(A copy of H.R. 869 and the Departmental report follow :)

[H. R. 869, 92d Cong., first sess.]

A BILL To reauthorize construction by the Secretary of the Interior of the North Loup division, Nebraska, of the Missouri River Basin project

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the authorization for construction, operation, and maintenance of the North Loup division of the Missouri River Basin project contained in section 9(c) of the Act of December 22, 1944 (58 Stat. 887), as amended and supplemented, is hereby amended to authorize the Secretary of the Interior to construct, operate, and maintain the North Loup division, Nebraska, of the Missouri River Basin project substantially in accordance with the report of the Secretary of the Interior transmitted to Congress on July 25, 1962, and printed as House Document Numbered 491, Eighty-seventh Congress. The principal works of such said division which will furnish water to approximately fifty-three thousand acres of land in Valley, Greeley, Howard, Merrick, and Nance Counties, Nebraska, shall consist of two reservoirs at or near the Calamus River and Davis Creek sites, works for the diversion of water from the Calamus and North Loup Rivers and its delivery to said reservoirs, and necessary pumping facilities, canals, drains, and other related works.

SEC. 2. In the construction, operation, and maintenance of the North Loup division, the Secretary shall be governed by the Federal reclamation laws (Act of June 17, 1902, 32 Stat. 388, and Acts amendatory thereof or supplementary thereto).

SEC. 3. The conservation and development of the fish and wildlife resources and the enhancement of recreation opportunities in connection with the North Loup division shall be in accordance with provisions of the Federal Water Project Recreation Act (79 Stat. 213).

SEC. 4. The North Loup division shall be integrated, physically and financially, with the other Federal works in the Missouri Basin constructed or authorized to be constructed under the comprehensive plans approved by section 9 of the Act of December 22, 1944 (58 Stat. 891), as amended and supplemented. SEC. 5. The North Loup division shall be so constructed and operated that no water shall be diverted from either the Calamus or the North Loup Rivers for any use by the division during the months of July and August each year; and no water shall be diverted from said rivers during the month of September each year whenever during said month there is sufficient water available in the division storage reservoirs to deliver the design capacity of the canals receiving water from said reservoirs.

SEC. 6. There are hereby authorized to be appropriated such sums as are necessary to carry out the purposes of this Act.

U.S. DEPARTMENT OF THE INTERIOR,

Hon. WAYNE N. ASPINALL,

OFFICE OF THE SECRETARY, Washington, D.C., Jan. 25, 1972.

Chairman, Committee on Interior and Insular Affairs,
House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: This responds to your request for the views of this Department on H.R. 869, a bill "To reauthorize construction by the Secretary of the Interior of the North Loup division, Nebraska, of the Missouri River Basin project."

We recommend that the enclosed draft of proposed legislation, which incorporates a number of amendments, be enacted in lieu of H.R. 869.

The division is a proposed multipurpose water resource development in the basins of the Calamus, North Loup, and Loup Rivers in central Nebraska. Flows of the North Loup and Calamus Rivers would be developed for irrigation, outdoor recreation opportunities, and fish and wildlife enhancement.

Portions of the North Loup division were contemplated for development in S. Doc. 191, 78th Congress, and were authorized as an integral part of the Missouri River Basin project by the Flood Control Acts of 1944 and 1946. Subsequent investigations disclosed desirable modifications in the original plans

which were presented in the Secretary's report of July 25, 1962, to the Congress (H. Doc. No. 491, 87th Cong.).

We have since prepared a reevaluation statement on the division, dated February 1971, which modifies the plan of development and operation presented in H. Doc. 491 and updates the estimated costs and the economic and financial analyses associated therewith. This reevaluation statement, a copy of which will be forwarded to the Committee shortly, supplements and modifies the Secretary's report previously submitted to the Congress. Reauthorization of the division is required by the provisions of the Act of August 14, 1964 (78 Stat. 446).

The plan of development does not include as objectives flood control, hydroelectric power generation, or provision of municipal and industrial water supplies. Floods on the North Loup River are not a serious problem, and storage regulation would provide insignicant flood control benefits. Development of hydroelectric power was found to be uneconomical. Regional needs for municipal and industrial water supplies can be met more economically by other means.

The division involves an area where the predominantly agricultural economy has suffered periodically from uncertain natural moisture conditions. This has tended to limit dependable farm income and has adversely affected the interdependent urban economy. Lack of both job opportunities in the towns and stable employment on the farms has resulted in substantial migration from the area, particularly by the younger people. Construction of the division would have a favorable economic and social impact in the area, and the proposal has strong local support. The potential water users have formed the Twin Loups Reclamation and Irrigation Districts to support authorization of the division and to assume responsibility for operations and the repayment of reimbursable costs. The principal structures proposed for the division include the Calamus Dam and Reservoir on the Calamus River near Burwell, Nebraska, the off-channel Davis Creek Dam and Reservoir, and the Kent Diversion works on the North Loup River near Burwell. Total capacities of the two storage reservoirs would be 128,200 and 32,500 acre-feet, respectively. Irrigation water provided by these facilities would be distributed to 52,570 acres of full irrigation service lands through a complex of six principal canals, nine pumping plants, and laterals as required to afford delivery to individual operators. Drains would be constructed to meet demonstrated needs for disposition of excess surface water and for subsurface drainage. Outdoor recreation and fish and wildlife facilities would be provided as a part of the proposed development.

The February 1971 reevaluation statement modifies the plan of development and operation for the division proposed in H. Doc. 491. Under the plan now recommended, no natural flows of the North Loup and Calamus Rivers would be diverted for irrigation purposes during the critical water supply months of July and August and some years in September. This would permit maintaining downstream flows in the Loup and Platte Rivers for recharge of ground water for existing municipal and irrigation uses and minimizing the adverse impact of project water withdrawals on water quality and the existing ecology. This operational change would require adding the Kent Diversion Dam and the Kent Canal to obtain water from the North Loup River and enlarging Calamus and Davis Creek Reservoirs to increase their conservation storage capacity by 30,000 acre-feet. This enlargement of the reservoir storage capacity would require a slightly higher dam in both cases.

The plan of development presented in H. Doc. 491 was reevaluated to reflect more current price levels and modifications in the recommended plan of development. The total estimated project cost for benefit analysis, based on October 1970 price levels, is $76,466,000. The total includes the estimated construction cost of $73,400,000, plus an assignment of $1,207,000 of the Pick-Sloan Missouri Basin Program power investment for irrigation pumping and $3,459,000 for interest during construction. $1,600,000 of preauthorization costs have been deducted. The operation, maintenance, and replacement costs are estimated at $324,000 annually. The estimated annual costs for economic analyses, which include the annual equivalent of the net project investment (total investment less preauthorization investigation costs) and the annual operation, maintenance, and replacement costs, have been computed to be $2,915,000.

The annual benefits attributable to the project functions total $3.871,000. The total benefits to be derived from irrigation of the division lands have been evaluated to be $3,804,800 annually and are comprised of $3,127,000 direct and $677,800 indirect and public benefits. Recreation benefits of $37,500 annually

would be derived from water-oriented outdoor recreation opportunities created by construction and operation of Calamus and Davis Creek Reservoirs. Similarly, fish and wildlife benefits of $28,700 annually from hunting and fishing would result from the construction and operation of the division.

As presented herein, the economic justification for the division as demonstrated by the comparative ratio of the total evaluated benefits ($3.871,000) to the estimated annual costs ($2,915,000) on the basis of a 100-year period of analysis at 34 percent interest is 1.33 to 1.2 Using only direct benefits ($3,193,200), the ratio would be 1.10 to 1.

The total estimated project cost of $73,007,000 has been allocated among the purposes as follows: $71,895,000 to irrigation, $750,000 to fish and wildlife, and $362,000 to recreation. Similarly, the tentative allocation of the $324,000 estimated annual operation, maintenance, and replacement costs is $298,000 to irrigation, $25,000 to recreation and $1,000 to fish and wildlife.

Project costs allocated to irrigation would be reimbursable without interest within 50 years following a 10-year development period after completion of the division's irrigation facilities. The irrigation beneficiaries, principally the water users, would repay an estimated $13,850,000 or 19 percent of the irrigation cost, plus the annual operation, maintenance, and replacement expenses allocated to irrigation ($298,000). Either the Twin Loups Reclamation District or the Twin Loups Irrigation District would contract for the repayment of all reimbursable irrigation costs by the beneficiaries. The $58,045,000 allocated to the irrigation function would be repaid from Pick-Sloan Missouri Basin Program power revenues available for that purpose during the 50-year repayment period.

The Twin Loups Reclamation District has indicated by letter dated July 28, 1969, its intent to administer the land and water areas of the division for recreation and fish and wildlife enhancement and to repay with interest onehalf of the separable costs of the division allocated to those two functions, totaling $175,000, plus $3,000 interest during construction and all annual operation, maintenance, and replacement costs of $25,000 incurred therefor, as provided by the Federal Water Project Recreation Act.

The remaining $937,000 of project costs consisting of one-half the separable costs ($175,000) and all the joint costs ($762,000) plus $1,000 of annual operation, maintenance, and replacement costs are allocated to recreation and fish and wildlife functions and would be nonreimbursable Federal costs as provided by the law. Reimbursement by irrigation, fish and wildlife, and recreation contractors and from Missouri River Basin power revenues would total about $72,073,000 or nearly 99 percent of the total project and assigned costs.

Local support for the North Loup division is strong, as evidenced by the early organization of the Twin Loups Reclamation and Irrigation Districts, which have indicated their willingness to consummate the required repayment contracts. The Nebraska Soil and Water Conservation Commission supports the authorization of the plan of development now recommended for the North Loup division.

We have examined the plan of development for compliance with Executive Orders No. 11296 and No. 11507, which prescribe regulations concerning the relationship of Federal water resources projects to flood hazards and water and air quality standards. No significant problems are foreseen in these respects except some increase in salinity may occur downstream in the North Loup and Loup Rivers due to return flows from irrigation. The resultant salinity levels would not violate the Nebraska water quality standards which were approved by this Department.

The impact of the division on the environment has been considered pursuant to the National Environmental Policy Act of 1969. The North Loup division will have a beneficial environmental impact on the area and the State. Conversion of the present dryland agriculture to irrigated agriculture would provide the impetus for desirable social and economic opportunities. In addition, the enhancement of water and related land resources for fish and wildlife and outdoor recreation will improve the quality of the human environment.

No significantly unique natural resource areas or conditions would be adversely affected by the proposal. A unique wildlife feature of the area, a cottonwood grove with a substantial heron rookery, would be protected and preserved.

Certain environmental impacts may be adverse. Although substantial flows will remain, reduction of flows in the Calamus and North Loup and Loup Rivers may cause some minor ecological change. The present plan for the

division includes measures to reduce the impact of diversions from the rivers for project use, especially during summer months. River withdrawals will be restricted to the months during which there are higher flows. Adequate summer flows will thereby be maintained for the purpose of protecting water quality. As previously mentioned, the proposed development would result in some increase in the dissolved solids in the North Loup, Loup, and Platte Rivers during the summer months from irrigation return flows. We are reviewing the possibility of using storage space in the project, which would be made available by withdrawals for irrigation use, to store excess flows in July and August for use in September (the month in which the lowest streamflows generally occur). This would benefit water quality from the standpoint of dissolved oxygen and total dissolved solids. The conversion of 13 miles of the Calamus River from a river ecology to a reservoir ecology would result in net benefits for recreation and fish and wildlife enhancement. A more detailed statement of effects on the environment, prepared pursuant to section 102 (2) (C) of the National Environmental Policy Act of 1969 is enclosed.

There is no alternative use of the water and related land resources which would achieve equivalent economic, social, and environmental benefits at comparable costs.

The human and natural resources of the area are utilized predominately in an agricultural economy. This relationship is not expected to change materially in the future, either with or without development of the North Loup division. Therefore, no major requirement is foreseen for the commitment of resources to uses other than those proposed, although such commitment would not be irreversible or irretrievable if higher value uses should arise at some future time. Thus, local short-term use of these resources is consistent with the need to maintain and enhance long-term productivity.

The enclosed draft bill would make a number of changes in H.R. 869. Section 1 deletes the reference to the Secretary's report transmitted to the Congress (H. Doc. No. 491, 87th Cong.), since the plan presented therein has been modified by an agreement between upper and lower river basin interests as reflected in the enclosed February 1971 reevaluation statement. Other minor drafting changes have also been made. Section 2 of H.R. 869, providing that the Secretary would be governed by the Federal reclamation laws, has been omitted as unnecessary, since such laws would apply to the division by their own terms. Section 4 of the draft bill provides the customary formula for determining the interest rate to be used in computing interest during construction and interest on the unpaid balance of the capital costs allocated to interest-bearing features of the division, which is not provided for in H.R. 869. Section 6 of the draft bill, consistent with current practice, sets a limitation on the amount authorized to be appropriated for the division which takes into account the fluctuations in construction costs and authorizes appropriations for nonreimbursable operation and maintenance costs.

Enclosed is a statement concerning the estimated employment and expenditures required by 5 U.S.C. 2953 (1966), formerly Public Law 84-801 (5 U.S.C. 642).

The Office of Management and Budget has advised that there is no objection to the presentation of this report from the standpoint of the Administration's program.

Sincerely yours,

JAMES R. SMITH, Assistant Secretary of the Interior.

A BILL to authorize the Secretary of the Interior to construct, operate and maintain the North Loup division, Pick-Sloan Missouri Basin Program, Nebraska, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the North Loup division heretofore authorized as an integral part of the Missouri River Basin project by section 9 of the Flood Control Act of December 22, 1944, as amended and supplemented, is hereby reauthorized as a unit of that project for the purposes of providing irrigation water for fifty three thousand acres of land, enhancement of outdoor recreation opportunities, conservation and development of fish and wildlife resources and for other purposes. The principal features of the North Loup division shall include Calamus and Davis Creek Dams and Reser

voirs, Kent Diversion Works: irrigation works; pumping facilities: associated irrigation distribution and drainage works; facilities for public outdoor recreation and fish and wildlife developments; and other necessary works and facilities to effect its purposes.

SEC. 2. The conservation and development of the fish and wildlife resources and the enhancement of outdoor recreation opportunities in connection with the North Loup division shall be in accordance with provisions of the Federal Water Project Recreation Act (79 Stat. 213).

SEC. 3. The North Loup division shall be integrated physically and financially with the other Federal works constructed under the comprehensive plan approved by section 9 of the Flood Control Act of December 22, 1944, as amended and supplemented.

SEC. 4. The interest rate used for purposes of computing interest during construction and interest on the unpaid balance of the capital costs allocated to interest-bearing features of the project shall be determined by the Secretary of the Treasury, as of the beginning of the fiscal year in which construction is initiated, on the basis of the computed average interest rate payable by the Treasury upon its outstanding marketable public obligations, which are neither due nor callable for redemption for fifteen years from date of issue.

SEC. 5. The North Loup division shall be so constructed and operated that no water shall be diverted from either the Calamus or the North Loup Rivers for any use by the division during the months of July and August each year; and no water shall be diverted from said rivers during the month of September each year whenever during said month there is sufficient water available in the division storage reservoirs to deliver the design capacity of the canals receiving water from said reservoirs.

SEC. 6. There is hereby authorized to be appropriated for construction of the North Loup division as authorized in this Act the sum of $73,400,00 (based upon October 1970 prices), plus or minus such amounts, if any, as may be justified by reason of ordinary fluctuations in construction costs as indicated by engineering costs indexes applicable to the types of construction involved herein. There are also authorized to be appropriated such additional sums as may be required for operation and maintenance of the division.

ESTIMATED ADDITIONAL MAN-YEARS OF CIVILIAN EMPLOYMENT AND EXPENDITURES FOR THE FIRST 5 FISCAL YEARS (AS REQUIRED BY 5 U.S.C. 2953 (1966), FORMERLY PUBLIC LAW 801, 84TH CONG.)