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Statement of John W. Keys, III, Commissioner
Bureau of Reclamation
U.S. Department of the Interior
Before the
Energy and Natural Resources Committee
Subcommittee on Water and Power
1
on
S. 1876
To Authorize the Secretary of the Interior to Convey Certain Lands and Facilities of the Provo River Project

May 19, 2004

My name is John Keys and I am the Commissioner of the Bureau of Reclamation. I am pleased to present the views of the Department regarding S. 1876, legislation to authorize the Secretary of the Interior to convey certain lands and facilities of the Provo River Project in Utah.

The Department of the Interior (Department) has an active title transfer program and supports transferring ownership of certain Reclamation project facilities to non-Federal entities, particularly in cases where transfers could create opportunities, not just for those who receive title, but for other stakeholders and the public as well. While we believe this transfer has the potential to create such opportunities, the Department has several concerns with S. 1876, as it was introduced. It is our understanding that the proponents of this transfer intend to suggest a number of specific revisions to S. 1876 which could help to resolve some of our concerns.

Background
The Provo River Project stores and delivers water from the Provo River for irrigation and municipal and industrial uses along the Wasatch Front, a highly urbanized area, located within Utah and Salt Lake Counties . The three features of the project under consideration for transfer are the 22-mile-long Provo Reservoir Canal ; a 3.79-acre office building site, which would be transferred to the Provo River Water Users Association (Association); and the 42-mile-long Salt Lake Aqueduct, which would be transferred to the Metropolitan Water District of Salt Lake & Sandy (District).

Reclamation began discussing this transfer with the Association and the District in November 2002. Since that time much work has been done and a great deal of progress has been made.

In August 2003, Reclamation, the Association, and the District signed an agreement entitled "Contributed Funds Act and Memorandum of Agreement" (Contract No. 03-WC-40-8800) which articulated the respective roles, responsibilities, and cost obligations for carrying out the title transfer process. Since that time, several other water user entities, including the Central Utah Water Conservancy District (Central) and the Jordan Valley Water Conservancy District ( Jordan Valley ) also have become involved. A title transfer work group made up of these entities and Reclamation was formed to discuss the issues of importance to the entities involved, and that work group has been meeting regularly.

In order to initiate the public review process required under the National Environmental Policy Act (NEPA), the title transfer work group assembled a list of more than 2,000 individuals, agencies, and other entities having a potential interest in this transfer. This list includes a large number of owners of private property located adjacent to the transfer facilities. It also includes several state and federal agencies and environmental and recreational interest groups. On September 29, 2003 , an initial scoping letter describing the proposal was mailed to all on this list. Public scoping meetings were held on October 27, 28, and 30, 2003 in Sandy , Lehi, and Provo respectively. Many concerns and issues were raised at these meetings and in subsequent calls, letters and e-mails by interested stakeholders. To enable anyone else with interests and concerns to have an opportunity to voice them, the official public comment period was held open until November 26, 2003 .

As the lead agency, Reclamation is in the process of completing a draft environmental assessment. The Department of the Interior's Central Utah Project Completion Act Office, the U.S. Forest Service, and the National Park Service are cooperating agencies. The draft environmental assessment is expected to be released to the public for review and comment by the end of May 2004.

S. 1876
S. 1876 requires the Secretary to convey to the Provo River Water Users Association, pursuant to a transfer agreement still being drafted, all right, title, and interest of the United States in certain lands, rights-of-way, and facilities that are part of the Provo River Project in Utah . The bill does not impair any existing contracts that allow for, or create a right, to convey water through the Provo Reservoir Canal .

Section 6 of S. 1876 requires that the Association and the Metropolitan Water District of Salt Lake & Sandy pay or contribute to administrative costs, real estate transfer costs, and the costs of compliance with the National Environmental Policy Act of 1969 (NEPA), the Endangered Species Act of 1973 (ESA), the National Historic Preservation Act, and other Federal cultural resource laws included in the transfer agreement. S. 1876 clearly states in Section 7 that before any property is conveyed, the Secretary must complete all actions required under NEPA, the ESA, and all other applicable laws. Section 6 also requires the Association and the District to pay the net present value of the property being transferred.

Finally in Section 9, the bill makes it clear that, upon conveyance of the land and facilities, the United States will not be liable for future occurrences on those lands and facilities, and the Association and District will not be entitled to receive any future Reclamation benefits with respect to the transferred properties, except those benefits available to other non-Reclamation facilities.

Issues of Concern
Despite the Administration's support for the transfer of these lands and facilities, we have a number of concerns about S. 1876 as drafted.

Agreements: During the course of its deliberations, the members of the work group identified several written agreements among the parties that are needed in order to ensure that the transfer achieves its intended purposes without adversely impacting the other affected parties. At present, many of the identified agreements are being drafted by the work group, but none have been completed or signed. Section 3(a) of the bill partially addresses this issue by requiring that the Association provide the Secretary with certification, prior to transfer. We are concerned that this does not fully address our situation or the issue.

We believe that completing the agreements prior to passage of the legislation will expedite implementation of the transfer. Our experience has shown that transfers move more expeditiously when involved parties complete preliminary work, including written agreements, before proceeding with legislation. In many cases where agreements were not completed before legislation was passed, significant delays occurred while issues were identified, negotiated, and satisfactorily addressed in agreements.

If agreements are not completed prior to passage of the legislation, then we believe the legislation should specify that certain minimum requirements be included in the agreements. For example, Section 2(8) of the bill defines a transfer agreement among the United States , the District and the Association and requires the transfer to be completed in accordance with the terms of that transfer agreement. While the work group has been actively engaged in drafting the transfer agreement, it is not yet finalized or signed. This transfer agreement should include descriptions and maps of land interests to be transferred, including rights-of-way. Also, at a minimum, the agreement defined in Section 2(8) should include terms which: (1) provide for orderly and efficient transfer and protect public interests; (2) preserve access for operation and maintenance of nearby facilities which will continue to be federally owned; (3) provide for coordinated operation of transferred and retained portions of the Provo River Project; and (4) ensure the Department can continue to fulfill its obligations.

Certification of Agreements: Section 3(a) directs the Secretary to convey the lands and facilities of the Project when the Association has certified that the agreements entered into are satisfactory to the Association, District, Central, and Jordan Valley . Since many of the features and facilities of the Project will not be conveyed and because of the close relationship between this project and the Central Utah Project, which will not be transferred, the Secretary will be a party to several of these agreements. As such, we believe that both the Association and the Secretary should certify the agreements are satisfactory.

Operational Access: The canal and the aqueduct to be transferred in S. 1876 are in close proximity and operationally related to the Central Utah Project which will remain in Federal ownership. For example, for a sizeable portion of its alignment, the canal lies so near key Central Utah Project facilities that lack of access to the canal right-of-way would make operation and maintenance of those Central Utah Project facilities difficult. Conversely, operation and maintenance of the canal would be problematic without access to Central Utah Project lands. Therefore, as indicated above, it is important that provisions for reciprocal access are included in the agreement defined in Section 2(8) of the bill.

National Forest System: In several locations, the Salt Lake Aqueduct crosses lands lying within the boundaries of the Uinta and Wasatch-Cache National Forests under the jurisdiction of the U.S. Forest Service. Prior to constructing the aqueduct, Reclamation withdrew significant blocks of land in locations where the aqueduct alignment crosses through these National Forests. At present, operation and maintenance of the aqueduct by the District within National Forest boundaries is possible solely because the aqueduct is federally owned and located upon Reclamation withdrawals. Any revocation of Reclamation's withdrawals will return primary jurisdiction of these areas to the U.S. Forest Service. S. 1876 needs to address this issue or it will significantly delay conveyance of the lands and rights-of-way and will negatively impact the District's ability to operate and maintain the facilities once transferred. We also recommend the transfer agreement defined in Section 2(8) include a suitable provision covering replacement of withdrawals with a linear permanent easement for the District. We recommend that the Department of the Interior issue the easement of the Aqueduct. At that point, the Bureau of Reclamation would revoke the withdrawal on the National Forest System lands, and then the Forest Service would administer the easement.

Timpanogos Interagency Land Exchange Act (P.L. 107-329): On December 6, 2002 , Congress passed the Timpanogos Interagency Land Exchange Act (TILEA), P.L. 107-329. This Act authorizes the acquisition of land and construction of an interagency administrative and visitor facility by the National Park Service and the U.S. Forest Service at the entrance to American Fork Canyon . The proposed exchange would be with a private landowner who is willing to trade property in Highland City , Utah , for six parcels of National Forest Land. The private property proposed to be acquired for the site of the administrative and visitor facility is bisected by a strip of land owned in fee title by the United States and administered by Reclamation for the aqueduct. If fee title were transferred to the District at this location, the administrative and visitor facility site would be bisected by a strip of District-owned lands. To avoid this situation, we believe the transfer agreement defined in Section 2(8) should provide for the Secretary to convey an appropriate permanent easement to the District for the aqueduct where it bisects the administrative and visitor facility site and then to transfer jurisdiction over the same area to the U.S. Forest Service to be administered as part of the administrative and visitor facility site.

Impact on the On-Going Utah Lake Basin Water Delivery System EIS : Central and the Department recently released a draft environmental impact statement (EIS) for the Utah Lake Basin Water Delivery System (ULS) to the public. This draft EIS indicates that about 24,000 acre-feet of CUP M&I water would be conveyed through the Provo Reservoir Canal for use in Salt Lake County, which is proposed for transfer under S. 1876. As part of this legislation, or the transfer agreement for these facilities, it is important to ensure that this transfer does not impact the NEPA compliance process for the ULS or, more importantly, prevent the utilization of the canal to convey CUP M&I water.

Technical Issues
In addition to the policy and procedural issues identified above, we have identified several minor technical corrections to S. 1876 that are needed in order to facilitate completion of the transfer.

Include Both Reservoirs at the Salt Lake Aqueduct : In the definition for the Salt Lake Aqueduct, S. 1876 refers to the "Terminal Reservoir located at 3300 South and I-215." There are in fact two reservoirs located at the terminus of the Salt Lake Aqueduct. We believe any transfer should include both. Therefore, Section 2(g) of the bill should be amended to change "Terminal Reservoir" to "Terminal Reservoir's".

Make Consistent with Existing Contributed Funds Act Agreement and Memorandum of Agreement: On August 21, 2003 Reclamation, the Association, and the District signed an agreement entitled "Contributed Funds Act Agreement and Memorandum of Agreement" (Contract No. 03-WC-40-8800) (Contributed Funds Act Agreement) to formalize, among other things, the cost-sharing obligations of the various parties for transfer-related expenses. To ensure that the legislation is consistent with the already signed Contributed Funds Act Agreement, Section 6(a) of the bill should be amended to read "The Secretary shall require, as a condition of the conveyance under section 3, that the Association and the District pay all administrative costs and real estate transfer costs, and half of costs associated with compliance with the National Environmental Policy Act of 1969, the Endangered Species Act, the National Historic Preservation Act, and other federal cultural resource laws, all as described in the Agreement." This would make it consistent with the terms of the existing Contributed Funds Act Agreement.

Modify Payment Requirement: Section 6(b)(1) requires the Association to pay "the net present value of the Provo Reservoir Canal and the Pleasant Grove Property". Similarly, Section 6(b)(2) requires the District to pay "the net present value of the Salt Lake Aqueduct." We believe the intent of these sections is to require the transfer recipients to pay, not the net present value of a facility (potentially, a very large sum), but rather the present value of the remaining obligations for that facility. Therefore, we recommend these portions of Section 6(b) be amended to read:

  1. "In addition to subsection (a) the Secretary shall also require, as a condition of the conveyances under Sections 3(a) and 3(b), that the Association pay to the United States the net present value of the remaining debt obligation, including future miscellaneous revenue streams, attributable to the Provo Reservoir Canal and the Pleasant Grove Property, as described in the Agreement; Provided, however, that the Association may deduct from the net present value such sums as are required to accomplish the reimbursement described in the Contributed Funds Act Agreement."
  2. "In addition to subsection (a) the Secretary shall also require, as a condition of the conveyance under Section 3(c), that the District pay to the United States the net present value of the remaining debt obligation, including future miscellaneous revenue streams , attributable to the Salt Lake Aqueduct, as described in the Agreement; Provided, however, that the Association may deduct from the net present value such sums as are required to accomplish the reimbursement described in the Contributed Funds Act Agreement."

National Environmental Policy Act Citation : Section 7 should be modified to correct an error in the citation for the National Environmental Policy Act of 1969 (42 U.S.C. 4321, et seq.).

Conclusion
The Department recognizes significant benefits that may be achieved by the proposed title transfer. Much work has already been accomplished. If the above-mentioned issues and technical corrections can be addressed, I believe the Department could support passage of this legislation.

Mr. Chairman, we appreciate the excellent work and cooperation we have had with the District, the Association, Central , Jordan Valley, the Central Utah Project Completion Act Office, the U.S. Forest Service and the National Park Service. We look forward to continuing that effort and to working with Senator Bennett, Committee staff, as well as the Association, the District, the Title Transfer Working Group and anyone else to craft provisions necessary to resolve these issues. That concludes my testimony. I would be pleased to answer any questions.