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                                                       Calendar No. 621
105th Congress                                                   Report
                                 SENATE
 2d Session                                                     105-368
_______________________________________________________________________


 
             PERKINS COUNTY RURAL WATER SYSTEM ACT OF 1997

                                _______
                                

  October 6 (legislative day, October 2), 1998.--Ordered to be printed

_______________________________________________________________________


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 2117]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 2117) to authorize the construction of 
the Perkins County Rural Water System and authorize financial 
assistance to the Perkins County Rural Water System, Inc., a 
nonprofit corporation, in the planning and construction of the 
water supply system, and for other purposes, having considered 
the same, reports favorably thereon with amendments and 
recommends that the bill, as amended, do pass.
    The amendment are as follows:
    1. On page 5, line 20, delete ``system;'' and insert 
``system; and''.
    2. On page 5, beginning on line 24, strike all after ``of 
the'' through page 7, line 5; insert in lieu thereof 
``system''; and renumber the following sections accordingly.

                         purpose of the measure

    The purpose of S. 2117 is to authorize grants for the 
construction of a rural water system in Perkins County, South 
Dakota.

                          background and need

    Perkins County is located in Northwest South Dakota on the 
border with North Dakota. Like many areas in the High Plains, 
there are insufficient water supplies of reasonable quality and 
those that are available do not meet minimum health and safety 
standards. In 1982 a study was undertaken on the feasibility of 
building a system that could connect with the proposed 
Southwest Pipeline Project in North Dakota, a part of the 
Garrison Diversion Conservancy District. Under the North Dakota 
Century Law, a Perkins County connection was included under the 
original authorization for the Southwest Water Authority. In 
the early 1990's South Dakota provided the funds for a 
feasibility study on an 80-20 match with the County. The 
feasibility study was completed in 1994 and showed that 
obtaining water from the Southwest Water Authority was the most 
feasible option and that the system would cost approximately 
$20 million. As part of the original agreement with North 
Dakota, Perkins County would be able to obtain water at the 
operation and maintenance cost if it furnished about $5.5 
million to increase the pipe capacity to provide 400 gallons/
minute. Since Southwest is an ongoing project, $440,000 was 
provided in 1996 and $550,000 in 1997. An additional $4.5 
million will need to be provided to North Dakota during 
construction of the Perkins County connection to reimburse work 
already completed. The legislation provides for a 75-25 
Federal-local cost share with a total authorization of $15 
million.

                          legislative history

    S. 2117 was introduced on May 22, 1998 by Senator Johnson. 
A similar measure was introduced by Congressman Thune on March 
21, 1997. A hearing was held by the Subcommittee on Water and 
Power on July 14, 1998.
    At the business meeting on September 23, 1998, the 
Committee on Energy and Natural Resources ordered S. 2117, as 
amended, favorably reported.

           committee recommendations and tabulation of votes

    The Committee on Energy and Natural Resources, in open 
business session on September 23, 1998, by a unanimous voice 
vote of a quorum present, recommends that the Senate pass S. 
2117, if amended as described herein.

                          committee amendments

    During the consideration of S. 2117, the Committee adopted 
an amendment to deleteprovisions of the legislation that would 
impose federal standards for water conservation. The Committee believes 
that such a requirement is unnecessary in this legislation.

                      section-by-section analysis

    Section 1 provides a short title.
    Section 2 provides a series of findings and purposes.
    Section 3 provides a series of definitions.
    Section 4(a) authorizes grants from the Secretary of the 
Interior for planning and construction of the system and for 
repairs to the existing distribution system to promote 
conservation and efficiency.
    Subsection 4(b) defines the service area as Perkins County, 
South Dakota.
    Subsection 4(c) provides that grants may not exceed the 
federal share (which is defined as 75% under section 9).
    Subsection 4(d) prohibits any obligation of funds until 
requirements of the National Environmental Policy Act are met 
and a final engineering report is submitted to and lays before 
Congress for 90 days. The inclusion of a provision providing 
that the requirements of the National Environmental Policy Act 
must be met is not intended to suggest that such requirements 
would not apply in the absence of the provision nor to suggest 
that a full Environmental Impact Statement or even an 
Environmental Assessment would be necessary.
    Section 5 provides standard language on mitigation for fish 
and wildlife losses.
    Subsection 6(a) provides that the Western Area Power 
Administration (WAPA) will make power available for pumping 
from Pick-Sloan power designated for future irrigation and 
drainage pumping.
    Subsection 6(b) makes the provision of power contingent on 
the system being operated on a not-for-profit basis, that the 
power be purchased from a qualified preference customer of 
WAPA, the rate schedule be the firm power rate at the time of 
delivery by WAPA, and that the preference customer pass through 
the firm rate, adding only other customary and usual charges.
    Section 7 provides that the Act does not affect any other 
water project in North or South Dakota.
    Section 8 provides a series of savings provisions on water 
rights.
    Section 9 provides that the federal share will be 75% of 
costs.
    Section 10 provides that the local share will be 25% of 
costs.
    Section 11 authorizes the Secretary to provide construction 
oversight and limits expenditures by the Secretary to 3% of the 
construction budget.
    Section 12 authorizes $15 million subject to appropriate 
engineering cost indices.

                   cost and budgetary considerations

    An estimate of the cost of this measure has been requested 
from the Congressional Budget Office, but has not been received 
as of the date of filing of this report. When the estimate is 
received, the Chairman will have it printed in the 
Congressional Record for the advice of the Senate.

                      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. 2117. 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. 2117, as ordered reported.

                        executive communications

    On June 5, 1998, the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
the Interior and the Office of Management and Budget setting 
forth Executive agency recommendations on S. 2117. These 
reports had not been received at the time the report on S. 2117 
was filed. When the reports become available, the Chairman will 
request that they be printed in the Congressional Record for 
the advice of the Senate. The testimony provided by the 
Commissioner of the Bureau of Reclamation, Department of the 
Interior, at the Subcommittee hearing follows:

     Statement of Eluid L. Martinez, Commissioner, U.S. Bureau of 
                Reclamation, Department of the Interior

    My name is Eluid Martinez, I am Commissioner of the U.S. 
Bureau of Reclamation. I am pleased to be here today to provide 
the Administration's views on S. 2117.
    S. 2117, the Perkins County Rural Water System Act of 1997, 
authorizes the construction of the Perkins County Rural Water 
System and directs the Secretary of the Interior to make grants 
and provide assistance and oversight in planning and 
construction of the water supply system in Perkins County, 
South Dakota. S. 2117 authorizes the appropriation of $15 
million for the planning and construction oversight of the 
water supply system and authorizes a seventy five percent 
Federal cost share. It also authorizes the Western Area Power 
Administration to make power designated for future irrigation 
development under the Pick Sloan Missouri Basin Program 
available for the summer season (May 1 to October 31) at the 
preference power rate of 14.54 mills/kWh for this rural water 
supply system.
    The Administration opposes S. 2117 as drafted.
    The Perkins County Rural Water System (PCRWS) would be 
located in northwestern South Dakota. It is the second largest 
county in the state (2,866 mi\2\) and is characterized by 
widely separated towns and ranches. In 1990, the population of 
Perkins County was 3,930. The proposed rural water system will 
serve 189 rural hook-ups, plus the cities of Lemmon and Bison, 
South Dakota. The purpose of this legislation is to enable 
Perkins County to connect into the Southwest Pipeline Project 
(SWPP), which was authorized as part of the Garrison Diversion 
Unit Reformulation Act of 1986 and is being constructed with a 
75 percent Federal cost share. As described in the 1995 
Feasibility Study, the preferred alternative for PCRWS is to 
purchase 400 gallons per minute of treated water from the SWPP 
in North Dakota and then construct new facilities to distribute 
the water to customers throughout the Perkins County service 
area. While Water purchased from SWPP would not meet the area's 
full demand, the PCRWS proposes to include the construction of 
a 2,000,000 gallon storage tank to meet the anticipated peak 
demands. In addition, PCRWS proposes to purchase three existing 
wells from the City of Lemmon to serve as a back-up water 
supply during periods of drought. The proposal also includes 
funding for municipal distribution system upgrades or 
replacement.
    Mr. Chairman, the Bureau of Reclamation recognizes the need 
for a safe and adequate water supply for the residents of the 
rural areas that would be served by the proposed project. 
Reclamation believes the project would meet important needs in 
the service area, however, we cannot support this bill as 
drafted because of the cost share requirement in Section 10 
directing the Federal government to provide 75 percent of the 
planning and construction costs through grants. Reclamation's 
long-standing policy relative to non-Indian rural water system 
development is that non-Federal interests should repay 100 
percent of allocated project construction costs at current 
interest rates and that they pay 100 percent of operation, and 
maintenance costs. In addition, we are concerned that this 
legislation directs the Federal funds authorized for this 
project be used to upgrade the municipal distribution systems 
within the City of Lemmon. Traditionally this has not been a 
function which Reclamation projects have undertaken. This 
upgrade of municipal distribution is often eligible for loans 
and grants under other Federal programs including the Rural 
Utility Service Grants and Loans program, Community Development 
Block Grants or the Safe Drinking Water Act Revolving Loan 
Fund.
    In summary, Reclamation recognizes that this project would 
improve the water supply in the service area. It is difficult 
to justify the minimal cost sharing by non-Federal 
participants.
    It should also be noted that Section 4(a) directs rather 
than authorizes the Secretary to make grants. As drafted, this 
bill would increase direct spending and requires a PAYGO 
offset.
    That concludes my testimony, I am pleased to answer any 
questions.

                        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. 2117, as 
ordered reported.