[Senate Report 106-486]
[From the U.S. Government Publishing Office]
Calendar No. 935
106th Congress Report
SENATE
2d Session 106-486
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RECLAMATION REFORM REFUND ACT OF 1999
_______
October 4 (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. 1697]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 1697) to authorize the Secretary of the
Interior to refund certain collections received pursuant to the
Reclamation Reform Act of 1982, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill, as amended, do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This title may be cited as the ``Reclamation Reform Refund Act of
2000''.
SEC. 2. REFUND OF CERTAIN AMOUNTS RECEIVED UNDER RECLAMATION REFORM ACT
OF 1982.
(a) Refund Required.--Subject to the availability of
appropriations, the Secretary of the Interior is authorized and
directed to refund fully amounts received by the United States as
payments for charges assessed by the Secretary before January 1, 1994,
for failure to file or properly file certain certification or reporting
forms pursuant to sections 206 and 224(c) of the Reclamation Reform Act
of 1982 (43 U.S.C. 390ff, 390ww(c)) prior to the receipt of irrigation
water. Such refunds shall be made regardless of whether such payments
were required by the United States, were made pursuant to a compromise
or settlement (whether court approved or otherwise), or were otherwise
received by the United States. Any refund issued pursuant to this
subsection shall include the amount of associated interest assessed by
the Secretary and paid to the United States pursuant to section 224(i)
of that Act (43 U.S.C. 390ww(ii)).
(b) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as necessary.
purpose of the measure
The purpose of S. 1697 is to authorize the Secretary of the
Interior to refund certain charges assessed by the Bureau of
Reclamation, before January 1, 1994, for failure to file
certain reporting forms prior to the receipt of irrigation
water.
background and need
From 1987 to 1994, the Bureau of Reclamation assessed
penalties against landholders who received Project water
without filing the necessary forms required by the Reclamation
Reform Act of 1982. The Solicitor of the Department of the
Interior opined that the receipt of Project water by an
ineligible party was tantamount to a common law conversion of
that water. The Solicitor noted that the traditional remedy for
conversion is either (i) the return of the property to the
rightful owner or (ii) the payment to the owner of the fair
value of the property. Because improperly delivered Project
water cannot be recovered, the Solicitor concluded that an
ineligible recipient of Project water should be required to pay
the Bureau the fair value of the water--which the Solicitor
determined to be the ``full cost'' rate payable under the
Reclamation law by certain lessees.
On the strength of the Solicitor's opinion, the Bureau then
asserted that a landowner filing incomplete or incorrect
certification/reporting forms was ineligible to receive Project
water and must therefore pay a ``full cost penalty'' on all
water received before the correct forms were filed. The Bureau
insisted on collecting those full cost penalties for even
minor, technical errors in filed forms, including, some allege,
defects which resulted from faulty advice given by Bureau
personnel. Because the Bureau had no means of directly
enforcing full cost penalties against individual water users,
the penalties were levied against the districts that delivered
water to the allegedly ineligible water users. Millions of
dollars in full cost penalties were assessed by the Bureau from
1988 through 1994.
Two districts that paid full cost penalties separately
filed suits against the United States. Ultimately, the Court of
Federal Claims determined that the Bureau had no authority to
assess full cost penalties and the Bureau was ordered to issue
a refund to the plaintiff district Orange Cove Irrigation
District v. United States, 28 Fed.Cl.790 (1993). The second
lawsuit was settled by the district involved when it received a
similar refund. Many other districts applied for refunds or
appealed the imposition of full cost penalties before paying.
In 1995, the Bureau promulgated a new regulation to provide
for the assessment of an ``administrative fee'' for minor
certification and reporting form violations. By adopting that
new regulation, the Bureau impliedly acknowledge the failure of
its full cost penalty strategy. Thereafter, the Bureau proposed
settlement of most pending full cost penalty claims based on
the payment by the affected districts of administrative fees.
However, the Solicitor advised the Bureau that it did not
have the legal authority to make refunds of amounts previously
paid by the districts as full cost penalties. As a result,
although the Bureau has recognized that full cost penalties for
minor certification and reporting form violations are
inappropriate--and a court has determined them to be illegal--
nearly 100 Bureau contractors westwide cannot receive refunds
of amounts paid to the Bureau for such penalties.
Recognizing the dilemma of owing money but not having the
authority to pay it, the Department of the Interior, through
the Bureau of Reclamation, sent legislation to Congress and
requested that it be introduced. The legislation authorizes the
Secretary of the Interior to refund to landholders payments
made in excess of $260 (the administrative fee). Reclamation
estimates this legislation would affect landholders in 77 water
districts in the states of Arizona, California, Colorado,
Idaho, Montana, New Mexico, Oregon, Utah, and Wyoming.
legislative history
S. 1697 was introduced by Senator Smith of Oregon on
October 6, 1999 at the request of the Administration. The
Subcommittee on Water and Power held a hearing on October 20,
1999. At the business meeting on September 20, 2000, the
Committee on Energy and Natural Resources ordered S. 1697, as
amended, favorably reported.
committee recommendation and tabulation of votes
The Committee on Energy and Natural Resources, in open
business session on September 20, 2000, by a unanimous vice
vote with a quorum present, recommends that the Senate pass S.
1697, if amended as described herein.
committee amendment
During the consideration of S. 1697, the Committee adopted
an amendment in the nature of a substitute. The amendment
extended relief to water districts that paid the full cost
penalties but have already settled with the Bureau of
Reclamation. The amendment also deletes the $260 administrative
fee and authorizes such sums as necessary rather than the
$1,000,000 total authorization in the bill as introduced.
cost and budgetary considerations
The following estimate of costs of this measure has been
provided by the Congressional Budget Office.
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 25, 2000.
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. 1697, the
Reclamation Reform Refund Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lisa Cash
Driskill.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
S. 1697--Reclamation Reform Refund Act of 2000
S. 1697 would authorize the appropriation of such sums as
necessary to refund certain payments made by water districts to
the Bureau of Reclamation (bureau) before January 1, 1994.
Until that time, the bureau charged the full cost of irrigation
water, rather than the reduced rate, to those water districts
whose customers failed to file the appropriate forms, as
required by the Reclamation Reform Act of 1982. Currently, the
bureau assesses a $260 fee for failure to file such forms.
The bill would authorize and direct the bureau to fully
refund the difference between the full cost rate and the
reduced rate for providing irrigation water to certain
districts with customers who did not complete the bureau's
required paperwork prior to January 1, 1994. In addition, about
80 districts have already settled with the bureau and paid the
fee required for failure to file the appropriate forms. Under
the bill, those districts would also be eligible for a refund.
Based on information from the bureau, CBO estimates that about
160 districts would receive payments of about $1 million in
2001, subject to the availability of appropriated funds.
S. 1697 would not affect direct spending or receipts;
therefore, pay-as-you-go procedures would not apply. The bill
contains no intergovernmental or private-sector mandates as
defined by the Unfunded Mandates Reform Act and would benefit
some water districts by directing the Secretary of the Interior
to refund certain penalties collected from them.
On August 18, 2000, CBO transmitted a cost estimate for
H.R. 4847, the Reclamation Reform Refund Act of 2000, as
ordered reported by the House Committee on Resources on July
26, 2000. H.R. 4847 and S. 1697 have different criteria for
determining which districts would be eligible for a refund, but
both bills would cost about $1 million to implement.
The CBO staff contact for this estimate is Lisa Cash
Driskill. This estimate was 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 S. 1697. 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. 1697, as ordered reported.
executive communications
On, October 22, 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. 1697. These
reports had not been received at the time the report on S. 1697
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
Commissioner of the Bureau of Reclamation at the Subcommittee
hearing follows:
Statement of Eluid Martinez, Commissioner, Bureau of Reclamation,
Department of the Interior
Thank you for the opportunity to testify on S. 1697, a bill
to authorize the Secretary of the Interior to refund certain
collections. The Bureau of Reclamation (Reclamation)
appreciates Subcommittee Chairman Gordon Smith's introduction
of this bill at the Administration's request.
Background
Sections 206 and 224(c) of the Reclamation Reform Act of
1982 require certain landholders, including owners and lessees,
to file with their respective water districts on an annual
basis certification and reporting forms disclosing their
landholdings. These forms are the basis upon which water
districts and Reclamation determine the eligibility of
landholders to receive Reclamation irrigation water and assess
the proper charges for the water. From 1987 through 1994,
certain landholders failed to file the appropriate forms in a
timely manner. In response, Reclamation charged those who
failed to file the forms full cost for the water delivered.
In 1993, Reclamation reviewed its policy and determined
that use of an administrative fee could be established through
a rulemaking process to address those who failed to file forms.
In 1995, Reclamation issued regulations charging a $260
administrative fee for anyone not filing the appropriate forms
in a timely basis. That policy is in effect today, but it can
not be applied retroactively.
Reclamation has addressed those who failed to file the
forms and did not pay the full cost assessment by charging the
$260 administrative fee. Reclamation would like to be able to
reimburse those who paid the full cost charge by refunding all
but $260.
Legislation
S. 1697 authorizes the Secretary of the Interior to refund
to landholders payments made in excess of $260. Reclamation
estimates that the legislation will affect approximately 75
water districts in the states of Arizona, California, Colorado,
Idaho, Montana, New Mexico, Oregon, Utah and Wyoming.
The Administration strongly supports this bill.
Thank you for holding this hearing. I appreciate the
opportunity to present the Administration's views.
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. 1697, as
ordered reported.