[Senate Report 108-272]
[From the U.S. Government Publishing Office]
Calendar No. 527
108th Congress Report
SENATE
2d Session 108-272
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LEASE LOT CONVEYANCE ACT OF 2002
_______
May 20, 2004.--Ordered to be printed
_______
Mr. Domenici, from the Committee on Energy and Natural Resources,
submitted the following
R E P O R T
[To accompany S. 1791]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 1791) to amend the Lease Lot Conveyance
Act of 2002 to provide that the amounts received by the United
States under that Act shall be deposited in the reclamation
fund, and for other purposes, having considered the same,
reports favorably thereon without an amendment and recommends
that the bill do pass.
Purpose of the Measure
S. 1791 would amend the Lease Lot Conveyance Act of 2002
(Public Law 107-335) to provide that the amounts received by
the United States under that Act shall be deposited in the
Reclamation Fund and made immediately available to the
applicable irrigation districts as net profits.
Background and Need
The Lease Lot Conveyance Act of 2002 directs the Secretary
of Interior to convey property comprising 403 cabin sites
(located along the western portion of the reservoirs in
Elephant Butte State Park and Caballo State Park, New Mexico)
under the administrative jurisdiction of the Bureau of
Reclamation to the Elephant Butte/Caballo Leaseholders
Association, Inc., for fair market value. The act is vague with
regard to the disposition of proceeds collected from the sale
of the lands. The purpose of S. 1791 is to amend the Act to
direct the Secretary of the Interior to deposit such proceeds
into the Reclamation Fund for the benefit of the Elephant Butte
Irrigation District and El Paso County Water Improvement
District #1.
Legislative History
S. 1791 was introduced by Senators Domenici and Bingaman on
October 28, 2003 and was referred to the Energy and Natural
Resources Committee on October 28, 2003. The Subcommittee on
Water and Power held a hearing on S. 1791 on March 25, 2004.
The Committee on Energy and Natural Resources ordered the bill
favorably reported on April 28, 2004.
Committee Recommendation and Tabulation of Votes
The Senate Committee on Energy and Natural Resources, in an
open business session on April 28, 2004, by unanimous voice
vote of a quorum present, recommends that the Senate pass S.
1791.
Section-by-Section Analysis
Section 1 of S. 1791 amends section 4(b) of the Lease Lot
Conveyance Act of 2002 (Public Law 107-335; 116 Stat. 2879) to
provide that amounts received by the United States under the
Act shall be deposited by the Secretary of the Interior in the
Reclamation Fund on behalf of the Rio Grande Project and that
amounts deposited shall be made immediately available to the
applicable irrigation districts in accordance with section 4(1)
of the Act of December 5, 1924 (commonly known as the Fact
Finder's Act; 43 U.S.C. 501).
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, May 11, 2004.
Hon. Pete V. Domenici,
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. 1791, a bill to
amend the Lease Lot Conveyance Act of 2002 to provide that
amounts received by the United States under the act shall be
deposited in the reclamation fund, and for other purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Julie
Middleton.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
S. 1791--A bill to amend the Lease Lot Conveyance Act of 2002 to
provide that amounts received by the United States under the
Act shall be deposited in the reclamation fund, and for other
purposes
Summary: S. 1791 would authorize the Secretary of the
Interior to make proceeds from the sale of 403 cabin sites
located in the Elephant Butte and Caballo State Parks in New
Mexico available to the Elephant Butte Irrigation District and
El Paso County Water Improvement District No. 1. Under this
bill, the districts would be able to use the proceeds from
cabin site sales for annual project repayment costs, for annual
operations and maintenance costs, and for any other purpose.
Enacting this bill would authorize the expenditure of
receipts from the sale of certain cabin sites. Based on
information from the Bureau of Reclamation, CBO estimates that
the additional direct spending would amount to $1 million
annually over the 2005-2014 period. Enacting the bill would not
affect federal revenues.
S. 1791 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments. Enacting this legislation would benefit the
affected irrigation districts in New Mexico.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 1791 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--
----------------------------------------------------------------------------
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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CHANGES IN DIRECT SPENDING
Estimated Budget Authority......... 0 1 1 1 1 1 1 1 1 1 1
Estimated Outlays.................. 0 1 1 1 1 1 1 1 1 1 1
----------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that S.
1791 will be enacted near the end of fiscal year 2004. Under
this bill, the proceeds from the sale of the 403 cabin sites at
Elephant Butte and Caballo State Parks in New Mexico would be
made available to the Elephant Butte Irrigation District and El
Paso County Water Improvement District No. 1. When the sales
are complete, proceeds are expected to amount to about $15
million. The districts would be able to use the proceeds,
first, as a credit toward the annual repayment contract with
the federal government, second, as a credit toward annual
operations and maintenance costs for the Rio Grande Project,
and, finally, for any other project purpose. Under current law,
the proceeds from the sale of the cabin sites would be
deposited into the Reclamation Fund and would not be available
to the districts.
Currently, the districts do not have any outstanding
repayment contracts. Together, the districts pay a total of
$540,000 annually for operations and maintenance costs
associated with the Rio Grande Project. For this estimate, CBO
assumes that the Bureau of Reclamation would apply the proceeds
from the sale of the cabin sites to the districts' annual
operations and maintenance obligations. Based on information
from the bureau, CBO estimates that enacting this bill would
result in additional direct spending of about $1 million
annually over the 2005-2014 period.
Intergovernmental and private-sector impact: S. 1791
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments. Enacting this legislation would benefit the
affected irrigation districts in New Mexico.
Estimate prepared by: Federal Costs: Julie Middleton.
Impact on State, Local, and Tribal Governments: Marjorie
Miller. Impact on the Private Sector: Patrice Gordon.
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 S. 1791. The bill is not a regulatory measure in
the sense of imposing Government-established standards or
significant 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. 1791.
Executive Communications
On April 30, 2004, 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 S. 1791. These reports had not been
received at the time the report on S. 1791 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 Committee hearing follows:
Statement of John W. Keys, III, Commissioner, Bureau of Reclamation,
Department of the Interior
Madam Chairman and Members of the Subcommittee, I am John
W. Keys, III, Commissioner of the U.S. Bureau of Reclamation
(Reclamation). I am pleased to be here today to present the
views of the Department of the Interior on S. 1791, a bill to
amend the Lease Lot Conveyance Act of 2002 to provide that the
amounts received by the United States under that act shall be
deposited in the Reclamation Fund.
On December 16, 2002, the President signed into law the
Lease Lot Conveyance Act of 2002 (P.L. 107-335) which provides
for the conveyance of 403 lease lots at Elephant Butte and
Caballo Reservoirs to the Elephant Butte/Caballo Leaseholders
Association, Inc. (Association). Reclamation has been working
closely with the Association to carry out the objectives of
P.L. 107-335.
Madam Chairman, the Department cannot support S. 1791. In
previous testimony on H.R. 706, the Lease Lot Conveyance Act of
2002, I spoke in opposition to a similar provision in that
legislation which would have required the proceeds derived from
the sale of the lots to ``be deposited in the Reclamation Fund
on behalf of the Rio Grande Project and made immediately
available to the subject Irrigation Districts under subsection
I of the Fact Finders Act.'' The bill was subsequently amended,
remaining silent on the issue and leaving in place existing law
as to the general disposition of the funds derived from the
sale of the leased lots.
Existing law provides that the proceeds from the sale of
lands withdrawn from the public domain be deposited as a
general credit to the Reclamation Fund and that proceeds from
the sale of acquired lands be deposited into the Reclamation
Fund as a credit to the project for which those lands were
acquired.
The proposed amendment would direct all funds, from both
acquired lands and withdrawn public lands, to be deposited in
the Reclamation Fund as a credit to the project and immediately
made available to the irrigation districts. The Department
believes the proceeds from the sale of the leased lots should
be disposed of consistent with existing law.
In continuing litigation during the past 13 years,
Reclamation has contended that these revenues, as well as other
similar project revenues, are not of the types of revenues
covered by Subsection 4(i) of the Fact Finder's Act. The 10th
Circuit Court of Appeals has ruled that Subsection 4(i), as
amended by the Haden-O'Mahoney amendment (43 U.S.C.
Sec. Sec. 391a-1, 392a), provides credits for revenues derived
from only two specific sources: leasing of project grazing and
farm lands; and the sale or use of town sites. Revenue from the
sale of these lots does not derive from either of these
specific sources, insomuch as the lease lots are being sold not
leased, and ``town sites'' is a legal term of art applying only
to town sites which were created under the Town Sites and Power
Development Act of 1906 (34 Stat. 116; 43 U.S.C. Sec. 561, et
seq.). The Districts are not currently entitled to receive
Subsection 4(i) benefits from any sources other than those two
specific sources listed above. In addition to amending the
Conveyance Act, Section 1(2)(B) of the proposed bill would
amend Subsection 4(i) of the Fact Finders Act to provide these
Districts with a unique benefit. We are concerned that the
amendment would set a precedent and encourage other districts
to seek benefits under the Fact Finders Act that are otherwise
not provided.
Also important to this case is that a small portion of the
lease lots are located on public land that was withdrawn from
the public domain for the project by Reclamation. As such, the
Districts have never paid anything toward acquisition cost for
these lands. The remainder of the lots are located on lands
acquired out of private ownership by Reclamation for
construction of the Project. Originally, the Districts' cost of
purchasing these lands was included in the Districts' repayment
obligation. However, in 1937 the Districts were relieved of
their obligation to repay any portion of the cost of these
acquired lands and the cost of constructing Elephant Butte Dam
and Reservoir. All payments made by the Districts prior to that
time were returned to them as credits toward their remaining
repayment obligation. All costs of constructing Caballo Dam and
Reservoir were deemed non-reimbursable by the Districts and
charged to flood control. In light of this history, the
proposed amendment would make available to the respective
irrigation districts funds from the sale of lands to which they
have no legal right, and where the federal government has borne
all the associated costs.
In summary, while the Department supported the original
Lease Lot Conveyance Act of 2002 as it was passed and signed
into law, we cannot support passage of S. 1791 for the reasons
stated above.
That concludes my testimony, Madam Chairman. I would be
happy to answer any questions the Subcommittee may have.
Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, S. 1791, as ordered reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italic, existing law in
which no change is proposed in shown in roman):
LEASE LOT CONVEYANCE ACT OF 2002
P.L. 107-335 (116 Stat. 2878)
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lease Lot Conveyance Act of
2002''.
* * * * * * *
SEC. 4. CONVEYANCE OF PROPERTIES.
(a) In General.--The Secretary shall convey to the
Purchaser in accordance with this Act, subject to valid
existing rights, all right, title, and interest of the United
States in and to the Properties and all appurtenances thereto,
including specifically easements for
(1) vehicular access to each Property;
(2) drainage; and
(3) access to and the use of all ramps, retaining
walls, and other improvements for which access is
provided under the leases that apply to the Properties
as of the date of the enactment of this Act.
(b) Consideration.--[As consideration]
(1) In general.--As consideration for any conveyance
under this section, the Secretary shall require the
Purchaser to pay to the United States fair market value
of the Properties.
(2) Use.--Amounts received under paragraph (1) shall
be--
(A) deposited by the Secretary, on behalf of
the Rio Grande Project, in the reclamation fund
established under the first section of the Act
of June 17, 1902 (43 U.S.C. 391); and
(B) made immediately available to the
Irrigation Districts, to be credited in
accordance with section 4(I) of the Act of
December 5, 1924 (43 U.S.C. 501).