[Senate Report 106-195]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 330
106th Congress                                                   Report
                                 SENATE
 1st Session                                                    106-195

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                   HOOVER DAM MISCELLANEOUS SALES ACT

                                _______
                                

                October 18, 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. 1275]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1275) to authorize the Secretary of the 
Interior to produce and sell products and to sell publications 
relating to the Hoover Dam, and to deposit revenues generated 
from the sales into the Colorado River Dam fund, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                         purpose of the measure

    The purpose of S. 1275 is to authorize the Bureau of 
Reclamation to produce items, such as books, maps, brochures, 
memorabilia, and other commemorative items related to the 
Hoover Dam, for sale in the Hoover Visitor Center, and to use 
revenues from those sales to defray Hoover Visitor Center 
construction costs.

                          background and need

    Since the Hoover Dam Visitor Center opened in June 1995, it 
has had more than one million visitors annually and there has 
been a significant demand for maps, publications, memorabilia, 
photographs, and videos. There is also interest in the minting 
and sale of commemorative coins and other memorabilia that 
could be made from high-grade excess copper that came from the 
electrical cabinet and boxes which were used when the Dam was 
manually operated. Since the Dam is now operated by computer, 
these cabinets and boxes are no longer needed. It is estimated 
that 4 to 5 tons of copper are available.
    After a review of the pertinent laws and regulations, the 
Bureau of Reclamation (Reclamation) determined that it lacked 
the authority to produce and sell such items. S. 1275 is 
designed to serve two purposes: (1) meet visitor demand for 
such items; and (2) create a revenue source to help repay the 
cost of constructing the Visitor Center.
    The cost of the Hoover Dam Visitor Center, authorized in 
the 1984 Hoover Power Plant Act (P.L. 98-381), has been the 
subject of much criticism. Reclamation's 1983 estimate for 
construction was $32 million. The total cost, in 1994 dollars, 
with interest during construction (IDC), is estimated to be in 
excess of $122 million. The Office of Inspector General (Audit 
Report No. 94-I-915) attributed about $10 million of the cost 
increase to inflation and the remaining increase primarily to 
the use of inadequate, cost estimates and to changes in the 
scope of the program since it was authorized.
    Despite the significant increase in costs, Reclamation 
management failed to highlight these increases and take 
corrective action to mitigate them during the early years of 
construction. Reclamation relied, instead, on the fact that the 
cost increases did not exceed the Congressionally authorized 
appropriation ceiling.
    The Inspector General recommended three actions to mitigate 
the effect of the increased costs on the Hoover Dam power 
contractors, who are required by law to repay the Visitor 
Center construction costs. Reclamation is to pursue all 
reasonable efforts to generate sufficient revenues from direct 
facility beneficiaries, such as visitors and concession 
operators, to not only pay the operation and maintenance costs 
of the facilities, but to also repay the capital costs and IDC 
costs in excess of the 1983 cost estimate, as indexed in 
October 1994 cost levels.
    In addition, Reclamation has initiated a partnership 
process with the Western Area Power Administration and the 
Hoover Dam power customers to ensure that Hoover Dam power 
rates and expenditures continue to be provided at the lowest 
cost levels consistent with sound business practices.

                          legislative history

    Senator Kyl introduced S. 1275 on June 24, 1999 and a 
hearing was held in the Water and Power Subcommittee on July 
28, 1999. At the business meeting on September 22, 1999, the 
Committee on Energy and Natural Resources ordered S. 1275 
favorably reported.

           committee recommendations and tabulation of votes

    The Committee on Energy and Natural Resources, in open 
business session on September 22, 1999, by a unanimous voice 
vote of a quorum present, recommends that the Senate pass S. 
1275.

                         summary of the measure

    S. 1275 would authorize the Secretary of the Interior to 
produce and sell educational and commemorative items at the 
Hoover Dam Visitors Center. These items shall be related to 
programs or projects of the Bureau of Reclamation and all 
revenues, minus specified costs, shall be transferred to the 
general fund in repayment of construction costs at the Hoover 
Dam Visitor Center.

                   cost and budgetary considerations

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 14, 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. 1275, the Hoover Dam 
Miscellaneous Sales Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Mark Hadley.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               congressional budget office cost estimate

S. 1275--Hoover Dam Miscellaneous Sales Act

    S. 1275 would allow the Bureau of Reclamation to sell 
memorabilia made from unneeded property and scrap materials 
from the Hoover Dam. The bill also would allow the bureau to 
sell publications related to its projects. Costs incurred to 
produce these items would be derived from the Colorado River 
Dam Fund and would be repaid from the proceeds from sales. Any 
sales profits would be credited toward the repayment of the 
cost of constructing the Hoover Dam Visitor Center. Under 
current law, purchasers of power from the Hoover Dam repay 
costs related to the center. CBO estimates that enactment of 
this bill would result in no net budget impact.
    Amounts spent from and deposited into the Colorado River 
Dam fund are classified as discretionary spending. According to 
the Bureau of Reclamation, sales of memorabilia and 
publications would yield profits of about $1 million annually 
over the 2000-2004 period, and negligible amounts in subsequent 
years. Because these collections would reduce the repayment 
obligation of power customers, CBO expects that collections 
from electricity sales (which are also classified as 
discretionary spending in this account) would be reduced by a 
corresponding amount. Because S. 1275 would not affect direct 
spending or receipts, pay-as-you-go procedures would not apply.
    S. 1275 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would have no significant impact on the budgets of state, 
local, or tribal governments.
    The CBO staff contact is Mark Hadley. This estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

                      regulatory impact evaluation

    In compliance with paragraph 11(d) 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. 1275. 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. 1275, as ordered reported.

                        executive communications

    On July 19, 1999, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
the Interior and the Office of Management and Budget setting 
forth Executive agency recommendations on S. 1275. These 
reports had not been received at the time the report on S. 1275 
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 
Department of the Interior at the Subcommittee hearing follows:

     Statement of Steve Richardson, Chief of Staff, U.S. Bureau of 
                Reclamation, Department of the Interior

    I am Steve Richardson, Chief of Staff of the U.S. Bureau of 
Reclamation. I appreciate the opportunity to provide the 
Administration's views on S. 1275, the Hoover Dam Miscellaneous 
Sales Act.
    Since it opened in 1995, the Hoover Dam Visitor Center has 
served over one million visitors annually (including over 
200,000 from other countries). Many of these visitors request 
educational materials and memorabilia to take home as a memento 
of their visits to the Hoover Dam. S. 1275 would authorize the 
Bureau of Reclamation (Reclamation) to produce publications and 
other educational materials about Hoover Dam; to sell these 
materials at the Hoover Dam Visitor Center; and to produce and 
sell memorabilia created from excess Hoover Dam material. 
Revenues generated from these sales would be used to repay 
costs associated with construction of the Visitor Center as 
well as ongoing operation and maintenance costs.
    The Department supports this bill. S. 1275 will enable 
Reclamation to respond to the significant public demand from 
visitors to Hoover Dam for educational materials, and will 
allow the creative re-use of excess Dam material that otherwise 
would become surplus and therefore be disposed of as scrap. 
Additionally, sales authorized by this legislation are expected 
to generate revenues which would reduce the financial 
obligation of power users for debt repayment.
Public demand for educational materials
    The millions of people who visit the Visitor Center at 
Hoover annually create a significant demand for information 
about the Hoover Dam. On a regular basis, we get requests for 
maps, brochures, posters, photographs, computer information 
discs, and videos. While Reclamation is often the sole source 
of this information, under current law we do not have the 
authority to produce or have these materials printed. If 
authorized by enactment of S. 1275, Reclamation proposes to 
open a bookstore or gift shop at the Visitor Center and to 
offer for sale government and academic press publications and 
other educational materials and memorabilia related to the 
Hoover Dam.
    Currently, three vendors under the jurisdiction of the 
Nevada State Services for the Blind operate concessions at 
Hoover Dam. Under the provisions of the Randolf-Sheppard Act, 
these vendors are authorized to sell postcards and other 
souvenirs, but are not authorized to sell government 
publications nor academic press publications related to the 
Hoover Dam. Reclamation and the blind vendors have reached an 
agreement in concept to ensure that the materials to be sold at 
the Visitor Center bookstore will not be in competition with 
the materials sold at the vendors' outlets.
New use for excess dam material
    Reclamation has an opportunity to produce truly unique 
Hoover Dam memorabilia by putting to new use some of the 
original copper used in construction of the power plant in the 
1930's--material which became ``excess'' due to plant and 
switch yard modernization. The copper comes from two sources: 
the ``bus gallery'' within the power plant which contains the 
bus works and cabinets (``bus'' work is a hard conduit for 
transmission of electricity), and the switch yards that were 
used before the transmission system was integrated into a 
common voltage as part of the Hoover uprate program. Since all 
Hoover generating units now have their voltage stepped to 230 
kV, portions of the old 287 kV line were abandoned. The 287 kV 
line is somewhat unique in that it is a hollow copper line that 
was constructed using a tongue and groove spiral.
    Under current law, Reclamation is not authorized to dispose 
of excess Government property (copper) except under the 
property disposal regulations. Under those regulations, excess 
copper is disposed of as scrap material. Sale of this excess 
copper as scrap material would likely bring in very little 
revenue. Although the price varies, excess copper is currently 
valued at less than $1 per pound. Reclamation estimates about 
four to five tons of excess copper have become available as a 
result of modernization at Hoover Dam; the potential revenue 
from sale of this material as scrap would be around $20,000.
    In contrast, there is significant interest in the minting 
and sale of commemorative coins and other unique memorabilia. 
With an investment of $1 million to produce the items, sales of 
memorabilia created from excess Hoover Dam copper could be 
expected to generate approximately $5 million in revenues. 
Since revenues from sales would be applied toward debt 
reduction and other costs associated with operation of the 
Visitor Center, this authority would benefit not only tourists 
but power users as well.
Reduce financial obligation of power users
    If authorized by this legislation, net revenues from the 
sale of publications and products such as maps and videos are 
estimated at between $25,000 and $75,000 annually. These 
revenues will assist in repaying the construction costs of the 
Visitor Center and Parking Structure, thereby reducing the 
financial obligation of power users. The revenues also will 
assist in paying for the operation, maintenance, and recovery 
costs associated with the delivery of guided tours at Hoover 
Dam and its power plant.
    Mr. Chairman, the Department supports this legislation 
because it is a ``win-win'' all around. Visitors will benefit 
from the availability of on-site sales of materials they have 
requested. Power users will benefit, as revenues from sales are 
applied toward repayment of the Visitor Center construction 
debt and operations and maintenance. The current vendors will 
benefit from the opportunity to operate the bookstore.
    The concludes my prepared testimony. I would to glad to 
answer any questions.

                        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. 1275, as 
ordered reported.

                                  
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