[Senate Report 105-410]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 642
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-410
_______________________________________________________________________


 
                 CANADIAN RIVER PROJECT PREPAYMENT ACT

                                _______
                                

  October 12 (legislative day, October 2), 1998.--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. 3687]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 3687) to authorize prepayment of amounts 
due under a water reclamation project contract for the Canadian 
River Project, Texas, having considered the same, reports 
favorably thereon with an amendment and recommends that the 
Act, as amended, do pass.
    The amendment is as follows:
    On page 4, lines 18 and 19, delete ``shall have the right'' 
and insert ``may be permitted''.

                         purpose of the measure

    The purpose of the legislation is to provide for the 
prepayment of repayment obligations for the pipeline and 
related facilities of the Canadian River Project in Texas and 
the conveyance of such facilities to the Canadian River 
Municipal Water Authority.

                          background and need

    The Canadian River Project is located in the northwest 
corner of Texas, providing municipal and industrial water for 
11 cities and towns throughout the High Plains area. The 
primary purpose of the project is to supply water to the Texas 
cities of Borger, Pampa, Amarillo, Plainview, Lubbock, Slaton, 
Tahoka, O'Donnell, Lamesa, Levelland, and Brownfield. The 
principal structure is Sanford Dam on the Canadian River about 
37 miles northeast of Amarillo. Additional features include 322 
miles of pipelines, 10 pumping plants, and 3 regulating pools.
    Beginning in 1900, the Geological Survey made several 
reports about ground water in the area. From 1935 to 1946, the 
Corps of Engineers made flood control and related 
investigations of the Canadian River. In 1941, the Bureau of 
Reclamation initiated an investigation of the Arkansas River 
Basin that included the portion of the Canadian River 
identified with the project. In a letter dated May 3, 1948, the 
Department of the Interior was asked to investigate and report 
on the possibilities of developing the water and related 
resources in the Texas Panhandle, with special attention to the 
area in the Canadian River Basin. Later, the Texas 
congressional delegation requested that the Bureau of 
Reclamation, as the Federal agency primarily responsible for 
water conservation activities, expedite its investigation and 
report upon the feasibility of developing the Canadian River as 
a source of municipal and industrial water in northwest Texas. 
A series of meetings was held and representatives of local 
interests were advised to submit estimated requirements on the 
understanding that they would be required to assume contractual 
obligations prior to project construction to pay for the water 
desired. The Bureau of Reclamation prepared a feasibility 
report in 1949. The Texas Legislature created the Canadian 
River Municipal Water Authority and authorized it to contract 
with the Federal Government under the Federal reclamation laws. 
A definite plan report was prepared by Reclamation in November 
1960.
    The Canadian River Compact Commission, composed of 
representatives from Texas, Oklahoma, New Mexico, and the 
Federal Government, was organized on June 30, 1950, in 
accordance with provisions of Public Law 81-491, granting the 
consent of the Congress to negotiations between the States for 
division of the waters of the Canadian River. The compact was 
ratified by the three States by may 10, 1951, and consented to 
in Public Law 82-345 in 1952. The project was authorized by 
Public law 81-898 on December 29, 1950 (64 Stat. 1124). Section 
2(c)(3) of the statute provides ``that title to such portions 
of the pipeline and related facilities shall in like manner 
pass to the contract holder or its designee of designees upon 
payment to the United States of all obligations arising under 
this Act or incurred in connection with the project.''
    Construction of the Canadian River Project began with the 
award of a contract for Sanford Dam in February 1962. 
Continuation of construction involved award of many contracts 
for the aqueduct system, including various components such as 
segments of the pipelines, pumping plants,structures, building 
control systems, relocations, crossing agreements, and chlorination 
stations. Construction of the aqueduct system was sufficiently complete 
to initiate water deliveries in April 1968 and to transfer operation 
and maintenance responsibility to the Canadian River Municipal Water 
Authority on July 1, 1968. Subsequent completion of minor construction 
items was accomplished by the Canadian River Municipal Water Authority 
and the Bureau of Reclamation.
    Unlike other project transfers considered by the Committee 
recently, transfer of the distribution system for the Canadian 
River Project is required under the initial authorization. This 
legislation provides for prepayment of outstanding indebtedness 
and clarification of the facilities that will be transferred 
and access to other facilities that the United States will 
retain.

                          legislative history

    H.R. 3687 was introduced on April 1, 1998 and referred to 
the House Resources Committee. A hearing was held on April 30, 
1998. The measure was ordered reported amended on August 5, 
1998. On August 7, 1998, the House Committee was discharged and 
the measure passed the House by voice vote. The Senate Energy 
and Natural Resources Committee has not held a hearing on this 
bill.
    At the business meeting on September 23, 1998, the 
Committee on Energy and Natural Resources ordered H.R. 3687, as 
amended, favorably reported.

           committee recommendations and tabulations of votes

    The Committee on Energy and Natural Resources, in open 
business session on September 23, 1998, by a unanimous voice 
vote of a quorum present, recommends that the Senate pass H.R. 
3687, if amended as described herein.

                          committee amendments

    During the consideration of H.R. 3687, the Committee 
adopted an amendment to clarify that the Secretary may permit 
the Authority to use facilities retained by the United States 
but that the Authority does not have a right to such use.

                      section-by-section analysis

    Section 1 provides a short title.
    Section 2 provides a series of definitions.
    Section 3 provides for the prepayment by the Canadian River 
Authority of outstanding obligations and for the transfer of 
Project facilities as provided under the 1950 authorization of 
the Project.
    Section 4 provides for continued operation of the Project 
and use of certain facilities.
    Section 5 provides generally for the termination of further 
repayment obligations by the Authority and future 
responsibility of the Authority for operation and maintenance 
of the Project.

                   cost and budgetary considerations

    An estimate of the cost of this measure has been requested 
from the Congressional Budget Office, but has not been received 
as of the date of filing of this report. When the estimate is 
received, the Chairman will have it printed in the 
Congressional Record for the advice of the Senate. The 
legislation provides for the prepayment, within one year, of 
$34,806,731, which the Administration estimates to be the value 
of the remaining repayment obligations taking into account 
future credits to the Authority for costs incurred in operating 
non-reimbursable features of the Project. If the prepayment is 
made, revenues to the Federal Government in future years would 
be reduced by the amount of repayment obligations adjusted by 
credits for future costs incurred by the Authority on behalf of 
the United States.

                      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 H.R. 3687. 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 H.R. 3687, as ordered reported.

                        executive communications

    The Committee has not held hearings on this measure and has 
not requested formal Executive agency recommendations. The 
Commissioner of the Bureau of Reclamation, Department of the 
Interior, testified before the Subcommittee on Water and Power 
Resources of the Committee on Resources of the House of 
Representatives on April 30, 1998 on H.R. 3687. The pertinent 
portions of his testimony follow:

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

    Thank you for the opportunity to appear today to provide 
the Administration's view on H.R. 3687.
    H.R. 3687 authorizes the prepayment by the Canadian River 
Authority of the amounts due under Bureau of Reclamation 
contract number 14-06-500-485 for the Canadian River Project in 
Texas.
    Mr. Chairman, we could support this legislation with 
technical amendments.
    The Canadian River Project located in the northwest corner 
of Texas provides municipal and industrial water for eleven 
cities and towns throughout the High Plains. This project was 
authorized by Public Law 81-898 in December 1950. The Canadian 
River Project's principle structure is Sanford Dam, which is 8 
miles west of Borger, Texas on the Canadian River. It also 
includes 322 miles of pipeline, ten pumping plants, several 
small regulating reservoirs at the high points of the system 
near Amarillo, Lubbock, and Borger, and the headquarters 
building in the town of Sanford. The Canadian River Authority 
has conducted all of the operation and maintenance activities 
for this project since 1968, and has more than adequately 
maintained the project facilities.
    In addition to authorizing construction of the project, 
P.L. 81-898 directed that ``title to such portions of the 
pipeline and related facilities shall in like manner pass to 
the contract holder or its designee or designees upon payment 
to the United States of all obligations arising under this 
Act.''
    Passage of H.R. 3687 will enable the Canadian River Water 
Authority to prepay the present value, as determined by the 
Secretary, of their contractual obligation to the United 
States, and pursuant to Public Law 81-898, receive title to the 
pipeline and the other related facilities.
    It is important to note that Sanford Dam will continue to 
be owned by the United States and that Lake Meredith, which is 
the reservoir formed by the Sanford Dam, will continue to be 
administered by the National Park Service pursuant to PL. 101-
628.
    The facilities that would be transferred after the 
prepayment proposed in this legislation are good candidates for 
title transfer since there is no need for continued Federal 
involvement in the management or operation of these facilities. 
Transferring these facilities will allow Reclamation to 
redirect staff time to other important activities.
    Mr. Chairman, we have worked closely with the Authority and 
believe that both the United States and the citizens of the 
communities served by the Project will benefit from this 
transaction. As such, we could support passage of this bill 
with two changes. First, Section 1(a) should be amended to add 
after Secretary of the Interior, ``in consultation with the 
Secretary of the Treasury.'' Second, Section 1(b) should be 
amended by adding the following language: ``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.''

                        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. 736, as ordered 
reported.