[House Report 106-829]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-829

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



 
 CONVEYANCE OF THE ASSETS OF THE MIDDLE LOUP DIVISION OF THE MISSOURI 
                     RIVER BASIN PROJECT, NEBRASKA
                                _______
                                

 September 7, 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

                        [To accompany H.R. 2984]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 2984) to direct the Secretary of the Interior, through 
the Bureau of Reclamation, to convey to the Loup Basin 
Reclamation District, the Sargent River Irrigation District, 
and the Farwell Irrigation District, Nebraska, property 
comprising the assets of the Middle Loup Division of the 
Missouri River Basin Project, Nebraska, 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. CONVEYANCE OF THE ASSETS OF THE MIDDLE LOUP DIVISION OF THE 
                    MISSOURI RIVER BASIN PROJECT, NEBRASKA.

  (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 property 
comprising the assets of the Missouri River Basin Project, Middle Loup 
Division, Nebraska, in accordance with the Memorandum of Understanding.
  (b) Sale Price.--The Secretary may accept payment as provided for in 
the Memorandum of Understanding as consideration for the conveyance of 
the assets.
  (c) Future Benefits.--Upon payment by the Districts of consideration 
for the conveyance in accordance with the Memorandum of Understanding, 
the Middle Loup Division of the Missouri River Basin Project--
          (1) shall not be treated as a Federal reclamation project; 
        and
          (2) shall not be subject to the reclamation laws or entitled 
        to receive any reclamation benefits under those laws.
  (d) Liability.--Except as otherwise provided by law, effective on the 
date of conveyance of the assets under this section, the United States 
shall not be liable for damages of any kind arising out of any act, 
omission, or occurrence based on its prior ownership or operation of 
the assets.
  (e) Definitions.--In this section:
          (1) Assets.--The term ``assets'' has the meaning that term 
        has in the Memorandum of Understanding.
          (2) Districts.--The term ``Districts'' means the Loup Basin 
        Reclamation District, the Sargent River Irrigation District, 
        and the Farwell Irrigation District, Nebraska.
          (3) Memorandum of understanding.--The term ``Memorandum of 
        Understanding'' means Bureau of Reclamation memorandum of 
        understanding number 99AG601285, entitled ``MEMORANDUM OF 
        UNDERSTANDING BETWEEN UNITED STATES DEPARTMENT OF THE INTERIOR 
        BUREAU OF RECLAMATION GREAT PLAINS REGION NEBRASKA-KANSAS AREA 
        OFFICE AND LOUP BASIN RECLAMATION DISTRICT FARWELL IRRIGATION 
        DISTRICT SARGENT IRRIGATION DISTRICT CONCERNING PRINCIPLES AND 
        ELEMENTS OF PROPOSED TRANSFER OF TITLE TO WORKS, FACILITIES AND 
        LANDS IN THE MIDDLE LOUP DIVISION''.

                          PURPOSE OF THE BILL

    The purpose of H.R. 2984 is to direct the Secretary of the 
Interior, through the Bureau of Reclamation, to convey to the 
Loup Basin Reclamation District, the Sargent River Irrigation 
District, and the Farwell Irrigation District, Nebraska, 
property comprising the assets of the Middle Loup Division of 
the Missouri River Basin Project, Nebraska.

                  BACKGROUND AND NEED FOR LEGISLATION

    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. 2984 continues this defederalization 
process by conveying certain works, facilities, and titles of 
the Middle Loup Division to the Farwell Irrigation District, 
the Sargent Irrigation District, and the Loup Basin Reclamation 
District, all of Nebraska.
    The Loup Basin Reclamation District was organized in 1950 
to promote and complete the construction of the Sargent and 
Farwell Units in the Loup Basin area of Nebraska. The Sargent 
District formed in 1952 and the Farwell District was created in 
1954. A 40-year water service contract was signed in 1957 
between the Bureau of Reclamation and the Loup Basin 
Reclamation District. This was followed by repayment contracts 
signed by the irrigation districts. Construction of the Sargent 
Unit was completed in 1959 while construction of the Farwell 
Unit was not complete until 1966.
    The Sargent Unit serves approximately 14,000 acres in 
Custer and Valley Counties of Nebraska by providing irrigation 
water for corn, soybeans and alfalfa. The Farwell Unit serves 
approximately 50,000 acres in Howard and Sherman Counties by 
providing irrigation water for corn, soybeans, alfalfa and some 
milo.
    Under the original construction financing for the Middle 
Loup Division project, power users have an obligation to repay 
a portion of the Middle Loup construction costs as a component 
expense in the federal power they purchase from the Western 
Area Power Administration (WAPA). To meet their obligation, 
power users have arranged with WAPA to accelerate their 
payments. WAPA will in turn provide the money to the Secretary 
of the Interior as part of the funding necessary to make the 
U.S. Treasury whole through this transaction.
    It is the understanding of the Committee that the 
Secretary, in accordance with a Memorandum of Understanding 
referenced in the bill, would accept payment from the power 
users, through WAPA, as complete repayment by the power 
customers of the aid to irrigation costs associated with the 
facilities. This payment by the power users, combined with the 
three Districts' final payment, will constitute the total 
payment by the Districts for the right, title, and interest in 
the property which makes up the assets of the Missouri River 
Basin Project, Middle Loup Division in Nebraska.

                            COMMITTEE ACTION

    H.R. 2984 was introduced on September 30, 1999, by 
Congressman Bill Barrett (R-NE). The bill was referred to the 
Committee on Resources, and within the Committee to the 
Subcommittee on Water and Power. On October 7, 1999, 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 clarified when the 
Secretary shall transfer the project, and how the payment would 
be accepted. 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 unanimous consent.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Conveyance of the assets of the Middle Loup Division of the 
        Missouri River Basin Project, Nebraska

    This section decrees that the Secretary of the Interior 
shall convey to the Districts all right, title, and interest of 
the United States in and to the property comprising the assets 
of the Missouri River Basin Project, Middle Loup Division, 
Nebraska. At that time, the assets shall not be treated as a 
federal reclamation assets and consequently they shall not be 
subject to the reclamation laws nor entitled to receive the 
benefits under the reclamation laws. At the completion of the 
transfer the United States shall not be liable for damages 
arising from its previous ownership.
    This section also provides definitions of terms used in the 
bill including: ``assets'', ``Districts'', and ``Memorandum of 
Understanding''.

            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, spending 
authority, credit authority, or an increase or decrease in tax 
expenditures. According to the Congressional Budget Office, 
enactment of this bill would result in net receipts of 
approximately $1.3 million over the 2001-2005 time period.
    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,
                                    Congress Budget Office,
                                 Washington, DC, September 1, 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. 2984, a bill to 
direct the Secretary of the Interior, through the Bureau of 
Reclamation, to convey to the Loup Basin Reclamation District, 
the Sargent River Irrigation District, and the Farwell 
Irrigation District, Nebraska, property comprising the assets 
of the Middle Loup Division of the Missouri River Basin 
Project, Nebraska.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lisa Cash 
Driskill.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 2984--A bill to direct the Secretary of the Interior, through the 
        Bureau of Reclamation, to convey to the Loup Basin Reclamation 
        District the Sargent River Irrigation District, and the Farwell 
        Irrigation District, Nebraska, property comprising the assets 
        of the Middle Loup Division of the Missouri River Basin 
        Project, Nebraska

    Summary: H.R. 2984 would direct the Secretary of the 
Interior to convey certain facilities, lands, and rights to the 
Farwell Irrigation District, the Sargent Irrigation District, 
and the Loup Basin Reclamation District, in the state of 
Nebraska. Under the bill, these districts would pay the federal 
government about $2.8 million for the Sherman Reservoir, 
Milburn Diversion Dam, Arcadia Diversion Dam, related canals 
and lands, and other associated rights and interests currently 
owned by the United States.
    Based on information from the Bureau of Reclamation, CBO 
estimates that enacting H.R. 2984 would result in net receipts 
of about $1.3 million over the 2001-2005 period: $2.8 million 
in asset sale receipts, offset by $1.5 million of forgone 
offsetting receipts over that period.
    Because enacting H.R. 2984 would affect direct spending, 
pay-as-you-go procedures would apply. CBO estimates a net pay-
as-you-go cost of $1.5 million over the 2001-2005 period, 
reflecting the forgone offsetting receipts. The asset sale 
receipts would not count for pay-as-you-go purposes because the 
sale of assets under H.R. 2984 would result in a net financial 
cost (on a present value basis) to the federal government.
    CBO estimates that implementing this bill would have no net 
effect on discretionary spending in 2001, but would result in a 
very small decrease in discretionary spending each year 
thereafter.
    H.R. 2984 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The conveyance provided for in this bill would be voluntary on 
the part of the districts, and all costs incurred by them as a 
result of the conveyance also would be voluntary.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2984 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

Asset sale receipts:
    Estimated budget authority................................      -2.8         0         0         0         0
    Estimated outlays.........................................      -2.8         0         0         0         0
Forgone offsetting receipts:
    Estimated budget authority................................       0.3       0.3       0.3       0.3       0.3
    Estimated outlays.........................................       0.3       0.3       0.3       0.3       0.3
Net changes:
    Estimated budget authority................................      -2.5       0.3       0.3       0.3       0.3
    Estimated outlays.........................................      -2.5       0.3       0.3       0.3       0.3
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that H.R. 
2984 will be enacted near the start of fiscal year 2001. We 
expect that the project will be conveyed to the districts in 
fiscal year 2001. The bill would require the water districts to 
pay about $2.8 million for the facilities that would be 
conveyed.
    Currently, those districts have fixed repayment and water 
service contracts with the Bureau. Those contracts result in 
payments of about $300,000 a year through 2016 and about 
$130,000 a year over the remaining life of the contract 
(through 2042). Once the assets are conveyed to the districts, 
those repayments would no longer occur, and would result in a 
loss of offsetting receipts to the federal government. CBO 
assumes that once the assets are conveyed, the customers of the 
Western Area Power Administration (WAPA) would no longer pay 
the federal government $29 million over the 2036-2042 period. 
Under current law, WAPA customers would make such payments to 
assist with the repayment of the cost of these facilities. 
Enactment of H.R. 2984 would lead to a loss of these receipts 
as well.
    Based on information from the Bureau of Reclamation, CBO 
estimates that the agency currently spends less than $60,000 
each year for expenses related to the projects to be conveyed 
under H.R. 2984. After the projects are conveyed, these 
expenses would be longer be incurred, resulting in a small 
savings to the government. However, in the year of the 
conveyance, CBO expects that the bureau would spend about that 
amount to administer the conveyance, resulting in no net change 
to discretionary spending in 2001.
    Pay-as-you-go consideration: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. 
Enactment of H.R. 2984 would result in the loss of offsetting 
receipts of $0.3 million annually over the 2001-2010 period, 
and additional amounts later. 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     0.3     0.3     0.3     0.3     0.3     0.3     0.3     0.3     0.3     0.3
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. 
Under BBA, ``financial cost to the government'' is defined in 
terms of the present value of all cash flows associated with an 
asset sale. CBO estimates that the sale of Sherman Reservoir, 
Milburn Diversion Dam, Arcadia Diversion Dam, and all other 
associated rights and interests as specified in H.R. 2984 would 
result in a net cost to the federal government of about $0.4 
million. Therefore, the proceeds of the sale would not be 
counted for pay-as-you-go purposes. The forgone offsetting 
receipts resulting from this asset sale--less than $500,000 
annually--would be counted for purposes of enforcing pay-as-
you-go procedures.
    Estimated impact on State, local, and tribal governments: 
H.R. 2984 contains no intergovernmental mandates as defined in 
UMRA. The bill would require the districts to pay approximately 
$2.8 million to receive title to federal facilities, and would 
impose a number of other conditions. The conveyance would be 
voluntary on the part of the districts, however, and all costs 
incurred by them as a result would be voluntary. The bill would 
impose no costs on any other state, local, or tribal 
governments.
    Estimated impact on the private sector: This bill contains 
no new private-sector mandates as defined in UMRA.
    Previous CBO estimate: On September 1, 2000, CBO 
transmitted a cost estimated for S. 1612, Missouri River Basin, 
Middle Loup Division Facilities Conveyance Act, as reported by 
the Senate Committee on Energy and Natural Resources on August 
25, 2000. These two pieces of legislation are similar, and our 
cost estimates are the same.
    Previous CBO estimate: On September 1, 2000, CBO 
transmitted a cost estimated for S. 1612, Missouri Rvier Basin, 
Middle Loup Division Facilities Conveyance Act, as reported by 
the Senate Committee on Energy and Natural Resources on August 
25, 2000. These two pieces of legislation are similar, and our 
cost estimates are the same.
    Estimate prepared by: Federal Costs: Lisa Cash Driskill; 
Impact on State, Local, and Tribal Governments: Majorie Miller; 
and 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.

                                
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