House Report 107-368 - LEASE LOT CONVEYANCE ACT OF 2002

[House Report 107-368]
[From the U.S. Government Publishing Office]

107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-368

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LEASE LOT CONVEYANCE ACT OF 2002

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March 7, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

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Mr. Hansen, from the Committee on Resources, submitted the following

R E P O R T

[To accompany H.R. 706]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill
(H.R. 706) to direct the Secretary of the Interior to convey
certain properties in the vicinity of the Elephant Butte
Reservoir and the Caballo Reservoir, New Mexico, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Lease Lot Conveyance Act of 2002''.

SEC. 2. FINDINGS.

The Congress finds that the conveyance of the Properties to the
Lessees for fair market value would have the beneficial results of--
(1) eliminating Federal payments in lieu of taxes and
associated management expenditures in connection with the
Government's ownership of the Properties, while increasing
local tax revenues from the new owners;
(2) sustaining existing economic conditions in the vicinity
of the Properties, while providing the new owners of the
Properties the security to invest in permanent structures and
improvements; and
(3) adding needed jobs to the county in which the Properties
are located and increasing revenue to the county and
surrounding communities through property and gross receipt
taxes, thereby increasing economic stability and a sustainable
economy in one of the poorest counties in New Mexico.

SEC. 3. DEFINITIONS.

In this Act:
(1) Fair market value.--The term ``fair market value'' means,
with respect to a parcel of property, the value of the property
determined--
(A) without regard to improvements constructed by the
Lessee of the property;
(B) by an appraisal in accordance with the Uniform
Standards for Federal Land Acquisitions; and
(C) by an appraiser approved by the Secretary and the
purchaser.
(2) Irrigation districts.--The term ``Irrigation Districts''
means the Elephant Butte Irrigation District and the El Paso
County Water Improvement District No. 1.
(3) Lessee.--The term ``Lessee'' means the leaseholder of a
Property on the date of enactment of this Act, and any heir,
executor, or assign of the leaseholder with respect to that
leasehold interest.
(4) Property.--The term ``Property'' means any of the cabin
sites comprising the Properties.
(5) Properties.--The term ``Properties'' means all the real
property comprising 403 cabin sites under the administrative
jurisdiction of the Bureau of Reclamation that are located
along the western portion of the reservoirs in Elephant Butte
State Park and Caballo State Park, New Mexico, including
easements, roads, and other appurtenances. The exact acreage
and legal description of such real property shall be determined
by the Secretary after consulting with the Purchaser.
(6) Purchaser.--The term ``Purchaser'' means the Elephant
Butte/Caballo Leaseholders Association, Inc., a nonprofit
corporation established under the laws of New Mexico.
(7) Reservoirs.--The term ``reservoirs'' means the Elephant
Butte Reservoir and the Caballo Reservoir in the State of New
Mexico.
(8) Secretary.--The term ``Secretary'' means the Secretary of
the Interior.

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 isprovided under the leases
that apply to the Properties as of the date of the enactment of this
Act.
(b) Consideration.--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.

SEC. 5. TERMS OF CONVEYANCE.

(a) Specific Conditions.--As conditions of any conveyance to the
Purchaser under this Act, the Secretary shall require the following:
(1) Leaseholders' option.--The Purchaser shall grant to each
Lessee of a Property an option--
(A) to purchase the Property at fair market value; or
(B) to continue leasing the Property on terms to be
negotiated with the Purchaser.
(2) Administrative costs.--Any reasonable administrative cost
incurred by the Secretary incident to the conveyance under
section 6 shall be reimbursed by the Purchaser.
(b) Restrictive Use Covenant.--
(1) In general.--To maintain the unique character of the area
in the vicinity of the Reservoirs, the Secretary shall
establish, by the terms of conveyance, use restrictions to
carry out paragraph (2) that--
(A) are appurtenant to, and run with, each Property;
and
(B) are binding upon each subsequent owner of each
Property.
(2) Access to reservoirs.--The use restrictions required by
paragraph (1) shall ensure that--
(A) public access to and along the shoreline of the
Reservoirs in existence on the date of enactment of
this Act is not obstructed;
(B) adequate public access to and along the shoreline
of the Reservoirs is maintained; and
(C) the operation of the Reservoirs by the Secretary
or the Irrigation Districts shall not result in
liability of the United States or the Irrigation
Districts for damages incurred, as a direct or indirect
result of such operation, by the owner of any Property
conveyed under this Act, including--
(i) damages for any loss of use or enjoyment
of a Property; and
(ii) damages resulting from any modifications
or construction of any reservoir dam.
(c) Timing.--
(1) In general.--The Secretary shall convey the Properties
under this Act as soon as practicable after the date of
enactment of this Act and in accordance with all applicable
law.
(2) Report.--If the Secretary has not completed conveyance of
the Properties to the Purchaser by the end of the 1-year period
beginning on the date of the enactment of this Act, the
Secretary shall, before the end of that period, submit a report
to the Congress explaining the reasons that conveyance has not
been completed and stating the date by which the conveyance
will be completed.
(d) Reimbursement of Purchaser's Costs.--The terms of conveyance
shall authorize the Purchaser to require each Lessee to reimburse the
Purchaser for a proportionate share of the costs incurred by the
Purchaser in completing the transactions pursuant to this Act,
including any interest charges.

SEC. 6. RESOLUTION OF CLAIMS AND DISPUTES.

After conveyance of the Properties to the Purchaser, if any Lessee
has a dispute with or claim against the Purchaser or any of its
officers, directors, or members arising from the Properties, the Lessee
shall promptly give written notice of the dispute or claim to the
Purchaser. If such notice is not provided to the Purchaser within 20
days after the date the Lessee knew or should have known of such
dispute or claim, then any right of the Lessee for relief based on such
dispute or claim shall be waived. If the Lessee and the Purchaser are
unable to resolve the dispute or claim by mediation, the dispute or
claim shall be resolved by binding arbitration.

SEC. 7. FEDERAL RECLAMATION LAW.

No conveyance under this Act shall restrict or limit the authority or
ability of the Secretary to fulfill the duties of the Secretary under
the Act of June 17, 1902 (32 Stat. 388, chapter 1093), and Acts
supplemental to and amendatory of that Act (43 U.S.C. 371 et seq.).

PURPOSE OF THE BILL

The purpose of H.R. 706, is to direct the Secretary of the
Interior to convey certain properties in the vicinity of the
Elephant Butte Reservoir and the Caballo Reservoir, New Mexico.

BACKGROUND AND NEED FOR LEGISLATION

In the 1930s the lease lot program at Elephant Butte and
Caballo Reservoirs began where the Bureau of Reclamation leased
parcels of land surrounding the two reservoirs. Under the terms
of the lease, significant improvements to the land had to be
made before renewal could take place. Leaseholders made these
improvements including the building of homes. The lease holders
made these improvements because they were under the impression
that someday they would be able to buy the property from the
Bureau of Reclamation. Privatization of this land has been the
plan of many such leaseholders.
This proposed transfer in H.R. 706 culminates several years
of effort by the interested parties, the Bureau of Reclamation
and Congress to address all issues related to the transfer.
The Committee expects that the costs associated with the
surveys and appraisals required for the determination of fair
market value will be included in the administrative costs
described in section 5(a)(2) of the bill.

COMMITTEE ACTION

H.R. 706 was introduced on February 14, 2001, by
Congressman Joe Skeen (R-NM). The bill was referred to the
Committee on Resources, and within the Committee to the
Subcommittee on Water and Power. On December 10, 2001, the
Subcommittee held a field hearing on the bill in Las Vegas,
Nevada. On February 14, 2002, the Subcommittee met to mark up
the bill. Congressman Ken Calvert (R-CA) offered an amendment
in the nature of a substitute to clarify where the proceeds of
the sale will be credited and how the fair market value will be
determined. The amendment also provided a date by which the
transfer shall be completed, or require a report to Congress if
the Administration cannot complete the transfer in a timely
manner. The Calvert amendment was adopted by unanimous consent.
The bill as amended was then ordered favorably reported to the
Full Committee by unanimous consent. On February 26, 2002, the
Full Resources Committee met to consider the bill. Congressman
Calvert offered an amendment to clarify that the Secretary of
the Interior and the purchaser will select the appraiser. The
amendment was adopted by unanimous consent. The bill, as
amended, was then ordered favorably reported to the House of
Representatives by unanimous consent.

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Resources' oversight findings and recommendations
are reflected in the body of this report.

CONSTITUTIONAL AUTHORITY STATEMENT

Article I, section 8 of the Constitution of the United
States grants Congress the authority to enact this bill.

COMPLIANCE WITH HOUSE RULE XIII

1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(3)(B)
of that rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act. As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, spending
authority, credit authority, or an increase or decrease in
expenditures. According to the Congressional Budget Office,
enactment of H.R. 706 will result in additional receipts of $20
million over the 2003-2007 period.
3. General Performance Goals and Objectives. This bill does
not authorize funding and therefore, clause 3(c)(4) of rule
XIII of the Rules of the House of Representatives does not
apply.
4. Congressional Budget Office Cost Estimate. Under clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for this bill from the Director of the Congressional Budget
Office:

U.S. Congress,
Congressional Budget Office,
Washington, DC, March 5, 2002.
Hon. James V. Hansen,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 706, the Lease Lot
Conveyance Act of 2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Julie
Middleton (for the federal costs), and Marjorie Miller (for the
state and local impact).
Sincerely,
Steven M. Lieberman
(For Dan L. Crippen, Director).
Enclosure.

Estimated Budget Authority................................ 0 0 -20 0 0 0
Estimated Outlays......................................... 0 0 -20 0 0 0
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Basis of estimate: For this estimate, CBO assumes that H.R.
706 will be enacted in fiscal year 2002 and that the conveyance
of the properties will occur in 2004. According to both the
Elephant Butte/Caballo Leaseholders Association and the Bureau
of Reclamation, it will take at least one year to survey and
appraise the property before the land would convey.
Based on information provided by the Bureau of Reclamation,
CBO estimates that the association would purchase the property
including easements and roads from the federal government for
about $40,000 to $60,000 per lot, for a total of about $20
million for the 403 cabin sites.
Currently, these properties do not generate any receipts
for the federal government. The state of New Mexico manages the
property for recreation and leases the cabin sites to
individuals for temporary occupancy. The state uses the revenue
generated from the leases for administration and management of
the cabin sites and other types of park operations.
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts. The net
changes in outlays that are subject to pay-as-you-go procedures
are shown in the following table. For the purposes of enforcing
pay-as-you-go procedures, only the effects through 2006 are
counted.

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By fiscal year, in millions of dollars--
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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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Changes in outlays................ 0 0 -20 0 0 0 0 0 0 0 0
Changes in receipts............... Not applicable
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Intergovernmental and private-sector impact: H.R. 706
contains no intergovernmental or private-sector mandates as
defined in UMRA. The state of New Mexico manages these leases
and retains the lease payments to cover their costs. Should the
property be sold, the state would lose the lease income, but
also would benefit from reduced costs. The net impact on the
state probably would not be substantial.
Estimate prepared by: Federal Costs: Julie Middleton.
Impact on State, Local, and Tribal Governments: Majorie Miller.
Impact on the Private Sector: Lauren Marks.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.

COMPLIANCE WITH PUBLIC LAW 104-4

This bill contains no unfunded mandates.

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or
tribal law.

CHANGES IN EXISTING LAW

If enacted, this bill would make no changes in existing
law.