House Report 107-554 - AMENDMENTS TO THE CENTRAL UTAH PROJECT COMPLETION ACT

[House Report 107-554]
[From the U.S. Government Publishing Office]

107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-554

======================================================================

AMENDMENTS TO THE CENTRAL UTAH PROJECT COMPLETION ACT

_______

July 8, 2002.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

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

R E P O R T

[To accompany H.R. 4129]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill
(H.R. 4129) to amend the Central Utah Project Completion Act to
clarify the responsibilities of the Secretary of the Interior
with respect to the Central Utah Project, to redirect
unexpended budget authority for the Central Utah Project for
wastewater treatment and reuse and other purposes, to provide
for prepayment of repayment contracts for municipal and
industrial water delivery facilities, and to eliminate a
deadline for such prepayment, 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. AMENDMENTS TO THE CENTRAL UTAH PROJECT COMPLETION ACT.

(a) Treatment of Investigation Costs.--Section 201(b) of the Central
Utah Project Completion Act (106 Stat. 4607) is amended following
paragraph (2) by inserting the following: ``All amounts previously
expended in planning and developing the projects and features described
in this subsection including amounts previously expended for
investigation of power features in the Bonneville Unit shall be
considered non-reimbursable and non-returnable.''.
(b) Clarification of Secretarial Responsibilities.--Section 201(e) of
the Central Utah Project Completion Act (106 Stat. 4608) is amended--
(1) in the first sentence--
(A) by striking ``identified in this Act'' and
inserting ``identified in this title and the Act of
April 11, 1956 (chapter 203; 70 Stat. 110 et seq.),
popularly known as the Colorado River Storage Project
Act,''
(B) by inserting ``relating to the Bonneville Unit of
the Central Utah Project including oversight for all
phases of the Bonneville Unit, the administration of
all prior and future contracts, operation and
maintenance of previously constructed facilities''
before ``and may not delegate'';
(C) by striking ``his responsibilities under this
Act'' and inserting ``such responsibilities'';
(D) by striking the period after ``Reclamation'' and
inserting: ``, except through the pilot management
program hereby authorized. The pilot management program
will exist for a period not to exceed 5 years and shall
provide a mechanism for the Secretary and the District
to create a mutually acceptable organization within the
Bureau of Reclamation to assist the Secretary in his
responsibilities for the long-term management of the
Bonneville Unit. Such pilot management program may be
extended indefinitely by mutual agreement between the
Secretary and the District.'';
(2) in the second sentence--
(A) by inserting ``technical'' before ``services'';
(B) by inserting ``for engineering and construction
work'' before ``on any project features'';
(3) by inserting at the end thereof the following new
sentence: ``These provisions shall not affect the
responsibilities of the Bureau of Reclamation and the Western
Area Power Administration regarding all matters relating to all
Colorado River Storage Project power functions, including all
matters affecting the use of power revenues, power rates and
ratemaking.''.
(c) Municipal and Industrial Water.--Section 202(a)(1)(B) of the
Central Utah Project Completion Act (106 Stat. 4608) is amended in the
last sentence by inserting ``and municipal and industrial water'' after
``basin''.
(d) Use of Unexpended Budget Authority.--Section 202(c) of the
Central Utah Project Completion Act (106 Stat. 4611) is amended--
(1) in the first sentence--
(A) by striking ``in this title up to $60,000,000''
and inserting ``for units of the Central Utah
Project''; and
(B) by inserting ``including use of reverse osmosis
membrane technologies, water recycling, and conjunctive
use, to stabilize high mountain lakes and appurtenant
facilities, to develop power,'' after ``conservation
measures,''; and
(2) in the last sentence strike ``section 202(a)(1)'' and
insert ``sections 202(a)(1), 205(b), and Title VI''.
(e) Prepayment of Repayment.--Section 210 of the Central Utah Project
Completion Act (106 Stat. 4624) is amended--
(1) in the second sentence--
(A) by inserting ``or any additional or supplemental
repayment contract'' after ``1985,''; and
(B) by inserting ``of the Central Utah Project''
after ``water delivery facilities''; and
(2) by striking ``The District shall exercise'' and all that
follows through the end of that sentence.

Purpose of the Bill

The purpose of H.R. 4129 is to amend the Central Utah
Project Completion Act to clarify the responsibilities of the
Secretary of the Interior with respect to the Central Utah
Project, to redirect unexpended budget authority for the
Central Utah Project for wastewater treatment and reuse and
other purposes, to provide for prepayment of repayment
contracts for municipal and industrial water delivery
facilities, and to eliminate a deadline for such prepayment.

Background and Need for Legislation

The Central Utah Project (CUP) was authorized in 1956 as
part of the Colorado River Storage Project Act. Construction
began by the Bureau of Reclamation (Reclamation) in 1964 and
continues presently. CUP develops Utah's share of Colorado
river water for use in 10 counties in central Utah.
In 1992 legislation known as the Central Utah Project
Completion Act (CUPCA) was enacted. CUPCA reauthorized
appropriations for CUP with over $900 million to complete the
project over the next several decades. The 1992 legislation
gave the planning and construction responsibilities for the
project to the Central Utah Water Conservancy District rather
than Reclamation. CUPCA also established a federal commission
charged with the responsibility of providing environmental
mitigation and enhancement for the project.
This legislation amends section 201(e) of CUPCA to clarify
that the Secretary of the Interior continues to retain full
responsibility for CUP even after the construction phase is
completed. The amended legislation allows for the construction
of facilities for municipal and industrial water uses within
the Bonneville Unit of CUP. The legislation also allows for the
use of unexpended budget authority for reverse osmosis membrane
technologies, water recycling and conjunctive use. The
legislation also provides the opportunity to prepay additional
repayment obligations, which will be associated with new
municipal and industrial features being constructed. The
legislation does not increase the total amount authorized to be
expended to complete CUP.

Committee Action

H.R. 4129 was introduced on April 10, 2002, by Congressman
Chris Cannon (R-UT). The bill was referred to the Committee on
Resources, and within the Committee to the Subcommittee on
Water and Power. The Subcommittee held a hearing on the bill on
April 24, 2002. On May 22, 2002, the Full Resources Committee
met to consider the bill. The Subcommittee on Water and Power
was discharged from further consideration of the bill by
unanimous consent. Mr. Cannon offered an amendment to provide
for the use of water for municipal and industrial use. The
amendment was adopted by unanimous consent. No further
amendments were offered and the bill as amended was 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 tax
expenditures. According to the Congressional Budget Office,
enactment of this bill would result in a loss of offsetting
receipts (a credit against direct spending) beginning in 2005.
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, July 1, 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. 4129, a bill to
amend the Central Utah Project Completion Act to clarify the
responsibilities of the Secretary of the Interior with respect
to the Central Utah Project, to redirect unexpended budget
authority for the Central Utah Project for wastewater treatment
and reuse and other purposes, to provide for prepayment of
repayment contracts for municipal and industrial water delivery
facilities, and to eliminate a deadline for such prepayment.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Julie
Middleton.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.

H.R. 4129--A bill to amend the Central Utah Project Completion Act to
clarify the responsibilities of the Secretary of the Interior
with respect to the Central Utah Project, to redirect
unexpended budget authority for the Central Utah Project for
wastewater treatment and reuse and other purposes, to provide
for prepayment of repayment contracts for municipal and
industrial water delivery facilities, and to eliminate a
deadline for such prepayment

Summary: H.R. 4129 would make several amendments to the
Central Utah Project Completion Act (CUPCA). These amendments
include provisions that would make certain federal planning and
development costs nonreimbursable and remove a deadline for the
prepayment of water project construction costs under existing
authority.
Based on information from the Department of the Interior,
CBO estimates that enacting this bill would result in a loss of
offsetting receipts (a credit against direct spending) of
nearly $1 million each year, totaling about $43 million over
the 50-year period beginning in 2005. Enacting H.R. 4129 would
affect direct spending; therefore, pay-as-you-go procedures
would apply.
H.R. 4129 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 4129 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------
2002 2003 2004 2005 2006 2007
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING \1\

Estimated budget authority................................ 0 0 0 1 1 1
Estimated outlays......................................... 0 0 0 1 1 1
----------------------------------------------------------------------------------------------------------------
\1\ The costs of enacting the bill would continue at about $1 million a year for 50 years.

Basis of estimate: For this estimate, CBO assumes that H.R.
4129 will be enacted in fiscal year 2002. Two provisions of the
bill could impact the federal budget. First, it would make
certain federal planning and development costs for the Central
Utah Project nonreimbursable. It also would remove the current
2020 deadline for the project beneficiaries to prepay certain
construction costs for a portion of the Central Utah Project
that is not yet completed. The other provisions of H.R. 4129
would have no significant impact on the federal budget.
Based on information from the Department of the Interior,
CBO estimates that about $26 million in previously expended
investigative costs would become nonreimbursable by project
beneficiaries under this bill. For this estimate, CBO assumes
that the loss of these receipts would occur over a typical 50-
year repayment period starting in 2005. Including both
principal and interest payments, CBO estimates that this
provision would result in the loss of $43 million in receipts
over that period.
H.R. 4129 also would change the date that the federal
government would receive the final payment for a water project
contract under CUPCA. Under current law, the local water
district is required to pay the final installment of the
contract of about $270 million by the end of fiscal year 2002.
The construction of the water project, however, is only two-
thirds complete. The Department of the Interior expects that
the water project will be completed in 2005, assuming adequate
funds are appropriated each year to complete construction.
Because construction of the water project is not complete, the
district cannot generate operating income to make the final
payment. CBO does not expect the final project payment will be
made in 2002 under current law. Extending the deadline would
not cause the payment to occur later because that payment is
contingent upon completion of the project (which, in turn,
depends on the availability of appropriated funds).
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.

--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------------------------
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays.............................................. 0 0 0 1 1 1 1 1 1 1 1
Changes in receipts............................................. Not applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------

Intergovernmental and private-sector impact: H.R. 4129
contains no intergovernmental or private-sector mandates as
defined in the UMRA and would impose no costs on state, local,
or tribal governments.
Estimate prepared by: Federal costs: Julie Middleton;
impact on state, local, and tribal governments: Majorie Miller;
impact on the private sector: Cecil McPherson.
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 laws.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

CENTRAL UTAH PROJECT COMPLETION ACT

* * * * * * *

SEC. 201. AUTHORIZATION OF ADDITIONAL AMOUNTS FOR THE COLORADO RIVER
STORAGE PROJECT.

(a) * * *
(b) Utah Reclamation Projects and Features Not To Be
Funded.--Notwithstanding the Act of April 11, 1956 (70 Stat.
110; 43 U.S.C. 105), the Act of August 10, 1972 (86 Stat. 525;
43 U.S.C. 620k note), the Act of October 19, 1980 (94 Stat.
2239; 43 U.S.C. 620), and the Act of October 31, 1988 (102
Stat. 2826), funds may not be made available, obligated, or
expended for the following Utah reclamation projects and
features:
(1) * * *
(2) Water development projects and features:
(A) * * *

* * * * * * *

Counties in which the projects and features described in this
subsection were proposed to be located may participate in the
local development projects provided for in section 206. All
amounts previously expended in planning and developing the
projects and features described in this subsection including
amounts previously expended for investigation of power features
in the Bonneville Unit shall be considered non-reimbursable and
non-returnable.

* * * * * * *

(e) Secretarial Responsibility.--The Secretary is responsible
for carrying out the responsibilities as specifically
[identified in this Act] identified in this title and the Act
of April 11, 1956 (chapter 203; 70 Stat. 110 et seq.),
popularly known as the Colorado River Storage Project Act,
relating to the Bonneville Unit of the Central Utah Project
including oversight for all phases of the Bonneville Unit, the
administration of all prior and future contracts, operation and
maintenance of previously constructed facilities and may not
delegate [his responsibilities under this Act] such
responsibilities to the Bureau of Reclamation[.], except
through the pilot management program hereby authorized. The
pilot management program will exist for a period not to exceed
5 years and shall provide a mechanism for the Secretary and the
District to create a mutually acceptable organization within
the Bureau of Reclamation to assist the Secretary in his
responsibilities for the long-term management of the Bonneville
Unit. Such pilot management program may be extended
indefinitely by mutual agreement between the Secretary and the
District. The District at its sole option may use the technical
services of the Bureau of Reclamation for engineering and
construction work on any project features. These provisions
shall not affect the responsibilities of the Bureau of
Reclamation and the Western Area Power Administration regarding
all matters relating to all Colorado River Storage Project
power functions, including all matters affecting the use of
power revenues, power rates and ratemaking.

SEC. 202. BONNEVILLE UNIT WATER DEVELOPMENT.

(a) Of the amounts authorized to be appropriated in section
201, the following amounts shall be available only for the
following features of the Bonneville Unit of the Central Utah
Project:
(1) Irrigation and drainage system.--(A) * * *
(B) The authorization to construct the features
provided for in subparagraph (A) shall expire if no
federally appropriated funds to construct such features
have been obligated or expended by the District in
accordance with this Act, unless the Secretary
determines the District has complied with sections 202,
204, and 205, within five years from the date of its
enactment, or such longer time as necessitated for--
(i) * * *

* * * * * * *

Provided, however, That in the event that construction is not
initiated on the features provided for in subparagraph (A),
$125,000,000 shall remain authorized pursuant to the provisions
of this Act applicable to subparagraph (A) for the construction
of alternate features to deliver irrigation water to lands in
the Utah Lake drainage basin and municipal and industrial
water, exclusive of the features identified in section 201(b).

* * * * * * *

(c) The Secretary is authorized to utilize any unexpended
budget authority provided [in this title up to $60,000,000] for
units of the Central Utah Project and such funds as may be
provided by the Commission for fish and wildlife purposes, to
provide 65 percent Federal share pursuant to section 204, to
acquire water and water rights for project purposes including
instream flows, to complete project facilities authorized in
this title and title III, to implement water conservation
measures, including use of reverse osmosis membrane
technologies, water recycling, and conjunctive use, to
stabilize high mountain lakes and appurtenant facilities, to
develop power, and for the engineering, design, and
construction of Hatchtown Dam in Garfield County and associated
facilities to deliver supplemental project water from Hatchtown
Dam. The District shall establish a viable minimum conservation
pool in Hatchtown dam and shall ensure maintenance of viable
instream flows in the Sevier River between Hatchtown dam and
the Piute dam with the concurrence of the Commission and in
consultation with the Division of Wildlife Resources of the
State of Utah. The District shall comply with the provisions of
[section 202(a)(1)] sections 202(a)(1), 205(b), and Title VI
with respect to the features to be provided for in this
subsection.

* * * * * * *

SEC. 210. JORDAN AQUEDUCT PREPAYMENT.

Under such terms as the Secretary may prescribe, and within
one year of the date of enactment of this Act, the Secretary
shall allow for the prepayment, or shall otherwise dispose of,
repayment contracts entered into among the United States, the
District, the Metropolitan Water District of Salt Lake City,
and the Salt Lake County Water Conservancy District, dated May
16, 1986, providing for repayment of the Jordan Aqueduct
System. The Secretary shall allow for prepayment of the
repayment contract between the United States and the Central
Utah Water Conservancy District dated December 28, 1965, and
supplemented on November 26, 1985, or any additional or
supplemental repayment contract providing for repayment of
municipal and industrial water delivery facilities of the
Central Utah Project for which repayment is provided pursuant
to such contract, under terms and conditions similar to those
contained in the supplemental contract that provided for the
prepayment of the Jordan Aqueduct dated October 28, 1993. The
prepayment may be provided in several installments to reflect
substantial completion of the delivery facilities being prepaid
and may not be adjusted on the basis of the type of prepayment
financing utilized by the District. [The District shall
exercise its right to prepayment pursuant to this section by
the end of fiscal year 2002. Nothing in this section authorizes
or terminates the authority to use tax exempt bond financing
for this prepayment.]

* * * * * * *