[Federal Register Volume 59, Number 175 (Monday, September 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22379]


[[Page Unknown]]

[Federal Register: September 12, 1994]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

43 CFR Part 403

RIN 1006-AA30

 

Revenues Management

AGENCY: Bureau of Reclamation, Interior.

ACTION: Proposed rule.

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SUMMARY: This proposed rule governs the collection and disposition of 
revenues generated by incidental use of Reclamation projects or project 
lands. It is being promulgated so that the water districts have access 
to the legal requirements that Reclamation applies in crediting 
revenues to the district.

DATES: Written comments on this proposed rule must be received on or 
before November 14, 1994.

ADDRESSES: Written comments on this proposed rule are to be submitted 
to Donald R. Glaser, Director, Program Analysis Office, Bureau of 
Reclamation, P.O. Box 25007, Denver, Colorado 80225-0007.

FOR FURTHER INFORMATION CONTACT: Ms. Jaralyn Beek, Reclamation Law, 
Contracts, and Repayment Office, Bureau of Reclamation, D-5610, P.O. 
Box 25007, Denver, Colorado, 80225-0007, telephone (303) 236-1061, 
extension 227.

SUPPLEMENTARY INFORMATION:

A. Background

    The 1902 passage of the Reclamation Act, (43 U.S.C. 391, et seq.) 
provided for the creation of the Reclamation fund (a fund within the 
U.S. Treasury) to be used to finance water projects in the arid west. 
These water projects were to be constructed on a reimbursable basis 
with the water users repaying the funds advanced from the Reclamation 
fund, without interest.
    The early Reclamation projects were for irrigation only, and the 
irrigators were responsible for the repayment of all costs associated 
with these projects. Intending to recover the costs of construction 
projects as quickly as possible, Congress set the time frame for the 
repayment of funds by the water users in this initial period at 10 
years. This responsibility, and the original repayment time frame of 10 
years, proved to be a difficult and significant burden on the water 
users. In 1914, this term was extended to 20 years by Section 2 of the 
Reclamation Extension Act of August 13, 1914 (43 U.S.C. 475).
    Originally, the funds that made up the Reclamation fund were from 
revenues generated by the sale of public lands (see Section 1 of the 
Reclamation Act of 1902.) It soon became apparent that this source of 
revenue was not sufficient to cover the costs of constructing water 
projects. This was addressed in a variety of statutes, one of which was 
the Sundry Civil Expenses Appropriations Act for 1920 (43 U.S.C. 394). 
This act forms the basis for the allocation of lease revenues by 
requiring that revenues generated from the leasing of withdrawn 
Reclamation lands would be a credit to the Reclamation fund.
    The 1920's saw the agriculture industry experiencing serious 
economic difficulties that further affected the water users' ability to 
meet their contractual obligations to the United States. Responding to 
these difficulties, Congress enacted the Fact Finders Act of 1924. 
Section 4, Subsection I of the Fact Finders Act created an entitlement 
program that allowed the direct crediting of certain revenues to the 
water users. Providing the water users assumed responsibility for the 
operation and maintenance of the project, the revenues from certain 
activities conducted on Federal lands would be used toward relieving 
the water users of their yearly payment on the construction costs. The 
revenues were restricted to those from project power plants, leasing of 
project lands for grazing and farms, and the sale or use of townsite 
lots. These revenues were to be applied as a direct or front-end 
credit: (1) To the water users' annual construction charges; (2) to 
their annual project operation and maintenance expenses; and (3) as 
directed by the water users (43 U.S.C. 501). Revenues were required to 
be credited to construction costs until all obligations to the United 
States have been repaid.
    Additional relief was provided when the Congress approved The 
Omnibus Adjustment Act of May 25, 1926, that allowed the Secretary to 
extend the crediting provisions of Subsection I to water districts in 
identified projects without requiring them to assume responsibility for 
operation and maintenance of the project. Section 45 of the Omnibus 
Adjustment Act also allowed the Secretary of the Interior to amend 
existing water-rights contracts, at the request of the water district, 
to extend the repayment period to 40 years (43 U.S.C. 423d).
    The Congress did not, in its enactment of Subsection I, repeal 
prior revenue specific statutes, nor did it indicate that the revenue 
disposition requirements reflected in Subsection I would extend to 
revenues derived from sources not identified. For example, the revenue 
disposition requirements of the Act for the Sale of Surplus Acquired 
Lands of February 2, 1911, provided for the revenues from the sale of 
such lands to be a ``credit to the project'' rather than a credit to 
the water users (43 U.S.C. 374).
    Subsection J of the Fact Finders Act (43 U.S.C. 526) also required 
the revenues generated by the sale of surplus water under the Warren 
Act (43 U.S.C. 523) to be deposited as a credit to the project. 
Therefore, the disposition requirements of Subsection I were restricted 
to the revenues generated from the uses specified in that subsection.
    On May 9, 1938, Congress, with the passage of the Hayden-O'Mahoney 
Amendment to the Interior Department Appropriation Act of 1939, altered 
revenue crediting requirements by providing that all of the revenues 
generated in connection with any irrigation project, including the 
incidental power features, would thereafter be a credit to the 
Reclamation fund. This provision excepted those cases in which law or 
existing contract provisions provided for a different use of these 
revenues, such as reflected in the passage of legislation authorizing 
the establishment of special accounts, specific revenue crediting 
directions, and/or revolving funds that govern the management of 
revenues from specific projects. Additionally, the provision provided 
that when construction costs of the project that were allocated to 
power had been repaid and the revenues from the sale of power were no 
longer required to meet contractual obligations to the United States, 
the net revenues from the sale of power would be credited to the 
Treasury of the United States as miscellaneous receipts.
    Thus, the Hayden-O'Mahoney Amendment protected existing contracts 
with valid direct revenue crediting provisions, but removed the 
opportunity for future Subsection I application. The sources of the 
revenues covered by the Hayden-O'Mahoney Amendment are all inclusive as 
indicated by the language of the provision (43 U.S.C. 392a).
    It should be noted that during the years that the Fact Finders Act 
provisions were available, Reclamation projects started to become 
multi-purpose in scope. Due to this evolution from single purpose 
(irrigation) to multi-purpose (municipal and industrial, irrigation, 
power, flood control, etc.), the focus of project repayment no longer 
rested entirely with the irrigators. The repayment of project 
construction was now allocated among the various water users; municipal 
and industrial users and power facilities, as well as the irrigators. 
To further disperse the repayment responsibilities, Congress deemed 
certain purposes, such as flood control, to be in the public's best 
interest and as such made them nonreimbursable by the project 
beneficiaries.
    The passage of the Reclamation Project Act of 1939 provided the 
next major impact on the repayment of Reclamation projects. 
Specifically, Sections 9 (c), (d)(3) and (e) introduced: (1) The 40-
year repayment schedule as standard rather than on the ``as requested'' 
basis of the 1926 Act; and (2) the concept of ``ability to pay'' (43 
U.S.C. 485).
    The concept of ``ability to pay'' allowed the revenues generated 
from approved project purposes, such as power, to be used to help repay 
the portion of the construction cost allocated to irrigation. This plan 
is implemented by assessing the financial resources of the water users 
and assigning to them responsibility to repay that portion of the 
construction costs allocated to irrigation on the basis of their 
ability to pay. The remainder of the construction cost allocated to 
irrigation was assigned to other project users. In this way the legal 
requirement for a full return of the project costs would be met. For 
example, power revenues in excess of the amount needed to repay the 
power component of project construction may be used to make up the 
difference between the amount the irrigators were able to pay and the 
costs allocated to the irrigation purpose.
    By introducing ``ability to pay'' Congress provided assistance to 
the irrigators that did not involve using revenues derived from Federal 
lands as a direct credit to the water users. Thus, while the direct 
crediting aspects of Subsection I of the Fact Finders Act of 1924 were 
removed by the enactment of the Hayden-O'Mahoney Amendment of the 
Interior Department Appropriations Act, Fiscal Year 1939, which 
directed that all revenues would be a credit to the Reclamation fund, 
Congress did not abandon the needs of the irrigators. Indeed, the water 
users benefitted from the introduction of the concept of ``ability to 
pay'' in the Reclamation Project Act of 1939.
    There are many statutes that authorize the Secretary of the 
Interior to enter into specific agreements for the incidental use of 
Reclamation projects and project lands. These activities may take place 
on both withdrawn public domain lands and on lands acquired for 
Reclamation projects either by purchase, exchange, or condemnation. In 
addition, activities may be authorized for the use of project 
facilities or may address the sale or disposal of water. Generally 
those statutes detailed the specific manner in which revenues generated 
by these incidental uses were to be distributed. The revenues are funds 
of the United States and, as required by the U. S. Constitution, cannot 
be expended or credited other than as Congress directs. In those 
instances where Congress has not provided specific crediting criteria, 
Reclamation has adopted the manner of revenues crediting specified for 
other activities from authorized use of Reclamation lands. Examples of 
the types of uses on Reclamation projects and project lands include:
    (1) Leasing of minerals--The Mineral Leasing Act of 1920, as 
amended, (30 U.S.C. 181, et seq.), and the Mineral Leasing Act for 
Acquired Lands of 1947 (30 U.S.C. 351, et seq.), authorized the 
Secretary of the Interior to engage in the leasing and extraction of 
minerals, i.e., oil, gas, oil shale, gilsonite, sodium, phosphate, 
potassium, sulphur, and asphalt either on lands (specifically the 
mineral estates) in the public domain, or on lands acquired for a 
specific project and administered by Reclamation. (Jurisdiction over 
leasing activities does not rest with Reclamation).
    (2) Mineral leases (geothermal steam)--The Geothermal Steam Act of 
1970 (30 U.S.C. 1001, et seq.) authorized the United States to issue 
leases for geothermal steam on both public domain and on acquired 
Federal lands. (Jurisdiction over leasing activities does not rest with 
Reclamation).
    (3) Recreation/concession agreements--The Land and Water 
Conservation Act of 1965 (Pub. L. 88-578); the Federal Water Project 
Recreation Act of 1965 (Pub. L. 89-72), as amended by the Water 
Resources Development Act of 1974 (Pub. L. 94-251); and the Reclamation 
Projects Authorization and Adjustment Act of 1992 (Title 28, Pub. L. 
102-575), provide for the charging and collection of fees for public 
recreational uses of the land and water under the jurisdiction of 
Reclamation.
    (4) Sale of products and rights-of-use--Section 10 of the 
Reclamation Project Act of 1939 (43 U.S.C. 387) grants authority to the 
Secretary of the Interior to permit the removal of sand, gravel, and 
certain other types of mineral materials and building materials, 
including the sale of timber, and to grant leases, licenses, easements, 
and rights-of-way on lands either withdrawn or acquired by the 
Government. This authority was valid only so long as the granting of 
the rights-of-use was not incompatible with the purposes for which the 
lands were designated.
    (5) Rights-of-way authorized by Mineral Leasing Act of 1920--The 
Mineral Leasing Act of 1920 (30 U.S.C. 181, et seq.) authorized the 
granting of rights-of-way for the transportation of oil, natural gas, 
synthetic liquid or gaseous fuels, or any refined product produced to a 
common collection point, a refiner, or to the point of sale.
    (6) Sale of townsites--The Townsites and Power Development Act of 
April 16, 1906 (43 U.S.C. 561) authorized the withdrawal of lands from 
public entry to be used for the purpose of townsite lots in conjunction 
with irrigation projects (up to 160 acres). The lands were then 
surveyed, subdivided and sold by Reclamation for townsite lots (43 
U.S.C. 562).
    (7) Sale of land--The Bureau of Reclamation has authority to sell 
land that is under its jurisdiction in several different statutes:
    (a) The Sale of Surplus Acquired Lands Act of February 2, 1911 (43 
U.S.C. 374) authorizes the sale of lands acquired under the provisions 
of the Reclamation Act that are no longer needed for the purpose for 
which the lands were acquired.
    (b) The Sale of Surplus Improved Public Lands Act of May 20, 1920 
(43 U.S.C. 375) authorizes the sale of withdrawn public domain lands 
that were improved at the expense of the project for which the lands 
were withdrawn.
    (c) The Disposal of Small Tracts Act of March 31, 1950 (43 U.S.C. 
375b) authorizes the sale of public domain lands withdrawn for the 
construction of a Reclamation project that are in tracts too small to 
qualify as farm units.

B. Methods of Disbursement

    Revenues disposition statutes governing Reclamation projects 
generally cover four primary methods of crediting. These methods are: 
(1) Front-end or direct credit; (2) credit to the project or tail-end 
credit; (3) general credit to the Reclamation fund; and (4) general 
credit to revolving funds or special accounts authorized by Congress.
    (1) Revenues that are to be credited as a direct or front-end 
credit are credited to the reimbursable construction costs of the 
project by satisfying all or part of the annual payment currently due 
from the water users. All revenues in excess of the annual construction 
payment are to be applied against the annual operation and maintenance 
expenses of the district. This relieves the water users of their 
current repayment obligation, in part or in its entirety, without 
accelerating the repayment of the total construction debt. Section 4, 
Subsection I of the Fact Finders Act is the only general statute with 
applicability at more than one Reclamation project in which front-end 
crediting provisions are found. These provisions were conditioned on 
whether the district had assumed the operation and maintenance of the 
project, or the Secretary of the Interior had granted this relief under 
the authority of the Omnibus Adjustment Act of May 25, 1926. Subsection 
I allowed the revenues derived from the sale of project power, the sale 
or use of townsite lots, and the leasing of Federal lands for the 
purposes of grazing and agriculture to be credited as a direct or 
front-end credit.
    (2) Credits to the project or tail-end credits involve funds being 
directed to the Reclamation fund and applied to the construction 
obligation of the project associated with the revenues. This method of 
repayment accelerates the return of the construction cost of the 
project to the Reclamation fund.
    (3) General credit to the Reclamation fund does not provide a 
benefit to either the project construction costs or to the districts' 
annual obligations. When revenues are a credit to the Reclamation fund, 
the funds are not targeted to be spent on a specific function or 
project, but are only available to be spent as directed by the laws 
that control the fund.
    (4) General credit to special accounts or revolving funds are 
created by Congressional authorization and relate to specific projects 
or specialized activities. These accounts/revolving funds are 
maintained separate and apart from the Reclamation fund and are managed 
in accordance with the legislation that authorized their creation. 
Project-specific special accounts or revolving funds are: (a) The 
Recreation Account within the general fund of the Treasury was created 
by the Omnibus Adjustment Act of 1987. This account is a depository for 
recreation user fees or concession fees; (b) The Lower Colorado River 
Basin Development Fund is specific to the Central Arizona Project and 
was established under the authority of Section 403 of the Colorado 
River Basin Project Act of September 10, 1968; (c) The Columbia Basin 
Land Development Account was authorized under Section 6 of the Columbia 
Basin Project Act of March 10, 1943, and is specific to the Columbia 
Basin Project; (d) The Colorado River Dam Fund was authorized under the 
authority of Section 2 of the Boulder Canyon Project Act of December 
21, 1928, and is specific to the Boulder Canyon Project; and (e) The 
Upper Colorado River Basin Fund was established under the authority of 
Section 5 of the Colorado River Storage Project Act of April 11, 1956, 
and is specific to the divisions of the Colorado River Storage Project.

C. Immediate Action

    The Office of the Inspector General (IG) conducted an audit of 
Reclamation's revenues crediting practices and made recommendations for 
ensuring proper application of revenues received from the use of water 
project facilities and lands. That office also recommended, in part, 
that inappropriate revenues crediting be discontinued. Reclamation is 
currently in the process of implementing the recommendations. A review 
of repayment contracts and amendments, and current Reclamation 
practices as they pertain to collection and crediting or disposition of 
those revenues, has been accomplished. These rules are being published 
to establish guidance for the consistent application of revenues 
received.
Public Comment on Rules
    Reclamation received a total of 10 comments in response to its 
notice of intent to propose rulemaking that was published in the 
Federal Register on January 3, 1994. Four of the responses received 
were requests for copies of future rulemaking actions; two were 
requests for more information about revenues crediting after a district 
has fulfilled its repayment obligation to the Government; four 
responses contained comments specific to different methods of 
crediting. All of the comments received have been reviewed and have 
been or will be addressed in either this proposed rule or in future 
rulemaking actions.
    The policy of the Department of the Interior is, whenever 
practicable, to afford the public an opportunity to participate in the 
rulemaking process. Accordingly, interested persons may submit written 
suggestions or objections regarding the proposed rule to the location 
identified in the Addresses section of this preamble. Comments must be 
received on or before November 14, 1994.
Executive Order 12866
    This rule is not subject to review by the Office of Management and 
Budget under Executive Order 12866.
Paperwork Reduction Act
    This proposed rule does not contain information collection 
requirements that require approval by the Office of Management and 
Budget under 44 U.S.C. 3501, et seq.
National Environmental Policy Act Compliance
    The Department of the Interior has determined that this action 
meets the criteria for an action categorically excluded from the 
provisions of the National Environmental Policy Act (40 CFR 1508.4) 
under Departmental Manual part 516 DM 6, Appendix 9, section 9.4.A.1--
``Changes in regulations or policy directives and legislative proposals 
where impacts are limited to economic and/or social effects.''
Small Entity Flexibility Analysis
    This proposed rule will not have a significant economic effect on a 
substantial number of small entities. This proposed rule establishes 
procedures for the management of revenues from activities on 
Reclamation projects and project lands.

Authorship

    This proposed rule was prepared by the Reclamation Law, Contracts, 
and Repayment Office, Bureau of Reclamation, Denver, Colorado.

List of Subjects in 43 CFR Part 403

    Administrative practices and procedures, Reclamation revenues 
crediting and disposition.

    Dated: August 25, 1994.
Elizabeth Ann Rieke,
Assistant Secretary--Water and Science.
    For the reasons set out in the preamble, Title 43, Subtitle B, 
Chapter I of the Code of Federal Regulations is proposed to be amended 
by adding part 403 to read as follows:

PART 403--MANAGEMENT OF REVENUES GENERATED FROM BUREAU OF 
RECLAMATION LANDS AND ACTIVITIES

Sec.
403.10  Objective
403.20  Applicability
403.30  Definitions
403.40  Decisions and appeals

Subpart A--Revenues Crediting Criteria

403.110  Direct or front-end credit requirements
403.120  Credit to the project or tail-end credit requirements
403.130  General credit to reclamation fund
403.140  Special accounts or revolving funds
403.150  Reserved

Subpart B--[Reserved]

    Authority: 5 U.S.C. 553; 43 U.S.C. 373, 391, 392, 392a, 491, 
498, 501.


Sec. 403.10  Objective.

    The objective of this rule is to ensure the proper crediting of 
incidental revenues in accordance with the applicable statutes.


Sec. 403.20  Applicability.

    (a) This rule applies to revenues generated from the authorized use 
of Reclamation water projects and project lands, except as provided by 
Congress in project-specific legislation.
    (b) This rule supersedes any internal Reclamation policy, guidance, 
or instruction that is inconsistent with this rule.
    (c) If any provision of this rule or the applicability thereof to 
any person or circumstances is held invalid, the remainder of the rule 
and the application of such provisions to that person or other persons 
or circumstances shall not be affected thereby.


Sec. 403.30  Definitions.

    As used in this Part:
    Acquired lands refers to those lands acquired by Reclamation for 
Reclamation projects by purchase, exchange, or condemnation.
    Collected refers to those revenues generated by activities on 
Reclamation projects or project lands (whether withdrawn public domain 
lands or lands otherwise acquired for the project).
    Concession refers to any non-Federal entity operating on 
Reclamation lands that is remunerated by visitors for use of 
facilities, goods, and/or services that it provides for their 
recreational purposes, general enjoyment, and/or needs.
    Concession fee refers to compensation received by the managing 
agency from a concession as defined under ``concession'' above.
    Credit to the project or tail-end credit refers to the disposition 
of revenues to the Reclamation fund as a credit to the project 
construction costs. This method accelerates the return of construction 
costs to the Reclamation fund.
    Direct or front-end credit refers to the disposition of revenues 
that allows the water users or districts to receive credit for the 
revenues to help satisfy their next capital obligation to the 
Government, for annual project operation and maintenance expenses, or 
as the district directs.
    Easement refers to a grant of an interest to a party in the land of 
another for a specific use of specified land. Easements usually consist 
of long-term rights-of-way for public roads, telecommunication lines, 
transmission lines, and pipelines.
    General credit refers to those revenues credited to the Reclamation 
fund without benefit to the water users, the districts, or the project 
construction costs.
    Grazing means a lease granted by the Government that entitles the 
lessee to use project lands for the purpose of grazing livestock. 
Grazing lands refers to lands currently under lease for that purpose.
    Lease means a contract by which the lessor (Government) gives to 
another (tenant or lessee), the use or possession of land, facilities, 
or water for a specific purpose for a specified period of time, in 
exchange for agreed upon payments.
    License or permit refers to a grant of authority for a person or 
entity to use a specific piece of land for a specific purpose without 
gaining any interest in the land. A license or permit may allow use 
for: the construction and placement of small transmission lines; 
temporary access roads; trails; small pipelines; small power lines; 
removal of timber, sand and gravel, and other building material; 
miscellaneous agricultural uses; cabin sites; and like activities. A 
permit or license is used when Reclamation does not intend to grant 
control of the surrounding area, as is the case with an easement or 
lease.
    Mineral materials includes, but is not limited to, common varieties 
of sand, stone, gravel, pumice, pumicite, cinders, clay, and petrified 
wood.
    Project means any Reclamation irrigation or multi-purpose project, 
including incidental features thereof, authorized by Federal 
Reclamation law, or constructed by the United States pursuant to such a 
law, or in connection with which there is a repayment or water service 
contract executed by the United States pursuant to such law, or any 
project constructed by the Secretary of the Interior through 
Reclamation.
    Public domain lands refers to lands that have never left Federal 
ownership.
    Reclamation fund means a special fund within the Treasury, 
established by the Congress under the Reclamation Act of June 17, 1902, 
as amended and supplemented. Monies from the fund are available for the 
investigation, construction, operation, and administration of 
Reclamation projects. Collections from water users for reimbursable 
costs of these projects are returned to the fund unless Congress has 
specified otherwise.
    Revenues refers to monies generated from the use of lands. This 
excludes administrative fees, annual obligations paid in accordance 
with repayment contracts and water service contracts, monies generated 
from the marketing of surplus power, and revenues from the sale or 
rental of surplus water or storage and conveyance capacity.
    Right-of-use refers to legal temporary uses of project lands 
resulting from easements, permits, licenses, leases, and rights-of-way.
    Right-of-way refers to a legal right of passage over another's 
land, such as for roads and transmission lines.
    Special use permit refers to a permit issued with or without charge 
to a group for activities such as the rental of picnic shelters, off-
road vehicle access, river running excursions, etc.
    Townsite refers to lands withdrawn from public entry to be used for 
the purpose of townsite lots of up to 160 acres which were surveyed, 
subdivided, and sold in conjunction with irrigation projects.
    User fee refers to a fee charged for the use of specialized sites, 
facilities and equipment, or services furnished at Federal expense, 
including but not limited to, camping facilities, boat launching, and 
parking.
    Water user or district refers to any individual or legal entity 
established under State law that has entered into a contract or is 
eligible to contract with the Secretary of the Interior for water. This 
definition includes entities that contract for construction or 
improvement of water storage and/or delivery facilities.
    Withdrawn lands refers to those lands withdrawn from public entry 
and set aside for a specific public purpose or program, and contributed 
at no cost to the project by the United States.


Sec. 403.40  Decisions and appeals.

    (a) Unless otherwise provided by the Secretary of the Interior, the 
regional director shall make any determination required under these 
rules and regulations.
    (1) A party directly affected by such a determination may appeal in 
writing to the Commissioner of Reclamation within 60 days from the date 
of a regional director's determination. The affected party shall have a 
total of 90 days from the date of a regional director's determination 
within which to submit a supporting brief or memorandum to the 
Commissioner.
    (2) The date of a regional director's determination will be 
considered to be the date shown on the letter or other document 
transmitting the determination.
    (3) The Commissioner may extend the time for submitting a 
supporting brief or memorandum, provided the affected party submits a 
request in writing to the Commissioner and the Commissioner determines 
the appellant has shown good cause for such an extension.
    (4) A regional director's determination will have full force and 
effect during the time an appeal is pending before the Commissioner, 
except that upon specific request and showing of good cause by the 
appellant in a timely notice of appeal, the Commissioner may hold a 
regional director's determination in abeyance until a decision has been 
rendered.
    (b) The affected party may appeal the Commissioner's decision to 
the Secretary of the Interior by writing to the Director, Office of 
Hearings and Appeals, within 30 days from the date of mailing of the 
Commissioner's decision. The appeal provided in this paragraph (b) 
shall be governed by 43 CFR Part 4, Subpart G.
    (c) Final decisions on appeals rendered by the Commissioner prior 
to the effective date of this section are hereby validated as final 
agency action and may not be further appealed administratively.

Subpart A--Revenues Crediting Criteria


Sec. 403.110  Direct or front-end credit requirements.

    Direct or front-end credit will be applied only to those revenues 
cited in the Second Deficiency Appropriation Act for 1924 (Fact 
Finder's Act), Subsection I.
    (a) Contract provisions prior to 1938, or specific project 
legislation. To be eligible to receive front-end credit, a water user 
or district must show that an existing contract had invoked valid 
Subsection I revenue provisions prior to 1938, or legislation specific 
to the project allowed for the direct crediting of some or all 
incidental revenues.
    (b) Reclamation actions regarding direct (front-end) crediting of 
revenues. Effective January 1, 1994, Reclamation discontinued all 
unauthorized direct (front-end) crediting of revenues. Provisions in 
current contracts between water users or districts and Reclamation 
purporting to allow direct (front-end) crediting unauthorized by law 
are unenforceable and will not be honored. Reclamation will notify 
directly all water users or districts affected by this subsection and 
will provide information concerning rights of appeal.


Sec. 403.120  Credit to the project or tail-end credit requirements.

    Credits to the project or tail-end credits involve funds being 
directed to the Reclamation fund and applied to the construction 
obligation of the project associated with the revenues.
    (a) Revenues that may be credited to the project or as a tail-end 
credit.
    (1) Leasing of minerals from acquired lands--mineral revenues from 
lands acquired for project purposes;
    (2) Mineral leases (geothermal steam) on acquired lands--revenues 
from leasing of geothermal steam on lands acquired for project 
purposes;
    (3) Sale of timber on acquired lands--revenues from the sale of 
timber from lands acquired for project purposes;
    (4) Sale of sand and gravel on acquired lands--revenues from the 
sale of sand, gravel, and other mineral materials from lands acquired 
for project purposes; and
    (5) Rights-of-use on acquired lands--revenues generated by 
temporary uses, authorized under Reclamation law, of lands acquired for 
project purposes.
    (6) Sale of land--lands either withdrawn or acquired for project 
purposes and no longer required for the purpose for which the lands 
were designated may, upon the Secretary of the Interior's 
determination, be sold and the revenues distributed in accordance with 
applicable statutes. Specifically, revenues from the following types of 
sales will be applied as a tail-end credit to the project:
    (i) Sale of withdrawn public domain lands that were improved at the 
expense of the project;
    (ii) Sale of unimproved withdrawn public domain lands that are in 
tracts too small to qualify as farm units; and
    (iii) Sale of acquired lands.
    (b) Reclamation actions regarding credit to the project or tail-end 
credit requirements. Provisions in current contracts between water 
users and/or districts and Reclamation purporting to allow credits to 
the project or tail-end credits unauthorized by law are unenforceable 
and will not be honored. Reclamation will notify directly all water 
users or districts affected by this subsection and will provide 
information concerning rights of appeal.


Sec. 403.130  General credit to the reclamation fund.

    General credit to the Reclamation fund does not provide a credit to 
either the project construction costs or to the districts' annual 
obligations. The following revenues will be credited as a general 
credit to the Reclamation fund:
    (a) Leasing of minerals from public domain lands--revenues from 
mineral leases issued under the authority of the Mineral Leasing Act of 
1920;
    (b) Rights-of-way--revenues from rights-of-way issued under the 
Mineral Leasing Act of 1920;
    (c) Mineral leases (geothermal steam) from public domain lands--
revenues from leases for geothermal steam on public domain lands 
pursuant to the Geothermal Steam Act of 1970;
    (d) Sale of townsites--revenues from the sale of the townsite lots 
on lands withdrawn from public entry;
    (e) Sale of timber from withdrawn lands--revenues from the sale of 
timber on withdrawn public domain lands, or from lands ``donated'' to a 
specific project by the United States;
    (f) Sale of sand and gravel from withdrawn lands--revenues from the 
sale of sand, gravel and other mineral materials on withdrawn lands; 
and
    (g) Rights-of-use on withdrawn lands--revenues from the granting of 
rights-of-use, authorized under Reclamation law, on withdrawn lands.


Sec. 403.140  Special Accounts or Revolving Funds.

    Revenues and fees are to credited to special accounts or revolving 
funds in accordance with the table below.

------------------------------------------------------------------------
  Revenues and fees to be credited             Account or fund          
------------------------------------------------------------------------
User fees (16 U.S.C. 460l.6a) and    Recreation Account.                
 concession or franchise fees.                                          
Revenues specific to the Central     Lower Colorado River Basin         
 Arizona Project (except              Development Fund.                 
 recreational user fees).                                               
Revenues specific to the Boulder     Colorado River Dam Fund.           
 Canyon Project.                                                        
Revenues from divisions of the       Upper Colorado River Basin Fund.   
 Upper Colorado River Storage                                           
 Project.                                                               
Revenues from sale, exchange, or     Columbia Basin Land Development    
 lease of Columbia Basin Project      Account.                          
 lands.                                                                 
------------------------------------------------------------------------

Subpart B--[Reserved]

[FR Doc. 94-22379 Filed 9-9-94; 8:45 am]
BILLING CODE 4310-94-P