House Report 106-257 - WELLTON-MOHAWK TRANSFER ACT

[House Report 106-257]
[From the U.S. Government Publishing Office]

106th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 106-257

======================================================================

WELLTON-MOHAWK TRANSFER ACT

_______

July 26, 1999.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Young of Alaska, from the Committee on Resources, submitted the
following

R E P O R T

[To accompany H.R. 841]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill
(H.R. 841) 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, report favorably thereon
with an amendment and recommend 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 directed 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Withdrawn Lands, as defined in the Agreement.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 (Public Law 93-320; 43 U.S.C. 1571 et
seq.).

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 BILL

The purpose of H.R. 841 is 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.

BACKGROUND AND NEED FOR LEGISLATION

Bureau of Reclamation (BOR) facility transfers has been of
particular interest to Congress, local irrigation districts,
and the Administration in recent years. Facility transfers
represent an effort to shrink the federal government and shift
the responsibilities for ownership into the hands of those who
can more efficiently operate and maintain them. As a result of
the National Performance Review (Reinventing Government II),
BOR, which is part of the Department of the Interior, initiated
a program in 1995 to transfer ownership of some of its
facilities to non-federal entities. However, to date, the
Administration has not presented a legislative proposal for
project transfers. During the 105th Congress, two legislatively
initiated BOR transfers bills were signed into law that
directed the Secretary of the Interior to convey all right,
title, and interest of the United States in and to specified
project facilities.
Much of the momentum for these transfers comes from local
irrigation districts that are seeking title to these projects.
The federal government holds title to more than 600 BOR water
projects throughout the West. A growing number of these
projects are now paid out and operated and maintained by local
irrigation districts. The districts seek to have the facilities
transferred to them since many of the districts now have the
expertise needed to manage the systems and can do so more
efficiently then the federal government. BOR has already
transferred operation and maintenance responsibilities for
about 400 of the projects to local irrigation districts. Under
the provisions of Section VI of the Reclamation Act of 1902,
title to project facilities remain with the United States
unless otherwise provided by Congress, even if project
beneficiaries have completed their repayment obligation.
Section VI of the Reclamation Act of 1902 states:

The Secretary of the Interior is hereby authorized
and directed to use the reclamation fund for the
operation and maintenance of all reservoirs and
irrigation works constructed under the provisions of
this act: Provided, That when the payments required by
this act are made for the major portion of the lands
irrigated from the waters of any 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, to be maintained at their expense
under such form of organization and under such rules
and regulations as may be acceptable to the Secretary
of the Interior: Provided, That the title to and the
management and operation of the reservoirs and the
works necessary for their protection and operation
shall remain in the Government until otherwise provided
by Congress.

32 Stat. 389; 43 U.S.C. Sec. Sec. 491, 498
Many of these projects were constructed in remote locations
and at a time when there were no local communities and
utilities near the BOR project. Furthermore, many of the States
in which the projects were built did not have a sufficient tax
base to fund them. However, as the West became more populated,
and with the urbanization of these areas, the BOR now owns and
operates public facilities that would be owned, operated, and
funded by private corporations or local government agencies if
they were constructed today.
Legislative initiatives to transfer the title of BOR
facilities have been in play for many years. Two bills enacted
during the 105th Congress and signed into law directed the
Secretary of Interior to convey all right, title, and interest
of the United States in and to selected project features to the
Burley Irrigation District and the Canadian River Project. See
Public Law 105-351 and Public Law 105-316. In addition, Title
XIV of Public Law 102-575 directed the Secretary to transfer
the Rio Grande Project in New Mexico to the local irrigation
district, once the local irrigation district consented to amend
a contract.

Background of the Gila Project

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 was begun in 1936,
and the first water was available for irrigation from the Gila
Gravity main canal on November 4, 1943. Construction of the
Wellton-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 has fully repaid its project costs and was
provided a certificate of discharge on November 27, 1991. On
July 10, 1998, the District and BOR signed a Memorandum of
Agreement 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 Public Law 93-320. The transfer would include all
facilities and works for which full repayment has been made.

COMMITTEE ACTION

H.R. 841 was introduced on February 24, 1999, by
Congressman Ed Pastor (D-AZ). The bill was referred to the
Committee on Resources, and within the Committee to the
Subcommittee on Water and Power. On March 11, 1999, the
Subcommittee met to mark up the bill. Congressman John
Doolittle offered an amendment to the bill that would direct
the Secretary of Interior, rather than authorize, to transfer
the project works. The amendment was adopted by voice vote. The
bill was then ordered favorably reported to the Full Committee
by voice vote. On March 17, 1999, the Full Resources Committee
met to consider the bill. No amendments were offered and the
bill was then ordered favorably reported to the House of
Representatives by voice vote.

SECTION-BY-SECTION ANALYSIS

Section 1. Short title

The short title of the bill is the Wellton-Mohawk Transfer
Act.

Section 2. Transfer

The section directs the Secretary of Interior to convey
certain facilities of the Gila Project, Arizona, to the
Wellton-Mohawk Irrigation and Drainage District pursuant to a
Memorandum of Agreement (MOA) between the Bureau and the
District that was signed on July 10, 1998. The MOA states:

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 and interest 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.

Furthermore, pursuant to the MOA, the bill authorizes the
Secretary to sell adjacent withdrawn lands and related lands to
the District based on a fair market valuation. 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 Public Law 93-320. The transfer would include all
facilities and works for which full repayment has been made. On
November 7, 1991, the Bureau certified that full repayment had
been made for all water delivery and drainage works.
Additionally, the Committee expects that title transfer
should occur in an open and fair public process within the
affected community. The Committee does not want to establish a
one size fits all statutory procedure that would limit a State,
or community from developing a process to address issues
surrounding each individual project, and how it should be
transferred. Furthermore, it is not the intent of the Committee
to use the National Environmental Policy Act as a means to
stall, or halt a project from transferring to a local entity.
If environmental documentation is needed to facilitate a
transfer, it is the intent of the Committee to have it done in
a timely manner.

Section 3. Water and power contracts

This section 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
MOA.

Section 4. Savings

This Section clarifies the application of the Colorado
River Basin Salinity Control Act (43 U.S.C. 1571 et seq.).

Section 5. Report

This Section requires the Secretary to issue a report if
the transfer has not occurred by July 1, 2000.

Section 6. Authorization

This Section authorizes an appropriation of such sums as
may be necessary.

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Resources' oversight findings and recommendations
are reflected in the body of this report.

CONSTITUTIONAL AUTHORITY STATEMENT

Article I, Section 8 and Article IV, Section 3 of the
Constitution of the United States grant Congress the authority
to enact this bill.

COMPLIANCE WITH HOUSE RULE XIII

1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(3)(B)
of that rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under Section 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act. As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
Section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, spending
authority, credit authority, or an increase or decrease in tax
expenditures. According to the Congressional Budget Office,
enactment of the bill would increase offsetting receipts by
approximately $2 million from the sale of federal land.
3. Government Reform Oversight Findings. Under clause
3(c)(4) of rule XIII of the Rules of the House of
Representatives, the Committee has received no report of
oversight findings and recommendations from the Committee on
Government Reform on this bill.
4. Congressional Budget Office Cost Estimate. Under clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and Section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for this bill from the Director of the Congressional Budget
Office:

U.S. Congress,
Congressional Budget Office,
Washington, DC, March 18, 1999.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 841, the Wellton-
Mohawk Transfer Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Gary Brown
(for federal costs), and Marjorie Miller (for the state and
local impact).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.

congressional budget office cost estimate

H.R. 841--Wellton-Mohawk Transfer Act

Summary: H.R. 841 would authorize the appropriation of such
sums as are necessary to implement a memorandum of agreement
between the Bureau of Reclamation (the bureau) and the Wellton-
Mohawk Irrigation and Drainage District (the district)
regarding transfer of the federally owned Gila Irrigation
Project to the district. The bill would give each party the
discretion to exchange with each other, or purchase at fair
market value, lands relating to the project.
CBO estimates that implementing this bill would result in
additional spending of about $500,000 by the bureau over the
2000-2001 period, assuming appropriation of the necessary
amounts. In addition, CBO estimates that the district would pay
a minimum of about $2 million in 2002 for certain federally
owned lands. Because the bill would affect direct spending by
increasing offsetting receipts from the sale of federal land,
pay-as-you-go procedures would apply.
H.R. 841 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Local governments might incur some costs as a result of the
bill's enactment, but these costs would be voluntary.
Estimated cost to the federal government: The estimated
budgetary impact of H.R. 841 is shown in the following table.
The cost of this legislation fall within budget function 300
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
1999 2000 2001 2002 2003 2004
----------------------------------------------------------------------------------------------------------------
Changes in direct spending:\1\
Estimated budget authority............................ 0 0 0 -2 0 0
Estimated outlays..................................... 0 0 0 -2 0 0
----------------------------------------------------------------------------------------------------------------
\1\ Implementing the bill would also affect spending subject to appropriation, but in amounts less than $500,000
a year (for 2000 and 2001).

Basis of estimate: For the purpose of this estimate, CBO
assumes that H.R. 841 will be enacted by the end of fiscal year
1999 and that the estimated amounts necessary to implement the
bill will be appropriated for fiscal year 2000. Based on
information from the bureau, CBO estimates that the federal
share of costs for implementing the transfer of the federally
owned irrigation project would be about $500,000, spread over
fiscal years 2000 and 2001. These funds would pay for necessary
environmental studies and legal transactions. The estimate of
outlays is based on historical rates of spending for these
activities.
H.R. 841 would give the district and the bureau the
discretion to exchange, or purchase at fair market value, lands
relating to the project. Based on information provided by the
bureau, CBO estimates that the district would pay a minimum of
about $2 million in 2002 for certain lands. That payment would
be recorded as offsetting receipts (a credit against direct
spending). Based on information provided by the bureau, CBO
estimates that the government would not forgo any income by
completing these transactions. In addition, we estimate that
completing the land transfers would have no significant impact
on spending subject to appropriation.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. The net
changes in outlays that are subject to pay-as-you-go procedures
are shown in the following table. For the purposes of enforcing
pay-as-you-go procedures, only the effects in the current year,
the budget year, and the succeeding four years are counted.

--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays.......................................... 0 0 0 -2 0 0 0 0 0 0 0
Changes in receipts......................................... Not applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------

Under the Balanced Budget Act of 1997, proceeds from
nonroutine asset sales (sales that are not authorized under
current law) may be counted for pay-as-you-go purposes only if
the sale would entail no financial cost to the government.
Based on information provided by the bureau, CBO estimates that
the sale proceeds would exceed any net revenues currently
projected to accrue from these lands; therefore, selling these
assets would result in a net savings for pay-as-you-go
purposes.
Estimated impact on state, local and tribal governments:
H.R. 841 contains no intergovernmental mandates as defined in
UMRA. 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 equal
about $1 million, were voluntarily accepted by the district as
part of that agreement. The decision to purchase land from the
federal government also would be voluntary on the part of the
district.
Estimated impact on the private sector: This bill contains
no new private-sector mandates as defined in UMRA.
Previous CBO estimate: On March 11, 1999, CBO prepared an
estimate for S. 356, the Wellton-Mohawk Transfer Act, as
ordered reported by the Senate Committee on Energy and Natural
Resources on March 4, 1999. The two bills are similar and the
estimates are the same.
Estimate prepared by: Federal costs: Gary Brown. Impact on
State, local, and tribal governments: Marjorie Miller.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for Budget Analysis.

compliance with public law 104-4

This bill contains no unfunded mandates.

preemption of state, local or tribal law

This bill is not intended to preempt State, local or tribal
law.

changes in existing law

If enacted, this bill would make no changes in existing
law.