[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.