[Senate Report 106-19]
[From the U.S. Government Publishing Office]




                                                        Calendar No. 46

106th Congress                                                   Report
                                 SENATE
 1st Session                                                     106-19

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




 
         CARLSBAD IRRIGATION PROJECT ACQUIRED LAND TRANSFER ACT

                                _______
                                

                 March 17, 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. 291]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 291) to convey certain real property 
within the Carlsbad Project in New Mexico to the Carlsbad 
Irrigation District, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                         purpose of the measure

    The purpose of S. 291, as ordered reported, is to authorize 
the transfer of the Carlsbad Project in New Mexico to the 
Carlsbad Irrigation District.

                          background and need

History of facility transfers

    In the 104th Congress, the Committee held hearings on 
legislation (S. 620) that would have provided generic authority 
for the transfer of certain Reclamation projects to project 
beneficiaries as well as legislation specific to individual 
projects. The generic legislation was introduced following the 
Department of the Interior's statement, as part of the 
Reinventing Government Initiative, that it would seek to 
transfer title to appropriate projects where there were no 
overriding concerns.
    S. 620 would have directed the Secretary of the Interior to 
transfer title to all Federal property associated with full 
paid out Bureau of Reclamation projects to the project 
beneficiaries in those instances where the beneficiaries have 
already assumed responsibility for operation and maintenance. 
The legislation would have provided that the transfer would be 
without cost and would have made all revenues previously 
collected from project lands and placed in the reclamation fund 
available to the beneficiaries under the formula set forth in 
subsection I of the Fact Finders Act of 1924. The Fact Finders 
Act provides generally that when water users take over 
operation of a project, the net profits from operation of 
project power, leasing of project lands (for grazing or other 
purposes), and sale or use of town sites are to be applied 
first to construction charges, second to operation and 
maintenance (O&M) charges, and third ``as the water users may 
direct.''
    Proposals to transfer title to selected Reclamation 
facilities have been advanced before. Some have already been 
authorized by Congress. (See: Pub. L. No. 102-575, title XXXIII 
transferring facilities to the Elephant Butte Irrigation 
District, New Mexico, and title XIV, dealing with the Vermejo 
Project, New Mexico.) Other title transfer proposals, such as 
ones advanced in 1992 for the Central Valley Project and in the 
late 1980s for the Solano Project and the Sly Park Unit, have 
been quite controversial.
    As of 1990, the Bureau had identified 415 project 
components--out of a total of 568 facilities--where operation 
and management responsibilities had been transferred or were 
scheduled to be transferred to project users. Section 6 of he 
Reclamation Act of 1902 (32 Stat. 388, 389) provides in 
pertinent part that ``when the payments required by this act 
are made for the major portion of the lands irrigated from the 
waters 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. . . .'' The section concludes 
with the following proviso:'' Provided, That the title to and 
the management and operations of the reservoirs and the works 
necessary for their protection and operation shall remain in 
the Government until otherwise provided by Congress.'' 
Historically, the Bureau has usually transferred operation and 
maintenance to local districts in advance of project repayment 
where the districts have expressed an interest in taking over 
management and have the capability to assume the 
responsibility.
    A transfer provision was also included in the 1955 
Distribution System Loans Act, asamended. This provision 
differs from the 1902 law in that it allows transfer of title to the 
lands and facilities upon repayment of the loan. In addition to the 
operations and management transfer authorization under the Reclamation 
Act of 1902, several other title transfer provisions are included in 
individual project acts. These include section 7 of the 1928 Boulder 
Canyon Project Act (Act of Dec. 21, 1928, 45 Stat. 1057, 43 U.S.C. 617 
et seq.), which authorizes the Secretary of the Interior to transfer 
title of the All-American Canal and certain other related facilities 
after repayment has been completed; provisions in the Act of September 
22, 1959 (Pub. L. No. 86-357, 73 Stat. 641), regarding transfer of 
title for Lower Rio Grande project facilities; and, Pub. L. No. 83-752 
(68 Stat. 1045), which directs the Secretary to transfer title to the 
Palo Verde Irrigation District upon repayment. Under the 1954 Act, the 
U.S. retained the right to build hydro power facilities at the site and 
to retain a share in energy production.
    The hearings on S. 620 during the 104th Congress 
demonstrated that generic legislation was not likely to deal 
with all the possible issues associated with project transfers 
and that such legislation would wind up being complex and 
overly burdensome. As a result, discussions began on the 
potential transfer of several projects, or portions thereof. 
The Committee considered the transfer of the Collbran project 
and included language in the Reconciliation measure, H.R. 2491, 
the Balanced Budget Act of 1995, which was vetoed by the 
President. The Reconciliation measure also contained language 
(section 5356) to transfer the Sly Park unit of the Central 
Valley Project. That language was included in the House 
amendments and accepted in conference. During the 104th 
Congress, the Committee also conducted hearings and favorably 
reported legislation on the Carlsbad project (S. 2015), and the 
distribution portion of the Minidoka project serving the Burley 
Irrigation District (S. 1921). The Committee also held hearings 
on legislation for the transfer of Canadian River, Palmetto 
Bend and Nueces River projects in Texas (S. 1719). However, 
none of the measures was enacted into law.
    During the 105th Congress, the Committee considered 
legislation providing for the transfer of certain features of 
the Minidoka Project, Idaho (S. 538), which was favorably 
reported from the Committee on November 3, 1997 and which 
passed the Senate on June 25, 1998. The Committee also 
considered and favorably reported legislation providing for the 
transfer of the lands and facilities of the Wellton-Mohawk 
Division of the Gila Project, Arizona (S. 2087) and the Pine 
River Project, Colorado (S. 2142). The Committee also 
considered and favorably reported legislation that authorizes 
the prepayment of outstanding obligations on the Canadian River 
Project, Texas, which would permit the transfer of those 
facilities as provided in the 1950 legislation authorizing the 
project.

Background of Carlsbad Project

    The Carlsbad Project is located in southeastern New Mexico 
on the Pecos River near the city of Carlsbad. Project features 
include Sumner Dam and Lake Sumner (previously Alamogordo Dam 
and Reservoir), McMillan Dam, Avalon Dam, and a drainage and 
distribution system. In addition to irrigation benefits, the 
project facilities also provide flood control and recreation 
benefits. Irrigation in the area dates to Spanish settlements 
around 1600 and flourished during the Spanish land grant 
colonization system in the early 19th century. In 1888, a large 
ranch was located in the general area of the present Carlsbad 
Project. The ranch manager initiated the first large-scale 
irrigation attempt. Since the natural characteristics of the 
area required a more comprehensive treatment than the 
enterprise could afford, it failed. For the next 17 years, 
various private interests attempted to make this project 
financially profitable, but without success.
    During this period, project facilities were built to 
include McMillan Dam for water storage, Avalon Dam for both 
storage and diversion, the Main Canal, and a distribution 
system that irrigated 15,000 acres. Private operation of the 
project ended in 1904 when a Pecos River flood destroyed the 
central canal and much of the irrigation system and swept away 
Avalon Dam. Without water for the land, the project settlers 
faced complete ruin. Upon their request, in 1905 the 
Reclamation Service was authorized to purchase the system. 
Reclamation then began investigations prior to rehabilitating 
the project.
    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. 
Brantley Dam and Reservoir were authorized on October 20, 1972, 
by Public Law 92-514, to replace the depleted capacity of 
McMillan Reservoir and provide flood control, fish and 
wildlife, and recreation benefits. The Carlsbad Irrigation 
District has also entered into loans under the Rehabilitation 
and Betterment program of the Bureau of Reclamation for 
concrete lining and improvement of the irrigation system which 
have significantly reduced water losses and provided a more 
efficient delivery of water.

                          legislative history

    S. 291 was introduced on January 21, 1999 by Senator 
Domenici (for himself and Senator Bingaman). S. 291 is 
identical to the version of S. 736 that was passed by the 
Senate in the 105th Congress. S. 736 was introduced on May 13, 
1997 by Senator Domenici. A hearing was held on S. 736 by the 
Subcommittee on Water and Power on June 10, 1997 and the 
measure was reported from the Committee with a substitute 
amendment on September 23, 1998. (Report 105-370.) S. 736 
passed the Senate, as amended, on October 7, 1998.
    At the business meeting on March 4, 1999, the Committee on 
Energy and Natural Resources ordered S. 291 favorably reported.

                       committee recommendations

    The Committee on Energy and Natural Resources, in open 
business session on March 4, 1999, by a unanimous voice vote of 
a quorum present, recommends that the Senate pass S. 291, as 
described herein.

                      section-by-section analysis

    Section 1 provides a short title.
    Section 2 authorizes the conveyance of the project except 
for the surface estate under the footprint of Brantley and 
Avalon dams and the retention of storage and flow easements for 
any tracts located under the maximum spillway elevations of the 
reservoirs. The District is required to manage all lands for 
project purposes and will assume all rights and obligations of 
the United States for the management of certain lands near 
Brantley for fish and wildlife purposes and the management of 
Brantley Lake State Park, except that the District will not be 
obligated for financial support nor entitled to any revenues. 
The section provides that if the project has not been 
transferred within 180 days from the date of enactment, the 
Secretary of the Interior shall submit a report to Congress 
explaining why the project has not been conveyed and what steps 
the Secretary will take to complete the conveyance.
    Section 3 provides for the District to assume all mineral 
and grazing leases and requires that any income be used for 
project purposes and that the District adhere to Bureau of 
Reclamation leasing stipulations. The section provides for the 
transfer of existing credits of the Carlsbad Project in the 
Reclamation Fund to be credited to the General Treasury and 
provides that the first $200,000 of receipts received after the 
date of enactment to be used to offset the costs of transfer 
with all further costs shared equally between the United States 
and the District.
    Section 4 provides that nothing in the Act will constitute 
a limit on any water conservation measures the District may 
choose to implement.
    Section 5 provides for a limitation on future liability of 
the United States subsequent to transfer of the project.
    Section 6 provides that upon transfer, land and facilities 
will no longer be eligible for Reclamation benefits available 
solely as a result of their status as a Reclamation project.

                   cost and budgetary considerations

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 10, 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. 291, the Carlsbad 
Irrigation Project Acquired Land Transfer 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 Marjorie Miller (for the state and 
local impact).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

S. 291--Carlsbad Irrigation Project Acquired Land Transfer Act

    Summary: S. 291 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).
    CBO estimates that implementing the bill would reduce 
discretionary spending over the 2000-2004 period by $100,000, 
assuming appropriations are reduced correspondingly. CBO also 
estimates that enacting S. 291 would increase direct spending 
by $200,000 annually beginning in 2000; therefore, pay-as-you-
go procedures would apply.
    S. 291 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 that enacting S. 291 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 purposes 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 S. 291 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 S. 291 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. S. 291 
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 governments: 
S. 291 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 $200,00 per year).
    Estimated impact on the private sector: This bill contains 
no new private-sector mandates as defined in UMRA.

                      regulatory impact evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee make the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 291. The bill is not a regulatory measure in 
the sense of improving 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. 291, as ordered reported.

                        executive communications

    The following communication was received on March 3, 1999 
from the Department of the Interior:
                   U.S. Department of the Interior,
                                     Bureau of Reclamation,
                                     Washington, DC, March 3, 1999.
Hon. Frank Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: I am writing to express the 
Administration's position on two bills scheduled for 
consideration by the Committee on Energy and Natural Resources 
on Wednesday, March 3, 1999, which could result in the transfer 
of title to projects constructed and owned by the Bureau of 
Reclamation (Reclamation). The Administration supports S. 291, 
to convey certain lands and facilities of the Carlsbad Project 
in New Mexico. In addition, the Administration could support S. 
356 to convey certain works and facilities of the Gila Project, 
and designated lands within or adjacent to the Gila Project, if 
it were clarified that the District could not use revenues from 
municipal bonds to finance this transfer.
    As you may know, in 1995, Reclamation, as part of the 
second phase of the Vice President's National Performance 
Review, undertook an initiative to transfer title for 
appropriate Reclamation projects and facilities to non-Federal 
entities. Since that time, Reclamation has been working closely 
with the water users, the other stakeholders, and the sponsors 
in both the House and Senate to address the issues of concern. 
As a result of that hard work on all sides, tremendous progress 
has been made.
    S. 291 is identical to S. 736, as amended, and S. 356 is 
identifical to S. 2087, as amended, from the 105th Congress. 
Both these bills passed the Senate but were not considered by 
the House of Representatives before it adjourned sine die for 
the 105th Congress. As you may recall, the Administration 
supported both last year. While these represent very difficult 
approaches, we view them as good examples of the progress that 
has been made.
    While we were once far apart on the terms of the 
legislation for both these projects, the Carlsbad Irrigation 
District and the Wellton Mohawk Irrigation and Drainage 
District both worked closely with the Administration and the 
other stakeholders to address the issues of concern and to 
craft creative proposals which will ensure compliance with 
Federal environmental laws; protect the interests of the United 
States, potentially save the taxpayers money in the long term 
and give responsibility for operational control and management 
to the local beneficiaries and interests.
    Enactment of S. 291 would affect receipts; therefore it is 
subject to the pay-as-you-go requirement of the Omnibus Budget 
Reconciliation Act of 1990.
    The Office of Management and Budget advises that there is 
no objection to the submission of this report from the 
standpoint of the Administration's program.
    We look forward to working closely with you and the 
Committee to complete consideration of these proposals. If I 
can provide any additional information or assistance, please do 
not hesitate to contact me.
            Sincerely,
                                   Eluid L. Martinez, Commissioner.

                        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. 291, as ordered 
reported.

                                

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