[House Report 106-829]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-829
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CONVEYANCE OF THE ASSETS OF THE MIDDLE LOUP DIVISION OF THE MISSOURI
RIVER BASIN PROJECT, NEBRASKA
_______
September 7, 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
[To accompany H.R. 2984]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 2984) to direct the Secretary of the Interior, through
the Bureau of Reclamation, to convey to the Loup Basin
Reclamation District, the Sargent River Irrigation District,
and the Farwell Irrigation District, Nebraska, property
comprising the assets of the Middle Loup Division of the
Missouri River Basin Project, Nebraska, 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 out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. CONVEYANCE OF THE ASSETS OF THE MIDDLE LOUP DIVISION OF THE
MISSOURI RIVER BASIN PROJECT, NEBRASKA.
(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 property
comprising the assets of the Missouri River Basin Project, Middle Loup
Division, Nebraska, in accordance with the Memorandum of Understanding.
(b) Sale Price.--The Secretary may accept payment as provided for in
the Memorandum of Understanding as consideration for the conveyance of
the assets.
(c) Future Benefits.--Upon payment by the Districts of consideration
for the conveyance in accordance with the Memorandum of Understanding,
the Middle Loup Division of the Missouri River Basin Project--
(1) shall not be treated as a Federal reclamation project;
and
(2) shall not be subject to the reclamation laws or entitled
to receive any reclamation benefits under those laws.
(d) Liability.--Except as otherwise provided by law, effective on the
date of conveyance of the assets under this section, the United States
shall not be liable for damages of any kind arising out of any act,
omission, or occurrence based on its prior ownership or operation of
the assets.
(e) Definitions.--In this section:
(1) Assets.--The term ``assets'' has the meaning that term
has in the Memorandum of Understanding.
(2) Districts.--The term ``Districts'' means the Loup Basin
Reclamation District, the Sargent River Irrigation District,
and the Farwell Irrigation District, Nebraska.
(3) Memorandum of understanding.--The term ``Memorandum of
Understanding'' means Bureau of Reclamation memorandum of
understanding number 99AG601285, entitled ``MEMORANDUM OF
UNDERSTANDING BETWEEN UNITED STATES DEPARTMENT OF THE INTERIOR
BUREAU OF RECLAMATION GREAT PLAINS REGION NEBRASKA-KANSAS AREA
OFFICE AND LOUP BASIN RECLAMATION DISTRICT FARWELL IRRIGATION
DISTRICT SARGENT IRRIGATION DISTRICT CONCERNING PRINCIPLES AND
ELEMENTS OF PROPOSED TRANSFER OF TITLE TO WORKS, FACILITIES AND
LANDS IN THE MIDDLE LOUP DIVISION''.
PURPOSE OF THE BILL
The purpose of H.R. 2984 is to direct the Secretary of the
Interior, through the Bureau of Reclamation, to convey to the
Loup Basin Reclamation District, the Sargent River Irrigation
District, and the Farwell Irrigation District, Nebraska,
property comprising the assets of the Middle Loup Division of
the Missouri River Basin Project, Nebraska.
BACKGROUND AND NEED FOR LEGISLATION
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. 2984 continues this defederalization
process by conveying certain works, facilities, and titles of
the Middle Loup Division to the Farwell Irrigation District,
the Sargent Irrigation District, and the Loup Basin Reclamation
District, all of Nebraska.
The Loup Basin Reclamation District was organized in 1950
to promote and complete the construction of the Sargent and
Farwell Units in the Loup Basin area of Nebraska. The Sargent
District formed in 1952 and the Farwell District was created in
1954. A 40-year water service contract was signed in 1957
between the Bureau of Reclamation and the Loup Basin
Reclamation District. This was followed by repayment contracts
signed by the irrigation districts. Construction of the Sargent
Unit was completed in 1959 while construction of the Farwell
Unit was not complete until 1966.
The Sargent Unit serves approximately 14,000 acres in
Custer and Valley Counties of Nebraska by providing irrigation
water for corn, soybeans and alfalfa. The Farwell Unit serves
approximately 50,000 acres in Howard and Sherman Counties by
providing irrigation water for corn, soybeans, alfalfa and some
milo.
Under the original construction financing for the Middle
Loup Division project, power users have an obligation to repay
a portion of the Middle Loup construction costs as a component
expense in the federal power they purchase from the Western
Area Power Administration (WAPA). To meet their obligation,
power users have arranged with WAPA to accelerate their
payments. WAPA will in turn provide the money to the Secretary
of the Interior as part of the funding necessary to make the
U.S. Treasury whole through this transaction.
It is the understanding of the Committee that the
Secretary, in accordance with a Memorandum of Understanding
referenced in the bill, would accept payment from the power
users, through WAPA, as complete repayment by the power
customers of the aid to irrigation costs associated with the
facilities. This payment by the power users, combined with the
three Districts' final payment, will constitute the total
payment by the Districts for the right, title, and interest in
the property which makes up the assets of the Missouri River
Basin Project, Middle Loup Division in Nebraska.
COMMITTEE ACTION
H.R. 2984 was introduced on September 30, 1999, by
Congressman Bill Barrett (R-NE). The bill was referred to the
Committee on Resources, and within the Committee to the
Subcommittee on Water and Power. On October 7, 1999, 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 clarified when the
Secretary shall transfer the project, and how the payment would
be accepted. 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 unanimous consent.
SECTION-BY-SECTION ANALYSIS
Section 1. Conveyance of the assets of the Middle Loup Division of the
Missouri River Basin Project, Nebraska
This section decrees that the Secretary of the Interior
shall convey to the Districts all right, title, and interest of
the United States in and to the property comprising the assets
of the Missouri River Basin Project, Middle Loup Division,
Nebraska. At that time, the assets shall not be treated as a
federal reclamation assets and consequently they shall not be
subject to the reclamation laws nor entitled to receive the
benefits under the reclamation laws. At the completion of the
transfer the United States shall not be liable for damages
arising from its previous ownership.
This section also provides definitions of terms used in the
bill including: ``assets'', ``Districts'', and ``Memorandum of
Understanding''.
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 net receipts of
approximately $1.3 million over the 2001-2005 time period.
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,
Congress Budget Office,
Washington, DC, September 1, 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. 2984, a bill to
direct the Secretary of the Interior, through the Bureau of
Reclamation, to convey to the Loup Basin Reclamation District,
the Sargent River Irrigation District, and the Farwell
Irrigation District, Nebraska, property comprising the assets
of the Middle Loup Division of the Missouri River Basin
Project, Nebraska.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Lisa Cash
Driskill.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
H.R. 2984--A bill to direct the Secretary of the Interior, through the
Bureau of Reclamation, to convey to the Loup Basin Reclamation
District the Sargent River Irrigation District, and the Farwell
Irrigation District, Nebraska, property comprising the assets
of the Middle Loup Division of the Missouri River Basin
Project, Nebraska
Summary: H.R. 2984 would direct the Secretary of the
Interior to convey certain facilities, lands, and rights to the
Farwell Irrigation District, the Sargent Irrigation District,
and the Loup Basin Reclamation District, in the state of
Nebraska. Under the bill, these districts would pay the federal
government about $2.8 million for the Sherman Reservoir,
Milburn Diversion Dam, Arcadia Diversion Dam, related canals
and lands, and other associated rights and interests currently
owned by the United States.
Based on information from the Bureau of Reclamation, CBO
estimates that enacting H.R. 2984 would result in net receipts
of about $1.3 million over the 2001-2005 period: $2.8 million
in asset sale receipts, offset by $1.5 million of forgone
offsetting receipts over that period.
Because enacting H.R. 2984 would affect direct spending,
pay-as-you-go procedures would apply. CBO estimates a net pay-
as-you-go cost of $1.5 million over the 2001-2005 period,
reflecting the forgone offsetting receipts. The asset sale
receipts would not count for pay-as-you-go purposes because the
sale of assets under H.R. 2984 would result in a net financial
cost (on a present value basis) to the federal government.
CBO estimates that implementing this bill would have no net
effect on discretionary spending in 2001, but would result in a
very small decrease in discretionary spending each year
thereafter.
H.R. 2984 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
The conveyance provided for in this bill would be voluntary on
the part of the districts, and all costs incurred by them as a
result of the conveyance also would be voluntary.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2984 is shown in the following table.
The costs of this legislation fall within budget function 300
(natural resources and environment).
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By fiscal year, in millions of dollars
-------------------------------------------------
2001 2002 2003 2004 2005
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CHANGES IN DIRECT SPENDING
Asset sale receipts:
Estimated budget authority................................ -2.8 0 0 0 0
Estimated outlays......................................... -2.8 0 0 0 0
Forgone offsetting receipts:
Estimated budget authority................................ 0.3 0.3 0.3 0.3 0.3
Estimated outlays......................................... 0.3 0.3 0.3 0.3 0.3
Net changes:
Estimated budget authority................................ -2.5 0.3 0.3 0.3 0.3
Estimated outlays......................................... -2.5 0.3 0.3 0.3 0.3
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Basis of estimate: For this estimate, CBO assumes that H.R.
2984 will be enacted near the start of fiscal year 2001. We
expect that the project will be conveyed to the districts in
fiscal year 2001. The bill would require the water districts to
pay about $2.8 million for the facilities that would be
conveyed.
Currently, those districts have fixed repayment and water
service contracts with the Bureau. Those contracts result in
payments of about $300,000 a year through 2016 and about
$130,000 a year over the remaining life of the contract
(through 2042). Once the assets are conveyed to the districts,
those repayments would no longer occur, and would result in a
loss of offsetting receipts to the federal government. CBO
assumes that once the assets are conveyed, the customers of the
Western Area Power Administration (WAPA) would no longer pay
the federal government $29 million over the 2036-2042 period.
Under current law, WAPA customers would make such payments to
assist with the repayment of the cost of these facilities.
Enactment of H.R. 2984 would lead to a loss of these receipts
as well.
Based on information from the Bureau of Reclamation, CBO
estimates that the agency currently spends less than $60,000
each year for expenses related to the projects to be conveyed
under H.R. 2984. After the projects are conveyed, these
expenses would be longer be incurred, resulting in a small
savings to the government. However, in the year of the
conveyance, CBO expects that the bureau would spend about that
amount to administer the conveyance, resulting in no net change
to discretionary spending in 2001.
Pay-as-you-go consideration: The Balanced Budget and
Emergency Deficit Control Act sets up pay-as-you-go procedures
for legislation affecting direct spending or receipts.
Enactment of H.R. 2984 would result in the loss of offsetting
receipts of $0.3 million annually over the 2001-2010 period,
and additional amounts later. 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 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
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.
Under BBA, ``financial cost to the government'' is defined in
terms of the present value of all cash flows associated with an
asset sale. CBO estimates that the sale of Sherman Reservoir,
Milburn Diversion Dam, Arcadia Diversion Dam, and all other
associated rights and interests as specified in H.R. 2984 would
result in a net cost to the federal government of about $0.4
million. Therefore, the proceeds of the sale would not be
counted for pay-as-you-go purposes. The forgone offsetting
receipts resulting from this asset sale--less than $500,000
annually--would be counted for purposes of enforcing pay-as-
you-go procedures.
Estimated impact on State, local, and tribal governments:
H.R. 2984 contains no intergovernmental mandates as defined in
UMRA. The bill would require the districts to pay approximately
$2.8 million to receive title to federal facilities, and would
impose a number of other conditions. The conveyance would be
voluntary on the part of the districts, however, and all costs
incurred by them as a result would be voluntary. The bill would
impose no costs on any other state, local, or tribal
governments.
Estimated impact on the private sector: This bill contains
no new private-sector mandates as defined in UMRA.
Previous CBO estimate: On September 1, 2000, CBO
transmitted a cost estimated for S. 1612, Missouri River Basin,
Middle Loup Division Facilities Conveyance Act, as reported by
the Senate Committee on Energy and Natural Resources on August
25, 2000. These two pieces of legislation are similar, and our
cost estimates are the same.
Previous CBO estimate: On September 1, 2000, CBO
transmitted a cost estimated for S. 1612, Missouri Rvier Basin,
Middle Loup Division Facilities Conveyance Act, as reported by
the Senate Committee on Energy and Natural Resources on August
25, 2000. These two pieces of legislation are similar, and our
cost estimates are the same.
Estimate prepared by: Federal Costs: Lisa Cash Driskill;
Impact on State, Local, and Tribal Governments: Majorie Miller;
and 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.