[Senate Report 108-365]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 724
108th Congress                                                   Report
                                 SENATE
 2d Session                                                     108-365
======================================================================


 
                    PROVO RIVER PROJECT TRANSFER ACT

                                _______
                                

               September 28, 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. 1876]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1876) to authorize the Secretary of the 
Interior to convey certain lands and facilities of the Provo 
River Project, 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 Act may be cited as the ``Provo River Project Transfer Act''.

SEC. 2. DEFINITIONS.

  In this Act:
          (1) Agreement.--The term ``Agreement'' means the contract 
        numbered 04-WC-40-8950 and entitled ``Agreement Among the 
        United States, the Provo River Water Users Association, and the 
        Metropolitan Water District of Salt Lake & Sandy to Transfer 
        Title to Certain Lands and Facilities of the Provo River 
        Project''.
          (2) Association.--The term ``Association'' means the Provo 
        River Water Users Association, a nonprofit corporation 
        organized under the laws of the State.
          (3) District.--The term ``District'' means the Metropolitan 
        Water District of Salt Lake & Sandy, a political subdivision of 
        the State.
          (4) Pleasant grove property.--
                  (A) In general.--The term ``Pleasant Grove Property'' 
                means the 3.79-acre parcel of land acquired by the 
                United States for the Provo River Project, Deer Creek 
                Division, located at approximately 285 West 1100 North, 
                Pleasant Grove, Utah, as in existence on the date of 
                enactment of this Act.
                  (B) Inclusions.--The term ``Pleasant Grove Property'' 
                includes the office building and shop complex 
                constructed by the Association on the parcel of land 
                described in subparagraph (A).
          (5) Provo reservoir canal.--The term ``Provo Reservoir 
        Canal'' means the canal, and any associated land, rights-of-
        way, and facilities acquired, constructed, or improved by the 
        United States as part of the Provo River Project, Deer Creek 
        Division, extending from, and including, the Murdock Diversion 
        Dam at the mouth of Provo Canyon, Utah, to and including the 
        Provo Reservoir Canal Siphon and Penstock, as in existence on 
        the date of enactment of this Act.
          (6) Salt Lake Aqueduct.--The term ``Salt Lake Aqueduct'' 
        means the aqueduct and associated land, rights-of-way, and 
        facilities acquired, constructed, or improved by the United 
        States as part of the Provo River Project, Aqueduct Division, 
        extending from, and including, the Salt Lake Aqueduct Intake at 
        the base of Deer Creek Dam to and including the Terminal 
        Reservoirs located at 3300 South St. and Interstate Route 215 
        in Salt Lake City, Utah, as in existence on the date of 
        enactment of this Act.
          (7) Secretary.--The term ``Secretary'' means the Secretary of 
        the Interior.
          (8) State.--The term ``State'' means the State of Utah.

SEC. 3. CONVEYANCE OF LAND AND FACILITIES.

  (a) Conveyances to Association.--
          (1) Provo reservoir canal.--
                  (A) In general.--In accordance with the terms and 
                conditions of the Agreement and subject to subparagraph 
                (B), the Secretary shall convey to the Association, all 
                right, title, and interest of the United States in and 
                to the Provo Reservoir Canal.
                  (B) Condition.--The conveyance under subparagraph (A) 
                shall not be completed until the Secretary accepts 
                future arrangements entered into by the Association, 
                the District, the Central Utah Water Conservancy 
                District, and the Jordan Valley Water Conservancy 
                District providing for the operation, ownership, 
                financing, and improvement of the Provo Reservoir 
                Canal.
          (2) Pleasant grove property.--In accordance with the terms 
        and conditions of the Agreement, the Secretary shall convey to 
        the Association, all right, title, and interest of the United 
        States in and to the Pleasant Grove Property.
  (b) Conveyance to District.--
          (1) In general.--In accordance with the terms and conditions 
        of the Agreement, the Secretary shall convey to the District, 
        all right, title, and interest of the United States in and to 
        the Salt Lake Aqueduct.
          (2) Easements.--
                  (A) In general.--As part of the conveyance under 
                paragraph (1), the Secretary shall grant to the 
                District permanent easements to--
                          (i) the National Forest System land on which 
                        the Salt Lake Aqueduct is located; and
                          (ii) land of the Aqueduct Division of the 
                        Provo River Project that intersects the parcel 
                        of non-Federal land authorized to be conveyed 
                        to the United States under section 104(a) of 
                        Public Law 107-329 (116 Stat. 2816).
                  (B) Purpose.--The easements conveyed under 
                subparagraph (A) shall be for the use, operation, 
                maintenance, repair, improvement, or replacement of the 
                Salt Lake Aqueduct by the District.
                  (C) Limitation.--The United States shall not carry 
                out any activity on the land subject to the easements 
                conveyed under subparagraph (A) that would materially 
                interfere with the use, operation, maintenance, repair, 
                improvement, or replacement of the Salt Lake Aqueduct 
                by the District.
                  (D) Boundaries.--The boundaries of the easements 
                conveyed under subparagraph (A) shall be determined by 
                the Secretary, in consultation with the District.
                  (E) Revocation of withdrawals.--On conveyance of the 
                easement to the land described in subparagraph (A)(i), 
                the Secretary, subject to the easement and any terms 
                and conditions of the Agreement, shall revoke any 
                public land orders withdrawing National Forest System 
                land for the Aqueduct Division of the Provo River 
                Project.
                  (F) Transfer of administrative jurisdiction.--
                          (i) In general.--On conveyance of the 
                        easement to the land described in subparagraph 
                        (A)(ii), the Secretary, subject to the 
                        easement, shall transfer to the Secretary of 
                        Agriculture administrative jurisdiction over 
                        the land.
                          (ii) Administrative site.--The land 
                        transferred under clause (i) shall be 
                        administered by the Secretary of Agriculture as 
                        an administrative site.
                  (G) Administration.--The easements conveyed under 
                subparagraph (A) shall be administered by the Secretary 
                of Agriculture in accordance with section 501(b)(3) of 
                the Federal Land Policy and Management Act of 1976 (43 
                U.S.C. 1761(b)(3)).
  (c) Consideration.--
          (1) Association.--
                  (A) In general.--In exchange for the conveyance under 
                subsection (a)(1), the Association shall pay the 
                Secretary an amount that is equal to the sum of--
                          (i) the net present value of any remaining 
                        debt obligation of the United States with 
                        respect to the Provo Reservoir Canal; and
                          (ii) the net present value of any revenues 
                        from the Provo Reservoir Canal that, based on 
                        past history--
                                  (I) would be available to the United 
                                States but for the conveyance of the 
                                Provo Reservoir Canal under subsection 
                                (a)(1); and
                                  (II) would be deposited in the 
                                reclamation fund established under the 
                                first section of the Act of June 17, 
                                1902 (43 U.S.C. 391), and credited 
                                under the terms of Reclamation Manual/
                                Directives and Standards PEC 03-01.
                  (B) Deduction.--In determining the net present values 
                under clauses (i) and (ii) of subparagraph (A), the 
                Association may deduct from the net present value such 
                sums as are required for the reimbursement described in 
                the Agreement.
          (2) District.--
                  (A) In general.--In exchange for the conveyance under 
                subsection (b)(1), the District shall pay the Secretary 
                an amount that is equal to the sum of--
                          (i) the net present value of any remaining 
                        debt obligation of the United States with 
                        respect to the Salt Lake Aqueduct; and
                          (ii) the net present value of any revenues 
                        from the Salt Lake Aqueduct that, based on past 
                        history--
                                  (I) would have been available to the 
                                United States but for the conveyance of 
                                the Salt Lake Aqueduct under subsection 
                                (b)(1); and
                                  (II) would be deposited in the 
                                reclamation fund established under the 
                                first section of the Act of June 17, 
                                1902 (43 U.S.C. 391), and credited 
                                under the terms of Reclamation Manual/
                                Directives and Standards PEC 03-01.
                  (B) Deduction.--In determining the net present values 
                under clauses (i) and (ii) of subparagraph (A), the 
                District may deduct from the net present value such 
                sums as are required for the reimbursement described in 
                the Agreement.
  (d) Payment of Costs.--In addition to amounts paid to the Secretary 
under subsection (c), the Association and the District shall, in 
accordance with the Agreement, pay the Secretary--
          (1) any necessary and reasonable administrative and real 
        estate transfer costs incurred by the Secretary in carrying out 
        the conveyance; and
          (2) \1/2\ of any necessary and reasonable costs associated 
        with complying with--
                  (A) the National Environmental Policy Act of 1969 (42 
                U.S.C. 4321 et seq.);
                  (B) the Endangered Species Act of 1973 (16 U.S.C. 
                1531 et seq.); and
                  (C)(i) the National Historic Preservation Act (16 
                U.S.C. 470 et seq.); and
                  (ii) any other Federal cultural resource laws.
  (e) Compliance With Environmental Laws.--
          (1) In general.--Before conveying land and facilities under 
        subsections (a) and (b), the Secretary shall comply with all 
        applicable requirements under--
                  (A) the National Environmental Policy Act of 1969 (42 
                U.S.C. 4321 et seq.);
                  (B) the Endangered Species Act of 1973 (16 U.S.C. 
                1531 et seq.); and
                  (C) any other law applicable to the land and 
                facilities.
          (2) Effect.--Nothing in this Act modifies or alters any 
        obligations under--
                  (A) the National Environmental Policy Act of 1969 (42 
                U.S.C. 4321 et seq.); or
                  (B) the Endangered Species Act of 1973 (16 U.S.C. 
                1531 et seq.).

SEC. 4. EXISTING CONTRACTS.

  (a) Deer Creek Division Construction Contract.--Notwithstanding the 
conveyances under subsections (a) and (b)(1) of section 3, any portion 
of the Deer Creek Division, Provo River Project, Utah, that is not 
conveyed under that section shall continue to be operated and 
maintained by the Association, in accordance with the contract numbered 
I1r-874, dated June 27, 1936, and entitled the ``Contract Between the 
United States and Provo River Water Users Association Providing for the 
Construction of the Deer Creek Division of the Provo River Project, 
Utah''.
  (b) Provo River Project and Jordan Aqueduct System Contracts.--Any 
written contract of the United States in existence on the date of 
enactment of this Act relating to the operation and maintenance of any 
division or facility of the Provo River Project or the Jordan Aqueduct 
System is confirmed and declared to be a valid contract of the United 
States that is enforceable in accordance with the express terms of the 
contract.
  (c) Use of Central Utah Project Water.--
          (1) In general.--Subject to paragraph (2), any entity with 
        contractual Provo Reservoir Canal or Salt Lake Aqueduct 
        capacity rights in existence on the date of enactment of this 
        Act may, in addition to the uses described in the existing 
        contracts, use the capacity rights, without additional charge 
        or further approval from the Secretary, to transport Central 
        Utah Project water on behalf of the entity or others.
          (2) Limitations.--An entity shall not use the capacity rights 
        to transport Central Utah Project water under paragraph (1) 
        unless--
                  (A) the use is expressly authorized by the entity 
                responsible for operation and maintenance of the 
                Central Utah Project water facility; and
                  (B) carrying Central Utah Project water through Provo 
                River Project facilities would not--
                          (i) materially impair the ability of the 
                        Central Utah Water Conservancy District or the 
                        Secretary to meet existing express 
                        environmental commitments for the Bonneville 
                        Unit; or
                          (ii) require the release of additional 
                        Central Utah Project water to meet those 
                        environmental commitments.
  (d) Authorized Modifications.--The Agreement may provide for--
          (1) the modification of the 1936 Repayment Contract for the 
        Deer Creek Division of the Provo River Project to reflect the 
        partial prepayment, the adjustment of the annual repayment 
        amount, and the transfer of the Provo Reservoir Canal and the 
        Pleasant Grove Property; and
          (2) the modification or termination of the 1938 Repayment 
        Contract for the Aqueduct Division of the Provo River Project 
        to reflect the complete payout and transfer of all facilities 
        of the Aqueduct Divsion.
  (e) Effect of Act.--Nothing in this Act impairs any contract 
(including subscription contracts) in effect on the date of enactment 
of this Act that allows for or creates a right to convey water through 
the Provo Reservoir Canal.

SEC. 5. EFFECT OF CONVEYANCE.

  On conveyance of any land or facility under subsection (a) or (b)(1) 
of section 3--
          (1) the land and facilities shall no longer be part of a 
        Federal reclamation project;
          (2) the Association and the District shall not be entitled to 
        receive any future reclamation benefits with respect to the 
        land and facilities, except for benefits that would be 
        available to other nonreclamation facilities; and
          (3) the United States shall not be liable for damages arising 
        out of any act, omission, or occurrence relating to the land 
        and facilities, but shall continue to be liable for damages 
        caused by acts of negligence committed by the United States or 
        by any employee or agent of the United States before the date 
        of conveyance, consistent with chapter 171 of title 28, United 
        States Code.

SEC. 6. REPORT.

  If a conveyance required under subsection (a) or (b)(1) of section 3 
is not completed by the date that is 18 months after the date of 
enactment of this Act, the Secretary shall submit to Congress a report 
that--
          (1) describes the status of the conveyance;
          (2) describes any obstacles to completing the conveyance; and
          (3) specifies an anticipated date for completion of the 
        conveyance.

                                PURPOSE

    The purpose of S. 1876, as ordered reported, is to 
authorize the Secretary of the Interior to convey certain lands 
and facilities of the Provo River Project.

                          BACKGROUND AND NEED

    The Bureau of Reclamation holds title to the Provo River 
Project, which provides approximately 100,000 acre-feet of 
supplemental irrigation and domestic water supply each year to 
the counties of Wasatch, Summit, Utah, and Salt Lake in the 
State of Utah. Up to one million people receive water from the 
Project. The Project includes Deer Creek Dam and Reservoir on 
the Provo River, the Salt Lake Aqueduct and Terminal 
Reservoirs, the Murdock Diversion Dam on the Provo River, the 
Provo Reservoir Canal, and several transbasin diversion and 
conveyance facilities. The Aqueduct Division is comprised of 
the Salt Lake Aqueduct and Terminal Reservoirs; the remaining 
features are included in the Deer Creek Division.
    S. 1876 would transfer the Project's Provo Reservoir Canal 
and the Pleasant Grove Property to the Provo River Water Users 
Association (``Association''). The bill would also transfer the 
Project's Salt Lake Aqueduct to the Metropolitan Water District 
of Salt Lake and Sandy, Utah (``District''). The Bureau has 
been working collaboratively with the Association and the 
District on this proposed title transfer since November 2002. 
In August 2003, the parties entered into a Memorandum of 
Agreement regarding cost-sharing for the proposal.
    The Provo Reservoir Canal is an open canal and is 
approximately 21.5 miles long. Beginning at the Murdock 
Diversion Dam at the mouth of Provo Canyon, the canal runs 
northwest along the Wasatch foothills, to the south end of Salt 
Lake County. The Canal is currently operated by the Association 
pursuant to a contract with the Bureau. The transfer will 
facilitate covering the canal in order to conserve water, 
improve water quality, and ensure public safety. As private 
owners, the Association expects to secure tax-free bonds to 
finance the project.
    The Pleasant Grove Property is a 3.79 acre office building 
site located in north Pleasant Grove, Utah. The Association has 
completed a new $2 million Office and Shop Complex. The title 
to the underlying land is held by the Federal Government, and 
it is the Committee's understanding that no federal dollars 
have been used in the construction of the new buildings.
    The Salt Lake Aqueduct is a 42-mile-long, 69-inch diameter 
pipeline that runs from the intake structure, located at the 
base of Deer Creek Dam, to two finished water reservoirs in 
south Salt Lake City. There is a diversion point near the mouth 
of Provo Canyon where water can be diverted from the Aqueduct 
into the Jordan Aqueduct System (JAS) or vice versa. The JAS is 
a system of Central Utah Project (CUP) water conveyance 
facilities that serve the Utah Valley Water Treatment Plant, 
which is owned and operated by Central Utah Water Conservancy 
District, and the Jordan Valley Water Treatment Plan, which is 
operated by the Jordan Valley Water Conservancy District. The 
Aqueduct is currently operated by the District pursuant to a 
contract with the Bureau. The transfer will allow the District 
to obtain tax-exempt financing for rehabilitation of the 
Aqueduct.
    During the May 19, 2004 hearing on the measure conducted by 
the Subcommittee on Water and Power, the Administration 
testified that it generally supports transferring ownership of 
certain Reclamation project facilities to non-Federal entities. 
At that time, the Administration stated that it had several 
concerns with S. 1876 as introduced, and preferred certain key 
agreements be completed prior to transfer of title. In the 
intervening four months, the parties have worked to address the 
Administration's concerns. It is the Committee's understanding 
that both the Master Title Transfer Agreement and the 3-Pipe 
Agreement (also known as the Multi-Party Operating Agreement) 
are in draft final form. Representatives of the Administration 
have indicated to the Committee staff that the execution of 
these agreements is expected in the immediate future and that 
they support enactment of the legislation at this time.

                          LEGISLATIVE HISTORY

    S. 1876 was introduced by Senator Bennett on November 18, 
2003, and referred to the Committee on Energy and Natural 
Resources. H.R. 3391, the companion measure to this bill, was 
introduced by Representative Cannon (R-UT) on October 29, 2003, 
and referred to the House Committee on Resources. The Resources 
Committee's Subcommittee on Water and Power conducted a hearing 
on H.R. 3391 on October 30, 2003. A hearing on S. 1876 was 
conducted by the Energy Committee's Subcommittee on Water and 
Power on May 19, 2004. The Committee on Energy and Natural 
Resources, on September 15, 2004, favorably reported S. 1876, 
as amended.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in an 
open business session on September 15, 2004, by a unanimous 
voice vote of a quorum present, recommends that the Senate pass 
S. 1876, if amended as described herein.

                          COMMITTEE AMENDMENT

    The amendment in the nature of a substitute makes a series 
of mostly technical changes to S. 1876 as introduced. In 
addition, the substitute amendment makes the following 
substantive changes:
    1. Conditions the conveyance of the Provo Reservoir Canal 
on the Secretary of the Interior's acceptance of future 
arrangements of the Association, the District, the Central Utah 
Water Conservancy District, and the Jordan Valley Water 
Conservancy District, governing the operation, ownership, 
financing, and improvement of the Provo Reservoir Canal.
    2. Provides that the boundaries of the easements that are 
necessary for the conveyance of the Aqueduct to the District 
are to be determined by the Secretary, in consultation with the 
District.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 contains the short title.
    Section 2 defines terms used in the Act.
    Section 3(a)(1)(A) directs the Secretary of the Interior to 
convey to the Association all right, title, and interest of the 
United States in and to the Provo Reservoir Canal.
    Subsection 3(a)(1)(B) conditions the Canal's conveyance on 
the Secretary of the Interior's acceptance of future 
arrangements governing the operation, ownership, financing, and 
improvement of the Canal. The parties to such future 
arrangements will be the Association, the District, the Central 
Utah Water Conservancy District, and the Jordan Valley Water 
Conservancy District.
    Subsection 3(a)(2) directs the Secretary of the Interior to 
convey to the Association all right, title, and interest of the 
United States in and to the Pleasant Grove Property.
    Subsection 3(b)(1) directs the Secretary of the Interior to 
convey to the District all right, title, and interest of the 
United States in and to the Salt Lake Aqueduct.
    Subsection 3(b)(2)(A) directs the Secretary of the Interior 
to grant permanent easements to the District as part of the 
Aqueduct's conveyance. The easements are to cover (I) the 
National Forest System Land where the Aqueduct is located and 
(ii) the Project's Aqueduct Division land that intersects the 
parcel of non-Federal land authorized to be conveyed in section 
104(a) of Public Law 107-329 (116 Stat. 2816).
    Subsection 3(b)(2)(B) provides that these easements are to 
be conveyed for the use, operation, maintenance, repair, 
improvement, or replacement of the Salt Lake Aqueduct by the 
District.
    Subsection 3(b)(2)(c) prohibits the Federal Government from 
carrying out activities on the lands covered by the easements 
that materially interfere with the use, operation, maintenance, 
repair, improvement or replacement of the Salt Lake Aqueduct by 
the District.
    Subsection 3(b)(2)(D) provides that the easements' 
boundaries are to be determined by the Secretary, in 
consultation with the District.
    Subsection 3(b)(2)(E) directs the Secretary of the 
Interior, on conveying the easement described in subparagraph 
(A)(i), to revoke any public land orders withdrawing National 
Forest System land for the Project's Aqueduct Division. Such 
action shall be subject to both the governing easement and the 
terms and conditions of the Transfer Title Agreement.
    Subsection 3(b)(2)(F) directs the Secretary of the Interior 
to transfer administrative jurisdiction over the land covered 
by the easement described in subparagraph (A)(ii) to the 
Secretary of Agriculture. The Secretary of Agriculture is 
directed to administer this transferred land as an 
administrative site.
    Subsection 3(b)(2)(G) directs the Secretary of Agriculture 
to administer the conveyed easements in accordance with the 
provisions of the Federal Land Policy and Management Act of 
1976.
    Subsection 3(c) sets forth the formula for determining the 
payment owed by both the Association and the District to the 
Secretary of the Interior for the respective Provo River 
Project conveyances. The formula requires payment of the net 
present value of any remaining debt obligation, as well as the 
net present value of any historical revenues that would have 
been paid to the Federal Government. The formula further allows 
a deduction for reimbursements described in the Title Transfer 
Agreement.
    Subsection 3(d) directs both the Association and the 
District to pay to the Secretary of the Interior the following 
additional costs: (1) necessary and reasonable administrative 
and real estate transfer costs associated with the conveyances; 
and (2) one-half of any necessary and reasonable costs 
associated with certain applicable environmental and historical 
preservation laws. These additional costs shall be paid in 
accordance with the Title Transfer Agreement.
    Subsection 3(e) directs the Secretary of the Interior to 
comply with certain environmental laws and any other law 
applicable to the land and facilities prior to the conveyance 
of such land and facilities. The Subsection also confirms that 
the obligations pursuant to both the National Environmental 
Policy Act and the Endangered Species Act are in no way altered 
or modified by S. 1876.
    Section 4 confirms that all existing contracts covering 
parts of the Provo River Project not conveyed by S. 1876 are 
not in any way impaired. Section 4(a) covers the existing Deer 
Creek Division Construction Contract and section 4(b) covers 
the existing Provo River Project and Jordan Aqueduct System 
Contracts.
    Subsection 4(c) confirms that those entities with existing 
contractual capacity rights to either the Provo Reservoir Canal 
or Salt Lake Aqueduct may use those rights to transport CUP 
water on behalf of itself or others. Such use is not subject to 
additional charge, and further approval from the Secretary is 
not required. However, such use is limited in that (1) the use 
must be expressly authorized by the entity responsible for the 
operation and maintenance of the CUP water facility and (2) the 
transport of CUP water through the Provo River Project 
facilities must not materially impair the existing 
environmental commitment for the Bonneville Unit or require the 
release of additional CUP water to meet those environmental 
commitments.
    Subsection 4(d) authorizes any modifications to the 
applicable repayment contracts that are necessary as a result 
of the conveyances.
    Subsection 4(e) provides that S. 1876 does not impair any 
existing contract, including subscription contracts, regarding 
the conveyance of water via the Provo Reservoir Canal.
    Section 5(a) provides that the transferred land and 
facilities are no longer part of a Federal reclamation project.
    Subsection 5(b) provides that the Association and the 
District are no longer entitled to reclamation benefits with 
respect to the transferred land or facilities, except for 
benefits that would be available to other non-reclamation 
facilities.
    Subsection 5(c) provides that the United States shall only 
be liable for damages caused by acts of negligence, committed 
prior to the conveyance of the land or facilities, by the 
Federal Government or by an employee or agent of the Federal 
Government.
    Section 6 directs the Secretary of the Interior to submit a 
report to Congress if the land or facilities covered by 
subsections (a) or (b)(1) of section 3 are not conveyed within 
18 months from the date of the bill's enactment. The report 
must describe the status of the conveyance and any obstacles to 
completing the conveyance. The report must also specify a 
target completion date.

                   COST AND BUDGETARY CONSIDERATIONS

    The Congressional Budget Office estimate of the costs of 
this measure has been requested but was not received at the 
time the report was filed. When the report is available, the 
Chairman will request it to 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. 1876. The Act 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. 1876.

                        EXECUTIVE COMMUNICATIONS

    On September 17, 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. 1876. These reports had not been 
received at the time the report on S. 1876 was filed. The 
testimony provided by the Department of the Interior at the 
Subcommittee hearing follows:

 Statement of John W. Keys, III, Commissioner, Bureau of Reclamation, 
                    U.S. Department of the Interior

    The Department of the Interior (Department) has an active 
title transfer program and supports transferring ownership of 
certain Reclamation project facilities to non-Federal entities, 
particularly in cases where transfers could create 
opportunities, not just for those who receive title, but for 
other stakeholders and the public as well. While we believe 
this transfer has the potential to create such opportunities, 
the Department has several concerns with S. 1876, as it was 
introduced. It is our understanding that the proponents of this 
transfer intend to suggest a number of specific revisions to S. 
1876 which could help to resolve some of our concerns.
Background
    The Provo River Project stores and delivers water from the 
Provo River for irrigation and municipal and industrial uses 
along the Wasatch Front, a highly urbanized area, located 
within Utah and Salt Lake Counties. The three features of the 
project under consideration for transfer are the 22-mile-long 
Provo Reservoir Canal; a 3.79-acre office building site, which 
would be transferred to the Provo River Water Users Association 
(Association); and the 42-mile-long Salt Lake Aqueduct, which 
would be transferred to the Metropolitan Water District of Salt 
Lake & Sandy (District).
    Reclamation began discussing this transfer with the 
Association and the District in November 2002. Since that time 
much work has been done and a great deal of progress has been 
made.
    In August 2003, Reclamation, the Association, and the 
District signed an agreement entitled ``Contributed Funds Act 
and Memorandum of Agreement'' (Contract No. 03-WC-40-8800) 
which articulated the respective roles, responsibilities, and 
cost obligations for carrying out the title transfer process. 
Since that time, several other water user entities, including 
the Central Utah Water Conservancy District (Central) and the 
Jordan Valley Water Conservancy District (Jordan Valley) also 
have become involved. A title transfer work group made up of 
these entities and Reclamation was formed to discuss the issues 
of importance to the entities involved, and that work group has 
been meeting regularly.
    In order to initiate the public review process required 
under the National Environmental Policy Act (NEPA), the title 
transfer work group assembled a list of more than 2,000 
individuals, agencies, and other entities having a potential 
interest in this transfer. This list includes a large number of 
owners of private property located adjacent to the transfer 
facilities. It also includes several State and Federal agencies 
and environmental and recreational interest groups. On 
September 29, 2003, an initial scoping letter describing the 
proposal was mailed to all on this list. Public scoping 
meetings were held on October 27, 28, and 30, 2003 in Sandy, 
Lehi, and Provo respectively. Many concerns and issues were 
raised at these meetings and in subsequent calls, letters and 
e-mails by interested stakeholders. To enable anyone else with 
interests and concerns to have an opportunity to voice them, 
the official public comment period was held open until November 
26, 2003.
    As the lead agency, Reclamation is in the process of 
completing a draft environmental assessment. The Department of 
the Interior's Central Utah Project Completion Act Office, the 
U.S. Forest Service, and the National Park Service are 
cooperating agencies. The draft environmental assessment is 
expected to be released to the public for review and comment by 
the end of May 2004.
S. 1876
    S. 1876 requires the Secretary to convey to the Provo River 
Water Users Association, pursuant to a transfer agreement still 
being drafted, all right, title, and interest of the United 
States in certain lands, rights-of-way, and facilities that are 
part of the Provo River Project in Utah. The bill does not 
impair any existing contracts that allow for, or create a 
right, to convey water through the Provo Reservoir Canal.
    Section 6 of S. 1876 requires that the Association and the 
Metropolitan Water District of Salt Lake & Sandy pay or 
contribute to administrative costs, real estate transfer costs, 
and the costs of compliance with the National Environmental 
Policy Act of 1969 (NEPA), the Endangered Species Act of 1973 
(ESA), the National Historic Preservation Act, and other 
Federal cultural resource laws included in the transfer 
agreement. S. 1876 clearly states in Section 7 that before any 
property is conveyed, the Secretary must complete all actions 
required under NEPA, the ESA, and all other applicable laws. 
Section 6 also requires the Association and the District to pay 
the net present value of the property being transferred.
    Finally in Section 9, the bill makes it clear that, upon 
conveyance of the land and facilities, the United States will 
not be liable for future occurrences on those lands and 
facilities, and the Association and District will not be 
entitled to receive any future Reclamation benefits with 
respect to the transferred properties, except those benefits 
available to other non-Reclamation facilities.
Issues of Concern
    Despite the Administration's support for the transfer of 
these lands and facilities, we have a number of concerns about 
S. 1876 as drafted.
    Agreements: During the course of its deliberations, the 
members of the work group identified several written agreements 
among the parties that are needed in order to ensure that the 
transfer achieves its intended purposes without adversely 
impacting the other affected parties. At present, many of the 
identified agreements are being drafted by the work group, but 
none have been completed or signed. Section 3(a) of the bill 
partially addresses this issue by requiring that the 
Association provide the Secretary with certification, prior to 
transfer. We are concerned that this does not fully address our 
situation or the issue.
    We believe that completing the agreements prior to passage 
of the legislation will expedite implementation of the 
transfer. Our experience has shown that transfers move more 
expeditiously when involved parties complete preliminary work, 
including written agreements, before proceeding with 
legislation. In many cases where agreements were not completed 
before legislation was passed, significant delays occurred 
while issues were identified, negotiated, and satisfactorily 
addressed in agreements.
    If agreements are not completed prior to passage of the 
legislation, then we believe the legislation should specify 
that certain minimum requirements be included in the 
agreements. For example, Section 2(8) of the bill defines a 
transfer agreement among the United States, the District and 
the Association and requires the transfer to be completed in 
accordance with the terms of that transfer agreement. While the 
work group has been actively engaged in drafting the transfer 
agreement, it is not yet finalized or signed. This transfer 
agreement should include descriptions and maps of land 
interests to be transferred, including rights-of-way. Also, at 
a minimum, the agreement defined in Section 2(8) should include 
terms which: (1) provide for orderly and efficient transfer and 
protect public interests; (2) preserve access for operation and 
maintenance of nearby facilities which will continue to be 
federally owned; (3) provide for coordinated operation of 
transferred and retained portions of the Provo River Project; 
and (4) ensure the Department can continue to fulfill its 
obligations.
    Certification of Agreements: Section 3(a) directs the 
Secretary to convey the lands and facilities of the Project 
when the Association has certified that the agreements entered 
into are satisfactory to the Association, District, Central, 
and Jordan Valley. Since many of the features and facilities of 
the Project will not be conveyed and because of the close 
relationship between this project and the Central Utah Project, 
which will not be transferred, the Secretary will be a party to 
several of these agreements. As such, we believe that both the 
Association and the Secretary should certify the agreements are 
satisfactory.
    Operational Access: The canal and the aqueduct to be 
transferred in S. 1876 are in close proximity and operationally 
related to the Central Utah Project which will remain in 
Federal ownership. For example, for a sizeable portion of its 
alignment, the canal lies so near key Central Utah Project 
facilities that lack of access to the canal right-of-way would 
make operation and maintenance of those Central Utah Project 
facilities difficult. Conversely, operation and maintenance of 
the canal would be problematic without access to Central Utah 
Project lands. Therefore, as indicated above, it is important 
that provisions for reciprocal access are included in the 
agreement defined in Section 2(8) of the bill.
    National Forest System: In several locations, the Salt Lake 
Aqueduct crosses lands lying within the boundaries of the Uinta 
and Wasatch-Cache National Forests under the jurisdiction of 
the U.S. Forest Service. Prior to constructing the aqueduct, 
Reclamation withdrew significant blocks of land in locations 
where the aqueduct alignment crosses through these National 
Forests. At present, operation and maintenance of the aqueduct 
by the District within National Forest boundaries is possible 
solely because the aqueduct is federally owned and located upon 
Reclamation withdrawals. Any revocation of Reclamation's 
withdrawals will return primary jurisdiction of these areas to 
the U.S. Forest Service. S. 1876 needs to address this issue or 
it will significantly delay conveyance of the lands and rights-
of-way and will negatively impact the District's ability to 
operate and maintain the facilities once transferred. We also 
recommend the transfer agreement defined in Section 2(8) 
include a suitable provision covering replacement of 
withdrawals with a linear permanent easement for the District. 
We recommend that the Department of the Interior issue the 
easement of the Aqueduct. At that point, the Bureau of 
Reclamation would revoke the withdrawal on the National Forest 
System lands, and then the Forest Service would administer the 
easement.
    Timpanogos Interagency Land Exchange Act (P.L. 107-329): On 
December 6, 2002, Congress passed the Timpanogos Interagency 
Land Exchange Act (TILEA), P.L. 107-329. This Act authorizes 
the acquisition of land and construction of an interagency 
administrative and visitor facility by the National Park 
Service and the U.S. Forest Service at the entrance to American 
Fork Canyon. The proposed exchange would be with a private 
landowner who is willing to trade property in Highland City, 
Utah, for six parcels of National Forest Land. The private 
property proposed to be acquired for the site of the 
administrative and visitor facility is bisected by a strip of 
land owned in fee title by the United States and administered 
by Reclamation for the aqueduct. If fee title were transferred 
to the District at this location, the administrative and 
visitor facility site would be bisected by a strip of District-
owned lands. To avoid this situation, we believe the transfer 
agreement defined in Section 2(8) should provide for the 
Secretary to convey an appropriate permanent easement to the 
District for the aqueduct where it bisects the administrative 
and visitor facility site and then to transfer jurisdiction 
over the same area to the U.S. Forest Service to be 
administered as part of the administrative and visitor facility 
site.
    Impact on the On-Going Utah Lake Basin Water Delivery 
System EIS: Central and the Department recently released a 
draft environmental impact statement (EIS) for the Utah Lake 
Basin Water Delivery System (ULS) to the public. This draft EIS 
indicates that about 24,000 acre-feet of CUP M&I water would be 
conveyed through the Provo Reservoir Canal for use in Salt Lake 
County, which is proposed for transfer under S. 1876. As part 
of this legislation, or the transfer agreement for these 
facilities, it is important to ensure that this transfer does 
not impact the NEPA compliance process for the ULS or, more 
importantly, prevent the utilization of the canal to convey CUP 
M&I water.
Technical Issues
    In addition to the policy and procedural issues identified 
above, we have identified several minor technical corrections 
to S. 1876 that are needed in order to facilitate completion of 
the transfer.
    Include Both Reservoirs at the Salt Lake Aqueduct: In the 
definition for the Salt Lake Aqueduct, S. 1876 refers to the 
``Terminal Reservoir located at 3300 South and I-215.'' There 
are in fact two reservoirs located at the terminus of the Salt 
Lake Aqueduct. We believe any transfer should include both. 
Therefore, Section 2(g) of the bill should be amended to change 
``Terminal Reservoir'' to ``Terminal Reservoirs''.
    Make Consistent with Existing Contributed Funds Act 
Agreement and Memorandum of Agreement: On August 21, 2003 
Reclamation, the Association, and the District signed an 
agreement entitled ``Contributed Funds Act Agreement and 
Memorandum of Agreement'' (Contract No. 03-WC-40-8800) 
(Contributed Funds Act Agreement) to formalize, among other 
things, the cost-sharing obligations of the various parties for 
transfer-related expenses. To ensure that the legislation is 
consistent with the already signed Contributed Funds Act 
Agreement, Section 6(a) of the bill should be amended to read 
``The Secretary shall require, as a condition of the conveyance 
under section 3, that the Association and the District pay all 
administrative costs and real estate transfer costs, and half 
of costs associated with compliance with the National 
Environmental Policy Act of 1969, the Endangered Species Act, 
the National Historic Preservation Act, and other federal 
cultural resource laws, all as described in the Agreement.'' 
This would make it consistent with the terms of the existing 
Contributed Funds Act Agreement.
    Modify Payment Requirement: Section 6(b)(1) requires the 
Association to pay ``the net present value of the Provo 
Reservoir Canal and the Pleasant Grove Property''. Similarly, 
Section 6(b)(2) requires the District to pay ``the net present 
value of the Salt Lake Aqueduct.'' We believe the intent of 
these sections is to require the transfer recipients to pay, 
not the net present value of a facility (potentially, a very 
large sum), but rather the present value of the remaining 
obligations for that facility. Therefore, we recommend these 
portions of Section 6(b) be amended to read:
          (1) ``In addition to subsection (a) the Secretary 
        shall also require, as a condition of the conveyances 
        under Sections 3(a) and 3(b), that the Association pay 
        to the United States the net present value of the 
        remaining debt obligation, including future 
        miscellaneous revenue streams, attributable to the 
        Provo Reservoir Canal and the Pleasant Grove Property, 
        as described in the Agreement; Provided, however, that 
        the Association may deduct from the net present value 
        such sums as are required to accomplish the 
        reimbursement described in the Contributed Funds Act 
        Agreement.''
          (2) ``In addition to subsection (a) the Secretary 
        shall also require, as a condition of the conveyance 
        under Section 3c), that the District pay to the United 
        States the net present value of the remaining debt 
        obligation, including future miscellaneous revenue 
        streams, attributable to the Salt Lake Aqueduct, as 
        described in the Agreement; Provided, however, that the 
        Association may deduct from the net present value such 
        sums as are required to accomplish the reimbursement 
        described in the Contributed Funds Act Agreement.''
    National Environmental Policy Act Citation: Section 7 
should be modified to correct an error in the citation for the 
National Environmental Policy Act of 1969 (42 U.S.C. 4321, et 
seq.).
Conclusion
    The Department recognizes significant benefits that may be 
achieved by the proposed title transfer. Much work has already 
been accomplished. If the above-mentioned issues and technical 
corrections can be addressed, I believe the Department could 
support passage of this legislation.
    Mr. Chairman, we appreciate the excellent work and 
cooperation we have had with the District, the Association, 
Central, Jordan Valley, the Central Utah Project Completion Act 
Office, the U.S. Forest Service and the National Park Service. 
We look forward to continuing that effort and to working with 
Senator Bennett, Committee staff, as well as the Association, 
the District, the Title Transfer Working Group and anyone else 
to craft provisions necessary to resolve these issues. That 
concludes my testimony. I would be pleased to answer any 
questions.

                        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. 1876 as ordered 
reported.

                                  
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