[Senate Report 104-388]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 611
104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-388
_______________________________________________________________________


 
                      CARLSBAD IRRIGATION DISTRICT

                                _______
                                

               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

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 2015]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2015) to convey certain real property 
located within the Carlsbad Project in New Mexico to the 
Carlsbad Irrigation District, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                         purpose of the measure

    S. 2015, as ordered reported, would transfer the interests 
of the United States in the lands and facilities associated 
with the irrigation and drainage system of the Carlsbad Project 
in New Mexico to the Carlsbad Irrigation District except for 
any acquired lands on which any dam or reservoir diversion 
structure is located (in which case the transfer will only 
include the mineral estate) and storage and flow easements for 
any tracts under the maximum spillway elevations of Avalon and 
Brantley Reservoirs. The District is required to continue to 
manage the lands for project purposes and will assume all 
obligations of the United States under certain agreements for 
recreation and fish and wildlife purposes except that the 
District will not be obliged to provide financial support and 
will not be entitled to any revenues from the agreements.
    The Districts will also assume any rights and obligations 
of the United States under any grazing or mineral leases. 
Mineral lease receipts credited to the Project will be 
distributed under the Fact Finders Act of 1942. The Fact 
Finders Act provides generally that when water users take over 
operation of a project, the net profits from operation of 
project power, leasing of project lands (for grazing or other 
purposes), and sale or use of town sites are to be applied 
first to construction charges, second to operation and 
maintenance (O&M) charges, and third ``as the water users may 
direct''.

                          background and need

    The transfer of the Carlsbad and Elephant Butte projects 
was the genesis for the development of S. 620, on which the 
Subcommittee on Forests and Public Land Management conducted a 
hearing on March 24, 1995 and the Committee received extensive 
testimony on the situation at both Elephant Butte and Carlsbad 
at that time. The Carlsbad Irrigation District is located in 
southeastern New Mexico. It takes its water from the Pecos 
River and serves 25,055 acres through the Bureau of 
Reclamation's Carlsbad Project. The single purpose project was 
created in 1905 by the Bureau acquiring all dams, facilities, 
lands, and water rights of the privately owned Pecos Irrigation 
Company. The Irrigation District has had O&M responsibility 
since 1932 and all repayment obligations were satisfied in 
1991.

                          legislative history

    Senator Pete Domenici introduced S. 2015 on August 1, 1996. 
The Subcommittee on Forests and Public Land Management held a 
hearing on September 3, 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. 2015 as described herein.

                      SECTION-BY-SECTION ANALYSIS

Section 1--Conveyance

    Subsection 1(a) provides that all right, title, and 
interest of the United States in and to the lands acquired 
lands described in subsection (b), in addition to all interests 
the United States holds in the irrigation and drainage systems 
of the Carlsbad Project and all related lands including ditch 
rider houses, maintenance shop and buildings, and Pecos River 
Flume, are conveyed by operation of law to the Carlsbad 
Irrigation District.
    Subsection 1(b) describes the acquired lands to be 
transferred to the District.
    Subsection 1(c) sets the terms and conditions for the 
conveyance of the acquired lands: (1) The lands shall continue 
to be managed and used for the purposes for which the Carlsbad 
Project was authorized; and (2) the District shall assume all 
rights and obligations of the United States under agreements 
relating to management of certain lands near Brantley Reservoir 
for fish and wildlife purposes and for the management and 
operation of Brantley Lake State Park. However, two exceptions 
to the previous terms and conditions are set forth: (1) The 
District shall not be obligated for any financial support 
associated with the agreements described immediately above; and 
(2) the District shall not be entitled to any revenues 
generated by the operation of Brantley Lake State Park.

Section 2--Lease management and past revenues from acquired lands

    Subsection 2(a) requires the Secretary of the Interior to 
provide to the District, within 45 days of enactment of the 
Act, written identification of all mineral and grazing leases 
in effect on the acquired lands on the date of enactment of the 
Act, and to notify all leaseholders of the conveyance made by 
the Act.
    Subsection 2(b) requires the District to assume all rights 
and obligations of the United States for all mineral and 
grazing leases on the acquired lands, and to be entitled to any 
revenues from such leases accruing after the conveyance. The 
District will be required to continue to adhere to the current 
Bureau of Reclamation mineral leasing stipulations for the 
Carlsbad Project.
    Subsection 2(c) provides that receipts paid into the 
reclamation fund that now exist as credits to the Carlsbad 
Project under the Mineral Lands Leasing Act of 1920 are to be 
made available to the District under the distribution scheme 
set forth in section (4)(I) of the Act of December 5, 1924 (43 
U.S.C. 501; commonly referred to as the ``Fact Finders Act of 
1924''). This language is intended to clarify that receipts 
paid into the Reclamation Fund that were collected prior to the 
date of the conveyance shall be available to the District for 
purposes of offsetting reimbursable operation and maintenance 
costs of the Bureau.

                   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 25, 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. 2015, a bill to 
convey real property located within the Carlsbad Project in New 
Mexico to the Carlsbad Irrigation District.
    Enacting S. 2015 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: S. 2105.
    2. Bill title: A bill to convey certain real property 
located within the Carlsbad Project in New Mexico to the 
Carlsbad Irrigation District.
    3. Bill status: As reported by the Senate Committee on 
Energy and Natural Resources on September 16, 1996.
    4. Bill purpose: S. 2015 would convey the irrigation and 
drainage system of the Carlsbad Project, New Mexico, and 
related lands and property, including the surface and mineral 
estates, to the Carlsbad Irrigation District. The district 
would assume all rights and obligations of the United States 
under mineral and grazing leases on the acquired lands and 
would be entitled to all revenues acquired from such leases 
after the conveyance. Additionally, amounts paid into the 
reclamation fund prior to enactment that have been recorded as 
construction credits to the Carlsbad Project would be credited 
toward the district's ongoing operation and maintenance 
obligation to the federal government.
    5. Estimated cost to the Federal Government: CBO estimates 
that enacting H.R. 3258 would increase direct spending by $1.7 
million in 1997, and by about $200,000 each year thereafter. 
Implementing the bill also would increase administrative costs 
at the Bureau of Reclamation in 1997, subject to the 
availability of appropriated funds, by about $200,000. The 
effects on direct spending are summarized in the following 
table.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                              1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING                                           
                                                                                                                
Estimated budget authority................................        2    (\1\)    (\1\)    (\1\)    (\1\)    (\1\)
Estimated outlays.........................................        2    (\1\)    (\1\)    (\1\)    (\1\)    (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         

    The costs of this bill fall within budget function 300.
    6. Basis of estimate: S. 2015 would provide a monetary 
credit for receipts paid into the reclamation fund prior to 
conveyance. The size of the credit is unclear because the 
provision incorrectly cites the Mineral Leasing Act of 1920, 
which covers payments from leases on all withdrawn and public 
domain lands (lands that have never passed out of federal 
ownership) and which governs no receipts that have been 
recorded as construction credits to the Carlsbad project. The 
apparent intent of the provision is to identify for transfer 
amounts that represent credits to the Carlsbad Project under 
the Mineral Leasing Act for Acquired Lands of 1947. Hence, CBO 
estimates that enacting this provision would likely result in a 
credit to the district of $1.5 million in 1997, the amount 
which is attributed to the district under the 1947 act. This 
credit would be used by the district to reimburse the Bureau of 
Reclamation for the district's share of operations and 
maintenance expenses. The value of the monetary credit would be 
counted as direct spending in the year it is issued.
    Enacting S. 2015 also would increase direct spending by 
reducing offsetting receipts in 1997 and subsequent years. The 
bill would transfer the right to all future receipts from 
mineral and grazing leases on the specified lands. This would 
result in a loss of offsetting receipts totaling about $200,000 
a year beginning in 1997.
    Finally, based on information provided by the Bureau of 
Reclamation, CBO estimates that enacting S. 2015 would result 
in discretionary spending of about $200,000 in 1997 for 
administrative costs associated with transferring the specified 
lands, subject to the availability of appropriated funds.
    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. 2015 would affect direct spending. Therefore, pay-as-you-go 
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        2        0
Change in receipts...........................    (\1\)    (\1\)    (\1\)
------------------------------------------------------------------------
\1\ Not applicable.                                                     

    8. Estimated impact on State, local, and tribal 
governments: S. 2015 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. The Carlsbad Irrigation District would receive, at 
no cost, all the benefits conveyed by this bill, including the 
irrigation and drainage system, related lands and property, and 
surface and mineral estates. These benefits would include the 
right to all future receipts from mineral and grazing leases on 
the lands, which we estimate will total about $200,000 per 
year. Further, the district would be able to use the monetary 
credit provided by this bill to reimburse the Bureau of 
Reclamation for its share of operations and maintenance 
expenses, thus avoiding future cash payments averaging about 
$30,000 per year.
    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 September 25, 1996, CBO 
provided an estimate for H.R. 3258, as reported by the House 
Committee on Resources on September 18, 1996. The two bills and 
their estimated costs are similar.
    11. Estimate prepared by: Federal Cost Estimate: Gary Brown 
and Victoria Heid. Impact on State, Local, and Tribal 
Governments: Marjorie Miller. Impact on the Private Sector: 
Patrice Gordon.
    12. Estimate approved by: Robert A. Sunshine (for Paul N. 
Van de Water, Assistant Director for Budget Analysis).

                       federal mandate evaluation

    The Congressional Budget Office has determined that S. 2015 
contains no new private sector mandates as defined in the 
Unfunded Mandates Reform Act of 1995 (Public Law 104-4).

                      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. 2015. 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 personal 
privacy.
    The paperwork requirements imposed on the Department of the 
Interior as a result of the conveyance required by this Act are 
not believed to be significant.

                        executive communications

    A Statement of Administration Position has not been 
submitted as of 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.
              ADDITIONAL VIEWS BY SENATOR PETE V. DOMENICI

    In May, 1995, the Subcommittee on Forests and Public Land 
Management held a hearing on S. 620, the Reclamation Facilities 
Transfer Act. At that hearing, it became very clear that a more 
project-specific approach would be needed to provide 
legislative support for the Clinton Administration's commitment 
to ``aggressively pursue'' the transfer of ownership and 
control of certain project lands and facilities from the Bureau 
of Reclamation to the various project beneficiaries, ``. . . 
where it makes sense.''
    Since that time, the Bureau and the Carlsbad Irrigation 
District have been working together to craft a legislative 
proposal that would address the specific issues involved in the 
transfer of acquired lands and certain irrigation facilities 
from the Bureau to the District. On August 1, 1996, I 
introduced S. 2015 to address the major concerns raised by the 
Administration and the minority with the earlier legislation.
    At the Subcommittee hearing on September 5, the 
Administration raised additional concerns with S. 2015, as it 
was introduced. In response to these concerns, I have been 
working with the Bureau to craft suitable language that will 
allow the Secretary of the Interior to complete the facilities 
transfer to the Carlsbad Irrigation District, while providing 
the District with assurances that the transfer process will be 
done in a timely and cost effective manner.
    When the Committee agreed to report S. 2015 for 
consideration by the Senate, I restated my commitment to work 
with the Bureau in an effort to resolve the remaining issues of 
concern. Although several issues had not been fully resolved, I 
believed that an agreement was very close, and I indicated my 
intent to offer a substitute amendment on the Senate floor that 
would clarify a number of provisions and reflect the resolution 
of outstanding concerns.
    Among the provisions that required some clarification is 
the subsection dealing with the availability of receipts that 
have been paid into the reclamation fund since the District 
completed its contractual obligation for repayment of 
construction costs in 1991. As currently drafted, subsection 
2(c) remains somewhat unclear as to the funds available to the 
District for project purposes. In order to clarify my intent, I 
wish to state that any amendment I offer will contain the 
following clarification for subsection 2(c).

          Availability of Amounts Paid Into the Reclamation 
        Fund.--Receipts paid into the reclamation fund which 
        only exist as construction credits to the Carlsbad 
        Project under the terms of the Mineral Leasing Act for 
        Acquired Lands of 1947 (30 U.S.C. 351-359) as amended, 
        as explained by Interior Solicitor's Opinion M-36969 
        dated September 8, 1989, entitled Proper Disbursement 
        and Crediting of Mineral Leasing Revenues from 
        Reclamation Acquired Lands, shall be made available to 
        the District as credits towards its ongoing operation 
        and maintenance obligation to the United States until 
        such credits are depleted.

    This legislation, as introduced, or as I would agree to 
amend it, is intended to provide the Secretary of the Interior 
with the authority to convey lands acquired by the Bureau for 
the purposes of constructing and operating the Carlsbad 
Project. All costs to the United States associated with the 
acquisition having been repaid by the water users under the 
terms of the construction repayment contract, these lands 
should revert back to the those same water users for whom the 
project was constructed. In the end, I intend to make it 
perfectly clear that this legislation would in no way affect 
the management or ownership of withdrawn public domain, and 
similarly that it would in no way affect the multi-purpose 
functions of the Brantley Reservoir Project, which was 
superimposed over a part of the single purpose Carlsbad 
Project.
                                                  Pete V. Domenici.
                        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. 2015, as 
ordered reported.