[Congressional Record (Bound Edition), Volume 150 (2004), Part 9]
[Senate]
[Pages 12138-12139]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               CBO REPORT

  Mr. DOMENICI. Mr. President, at the time S. Rep. No. 108-269 was 
filed, the Congressional Budget Office report was not available. At the 
following link, ftp://ftp.cho.gov/54xx/doc5479/s1582.pdf, the CBO 
report for S. 1582 is now available on their Web site, and I ask 
unanimous consent that the CBO cost estimate be printed in the Record 
for the information of the Senate.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:
     S. 1582--Valles Caldera Preservation Act of 2004
       Summary: Public Law 106-248 established the Valles Caldera 
     Preserve in New Mexico. That law also established the Valles 
     Caldera Trust, a government-owned corporation, to manage the 
     preserve. S. 1582 would make several changes to Public Law 
     106-248. One of those changes would authorize the Secretary 
     of Agriculture to acquire, by taking, certain subsurface 
     rights to the Baca Ranch, which lies within the preserve. 
     Under the bill, the owners of those subsurface rights would 
     be entitled to just compensation as determined by a court.
       CBO estimates that S. 1582 would increase direct spending 
     by about $3 million in 2007. Enacting the bill would not 
     affect revenues. S. 1582 contains no intergovernmental 
     mandates as defined in the Unfunded Mandates Reform Act 
     (UMRA) and would have no significant impact on the budgets of 
     state, local, or tribal governments.

[[Page 12139]]

       In the event that the Secretary of Agriculture uses a 
     declaration of taking to acquire certain mineral interests of 
     the Baca Ranch, such an acquisition would constitute a 
     private-sector mandate as defined by UMRA. The cost of the 
     mandate would be the fair market value of the mineral 
     interests and expenses incurred by the private-sector owners 
     in transferring those interests to the federal government. 
     Based on information from government sources, CBO estimates 
     that the direct cost of the mandate would fall well below the 
     annual threshold established by UMRA for private-sector 
     mandates ($120 million in 2002, adjusted annually for 
     inflation).
       Estimated Cost to the Federal Government: The estimated 
     budgetary impact of S. 1582 is shown in the following table. 
     The costs of this legislation fall within budget function 300 
     (natural resources and environment) and 800 (general 
     government).

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                                                                                        By fiscal year, in millions of dollars--
                                                               -----------------------------------------------------------------------------------------
                                                                  2005     2006     2007     2008     2009     2010     2011     2012     2013     2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Estimated budget authority....................................        0        0        1        0        0        0        0        0        0        0
Estimated outlays.............................................        0        0        3        0        0        0        0        0        0        0
--------------------------------------------------------------------------------------------------------------------------------------------------------

       Basis of Estimate: For this estimate, CBO assumes that S. 
     1582 will be enacted near the start of fiscal year 2005 and 
     that the federal government will assume ownership of the 
     subsurface rights soon thereafter. Based on information from 
     the Department of the Interior about the length of time 
     typically required to resolve similar cases, we assume that a 
     court would award a total of $3 million in compensation to 
     the owners of those subsurface rights during fiscal year 
     2007.
       According to the Forest Service, the appraised value of the 
     subsurface rights to be taken is about $2 million. In 
     addition, based on information about historical differences 
     between federal appraisals and amounts awarded by courts to 
     compensate takings of private property in New Mexico, CBO 
     estimates that an additional $1 million would be awarded to 
     the owners of those subsurface rights. Hence, we estimate 
     that payments to those parties would total about $3 million 
     in 2007.
       S. 1582 specifies two sources of funds to make that 
     payment. First, the bill would require the Forest Service to 
     use existing funds to compensate the owners of the subsurface 
     rights for the appraised value of those rights. Second, S. 
     1582 would provide authority to use the Claims and Judgments 
     Fund to pay additional amounts awarded by the court. For this 
     estimate, CBO assumes that the agency would use $2 million of 
     funds appropriated for land acquisition in fiscal year 2004--
     funds that CBO estimates are available but not likely to be 
     spent under current law--to pay a portion of the compensation 
     amount. Hence, we estimate that the bill would provide new 
     budget authority of $1 million in 2007.
       Estimated Impact on State, Local, and Tribal Governments: 
     S. 1582 contains no intergovernment mandates as defined in 
     UMRA and would have no significant impact on the budgets of 
     state, local, or tribal governments.
       Estimated Impact on the Private Sector: In the event that 
     the Secretary of Agriculture uses a declaration of taking to 
     acquire certain mineral interests of the Baca Ranch, such an 
     acquisition would constitute a private-sector mandate as 
     defined by UMRA. The cost of the mandate would be the fair 
     market value of the mineral interests and expenses incurred 
     by the private-sector owners in transferring those interests 
     to the federal government. Based on information from 
     government sources, CBO estimates that the direct cost of the 
     mandate would fall well below the annual threshold 
     established by UMRA for private-sector mandates ($120 million 
     in 2002, adjusted annually for inflation).
       The bill would direct the Secretary of Agriculture to 
     acquire the mineral interests without the seller's consent 
     should negotiations for a sale fail after 60 days. Should 
     those negotiations fail, the Secretary of Agriculture would 
     be required to file a declaration of taking with the court. 
     The declaration of taking would force the owners of the 
     geothermal and mineral interests to give up ownership in 
     exchange for a sum equal to the fair market value as 
     determined by the court. As noted above, an appraisal done by 
     the Forest Service in 2001 concluded that the privately held 
     mineral and geothermal interests on the Baca Ranch have a 
     fair market value of almost $2 million. In December 2001, the 
     Forest Service's offer for purchase of the interests based on 
     this appraisal was rejected.
       Estimate Prepared by: Federal Costs: Megan Carroll. Impact 
     on State, Local, and Tribal Governments: Marjorie Miller. 
     Impact on the Private Sector: Selena Caldera.
       Estimate Approved by: Peter H. Fontaine, Deputy Assistant 
     Director for Budget Analysis.

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