79–010

Calendar No. 899

106TH CONGRESS REPORT

2d Session " ! SENATE 106–453

WASHINGTON COUNTY, UTAH LEGISLATIVE TAKING

OCTOBER 2 (legislative day, SEPTEMBER 22), 2000. Ordered to be printed

Mr. MURKOWSKI, from the Committee on Energy and Natural

Resources, submitted the following

REPORT

[To accompany S. 2873]

The Committee on Energy and Natural Resources, to which was

referred the bill (S. 2873) to provide for all right, title, and interest

in and to certain property in Washington County, Utah, to be vested in the United States, having considered the same, reports favorably thereon without amendment and recommends that the bill do

pass.

PURPOSE OF THE MEASURE

The purpose of S. 2873 is to provide for a legislative taking of

approximately 1,550 acres of private lands within the federally designated Red Cliff Reserve in Washington County, Utah.

BACKGROUND AND NEED

In 1983, Environmental Land Technology (ELT) acquired 2,440

acres from the State of Utah for development purposes and completed appraisals, engineering studies, site plans, and other work

in preparation for development of its property. In April, 1990, the

desert tortoise (Gopherus agassizii) was listed as a threatened species pursuant to the Endangered Species Act of 1973. The landowner testified before the Committee that he has been unable to

develop the property as originally intended because of the occurrence of critical desert tortoise habitat in and around the ELT

property. In February 1996, the United States Fish and Wildlife

Service (USFWS) adopted a Habitat Conservation Plan (HCP) creating the Red Cliffs Reserve for the protection of the desert tortoise

habitat. Under the plan, the Bureau of Land Management (BLM)

proposed to acquire all private lands in the designated habitat

area.

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To date, the BLM has acquired nearly all the private property located in the Reserve except for approximately 1,516 of ELT land.

Numerous attempts to reach an agreement with the BLM for exchanges of this property have failed, at considerable cost to the

landowner. In the interim, Congress has enacted legislation to exchange large blocks of Federal lands with the State of Utah, making other land exchanges in the State much more difficult to complete.

No funds were appropriated to the BLM in FY 2000 to purchase

the property. The Department of the Interior did not request funds

for this acquisition in FY 2001, though the acquisition of the ELT

property remains a high priority for the BLM.

The continued inability to develop or otherwise dispose of the

property has resulted in economic hardship for the landowner. Conventional financing to hold the property was not available to the

landowner because the banks were unwilling to lend money against

the land without a clear payoff date. Accordingly, ELT has had to

borrow substantial sums, sometimes at high interest rates, to hold

the property. S. 2873 is needed to complete the land transfer and

to compensate ELT for its land in a more timely manner than is

available without the legislation.

LEGISLATIVE HISTORY

S. 2873 was introduced on July 14, 2000 by Senator Bennett and

referred to the Committee on Energy on Natural Resources. The

Subcommittee on Forests and Public Land Management held a

hearing on S. 2873 on September 13, 2000. At the business meeting

on September 20, 2000, the Committee on Energy and Natural Resources ordered S. 2873 favorably reported.

COMMITTEE RECOMMENDATION

The Senate Committee on Energy and Natural Resources, in

open business session on September 20, 2000, by a voice vote of a

quorum present, recommends that the Senate pass S. 2873.

SECTION-BY-SECTION ANALYSIS

Section 1 lists several findings of Congress.

Section 2(a) transfers title to the United States for 1,516 acres

of property owned by Environmental Land Technology (ELT) within the Red Cliffs Reserve and 34 acres owned by ELT adjacent to

the land within the reserve.

Subsection 2(b) provides for compensation to ELT through an initial cash payment of $15,000,000 and the balance to be paid in cash

or, at the option of ELT, as provided in Subsection 2(e). Payment

shall be in the amount of appraised value plus interest and reasonable costs and expenses of holding the property from February,

1990.

Subsection 2(c) directs that, in the absence of a negotiated settlement, the Secretary shall initiate a proceeding in the U.S. District

Court to determine just compensation.

Subsection 2(d) provides for the orderly termination of all current

activities of the landowner.

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Subsection 2(e) provides that the Secretary, at the option of ELT,

credit a surplus property account in the amount of the unpaid compensation due which ELT could use to bid for surplus property.

COST AND BUDGETARY CONSIDERATIONS

The Congressional Budget Office (CBO) estimate of the cost of

this measure has been requested but was not available at the time

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

will request it be printed in the Congressional Record for the advice of the Senate.

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. 2873.

The bill is not a regulatory measure in the sense of imposing

Government-established standards or significant economic 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. 2873, as ordered reported.

EXECUTIVE COMMUNICATIONS

On September 20, 2000, 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 the bill. These reports had not been received at

the time the report on S. 2873 was filed. When the reports become

available, the Chairman will request that they be printed in the

Congressional Record for the advice of the Senate.

The testimony provided by the Department of the Interior at the

Subcommittee hearing follows:

STATEMENT OF TOM FRY, DIRECTOR, BUREAU OF LAND

MANAGEMENT

Mr. Chairman and members of the subcommittee, I appreciate the opportunity to appear before you today to testify on S. 2873, to provide for all right, title, and interest

in and to certain property in Washington County, Utah, to

be vested in the United States. The Administration opposes this legislation. The bill seeks to accomplish the Federal government’s long-awaited and much-desired acquisition of the last major block of private lands within the

Washington county Habitat Conservation Plan (HCP) area

near St. George, Utah. Specifically at issue is the area

known as the Red Cliffs Desert Reserve which provides

critical habitat for the threatened desert tortoise. There is

no disagreement as to the important goal and desire to

consummate the final, critical acquisitions in this unique

and special place, yet we believe the objectives of S. 2873

can be accomplished through the normal land acquisition

process for which the Bureau of Land Management (BLM)

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has well-established procedures. I would like to point out

that the Administration also opposed Mr. Hansen’s companion bill on this issues, H.R. 4721, at the House Resources Committee hearing held on July 13, 2000. I will

now briefly outline the legislation and our reasons for opposing it.

S. 2873 would provide for the acquisition by the BLM of

all right, title and interest to 1,516 acres of private property within the Red Cliffs Desert Reserve and 34 acres of

private property adjacent to the Reserve. The Red Cliffs

Desert Reserve was established in 1996 as part of the

Desert Tortoise HCP for Washington County, Utah. The

County developed the HCP, with technical advice from the

Fish and Wildlife Service, in order to receive a permit to

allow for the incidental take of about 12,000 acres of privately-held desert tortoise habitat and to mitigate that

take by developing the Reserve to ensure the protection

and recovery of the threatened Desert Tortoise and other

listed species in the Area. S. 2873 provides compensation

to the private landowner, Environmental Land Technology,

Ltd. (ELT) as of the date of the approval of the HCP, with

an initial payment of $15 million and any remaining judgment backed by the full faith and credit of the United

States. Compensation would also include interest, reasonable costs, expenses of holding the property and attorney

fees from February 1996 to the date of final payment.

Since 1996, BLM has coordinated the acquisition of

nearly 4,400 acres of Desert Tortoise Habitat within the

Red Cliff’s Desert Reserve worth approximately $35 million. These state and private acquisitions have included

land exchanges, direct purchases at fair market value and

one donation. BLM has expended $10.5 million in Land

and Water Conservation Fund (LWCF) monies to date in

completing land purchases and has an additional $1.5 million available to purchase high value habitat in FY 2000.

BLM has completed five separate transactions with ELT,

the private landowner at issue in S. 2873, for a total of approximately 383 acres, including both exchanges and

LWCF purchases.

In addition, since 1997, the Fish and Wildlife Service

has provided approximately $4.7 million in grants to the

State of Utah for land acquisitions associated with the

Washington County HCP. These grants were provided

through the Service’s HCP Land Acquisition Program

under the Endangered Species Act section 6 Cooperative

Endangered Species Conservation Fund. The Washington

County HCP is one of only two HCPs which have received

funding through this program in each year since its inception in 1997. This program is based on a competitive proposal process. To date, the Fish and Wildlife Service has

not received a proposal for grant assistance for acquisition

of the 1,500 acre ELT property. If a proposal were submitted and included the required 25% non-Federal cost

sharing, it would be eligible to compete for funding under

the HCP Land Acquisition Program. However, the acquisiVerDate 11-MAY-2000 20:00 Oct 03, 2000 Jkt 079010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6969 E:\HR\OC\SR453.XXX pfrm11 PsN: SR453
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tion would have to satisfy all applicable Federal appraisal

and other land acquisition requirements.

These transactions demonstrate a long-term record of

successful accomplishments in meeting the goals and objectives of the HCP despite widely varying expectations by

many landowners.

The Administration believes that S. 2873 is not in the

public interest for several reasons:

(1) S. 2873 provides preferential treatment to one land

owner and provides for compensation above and beyond

the benefits received by other landowners in previous acquisitions in this area. The amounts that S. 2873 directs

the landowner be paid are not supported by the preliminary appraisal for this property and, in fact, are considerably in excess of the appraised values on other adjacent

properties. We see no justification to add interest, reasonable costs, expenses of holding the property and attorney

fees to any settlement with the private landowner. Given

the early absence of clear title and other delays in final

settlement, no such considerations are in the public interest.

(2) The bill also legislates the acquisition of 34 acres adjacent to but not within the Reserve. This parcel abuts the

Reserve on only one side and is surrounded on three sides

by private land which has been developed. Access is available to the parcel through adjacent lands. The parcel has

not been included in any agreement, it is not addressed in

the HCP and because of its size and configuration, it has

marginal potential for habitat management. We have no

reason to believe that the public interest would be well

served by this 34-acre acquisition.

(3) The BLM has attempted to work with ELT over the

last four years to reach agreement on a fair and reasonable process in conducting appraisals in reaching agreement on the value of the remaining 1,500 acres. After completing a number of previous transactions using approved

and acceptable appraisal standards, the company has departed from the process and sought independent private

appraisers who have used appraisal assumptions not consistent with BLM policies and procedures used on previous

HCP acquisitions. All previous appraisal reports have complied with Public Law 104–333, the Omnibus Parks and

Public Lands Management Act of 1996, which requires the

BLM to disregard the listing of the Desert Tortoise in the

appraisals and determination of value for other properties.

Appraisals involving Federal acquisitions must carefully

conform to established and accepted procedures to ensure

a fair and an unbiased estimate of value. Laws and regulations pertaining to land exchanges provide reasonable administrative discretion for resolving disputes concerning

property value.

(4) S. 2873 would provide for the acquisition of all right,

title and interest of the 1,516 acres of property within the

Reserve and the additional 34 acres outside the Reserve.

Title to the subject property was clouded by litigation for

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many years with the State of Utah and was not resolved

until a settlement was signed between the parties in 1997.

We are uncertain as to what rights, title and interest the

land owner may possess at this time. The State of Utah

may have also retained the mineral rights to these properties. There is also some concern that title may still be

encumbered by other liens or financial obligations.

(5) The legislation is premature because it circumvents

the normal court considerations of a property owner’s

claims. The property owner has the right to bring a civil

action in a court of law to seek indemnification for an alleged government taking of private property. The court

would determine whether the property has been taken and

the amount of just compensation. If S. 2873 is a legislative

taking, Congress should determine the full amount of just

compensation and leave it to the property owner to contest

the payment.

(6) The legislation requires the United States to take

title immediately upon enactment but does not provide an

adequate time frame to ensure clear title or remove encumbrances, potential liens, and satisfy property taxes

that may be due on the property. Also, the bill does not address how or when to complete pre-acquisition site assessments, hazardous material investigations and follow

through on findings to protect the interests of the United

States.

In closing, Mr. Chairman, the acquisition of these lands

within the Reserve is a high priority for the BLM and the

Fish and Wildlife Service because there is no question this

area is critical to the protection and recovery of the Desert

Tortoise. The HCP has provided a mechanism to both protect listed species and allow for continued economic opportunities in Washington County, Utah. Completion of the

land acquisition goals within the Reserve is supported by

State and local officials, the Utah Congressional delegation

and the Administration. We fully support the concept of

transferring title to the land inside the reserve to the Bureau of Land Management in a manner that compensates

the landowner in accordance with existing Federal law. We

thank Mr. Bennett for his efforts to resolve this difficult

issue. While we cannot support S. 2873 for the reasons set

forth in this testimony, we are nevertheless committed to

working with the land owner to finalize the acquisition of

its lands within the Red Cliffs Desert Reserve. This concludes my statement. I would be pleased to answer any

questions at this time.

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 S. 2873, as ordered reported.

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