[Senate Report 106-453]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 899
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-453

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               WASHINGTON COUNTY, UTAH LEGISLATIVE TAKING

                                _______
                                

 October 2 (legislative day, September 22), 2000. 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. 2873]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2873) to provide for all right, title, 
and interest in and to certain property in Washington County, 
Utah, to be vested in the United States, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                         purpose of the measure

    The purpose of S. 2873 is to provide for a legislative 
taking of approximately 1,550 acres of private lands within the 
federally designated Red Cliff Reserve in Washington County, 
Utah.

                          background and need

    In 1983, Environmental Land Technology (ELT) acquired 2,440 
acres from the State of Utah for development purposes and 
completed appraisals, engineering studies, site plans, and 
other work in preparation for development of its property. In 
April, 1990, the desert tortoise (Gopherus agassizii) was 
listed as a threatened species pursuant to the Endangered 
Species Act of 1973. The landowner testified before the 
Committee that he has been unable to develop the property as 
originally intended because of the occurrence of critical 
desert tortoise habitat in and around the ELT property. In 
February 1996, the United States Fish and Wildlife Service 
(USFWS) adopted a Habitat Conservation Plan (HCP) creating the 
Red Cliffs Reserve for the protection of the desert tortoise 
habitat. Under the plan, the Bureau of Land Management (BLM) 
proposed to acquire all private lands in the designated habitat 
area.
    To date, the BLM has acquired nearly all the private 
property located in the Reserve except for approximately 1,516 
of ELT land. Numerous attempts to reach an agreement withthe 
BLM for exchanges of this property have failed, at considerable cost to 
the landowner. In the interim, Congress has enacted legislation to 
exchange large blocks of Federal lands with the State of Utah, making 
other land exchanges in the State much more difficult to complete.
    No funds were appropriated to the BLM in FY 2000 to 
purchase the property. The Department of the Interior did not 
request funds for this acquisition in FY 2001, though the 
acquisition of the ELT property remains a high priority for the 
BLM.
    The continued inability to develop or otherwise dispose of 
the property has resulted in economic hardship for the 
landowner. Conventional financing to hold the property was not 
available to the landowner because the banks were unwilling to 
lend money against the land without a clear payoff date. 
Accordingly, ELT has had to borrow substantial sums, sometimes 
at high interest rates, to hold the property. S. 2873 is needed 
to complete the land transfer and to compensate ELT for its 
land in a more timely manner than is available without the 
legislation.

                          legislative history

    S. 2873 was introduced on July 14, 2000 by Senator Bennett 
and referred to the Committee on Energy on Natural Resources. 
The Subcommittee on Forests and Public Land Management held a 
hearing on S. 2873 on September 13, 2000. At the business 
meeting on September 20, 2000, the Committee on Energy and 
Natural Resources ordered S. 2873 favorably reported.

                        committee recommendation

    The Senate Committee on Energy and Natural Resources, in 
open business session on September 20, 2000, by a voice vote of 
a quorum present, recommends that the Senate pass S. 2873.

                      section-by-section analysis

    Section 1 lists several findings of Congress.
    Section 2(a) transfers title to the United States for 1,516 
acres of property owned by Environmental Land Technology (ELT) 
within the Red Cliffs Reserve and 34 acres owned by ELT 
adjacent to the land within the reserve.
    Subsection 2(b) provides for compensation to ELT through an 
initial cash payment of $15,000,000 and the balance to be paid 
in cash or, at the option of ELT, as provided in Subsection 
2(e). Payment shall be in the amount of appraised value plus 
interest and reasonable costs and expenses of holding the 
property from February, 1990.
    Subsection 2(c) directs that, in the absence of a 
negotiated settlement, the Secretary shall initiate a 
proceeding in the U.S. District Court to determine just 
compensation.
    Subsection 2(d) provides for the orderly termination of all 
current activities of the landowner.
    Subsection 2(e) provides that the Secretary, at the option 
of ELT, credit a surplus property account in the amount of the 
unpaid compensation due which ELT could use to bid for surplus 
property.

                   cost and budgetary considerations

    The Congressional Budget Office (CBO) estimate of the cost 
of this measure has been requested but was not available at the 
time the report was filed. When the report is available, the 
Chairman will request it be printed in the Congressional Record 
for the advice of the Senate.

                      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. 2873.
    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. 2873, as ordered reported.

                        executive communications

    On September 20, 2000, 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 views on the bill. These reports had not been 
received at the time the report on S. 2873 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 Tom Fry, Director, Bureau of Land Management

    Mr. Chairman and members of the subcommittee, I appreciate 
the opportunity to appear before you today to testify on S. 
2873, to provide for all right, title, and interest in and to 
certain property in Washington County, Utah, to be vested in 
the United States. The Administration opposes this legislation. 
The bill seeks to accomplish the Federal government's long-
awaited and much-desired acquisition of the last major block of 
private lands within the Washington county Habitat Conservation 
Plan (HCP) area near St. George, Utah. Specifically at issue is 
the area known as the Red Cliffs Desert Reserve which provides 
critical habitat for the threatened desert tortoise. There is 
no disagreement as to the important goal and desire to 
consummate the final, critical acquisitions in this unique and 
special place, yet we believe the objectives of S. 2873 can be 
accomplished through the normal land acquisition process for 
which the Bureau of Land Management (BLM) has well-established 
procedures. I would like to point out that the Administration 
also opposed Mr. Hansen's companion bill on this issues, H.R. 
4721, at the House Resources Committee hearing held on July 13, 
2000. I will now briefly outline the legislation and our 
reasons for opposing it.
    S. 2873 would provide for the acquisition by the BLM of all 
right, title and interest to 1,516 acres of private property 
within the Red Cliffs Desert Reserve and 34 acres of private 
property adjacent to the Reserve. The Red Cliffs Desert Reserve 
was established in 1996 as part of the Desert Tortoise HCP for 
Washington County, Utah. The County developed the HCP, with 
technical advice from the Fish and Wildlife Service, in order 
to receive a permit to allow for the incidental take of about 
12,000 acres of privately-held desert tortoise habitat and to 
mitigate that take by developing the Reserve to ensure the 
protection and recovery of the threatened Desert Tortoise and 
other listed species in the Area. S. 2873 provides compensation 
to the private landowner, Environmental Land Technology, Ltd. 
(ELT) as of the date of the approval of the HCP, with an 
initial payment of $15 million and any remaining judgment 
backed by the full faith and credit of the United States. 
Compensation would also include interest, reasonable costs, 
expenses of holding the property and attorney fees from 
February 1996 to the date of final payment.
    Since 1996, BLM has coordinated the acquisition of nearly 
4,400 acres of Desert Tortoise Habitat within the Red Cliff's 
Desert Reserve worth approximately $35 million. These state and 
private acquisitions have included land exchanges, direct 
purchases at fair market value and one donation. BLM has 
expended $10.5 million in Land and Water Conservation Fund 
(LWCF) monies to date in completing land purchases and has an 
additional $1.5 million available to purchase high value 
habitat in FY 2000. BLM has completed five separate 
transactions with ELT, the private landowner at issue in S. 
2873, for a total of approximately 383 acres, including both 
exchanges and LWCF purchases.
    In addition, since 1997, the Fish and Wildlife Service has 
provided approximately $4.7 million in grants to the State of 
Utah for land acquisitions associated with the Washington 
County HCP. These grants were provided through the Service's 
HCP Land Acquisition Program under the Endangered Species Act 
section 6 Cooperative Endangered Species Conservation Fund. The 
Washington County HCP is one of only two HCPs which have 
received funding through this program in each year since its 
inception in 1997. This program is based on a competitive 
proposal process. To date, the Fish and Wildlife Service has 
not received a proposal for grant assistance for acquisition of 
the 1,500 acre ELT property. If a proposal were submitted and 
included the required 25% non-Federal cost sharing, it would be 
eligible to compete for funding under the HCP Land Acquisition 
Program. However, the acquisition would have to satisfy all 
applicable Federal appraisal and other land acquisition 
requirements.
    These transactions demonstrate a long-term record of 
successful accomplishments in meeting the goals and objectives 
of the HCP despite widely varying expectations by many 
landowners.
    The Administration believes that S. 2873 is not in the 
public interest for several reasons:
    (1) S. 2873 provides preferential treatment to one land 
owner and provides for compensation above and beyond the 
benefits received by other landowners in previous acquisitions 
in this area. The amounts that S. 2873 directs the landowner be 
paid are not supported by the preliminary appraisal for this 
property and, in fact, are considerably in excess of the 
appraised values on other adjacent properties. We see no 
justification to add interest, reasonable costs, expenses of 
holding the property and attorney fees to any settlement with 
the private landowner. Given the early absence of clear title 
and other delays in final settlement, no such considerations 
are in the public interest.
    (2) The bill also legislates the acquisition of 34 acres 
adjacent to but not within the Reserve. This parcel abuts the 
Reserve on only one side and is surrounded on three sides by 
private land which has been developed. Access is available to 
the parcel through adjacent lands. The parcel has not been 
included in any agreement, it is not addressed in the HCP and 
because of its size and configuration, it has marginal 
potential for habitat management. We have no reason to believe 
that the public interest would be well served by this 34-acre 
acquisition.
    (3) The BLM has attempted to work with ELT over the last 
four years to reach agreement on a fair and reasonable process 
in conducting appraisals in reaching agreement on the value of 
the remaining 1,500 acres. After completing a number of 
previous transactions using approved and acceptable appraisal 
standards, the company has departed from the process and sought 
independent private appraisers who have used appraisal 
assumptions not consistent with BLM policies and procedures 
used on previous HCP acquisitions. All previous appraisal 
reports have complied with Public Law 104-333, the Omnibus 
Parks and Public Lands Management Act of 1996, which requires 
the BLM to disregard the listing of the Desert Tortoise in the 
appraisals and determination of value for other properties. 
Appraisals involving Federal acquisitions must carefully 
conform to established and accepted procedures to ensure a fair 
and an unbiased estimate of value. Laws and regulations 
pertaining to land exchanges provide reasonable administrative 
discretion for resolving disputes concerning property value.
    (4) S. 2873 would provide for the acquisition of all right, 
title and interest of the 1,516 acres of property within the 
Reserve and the additional 34 acres outside the Reserve. Title 
to the subject property was clouded by litigation for many 
years with the State of Utah and was not resolved until a 
settlement was signed between the parties in 1997. We are 
uncertain as to what rights, title and interest the land owner 
may possess at this time. The State of Utah may have also 
retained the mineral rights to these properties. There is also 
some concern that title may still be encumbered by other liens 
or financial obligations.
    (5) The legislation is premature because it circumvents the 
normal court considerations of a property owner's claims. The 
property owner has the right to bring a civil action in a court 
of law to seek indemnification for an alleged government taking 
of private property. The court would determine whether the 
property has been taken and the amount of just compensation. If 
S. 2873 is a legislative taking, Congress should determine the 
full amount of just compensation and leave it to the property 
owner to contest the payment.
    (6) The legislation requires the United States to take 
title immediately upon enactment but does not provide an 
adequate time frame to ensure clear title or remove 
encumbrances, potential liens, and satisfy property taxes that 
may be due on the property. Also, the bill does not address how 
or when to complete pre-acquisition site assessments, hazardous 
material investigations and follow through on findings to 
protect the interests of the United States.
    In closing, Mr. Chairman, the acquisition of these lands 
within the Reserve is a high priority for the BLM and the Fish 
and Wildlife Service because there is no question this area is 
critical to the protection and recovery of the Desert Tortoise. 
The HCP has provided a mechanism to both protect listed species 
and allow for continued economic opportunities in Washington 
County, Utah. Completion of the land acquisition goals within 
the Reserve is supported by State and local officials, the Utah 
Congressional delegation and the Administration. We fully 
support the concept of transferring title to the land inside 
the reserve to the Bureau of Land Management in a manner that 
compensates the landowner in accordance with existing Federal 
law. We thank Mr. Bennett for his efforts to resolve this 
difficult issue. While we cannot support S. 2873 for the 
reasons set forth in this testimony, we are nevertheless 
committed to working with the land owner to finalize the 
acquisition of its lands within the Red Cliffs Desert Reserve. 
This concludes my statement. I would be pleased to answer any 
questions at this time.

                        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 S. 2873, as ordered 
reported.

                                  
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