Revenues Management

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

43 CFR Part 403

RIN 1006-AA30

Revenues Management

AGENCY: Bureau of Reclamation, Interior.

ACTION: Proposed rule.

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SUMMARY: This proposed rule governs the collection and disposition of

revenues generated by incidental use of Reclamation projects or project

lands. It is being promulgated so that the water districts have access

to the legal requirements that Reclamation applies in crediting

revenues to the district.

DATES: Written comments on this proposed rule must be received on or

before November 14, 1994.

ADDRESSES: Written comments on this proposed rule are to be submitted

to Donald R. Glaser, Director, Program Analysis Office, Bureau of

Reclamation, P.O. Box 25007, Denver, Colorado 80225-0007.

FOR FURTHER INFORMATION CONTACT: Ms. Jaralyn Beek, Reclamation Law,

Contracts, and Repayment Office, Bureau of Reclamation, D-5610, P.O.

Box 25007, Denver, Colorado, 80225-0007, telephone (303) 236-1061,

extension 227.

SUPPLEMENTARY INFORMATION:

A. Background

The 1902 passage of the Reclamation Act, (43 U.S.C. 391, et seq.)

provided for the creation of the Reclamation fund (a fund within the

U.S. Treasury) to be used to finance water projects in the arid west.

These water projects were to be constructed on a reimbursable basis

with the water users repaying the funds advanced from the Reclamation

fund, without interest.

The early Reclamation projects were for irrigation only, and the

irrigators were responsible for the repayment of all costs associated

with these projects. Intending to recover the costs of construction

projects as quickly as possible, Congress set the time frame for the

repayment of funds by the water users in this initial period at 10

years. This responsibility, and the original repayment time frame of 10

years, proved to be a difficult and significant burden on the water

users. In 1914, this term was extended to 20 years by Section 2 of the

Reclamation Extension Act of August 13, 1914 (43 U.S.C. 475).

Originally, the funds that made up the Reclamation fund were from

revenues generated by the sale of public lands (see Section 1 of the

Reclamation Act of 1902.) It soon became apparent that this source of

revenue was not sufficient to cover the costs of constructing water

projects. This was addressed in a variety of statutes, one of which was

the Sundry Civil Expenses Appropriations Act for 1920 (43 U.S.C. 394).

This act forms the basis for the allocation of lease revenues by

requiring that revenues generated from the leasing of withdrawn

Reclamation lands would be a credit to the Reclamation fund.

The 1920's saw the agriculture industry experiencing serious

economic difficulties that further affected the water users' ability to

meet their contractual obligations to the United States. Responding to

these difficulties, Congress enacted the Fact Finders Act of 1924.

Section 4, Subsection I of the Fact Finders Act created an entitlement

program that allowed the direct crediting of certain revenues to the

water users. Providing the water users assumed responsibility for the

operation and maintenance of the project, the revenues from certain

activities conducted on Federal lands would be used toward relieving

the water users of their yearly payment on the construction costs. The

revenues were restricted to those from project power plants, leasing of

project lands for grazing and farms, and the sale or use of townsite

lots. These revenues were to be applied as a direct or front-end

credit: (1) To the water users' annual construction charges; (2) to

their annual project operation and maintenance expenses; and (3) as

directed by the water users (43 U.S.C. 501). Revenues were required to

be credited to construction costs until all obligations to the United

States have been repaid.

Additional relief was provided when the Congress approved The

Omnibus Adjustment Act of May 25, 1926, that allowed the Secretary to

extend the crediting provisions of Subsection I to water districts in

identified projects without requiring them to assume responsibility for

operation and maintenance of the project. Section 45 of the Omnibus

Adjustment Act also allowed the Secretary of the Interior to amend

existing water-rights contracts, at the request of the water district,

to extend the repayment period to 40 years (43 U.S.C. 423d).

The Congress did not, in its enactment of Subsection I, repeal

prior revenue specific statutes, nor did it indicate that the revenue

disposition requirements reflected in Subsection I would extend to

revenues derived from sources not identified. For example, the revenue

disposition requirements of the Act for the Sale of Surplus Acquired

Lands of February 2, 1911, provided for the revenues from the sale of

such lands to be a ``credit to the project'' rather than a credit to

the water users (43 U.S.C. 374).

Subsection J of the Fact Finders Act (43 U.S.C. 526) also required

the revenues generated by the sale of surplus water under the Warren

Act (43 U.S.C. 523) to be deposited as a credit to the project.

Therefore, the disposition requirements of Subsection I were restricted

to the revenues generated from the uses specified in that subsection.

On May 9, 1938, Congress, with the passage of the Hayden-O'Mahoney

Amendment to the Interior Department Appropriation Act of 1939, altered

revenue crediting requirements by providing that all of the revenues

generated in connection with any irrigation project, including the

incidental power features, would thereafter be a credit to the

Reclamation fund. This provision excepted those cases in which law or

existing contract provisions provided for a different use of these

revenues, such as reflected in the passage of legislation authorizing

the establishment of special accounts, specific revenue crediting

directions, and/or revolving funds that govern the management of

revenues from specific projects. Additionally, the provision provided

that when construction costs of the project that were allocated to

power had been repaid and the revenues from the sale of power were no

longer required to meet contractual obligations to the United States,

the net revenues from the sale of power would be credited to the

Treasury of the United States as miscellaneous receipts.

Thus, the Hayden-O'Mahoney Amendment protected existing contracts

with valid direct revenue crediting provisions, but removed the

opportunity for future Subsection I application. The sources of the

revenues covered by the Hayden-O'Mahoney Amendment are all inclusive as

indicated by the language of the provision (43 U.S.C. 392a).

It should be noted that during the years that the Fact Finders Act

provisions were available, Reclamation projects started to become

multi-purpose in scope. Due to this evolution from single purpose

(irrigation) to multi-purpose (municipal and industrial, irrigation,

power, flood control, etc.), the focus of project repayment no longer

rested entirely with the irrigators. The repayment of project

construction was now allocated among the various water users; municipal

and industrial users and power facilities, as well as the irrigators.

To further disperse the repayment responsibilities, Congress deemed

certain purposes, such as flood control, to be in the public's best

interest and as such made them nonreimbursable by the project

beneficiaries.

The passage of the Reclamation Project Act of 1939 provided the

next major impact on the repayment of Reclamation projects.

Specifically, Sections 9 (c), (d)(3) and (e) introduced: (1) The 40-

year repayment schedule as standard rather than on the ``as requested''

basis of the 1926 Act; and (2) the concept of ``ability to pay'' (43

U.S.C. 485).

The concept of ``ability to pay'' allowed the revenues generated

from approved project purposes, such as power, to be used to help repay

the portion of the construction cost allocated to irrigation. This plan

is implemented by assessing the financial resources of the water users

and assigning to them responsibility to repay that portion of the

construction costs allocated to irrigation on the basis of their

ability to pay. The remainder of the construction cost allocated to

irrigation was assigned to other project users. In this way the legal

requirement for a full return of the project costs would be met. For

example, power revenues in excess of the amount needed to repay the

power component of project construction may be used to make up the

difference between the amount the irrigators were able to pay and the

costs allocated to the irrigation purpose.

By introducing ``ability to pay'' Congress provided assistance to

the irrigators that did not involve using revenues derived from Federal

lands as a direct credit to the water users. Thus, while the direct

crediting aspects of Subsection I of the Fact Finders Act of 1924 were

removed by the enactment of the Hayden-O'Mahoney Amendment of the

Interior Department Appropriations Act, Fiscal Year 1939, which

directed that all revenues would be a credit to the Reclamation fund,

Congress did not abandon the needs of the irrigators. Indeed, the water

users benefitted from the introduction of the concept of ``ability to

pay'' in the Reclamation Project Act of 1939.

There are many statutes that authorize the Secretary of the

Interior to enter into specific agreements for the incidental use of

Reclamation projects and project lands. These activities may take place

on both withdrawn public domain lands and on lands acquired for

Reclamation projects either by purchase, exchange, or condemnation. In

addition, activities may be authorized for the use of project

facilities or may address the sale or disposal of water. Generally

those statutes detailed the specific manner in which revenues generated

by these incidental uses were to be distributed. The revenues are funds

of the United States and, as required by the U. S. Constitution, cannot

be expended or credited other than as Congress directs. In those

instances where Congress has not provided specific crediting criteria,

Reclamation has adopted the manner of revenues crediting specified for

other activities from authorized use of Reclamation lands. Examples of

the types of uses on Reclamation projects and project lands include:

(1) Leasing of minerals--The Mineral Leasing Act of 1920, as

amended, (30 U.S.C. 181, et seq.), and the Mineral Leasing Act for

Acquired Lands of 1947 (30 U.S.C. 351, et seq.), authorized the

Secretary of the Interior to engage in the leasing and extraction of

minerals, i.e., oil, gas, oil shale, gilsonite, sodium, phosphate,

potassium, sulphur, and asphalt either on lands (specifically the

mineral estates) in the public domain, or on lands acquired for a

specific project and administered by Reclamation. (Jurisdiction over

leasing activities does not rest with Reclamation).

(2) Mineral leases (geothermal steam)--The Geothermal Steam Act of

1970 (30 U.S.C. 1001, et seq.) authorized the United States to issue

leases for geothermal steam on both public domain and on acquired

Federal lands. (Jurisdiction over leasing activities does not rest with

Reclamation).

(3) Recreation/concession agreements--The Land and Water

Conservation Act of 1965 (Pub. L. 88-578); the Federal Water Project

Recreation Act of 1965 (Pub. L. 89-72), as amended by the Water

Resources Development Act of 1974 (Pub. L. 94-251); and the Reclamation

Projects Authorization and Adjustment Act of 1992 (Title 28, Pub. L.

102-575), provide for the charging and collection of fees for public

recreational uses of the land and water under the jurisdiction of

Reclamation.

(4) Sale of products and rights-of-use--Section 10 of the

Reclamation Project Act of 1939 (43 U.S.C. 387) grants authority to the

Secretary of the Interior to permit the removal of sand, gravel, and

certain other types of mineral materials and building materials,

including the sale of timber, and to grant leases, licenses, easements,

and rights-of-way on lands either withdrawn or acquired by the

Government. This authority was valid only so long as the granting of

the rights-of-use was not incompatible with the purposes for which the

lands were designated.

(5) Rights-of-way authorized by Mineral Leasing Act of 1920--The

Mineral Leasing Act of 1920 (30 U.S.C. 181, et seq.) authorized the

granting of rights-of-way for the transportation of oil, natural gas,

synthetic liquid or gaseous fuels, or any refined product produced to a

common collection point, a refiner, or to the point of sale.

(6) Sale of townsites--The Townsites and Power Development Act of

April 16, 1906 (43 U.S.C. 561) authorized the withdrawal of lands from

public entry to be used for the purpose of townsite lots in conjunction

with irrigation projects (up to 160 acres). The lands were then

surveyed, subdivided and sold by Reclamation for townsite lots (43

U.S.C. 562).

(7) Sale of land--The Bureau of Reclamation has authority to sell

land that is under its jurisdiction in several different statutes:

(a) The Sale of Surplus Acquired Lands Act of February 2, 1911 (43

U.S.C. 374) authorizes the sale of lands acquired under the provisions

of the Reclamation Act that are no longer needed for the purpose for

which the lands were acquired.

(b) The Sale of Surplus Improved Public Lands Act of May 20, 1920

(43 U.S.C. 375) authorizes the sale of withdrawn public domain lands

that were improved at the expense of the project for which the lands

were withdrawn.

(c) The Disposal of Small Tracts Act of March 31, 1950 (43 U.S.C.

375b) authorizes the sale of public domain lands withdrawn for the

construction of a Reclamation project that are in tracts too small to

qualify as farm units.

B. Methods of Disbursement

Revenues disposition statutes governing Reclamation projects

generally cover four primary methods of crediting. These methods are:

(1) Front-end or direct credit; (2) credit to the project or tail-end

credit; (3) general credit to the Reclamation fund; and (4) general

credit to revolving funds or special accounts authorized by Congress.

(1) Revenues that are to be credited as a direct or front-end

credit are credited to the reimbursable construction costs of the

project by satisfying all or part of the annual payment currently due

from the water users. All revenues in excess of the annual construction

payment are to be applied against the annual operation and maintenance

expenses of the district. This relieves the water users of their

current repayment obligation, in part or in its entirety, without

accelerating the repayment of the total construction debt. Section 4,

Subsection I of the Fact Finders Act is the only general statute with

applicability at more than one Reclamation project in which front-end

crediting provisions are found. These provisions were conditioned on

whether the district had assumed the operation and maintenance of the

project, or the Secretary of the Interior had granted this relief under

the authority of the Omnibus Adjustment Act of May 25, 1926. Subsection

I allowed the revenues derived from the sale of project power, the sale

or use of townsite lots, and the leasing of Federal lands for the

purposes of grazing and agriculture to be credited as a direct or

front-end credit.

(2) Credits to the project or tail-end credits involve funds being

directed to the Reclamation fund and applied to the construction

obligation of the project associated with the revenues. This method of

repayment accelerates the return of the construction cost of the

project to the Reclamation fund.

(3) General credit to the Reclamation fund does not provide a

benefit to either the project construction costs or to the districts'

annual obligations. When revenues are a credit to the Reclamation fund,

the funds are not targeted to be spent on a specific function or

project, but are only available to be spent as directed by the laws

that control the fund.

(4) General credit to special accounts or revolving funds are

created by Congressional authorization and relate to specific projects

or specialized activities. These accounts/revolving funds are

maintained separate and apart from the Reclamation fund and are managed

in accordance with the legislation that authorized their creation.

Project-specific special accounts or revolving funds are: (a) The

Recreation Account within the general fund of the Treasury was created

by the Omnibus Adjustment Act of 1987. This account is a depository for

recreation user fees or concession fees; (b) The Lower Colorado River

Basin Development Fund is specific to the Central Arizona Project and

was established under the authority of Section 403 of the Colorado

River Basin Project Act of September 10, 1968; (c) The Columbia Basin

Land Development Account was authorized under Section 6 of the Columbia

Basin Project Act of March 10, 1943, and is specific to the Columbia

Basin Project; (d) The Colorado River Dam Fund was authorized under the

authority of Section 2 of the Boulder Canyon Project Act of December

21, 1928, and is specific to the Boulder Canyon Project; and (e) The

Upper Colorado River Basin Fund was established under the authority of

Section 5 of the Colorado River Storage Project Act of April 11, 1956,

and is specific to the divisions of the Colorado River Storage Project.

C. Immediate Action

The Office of the Inspector General (IG) conducted an audit of

Reclamation's revenues crediting practices and made recommendations for

ensuring proper application of revenues received from the use of water

project facilities and lands. That office also recommended, in part,

that inappropriate revenues crediting be discontinued. Reclamation is

currently in the process of implementing the recommendations. A review

of repayment contracts and amendments, and current Reclamation

practices as they pertain to collection and crediting or disposition of

those revenues, has been accomplished. These rules are being published

to establish guidance for the consistent application of revenues

received.

Public Comment on Rules

Reclamation received a total of 10 comments in response to its

notice of intent to propose rulemaking that was published in the

Federal Register on January 3, 1994. Four of the responses received

were requests for copies of future rulemaking actions; two were

requests for more information about revenues crediting after a district

has fulfilled its repayment obligation to the Government; four

responses contained comments specific to different methods of

crediting. All of the comments received have been reviewed and have

been or will be addressed in either this proposed rule or in future

rulemaking actions.

The policy of the Department of the Interior is, whenever

practicable, to afford the public an opportunity to participate in the

rulemaking process. Accordingly, interested persons may submit written

suggestions or objections regarding the proposed rule to the location

identified in the Addresses section of this preamble. Comments must be

received on or before November 14, 1994.

Executive Order 12866

This rule is not subject to review by the Office of Management and

Budget under Executive Order 12866.

Paperwork Reduction Act

This proposed rule does not contain information collection

requirements that require approval by the Office of Management and

Budget under 44 U.S.C. 3501, et seq.

National Environmental Policy Act Compliance

The Department of the Interior has determined that this action

meets the criteria for an action categorically excluded from the

provisions of the National Environmental Policy Act (40 CFR 1508.4)

under Departmental Manual part 516 DM 6, Appendix 9, section 9.4.A.1--

``Changes in regulations or policy directives and legislative proposals

where impacts are limited to economic and/or social effects.''

Small Entity Flexibility Analysis

This proposed rule will not have a significant economic effect on a

substantial number of small entities. This proposed rule establishes

procedures for the management of revenues from activities on

Reclamation projects and project lands.

Authorship

This proposed rule was prepared by the Reclamation Law, Contracts,

and Repayment Office, Bureau of Reclamation, Denver, Colorado.

List of Subjects in 43 CFR Part 403

Administrative practices and procedures, Reclamation revenues

crediting and disposition.

Dated: August 25, 1994.

Elizabeth Ann Rieke,

Assistant Secretary--Water and Science.

For the reasons set out in the preamble, Title 43, Subtitle B,

Chapter I of the Code of Federal Regulations is proposed to be amended

by adding part 403 to read as follows:

PART 403--MANAGEMENT OF REVENUES GENERATED FROM BUREAU OF

RECLAMATION LANDS AND ACTIVITIES

Sec.

403.10 Objective

403.20 Applicability

403.30 Definitions

403.40 Decisions and appeals

Subpart A--Revenues Crediting Criteria

403.110 Direct or front-end credit requirements

403.120 Credit to the project or tail-end credit requirements

403.130 General credit to reclamation fund

403.140 Special accounts or revolving funds

403.150 Reserved

Subpart B--[Reserved]

Authority: 5 U.S.C. 553; 43 U.S.C. 373, 391, 392, 392a, 491,

498, 501.

Sec. 403.10 Objective.

The objective of this rule is to ensure the proper crediting of

incidental revenues in accordance with the applicable statutes.

Sec. 403.20 Applicability.

(a) This rule applies to revenues generated from the authorized use

of Reclamation water projects and project lands, except as provided by

Congress in project-specific legislation.

(b) This rule supersedes any internal Reclamation policy, guidance,

or instruction that is inconsistent with this rule.

(c) If any provision of this rule or the applicability thereof to

any person or circumstances is held invalid, the remainder of the rule

and the application of such provisions to that person or other persons

or circumstances shall not be affected thereby.

Sec. 403.30 Definitions.

As used in this Part:

Acquired lands refers to those lands acquired by Reclamation for

Reclamation projects by purchase, exchange, or condemnation.

Collected refers to those revenues generated by activities on

Reclamation projects or project lands (whether withdrawn public domain

lands or lands otherwise acquired for the project).

Concession refers to any non-Federal entity operating on

Reclamation lands that is remunerated by visitors for use of

facilities, goods, and/or services that it provides for their

recreational purposes, general enjoyment, and/or needs.

Concession fee refers to compensation received by the managing

agency from a concession as defined under ``concession'' above.

Credit to the project or tail-end credit refers to the disposition

of revenues to the Reclamation fund as a credit to the project

construction costs. This method accelerates the return of construction

costs to the Reclamation fund.

Direct or front-end credit refers to the disposition of revenues

that allows the water users or districts to receive credit for the

revenues to help satisfy their next capital obligation to the

Government, for annual project operation and maintenance expenses, or

as the district directs.

Easement refers to a grant of an interest to a party in the land of

another for a specific use of specified land. Easements usually consist

of long-term rights-of-way for public roads, telecommunication lines,

transmission lines, and pipelines.

General credit refers to those revenues credited to the Reclamation

fund without benefit to the water users, the districts, or the project

construction costs.

Grazing means a lease granted by the Government that entitles the

lessee to use project lands for the purpose of grazing livestock.

Grazing lands refers to lands currently under lease for that purpose.

Lease means a contract by which the lessor (Government) gives to

another (tenant or lessee), the use or possession of land, facilities,

or water for a specific purpose for a specified period of time, in

exchange for agreed upon payments.

License or permit refers to a grant of authority for a person or

entity to use a specific piece of land for a specific purpose without

gaining any interest in the land. A license or permit may allow use

for: the construction and placement of small transmission lines;

temporary access roads; trails; small pipelines; small power lines;

removal of timber, sand and gravel, and other building material;

miscellaneous agricultural uses; cabin sites; and like activities. A

permit or license is used when Reclamation does not intend to grant

control of the surrounding area, as is the case with an easement or

lease.

Mineral materials includes, but is not limited to, common varieties

of sand, stone, gravel, pumice, pumicite, cinders, clay, and petrified

wood.

Project means any Reclamation irrigation or multi-purpose project,

including incidental features thereof, authorized by Federal

Reclamation law, or constructed by the United States pursuant to such a

law, or in connection with which there is a repayment or water service

contract executed by the United States pursuant to such law, or any

project constructed by the Secretary of the Interior through

Reclamation.

Public domain lands refers to lands that have never left Federal

ownership.

Reclamation fund means a special fund within the Treasury,

established by the Congress under the Reclamation Act of June 17, 1902,

as amended and supplemented. Monies from the fund are available for the

investigation, construction, operation, and administration of

Reclamation projects. Collections from water users for reimbursable

costs of these projects are returned to the fund unless Congress has

specified otherwise.

Revenues refers to monies generated from the use of lands. This

excludes administrative fees, annual obligations paid in accordance

with repayment contracts and water service contracts, monies generated

from the marketing of surplus power, and revenues from the sale or

rental of surplus water or storage and conveyance capacity.

Right-of-use refers to legal temporary uses of project lands

resulting from easements, permits, licenses, leases, and rights-of-way.

Right-of-way refers to a legal right of passage over another's

land, such as for roads and transmission lines.

Special use permit refers to a permit issued with or without charge

to a group for activities such as the rental of picnic shelters, off-

road vehicle access, river running excursions, etc.

Townsite refers to lands withdrawn from public entry to be used for

the purpose of townsite lots of up to 160 acres which were surveyed,

subdivided, and sold in conjunction with irrigation projects.

User fee refers to a fee charged for the use of specialized sites,

facilities and equipment, or services furnished at Federal expense,

including but not limited to, camping facilities, boat launching, and

parking.

Water user or district refers to any individual or legal entity

established under State law that has entered into a contract or is

eligible to contract with the Secretary of the Interior for water. This

definition includes entities that contract for construction or

improvement of water storage and/or delivery facilities.

Withdrawn lands refers to those lands withdrawn from public entry

and set aside for a specific public purpose or program, and contributed

at no cost to the project by the United States.

Sec. 403.40 Decisions and appeals.

(a) Unless otherwise provided by the Secretary of the Interior, the

regional director shall make any determination required under these

rules and regulations.

(1) A party directly affected by such a determination may appeal in

writing to the Commissioner of Reclamation within 60 days from the date

of a regional director's determination. The affected party shall have a

total of 90 days from the date of a regional director's determination

within which to submit a supporting brief or memorandum to the

Commissioner.

(2) The date of a regional director's determination will be

considered to be the date shown on the letter or other document

transmitting the determination.

(3) The Commissioner may extend the time for submitting a

supporting brief or memorandum, provided the affected party submits a

request in writing to the Commissioner and the Commissioner determines

the appellant has shown good cause for such an extension.

(4) A regional director's determination will have full force and

effect during the time an appeal is pending before the Commissioner,

except that upon specific request and showing of good cause by the

appellant in a timely notice of appeal, the Commissioner may hold a

regional director's determination in abeyance until a decision has been

rendered.

(b) The affected party may appeal the Commissioner's decision to

the Secretary of the Interior by writing to the Director, Office of

Hearings and Appeals, within 30 days from the date of mailing of the

Commissioner's decision. The appeal provided in this paragraph (b)

shall be governed by 43 CFR Part 4, Subpart G.

(c) Final decisions on appeals rendered by the Commissioner prior

to the effective date of this section are hereby validated as final

agency action and may not be further appealed administratively.

Subpart A--Revenues Crediting Criteria

Sec. 403.110 Direct or front-end credit requirements.

Direct or front-end credit will be applied only to those revenues

cited in the Second Deficiency Appropriation Act for 1924 (Fact

Finder's Act), Subsection I.

(a) Contract provisions prior to 1938, or specific project

legislation. To be eligible to receive front-end credit, a water user

or district must show that an existing contract had invoked valid

Subsection I revenue provisions prior to 1938, or legislation specific

to the project allowed for the direct crediting of some or all

incidental revenues.

(b) Reclamation actions regarding direct (front-end) crediting of

revenues. Effective January 1, 1994, Reclamation discontinued all

unauthorized direct (front-end) crediting of revenues. Provisions in

current contracts between water users or districts and Reclamation

purporting to allow direct (front-end) crediting unauthorized by law

are unenforceable and will not be honored. Reclamation will notify

directly all water users or districts affected by this subsection and

will provide information concerning rights of appeal.

Sec. 403.120 Credit to the project or tail-end credit requirements.

Credits to the project or tail-end credits involve funds being

directed to the Reclamation fund and applied to the construction

obligation of the project associated with the revenues.

(a) Revenues that may be credited to the project or as a tail-end

credit.

(1) Leasing of minerals from acquired lands--mineral revenues from

lands acquired for project purposes;

(2) Mineral leases (geothermal steam) on acquired lands--revenues

from leasing of geothermal steam on lands acquired for project

purposes;

(3) Sale of timber on acquired lands--revenues from the sale of

timber from lands acquired for project purposes;

(4) Sale of sand and gravel on acquired lands--revenues from the

sale of sand, gravel, and other mineral materials from lands acquired

for project purposes; and

(5) Rights-of-use on acquired lands--revenues generated by

temporary uses, authorized under Reclamation law, of lands acquired for

project purposes.

(6) Sale of land--lands either withdrawn or acquired for project

purposes and no longer required for the purpose for which the lands

were designated may, upon the Secretary of the Interior's

determination, be sold and the revenues distributed in accordance with

applicable statutes. Specifically, revenues from the following types of

sales will be applied as a tail-end credit to the project:

(i) Sale of withdrawn public domain lands that were improved at the

expense of the project;

(ii) Sale of unimproved withdrawn public domain lands that are in

tracts too small to qualify as farm units; and

(iii) Sale of acquired lands.

(b) Reclamation actions regarding credit to the project or tail-end

credit requirements. Provisions in current contracts between water

users and/or districts and Reclamation purporting to allow credits to

the project or tail-end credits unauthorized by law are unenforceable

and will not be honored. Reclamation will notify directly all water

users or districts affected by this subsection and will provide

information concerning rights of appeal.

Sec. 403.130 General credit to the reclamation fund.

General credit to the Reclamation fund does not provide a credit to

either the project construction costs or to the districts' annual

obligations. The following revenues will be credited as a general

credit to the Reclamation fund:

(a) Leasing of minerals from public domain lands--revenues from

mineral leases issued under the authority of the Mineral Leasing Act of

1920;

(b) Rights-of-way--revenues from rights-of-way issued under the

Mineral Leasing Act of 1920;

(c) Mineral leases (geothermal steam) from public domain lands--

revenues from leases for geothermal steam on public domain lands

pursuant to the Geothermal Steam Act of 1970;

(d) Sale of townsites--revenues from the sale of the townsite lots

on lands withdrawn from public entry;

(e) Sale of timber from withdrawn lands--revenues from the sale of

timber on withdrawn public domain lands, or from lands ``donated'' to a

specific project by the United States;

(f) Sale of sand and gravel from withdrawn lands--revenues from the

sale of sand, gravel and other mineral materials on withdrawn lands;

and

(g) Rights-of-use on withdrawn lands--revenues from the granting of

rights-of-use, authorized under Reclamation law, on withdrawn lands.

Sec. 403.140 Special Accounts or Revolving Funds.

Revenues and fees are to credited to special accounts or revolving

funds in accordance with the table below.

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Revenues and fees to be credited Account or fund

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User fees (16 U.S.C. 460l.6a) and Recreation Account.

concession or franchise fees.

Revenues specific to the Central Lower Colorado River Basin

Arizona Project (except Development Fund.

recreational user fees).

Revenues specific to the Boulder Colorado River Dam Fund.

Canyon Project.

Revenues from divisions of the Upper Colorado River Basin Fund.

Upper Colorado River Storage

Project.

Revenues from sale, exchange, or Columbia Basin Land Development

lease of Columbia Basin Project Account.

lands.

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Subpart B--[Reserved]

[FR Doc. 94-22379 Filed 9-9-94; 8:45 am]

BILLING CODE 4310-94-P