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[Senate Report 113-56]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 110
113th Congress                                                   Report
                       }         SENATE         {                            1st Session                                                     113-56
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                  FORT SUMNER PROJECT TITLE CONVEYANCE

                                _______
                                

                 June 27, 2013.--Ordered to be printed

                                _______
                                

    Mr. Wyden, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 284]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 284) to transfer certain facilities, 
easements, and rights-of-way to Fort Sumner Irrigation 
District, New Mexico, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                                PURPOSE

    The purpose of S. 284 is to transfer certain facilities, 
easements, and rights-of-way to Fort Sumner Irrigation 
District, New Mexico.

                          BACKGROUND AND NEED

    The Fort Sumner Project area was developed by private 
interests in the mid-1800s. The project includes approximately 
6,500 acres and is located within the Pecos River basin in 
Eastern New Mexico. Some of the first irrigators were the 
Apache and Navajo Indians, held in captivity by United States 
troops under the command of Kit Carson. The Fort Sumner 
Irrigation District (District) acquired the property in 1919. 
In 1949, Congress authorized the Bureau of Reclamation 
(Reclamation) to rehabilitate the project and Reclamation and 
the District entered into a repayment contract to allow the 
U.S. to recover the costs of the rehabilitation work.
    In 2009, the District entered into a forbearance agreement 
with Reclamation whereby the District has agreed not to take 
all of the irrigation water it is entitled to take each year 
and receives a payment for that water from Reclamation. 
Reclamation stores the water and uses it to keep the Pecos 
River wet in times of drought in order to comply with 
Endangered Species Act flow requirements for the Pecos 
bluntnose shiner. The payment the District receives for water 
offsets the amount the District owes the U.S. under its 
repayment agreement. The 2009 forbearance agreement includes 
provisions that the U.S. will support title transfer to the 
District.
    A Memorandum of Agreement between Reclamation and the 
District will govern the title transfer process. Upon transfer 
of title, the repayment contract will terminate, but the 
forbearance agreement will continue for at least ten years. S. 
284 is needed to facilitate the transfer.

                          LEGISLATIVE HISTORY

    S. 284 was introduced by Senator Udall of New Mexico and 
Senator Heinrich on February 12, 2013. The Subcommittee on 
Water and Power held a hearing on S. 284 on April 16, 2013. At 
its business meeting on May 16, 2013, the Committee ordered S. 
284 favorably reported by voice vote.
    In the 112th Congress, Senators Bingaman and Udall of New 
Mexico introduced similar legislation, S. 1225. The 
Subcommittee on Water and Power held a hearing on June 23, 2011 
(S. Hrg. 112-129).

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on May 16, 2013, by a voice vote of a 
quorum present, recommends that the Senate pass S. 284.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 provides for the short title, the ``Fort Sumner 
Project Title Conveyance Act''.
    Section 2 defines key terms in the bill.
    Section 3(a) and (b) authorizes the Secretary of the 
Interior (Secretary) to convey United States right and title to 
all works, lands, and facilities of the Fort Sumner reclamation 
project to the Fort Sumner Irrigation District (District) in 
accordance with the terms and conditions of the Transfer 
Agreement, subject to all valid existing rights.
    Subsection (c) stipulates that the costs of conveyance 
including environmental compliance may be shared between the 
United States and District in accordance with the Memorandum of 
Agreement between the United States and the Fort Sumner 
Irrigation District Concerning Principles and Elements of 
Proposed Transfer of Title to Fort Sumner Irrigation District 
Facilities,'' numbered 11-WC-40-406.
    Subsections (d) and (e) direct the Secretary to assure 
compliance with environmental laws before conveyance. The 
Secretary is further directed to report to Congress if 
conveyance is not completed within 2 years of completion of the 
requirements stipulated above.
    Section 4 requires that after the date of conveyance, the 
U.S. shall have no further interest in or responsibility for 
operating and maintaining the project and shall not be liable 
for damages to the conveyed property, other than for damages 
committed by the U.S or its agents.
    Section 5 stipulates that effective beginning on the date 
of conveyance, the repayment contract between the U.S. and the 
District (numbered Ilr--1524 and dated November 5, 1948, 
including supplements and amendments) shall terminate and the 
U.S. and the District shall have no further obligations under 
the contract.
    Section 6 orders that the terms and conditions of the 
forbearance agreement between the U.S. and the District 
(numbered 08-WC-40-292, dated August 21, 2009) for the 
forbearance of exercising priority water rights shall remain in 
full force and effect on termination of the Repayment Contract 
for not less than 10 years after the enactment of this Act and 
that the U.S. shall have no payment obligation under the 
agreement.
    Section 7 states that after conveyance, the property shall 
not be considered a Federal reclamation project and shall not 
be eligible to receive benefits, except for those that would be 
available to a similarly situated entity with respect to 
property that is not part of a Federal reclamation project.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of costs of S. 284 has been provided 
by the Congressional Budget Office:

S. 284--Fort Sumner Project Title Conveyance Act

    S. 284 would direct the Secretary of the Interior to convey 
the title of the Fort Sumner Project, including the diversion 
dam and all associated features, to the Fort Sumner Irrigation 
District. Based on information from the Bureau of Reclamation, 
enacting the legislation also would end the repayments the 
District makes to the U.S. Treasury for certain costs of the 
project. CBO estimates that those repayments will total about 
$550,000 under current law over the 2014-2023 period. Because 
enacting the legislation would decrease offsetting receipts, 
which are treated as reductions in direct spending, pay-as-you-
go procedures apply. The legislation would not affect revenues.
    The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting 
direct spending or revenues. S. 284 would decrease offsetting 
receipts (thus, increasing direct spending) beginning in 2014, 
for a total cost of $550,000 through 2023.

  CBO ESTIMATE OF THE STATUTORY PAY-AS-YOU-GO EFFECTS FOR S. 284 AS 
ORDERED REPORTED BY THE SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES 
ON MAY 16,
                                                                      2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        By fiscal year, in millions of dollars--
                                                              ------------------------------------------------------------------------------------------
                                                                                                                                            2013-  2013-
                                                                2013   2014   2015   2016   2017   2018   2019   2020   2021   2022   2023   2018   2023
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact...............................      0      0      0      0      0      0      0      0      0      0      0      0      1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    S. 284 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Aurora Swanson. 
The estimate was approved by Theresa Gullo, 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 S. 284.
    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. 284, as ordered reported.

                   CONGRESSIONALLY DIRECTED SPENDING

    S. 284, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the U.S. Department of the 
Interior at the April 16, 2013, Subcommittee on Water and Power 
hearing on S. 284 follows:

 Statement of Robert Quint, Senior Advisor Bureau of Reclamation U.S. 
                         Department of Interior

    Chairman Schatz and members of the Subcommittee, I am 
Robert Quint, Senior Advisor at the Bureau of Reclamation 
(Reclamation). I am pleased to provide the views of the 
Department of the Interior (Department) regarding S. 284, which 
would authorize the Secretary of the Interior to convey title 
to all of the works of the Fort Sumner Project (including the 
diversion dam, easements, ditches, laterals, canals, drains, 
and other rights) to the Fort Sumner Irrigation District 
(FSID). The Department supports S. 284.
    In 2011, S. 1225 was introduced in the 112th Congress, 
which would have authorized the United States to convey title 
to all of the works of the Fort Sumner Project to the FSID. At 
the time of the hearing on June 23, 2011 before this Committee 
on that bill, it was the view of the Administration that a 
number of issues had yet to be resolved between the United 
States and FSID, including a net financial loss to the Treasury 
of approximately $250,000, the need for an open and transparent 
process for the public to provide input prior to conveyance of 
title, and the need for Reclamation and FSID to work through a 
collaborative process to ensure that operational, fiscal, 
environmental, and other issues are identified and addressed. 
However, since that time, Reclamation and FSID have worked 
together and a number of those issues are addressed in S. 284. 
Specifically, in 2012, the ``Memorandum of Agreement between 
the United States and the Fort Sumner Irrigation District 
Concerning Principles and Elements of Proposed Transfer of 
Title to Fort Sumner Irrigation District'' (MOA) was executed, 
which addresses the issues we had with the previous legislation 
as described below.

                               background

    There are two Reclamation projects on the Pecos River 
located in southeastern New Mexico: the Carlsbad and Fort 
Sumner Projects. The Fort Sumner Project was developed by 
private interests at the turn of the last century. In the 
1950s, this project was reconstructed and rehabilitated by 
Reclamation. In 1948, in order to make this happen, Reclamation 
and the FSID executed a contract to provide for the repayment 
of construction costs to rehabilitate the project. As part of 
the process, Reclamation law required that Reclamation take 
title to the Project. Currently, the FSID has an annual 
repayment obligation of about $54,500 with an outstanding 
balance of approximately $597,697.00
    The FSID holds a senior water right for not more than 100 
cubic feet per second from the natural flow of the Pecos River. 
Reclamation must bypass the FSID's water through Sumner 
Reservoir prior to storing water for the Carlsbad Project. Over 
the past ten years, Reclamation has consulted with the U.S. 
Fish and Wildlife Service (Service) to ensure that Federal 
actions are not jeopardizing the existence of the Pecos 
bluntnose shiner or adversely modifying its critical habitat 
located below FSID's diversion dam. In these consultations, 
Reclamation has committed to the Service to maintain the shiner 
population level by minimizing river drying. A significant 
cause of drying on the Pecos is due to the FSID diverting its 
senior water right. The only way Reclamation has been able to 
keep the Pecos River flowing is by purchasing water from 
willing sellers and by paying the FSID not to divert water 
through a forbearance agreement.
    In August 2009, Reclamation and FSID entered into a 
mutually beneficial agreement whereby FSID would forbear the 
diversion of up to 2,500 acre-feet of water annually for ten 
years when they would otherwise be in priority. Instead, this 
water goes into Sumner Lake reservoir where it is stored and 
delivered for Reclamation to prevent intermittency of flows on 
the Pecos River in compliance with the 2006 biological opinion. 
Reclamation pays FSID $60,000 annually plus $20 per acre-foot 
for the water. In addition to the forbearance of this water, 
FSID agreed to pursue ESA Section 10 consultation with the 
Service and Reclamation agreed to assist them in this process. 
Also in this agreement, FSID indicated its desire to take title 
to the facilities and Reclamation agreed to work with them on 
that process. The forbearance agreement further provides that 
the annual payments of $60,000 from Reclamation to FSID will 
cease upon both the passage of title transfer legislation and 
the conveyance of title. To date, this has been a mutually 
beneficial agreement. The forbearance water has afforded 
Reclamation with an additional tool to meet the biological 
opinion to ensure that the Pecos River does not run dry in a 
cost effective manner.
    As drafted, S. 284 protects the financial interests of the 
taxpayers of the United States. Under the terms of the 
Forbearance Agreement that is currently in place, Reclamation 
pays FSID $60,000 annually plus $20 per acre-foot for water. 
Under the terms of S. 284, after title transfer, the $60,000 
annual payments from the United States to FSID would cease. At 
the same time, FSID's repayment obligation of $597,697 to the 
United States would also cease. These two revenue streams--one 
to FSID and one to the United States would offset. Further, the 
United States would continue to receive, in perpetuity rather 
than just for the ten years, the below-market-cost of $20 per 
acre-foot for up to 2,500 acre feet of water annually that they 
need in order to meet the 2006 biological opinion--thereby 
saving the taxpayers in costs associated with this important 
water acquisition effort.

                        memorandum of agreement

    On June 22, 2012, the United States and FSID executed MOA, 
numbered 11-WC-40-406. This agreement was the culmination of a 
collaborative process between Reclamation and the FSID which 
articulated the principles elements for any legislation to 
authorize conveyance of title to the works of the Fort Sumner 
Project, as well as the steps required to complete the title 
transfer process, the responsible parties for each activity and 
spelled out the prerequisites to the actual conveyance of title 
to FSID.
    The MOA takes an important step in resolving our concern 
regarding compliance with Federal and state laws--more 
specifically--with the terms of agreement to be developed 
between FSID and the U.S. Fish and Wildlife Service required 
under Section 10 of the Endangered Species Act. While it would 
be our preference to complete all of the activities required 
under the National Environmental Policy Act, the National 
Historic Preservation Act and the Endangered Species Act prior 
to acting upon legislation to transfer title, as a compromise, 
S. 284 requires that all the activities associated with these 
laws, including whatever mitigation may be necessary be 
completed prior to the transfer of title to these facilities. 
As part of that, before the conveyance of title, Reclamation 
must concur with the ESA Section 10 agreement thus ensuring 
that the United States' interests are not compromised.
    Because S. 284 requires National Environmental Policy Act 
compliance and completion of ESA Section 7 and Section 10 
consultations as prerequisites to conveyance of title, 
Reclamation and FSID will have the opportunity to complete a 
public process to determine whether other interested citizens 
of New Mexico have concerns and any issues that arise during 
that public process can be collaboratively be addressed in the 
title transfer agreement that must be prepared to articulate 
the terms and conditions of the title transfer as defined in 
Section 2(7) of the Act.
    S. 284 also authorizes Reclamation to cost-share with FSID 
for both environmental compliance as well as the cost of 
conveyance of title.
    Lastly, Reclamation believes that S. 284 would assure the 
continuation of the partnership Reclamation has developed with 
FSID in meeting the 2006 Biological Opinion requirements. With 
the challenges of persistent drought in the Pecos River basin 
and the need for Reclamation to consult, in partnership with 
FSID and the Carlsbad Irrigation District, with the Service in 
obtaining a new biological opinion by 2016, this title transfer 
legislation will enable us to meet this critical objective.
    As a result of the efforts, hard work and compromises by 
both Reclamation and FSID, we believe that we have reached an 
agreement that protects the interests of FSID, the citizens of 
the States of New Mexico and the interests of the United 
States.
    That concludes my written statement. I am pleased to answer 
questions at the appropriate 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. 284, as ordered 
reported.

                                  
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