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                                                     Calendar No. 649
115th Congress         }                      {              Report
 2d Session            }                      {               115-362




               November 14, 2018.--Ordered to be printed


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

                              R E P O R T

                        [To accompany H.R. 6040]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (H.R. 6040) to authorize the Secretary of the 
Interior to convey certain land and facilities of the Central 
Valley Project, having considered the same, reports favorably 
thereon without amendment and recommends that the bill do pass.


    The purpose of H.R. 6040 is to authorize the Secretary of 
the Interior (Secretary) to convey certain lands and facilities 
of the Central Valley Project.

                          BACKGROUND AND NEED

    The Contra Costa Canal System in California, which includes 
the Rock Slough intake channel, Main Canal, Loop Canal, 
Shortcut Pipeline, the Clayton and Ygnacio Re-lift Canals and 
pumping plants, and the Martinez Reservoir and pumping plants, 
was authorized in 1937 through the Rivers and Harbors Act of 
1937 (Public Law 75-392). Construction was completed in 1948, 
and additional features were finished in 1967.
    The Contra Costa Water District (CCWD) has operated and 
maintained these facilities since 1972 under agreement with the 
Bureau of Reclamation (BOR), and in 2010 repaid its contract 
for the cost of construction in full. The repayment contract 
states that at completion of repayment, title to the facilities 
is to be transferred to CCWD, following authorization by 
    With repayment for these facilities complete, CCWD has 
asked for authorization to receive title of the Contra Costa 
Canal System as provided in its contract with BOR. Conveying 
title to CCWD will facilitate a planned $650 million project to 
convert the open main canal to closed pipe in order to increase 
public safety and water conservation, and to provide needed 
upgrades to the main canal and other system components.

                          LEGISLATIVE HISTORY

    Representative DeSaulnier introduced H.R. 6040 on June 7, 
2018. The Natural Resources Committee's Subcommittee on Water, 
Power and Oceans held a hearing on H.R. 6040 on July 11, 2018. 
The bill was favorably reported, as amended, by the Natural 
Resources Committee on August 31, 2018. H.R. 6040 passed the 
House of Representatives by voice vote on September 12, 2018.
    Senator Feinstein introduced S. 3001, companion 
legislation, on June 6, 2018. The Subcommittee on Water and 
Power held a hearing on S. 3001 on June 13, 2018.
    The Senate Committee on Energy and Natural Resources met in 
an open business session on October 2, 2018, and ordered H.R. 
6040 favorably reported.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on October 2, 2018, by a majority voice 
vote of a quorum present, recommends that the Senate pass H.R. 

                      SECTION-BY-SECTION ANALYSIS

Sec. 1. Short title

    This section states the short title.

Sec. 2. Definitions

    Section 2 defines key terms.

Sec. 3. Conveyance of land and facilities

    Subsection (a) directs BOR to convey all right, title and 
interest of the United States in the Contra Costa Canal and the 
acquired land, as well as all interest in the acquired land to 
date to CCWD within 180 days of the Act's enactment. As 
consideration for the conveyance, CCWD must assume all 
liability for the administration, operation, maintenance, and 
replacement of the Contra Costa Canal, in accordance with 
applicable agreements and valid existing rights.
    Subsection (b) directs the Secretary to convey the Rock 
Slough fish screen facility to the CCWD pursuant to that 
facility's title transfer agreement. This subsection also 
directs the Secretary and CCWD to enter into negotiations to 
accomplish the fish screen facility conveyance within 180 days 
of the Contra Costa Canal conveyance.
    Subsection (c) requires the CCWD to pay any conveyance-
related administrative and real estate transfer costs to the 
    Subsection (d) requires the Secretary to comply with 
applicable environmental laws prior to conveyance.

Sec. 4. Relationship to existing Central Valley project contracts

    Section 4 states that nothing in the Act affects the 
application of reclamation laws to water delivered to CCWD and 
authorizes the modification of existing contracts to comply 
with the Act. This section further shields the United States 
from liability related to the conveyed property after the date 
of conveyance.

Sec. 5. Report

    Section 5 requires the Secretary to submit an explanatory 
report to Congress if the conveyance and assignment of the 
Contra Costa Canal is not completed within one year after the 
Act's enactment.


    The following estimate of the costs of this measure has 
been provided by the Congressional Budget Office:
    H.R. 6040 would authorize the Bureau of Reclamation (BOR), 
the Western Area Power Administration, and the Department of 
Defense to transfer the Contra Costa Canal, the Rock Slough 
Fish Screen, and the associated federal land and facilities to 
the Contra Costa County Water District located in California.
    Under the Act, BOR would modify the Rock Slough Fish Screen 
to ensure the screen is operating safely before transferring 
it. Using information from BOR, CBO estimates that the federal 
share of the costs to complete that work would be $2 million, 
subject to the availability of appropriated funds.
    Under current law, the federal government collects leasing 
and grazing fees of about $80,000 per year from the property 
that would be transferred under H.R. 6040. Those amounts are 
recorded in the federal budget as offsetting receipts, or 
reductions in direct spending. Under the Act, to compensate the 
federal government for those lost receipts, the district would 
pay the federal government an amount equal to the net present 
value of 10 years of receipts (discounted using the 10-year 
Treasury rate). CBO estimates that the district would pay the 
federal government $750,000 in the next few years and that the 
net effect on direct spending over the 2019-2028 period would 
be negligible.
    Because enacting H.R. 6040 would affect direct spending, 
pay-as-you-go procedures apply. Enacting H.R. 6040 would not 
affect revenues.
    CBO estimates that enacting H.R. 6040 would not 
significantly increase net direct spending or on-budget 
deficits in any of the four consecutive 10-year periods 
beginning in 2029.
    H.R. 6040 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    On August 29, 2018, CBO transmitted a cost estimate for 
H.R. 6040, the Contra Costa Canal Transfer Act, as ordered 
reported by the House Committee on Natural Resources on July 
18, 2018. On October 23, 2018, CBO transmitted a cost estimate 
for S. 3001, the Contra Costa Canal Transfer Act, as ordered 
reported by the Senate Committee on Energy and Natural 
Resources on October 2, 2018. The three pieces of legislation 
are similar and CBO's estimates of their budgetary effects are 
the same.
    The CBO staff contact for this estimate is Aurora Swanson. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.


    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 H.R. 6040. The Act 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 
    Little, if any, additional paperwork would result from the 
enactment of H.R.6040, as ordered reported.


    H.R. 6040, as ordered 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 Department of the Interior at 
the July 13, 2018, hearing on S. 3001, companion legislation to 
H.R. 6040, follows:

Statement of Timothy R. Petty, Ph.D., Assistant Secretary for Water and 
                Science, U.S. Department of the Interior

    Chairman Flake, Ranking Member Cortez Masto and members of 
the Subcommittee, I am Dr. Tim Petty, the Assistant Secretary 
for Water and Science at the Department of the Interior 
(Department). Thank you for the opportunity to provide the 
views of the Department on S. 3001, the Contra Costa Canal 
Title Transfer Act.
    S. 3001 directs the Department to offer to transfer and 
convey to the Contra Costa County Water District (District) all 
right, title, and interest of the United States in and to the 
Contra Costa Canal (Canal) within 180 days of enactment of this 
Act. The Canal, as defined in S. 3001, includes the entirety of 
the Contra Costa Canal Unit of the Central Valley Project 
(CVP), including pipelines, conduits, pumping plants, 
aqueducts, laterals, water storage and regulatory facilities, 
electric substations, related works, and improvements and all 
interests in land associated within the unit, not including the 
Rock Slough fish screen facility. The lands under consideration 
to be transferred are currently under the jurisdiction of the 
Bureau of Reclamation, the Western Area Power Administration, 
and the Department of Defense. The District has been 
effectively operating and maintain these facilities. The title 
transfer of the Canal will maintain this arrangement into the 
    The Department recognizes that the District is a longtime 
CVP contractor, and that even with enactment of S. 3001, the 
District would continue to pay their share of CVP operations 
and maintenance and repayment through their water service 
    If the conveyance has not been completed within 12 months, 
Interior is required to submit Congress an explanation and the 
date by which the conveyance will be completed.
    The Department has an active title transfer program and 
supports transferring 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. 
Specifically, a streamlined title transfer process for 
uncomplicated transfers creates incentives for non-Federal 
entities to closely engage with Reclamation to complete the 
process and allow for appropriate transfers to take place 
without legislation. This approach is reflected in the 
Administration's Title Transfer legislative proposal, 
transmitted to Congress in February of this year.
    Mr. Chairman, it is important to note that in most cases, 
Reclamation and the entity interested in taking title must 
complete environmental compliance activities and negotiate the 
terms and conditions of the transfer before pursuing 
legislation. Reclamation has been working with the District 
closely on this effort and will continue to do so. However, 
this legislation, as currently drafted would authorize the 
transfer before those steps are completed.
    Instead, we recommend that the conveyance be completed 
pursuant to a title transfer agreement developed between the 
Department and the District, in consultation with other 
stakeholders, including the East Bay Regional Park District, 
the City of Antioch and the City of Walnut Creek. This will 
enable Reclamation, the District and the other stakeholders to 
work through the upfront activities necessary to complete a 
title transfer. We have had situations in previous transfers 
where additional legislation was required because the terms and 
conditions were dictated exclusively in the legislation and 
there was no flexibility to address unanticipated problems on 
this matter.
    Further, it is important that the legislation protect the 
financial interests of the taxpayers. While the District has 
completed its repayment obligation for its share of 
construction costs of the Canal, we need to account for 
revenues from other contracts, leases and agreements that 
currently come to the United States, but would transfer to the 
District under this Act. We recommend that the legislation 
acknowledge this requirement.
    We would be pleased to work with the Committee, the 
sponsors and the District on legislative language to reflect 
these necessary modifications. In the meantime, we recommend 
that Reclamation and the District complete a valuation analysis 
to ensure that the financial interests of the United States are 
protected and that the results be reflected in the title 
transfer agreement that is referenced in the legislation.
    Mr. Chairman, Reclamation has been working closely with the 
District on this issue and we look forward to continuing that 
progress. We believe that if structured properly, the transfer 
of these facilities will improve the efficiency and 
effectiveness of the Canal's operations by getting control of 
the lands and facilities into the hands of those who best 
understand the needs of the community.
    With these modifications, the Department is pleased to 
support this legislation. This completes my statement, I am 
happy 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, the Committee notes that no 
changes in existing law are made by the Act as ordered