[Senate Report 106-115]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 223
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-115

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



 
            ARIZONA NATIONAL FOREST IMPROVEMENT ACT OF 1999

                                _______
                                

                 July 21, 1999.--Ordered to be printed

                                _______


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1088]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1088) to authorize the Secretary of 
Agriculture to convey certain administrative sites in national 
forests in the State of Arizona, to convey certain land to the 
City of Sedona, Arizona for a wastewater treatment facility, 
and for other purposes, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                         purpose of the measure

    The purpose of S. 1088 is to authorize the Secretary of 
Agriculture to convey six Forest Service administrative sites 
in Arizona, and to sell land for an amount equal to the fair 
market value to the city of Sedona, Arizona. The bill 
authorizes proceeds from these conveyances to be used to fund 
improvements to administrative facilities and acquire other 
land in Arizona to be added to the National Forest System.

                          background and need

    S. 1088 authorizes the Secretary of Agriculture to convey 
six unmanageable, undesirable or excess National Forest 
administrative sites in the Prescott, Tonto, Kaibab and 
Coconino National Forests (Camp Verde Administrative Site, a 
portion of the Cave Creek Administrative Site, the Fredonia 
Duplex and Housing Site, the Groom Creek Administrative Site, 
the Payson Administrative Site, and the Sedona Administrative 
Site). The bill also allows the Secretary to sell to the city 
of Sedona, Arizona, at fair market value, approximately 300 
acres of land for construction of an effluent disposal system.
    The bill authorizes the Forest Service to use the proceeds 
from five of these conveyances to either fund new construction 
or upgrade current administrative facilities in four national 
forests in Arizona. The forest Service is to use the proceeds 
from the other sale and the city of Sedona purchase, to fund 
acquisition of sites, or construction of administrative 
facilities for national forests in Arizona, or for the 
acquisition of other parcels of land in Arizona. Land 
conveyances completed pursuant to the authority granted in this 
bill are to be done in accordance with all applicable laws, 
including environmental laws.
    This bill will enhance customer and administrative services 
by allowing the Forest Service to consolidate and update 
facilities or relocate facilities to more convenient locations. 
This bill will also facilitate the construction of a much 
needed wastewater treatment plant for the city of Sedona.

                          legislative history

    S. 1088 was introduced by Senator Kyl on May 20, 1999. The 
Subcommittee on Forests and Public Land Management held a 
hearing on S. 1088 on June 23, 1999. At the business meeting on 
June 30, 1999, the Committee on Energy and Natural Resources 
ordered S. 1088 favorably reported.

           committee recommendations and tabulation of votes

    The Senate Committee on Energy and Natural Resources, in 
open business session on June 30, 1999, by a voice vote of a 
quorum present, recommends that the Senate pass S. 1088, 
without amendment.

                      section-by-section analysis

    Section 1 designates the bill's short title as the 
``Arizona National Forest Improvement Act of 1999.''
    Section 2 defines terms used in the bill.
    Section 3 identifies the six National Forest System 
administrative sites which may be sold or exchanged and 
contains consideration, equalization, solicitation and 
revocation provisions.
    Section 4(a) authorizes the Secretary to sell approximately 
300 acres for the purpose of an effluent disposal system.
    Subsection (b) requires the legal description to be 
available at the Office of the Chief of the Forest Service.
    Subsection (c)(1) directs the city to pay fair market value 
for the land, as determined by an acceptable appraisal.
    Paragraph (2) requires the city to pay the cost of the 
appraisal.
    Paragraph (3) allows the city to make payment, at the 
option of the city--
          (A) in full no later than 180 days after conveyance; 
        or
          (B) in 7 equal annual installments beginning no later 
        than January 1 of the year following conveyance.
    Paragraph (4) mandates that interest will accrue beginning 
on the date of conveyance at a rate equal to marketable 
obligations of the United States of one year maturity as of 
that date.
    Subsection (d) requires, subject to environmental 
compliance prior to the conveyance, the city to agree in 
writing to hold the United States harmless from any claims to 
the land, including claims resulting from hazardous materials 
on the land.
    Subsection (e) subjects the land to a right of reentry by 
the United States at any time before full payment is made if 
the Secretary determines that the city has not complied with 
requirements of the section or conditions of the deed, or the 
conveyed land is not used for effluent disposal purposes or 
construction of a disposal system.
    Section 5 describes the disposition of the proceeds of the 
land conveyances authorized by this bill, and what uses are 
authorized for those proceeds.

                   cost and budgetary considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 19, 1999.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman. The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1088, the Arizona 
National Forest Improvement Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Victoria 
Heid Hall (for federal costs) and Marjorie Miller (for the 
state and local impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 1088--Arizona National Forest Improvement Act of 1999

    Summary: S. 1088 would authorize the Secretary of 
Agriculture to sell or exchange about 858 acres of land and 
administrative sites in the National Forest System and to 
acquire other land and administrative facilities through 
purchase or exchange.
    CBO estimates that enacting S. 1088 would result in outlay 
savings of about $8 million in 2000, but that amount would be 
offset by costs in subsequent years for a net increase in 
outlays of $3 million over the 2000-2009 period. Because 
enacting the bill would affect direct spending, pay-as-you-go 
procedures would apply. S. 1088 contains no intergovernmental 
or private-sector mandates as defined in the Unfunded Mandates 
Reform Act (UMRA). The city of Sedona would incur some costs as 
a result of the bill's enactment, but these costs would be 
voluntary. The bill would have no significant impact on the 
budgets of other local governments or on state and tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1088 is shown in the following table. 
the costs of this legislation fall within budget function 300 
(natural resources and the environment).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              1999     2000     2001     2002     2003     2004
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Estimated budget authority................................        0       -4        1        1        1        1
Estimaetd outlays.........................................        0       -8    (\1\)        2        4        2
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.

    Basis of estimate: Section 3 of the bill would authorize 
the Secretary of Agriculture to sell or exchange about 558 
acres within several national forests in Arizona that are 
currently used as administrative sites. The bill would 
authorize the Secretary to either accept cash equalization 
payments that exceed 25 percent of the value of the sites or 
acquire existing or future administrative facilities and 
improvements in exchange for the sites. Any proceeds from sale 
or exchange of the sites would be available for the 
construction or improvement of offices or other administrative 
buildings for four national forests in Arizona: Coconino, 
Kaibab, Prescott, and Tonto.
    Based on information from the Forest Service, CBO estimates 
that enacting section 3 would result in additional offsetting 
receipts from the sale of the federal administrative sites of 
about $11 million over the 200-2002 period. Under the bill, the 
Forest Service could spend such receipts, without further 
appropriation, to construct or improve other facilities on 
federal land. Such spending would likely occur over fiscal 
years 2000 through 2005.
    Section 4 would authorize the Secretary to sell about 300 
acres of property to the city of Sedona, Arizona, to build a 
sewage disposal system. CBO estimates that this sale would 
result in additional offsetting receipts of about $6 million. 
Because the city has a permit to use about 250 acres of this 
land under current law, selling the land to the city would also 
result in foregone permit fees totaling less than $250,000 each 
year. proceeds from the sale would be available to the 
Secretary to acquire land elsewhere in the state of Arizona. 
CBO estimates that these sums would be spent over the 2000-2007 
period.
    Section 4 would authorize the city to pay the Secretary in 
either a lump sum amount or seven equal annual installments, 
including interest. Allowing the city to pay for the land to be 
conveyed under section 4 in installments would constitute a 
loan, and this authority would therefore be subject to the 
provisions of the Federal Credit Reform Act of 1990. Under 
thoseprovisions, the costs of loans are recorded in the budget 
on a net present value or ``subsidy'' basis. We estimate that the loan 
stemming from section 4 would have a subsidy cost of less than $1 
million, reflecting both the risk of a default by the city and the cost 
to the government of providing payment terms based on an interest rate 
that is lower than the government's cost of money for the loan period. 
Specifically, the bill states that interest should be charged at the 
rate for a one-year Treasury security, while the loan period would 
extend for seven years. (Generally, longer-term Treasury securities 
have higher interest rates than short-term securities such as the one-
year rate.) Subsidy costs are recorded in the years in which loans are 
made. Under S. 1088, CBO assumes that the property would be transferred 
to the city of Sedona in 2000 with installment payments due to the 
federal government over the 2000-2006 period. Thus, both the estimated 
proceeds of about $6 million and the small subsidy cost of less than $1 
million would be recorded in 2000.
    Because the Forest Service would likely spend the proceeds 
of the land to be sold under section 4 as the city pays the 
installments, we estimate that over the long term the net 
effect on direct spending from enacting section 4 would be only 
the subsidy cost of the loan and the foregone permit fees.
    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. Under 
the Balanced Budget Act of 1997, proceeds from nonroutine asset 
sales maybe counted for purposes of pay-as-you-go scorekeeping 
only if such sales would entail no net financial cost to the 
government. The property sales authorized by this bill would 
not entail a net financial cost; therefore, the proceeds would 
be counted for pay-as-you-go purposes.
    The net changes in direct spending 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     -8      0      2      4      2      1      1      1      0      0
Changes in receipts................                                 Not applicable
----------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments: 
S. 1088 contains no intergovernmental mandates as defined in 
UMRA. Enactment of this bill would give the city of Sedona the 
opportunity to purchase land that it currently leases from the 
Forest Service. This purchase would be voluntary on the part of 
the city as would any amounts paid for the appraisal required 
by the bill. Purchasing the land would allow the city to avoid 
annual permit fees of about $250,000. The bill would have no 
significant impact on the budgets of other local governments or 
on state or tribal governments.
    Estimated impact on the private sector: This bill contains 
no new private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal costs: Victoria Heid Hall; 
Impact on State, local, and tribal governments: Marjorie 
Miller.
    Estimate approved by: Robert A. Sunshine, Deputy Assistant 
Director for Budget Analysis.

                      regulatory impact evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1088.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1088, as ordered reported.

                        executive communications

    On June 30, 1999, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
Agriculture and the Office of Management and Budget setting 
forth Executive agency recommendations on S. 1088. These 
reports had not been received at the time the report on S. 1088 
was filed. When the reports become available, the Chairman will 
request that they be printed in the Congressional Record for 
the advice of the Senate. The testimony provided by the Forest 
Service at the Subcommittee hearing follows:

    Statement of Denny Bschor, Director, Recreation, Heritage, and 
    Wilderness Resources, Forest Service, Department of Agriculture

    Thank you for your invitation to testify on S. 1088, the 
``Arizona National Forest Improvement Act of 1999''.


      s. 1088, the arizona national forest improvement act of 1999


    The Administration supports S. 1088, the ``Arizona National 
Forest Improvement Act of 1999''. This legislation would allow 
for the sale or exchange of administrative sites on national 
forests in the State of Arizona. The bill would allow for the 
consolidation of existing administrative sites, or the 
acquisition or construction of new administrative sites.
    The legislation also allows the Forest Service to convey 
approximately 300 acres to the City of Sedona for a wastewater 
treatment facility. The conveyance would be at fair market 
value, paid in installments with interest, over seven years. 
This legislation allows the Forest Service to assist the local 
community in their efforts to provide a wastewater treatment 
facility, while obtaining a fair return to the taxpayers for 
the disposal of national forest land.

                        changes in existing law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 1088, as 
ordered reported.

                                  
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