[Senate Report 105-289]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 526
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-289
_______________________________________________________________________


 
               WELLTON-MOHAWK TITLE TRANSFER ACT OF 1998

                                _______
                                

                August 25, 1998.--Ordered to be printed

   Filed under authority of the order of the Senate of July 31, 1998

_______________________________________________________________________


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 2087]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2087) to authorize the Secretary of the 
Interior to convey certain works, facilities, and titles of the 
Gila Project, and designated lands within or adjacent to the 
Gila project, to the Wellton-Mohawk Irrigation and Drainage 
District, and for other purposes, having considered the same, 
reports favorably thereon with an amendment, and recommends 
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 referred to as the 
``Wellton-Mohawk Transfer Act''.
    Sec. 2. Transfer.--The Secretary of the Interior (``Secretary'') is 
authorized to carry out the terms of the Memorandum of Agreement No. 8-
AA-34-WAO14 (``Agreement'') dated July 10, 1998 between the Secretary 
and the Wellton-Mohawk Irrigation and Drainage District (``District'') 
providing for the transfer of works, facilities, and lands to the 
District, including conveyance of Acquired Lands, Public Lands, and 
Withdrawn Lands, as defined in the Agreement.
    Sec. 3. Water and Power Contracts.--Notwithstanding the transfer, 
the Secretary and the Secretary of Energy shall provide for and deliver 
Colorado River water and Parker-Davis Project Priority Use Power to the 
District in accordance with the terms of existing contracts with the 
District, including any amendments or supplements thereto or extensions 
thereof and as provided under section 2 of the Agreement.
    Sec. 4. Savings.--Nothing in this Act shall affect any obligations 
under the Colorado River Basin Salinity Control Act (P.L. 93-320, 43 
U.S.C. 1571).
    Sec. 5. Report.--If transfer of works, facilities, and lands 
pursuant to the Agreement has not occurred by July 1, 2000, the 
Secretary shall report on the status of the transfer as provided in 
section 5 of the Agreement.
    Sec. 6. Authorization.--There are authorized to be appropriated 
such sums as may be necessary to carry out the provisions of this Act.

                         purpose of the measure

    The purpose of S. 2087, as ordered reported, is to provide 
for the transfer of Gila Project-Wellton Mohawk Division 
facilities and lands pursuant to a Memorandum of Agreement 
entered into between the Wellton-Mohawk Irrigation and Drainage 
District and the Secretary of the Interior dated July 10, 1998.

                          background and need

General background

    In the 104th Congress, the Committee held hearings on 
legislation (S. 620) that would provide generic authority for 
the transfer of certain Reclamation projects to project 
beneficiaries as well as legislation specific to individual 
projects. The generic legislation was introduced following the 
Department of the Interior's statement, as part of the 
Reinventing Government Initiative, that it would seek to 
transfer title to appropriate projects where there were no 
overriding concerns.
    S. 620 directed the Secretary of the Interior to transfer 
title to all Federal property associated with fully paid out 
Bureau of Reclamation projects to the project beneficiaries in 
those instances where the beneficiaries have already assumed 
responsibility for operation and maintenance. The legislation 
provided that the transfer would be without cost and also made 
all revenues previously collected from project lands and placed 
in the reclamation fund available to the beneficiaries under 
the formula set forth in subsection I of the Fact Finders Act 
of 1924. 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''.
    Proposals to transfer title to selected reclamation 
facilities have been advanced before. Some have already been 
authorized by Congress. (See most recently: Pub. L. No. 102-
575, title XXXIII transferring facilities to the Elephant Butte 
Irrigation District, New Mexico, and title XIV, dealing with 
the Vermejo Project, New Mexico.) Other title transfer 
proposals, such as ones advanced in 1992 for the Central Valley 
Project and in the late 1980's for the Solano Project and the 
Sly Park Unit, have been quite controversial.
    As of 1990, the Bureau had identified 415 project 
components--out of a total of 568 facilities--where operation 
and management responsibilities had been transferred or were 
scheduled to be transferred to project users. Section 6 of the 
Reclamation Act of 1902 (32 Stat. 388, 389) provides in 
pertinent part that ``when the payments required by this act 
are made for the major portion of the lands irrigated from the 
waters of an of the works herein provided for, then the 
management and operation of such irrigation works shall pass to 
the owners of the lands irrigated thereby * * * ''. This 
section concludes with the following proviso: ``Provided, That 
the title to and the management and operations of the 
reservoirs and the works necessary for their protection and 
operation shall remain in the Government until otherwise 
provided by Congress.'' Historically, the Bureau has usually 
transferred operation and maintenance to local districts in 
advance of project repayment where the districts have expressed 
an interest in taking over management and have the capability 
to assume the responsibility.
    A transfer provision was also included in the 1955 
Distribution System Loans Act, as amended. This provision 
differs from the 1902 law in that it allows transfer of title 
to the lands and facilities upon repayment of the loan. In 
addition to the operations and management transfer 
authorization under the Reclamation Act of 1902, several other 
title transfer provisions are included in individual project 
acts. These include Section 7 of the 1928 Boulder Canyon 
Project Act (Act of Dec. 21, 1928, 45 Stat. 1057, 43 U.S.C. 617 
et seq.) which authorizes the Secretary to transfer title of 
the All-American Canal and certain other related facilities 
after repayment has been completed; provisions in the Act of 
September 22, 1959 (Pub. L. No. 86-357, 73 Stat. 641), 
regarding transfer of title for Lower Rio Grande project 
facilities; and Pub. L. No. 83-752 (68 Stat. 1045), which 
directs the Secretary to transfer title to the Palo Verde 
Irrigation District upon repayment. Under the 1954 Act, the 
U.S. retained the right to build hydro power facilities at the 
site and to retain a share in energy production.
    The hearings on S. 620 during the 104th Congress 
demonstrated that generic legislation was not likely to deal 
with all the possible issues associated with project transfers 
and that such legislation would wind up being complex and 
overly burdensome. As a result, discussions began on the 
potential transfer of several projects, or portions thereof. 
The Committee considered the transfer of the Collbran project 
and included language in the Reconciliation measure, H.R. 2491, 
the Balanced Budget Act of 1995, which was vetoed by the 
President. The Reconciliation measure also contained language 
(section 5356) to transfer the Sly Park unit of the Central 
Valley Project. That language was included in the House 
amendments and accepted in conference. During the 104th 
Congress, the Committee also conducted hearings and favorably 
report legislation on the Carlsbad project (S. 2015), and the 
distribution portion of the Minidoka project serving the Burley 
Irrigation District (S. 1921), which was similar to S. 538. The 
Committee also held hearings on legislation for the transfer of 
Canadian River, Palmetto Bend and Nueces River projects in 
Texas (S. 1719). However, none of the measures was enacted into 
law.

Gila Project, Wellton-Mohawk Division

    The Gila Project in western Arizona was originally 
authorized for construction under a finding of feasibility 
approved by the President on June 21, 1937, pursuant to section 
4 of the Act of June 25, 1910 (36 Stat. 836), and subsection B 
of section 4 of the Act of December 5, 1924 (43 Stat. 701). It 
was reauthorized and reduced in area to 115,000 acres by the 
Act of July 30, 1947 (61 Stat. 628). Further reduction in 
irrigable acreage of the Wellton-Mohawk Division was authorized 
by the Colorado River Basin Salinity Control Act of June 24, 
1974 (88 Stat. 266). Project construction wasbegun in 1936, and 
the first water was available for irrigation from the Gila Gravity main 
Canal on November 4, 1943. Construction of the Welton-Mohawk Division 
features was started in August 1949. On May 1, 1952, water from the 
Colorado River was turned onto the Wellton-Mohawk fields for the first 
time. The project was essentially complete by June 30, 1957. The 
Wellton-Mohawk Irrigation and Drainage District operates the irrigation 
facilities in the Wellton-Mohawk Division.
    Wellton-Mohawk is one of the Reclamation Project Districts 
that have sought agreement with the Bureau of Reclamation for a 
transfer and is similar to the situation of the Burley 
Irrigation District which sought transfer of its portion of the 
Minidoka Project in Idaho. Initial drafts of the legislation 
were modeled after the Burley legislation reported by the 
Committee during the first session. Wellton-Mohawk has fully 
repaid its project costs and was provided a certificate of 
discharge on November 27, 1991. On July 10, 1998, the District 
and the Bureau signed a Memorandum of Agreement (see Appendix) 
that covers the details of the transfer of title. It includes 
transfer of lands between the federal government and the 
District, including the acquisition of additional lands for 
exchange. All transfers will be at fair market value. No change 
in project operation is contemplated by the transfer and the 
District will continue to limit irrigated acreage to 62,875 as 
provided in P.L. 93-320. The transfer would include all 
facilities and works for which full repayment has been made.

                          legislative history

    S. 2087 was introduced by Senator Kyl (for himself and 
Senator McCain) on May 18, 1998. A hearing was held by the 
Subcommittee on Water and Power on June 16, 1998. Similar 
legislation (H.R. 3677) was introduced by Congressman Pastor on 
April 1, 1997.
    At the business meeting on July 29, 1998, the Committee on 
Energy and Natural Resources ordered S. 2087, as amended, 
favorably reported.

           committee recommendations and tabulation of votes

    The Committee on Energy and Natural Resources, in open 
business session on July 29, 1998, by a unanimous voice vote of 
a quorum present, recommends that the Senate pass S. 2087, if 
amended as described herein.

                          committee amendment

    During the consideration of S. 2087, the Committee adopted 
an amendment in the nature of a substitute to reflect that the 
Department of the Interior and the Wellton-Mohawk Irrigation 
and Drainage District had entered into an agreement covering 
the details of the proposed transfer. At the time S. 2087 was 
introduced, the agreement was still under negotiation. The 
amendment authorizes the Secretary to implement the terms of 
the agreement, including conveying certain lands and continuing 
to provide water and power under existing contracts. The 
amendment also clarifies that the legislation does not alter 
any obligations under the Colorado River Salinity Control Act.

                      section-by-section analysis

    Section 1 provides a short title.
    Section 2 provides the Secretary of the Interior the 
authority to carry out all provisions of the Memorandum of 
Agreement covering the transfer of title, including the 
authority to convey lands as reburied under section 2 of the 
Memorandum.
    Section 3 requires the Secretary of the Interior and the 
Secretary of Energy to continue to provide water and power as 
provided under existing contracts and as provided under the 
Memorandum.
    Section 4 is self-explanatory.
    Section 5 is self-explanatory.
    Section 6 is self-explanatory.

                   cost and budgetary considerations

    The following estimate of the cost of this measure has been 
provided by the Congressional Budget Office:

S. 2087--Wellton-Mohawk Title Transfer Act of 1998

    CBO estimates that enacting this bill would result in 
additional spending of about $1 million by the Bureau of 
Reclamation (the bureau) over the next two years, assuming 
appropriation of the necessary amounts. These funds would pay 
for necessary environmental studies and legal transactions 
associated with the transfer of the federally owned Gila 
Irrigation Project in Arizona to the Wellton-Mohawk Irrigation 
and Drainage District (the district). Because the bill could 
affect direct spending by increasing offsetting receipts from 
the sale of federal land, pay-as-you-go procedures would apply, 
but CBO estimates that no such change would occur.
    S. 2087 would authorize the appropriation of such sums as 
are necessary to implement a memorandum of agreement between 
the bureau and the district regarding transfer of the federal 
irrigation project to the district. Based on information from 
the bureau, CBO estimates that the federal share of costs to 
implement this transfer would be about $1 million over the next 
two years. In addition, the agreement gives each party the 
discretion to exchange, or purchase at fair market value, 
certain land owned by the district or the federal government. 
Any such purchases or sales of federal land could result in 
additional federal spending or offsetting receipts. However, 
CBO expects that any additional land transactions would be 
accomplished by means of exchanges between the parties and thus 
would have no budgetary effect.
    S. 2087 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments. 
The district has agreed to pay a share of the costs to 
implement this transfer as part of its memorandum of agreement 
with the bureau. These costs, which CBO estimates would total 
about $1 million, were voluntarily accepted by the district as 
part of that agreement.
    The CBO staff contacts are Kim Cawley (for federal costs), 
and Marjorie Miller (for the state and local impact). This 
estimate was approved by Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                      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 
carrying out S. 2087. 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.
    Little, if any, additional paperwork would result from the 
enactment of S. 2087, as ordered reported.

                        executive communications

    On June 5, 1998, 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 agency recommendations on S. 2087. These 
reports had not been received at the time the report on S. 2087 
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. The relevant testimony provided by 
the Bureau of Reclamation at the Subcommittee hearing follows:

     Statement of Eluid L. Martinez, Commissioner, U.S. Bureau of 
                Reclamation, Department of the Interior

    Thank you for the opportunity to appear today to provide 
the Administration's views on S. 2087.
    S. 2087 would authorize the Secretary of the Interior to 
convey certain works, facilities, and title to the Gila Project 
and designated lands within or adjacent to the Gila Project to 
the Wellton Mohawk Irrigation and Drainage District, and for 
other purposes.
    Mr. Chairman, the Department believes that the Gila Project 
and designated lands associated with the Wellton Mohawk 
District present a good candidate for transfer. However, 
adopting the language in this legislation is premature given 
the ongoing efforts between the District and the Bureau of 
Reclamation to work through a number of unresolved issues. 
Accordingly, Reclamation opposes S. 2087 as presently drafted.
    Background. Since February 1998, when the Wellton Mohawk 
Irrigation and Drainage District (WMIDD) indicated its interest 
in title transfer, Reclamation's area office in Yuma, Arizona 
and the regional office in Boulder City, NV have been meeting 
with the District, the Western Area Power Administration and 
the Bureau of Land Management to identify issues that need to 
be addressed and work through them as much as possible. The 
sessions have been cooperative and productive. However, the 
issues related to the lands, salinity control and others are 
complicated and the process for resolving them is new to all 
sides. Reclamation and WMIDD have agreed to complete and sign a 
Memorandum of Agreement (MOA) to specify the roles and 
responsibilities for working through all the issues to develop 
a title transfer agreement in an efficient and timely process 
agreeable to all sides. WMIDD and Reclamation set a schedule 
for completing and signing the MOA by November 1998. However, 
we are attempting to significantly speed up that process and 
have the MOA completed by July 1, 1998--five months sooner than 
originally anticipated. I would like to commend Reclamation and 
the District for the hard work and dedication to making this 
transfer a reality.
    Mr. Chairman, in April, I testified on similar 
legislation--HR 3766--before the House Resources Subcommittee 
on Water and Power. I am pleased to note that many of the 
concerns that were raised in my testimony at that time have 
been addressed.
    I would like to address the Department's concerns with S. 
2087 as drafted:
    (1) Memorandum of Agreement. Section 2(a)(1) defines the 
MOA as being dated July 1, 1998. While we are working hard to 
make this deadline. I am concerned that defining the date for 
execution of the MOA this specifically is problematic.
    (2) Implementing. Section 2(b) is confusing and should be 
clarified. The Department strongly opposes the provision which 
would automatically transfer the lands and facilities by 
``operation of law'' once NEPA is completed and once the fair 
market value is determined. This language would not allow for 
an agreement to be reached on mitigation or other issues that 
might be necessary as a result of the public input received and 
analysis completed under the NEPA process. Reclamation suggests 
that the bill language be modified to require that if title is 
not transferred by the date set forth in the MOA, that 
Reclamation, after consultation with WMIDD, will submit a 
report to the Committee on Resources of the United States House 
of Representatives and to the Committee on Energy and Natural 
Resources of the United States Senate on the status of the 
transfer, and any obstacles to its completion.
    (3) Salinity Control. An important function of the Bureau 
of Reclamation in this region is to ensure that the United 
States complies with Minute No. 242 of the Mexican Water Treaty 
of 1944 related to the permanent and definitive solution to the 
international problem of the salinity of the Colorado River. 
Given the importance of this issue and the fact that we have 
not had the opportunity to fully research or work out the 
issues associated with salinity control and compliance with 
Minute No. 242 of the Mexican Water Treaty of 1944, we believe 
that salinity issues must be directly addressed in any 
agreement to transfer title. This issue is of critical 
importance. Work toward this end is on-going as part of the 
drafting of the MOA, but given the complexity, it has not been 
finalized.
    (4) Report Requirement. Section 2(f) requires that the 
Secretary provide a report to the House Resources Committee and 
the Senate Energy and Natural Resources Committee within 18 
months after enactment on the status and any obstacles. While 
we do not object to the requirement, we suggest that the 
language be modified to require that the report be submitted 
only if the transfer is not substantially completed. This way, 
no report will be necessary if the transfer is completed. 
Secondly, the 18 month time frame established in S. 2087 does 
not give Reclamation or the District enough time to work 
through the numerous issues that need to be addressed.
    (5) Lands. Some of the lands that are under consideration 
for transfer are owned by the Bureau of Land Management (BLM) 
or are BLM withdrawn lands. While BLM has been part of the 
discussions with Reclamation and WMIDD in the field, a process 
for addressing the disposition of these lands needs to be 
developed.
    (6) Tax-exempt financing. To ensure that the District does 
not finance its costs in ways that would generate a loss to the 
Treasury, Section 2 should be amended to include the following 
language:
    (h) Any funds paid by the District pursuant to this section 
shall not be financed by the proceeds of obligations that 
qualify as federally tax-exempt obligations under Section 103 
of the Internal Revenue Code, as amended.''
    In conclusion, Mr. Chairman, this is a good candidate for 
transfer. I want to reiterate that progress on completing the 
MOA is well ahead of our original schedule in response to the 
request of this Committee. Once that is completed and the MOA 
is signed, I respectfully propose that we work together to 
craft legislative language to implement the process set forth 
in that document--which will reflect agreement between the 
Department and Wellton Mohawk.

                        changes in existing law

    In compliance with paragraph 12 of the rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 2087, as 
ordered reported.

                             A P P E N D I X

                              ----------                              


    Memorandum of Agreement Between United States Department of the 
   Interior, Bureau of Reclamation, Lower Colorado Region, Yuma Area 
Office and Wellton-Mohawk Irrigation and Drainage District To Transfer 
Title to Works, Facilities and Lands in the Wellton-Mohawk Division of 
                       the Gila Project, Arizona

    This Memorandum of Agreement (hereafter referred to as the 
``Agreement''), made this 10th day of July, 1998, is between 
the United States of America, Bureau of Reclamation (hereafter 
referred to as the ``United States or Reclamation'') and 
Wellton-Mohawk Irrigation and Drainage District (hereafter 
referred to as the ``District''), an irrigation and drainage 
district created, organized, and existing under and pursuant to 
the laws of the State of Arizona, with its principal place of 
business in Yuma County, Arizona.
    The purpose of this Agreement is to define the method and 
principles by which title to the Gila Project, Wellton-Mohawk 
Division works, facilities and certain federally-owned lands 
will be transferred from the United States to the District.

                          Explanatory Recitals

    Whereas, Reclamation desires to transfer title to, and the 
District desires to accept transfer of, title now vested in the 
United States to Gila Project, Wellton-Mohawk Division works, 
facilities and certain federally-owned lands; and
    Whereas, on November 27, 1991, a Certificate of Discharge 
of Repayment Obligation and Exemption from Acreage Limitation 
and Full Cost Pricing Provisions of Federal Reclamation Law was 
issued to the District.
    Now, therefore, in consideration of mutual covenants herein 
contained, the Parties agree as follows:

                              definitions

    1. Unless otherwise noted, the following definitions apply 
only to the terms used in this Agreement:
    (a) ``Acquired Lands'' means those lands within or adjacent 
to the Division acquired by the United States pursuant to 
Public Law 93-320 or Public Law 100-512.
    (b) ``Agricultural Return Flows'' means, including but not 
limited to: (1) water delivered at Reclamation's Main Outlet 
Drain (MOD) Station 0+00; (2) Gila Gravity Main Canal seepage 
credited to the District; (3) gravity flow returns, both 
surface and subsurface, to the Gila River measured at Dome.
    (c) ``Consolidated Contract'' means Reclamation's contract 
with the District, Contract No. 1-07-30-W0021 as amended and/or 
supplemented.
    (d) ``Division'' means the Wellton-Mohawk Division of the 
Gila Project, Arizona, as authorized under Gila Project 
Reauthorization Act of July 30, 1947 (61 Stat. 628).
    (e) ``Exhibit A'' lists the tasks, responsible party, 
schedule, and costs for all land transactions included in this 
Agreement.\1\
---------------------------------------------------------------------------
    \1\ The exhibits have been retained in committee files.
---------------------------------------------------------------------------
    (f) ``Exhibit B'' lists the tasks, responsible party, 
schedule, and costs to convey all works and facilities of the 
Division to the District.
    (g) ``Exhibit C'' lists the tasks, responsible party, 
schedule, and costs of compliance with all laws, regulations, 
and manual requirements; including but not limited to, 
environmental compliance clearances, National Environmental 
Policy Act (NEPA) activities, hazardous waste remediation, 
National Historic Preservation Act (NHPA) compliance, 
Comprehensive Environmental Response Compensation and Liability 
Act (CERCLA) compliance.
    (h) ``Exhibit D'' lists the title transfer contracts to be 
developed, existing contracts or contract provisions that may 
require amendment or supplementation due to title transfer; and 
identifies the task, responsible party, schedule and costs of 
development, amendment or supplementation.
    (i) ``Exhibit E'' lists all costs to reflect the total cost 
of this title transfer.
    (j) ``GVPD/MMWCD Lands'' means those Gila Valley Power 
District and Mohawk Municipal Water Conservation District lands 
remaining in title to the United States which were acquired by 
the United States pursuant to Section 2 of the Gila Project 
Reauthorization Act of July 30, 1974 (61 Stat. 628) for which 
the repayment obligation has been satisfied.
    (k) ``Offered Lands'' means those lands, primarily in the 
Gila River Channel, owned by the District, offered to 
Reclamation for exchange or purchase at fair market value, to 
allow Reclamation to meet the reasonable and prudent 
alternatives of the Biological Opinion for Colorado River 
operations.
    (l) ``Oversight Committee'' means the committee comprised 
of the Manager of the Yuma Area Reclamation, and the Manager of 
the District or a designated representative.
    (m) ``Priority Use Power'' means the capacity and energy 
associated with Parker-Davis Project Generation for full 
project development and operation; and for use on or by federal 
Reclamation projects in the Yuma County, Arizona area.
    (n) ``Project'' means the Gila Project as identified by the 
Gila Project Reauthorization Act of July 30, 1947 (61 Stat. 
628).
    (o) ``Public Lands'' means the public lands within and 
adjacent to the Division that the Secretary of Interior, at his 
discretion, is authorized to sell to the District at fair 
market value.
    (p) ``Reclamation'' means the United States Department of 
Interior, Bureau of Reclamation.
    (q) ``Secretary'' means the Secretary of the Interior or a 
duly authorized representative.
    (r) ``Title Transfer Contract'' means the contract that 
incorporates the terms and conditions for, and lists the works, 
facilities, and lands to be transferred.
    (s) ``Western'' means the Western Area Power Administration 
of the United States Department of Energy.
    (t) ``Withdrawn Lands'' means those lands within and 
adjacent to the District that have been withdrawn from public 
use for Reclamation purposes.
    (u) ``Works and Facilities'' means the works and facilities 
of the Division, or portions thereof, constructed by the United 
States for the District pursuant to the Consolidated Contract 
as more particularly described in Exhibit B of said Contract, 
or otherwise constructed as Division works and facilities. 
Works and facilities do not include Acquired Lands or Withdrawn 
Lands on which the works and facilities have been constructed.

                        statement of principles

    2. This Agreement shall protect the financial interest of 
the United States. The following principles shall guide and 
direct the transfer process:
    (a) Legislation Required. The United States holds title to 
works and facilities in the Wellton-Mohawk Division of the Gila 
Project, Arizona, as well as lands within and adjacent to the 
District. The Secretary is not authorized to transfer title to 
United States assets without express authorization by Congress 
through legislation. This title transfer will not occur unless, 
and until, authorized by duly enacted legislation.
    (b) Compliance with Environmental Laws and Regulations. 
Reclamation will ensure compliance with NEPA, NHPA, CERCLA and 
other applicable Federal laws as required for transfer of 
ownership of Division works, facilities, and lands. The 
District will ensure that the works, facilities, and lands to 
be transferred will be operated in accordance with authorized 
purposes. No change in project purpose, operation, or use is 
contemplated or intended by the District or the United States 
as a result of this transfer.
    (c) Lands Transactions. The District and Reclamation shall 
jointly identify lands within and adjacent to the District to 
be purchased or exchanged or otherwise transferred by and 
between the District and Reclamation. Acquired Lands, Public 
Lands, and Withdrawn Lands shall be appraised in accordance 
with practices approved by the Secretary to ensure that the 
United States receives fair market value for the lands 
purchased or exchanged. Withdrawn Lands may be acquired by the 
District at fair market value provided that Congress enacts 
legislation authorizing and providing for such acquisition and 
transfer. The acquisition costs of GVPD/MMWCD lands have been 
fully repaid by the District and the GVPD/MMWCD lands shall be 
transferred to the District without cost to the District except 
as identified in Exhibit A.
    (d) Agricultural Return Flows (ARFs) From the District 
Delivered to the MOD at Station 0+00. The District agrees to 
accept Reclamation's goal of delivery of ARFs at the Yuma 
Desalting Plant (YDP) design capacity at MOD Station 0+00, and 
that the District water management activities will reflect this 
goal to the extent that the goal remains relevant regardless of 
whether the United States operates the YDP or replaces the 
bypass stream in accordance with Public Law 93-320, as amended. 
Further, District water management activities will reflect 
Reclamation's goal that salinity levels of ARF's delivered at 
MOD Station 0+00 shall not increase above historical salinity 
levels of ARFs delivered at MOD Station 0+00.
    (e) Agricultural Production Lands: Pursuant to Public Law 
93-320, as amended, and the Consolidated Contract, the District 
is restricted to irrigating not more than 62,875 acres of land.
    (f) Repair of Main Outlet Drain Extension (MODE)/MOD: The 
District will cooperate with Reclamation in discontinuing use 
of MODE/MOD for two weeks each year or as needed for repairs. 
The District will also inform Reclamation of any outages that 
may occur in relation to the ARFs.
    (g) Applicability of Existing Water and Power Contracts: 
The Secretary and the District shall maintain in place and in 
force all contracts which provide for Colorado River water and 
Parker-Davis Project Priority Use Power, and the delivery 
thereof, unless such contract or contracts are modified or 
terminated by mutual consent of the parties thereto or as 
otherwise provided in said contracts. This Agreement shall not 
alter, supplement or amend any contract. Title to the Western's 
Wellton-Mohawk Substation, transmission lines and substations 
associated with Pumping Plant One and Pumping Plant Three, 
underlying lands, and all appurtenant rights of way and 
easements shall remain in the name of the United States. 
Notwithstanding the transfer of title to works, facilities, and 
lands, the Secretary is authorized and shall continue to 
provide for and deliver water and Priority Use Power to 
Wellton-Mohawk in accordance with the terms of the Consolidated 
Contract including any amendments, supplements, or extensions 
thereof and the Power Management Agreement (Reclamation's and 
Western's Contract Numbers 6-CU-30-P1136, 6-CU-30-P1137 and 6-
CU-30-P1138) including any amendments, supplements, or 
extensions thereof.
    (h) Works and Facilities: This title transfer shall include 
all works and facilities of the Division.
    (i) Rights of Way and Easements: The transfer of works and 
facilities shall include any and all rights of way and 
easements appurtenant to the operation of the works and 
facilities including works and facilities in the Gila River 
channel. The transfer of rights of way and easements shall not 
result in any impairment or defect in any right of way or 
easement. Each right of way and easement shall be in full force 
and effect following transfer. Conveyance and transfer of 
easements and rights of way shall be approved by Reclamation 
and the District.

                             effective date

    3. This Agreement shall be signed before legislation is 
enacted. The signed Agreement shall become effective upon 
enactment of authorizing legislation. No transfer of title to 
works, facilities and lands shall occur unless and until 
legislation authorizing this transfer is enacted by Congress. 
The target date for completion of the transfer of title is 
December 31, 2001, or such date as set by Congress.

                              termination

    4. This Agreement may be terminated, if permitted by duly 
enacted legislation, by either party 30 days after receiving 
written notification from the party requesting termination.
    In any event, this Agreement will terminate upon execution 
of the Title Transfer Contract. Upon termination, all 
outstanding, irrevocable, reimbursable obligations incurred by 
Reclamation under the terms of this Agreement shall be 
satisfied by the District. Any funds advanced by the District 
for reimbursable costs not expended or obligated by Reclamation 
shall be refunded to the District.

                           Report to congress

    5. If title transfer has not occurred, pursuant to duly 
enacted legislation and this Agreement, by July 1, 2000, 
Reclamation will provide a report to the Committee on Resources 
of the United States House of Representatives and to the 
Committee on Energy and Natural Resources of the United States 
Senate. The report will cover the status of the Title Transfer, 
any obstacles to completion of the transfer as provided in the 
legislation, and the anticipated date for such transfer.
    The goal of Reclamation and the District is that within one 
hundred eighty days of the execution of the Title Transfer 
Contract, the Secretary shall convey to the District all right, 
title andinterest of the United States to the facilities, works 
and lands to be conveyed and transferred to the District; provided, 
that such transfer is not otherwise directed by Congress.

                         LAND PURCHASE PAYMENT

    6. The District shall pay such sums, and on such terms, as 
are stated in the Title Transfer Contract for lands purchased 
by the District pursuant to this Agreement.

       RESPONSIBILITY FOR WORKS AND FACILITIES FOLLOWING TRANSFER

    7. (a) Operation, Maintenance, Repair and Replacement. The 
District shall assume full responsibility and liability for all 
duties and costs associated with the operation, maintenance, 
repair, replacement, enhancement, and betterment of the 
following transfer. The District shall not be eligible for any 
federal funding under federal Reclamation law to assist the 
District's activities listed in this paragraph.
    (b) Other Federal Assistance. This title transfer action in 
not intended to affect the District's right to request or 
receive federal assistance under other federal programs.

                                 COSTS

    8. The following cost allocation, which is consistent with 
existing Reclamation policy, applies in the absence of specific 
criteria established through legislation.
    (a) Cost-effective Cost-efficient. The goal is for 
Reclamation and the District to seek the most cost effective 
means in developing and implementing this transfer. It is the 
intent of the parties to accomplish this transfer of title and 
assignment of interest in the most fiscally responsible manner 
consistent with proper land and facility title transfer 
practices.
    (b) Cost Shared. The District and Reclamation shall 50-50 
cost share all expenses associated with NEPA compliance, 
CERCLA, and NHPA, in accordance with Exhibit C. Reclamation 
will not be responsible for mitigation costs associated with 
this transfer. The cost of preparing and presenting the report 
to Congress shall be shared equally by Reclamation and the 
District.
    (c) District's Cost Responsibility. The District will be 
responsible for payment of costs directly attributable to and 
solely occasioned by the transfer as they relate to works, 
facilities, and lands transferred to the District. Such costs 
include normal costs of land transfer, purchase, and/or 
exchanges including, but not limited to, title examinations, 
title searches, boundary surveys, appraisals and legal 
descriptions and recording costs.
    (d) Reclamation's Cost Responsibility. Reclamation will be 
responsible for Reclamation costs associated with miscellaneous 
transfer activities, consisting of contract development, 
contracting negotiations, research activities undertaken by 
Reclamation staff, including preparation and execution of this 
Agreement, costs associated with works and facilities transfer, 
costs of preparation of property voucher for transfer of 
physical property, and transfer costs for lands transferred to 
the United States.

              COOPERATION, PROCEDURES AND RESPONSIBILITIES

    9. (a) Reclamation will be responsible for the following:
    1. To establish a unique cost authority number to track and 
account for the cost of services provided under the terms of 
this Agreement and to provide the District with quarterly 
updates itemized by month.
    2. To provide the District with copies of all contracts, 
invoices, and other writings which evidence obligations 
pursuant to this Agreement.
    3. To ensure compliance with applicable federal laws.
    4. To draft and execute this Agreement and the Title 
Transfer Contract(s) and other documents.
    5. Reclamation will be responsible for CERCLA remediation 
on the lands under Reclamation control.
    (b) The District will be responsible for the following:
    1. To establish a process to track and account for the 
costs associated with title transfer activities provided under 
the terms of this Agreement and to provide Reclamation with 
quarterly updates itemized by month.
    2. To review and comment on the draft Title Transfer 
Contract.
    3. To provide to Reclamation environmental compliance 
reviews and documents that are necessary for Reclamation to 
accept or adopt the environmental compliance actions undertaken 
by the District with respect to this title transfer.
    4. To provide any required boundary surveys, title 
searches, appraisals, and legal descriptions for lands 
associated with this conveyance to be transferred, purchased, 
and/or exchanged including deeds therefore.
    5. The District will be responsible for CERCLA remediation 
on the lands under the District's control.
    (c) Areas of mutual responsibility:
    1. To determine which lands will be exchanged, sold, 
purchased, conveyed or otherwise transferred to the District or 
Reclamation.
    2. To identify works, facilities, and lands to be 
transferred.
    3. To ensure, and provide for, reasonable and appropriate 
public participation.
    4. To identify in-kind services. Credit may be given for 
in-kind services directly related to this project, and agreed 
to by the Oversight Committee. In-kind services will not be 
credited for an amount greater than Reclamation's cost to do 
the work. These costs will be outlined in the Exhibits.

                          oversight committee

    10. The Oversight Committee shall provide the 
administrative oversight to ensure a timely and successful 
transfer. This Committee shall guide transfer activities 
including the formation and guidance of technical committees. 
The Committee has the authority to approve variations in tasks, 
schedules, costs and budget to meet the purpose of this 
Agreement.

                               liability

    11. The District shall hold the United States harmless and 
shall indemnify the United States for any and all claims, 
costs, damages, and judgments of any kind arising out of any 
act, omission, or occurrence relating to the works, facilities 
and lands at issue herein, except for such claims, costs, or 
damages arising from acts of negligence committed by the United 
States or by its employees, agents, or contractors prior to the 
date of title transfer for which the United States is found 
liable under the Federal Tort Claims Act, 28 U.S.C. 2671 et. 
seq. or as provided by Congress in transfer legislation.

                  exhibits made part of this agreement

    12. The Exhibits as attached hereto are incorporated and 
made a part of this Agreement and each shall be effective until 
modified or superseded as provided in this Agreement. The 
Exhibits may be amended upon mutual agreement of the District 
and Reclamation.

           contingent on appropriations or allotment of funds

    13. The expenditure or advance of any money for the 
performance of any obligation of the United States under this 
Agreement shall be contingent upon the appropriation or 
allotment of funds. Absence of appropriations or allotment of 
funds shall relieve Reclamation and the District from any 
obligations under this Agreement. No liability shall accrue to 
the United States in case funds are not appropriated or 
allotted.

                                Notices

    14. Any notice, demand, or request authorized or required 
by this Agreement shall be deemed to have been given by the 
District when mailed or delivered to the Area Manager, Yuma 
Area Office, Bureau of Reclamation, and by Reclamation when 
mailed or delivered to the Manager of the District. The 
designation of the addressee or the address may be changed by 
written notification to the parties.

                  compliance with laws and regulations

    15. Following title transfer, the District shall comply 
with all applicable federal and state laws and regulations.

                         third party agreements

    16. The United States shall, if assignable, assign to the 
District its rights, duties, obligations, and responsibilities 
which exist as a result of third-party agreements in the 
Division, including the granting of any right to use, cross, or 
occupy any of the facilities, works and lands. The District 
shall honor all third-party agreements for the length of the 
agreement and shall provide all third parties with the same 
allowances that they receive under the existing contracts.

                        officials not to benefit

    17. No member of, or delegate to, Congress, resident 
Commissioner, or official of the District shall benefit from 
this Agreement other than as a water user or landowner in the 
same manner as other water users or landowners.

              amendment, modification, and supplementation

    18. This Agreement may be amended, supplemented or 
modified, in writing and signed by Reclamation and the 
District. Any Exhibit referenced herein may be later attached 
as a supplement to this Agreement and shall be signed by 
Reclamation and the District.

In duplicate

    Accepted and agreed to this 10th Day of July, 1998.