49–010 

Calendar No. 558 

109TH CONGRESS REPORT " ! SENATE 2d Session 109–315 

IRRIGATION DISTRICTS REPAYMENT REVISIONS ACT 

JULY 31, 2006.—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 H.R. 4000] 

The Committee on Energy and Natural Resources, to which was 

referred the Act (H.R. 4000) to authorize the Secretary of the Interior to revise certain repayment contracts with the Bostwick Irrigation District in Nebraska, the Kansas Bostwick Irrigation District 

No. 2, the Frenchman-Cambridge Irrigation District, and the Webster Irrigation District No. 4, all a part of the Pick-Sloan Missouri 

Basin Program, and for other purposes, having considered the 

same, reports favorably thereon without amendment and recommends that the Act do pass. 

PURPOSE OF THE MEASURE

H.R. 4000 would authorize the Secretary of the Interior to revise 

distribution works repayment contracts with the Bostwick Irrigation District in Nebraska, the Kansas Bostwick Irrigation District 

No. 2, the Frenchman-Cambridge Irrigation District, and the Webster Irrigation District No. 4. 

BACKGROUND AND NEED

The Bostwick Irrigation District in Nebraska, the Kansas 

Bostwick Irrigation District No. 2, the Frenchman-Cambridge Irrigation District, and the Webster Irrigation District No. 4 are irrigation districts served by the Pick-Sloan Missouri Basin Program, a 

Reclamation Project. All of the irrigation districts are located in the 

Republican River basin except for Webster Irrigation District No. 

4, which is located in the Solomon River basin. 

The four districts recently renewed a portion of their water supply works repayment contracts to include a repayment term of 40 


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years. All districts renewed their contract in 2000 except for Webster Irrigation District No. 4, which renewed its contract in 2002. 

The districts’ repayment obligations for construction costs associated with distribution works were not included in the renewal of 

the water supply works contracts. 

Currently, repayment of construction costs associated with distribution works must be completed between 2009 and 2015, depending on the particular district. Within five years of the fulfillment of the districts’ distribution works construction cost obligation, deposits into the distribution works reserve fund and the district water supply reserve fund are scheduled to increase significantly. In their testimony before the House Resources Committee 

on H.R. 4000, both Reclamation and U.S. Congressman Jerry 

Moran testified that the districts would be unable to meet the current reserve fund obligations. 

LEGISLATIVE HISTORY

H.R. 4000 was introduced by Representative Moran for himself 

and Representative Osborn and referred to the Committee on Resources. The House Resources Committee Water and Power Subcommittee held hearings on the measure on December 7, 2005. 

H.R. 4000 was discharged from the House Resources Committee, 

passed the House of Representatives and was received by the Senate on December 19, 2005. A similar measure, S. 1962 was introduced on November 4, 2005, by Senator Roberts for himself and 

Senators Brownback, Hagel and Nelson and referred to the Committee on Energy and Natural Resources. The Subcommittee on 

Water and Power held a hearing on March 30, 2006. The Senate 

Committee on Energy and Natural Resources ordered H.R. 4000 favorably reported on May 24, 2006. 

COMMITTEE RECOMMENDATION

The Committee on Energy and Natural Resources, in open business session on May 24, 2006, by a unanimous voice vote of a 

quorum present, recommends that the Senate pass H.R. 4000. 

SECTION-BY-SECTION ANALYSIS

Section 1 authorizes the Secretary of the Interior to revise the repayment contract with the Bostwick Irrigation District in Nebraska 

(009D6B0121) by equalizing the total annual repayment obligation 

for the distribution works construction charge and the water supply 

repayment obligation. The section also authorizes the Secretary of 

the Interior to extend the date for adjusting the annual deposits 

into the distribution works reserve fund and the district water supply reserve fund for an additional 10 years. 

Section 2 authorizes the Secretary of the Interior to revise the repayment contract with the Kansas Bostwick Irrigation District No. 

2 (009D6B0120) by equalizing the total annual repayment obligation for the distribution works construction charge and the water 

supply repayment obligation. The section also authorizes the Secretary of the Interior to extend the date for adjusting the annual 

deposits into the distribution works reserve fund and the district 

water supply reserve fund for an additional 10 years. 


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Section 3 authorizes the Secretary of the Interior to revise the repayment contract with the Frenchman-Cambridge Irrigation District (009D6B0122) by equalizing the total annual repayment obligation for the distribution works construction charge and the water 

supply repayment obligation. The section also authorizes the Secretary of the Interior to extend the date for adjusting the annual 

deposits into the distribution works reserve fund and the district 

water supply reserve fund for an additional 10 years. 

Section 4 authorizes the Secretary of the Interior to revise the repayment contract with the Webster Irrigation District 

(009D6B0002) by equalizing the total annual repayment obligation 

for the distribution works construction charge and the water supply 

repayment obligation. The section also authorizes the Secretary of 

the Interior to extend the date for adjusting the annual deposits 

into the distribution works reserve fund and the district water supply reserve fund for an additional 10 years. 

COST AND BUDGETARY CONSIDERATIONS

The following estimate of costs of this measure has been provided 

by the Congressional Budget Office: 

H.R. 4000—An act to authorize the Secretary of the Interior to 

revise certain repayment contracts with the Bostwick Irrigation 

District in Nebraska, the Kansas Bostwick Irrigation District No. 

2, the Frenchman-Cambridge Irrigation District, and the Webster 

Irrigation District No. 4, all a part of the Pick-Sloan Missouri 

Basin Program, and for other purposes. 

Summary: H.R. 4000 would authorize the Secretary of the Interior to revise certain repayment contracts with several irrigation 

districts that are a part of the Pick-Sloan Missouri Basin Program. 

The repayment contracts are for reimbursable construction costs. 

This act would amend the current schedule of repayments by 

equalizing the amount of annual payments over the remaining life 

of the contracts. 

Under the legislation, the irrigation districts would make smaller 

payments to the federal government during the first 10 years after 

enactment and larger payments in the later years of their contracts, compared with the payments due under current law. Those 

payments are recorded in the budget as offsetting receipts (that is, 

offsets to outlays). Because the act would reduce the amount of offsetting receipts collected by the government over the next 10 years, 

CBO estimates that enacting H.R. 4000 would increase direct 

spending by almost $35 million over the 2006–2016 period. Over 

the next 35 years, aggregate receipts to the government would be 

unchanged, assuming H.R. 4000 is enacted before the end of 2006. 

H.R. 4000 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandate Reform Act. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 4000 is shown in the following table. The costs 

of this legislation fall within budget function 300 (water resources). 

For this estimate, CBO assumes that H.R. 4000 will be enacted before the end of fiscal year 2006. 


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By fiscal year, in millions of dollars— 

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority ......................... 1 1 1 1 * * * * * * * 

Estimated Outlays .......... 1 1 1 1 * * * * * * * 

Note: * = less than $500,000. 

Intergovernmental and private-sector impact: H.R. 4000 contains 

no intergovernmental or private-sector mandates. The act would 

benefit some water districts by authorizing the Secretary of the Interior to revise their repayment contracts for construction and 

water supply projects, shifting some payments into later years. 

Estimate prepared by: Federal spending: Gregory Waring; Impact on state, local, and tribal governments: Lisa Ramirez-Branum; 

Impact on the private sector: Fatimot Ladipo. 

Estimate approved by: Robert A. Sunshine, 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 

H.R. 4000. The bill 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 H.R. 4000. 

EXECUTIVE COMMUNICATIONS

The testimony provided by the Bureau of Reclamation at the 

Water and Power Subcommittee hearing on S. 1962, the Senate 

counterpart to H.R. 4000, in the 109th Congress follows: 

STATEMENT OF JOHN KEYS III, COMMISSIONER OF

RECLAMATION, DEPARTMENT OF THE INTERIOR

Madam. Chairman and Members of the Subcommittee, I 

am John Keys, Commissioner of the Bureau of Reclamation. I am pleased to be here today to give the Administration’s view on S. 1962, a bill to revise certain repayment 

contracts of four irrigation districts that are part of the 

Pick-Sloan Missouri Basin Program. 

The Irrigation Projects Reauthorization Council (IPRC) 

represents four member irrigation districts in support of 

this legislation. The districts—the Kansas Bostwick Irrigation District No. 2 and the Webster Irrigation District No. 

4, both in Kansas, and the Bostwick Irrigation District in 

Nebraska and the Frenchman-Cambridge Irrigation District (also in Nebraska), are served by Reclamation 

projects built as part of the Pick-Sloan Missouri Basin Program. Webster Irrigation District No. 4 is located in the 

Solomon River basin; the others are in the Republican 

River basin, both tributaries to the Kansas River. 


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The districts recently renewed their contracts with Reclamation. The contract renewal addressed repayment of a 

portion of the water supply works construction cost over a 

40 year term. Webster Irrigation District No. 4 renewed its 

contract in 2002; the others renewed their contracts in 

2000. However, each District’s repayment of the distribution works construction cost obligation remained unchanged during contract renewal. Thus, the remaining 

term for repayment of the distribution works is, in each 

case, significantly less than that remaining for the water 

supply works. Under Reclamation law, the irrigation districts repay irrigation capital costs without interest 

charges. 

As discussed above, currently each of these districts’ contracts has two different repayment periods: a water supply 

works repayment term which extends until 2040 or 2042 

(40 years from when the respective district’s contract was 

renewed) and a distribution works repayment period which 

extends 40 years from their first payment for the distribution works (to sometime between 2009 and 2015 depending 

on the particular district). This legislation would allow the 

repayment periods for the distribution works to be extended to match the repayment period for the water supply works, and allow for equal annual payments over that 

period. Additionally, reserve fund payments were slated to 

increase significantly in about 5 years, following scheduled 

completion of repayment of the distribution works construction costs obligation. Anticipating that this time horizon is too short for the districts to ensure financial recovery sufficient to make the increased reserve fund payments, this bill delays these increases for an additional 10 

years. 

Drought conditions in southwest Nebraska and northwest Kansas have significantly impacted inflows to reservoirs providing a water supply to Kansas Bostwick Irrigation District, Bostwick Irrigation District in Nebraska, 

Frenchman-Cambridge Irrigation District and Webster Irrigation District. Annual inflow into reservoirs providing 

these districts’ water supplies has reached new historical 

lows in the last three years. Four of the five canals in the 

Bostwick Irrigation District in Nebraska did not divert 

water the past two years. The Kansas Bostwick Irrigation 

District has not delivered a substantial amount of water to 

acres above Lovewell Reservoir the past two years. Three 

of the four canals in the Frenchman-Cambridge Irrigation 

District have not diverted any water the past three years. 

The Webster Irrigation District did not divert water into 

Osborne Canal this past year. 

Despite the declining water supply available to these 

Projects, the districts’ contracts require that they pay a 

portion of annual operation and maintenance costs for the 

water supply works and repay construction cost obligations 

to the United States. This payment obligation to Reclamation is in addition to the districts’ responsibility for 100 

percent of the operation and maintenance costs of the disVerDate Aug 31 2005 04:31 Aug 02, 2006 Jkt 049010 PO 00000 Frm 00005 Fmt 6659 Sfmt 6969 E:\HR\OC\SR315.XXX SR315

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tribution works and those water supply works that have 

been transferred to the districts. Even with no water or a 

diminished supply, the need for maintenance of these facilities continues. 

The districts assess their irrigators in order to pay the 

districts’ annual expenses and repayment obligations. 

These irrigators have received a diminished or no supply 

in recent years. For the last couple of years most of these 

districts have sought and been granted annual deferments 

to their payments under Reclamation law (the Act of September 21, 1959, 73 Stat. 584). In order to grant a 

deferment, Reclamation requires a determination that payment of the installments will cause an undue burden on 

the water users and that there is no alternative source of 

funds available to pay the installments. When an annual 

payment is deferred, it is rescheduled to be repaid as 

quickly as possible within the remaining term of the contract. The deferments have helped the districts to weather 

the drought in the short run, but have also caused the annual distribution works payments to be substantially larger over their remaining repayment period, because 

deferments do not extend the total time period allowed for 

repayment. 

For example, Kansas-Bostwick Irrigation District #2 

would, after execution of the annual deferment currently 

being processed, have annual distribution works payments 

of $421,353 due through 2015, with annual water supply 

works payments of $21,841 through 2015, increasing to 

$96,512 for 2016 and 2017, then decreasing to $85,591 

from 2018 through 2040. This results in an annual repayment total for this district of $443,194 through 2015 when 

the distribution works are scheduled to pay out in the absence of this legislation. If S. 1962 becomes law, the district will have consistent annual payments of $188,387 

from 2006 through 2040, thus providing relief to help the 

district through the current financial crisis. 

The total repayment obligation for the distribution 

works and water supply works for all four districts together is $12,442,447. This legislation does not change the 

dollar amount of this repayment obligation. However, because Reclamation law provides that irrigators do not pay 

interest on capital costs, this bill would reduce the present 

value of expected Treasury receipts. The difference between the present value of the payout stream of the contracts as they currently exist and as they would be amended by this bill is $1,620,637. This assumes that, in the absence of this legislation, the districts would pay the minimum payments due on time over the life of these contracts. 

The IPRC and the participating districts have done an 

exemplary job of communicating with Reclamation as they 

sought this legislation. They contacted us in early 2005 to 

explore what opportunities were available to them under 

existing law to address their financial concerns. Other 

than the deferments discussed above, none existed. RecVerDate Aug 31 2005 04:31 Aug 02, 2006 Jkt 049010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6969 E:\HR\OC\SR315.XXX SR315

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lamation also very much appreciates the manner by which 

IPRC has kept us informed and worked with us to identify 

issues. They addressed the possible effect to power repayments through ‘‘aid to irrigation’’ early on by working 

closely with Midwest Electric Consumers Association and 

with Reclamation. It is our understanding that ‘‘aid to irrigation’’ is not affected by this legislation. 

The legislation would provide needed financial relief to 

the districts by rescheduling their financial obligations to 

the United States. Extension of the repayment period will 

not be a permanent solution to the water scarcity facing 

these districts. However, taking this action will provide 

needed relief for the districts and increase the likelihood 

that they will be able to attain long-term financial viability 

and fulfill their repayment obligation to the United States. 

Therefore, the Department supports 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, the Committee notes that no changes in existing law are made by the Act H.R. 4000, as ordered reported. 

Æ 


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