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                                                       Calendar No. 515
113th Congress                                                   Report
                                 SENATE
 2d Session                                                     113-228

======================================================================



 
 EAST BENCH IRRIGATION DISTRICT WATER CONTRACT EXTENSION ACT AMENDMENTS

                                _______
                                

                 July 31, 2014.--Ordered to be printed

                                _______
                                

   Ms. Landrieu, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1965]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1965) to amend the East Bench Irrigation 
District Water Contract Extension Act to permit the Secretary 
of the Interior to extend the contract for certain water 
services, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                Purpose

    The purpose of S. 1965 is to amend the East Bench 
Irrigation District Water Contract Extension Act to permit the 
Secretary of the Interior to extend the contract for certain 
water services.

                          Background and Need

    The East Bench Irrigation District (EBID) is a privately 
owned irrigation district located in Dillon, Montana. EBID had 
an irrigation water service contract supplied by the Bureau of 
Reclamation's Clark Canyon Dam and Reservoir in southwest 
Montana from the contract's original execution in 1958 until 
its expiration on December 31, 2005. EBID began to renew its 
1958 contract in 2006 (which requires a Montana 5th District 
Court decree), but an objection was filed that is not expected 
to be resolved for two or more years. Short-term extensions of 
the 1958 contract were provided in prior year appropriations 
bills and most recently by Public Law 112-139 for an additional 
four years, but this expired on December 31, 2013. EBID is 
concerned about losing their right to renew their 1958 contract 
if it is allowed to expire prior to securing court confirmation 
of the renewed 2006 contract, so EBID is pursuing an extension 
of the 1958 contract. S. 1965 would further extend the 1958 
contract for an additional six years (for a total of 10 years, 
or until December 31, 2019) or until the renewed 2006 contract 
is executed. S. 1965 would still defer to the court to take up 
the issue again at a time of its choosing.

                          Legislative History

    Senator Baucus introduced S. 1965 on January 28, 2014 with 
Senator Tester as a co-sponsor. Senator Walsh was added as a 
co-sponsor on June 3, 2014. A hearing was held by the 
Subcommittee on Water and Power on February 27, 2014 (S. Hrg. 
113-284). At its business meeting on June 18, 2014, the Senate 
Energy and Natural Resources Committee ordered S. 1965 
favorably reported without amendment.
    A related bill, S. 997, was introduced by Senator Tester in 
the 112th Congress. A hearing was held by the Subcommittee on 
Water and Power on June 23, 2011 (S. Hrg. 112-129). At its 
business meeting on July 14, 2011, the Senate Energy and 
Natural Resources Committee ordered S. 997 favorably reported 
(S. Rpt. 112-65) and was passed into law on June 27, 2012 (P.L. 
112-139).

                        Committee Recommendation

    The Senate Committee on Energy and Natural Resources, in 
open business session on June 18, 2014, by a voice vote, 
recommends that the Senate pass S. 1965 without amendment.

                      Section-by-Section Analysis

    Section 1 amends the East Bench Irrigation District Water 
Contract Extension Act (Public Law 112-139; 126 Stat. 390) to 
extend the contract from 4 years to 10 years.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

S. 1965--A bill to amend the East Bench Irrigation District Water 
        Contract Extension Act to permit the Secretary of the Interior 
        to extend the contract for certain water services

    S. 1965 would authorize the Secretary of the Interior, 
acting through the Bureau of Reclamation, to extend the water 
contract between the United States and the East Bench 
Irrigation District for six additional years or until a new 
long-term contract is executed, whichever is earlier. Based on 
information from the Bureau of Reclamation, CBO estimates that 
enacting the legislation would not affect the federal budget. 
Because enacting S. 1965 would not affect revenues or direct 
spending, pay-as-you-go procedures do not apply.
    The Bureau of Reclamation supplies irrigation water from 
the Clark Canyon Dam and Reservoir project to the East Bench 
Irrigation District under an interim contract negotiated in 
2006 after the original contract expired. Although the interim 
contract expired at the end of 2013 both the bureau and the 
district continue to operate under the terms of the expired 
contract and expect to do so until a new contract is executed.
    S. 1965 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Aurora Swanson. 
The estimate was 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. 1965.
    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 could 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. 1965, as ordered reported.

                   Congressionally Directed Spending

    This bill, as reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        Executive Communications

    The testimony provided by the Bureau of Reclamation at the 
Subcommittee on Water and Power hearing on S. 1965 follows:

   Statement of Robert Quint, Senior Advisor, Bureau of Reclamation, 
                       Department of the Interior

    Chairman Schatz and members of the Subcommittee, I am Bob 
Quint, Senior Advisor at the Bureau of Reclamation 
(Reclamation). I am pleased to provide the views of the 
Department of the Interior (Department) on S. 1965, to amend 
the East Bench Irrigation District Water Contract Extension Act 
to permit the Secretary of the Interior to extend the contract 
for certain water services. The Department supports S. 1965.
    Reclamation's Clark Canyon Dam and Reservoir are located in 
southwest Montana and supply irrigation water under contract to 
the East Bench Irrigation District (EBID). EBID's water service 
contract with Reclamation was first executed in October 1958 
and expired on December 31, 2005. Pursuant to Section 1 of the 
Act of May 15, 1922 (42 Stat. 541), Section 46 of the Omnibus 
Adjustment Act of 1926 (44 Stat. 649), and Section 85-7-1957, 
Montana Code Annotated, execution of a new contract between the 
United States and any irrigation district requires confirmation 
by a Montana District court.
    In 2006, EBID filed a petition with the Montana Fifth 
Judicial District Court seeking confirmation of the execution 
of their renewed contract with Reclamation. A hearing was 
convened on December 14, 2006, in Dillon, MT, and one objection 
to the confirmation was filed.
    A part of the legal challenge to confirmation of the 
contract involves the proper place of use of the water, which 
is an element of a water right which the Montana Water Court 
has sole jurisdiction over. Therefore, the case was certified 
from the Montana District Court to the Montana Water Court.
    Once the Montana Water Court addresses the proper place of 
use for the subject water right, it will send the case back to 
the Montana District Court for further proceedings on the 
various additional legal challenges to the contract. A decision 
by either the Montana Water Court or the Montana District Court 
may be appealed directly to the Montana Supreme Court, which is 
the court of last resort.
    Prior year appropriations bills have extended the contracts 
for terms of up to two years. Most recently, in the 112th 
Congress, Public Law 112-139; 126 Stat. 390 extended the 
contract for four years (to December 31, 2013) or until the 
date on which a new long-term contract is executed. EBID 
remains concerned about losing their right to renew their 1958 
contract if it is allowed to expire prior to securing court 
confirmation of the renewed 2006 Contract. For this reason they 
are pursuing extension of the 1958 contract.
    Under current law, the 2006 contract is not binding on the 
United States until court confirmation is secured. A final 
decree from the court confirming the 2006 contract has not 
occurred. Therefore, EBID is seeking authority under S. 1965 to 
extend the 1958 contract. S. 1965 would extend the contract for 
six years beyond Public Law 112-139 for a total of ten years 
(to December 31, 2019) or until a new contract is executed and 
still defer to the court to take up the issue again at a time 
of its choosing. The Department believes that a 10 year 
extension under S. 1965 will allow adequate time for 
confirmation by the Montana Fifth Judicial District Court. The 
Department supports this legislation because it would allow 
water service to the EBID to continue and protects the right 
for contract renewal while the court confirmation process is 
given time to be completed.
    This concludes my statement. Again, the Department supports 
S. 1965. I would be pleased to answer questions at the 
appropriate time.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 1965, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is in italic, and existing law in which no 
change is proposed in shown in roman):

      EAST BENCH IRRIGATION DISTRICT WATER CONTRACT EXTENSION ACT


                           Public Law 112-139


  AN ACT To authorize the Secretary of the Interior to extend a water 
   contract between the United States and the East Bench Irrigation 
District.

           *       *       *       *       *       *       *


SEC. 2. AUTHORITY TO EXTEND WATER CONTRACT.

    The Secretary of the Interior may extend the contract for 
water services between the United States and the East Bench 
Irrigation District, numbered 14-06-600-3593, until the earlier 
of--
    (1) the date that is [4 years] 10 years after the date on 
which the contract would have expired if this Act had not been 
enacted; or
    (2) the date on which a new long-term contract is executed 
by the parties to the contract.