[House Report 104-768]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-768
_______________________________________________________________________


 
                      SLY PARK UNIT CONVEYANCE ACT
                                _______
                                

 September 4, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3903]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill 
(H.R. 3903) to require the Secretary of the Interior to sell 
the Sly Park Dam and Reservoir, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

  The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Sly Park Unit Conveyance Act''.

SEC. 2. DEFINITIONS.

          For purposes of this Act:
          (1) The term ``El Dorado Irrigation District'' or 
        ``District'' means a political subdivision of the State of 
        California duly organized, existing, and acting pursuant to the 
        laws thereof with its principal place of business in the city 
        of Placerville, El Dorado County, California.
          (2) The term ``Secretary'' means the Secretary of the 
        Interior.
          (3) The term ``Sly Park Unit'' means the Sly Park Dam and 
        Reservoir, Camp Creek Diversion Dam and Tunnel and conduits and 
        canals as authorized under the Act entitled ``An Act to 
        authorize the American River Basin Development, California, for 
        irrigation and reclamation, and for other purposes'', approved 
        October 14, 1949 (63 Stat. 852 chapter 690), together with all 
        other facilities owned by the United States including those 
        used to convey and store water delivered from Sly Park, as well 
        as all recreation facilities associated thereto.

SEC. 3. SALE OF THE SLY PARK UNIT.

    (a) The Secretary shall, on or before December 31, 1997, and upon 
receipt of the payment for the original construction debt described in 
subsection (b), sell and convey to the El Dorado Irrigation District 
all right, title, and interest of the United States in and to the Sly 
Park Unit. At the time the Sly Park Unit is conveyed, the Secretary 
shall also transfer and assign to the District the water rights 
relating to the Sly Park Unit held in trust by the Secretary for 
diversion and storage under California State permits numbered 2631 and 
12258 and other valid permits issued by the California State Water 
Resources Control Board.
    (b) The sale price for the Sly Park Unit shall be $2,600,000. 
Payment shall be deposited as miscellaneous receipts in the Treasury. 
Payment of such price shall extinguish all payment obligations under 
contract numbered 14-06-200-949IR1 between the District and the 
Secretary.
    (c) The terms of the transfer shall include a commitment by the El 
Dorado Irrigation District to continue to use and operate the facility 
for the existing purposes following the transfer. If the District 
chooses to alter the operations or uses in the future it shall comply 
with all applicable laws or regulations governing such changes at that 
time.

SEC. 4. CERTAIN CONTRACT OBLIGATIONS NOT AFFECTED.

    The sale of the Sly Park Unit under this Act shall not affect the 
payment obligations of the District under the contract between the 
District and the Secretary numbered 14-06-200-7734, as amended by 
contracts numbered 14-06-200-4282A and 14-06-200-8536A.

SEC. 5. TREATMENT OF SALES FOR PURPOSES OF CERTAIN LAWS.

    (a) The sales of assets under this Act shall not be considered a 
disposal of Federal surplus property under the following provisions of 
law:
        (1) Section 203 of the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 484).
        (2) Section 13 of the Surplus Property Act of 1944 (50 U.S.C. 
        App. 1622).
    (b) The Congress specifically finds that (1) the sale, conveyance 
and assignment of the Sly Park Unit and water rights under this Act 
involves the transfer of the ownership and operation of an existing 
ongoing water project, (2) the Sly Park Unit will continue to be 
operated for the existing purposes following the transfer, pursuant to 
section 3(c) of this Act, and (3) the sale, conveyance and assignment 
of the Sly Park Unit and water rights does not involve any additional 
growth or expansion of the Project or other environmental impacts. The 
sale, conveyance and assignment of the Sly Park Unit and water rights 
is consistent with the National Environmental Policy Act of 1969 (42 
U.S.C. 4332) and the Endangered Species Act of 1973 (16 U.S.C. 1531 et 
seq.) without additional environmental review and, consequently, no new 
environmental documentation is required pursuant to such Acts.

SEC. 6. PAYMENTS INTO THE CENTRAL VALLEY PROJECT RESTORATION FUND.

    The El Dorado Irrigation District shall continue to make payments 
into the Central Valley Project Restoration Fund for 35 years after 
enactment of the Act. The District's obligation shall be calculated in 
the same manner as Central Valley Project water contractors.

SEC. 7. RECLAMATION ACT APPLICABILITY.

    Upon conveyance of the title to the Sly Park Unit, the El Dorado 
Irrigation District shall no longer be subject to the Reclamation Act 
of 1902 (82 Stat. 388) and all Acts amendatory thereof or supplemental 
thereto, except as provided in section 7 of this Act.

                          PURPOSE OF THE BILL

    The purpose of H.R. 3903 is to direct the Secretary of the 
Interior to sell the Sly Park Dam and Reservoir to the El 
Dorado Irrigation District under certain specified terms and 
conditions.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 3903 provides for the sale and conveyance by the 
Secretary of the Interior of the Sly Park Unit of the Central 
Valley Project (CVP) to the El Dorado Irrigation District, 
Placerville, El Dorado County, California. This bill directs 
the Secretary, within one year of enactment, to sell and convey 
the facilities, and to transfer and assign the water rights 
relating to the Unit which are held in trust by the Secretary 
for the project beneficiaries.
    The sale and transfer of these assets out of Federal 
ownership is consistent with Phase II of the Administration's 
``Reinventing Government'' initiative. In March 1995, as part 
of the Reinventing Government program, the Department of the 
Interior announced that it would pursue an aggressive program 
to transfer Bureau of Reclamation facilities out of federal 
ownership. The Administration has yet to transmit any 
legislation for Reclamation project transfers to the Congress, 
but the Committee believes that this transfer furthers the goal 
of the Reinventing Government initiative.
    The Sly Park Unit was originally authorized under the 
American River Act of October 14, 1949. The Unit includes Sly 
Park Dam and Jenkinson Lake on Sly Park Creek, Camp Creek 
Diversion Dam on Cam Creek, and Camino Conduit. Upon completion 
in1955, the operation of the facilities was transferred to the 
El Dorado Irrigation District. The District is the major water 
supplier in El Dorado County, providing service throughout a 
200 square-mile area in the western part of the County. In 
cooperation with the Bureau of Reclamation, the District 
operates the Sly Park Recreation Area, which offers camping, 
boating, swimming, picnicking and fishing.
    Under provisions of the bill, the sale price is set at $2.6 
million. Transfer of title to the facilities will occur upon 
the signing of an agreement to carry out the sale. The sale of 
the Sly Park Unit under the bill would not affect the payment 
obligation of the District under an additional contract it has 
with the Secretary of the Interior. Payments under that 
contract will continue under the terms of the contract.
    Power customers of the CVP had raised concerns that since 
their contributions to the CVP Restoration Fund are not capped, 
their contributions would be increased to compensate for the 
fact that the El Dorado Irrigation District would no longer be 
paying into the Fund. The Committee has addressed this concern 
by requiring the El Dorado Irrigation District to continue 
making payments into the Fund for 35 years after title is 
transferred.
    This bill is not intended as a precedent for federal policy 
regarding transfer of project facilities from other units of 
the CVP or any other Bureau of Reclamation project. The Sly 
Park Unit presents a unique situation with respect to its 
physical isolation from other CVP units, and due to the long 
history of project transfer discussions and legislative 
proposals. The Congress and this Committee will consider other 
facility transfer proposals in the future on the basis of the 
individual policy issues presented by those proposals.
    Language similar to H.R. 3903 was approved by the Congress 
as part of the fiscal year 1996 Budget Reconciliation package 
which was vetoed by the President. In addition, language 
providing for the sale of the Sly Park Unit, under different 
conditions, was passed by the House in 1991 as a part of H.R. 
429, the Reclamation Projects Authorization and Adjustment Act 
of 1991. However, the sale was not included in the final public 
law, Public Law 102-575.

                            COMMITTEE ACTION

    On June 15, 1995, the Subcommittee on Water and Power 
Resources of the Committee on Resources held an oversight 
hearing on the possible transfer of Reclamation facilities out 
of federal ownership. At that hearing, the Board Director of 
the El Dorado Irrigation District testified about the 
District's ongoing efforts to acquire title to the Sly Park 
Unit facilities.
    The Subcommittee on Water and Power Resources marked up a 
Subcommittee Print of legislation to direct the sale of the Sly 
Park Unit on July 11, 1996, which was ordered reported to the 
Full Committee by voice vote.
    H.R. 3903 was subsequently introduced on July 25, 1996, by 
Congressman John T. Doolittle (R-CA). The bill, as introduced, 
was nearly identical to the Subcommittee Print directing the 
Secretary of the Interior to sell the Sly Park Dam and 
Reservoir. Changes were made to clarify contract and water 
permit numbers, and to clarify that the project will be 
operated in accordance with state water law in the future.
    H.R. 3903 was referred to the Committee on Resources, and 
held at the full Committee. On August 1, 1996, the Full 
Resources Committee met to consider H.R. 3903. Congressman 
Doolittle offered an amendment en bloc to: specify that the 
terms of the transfer shall include a commitment by the El 
Dorado Irrigation District to continue to use and operate the 
facility for the existing purposes following the transfer; 
stipulate that the sales price for the Sly Park Unit shall be 
$2.6 million and that payment shall be deposited as 
miscellaneous receipts in the Treasury; clarify the 
Congressional findings section; add a new section to require 
the District to continue to make payments for 35 years into the 
Central Valley Project Restoration Fund; and add a new section 
stating that upon conveyance of the Unit's title to the 
District, the District shall no longer be subject to the 
Reclamation Act of 1902. The en bloc amendment was adopted by 
voice vote. The bill as amended was then ordered favorably 
reported to the House of Representatives by voice vote.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    The short title of the bill is the ``Sly Park Unit 
Conveyance Act''.

Section 2. Definitions

    This section defines the Sly Park Unit to include the Sly 
Park Dam and Reservoir, Camp Creek Diversion Dam and Tunnel and 
conduits and canals as authorized under the Act entitled ``An 
Act to authorize the American River Basin Development, 
California, for irrigation and reclamation, and for other 
purposes,'' and all other facilities owned by the U.S. 
including those used to convey and store water delivered from 
Sly Park and the associated recreation facilities.

Section 3. Sale of the Sly Park Unit

    This section requires the Secretary of the Interior to 
sell, no later than December 31, 1997, the Sly Park Unit to the 
El Dorado Irrigation District for $2.6 million, and directs 
that the payment be deposited as miscellaneous receipts in the 
Treasury.
    The section requires the Secretary of the Interior to 
transfer to the El Dorado Irrigation District water rights 
relating to the Sly Park Unit for diversion and storage under 
California State permits numbered 2631 and 12258 and other 
permits issued by the California State Water Resources Control 
Board.
    Finally, the section stipulates that the terms of the 
transfer shall include a commitment by the El Dorado Irrigation 
District to continue to use and operate the facility for the 
existing purposes following the transfer.

Section 4. Certain contract obligations not affected

    The sale of the Sly Park Unit does not affect the payment 
obligations of the El Dorado Irrigation District under the 
distribution system loan contract between the District and the 
Secretary of the Interior numbered 14-06-200-7734, as amended 
by contracts numbered 14-06-200-4282A and 14-06-200-8536A.

Section 5. Treatment of sales for purposes of certain laws

    The sale of the Sly Park Unit is not considered to be 
disposal of Federal surplus property under the provisions of 
Section 203 of the Federal Property and Administrative Services 
Act of 1949 and Section 13 of the Surplus Property Act of 1944.
    This section declares that the sale, conveyance and 
assignment of the Sly Park Unit and water rights involves the 
transfer of the ownership and operation of an existing ongoing 
water project, that since the Sly Park Unit will continue to be 
operated for the existing purposes following the transfer in 
accordance with section 3 of this Act, and that the sale, 
conveyance and assignment of the Unit and water rights does not 
involve expansion of the project or other environmental 
impacts.
    The sale of the Unit and water rights is found, without 
additional environmental review, to be consistent with the 
National Environmental Policy Act of 1969 and the
    Endangered Species Act of 1973, and no additional 
environmental documentation is required pursuant to the Acts.

Section 6. Payments into the Central Valley Project Restoration Fund

    The El Dorado Irrigation District shall continue to make 
payments into the Central Valley Project Restoration Fund for 
35 years after enactment of the Act. The District's obligation 
shall be calculated in the same manner as CVP water 
contractors.

Section 7. Reclamation act applicability

    Upon conveyance of the title to the Sly Park Unit, the El 
Dorado Irrigation District shall no longer be subject to the 
Reclamation Act of 1902 (82 Stat. 388) and all Acts amendatory 
thereof or supplemental thereto, except that the District shall 
continue to make payments into the restoration fund.

            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                     INFLATIONARY IMPACT STATEMENT

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 3903 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                        COST OF THE LEGISLATION

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 3903. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     COMPLIANCE WITH HOUSE RULE XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.R. 
3903 does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in tax 
expenditures. If enacted, H.R. 3903 would result in asset sale 
proceeds of $2.6 million in 1998, but would also result in loss 
of receipts of $200,000 a year from 1998-2022.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 3903.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
3903 from the Director of the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, August 22, 1996.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3903, the Sly Park 
Unit Conveyance Act.
    Enacting H.R. 3903 would affect direct spending. Therefore, 
pay-as-you-go procedures would apply to the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

    1. Bill number: H.R. 3903.
    2. Bill title: Sly Park Unit Conveyance Act.
    3. Bill status: As ordered reported by the House Committee 
on Resources on August 1, 1996.
    4. Bill purpose: H.R. 3903 would direct the Secretary of 
the Interior, acting through the Bureau of Reclamation, to sell 
the Sly Park water supply unit and transfer all associated 
water rights to the El Dorado Irrigation District (the 
District) for $2.6 million on or before December 31, 1997. The 
payment would be deposited as a miscellaneous receipt to the 
Treasury and would extinguish all obligations of the District 
to repay federal investments in the water supply unit.
    5. Estimated cost to the Federal Government: CBO estimates 
that enacting the bill would result in asset sale proceeds of 
$2.6 million in 1998 but would result in a loss of receipts of 
about $0.2 million a year over the 1998-2022 period. Receipts 
from the Sly Park Unit represent a very small portion of the 
federal receipts collected under water supply and repayment 
contracts managed by the Bureau of Reclamation. (The total 
amount of such payments is currently about $160 million a 
year.) The following table summarizes the estimated budgetary 
effects of H.R. 3903.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                              1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                                ASSETS SALES \1\                                                
                                                                                                                
Estimated budget authority................................  .......       -3  .......  .......  .......  .......
Estimated outlays.........................................  .......       -3  .......  .......  .......  .......
                                                                                                                
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Estimated budget authority................................  .......    (\2\)    (\2\)    (\2\)    (\2\)    (\2\)
Estimated outlay..........................................  .......    (\2\)    (\2\)    (\2\)    (\2\)    (\2\)
----------------------------------------------------------------------------------------------------------------
\1\ Under the 1997 budget resolution, proceeds from asset sales are counted in the budget totals for purposes of
  Congressional scoring. Under the Balanced Budget Act, however, proceeds from asset sales are not counted in   
  determining compliance with the discretionary limits or pay-as-you-go requirement.                            
\2\ Less than $500,000.                                                                                         

    The costs of this bill fall within budget function 300.
    6. Basis of estimate: For the purpose of this estimate, CBO 
assumes that the District would purchase the Sly Park Unit for 
$2.6 million, the price specified in the bill, and that the 
transaction would occur by the end of the first quarter of 
fiscal year 1998. That payment would extinguish all obligations 
of the District to repay federal investments in the water 
supply unit. This would result in a loss of receipts totaling 
about $0.2 million a year over the 1998-2022 period.
    7. Pay-as-you-go considerations: Section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985 sets 
up pay-as-you-go procedures for legislation affecting direct 
spending or receipts through 1998. CBO estimates that enacting 
H.R. 3903 would affect direct spending because the government 
would forgo offsetting receipts of about $0.2 million a year 
after the unit is sold to the District early in fiscal year 
1998. Hence, the first year of such a receipt loss would be 
1998. The proceeds from nonroutine asset sales do not count as 
an offset to direct spending for pay-as-you-go purposes under 
current law. Therefore, the asset sale receipts of $2.6 million 
are not included in the following table that summarizes the 
bill's estimated pay-as-you-go impact.

                [By fiscal year, in millions of dollars]                
------------------------------------------------------------------------
                                            1996       1997       1998  
------------------------------------------------------------------------
Change in outlays......................          0          0          0
Change in receipts.....................      (\1\)      (\1\)      (\1\)
------------------------------------------------------------------------
\1\ Not applicable.                                                     

    7. Estimated impact on State, local, and tribal 
governments: H.R. 3903 contains no intergovernmental mandates 
as defined in the Unfunded Mandates Reform Act of 1995 (Public 
Law 104-4) and would impose no costs on state, local, or tribal 
governments. This transaction would be voluntary on the part of 
the El Dorado Irrigation District.
    9. Estimated impact on the private sector: This bill would 
impose no new private-sector mandates as defined in Public Law 
104-4.
    10. Previous CBO estimate: On November 16, 1995, CBO 
provided an estimate for the conference report on H.R. 2491, 
the Balanced Budget Act of 1995, which also would direct the 
Secretary of the Interior to sell the Sly Park Unit. 
Differences between that estimate and the estimate for H.R. 
3903 reflect differences in the provisions regarding the terms 
of the sale.
    11. Estimate prepared by: Federal Cost Estimate: Gary 
Brown. Impact on State, Local, and Tribal Governments: Marjorie 
Miller. Impact on the Private Sector: Amy Downs.
    12. Estimate approved by: Peter Fontaine, for Paul N. Van 
de Water, Assistant Director for Budget Analysis.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    H.R. 3903 contains no unfunded mandates.

                        CHANGES IN EXISTING LAW

    If enacted, H.R. 3903 would make no changes in existing 
law.
                     ADDITIONAL VIEWS ON H.R. 3903

    H.R. 3903 as reported by the Committee represents some 
significant improvements over the language of the bill as 
introduced. The price that the El Dorado Irrigation District 
will pay for the Sly Park Unit has been increased to more 
closely reflect the present value of payments that would have 
been received by the federal Treasury over the next 35 years if 
the project were not transferred. (The exact amount of future 
receipts is impossible to state with certainty, since it 
depends in part upon the amount of municipal and industrial 
water use by the District in the future and future ratesetting 
policies for municipal and industrial water.) Another change 
ensures that the District will retain its obligation to 
contribute to funding the Central Valley Project Restoration 
Fund over the next 35 years, rather than passing that 
obligation onto other project beneficiaries--an obligation that 
likely would have been born by project power customers. In 
addition, language that might have been construed to override 
California state water law has been removed.
    However, a significant problem remains with the bill; it 
explicitly overrides the provisions of the National 
Environmental Policy Act and the Endangered Species Act with 
respect to the sale of the Sly Park Unit, declaring by 
legislative fiat that existing environmental documentation is 
sufficient to meet the requirements of those laws. Under normal 
application of these two environmental laws, the determination 
of what environmental analysis is sufficient would be left to 
the relevant agencies--the Bureau of Reclamation and the U.S. 
Fish and Wildlife Service. Instead, this bill substitutes a 
legislative judgment that existing environmental analysis is 
sufficient, although the Committee has received no evidence 
regarding the sufficiency of the analysis or the potential 
environmental impacts of the transfer.
    In fact, H.R. 3903 places no restrictions on future 
operation of the Sly Park Unit, and thus the environmental 
implications of the transfer cannot be determined without a 
study of potential operating changes following transfer. As 
recently as last year, the Bureau of Reclamation and the Fish 
and Wildlife Service conducted a formal Endangered Species Act 
section 7 consultation on renewal of the Bureau's contract with 
the El Dorado Irrigation District. The environmental values 
represented by our federal environmental laws will be upheld 
only if the agencies are free to explore the environmental 
impacts of this more permanent facility transfer.
    The problem with this environmental language might have 
been resolved earlier if this bill had followed the normal 
legislative process of introduction, hearings and mark-up. 
Instead, the bill was rushed before the Committee less than a 
week after introduction; the Subcommittee on Water and Power 
Resources had previously acted to mark up a similar 
``Subcommittee Print'' on two days' notice. No legislative 
hearings have been held in this Committee on Sly Park transfer 
since 1991. (The testimony of a single witness in a June 1995 
oversight hearing is simply not sufficient to explore the need 
for and implications of this detailed legislative proposal.)
    The serious problem of overrides of federal environmental 
laws should be resolved as H.R. 3903 moves through the 
legislative process.
                                                     George Miller.