29–010

Calendar No. 724

108TH CONGRESS REPORT " SENATE ! 2d Session 108–365

PROVO RIVER PROJECT TRANSFER ACT 

SEPTEMBER 28, 2004.—Ordered to be printed 

Mr. DOMENICI, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

[To accompany S. 1876] 

The Committee on Energy and Natural Resources, to which was 

referred the bill (S. 1876) to authorize the Secretary of the Interior 

to convey certain lands and facilities of the Provo River Project, 

having considered the same, reports favorably thereon with an 

amendment and recommends 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. SHORT TITLE. 

This Act may be cited as the ‘‘Provo River Project Transfer Act’’. 

SEC. 2. DEFINITIONS. 

In this Act: 

(1) AGREEMENT.—The term ‘‘Agreement’’ means the contract numbered 04–

WC–40–8950 and entitled ‘‘Agreement Among the United States, the Provo 

River Water Users Association, and the Metropolitan Water District of Salt 

Lake & Sandy to Transfer Title to Certain Lands and Facilities of the Provo 

River Project’’. 

(2) ASSOCIATION.—The term ‘‘Association’’ means the Provo River Water 

Users Association, a nonprofit corporation organized under the laws of the 

State. 

(3) DISTRICT.—The term ‘‘District’’ means the Metropolitan Water District of 

Salt Lake & Sandy, a political subdivision of the State. 

(4) PLEASANT GROVE PROPERTY.—

(A) IN GENERAL.—The term ‘‘Pleasant Grove Property’’ means the 3.79-

acre parcel of land acquired by the United States for the Provo River 

Project, Deer Creek Division, located at approximately 285 West 1100 

North, Pleasant Grove, Utah, as in existence on the date of enactment of 

this Act. 

(B) INCLUSIONS.—The term ‘‘Pleasant Grove Property’’ includes the office 

building and shop complex constructed by the Association on the parcel of 

land described in subparagraph (A). 

2

(5) PROVO RESERVOIR CANAL.—The term ‘‘Provo Reservoir Canal’’ means the 

canal, and any associated land, rights-of-way, and facilities acquired, constructed, or improved by the United States as part of the Provo River Project, 

Deer Creek Division, extending from, and including, the Murdock Diversion 

Dam at the mouth of Provo Canyon, Utah, to and including the Provo Reservoir 

Canal Siphon and Penstock, as in existence on the date of enactment of this 

Act. 

(6) SALT LAKE AQUEDUCT.—The term ‘‘Salt Lake Aqueduct’’ means the aqueduct and associated land, rights-of-way, and facilities acquired, constructed, or 

improved by the United States as part of the Provo River Project, Aqueduct Division, extending from, and including, the Salt Lake Aqueduct Intake at the 

base of Deer Creek Dam to and including the Terminal Reservoirs located at 

3300 South St. and Interstate Route 215 in Salt Lake City, Utah, as in existence on the date of enactment of this Act. 

(7) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Interior. 

(8) STATE.—The term ‘‘State’’ means the State of Utah. 

SEC. 3. CONVEYANCE OF LAND AND FACILITIES. 

(a) CONVEYANCES TO ASSOCIATION.—

(1) PROVO RESERVOIR CANAL.—

(A) IN GENERAL.—In accordance with the terms and conditions of the 

Agreement and subject to subparagraph (B), the Secretary shall convey to 

the Association, all right, title, and interest of the United States in and to 

the Provo Reservoir Canal. 

(B) CONDITION.—The conveyance under subparagraph (A) shall not be 

completed until the Secretary accepts future arrangements entered into by 

the Association, the District, the Central Utah Water Conservancy District, 

and the Jordan Valley Water Conservancy District providing for the operation, ownership, financing, and improvement of the Provo Reservoir Canal. 

(2) PLEASANT GROVE PROPERTY.—In accordance with the terms and conditions 

of the Agreement, the Secretary shall convey to the Association, all right, title, 

and interest of the United States in and to the Pleasant Grove Property. 

(b) CONVEYANCE TO DISTRICT.—

(1) IN GENERAL.—In accordance with the terms and conditions of the Agreement, the Secretary shall convey to the District, all right, title, and interest of 

the United States in and to the Salt Lake Aqueduct. 

(2) EASEMENTS.—

(A) IN GENERAL.—As part of the conveyance under paragraph (1), the Secretary shall grant to the District permanent easements to—

(i) the National Forest System land on which the Salt Lake Aqueduct 

is located; and 

(ii) land of the Aqueduct Division of the Provo River Project that 

intersects the parcel of non-Federal land authorized to be conveyed to 

the United States under section 104(a) of Public Law 107–329 (116 

Stat. 2816). 

(B) PURPOSE.—The easements conveyed under subparagraph (A) shall be 

for the use, operation, maintenance, repair, improvement, or replacement of 

the Salt Lake Aqueduct by the District. 

(C) LIMITATION.—The United States shall not carry out any activity on 

the land subject to the easements conveyed under subparagraph (A) that 

would materially interfere with the use, operation, maintenance, repair, improvement, or replacement of the Salt Lake Aqueduct by the District. 

(D) BOUNDARIES.—The boundaries of the easements conveyed under subparagraph (A) shall be determined by the Secretary, in consultation with 

the District. 

(E) REVOCATION OF WITHDRAWALS.—On conveyance of the easement to 

the land described in subparagraph (A)(i), the Secretary, subject to the 

easement and any terms and conditions of the Agreement, shall revoke any 

public land orders withdrawing National Forest System land for the Aqueduct Division of the Provo River Project. 

(F) TRANSFER OF ADMINISTRATIVE JURISDICTION.—

(i) IN GENERAL.—On conveyance of the easement to the land described in subparagraph (A)(ii), the Secretary, subject to the easement, 

shall transfer to the Secretary of Agriculture administrative jurisdiction over the land. 

(ii) ADMINISTRATIVE SITE.—The land transferred under clause (i) shall 

be administered by the Secretary of Agriculture as an administrative 

site. 

3

(G) ADMINISTRATION.—The easements conveyed under subparagraph (A) 

shall be administered by the Secretary of Agriculture in accordance with 

section 501(b)(3) of the Federal Land Policy and Management Act of 1976 

(43 U.S.C. 1761(b)(3)). 

(c) CONSIDERATION.—

(1) ASSOCIATION.—

(A) IN GENERAL.—In exchange for the conveyance under subsection (a)(1), 

the Association shall pay the Secretary an amount that is equal to the sum 

of—

(i) the net present value of any remaining debt obligation of the 

United States with respect to the Provo Reservoir Canal; and 

(ii) the net present value of any revenues from the Provo Reservoir 

Canal that, based on past history—

(I) would be available to the United States but for the conveyance of the Provo Reservoir Canal under subsection (a)(1); and 

(II) would be deposited in the reclamation fund established under 

the first section of the Act of June 17, 1902 (43 U.S.C. 391), and 

credited under the terms of Reclamation Manual/Directives and 

Standards PEC 03–01. 

(B) DEDUCTION.—In determining the net present values under clauses (i) 

and (ii) of subparagraph (A), the Association may deduct from the net 

present value such sums as are required for the reimbursement described 

in the Agreement. 

(2) DISTRICT.—

(A) IN GENERAL.—In exchange for the conveyance under subsection (b)(1), 

the District shall pay the Secretary an amount that is equal to the sum of—

(i) the net present value of any remaining debt obligation of the 

United States with respect to the Salt Lake Aqueduct; and 

(ii) the net present value of any revenues from the Salt Lake Aqueduct that, based on past history—

(I) would have been available to the United States but for the 

conveyance of the Salt Lake Aqueduct under subsection (b)(1); and 

(II) would be deposited in the reclamation fund established under 

the first section of the Act of June 17, 1902 (43 U.S.C. 391), and 

credited under the terms of Reclamation Manual/Directives and 

Standards PEC 03–01. 

(B) DEDUCTION.—In determining the net present values under clauses (i) 

and (ii) of subparagraph (A), the District may deduct from the net present 

value such sums as are required for the reimbursement described in the 

Agreement. 

(d) PAYMENT OF COSTS.—In addition to amounts paid to the Secretary under subsection (c), the Association and the District shall, in accordance with the Agreement, 

pay the Secretary—

(1) any necessary and reasonable administrative and real estate transfer costs 

incurred by the Secretary in carrying out the conveyance; and 

(2) 1⁄2 of any necessary and reasonable costs associated with complying with—

(A) the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 

seq.); 

(B) the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); and 

(C)(i) the National Historic Preservation Act (16 U.S.C. 470 et seq.); and 

(ii) any other Federal cultural resource laws. 

(e) COMPLIANCE WITH ENVIRONMENTAL LAWS.—

(1) IN GENERAL.—Before conveying land and facilities under subsections (a) 

and (b), the Secretary shall comply with all applicable requirements under—

(A) the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 

seq.); 

(B) the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.); and 

(C) any other law applicable to the land and facilities. 

(2) EFFECT.—Nothing in this Act modifies or alters any obligations under—

(A) the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 

seq.); or 

(B) the Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.). 

SEC. 4. EXISTING CONTRACTS. 

(a) DEER CREEK DIVISION CONSTRUCTION CONTRACT.—Notwithstanding the conveyances under subsections (a) and (b)(1) of section 3, any portion of the Deer Creek 

Division, Provo River Project, Utah, that is not conveyed under that section shall 

continue to be operated and maintained by the Association, in accordance with the 

contract numbered I1r–874, dated June 27, 1936, and entitled the ‘‘Contract BeVerDate jul 14 2003 00:21 Sep 30, 2004 Jkt 029010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6621 E:\HR\OC\SR365.XXX SR365
4

tween the United States and Provo River Water Users Association Providing for the 

Construction of the Deer Creek Division of the Provo River Project, Utah’’. (b) PROVO RIVER PROJECT AND JORDAN AQUEDUCT SYSTEM CONTRACTS.—Any written contract of the United States in existence on the date of enactment of this Act 

relating to the operation and maintenance of any division or facility of the Provo 

River Project or the Jordan Aqueduct System is confirmed and declared to be a valid 

contract of the United States that is enforceable in accordance with the express 

terms of the contract. 

(c) USE OF CENTRAL UTAH PROJECT WATER.— (1) IN GENERAL.—Subject to paragraph (2), any entity with contractual Provo 

Reservoir Canal or Salt Lake Aqueduct capacity rights in existence on the date 

of enactment of this Act may, in addition to the uses described in the existing 

contracts, use the capacity rights, without additional charge or further approval 

from the Secretary, to transport Central Utah Project water on behalf of the entity or others. 

(2) LIMITATIONS.—An entity shall not use the capacity rights to transport 

Central Utah Project water under paragraph (1) unless— (A) the use is expressly authorized by the entity responsible for operation 

and maintenance of the Central Utah Project water facility; and 

(B) carrying Central Utah Project water through Provo River Project facilities would not—

(i) materially impair the ability of the Central Utah Water Conservancy District or the Secretary to meet existing express environmental 

commitments for the Bonneville Unit; or 

(ii) require the release of additional Central Utah Project water to 

meet those environmental commitments. 

(d) AUTHORIZED MODIFICATIONS.—The Agreement may provide for—

(1) the modification of the 1936 Repayment Contract for the Deer Creek Division of the Provo River Project to reflect the partial prepayment, the adjustment 

of the annual repayment amount, and the transfer of the Provo Reservoir Canal 

and the Pleasant Grove Property; and 

(2) the modification or termination of the 1938 Repayment Contract for the 

Aqueduct Division of the Provo River Project to reflect the complete payout and 

transfer of all facilities of the Aqueduct Divsion. 

(e) EFFECT OF ACT.—Nothing in this Act impairs any contract (including subscription contracts) in effect on the date of enactment of this Act that allows for or creates a right to convey water through the Provo Reservoir Canal. 

SEC. 5. EFFECT OF CONVEYANCE. 

On conveyance of any land or facility under subsection (a) or (b)(1) of section 3—

(1) the land and facilities shall no longer be part of a Federal reclamation 

project; 

(2) the Association and the District shall not be entitled to receive any future 

reclamation benefits with respect to the land and facilities, except for benefits 

that would be available to other nonreclamation facilities; and 

(3) the United States shall not be liable for damages arising out of any act, 

omission, or occurrence relating to the land and facilities, but shall continue to 

be liable for damages caused by acts of negligence committed by the United 

States or by any employee or agent of the United States before the date of conveyance, consistent with chapter 171 of title 28, United States Code. 

SEC. 6. REPORT. 

If a conveyance required under subsection (a) or (b)(1) of section 3 is not completed by the date that is 18 months after the date of enactment of this Act, the 

Secretary shall submit to Congress a report that—

(1) describes the status of the conveyance; 

(2) describes any obstacles to completing the conveyance; and 

(3) specifies an anticipated date for completion of the conveyance.

PURPOSE

The purpose of S. 1876, as ordered reported, is to authorize the 

Secretary of the Interior to convey certain lands and facilities of 

the Provo River Project. 

BACKGROUND AND NEED

The Bureau of Reclamation holds title to the Provo River Project, 

which provides approximately 100,000 acre-feet of supplemental irVerDate jul 14 2003 00:21 Sep 30, 2004 Jkt 029010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR365.XXX SR365
5

rigation and domestic water supply each year to the counties of 

Wasatch, Summit, Utah, and Salt Lake in the State of Utah. Up 

to one million people receive water from the Project. The Project includes Deer Creek Dam and Reservoir on the Provo River, the Salt 

Lake Aqueduct and Terminal Reservoirs, the Murdock Diversion 

Dam on the Provo River, the Provo Reservoir Canal, and several 

transbasin diversion and conveyance facilities. The Aqueduct Division is comprised of the Salt Lake Aqueduct and Terminal Reservoirs; the remaining features are included in the Deer Creek Division. 

S. 1876 would transfer the Project’s Provo Reservoir Canal and 

the Pleasant Grove Property to the Provo River Water Users Association (‘‘Association’’). The bill would also transfer the Project’s 

Salt Lake Aqueduct to the Metropolitan Water District of Salt Lake 

and Sandy, Utah (‘‘District’’). The Bureau has been working collaboratively with the Association and the District on this proposed 

title transfer since November 2002. In August 2003, the parties entered into a Memorandum of Agreement regarding cost-sharing for 

the proposal. 

The Provo Reservoir Canal is an open canal and is approximately 

21.5 miles long. Beginning at the Murdock Diversion Dam at the 

mouth of Provo Canyon, the canal runs northwest along the 

Wasatch foothills, to the south end of Salt Lake County. The Canal 

is currently operated by the Association pursuant to a contract 

with the Bureau. The transfer will facilitate covering the canal in 

order to conserve water, improve water quality, and ensure public 

safety. As private owners, the Association expects to secure tax-free 

bonds to finance the project. 

The Pleasant Grove Property is a 3.79 acre office building site located in north Pleasant Grove, Utah. The Association has completed a new $2 million Office and Shop Complex. The title to the 

underlying land is held by the Federal Government, and it is the 

Committee’s understanding that no federal dollars have been used 

in the construction of the new buildings. 

The Salt Lake Aqueduct is a 42-mile-long, 69-inch diameter pipeline that runs from the intake structure, located at the base of 

Deer Creek Dam, to two finished water reservoirs in south Salt 

Lake City. There is a diversion point near the mouth of Provo Canyon where water can be diverted from the Aqueduct into the Jordan Aqueduct System (JAS) or vice versa. The JAS is a system of 

Central Utah Project (CUP) water conveyance facilities that serve 

the Utah Valley Water Treatment Plant, which is owned and operated by Central Utah Water Conservancy District, and the Jordan 

Valley Water Treatment Plan, which is operated by the Jordan 

Valley Water Conservancy District. The Aqueduct is currently operated by the District pursuant to a contract with the Bureau. The 

transfer will allow the District to obtain tax-exempt financing for 

rehabilitation of the Aqueduct. 

During the May 19, 2004 hearing on the measure conducted by 

the Subcommittee on Water and Power, the Administration testified that it generally supports transferring ownership of certain 

Reclamation project facilities to non-Federal entities. At that time, 

the Administration stated that it had several concerns with S. 1876 

as introduced, and preferred certain key agreements be completed 

prior to transfer of title. In the intervening four months, the parVerDate jul 14 2003 00:21 Sep 30, 2004 Jkt 029010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\SR365.XXX SR365
6

ties have worked to address the Administration’s concerns. It is the 

Committee’s understanding that both the Master Title Transfer 

Agreement and the 3-Pipe Agreement (also known as the MultiParty Operating Agreement) are in draft final form. Representatives of the Administration have indicated to the Committee staff 

that the execution of these agreements is expected in the immediate future and that they support enactment of the legislation at 

this time. 

LEGISLATIVE HISTORY

S. 1876 was introduced by Senator Bennett on November 18, 

2003, and referred to the Committee on Energy and Natural Resources. H.R. 3391, the companion measure to this bill, was introduced by Representative Cannon (R–UT) on October 29, 2003, and 

referred to the House Committee on Resources. The Resources 

Committee’s Subcommittee on Water and Power conducted a hearing on H.R. 3391 on October 30, 2003. A hearing on S. 1876 was 

conducted by the Energy Committee’s Subcommittee on Water and 

Power on May 19, 2004. The Committee on Energy and Natural 

Resources, on September 15, 2004, favorably reported S. 1876, as 

amended. 

COMMITTEE RECOMMENDATION

The Senate Committee on Energy and Natural Resources, in an 

open business session on September 15, 2004, by a unanimous 

voice vote of a quorum present, recommends that the Senate pass 

S. 1876, if amended as described herein. 

COMMITTEE AMENDMENT

The amendment in the nature of a substitute makes a series of 

mostly technical changes to S. 1876 as introduced. In addition, the 

substitute amendment makes the following substantive changes: 

1. Conditions the conveyance of the Provo Reservoir Canal on the 

Secretary of the Interior’s acceptance of future arrangements of the 

Association, the District, the Central Utah Water Conservancy District, and the Jordan Valley Water Conservancy District, governing 

the operation, ownership, financing, and improvement of the Provo 

Reservoir Canal.

2. Provides that the boundaries of the easements that are necessary for the conveyance of the Aqueduct to the District are to be 

determined by the Secretary, in consultation with the District. 

SECTION-BY-SECTION ANALYSIS

Section 1 contains the short title. 

Section 2 defines terms used in the Act. 

Section 3(a)(1)(A) directs the Secretary of the Interior to convey 

to the Association all right, title, and interest of the United States 

in and to the Provo Reservoir Canal. 

Subsection 3(a)(1)(B) conditions the Canal’s conveyance on the 

Secretary of the Interior’s acceptance of future arrangements governing the operation, ownership, financing, and improvement of the 

Canal. The parties to such future arrangements will be the Association, the District, the Central Utah Water Conservancy District, 

and the Jordan Valley Water Conservancy District. 

7

Subsection 3(a)(2) directs the Secretary of the Interior to convey 

to the Association all right, title, and interest of the United States 

in and to the Pleasant Grove Property. 

Subsection 3(b)(1) directs the Secretary of the Interior to convey 

to the District all right, title, and interest of the United States in 

and to the Salt Lake Aqueduct. 

Subsection 3(b)(2)(A) directs the Secretary of the Interior to 

grant permanent easements to the District as part of the Aqueduct’s conveyance. The easements are to cover (I) the National Forest System Land where the Aqueduct is located and (ii) the 

Project’s Aqueduct Division land that intersects the parcel of nonFederal land authorized to be conveyed in section 104(a) of Public 

Law 107–329 (116 Stat. 2816). 

Subsection 3(b)(2)(B) provides that these easements are to be 

conveyed for the use, operation, maintenance, repair, improvement, 

or replacement of the Salt Lake Aqueduct by the District. 

Subsection 3(b)(2)(c) prohibits the Federal Government from carrying out activities on the lands covered by the easements that materially interfere with the use, operation, maintenance, repair, improvement or replacement of the Salt Lake Aqueduct by the District. 

Subsection 3(b)(2)(D) provides that the easements’ boundaries 

are to be determined by the Secretary, in consultation with the District. 

Subsection 3(b)(2)(E) directs the Secretary of the Interior, on conveying the easement described in subparagraph (A)(i), to revoke 

any public land orders withdrawing National Forest System land 

for the Project’s Aqueduct Division. Such action shall be subject to 

both the governing easement and the terms and conditions of the 

Transfer Title Agreement. 

Subsection 3(b)(2)(F) directs the Secretary of the Interior to 

transfer administrative jurisdiction over the land covered by the 

easement described in subparagraph (A)(ii) to the Secretary of Agriculture. The Secretary of Agriculture is directed to administer 

this transferred land as an administrative site. 

Subsection 3(b)(2)(G) directs the Secretary of Agriculture to administer the conveyed easements in accordance with the provisions 

of the Federal Land Policy and Management Act of 1976. 

Subsection 3(c) sets forth the formula for determining the payment owed by both the Association and the District to the Secretary of the Interior for the respective Provo River Project conveyances. The formula requires payment of the net present value of 

any remaining debt obligation, as well as the net present value of 

any historical revenues that would have been paid to the Federal 

Government. The formula further allows a deduction for reimbursements described in the Title Transfer Agreement. 

Subsection 3(d) directs both the Association and the District to 

pay to the Secretary of the Interior the following additional costs: 

(1) necessary and reasonable administrative and real estate transfer costs associated with the conveyances; and (2) one-half of any 

necessary and reasonable costs associated with certain applicable 

environmental and historical preservation laws. These additional 

costs shall be paid in accordance with the Title Transfer Agreement. 

8

Subsection 3(e) directs the Secretary of the Interior to comply 

with certain environmental laws and any other law applicable to 

the land and facilities prior to the conveyance of such land and facilities. The Subsection also confirms that the obligations pursuant 

to both the National Environmental Policy Act and the Endangered 

Species Act are in no way altered or modified by S. 1876. 

Section 4 confirms that all existing contracts covering parts of 

the Provo River Project not conveyed by S. 1876 are not in any way 

impaired. Section 4(a) covers the existing Deer Creek Division Construction Contract and section 4(b) covers the existing Provo River 

Project and Jordan Aqueduct System Contracts. 

Subsection 4(c) confirms that those entities with existing contractual capacity rights to either the Provo Reservoir Canal or Salt 

Lake Aqueduct may use those rights to transport CUP water on behalf of itself or others. Such use is not subject to additional charge, 

and further approval from the Secretary is not required. However, 

such use is limited in that (1) the use must be expressly authorized 

by the entity responsible for the operation and maintenance of the 

CUP water facility and (2) the transport of CUP water through the 

Provo River Project facilities must not materially impair the existing environmental commitment for the Bonneville Unit or require 

the release of additional CUP water to meet those environmental 

commitments.

Subsection 4(d) authorizes any modifications to the applicable repayment contracts that are necessary as a result of the conveyances. 

Subsection 4(e) provides that S. 1876 does not impair any existing contract, including subscription contracts, regarding the conveyance of water via the Provo Reservoir Canal. 

Section 5(a) provides that the transferred land and facilities are 

no longer part of a Federal reclamation project. 

Subsection 5(b) provides that the Association and the District are 

no longer entitled to reclamation benefits with respect to the transferred land or facilities, except for benefits that would be available 

to other non-reclamation facilities. 

Subsection 5(c) provides that the United States shall only be liable for damages caused by acts of negligence, committed prior to 

the conveyance of the land or facilities, by the Federal Government 

or by an employee or agent of the Federal Government. 

Section 6 directs the Secretary of the Interior to submit a report 

to Congress if the land or facilities covered by subsections (a) or 

(b)(1) of section 3 are not conveyed within 18 months from the date 

of the bill’s enactment. The report must describe the status of the 

conveyance and any obstacles to completing the conveyance. The 

report must also specify a target completion date. 

COST AND BUDGETARY CONSIDERATIONS

The Congressional Budget Office estimate of the costs of this 

measure has been requested but was not received at the time the 

report was filed. When the report is available, the Chairman will 

request it to be printed in the Congressional Record for the advice 

of the Senate. 

9

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. 1876. The Act is not a regulatory measure in the sense of imposing government-established standards or significant responsibilities 

on private individuals and businesses. 

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. 1876. 

EXECUTIVE COMMUNICATIONS

On September 17, 2004, the Committee on Energy and Natural 

Resources requested legislative reports from the Department of the 

Interior and the Office of Management and Budget setting forth executive views on S. 1876. These reports had not been received at 

the time the report on S. 1876 was filed. The testimony provided 

by the Department of the Interior at the Subcommittee hearing follows:

STATEMENT OF JOHN W. KEYS, III, COMMISSIONER, BUREAU

OF RECLAMATION, U.S. DEPARTMENT OF THE INTERIOR

The Department of the Interior (Department) has an active title transfer program and supports transferring ownership of certain Reclamation project facilities to non-Federal entities, particularly in cases where transfers could 

create opportunities, not just for those who receive title, 

but for other stakeholders and the public as well. While we 

believe this transfer has the potential to create such opportunities, the Department has several concerns with S. 

1876, as it was introduced. It is our understanding that 

the proponents of this transfer intend to suggest a number 

of specific revisions to S. 1876 which could help to resolve 

some of our concerns. 

Background 

The Provo River Project stores and delivers water from 

the Provo River for irrigation and municipal and industrial 

uses along the Wasatch Front, a highly urbanized area, located within Utah and Salt Lake Counties. The three features of the project under consideration for transfer are 

the 22-mile-long Provo Reservoir Canal; a 3.79-acre office 

building site, which would be transferred to the Provo 

River Water Users Association (Association); and the 42-

mile-long Salt Lake Aqueduct, which would be transferred 

to the Metropolitan Water District of Salt Lake & Sandy 

(District). 

Reclamation began discussing this transfer with the Association and the District in November 2002. Since that 

time much work has been done and a great deal of 

progress has been made. 

In August 2003, Reclamation, the Association, and the 

District signed an agreement entitled ‘‘Contributed Funds 

10

Act and Memorandum of Agreement’’ (Contract No. 03– WC–40–8800) which articulated the respective roles, responsibilities, and cost obligations for carrying out the title 

transfer process. Since that time, several other water user 

entities, including the Central Utah Water Conservancy 

District (Central) and the Jordan Valley Water Conservancy District (Jordan Valley) also have become involved. 

A title transfer work group made up of these entities and 

Reclamation was formed to discuss the issues of importance to the entities involved, and that work group has 

been meeting regularly. 

In order to initiate the public review process required 

under the National Environmental Policy Act (NEPA), the 

title transfer work group assembled a list of more than 

2,000 individuals, agencies, and other entities having a potential interest in this transfer. This list includes a large 

number of owners of private property located adjacent to 

the transfer facilities. It also includes several State and 

Federal agencies and environmental and recreational interest groups. On September 29, 2003, an initial scoping 

letter describing the proposal was mailed to all on this list. 

Public scoping meetings were held on October 27, 28, and 

30, 2003 in Sandy, Lehi, and Provo respectively. Many concerns and issues were raised at these meetings and in subsequent calls, letters and e-mails by interested stakeholders. To enable anyone else with interests and concerns 

to have an opportunity to voice them, the official public 

comment period was held open until November 26, 2003. 

As the lead agency, Reclamation is in the process of completing a draft environmental assessment. The Department of the Interior’s Central Utah Project Completion Act 

Office, the U.S. Forest Service, and the National Park 

Service are cooperating agencies. The draft environmental 

assessment is expected to be released to the public for review and comment by the end of May 2004. 

S. 1876 

S. 1876 requires the Secretary to convey to the Provo 

River Water Users Association, pursuant to a transfer 

agreement still being drafted, all right, title, and interest 

of the United States in certain lands, rights-of-way, and facilities that are part of the Provo River Project in Utah. 

The bill does not impair any existing contracts that allow 

for, or create a right, to convey water through the Provo 

Reservoir Canal. 

Section 6 of S. 1876 requires that the Association and 

the Metropolitan Water District of Salt Lake & Sandy pay 

or contribute to administrative costs, real estate transfer 

costs, and the costs of compliance with the National Environmental Policy Act of 1969 (NEPA), the Endangered 

Species Act of 1973 (ESA), the National Historic Preservation Act, and other Federal cultural resource laws included 

in the transfer agreement. S. 1876 clearly states in Section 

7 that before any property is conveyed, the Secretary must 

complete all actions required under NEPA, the ESA, and 

11

all other applicable laws. Section 6 also requires the Association and the District to pay the net present value of the 

property being transferred. 

Finally in Section 9, the bill makes it clear that, upon 

conveyance of the land and facilities, the United States 

will not be liable for future occurrences on those lands and 

facilities, and the Association and District will not be entitled to receive any future Reclamation benefits with respect to the transferred properties, except those benefits 

available to other non-Reclamation facilities.

Issues of Concern 

Despite the Administration’s support for the transfer of 

these lands and facilities, we have a number of concerns 

about S. 1876 as drafted. 

Agreements: During the course of its deliberations, the 

members of the work group identified several written 

agreements among the parties that are needed in order to 

ensure that the transfer achieves its intended purposes 

without adversely impacting the other affected parties. At 

present, many of the identified agreements are being drafted by the work group, but none have been completed or 

signed. Section 3(a) of the bill partially addresses this 

issue by requiring that the Association provide the Secretary with certification, prior to transfer. We are concerned that this does not fully address our situation or the 

issue. 

We believe that completing the agreements prior to passage of the legislation will expedite implementation of the 

transfer. Our experience has shown that transfers move 

more expeditiously when involved parties complete preliminary work, including written agreements, before proceeding with legislation. In many cases where agreements 

were not completed before legislation was passed, significant delays occurred while issues were identified, negotiated, and satisfactorily addressed in agreements. 

If agreements are not completed prior to passage of the 

legislation, then we believe the legislation should specify 

that certain minimum requirements be included in the 

agreements. For example, Section 2(8) of the bill defines a 

transfer agreement among the United States, the District 

and the Association and requires the transfer to be completed in accordance with the terms of that transfer agreement. While the work group has been actively engaged in 

drafting the transfer agreement, it is not yet finalized or 

signed. This transfer agreement should include descriptions and maps of land interests to be transferred, including rights-of-way. Also, at a minimum, the agreement defined in Section 2(8) should include terms which: (1) provide for orderly and efficient transfer and protect public interests; (2) preserve access for operation and maintenance 

of nearby facilities which will continue to be federally 

owned; (3) provide for coordinated operation of transferred 

and retained portions of the Provo River Project; and (4) 

12

ensure the Department can continue to fulfill its obligations. 

Certification of Agreements: Section 3(a) directs the Secretary to convey the lands and facilities of the Project 

when the Association has certified that the agreements entered into are satisfactory to the Association, District, Central, and Jordan Valley. Since many of the features and facilities of the Project will not be conveyed and because of 

the close relationship between this project and the Central 

Utah Project, which will not be transferred, the Secretary 

will be a party to several of these agreements. As such, we 

believe that both the Association and the Secretary should 

certify the agreements are satisfactory. 

Operational Access: The canal and the aqueduct to be 

transferred in S. 1876 are in close proximity and operationally related to the Central Utah Project which will remain in Federal ownership. For example, for a sizeable 

portion of its alignment, the canal lies so near key Central 

Utah Project facilities that lack of access to the canal 

right-of-way would make operation and maintenance of 

those Central Utah Project facilities difficult. Conversely, 

operation and maintenance of the canal would be problematic without access to Central Utah Project lands. Therefore, as indicated above, it is important that provisions for 

reciprocal access are included in the agreement defined in 

Section 2(8) of the bill. 

National Forest System: In several locations, the Salt 

Lake Aqueduct crosses lands lying within the boundaries 

of the Uinta and Wasatch-Cache National Forests under 

the jurisdiction of the U.S. Forest Service. Prior to constructing the aqueduct, Reclamation withdrew significant 

blocks of land in locations where the aqueduct alignment 

crosses through these National Forests. At present, operation and maintenance of the aqueduct by the District 

within National Forest boundaries is possible solely because the aqueduct is federally owned and located upon 

Reclamation withdrawals. Any revocation of Reclamation’s 

withdrawals will return primary jurisdiction of these areas 

to the U.S. Forest Service. S. 1876 needs to address this 

issue or it will significantly delay conveyance of the lands 

and rights-of-way and will negatively impact the District’s 

ability to operate and maintain the facilities once transferred. We also recommend the transfer agreement defined 

in Section 2(8) include a suitable provision covering replacement of withdrawals with a linear permanent easement for the District. We recommend that the Department 

of the Interior issue the easement of the Aqueduct. At that 

point, the Bureau of Reclamation would revoke the withdrawal on the National Forest System lands, and then the 

Forest Service would administer the easement. 

Timpanogos Interagency Land Exchange Act (P.L. 107–

329): On December 6, 2002, Congress passed the 

Timpanogos Interagency Land Exchange Act (TILEA), P.L. 

107–329. This Act authorizes the acquisition of land and 

construction of an interagency administrative and visitor 

13

facility by the National Park Service and the U.S. Forest 

Service at the entrance to American Fork Canyon. The 

proposed exchange would be with a private landowner who 

is willing to trade property in Highland City, Utah, for six 

parcels of National Forest Land. The private property proposed to be acquired for the site of the administrative and 

visitor facility is bisected by a strip of land owned in fee 

title by the United States and administered by Reclamation for the aqueduct. If fee title were transferred to the 

District at this location, the administrative and visitor facility site would be bisected by a strip of District-owned 

lands. To avoid this situation, we believe the transfer 

agreement defined in Section 2(8) should provide for the 

Secretary to convey an appropriate permanent easement to 

the District for the aqueduct where it bisects the administrative and visitor facility site and then to transfer jurisdiction over the same area to the U.S. Forest Service to be 

administered as part of the administrative and visitor facility site. 

Impact on the On-Going Utah Lake Basin Water Delivery 

System EIS: Central and the Department recently released 

a draft environmental impact statement (EIS) for the Utah 

Lake Basin Water Delivery System (ULS) to the public. 

This draft EIS indicates that about 24,000 acre-feet of 

CUP M&I water would be conveyed through the Provo 

Reservoir Canal for use in Salt Lake County, which is proposed for transfer under S. 1876. As part of this legislation, or the transfer agreement for these facilities, it is important to ensure that this transfer does not impact the 

NEPA compliance process for the ULS or, more importantly, prevent the utilization of the canal to convey CUP 

M&I water.

Technical Issues 

In addition to the policy and procedural issues identified 

above, we have identified several minor technical corrections to S. 1876 that are needed in order to facilitate completion of the transfer. 

Include Both Reservoirs at the Salt Lake Aqueduct: In 

the definition for the Salt Lake Aqueduct, S. 1876 refers 

to the ‘‘Terminal Reservoir located at 3300 South and I–

215.’’ There are in fact two reservoirs located at the terminus of the Salt Lake Aqueduct. We believe any transfer 

should include both. Therefore, Section 2(g) of the bill 

should be amended to change ‘‘Terminal Reservoir’’ to 

‘‘Terminal Reservoirs’’. 

Make Consistent with Existing Contributed Funds Act 

Agreement and Memorandum of Agreement: On August 21, 

2003 Reclamation, the Association, and the District signed 

an agreement entitled ‘‘Contributed Funds Act Agreement 

and Memorandum of Agreement’’ (Contract No. 03–WC–

40–8800) (Contributed Funds Act Agreement) to formalize, 

among other things, the cost-sharing obligations of the 

various parties for transfer-related expenses. To ensure 

that the legislation is consistent with the already signed 

14

Contributed Funds Act Agreement, Section 6(a) of the bill 

should be amended to read ‘‘The Secretary shall require, 

as a condition of the conveyance under section 3, that the 

Association and the District pay all administrative costs 

and real estate transfer costs, and half of costs associated 

with compliance with the National Environmental Policy 

Act of 1969, the Endangered Species Act, the National Historic Preservation Act, and other federal cultural resource 

laws, all as described in the Agreement.’’ This would make 

it consistent with the terms of the existing Contributed 

Funds Act Agreement. 

Modify Payment Requirement: Section 6(b)(1) requires 

the Association to pay ‘‘the net present value of the Provo 

Reservoir Canal and the Pleasant Grove Property’’. Similarly, Section 6(b)(2) requires the District to pay ‘‘the net 

present value of the Salt Lake Aqueduct.’’ We believe the 

intent of these sections is to require the transfer recipients 

to pay, not the net present value of a facility (potentially, 

a very large sum), but rather the present value of the remaining obligations for that facility. Therefore, we recommend these portions of Section 6(b) be amended to read: 

(1) ‘‘In addition to subsection (a) the Secretary shall 

also require, as a condition of the conveyances under 

Sections 3(a) and 3(b), that the Association pay to the 

United States the net present value of the remaining 

debt obligation, including future miscellaneous revenue streams, attributable to the Provo Reservoir 

Canal and the Pleasant Grove Property, as described 

in the Agreement; Provided, however, that the Association may deduct from the net present value such 

sums as are required to accomplish the reimbursement described in the Contributed Funds Act Agreement.’’

(2) ‘‘In addition to subsection (a) the Secretary shall 

also require, as a condition of the conveyance under 

Section 3c), that the District pay to the United States 

the net present value of the remaining debt obligation, 

including future miscellaneous revenue streams, attributable to the Salt Lake Aqueduct, as described in 

the Agreement; Provided, however, that the Association may deduct from the net present value such sums 

as are required to accomplish the reimbursement described in the Contributed Funds Act Agreement.’’

National Environmental Policy Act Citation: Section 7 

should be modified to correct an error in the citation for 

the National Environmental Policy Act of 1969 (42 U.S.C. 

4321, et seq.). 

Conclusion 

The Department recognizes significant benefits that may 

be achieved by the proposed title transfer. Much work has 

already been accomplished. If the above-mentioned issues 

and technical corrections can be addressed, I believe the 

Department could support passage of this legislation. 

15

Mr. Chairman, we appreciate the excellent work and cooperation we have had with the District, the Association, 

Central, Jordan Valley, the Central Utah Project Completion Act Office, the U.S. Forest Service and the National 

Park Service. We look forward to continuing that effort 

and to working with Senator Bennett, Committee staff, as 

well as the Association, the District, the Title Transfer 

Working Group and anyone else to craft provisions necessary to resolve these issues. That concludes my testimony. I would be pleased to answer any questions.

CHANGES IN EXISTING LAW

In compliance with paragraph 12 of Rule XXVI of the Standing 

Rules of the Senate, the Committee notes that no changes in existing law are made by the bill S. 1876 as ordered reported.

Æ