[House Report 106-258]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-258

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



 
             CLEAR CREEK DISTRIBUTION SYSTEM CONVEYANCE 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. 862]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 862) to authorize the Secretary of the Interior to 
implement the provisions of the Agreement conveying title to a 
Distribution System from the United States to the Clear Creek 
Community Services District, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 862 is to direct the Secretary of 
Interior to convey title for the Clear Creek Distribution 
System to the Clear Creek Community Services District.

                  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 theprojects 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 Clear Creek distribution project

    The facilities to be transferred are located in the Central 
Valley Project's (CVP) Clear Creek South Unit, a portion of the 
Trinity River Diversion, which was authorized by the Act of 
August 12, 1955. The District is provided with CVP water 
through the Muletown Conduit which extends from the outlet 
works of Whiskeytown Dam to the terminus of the conduit at the 
existing pressure-regulating control tank located at the 
District's northern boundary.
    The District was originally formed in 1963 to sign a two-
part contract with the BOR to provide a public water system for 
homes and businesses in Anderson, California. The first part of 
the contract was a water service contract that provided the 
actual water to be used for the community's consumption. The 
second part of the contract required BOR to finance the land, 
pipes, gauges, valves and other physical facilities that make 
up the original part of the community's water distribution 
system.
    The total cost of building the original system was to be 
paid by Clear Creek over a period of forty years. However, 
unlike other situations where the purchaser owns the facilities 
at the end of the payment period, under the terms of the May 
14, 1963, contract, the federal government retained ownership 
of the original distribution system, the District office, and 
other physical facilities even thought the debt was to be paid 
completely by Clear Creek. This bill transfers title of the 
distribution system to the Clear Creek Services District 
without affecting the underlying water service contract and 
relieves the federal government of all liability for its role 
in owning and constructing the water distribution system.

                            committee action

    H.R. 862 was introduced on February 25, 1999, by 
Congressman Wally Herger (R-CA). 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. No amendments were 
offered and the bill was 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 Clear Creek Distribution 
System Conveyance Act.

Section 2. Definitions

    This sections provides three definitions for the bill.

Section 3. Conveyance of project

    The section directs the Secretary of Interior to convey 
several project components to the District, pursuant to an MOA 
entered into between the BOR and the District. Specifically, 
the agreement states:

          Within one hundred eighty (180) days of the effective 
        date of this Agreement, the Secretary shall convey to 
        the District, by means of execution, delivery, and 
        recordation of a document in the form substantially set 
        forth in Appendix A attached, all right, title, and 
        interest of the United States in and to the 
        Distribution System, subject to the terms and 
        conditions in this agreement.

MOA, page 5 [emphasis added]
    The agreement stipulates the irrigation conveyance system, 
surface drainage, related lands, a control tank and various 
other equipment and properties will be transferred. The 
payments received to date through the existing repayment 
contract constitute the full payment for transfer of the 
project, while responsibilities for all duties and costs 
associated with the operation, replacement, maintenance, 
enhancement, and betterment of the distribution system shall be 
assumed by the District.

Section 4. Relationship to existing operations

    This section clarifies the effect of the transfer required 
by H.R. 862 on existing operations of the Project.

Section 5. Relationship to certain contract obligations

    This section clarifies that the conveyance under this Act 
does not affect the District's existing water service contract 
as specified and does not deprive the District of existing 
entitlements to renewal of that contract or renewal by entering 
into a long-term water service contract.

Section 6. Liability

    Once title is transferred, the responsibility for the 
transferred property fully resides with the District. For all 
decisions and liabilities that may arise subsequently, the 
District assumes all financial risks and benefits. Both future 
cost and potential benefits should accrue to the Districts.

            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 
revenues or tax expenditures. According to the Congressional 
Budget Office, enactment of this bill could reduce federal 
spending over the 2000-2004 period but any savings would be 
``insignificant.''
    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 31, 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. 862, the Clear 
Creek Distribution System Conveyance Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Gary Brown.
            Sincerely,
                                        Steven M. Liberman,
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 862--Clear Creek Distribution System Conveyance Act

    H.R. 862 would authorize the Secretary of the Interior, 
acting through the Bureau of Reclamation, to convey all right, 
title, and interest in and to the Clear Creek Distribution 
System to the Clear Creek community Services District, which is 
located in Shasta County, California. CBO estimates that 
enacting the bill could reduce federal spending over the 2000-
2004 period, but that any such savings would not be 
significant. Because these savings could take the form of a 
reduction in direct spending, pay-as-you-go procedures would 
apply. H.R. 862 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act. Local 
governments might incur some costs as a result of the bill's 
enactment, but these costs would be voluntary. The budgetary 
impact of this legislation falls within functions 300 (natural 
resources and environment) and 800 (general government).
    H.R. 862 would absolve the federal government of potential 
liabilities associated with the Clear Creek Distribution 
System, including the cost of repairing an installation defect 
that has resulted in frequent breaks in the water delivery 
system. If H.R. 862 is not enacted, the federal government may 
elect to repair the system with appropriated funds. 
Alternatively, it is possible that the district would take 
legal action against the United States and that the federal 
government would be compelled to pay these costs. Based on 
information provided by the Bureau of Reclamation, CBO 
estimates that such costs could total about $1 million.
    H.R. 862 also would excuse the district from repaying 
amounts due to the federal government for the distribution 
system. However, in light of the problem with the system and 
the associated maintenance costs, the district may refuse to 
pay these amounts even if H.R. 862 is not enacted. The 
district's outstanding balance is $0.4 million. Its next 
scheduled payment is in 2000, and currently scheduled payments 
over the 2000-2004 period total about $0.1 million. (No 
payments were scheduled over the past several years.)
    The CBO staff contact for this estimate is Gary Brown. This 
estimate was 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 have no changes in existing 
law.
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