Statement of John W. Keys III

Commissioner

Bureau of Reclamation, U.S. Department of the Interior

Before the

Subcommittee on Water and Power

Committee on Resources

House of Representatives

on

H.R. 4708, Fremont-Madison Conveyance Act

July 9, 2002

The facilities under consideration for transfer in H.R. 4708 - the Cross Cut Diversion Dam and Canal, the Teton Exchange Wells and the Idaho Department of Water Resources permit number 22-7022 - are associated with the Upper Snake River Division, Minidoka Project and the Lower Teton Division, Teton Basin Project, respectively, and are located near Rexburg in eastern Idaho. The facilities under consideration for transfer are used exclusively for irrigation purposes and have always been operated and maintained by the District. While the Cross Cut Diversion Dam and Canal are paid-out by the District, the legislation provides for a payment for the Teton Exchange Wells, which are currently valued at $277,961, based upon the outstanding balance to be repaid by the District.

Mr. Chairman, over the last few years, we have been working very closely with the District and numerous other local organizations including the Henry's Fork Foundation, a local conservation and sportsmen's organization, to work through the issues on the title transfer for the features, lands and water rights associated with this project. Over the last year, we have made great progress in narrowing the scope of the transfer to meet the District's needs, protect the interests of the other stakeholders, and ensure that the transfer does not negatively impact downstream contractors of the integrated Snake River system. While I believe that we are very close to agreement on this legislation, H.R. 4708, as drafted, creates some problems and concerns, which I will address in my statement. However, with the technical modifications outlined below, the Department could support H.R. 4708.

Background

Individuals, organizations, Federal, States and local agencies interested in the Henry's Fork of the Snake River have a very impressive history of collaboration and cooperation through the Henry's Fork Watershed Council (Council) - a grassroots community forum whose goal is to encourage management of the Henry's Fork Basin in a socially, economic and environmentally sustainable manner. When the District first raised the idea of title transfer, the Council dedicated its March, 1999, meeting to this issue. This included presentations by the District and Reclamation and fostered open discussions with any and all groups or individuals who had comments or concerns.

Subsequently, the District and the Henry's Fork Foundation, along with the Land and Water Fund of the Rockies engaged in a series of negotiations to develop a mutually acceptable proposal. While that process did not result in a concrete proposal, it did lead to some consensus on the facilities to be transferred that are included in this legislation. It also led to the removal of the Grassy Lake and Island Park dams from the transfer proposal about which many local organizations had serious concerns.

Accordingly, in September, 2001, Reclamation and the District signed a memorandum of agreement (Contract No. 1425-01-10-3310) (MOA) which expires on September 13, 2003, and is referenced in H.R. 4708. This agreement lists the facilities to be transferred, delineates the respective responsibilities to complete activities necessary for the title transfer such as arrangements for the sharing of costs, valuation of the facilities to be transferred, and responsibilities associated with compliance with Federal and State laws.

We have, however, identified some concerns and technical issues which I would like to raise for the Committee's consideration:

Cost Share Requirements

First, Section 3(a) of H.R. 4708 requires the District to pay the administrative costs of the conveyance and related activities, including the costs of any review required under NEPA, but limits their contribution to no more than $40,000. This language is both unclear as to what is or is not included as "costs," nor is it in accordance with the MOA that FMID should pay the 50% of costs associated with applicable procedural requirements of the NEPA, ESA, and other applicable state and federal laws required.

We agree that it is appropriate to share the costs of compliance with Federal laws, as was agreed upon in the MOA. We also believe that the recipients of title transfer should cover those costs that are associated with the real estate transaction resulting from the title transfer. In this vein, the MOA states that the District would pay for applicable activities such as surveys, title searches, facility inspections, and development of a quit claim deed or other legal documents necessary for completing the transfer. Unfortunately, H.R. 4708, as drafted, is unclear on this point.

To address these ambiguities, we suggest that H.R. 4708 reference the MOA's treatment of costs or reiterate the manner in which the distribution of costs were addressed in the MOA. Given the amount of work that went into developing the MOA, its applicability under H.R. 4708 for implementation of the transfer, and the fact that it has been agreed upon and signed by representatives of both Reclamation and the District, referencing the MOA on these issues would provide an equitable, clear and consistent resolution to our concern.

Conveyance Deadline and Report

Section 2(a) of H.R. 4708 requires that the title transfer be completed no later than the termination date of the MOA (September 13, 2003). However, Section 2 states that the transfer be completed "as soon as practicable after the date of enactment and in accordance with all applicable law." These provisions appear inconsistent as Section 2(a) designates a required date certain for completion, while Section 2(d) (1) states that it be completed "as soon as practicable,"

Further, Section 2(d) (2) requires that the Secretary submit a report to Congress within one year of the date of enactment if the transfer has not been completed in that time frame. This provision seems somewhat arbitrary and could potentially delay the transfer from the September 13, target date while the report is being prepared.

To address our concerns with inconsistent deadlines and reporting requirements, I suggest that the legislation be modified to require that the transfer be completed "as soon as practicable after the date of enactment" and the reporting requirement in H.R. 4708 be modified to require a report to Congress be completed only if the title has not been transferred by September 13, 2003 - the expiration date of MOA referenced in the legislation. In this manner, the requirements are made clear and consistent, and no report to Congress would be necessary if the facilities are transferred by the MOA's expiration date.

Conclusion

In conclusion, Mr. Chairman, I believe we have worked closely with the District and a great deal of progress has been made. I would like to take this opportunity to compliment District Board Chairman Jeff Raybould and their Executive Director, Dale Swenson, for their diligence and commitment in working with us and the other interested entities of eastern Idaho on the issues surrounding this transfer. I would also like to thank Congressman Simpson, Congressman Otter and their staffs for their cooperation. With the technical modifications mentioned above, I believe the Department could support passage of this legislation.

That concludes my statement. I would be happy to answer any questions.