U.S. Bureau of Reclamation, Department of the Interior—Amounts Collected from Central Valley Project Water Contractors and the Miscellaneous Revenue Act

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Decision

Matter of: U.S. Bureau of Reclamation, Department of the Interior—Amounts Collected from Central Valley Project Water Contractors and the Miscellaneous Revenue Act

File: B-329575

Dated: April 6, 2022

Under the Miscellaneous Revenue Act, agencies are required to deposit money received for the government in the general fund of the Treasury, unless otherwise authorized by law. The United States Bureau of Reclamation (USBR), Department of the Interior, collected amounts from the Central Valley Project water contractors, but did not deposit them as miscellaneous receipts in the general treasury fund. USBR did not violate the Miscellaneous Receipts Act because USBR is authorized by law to retain these amounts.

This responds to a request for a ruling on whether the United States Bureau of Reclamation (USBR), Department of the Interior (DOI), violated the Miscellaneous Receipts Act, 31 USC § 3302, when it withheld certain monies collected from Central Valley Project (CVP) water contractors instead of depositing monies in the Treasury.[1] USBR is authorized by law to retain monies collected from CVP water contractors as prepayments for project operation and maintenance costs. As we explain below, we conclude that USBR’s withholding of these amounts did not violate the Miscellaneous Receipts Act.

In accordance with our practice for legal decisions, we sent a development letter to the DOI, requesting factual information as well as the DOI’s legal opinions on this matter. Letter from Assistant General Counsel, Appropriations Act, GAO, to (Acting) Counsel, DOI (December 6, 2017) (Development Letter); GAO, Procedures and Practices for Judicial Decisions and OpinionsGAO‑06‑1064SP (Washington, DC: Sept. 2006), available at https://www.gao.gov/products/gao-06-1064sp. DOI responded in August 2019 and June 2020.[2]

CONTEXT

USBR and CVP

USBR’s mission is to manage, develop and protect water and water-related resources.[3] USBR builds dams and canals, among other things, and is the largest water wholesaler in the United States.[4] Congress created the Reclamation Fund as a “special fund”[5] USBR to build and maintain irrigation works, among others. To see 43 USC § 391. USBR also receives credits, such as its Water and Related Resources Credit (WRR Credit).[6] The WRR credit is available until spent on activities such as “the management, development and restoration of water and related natural resources and on related activities, including exploitation, l maintenance and rehabilitation of rehabilitation and other facilities, [and] participation in the fulfillment of [f]federal responsibilities. DOI Response, p. 8. The WRR endowment stipulates that it should come, as far as possible, from the rehabilitation fund.[7]

USBR’s CVP is a network of dams, reservoirs, canals, hydroelectric plants, and other facilities in central California.[8] The CVP reduces the risk of flooding, provides water for domestic and industrial users, generates electricity, and provides water to restore and protect fish and wildlife, among other things.[9] Under the CVP, USBR enters into long-term contracts with water users such as irrigation districts and municipal and industrial users, referred to in this decision as water contractors.[10]

CVP operation and maintenance costs

CVP’s ​​dams and reservoirs are operated and maintained by USBR. DOI Response, at 4. Water contractors are required by law to pay USBR for operation and maintenance costs[11] assigned to them by the USBR. 43 USC § 492. USBR typically pays these costs up front and then bills the water contractors. DOI second response, at 7; DOI Response, p. 5. The law also allows water contractors to prepay operation and maintenance costs before water delivery. To see 43 U.S.C. § 397a. The law states that money prepaid to USBR for operation and maintenance must be deposited into the reclamation fund. View ID. The WRR credit stipulates that advance payments under Section 397a must be credited to the WRR account and are available in accordance with the purposes of the account. To see, for example, pub. L. no. 113‑235, 128 Stat. at 2309.

From 2009 to 2015, USBR entered into agreements with some water contractors whereby the contractors prepaid operation and maintenance costs for 1 year of water. DOI OIG report, p. 8; DOI response, p. 7; to see Second DOI response, p. 7. During this time, USBR used these advance payments to cover operating and maintenance costs. DOI OIG report, p. 8; Second DOI response, p. 7.

DISCUSSION

The question here is whether the USBR had the authority to retain the installments collected from the CVP water contractors for the operation and maintenance costs of the project or should have deposited the installments in the Treasury as miscellaneous receipts. .

Under the Miscellaneous Revenue Act, “a government official or agent receiving money for the government from any source shall deposit the money in the Treasury as soon as possible without deduction for any charge or claim”. 31 USC § 3302(b). The primary purpose of the Miscellaneous Revenue Act is to ensure that Congress retains control of the public purse, thereby protecting Congress’s constitutional power to appropriate the public purse. B-322531, March 30, 2012.

A law may, however, authorize an agency to withhold monies received from an outside source and direct that such receipts be deposited in an account other than the general fund of the Treasury. B-322531, p. 4. Such authority allows the agency to retain funds without violating the Miscellaneous Receipts Act. For example, in an earlier ruling, we found that the Office of Comptroller of the Currency (OCC) was authorized by law to lease property, collect payments from tenants, and deposit the funds at any depository. regular government or any state or national bank. B-324857, August 6, 2015. Since OCC’s statutory authority directed OCC to retain and use funds raised through its leases, these amounts were not required to be deposited in the general treasury fund as miscellaneous receipts. ID. In contrast, the Office of Navajo and Hopi Indian Relocation (ONHIR) violated the Miscellaneous Receipts Act when it failed to deposit money received from the sale of livestock in the treasury because ONHIR had not no legal authority to hold the funds. B-329446, September 17, 2020.

Here, similar to the authority of the OCC to withhold funds collected from tenants, the USBR is authorized to withhold advance payments from water contractors instead of depositing these amounts in the Treasury as miscellaneous receipts. . To see 43 U.S.C. § 397a; Pub. L. no. 113-235, 128 Stat. at 2309. We conclude that USBR did not violate the Miscellaneous Receipts Act when it withheld amounts collected from CVP water contractors because USBR has the legal authority to withhold such amounts.

CONCLUSION

The Miscellaneous Revenue Act requires that amounts received for the government be deposited in the Treasury, unless Congress directs otherwise. 31 USC § 3302. USBR’s withholding of CVP water contractors’ operating and maintenance advance payments was in accordance with the Miscellaneous Receipts Act because USBR was not required to deposit these amounts to the Treasury under 43 USC § 397a and WRR assignment.

Edda Emmanuelli Perez

General Counsel


[1] Letter from the Ranking Member, Committee on Natural Resources, House of Representatives, and Ranking Member, Subcommittee on Water, Energy and Oceans, House of Representatives, and four other members, House of Representatives, October 24, 2017. The request referred to a report released by the DOI Office of the Inspector General (DOI OIG) regarding USBR’s use of its credits for a project called the Bay Delta Conservation Plan Project. To see DOI OIG, The Bureau of Reclamation was not transparent in its financial participation in the Bay Delta Conservation Plan, Report No. 2016‑WR‑040 (Sept. 2017) (DOI OIG report). The request asked whether USBR’s actions complied with the Miscellaneous Receipts Act. We focused our decision on whether the miscellaneous revenue law would apply to USBR’s retention of amounts collected from CVP water contractors to cover project operating and maintenance costs.

[2] The DOI submitted its response to our development letter on August 2, 2019. Letter from Associate Counsel, Water Resources Division, DOI, to Associate General Counsel, Appropriations Law, GAO (DOI response). However, the DOI’s response did not provide certain factual information or supporting documentation, nor, in a number of cases, the DOI’s legal opinions. We sent a second letter to the DOI on June 12, 2020. Letter from the Assistant General Counsel, Appropriations Act, GAO, to the attorney, DOI. The DOI submitted its response, with supporting documentation, on June 30, 2020. Letter from Associate Counsel, Water Resources Division, DOI, to Assistant General Counsel, Appropriations Act, GAO (Second Response from DOI ). We contacted USBR via email on December 14, 2020 to clarify some factual issues. In response to our email, on March 3, 2021, we participated in a teleconference with DOI.

[5] Special fund is defined as “a [f]federal fund account for earmarked revenue and the expenditure of that revenue. Office of Management and Budget Circular No. A-11, Preparation, submission and execution of the budget, p.t. 1, § 20 (August 2021).

[6] See, for example, Consolidated and Continuing Appropriations Act of 2015, Pub. L. no. 113‑235, div. D, Title II, 128 Stat. 2130, 2309 (December 16, 2014).

[10] GAO, Bureau of Reclamation: Availability of information on reimbursement of construction costs of water projects could be better promotedGAO-14-764 (Washington, DC: September 8, 2014), p. 1–2.

[11] The DOI defines operation and maintenance costs as “all costs that are not identified as construction costs [which] would generally include the administration, management, coordination and execution of the services. . . necessary to ensure that [USBR] facilities provide for the achievement of authorized project objectives. DOI response, at 4.

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