[Federal Register Volume 59, Number 1 (Monday, January 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32028]
[[Page Unknown]]
[Federal Register: January 3, 1994]
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DEPARTMENT OF THE INTERIOR
Bureau of Reclamation
43 CFR Part 403
RIN 1006-AA30
Revenues Management
AGENCY: Bureau of Reclamation, Interior.
ACTION: Advance notice of proposed rulemaking.
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SUMMARY: The Bureau of Reclamation (Reclamation) is proposing to
publish rules and guidelines detailing the authorized crediting of
revenues derived from the incidental use of Reclamation water projects
and project lands under the jurisdiction of Reclamation. Due to
existing confusion in revenues crediting criteria, rules will be
utilized to clearly define front-end, tail-end, and general credit and
when each is appropriate. Rules are necessary to define statutory
language which may seem ambiguous and which may have caused confusion
in the past. The rules will also govern the treatment of the
contractors who have received unauthorized credits in the past.
DATES: Reclamation invites the public to submit written comments on the
proposed rulemaking action. Comments must be submitted on or before
February 2, 1994.
ADDRESSES: Written comments on the proposed rules and guidelines should
be addressed to J. William McDonald, Assistant Commissioner-Resources
Management, Bureau of Reclamation, Denver Office, P.O. Box 25007,
Denver, CO 80225-0007.
FOR FURTHER INFORMATION CONTACT:
Ms. Jaralyn Beek, Head, Revenues, Section, Bureau of Reclamation, D-
5612, P.O. Box 25007, Denver, CO 80225-000 of telephone (303) 236-1061,
extension 227.
SUPPLEMENTARY INFORMATION: The passage of the 1902 Reclamation Act, as
amended and supplemented provided for the creation of a fund within the
United States Treasury (Reclamation fund) to be used to finance water
projects in the arid West. Subsequently, water projects were
constructed under a variety of statutory authorities with the
beneficiaries generally repaying those costs determined to be
reimbursable through scheduled payments.
Revenues are generated from the incidental use of Reclamation water
projects and the lands under the jurisdiction of Reclamation. These
uses are authorized by Reclamation law and the disposition of the
revenues generated by the uses are mandated by law. These uses include,
but are not limited to, grazing, the leasing of minerals such as oil
and gas, commercial uses, cabin sites, storage of non-project water,
sale of surplus water, etc. Generally, these revenues are credited in
one of three ways. These are:
(1) Revenues which may be distributed as a general credit to the
Reclamation fund;
(2) Revenues which may be distributed as a ``tail-end'' credit to
the construction costs; and
(3) Revenues which may be distributed as a ``front-end'' or direct
credit to the annual obligations of the water users.
The revenues which are distributed as a general credit to the
Reclamation fund are not meant to be spent on specific functions or
projects, but rather are accessible only as directed by the laws which
govern the Reclamation fund.
The second type of disbursement, a tail-end credit (also termed a
credit to the project), involves application of the funds against the
last payment due in the repayment schedule. The reimbursable portion of
a water project's construction cost is amortized and repaid by the
beneficiaries (districts). With this type of revenues crediting the net
result is accelerated repayment of the project's construction cost,
without relieving the project users of their requirement to pay some or
all of their annual obligation.
The third type of revenue crediting is termed a front-end or direct
credit. This method allows the ``direct'' crediting of specific
revenues on the annual construction repayment and operation and
maintenance obligations of the water districts. Under the general
legislative authority which provided for front-end crediting the water
user could receive benefit from the direct crediting of revenues only
from specified sources:
(1) Power plants;
(2) Leasing of project grazing and farm lands; and
(3) The sale or use of town sites.
The primary difference between the tail-end credit and a front-end
credit is that the front-end or direct credit is used to satisfy a
water user's current construction payment. Any revenues in excess of
the annual construction payment are to be applied first against the
annual operation and maintenance expenses of the district and then as
the water users direct. This crediting assists the water user or
district in meeting current obligations rather than accelerating the
repayment of the construction obligation and applies to only a limited
number of contracts written between 1924 and 1938.
Exceptions to the general revenue disposition requirements are
revenue crediting criteria directed by project specific legislation.
The specific method used to disburse the revenues is dependent upon
the particular statute which authorizes the activity and mandates the
crediting of revenues, the activity generating the revenue, and the
status of the lands involved (whether the lands are withdrawn public
domain lands or lands purchased/acquired for the project).
Inasmuch as Reclamation does not have the latitude to dispose of
revenues differently than is required by law, Reclamation has recently
completed the first stage of a review of general and project-specific
legislation, repayment contracts and amendments, and current
Reclamation practices as they pertain to collection and crediting of
revenues. The intent of the initial review was to ensure that revenues
crediting fully complies with statutory requirements and focused
primarily on those revenues from which the water users receive direct
benefit. Reclamation has determined that there have been instances
where revenues may have been credited (direct credits) to the benefit
of the water users (districts) rather than to reduce the total
construction repayment obligation. This improper crediting is a result
of incomplete or inaccurate guidelines within Reclamation and, in some
instances, inappropriate contract provisions.
Reclamation intends to propose rules that would clearly set forth
when direct or front-end credits, tail-end credits, and credits to the
Reclamation fund are authorized, and will define ambiguous statutory
terms that have caused confusion in the past. In addition, the rules
would propose to establish an appeal process for districts who are
notified of improper past crediting. Reclamation also will propose to
require districts to pay interest on unpaid balances once notified of
underpayment.
Dated: December 23, 1993.
Donald R. Glaser,
Deputy Commissioner.
[FR Doc. 93-32028 Filed 12-30-93; 8:45 am]
BILLING CODE 4910-14-M
