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<br />.., '.. <br /> <br />..... <br />w <br />~ <br />...... <br /> <br />The substitute amendment offered today daes not amend Section 4(a). This <br />statement is presented only to restate what is intended with respect to cost <br />sharing. The term "total costs" is used to describe the federal costs of the <br />program. These "total costs" will be inpart repaid to the federal government <br />by the states with funds from the upper and 10>ler basin accounts as provided <br />for the 1974 Act and modified by this Act. Thi. Act provides for significant <br />increases, with payment upfront or payment with interest, in the state <br />contributions. It is anticipated that with respect to the newly authorized <br />Department of Agriculture On-Farm Program that up front contributions will be <br />made by lando,mers that will be in addition to the "total costs" to the <br />federal government that will be shared by the states. <br /> <br />Section 4(d) of the bill: <br /> <br />Section 4(d) of the bill adds a new paragraph (4) to section 205(a) of <br />the bill. This new paragraph (4) provides for the long-term reimbursement of <br />costs allocated to the Upper Basin, in subparagraph (iv), this interest rate <br />will be based upon the current cost of long-term Treasury borrowing at the <br />time costs are incurred by the Secretary. Under current and foreseeable <br />conditions, this rate will be higher than the rate applicable to other <br />repayment obligations of the Upper Colorado River Basin Fund. <br /> <br />The committee is aware of the controversy surrounding the Department of <br />Energy's policy of starting hydroelectric power rates at levels which repay <br />selected higher interest investments ahead of their required repayment date <br />while postponing repayment of lower interest investments. This legislation <br />does not resolve this controversy and is not intended to prejudice further <br />legislative or administrative action on this subject in the future. However, <br />because the Upper Basin repayment obligations under this legislation are <br />relatively small, and because of the committee's desire not to encumber this <br />legislation with controversy over the Department's amortization policy, this <br />legislation does not address this issue. It is anticipated that Congress will <br />address repayment from basin accounts in the next session. <br /> <br />The committee notes that the On-Farm Program authorized by this Act will <br />be in part repaid as provided for in Section 4(d) of the Act. As noted before <br />in today's discussion, these federal casts will only represent a portion of <br />the costs of the On-Farm Program. Landowners will be making important <br />contributions with respect to time and money. Under already existing <br />autharities the Department of Agriculture has started pilot programs in Utah <br />and Colorado. At times a 90% federal cost sharing has been offered to <br />encourage landowners to participate in On-Farm fish and wildlife replacement <br />measures. However, this high federal cost-sharing represent only a small part <br />of the program to date. ]'lost often the federal share has been only 50% to 75% <br />with the lando,mer providing the remainder. When you consider the lando,mers <br />contribution and also the state's repayment of the federal costs (total costs) <br />in the amount of 25% the effective cost share of the local state entities with <br />the federal government approaches an equal division of the costs. The <br />committee did not establish a minimum cost share to be paid by the lando,mer <br />because situations vary over the agricultural areas of the basin but the <br />committee does expect that the cost will be divided, in part, based on <br />benefits derived and will be similar to the cost sharing for the On-Farm <br />measures entered into thus far. <br />