99–010

Calendar No. 606

107TH CONGRESS REPORT " SENATE ! 2d Session 107–287

LEASE LOT CONVEYANCE ACT OF 2002

SEPTEMBER 17, 2002.—Ordered to be printed 

Mr. BINGAMAN, from the Committee on Energy and Natural 

Resources, submitted the following 

R E P O R T 

[To accompany H.R. 706]

The Committee on Energy and Natural Resources, to which was 

referred the Act (H.R. 706) to direct the Secretary of the Interior 

to convey certain properties in the vicinity of the Elephant Butte 

Reservoir and the Caballo Reservoir, New Mexico, having considered the same, reports favorably thereon without amendment and 

recommends that the Act do pass.

PURPOSE OF THE MEASURE

The purpose H.R. 706 is to direct the Secretary of the Interior 

to convey, for fair market value, property comprising 403 cabin 

sites within the Rio Grande Reclamation Project to the Elephant 

Butte/Caballo Leaseholders Association, Inc., so that the properties 

can then be conveyed to individual leaseholders. 

BACKGROUND AND NEED

The Rio Grande Reclamation Project was authorized by Congress 

in 1905 (33 Stat. 814) as one of the first projects initiated under 

the Reclamation Act of 1902. In the late 1940s, the Bureau of Reclamation, which had acquired and reserved a large amount of land 

for the project, began to lease a number of small lots along the 

shoreline of Elephant Butte and Caballo Reservoirs to the public on 

a short-term basis. Ultimately, the leaseholders began to make significant and permanent improvements to the land in order to secure the right to continued use of the lots. The leaseholders, in 

order to ensure their continued use of the lots and to protect the 

value of their improvements, now seek to acquire their respective 

properties for the fair market value. H.R. 706 would address this 

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concern by enabling the leased parcels to be conveyed to the individual lessees. 

LEGISLATIVE HISTORY

H.R. 706 was introduced by Representative Skeen on February 

14, 2001. The bill was passed by the House of Representatives on 

March 19, 2002. The Subcommittee on Water and Power held a 

hearing on H.R. 706 on June 6, 2002. At the business meeting on 

July 31, 2002, the Committee on Energy and Natural Resources ordered H.R. 706, favorably reported. 

COMMITTEE RECOMMENDATION

The Committee on Energy and Natural Resources, in open business session on July 31, 2002, by a voice vote of a quorum present, 

recommends that the Senate pass H.R. 706, as described herein. 

SECTION-BY-SECTION ANALYSIS

Section 1 provides the short title, the ‘‘Lease Lot Conveyance Act 

of 2002.’’

Section 2 contains three findings by Congress related to the Act. 

Section 3 defines terms used in the Act. 

Section 4, subsection (a) directs the Secretary of the Interior to 

convey to the Elephant Butte/Caballo Leaseholders Association, 

Inc. (purchaser), all right, title, and interest of the United States 

in and to all real property (easements included), comprising 403 

cabin sites under the administrative jurisdiction of the Bureau of 

Reclamation and located along the Elephant Butte and Caballo 

Reservoirs. 

Subsection (b) requires the purchaser to pay the United States 

the fair market value of the properties conveyed under the Act. 

Section 5, subsection (a) requires the Secretary to impose certain 

conditions for the conveyance including: (1) the purchaser shall 

grant to each individual lessee an option to purchase the property 

at fair market value or to continue leasing the property; and (2) the 

purchaser shall pay reasonable administrative costs incurred by 

the Secretary that are incident to the conveyance. 

Section (b) directs the Secretary to establish certain use restrictions to maintain the unique character of the area in the vicinity 

of the Reservoirs that are appurtenant to, and run with each property, and are binding upon each subsequent owner of each property. The restrictions must ensure that existing public access to 

and along the Reservoirs’ shoreline is not obstructed; that adequate 

public access to and along the Reservoirs’ shoreline is maintained; 

and that the Secretary and Irrigation Districts’ operation of the 

Reservoirs does not result in liability for either the United States 

or the Irrigation Districts for damages incurred as a result of such 

operation including damages for any loss of or enjoyment of the 

property; and damages resulting from modifications or construction 

of any Reservoir dam. 

Subsection (c) directs the Secretary to convey the properties 

under this Act as soon as possible after the date of enactment and 

in accordance with all applicable law. If the conveyance is not completed within one year of the date of enactment of this Act, the Secretary shall submit a report to the Congress explaining the reasons 

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for not completing the conveyance and the proposed date of completion. 

Subsection (d) states that the terms of the conveyance shall authorize the purchaser to require each lessee to reimburse the purchaser for a proportionate share of the costs incurred in completing 

the transactions, including any interest charges. 

Section 6 requires any lessee having a claim against the purchaser after the conveyance, to promptly give written notice of the 

claim to the purchaser within 20 days after the date the lessee 

knew or should have known of such claim, or lose any right to relief under the claim. If the lessee and purchaser are unable to resolve the claim by mediation, the matter shall be resolved by binding arbitration. 

Section 7 states that no conveyance under the Act will limit the 

authority or ability of the Secretary to fulfill the duties of the Secretary under the Act of June 17, 1902 (32 Stat. 388, chapter 1093), 

and Acts supplemental to and amendatory of that Act. 

COST AND BUDGETARY CONSIDERATIONS

The following estimate of the cost of this measure has been provided by the Congressional Budget Office.

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, August 6, 2002. 

Hon. JEFF BINGAMAN, 

Chairman, Committee on Energy and Natural Resources, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 706, the Lease Lot Conveyance Act of 2002. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Julie Middleton (for 

the federal costs) and Marjorie Miller (for the state and local impact). 

Sincerely, 

BARRY B. ANDERSON

(For Dan L. Crippen, Director). 

Enclosure. 

H.R. 706—Lease Lot Conveyance Act of 2002

Summary: H.R. 706 would direct the Secretary of the Interior to 

convey 403 cabin sites that are located along the shores of the reservoirs in Elephant Butte State Park and Caballo State Park in 

New Mexico to the Elephant Butte/Caballo Leaseholders Association. As a condition of conveyance, the association would pay the 

fair market value of the 403 sites, minus any structural improvements that have been made by current leaseholders. In addition, 

the association would have to reimburse the federal government for 

administrative costs associated with the conveyance. 

Based on information from the Bureau of Reclamation, CBO estimates that selling the properties under H.R. 706 would result in 

additional receipts of about $20 million over the 2003–2007 period. 

Because the legislation would affect direct spending, pay-as-you-go 

procedures would apply. 

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H.R. 706 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

The state of New Mexico manages these leases and retains the 

lease payments to cover their costs. Should the property be sold, 

the state would lose the lease income but also would benefit from 

reduced costs. The net impact to the state probably would not be 

substantial. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 706 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—

2002 2003 2004 2005 2006 2007

CHANGES IN DIRECT SPENDING

Estimated budget authority ......................................................... 0 0 ¥20 0 0 0

Estimated outlays ......................................................................... 0 0 ¥20 0 0 0

Basis of estimate: For this estimate, CBO assumes that H.R. 706 

will be enacted by the start of fiscal year 2003 and that the conveyance of the properties would occur in 2004. According to both the 

Elephant Butte/Caballo Leaseholders Association and the Bureau 

of Reclamation, it will take at least one year to survey and appraise the property before the land would convey. 

Based on information provided by the Bureau of Reclamation, 

CBO estimates that the association would purchase the property, 

including easements and roads, from the federal government for 

about $40,000 to $60,000 per lot, for a total of about $20 million 

for the 403 cabin sites. 

Currently, these properties do not generate any receipts for the 

federal government. The state of New Mexico manages the property 

for recreation and leases the cabin sites to individuals for temporary occupancy. The state uses the revenue generated from the 

leases for administration and management of the cabin sites and 

other types of park operations. 

Pay-as-you-go considerations: The Balanced Budget and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending or receipts. The net changes in 

outlays that are subject to pay-as-you-go procedures are shown in 

the following table:

By fiscal year, in millions of dollars—

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Changes in outlays ........ 0 0 ¥20 0 0 0 0 0 0 0 0

Changes in receipts ....... Not applicable 

Intergovernmental and private-sector impact: H.R. 706 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA. The state of New Mexico manages these leases and retains 

the lease payments to cover their costs. Should the property be 

sold, the state would lose the lease income but also would benefit 

from reduced costs. The net impact to the state probably would not 

be substantial. 

Previous CBO estimate: On March 5, 2002, CBO prepared a cost 

estimate for H.R. 706 as ordered reported by the House Committee 

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on Resources on February 27, 2002. The two versions of this legislation are identical, as are our cost estimates. 

Estimate prepared by: Federal costs: Julie Middleton; impact on 

state, local, and tribal governments: Marjorie Miller; impact on the 

private sector: Lauren Marks. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

REGULATORY IMPACT EVALUATION

In compliance with paragraph 11(b) of rule XXVI of the Standing 

Rules of the Senate, the Committee makes the following evaluation 

of the regulatory impact which would be incurred in carrying out 

H.R. 706. 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 H.R. 706. 

EXECUTIVE COMMUNICATIONS

The pertinent legislative report received by the Committee from 

the Department of the Interior setting forth Executive agency recommendation relating to H.R. 706 are set forth below:

U.S. DEPARTMENT OF THE INTERIOR, 

OFFICE OF THE SECRETARY, 

Washington, DC, August 8, 2002. 

Hon. JEFF BINGAMAN, 

Chairman, Committee on Energy and Natural Resources, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: This letter responds to your request for the 

views of the Department of the Interior on H.R. 706, the Elephant 

Butte Lease Lot Conveyance Act, as passed by the House of Representatives and referred to the Senate (RFS). This confirms the 

testimony of Mark A. Limbaugh, Director, External & Intergovernmental Affairs, Bureau of Reclamation, before the Committee on 

June 6, 2002. 

The Department has no objections to H.R. 706 as passed by the 

House of Representatives and referred to the Senate (RFS). 

H.R. 706 provides for the transfer and disposal of 403 residential 

leased lots located on federal properties at Elephant Butte and 

Caballo Reservoirs near Truth or Consequences, New Mexico. In 

the late 1940s, small quarter-acre and half-acre lots along the 

shoreline of Elephant Butte and Caballo Reservoirs were made 

available for the public to lease and occupy on a short-term basis. 

Individuals were permitted to place tents, campers, or construct 

temporary structures on the site for the duration of their stay. Although the original intent of the lease lot program was to provide 

lots for part-time recreational use, over time permanent structures 

and other improvements have replaced initial recreational facilities 

with many of the structures now used as full-time residences. 

The Department supports efforts to convey certain Reclamation 

lands and facilities to private entities—in particular, those that are 

no longer necessary for managing either the dam or the recreation 

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areas. However, the Department did not support H.R. 706 as introduced. In testimony before the House Resources Committee on December 10, 2001, we raised several concerns with H.R. 706 as introduced; for example, the method by which fair market value would 

be determined, disposition of proceeds from the sale of the leased 

lots, and compliance with applicable laws prerequisite to conveyance. 

Reclamation staff subsequently worked with the House Resources Committee to develop acceptable legislative language. The 

resulting Amendment in the Nature of a Substitute, offered by 

Representative Calvert, addressed our most significant concerns. 

Ultimately, those changes were adopted and passed by the House 

of Representatives on March 19, 2002, and are reflected in H.R. 

706(RFS). 

The Office of Management and Budget advises that there is no 

objection to the presentation of this report from the standpoint of 

the Administration’s program. 

Sincerely, 

JOHN W. KEYS III, 

Commissioner, Bureau of Reclamation. 

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 H.R. 706, as ordered reported.

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