[DOCID: f:sr373.110]
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Calendar No. 805
110th Congress Report
SENATE
2d Session 110-373
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EASTERN NEW MEXICO RURAL WATER SYSTEM AUTHORIZATION ACT
_______
June 16, 2008.--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 S. 2814]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 2814) to authorize the Secretary of the
Interior to provide financial assistance to the Eastern New
Mexico Rural Water Authority for the planning, design, and
construction of the Eastern New Mexico Rural Water System, and
for other purposes, having considered the same, reports
favorably thereon without amendment and recommends that the
bill do pass.
PURPOSE OF THE MEASURE
The purpose of S. 2814 is to authorize the Secretary of the
Interior to provide financial assistance to the Eastern New
Mexico Rural Water Authority for the planning, design, and
construction of the Eastern New Mexico Rural Water System
(ENMRWS), and for other purposes.
BACKGROUND AND NEED
A number of communities in eastern New Mexico, including
Cannon Air Force Base, are predominantly reliant on water from
the Ogallala and Entrada Aquifers for municipal, industrial,
and agricultural uses. Despite voluntary conservation efforts
and improvements in agricultural water use efficiencies,
current estimates indicate that present levels of groundwater
use in some areas of eastern New Mexico are only sustainable
for an additional 12 to 25 years.
Ute Reservoir was constructed in 1959 by the State of New
Mexico with the intention of providing a long-term sustainable
water supply for the region. Located approximately 100 miles
north of Clovis, New Mexico, the reservoir is believed to be
the most viable source of water available to supply the water
needed to sustain long-term needs in eastern New Mexico. In
1966, Congress authorized the Bureau of Reclamation to study
the feasibility of a project that would utilize Ute Reservoir
to supply water to communities in eastern New Mexico (P.L. 89-
561). Numerous studies have been completed, but it was not
until recently that several communities, concerned about their
reliance on declining and degraded groundwater supplies in the
area, began to plan seriously for the development of a regional
water system that would make use of the renewable supply
available from Ute Reservoir. As part of that process, the
Eastern New Mexico Rural Water Authority (Authority) was formed
to carry out the development of the ENMRWS. The Authority
consists of 6 communities and two counties in eastern New
Mexico, and has been very effective in securing local funds and
State funding to support the studies and planning necessary to
move the project forward. To date, the State of New Mexico has
provided approximately $7.5 million to develop the ENMRWS. The
water supply provided by the Project will help provide long-
term stability to the regional economy in eastern New Mexico.
LEGISLATIVE HISTORY
S. 2814 was introduced by Senator Bingaman for himself and
Senator Domenici on April 3, 2008, and referred to the
Committee on Energy and Natural Resources. The Water and Power
Subcommittee held a hearing on S. 2814 on April 24, 2008. At
its business meeting on May 7, 2008, the Committee on Energy
and Natural Resources ordered S. 2814 favorably reported.
COMMITTEE RECOMMENDATION
The Committee on Energy and Natural Resources, in open
business session on January 30, 2008, by voice vote of a quorum
present, recommends that the Senate pass S. 2814.
SECTION-BY-SECTION ANALYSIS
Section 1 provides the short title of the Act.
Section 2 defines a number of terms used in the Act.
Section 3(a) authorizes the Secretary to provide financial
and technical assistance to the Authority to plan, design, and
construct the rural water system, and directs that any
financial assistance be provided pursuant to a cooperative
agreement and specified criteria.
Section 3(b) specifies that the Federal cost-share for the
system shall not exceed 75 percent of its total cost, and
defines a time-frame for determining the total cost.
Section 3(c) limits the use of Federal money for
construction of the system until an operation, maintenance, and
replacement plan is developed and there has been compliance
with the National Environmental Policy Act.
Section 4(a) declares that the Authority shall be
responsible for system operation, maintenance, and replacement
costs.
Section 4(b) requires the Authority to develop an
operation, maintenance, and replacement plan with the
Secretary.
Section 5(a) provides general authorizations for the
Secretary to carry out the Act, and directs the Secretary to
enter into a cooperative agreement with the Authority to
provide financial assistance and address certain requirements
in developing the system.
Section 5(b) authorizes the Secretary to provide technical
assistance.
Section 5(c) directs the Secretary to consult with the New
Mexico Interstate Stream Commission and Authority in preparing
a biological assessment of the system under the Endangered
Species Act.
Section 5(d) disclaims specified effects of the Act.
Section 6(a) authorizes appropriations to carry out the
Act.
Section 6(b) provides for an adjustment to the authorized
appropriations to account for changes in construction costs
over time.
Section 6(c) declares that funding provided to the
Authority under the cost-sharing requirement shall be
nonreimbursable.
Section 6(d) declares that unexpended funds may be retained
for use in subsequent years.
COST AND BUDGETARY CONSIDERATIONS
The following estimate of costs of this measure has been
provided by the Congressional Budget Office:
S. 2814--Eastern New Mexico Rural Water System Authorization Act
Summary: S. 2814 would authorize the Secretary of the
Interior to provide financial and technical assistance to the
Eastern New Mexico Rural Water Authority to help plan, design,
and construct a water delivery project.
Based on information from the Bureau of Reclamation and
assuming appropriation of the necessary amounts, CBO estimates
that implementing S. 2814 would cost $348 million over the
2009-2013 period. Enacting the legislation would not affect
direct spending or revenues.
S. 2814 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 impact of S. 2814 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--
------------------------------------------------------------------
2009 2010 2011 2012 2013 2009-2013
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CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level................ 80 100 100 80 0 360
Estimated Outlays............................ 48 80 97 88 35 348
----------------------------------------------------------------------------------------------------------------
Basis of estimate: For this estimate, CBO assumes that the
legislation will be enacted near the start of fiscal year 2009
and that the necessary amounts will be appropriated for each
year.
S. 2814 would authorize the appropriation of $327 million,
plus additional amounts to reflect changes in construction
costs after January, 2007. Under the bill, the Secretary would
not be able to provide federal funds for operation and
maintenance costs of the project. The maximum federal share of
any activity related to the project would be limited to 75
percent. Any federal funds contributed to construct the project
would be nonreimbursable.
Based on information from the Bureau of Reclamation and
assuming appropriation of the necessary amounts, CBO estimates
that implementing the legislation would cost $348 million over
the 2009-2013 period, and an additional $12 million thereafter.
Intergovernmental and private-sector impact: S. 2814
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments. Funds authorized in the bill to design,
plan, and construct a system for delivering water would benefit
the Eastern New Mexico Rural Water Authority. Any costs the
authority might incur would result from complying with
conditions for receiving federal assistance.
Estimate prepared by: Federal Costs: Tyler Kruzich; Impact
on State, Local, and Tribal Governments: Melissa Merrell; and
Impact on the Private Sector: Amy Petz.
Estimate 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. 2814. 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. 2814, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
In accordance with paragraph 4(b) of rule XLIV of the
Standing Rules of the Senate, the Committee provides the
following identification of congressionally directed spending
items contained in the bill, as reported:
Section: 6, Provision: Authorization of appropriations,
Member: Senator Bingaman.
EXECUTIVE COMMUNICATIONS
The testimony provided by the Bureau of Reclamation at the
Subcommittee hearing on April 24, 2008, on S. 2814 follows:
Statement of Robert W. Johnson, Commissioner, Bureau of Reclamation,
Department of the Interior
Mr. Chairman and Members of the Subcommittee, I am Robert
W. Johnson, and I am Commissioner of the Bureau of Reclamation.
I am pleased to be here to provide the Department of the
Interior's views on S. 2814, the Eastern New Mexico Rural Water
Project Act. The Department cannot support S. 2814.
Reclamation has been working with the state of New Mexico
and local parties on developing concepts for the Eastern New
Mexico Rural Water Project since Congress authorized
feasibility studies in 1966. Reclamation has participated in a
number of studies on this evolving project over the years.
Since 1998, Congress has provided $1,763,000 for planning and
technical assistance, of which more than $1.2 million has been
transferred directly to the City of Clovis, acting as the
fiscal agent for the local communities, for work on the
project. The FY 2008 omnibus appropriation includes $246,000
for the Project.
The proposed Eastern New Mexico Rural Water Project would
provide a sustainable water supply for the eastern New Mexico
municipalities of Clovis, Elida, Grady, Melrose, Portales, and
Texico, as well as Curry and Roosevelt counties and Cannon Air
Force Base. The area currently depends entirely on a
groundwater source that is diminishing in both quantity and
quality. The currently envisioned project would supply 16,400
acre-feet per year. The water would be delivered through a
pipeline from Ute Reservoir, which was built by the State of
New Mexico in 1963 as a water supply source for eastern New
Mexico, and would cost approximately $436 million to construct,
with $8.2 million in annual operations and maintenance costs.
In 2004, Reclamation testified on legislation (HR 4623) to
authorize construction of the Eastern New Mexico Rural Water
Supply Project. During that hearing, Reclamation cited concerns
with the adequacy of the Conceptual Design Report to support
authorization and identified some critical questions that
needed to be answered before construction should proceed, such
as whether all economically viable alternatives had been
considered, whether design and construction costs were
consistent with comparable projects, and whether the
communities that would be sharing project costs had an accurate
estimate of how much those costs might be. Reclamation also
expressed concerns with the proposed cost sharing formula,
which assumed an 80% federal share for construction of the
project. The federal cost share in the new legislation (S.
2814) is 75%.
In the intervening years, a Reclamation ``Oversight
Committee'' has been assisting the Eastern New Mexico Rural
Water Authority (Authority) and their consultants in developing
a more complete and thorough feasibility report.
A ``Preliminary Engineering Report'' prepared for the
Authority by their consultant that was submitted in December
2006 represents significant progress toward a feasibility-level
analysis. Reclamation is continuing to work with the Authority
as they further develop the proposed project's design, cost
estimates, financing plan, and environmental analysis.
The Authority is working with their consultant to take the
design and associated cost estimate to the feasibility level.
Feasibility-level cost estimates are based on information and
data which is sufficient to permit the preparation of
preliminary layouts and designs used to estimate each kind,
type, or class of material, equipment, and labor necessary to
complete a project. A second consultant has been selected by
the Authority to work on National Environmental Policy Act
compliance. A third consultant for the Authority is working on
a detailed plan for financing the project.
As stated above, the most recent cost estimate for
construction, as prepared last year by the Authority's
consultant, is $436 million, with an estimated annual operation
and maintenance cost of $8.2 million. The local communities
would pay 100% of the operation, maintenance, and replacement
costs.
Reclamation is committed to working with its customers,
States, Tribes, and other stakeholders to find ways to balance
and provide for the mix of water resource needs in the future.
The Administration is concerned, however, about becoming the
primary source of funds for these types of projects. Because of
this project's high cost, with a federal cost share of $327
million, and because this project would compete with ongoing
work by Reclamation in New Mexico and across the West, the
Department cannot support S. 2814. However, we are working with
the Authority and the State to bring the project to a point
where a feasibility determination is possible.
This concludes my statement, and I am happy to answer any
questions the Subcommittee may have.
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 S. 2814, as
ordered reported.
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