[Senate Report 106-393]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 769
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-393

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



 
                CONVEYANCE OF SLY PARK DAM AND RESERVOIR

                                _______
                                

                August 25, 2000.--Ordered to be printed

   Filed under authority of the order of the Senate of July 26, 2000

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 992]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 992) to convey the Sly Park Dam and 
Reservoir to the El Dorado Irrigation District, and for other 
purposes, having considered the same, reports favorably thereon 
with amendments and recommends that the Act, as amended, do 
pass.
    The amendments are as follows:
    1. On page 2, line 21, strike ``14-06-200-949IR2,'' and 
insert ``14-06-200-949IR3,''.
    2. Insert the following after section 4:

``SEC. 5. COSTS.

    ``All costs, including interest charges, associated with 
the Project that have been included as a reimbursable cost of 
the Central Valley Project are declared to be nonreimbursable 
and nonreturnable.''.

                         purpose of the measure

    The purpose of the measure is to direct the Secretary of 
the Interior, upon payment by the El Dorado Irrigation District 
of the net present value of the remaining repayment obligation, 
to convey the Sly Park Project to the District.

                          background and need

    Construction of Sly Park Dam and Reservoir (Jenkinson Lake) 
and Camino Conduit was authorized by the American River Basin 
Development Act, enacted October 14, 1949. Sly Park Dam and 
Reservoir are located on Sly Park Creek, a tributary of the 
North Fork Cosumnes River. The Camino Conduit conveys water by 
gravity from Jenkinson Lake to the El Dorado Distribution 
System. A small dam and tunnel, Camp Creek Diversion Dam and 
Tunnel, divert water from Camp Creek to augment the flow into 
Jenkinson Lake. The costs for construction of this small dam 
and tunnel are included with construction costs for Sly Park 
Dam, Reservoir, and Conduit.
    Sly Park Dam, Reservoir, and Conduit were financially 
integrated into the Central Valley Project (CVP) by the 
authorizing legislation; however, operation of these facilities 
is independent from the CVP. There is no contractual 
commitment, nor any physical connection, to provide either 
water or power to or from the CVP. All of the Unit's output in 
water services is contractually obligated to the El Dorado 
Irrigation District (District), which has operated and 
maintained the facilities since completion of the Unit in 1955.
    The District is the major water supplier in El Dorado 
County, providing service throughout a 200 square-mile area in 
the western part of the county. In cooperation with the Bureau 
of Reclamation (Bureau), the District operates the Sly Park 
Recreation Area, which offers camping, boating, swimming, 
picnicking and fishing.
    One issue that was recently brought to the attention of the 
Committee regarding the Sly Park transfer is the cost 
allocation for this project. The Bureau is currently performing 
a reallocation of CVP capital costs to comply with section 106 
of the Coordinated Operation Agreement Act of 1986 (P.L. 99-
546) and to address a report issued by the General Accounting 
Office in March 1992 criticizing the current cost allocation. 
During a review of the Bureau's proposed allocation, released 
for public review in November 1998, it was found that the costs 
of constructing the Sly Park facility have been included as a 
CVP capital obligation for repayment by the CVP irrigation and 
municipal and industrial water users. As mentioned above, this 
facility serves a single local water district and does not 
contribute to the water yield or operations of the CVP.
    In financially integrating the Sly Park Unit into the CVP, 
the Bureau is relying on the authorizing legislation. The 
authorizing Act for Sly Park directs the Secretary ``to cause 
the operation of said works to be coordinated and integrated 
with the operation of existing and future features of the 
Central Valley project. . . .'' The Act does not refer to 
financial integration. It appears that the project has not been 
integrated operationally but has been integrated financially.

                          legislative history

    H.R. 992 was introduced on March 4, 1999 by Congressman 
John Doolittle of California and was referred to the Committee 
on Resources. The bill passed the House by voice vote on 
November 1, 1999. The measure was received by the Senate and on 
November 19, 1999, was referred to the Energy and Natural 
Resources Committee. The Subcommittee on Water and Power held a 
hearing on the measure on March 22, 2000. At the business 
meeting on July 13, 2000, the Committee on Energy and Natural 
Resources ordered H.R. 992, as amended, favorably reported.

                       committee recommendations

    The Committee on Energy and Natural Resources, in open 
business session on July 13, 2000 by a unanimous voice vote 
with a quorum present, recommends that the Senate pass H.R. 
992, if amended as described herein.

                          committee amendment

    During the consideration of H.R. 992, the Committee adopted 
an amendment to make all costs, including interest charges, 
associated with the Project that have been included as a 
reimbursable cost of the Central Valley Project, 
nonreimbursable and nonreturnable.

                           section-by-section

    Section 1 provides definitions of key terms.
    Section 2 provides that the Secretary of the Interior 
shall, as soon as practicable after date of enactment, transfer 
the Sly Park Unit to the District. The Secretary is authorized 
to receive a total of $11,500,000 to extinguish debt under 
specified contracts. Amounts paid shall be credited toward 
repayment of capital costs of the Central Valley Project.
    Section 3 provides that, upon payment described in section 
2, the Sly Park Unit shall no longer be a Federal reclamation 
project or a unit of the CVP, nor shall the District be 
entitled to receive any further reclamation benefits.
    Section 4 describes the extent of the liability retained by 
the United States after conveyance.
    Section 5 provides that all costs, including interest 
charges, associated with the Project that have been included as 
a reimbursable cost of the Central Valley Project, are declared 
to be nonreimbursable and nonreturnable.

                   cost and budgetary considerations

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

H.R. 992--An act to convey the Sly Park Dam and Reservoir to the El 
        Dorado Irrigation District, and for other purposes

    Summary: H.R. 992 would direct the Secretary of the 
Interior to convey the Sly Park Dam and Reservoir, the Camp 
Creek Diversion Dam and Tunnel, and certain conduits and canals 
to the El Dorado Irrigation District. These water facilities 
are part of the Central Valley Project in California. The 
district would pay $11.5 million to the federal government for 
these facilities.
    CBO estimates that enacting H.R. 992 would decrease net 
direct spending by about $11 million in fiscal year 2001, and 
that this near-term cash savings would be offset by the loss of 
about $1 million in receipts annually over the 2002-2028 
period. Because the legislation would affect direct spending, 
pay-as-you-go procedures would apply.
    H.R. 992 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Local governments would incur some costs as a result of the 
legislation's enactment, but these costs would be voluntary.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 992 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--
                                                     -----------------------------------------------------------
                                                        2000      2001      2002      2003      2004      2005
----------------------------------------------------------------------------------------------------------------
                                         CHANGES IN DIRECT SPENDING \1\
Estimated Budget Authority..........................         0       -11         1         1         1         1
Estimated Outlays...................................         0       -11         1         1         1         1
----------------------------------------------------------------------------------------------------------------
\1\ Implementing the conveyance of property under H.R. 992 would cost about $50,000, assuming the availability
  of appropriated funds.

    Basis of estimate: For this estimate, CBO assumes that the 
conveyance of water facilities under H.R. 992 will occur in 
early fiscal year 2001. CBO estimates that it will cost about 
$50,000 to administer the conveyance.
    The El Dorado Irrigation District would pay $11.5 million 
to the federal government for the conveyance. In return, the 
legislation would cancel all repayment obligations and interest 
charges associated with the conveyed water facilities. As a 
result of these provisions, receipts to the federal government 
would be offset by the loss of currently scheduled repayments 
of about $1 million each year over the 2001-2008 period.
    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--
                                   -----------------------------------------------------------------------------
                                     2000   2001    2002   2003   2004   2005   2006   2007   2008   2009   2010
----------------------------------------------------------------------------------------------------------------
Changes in outlays................      0     -11      1      1      1      1      1      1      1      1      1
Changes in receipts...............  (\1\)   (\1\)  (\1\)  (\1\)  (\1\)  (\1\)  (\1\)  (\1\)  (\1\)  (\1\)  (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Not applicable.

    Intergovernmental and private-sector impact: H.R. 992 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The conveyance authorized by this bill would 
be voluntary on the part of the district, and any costs 
incurred by it as a result of the conveyance would be accepted 
on that basis. The bill would allow the district to prepay 
certain outstanding obligations to the federal government.
    Previous CBO estimate: On March 19, 1999, CBO transmitted a 
cost estimate for H.R. 992, the Sly Park Unit Conveyance Act, 
as ordered reported by the House Committee on Resources on 
March 11, 1999. The House version of H.R. 992 would direct the 
Secretary of the Interior to convey some but not all of the 
water facilities that are included in the Senate version. The 
House version also contains a different set of conditions for 
the conveyance. The two estimates reflect those differences.
    Estimate prepared by: Federal Costs: Rachel Applebaum. 
Impact on State, Local, and Tribal Governments: Majorie Miller. 
Impact on the Private Sector: Sarah Sitarek.
    Estimate approved by: Peter H. Fontaine, 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 H.R. 992. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and business.
    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 H.R. 992, as ordered reported.

                        Executive Communications

    The pertinent legislative report received by the Committee 
from the Department of the Interior setting forth Executive 
agency recommendation relating to H.R. 992 is set forth below:

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                      Washington, DC, June 5, 2000.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: This letter responds to your request for 
the views of this Department on H.R. 992, to convey the Sly 
Park Dam and Reservoir to the El Dorado Irrigation District, as 
adopted by the House of Representatives.
    The Administration supports H.R. 992, with the inclusion of 
the technical modification recommended below. The bill as 
originally introduced was amended at the request of the 
Administration in the House of Representatives so that we 
believe it now protects the interests of the United States, the 
citizens of El Dorado County and the El Dorado Irrigation 
District. As such, and we look forward to working with the 
Committee, the California delegation, and the District to move 
this legislation forward.
    There is a minor technical amendment that recently became 
necessary. On February 29, 2000, Reclamation and the El Dorado 
Irrigation District renewed the interim water service contract 
pursuant to the Central Valley Project Improvement Act. To 
accurately identify the contract that is being extinguished by 
the payments authorized in H.R. 992, the contract number that 
is referenced needs to be changed. Therefore in Section 2(b), 
line 20, the contract number should be 14-06-200-949IR3.

                  recent activities in title transfer

    We would like to provide the Subcommittee a brief status 
report on some recent activities with Reclamation's Title 
Transfer initiative.
    At the end of the 105th Congress, two proposals were signed 
into law, enabling the Secretary of the Interior to transfer 
title to Reclamation facilities. The first, P.L. 105-316, 
authorized the prepayment and subsequent conveyance of the 
Canadian River Pipeline in Texas to the Canadian River 
Authority. This facility was transferred in May, 1999.
    The second, P.L. 105-351, enabled Reclamation to convey the 
distribution facilities associated with the Southside Pumping 
Division of the Minidoka Project in Idaho. We are pleased to 
report that just a few weeks ago, these facilities were 
transferred to the Burley Irrigation District (BID).
    P.L. 105-316 required that several steps be taken before 
title could be transferred--including completion of the process 
under the National Environmental Policy Act (NEPA) and the 
negotiation and the development of an agreement between BID, 
the Secretary and the neighboring Minidoka Irrigation District 
(MID) on the distribution and management of the natural flow 
water rights, part of which would be transferred to BID but 
which that had been managed together with those of MID. We 
worked diligently with BID, other federal agencies, and the 
State to get this process completed in a timely fashion. Since 
BID began the environmental review prior to the legislation's 
passage, the NEPA process was completed, including the full 
public review, and a finding of no significant impact (FONSI) 
was issued on February 18, 2000. The water rights agreement was 
negotiated in December, 1999 and signed by all parties in 
February, 2000. The Quit Claim Deed for the water rights 
transfer was negotiated in December, 1999 and signed in 
February 2000 and the Quit Claim Deed Real Property was 
negotiated in February, 2000 and signed on February 24, 2000. 
As such, the facilities were transferred to Burley Irrigation 
District on February 24, 2000--more than two months ahead of 
schedule.
    While completing this is a credit to the hard work and 
cooperation of both Reclamation staff and to the Burley 
Irrigation District, we remain convinced that rather than 
negotiating the details in Washington, which in this case took 
several Congresses, then doing NEPA, the water rights agreement 
and other local consultations, and risk finding unanticipated 
problems through that process that may delay or require 
additional legislation before the transfer, had we gone through 
Reclamation's Framework process where we work through NEPA, the 
water rights agreement and negotiate all of the details prior 
to the legislative process, we would likely have completed the 
transfer more quickly and probably cheaper.
    In addition to these completed transfers, a significant 
amount of work has been going-on throughout the western United 
States to move other projects and facilities toward possible 
title transfers. Memoranda of Agreement have been negotiated 
and signed between Reclamation and numerous water districts 
across the west including districts in Idaho, Nevada, Colorado, 
Montana, Arizona and Texas. These memoranda establish roles and 
responsibilities, and in some cases, identify goals and 
objectives, for completing a fair and open title transfer 
process. In addition, we are working with numerous other 
entities that are just now coming forward with an interest in 
title transfer.
    The process for completing title transfer, even for 
relatively ``uncomplicated'' projects, is not simple. Each 
project has unique authorities, characteristics and 
circumstances that need to be analyzed and worked through to 
avoid serious unintended consequences. Given the significant 
progress that we have made, we continue to believe that title 
transfer, and the process envisioned in the Framework, is an 
important and worthwhile initiative that continues to be a 
priority for this Administration.
    Given that background, we turn to the Administration's 
views on H.R. 992.

        h.r. 992 convey sly park unit of central valley project

    H.R. 992 would enable the Secretary of the Interior to 
transfer all right, title and interest in the Sly Park Unit of 
the Central Valley Project (CVP) to the El Dorado Irrigation 
District (District) in California. This legislation has been 
the subject of a great deal of negotiation in the House of 
Representatives and the bill before the Subcommittee today 
represents a reasonable and fair compromise. As such, with one 
further technical amendment, the Department supports H.R. 992 
as it is now under consideration by this Committee.

                               background

    The Sly Park Unit of the Central Valley Project (CVP), 
while hydrologically isolated from the rest of the CVP, was 
authorized under the American River Act of October 14, 1949 (63 
Stat. 853) and includes the Sly Park Dam and Jenkinson Lake, 
Camp Creek Diversion and the Camino Conduit, and Camino and Cap 
Creek Tunnels which were built by the Bureau of Reclamation. 
Upon completion of construction in 1955, the operations, 
maintenance and replacement responsibility for these facilities 
was transferred to the District.
    The Project also includes water treatment facilities and a 
distribution system for irrigation and municipal purposes in 
western El Dorado County, which was built by Reclamationand is 
also operated and maintained by the District. The distribution system 
consists of three pipelines which extend a total of 46.3 miles from the 
vicinity of Sly Park Dam to the community of Placerville, California.

                                H.R. 992

    As amended and passed by the House of Representatives, H.R. 
992 would enable the Secretary of the Interior to transfer all 
rights, title and interest in the Sly Park Unit. In exchange, 
the District is required to make a lump-sum payment 
extinguishing all debt associated with related water service 
and repayment contracts between the District and the United 
States. However, the District would still be required to make 
payments into the Central Valley Project Restoration Fund, 
established by Section 3407(c) of the Central Valley Project 
Improvement Act.
    Once the facilities are transferred, the District would 
assume all liability for the Project. In addition, the Sly Park 
Unit would no longer be a Federal reclamation project or a unit 
of the CVP, and the District would no longer be eligible to 
receive any further reclamation benefits.
    During discussions of this bill in the House and of many 
others in both the House and Senate, the Administration has 
insisted that title transfers comply with all applicable laws 
including NEPA and the Endangered Species Act (ESA) prior to 
transfer and to ensure that whatever mitigation for the impacts 
of the title transfer, that is identified as necessary, is 
carried out. We believe that H.R. 992 does this.
    Compliance with the process under NEPA will enable all 
interested stakeholders to have an opportunity to voice their 
concerns and have them addressed. Furthermore, compliance with 
NEPA and ESA will enable the Fish and Wildlife Service to 
evaluate the impacts of the transfer and further activities on 
species that may be threatened or endangered. Six such species 
of plants, the gabbro soil plants of the Central Sierra Nevada 
Foothills, are present in El Dorado County. The Fish and 
Wildlife Service is currently developing a recovery plan for 
these species in hopes of being able to delist them in the 
future. It is the Department's expectation that this will be an 
integral part of the NEPA and ESA compliance processes as this 
title transfer moves forward.

                         Technical Modification

    As mentioned earlier, there is a minor technical amendment 
that recently became necessary. On February 29, 2000, 
Reclamation and the El Dorado Irrigation District renewed the 
interim water service contract pursuant to the Central Valley 
Project Improvement Act. To accurately identify the contract 
that is being extinguished by the payments authorized in H.R. 
992, the contract number that is referenced needs to be 
changed. Therefore in Section 2(b), line 20, the contract 
number should be 14-06-200-949IR3. With this amendment, we 
support the bill.
    The Office of Management and Budget advises that there is 
no objection to the presentation of this report from the 
standpoint of the Administration's program.
            Sincerely,
                                             E.L. Martinez,
                               Commissioner, Bureau of Reclamation.

                        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 Act H.R. 992, as 
ordered reported.

                                  
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