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[House Report 114-719]
[From the U.S. Government Publishing Office]

114th Congress     }                                     {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                     {     114-719

======================================================================

 
  TO DIRECT THE SECRETARY OF THE INTERIOR TO ALLOW FOR PREPAYMENT OF 
  REPAYMENT OBLIGATIONS UNDER REPAYMENT CONTRACTS BETWEEN THE UNITED 
         STATES AND THE WEBER BASIN WATER CONSERVANCY DISTRICT

                                _______
                                

 September 6, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Bishop of Utah, from the Committee on Natural Resources, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 5468]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 5468) to direct the Secretary of the Interior to 
allow for prepayment of repayment obligations under Repayment 
Contracts between the United States and the Weber Basin Water 
Conservancy District, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                          PURPOSE OF THE BILL

    The purpose of H.R. 5468 is to direct the Secretary of the 
Interior to allow for prepayment of repayment obligations under 
Repayment Contracts between the United States and the Weber 
Basin Water Conservancy District.

                  BACKGROUND AND NEED FOR LEGISLATION

    Under federal law, an irrigation district, municipal water 
utility or a water conservancy district that receives 
contracted water from a Bureau of Reclamation facility must 
repay its allocated portion of the capital costs of the federal 
water project. These repayment costs are typically set forth in 
long-term capital repayment contracts between the water utility 
and the federal government. A water utility that seeks to 
prepay what it owes to the federal government usually must wait 
for enactment of a public law specific to its circumstances.
    The federal Weber Basin Project is one of fourteen 
Reclamation projects in Utah. The Weber Basin Water Conservancy 
District maintains, operates and acts as the local sponsor of 
the Project. By its own estimates, the District supplies on 
average 166,000 acre-feet of irrigation water to over 1,000 
farms and 50,000 acre-feet of municipal and industrial water to 
over 500,000 people across five counties in northern Utah. An 
acre-foot amounts to 326,000 gallons of water or enough to 
cover an acre with one foot of water. The District entered into 
an initial repayment contract with the United States in 1952 
and amended/supplemented that contract thereafter to repay its 
share of the original Project costs with applicable interest. 
The current contract repayment schedule will be completed in 
2034.
    The District seeks to prepay its repayment contract. A 
District representative testified that the District can save 
money by retiring its debt early and that such savings can be 
used to finance future water infrastructure and repair and 
replacement costs. At the same time, the federal government 
would receive early receipts as a result of accelerated 
repayments, according to the Congressional Budget Office.
    H.R. 5468 achieves these objectives by allowing for 
prepayment. The prepayment concept is based on legislative 
precedent from prior Congresses and this Congress. Specific to 
Utah, this bill requires the prepayment to be ``under the terms 
and conditions similar to'' section 210 of the Central Utah 
Project Completion Act (Public Law 102-575), which allowed the 
Central Utah Water Conservancy District to prepay municipal and 
industrial obligations associated with the Bonneville Unit of 
the Central Utah Project.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 directs the Secretary of the Interior to allow 
the District to prepay its repayment contract obligations 
similar to the terms and conditions of Section 210 of the 
Central Utah Project Completion Act (Public Law 102-575) for 
prepayment of Central Project Unit repayment obligations. The 
prepayment shall include the net present value of all repayment 
obligations that would have been payable to the United States 
if this Act was not in effect, may be provided in several 
installments, may not be adjusted based on the prepayment 
financing used by the District, and the total repayment must 
occur no later than September 30, 2026.

                            COMMITTEE ACTION

    H.R. 5468 was introduced on June 14, 2016, by Congressman 
Rob Bishop (R-UT). The bill was referred to the Committee on 
Natural Resources, and within the Committee to the Subcommittee 
on Water, Power and Oceans. On June 23, 2016, the Subcommittee 
held a hearing on the bill. On July 12, 2016, the Natural 
Resources Committee met to consider the bill. The Subcommittee 
was discharged by unanimous consent. No amendments were offered 
and the bill was ordered favorably reported to the House of 
Representatives by unanimous consent on July 13, 2016.

            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 Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation and Section 308(a) of the 
Congressional Budget Act. With respect to the requirements of 
clause 3(c)(2) and (3) of rule XIII of the Rules of the House 
of Representatives and sections 308(a) and 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the enclosed cost estimate for the bill from the Director of 
the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, September 2, 2016.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
    Dear Madam Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5468, a bill to 
direct the Secretary of the Interior to allow for prepayment of 
repayment obligations under Repayment Contracts between the 
United States and the Weber Basin Water Conservancy District.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Aurora 
Swanson.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 5468--A bill to direct the Secretary of the Interior to allow for 
        prepayment of repayment obligations under Repayment Contracts 
        between the United States and the Weber Basin Water Conservancy 
        District

    Summary: H.R. 5468 would direct the Bureau of Reclamation 
(BOR) to allow water contractors in the Weber Basin Water 
Conservancy District (the district) in Utah to repay their 
share of the capital costs of the Weber Basin Project on an 
accelerated schedule.
    CBO estimates that enacting the bill would result in a net 
increase in offsetting receipts, which are treated as 
reductions in direct spending, of $3 million over the next 10 
years. Additionally, the staff of the Joint Committee on 
Taxation (JCT) expect that the contractors would finance some 
of those accelerated payments to the government with bonds 
exempt from federal taxation. As a result, JCT estimates that 
enacting the legislation would reduce revenues by a total of 
less than $500,000 over the 2017-2026 period. In total, CBO 
estimates that those changes in direct spending and revenues 
would decrease budget deficits over that 10-year period by $3 
million. Because the legislation would affect direct spending 
and revenues, pay-as-you-go procedures apply.
    CBO estimates that enacting the bill would not increase net 
direct spending or on-budget deficits by more than $5 billion 
in any of the four consecutive 10-year periods beginning in 
2027.
    H.R. 5468 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 5468 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2017    2018    2019    2020    2021    2022    2023    2024    2025    2026   2017-2021  2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASE OR DECREASE (-) IN DIRECT SPENDINGa
 
Estimated Budget Authorityb.......................     -15       1       1       1       1       1       1       1       1       1        -10         -3
Estimated Outlays.................................     -15       1       1       1       1       1       1       1       1       1        -10         -3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.
aStaff of the Joint Committee on Taxation estimate that enacting H.R. 5468 would result in an insignificant loss of revenues over the 2017-2026 period.
bOver the next 18 years (2017-2034), CBO estimates that enacting the bill would lead to a net loss in offsetting receipts, which would increase direct
  spending by about $6 million.

    Basis of estimate: For this estimate, CBO assumes that H.R. 
5468 will be enacted near the end of 2016.
    Under current law, the BOR delivers water to irrigation and 
municipal and industrial contractors in Utah through the Weber 
Basin Project. In addition to paying for the water, those 
contractors also pay for a portion of the estimated capital 
costs of constructing the reservoirs and conveyance systems 
that store and deliver the water. Over the next 18 years, CBO 
estimates that those contractors will pay about $1.3 million 
annually for their share of construction costs (including 
interest) to the federal government on an outstanding 
obligation of about $22 million (including principle and 
interest). They are not authorized to pay construction costs on 
an accelerated schedule.
    H.R. 5468 would authorize contractors in the district to 
repay their share of the capital investment in the project at 
any time before the end of 2026. To fulfill their repayment 
obligation early, contractors would be required to repay the 
present value of their future contract payments discounted at 
the 20-year maturity rate for U.S. Treasury securities.
    Based on information from the BOR about the terms of 
current water contracts in the Weber Basin, CBO expects that 
contractors would choose to repay their outstanding obligations 
in the first year after enactment. CBO estimates that receipts 
from accelerated payments would total $16 million over the 
2017-2026 period. During the same period there would be a 
corresponding loss totaling $13 million in annual repayments 
(including interest from municipal and industrial water 
contractors) that would otherwise occur under current law. On 
balance, under H.R. 5468, CBO estimates that net receipts would 
increase by $3 million over the 2017-2026 period. That 10-year 
increase in net receipts would be more than offset by a 
corresponding reduction in payments that would otherwise occur 
in years after 2026. In total, over the next 18 years, CBO 
estimates that the net loss in offsetting receipts from 
enacting this provision would total about $6 million.
    In addition, JCT expects that revenue losses related to 
increased use of tax exempt financing under the bill would 
total less than $500,000 over the 2017-2026 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollarsa--
                                           -------------------------------------------------------------------------------------------------------------
                                             2016    2017    2018    2019    2020    2021    2022    2023    2024    2025    2026   2016-2021  2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact............       0     -15       1       1       1       1       1       1       1       1       1       -10        -3
--------------------------------------------------------------------------------------------------------------------------------------------------------
aStaff of the Joint Committee on Taxation estimate that enacting H.R. 5468 would result in an insignificant loss of revenues over the 2017-2026 period.

    Estimated impact on state, local, and tribal governments: 
H.R. 5468 contains no intergovernmental mandates as defined in 
UMRA and would benefit the Weber Basin Water Conservancy 
District in Utah by allowing the district to prepay what it 
owes in remaining capital obligations to the federal government 
for use of federal water infrastructure. Any costs incurred by 
the district under agreements with the federal government would 
result from voluntary commitments.
    Estimated impact on the private sector: H.R. 5468 contains 
no private-sector mandates as defined in UMRA.
    Increase in long-term net direct spending and deficits: CBO 
estimates that enacting the bill would not increase net direct 
spending or on-budget deficits by more than $5 billion in any 
of the four consecutive 10-year periods beginning in 2027.
    Estimate prepared by: Federal spending: Aurora Swanson; 
Federal revenues: Staff of the Joint Committee on Taxation; 
Impact on state, local, and tribal governments: Jon Sperl; 
Impact on the private sector: Paige Piper/Bach.
    Estimate approved by: Theresa Gullo, Assistant Director for 
Budget Analysis.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to direct the Secretary of the 
Interior to allow for prepayment of repayment obligations under 
Repayment Contracts between the United States and the Weber 
Basin Water Conservancy District.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                       COMPLIANCE WITH H. RES. 5

    Directed Rule Making. The Chairman does not believe that 
this bill directs any executive branch official to conduct any 
specific rule-making proceedings.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                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 would make no changes in existing 
law.

                              [all]
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