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[Senate Report 110-25]
[From the U.S. Government Publishing Office]

                                                        Calendar No. 51
110th Congress                                                   Report
                                 SENATE
 1st Session                                                     110-25

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               NORTH UNIT IRRIGATION DISTRICT ACT OF 2007

                                _______
                                

               February 16, 2007.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 266]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 266) to provide for the modification of 
and amendatory repayment contract between the Secretary of the 
Interior and the North Unit Irrigation District, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                Purpose

    The purpose of S. 266 is to provide for the modification of 
an amendatory repayment contract between the Secretary of the 
Interior and the North Unit Irrigation District, and for other 
purposes.

                          Background and Need

    Created in 1916, the North Unit Irrigation District 
(District) provides water necessary to irrigate approximately 
59,000 acres of land in central Oregon. Approximately 900 farms 
and ranches receive irrigation water from the District for 
farming and ranching. The District receives water from the 
Deschutes Project, a Bureau of Reclamation (Reclamation) 
project and the Crooked River pumping plant, a private project 
constructed by the District. In the mid-1950's, the United 
States and the District renegotiated the District's repayment 
contract. Public Law 83-573 approved the renegotiated repayment 
contract. The renegotiated contract limits the amount of water 
that the District can receive from a Reclamation project to the 
water necessary to irrigate 49,818 acres of land. Because 
Congress approved the renegotiated contract, any changes to 
that contract must also be approved by Congress.
    S. 266 would amend the Contract between the United States 
and the District in order to address several issues that were 
not contemplated when the contract was approved 50 years ago. 
S. 266 would amend the repayment contract to allow the District 
to participate in a conserved water project, which would allow 
the District to provide water from the Deschutes Project to 
irrigators who are presently irrigating roughly 9,000 acres of 
land with water from the Crooked River pumping plant. Under the 
current repayment contract, adding these 9,000 acres would 
exceed the cap of irrigated lands that may receive Deschutes 
Project water. Adding the 9,000 acres will allow the District 
to use less Crooked River water and leave more water in that 
river. Reclamation believes that leaving more water in Crooked 
River and the District's participation in State conserved water 
projects will benefit fish and wildlife in both the Crooked and 
Deschutes River. Amending the repayment contract from a 
variable to a fixed term will also result in financial benefits 
to the United States.

                          Legislative History

    S. 266 was introduced on January 11, 2007 by Senator Smith 
for himself and Senator Wyden and referred to the Committee on 
Energy and Natural Resources. At its business meeting on 
January 31, 2007, the Committee ordered S. 266 favorably 
reported.
    During the 109th Congress, the Committee considered similar 
legislation, S. 2502, introduced by Senator Smith on April 4, 
2006. Senator Wyden was a co-sponsor. The Subcommittee on Water 
and Power held a hearing on S. 2502 on June 28, 2006. S. Hrg. 
109-677. No further action occurred on S. 2502 prior to the 
sine die adjournment of the 109th Congress. A companion 
measure, Section 5 of H.R. 5079, was considered by the House of 
Representatives under suspension of the rules and passed by a 
voice vote on September 25, 2006.

                        Committee Recommendation

    The Senate Committee on Energy and Natural Resources, in an 
open business meeting on January 31, 2007, by a voice vote of a 
quorum present, recommends that the Senate pass S. 266.

                      Section-by-Section Analysis

    Section 1 provides the short title.
    Section 2 amends the Act of August 10, 1954 (68 Stat. 679, 
chapter 663) by adding some abbreviated references to section 1 
of the Act, and then adding two new sections. The first added 
section (``Sec. 3. Additional Terms'') sets forth, as 
described, specific amendments or terms to be added to the 
Contract between the United States and the North Unit 
Irrigation District. The second added section (``Sec. 4. Future 
Authority to Renegotiate'') authorizes the Secretary of the 
Interior (acting through the Commissioner of Reclamation) to 
renegotiate terms of the Contract under certain conditions.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

S. 266--North Unit Irrigation District Act of 2007

    S. 266 would amend certain provisions of a contract between 
the Department of the Interior and Oregon's North Unit 
Irrigation District. CBO estimates that enacting this bill 
would have no significant impact on the federal budget.
    S. 266 would amend the North Unit's Irrigation District 
repayment contract with the Department of the Interior. Under 
current law, payments under that contract will be completed 
within the next 35 to 45 years. S. 266 would amend the terms of 
the district's contract with the department by setting a fixed 
annual payment and requiring the district's total obligation to 
be paid to the department by 2044. CBO estimates that enacting 
S. 266 would increase offsetting receipts by less than $100,000 
a year. (Such collections are a credit against direct 
spending.) Enacting this bill would not affect revenues.
    S. 266 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments. 
The bill would authorize the Secretary of the Interior to 
modify a repayment contract with the North Unit Irrigation 
District. Other modifications to the contract would increase 
the number of acres eligible for irrigation and allow the 
district to use conserved water to support wildlife. Those 
modifications would generally benefit the district, and any 
costs they might incur would be incurred voluntarily.
    The CBO staff contacts for this estimate are Julie 
Middleton (for federal costs), and Lisa Ramirez-Branum (for the 
state and local impact). The estimate was approved by Peter H. 
Fontaine, Deputy Assistant Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 266. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant responsibilities on private individuals and 
business.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 266.

                        Executive Communications

    Because S. 266 is similar to legislation considered during 
the 109th Congress, the Committee did not request Executive 
Agency views. The testimony provided by the Bureau of 
Reclamation on S. 2502 at the Subcommittee hearing in the 109th 
Congress follows:

     Statement of William E. Rinne, Acting Commissioner, Bureau of 
                              Reclamation

    Madam Chairwoman and members of the Subcommittee, I am 
William Rinne, Acting Commissioner of the Bureau of 
Reclamation. Thank you for the opportunity to testify on S. 
2502. The Department supports S. 2502.
    The North Unit Irrigation District receives water from the 
Bureau of Reclamation's Deschutes Project and the District's 
privately developed Crooked River pumping plant in Oregon. Over 
900 small farm and ranch families in Oregon's Deschutes Basin 
rely upon the District for the delivery of irrigation water. 
Since the District's formation a century ago, these families 
have shifted from dryland wheat to alfalfa hay, grass seed, 
garlic seed, and carrot seed, as well as raising cattle, sheep, 
horses, and other livestock.
    In the mid-1950s, Reclamation and the District renegotiated 
the District's repayment contract in accordance with section 7, 
subsection (a), of the Reclamation Project Act of 1939. 
Pursuant to the Act of August 10, 1954, Congress approved the 
contract along with an authorization for the construction of 
Haystack Dam and regulating reservoir. The contract established 
the maximum irrigable acreage that can receive Reclamation 
project water at 49,818 acres.
    S. 2502 will resolve several limitations in the District's 
contract, enabling the District to more efficiently manage its 
water supplies. Because Congress approved the District's 
contract, changes to the contract which are beyond the scope of 
the Contracting Officer's authority must also be approved to 
Congress.
    Oregon law requires irrigation districts that participate 
in a publicly financed ``conserved water project'' to dedicate 
a portion of conserved water resulting from the project to 
instream flows for fish, wildlife or other purposes (ORS 
537.455 et seq.). The District has self-financed over $8 
million in conservation activities, and would like to consider 
participation in a publicly financed program. Unfortunately, 
the underlying Project authorization and the District's 
contract do not allow it to dedicate water to instream uses. S. 
2502 amends the District's contract so the District can comply 
with State law if it chooses to participate in a conserved 
water project.
    A related change to the District's contract would allow the 
District to deliver Deschutes Project water to families who are 
irrigating approximately 9,000 acres of land in the District 
with non-project water diverted by the District's Crooked River 
pumping plant. All of these lands are within the District's 
present boundary, have been irrigated for decades, and have 
appurtenant water rights issued by the State, but they exceed 
the current contract's ceiling of approximately 49,818 acres. 
Using Deschutes Project water on these lands will allow the 
District to divert less Crooked River water and leave more 
water instream.
    S. 2502 will benefit fish and wildlife by enabling the 
District to use less water from the Crooked River, and 
participate in State conserved water projects that return a 
portion of the conserved water to the Deschutes River. The 
United States would also realize financial benefits in the form 
of accelerated repayment of Project construction costs through 
the annual participation of an additional 9,000 acres in 
Project repayment. The District's current contract is based on 
a variable repayment plan, which means that rather than paying 
fixed annual installments, the District's annual payments vary 
based on factors such as crop production. Thus it is difficult 
or impossible to predict when the District would pay out its 
contract if this bill is not enacted. This legislation not only 
increases the number of acres in Project repayment, but also 
requires the District to pay its remaining obligation of 
$6,649,371 in fixed annual installments.
    The Administration also supports the language that this 
bill inserts at the end of the bill, in section 4 to be 
inserted into the underlying act. This provision gives the 
Secretary the authority to renegotiate this contract upon 
mutually agreeable terms without having to have Congress 
approve of changes agreed upon between the District and the 
Secretary. This provision reflects the general rule that 
repayment contracts do not require Congressional approval.
    The legislation is specific to the District; it would not 
affect any other district in the Deschutes Project, their 
patrons, or any others in Oregon. The District will continue to 
comply with all applicable state and federal laws including the 
Reclamation Reform Act of 1982.
    On behalf of the Department, I would like to compliment the 
District on its proactive approach to addressing the water 
management issues it is facing, as well as obtaining the 
support of other interested parties in the local community. We 
are pleased to support this legislation.
    I am happy to respond to any questions.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 266, as ordered 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):

             ACT OF AUGUST 10, 1954 (68 Stat. 679, ch. 663)

AN ACT To approve an amendatory repayment contract negotiated with the 
 North Unit irrigation district, to authorize construction of Haystack 
 Reservoir on the Deschutes Federal reclamation project, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, That the 
contract with the North Unit irrigation district (referred to 
in this Act as the ``District'') in form substantially similar 
to that approved by the district directors on July 31, 1953 
(referred to in this Act as the ``Contract''), which has been 
negotiated by the Secretary of the Interior pursuant to section 
7, subsection (a), of the Reclamation Project Act of 1939 (53 
Stat. 1187, 1192; 43 U.S.C., 1946 edition, sec. 485), is 
approved and the Secretary of the Interior is authorized to 
execute it on behalf of the United States.

           *       *       *       *       *       *       *

SEC. 3. ADDITIONAL TERMS.

    On approval of the District directors and notwithstanding 
project authorizing legislation to the contrary, the Contract 
is modified, without further action by the Secretary of the 
Interior, to include the following modifications:
          (1) In Article 8(a) of the Contract, by deleting ``a 
        maximum of 50,000'' and inserting ``approximately 
        59,000'' after ``irrigation service to''.
          (2) In Article 11(a) of the Contract, by deleting 
        ``The classified irrigable lands within the project 
        comprise 49,817.75 irrigable acres, of which 35,773.75 
        acres are in Class A and 14,044.40 in Class B. These 
        lands and the standards upon which the classification 
        was made are described in the document entitled `Land 
        Classification, North Unit, Deschutes Project, 1953' 
        which is on file in the office of the Regional 
        Director, Bureau of Reclamation, Boise, Idaho, and in 
        the office of the District'' and inserting ``The 
        classified irrigable land within the project comprises 
        58,902.8 irrigable acres, all of which are authorized 
        to receive irrigation water pursuant to water rights 
        issued by the State of Oregon and have in the past 
        received water pursuant to such State water rights.''.
          (3) In Article 11(c) of the Contract, by deleting ``, 
        with the approval of the Secretary,'' after ``District 
        may'', by deleting ``the 49,817.75 acre maximum limit 
        on the irrigable area is not exceeded'' and inserting 
        ``irrigation service is provided to no more than 
        approximately 59,000 acres and no amendment to the 
        District boundary is required'' after ``time so long 
        as''.
          (4) In Article 11(d) of the Contract, by inserting 
        ``, and may further be used for instream purposes, 
        including fish or wildlife purposes, to the extent that 
        such use is required by Oregon State law in order for 
        the District to engage in, or take advantage of, 
        conserved water projects as authorized by Oregon State 
        law'' after ``herein provided''.
          (5) By adding at the end of Article 12(d) the 
        following: ``(e) Notwithstanding the above subsections 
        of this Article or Article 13 below, beginning with 
        irrigation season immediately following the date of 
        enactment of the North Unit Irrigation District Act of 
        2006, the annual installment for each year, for the 
        District, under the Contract, on account of the 
        District's construction charge obligation, shall be a 
        fixed and equal annual amount payable on June 30 the 
        year following the year for which it is applicable, 
        such that the District's total construction charge 
        obligation shall be completely paid by June 30, 
        2044.''.
          (6) In Article 14(a) of the Contract, by inserting 
        ``and for instream purposes, including fish or wildlife 
        purposes, to the extent that such use is required by 
        Oregon State law in order for the District to engage 
        in, or take advantage of, conserved water projects as 
        authorized by Oregon State law,'' after ``and 
        incidental stock and domestic uses'', by inserting 
        ``and for instream purposes, as described above,'' 
        after ``irrigation, stock and domestic uses'', and by 
        inserting ``, including natural flow rights out of the 
        Crooked River held by the District'' after ``irrigation 
        system''.
          (7) In Article 290a( of the Contract, by inserting 
        ``and for instream purposes, including fish and 
        wildlife purposes, to the extent that such use is 
        required by Oregon State law in order for the District 
        to engage in, or take advantage of, conserved water 
        projects as authorized by Oregon State law'' after 
        ``provided in article 11''.
          (8) In Article 34 of the Contract, by deleting ``The 
        District, after the election and upon the execution of 
        this contract, shall promptly secure final decree of 
        the proper State court approving and confirming this 
        contract and decreeing and adjudging it to be a lawful, 
        valid, and binding general obligation of the District. 
        The District shall furnish to the United States 
        certified copies of such decrees and of all pertinent 
        supporting records.'' after ``for that purpose.''.

SEC. 4. FUTURE AUTHORITY TO RENEGOTIATE.

    The Secretary of the Interior (acting through the 
Commissioner of Reclamation) may in the future renegotiate with 
the District such terms of the Contract as the District 
directors determine to be necessary, only upon the written 
request of the District directors and the consent of the 
Commissioner of Reclamation.

                                  
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