[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).
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By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
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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
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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.
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By fiscal year, in millions of dollarsa--
-------------------------------------------------------------------------------------------------------------
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016-2021 2016-2026
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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
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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.
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