Statement of Administration Policy: H.R. 429 - Reclamation Projects Authorization and Adjustment Act of 1991

(SENT House Floor - 6/20/91
(House Rules)
(Thomas (R) Wyoming)

The Administration supports many of the projects and provisions in H.R. 429. These include the increased authorized appropriations ceiling and requirements for improved cost sharing, binding contracts, and environmental compliance activities for the Central Utah Project. The Administration also supports (consistent with our GATT proposal) the intent of title XVII, which would amend the Reclamation Reform Act, and title XXV, which would reduce subsidy levels for irrigation water used to grow surplus crops, but will work in the Senate to address problems in the language contained in these provisions.

Nevertheless, the Administration opposes H.R. 429 because it contains numerous objectionable provisions and does not include offsets to the bill's increases in direct spending and decreases in receipts, as required by the Omnibus Budget Reconciliation Act of 1990 (OBRA).

Specifically, the Administration opposes title V, which would authorize about $240 million for the Ute Indian (Utah) Water Rights Settlement. This amount far exceeds the Federal government's maximum potential legal liability for an alleged breach by the United States of a 1965 water deferral agreement. The Federal government did not participate in the development of this settlement, a requirement of the Federal government's procedures for Indian water rights negotiations and settlements. The Administration would not support any settlement developed or negotiated outside these established procedures.

In addition, the Administration opposes:

—   Title XIX, the Mid-Dakota Rural Water Supply System (South Dakota), which would authorize in excess of $100 million for the construction of a water supply project and establishment of a wetlands trust. Administration policy requires 100 percent repayment of such project costs; title XIX, however, would require as little as 15 percent reimbursement for the construction of the project and no cost-sharing for the wetlands trust fund.

—   Title X, the Central Valley Project, which would authorize an extension of the Tehama-Colusa Canal (California). This extension may be inconsistent with final water allocations under the project's operating agreement. Section 1002 would authorize a long-term water contract prior to completion of the Environmental Impact Statement on water marketing for the Central Valley Project.

While supporting the transfer of certain project facilities, the Administration objects to the following transfers which do not conform with its policy that transfers be mutually beneficial to the contracting entity and the United States:

—   Title XXII, the Sunnyside Valley Irrigation District (Washington), because it would convey a parcel of Federal land to the District without compensation.

—   Title XXIV, the Sly Park Unit of the Central Valley Project (California), because it would prevent the Secretary from negotiating terms acceptable to the United States by placing a cap on the sales price and would not expressly relieve the Federal government of future liability.

—   Title XXVII, the Solano Project Transfer and Putah Creek Improvement Project (California), because the pricing formula is unacceptable to the Administration.

The Administration urges the House to amend:

—   Title IV, the Utah Reclamation Mitigation Account, to delete the provision that would use revenues from the sale of electric power from the Colorado River Storage Project to fund both new conservation measures and the repayment of project debt. This provision would increase expenditures for Federal programs without a corresponding increase in Federal revenues.

—   Title XI, the Salton Sea Research Project (California), to require 100 percent reimbursement of Federal funding of the project.

—   Title VIII, the Lake Meredith Salinity Control Project (New Mexico and Texas), to require that the cost for design and construction services provided by the Bureau of Reclamation be reimbursed, including interest at current Treasury rates, within 3 years.

—   Title XX, the Lake Andes-Wagner Drainage Demonstration Program (South Dakota), to provide for significant non-Federal cost sharing.

In addition, H.R. 429 would relinquish the Federal government's exclusive control over construction of certain Central Utah Project facilities. The Federal government, however, would remain liable for certain penalties of $2 million per year — up to a total of $10 million — until the Central Utah Project is completed. The Administration urges the House to repeal the penalty provisions of P.L. 99-591 that stipulate the Federal government's liability for facility completion.

Scoring for the Purpose of PAYGO and Discretionary Caps

H.R. 429 would increase direct spending and decrease receipts; therefore, it is subject to the pay-as-you-go requirement of OBRA. No offsets to the direct spending increases are provided in the bill. A budget point of order applies in the House and Senate against any bill that is not fully offset under CBO scoring. If, contrary to the Administration's recommendation, the House waives any such point of order that applies against H.R. 429, the effects of enactment of this legislation would be included in the look back pay-as-you-go sequester report at the end of the Congressional session.

OMB's preliminary scoring estimates of this bill are presented in the table below. Final scoring of this legislation may deviate from these estimates. If H.R. 429 were enacted, final OMB scoring estimates would be published within 5 days of enactment, as required by OBRA. The cumulative effects of all enacted legislation on direct spending will be issued in monthly reports transmitted to Congress.

Estimates For Pay-As-You-Go
(in millions)