House Report 106-812 - CONVEYANCE TO NORTHERN COLORADO WATER CONSERVANCY DISTRICT

[House Report 106-812]
[From the U.S. Government Publishing Office]

106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-812

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CONVEYANCE TO NORTHERN COLORADO WATER CONSERVANCY DISTRICT

_______

September 6, 2000.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed

_______

Mr. Young of Alaska, from the Committee on Resources, submitted the
following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H.R. 4389]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill
(H.R. 4389) to direct the Secretary of the Interior to convey
certain water distribution facilities to the Northern Colorado
Water Conservancy District, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended to pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:

SECTION 1. DEFINITIONS.

In this Act:
(1) Contract.--The term ``contract'' means the contract
between the United States and the Northern Colorado Water
Conservancy District providing for the construction of the
Colorado-Big Thompson Project, dated July 5, 1938 (including
any amendments and supplements).
(2) District.--The term ``District'' means the Northern
Colorado Water Conservancy District.
(3) Secretary.--The term ``Secretary'' means the Secretary of
the Interior.
(4) Transferred water distribution facilities.--The term
``transferred water distribution facilities'' means the North
Poudre Supply Canal and Diversion Works, also known as the
Munroe Gravity Canal, the Charles Hansen (Supply) Canal and
Windsor Extension and the Dixon Feeder Canal, all of which are
facilities of the Colorado-Big Thompson Project located in
Larimer County, Colorado.

SEC. 2. CONVEYANCE OF TRANSFERRED WATER DISTRIBUTION FACILITIES.

(a) In General.--The Secretary shall, as soon as practicable after
the date of enactment of this Act and in accordance with all applicable
law, convey all right, title, and interest in and to the transferred
water distribution facilities to the District.
(b) Sale Price.--
(1) In general.--The Secretary shall accept $1,948,515 as
consideration for the conveyance of the transferred water
distribution facilities under subsection (a).
(2) No effect on obligations and rights.--Except as expressly
provided in this Act, nothing in this Act affects or modifies
the obligations and rights of the District under the contract.
(3) Payments.--Except as provided in subsection (c), the
District shall continue to make such payments as are required
under the contract.
(c) Credit Toward Project Repayment.--On payment by the District of
the amount authorized to be accepted under subsection (b)(1), the
amount paid shall be credited toward repayment of capital costs of the
Colorado-Big Thompson Project in an amount equal to the associated
undiscounted obligation for repayment of the capital costs.

SEC. 3. LIABILITY.

Except as otherwise provided by law, effective on the date of
conveyance of the transferred water distribution facilities under this
Act, the United States shall not be liable for damages of any kind
arising out of any act, omission, or occurrence based on any prior
ownership or operation by the United States of the conveyed property.

PURPOSE OF THE BILL

The purpose of H.R. 4389 is to direct the Secretary of the
Interior to convey certain water distribution facilities to the
Northern Colorado Water Conservancy District.

BACKGROUND

For the last six years the Subcommittee on Water and Power
has pursued legislation to shrink the size and scope of the
federal government through the defederalization of Bureau of
Reclamation assets. H.R. 4389 continues this defederalization
process by directing the Secretary of the Interior to convey
water distribution facilities to the Northern Colorado Water
Conservancy District.
H.R. 4389 transfers a small component of a much larger
project. The entire project was built from 1938 to 1957 and
called the Colorado-Big Thompson Project (CBTP). The CBTP
provides supplemental water to 30 cities and towns. The water
is used to help irrigate 615,000 acres of northeastern Colorado
farmland.
The component being transferred as part of H.R. 4389 will
divest the Bureau of Reclamation of all present and future
responsibility for and cost associated with the management,
operation, maintenance, repair, rehabilitation and replacement
of, and liability for the North Poudre Supply Canal and
Diversion Works, the Charles Hansen (Supply) Canal and Windsor
Extension and the Dixon Feeder Canal. Moreover, the legislation
will eliminate the duplication of efforts between the District
and the Bureau in issuing and administering crossing licenses
and other forms of permission to utilize the land on which the
facilities are located. Finally, the legislation will provide
for enhanced local control over water facilities that are not
of national importance, and allow these facilities to be used
for more efficient and effective water management.
In a letter dated June 13, 2000, Maryanne C. Bach, the
Bureau of Reclamation's Regional Director for the Great Plains
Region, delineated the process in which the Bureau would
collect consideration for the title transfer. The Committee
believes that the delineated process outlined in this letter is
proper and should be followed; however, the Committee does not
agree with the price as set out in the letter. Therefore, the
United States Treasury will accept $1,948,315 as consideration
for the transfer. Western Area Power Administration (WAPA), on
behalf of their preference power customers, would be
responsible for $1,798,200 and the District will be responsible
for $150,315. The aid-to-irrigation obligation for the CBTP
will be credited $3,767,682 as a result of the accelerated
payment by WAPA, and the District's repayment obligation would
be reduced by $170,555.
In a letter dated June 14, 2000, Joel K. Bladow, WAPA's
Regional Manager for the Rocky Mountain Customer Service
Region, agreed with the amount of $1,798,200 for irrigation
assistance for the Pick-Sloan Missouri Basin Program, and
agreed that WAPA would ``make the appropriate adjustments to
the power repayment study to include this amount when the
legislation becomes law, and the Bureau of Reclamation advises
us of the changes in existing irrigation assistance obligations
for the Colorado-Big Thompson Project.''

COMMITTEE ACTION

H.R. 4389 was introduced on May 4, 2000, by Congressman Bob
Schaffer (R-CO). The bill was referred to the Committee on
Resources, and within the Committee to the Subcommittee on
Water and Power. On May 23, 2000, the Subcommittee held a
hearing on the bill. On June 15, 2000, the Subcommittee met to
mark up the bill. Congressman John Doolittle (R-CA) offered an
amendment that modified a definition in the bill and removed a
speculative cost to the transfer. The amendment was adopted by
voice vote. The bill, as amended, was then ordered to be
reported to the Full Committee by voice vote. On June 21, 2000,
the Full Resources Committee met to consider the bill. No
further amendments were offered and the bill was ordered
favorably reported to the House of Representatives by voice
vote.

SECTION-BY-SECTION ANALYSIS

Section 1. Definitions

This section provides definitions of terms used in the bill
including: ``contract'', ``District'', ``Secretary'', and
``transferred water distribution facilities''.

Section 2. Conveyance of transferred water distribution facilities

This section directs the Secretary of the Interior to
convey all right, title, and interest in the single-purpose
water distribution facilities to the District for which the
Secretary may accept from the District $1,948,515 as
consideration for the transfer. This consideration will be
credited toward repayment of capital costs of the CBTP. This
transfer shall not affect the obligations and rights of the
District under the contract and the District shall continue to
make payments as outlined in the contract.

Section 3. Liability

This section states that the United States, upon completion
of the transfer, shall no longer be liable for any damage that
might arise as a result of its previous ownership.

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, credit
authority, or an increase or decrease in tax expenditures.
According to the Congressional Budget Office, enactment of this
bill would reduce direct spending by about $2 million in fiscal
year 2001, which would be offset by a loss of offsetting
receipts.
3. Government Reform Oversight Findings.--Under clause
3(c)(4) of rule XIII of the Rules of the House of
Representatives, the Committee has received no report of
oversight findings and recommendations from the Committee on
Government Reform on this bill.
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 24, 2000.
Hon. Don Young,
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. 4389, a bill to
direct the Secretary of the Interior to convey certain water
distribution facilities to the Northern Colorado Water
Conservancy District.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Rachel
Applebaum.
Sincerely,
Steven Lieberman
(For Dan L. Crippen, Director).
Enclosure.

H.R. 4389--A bill to direct the Secretary of the Interior to convey
certain water distribution facilities to the Northern Colorado
Water Conservancy District

Summary: H.R. 4389 would direct the Secretary of the
Interior to convey certain canals and water distribution
facilities to the Northern Colorado Water Conservancy District.
These facilities are a small part of the Colorado-Big Thompson
project in Larimer County, Colorado. H.R. 4389 would require
the district of pay $1,948,515 for the facilities.
Based on information from the Bureau of Reclamation, CBO
estimates that enacting H.R. 4389 would reduce direct spending
by about $2 million in fiscal year 2001. These savings would be
offset by the loss of offsetting receipts of about $4 million
over the 2001-2012 period. Because enacting H.R. 4389 would
affect direct spending, pay-as-you-go procedures would apply.
CBO estimates that implementing this bill would have no
significant effect on discretionary spending.
H.R. 4389 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
State and local governments would probably incur some costs as
a result of the bill's enactment, but these costs would be
voluntary.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 4389 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment).

Estimated budget authority......................................... -2 (\1\) 0 0 0
Estimated outlays.................................................. -2 (\1\) 0 0 0
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\1\ Less than $500,000.

Basis of estimate: For this estimate, CBO assumes that the
conveyance would occur in the beginning of fiscal year 2001.
The bill would require the water district to pay $1,948,515 for
the facilities that would be conveyed under H.R. 4389. The bill
would credit this amount to the repayment of capital costs for
the Colorado-Big Thompson project. Based on information from
the Bureau of Reclamation, the federal government would forgo a
payment of $170,555 from the water district in fiscal year
2002, a payment of $764,463 from the electricity customers of
the Western Area Power Administration (WAPA) in fiscal year
2011, and another payment of $3,003,219 from WAPA customers in
fiscal year 2012. If the project is sold in 2001, the federal
government could not enter into a contract to sell excess water
capacity from the project to the Pleasant Valley Pipeline. CBO
estimates that the federal government would receive $197,261 in
fiscal year 2001 from such a contract.
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 in the current year,
the budget year, and the succeeding four years are counted.

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By fiscal year, in millions of dollars--
----------------------------------------------------------------------------
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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Changes in outlays................. 0 -2 0 0 0 0 0 0 0 0 0
Changes in receipts................ Not applicable
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Under the Balanced Budget Act (BBA), proceeds from
nonroutine asset sales (sales that are not authorized under
current law) may be counted for pay-as-you-go purposes only if
the sale would entail no financial cost to the government. CBO
estimates that the sale of the water facilities as specified in
H.R. 4389 would satisfy the conditions in the BBA, and
therefore, the proceeds would count for pay-as-you-go purposes.
Under BBA, ``financial cost to the government'' is defined in
terms of the present value of all cash flows associated with an
asset sale. The forgone payments of about $4 million over the
2002-2012 period has an estimated present value that is
slightly less than the sale price specified in H.R. 4389 (about
$2 million).
Intergovernmental and private-sector impact: H.R. 4389
contains no intergovernmental or private-sector mandates as
defined in UMRA. The Northern Colorado Water Conservancy
District, a local public agency, would probably incur costs to
acquire the four water distribution facilities, but the
decision to bear those costs would be voluntary. The district
would benefit from the enactment of this legislation.
Estimate prepaid by: Federal costs: Rachel Applebaum;
impact on State, local, and tribal governments: Susan Van
Deventer and Marjorie Miller, impact on the private sector:
Sarah Sitarek.
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 makes no changes in existing law.

ADDITIONAL VIEWS

As amended and reported by the Committee on Resources, H.R.
4389, a bill to direct the Secretary to convey certain water
distribution facilities to the Northern Colorado Water
Conservancy District, lacks at least four important elements
that should be addressed before passage:
First, H.R. 4389 mandates conveyance of the facilities
without requiring a determination by the Secretary of the
Interior that the conveyance is in the public interest. The
bill's language mandating conveyance--``shall, as soon as
practicable after the date of enactment of this Act and in
accordance with all applicable law''--is helpful in providing
assurance that the Secretary must, for example, comply with the
National Environmental Policy Act, but that language does not
provide the Secretary with adequate discretion as to whether
the facilities should be conveyed. The language also appears to
foreclose the ``no action'' alternative (not conveying the
facilities) that must be included as part of National
Environmental Policy Act compliance. Instead of this mandatory
language, the bill should merely ``authorize'' conveyance. This
would allow the Secretary to base a determination whether to
convey on invaluable input from the proposed transferee, Bureau
of Reclamation, other federal and state agencies, and
interested members of the local public.
Second, H.R. 4389 fails to require that full public
involvement precede legislation. Stakeholder involvement and
negotiation at the local level are essential prior to
legislation so that Congress, the District, and the public know
the details of what is enacted into law. Lack of such
involvement prior to legislation deprives Congress of the
benefit of full analysis of the issues by federal agencies and
stakeholders. It leaves the transferee in the dark about future
obligations related to transfer. And, it substantially alters
the playing field for public participation in transfer
negotiations due to the foregone conclusion that transfer will
take place. In its written testimony before the Water and Power
Subcommittee, the Bureau of Reclamation voiced its concern that
this transfer not side-step the established Framework process
which, among other things, contemplates that the specifics of
transfer be negotiated at the local level prior to
congressional action. If transfer happens, it should be done
right, with full public input.
Third, H.R. 4389 fails to provide for environmental
protection and enhancement. Environmental protection and
enhancement are the appropriate quid pro quo to mitigate for
post-transfer loss of federal control and applicability of most
federal laws. Providing for protection and enhancement of the
environment enables the District to share the benefit of the
transfer with the current federal taxpayer-owners in the form
of environmental protection and enhancement, as well as public
accountability. Environmental protections should be negotiated
and agreed upon in advance of interested stakeholders and then
included as specific terms and conditions of conveyance.
Fourth, H.R. 4389 creates a fixed ``sale price'' prior to
knowing the details of the transfer. The United States should
negotiate a fair price for the conveyance only after the terms
and conditions of conveyance are established through
negotiations with local stakeholders.
If this bill is enacted in its present form, the Committee
on Resources and this Congress will have lost another
opportunity to write sensible and fair legislation that
protects the public interest while allowing the transfer of
Bureau of Reclamation projects to local control.
George Miller.