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The original documents are located in Box 30, folder "10/3/75 HR543 Loans for Certain
Water Resource Development Projects" of the White House Records Office: Legislation
Case Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
Signed
APPROVED
0/3/75
ACTION
THE WHITE HOUSE
WASHINGTON
Last Day: October 4
October 1, 1975
To archive
10/0
MEMORANDUM FOR THE PRESIDENT
Postal
FROM:
JIM CANNON
10/6
SUBJECT:
Enrolled Bill H.R. 543 - Rehabilitation
and Betterment Loans for Certain Water
Resource Development Projects
Attached for your consideration is H.R. 543, sponsored
by Representative Johnson, which expands the loan
authority of the Rehabilitation and Betterment Act
to permit small reclamation projects to be eligible
to apply for rehabilitation and betterment loans.
A detailed analysis of the bill is provided in OMB's
enrolled bill report at Tab A.
OMB, Max Friedersdorf, Counsel's Office (Lazarus) and
I recommend approval of the enrolled bill.
RECOMMENDATION
That you sign H.R. 543 at Tab B.
ReidwRends office 10/4/95 (10:30 AM)
tape to Press offee, Thym Smith desk; 10/4/75 (10:35 AM)
FORD : LIBRARY BERALD
Digitized from Box 30 of the White House Records Office Legislation Case Files at the Gerald R. Ford Presidential Library
PRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
UNITED
OFFICE OF MANAGEMENT AND BUDGET
SECUTIVE
STATE
WASHINGTON, D.C. 20503
SEP 30 1975
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 543 - Rehabilitation and
betterment loans for certain water resource
development projects
Sponsor - Rep. Johnson (D) California
Last Day for Action
October 4, 1975 - Saturday
Purpose
Expands existing, statutory eligibility for loans to
rehabilitate and improve certain Federally constructed
irrigation systems to certain other Federally constructed
water resource development projects.
Agency Recommendations
Office of Management and Budget
Approval
Department of the Interior
No objection
Discussion
The Rehabilitation and Betterment Act of 1949 provides
authority for the Secretary of the Interior to make
rehabilitation and betterment loans to entities operating
irrigation systems constructed under Federal reclamation
laws. This loan authority provides a mechanism for keeping
these projects in good repair and for modernizing them, where
applicable, to assure the continued effective, efficient and
economic operation of Federally constructed irrigation systems.
2
In 1956, the Small Reclamation Projects Act authorized a
new Federal loan program to assist the construction of
certain multipurpose water resource development projects.
While that Act permits the Secretary of the Interior to
make certain rehabilitation and betterment loans, it
contains a number of limitations which could, in the case
of some projects, preclude future supplemental loans for
rehabilitation purposes. In addition to these restrictions,
projects constructed under the Act have recently been
determined to be ineligible for rehabilitation and
betterment loans under the 1949 Act.
Recognizing that projects constructed under the Small
Reclamation Projects Act will, at some time, be in need
of rehabilitation, the enrolled bill expands the loan
authority of the Rehabilitation and Betterment Act to permit
small reclamation projects to be eligible to apply for
rehabilitation and betterment loans. The enrolled bill also
requires that in the repayment of such loans, any interest
payable is to be computed at the rate which applied to the
original construction loan made pursuant to the Small
Reclamation Projects Act.
Since the bill does not make any specific monetary authori-
zation, but simply expands eligibility for loan considera-
tion to a class of existing projects, the cost of its enactment
is speculative. As noted above, however, the loans are
repayable, and Interior states in its enrolled bill letter
that
"
the budgetary impact of this legislative change is
not expected to be of great magnitude.'
In its enrolled bill letter, Interior also notes that the
objective of H.R. 543 could have been accomplished by amending
the Small Reclamation Projects Act instead of the Rehabilitation
and Betterment Act. Nonetheless, the Department supports the
objective of the bill and has no objection to its enactment.
The provision in the bill discussed above for computation of
the interest rate for rehabilitation and betterment loans for
small reclamation projects establishes an arbitrary interest
rate which bears no relationship to Treasury's current
borrowing costs. The interest rate formula currently produces
3
a rate of 4 3/8 percent compared with recent long term
Treasury borrowing costs of about 8 1/2 percent. We have
consistently objected to this arbitrary computation of
interest rates for water resource development projects and
accordingly oppose the interest rate provision of H.R. 543.
We do not believe, however, that this provision is sufficiently
objectionable to warrant disapproval of the bill. Furtheremore,
we expect that a cost-sharing/reimbursement bill adjusting
the rate for all water resources projects will be transmitted
to the Congress next session. The interest rate specified
in H.R. 543 can be corrected in that bill.
James m. Director Trey for
Legislative Reference
Enclosures
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
3:30p.m.
SEP 30 1975
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 543 - Rehabilitation and
betterment loans for certain water resource
development projects
Sponsor - Rep. Johnson (D) California
Last Day for Action
October 4, 1975 - Saturday
Purpose
Expands existing, statutory eligibility for loans to
rehabilitate and improve certain Federally constructed
irrigation systems to certain other Federally constructed
water resource development projects.
Agency Recommendations
Office of Management and Budget
Approval
Department of the Interior
No objection
Discussion
The Rehabilitation and Betterment Act of 1949 provides
authority for the Secretary of the Interior to make
rehabilitation and betterment loans to entities operating
irrigation systems constructed under Federal reclamation
laws. This loan authority provides a mechanism for keeping
these projects in good repair and for modernizing them, where
applicable, to assure the continued effective, efficient and
economic operation of Federally constructed irrigation systems.
2
In 1956, the Small Reclamation Projects Act authorized a
new Federal loan program to assist the construction of
certain multipurpose water resource development projects.
While that Act permits the Secretary of the Interior to
make certain rehabilitation and betterment loans, it
contains a number of limitations which could, in the case
of some projects, preclude future supplemental loans for
rehabilitation purposes. In addition to these restrictions,
projects constructed under the Act have recently been
determined to be ineligible for rehabilitation and
betterment loans under the 1949 Act.
Recognizing that projects constructed under the Small
Reclamation Projects Act will, at some time, be in need
of rehabilitation, the enrolled bill expands the loan
authority of the Rehabilitation and Betterment Act to permit
small reclamation projects to be eligible to apply for
rehabilitation and betterment loans. The enrolled bill also
requires that in the repayment of such loans, any interest
payable is to be computed at the rate which applied to the
original construction loan made pursuant to the Small
Reclamation Projects Act.
Since the bill does not make any specific monetary authori-
zation, but simply expands eligibility for loan considera-
tion to a class of existing projects, the cost of its enactment
is speculative. As noted above, however, the loans are
repayable, and Interior states in its enrolled bill letter
that "
the budgetary impact of this legislative change is
not expected to be of great magnitude. "
In its enrolled bill letter, Interior also notes that the
objective of H.R. 543 could have been accomplished by amending
the Small Reclamation Projects Act instead of the Rehabilitation
and Betterment Act. Nonetheless, the Department supports the
objective of the bill and has no objection to its enactment.
The provision in the bill discussed above for computation of
the interest rate for rehabilitation and betterment loans for
small reclamation projects establishes an arbitrary interest
rate which bears no relationship to Treasury's current
borrowing costs. The interest rate formula currently produces
3
a rate of 4 3/8 percent compared with recent long term
Treasury borrowing costs of about 8 1/2 percent. We have
consistently objected to this arbitrary computation of
interest rates for water resource development projects and
accordingly oppose the interest rate provision of H.R. 543.
We do not believe, however, that this provision is sufficiently
objectionable to warrant disapproval of the bill. Furtheremore,
we expect that a cost-sharing/reimbursement bill adjusting
the rate for all water resources projects will be transmitted
to the Congress next session. The interest rate specified
in H.R. 543 can be corrected in that bill.
(Signed) James M. Frey
Assistant Director for
Legislative Reference
Enclosures
OF THE INTERIOR
United States Department of the Interior
OFFICE OF THE SECRETARY
March
1849
WASHINGTON, D.C. 20240
3,
SEP 26 1975
Dear Mr. Lynn:
This responds to your request for our views on the enrolled bill
H.R. 543, "To expand coverage of the Rehabilitation and Betterment
Act (Act of October 7, 1949, 63 Stat. 724).'
We would not object to Presidential approval of the enrolled bill.
The Rehabilitation and Betterment Act of 1949 provides authority for,
and is restricted in its use to the rehabilitation and betterment of
irrigation systems on projects governed by Federal Reclamation law.
H.R. 543 would extend the Rehabilitation and Betterment Act to projects
constructed under the authority of the Small Reclamation Projects
Act which need remedial measures to protect their financial integrity.
Both Acts are administered by the Secretary of the Interior.
As originally introduced in the House, H.R. 543 would have extended
the authority of the Rehabilitation and Betterment Act, not only to
small reclamation projects constructed under the authority of the
Small Reclamation Projects Act, but also to any irrigation or drainage
system operated by a State-authorized public agency. Further, it
would have granted interest-free status to loans for rehabilitation
of municipal and industrial water projects as well as irrigation
projects. On these two points the Department disagreed with the
original bill and recommended against its enactment. The House
Subcommittee on Water and Power Resources, in reporting H.R. 543,
amended the bill to eliminate both of those objectionable provisions.
The Subcommittee, however, chose to ignore a third objection relating
to the choice of which Act to amend. The House passed H.R. 543 in
its present form.
The Senate passed H.R. 543 without amendment.
The Department supports the objective incorporated in H.R. 543 to
provide authority for the rehabilitation and betterment of projects
authorized by the Small Reclamation Projects Act, particularly
those projects which need remedial measures to protect their financial
integrity. We would note, however, that this objective could also
REVOLUTION
AMERICAN
BICENTENNIAL
1776-1976
be accomplished by amending the Small Reclamation Projects Act instead
of the Rehabilitation and Betterment Act.
The Small Reclamation Projects Act already authorizes the Secretary
to make certain loans for rehabilitation and betterment of projects
which would be extended under H.R. 543. However, the Department
recognizes that in some cases the present Small Reclamation Projects
Act could preclude certain projects from being approved and con-
structed. The currently authorized ceiling on total project costs
and Federal loans for a project may in some cases preclude a future
supplemental loan for project rehabilitation.
There have been 40 projects built under the Small Reclamation Projects
Act and 14 are under construction. The total cost of these 54 projects
is approximately $150 million. Under the Rehabilitation and Betterment
Act, 34 projects have been aided, with an average age of 30 years at
the time of improvement. The cost of the assistance amounts to about
12 percent of the total investment in the projects involved. Based
on this experience, perhaps as many as one-half of the Small Loan
projects could require rehabilitation and betterment in the future.
The estimated cost would probably range from $10 million to $15 million
on a very rough calculation. This estimate is based on 12 percent
of half of the $150 million total original costs of the projects.
Although current construction costs are much higher than those of the
past, better maintenance of projects, in contrast to the inadequate
attention of the economic depression and wartime years, may be expected
to reduce the need for rehabilitation and betterment. In any event,
the budgetary impact of this legislative change is not expected to be
of great magnitude.
Therefore, the Department has no objection to H.R. 543.
Sincerely yours,
Jack Hoston
Assistant Secretary of the Interior
Honorable James T. Lynn
Director, Office of
Management and Budget
Washington, D. C. 20503
2
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 407
Date: September 30
Time: 600pm
FOR ACTION: George Humphreys on
cc (for information): Jim Cavanaugh
Max Friedersdorf
m
Jack Marsh
Ken Lazarus/L
Paul theis
FROM THE STAFF SECRETARY
DUE: Date: October 1
Time: 300pm
SUBJECT:
H.R. 543 - Rehabilitationaand Betterment loans for
certain water resource development projects
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
K. R. COLE, JR.
telephone the Staff Secretary immediately.
For the President
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
407
Date:
September 30
Time: 600pm
FOR ACTION: George Humphreys
CC (for information): Jim Cavanaugh
Max Friedersdorf
Jack Marsh
Ken Lazarus
FROM THE STAFF SECRETARY
DUE: Date:
October 1
Time: 300pm
SUBJECT:
H.R. 543 - Rehabilitation and Betterment loans for
certain water resource development projects
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
October 1
TO: JUDY
FROM: GEORGE W. HUMPHREYS
I have no objections or additional comments.
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
telephone the Staff Secretary immediately.
THE WHITE HOUSE
WASHINGTON
October 1, 1975
MEMORANDUM FOR:
JIM CAVANAUGH
FROM:
MAX L. FRIEDERSDORF M.G.
SUBJECT:
H.R. 543 - Rehabilitation and Betterment loans for certail
water resource development projects
The Office of Legislative Affairs concurs with the agencies
that the
subject bill be signed.
Attachments
THE WHITE HOUSE
ACTION MEMORANDUM
WASHINGTON
LOG NO.:
407
Date:
September 30
Time: 600pm
FOR ACTION: George Humphreys
CC (for information): Jim Cavanaugh
Max Friedersdorf
Jack Marsh
Ken Lazarus
FROM THE STAFF SECRETARY
DUE: Date:
October 1
Time:
300pm
SUBJECT:
H.R. 543 - Rehabilitation and Betterment loans for
certain water resource development projects
ACTION REQUESTED:
For Necessary Action
For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS:
Please return to Judy Johnston, Ground Floor West Wing
No objection.
Ken Lazarus
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
delay in submitting the required material, please
telephone the Staff Secretary immediately.
94TH CONGRESS
HOUSE OF REPRESENTATIVES
REPORT
1st Session
No. 94-102
EXPANDING COVERAGE OF THE REHABILITATION AND
BETTERMENT ACT (ACT OF OCT. 7, 1949, 63 STAT. 724)
MARCH 20, 1975.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. HALEY, from the Committee on Interior and Insular Affairs,
submitted the following
REPORT
[To accompany H.R. 543]
The Committee on Interior and Insural Affairs, to whom was re-
ferred the bill (H.R. 543) to expand coverage of the Rehabilitation
and Betterment Act (act of Oct. 7, 1949, 63 Stat. 724), having consid-
ered the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
The amendment is as follows:
Page 1, beginning on line 3, strike out all after the enacting clause
and insert in lieu thereof the following:
That the first sentence of the Act entitled "An Act to provide for the return
of rehabilitation and betterment costs of Federal reclamation projects", ap-
proved October 7, 1949, is amended to read as follows: "Expenditures of funds
hereafter specifically appropriated for rehabilitation and betterment of any proj-
ect constructed under authority of the Small Reclamation Projects Act (Act of
August 6, 1956, 70 Stat. 1044, and Acts amendatory thereof and supplementary
thereto) and of irrigation systems on projects governed by the Federal Reclama-
tion laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory thereof or
supplementary thereto), shall be made only after the organizations concerned
shall have obligated themselves for the return thereof, in installments fixed in
accordance with their "ability to pay," as determined by the Secretary of the In-
terior in the light of their outstanding repayment obligations, and which shall, to
the fullest practicable extent, be scheduled for return with their construction
charge installments or otherwise schdeuled as he shall determine: Provided, That
repayment of such loans made for Small Reclamation Projects shall include
interest in accordance with the provisions of said "Small Reclamation Projects
Act."
PURPOSE OF THE LEGISLATION
The purpose of H.R. 543 by Mr. Johnson of California is to clarify
the eligibility of projects developed under the authority of the Small
Reclamation Projects Act (70 Stat. 1077) for participation in the pro-
grams authorized by the Rehabilitation and Betterment Act of 1949
(63 Stat. 724) as amended.
38-006
2
3
BACKGROUND OF THE LEGISLATION
COSTS
The Rehabilitation and Betterment Act of 1949, as amended, pro-
As H.R. 543 does not specifically authorize a program of works,
vides that the Secretary of the Interior may make loans to entities op-
but simply extends eligibility for consideration to a class of existing
erating irrigation systems, constructed under the Federal Reclamation
projects, it is speculative as to the probable cost of the measure. The
law, for the purpose of rehabilitating and betterment of such systems.
Department of the Interior testified that the ultimate use of the
Such loans may be implemented only after the Secretary enters into
authority conveyed by H.R. 543 would probably be about $9 million
a repayment contract with the borrowing entity for repayment of the
(at current price levels) over a term of 30 to 40 years. The Committee
loan in not more than 40 years and after such contract has been before
believes that this estimate is low and that actual expenditures may ap-
the Congress for 60 days. This program has functioned effectively as
proach twice that amount due to the continuing escalation of construc-
a vehicle for assuring that Federally constructed irrigation systems
tion costs. Accordingly, in terms of budgetary outlay, an average of
maintain their capability to produce the services, benefits and repay-
$500,000 per year for the next forty years or $20 million represents
ment revenues for which they were developed. Since the inception of
the Committee estimate required by the Rules of the House.
the program in 1949 there have been 34 projects receiving loans-with
an approximate aggregate value of $55 million. There have been no
INFLATION IMPACT
defaults and there are no delinquencies.
In recent months, the Solicitor of the Department of the Interior
The Committee does not believe that H.R. 543 has an identifiable
has determined that multiple purpose water resource development
inflationary impact. First of all, the same program of budgetary out-
projects, constructed under the authority of the Small Reclamation
lays would be possible, in theory, if applicants for Rehabilitation and
Projects Act, as amended, are not eligible, legally, for consideration
Betterment loans sought and obtained supplemental loans through
for rehabilitation and betterment loans. His reasoning apparently is
the Small Reclamation Projects Act. This option is available to the
that title to "small projects" does not vest in the United States. Yet
borrowing entity without further legislative action, but it involves
it is reasonable to assume that such programs will in the not too distant
more administrative costs, overhead and procedural delay. Secondly,
future need rehabilitation and betterment assistance.
the effect of H.R. 543 will be to preserve the benefit and revènue-pro-
ducing capability of the applicant and thereby assure the return of the
EXPLANATION OF THE LEGISLATION
existing loans, thus resulting in the return of more revenues to the
Treasury than are expended for the rehabilitation purpose.
H.R. 543 will amend the Rehabilitation and Betterment Act to
enable projects constructed under the Small Reclamation Projects Act
COMMITTEE RECOMMENDATION
to apply for Rehabilitation and Betterment Loans. The bill also re-
quires that the repayment of such loans be in accordance with the
The Committee on Interior and Insular Affairs, on the basis of a
repayment requirements of the Small Reclamation Projects Act, SO
voice vote, recommends that H.R. 543 be enacted.
that costs allocable to interest-bearing features will bear interest. It is
the intent of the Committee that the interest rate for the rehabilitation
DEPARTMENTAL REPORTS
and betterment loans be the same as the rate provided for the repay-
ment of the original construction loan for the project.
The report of the Department of the Interior is presented below
The Committee also notes the continuing question of what constitutes
in its entirety. This report supports the objectives of the bill but rec-
"betterment" as distinct from "new construction." It is the view of the
ommends that it not be enacted. The Department suggests that the
Committee that new facilities and features designed to improve the
same effect could be accomplished by amending the Small Reclama-
operability of an existing system may properly be considered as
tion Project Act. The Departmental witness testified, however, that
"betterment" SO long as such facilities do not result in an increase in
the Committee amendment resolved 90 percent of the Department's
the scope of the original undertaking by increasing the acreage to be
concern with the legislation.
irrigated or the introduction of new project purposes.
U.S. DEPARTMENT OF THE INTERIOR,
COMMITTEE AMENDMENT
OFFICE OF THE SECRETARY,
Washington, D.C., February 21, 1975.
The Committee adopted one amendment to H.R. 543 substituting a
Hon. JAMES A. HALEY,
completely new text. The amendment:
Chairman, Committee on Interior and Insular Affairs,
(1) limits the effect of the bill to the Small Reclamation Proj-
House of Representatives, Washington, D.C.
ects program only, while the bill, as introduced, would have
DEAR MR. CHAIRMAN This responds to your request for this De-
qualified any publicly-financed irrigation and drainage project
partment's views on H.R. 543, a bill "To expand coverage of the Re-
in the United States; and
habilitation and Betterment Act (Act of October T, 1949, 63 Stat.
(2) clarifies the repayment criteria for return of interest-
724)."
bearing costs.
H.R. 102
H.R. 102
4
5
As requested by your letter of January 31, 1975, we have reviewed
ported, are shown as follows (existing law proposed to be omitted is
the subject bill, and recommend against its enactment subject to the
enclosed in black brackets, new matter is printed in italic, existing
comments discussed below.
law in which no change is proposed is shown in roman) :
The Department supports that objective incorporated in H.R. 543
to provide authority for the rehabilitation and betterment of projects
ACT OF OCTOBER 7, 1949 (63 STAT. 724) AS AMENDED (64 STAT. 11)
authorized by the Small Reclamation Projects Act, as amended, par-
ticularly those projects that need remedial measures to protect their
That expenditures of funds hereafter specifically appropriated for
financial integrity. However, we believe that this objective can be best
rehabilitation and betterment of any project constructed under author-
accomplished by amending the Small Reclamation Projects Act, as
ity of the Small Reclamation Projects Act (Act of August 6, 1956, 70
amended, instead of the Rehabilitation and Betterment Act. We have
Stat. 1044, and Acts amendatory thereof and supplementary thereto)
not had sufficient time to identify the changes in the Act that would
and of irrigation systems on projects governed by the Federal reclama-
be necessary, but would be most willing to work with your committee
tion laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory
in this regard.
thereof or supplementary thereto) shall be made only after the orga-
The Rehabilitation and Betterment Act of 1949 provides authority
nizations concerned shall have obligated themselves for the return
for the rehabilitation and betterment of irrigation systems on Federal
thereof in installments fixed in accordance with their ability to pay,
reclamation projects. H.R. 543 would extend that authority to cover
as determined by the Secretary of the Interior in the light of their out-
anv irrigation or drainage project operated by a State authorized
standing repayment obligations, and which shall, to the fullest prac-
public agency and any project constructed with funds provided by the
tical extent, be scheduled for return with their construction charge
Small Reclamation Projects Act (Act of August 6, 1956, 70 Stat. 1044,
installments or otherwise scheduled as he shall determine[ Pro-
and Acts amendatory thereof or supplementary thereto). Extension
vided, That repayment of such loans made for Small Reclamation
of the Rehabilitation and Betterment Act to any irrigation or drain-
Projects shall include interest in accordance with the provisions of
age system operated by a State-authorized public agency goes far be-
said Small Reclamation Projects Act. No such determination of the
yond that required to meet the needs of systems receiving water from
Secretary of the Interior shall become effective until the expiration of
reclamation projects, and perhaps would make this part of the recla-
sixty days after it has been submitted to the Committee on Interior
and Insular Affairs of the Senate and the Committee on Interior and
mation program apply to all 50 States.
The Small Reclamation Projects Act already authorizes the Secre-
Insular Affairs of the House of Representatives; except that, any such
tary to make certain loans for rehabilitation and betterment of proj-
determination may become effective prior to the expiration of such
ects which would be extended under H.R. 543. The Department does
sixty days in any case in which each such committee approves an
recognize, however, that in some cases the present Small Reclamation
earlier date and notifies the Secretary, in writing, of such approval:
Projects Act, as amended. could preclude certain projects from being
Provided, That when Congress is not in session the Secretary's deter-
approved and constructed. For example, the Act states that no more
mination, if accompanied by a finding by the Secretary that substantial
than one loan may be granted for a particular project. To date, this
hardship to the water users concerned or substantial further injury
to the project works will result, shall become effective when the chair-
provision has been interpreted to mean that a project constructed
man and ranking minority member of each such committee shall file
under a Small Reclamation Projects Act loan cannot be eligible for
with the Secretary their written approval of said findings. The term
another loan for the rehabilitation of the same facility some time in
"rehabilitation and betterment", as used in this Act, shall mean main-
the future. In addition, the currently authorized ceiling on total proj-
tenance, including replacements, which cannot be financed currently,
ect costs and Federal loans for a project may in some cases preclude a
as otherwise contemplated by the Federal reclamation laws in the case
future supplemental loan for project rehabilitation.
of operation and maintenance costs, but shall not include construction,
In summary. the Department cannot support enactment of H.R. 543,
the costs of which are returnable, in whole or in part, through "con-
but would not object to amending the Small Reclamation Projects
struction charges" as that term is defined in section 2(d) of the Recla-
Act to permit the rehabilitation and betterment of projects authorized
mation Project Act of 1939 (53 Stat. 1187). Such rehabilitation and
by this Act.
betterment work may be performed by contract, by force-account, or,
The Office of Management and Budget has advised that there is no
notwithstanding any other law and subject only to such reasonable
objection to the presentation of this report from the standpoint of
terms and conditions as the Secretary of the Interior shall deem appro-
the Administration's program.
priate for the protection of the United States, by contract entered
Sincerely yours,
into with the organization concerned whereby such organization shall
JACK HORTON.
perform such work.
Secretary of the Interior.
CHANGES IN EXISTING LAW
In compliance with clause 3 of rule XIII of the Rules of the House
of Representatives, changes in existing law made by the bill, as re-
H.R. 102
H.R. 102
Calendar No. 374
94TH CONGRESS
SENATE
REPORT
1st Session
No. 94-380
EXPANDING COVERAGE OF THE REHABILITATION AND
BETTERMENT ACT (ACT OF OCT. 7, 1949, 63 STAT. 724)
SEPTEMBER 18 (legislative day, SEPTEMBER 12), 1975.-Ordered to be printed
Mr. JACKSON, from the Committee on Interior and Insular Affairs,
submitted the following
REPORT
[To accompany H.R. 543]
The Committee on Interior and Insular Affairs, to which was re-
ferred the bill (H.R. 543) to expand coverage of the Rehabilitation
and Betterment Act (Act of Oct. 7, 1949, 63 Stat. 724), having consid-
ered the same, reports favorably thereon without amendment and rec-
ommends that the bill do pass.
PURPOSE OF THE MEASURE
The purpose of the measure is to make available to projects devel-
oped pursuant to the Small Reclamation Projects Act (70 Stat. 1077) a
source of loan funds for rehabilitation and betterment purposes as pro-
vided by the programs authorized by the Rehabilitation and Better-
ment Act of 1949 (63 Stat. 724) as amended.
BACKGROUND AND NEED
In 1949, the Congress recognized the need to provide a mechanism
for funding rehabilitation and betterment activities association with
irrigation projects constructed under Federal reclamation laws. With
the signing into law of the Rehabilitation and Betterment Act of 1949,
the Secretary of the Interior was authorized to make loans to operat-
ing entities of such projects for such purposes thereby assuring the con-
tinued effective, efficient, and economic operation of Federally con-
structed irrigation systems. By keeping the projects in good repair and
in those instances where applicable, modernizing the irrigation works,
the projects have continued to provide valuable food and fiber re-
sources, stable incomes for participants, and the repayment of initial
Federal investments. In the 26 years since the program was initiated,
there have been no defaults or delinquencies and irrigators on 34 proj-
ects have benefitted from loans amounting to $55 million.
57-010
2
3
In 1956, a program of assistance via loans to qualified entities for
EXECUTIVE COMMUNICATIONS
construction of multipurpose reclamation projects was initiated under
the Small Reclamation Projects Act of 1956. During the almost 20
The executive communications regarding H.R. 543 are set forth in
years since passage of the act, it has proven to be a valuable tool for
full as follows:
the development and effective utilization of related land and water re-
U.S. DEPARTMENT OF THE INTERIOR,
sources. As of January, 1975, under the Small Reclamation Projects
OFFICE OF THE SECRETARY,
Act, construction has been completed on 41 projects with loans total-
Washington, D.C., September 9, 1975.
ing $95 million and 14 projects with loans totaling $66 million were
Hon. HENRY M. JACKSON,
under construction.
Chairman, Committee on Interior and Insular Affairs, U.S. Senate,
It is evident that projects constructed under the authority of the
Washington, D.C.
Small Reclamation Projects Act will, in time, be in need of rehabilita-
DEAR MR. CHAIRMAN: This-responds to your request for this Depart-
tion and betterment efforts if the projects are to continue or improve
ment's views on H.R. 543, as it passed the House of Representatives,
past performance. The Solicitor of the Interior has determined that
a bill "To expand coverage of the Rehabilitation and Betterment Act
projects constructed. under the authority of the Small Reclamation
(Act of October 7, 1949, 63 Stat. 724).'
Projects Act. as amended, are not eligible for rehabilitation and better-
As requested by your letter of May 18, 1975, we have reviewed the
ment loans under the Act of 1949.
subject bill, and recommend against its enactment subject to the com-
ments discussed below.
PROPOSED LEGISLATION
The Rehabilitation and Betterment Act of 1949 provides authority
H.R. 543 will amend the Rehabilitation and Betterment Act of 1949
for, and is restricted in its use to the rehabilitation and betterment of
to provide that organizations concerned with projects constructed
irrigation systems on projects governed by Federal Reclamation law.
under the terms of the Small Reclamation Projects Act, as amended,
H.R. 543. as passed by the House of Representatives, would extend
may be eligible and apply for loans in accordance with the Rehabilita-
the Rehabilitation and Betterment Act to projects constructed under
tion and Betterment Act of 1949; however, repayment would be sub-
the authority of the Small Reclamation Projects Act which need re-
ject to the terms of the Small Reclamation Projects Act.
medial measures to protect their financial integrity. Both Acts are
administered by the Secretary of the Interior.
COSTS
The Department supports the objective incorporated in H.R. 543 to
provide authority for the rehabilitation and betterment of projects
In accordance with Section 252 (a) of the Legislative Reorganiza-
authorized by the Small Reclamation Projects Act, particularly those
tion Act of 1970 the committee provides the following estimates of
projects which need remedial measures to protect their financial integ-
cost:
rity. However, we believe that this objective can best be accomplished
Although H.R. 543 does not contain authorization for a
by amending the Small Reclamation Projects Act instead of the Reha-
specific monetary program, additional expenditures will be
bilitation and Betterment Act. We have not identified the specific
involved as qualified entities avail themselves of the benefits
changes in the Act which would be necessary, but would be most willing
to be derived from loans under the terms of the Rehabilita-
to work with your committee in this regard.
tion and Betterment Act, as amended. The Department of the
The Small Reclamation Projects Act already authorizes the Secre-
Interior estimates that expenditures at current cost levels
tary to make certain loans for rehabilitation and betterment of projects
may reach $9 million over a period of 30 to 40 years. How-
which would be extended under H.R. 543. However, the Department
ever, the committee, particularly in light of the enthusiastic
recognizes that in some cases the present Small Reclamation Projects
extent to which the Small Reclamation Projects Act has been
Act could preclude certain projects from being approved and con-
utilized. would estimate that rehabilitation and betterment
structed. The currently authorized ceiling on total project costs and
loans available pursuant to this legislation may reach or
Federal loans for a project may in some cases preclude a future supple-
exceed $20 million for the same period of time. However, it
mental loan for project rehabilitation.
should be pointed out that these costs are for the most part,
We believe, however, that it would be more appropriate to amend
repayable.
the Small Reclamation Projects Act to provide authority for the
rehabilitation and betterment of projects authorized by that Act.
TABULATION OF VOTES CAST IN COMMITTEE
The Office of Management and Budget has advised that there is no
objection to the presentation of this report from the standpoint of
Pursuant to Section 133 (b) of the Legislative Reorganization Act
the Administration's program.
of 1946, as amended, the following is a tabulation of votes of the
Sincerely yours,
Committee during consideration of H.R. 543.
JACK HORTON.
H.R. 543 was ordered favorably reported to the Senate without
Assistant Secretary of the Interior.
amendments by unanimous voice vote taken in open public session on
September 10, 1975, with a quorum of members present.
S.R. 380
S.R. 380
4
CHANGES IN EXISTING LAW
In compliance with subsection (4) of rule XXIX of the Standing
Rules of the Senate, changes in existing law made by the bill H.R. 543,
as ordered reported, are shown as follows: (existing law proposed
to be omitted is enclosed in black brackets, new matter is printed in
italic, existing law in which no change is proposed is shown in roman) :
ACT OF OCTOBER 7, 1949 (63 STAT. 724) AS AMENDED (64 STAT. 11)
That expenditures of funds hereafter specifically. appropriated for
rehabilitation and betterment of any project constructed under author-
ity of the Small Reclamation Projects Act (Act of August 6, 1956, 70
Stat. 1044, and Acts amendatory thereof and supplementary thereto)
and of irrigation systems on projects governed by the Federal reclama-
tion laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory
thereof or supplementary thereto) shall be made only after the orga-
nizations concerned shall have obligated themselves for the return
thereof in installments fixed in accordance with their ability to pay,
as determined by the Secretary of the Interior in the light of their out-
standing repayment obligations, and which shall, to the fullest prac-
tical extent, be scheduled for return with their construction charge
installments or otherwise scheduled as he shall determine Pro-
vided, That repayment of such loans made for Small Reclamation
Projects shall include interest in accordance with the provisions of
said Small Reclamation Projects Act. No such determination of the
Secretary of the Interior shall become effective until the expiration of
sixty days after it has been submitted to the Committee on Interior
and Insular Affairs of the Senate and the Committee on Interior and
Insular Affairs of the House of Representatives; except that, any such
determination may become effective prior to the expiration of such
sixty days in any case in which each such committee approves an
earlier date and notifies the Secretary, in writing, of such approval:
Provided, That when Congress is not in session the Secretary's deter-
mination, if accompanied by a finding by the Secretary that substan-
tial hardship to the water users concerned or substantial further injury
to the project works will result, shall become effective when the chair-
man and ranking minority member of each such committee shall file
with the Secretary their written approval of said findings. The term
"rehabilitation and betterment", as used in this Act, shall mean main-
tenance, including replacements, which cannot be financed currently,
as otherwise contemplated by the Federal reclamation laws in the case
of operation and maintenance costs, but shall not include construction.
the cost of which are returnable, in whole or in part, through "con-
struction charges" as that term is defined in section 2(d) of the Recla-
mation Project Act of 1939 (53 Stat. 1187). Such rehabilitation and
betterment work may be performed by contract, by force-account, or,
notwithstanding any other law and subject only to such reasonable
terms and conditions as the Secretary of the Interior shall deem appro-
priate for the protection of the United States, by contract entered
into with the organization concerned whereby such organization shall
perform such work.
S.R. 380
H. R. 543
Ainety-fourth Congress of the United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday, the fourteenth day of January,
one thousand nine hundred and seventy-five
An Act
To expand coverage of the Rehabilitation and Betterment Act (Act of October 7,
1949, 63 Stat. 724).
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, That the first
sentence of the Act entitled "An Act to provide for the return of
rehabilitation betterment costs of Federal reclamation projects",
approved October 7, 1949, is amended to read as follows: "Expendi-
tures of funds hereafter specifically appropriated for rehabilitation
and betterment of any project constructed under authority of the
Small Reclamation Projects Act (Act of August 6, 1956, 70 Stat. 1044,
and Acts amendatory thereof and supplementary thereto) and of
irrigation systems on projects governed by the Federal reclamation
laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory thereof
or supplementary thereto), shall be made only after the organizations
concerned shall have obligated themselves for the return thereof, in
installments fixed in accordance with their ability to pay, as deter-
mined by the Secretary of the Interior in the light of their outstanding
repayment obligations, and which shall, to the fullest practicable
extent, be scheduled for return with their construction charge install-
ments or otherwise scheduled as he shall determine: Provided, That
repayment of such loans made for small reclamation projects shall
include interest in accordance with the provisions of said Small
Reclamation Projects Act.".
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
September 23, 1975
Dear Mr. Director:
The following bills were received at the White
House on September 23rd:
H.R. 543
H.R. 1401
Please let the President have reports and
recommendations as to the approval of these
bills as soon as possible.
Sincerely,
Robert D. Linder
Chief Executive Clerk
The Honorable James T. Lymn
Director
Office of Management and Budget
Washington, D. C.