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                                                       Calendar No. 614
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-381
_______________________________________________________________________


 
             LEWIS AND CLARK RURAL WATER SYSTEM ACT OF 1997

                                _______
                                

 October 8, (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. 777]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 777) to authorize the construction of the 
Lewis and Clark Rural Water System and to authorize assistance 
to the Lewis and Clark Rural Water System, Inc., a nonprofit 
corporation, for 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 amendments are as follows:

    1. Page 3, line 15-16, revise definition (7) to read as follows: 
``(7) System Funding Agencies.--The term `System Funding Agencies' 
means the Environmental Protection Agency and the Department of 
Agriculture.''.
    2. Page 4, line 3, delete ``Secretary'' and insert ``System Funding 
Agencies''.
    3. Page 4, line 23, delete ``Secretary'' and insert ``System 
Funding Agencies''.
    4. Page 5, line 12, delete ``Secretary'' and insert ``System 
Funding Agencies''.
    5. Page 6, line 18, strike ``Secretary'' and insert ``Secretary of 
the Interior''.
    6. Page 9, line 17, delete ``Secretary'' and insert ``System 
Funding Agencies''.
    7. Page 10, line 7, delete ``Secretary'' and insert ``System 
Funding Agencies''.
    8. Page 10, line 21, after ``Secretary'' and before ``may'' insert 
``of the interior''.
    9. Page 11, line 3, delete ``planning and construction'' and insert 
``oversight and other technical assistance''.

                         purpose of the measure

    S. 777 authorizes grants for the construction of the Lewis 
and Clark Rural Water System in South Dakota, Minnesota, and 
Iowa and for the provision of Pick-Sloan power for the 
operation of the system. The legislation includes components 
for wetlands and wildlife enhancement (sec. 4) and for water 
conservation (sec. 5).

                          background and need

    The Lewis and Clark Rural Water System (the ``System'') is 
designed to provide replacement or supplemental water supplies 
from the Missouri River to areas in southeastern South Dakota, 
northwestern Iowa, and southwestern Minnesota serving about 
180,000 people. The estimated cost of the project is $283 
million, with a twenty percent local cost share based on an 
ability to pay analysis. Funding for the Sioux Falls component 
is limited to 50-50. Annual operating costs are estimated at 
$4.7 million. Although the Bureau of Reclamation participated 
in the planning and ability to pay analyses and agreed with the 
need for a project to meet both supply and water quality needs, 
the Bureau opposed the legislation in the 103rd, 104th and 
105th Congresses due to the cost share, overall cost, and the 
inclusion of Sioux Falls within the project.
    The members of the System collectively provide an average 
of about 30 million gallons per day (78% in South Dakota) and 
the proposal would provide an average of 16.5 million gallons 
of supplemental supply (with a maximum delivery of 23.5 million 
gallons). The raw water would be diverted from the Missouri 
near Vermilion, South Dakota, treated and distributed through 
400 miles of piping with a series of storage reservoirs and 
pumping stations. The project is estimated to take about 8 
years to complete.

                          legislative history

    S. 777 was introduced on May 21, 1997 by Senators Johnson, 
Daschle, Wellstone, Grams, Harkin and Grassley. A similar 
measure, H.R. 1688, was introduced by Congressman Thune on May 
21, 1997. A hearing was held by the Subcommittee on Water and 
Power on October 7, 1997.
    At the business meeting on September 23, 1998, the 
Committee on Energy and Natural Resources ordered S. 777 
favorably reported as amended.

           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. 
777, as amended.

                          committee amendments

    During the consideration of S. 777, the Committee adopted a 
series of amendments that limit the role of the Bureau of 
Reclamation to technical assistance in engineering, planning, 
and construction oversight while assigning the primary 
responsibility for providing financial assistance to the Lewis 
and Clark project to the Administrator of the Environmental 
Protection Agency and the Secretary of Agriculture in light of 
their ongoing responsibilities for both rural and municipal 
water supply grant and loan programs.
    The Committee is concerned over the extent to which the 
Bureau should participate in a project extending outside of the 
Reclamation States and over a project that is not a traditional 
Reclamation project. Given the need for the system to address 
water quality needs in the area, as well as supply needs, a 
combination of funding from the USDA and EPA appears to be a 
reasonable alternative.

                      section-by-section analysis

    Section 1 provides a short title.
    Section 2 provides a series of definitions that are self-
explanatory. The term ``System Funding Agencies'' is defined as 
the Environmental Protection Agency and the Department of 
Agriculture, the agencies charged with providing financial 
assistance for construction to the Lewis and Clark Rural Water 
System.
    Section 3 generally provides the conditions for Federal 
financial assistance and is self-explanatory.
    Section 4 provides for funding of the initial development 
of the environmental enhancement component of the System and is 
self-explanatory.
    Section 5 provides for a water conservation program and is 
self-explanatory.
    Section 6 provides standard language on mitigation for fish 
and wildlife losses.
    Section 7 provides for the use of Pick-Sloan Power for the 
System and is self-explanatory.
    Section 8 provides that this legislation does not limit any 
other authorization for water projects is South Dakota, Iowa, 
or Minnesota.
    Section 9 is self-explanatory.
    Section 10 provides a cost-share formula and is self-
explanatory.
    Section 11 defines the role of the Bureau of Reclamation 
and is self-explanatory.
    Section 12 authorizes $226,320,000 for the System of which 
not less than $8,487,000 is for the initial development of the 
environmental enhancement component.

                   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. The 
legislation authorizes $226.3 million as the Federal share of 
the costs of the system.

                      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. 777. 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. 777, 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. 777. These reports 
had not been received at the time the report on S. 777 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 Martinez, Commissioner, U.S. Bureau of Reclamation

    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 view on S. 777.


       s. 777, the lewis and clark rural water system act of 1997


    Reclamation opposes S. 777 in its current form.
    S. 777, the Lewis and Clark Rural Water System Act of 1997, 
authorizes the Secretary of the Interior to make grants and 
provide project construction oversight to the Lewis and Clark 
Rural Water System, Inc. for the planning and construction of a 
water supply system that would serve over 180,000 persons in 
southeastern South Dakota, including to the City of Sioux Falls 
with a metropolitan population of 153,466, southwestern 
Minnesota and northwestern Iowa for domestic and industrial 
purposes. The project would provide a reliable and good quality 
drinking water supply to meet the current and future needs of 
the project beneficiaries. A small part of the project's 
construction budget would be dedicated to fish, wildlife, and 
wetland enhancement features.
    The bill authorizes the appropriation of $226.3 million, of 
which not less than $8.4 million would be used for the 
environmental enhancement component set forth in Section 4. 
With the exception of the City of Sioux Falls component, the 
Federal Government would fund 80 percent of the project 
planning and construction costs, and non-Federal interests 
would provide the remaining 20 percent. For the City of Sioux 
Falls component, non-Federal interests would provide 50 
percent.
    The Bureau of Reclamation has worked closely with 
proponents of the Lewis and Clark Rural Water System. 
Reclamation believes the project would meet an important local 
need. We recognize the need for a safe and adequate water 
supply for the residents of the rural and urban areas that 
would be served by the proposed project. However, we cannot 
support this bill as drafted due to the cost share requirement 
in Section 10 directing the Federal government to provide 80 
percent of the design and construction costs through grants (50 
percent for the Sioux Falls component). We support the 
authorization of single-purpose rural, municipal and industrial 
water supply projects only where the needs of Native Indian 
communities require the involvement of the Department of the 
Interior and then only where the non-Federal interests repay--
at current interest rates--100 percent of all project 
construction, operation, and maintenance costs allocated to 
them. In addition, the City of Sioux Falls, the largest user on 
the proposed system, cannot be viewed as a rural community. 
Urban areas like Sioux Falls should have a sufficient 
population base and economic resources to finance their own 
water system. This makes it difficult to justify any Federal 
assistance for the portion of the project serving Sioux Falls.
    In summary, Reclamation recognizes that this project would 
improve the water supply in the region. However, that does not 
necessarily mean the project has merit as a Federal project. It 
is difficult to justify S. 777 with its minimal cost sharing, 
especially considering the already tight competition for 
funding of ongoing projects in the region.

                        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. 777, as ordered 
reported.