[House Report 106-260]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-260

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



 
        CARLSBAD IRRIGATION PROJECT ACQUIRED LAND 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

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1019]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 1019) to direct the Secretary of the Interior to convey 
lands and interests comprising the Carlsbad Irrigation Project 
to the Carlsbad Irrigation District, New Mexico, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 1019 is to direct the Secretary of 
Interior to convey lands and interests comprising the Carlsbad 
Irrigation Project to the Carlsbad Irrigation District, New 
Mexico.

                  BACKGROUND AND NEED FOR LEGISLATION

    Bureau of Reclamation (BOR) facility transfers has been of 
particular interest to the 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 Carlsbad Irrigation Project

    The Carlsbad Project is a paid-out, single purpose 
irrigation project delivering stored water to approximately 
25,000 acres of farm land in southeastern New Mexico. The 
original Carlsbad Project was authorized by the Secretary of 
the Interior on November 28, 1905. Sumner Dam was authorized 
for construction by the President on November 6, 1935, initial 
funds having been approved on August 14, 1935, under the 
Emergency Relief Appropriations Act of 1935. Section 7 of the 
Flood Control Act of August 11, 1939, declared Sumner Dam and 
Lake Sumner were to be used first for irrigation, then for 
flood control, river regulation, and other beneficial uses.
    Mineral leases for the acquired lands in the project were 
issued under the Mineral Leasing Act for Acquired Lands, and 
until the project indebtedness was repaid in 1991, were 
credited toward indebtedness on the project. These receipts 
continue to be paid into the Reclamation Fund and exist as 
credits to the Carlsbad Project.
    It is contemplated that the Carlsbad project facilities 
transferred by this legislation would be maintained and managed 
after the transfer so that there would be no significant 
changes in operation and maintenance or in land and water use 
in the reasonably foreseeable future. Once transfer takes 
place, the future management of the facility will be the 
responsibility of the new owners with any changes made pursuant 
to all then applicable laws.

                            COMMITTEE ACTION

    H.R. 1019 was introduced on March 4, 1999, by Congressman 
Joe Skeen (R-NM). 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 ``Carlsbad Irrigation 
Project Acquired Land Conveyance Act.''

Section 2. Definitions

    This section defines three terms used in the Act.

Section 3. Conveyance of project

    With the Carlsbad Irrigation District's repayment 
obligation completed, the bill directs the Secretary of 
Interior to convey the acquired lands and the drainage and 
distribution system from the BOR to the District.
    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 conveyed. 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, as this action is 
essentially a quiet title action. If environmental 
documentation is needed to facilitate a conveyance, it is the 
intent of the Committee to have it done in a timely manner. For 
example, this H.R. 1019 provides that if no changes in Project 
operations are expected following the conveyance of title then 
the Secretary shall complete the conveyance expeditiously, but 
not later than 180 days after the date of the enactment of the 
Act. If the District proposes to change Project operations as a 
result of conveyance of the Project, the Secretary shall take 
that into consideration and complete the conveyance within two 
years. If the Secretary fails to meet the conveyance deadlines 
the Committee expects the full costs of administrative action 
and environmental compliance for the conveyance to be borne by 
the Secretary. If the Secretary completes the conveyance before 
the 180-day deadline, up to $200,000 of the post enactment/
prior conveyance mineral, grazing, licence and permit receipts 
may be applied to pay the Secretary's and District's cost of 
conveyance.

Section 4. Relationship to existing operations

    The Committee expects the Secretary to allow the District 
to continue its participation in programs which involve 
Carlsbad Project lands and facilities that are not conveyed 
under this Act.

Section 5. Relationship to certain contract obligations

    This section clarifies the obligations of the District and 
the United States regarding certain contract obligations.

Section 6. Lease management and past revenues collected from the 
        acquired lands

    H.R. 1019 stipulates that the amounts existing in the 
Reclamation Fund over $2,300,000, as of the date of enactment, 
will be deposited into the Treasury. Thereafter, up to $200,000 
of the receipts collected before conveyance will be set aside 
to cover conveyance costs. Once conveyance is complete, future 
revenues shall be made available to the District for 
maintenance and improvements to the project facilities after 
transfer.
    The appropriate use of the existing funds in the 
Reclamation Fund, as well as those which will continue to 
accrue after transfer have been controversial issues with the 
Administration. However, during 1998 the District and the BOR 
came to an agreement on how to treat the Reclamation Fund. The 
agreement remedies this problem by turning over the operation 
and management of Sumner Dam, from the BOR to the District.

Section 7. Water conservation practices

    This section clarifies that nothing in this Act shall limit 
the ability of the District to voluntarily conserve water.

Section 8. Liability

    Once title is conveyed, the responsibility for the conveyed 
property fully resides with the District. For all decisions and 
liabilities that may arise subsequently, the District assumes 
all financial risks and benefits.

Section 9. Future reclamation benefits

    After conveyance of the Project facilities to the District 
under this Act, the District is no longer eligible for any 
emergency loan from BOR for the maintenance or replacement of 
any facility conveyed.

            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, credit 
authority, or an increase or decrease in revenues or tax 
expenditures. The Congressional Budget Office estimates that 
enactment of this bill would reduce discretionary spending by 
$100,000 over the 2000-2004 period and increase direct spending 
by $200,000 a year beginning in 2000 based on the use of the 
receipts collected for mineral and grazing leases by the Bureau 
of Reclamation and later by the District.
    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 Com-

mittee 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. 1019, the Carlsbad 
Irrigation Project Acquired Land Conveyance 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 Majorie Miller (for the state and 
local impact).
            Sincerely,
                                         Barry B. Anderson,
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 1019--Carlsbad Irrigation Project Acquired Land Conveyance Act

    Summary: H.R. 1019 would direct the Secretary of the 
Interior, acting through the Bureau of Reclamation (the 
bureau), to convey the irrigation and drainage system of the 
Carlsbad Project, New Mexico, and related lands and property, 
including most of the surface and mineral estates, to the 
Carlsbad Irrigation District (the district).
    CBP estimates that implementing the bill would reduce 
discretionary spending over the 2000-2004 period by $100,000, 
assuming appropriations are reduced correspondingly. CBO 
estimates that enacting H.R. 1019 would increase direct 
spending by $200,000 annually beginning in 2000; therefore, 
pay-as-you-go procedures would apply.
    H.R. 1019 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: CBO estimates 
that implementing the bill would reduce discretionary spending 
by about $20,000 a year, assuming that appropriations are 
reduced accordingly, and would increase direct spending by 
$200,000 annually beginning in 2000. The costs of this 
legislation fall within budget function 300 (natural resources 
and environment).
    Basis of estimate: For purpose of this estimate, CBO 
assumes that the bill will be enacted by the end of fiscal year 
1999. Under current law, about $20,000 is appropriated each 
year to the Bureau of Reclamation for operation, maintenance, 
and oversight of land and facilities that would be managed 
solely by the district if H.R. 1019 is implemented. The bureau 
would no longer incur these costs if the bill is enacted.
    Conveying the lands and property to the irrigation district 
would also affect federal receipts from mineral and grazing 
leases at the Carlsbad Project. Direct spending would increase 
beginning in 2000 because H.R. 1019 would allow the bureau to 
use receipts collected after the bill is enacted but prior to 
conveyance to offset the cost of conveying the project. 
Additionally, the bill would transfer to the irrigation 
district the right to all receipts after conveyance. As a 
result, CBO estimates that additional outlays from direct 
spending would total about $200,000 a year.
    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. H.R. 
1019 would not affect governmental receipts but would increase 
outlays from direct spending by about $200,000 a year, 
beginning in 2000.
    Estimated impact on State, local, and tribal government: 
H.R. 1019 contains no intergovernmental mandates as defined in 
UMRA. The conveyance authorized by this bill would be voluntary 
on the part of the district, and any costs incurred as a result 
of the conveyance would be accepted on that basis. CBO 
estimates that the additional costs incurred by the district 
(about $20,000 per year) would be more than offset by the new 
receipts (about $200,000 per year).
    Estimated impact on the private sector: This bill contains 
no new private-sector mandates as defined in UMRA.
    Previous CBO estimate: On March 10, 1999, CBO prepared an 
estimate for S. 291, the Carlsbad Irrigation Project Acquired 
Land 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 any State, local or 
tribal law.

                        changes in existing law

    If enacted, this bill makes no changes in existing law.

                            ADDITIONAL VIEWS

    There are several objectionable provisions in this bill:
     This bill would set a precedent for privatization 
of federal facilities that would bankrupt the Treasury if 
applied nationwide. Rather than producing income to the 
Treasury, H.R. 1019 would provide a sweetheart give-away to the 
single-interest Carlsbad Irrigation District. The taxpayers 
cannot afford such largesse.
     In addition to practically giving away facilities 
owned by the public, the bill would give away public lands, 
public mineral rights, and even funds from the public Treasury. 
And this entire give-away would be mandated without any advance 
evaluation of the environmental impacts of such a transfer.
     The bill clearly provides that the District is 
``entitled to any receipts'' from oil and gas leases associated 
with this project. The oil and gas leases associated with the 
mineral rights that the Carlsbad Irrigation District wishes to 
acquire currently provide a steady income to the Treasury that 
is credited to the Reclamation Fund in accordance with the 
terms of the Fact Finders Act of 1924. The money is held in the 
Treasury, subject to appropriation for further capital 
investment in the Carlsbad Project. Instead of giving the 
receipts directly to the District as required by H.R. 1019, why 
shouldn't we at least consider using this money as credit 
toward continuing federal obligations for non-reimbursable 
project purposes like fish and wildlife, flood control, 
recreation and vegetation control?
     H.R. 1019 mandates that these assets be 
transferred without any review of the environmental impacts of 
that mandate. Despite the fact that management of the Carlsbad 
Project has significant effects on the local environment and 
recreation, no environmental analysis will be required before 
the Secretary transfers the project. Although there is no 
express waiver of the National Environmental Policy Act (NEPA), 
the bill still leaves the Secretary of the Interior with no 
alternative but to transfer the designated facilities. This 
mandated, non-discretionary transfer significant weakens the 
purposes of NEPA, by making the most significant choice--to 
transfer the project--without the benefit of environmental 
analysis. This dramatically constrains the Secretary's decision 
making options.
    However, existing legislative authorities available to the 
Secretary of the Interior are not repealed by this legislation, 
and we do not believe this bill totally circumscribes the role 
of the Bureau of Reclamation in specifying mitigation 
requirements, if appropriate. If the NEPA process is fairly 
applied as the Carlsbad transfer is implemented, we expect the 
Bureau will attach whatever conditions it believes are 
appropriate to mitigrate environmental damaged and to ensure 
compliance with applicable laws.

                                   George Miller.
                                   Peter DeFazio.

                                  
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