[House Report 106-812]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-812

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



 
       CONVEYANCE TO NORTHERN COLORADO WATER CONSERVANCY DISTRICT

                                _______
                                

 September 6, 2000.--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. 4389]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 4389) to direct the Secretary of the Interior to convey 
certain water distribution facilities to the Northern Colorado 
Water Conservancy District, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended to pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. DEFINITIONS.

  In this Act:
          (1) Contract.--The term ``contract'' means the contract 
        between the United States and the Northern Colorado Water 
        Conservancy District providing for the construction of the 
        Colorado-Big Thompson Project, dated July 5, 1938 (including 
        any amendments and supplements).
          (2) District.--The term ``District'' means the Northern 
        Colorado Water Conservancy District.
          (3) Secretary.--The term ``Secretary'' means the Secretary of 
        the Interior.
          (4) Transferred water distribution facilities.--The term 
        ``transferred water distribution facilities'' means the North 
        Poudre Supply Canal and Diversion Works, also known as the 
        Munroe Gravity Canal, the Charles Hansen (Supply) Canal and 
        Windsor Extension and the Dixon Feeder Canal, all of which are 
        facilities of the Colorado-Big Thompson Project located in 
        Larimer County, Colorado.

SEC. 2. CONVEYANCE OF TRANSFERRED WATER DISTRIBUTION FACILITIES.

  (a) In General.--The Secretary shall, as soon as practicable after 
the date of enactment of this Act and in accordance with all applicable 
law, convey all right, title, and interest in and to the transferred 
water distribution facilities to the District.
  (b) Sale Price.--
          (1) In general.--The Secretary shall accept $1,948,515 as 
        consideration for the conveyance of the transferred water 
        distribution facilities under subsection (a).
          (2) No effect on obligations and rights.--Except as expressly 
        provided in this Act, nothing in this Act affects or modifies 
        the obligations and rights of the District under the contract.
          (3) Payments.--Except as provided in subsection (c), the 
        District shall continue to make such payments as are required 
        under the contract.
  (c) Credit Toward Project Repayment.--On payment by the District of 
the amount authorized to be accepted under subsection (b)(1), the 
amount paid shall be credited toward repayment of capital costs of the 
Colorado-Big Thompson Project in an amount equal to the associated 
undiscounted obligation for repayment of the capital costs.

SEC. 3. LIABILITY.

  Except as otherwise provided by law, effective on the date of 
conveyance of the transferred water distribution facilities under this 
Act, the United States shall not be liable for damages of any kind 
arising out of any act, omission, or occurrence based on any prior 
ownership or operation by the United States of the conveyed property.

                          PURPOSE OF THE BILL

    The purpose of H.R. 4389 is to direct the Secretary of the 
Interior to convey certain water distribution facilities to the 
Northern Colorado Water Conservancy District.

                               BACKGROUND

    For the last six years the Subcommittee on Water and Power 
has pursued legislation to shrink the size and scope of the 
federal government through the defederalization of Bureau of 
Reclamation assets. H.R. 4389 continues this defederalization 
process by directing the Secretary of the Interior to convey 
water distribution facilities to the Northern Colorado Water 
Conservancy District.
    H.R. 4389 transfers a small component of a much larger 
project. The entire project was built from 1938 to 1957 and 
called the Colorado-Big Thompson Project (CBTP). The CBTP 
provides supplemental water to 30 cities and towns. The water 
is used to help irrigate 615,000 acres of northeastern Colorado 
farmland.
    The component being transferred as part of H.R. 4389 will 
divest the Bureau of Reclamation of all present and future 
responsibility for and cost associated with the management, 
operation, maintenance, repair, rehabilitation and replacement 
of, and liability for the North Poudre Supply Canal and 
Diversion Works, the Charles Hansen (Supply) Canal and Windsor 
Extension and the Dixon Feeder Canal. Moreover, the legislation 
will eliminate the duplication of efforts between the District 
and the Bureau in issuing and administering crossing licenses 
and other forms of permission to utilize the land on which the 
facilities are located. Finally, the legislation will provide 
for enhanced local control over water facilities that are not 
of national importance, and allow these facilities to be used 
for more efficient and effective water management.
    In a letter dated June 13, 2000, Maryanne C. Bach, the 
Bureau of Reclamation's Regional Director for the Great Plains 
Region, delineated the process in which the Bureau would 
collect consideration for the title transfer. The Committee 
believes that the delineated process outlined in this letter is 
proper and should be followed; however, the Committee does not 
agree with the price as set out in the letter. Therefore, the 
United States Treasury will accept $1,948,315 as consideration 
for the transfer. Western Area Power Administration (WAPA), on 
behalf of their preference power customers, would be 
responsible for $1,798,200 and the District will be responsible 
for $150,315. The aid-to-irrigation obligation for the CBTP 
will be credited $3,767,682 as a result of the accelerated 
payment by WAPA, and the District's repayment obligation would 
be reduced by $170,555.
    In a letter dated June 14, 2000, Joel K. Bladow, WAPA's 
Regional Manager for the Rocky Mountain Customer Service 
Region, agreed with the amount of $1,798,200 for irrigation 
assistance for the Pick-Sloan Missouri Basin Program, and 
agreed that WAPA would ``make the appropriate adjustments to 
the power repayment study to include this amount when the 
legislation becomes law, and the Bureau of Reclamation advises 
us of the changes in existing irrigation assistance obligations 
for the Colorado-Big Thompson Project.''

                            COMMITTEE ACTION

    H.R. 4389 was introduced on May 4, 2000, by Congressman Bob 
Schaffer (R-CO). The bill was referred to the Committee on 
Resources, and within the Committee to the Subcommittee on 
Water and Power. On May 23, 2000, the Subcommittee held a 
hearing on the bill. On June 15, 2000, the Subcommittee met to 
mark up the bill. Congressman John Doolittle (R-CA) offered an 
amendment that modified a definition in the bill and removed a 
speculative cost to the transfer. The amendment was adopted by 
voice vote. The bill, as amended, was then ordered to be 
reported to the Full Committee by voice vote. On June 21, 2000, 
the Full Resources Committee met to consider the bill. No 
further amendments were offered and the bill was ordered 
favorably reported to the House of Representatives by voice 
vote.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Definitions

    This section provides definitions of terms used in the bill 
including: ``contract'', ``District'', ``Secretary'', and 
``transferred water distribution facilities''.

Section 2. Conveyance of transferred water distribution facilities

    This section directs the Secretary of the Interior to 
convey all right, title, and interest in the single-purpose 
water distribution facilities to the District for which the 
Secretary may accept from the District $1,948,515 as 
consideration for the transfer. This consideration will be 
credited toward repayment of capital costs of the CBTP. This 
transfer shall not affect the obligations and rights of the 
District under the contract and the District shall continue to 
make payments as outlined in the contract.

Section 3. Liability

    This section states that the United States, upon completion 
of the transfer, shall no longer be liable for any damage that 
might arise as a result of its previous ownership.

            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 of the Constitution of the United 
States grants 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 tax expenditures. 
According to the Congressional Budget Office, enactment of this 
bill would reduce direct spending by about $2 million in fiscal 
year 2001, which would be offset by a loss of offsetting 
receipts.
    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, July 24, 2000.
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. 4389, a bill to 
direct the Secretary of the Interior to convey certain water 
distribution facilities to the Northern Colorado Water 
Conservancy District.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Rachel 
Applebaum.
            Sincerely,
                                           Steven Lieberman
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 4389--A bill to direct the Secretary of the Interior to convey 
        certain water distribution facilities to the Northern Colorado 
        Water Conservancy District

    Summary: H.R. 4389 would direct the Secretary of the 
Interior to convey certain canals and water distribution 
facilities to the Northern Colorado Water Conservancy District. 
These facilities are a small part of the Colorado-Big Thompson 
project in Larimer County, Colorado. H.R. 4389 would require 
the district of pay $1,948,515 for the facilities.
    Based on information from the Bureau of Reclamation, CBO 
estimates that enacting H.R. 4389 would reduce direct spending 
by about $2 million in fiscal year 2001. These savings would be 
offset by the loss of offsetting receipts of about $4 million 
over the 2001-2012 period. Because enacting H.R. 4389 would 
affect direct spending, pay-as-you-go procedures would apply. 
CBO estimates that implementing this bill would have no 
significant effect on discretionary spending.
    H.R. 4389 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
State and local governments would probably 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. 4389 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Estimated budget authority.........................................       -2    (\1\)        0        0        0
Estimated outlays..................................................       -2    (\1\)        0        0        0
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that the 
conveyance would occur in the beginning of fiscal year 2001. 
The bill would require the water district to pay $1,948,515 for 
the facilities that would be conveyed under H.R. 4389. The bill 
would credit this amount to the repayment of capital costs for 
the Colorado-Big Thompson project. Based on information from 
the Bureau of Reclamation, the federal government would forgo a 
payment of $170,555 from the water district in fiscal year 
2002, a payment of $764,463 from the electricity customers of 
the Western Area Power Administration (WAPA) in fiscal year 
2011, and another payment of $3,003,219 from WAPA customers in 
fiscal year 2012. If the project is sold in 2001, the federal 
government could not enter into a contract to sell excess water 
capacity from the project to the Pleasant Valley Pipeline. CBO 
estimates that the federal government would receive $197,261 in 
fiscal year 2001 from such a contract.
    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--
                                    ----------------------------------------------------------------------------
                                      2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010
----------------------------------------------------------------------------------------------------------------
Changes in outlays.................      0     -2      0      0      0      0      0      0      0      0      0
Changes in receipts................                                 Not applicable
----------------------------------------------------------------------------------------------------------------

    Under the Balanced Budget Act (BBA), 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. CBO 
estimates that the sale of the water facilities as specified in 
H.R. 4389 would satisfy the conditions in the BBA, and 
therefore, the proceeds would count for pay-as-you-go purposes. 
Under BBA, ``financial cost to the government'' is defined in 
terms of the present value of all cash flows associated with an 
asset sale. The forgone payments of about $4 million over the 
2002-2012 period has an estimated present value that is 
slightly less than the sale price specified in H.R. 4389 (about 
$2 million).
    Intergovernmental and private-sector impact: H.R. 4389 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The Northern Colorado Water Conservancy 
District, a local public agency, would probably incur costs to 
acquire the four water distribution facilities, but the 
decision to bear those costs would be voluntary. The district 
would benefit from the enactment of this legislation.
    Estimate prepaid by: Federal costs: Rachel Applebaum; 
impact on State, local, and tribal governments: Susan Van 
Deventer and Marjorie Miller, impact on the private sector: 
Sarah Sitarek.
    Estimate approved by: Peter H. Fontaine, 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

    As amended and reported by the Committee on Resources, H.R. 
4389, a bill to direct the Secretary to convey certain water 
distribution facilities to the Northern Colorado Water 
Conservancy District, lacks at least four important elements 
that should be addressed before passage:
    First, H.R. 4389 mandates conveyance of the facilities 
without requiring a determination by the Secretary of the 
Interior that the conveyance is in the public interest. The 
bill's language mandating conveyance--``shall, as soon as 
practicable after the date of enactment of this Act and in 
accordance with all applicable law''--is helpful in providing 
assurance that the Secretary must, for example, comply with the 
National Environmental Policy Act, but that language does not 
provide the Secretary with adequate discretion as to whether 
the facilities should be conveyed. The language also appears to 
foreclose the ``no action'' alternative (not conveying the 
facilities) that must be included as part of National 
Environmental Policy Act compliance. Instead of this mandatory 
language, the bill should merely ``authorize'' conveyance. This 
would allow the Secretary to base a determination whether to 
convey on invaluable input from the proposed transferee, Bureau 
of Reclamation, other federal and state agencies, and 
interested members of the local public.
    Second, H.R. 4389 fails to require that full public 
involvement precede legislation. Stakeholder involvement and 
negotiation at the local level are essential prior to 
legislation so that Congress, the District, and the public know 
the details of what is enacted into law. Lack of such 
involvement prior to legislation deprives Congress of the 
benefit of full analysis of the issues by federal agencies and 
stakeholders. It leaves the transferee in the dark about future 
obligations related to transfer. And, it substantially alters 
the playing field for public participation in transfer 
negotiations due to the foregone conclusion that transfer will 
take place. In its written testimony before the Water and Power 
Subcommittee, the Bureau of Reclamation voiced its concern that 
this transfer not side-step the established Framework process 
which, among other things, contemplates that the specifics of 
transfer be negotiated at the local level prior to 
congressional action. If transfer happens, it should be done 
right, with full public input.
    Third, H.R. 4389 fails to provide for environmental 
protection and enhancement. Environmental protection and 
enhancement are the appropriate quid pro quo to mitigate for 
post-transfer loss of federal control and applicability of most 
federal laws. Providing for protection and enhancement of the 
environment enables the District to share the benefit of the 
transfer with the current federal taxpayer-owners in the form 
of environmental protection and enhancement, as well as public 
accountability. Environmental protections should be negotiated 
and agreed upon in advance of interested stakeholders and then 
included as specific terms and conditions of conveyance.
    Fourth, H.R. 4389 creates a fixed ``sale price'' prior to 
knowing the details of the transfer. The United States should 
negotiate a fair price for the conveyance only after the terms 
and conditions of conveyance are established through 
negotiations with local stakeholders.
    If this bill is enacted in its present form, the Committee 
on Resources and this Congress will have lost another 
opportunity to write sensible and fair legislation that 
protects the public interest while allowing the transfer of 
Bureau of Reclamation projects to local control.
                                                     George Miller.

                                
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