[Senate Report 104-383]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 591
104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-383
_______________________________________________________________________


 
          TEXAS RECLAMATION PROJECTS INDEBTEDNESS PURCHASE ACT

                                _______
                                

               September 30, 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 S. 1719]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1719) to require the Secretary of the 
Interior to offer to sell to certain public agencies the 
indebtedness representing the remaining repayment balance of 
certain Bureau of Reclamation projects in Texas, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and an amendment to the title and recommends 
that the bill, as amended, do pass.
    The amendments are as follows:
    1. 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 ``Emergency Drought Relief Act of 
1996''.

SEC. 2. EMERGENCY DROUGHT RELIEF.

    (a) Corpus Christi.--
          (1) Emergency Drought Relief.--On the condition stated in 
        paragraph (2), for the purpose of providing emergency drought 
        relief, the Secretary of the Interior shall defer all principal 
        and interest payments without penalty or accrued interest for a 
        period of 5 years for the city of Corpus Christi, Texas, and 
        the Nueces River Authority under contract no. 6-07-01-X0675 
        involving the Nueces River Reclamation Project, Texas.
          (2) Condition.--The condition stated in this paragraph is 
        that the city of Corpus Christi, Texas, commit to use the funds 
        made available as a result of the deferral under paragraph (1) 
        exclusively for the acquisition of or construction of 
        facilities related to alternative sources of water supply.
          (3) Issuance of permits.--If construction of facilities 
        related to alternative water supplies under paragraph (2) 
        requires a Federal permit for use of Bureau of Reclamation 
        lands or facilities, the Secretary of the Interior shall issue 
        the permit not later than 90 days after the date of enactment 
        of this Act, recognizing the environmental impact statement 
        FES74-54 and the environmental assessment dated March 1991 
        (relating to the Lavaca-Navidad River Authority Pipeline 
        permit).
    (b) Canadian River Municipal Water Authority.--
          (1) Recognition of transfer of lands to the national park 
        service.--
                  (A) In general.--All obligations and associated debt 
                under contract no. 14-06-500-485 for land and related 
                relocations transferred to the National Park Service to 
                form the Lake Meredith National Recreation Area under 
                sections 502 through 504 of Public Law 101-628 (16 
                U.S.C. 460eee through 460eee-2), in the amount of 
                $4,000,000, shall be nonreimbursable.
                  (B) Recalculation of repayment schedule.--Not later 
                than 1 year after the date of enactment of this Act, 
                the Secretary of the Interior shall recalculate the 
                repayment schedule of the Canadian River Municipal 
                Water Authority to reflect the nonreimbursability of 
                obligations and associated debt under subparagraph (A).
          (2) Emergency drought relief.--The Secretary shall defer all 
        principal and interest payments without penalty or accrued 
        interest for a period of 3 years for the Canadian River 
        Municipal Water Authority under contract no. 14-06-500-485 as 
        emergency drought relief to enable construction of additional 
        water supply and conveyance facilities.
    2. Amend the title so as to read: ``A Bill to provide 
emergency drought relief to the city of Corpus Christi, Texas, 
and the Canadian River Municipal Water Authority, Texas, and 
for other purposes.''.

                         purpose of the measure

    S. 1719, as ordered reported, would provide emergency 
drought relief to the city of Corpus Christi, Texas, and the 
Nueces River Authority by directing the Secretary of the 
Interior to defer all principal and interest payments toward 
the Nueces River Project without penalty or accrued interest 
for a period of five years. Principal and interest payments 
toward the Canadian River Project similarly would be deferred 
for the Canadian River Municipal Water Authority, Texas, for a 
period of three years.

                          background and need

    The Canadian River Project was authorized in 1950 to 
provide a source of municipal and industrial (M&I) water to 
areas in the Texas Panhandle and South Plains with a current 
population of 500,000. The major project facilities include 
Sanford Dam on the Canadian River about 35 miles northeast of 
Amarillo, Lake Meredith, which is formed by the dam, and a 322 
mile aqueduct. The project was completed in the 1960's and has 
provided water since 1968. Operation and maintenance (O&M) have 
been a local responsibility since 1968. The total project cost 
was $83.8 million, of which $76.9 million was reimbursable. 
P.L. 95-625 in 1978 transferred 987 acres of land acquired for 
the project to the Park Service as part of the Alibates Flint 
Quarries National Monument and P.L. 101-628 in 1990 transferred 
the land within the Lake Meredith boundary to the Park Service 
as part of the Lake Meredith National Recreation Area.
    The Palmetto Bend project was authorized in 1968 by P.L. 
90-562 to provide M&I water to a broad area along the Texas 
Gulf Coast. The project was completed in 1985, and has as its 
main feature Lake Texana, which is midway between Houston and 
Corpus Christi. The 75,000 acre foot yield provides M&I 
supplies for Corpus Christi (42,000 af) and for the regional 
petrochemical-plastics industry. The local sponsors have a 
repayment obligation of about $70.7 million and also have 
invested over $24 million in a distribution system.
    The Nueces project was authorized in 1974 by P.L. 93-493 
which authorized the Bureau to construct the Choke Canyon 
Reservoir on the Frio River near three Rivers, Texas. The 
Bureau estimated that the project would provide a firm yield of 
252,000 acre feet and would meet the water needs of the area 
until 2040. Construction was completed in 1982 and operation 
was turned over to Corpus Christi in 1983. As a result of 
lower-than-estimated flows into Lake Corpus Christi and 
requirements for fresh water releases for fish and wildlife, 
the project is only providing an incremental yield of about 
88,000 acre feet. Of the original $81.3 million in estimated 
project costs, the local sponsors provided $24.5 million in 
advance payments during construction. The sponsors now have a 
repayment obligation of about $77 million based on estimated 
current project costs of $133 million, which are 64% higher 
than originally estimated.
    While the long-term goal of the water authorities is to 
transfer title to the facilities, the most pressing need now is 
to provide financial relief to Corpus Christi and its water 
suppliers so that alternative water supply systems can be 
constructed.

                      summary of major provisions

    S. 1719 would provide emergency drought relief to Corpus 
Christi and the Nueces River Authority by directing the 
Secretary of the Interior to defer all principal and interest 
payment toward the Nueces River Project without penalty or 
accrued interest for a period of five years.
    If the construction of alternative water supplies requires 
a federal permit for use of Bureau of Reclamation lands or 
facilities, the Secretary is required to issue such permit 
within 90 days after enactment of this Act, taking into account 
the environmental impact statement and environmental assessment 
relating to the Lavaca-Navidad River Authority Pipeline permit.
    As to the Canadian River Project, S. 1719 would declare 
that all obligations and associated debt under contract for 
land and related locations transferred to the National Park 
Service to form the Lake Meredith National Recreation Area, in 
the amount of $4 million, shall be non-reimbursable. The 
Secretary is required, within one year after enactment, to 
recalculate the repayment schedule of the Canadian River 
Municipal Water Authority to reflect the nonreimbursability of 
the obligations and debt. The Secretary also is required to 
defer all principal and interest payments by the Canadian River 
Municipal Water Authority toward the Canadian River Project for 
a period of three years.

                          legislative history

    The Committee held a hearing on related legislation dealing 
with the Nueces project, S. 2236, during the last Congress. 
Senator Hutchison introduced S. 1719 on May 1, 1996. The 
Subcommittee on Forests and Public Land Management held a 
hearing on September 3, 1996.
    The Committee ordered S. 1719, as amended, favorably 
reported at the business meeting on September 12, 1996.

            committee recommendations and tabulation of vote

    The Senate Committee on Energy and Natural Resources, in 
open business session on Thursday, September 12, 1996, by a 
unanimous voice vote of a quorum present, recommended that the 
Senate pass S. 1719 as described herein.

                      section-by-section analysis

Section 1--Short title

    The title of the Act is the ``Emergency Drought Relief Act 
of 1996''.

Section 2--Emergency drought relief

    Subsection 2(a)(1) directs the Secretary of the Interior to 
defer all principal and interest payments involving the Nueces 
River Project without penalty or accrued interest for a period 
of five years for the city of Corpus Christi, Texas, and the 
Nueces River Authority, Texas. Subsection 2(a)(2) requires the 
city of Corpus Christi to use all of the funds made available 
as a result of the deferral exclusively for the acquisition of 
or construction of facilities related to alternative sources of 
water supply. Subsection 2(a)(3) provides that, if the 
construction of alternative water supplies requires a federal 
permit for use of Bureau of Reclamation lands or facilities, 
the Secretary is required to issue such permit within 90 days 
after enactment of this Act, taking into account the 
environmental impact statement and environmental assessment 
relating to the Lavaca-Navidad River Authority Pipeline permit.
    Subsection 2(b)(1)(A) declares that all obligations and 
associated debt under contract for land and related relocations 
transferred to the National Park Service to form the Lake 
Meredith National Recreation Area, in the amount of $4 million, 
shall be non-reimbursable. Subsection 2(b)(1)(B) requires the 
Secretary, within one year after enactment, to recalculate the 
repayment schedule of the Canadian River Municipal Water 
Authority to reflect the nonreimbursability of the obligations 
and associated debt.
    Subsection 2(b)(2) requires the Secretary to defer all 
principal and interest payments by the Canadian River Municipal 
Water Authority toward the Canadian River Project for a period 
of three years to enable construction of additional water 
supply and conveyance facilities.

                   cost and regulatory considerations

    The Congressional Budget Office estimate of the costs of 
this measure follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 13, 1996.
Hon. Frank H. Murkowski,
Chairman, 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 S. 1719, the Emergency 
Drought Relief Act of 1996.
    Enacting S. 1719 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,
                                             James L. Blum,
                                             (For June E. O'Neill).
    Enclosure.

               congressional budget office cost estimate

    1. Bill number: S. 1719.
    2. Bill title: Emergency Drought Relief Act of 1996.
    3. Bill status: As ordered reported by the Senate Committee 
on Energy and Natural Resources on September 12, 1996.
    4. Bill purpose: S. 1719 would direct the Secretary of the 
Interior acting through the Bureau of Reclamation to:
          defer all principal and interest payments without 
        penalty or accrued interest for 5 years for the city of 
        Corpus Christi, Texas, and the Nueces River Authority;
          defer all principal and interest payments without 
        penalty or accrued interest for 3 years for the 
        Canadian River Municipal River Water Authority: and
          designate $4 million of the remaining principal 
        balance of the Canadian River Municipal Water 
        Authority's repayment contract as non-reimbursable.
    5. Estimated cost to the Federal Government: Assuming 
enactment by the beginning of fiscal year 1997, CBO estimates 
that S. 1719 would shift the collection of $28 million in 
offsetting receipts from the 1997-2002 period until after 2017. 
The bill also would result in a loss of offsetting receipts 
totaling less than $500,000 a year over the 2003-2017 period. 
These receipts represent a portion of the receipts received by 
the Treasury under repayment contracts managed by the Bureau of 
Reclamation. The total of such payments for 1997 through 2002 
is shown in the following table, along with the expected change 
in payments under S. 1719.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                              1996      1997      1998      1999      2000      2001      2002  
----------------------------------------------------------------------------------------------------------------
                                                DIRECTOR SPENDING                                               
                                                                                                                
Spending under current law:                                                                                     
    Estimated budget authority............      -186      -161      -163      -163      -174      -172      -171
    Estimate outlays......................      -186      -161      -163      -163      -174      -172      -171
Proposed changes:                                                                                               
    Estimated budget authority............  ........         7         7         7         4         4     (\1\)
    Estimate outlays......................  ........         7         7         7         4         4     (\1\)
Spending under S. 1719                                                                                          
    Estimated Budget Authority............      -186      -154      -156      -156      -170      -168      -167
    Estimated Outlays.....................      -186      -154      -156      -156      -170      -168      -167
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         

    The costs of this bill fall within budget function 300.
    6. Basis of estimate: Assuming that S. 1719 will be enacted 
by the beginning of fiscal year 1997, the city of Corpus 
Christi, Texas, the Nueces River Authority, and the Canadian 
River Municipal Water Authority would be able to withhold 
payment of principal and interest beginning in 1997. All three 
contractors have already made or are in the process of making 
their 1996 payments.
    The city of Corpus Christi, Texas, and the Nueces River 
Authority would resume payments to the Treasury beginning in 
2002 and the Canadian River Authority would resume payments to 
the Treasury beginning in 2000. All contractors would be 
required to repay all deferred amounts at the end of their 
current repayment periods. Annual payments by the Canadian 
River Authority would reflect a $4 million reduction in the 
outstanding principal balance of the contract and would 
therefore be lower than they are under current law.
    The terms of repayment contracts for water projects managed 
by the Bureau of Reclamation, such as the projects affected by 
this bill, are essentially equivalent to the terms of a loan as 
defined in the Federal Credit Reform Act of 1990. To date, 
however, neither CBO nor the Office of Management and Budget 
(OMB) have treated new contracts as loans or changes in such 
contracts as loan modifications under the provisions of credit 
reform. Such provisions call for recording the cost of a new 
loan-or any change in cost in the case of modificatin--on a 
present value basis, as opposed to cash basis reflected in this 
estimate. CBO and OMB are reviewing the budgetary treatment of 
Federal water projects with repayment contacts, and may decide 
to treat such transactions as loans for the purpose of scoring 
future legislation.
    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 
S. 1719 would affect direct spending by reducing offsetting 
receipts. Therefore, pay-as-you-do procedures would apply to 
the bill. The following table summarizes the estimated pay-as-
you-go impact.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                                     1996             1997             1998     
----------------------------------------------------------------------------------------------------------------
Change in outlays............................................               0                7                7 
Change in receipts...........................................                                                   
(2) Not applicable                                                                                              
----------------------------------------------------------------------------------------------------------------

    8. Estimated impact on State, Local and Tribal Governments: 
In accordance with the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4), CBO has determined that this bill contains 
no intergovernmental mandates and would impose no costs on 
State, local, or tribal governments.
    9. Estimated impact on the private sector: In accordance 
with Public Law 104-4, CBO has determined that this bill would 
impose no private-sector mandates.
    10. Previous CBO estimate: On August 28, 1996, CBO prepared 
an estimate for H.R. 3910, the Emergency Drought Relief Act of 
1996, as ordered reported by the House Committee on Resources 
on August 1, 1996. The two bills are identical, and so are the 
estimates.
    11. Estimate prepared by: Federal cost estimate: Gary 
Brown; Impact on State, local, and tribal government: Marjorie 
Miller, Impact on the private sector: Patrice Gordon.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                       federal mandate evaluation

    The Congressional Budget Office determined that S. 1719 
contains no private sector or 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.

                      regulatory impact evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
implementing S. 1719. 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 program. Therefore, there would be no impact on person 
privacy.
    There are likely to be significant paperwork requirements 
for the Department of the Interior.

                        executive communications

    A Statement of Administration Position has not been 
submitted as the date this report was filed. When the SAP is 
available, the Chairman will request that it 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, the Committee notes that no 
changes in existing law are made by the bill S.1719, as ordered 
reported.