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September 12, 2000

S. 624 - Fort Peck Reservation Rural Water System
(Hill (R) MT, Burns (R) MT and Baucus (D) MT)

S. 624 directs the Secretary of the Interior to design, construct, operate, and maintain the Fort Peck Reservation Rural Water System in Montana. The System would be comprised of two major interconnected rural water supply projects, including a Tribal water system and a non-Tribal water system. Although the Administration supports the tribal components of the proposed water system, the Administration opposes S. 624 because of the non-Reservation portion of the bill. We would like to continue to work with the appropriate Committees and the Montana delegation to resolve our concerns over the bill.

S. 624 would require the Federal Government to pay 76 percent of the planning and construction costs of the non-Tribal water system at a cost of approximately $51 million to U.S. taxpayers. Longstanding policy on non-Tribal rural water systems holds that non-Federal interests should repay 100 percent of design and construction costs with interest. The Administration also opposes the incorrect allocation of other projects' costs incurred by both systems as 100 percent Tribal. As the Federal Government is paying for the Tribal water system, this incorrect allocation would provide an additional subsidy for the non-Tribal system beneficiaries. The Administration also is concerned with provisions that would assign the ownership and operation of transmission facilities to the Secretary of the Interior, and about certain other aspects of the bill.