigation District.
       City of Safford.
       Town of Kearney.
       Graham County Utilities.
       Arizona State Land Department.
       Arizona Water Company.
       City of Tempe.
       Arizona Game and Fish.
       City of Casa Grande.
       Town of Gilbert.
       Town of Florence.
       Town of Duncan.
       Buckeye Irrigation Company.
       Roosevelt Irrigation District.
       New Magma Irrigation and Drainage District.
                                  ____



                                             State of Arizona,

                                                 October 11, 2000.
     Hon. Jon Kyl,
     U.S. Senate, Hart Office Building, Washington, DC.
       Dear Senator Kyl: I commend you for the introduction of the 
     draft legislation the Arizona Water Settlements Act of 2000. 
     This bill will maintain the momentum toward the completion of 
     negotiations on difficult water issues concerning the Central 
     Arizona Project, the Gila River Indian Community, the Tohono 
     O'odham Nation, and the San Carlos Apache Tribe.
       The Central Arizona Project is the lifeblood of Arizona. 
     Confirming the repayment settlement between the United States 
     and the Central Arizona Water Conservation District will 
     benefit all of Arizona's taxpayers. Confirming the agreement 
     between the Secretary of the Interior and the Arizona 
     Department of Water Resources on the allocation of CAP water 
     will provide for Arizona's future.
       It is my understanding that when this legislation is 
     reintroduced in the next congressional session, the parties 
     will approve the Gila River Indian Community settlement 
     agreement. The Governor of the State of Arizona has 
     traditionally been a signatory to Indian water rights 
     settlements and I expect to be a signatory to the Gila 
     settlement. However, I want to emphasize that I will only 
     support a complete settlement of the Gila River Indian 
     Community claims. For example, the economic well being of the 
     upper Gila River Valley communities and agricultural 
     interests is of great interest to the State of Arizona. I 
     understand that much work remains to revolve these upper 
     valley issues and I urge all the participants to reach an 
     agreement as part of the overall settlement.
       Again, I commend your efforts to move the process along, 
     and I look forward to our continued work together on Arizona 
     water resource issues.
           Sincerely,
                                                    Jane Dee Hull,
                                                         Governor.

  Mr. McCAIN. Mr. President, I am pleased to join my colleague, Senator 
Kyl, as a co-sponsor to this important legislation, the Arizona Water 
Settlements Act of 2000, to ratify a negotiated settlement for Central 
Arizona Project water allocations to municipalities, agricultural 
districts and Indian tribes in the state of Arizona. This settlement 
reflects extensive negotiations by state, federal, and tribal parties.
  Let me begin by commending the extraordinary commitment and diligence 
by all parties involved in these negotiations to reach this pivotal 
stage in the settlement process, which as I understand is near 
conclusion. I also praise my colleague, Senator Jon Kyl, and the 
Interior Secretary, Bruce Babbitt, for their front-line leadership in 
facilitating the settlement process. From my previous role in 
legislating past agreements, I recognize how challenging these 
negotiations can be, and I appreciate their personal commitment to this 
settlement process.
  This legislation is vitally important to Arizona's future because it 
will finally bring certainty and stability to Arizona's water supply by 
completing the final adjudication of the Gila River. Repayment 
obligations of the state of Arizona for construction of the Central 
Arizona Project (CAP) will be addressed as part of this bill. Pending 
water rights claims to the Gila River and its tributaries by various 
Indian tribes and non-Indian users will be permanently settled and 
allocated.
  I join Senator Kyl, and the rest of the Arizona delegation, in 
sponsoring companion bills today to express our strong support for 
continuation and conclusion of this settlement process. While much of 
the negotiations have successfully resulted in consensus language among 
the various parties, it is important to emphasize that this bill does 
not reflect the final settlement agreement. All parties recognize that 
the provisions of this bill are likely to change as the negotiations 
continue and additional parties settle remaining claims. We fully 
expect that settlement negotiations will continue with a final 
agreement ratified in the 107th congressional session.
  Mr. President, my sponsorship of this bill indicates my strong 
support for the settlement process and I expect that further 
negotiations will be carried out in good-faith among all parties. 
However, I want to be clear that my support today is not a full 
endorsement of all the provisions in this preliminary bill.
  This is a particularly important point as several provisions in this 
bill are not typical of language included in past Indian water 
settlement agreements ratified by the Congress. These noted provisions 
are intended to prescribe future off-reservation Indian trust land 
acquisitions for the Gila River Indian Community, one of the primary 
Indian parties to the settlement. Inclusion of these provisions is

[[Page S10931]]

intended to address water management concerns of the state in the event 
that the tribe removes lands from either public or private use to be 
added into federal Indian trust land status.
  Mr. President, Indian trust land acquisitions are the subject of much 
debate nationwide. In fact, the Department of Interior has proposed 
modifications to its existing regulations to address many of the same 
concerns raised by the state parties regarding potential impacts to 
resource management, loss of tax revenues, or other impacts to 
neighboring communities. These regulations have not been finalized to 
date.
  Despite my support for the overall settlement, I believe it unwise to 
include ad hoc language that applies restrictions to only one 
particular tribe when overall changes to the underlying federal law 
governing Indian trust land acquisitions have not been settled. Such 
modifications to federal Indian trust land policies should also be 
guided by the review and advice of the congressional committees of 
jurisdiction. I hope that continuing discussions on this matter will 
result in a resolution that respects both the rights of the Indian 
tribes and the state of Arizona, consistent with applicable laws.
  Mr. President, we introduce this bill today as an expression of our 
commitment to the various parties to successfully achieve conclusion to 
this process. The Arizona Water Settlements Act will be a historic 
accomplishment and one that will ultimately benefit all citizens of 
Arizona, the tribal communities, and the United States.

                          ____________________