[Senate Report 104-300]
[From the U.S. Government Publishing Office]
Calendar No. 475
104th Congress Report
SENATE
2d Session 104-300
_______________________________________________________________________
TO AMEND THE CENTRAL UTAH PROJECT COMPLETION ACT
_______
June 27, 1996.--Ordered to be printed
_______________________________________________________________________
Mr. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany H.R. 1823]
The Committee on Energy and Natural Resources, to which was
referred the Act (H.R. 1823) to amend the Central Utah Project
Completion Act to direct the Secretary of the Interior to allow
for prepayment of repayment contracts between the United States
and the Central Utah Water Conservancy District dated December
28, 1965, and November 26, 1985, and for other purposes, having
considered the same, reports favorably thereon without
amendment and recommends that the Act do pass.
Purpose of the Measure
The purpose of H.R. 1823 is to authorize the Central Utah
Water Conservancy District to prepay amounts due under a 1965
repayment contract, as supplemented, on terms and conditions
similar to those contained in the 1993 supplemental contract
that provided for prepayment of the Jordan Aqueduct feature.
Background and Need
Section 210 of the Reclamation Projects Authorization and
Adjustment Act of 1992 (P.L. 102-575) authorized the Secretary
to negotiate the prepayment of the Jordan Aqueduct component of
the Central Utah Project (CUP). On October 28, 1993, the
Secretary and the local water users signed a supplemental
repayment contract which quantified the amount of the
prepayment for that project feature based on a present value
calculation of the District's future repayment obligation.
H.R. 1823 authorizes additional prepayments under terms and
conditions similar to those contained in the Jordan Aqueduct,
such as the interest rate and other provisions. Some
flexibility is needed, however, to allow for the timing of
prepayment and to allow for the prepayment of Bonneville unit
M&I costs which have been incurred but for which repayment
block notices have not been issued and a final cost allocation
for project features has not been completed. The District used
its authorities as a subdivision of the State of Utah to use
tax exempt bonding to prepay the Jordan Aqueduct debt and H.R.
1823 is explicit that the prepayment authorized by this
legislation ``may not be adjusted on the basis of the type of
prepayment financing utilized by the District''. The District
will likely use whatever sources of financing are available to
it and the legislation is also explicit that nothing in the
legislation itself ``authorizes or terminates the authority to
use tax exempt bond financing for this prepayment''. That
language had been worked out with representatives of the Office
of Management and Budget during negotiations on the ``Balanced
Budget Act of 1995'' which was vetoed for other reasons.
Whatever authority the District has as a subdivision of the
State of Utah is unaffected by the legislation.
Passage of this legislation is necessary to enable the
District to prepay the balance of its repayment obligation and
to permit the Secretary to make the necessary cost allocations
with respect to various features of the CUP that have not yet
been constructed.
Legislative History
H.R. 1823 was introduced on June 13, 1995 and was ordered
reported by the House Resources Committee on March 13, 1996
with an amendment that substituted language negotiated with the
Administration during budget discussions. The measure passed
the House on April 30, 1996 and was referred to the Committee
on May 1, 1996. A companion measure, S. 900, was introduced by
Senator Bennett on June 8, 1995. A similar measure was included
by the House in H.R. 2491, the Balanced Budget Act of 1995, and
was agreed to in conference. That legislation was vetoed for
other reasons. The Committee considered and ordered H.R. 1823
favorably reported at its business meeting on June 19, 1996.
Committee Recommendation and Tabulation of Votes
The Senate Committee on Energy and Natural Resources, in
open business session on June 19, 1996, by a unanimous vote of
a quorum present recommends that the Senate pass H.R. 1823
without amendment.
Section-by-Section Analysis
The measure is self explanatory.
Cost and Budgetary Considerations
The following estimate of costs and intergovernmental and
private sector mandates of this measure has been provided by
the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 26, 1996.
Hon. Frank H. Murkowski,
Chairman, Senate Committee on Energy and Natural Resources, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1823, an act to
amend the Central Utah Project Completion Act to direct the
Secretary of the Interior to allow for prepayment of repayment
contracts between the United States and the Central Utah Water
Conservancy District dated December 28, 1965, and November 26,
1985, and for other purposes.
Enactment of H.R. 1823 would affect direct spending and
receipts; therefore, pay-as-you-go procedures would apply to
the legislation.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
congressional budget office cost estimate
1. Bill number: H.R. 1823.
2. Bill title: An act to amend the Central Utah Project
Completion Act to direct the Secretary of the Interior to allow
for prepayment of repayment contracts between the United States
and the Central Utah Water Conservancy District dated December
28, 1965, and November 26, 1985, and for other purposes.
3. Bill status: As ordered reported by the Senate Committee
on Energy and Natural Resources on June 19, 1996.
4. Bill purpose: H.R. 1823 would allow the Central Utah
Water Conservancy District to prepay the present value of
amounts due under construction repayment contracts for the
Central Utah Project (CUP). The district would be authorized to
pay for each portion of the project as it is completed. The
authority to make such payments would expire at the end of
fiscal year 2002.
5. Estimated cost to the Federal Government: Based on
information provided by the Bureau of Reclamation and the
Central Utah Water Conservancy District, CBO estimates that
H.R. 1823 would result in gross receipts to the federal
government of about $77 million in 1997, $147 million in 1998,
and $39 million in 2001. These receipts would be partially
offset by a loss of offsetting receipts totaling about $5
million in 1997 and $13 million annually from 1998-2002.
Additional amounts averaging $15 million a year would be
forgone over the 2003-2048 period. The following table
summarizes the estimated budgetary impact of H.R. 1823 from
1996 through 2002.
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
DIRECT SPENDING
Spending under current law:
Estimated budget authority..... 2 2 2 2 2 2 2
Estimated outlays.............. 4 -2 -10 -10 -10 -10 -10
Proposed changes:
Estimated budget authority..... 0 -72 -134 13 13 -26 13
Estimated outlays.............. 0 -72 -134 13 13 -26 13
Spending Under H.R. 1823:
Estimated budget authority..... 2 -70 -132 15 15 -24 15
Estimated outlays.............. 4 -74 -144 3 3 -36 3
----------------------------------------------------------------------------------------------------------------
The budgetary effects of H.R. 1823 fall within budget
function 300.
6. Basis of estimate: CBO's estimates of repayment streams
and prepaymnent amounts are based on current cost allocations
and construction costs incurred up to September 30, 1994.
Changes to the existing cost allocations and newly incurred
construction costs may affect these amounts. (The Bureau of
Reclamation expects to complete an updated cost allocation for
this project later this year.)
prepayment amounts
CBO estimates that a prepayment for already completed
segments of the CUP would total roughly $77 million in 1997.
Prepayments for the remaining segments, the Jordanelle Unit and
the Diamond Fork System, would occur in fiscal years 1998 and
2001, respectively, when construction on these two sets of
facilities is completed.
The Central Utah Water Conservancy District would choose to
prepay amounts due because that action would create room for
additional borrowing under the district's voter-approved debt
ceiling. By prepaying the discounted value of outstanding debt
owed the federal government, the district could borrow new
funds without exceeding its debt ceiling and thus have
available for spending the difference between the undiscounted
amount of CUP debt and the discounted amount reflected by any
prepayments. In addition, if the district is able to use tax-
exempt financing for any new borrowing, its annual debt
payments after prepayment could be lower than its current
annual costs.
loss of the current repayment stream
Prepayment of CUP repayment contracts also would result in
a loss of the existing repayment stream. This stream is made up
of offsetting receipts totaling about $5 million in 1997, $13
million annually over the following 10 years, and an additional
$12 million to $17 million a year through 2048. About $2
million a year out of these amounts represents collections that
are spent annually without appropriation for mandatory payments
to the Ute Indian Tribe. CBO assumes that payments to the tribe
would continue after prepayment even though the receipts that
currently cover such payments would not continue.
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 enactment
of H.R. 1823 would affect direct spending by changing the
stream of payments received by the U.S. Treasury under existing
federal contracts. Therefore, pay-as-you-go procedures would
apply to the legislation. The estimated pay-as-you-go effects
are shown below.
------------------------------------------------------------------------
1996 1997 1998
------------------------------------------------------------------------
Change in outlays...................... 0 -72 -134
Change in receipts..................... (\1\) (\1\) (\1\)
------------------------------------------------------------------------
\1\ Not applicable.
8. Estimated impact on State, local, and tribal
governments: H.R. 1823 contains no intergovernmental mandates
as defined in Public Law 104-4 and would impose no direct costs
on state, local, or tribal governments. The repayments
authorized by H.R. 1823 would be voluntary on the part of the
Central Utah Water Conservancy District and we assume that the
district would prepay only if it would benefit from doing so.
9. Estimated impact on the private sector: H.R. 1823 would
impose no new private-sector mandates as defined in Public Law
104-4.
10. Previous CBO estimate: On April 18, 1996, CBO provided
an estimate for H.R. 1823 as ordered reported by the House
Committee on Resources on March 13, 1996. The two versions of
H.R. 1823 are identical, as are the estimates.
On November 16, 1995, CBO provided an estimate for the
conference report on H.R. 2491, the Balanced Budget Act of
1995. H.R. 2491 included a provision that was similar to H.R.
1823 as ordered reported by the House Committee on Resources
and the Senate Committee on Energy and Natural Resources. At
that time, CBO estimated that enactment would result in
additional offsetting receipts to the Treasury totaling $190
million over the 1996-2000 period and $219 million over the
1996-2002 period. Our current estimate, which varies slightly
from the original estimate, reflects new interest rate
assumptions and revised projections of receipts under current
law.
11. Estimate prepared by: Federal Cost Estimate: Gary
Brown. State and Local Government Impact: Marge Miller. Private
Sector Impact: Amy Downs.
12. Estimate approved by: Robert A. Sunshine, for Paul N.
Van de Water, Assistant Director for Budget Analysis.
Regulatory Impact Evaluation
The bill is not a regulatory measure in the sense of
imposing Government established standards or significant
economic responsibilities on private individuals and
businesses.
No personal information would be collected in administering
the measure. Therefore, there would be no impact on personal
privacy.
Little, if any, additional paperwork would result from the
enactment of H.R. 1823.
Executive Communications
On May 1, 1996, the Committee on Energy and Natural
Resources requested legislative reports from the Department of
the Interior and the Office of Management and Budget setting
forth executive views on S. 900, the companion measure to H.R.
1823. These reports had not been received at the time the
report on H.R. 1823 was filed. When the reports become
available, the Chairman will request that they be printed in
the Congressional Record for the advice of the Senate.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the act, H.R. 1823, as ordered reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed is shown in roman):
[Public Law 102-575, 102d Congress]
AN ACT To authorize additional appropriations for the construction of
the Buffalo Bill Dam and Reservoir, Shoshone Project, Pick-Sloan
Missouri Basin Program, Wyoming.
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 ``Reclamation Projects
Authorization and Adjustment Act of 1992''.
* * * * * * *
SEC. 210. JORDAN AQUEDUCT PREPAYMENT.
Under such terms as the Secretary may prescribe, and within
one year of the date of enactment of this Act, the Secretary
shall allow for the prepayment, or shall otherwise dispose of,
repayment contracts entered into among the United States, the
District, the Metropolitan Water District of Salt Lake City,
and the Salt Lake County Water Conservancy District, dated May
16, 1986, providing for repayment of the Jordan Aqueduct System
[In carrying out this section, the Secretary shall take such
actions as he deems appropriate to accommodate, effectuate, and
otherwise protect the rights and obligations of the United
States and the obligors under the contracts executed to provide
for payment of such repayment contracts.] The Secretary shall
allow for prepayment of the repayment contract between the
United States and the Central Utah Water Conservancy District
dated December 28, 1965, and supplemented on November 26, 1985,
providing for repayment of municipal and industrial water
delivery facilities for which repayment is provided pursuant to
such contract, under terms and conditions similar to those
contained in the supplemental contract that provided for the
prepayment of the Jordan Aqueduct dated October 28, 1993. The
prepayment may be provided in several installments to reflect
substantial completion of the delivery facilities being prepaid
and may not be adjusted on the basis of the type of prepayment
financing utilized by the District. The District shall exercise
its right to prepayment pursuant to this section by the end of
fiscal year 2002. Nothing in this section authorizes or
terminates the authority to use tax exempt bond financing for
this prepayment.