[Senate Report 106-21]
[From the U.S. Government Publishing Office]
Calendar No. 48
106th Congress Report
1st Session SENATE 106-21
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WELLTON-MOHAWK 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. 356]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 356) to authorize the Secretary of the
Interior to convey certain works, facilities, and titles of the
Gila Project, and designated lands within or adjacent to the
Gila Project, to the Wellton-Mohawk Irrigation and Drainage
District, 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. 356, as ordered reported, is to provide
for the transfer of Gila Project-Wellton-Mohawk Division
facilities and lands pursuant to a Memorandum of Agreement
entered into between the Wellton-Mohawk Irrigation and Drainage
District and the Secretary of the Interior dated July 10, 1998.
background and need
History of facility transfers
In the 104th Congress, the Committee held hearings on
legislation (S. 620) that would provide 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 directed the Secretary of the Interior to transfer
title to all Federal property associated with fully 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
provided that the transfer would be without cost and also 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 1980's 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 the
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 andoperations 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, as amended. 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), which was similar to S. 538. 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 Carlsbad Project in
New Mexico (S. 291), 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 Gila Project
The Gila Project in western Arizona was originally
authorized for construction under a finding of feasibility
approved by the President on June 21, 1937, pursuant to section
4 of the Act of June 25, 1910 (36 Stat. 836), and subsection B
of section 4 of the Act of December 5, 1924 (43 Stat. 701). It
was reauthorized and reduced in area to 115,000 acres by the
Act of July 30, 1947 (61 Stat. 628). Further reduction in
irrigable acreage of the Wellton-Mohawk Division was authorized
by the Colorado River Basin Salinity Control Act of June 24,
1974 (88 Stat. 266). Project construction was begun in 1936,
and the first water was available for irrigation from the Gila
Gravity main Canal on November 4, 1943. Construction of the
Wellton-Mohawk Division features was started in August 1949. On
May 1, 1952, water from the Colorado River was turned onto the
Wellton-Mohawk fields for the first time. The project was
essentially complete by June 30, 1957. The Wellton-Mohawk
Irrigation and Drainage District operates the irrigation
facilities in the Wellton-Mohawk Division.
Wellton-Mohawk is one of the Reclamation Project Districts
that have sought agreement with the Bureau of Reclamation for a
transfer and is similar to the situation of the Burley
Irrigation District, which sought transfer of its portion of
the Minidoka Project in Idaho. Initial drafts of the
legislation were modeled after the Burley legislation reported
by the Committee during the first session. Wellton-Mohawk has
fully repaid its project costs and was provided a certificate
of discharge on November 27, 1991. On July 10, 1998, the
District and the Bureau signed a Memorandum of Agreement that
covers the details of the transfer of title. It includes
transfer of lands between the Federal Government and the
District, including the acquisition of additional lands for
exchange. All transfers will be at fair market value. No change
in project operation is contemplated by the transfer and the
District will continue to limit irrigated acreage to 62,875 as
provided in P.L. 93-320. The transfer would include all
facilities and works for which full repayment has been made.
legislation history
S. 356 was introduced by Senators Kyl and McCain on
February 3, 1999. S. 356 is identical to the version of S. 2087
that passed the Senate in the 105th Congress. A hearing was
held on S. 2087 by the Subcommittee on Water and Power on June
16, 1998 and the measure was ordered favorably reported by the
Committee on July 29, 1998. (Report 105-289.) S. 2087 passed
the Senate by Unanimous Consent on October 9, 1998.
At its business meeting on March 4, 1999, the Committee on
Energy and Natural Resources ordered S. 356 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. 356 as
described herein.
section-by-section analysis
Section 1 provides a short title.
Section 2 authorizes the Secretary of the Interior to carry
out all provisions of the Memorandum of Agreement covering the
transfer of title, including the authority to convey lands as
required under section 2 of the Memorandum.
Section 3 requires the Secretary of the Interior and the
Secretary of Energy to continue to provide water and power as
provided under existing contracts and as provided under the
Memorandum.
Section 4 is a savings clause.
Section 5 requires a report from the Secretary if the
transfer has not occurred by July 1, 2000.
Section 6 authorizes such sums as are necessary.
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, March 11, 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. 356, the Wellton-
Mohawk 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. 356--Wellton-Mohawk Transfer Act
Summary: S. 356 would authorize the appropriation of such
sums as are necessary to implement a memorandum of agreement
between the Bureau of Reclamation (the bureau) and the Wellton-
Mohawk Irrigation and Drainage District (the district)
regarding transfer of the federally owned Gila Irrigation
Project to the district. The bill would give each party the
discretion to exchange with each other, or purchase at fair
market value, lands relating to the project.
CBO estimates that implementing this bill would result in
additional spending of about $500,000 by the bureau over the
2000-2001 period, assuming appropriation of the necessary
amounts. In addition, CBO estimates that the district would pay
a minimum of about $2 million in 2002 for certain federally
owned lands. Because the bill would affect direct spending by
increasing offsetting receipts from the sale of federal land,
pay-as-you-go procedures would apply.
S. 356 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: The estimated
budgetary impact of S. 356 if 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--
-----------------------------------------------
1999 2000 2001 2002 2003 2004
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CHANGES IN DIRECT SPENDING \1\
Estimated budget authority...................................... 0 0 0 -2 0 0
Estimated outlays............................................... 0 0 0 -2 0 0
----------------------------------------------------------------------------------------------------------------
\1\ Implementing the bill would also affect spending subject to appropriation, but in amounts less than $500,000
a year (for 2000 and 2001).
Basis of estimate: For the purpose of this estimate, CBO
assumes that S. 356 will be enacted by the end of fiscal year
1999 and that the estimated amounts necessary to implement the
bill will be appropriated for fiscal year 2000. Based on
information from the bureau, CBO estimates that the federal
share of costs for implementing the transfer of the federally
owned irrigation project would be about $500,000, spread over
fiscal years 2000 and 2001. These funds would pay for necessary
environmental studies and legal transactions. The estimate of
outlays is based on historical rates of spending for these
activities.
S. 356 would give the district and the bureau the
discretion to exchange, or purchase at fair market value, lands
relating to the project. Based on information provided by the
bureau, CBO estimates that the district would pay a minimum of
about $2 million in 2002 for certain lands. That payment would
be recorded as offsetting receipts (a credit against direct
spending). Based on information provided by the bureau, CBO
estimates that the government would not forgo any income by
completing these transactions. In addition, we estimate that
completing the land transfers would have no significant impact
on spending subject to appropriation.
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--
----------------------------------------------------------------------------
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
----------------------------------------------------------------------------------------------------------------
Changes in outlays................. 0 0 0 -2 0 0 0 0 0 0 0
Changes in receipts................ Not applicable
----------------------------------------------------------------------------------------------------------------
Under the Balanced Budget Act of 1997, 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.
Based on information provided by the bureau, CBO estimates that
the sale proceeds would exceed any net revenues currently
projected to accrue from these lands; therefore, selling these
assets would result in a net savings for pay-as-you-go
purposes.
Estimated impact on State, local and tribal governments: S.
356 contains no intergovernmental mandates as defined in UMRA.
The district has agreed to pay a share of the costs to
implement this transfer as part of its memorandum of agreement
with the bureau. These costs, which CBO estimates would be
about $1 million, were voluntarily accepted by the district as
part of that agreement. The decision to purchase land from the
federal government also would be voluntary on the part of the
district.
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 makes the following
evaluation of the regulatory impact which would be incurred in
carrying out S. 356. 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. 356, as ordered reported.
Executive Communications
On March 3, 1999, the Committee received the following
communication from the Department of the Interior:
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
identical 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 different
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. 356, as ordered
reported.