H. Rept. 104-770 - EMERGENCY DROUGHT RELIEF ACT OF 1996104th Congress (1995-1996)
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[House Report 104-770]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-770
_______________________________________________________________________
EMERGENCY DROUGHT RELIEF ACT OF 1996
_______
September 4, 1996.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______________________________________________________________________
Mr. Young of Alaska, from the Committee on Resources, submitted the
following
R E P O R T
[To accompany H.R. 3910]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 3910) to provide emergency drought relief to the city of
Corpus Christi, Texas, and the Canadian River Municipal Water
Authority, Texas, and for other purposes, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Emergency Drought Relief Act of
1996''.
SEC. 2. EMERGENCY DROUGHT RELIEF.
(a) Corpus Christi.--
(1) Emergency drought relief.--For the purpose of providing
emergency drought relief, the Secretary of the Interior shall
defer all principal and interest payments without penalty or
accrued interest for the 5-year period beginning on the date of
enactment of this Act for the city of Corpus Christi, Texas,
and the Nueces River Authority under contract No. 6-07-01-X0675
involving the Nueces River Reclamation Project, Texas:
Provided, That the city of Corpus Christi shall commit to use
the funds thus made available exclusively for the acquisition
of or construction of facilities related to alternative sources
of water supply.
(2) Issuance of permits.--If construction of facilities
related to alternative water supplies referred to in paragraph
(1) requires a Federal permit for use of Bureau of Reclamation
lands or facilities, the Secretary shall issue such permits
within 90 days after the date of enactment of this Act,
recognizing the environmental impact statement FES74-54 and the
environmental assessment dated March 1991 (relating to the
Lavaca-Navidad River Authority Pipeline permit).
(b) Canadian River Municipal Water Authority.--
(1) Recognition of transfer of lands to the national park
service.--All obligations and associated debt under contract
No. 14-06-500-485 for land and related relocations transferred
to the National Park Service to form the Lake Meredith National
Recreation Area under Public Law 101-628, in the amount of
$4,000,000, shall be nonreimbursable. The Secretary shall
recalculate the repayment schedule of the Canadian River
Municipal Water Authority to reflect the determination of the
preceding sentence and to implement the revised repayment
schedule within one year of the date of enactment of this Act.
(2) Emergency drought relief.--The Secretary shall defer
all principal and interest payments without penalty or accrued
interest for the 3-year period beginning on the date of
enactment of this Act for the Canadian River Municipal Water
Authority under contract No. 14-06-500-485 as emergency drought
relief to enable construction of additional water supply and
conveyance facilities.
PURPOSE OF THE BILL
The purpose of H.R. 3910 is to provide emergency drought
relief to the city of Corpus Christ, Texas, and the Canadian
River Municipal Water Authority, Texas.
BACKGROUND AND NEED FOR LEGISLATION
This legislation would provide financial assistance to
certain water authorities in Texas by directing the Secretary
of the Interior to defer all principal and interest payments
without penalty or accrued interest for a period of five years
for the City of Corpus Christi and the Nueces River Authority
for their payments toward the Nueces River Project, and for a
period of three years for the Canadian River Municipal Water
Authority with respect to its payments toward the Canadian
River Project.
In approving this deferral, it is not the intent of the
Committee that the debt be forgiven, nor is it intended that
the debt be reamortized following the deferrals so that the
water authorities would be making higher payments over the
remaining length of the original contract. Rather, the
Committee intends that, following the deferrals, the payments
would resume in accordance with the current repayment schedule,
with additional years added beyond the current contract
repayment length. This would have the effect of adding five
years to the repayment of the Nueces River Project, and three
years to the repayment of the Canadian River Project. The
Committee would oppose the imposition of any additional terms
and conditions on the water authorities as a result of contract
modifications to incorporate these deferrals into the current
repayment contracts.
The bill also provides that if the construction of
alternative water supplies for the City of Corpus Christ
requires a federal permit for use of Bureau of Reclamation
lands or facilities, the Secretary of the Interior shall issue
such permits within 90 days of enactment. Further, the bill
states that the cost of lands in the Canadian River Project
that were transferred to the National Park Service to form Lake
Meredith National Recreation Area shall be nonreimbursable, and
the repayment obligation of the Canadian River Municipal Water
Authority is to be recalculated accordingly.
History of legislation
In November 1995, Congressman Solomon Ortiz (D-TX)
introduced H.R. 2609, a bill to provide for the transfer of the
following Bureau of Reclamation facilities in Texas to water
authorities: the Canadian River Project; the Palmetto Bend
Project; and the Nueces River Reclamation Project. The bill was
cosponsored by Congressman Greg Laughlin (R-TX), Congressman
Mac Thornberry (R-TX), and Congressman Larry Combest (R-TX),
and was the subject of a November 16, 1995, hearing in the
Water and Power Resources Subcommittee.
It became apparent after the November hearing that a major
goal of the facilities transfers was actually to free up
capital for the water authorities to pursue other water
supplies in the face of lower-than-expected water yields from
the Nueces River Project and the Canadian River Project. These
reduced yields, the size of which the Bureau of Reclamation
disputes, have been exacerbated by the continuing drought in
southern and western Texas.
The Nueces River Project (Choke Canyon Reservoir) is
located in McMullen County, Texas. Choke Canyon Reservoir is
used in conjunction with Lake Corpus Christi to provide
municipal and industrial supplies to serve the 500,000 people
in Corpus Christ and surrounding communities. The Project
provides 40,000 acre-feet of water per year for freshwater and
return flows to the Nueces estuary for environmental purposes.
Recreational development is provided by the Choke Canyon State
Park and the Dauthtrey Wildlife Management Area.
According to the City, the project yield of Choke Canyon
Reservoir has been much lower than anticipated, although the
Bureau of Reclamation disputes the hydrologic data, citing
issues such as the point in the system where the data was
collected. In addition, the City considers part of the yield
reduction the 40,000 acre-feet of releases that the State of
Texas is requiring the City to make for riparian habitat and
Gulf Coast estuaries.
The Palmetto Bend Project (Lake Texana) is located on the
Navidad River in Jackson County, Texas. The Project was
authorized in 1968, and provides a municipal and industrial
water supply for the central coastal region of Texas. The
Lavaca-Navidad River Authority, which operates and maintains
the project, currently has a contract with the City of Corpus
Christi and Formosa Plastics to supply water. The River
Authority and the Texas Parks and Wildlife Department provide
recreational areas for public use.
The Canadian River Project (Lake Meredith) was authorized
in 1950, and provides municipal and industrial water supplies,
as well as flood control benefits. The project provides a water
supply to 11 cities in the high plains area of Texas, including
Lubbock and Amarillo. However, the reservoir has had severe
natural salinity problems caused by brine discharges into the
Canadian River in New Mexico. The Canadian River Municipal
Water Authority, with assistance from the State of Texas and
the Bureau of Reclamation, will be beginning a project to
address these brine discharges within the next fiscal year. The
project provides recreational benefits through the areas
administered by the National Park Service that surround the
reservoir. The Water Authority is responsible for the operation
and maintenance of the project, and receives payments from the
Bureau of Reclamation to help defray the operation and
maintenance costs associated with the non-reimbursable elements
of the project, such as flood control.
Drought in Texas
At the time the legislation was considered by the Full
Committee, severe drought conditions prevailed in much of
Arizona, New Mexico and Southeast Texas. Although much of Texas
escaped the West-wide drought of the late 1980s, in July 1996,
the Palmer Drought Severity Index recorded drought status
throughout Texas, with the most severe conditions in South
Texas and the Gulf Coast area. San Antonio had received only 34
percent of normal rainfall in 1996; El Paso ended a 68-day dry
spell with 0.05 inches of rain on June 13; and in Corpus
Christi, the dry weather has been accompanied by severe heat
and record temperatures.
Due to weather conditions created by Hurricane Dolly,
southern and central Texas have received several inches of
rainfall during August 1996. However, the impact of this
rainfall in alleviating drought conditions and improving
reservoir storage is unclear.
Even without the drought, the Texas Water Development Board
has predicted that Corpus Christi will require additional water
supplies by 2010. The dry spell has exacerbated this water
shortage. Reservoir levels in the two Bureau of Reclamation
reservoirs that supply much of the city's water have dropped
steadily since mid-1993. Prior to the August rainfall,
projections by city officials indicated that all storage would
be gone within two years.
An option for the city of Corpus Christi
In approving H.R. 3910, the Committee is not endorsing any
specific alternative water supplies for the City of Corpus
Christi or the Canadian River Authority. Any locally-developed
alternative water supplies would have to be developed in
accordance with state law, including any necessary state
permits.
However, additional municipal and industrial water supplies
are available from Lake Texana, part of the Bureau's Palmetto
Bend Project, designed to supply 75,000 acre-feet annually on
the Navidad River to the north. This reservoir has been less
severely affected by the drought, and the Lavaca-Navidad River
Authority, which owns the water rights, has offered to sell
water from that facility to the City of Corpus Christi.
The conveyance facility for that water would be a 90-mile
pipeline which diverts water from a point near the dam on Lake
Texana and pumps the water south to Corpus Christi. The project
requires the Lavaca-Navidad Water Authority to obtain permits
from the Bureau of Reclamation to construct a pumping plant and
for a pipeline right-of-way at Lake Texana.
City representatives have expressed concern over the time
that may be required to obtain such permits from the Bureau.
Therefore, H.R. 3910 provides that if the construction of
alternative water supplies for the City of Corpus Christ
requires a federal permit for use of Bureau of Reclamation
lands or facilities, the Secretary of the Interior shall issue
such permits within 90 days of enactment. In addition, the City
of Corpus Christi faces an approximate $15 million shortfall in
its financing for the pipeline project, which is why it is
seeking the debt relief to which the Committee has agreed.
The Texas Natural Resources Conservation Commission must
approve the water permit, which has been filed by the Lavaca-
Navidad Water Authority and the Texas Water Development Board.
The application seeks to amend an existing certificate of
adjudication for the Palmetto Bend Project, and would permit
the water to be diverted to the City of Corpus Christi.
COMMITTEE ACTION
On July 19, 1996, the Subcommittee on Water and Power
Resources of the Committee on Resources held an oversight field
hearing in Corpus Christi, Texas, on drought conditions
affecting Bureau of Reclamation facilities in Texas.
H.R. 3910 was introduced on July 26, 1996, by Congressman
Ortiz, for himself and Congressman Thornberry. The bill was
referred to the Committee on Resources, and held in the Full
Committee. On August 1, 1996, the Full Resources Committee met
to consider H.R. 3910. An amendment to clarify that the
deferral periods begin on the date of enactment of this Act was
offered by Congressman Ortiz, and adopted by voice vote. The
bill as amended was then ordered favorably reported to the
House of Representatives by voice vote.
SECTION-BY-SECTION ANALYSIS
Section 1. Short title
The short title of the bill is the ``Emergency Drought
Relief Act of 1996''.
Section 2. Emergency drought relief
For the purposes of providing emergency drought relief,
subsection (a) directs the Secretary of the Interior to defer
all principal and interest payments for the Nueces River
Reclamation Project, Texas, without penalty or accrued interest
for a period of five years for the City of Corpus Christi,
Texas, and the Nueces River Authority. The subsection
stipulates that the funds made available are to be used
exclusively for the acquisition of or construction of
facilities for an alternative water supply. If construction of
facilities related to these alternative water supplies requires
a federal permit for use of Bureau of Reclamation lands or
facilities, the Secretary of the Interior shall issue the
permits within 90 days after the date of enactment of this Act,
recognizing certain past environmental documents.
Although paragraph 2(a)(2) places a 90-day deadline on the
Bureau of Reclamation's issuance of permits for facilities
constructed by the City of Corpus Christi, it is not the intent
of this legislation to thereby avoid compliance with the
National Environmental Policy Act(NEPA). Rather, the
legislation is designed to set the Bureau's priorities in
relation to this emergency and provide a date certain when the
work must be completed. The Committee believes that the 90-day
time period should be sufficient for completion of NEPA
procedures, considering the extensive environmental analysis
developed in 1991 for a related pipeline project, and the fact
that the Bureau has already begun NEPA compliance on the Corpus
Christi/Lavaca-Navidad River Authority permit application. The
Committee believes the Bureau of Reclamation can and should act
swiftly to complete the necessary environmental analysis before
the deadline.
Subsection (b) stipulates that all obligations and debt of
the Canadian River Municipal Water Authority with respect to
land and related relocations transferred to the National Park
Service to form the Lake Meredith National Recreation Area
under Public Law 101-628 shall be nonreimbursable. The
subsection directs the Secretary of the Interior to recalculate
the repayment schedule of the Authority to reflect this
nonreimbursable determination, and to implement the revised
repayment schedule within one year of the date of enactment of
this Act. The subsection further directs the Secretary to defer
all principal and interest payments for the Canadian River
Project without penalty or accrued interest for a period of
three years for the Authority for emergency drought relief to
enable construction of additional water supply and conveyance
facilities.
COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS
With respect to the requirements of clause 2(l)(3) of rule
XI of the Rules of the House of Representatives, and clause
2(b)(l) of rule X of the Rules of the House of Representatives
the Committee on Resources' oversight findings and
recommendations are reflected in the body of this report.
INFLATIONARY IMPACT STATEMENT
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee estimates that the
enactment of H.R. 3910 will have no significant inflationary
impact on prices and costs in the operation of the national
economy.
COST OF THE LEGISLATION
Clause 7(a) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs which would be incurred in carrying out
H.R. 3910. However, clause 7(d) of that rule provides that this
requirement does not apply when the Committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act of 1974.
COMPLIANCE WITH HOUSE RULE XI
1. With respect to the requirement of clause 2(l)(3)(B) of
rule XI of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, H.R.
3910 does not contain any new budget authority, spending
authority, credit authority, or an increase or decrease in tax
expenditures. The bill would result in a loss of offsetting
receipts totaling less than $500,000 a year over the 2003-2017
time period. The bill would also shift the collection of other
offsetting receipts from 1997-2002 until after 2017.
2. With respect to the requirement of clause 2(l)(3)(D) of
rule XI of the Rules of the House of Representatives, the
Committee has received no report of oversight findings and
recommendations from the Committee on Government Reform and
Oversight on the subject of H.R. 3910.
3. With respect to the requirement of clause 2(l)(3)(C) of
rule XI of the Rules of the House of Representatives and
section 403 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R.
3910 from the Director of the Congressional Budget Office.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 28, 1996.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3910, the
Emergency Drought Relief Act of 1996.
Enacting H.R. 3910 would affect direct spending. Therefore,
pay-as-you-go procedures would apply to the bill.
If you wish further details on this estimate, we will be
pleased to provide them.
Sincerely,
June E. O'Neill, Director.
Enclosure.
congressional budget office cost estimate
1. Bill number: H.R. 3910.
2. Bill title: Emergency Drought Relief Act of 1996.
3. Bill status: As ordered reported by the House Committee
on Resources on August 1, 1996.
4. Bill purpose: H.R. 3910 would direct the Secretary of
the Interior acting through the Bureau of Reclamation to:
Defer all principal and interest payments without
penalty or accrued interest for 5 years for the city of
Corpus Christi, Texas, and the Nueces River Authority;
Defer all principal and interest payments without
penalty or accrued interest for 3 years for the
Canadian River Municipal River Water Authority; and;
Designate $4 million of the remaining principal
balance of the Canadian River Municipal Water
Authority's repayment contract as non-reimbursable.
5. Estimated cost to the Federal Government: Assuming
enactment by the beginning of fiscal year 1997, CBO estimates
that H.R. 3910 would shift the collection of $28 million in
offsetting receipts from the 1997-2002 period until after 2017.
The bill also would result in a loss of offsetting receipts
totaling less than $500,000 a year over the 2003-2017 period.
These receipts represent a portion of the receipts received by
the Treasury under repayment contracts managed by the Bureau of
Reclamation. The total of such payments for 1997 through 2002
is shown in the following table, along with the expected change
in payments under H.R. 3910.
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
DIRECT SPENDING
Spending under current law:
Estimated budget authority............ -186 -161 -163 -163 -174 -172 -171
Estimated outlays..................... -186 -161 -163 -163 -174 -172 -171
Proposed changes:
Estimated budget authority............ ........ 7 7 7 4 4 (\1\)
Estimated outlays..................... ........ 7 7 7 4 4 (\1\)
Spending under H.R. 3910:
Estimated budget authority............ -186 -154 -156 -156 -170 -168 -167
Estimated outlays..................... -186 -154 -156 -156 -170 -168 -167
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.
The costs of this bill fall within budget function 300.
6. Basis of estimate: Assuming that H.R. 3910 will be
enacted by the beginning of fiscal year 1997, the city of
Corpus Christi, Texas, the Nueces River Authority, and the
Canadian River Municipal Water Authority would be able to
withhold payment of principal and interest beginning in 1997.
All three contractors have already made or are in the process
of making their 1996 payments.
The city of Corpus Christi, Texas, and the Nueces River
Authority would resume payments to the Treasury beginning in
2002 and the Canadian River Authority would resume payments to
the Treasury beginning in 2000. All contractors would be
required to repay all deferred amounts at the end of their
current repayment periods. Annual payments by the Canadian
River Authority would reflect a $4 million reduction in the
outstanding principal balance of the contract and would
therefore be lower than they are under current law.
The terms of repayment contracts for water projects managed
by the Bureau of Reclamation, such as the projects affected by
this bill, are essentially equivalent to the terms of a loan as
defined in the Federal Credit Reform Act of 1990. To date,
however, neither CBO nor the Office of Management and Budget
(OMB) have treated new contracts as loans or changes in such
contracts as loan modifications under the provisions of credit
reform. Such provisions call for recording the cost of a new
loan--or any change in cost in the case of a modification--on a
present value basis, as opposed to the cash basis reflected in
this estimate. CBO and OMB are reviewing the budgetary
treatment of federal water projects with repayment contracts,
and may decide to treat such transactions as loans for the
purpose of scoring future legislation.
7. Pay-as-you-go considerations: Section 252 of the
Balanced Budget and Emergency Deficit Control Act of 1985 sets
up pay-as-you-go procedures for legislation affecting direct
spending or receipts through 1998. CBO estimates that enacting
H.R. 3910 would affect direct spending by reducing offseting
receipts. Therefore, pay-as-you-go procedures would apply to
the bill. The following table summarizes the estimated pay-as-
you-go impact.
[By fiscal year, in millions of dollars]
------------------------------------------------------------------------
1996 1997 1998
------------------------------------------------------------------------
Change in outlays...................... 0 7 7
Change in receipts..................... 0 (\1\) 7
------------------------------------------------------------------------
\1\ Not applicable.
8. Estimated impact on state, local, and tribal
governments: In accordance with the Unfunded Mandates Reform
Act of 1995 (Public Law 104-4), CBO has determined that this
bill contains no intergovernmental mandates and would impose no
costs on state, local, or tribal governments.
9. Estimated impact on the private sector: In accordance
with Public Law 104-4, CBO has determined that this bill would
impose no private-sector mandates.
10. Previous CBO estimate: None.
11. Estimate prepared by: Federal cost estimate: Gary
Brown; impact on state, local, and tribal governments: Marjorie
Miller; and impact on the private sector: Amy Downs.
12. Estimate approved by: Paul N. Van de Water, Assistant
Director for Budget Analysis.
COMPLIANCE WITH PUBLIC LAW 104-4
H.R. 3910 contains no unfunded mandates.
CHANGES IN EXISTING LAW
If enacted, H.R. 3910 would make no changes in existing
law.