[Senate Report 106-195]
[From the U.S. Government Publishing Office]
Calendar No. 330
106th Congress Report
SENATE
1st Session 106-195
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HOOVER DAM MISCELLANEOUS SALES ACT
_______
October 18, 1999.--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. 1275]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 1275) to authorize the Secretary of the
Interior to produce and sell products and to sell publications
relating to the Hoover Dam, and to deposit revenues generated
from the sales into the Colorado River Dam fund, having
considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
purpose of the measure
The purpose of S. 1275 is to authorize the Bureau of
Reclamation to produce items, such as books, maps, brochures,
memorabilia, and other commemorative items related to the
Hoover Dam, for sale in the Hoover Visitor Center, and to use
revenues from those sales to defray Hoover Visitor Center
construction costs.
background and need
Since the Hoover Dam Visitor Center opened in June 1995, it
has had more than one million visitors annually and there has
been a significant demand for maps, publications, memorabilia,
photographs, and videos. There is also interest in the minting
and sale of commemorative coins and other memorabilia that
could be made from high-grade excess copper that came from the
electrical cabinet and boxes which were used when the Dam was
manually operated. Since the Dam is now operated by computer,
these cabinets and boxes are no longer needed. It is estimated
that 4 to 5 tons of copper are available.
After a review of the pertinent laws and regulations, the
Bureau of Reclamation (Reclamation) determined that it lacked
the authority to produce and sell such items. S. 1275 is
designed to serve two purposes: (1) meet visitor demand for
such items; and (2) create a revenue source to help repay the
cost of constructing the Visitor Center.
The cost of the Hoover Dam Visitor Center, authorized in
the 1984 Hoover Power Plant Act (P.L. 98-381), has been the
subject of much criticism. Reclamation's 1983 estimate for
construction was $32 million. The total cost, in 1994 dollars,
with interest during construction (IDC), is estimated to be in
excess of $122 million. The Office of Inspector General (Audit
Report No. 94-I-915) attributed about $10 million of the cost
increase to inflation and the remaining increase primarily to
the use of inadequate, cost estimates and to changes in the
scope of the program since it was authorized.
Despite the significant increase in costs, Reclamation
management failed to highlight these increases and take
corrective action to mitigate them during the early years of
construction. Reclamation relied, instead, on the fact that the
cost increases did not exceed the Congressionally authorized
appropriation ceiling.
The Inspector General recommended three actions to mitigate
the effect of the increased costs on the Hoover Dam power
contractors, who are required by law to repay the Visitor
Center construction costs. Reclamation is to pursue all
reasonable efforts to generate sufficient revenues from direct
facility beneficiaries, such as visitors and concession
operators, to not only pay the operation and maintenance costs
of the facilities, but to also repay the capital costs and IDC
costs in excess of the 1983 cost estimate, as indexed in
October 1994 cost levels.
In addition, Reclamation has initiated a partnership
process with the Western Area Power Administration and the
Hoover Dam power customers to ensure that Hoover Dam power
rates and expenditures continue to be provided at the lowest
cost levels consistent with sound business practices.
legislative history
Senator Kyl introduced S. 1275 on June 24, 1999 and a
hearing was held in the Water and Power Subcommittee on July
28, 1999. At the business meeting on September 22, 1999, the
Committee on Energy and Natural Resources ordered S. 1275
favorably reported.
committee recommendations and tabulation of votes
The Committee on Energy and Natural Resources, in open
business session on September 22, 1999, by a unanimous voice
vote of a quorum present, recommends that the Senate pass S.
1275.
summary of the measure
S. 1275 would authorize the Secretary of the Interior to
produce and sell educational and commemorative items at the
Hoover Dam Visitors Center. These items shall be related to
programs or projects of the Bureau of Reclamation and all
revenues, minus specified costs, shall be transferred to the
general fund in repayment of construction costs at the Hoover
Dam Visitor Center.
cost and budgetary considerations
The following estimate of the cost of this measure has been
provided by the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, October 14, 1999.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate,
Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1275, the Hoover Dam
Miscellaneous Sales Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Mark Hadley.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
congressional budget office cost estimate
S. 1275--Hoover Dam Miscellaneous Sales Act
S. 1275 would allow the Bureau of Reclamation to sell
memorabilia made from unneeded property and scrap materials
from the Hoover Dam. The bill also would allow the bureau to
sell publications related to its projects. Costs incurred to
produce these items would be derived from the Colorado River
Dam Fund and would be repaid from the proceeds from sales. Any
sales profits would be credited toward the repayment of the
cost of constructing the Hoover Dam Visitor Center. Under
current law, purchasers of power from the Hoover Dam repay
costs related to the center. CBO estimates that enactment of
this bill would result in no net budget impact.
Amounts spent from and deposited into the Colorado River
Dam fund are classified as discretionary spending. According to
the Bureau of Reclamation, sales of memorabilia and
publications would yield profits of about $1 million annually
over the 2000-2004 period, and negligible amounts in subsequent
years. Because these collections would reduce the repayment
obligation of power customers, CBO expects that collections
from electricity sales (which are also classified as
discretionary spending in this account) would be reduced by a
corresponding amount. Because S. 1275 would not affect direct
spending or receipts, pay-as-you-go procedures would not apply.
S. 1275 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would have no significant impact on the budgets of state,
local, or tribal governments.
The CBO staff contact is Mark Hadley. This estimate was
approved by Peter H. Fontaine, Deputy Assistant Director for
Budget Analysis.
regulatory impact evaluation
In compliance with paragraph 11(d) 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. 1275. 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. 1275, as ordered reported.
executive communications
On July 19, 1999, 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. 1275. These
reports had not been received at the time the report on S. 1275
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
Department of the Interior at the Subcommittee hearing follows:
Statement of Steve Richardson, Chief of Staff, U.S. Bureau of
Reclamation, Department of the Interior
I am Steve Richardson, Chief of Staff of the U.S. Bureau of
Reclamation. I appreciate the opportunity to provide the
Administration's views on S. 1275, the Hoover Dam Miscellaneous
Sales Act.
Since it opened in 1995, the Hoover Dam Visitor Center has
served over one million visitors annually (including over
200,000 from other countries). Many of these visitors request
educational materials and memorabilia to take home as a memento
of their visits to the Hoover Dam. S. 1275 would authorize the
Bureau of Reclamation (Reclamation) to produce publications and
other educational materials about Hoover Dam; to sell these
materials at the Hoover Dam Visitor Center; and to produce and
sell memorabilia created from excess Hoover Dam material.
Revenues generated from these sales would be used to repay
costs associated with construction of the Visitor Center as
well as ongoing operation and maintenance costs.
The Department supports this bill. S. 1275 will enable
Reclamation to respond to the significant public demand from
visitors to Hoover Dam for educational materials, and will
allow the creative re-use of excess Dam material that otherwise
would become surplus and therefore be disposed of as scrap.
Additionally, sales authorized by this legislation are expected
to generate revenues which would reduce the financial
obligation of power users for debt repayment.
Public demand for educational materials
The millions of people who visit the Visitor Center at
Hoover annually create a significant demand for information
about the Hoover Dam. On a regular basis, we get requests for
maps, brochures, posters, photographs, computer information
discs, and videos. While Reclamation is often the sole source
of this information, under current law we do not have the
authority to produce or have these materials printed. If
authorized by enactment of S. 1275, Reclamation proposes to
open a bookstore or gift shop at the Visitor Center and to
offer for sale government and academic press publications and
other educational materials and memorabilia related to the
Hoover Dam.
Currently, three vendors under the jurisdiction of the
Nevada State Services for the Blind operate concessions at
Hoover Dam. Under the provisions of the Randolf-Sheppard Act,
these vendors are authorized to sell postcards and other
souvenirs, but are not authorized to sell government
publications nor academic press publications related to the
Hoover Dam. Reclamation and the blind vendors have reached an
agreement in concept to ensure that the materials to be sold at
the Visitor Center bookstore will not be in competition with
the materials sold at the vendors' outlets.
New use for excess dam material
Reclamation has an opportunity to produce truly unique
Hoover Dam memorabilia by putting to new use some of the
original copper used in construction of the power plant in the
1930's--material which became ``excess'' due to plant and
switch yard modernization. The copper comes from two sources:
the ``bus gallery'' within the power plant which contains the
bus works and cabinets (``bus'' work is a hard conduit for
transmission of electricity), and the switch yards that were
used before the transmission system was integrated into a
common voltage as part of the Hoover uprate program. Since all
Hoover generating units now have their voltage stepped to 230
kV, portions of the old 287 kV line were abandoned. The 287 kV
line is somewhat unique in that it is a hollow copper line that
was constructed using a tongue and groove spiral.
Under current law, Reclamation is not authorized to dispose
of excess Government property (copper) except under the
property disposal regulations. Under those regulations, excess
copper is disposed of as scrap material. Sale of this excess
copper as scrap material would likely bring in very little
revenue. Although the price varies, excess copper is currently
valued at less than $1 per pound. Reclamation estimates about
four to five tons of excess copper have become available as a
result of modernization at Hoover Dam; the potential revenue
from sale of this material as scrap would be around $20,000.
In contrast, there is significant interest in the minting
and sale of commemorative coins and other unique memorabilia.
With an investment of $1 million to produce the items, sales of
memorabilia created from excess Hoover Dam copper could be
expected to generate approximately $5 million in revenues.
Since revenues from sales would be applied toward debt
reduction and other costs associated with operation of the
Visitor Center, this authority would benefit not only tourists
but power users as well.
Reduce financial obligation of power users
If authorized by this legislation, net revenues from the
sale of publications and products such as maps and videos are
estimated at between $25,000 and $75,000 annually. These
revenues will assist in repaying the construction costs of the
Visitor Center and Parking Structure, thereby reducing the
financial obligation of power users. The revenues also will
assist in paying for the operation, maintenance, and recovery
costs associated with the delivery of guided tours at Hoover
Dam and its power plant.
Mr. Chairman, the Department supports this legislation
because it is a ``win-win'' all around. Visitors will benefit
from the availability of on-site sales of materials they have
requested. Power users will benefit, as revenues from sales are
applied toward repayment of the Visitor Center construction
debt and operations and maintenance. The current vendors will
benefit from the opportunity to operate the bookstore.
The concludes my prepared testimony. I would to glad to
answer any questions.
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. 1275, as
ordered reported.