[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



 
                  H.R. 4708, H.R. 4739 and H.R. 5039
=======================================================================

                          LEGISLATIVE HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                               __________

                              July 9, 2002

                               __________

                           Serial No. 107-135

                               __________

           Printed for the use of the Committee on Resources



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                         COMMITTEE ON RESOURCES

                    JAMES V. HANSEN, Utah, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska,                   George Miller, California
  Vice Chairman                       Edward J. Markey, Massachusetts
W.J. ``Billy'' Tauzin, Louisiana     Dale E. Kildee, Michigan
Jim Saxton, New Jersey               Peter A. DeFazio, Oregon
Elton Gallegly, California           Eni F.H. Faleomavaega, American 
John J. Duncan, Jr., Tennessee           Samoa
Joel Hefley, Colorado                Neil Abercrombie, Hawaii
Wayne T. Gilchrest, Maryland         Solomon P. Ortiz, Texas
Ken Calvert, California              Frank Pallone, Jr., New Jersey
Scott McInnis, Colorado              Calvin M. Dooley, California
Richard W. Pombo, California         Robert A. Underwood, Guam
Barbara Cubin, Wyoming               Adam Smith, Washington
George Radanovich, California        Donna M. Christensen, Virgin 
Walter B. Jones, Jr., North              Islands
    Carolina                         Ron Kind, Wisconsin
Mac Thornberry, Texas                Jay Inslee, Washington
Chris Cannon, Utah                   Grace F. Napolitano, California
John E. Peterson, Pennsylvania       Tom Udall, New Mexico
Bob Schaffer, Colorado               Mark Udall, Colorado
Jim Gibbons, Nevada                  Rush D. Holt, New Jersey
Mark E. Souder, Indiana              Anibal Acevedo-Vila, Puerto Rico
Greg Walden, Oregon                  Hilda L. Solis, California
Michael K. Simpson, Idaho            Brad Carson, Oklahoma
Thomas G. Tancredo, Colorado         Betty McCollum, Minnesota
J.D. Hayworth, Arizona               Tim Holden, Pennsylvania
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
Dennis R. Rehberg, Montana

                      Tim Stewart, Chief of Staff
           Lisa Pittman, Chief Counsel/Deputy Chief of Staff
                Steven T. Petersen, Deputy Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                 James H. Zoia, Democrat Staff Director
               Jeffrey P. Petrich, Democrat Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                   KEN CALVERT, California, Chairman
            ADAM SMITH, Washington, Ranking Democrat Member

 Richard W. Pombo, California        George Miller, California
George Radanovich, California        Peter A. DeFazio, Oregon
Greg Walden, Oregon,                 Calvin M. Dooley, California
  Vice Chairman                      Grace F. Napolitano, California
Michael K. Simpson, Idaho            Hilda L. Solis, California
J.D. Hayworth, Arizona               Brad Carson, Oklahoma
C.L. ``Butch'' Otter, Idaho
Tom Osborne, Nebraska
Jeff Flake, Arizona
                                 ------                                
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on July 9, 2002.....................................     1

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     1
        Prepared statement on H.R. 4708, H.R. 4739 and H.R. 5039.     2
    Doggett, Hon. LLoyd, a Representative in Congress from the 
      State of Texas.............................................     3
    Gibbons, Hon. Jim, a Representative in Congress from the 
      State of Nevada............................................    10
        Prepared statement on H.R. 5039..........................    11
    Simpson, Hon. Michael K., a Representative in Congress from 
      the State of Idaho.........................................     9

Statement of Witnesses:
    Garcia, Hon. Gustavo, Mayor, City of Austin, Texas...........     4
        Prepared statement on H.R. 4739..........................     6
    Hodges, Bennie, Manager, Pershing County Water Conservation 
      District...................................................    28
        Prepared statement on H.R. 5039..........................    30
    Keys, John W. III, Commissioner, Bureau of Reclamation, U.S. 
      Department of the Interior, Oral statement on H.R. 4708....    13
        Oral statement on H.R. 4739..............................    16
        Oral statement on H.R. 5039..............................    18
        Prepared statement on H.R. 4708..........................    15
        Prepared statement on H.R. 4739..........................    17
        Prepared statement on H.R. 5039..........................    19
    Malloch, Steven, Counsel, Western Water Project, Trout 
      Unlimited, Inc.............................................    34
        Prepared statement on H.R. 4708 and H.R. 5039............    36
    Raybould, Jeff, Chairman, Board of Directors, Fremont-Madison 
      Irrigation District........................................    26
        Prepared statement on H.R. 4708..........................    27

Additional materials supplied:
    Semanko, Norman M., Executive Director and General Counsel, 
      Idaho Water Users Association, Statement submitted for the 
      record on H.R. 4708........................................    48


H.R. 4708, TO AUTHORIZE THE SECRETARY OF THE INTERIOR TO CONVEY CERTAIN 
 FACILITIES TO THE FREMONT-MADISON IRRIGATION DISTRICT; H.R. 4739, TO 
 AMEND THE RECLAMATION WASTEWATER AND GROUNDWATER STUDY AND FACILITIES 
 ACT TO AUTHORIZE THE SECRETARY OF THE INTERIOR TO PARTICIPATE IN THE 
 DESIGN, PLANNING, AND CONSTRUCTION OF A PROJECT TO RECLAIM AND REUSE 
WASTEWATER WITHIN AND OUTSIDE OF THE SERVICE AREA OF THE CITY OF AUSTIN 
   WATER AND WASTEWATER UTILITY, TEXAS; AND H.R. 5039, TO DIRECT THE 
SECRETARY OF THE INTERIOR TO CONVEY TITLE TO CERTAIN IRRIGATION PROJECT 
PROPERTY IN THE HUMBOLDT PROJECT, NEVADA, TO THE PERSHING COUNTY WATER 
CONSERVATION DISTRICT, PERSHING COUNTY, LANDER COUNTY, AND THE STATE OF 
                                NEVADA.

                              ----------                              


                         Tuesday, July 9, 2002

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to call, at 2:07 p.m., in 
room 1324, Longworth House Office Building, Hon. Ken Calvert 
[Chairman of the Subcommittee] presiding.

STATEMENT OF THE HON. KEN CALVERT, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Calvert. Good afternoon. The Subcommittee of Water and 
Power will come to order.
    The Committee is meeting today to hear testimony on three 
bills. H.R. 4708, the Fremont-Madison Conveyance Act; H.R. 
5039, the Humboldt Project Conveyance Act; and H.R. 4739, the 
City of Austin Water Reclamation Authorization Act.
    Under Rule 4(B) of the Committee rules any oral opening 
statements at hearing are limited to the Chairman and the 
Ranking Minority Member. If other members have statements, they 
can be included in the hearing record under unanimous consent.
    The subject of Federal facilities title transfer has been 
of particular interest for this Committee and others throughout 
the west. Title transfer legislation not only representatives a 
concerted effort to help shrink the Federal Government, but it 
also transfers facilities into the hands of those who can more 
officially operate and maintain them.
    H.R. 4708 directs the Secretary of Interior to transfer all 
right, title and interest of the United States in and to all 
components of the water system operated and maintained by the 
Fremont-Madison Irrigation District to the District. This title 
transfer must take place pursuant to a Memorandum of Agreement 
between the Secretary of Interior and the Fremont-Madison 
Irrigation District, dated September 13, 2001.
    The District will be responsible for administrative costs 
including any review required under the National Environmental 
Policy Act incurred during the conveyance process up to 
$40,000.
    Mr. Calvert. H.R. 5039 provides for the transfer of lands 
and facilities to the Pershing County Water Conservation 
District, Pershing County, Lander County, and the State of 
Nevada within 2 years of the enactment of this legislation.
    H.R. 5039 requires that a report be submitted to Congress 
if the title transfer does not take place within a specified 
timeframe. This legislation also directs the Secretary of the 
Interior to not require any of the entities receiving land or 
facilities to pay more than $40,000 for administrative and NEPA 
costs.
    Mr. Calvert. Although unrelated, the next bill we will hear 
today deals with another important subject for this Committee, 
water recycling. H.R. 4739 will amend the Reclamation 
Wastewater and Groundwater Study and Facilities Act to 
authorize the Secretary of Interior to participate in the 
design, planning and construction of a project to reclaim and 
reuse wastewater within and outside the service area of the 
City of Austin, Texas, Water and Wastewater Utility.
    Mr. Calvert. The Chairman now recognizes the Ranking 
Minority Member who is not here, but any opening statement will 
certainly submit for the record.
    Mr. Calvert. We have several Members who are going to 
testify, but first, Mr. Doggett, who is the sponsor of H.R. 
4739, would like to have an opening statement and introduce his 
special guests.
    [The prepared statement of Mr. Calvert follows:]

Statement of The Honorable Ken Calvert, Chairman, Subcommittee on Water 
                               and Power

    The subject of Federal facilities title transfer has been of 
particular interest for this Committee and others throughout the west. 
Title transfer legislation not only represents a concerted effort to 
help shrink the Federal Government, but it also transfer's facilities 
into the hands of those who can more efficiently operate and maintain 
them.
    In early 1995, the Department of the Interior announced that the 
Bureau of Reclamation would transfer title to a significant number of 
facilities to state and local governments. Since that time, Reclamation 
officials have been working through a self-developed process to 
implement that concept. Over ten title transfer bills have been signed 
into law since the commencement of this process. This program remains a 
high priority within the Subcommittee on Water and Power and 
expeditious steps must be found to facilitate these transfers.
    H.R. 4708 directs the Secretary of the Interior to transfer all 
right, title, and interest of the United States in and to all 
components of the water system that are operated and maintained by the 
Fremont-Madison Irrigation District to the District. This title 
transfer must take place pursuant to a memorandum of agreement between 
the Secretary of the Interior and Fremont-Madison Irrigation District 
dated September 13, 2001. The District will be responsible for all 
administrative costs incurred during the conveyance process.
    H.R. 5039 provides for the transfer of lands and facilities to the 
Pershing County Water Conservation District, Pershing County, Lander 
County, and the State of Nevada within two years of the enactment of 
this legislation. H.R. 5039 requires that a report be submitted to 
Congress if the title transfer doesn't take place within the specified 
time frame. This legislation also directs the Secretary of the Interior 
to not require any entity to pay more than $40,000 of administrative 
and NEPA costs when NEPA compliance is estimated to cost $400,000.
    Although unrelated, the next bill we will hear today deals with 
another important subject for this Committee, water recycling. Natural 
scarcity of fresh water makes the discovery of new and untapped sources 
of water important to provide for future demand. One source of water 
that has traditionally been overlooked is recycled water. Recycled 
water is desirable because there is a constant supply; and, although 
recycled water is mostly used in irrigation and industry, it also 
relieves pressure on local streams and aquifers that currently provide 
water for municipal and industrial use.
    The importance of this resource was officially recognized in 1992 
by the passing of Public Law 102-575. Title XVI of this law, also known 
as the Reclamation Wastewater and Groundwater Study and Facilities Act, 
authorized the Bureau of Reclamation to participate in the construction 
of five water recycling projects. Since 1992, the Act has been revised 
to include several other projects.
    H.R. 4739 will amend the Reclamation Wastewater and Groundwater 
Study and Facilities Act to authorize the Secretary of the Interior to 
participate in the design, planning, and construction of a project to 
reclaim and reuse wastewater within and outside of the service area of 
the City of Austin Water and Wastewater Utility, Texas.
                                 ______
                                 
    Mr. Doggett, you are recognized.

   STATEMENT OF THE HON. LLOYD DOGGETT, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Doggett. Thank you very much, Mr. Chairman. It was my 
good fortune to serve about 4 years ago on this Committee and I 
am pleased to be back. I appreciate so much the help in advance 
of today that your office and the Subcommittee staff 
particularly has provided us on this piece of legislation. I 
suppose that it is a little ironic that we are here today at 
this time talking about water for Austin, Texas.
    We are just a little north of the area that has suffered 
the most severe floods, but today we have more water flowing 
through the City of Austin than we know what to do with in the 
Colorado River shed. Fortunately, no houses in it, but we are 
here to discuss a subject that I know, Mr. Chairman, and other 
Members of the Committee have expressed great interest on in 
the past and that is how we make the most effective use of the 
water we have.
    We have many demands as well on water flowing out of the 
Colorado River shed from all the neighboring areas and are 
looking for ways to make the maximum use of the water that we 
have through recycling projects.
    I believe that the City of Austin is already a nationally 
recognized leader in water resource planning and that this 
legislation will help our community further the goals of water 
conservation and sustainable development, goals that are very 
important to our community, which is particularly sensitive to 
the environment.
    The reclaimed water service that we have now would be 
supplemented by this project. For the last decade or so, the 
City of Austin has developed and implemented long-range water 
protection and conservation plans and with this legislation we 
would be able to create a partnership between the City of 
Austin and the Federal Government on this reclamation.
    I believe that the legislation, designed with the 
assistance of your staff, meets the eligibility requirements 
and the goals established by the Bureau of Reclamation Title 
XVI programs. We are well aware of the fact that there are many 
projects out there already, there are many projects in a wide 
range of areas that the Bureau has that it does not have fully 
funded.
    Our objective today is a realistic one of being sure that 
the City of Austin and this important project are on the list 
of those projects to be considered as funds become available in 
the future.
    It is my pleasure, Mr. Chairman, to introduce at this time 
our Mayor, Gus Garcia. He has a lifelong commitment to our 
community and a distinguished record of public service. He 
recently was elected as Mayor and this is his first 
opportunity, despite many years of involvement in the 
legislative process, to testify here in Congress.
    I believe that he can provide more insight into the 
importance of this legislation for our community and how it 
fits into the overall national objectives of seeing that we 
maximize our water resources.
    Thank you.
    Mr. Calvert. The Mayor is recognized. Welcome, Mayor.

  STATEMENT OF THE HON. GUSTAVO GARCIA, MAYOR OF AUSTIN, TEXAS

    Mr. Garcia. Thank you, Mr. Chairman and Members of the 
Subcommittee. Thank you for the opportunity to appear before 
you to talk today about House Resolution 4739.
    I would also like to thank our Congressman, Lloyd Doggett, 
for introducing H.R. 4739 and for all his hard work on behalf 
of the City of Austin.
    Like he indicated, my name is Gus Garcia and I currently 
serve as Mayor of the city with a population of 670,000 and 
growing every day. The City of Austin offers the best big city 
life and small town environment.
    The City of Austin recognized early on that our high 
quantity of life would attract growth, thus creating an 
exceptional challenge in maintaining our unique ambiance. 
Although we have overcome some difficult obstacles, today 
Austin is nationally recognized as a leader in sustainable 
growth management. This is just one of the sustainable growth 
initiatives that we have in place.
    The City of Austin Water Reclamation Project is a 
sustainable growth initiative that fosters economic development 
while minimizing impacts on the environment. It is a city 
priority and a personal priority of mine.
    In my written testimony which was filed with the Clerk of 
the Committee, I provided background on Austin and its water 
needs, our efforts to meet those needs and the role that we 
envisioned for the Bureau of Reclamation's Title XVI in helping 
to meet those needs.
    H.R. 4739 amends the Reclamation Wastewater and Groundwater 
Study and Facilities Act to authorize the Secretary of the 
Interior to participate in the design, planning and 
construction of a water reclamation project within the service 
area of the City of Austin Water and Wastewater Utility.
    The City of Austin owns and operates its water and 
wastewater utility which has approximately 180,000 connections 
and services about 754,470 water users because our service area 
is a little bit larger than the city limits.
    The utility service area covers 450 square miles and is 
served by three water treatment plants and three wastewater 
treatment plans.
    If I may divert here for just a minute, we are talking 
about building a fourth water treatment plant in an 
environmental sensitive area. The City, I think, would be best 
served if we could use reclaimed water to serve the needs of 
our recreational areas and our industrial areas instead of 
putting another water treatment plant and treating the water to 
potable and drinking water standards.
    With the Lower Colorado River is the source of Austin's 
water supply, Austin's supplies potable water to approximately 
70 percent of the people in the Lower Colorado Basin. Recently, 
in response to inevitable future water shortages, the Texas 
Legislature adopted a comprehensive statewide regional water 
management plan.
    Austin's rapid population growth has resulted in a rapidly 
increased demand for water. During the 1990's, the city 
experienced a 35 percent growth in population and a 43 percent 
increase in peak day water demand. The State plan highly 
recommends water conservation and reuse.
    We are going into the months right now when we will have a 
great deal of demand for our treated water. The City of Austin 
has joined the statewide conservation effort by expanding its 
Water Reclamation Program. The expansion of our Water 
Reclamation system will assist in reducing the needs for 
additional water treatment plan capacity and help us meet the 
city's goal of achieving a more sustainable water supply.
    Stated another way, the effective use of properly treated 
effluent conserves this precious resource while reducing the 
need to use potable water to satisfy needs that can be met by 
using properly treated effluent.
    Currently reclaimed water use is over five millions gallons 
per day during the summer. Austin has operated its water 
reclamation program since 1980. In 1992, the City of Austin 
began planning for citywide expansion by developing a series of 
master plan documents.
    Currently, and throughout the funding process, the city 
continues to collaborate with the Bureau of Reclamation on 
those plans.
    A significant constraint to implement our water reclamation 
program, of course, is funding. These funding issues have 
become more difficult because of the recent economic downturn. 
I realize that under Title XVI, Federal funding is capped, but 
the city is prepared and committed to covering the bulk of this 
cost.
    We believe that the City of Austin Water Reclamation 
Program System expansion fits within the goals and objectives 
of the Title XVI Program, specifically in the areas of 
applicability, eligibility, financial capacity, ownership, 
regionalism, and environmental benefits.
    In conclusion, given the national importance of addressing 
water needs and water quantity, Federal assistance to this 
program is appropriate and welcome.
    I hereby respectfully request that the Subcommittee approve 
this bill and seek its final passage.
    We appreciate your time and support and we thank you again 
for this is opportunity to testify.
    I would be pleased to answer any questions that you may 
have. Thank you, Mr. Chairman.
    [The prepared statement of The Hon. Gus Garcia follows:]

Statement of The Honorable Gustavo Garcia, Mayor, City of Austin, Texas

    Chairman Calvert, Representative Smith and members of the 
Subcommittee, thank you for the opportunity to appear before you today 
to testify in favor of H.R. 4739. I would also like to thank our 
Congressman, Lloyd Doggett, for introducing H.R. 4739 and for all of 
his hard work on behalf of Austin.
    My name is Gustavo Garcia and I am the Mayor of Austin, the capital 
City of Texas. With a population of 670,000 Austin offers the best of 
big city and small town life. Achieving this balance has not always 
been easy. The City of Austin recognized early on that our high quality 
of life would attract growth and that we would have to manage this 
growth in order to maintain our high quality of life. Though we have 
had to overcome some difficult obstacles, today Austin is nationally 
recognized as a leader in sustainable growth that enhances communities, 
fosters economic development and minimizes the impact on the 
environment. The City's Water Reclamation Program is one part of that 
effort. It is a City priority and a personal priority for me.
    In my testimony, I will provide background on Austin and its water 
needs, our efforts to meet those needs and the role that we envision 
for the Bureau of Reclamation's Title 16 Program in helping to meet 
those needs.
H.R. 4739
    H.R. 4739 amends the Reclamation Wastewater and Groundwater Study 
and Facilities Act to authorize the Secretary of the Interior to 
participate in the design, planning, and construction of a project to 
reclaim and reuse wastewater within the service area of the City of 
Austin Water and Wastewater Utility.
About the City of Austin Water & Wastewater Utility
    The City of Austin owns and operates its Water and Wastewater 
Utility, which has approximately 180,000 residential, multifamily, 
commercial, industrial, and wholesale connections, with a total number 
of users of 754,470. The Utility's service area covers 450 square miles 
and is served by three wastewater treatment plants with a capacity of 
130 million gallons/day and three water treatment plants with a peak 
capacity of 265 million gallons/day. Austin has operated its Water 
Reclamation Program since the early 80's, providing irrigation water 
for golf courses. In 1992 the City of Austin began researching, 
planning and developing an infrastructure system for the city-wide use 
of reclaimed water.
    During this time, the City of Austin has been a leader in water 
conservation and reuse issues and promotion. While the commendations 
and awards are many for the Utility's Water Conservation Program, a few 
stand out:
     LThe City has repeatedly received the Water Mark award 
from the American Water Works Association for raising the public level 
of understanding of water conservation issues as well as their top 
award for conservation and reuse in the category of a Direct Program 
for a Large Utility.
     LIn 1996, the City received the United States Department 
of the Interior, Bureau of Reclamation Long-Term Conservation Award for 
Outstanding Conservation Achievements.
About Texas Water Resources
    Future water shortages are inevitable in Texas. The Texas 
legislature has recently adopted a comprehensive statewide water 
management plan, unique in its approach in developing statewide 
individual regional plans. The increasing scarcity of new water 
supplies, the high cost of new water supply development and heightened 
environmental concerns are the driving force behind the State'' plan.
    Building on this effort, the Texas Legislature authorized sixteen 
planning groups to develop regional plans for the development and 
management of water resources over the next fifty years. These plans 
identify current and future water demands, water availability, 
potential water shortages, and potential solutions that address 
shortages.
    The State's regional plan identifies Austin as an area facing a 
water shortage. Rapid population growth has resulted in rapidly 
increased water use. During the 1990's, the City experienced a 35% 
percent growth in population and a 43% percent increase in peak day 
water demand
    Against this backdrop, the City has joined the statewide effort. 
Expanding Austin's Water Reclamation Program has been one of several 
measures used to assist in meeting and balancing the water demands on 
the Lower Colorado River, from which Austin draws its raw water supply. 
The City of Austin provides potable water for 70% of the people in the 
Lower Colorado River basin.
The City of Austin Water Reclamation Program
    During peak irrigation demands in summer, the reclaimed water use 
is over 5 million gallons of reclaimed water per day, predominantly for 
landscape irrigation. An electric power utility will soon be a major 
customer, and computer microchip manufacturers have expressed an 
interest in reclaimed water. Other potential customers, such as the 
University of Texas, are interested in using reclaimed water if 
distribution lines can be extended to their property. Based on the high 
quality of the effluent, the major uses for reclaimed water in Austin 
include irrigation, cooling tower water, manufacturing processes and 
toilets.
    The City has developed a series of master planning documents 
identifying potential large institutional, industrial, commercial, and 
recreational customers. The planning documents also identified service 
areas with necessary extensions on the north side of the City, on the 
south side of the City, and in a satellite area. Satellite systems are 
separate from the Utility's infrastructure due to geographical 
constraints.
    The expansion of our water reclamation system will provide a number 
of benefits. It will assist in buffering the need for additional water 
treatment plant capacity and help us meet the City's goals in achieving 
a more sustainable water supply.
Reclamation and Reuse Project--North System Details
    In 2000, Austin began implementing the plan that will serve 
reclamation customers north of the Colorado River with construction of 
the water reclamation pumping and storage facility at the Walnut Creek 
Water Wastewater Treatment Plant and transmission main to the central 
part of town. This phase of the project was completed in the spring of 
2002.
    The north system extensions consist of 52 miles of transmission 
mains, four pump stations, and three storage tanks. The North System 
will be implemented in eight phases. The estimated cost to complete 
construction of all phases of the North System is $46 million. This 
estimated cost for the North System does not include the approximately 
$14 million already spent on the starter system.
    These pumping and storage facilities and transmission mains will 
serve as the backbone to the downtown area, the University of Texas, 
several golf courses and various high tech manufacturing facilities. 
Along with other potential large volume customers in the central part 
and northeast part of town, it is estimated that these customers will 
use approximately 5.8 to 7.3 billion gallons of reclaimed water per 
year. The proposed alignment and facility locations for the North 
System were located to implement the system as larger customers come on 
line.
Reclamation and Reuse Project--South System Details
    The City's Water Reclamation Initiative South System Master Plan 
identifies potential customers south of Town Lake and the Colorado 
River and delineates a service area that could be served by the South 
Austin Regional Wastewater Treatment Plant. The south system extensions 
consist of 66 miles of transmission mains, four pump stations, and five 
storage facilities. The estimated cost to complete construction of all 
phases of this system is $53.4 million.
    The plan identified eighty-seven potential large volume customers 
that could use approximately 2.9 billion gallons of reclaimed water per 
year. The potential customers include a power generation plant next to 
South Austin Regional Wastewater Treatment Plant, several high tech 
manufacturing facilities, golf courses, City parks, and commercial 
developments.
    The proposed alignments of the transmission main and location of 
the distribution systems were designed in phases to allow for 
implementation of the system as large customers come on line.
    The water reclamation improvements, pumping, and elevated storage 
facility at the South Austin Regional Water Treatment Plant are 
currently in the final design phase and are not part of the phasing 
described in this section. The estimated cost for the water reclamation 
part of the improvements at the plant is approximately $5 million.
Reclamation and Reuse Project--Satellite System Details
    Annexation of an area in the northwest part of town has given the 
City of Austin an opportunity to provide reclaimed water to an area 
that is several miles from the north system service area. Two existing 
wastewater package treatment plants, which are stand-alone facilities, 
currently serve this area. A third package plant is located 
approximately 2 miles further to the northwest and is in an area that 
will be annexed in 2003. Package plants are self-sustaining plants, 
separate from the main Utility system. The City of Austin is planning 
to use these three package plants as satellite facilities to provide 
reclaimed water to parkland, two golf courses, and residences in the 
area.
    Austin has already constructed approximately seven miles of 
residential service lines to serve approximately 600 residences. The 
cost of constructing the service lines is approximately $4.3 million. 
Additional costs will be incurred to upgrade the package plants, 
additional transmission mains, and a storage facility. The estimated 
cost for those improvements range from $3 to $5 million. This 
residential water project will be a pilot program to evaluate reclaimed 
water use for residential irrigation.
[GRAPHIC] [TIFF OMITTED] 80549.001

Financial Constraints Facing Austin's Water Reclamation Program
    A significant constraint to implementing our water reclamation 
program is funding. This constraint has been compounded further by the 
recent economic downturn, which has hit Austin particularly hard. 
Austin's economy is strongly influenced by the high tech industry, 
which went into recession earlier and deeper than other parts of the 
economy. In a metropolitan area of approximately one million people, we 
have lost in excess of 20,000 jobs in the high tech sector alone. The 
impact has spread into other areas and affects our ability to proceed 
with beneficial programs such as water reclamation and reuse.
    I realize that under the Title 16 Program, Federal funding is 
capped and that the City will have to cover the bulk of these costs. 
The City is prepared and committed to doing so. However given the 
national importance of addressing water needs and water quality, 
Federal assistance with this project is appropriate and welcome.
Bureau of Reclamation's Title 16 Program
    The Bureau of Reclamation operates a well-respected water 
reclamation program, referred to as the Title 16 Program, designed to 
improve efficiency in the use of water resources in urban areas. 
Section 1602 of Public Law 102-575 establishes broad goals for the 
Bureau of Reclamation in administering the Title 16 Program. These 
goals include:
     LIdentifying opportunities for reclamation and reuse of 
municipal wastewater,
     LInvestigating those opportunities and,
     LProviding a cost-share opportunity for an appraisal and 
feasibility study and for the design and construction of permanent 
facilities to reclaim and reuse municipal wastewater.
    The City of Austin's Water Reclamation Program fits well within 
these broad goals. The City has identified and is in the process of 
investigating, through a preliminary master plan, opportunities for 
reclamation and reuse of municipal wastewater. Throughout the funding 
process, the City will continue to collaborate with Bureau of 
Reclamation on those plans. Based on the results of the investigations, 
the City will request financial assistance from the Bureau of 
Reclamation in the design and construction of infrastructure to reclaim 
and reuse the municipal wastewater.
    In addition to conforming to the general goals of the Title 16 
Program, the City of Austin's Water Reclamation Program meets the 
following specifics for the Title 16 Program:
    Applicability--Austin is located in Texas, which is one of the 
seventeen western states under the Bureau of Reclamation's 
jurisdiction.
    Eligibility--Austin is a municipality and therefore capable of 
entering into a cost-sharing agreement with the Bureau of Reclamation.
    Financial capability--Austin has dedicated revenue sources through 
water and wastewater user fees and has demonstrated financial 
capabilities as evidenced by the investment grade rating of its bonds.
    Ownership--The City of Austin will hold title to the facilities and 
be responsible for their operation and maintenance.
    Regional perspective--Austin's Water Reclamation Program is 
consistent with state authorized regional water supply plans for the 
Colorado River.
    Environmental benefits--Austin's Water Reclamation Program assists 
in buffering the need for additional water treatment plant capacity and 
helps us meet the City's goals in achieving a more sustainable water 
supply.
Conclusion
    H.R. 4739 will provide Federal authorization for the City of Austin 
to formally enter the Bureau of Reclamation's Title 16 Program. We have 
developed a large-scale phased project for the reclamation and reuse of 
municipal wastewater in the Austin area and believe that the project 
fits within the goals and objectives of the Title XVI program. I hereby 
respectfully request that the Subcommittee approve H.R. 4739 and seek 
its final passage. We appreciate your time and support.
    Thank you again for this opportunity to testify. I would be pleased 
to answer any questions that you may have.
                                 ______
                                 
    Mr. Calvert. Thank you, Mayor. If you will please remain 
there, we will have a couple of opening statements on two other 
bills we have before us and then we will be hearing from 
Commissioner Keys. Thank you.
    Mr. Calvert. Next, Mr. Simpson, sponsor of H.R. 4708, will 
have an opening statement on his legislation.
    Mr. Simpson, you are recognized.

   STATEMENT OF HON. MICHAEL K. SIMPSON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF IDAHO

    Mr. Simpson. Thank you, Mr. Chairman, for holding this 
hearing on H.R. 4708, the Fremont-Madison Conveyance Act. I 
would also like to take this opportunity to thank Mr. Jeff 
Raybould, President of the Board of Directors of the Fremont-
Madison Irrigation District for making the trip from Idaho 
today.
    H.R. 4708 would require the Secretary of Interior to convey 
title of portions of the district, namely the crosscut 
diversion dam, the crosscut canal and the Teton Exchange Wells 
currently under the control of the Bureau of Reclamation of the 
Fremont-Madison Irrigation District.
    The district has managed these facilities since their 
creation and by all accounts has done an excellent job of 
maintaining and operating them. I'm confident they will 
continue to be excellent stewards of these facilities once 
ownership is transferred and conveyance of this title is in the 
best interest of the users, the Federal Government and the 
environment.
    Over the past few months, representatives of the district 
have worked with local citizens, agricultural producers and the 
Bureau of Reclamation and conservation groups to create a 
transfer agreement that would be acceptable to all interested 
parties. I commend them on all of their hard work and look 
forward to my work with them in the coming weeks as this bill 
moves through the legislative process.
    Mr. Chairman, I would like also to ask unanimous consent to 
submit two letter of support. The letters are from The 
Honorable Dirk Kempthorne, Governor of the State of Idaho and 
from the Idaho Water Users Association.
    Mr. Calvert. Without objection, it is so ordered.
    Mr. Simpson. Thank you. That concludes my remarks.
    Mr. Calvert. I thank the gentleman.
    Mr. Calvert. Mr. Gibbons, the sponsor of H.R. 3059, you are 
recognized to give your opening statement.

    STATEMENT OF HONORABLE JIM GIBBONS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF NEVADA

    Mr. Gibbons. Thank you very much, Mr. Chairman. I want to 
thank you and express my appreciation to the Subcommittee for 
holding this hearing on such short notice.
    At the outset, Mr. Chairman, if I could, I would also like 
to welcome two distinguished Nevadans who have come a long way 
to attend this hearing as well, Mr. Bennie Hodges who is the 
manager of the Pershing County Water Conservation District, and 
Mr. Bob Gibson, a member of the Pershing County Water 
Conservation District Board of Directors.
    I would like to thank and welcome a fellow pilot, Mr. Keys, 
who is attending here on behalf of the Bureau of Reclamation, 
and of course, the distinguished guest from the Washington, 
D.C. area, Mr. Steven Malloch, who representatives Trout, 
Unlimited.
    Mr. Chairman, this legislation, H.R. 5039, would direct the 
Secretary of Interior to convey certain title to an irrigation 
project in the Humboldt Project property in the Humboldt 
Project, Nevada, to the Pershing County Water Control District 
and the State of Nevada and to Lander and Pershing Counties 
respectfully.
    The Pershing County Water Conservation District will 
receive Rye Patch Reservoir along with specific lands around 
the reservoir and title for acquired pasturelands. The State of 
Nevada will receive all the withdrawn lands above the high 
water mark at Rye Patch to be added to existing State park and 
withdrawn lands in the Humboldt Sink area and in the Lander 
County area to be managed as wetlands.
    This bill will protect and enhance, I believe, the public 
benefits in this area because all lands conveyed to the State 
will be used for recreation, wildlife habitat, wetlands, 
resource conservation measures pursuant to the agreement 
between the State and the Pershing County Water Conservation 
District.
    Lander County will receive title to designated pasturelands 
and Pershing County will acquire land immediately adjacent to 
Derby Airport for maintenance and future expansion purposes.
    Over the past 5 years, the Pershing County Water 
Conservation District has undergone an extensive consensus-
based process with Federal Government, the counties and the 
State of Nevada. They have also conducted outreach with local 
representatives of the environmental organizations and as a 
result of public comments received through scoping meetings and 
in other venues, the Pershing County Water Conservation 
District has continued to reformulate their proposal in a 
sincere attempt to address all concerns.
    Mr. Chairman, I would admit that it has been a tough 
process and they should be recommended for their efforts in 
this effort. Mr. Chairman, this bill ratifies agreements 
between the Bureau of Reclamation and the Pershing County Water 
Conservation District, the State and the counties.
    It has the support of the Governor of Nevada, the Humboldt 
River Basin Water Authority and the Counties of Lander and 
Pershing in Nevada.
    The Department of Interior and the Bureau of Reclamation 
are on record as supporters of transferring title to local 
entities. This is the third, and hopefully final attempt to 
obtain title to the Humboldt Project facilities since it has 
repaid to the taxpayers its original project loan from the 
government back in 1978 when the Pershing County Water 
Conservation District operates and maintains the project and 
its constituents are the sole beneficiaries of the project and 
local control, therefore, Mr. Chairman, is the logical choice.
    This Subcommittee has reviewed a number of title transfer 
bills in the past. I believe this legislation is in the best 
interests of the public and is consistent with other bills we 
have favorably reviewed already. I urge expeditious 
consideration in the House this year.
    Again, Mr. Chairman, thank you for working this bill into 
your Subcommittee's very busy schedule.
    I would be happy to address any questions.

 Statement of The Honorable Jim Gibbons, a Representative in Congress 
                        from the State of Nevada

    Mr. Chairman, thank you for considering H.R. 5039 the Humboldt 
Project Conveyance Act. I want to express my strong appreciation to the 
Subcommittee for holding this hearing on such short notice.
    At the outset I would like to welcome Bennie Hodges, manager of the 
Pershing County Water Conservation District (PCWCD) in Lovelock, Nevada 
and Bob Gibson a member of the PCWCD Board of Directors. I also want to 
welcome fellow pilot, Commissioner Keys of the Bureau of Reclamation 
and our distinguished guest from Trout Unlimited.
    My legislation, H.R. 5039, would direct the Secretary of the 
Interior to convey title to certain irrigation project property in the 
Humboldt Project, Nevada, to the Pershing County Water Control 
District, the State of Nevada, and to Lander and Pershing Counties.
    The Pershing County Water Conservation District will receive the 
Rye Patch Reservoir along with specific lands around the reservoir and 
title for acquired pasture lands.
    The State of Nevada will receive all of the withdrawn lands above 
the high water mark at Rye Patch to be added to existing State Park and 
withdrawn lands in the Humboldt Sink area and in Lander County to be 
managed as wetlands.
    All lands being conveyed to the State will be used for recreation, 
wildlife habitat, wetlands, or resource conservation pursuant to the 
agreement between the State and the PCWCD
    Lander County will receive title to designated pasture lands and 
Pershing County will acquire lands immediately adjacent to Derby 
Airport for maintenance and future expansion purposes.
    Over the past five years, the PCWCD has undergone an extensive, 
consensus-based process with the Federal Government, the Counties and 
the State of Nevada. They have also conducted outreach with local 
representatives of environmental organizations.
    As a result of public comments received through scoping meetings 
and in other venues, PCWCD has continued to reformulate their proposal 
in a sincere attempt to address all concerns. They should be commended 
for their efforts.
    Mr. Chairman, this bill ratifies agreements between the Bureau of 
Reclamation and PCWCD, the State, and the Counties. It has the support 
of the Governor of Nevada, the Humboldt River Basin Water Authority, 
and the Counties of Lander and Pershing.
    The Department of the Interior and BOR are on record as supporters 
of transferring title to local entities.
    This is the third and hopefully final attempt to obtain title to 
Humboldt Project facilities since it repaid its original project loan 
back in 1978. PCWCD operates and maintains the Project and its 
constituents are the sole beneficiaries of the Project. Local control 
is the logical choice.
    This Subcommittee has reviewed a number of title transfer bills in 
the past. I believe that this legislation is consistent with other 
bills we have favorably reviewed already and I urge expeditious 
consideration in the House this year.
    Again, Mr. Chairman, thank you for working this bill into your 
Subcommittee's very busy schedule.
    I will be happy to address any of the Committee's concerns.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    At this time I would like to ask unanimous consent that 
Congressman Gibbons be given permission to sit on the dais.
    Without objection, it is so ordered.
    Mr. Doggett, after our questions with the Mayor, if he 
chooses to come sit on the dais, you certainly may also. 
Without objection, it is so ordered.
    First our questions for the Mayor and then we will 
introduce Commissioner Keys.
    I am certainly very interested, Mayor, in Title XVI, being 
from California. We have probably more than any other State has 
successfully used Title XVI. There is a very similar situation 
in my part of Southern California, an arid region, not enough 
water, and certainly we feel the effects of a long-term 
drought.
    I hope we have a solution soon, but not the same way you 
all are finding a solution. Hopefully, just a little bit of 
rain would do just fine.
    I understand your interest. I was going to ask, have you or 
the City of Austin worked with the Bureau of Reclamation before 
on this type of program?
    Mr. Garcia. We have a very good relationship with the 
regional office and intend to continue working with them. It is 
enormously important for us to have that kind of partnership 
because we are in it for the long term.
    If we are to build a sustainable community, we need to do 
this. We need to do it not just to make it sustainable, but 
also to keep the rates for our ratepayers down. We don't need 
to be building any more water treatment plans to provide water 
that can be supplied by the wastewater treatment plants.
    Like I said, this fourth treatment plant will be built in 
an environmental sensitive area. We don't want to do that with 
that tremendous cost and we don't think it is in our best 
interest.
    So, we hope to continue working with the Bureau and 
strengthening our partnership, yes.
    Mr. Calvert. I appreciate that. I know my friend, Mr. 
Gibbons, to my right probably I should say the State with the 
most success in water reclamation is the State of Nevada, even 
though when you go to Las Vegas and you see the Bellagio Hotel 
and all the wonderful water features there, they are using 
recycled water and they do it very well.
    Mr. Gibbons. Mr. Chairman, in Nevada we have enough whiskey 
for drinking, but water is for fighting.
    Mr. Calvert. That quote started with Mark Twain in 
California. We understand that very well.
    Mr. Gibbons. He was a resident of Nevada.
    Mr. Calvert. He was a resident of California, too, for a 
while. The Indians wouldn't let him in in those days.
    Are there any other questions for the Mayor?
    There are none. You have a very good project here. 
Certainly, I think most of us from the West are very supportive 
of water reclamation projects. So, we wish you well. If you 
would like to stay to listen to the Commissioner, I'm sure he 
might have some things to say you might want to have your 
Member of Congress ask questions about.
    Now, we are going to recognize John W. Keys, our 
Commissioner, Bureau of Reclamation, who will have comments on 
all three bills before us today.
    Commissioner, since you are going to testify on all three 
bills, normally we would limit your statement to 5 minutes, but 
if you take a little extra time that's OK. We appreciate your 
coming to visit our Committee and with that, Commissioner, you 
are recognized.

STATEMENT OF JOHN W. KEYS, COMMISSIONER, BUREAU OF RECLAMATION, 
                U.S. DEPARTMENT OF AGRICULTURE.

    Mr. Keys. Mr. Chairman, it is a pleasure to be here. Is 
there any particular order you would like to address these?
    Mr. Calvert. No. You can just take them as you see them.
    Mr. Keys. Mr. Chairman, it is a pleasure to be here today 
to offer testimony on H.R. 4708 first, the Proposed Fremont-
Madison Conveyance Act. H.R. 4708 would transfer title to the 
Cross Cut Diversion Dam and Canal, the Teton Exchange Wells and 
the Idaho Department of Water Resources Permit 22-7022 for 
those wells to the Fremont-Madison Irrigation District.
    The Cross Cut Diversion Dam and Canal are paid out 
facilities with their irrigation assessments completed in 1979. 
The legislation provides for the payment for the Teton Exchange 
Wells and the Idaho permit for those wells currently valued at 
about$278,000, based upon an outstanding balance to be paid by 
the district.
    Mr. Chairman, the Bureau of Reclamation has worked closely 
with the Fremont-Madison Irrigation District over the last few 
years to work through the issues involved with the title 
transfer for the facilities and the permit. I personally was 
working with them when I was regional Director there in 
reclamation and my people have worked with them very closely 
since.
    We are very close to agreement on all of the issues in 
4708. While there are still a couple of those to solve, the 
department could support H.R. 4708 with a couple of technical 
modifications.
    First, Section 3(a) of 4708 provides or requires the 
district to pay the administrative costs of the title transfer 
process and related activities, including the costs of any 
National Environmental Policy Act issues that have to be 
covered.
    Section 3(a) also limits the district's contributions 
toward this administration cost to $40,000. In September 2001, 
Reclamation and the District signed a Memorandum of Agreement, 
which called for each party to pay 50 percent of costs 
associated with applicable procedural requirements of NEPA, 
ESA, and Endangered SpeciesAct and other State and Federal 
laws.
    We agree that it is appropriate to share the cost of 
compliance with all of these laws. The MOA also calls for the 
District to pay for applicable surveys, title searches, 
facility inspections and development of a quitclaim deed or 
other legal documents for that transfer.
    Section 3(a) is not clear on which of those activities are 
covered or subject to the $40,000 limitation. We believe that 
the Memoranda of Agreement signed by both of us should be 
honored and the limitation eliminated.
    Section 2(a) of H.R. 4708 requires that the title transfer 
be completed no later than the termination date of the MOA, 
which is September 13, 2003.
    Section 2(d)(1) states the transfer be completed as soon as 
practicable. We would appreciate some clarification of which of 
those we should live by.
    Mr. Chairman, we have worked closely with the District to 
complete this title transfer with the technical modifications 
necessary mentioned. The department and Reclamation could 
support passage of H.R. 4708.
    At this time, I would like to take the opportunity to 
compliment District Board Chairman Jeff Raybould and their 
Executive Director, Dale Swenson for their good work and 
commitment to working with us and with other parties in the 
basin to do the transfer properly.
    I would also like to thank Congress Simpson, Congressman 
Otter, Senator Crapo, Senator Craig and their staffs for their 
cooperation in this thing. It has been excellent working with 
all of them.
    That concludes the statement on H.R. 4708.
    [The prepared statement of Mr. Keys on H.R. 4708 follows:]

 Statement of John W. Keys, III, Commissioner, Bureau of Reclamation, 
                    U.S. Department of the Interior

    Mr. Chairman, my name is John Keys. I am Commissioner of the U.S. 
Bureau of Reclamation. I am pleased to provide the Administration's 
views on H.R. 4708, the Fremont Madison Conveyance Act, which directs 
the Secretary of the Interior to transfer title of certain Federal 
owned facilities, lands and permits to the Fremont-Madison Irrigation 
District (District).
    The facilities under consideration for transfer in H.R. 4708 the 
Cross Cut Diversion Dam and Canal, the Teton Exchange Wells and the 
Idaho Department of Water Resources permit number 22-7022 are 
associated with the Upper Snake River Division, Minidoka Project and 
the Lower Teton Division, Teton Basin Project, respectively, and are 
located near Rexburg in eastern Idaho. The facilities under 
consideration for transfer are used exclusively for irrigation purposes 
and have always been operated and maintained by the District. While the 
Cross Cut Diversion Dam and Canal are paid-out by the District, the 
legislation provides for a payment for the Teton Exchange Wells, which 
are currently valued at $277,961, based upon the outstanding balance to 
be repaid by the District.
    Mr. Chairman, over the last few years, we have been working very 
closely with the District and numerous other local organizations 
including the Henry's Fork Foundation, a local conservation and 
sportsmen's organization, to work through the issues on the title 
transfer for the features, lands and water rights associated with this 
project. Over the last year, we have made great progress in narrowing 
the scope of the transfer to meet the District's needs, protect the 
interests of the other stakeholders, and ensure that the transfer does 
not negatively impact downstream contractors of the integrated Snake 
River system. While I believe that we are very close to agreement on 
this legislation, H.R. 4708, as drafted, creates some problems and 
concerns, which I will address in my statement. However, with the 
technical modifications outlined below, the Department could support 
H.R. 4708.
Background
    Individuals, organizations, Federal, States and local agencies 
interested in the Henry's Fork of the Snake River have a very 
impressive history of collaboration and cooperation through the Henry's 
Fork Watershed Council (Council) a grassroots community forum whose 
goal is to encourage management of the Henry's Fork Basin in a 
socially, economic and environmentally sustainable manner. When the 
District first raised the idea of title transfer, the Council dedicated 
its March, 1999, meeting to this issue. This included presentations by 
the District and Reclamation and fostered open discussions with any and 
all groups or individuals who had comments or concerns.
    Subsequently, the District and the Henry's Fork Foundation, along 
with the Land and Water Fund of the Rockies engaged in a series of 
negotiations to develop a mutually acceptable proposal. While that 
process did not result in a concrete proposal, it did lead to some 
consensus on the facilities to be transferred that are included in this 
legislation. It also led to the removal of the Grassy Lake and Island 
Park dams from the transfer proposal about which many local 
organizations had serious concerns.
    Accordingly, in September, 2001, Reclamation and the District 
signed a memorandum of agreement (Contract No. 1425-01-10-3310) (MOA) 
which expires on September 13, 2003, and is referenced in H.R. 4708. 
This agreement lists the facilities to be transferred, delineates the 
respective responsibilities to complete activities necessary for the 
title transfer such as arrangements for the sharing of costs, valuation 
of the facilities to be transferred, and responsibilities associated 
with compliance with Federal and State laws.
    We have, however, identified some concerns and technical issues 
which I would like to raise for the Committee's consideration:
Cost Share Requirements
    First, Section 3(a) of H.R. 4708 requires the District to pay the 
administrative costs of the conveyance and related activities, 
including the costs of any review required under NEPA, but limits their 
contribution to no more than $40,000. This language is both unclear as 
to what is or is not included as ``costs,'' nor is it in accordance 
with the MOA that FMID should pay the 50% of costs associated with 
applicable procedural requirements of the NEPA, ESA, and other 
applicable state and Federal laws required.
    We agree that it is appropriate to share the costs of compliance 
with Federal laws, as was agreed upon in the MOA. We also believe that 
the recipients of title transfer should cover those costs that are 
associated with the real estate transaction resulting from the title 
transfer. In this vein, the MOA states that the District would pay for 
applicable activities such as surveys, title searches, facility 
inspections, and development of a quit claim deed or other legal 
documents necessary for completing the transfer. Unfortunately, H.R. 
4708, as drafted, is unclear on this point.
    To address these ambiguities, we suggest that H.R. 4708 reference 
the MOA's treatment of costs or reiterate the manner in which the 
distribution of costs were addressed in the MOA. Given the amount of 
work that went into developing the MOA, its applicability under H.R. 
4708 for implementation of the transfer, and the fact that it has been 
agreed upon and signed by representatives of both Reclamation and the 
District, referencing the MOA on these issues would provide an 
equitable, clear and consistent resolution to our concern.
Conveyance Deadline and Report
    Section 2(a) of H.R. 4708 requires that the title transfer be 
completed no later than the termination date of the MOA (September 13, 
2003). However, Section 2 states that the transfer be completed ``as 
soon as practicable after the date of enactment and in accordance with 
all applicable law.'' These provisions appear inconsistent as Section 
2(a) designates a required date certain for completion, while Section 
2(d)(1) states that it be completed ``as soon as practicable,''
    Further, Section 2(d)(2) requires that the Secretary submit a 
report to Congress within one year of the date of enactment if the 
transfer has not been completed in that time frame. This provision 
seems somewhat arbitrary and could potentially delay the transfer from 
the September 13, target date while the report is being prepared.
    To address our concerns with inconsistent deadlines and reporting 
requirements, I suggest that the legislation be modified to require 
that the transfer be completed ``as soon as practicable after the date 
of enactment'' and the reporting requirement in H.R. 4708 be modified 
to require a report to Congress be completed only if the title has not 
been transferred by September 13, 2003 the expiration date of MOA 
referenced in the legislation. In this manner, the requirements are 
made clear and consistent, and no report to Congress would be necessary 
if the facilities are transferred by the MOA's expiration date.
Conclusion
    In conclusion, Mr. Chairman, I believe we have worked closely with 
the District and a great deal of progress has been made. I would like 
to take this opportunity to compliment District Board Chairman Jeff 
Raybould and their Executive Director, Dale Swenson, for their 
diligence and commitment in working with us and the other interested 
entities of eastern Idaho on the issues surrounding this transfer. I 
would also like to thank Congressman Simpson, Congressman Otter and 
their staffs for their cooperation. With the technical modifications 
mentioned above, I believe the Department could support passage of this 
legislation.
    That concludes my statement. I would be happy to answer any 
questions.
                                 ______
                                 

STATEMENT OF JOHN W. KEYS, COMMISSIONER, BUREAU OF RECLAMATION, 
                 U.S. DEPARTMENT OF AGRICULTURE

    Mr. Keys. Mr. Chairman, H.R. 4739 would authorize the 
Secretary of the Interior to participate in the planning, 
design and construction of and land acquisition for the City of 
Austin, Texas Water Reclamation Project. This work would be 
accomplished under Title XVI of the Reclamation Project's 
Authorization and Adjustment Act or Public Law 102-575.
    Mr. Chairman, to date, 25 specific projects have been 
authorized under the Title XVI Program. Congress has provided 
funding to plan or construct 19 of these 25 authorized 
projects.
    In addition, under the general authority of Title XVI, 
funding has been provided to identified and investigate eight 
potential water-recycling projects and to conduct three 
research and demonstration projects.
    Municipal, industrial, domestic and agricultural wastewater 
reuse efforts can assist States and local communities in 
solving contemporary water supply problems. However, the 
department opposes authorizing additional construction project 
in the absence of feasibility studies to determine whether 
these projects warrant Federal funding.
    The Department also opposes H.R. 4739 because authorizing 
new construction projects under Title XVI is likely to place an 
undue burden on Reclamation's already tight budget. Today we 
have been unable to provide full funding amounts to all but 
four of the water reclamation and reuses projects presently 
authorized by Title XVI.
    At current funding levels, it will take Reclamation more 
than 10 years to complete funding of the 25 already-authorized 
projects.
    Finally, the Department opposes enactment of H.R. 4739 
provision authorizing land acquisition prior to completion of a 
feasibility study. Federal contributions for land acquisition 
should await the outcome of a feasibility study.
    Mr. Chairman, it should be noted that Reclamation recently 
began working with the City of Austin on an appraisal study of 
this project. The appraisal study should be completed in about 
a year. A feasibility study, if recommended as a result of the 
appraisal study, has authority under the existing provisions of 
Title XVI of P.L. 102-575.
    We recommend continuing this cooperative study to prepare 
the necessary analysis and evaluations of the project prior to 
Congressional authorization of construction for the project.
    In summary, Interior strongly encourages local and water 
recycling efforts and is engaged in numerous water reuse and 
recycling projects around the West. However, as stated, the 
department cannot at this time support authorizing the new 
construction request.
    [The prepared statement of Mr. Keys on H.R. 4739 follows:]

Statement of John Keys, III, Commissioner, Bureau of Reclamation, U.S. 
                       Department of the Interior

    My name is John Keys and I am the Commissioner of the Bureau of 
Reclamation (Reclamation). I am pleased to present the views of the 
Department of the Interior (Department) on H.R. 4739, concerning the 
City of Austin water reclamation project in the State of Texas.
    H.R. 4739 would authorize the Secretary of the Interior (Secretary) 
to participate in the design, planning, and construction of, and land 
acquisition for, the City of Austin water reclamation project in the 
State of Texas. The authority provided in H.R. 4739 is an amendment to 
the Reclamation Projects Authorization and Adjustment Act, (Public Law 
102-575), which limits the Federal share of project costs to 25 percent 
of the total project costs and restricts the Secretary from providing 
funding for the operation and maintenance of this project. While the 
Department strongly encourages local water recycling efforts, must 
oppose authorizing this additional Federal recycling project for the 
reasons described below.
    In 1992, Congress adopted, and the President signed, the 
Reclamation Projects Authorization and Adjustment Act (Public Law 102-
575). Title XVI of this Act, the Reclamation Wastewater and Groundwater 
Study and Facilities Act, authorized the construction of five water 
reclamation and reuse projects. Four of these projects are in 
California and the fifth is in Arizona. The Secretary also was 
authorized to undertake a program to identify other water recycling 
opportunities throughout the 17 western United States, and to conduct 
appraisal level and feasibility level studies to determine if those 
opportunities are worthy of implementation. In addition, the Secretary 
was authorized to conduct research and to construct, operate, and 
maintain demonstration projects. The Bureau of Reclamation has been 
administering a grant program to fund these Title XVI activities since 
fiscal year 1994.
    In 1996, Public Law 104-266, the Reclamation Recycling and Water 
Conservation Act, was enacted. This Act amended Title XVI and 
authorized the Secretary to participate in the planning, design, and 
construction of 18 additional projects, including two desalination 
research and development projects. These new projects are distributed 
within five states, including California, Nevada, Utah, Texas, and New 
Mexico. Title XVI of P.L. 102-575 was further amended in 1998 by P.L. 
105-321, to authorize a project in Salem, Oregon. Finally, Title XVI 
was amended twice in 2000, first by Public Law 106-544, to authorize a 
project in Sparks, Nevada, and then by Public Law 106-566, which 
provided the Secretary with general authority to conduct planning 
studies in the State of Hawaii. To date, Congress has provided funding 
to plan or construct 19 of these 25 specifically authorized projects. 
In addition, under the general authority of Title XVI, funding has been 
provided to identify and investigate, at the appraisal or feasibility 
level, eight potential water recycling projects, and to conduct three 
research and demonstration projects.
    Municipal, industrial, domestic, and agricultural wastewater reuse 
efforts can assist states and local communities in solving contemporary 
water supply problems. However, the Department opposes authorizing 
additional construction projects in the absence of feasibility studies 
to determine whether these particular projects warrant Federal funding. 
In general, Reclamation places priority on funding new projects that: 
(1) are economically justified and environmentally acceptable in a 
watershed context; (2) are not eligible for funding under another 
Federal program; and (3) directly address Administration priorities for 
the Reclamation program, such as reducing the demand on existing 
Federal water supply facilities.
    It should be noted that the Department, through the Bureau of 
Reclamation, has recently begun working with the City of Austin on an 
appraisal study of this proposed project. The appraisal study should be 
completed in less than one year from now. A feasibility study, if 
recommended as a result of the appraisal, has authority under the 
existing provisions of P.L. 102-575, Title XVI and would also be 
contingent upon funding availability. We recommend continuing these 
cooperative studies to prepare the necessary analyses and evaluations 
of the project prior to Congressional authorization for construction.
    The Department also opposes enactment of this legislation because 
authorizing new construction projects is likely to place an additional 
burden on Reclamation's already tight budget. To date, Reclamation has 
been unable to provide the full authorized funding amounts for all but 
four of the water reclamation and reuse projects presently authorized 
by Title XVI. At current funding levels, it will take Reclamation more 
than 10 years to complete funding of the 25 currently authorized 
projects.
    Finally, the Department opposes enactment of the provision in H.R. 
4739 authorizing land acquisition prior to completion of a feasibility 
study. Federal contributions for land acquisition should await the 
outcome of a feasibility study.
    In summary, the Department strongly encourages local water 
recycling efforts, and is engaged in numerous water reuse and recycling 
projects around the West. In fact, the Department has recently begun an 
appraisal study of the project described in H.R. 4739. However, for the 
reasons provided above, the Department cannot, at this time, support 
authorizing this new construction request.
    Thank you for the opportunity to comment on H.R. 4739. This 
concludes my statement and I would be happy to answer any questions.
                                 ______
                                 

STATEMENT OF JOHN W. KEYS, COMMISSIONER, BUREAU OF RECLAMATION, 
                 U.S. DEPARTMENT OF AGRICULTURE

    Mr. Keys. Mr. Chairman, H.R. 5039, the Humboldt Project 
Conveyance Act would transfer title to Rye Patch Dam and 
Reservoir and all acquired lands under and adjacent to the dam 
and reservoir and all acquired lands below the high water mark 
to the Pershing County Water Conservation District. The 
District has agreed to maintain a 3,000-acre foot minimum pool 
in the reservoir for maintenance and fisheries protection.
    Withdrawn lands above the high water mark in the vicinity 
of the reservoir would be transferred to the State of Nevada to 
be managed for recreation, wildlife habitat, wetlands and 
resource conservation.
    Approximately 23,000 acres of land in the Battle Mountain 
Community Pasture will be transferred the District, while about 
1100 acres of the Battle Mountain Community pasture would be 
transferred to Lander Certify.
    Finally, one and a half sections or 960 acres of land 
around Derby Airport which Pershing County has leased from 
Reclamation would be transferred to the county.
    Humboldt Project Facilities are paid out; the payments 
being completed in 1978. Their safety of dams obligation for 
Rye Patch Dam repairs will be paid out later this year or next 
year.
    Mr. Chairman, let me commend the district for the extensive 
amount of work that they have done to develop some very 
important and complicated agreements between the many parties 
involved. However, while the department supports enacting 
legislation to enable these agreements to be implemented, we 
cannot support H.R. 5039 as introduced.
    I would hasten to add that we think with a few technical 
corrections we could support that bill. In handling details for 
the transfer of the Humboldt Project facilities, Reclamation in 
Pershing County Water Conservation District have finalized or 
are finalizing a Memorandum of Agreement to articulate rules 
and responsibilities for completing all of the necessary 
activities, necessary for this transfer.
    A number of problems with H.R. 5039 must be addressed for 
Interior to support the legislation. First, Section 4(F) limits 
the amount of administrative costs and costs associated 
withNational Environmental Policy Act compliance.
    Under this section the District, Lander County and Pershing 
County costs are limited to $40,000. This amount is not based 
upon any estimate of costs that we are aware of for this 
project. We recommend that any cost limitation require the 
United States and the receivers of the transfer to each pay 50 
percent of the total cost.
    Section 4(g) states that the State of Nevada shall not be 
responsible for any payments or cost under this section. 
Interior feels that the State should pay for these lands that 
they will receive, in other words, fair market value, and that 
the States should share in paying the administrative and NEPA 
costs for the title transfer.
    In our written comments we have also covered some concerns 
that we have with conveyance deadlines, a report to Congress on 
the transfer and future obligations and benefits to the 
Humboldt Project and the United States.
    Mr. Chairman, the transfer of the Humboldt Project Lands 
and the Project facilities to Pershing County Water 
Conservation is a good transfer. We look forward to working 
with them to complete this process.
    This concludes my oral statements. I would certainly be 
glad to answer any questions you might have on any of the 
three.
    [The prepared statement of Mr. Keys on H.R. 5039 follows:]

 Statement of John W. Keys, III, Commissioner, Bureau of Reclamation, 
                    U.S. Department of the Interior

    Mr. Chairman, my name is John Keys. I am Commissioner of the U.S. 
Bureau of Reclamation. I am pleased to provide the Administration's 
views on H.R.5039, the Humboldt Project Conveyance Act, which directs 
the Secretary of the Interior to transfer title of the Federal owned 
facilities, and lands associated with the Humboldt project to the 
Pershing County Water Conservation District (District), Pershing 
County, NV, Lander County, NV and the State of Nevada (State) pursuant 
to a series of agreements reached between these entities.
    First, let me commend the District for the extensive amount of work 
that they have done to develop some very important and complicated 
agreements between different parties. However, while the Department 
supports enacting legislation to enable these agreements to be 
implemented, we cannot support H.R. 5039 as introduced.
Background
    The Humboldt Project is located in northwestern Nevada on the 
Humboldt River and was authorized in 1933. Construction of Rye Patch 
Dam, the centerpiece of the Humboldt project was completed in 1936. In 
1976, it was raised to 78 feet high which expanded its capacity to 
213,000 acre feet of water. Rye Patch Reservoir is 21 miles long 
stretching from Rye Patch dam north to the Callahan Bridge near the 
town of Imlay. The Pershing County Water Conservation District assumed 
full operations and maintenance responsibility for the project in 1941 
and they have managed it ever since.
H.R. 5039
    The Humboldt Project Conveyance Act proposes to transfer title to 
all the lands and facilities associated with the Humboldt Project in 
Nevada. The terms, conditions and details of the transfer are spelled 
out in a series of agreements including a Memorandum of Agreement (MOA) 
between the District and Lander County; a Conceptual Agreement between 
the District and the State; and a Letter of Agreement between the 
District and Pershing County. In addition, the legislation references a 
MOA between the District and Reclamation, which is not yet completed 
and is still being finalized. This MOA will articulate the respective 
roles and responsibilities for completing all the necessary or required 
steps including responsibilities for compliance with the National 
Environmental Policy Act (NEPA) and other applicable Federal and state 
laws, and responsibilities for other activities necessary to complete 
the transfer.
    The agreements referenced in H.R. 5039, if authorized for 
implementation, would transfer the Dam, reservoir, and all acquired 
lands under and adjacent to the dam and reservoir and all acquired 
lands below the high water mark to the District. In addition, the 
District will maintain a 3,000 acre foot minimum pool in Rye Patch 
Reservoir for maintenance and fisheries protection.
    Withdrawn lands above the high water mark in the vicinity of the 
reservoir would be transferred to the State of Nevada to be managed for 
recreation, wildlife habitat, wetlands and resource conservation.
    Approximately 23,000 acres of land in the Battle Mountain Community 
Pasture (BMCP) will be transferred to the District, while approximately 
1,100 acres of BMCP land in the vicinity of the town of Battle Mountain 
will be transferred to Lander County. Finally, one and one-half 
sections of land around Derby Airport, which Pershing County has leased 
from Reclamation, will be transferred to the County.
Concerns with H.R. 5039
    While we support implementation of the terms and conditions of the 
transfer, as embodied in the various agreements summarized above, there 
are a number of problems with H.R. 5039, as presently drafted.
Cost Limitations
    While H.R. 5039 clearly addresses many of the cost-related issues, 
there are two areas of significant concern on this matter:
    1) Section 4(f) limits the amount of administrative costs and costs 
associated with compliance with the National Environmental Policy Act 
(NEPA). Under this section, the District, Lander County and Pershing 
County costs are limited to $40,000. The $40,000 figure is not based 
upon any estimate of costs that we are aware of for this project. The 
entities receiving title to the lands and facilities of the Humboldt 
Project are receiving the benefits of title and should share in the 
actual costs associated with the transfer. In order to address this 
concern, I recommend that any cost limitation should reflect that the 
United States pays no more than 50 percent of the total costs.
    2) Section 4(g) states that the State of Nevada shall not be 
responsible for any payments or costs under this section. This would 
include payment for the withdrawn lands (Section 4(b)), and, if a value 
is determined by an appraisal--administrative costs (Section 4(c)), 
costs associated with compliance with NEPA (Section 4(d)), and real 
estate costs, such as the cost of boundary surveys (Section 4(e)).
    The Department has three concerns associated with Section 4(g). 
First, since the State of Nevada is receiving title to withdrawn lands, 
it is appropriate they be expected to pay for these lands. These are 
public domain lands that were withdrawn for the construction and 
operation of the Project whose value was not incorporated into the 
District's repayment obligation, and thus, have never been paid for. It 
is Reclamation's policy, that such lands be professionally appraised 
pursuant to Federal standards of appraisals, and should reflect fair 
market value. While in many cases lands that are below the water mark, 
underneath dams and other facilities, and those reserved for 
recreation, wetlands, and wildlife management are appraised at no or 
little value, they are still subject to an independent appraisal. It is 
important that such an appraisal take place to protect the financial 
interests of the United States.
    Second, since the State is receiving these lands, they should share 
equally in the NEPA and administrative costs and should bear the real 
estate costs associated with these lands as is proposed for all the 
other recipients of lands and facilities in this bill.
    Third, the language of Section 4(g) is very unclear as to how the 
State's share of the costs associated with this Section would otherwise 
be distributed since sections 4(c) and 4(e) require payment in equal 
shares and Section 4(d) requires payment of the real estate transaction 
costs by the ``entity receiving title.'' Given this language, several 
important questions arise. Are the State's share of otherwise equally 
shared costs distributed to all of the remaining parties, or are these 
costs to be absorbed by Reclamation? Either interpretation results in 
an inequitable distribution of costs and will create confusion, 
controversy, and inevitably a delay in implementation.
Public Benefits or Windfall Profits
    As presently drafted, Section 4(g) requires that the State manage 
the lands transferred to them for recreation, wildlife habitat, 
wetlands or resource conservation. However, it goes on to suggest that 
the State could change that use and then make the ``payments pursuant 
to the Act'' or the lands could revert to the District who could then 
change the use as it sees fit. The Department maintains the legislation 
should ensure that the public benefits are preserved regardless of 
whether they are managed by the State, as currently envisioned in H.R. 
5039 and in the Letter of Conceptual Agreement between the County and 
the State. However, if ownership of the lands is sold by the State or 
reverts to the District and is then sold, the United States should 
share in any financial windfall that is received. We further note that 
wile the legislation in its current form appears to contemplate the 
preparation of a NEPA analysis of title transfer, the suggestion in 
Section 4(g) that the use of lands could change after transfer greatly 
complicates the preparation of an analysis of potential environmental 
impacts (beneficial or adverse) under NEPA, and may make invite legal 
challenge to such an analysis.
    In order to address the above concerns, we recommend that Section 
4(g) be deleted.
Conveyance Deadlines and Report
    The next area of concern is related to the arbitrary and somewhat 
confusing deadlines proposed in H.R. 5039.
    Section 3(a) requires the Secretary to convey title to the lands 
and facilities no later than two years after enactment. While it is our 
hope that all of the steps and agreements required under this 
legislation are completed in that time, two years is an arbitrary and 
potentially unrealistic timeframe.
    In most cases where title transfer has been completed quickly, a 
good deal of the necessary work for the transfer such as preparation of 
the environmental documentation (NEPA compliance), cultural resources, 
hazardous materials and boundary surveys, preparation of legal 
documentation or other actions that are required, had been completed, 
or at least was initiated, prior to the legislative process. While the 
District has made a great deal of progress in completing the MOAs and 
other agreements, additional steps necessary have not yet begun, nor 
have there been extensive discussions about what might be required. 
This timetable, together with the funding limitations previously 
mentioned, could also create significant obstacles to the preparation 
of a NEPA analysis, and may also invite further legal challenges. This 
makes it difficult to meet the proposed two-year goal.
    Further, Section 3(c) requires that Secretary submit a report to 
Congress within 18 months of enactment if the conveyance has not been 
completed. This time frame also seems arbitrary and could actually 
delay the transfer, since resources needed to complete the transfer 
would be drawn away to prepare the report.
    To address our concerns, I suggest the legislation be modified to 
require the transfer be completed ``as soon as practicable after the 
date of enactment'' and then require a report to Congress as to the 
status of the conveyance, any obstacles to completion of conveyance and 
the anticipated date of conveyance, if the transfer is not completed in 
two years. This has been the language successfully used in other 
authorized title transfers to both ensure accountability and to keep 
Reclamation and the other entities moving forward in a positive manner.
Future Obligations and Benefits
    The Department is also concerned that the legislation does not 
clearly articulate the obligations and benefits that will exist and be 
available after the transfer.
    One of the primary benefits to the entities receiving title is the 
ability to operate independently of Reclamation law. Conversely, one of 
the primary benefits of title transfer to Reclamation is to limit its 
liability and any financial exposure as it relates to the projects to 
be transferred. In most of the transfers that have been enacted into 
law, there has been a provision clearly articulating that the project 
being transferred is no longer a Federal project, that the recipients 
of title are no longer subject to Reclamation law and that they are no 
longer eligible for Reclamation programs that are available to Federal 
contractors.
    Such a provision should be added to H.R. 5039 to clarify this 
separation and to clearly articulate the understanding of both parties 
as to what is expected in the future in this regard.
    In addition, Section 8 of the bill provides that any conveyance 
would not abrogate any provision of any contract executed by the United 
States relating to any person's right to use water. This raises a 
significant issue that may require additional clarification: If the 
right of water users to use Humboldt Project water is based on water 
right contracts entered into with the United States, the obligations of 
the United States vis-a-vis the delivery of project water will need to 
be clarified in light of the proposed de-federalization of the Project. 
Reclamation cannot reasonably be required to maintain its obligations 
to deliver project water once title, management, and operation of 
Humboldt Project facilities passes out of Federal ownership and 
control.
Conclusion
    In closing, Mr. Chairman, let me commend the District, Lander 
County, Pershing County, and the State for their hard work to come to 
agreement on terms of the transfer that are embodied in the agreements 
referenced in the legislation. With the technical modification 
mentioned above, I believe the Department could support passage of this 
legislation.
    That concludes my statement. I would be happy to answer any 
questions.
                                 ______
                                 
    Mr. Calvert. Thank you, Commissioner. Please explain what 
you are doing at the Bureau to expedite and encourage transfers 
to take place?
    Mr. Keys. Mr. Chairman, we have a process together that we 
work very closely with any irrigation district that wants to 
take title to their project. We encourage every irrigation 
district to look at their facilities to see if it would be 
advantageous to them to do that.
    We have a framework that starts working which them on a 
ground level to evaluate, to assess, to see all the facilities 
that need to be transferred and it leads all the way up to 
Congressional authorization.
    Mr. Calvert. Now, you don't see any issues in the two 
transfer bills that are being recommended today that would 
prohibit such a transfer from taking place, do you?
    Mr. Keys. Mr. Chairman, on the contrary, we think these 
have been done in the correct way. With a few changes, we could 
certainly support both of them.
    Mr. Calvert. I would certainly encourage all the parties to 
work with you to expedite this where we can get this to full 
Committee as soon as possible so we can get these bills 
accomplished. I am sure that would satisfy both of the Members 
here.
    On the water reclamation project, as you know, my interest 
in water reclamation and certainly the City of Austin, as I 
mentioned earlier, that we have a similar climate, in spite of 
what has happened in Texas recently.
    These water reclamation projects throughout the West are 
necessary. I would ask you, what is the total amount of 
unfunded Title XVI projects that you have right now that have 
been authorized?
    Mr. Keys. Mr. Chairman, it is right around $100 million.
    Mr. Calvert. Obviously, from my perspective and I think for 
the West, there was a story this weekend about New Mexico and 
what is happening in that State with the lack of water. 
Certainly, as you know, throughout the West, certainly Nevada, 
certainly Arizona, I can't think of one State in the West that 
is not interested in a reclamation project, and certainly now 
in the Southwest.
    We need to probably work together to get additional funds 
available for these reclamation projects.
    Mr. Keys. Mr. Chairman, I said that the total authorized up 
to now is over $100 million. To be specific, it is $340 
million.
    Mr. Calvert. That is being a lot more specific.
    Mr. Keys. With the right kind of funding, it would take us 
somewhere between 10 and 20 years to get those that are already 
authorized done.
    Mr. Calvert. And it is absolutely necessary. I will tell 
you, as you well know again, the difference we are having in 
California and throughout the West.
    What have you done to work with the City of Austin on this 
project?
    Mr. Keys. Mr. Chairman, we have an area office in Austin. 
They have recently begun an appraisal level study of the 
wastewater recycling project that this bill would authorize, 
but it is at an appraisal level. Appraisal level study is to 
take a quick look to see if the project has merit and should go 
ahead.
    With the right recommendation from there, it goes to a 
feasibility study. We have authority under Title XVI to go 
ahead with the feasibility study and we have the funds to do 
that. A year from now when that appraisal level study is done, 
if it recommends going into the feasibility, we can go right on 
into the feasibility study without further authorization.
    Then the feasibility study would probably take another year 
to a year and a half and then we would come back for 
authorization for construction.
    Mr. Calvert. I just want to make one final point. As you 
know, we have a bill that we hope to pass on the floor, CalFed, 
soon. I have talked with Senator Domenici and others in the 
West that are very interested in doing a western water bill for 
needed western water projects.
    When I say ``the west,'' I certainly mean the southwest and 
throughout the United States. It is a considerable number. I 
know that in these times of budget austerity that we are 
concerned about that, but these types of projects are 
absolutely necessary for the economic vitality of this nation.
    So, we will hopefully be able to help you out on the 
funding side of this in the future.
    Mr. Keys. Mr. Chairman, we would be more than happy and 
would look forward to working with you on that. The realities 
of the reclamations budget within Interior is that it is fairly 
flat. It being flat, we still operate and maintain our 
projects, do the stuff to keep everything up.
    We have the Title XVI portion of that. That, in most cases, 
is just a pass-through. We like to do the feasibility studies 
ahead of time with the cities and so forth, so that we can be 
part of it to be sure that that money is getting its best use. 
We would certainly be willing to work with you to do that.
    Mr. Calvert. I thank the gentleman.
    Mr. Doggett.
    Mr. Doggett. Thank you, Mr. Chairman. Thank you for your 
testimony, Mr. Keys. It is my understanding that your concern 
about funding levels has caused you to raise these concerns 
about other pieces of legislation like this in the past. You 
are not singling out the City of Austin or its project. This is 
a generalized concern that you have, isn't that correct?
    Mr. Keys. Mr. Chairman, Mr. Doggett, that is exactly right. 
We have testified consistently since I have been in office on 
that very issue.
    Mr. Doggett. And we appreciate the cooperation we have 
already gotten from your staff in Austin, as well as here. I 
just want, for the record, to make it clear that we are not 
trying to get the cart ahead of the horse here. We recognize 
that the appraisal and the feasibility study have to occur 
first.
    Since three of every four dollars that would be used for 
this project will come from City of Austin taxpayers and 
ratepayers, we are not about to embark on construction or 
anything unless the appraisal and feasibility study suggests 
those are the way to go.
    Our goal with this legislation was to get our legislation 
and authorization for all of this in place so that given the 
amount of competition from around the country, we would be in 
line in the event that working cooperatively with you the 
appraisal and feasibility study suggest, as we believe they 
will, that they are big advantages to the city, certainly to 
our technology industry where we think that the average 
semiconductor plant, say like Samsung in Austin, might save $1 
million or $1.5 million by using this reclaimed wastewater at 
lower rates as well as for our parks and our school district 
and the like, that we can all be helped.
    So, hopefully, we can continue to work together. I would 
like to see this legislation approved to expedite that process, 
but we realize it is going to be a long term project and we 
need to work with you and the Committee to get the funding 
necessary to accomplish this objective here and in other parts 
of the country.
    Thank you, Mr. Chairman.
    Mr. Calvert. Thanks, gentlemen.
    Mr. Gibbons.
    Mr. Gibbons. Thank you, Mr. Chairman. First of all, I would 
agree with your analysis that the bill as introduced has some 
flaws in it that need to be worked out, certainly with regard 
to cost-sharing issues. I think we can work those out between 
both the Pershing County Water Conservation District counties, 
et cetera.
    I suppose working with you we could expect to have within 
the next couple of weeks, if we work out the agreement, work 
out the concerns that you have, some assurance that we could be 
back here with a finalized version of this bill once we have 
worked out those concerns with the bill.
    Mr. Keys. Mr. Chairman, and Mr. Gibbons, we would certainly 
do that. We feel that the corrections that are necessary are 
fairly minor to make. They have a big impact, but they are easy 
to make in the legislation itself.
    Mr. Gibbons. With that, Mr. Chairman, I will yield back the 
balance of my time and thank the witness and thank you for 
having me, Bill.
    Mr. Calvert. I thank the gentleman.
    Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. Thank you, Mr. Keys, 
for being here and for your testimony. I appreciate it very 
much. You have a difficult job to do with limited resources and 
we appreciate that.
    Relative to 4708, there are a couple of issues that you 
raised, one being the dates, one being mentioned as soon as 
practicable and the other being September 13, 2003. We can 
resolve those pretty easily. I think it means as soon as 
practical before September 13, 2003. That is how I would read 
that, but we can make that language very clear, I am sure.
    The second one was something else dealing with the cap on 
the amount that the district would have to pay of $40,000, 
There has been precedents set in other legislation on transfers 
where they have set the cap on what a district would have to 
pay. Do you have any idea what those amounts are, if $40,000 
would cover it?
    Mr. Keys. Mr. Chairman, Mr. Simpson, the $40,000 figure is 
a magic figure that floats around Idaho.
    Mr. Simpson. A lot of magic floats around Idaho.
    Mr. Keys. Yes, the semaphore was not unnoticed there. In 
working with other districts, we worked out an estimate of what 
it would take to do the title transfer process in NEPA. In 
another case half of that was about $40,000. That seems to be a 
magic number right now.
    What I would tell you is that I don't anticipate a lot of 
extra cost, but the total is more than $80,000. Certainly we 
have no source of funds for more than our half of that share. 
We would just expect the district to pay their portion of that.
    Mr. Simpson. When you say ``more than $80,000,'' are we 
talking $340 million as opposed to $100 million? I am just 
kidding.
    Mr. Keys. No, sir. I don't have a good estimate for it, but 
certainly my people would work with Dale Swenson to be sure 
that that is not excessive.
    Mr. Simpson. I appreciate it. I thank you for being here 
today and for your support of the legislation. We will work 
with you to be sure we can make some adjustments so that all of 
us can agree on the legislation as it moves forward.
    Thank you.
    Mr. Calvert. I thank you the gentleman.
    I certainly thank you, Commissioner, for once again coming 
to our Committee and sharing your time with us.
    If there are no further questions, you are excused.
    The next panel we have before us is Mr. Jeff Raybould, 
Chairman, Board of Directors, of the Fremont-Madison Irrigation 
District; Bennie Hodges, Manager of the Pershing County Water 
Conservation District; and Steven Malloch, Counsel, Western 
Water Project, Trout Unlimited, and I believe he is also 
testifying on behalf of the Henry's Fork Foundation.
    Just to remind the witnesses, we have a 5-minute rule. You 
will see an indicator. When the yellow light comes on, that 
means you have 1 minute to close up the statement. When the red 
light comes one, that is 5 minutes and the time is up. We 
appreciate your trying to stay within that timeframe so we have 
time for questions.
    With that, Mr. Raybould, you are recognized for 5 minutes.

   STATEMENT OF JEFF RAYBOULD, CHAIRMAN, BOARD OF DIRECTORS, 
              FREMONT-MADISON IRRIGATION DISTRICT

    Mr. Raybould. Thank you, Mr. Chairman, Members of the 
Subcommittee. My name is Jeff Raybould, I am the Chairman of 
the Board of Directors of the Fremont-Madison Irrigation 
District. I am here to testify in support of H.R. 4708.
    Mr. Chairman, Fremont-Madison saw title transfer as an 
opportunity for the water users in our area to have an 
increased water supply, to have some modest savings in the 
operation and maintenance costs of our district and also to 
have provide better consequence in the river.
    Early one when we decided that we wanted to pursue title 
transfer, we went hand in hand with the Bureau of Reclamation 
to the Henry's Fork Watershed Council which is an organization 
of 70 agency and organizations that meet on a regular basis to 
discuss the needs of the watershed.
    We let everyone know what our intentions were. After that 
we held public meetings so that people could give their input. 
At the conclusion of this part of the process, the Henry's Fork 
Foundation came forward and thought that perhaps we could 
develop a dialog with them on how we might move forward with 
this transfer and not only enhance our water supply, but help 
improve the consequence on the Henry's Fork.
    They also brought in Bruce Driver of the Land and Water 
Fund of the Rockies as an advisor to help them chart a course 
that they thought the environment community would approve of.
    All the while this was going on it was not done under the 
cover of darkness as some have suggested. We give the watershed 
counsel regular updates. We had a special workshop within the 
watershed counsel to discuss this specific title transfer 
proposal.
    In the end the Henry's Fork Foundation and the other local 
stakeholders could not support a transfer of all of our 
facilities. They were concerned about the ownership of Island 
Park Reservoir in particular, and also Grassy Lake moving from 
Federal ownership to local ownership.
    So, at this point in time, evaluating all the comments we 
had obtained over a two to 3 year period and all the 
discussions we had had with various groups, we decided to limit 
the scope of the transfer that we would request from the Bureau 
of Reclamation to their cross-cut diversion dam, the cross-cut 
canal and the Teton Exchange wells. These items were all on the 
table to begin with.
    There was very little negative comment about the 
possibility of those being transferred to Fremont-Madison 
Irrigation. With the input that we had received over this 
period of time, we decided to go forward with legislation. We 
looked at various ways of doing it and have brought this bill, 
4708 to you today.
    There are some concerns about what might happen if there is 
additional development of ground water because of this 
transfer. I know the Department of Water Resources will look at 
that very closely. Fremont-Madison Irrigation has agreed to put 
a mitigation plant in place that would mitigate for any impacts 
from additional development.
    We believe that this is in the interest of the watershed. 
We think that providing more water to our water users 
undoubtedly will leave more water in the river, more carryover 
in Island Park Reservoir for use for whatever purposes it might 
be needed for.
    Mr. Chairman, this is a good transfer. We have worked well 
with the Environmental Committee over the years and would like 
to have an opportunity to see this legislation move forward.
    I thank you for your time and I would be happy to answer 
any questions you might have.
    Mr. Calvert. I thank the gentlemen.
    [The prepared statement of Mr. Raybould follows:]

    Statement of Jeff Raybould, Chairman of the Board of Directors, 
                  Fremont-Madison Irrigation District

    Mr. Chairman, Members of the Subcommittee, I am Jeff Raybould, 
Chairman of the Board of Directors of the Fremont-Madison Irrigation 
District (FMID) in Idaho. I am here to testify in support of H.R. 4708.
    This legislation would require the Secretary of the Interior to 
convey certain facilities to our District pursuant to the Memorandum of 
Agreement with the Bureau of Reclamation. These facilities include: the 
Cross Cut Diversion Dam, the Cross Cut Canal and the Teton Exchange 
Wells.
    FMID was created under the laws of the State of Idaho in 1935 to 
enter into a repayment contract with the United States Bureau of 
Reclamation for the construction of Island Park Dam, Grassy Lake Dam 
and the Cross Cut Diversion Dam and Canal. The forty year repayment 
contract was paid out in 1979 by the spaceholders of FMID.
    FMID provides a supplemental water supply to approximately 1,500 
water users irrigating approximately 200,000 acres associated with the 
original Island Park and Grassy Lake projects as well as the failed 
Teton Dam project. Forty canal companies existed prior to the creation 
of FMID. The canal companies supply the natural flow water (primary 
water supply) to lands of their stockholders. They also conduct their 
own operation and maintenance. Most of the lands served by FMID are 
also lands of the canal companies. The FMID uses these canal companies 
to deliver storage water.
    In 1993, FMID and the Henry's Fork Foundation, a local 
environmental group, helped form the Henry's Fork Watershed Council 
which is a grassroots community forum that uses a non-adversarial, 
consensus-based approach to problem solving and conflict resolution 
among citizens, scientists, and agencies with varied perspectives.
    FMID originally submitted a resolution to the Bureau of 
Reclamation, requesting transfer of title from Reclamation to FMID of 
Island Park Dam, Grassy Lake Dam, Cross Cut Dam and Canal and the Teton 
wells. FMID worked closely with the Henry's Fork Foundation to develop 
a consensus on how title for all these facilities could be transferred. 
In the course of this effort, there was no opposition to title transfer 
of the Cross Cut Dam and Canal and the Teton wells from any 
representative of the Watershed Council, including the Henry's Fork 
Foundation and the Greater Yellowstone Coalition. As a result of these 
consultative discussions, FMID has decided at this time to only go 
forward with seeking title to the Cross Cut Dam and Canal and the Teton 
wells.
    The Cross Cut Dam is located on Henry's Fork of the Snake River 
which diverts water into the Last Chance and Cross Cut Canals. It is a 
concrete gravity weir with a structural height of 17 feet and a total 
length of 457 feet. It was completed in 1938. The Cross Cut Canal 
begins at the Cross Cut Dam. The canal is approximately 7 miles long 
with a capacity of 600 cubic feet/second (cfs) at the head.
    The canal diverts storage water from the Henry's Fork near Chester 
and conveys it to the Teton River. In addition to conveying storage 
water to users on the Teton River, the canal also conveys natural flow 
water to some of the lands within the Fall River Irrigation Company 
system. A portion of the Cross Cut Canal was constructed through the 
already existing Fall River Canal. FMID has operated and maintained the 
canal since it was built. FMID and Fall River jointly employ a canal 
manager to address operation and maintenance needs.
    Five Teton Exchange Wells were constructed by the Bureau of 
Reclamation in the early 1970's as part of the Lower Teton Division. 
They were designed to provide groundwater in exchange for water storage 
in Teton Reservoir. Failure of the Teton Dam in June, 1976 made the 
constructed wells the only supplemental water source available to 
irrigate the lands affected by the Teton Dam failure.
    In 1977, FMID and the Bureau entered into a contract to allow the 
use of the wells as a backup water supply in drought years. This 
contract provides for the use of wells, pumps, motors and appurtenant 
facilities over a 25 year period.
    Water from the five wells is pumped into the lower Henry's Fork 
system to augment supplemental irrigation water supply for FMID in dry 
years. FMID pays for all operation, maintenance and replacement costs.
    FMID has conducted extensive outreach with local entities in 
response to the proposed title transfer and we will continue to do so 
as the process moves forward. We would like to address three concerns 
that have recently been raised by local environmentalists:
    (1) LFirst, the only facilities authorized for transfer are the 
Cross Cut Dam and Canal and the Teton Wells. Island Park and Grassy 
Lake Dams are not included.
    (2) LSecond, it has been suggested that additional conservation 
flows be designated for the Henry's Fork. This should not be a 
condition for title transfer, but we will continue to work with all 
local stakeholders to address this issue.
    (3) LThird, the Secretary is required to complete all actions as 
required under the National Environmental Policy Act. At the request of 
local environmental groups, the Bureau of Reclamation has already 
initiated this process. The ultimate level of review will be determined 
in accordance with this law.
    This concludes my remarks. Thank you for allowing me to appear 
before your Subcommittee today. I would be pleased to answer any 
questions you might have.
                                 ______
                                 
    Mr. Calvert. Our next witness is Mr. Hodges, Pershing Water 
Conservation District. You are recognized for 5 minutes.

             STATEMENT OF BENNIE HODGES, MANAGER, 
          PERSHING COUNTY WATER CONSERVATION DISTRICT

    Mr. Hodges. Mr. Chairman and Members of the Subcommittee, I 
am the manager of the Pershing County Water Conservation 
District and with me today I have fellow Board member, Bob 
Gibson.
    We are here in support of H.R. 5039, the Humboldt Project 
Conveyance Act. This legislation will require the Secretary of 
the Interior to convey facilities to our district pursuant to 
agreements with the Bureau of Reclamation, Pershing County, 
Lander County and the State of Nevada.
    To fully understand this, this is a kind of complex 
project. I have to kind of go back and give just a little bit 
of an overview on this on how this and how this came about. In 
the late 1920's, the irrigators in the Lovelock Valley, which 
is about 90 miles east of Reno, realized that being on the 
bottom end of the Humboldt System, the Humboldt River System as 
an unreliable river system.
    They already had two small reservoirs that they were 
operating off of, but they weren't sufficient. They didn't 
store a sufficient amount of water for a sustained water 
supply. So, in the early 1930's they went to the Bureau of 
Reclamation with a proposal that what is now present day Rye 
Patch Reservoir, to build a reclamation project there.
    The Bureau of Reclamation came to Rye Patch and looked at 
it and they said, this is a good site. This was work as a good 
place for a reservoir, but you don't have enough water rights 
and water-righted ground to pay the construction costs and pay 
future O&M costs.
    So, the members of the irrigation district started working 
up stream cutting east through Winnemucca and Lander County. 
They got into Lander County and they bought two ranches up 
there. They signed the agreement to buy them. They were ranches 
of 30,000 acres, the Meyalduz and the Philippini Ranch.
    They went back to the Bureau of Reclamation and said, with 
these acquired ranches, do we have enough land and water, 
mainly water, to justify the construction of a reclamation 
project? And the Bureau said, yes, they do.
    In 1934, contracts were signed that the Bureau would loan 
the District the money to pay for the ranches and also to build 
Rye Patch Reservoir. In 1936 Rye Patch Reservoir was completed 
and in 1978 the repayment on the cost of the private ranches 
that were purchased and the construction costs of Rye Patch was 
repaid by the irrigation district.
    Now, we have operated and maintained Rye Patch Reservoir 
since 1941. We have grazed on the two ranches that we purchased 
through the Bureau of Reclamation. We have grazed our cattle up 
there since 1953. So, we have operated and maintained our 
project for quite a long time, as you can see.
    The constituents of the district have always felt that 
especially the acquired lands that are within the project, the 
acquired lands being the lands that the constituents of the 
district bought and paid for, they should have title to them.
    Starting in 1995, we started working with the Bureau of 
Reclamation's guidelines and framework for title transfer. In 
the course of doing that, we have had scoping sessions in Elko 
County, Lander County, Lovelock, Reno, and Carson City.
    Through oral and written testimony, we have issued response 
and negotiated with the State, Pershing County, Lander County 
and the Bureau of Reclamation. We feel that we have a win-win 
situation put together for the State of Nevada, Pershing County 
and Lander County and many of the other entities involved.
    If this legislation is introduced and passed, we will have 
environmental issues and happenings that do not exist to this 
day. The State of Nevada would receive over 5800 acres to 
create a wetlands in the heart of our community pasture.
    There would be a 3,000 acre-foot minimum pool for the 
fisheries at Rye Patch that they don't have today. They would 
own the ground that the State park sits on at Rye Patch 
Reservoir now, enabling them to receive increased funding from 
the Nevada legislature as they have to lease that now. The 
legislature doesn't like to give them much month on leased 
ground.
    In short, I think this is a very doable project. Some 
points I would like to leave with the Committee on this is the 
constituents of the district bought and paid for the withdrawn 
lands and they have felt that they have always title to them, 
100 percent of the cost.
    Again, it is a win-win situation for the State of Nevada, 
and all the local governments involved. If this legislation is 
passed, it will ensure that agriculture in the Lovelock Valley 
would exist in the future as it does now. It will also ensure 
that the State of Nevada receive lands for State parks, a 
wetlands, and a wildlife management area.
    That concludes my statement.
    Mr. Calvert. I thank the gentleman.
    [The prepared statement of Mr. Hodges follows:]

                 Statement of Bennie Hodges, Manager, 
              Pershing County Water Conservation District

    Mr. Chairman, Members of the Subcommittee, I am the manager of the 
Pershing County Water Conservation District (PCWCD). With me today, is 
PCWCD Board Member Bob Gibson. We are here to testify in support of 
H.R. 5039, the Humboldt Project Conveyance Act.
    This legislation would require the Secretary of the Interior to 
convey facilities to our District pursuant to various agreements with 
the United States Bureau of Reclamation (Reclamation), State of Nevada, 
and the Nevada Counties of Lander and Pershing.
    PCWCD is a quasi political agency of the State of Nevada.
1. Brief History of the Humboldt Project and the Pershing County Water 
        Conservation District
    The lands served by PCWCD are located in a high desert valley at an 
elevation of 3,900 feet. The valley lies some ninety miles east of 
Reno, just above the Humboldt Sink, which is the terminus of the 
Humboldt River.
    Emigrants following the California Trail used the lower river area 
in what is now Pershing County to rest with their livestock before 
attempting to cross the dreaded Forty Mile Desert. Before long, the 
increasing local population of emigrants and miners fueled a 
significant demand for agricultural products in the area.
    In the early 1900s, several irrigators banded together to construct 
the Pitt Taylor Reservoirs, located upstream of Lovelock, Nevada. 
However, these reservoirs were not of sufficient capacity and served 
only part of the irrigated area that now makes up PCWCD. In addition, 
the reservoirs suffered from a lack of available water during dry 
years.
    As the settlement of the Humboldt Basin progressed, the amount of 
water available at the lower end of the system continued to decrease. 
Water use on lands in the upper reaches of the river basin was 
increasing at a rapid rate, which created shortages for lower basin 
water users.
    In response to the problem, the Nevada State Engineer ordered a 
general adjudication of the Humboldt River system in 1923, designating 
the Sixth Judicial District Court in Winnemucca as the decree court. In 
1931, Hon. George A. Bartlett issued a final decree establishing the 
water rights for the Humboldt River Basin. The Bartlett Decree was 
immediately subjected to judicial challenges that were resolved through 
the issuance of the ``Edwards Decree'' in 1934. Together, these decrees 
are commonly referred to as the Humboldt River Decree. The Humboldt 
River adjudication was finalized by order of the Nevada Supreme Court 
in 1938, when it affirmed the Humboldt River Decree, halting all future 
challenges. Lovelock irrigators who were last on the Humboldt River had 
confirmed decreed water rights.
    The issuance of the Bartlett Decree in 1931 established some order 
on the river and opened the way for Lovelock Valley irrigators to build 
a new water storage project to augment their decreed water supply. The 
Lovelock Irrigation District had been organized in 1926 for the primary 
purpose of exploring possible storage sites on the Humboldt River. 
However, after the Bartlett Decree was entered these efforts 
intensified. To facilitate the construction of such a project, the 
District reorganized as a quasi political entity under the Nevada 
Irrigation District Act and changed its name to the Pershing Water 
Conservation District.
    In the early 1930s PCWCD began negotiations with Reclamation for 
the construction of the Humboldt Project. Funding for the Project was 
approved in August 1933 when the Public Works Administration allocated 
$2 million for construction. Presidential approval of the Project was 
given via letter dated November 6, 1935.
    After studying several locations for reservoir construction, PCWCD 
and Reclamation decided on the present site of Rye Patch Reservoir. 
However, to make the project feasible, PCWCD needed to acquire 
supplemental water rights for the project. To this end, PCWCD sought 
out willing sellers upstream of the reservoir site. PCWCD's directors 
located several willing sellers in Lander County, and in January 1934, 
PCWCD entered into purchase agreements with several ranch owners in the 
Battle Mountain and Valmy areas. In total, PCWCD contracted to acquire 
over 30,000 acres of land and appurtenant water rights from two large 
ranches just outside Battle Mountain and additional water rights from 
nearby properties for a contracted acquisition of 49,670 acre feet.
    After PCWCD successfully located and contracted for the necessary 
supplemental water rights, PCWCD's directors decided to proceed with 
the project. PCWCD entered into a repayment contract with Reclamation 
for the construction of Rye Patch Dam on October 1, 1934. The contract 
provided for the full repayment of all project related construction and 
acquisition costs over a forty year period.
    In late 1934, to facilitate the transfer of the water rights to 
PCWCD lands, PCWCD assigned its rights under the ranch and water right 
purchase agreements to the United States Government. In early 1935, the 
United States concluded the transactions when it purchased the land and 
water rights PCWCD had put under contract. The purchase price for these 
lands and water rights were then made a part of PCWCD repayment 
obligation to Reclamation.
    Construction of Rye Patch Dam began in January 1935, and was 
completed in January 1936, with a designed capacity of 170,000 acre 
feet. Due to the drought conditions and legal problems with the Pitt 
Taylor Reservoirs, Rye Patch was not initially filled to full capacity.
    In the early 1940s, with all water transfers completed, legal 
problems solved and operating methods established, PCWCD assumed the 
operation and maintenance of the Humboldt Project including Rye Patch 
Dam and the purchased lands in Lander County. Since that time, PCWCD 
has assumed all costs resulting from the day to day operations and 
maintenance of the entire Humboldt Project.
    Over the years, PCWCD entered into other contracts with 
Reclamation. One contract was for the rehabilitation and betterment of 
the Battle Mountain Collection System and another contract was for the 
rehabilitation of Rye Patch Dam. These contracts, as with the original 
construction contract, called for repayment by PCWCD for all funds 
expended by the United States for project costs. Over the years, PCWCD 
has satisfied each of these repayment obligations.
    In the early 1990s, Reclamation determined that some modifications 
to Rye Patch Dam would be necessary to protect the integrity of the 
actual dam structure. This work was completed in 1996 and Rye Patch 
Reservoir was filled to its present capacity of 213,000 acre feet. 
PCWCD recently made its last payment to Reclamation for its portion of 
the modification costs.
    PCWCD has, with the guidance of Reclamation, successfully 
maintained and operated the Humboldt Project for over fifty years. In 
these fifty years, PCWCD kept pace with the changing aspects of its 
operation by updating its equipment and methods. The project has 
stabilized water supplies, increased productivity of agricultural land 
within PCWCD, employed managers and consultants experienced in 
irrigation systems and grazing, provided recreational opportunities, 
and expanded the tax base for Pershing County and the State of Nevada.
2. Humboldt Project Overview
    As stated, the Humboldt Project is located in Northwestern Nevada 
on the Humboldt River. The project collects and stores Humboldt River 
water in Rye Patch Reservoir for the irrigation of 37,504.62 acres of 
farm land in and around Lovelock, Nevada. The Project facilities are 
operated and maintained in conjunction with the non Federal portions of 
the irrigation system PCWCD in Lovelock
Project Lands
    The Project lands consist of a total of approximately 76,000 acres 
of withdrawn and acquired land.
Withdrawn Lands
    Approximately 46,000 acres were withdrawn from the public domain by 
Reclamation in 1934-1935. Of this total, 32,000 acres are located 
within the Humboldt Sink, and 14,000 acres are located along the 
perimeter of and beneath Rye Patch Reservoir.
Acquired Lands
    The remaining 30,000 acres of Project land consists of acquired 
lands primarily located near Battle Mountain, Nevada. From 1934-1935 
Reclamation purchased two ranches totaling 30,065 acres with water 
rights, and the water rights of five other ranches, all of which were 
located in the vicinity of Battle Mountain, Nevada, approximately 150 
miles upstream from Lovelock, Nevada. These lands are presently leased 
to PCWCD and used by PCWCD patrons as a community pasture. In 1934, 
Reclamation also purchased a ranch and water rights under the future 
site of Rye Patch Reservoir portions of which are leased by 
Reclamation.
Project Water Rights
    Concurrently with the acquisition of the water rights from these 
private lands, PCWCD submitted several water right transfer 
applications to change the place of use to the Lovelock Valley farm 
lands. Ultimately as a result of transfer proceedings before the State 
Engineer, the State Engineer issued a series of orders transferring a 
total of approximately 49,670 acre feet of water to the Lovelock Valley 
lands for use within PCWCD.
Rye Patch Reservoir
    Rye Patch Dam and Reservoir, located on the Humboldt River about 26 
miles upstream from Lovelock, stores the flow of the river for 
diversion to the irrigated lands in the Lovelock area. The dam was 
completed and began storing water in 1936. The reservoir is 21 miles 
long and has a capacity of 213,000 acre feet. The operation and 
maintenance of the Project were transferred from Reclamation to PCWCD 
in 1941. There are 37,504.62 water righted acres within PCWCD. PCWCD 
contains 40,983 acres in total.
    Rye Patch Reservoir provides for the usual types of water based 
recreation such as boating and fishing. Facilities such as campsites 
and boat ramps have been developed and are operated under the 
administration of the Nevada Division of Parks. Fishing for trout and 
warm water species is managed by the Nevada Division of Wildlife.
Toulon and Humboldt Sink
    Reclamation withdrew lands within the Humboldt Sink to avoid the 
responsibility of flood damage which might occur due to project 
operations. Approximately 18,000 acres of land in the Humboldt Sink has 
been managed by the Nevada Division of Wildlife (NDOW) under a 
Management Agreement since 1957. The current agreement was signed on 
January 6, 1988 and is set to expire in 2013. NDOW administers these 
lands for wildlife management and grazing purposes.
3. Title Transfer Efforts
    Since September 1997, PCWCD has followed the title transfer 
framework in an effort to obtain title to the Humboldt Project located 
in the Humboldt River basin in northern Nevada. This is PCWCD's third 
attempt to obtain title to the Humboldt Project facilities since it 
repaid its original project loan in 1978. PCWCD operates and maintains 
the Project, and its constituents are the sole beneficiaries of the 
Project.
    Since 1997, PCWCD has been engaged in ongoing communication and 
negotiation with Reclamation, the State of Nevada, Lander County, 
Pershing County and various public interest groups regarding title 
transfer. With the assistance of Reclamation, PCWCD held scoping 
meetings at four locations in the State: Battle Mountain, Lovelock, 
Carson City and Reno. These scoping meeting were followed by the 
receipt of comments from various individuals and groups that were 
addressed by Reclamation and PCWCD. Out of these scoping meeting and 
comments there occurred ongoing discussions resulting in agreements 
that addressed the areas of concern.
4. Areas of Concern
    In December 2001, Tina Nappe and Dave Stanley of the Lahontan 
Audubon Society and Rose Strickland of the Toiyabe Chapter of the 
Sierra Club expressed a variety of concerns to the State of Nevada:
    a. LWater: As a part of the title transfer a portion of the 
Humboldt Project water rights should be transferred from Lovelock 
farmers for upstream use to establish an Argenta Marsh and downstream 
for use in the Humboldt Sink because the water rights are publicly 
owned. Money for the purchase of these water rights should be 
legislated. Legislation should not be passed until water is secured for 
the Argenta Marsh.
    District Response: The Humboldt Project purchased ranches with 
their appurtenant water rights and under the State process transferred 
the appurtenancy to private lands described within PCWCD's boundaries 
allowing for intermediate storage of these rights within Rye Patch 
reservoir. While water is publicly owned in Nevada, the right of use 
obtained by the transfer of the water rights is not. Therefore, neither 
Reclamation nor PCWCD owns the right of use to the transferred water 
rights that were perfected almost 60 years ago to PCWCD landowners. The 
ownership of these water rights are with the appurtenant landowners. At 
most, PCWCD/Reclamation have a trustee relationship with these 
landowners to deliver Humboldt River water including water stored in 
Rye Patch reservoir to them.
    Through the title transfer process, PCWCD agreed to transfer to the 
State approximately 6,000 acres of acquired lands that it paid for 
through its Reclamation repayment contract for the creation of a 
wetlands. PCWCD notes that the State has generated funds from outside 
sources to purchase water rights for the Stillwater wetlands in the 
Fallon, Nevada area and that there are water rights for sale on the 
Humboldt system that the State could purchase to create an Argenta 
Marsh on some or all of the 6,000 acres as water is available. If the 
State or the United States is going to establish a wetland park for the 
public, the appropriate public funds should be used.
    b. LPCWCD cooperation for wetlands development: NDOW should have 
flexibility to use its water rights where ever it chooses, and PCWCD 
should participate in that effort.
    District Response: NDOW presently holds water rights in PCWCD. 
Under Nevada law, transfers in place of use can take place; however, 
the water must be used as the transfer describes. NDOW and PCWCD are 
working together to establish a delivery canal to transport NDOW's 
water rights to the Toulon Sink Wildlife Area. To further assist NDOW's 
Wildlife Area, PCWCD's drain water rights have been allowed to flow to 
both the Toulon and Humboldt Sinks. All excess Humboldt River water 
flows to the Humboldt Sink.
    c. LPublicly owned lands (withdrawn) should be retained: 
Reclamation should retain ownership until these lands are inventoried. 
Flood and recreation uses should be addressed. An Environmental Impact 
Statement should be required. Nevada should initiate a planning 
process.
    District Response: All transferred lands will be evaluated through 
completion of the NEPA process prior to transfer. Those entities 
receiving title to specified lands will be required to pay the 
associated NEPA, administrative, and transfer expense. Since the State 
will receive approximately 24% of the acquired lands in Battle Mountain 
and approximately 50% of the Rye Patch lands, Nevada will be the second 
largest financial participant in the NEPA environmental decision 
process.
    d. LPCWCD Funding: After transfer to the State, PCWCD should pay 
the State to manage the State Parks, to purchase water for wetlands, to 
develop wetlands plans, and to manage wildlife lands.
    District Response: PCWCD has no statutory authority to collect 
assessments from its patrons for payment to the State for such 
purposes. PCWCD patrons who use the pasture pay only for pasture 
operations. As part of the title transfer, PCWCD is requesting no 
reimbursement from the State for the lands to which the State seeks 
title.
    e. LPCWCD should not receive title: In the alternative, PCWCD 
should be required to enter into a conservation easement over project 
lands.
    District Response: If title is not transferred to PCWCD, the State, 
and to Lander and Pershing Counties, title will remain with the United 
States. Unless legislated by Congress (which may be incongruent with 
the Reclamation Act), it is unlikely that the United States could 
burden its ownership with a conservation easement.
5. Agreements/Legislation
    After almost five years of negotiations, PCWCD entered into 
agreements with the State of Nevada, Lander and Pershing Counties. As 
of June 25, 2002, PCWCD approved execution of a Memorandum of Agreement 
(MOA) with Reclamation that followed the Nampa-Meridian MOA earlier 
executed by Reclamation. Other agreements are summarized as follows:
State Agreement
    a. LRye Patch (withdrawn lands): Under the State's agreement with 
PCWCD, the State will continue its operation of recreational facilities 
at Rye Patch. PCWCD agreed to transfer title to these withdrawn project 
lands to the State. In addition, PCWCD agreed to transfer title of all 
withdrawn lands, approximately 7,000 acres, above the high water mark 
around Rye Patch Reservoir to the State to support the State's 
recreational use. Further, PCWCD agreed that it would maintain a 
minimum pool of 3,000 acre feet at Rye Patch Reservoir to support 
aquatic and wildlife.
    b. LCommunity Pasture (acquired lands): PCWCD also agreed with the 
State to transfer title to approximately 5,800 acres of acquired lands 
within the community pasture to the State for conversion to a wetlands 
park along the Humboldt River near Battle Mountain.
    c. LWildlife Area (withdrawn lands): Project lands lying below the 
agricultural lands of PCWCD and at the terminus of the Humboldt River 
are also to be transferred to the State by agreement. This transfer of 
approximately 20,000 acres will facilitate the State's continued 
maintenance of the wildlife area within the Toulon and Humboldt Sink.
Lander County Agreement
    Because the acquired lands of the community pasture lie close to 
Battle Mountain, the county seat for Lander County, the Lander County 
agreement allows for title of approximately 1085 acres of these 
acquired lands to be converted for public use as: (1) a livestock event 
center (135 acres approximately), (2) an industrial park (920 acres 
approximately), (3) an expanded sewage treatment facility (165 acres 
approximately), and (4) a primitive park recreation area with 
associated parking (31 acres approximately).
Pershing County Agreement
    The City of Lovelock which is the county seat of Pershing County 
uses a portion of the withdrawn Humboldt Project lands lying below 
PCWCD agricultural lands for Derby field, a municipal airport. Thus, 
the agreement with Pershing County provides that the lands presently 
used for a municipal airport and some expansion of this facility will 
be transferred to Pershing County. This transfer would include 
approximately 960 withdrawn acres on the northern portion of the 
Humboldt Sink
6. Conclusion
    This concludes my remarks. Additional information can be found at 
http://water-law.com/Title/Handbook.htm. We would be pleased to answer 
any questions you might have.
                                 ______
                                 

 STATEMENT OF STEVEN MALLOCH, COUNSEL, WESTERN WATER PROJECT, 
            TROUT UNLIMITED, HENRY'S FORK FOUNDATION

    Mr. Calvert. Mr. Malloch, you are recognized for 5 minutes.
    Mr. Malloch. Thank you, Mr. Chairman. My name is Steve 
Malloch. I appear today on behalf of both Trout Unlimited and 
the Henry's Fork Foundation.
    Trout Unlimited preserves, protects and restores North 
America's trout and salmon fisheries and their watersheds. We 
have about 130,000 members in 450 chapters nationwide with 
about 2,002 in Idaho and 850 in Nevada.
    The Henry's Fork Foundation is an Idaho conservation 
organization whose 2,000 members work to protect the Henry's 
Fork Watershed.
    I thank you for citing Mark Twain's aphorism about whiskey, 
water and fighting. It is obligatory in every one of these 
hearings. In some parts of the West, however, people are on a 
12-step program and are working on anger management.
    Transfer reclamation project can go either way. A win-lose 
fight or win-win cooperation. Gaining ownership of reclamation 
projects is a significant win for water contractors. Our 
problems with the transfer bills before the Committee today are 
that they represent some missed opportunities for the 
environment and in some cases, loses.
    Trout Unlimited and the Henry's Fork Foundation agree with 
the premise that the Federal Government need not own all of the 
600-plus reclamation projects. The approach to transfer we 
advocate has four points:
    First, that transfers should enhance the public benefits of 
the project and help restore the associated rivers and 
ecosystems. Title transfer really makes sense only if the human 
and environmental systems associated with the water projects 
are made better because of the transfer.
    Second, some water and power projects should remain 
Federal. The projects that play critical roles in watersheds 
and river management for public purposes should remain Federal. 
Further, where public benefits cannot be ensured and enhanced 
in a transfer, the project should remain Federal. We don't see 
any particular problem with that with either of these projects 
as long as the public benefits are ensured and enhanced.
    Third, water users are not entitled to project ownership 
transfers, a new benefit to be negotiated and for which 
consideration is appropriate. Under reclamation laws, water 
users are not entitled to project ownership. Paid out does not 
mean paid for. If water owners are given a new benefit, 
ownership and control of the facilities, the quid pro quo 
should be fixing some of the problems that the projects have 
created, enhancing the public benefits.
    Fourth, a decision to transfer projects should not be made 
until the consequences of the transfer are understood and the 
terms of the transfer are determined. We suggest that Congress 
require environmental review and facility-specific transfer 
plans be completed prior to legislation.
    I will comment primarily on H.R. 4708. To understand the 
interest of Trout Unlimited and the Henry's Fork Foundation, 
you have to know that TU's members voted the Henry's Fork as 
the best fishing in the country. They ranked Henry's Fork No. 1 
in Trout America's guide to 100 best trout streams.
    Anglers are not the only beneficiaries of this fishery. The 
regional economic benefit of only a portion of the Henry's Fork 
Fishery was estimated in '99 to be in excess of $5 million a 
year. Henry's Fork and TU's chapters have a long and productive 
history or working with FMID on Henry's Fork issues, including 
title transfer.
    Through the Henry's Fork Water Shed Council and one-on-one, 
we appreciate that FMID faces a serious problem with drought 
year reliability of its reclamation water supply, because the 
fishery faces the same problems. Unfortunately, dry years are 
all too common and typically occur two to 3 years out of every 
ten.
    Every water user on the Snake River, including the fishery, 
faces the same set of problems. The centerpiece of the bill is 
the transfer of a partially developed well field, the Teton 
Exchange Wells. While the plans originally called for 45 wells 
totally 670 CFS, only five have been drilled.
    Our immediate concern is that additional water extraction 
from the ground water system may have adversely affected 
Henry's Fork. Our fundamental concerned is one of missed 
opportunity. The Henry's Fork needs a drought plan that 
addresses the need of the agricultural community, the angling 
interests and the river, the ecological needs of the river.
    Trout Unlimited and the Henry's Fork Foundation requests 
that the current legislative proposal be deferred while the 
various stakeholder groups are convened to work out a 12-step 
solution.
    To conclude, our goals should be to improve the benefits we 
all derive from western water resources. To be satisfied with 
the status quo in a deteriorating and increasingly complicated 
system is not enough. To slide backwards is even more 
unfortunate.
    Congress should only transfer reclamation projects when it 
leads to systems, both human and ecological, which are stronger 
and healthier and more resilient.
    Thank you.
    Mr. Calvert. I thank the gentleman.
    [The prepared statement of Mr. Malloch follows:]

  Statement of Steven Malloch, Counsel, Western Water Project, Trout 
                            Unlimited, Inc.

    Mr. Chairman, my name is Steven Malloch. I appear on behalf of both 
Trout Unlimited (TU) and the Henry's Fork Foundation (HFF) in 
testifying about H.R. 4708, the Fremont-Madison Conveyance Act.
    Trout Unlimited's mission is to conserve, protect and restore North 
America's trout and salmon fisheries and their watersheds. Trout 
Unlimited is a private, non-profit organization with 130,000 members in 
450 chapters nationwide. There are approximately 2,000 TU members in 
Idaho, many of whom enjoy the diverse and outstanding fishery resources 
of the Henry's Fork watershed. I work with TU's Western Water Project, 
which focuses on water quantity issues around the West. Across the 
West, even in normal water years, but especially in drought years like 
this one, rivers routinely are drained dry a condition that is 
disastrous for fish, anglers and local economies that depend on water-
based recreation.
    Today I also appear on behalf of the Henry's Fork Foundation, an 
Idaho conservation organization whose 2,000 members are dedicated to 
protecting the Henry's Fork watershed. The HFF mission is to 
``understand, protect, and restore the unique values of the Henry's 
Fork River while doing so in the context of mutual respect for others 
that live and work in the watershed to ensure solutions are 
sustainable.'' A letter on H.R. 4708 from HFF is attached as an exhibit 
to this testimony.
Introduction
    It seems that citing Mark Twain's hoary aphorism about whiskey, 
water and fighting is required in every hearing about western water, 
because there is a measure of truth in it. But in some parts of the 
West, people have grown up, and gotten beyond the endless opportunities 
for fighting. Instead, they are working together to solve problems, 
rather than simply win a round. Mr. Chairman, one example you know well 
is in California, where the compromise reached in the CALFED process 
was a victory of accomplishment over acrimony.
    In Idaho, a group of stakeholders on the Henry's Fork of the Snake 
River, acting through the Henry's Fork Watershed Council, have a 
remarkable history of collaboration and compromise on difficult 
resource issues extending back for two decades. The Henry's Fork 
Foundation and the Fremont-Madison Irrigation District (FMID) are 
leaders in the Watershed Council. Trout anglers have greatly 
appreciated this progress because the Henry's Fork is justifiably 
famous for its remarkable trout fishing with large numbers of huge, 
fat, and, unfortunately, smart wild rainbow trout. TU members voted it 
the best fishing in the country, and ranked it number one in TU's Guide 
to America's 100 Best Trout Streams. Anglers are not the only 
beneficiaries of this fabulous fishing. An economic study funded and 
completed by the HFF and published in Intermountain Journal of Sciences 
in 2000 estimated the regional economic benefit of only a portion of 
the Henry's Fork fishery to be in excess of $5 million per year.
    The issues the HFF and FMID have worked through with other 
Watershed Council members have sometimes been tough. Upstream of the 
main fishing section of the Henry's Fork is Island Park Reservoir, a 
part of the Bureau of Reclamation's Minidoka Project, and a principal 
water supply for FMID. In 1992, Reclamation drew down Island Park 
Reservoir--to the point that 50,000 tons of sediment were released, 
blanketing the river with silt and causing a disaster for aquatic life 
and the fishery. When the possibility of again drawing down the 
reservoir and releasing silt loomed last year due to drought conditions 
the HFF, FMID, Trout Unlimited and Reclamation reached agreements that 
avoided repeating that problem.
    That history of successful collaboration has not yet, however, been 
extended to transferring title to Bureau of Reclamation facilities. The 
Henry's Fork Foundation and the Fremont-Madison Irrigation District 
(FMID) had prolonged, substantive and productive negotiations regarding 
an earlier title transfer proposal for Island Park Reservoir and the 
various ways a transfer could serve to protect the fishery resource 
while still meeting the irrigation community's needs. Trout Unlimited 
was a strong public and private supporter of those efforts. That the 
effort foundered is proof of just how complex and potentially 
contentious this transfer of public resources into the hands of 
irrigation districts is, both on the Henry's Fork and elsewhere.
Transfer Policy Approach
    Trout Unlimited and the Henry's Fork Foundation agree with the 
premise that the Federal Government need not own all of the 600-plus 
Reclamation projects. However, spinning off parts of the Reclamation 
system to non-federal ownership makes policy sense only if the 
transfers protect and enhance the public benefits associated with the 
projects. America's taxpayers, people in the East, West, South, and 
North, paid for these projects. Only if a transfer of ownership serves 
to increase the public benefit and to solve the pressing problems in 
managing the West's water for economic needs as well as environmental, 
recreational, and aesthetic purposes, should it be accomplished.
    The approach we advocate has four main points:
Transfers should enhance the public benefits of the project and the 
        associated river system.
    Our fundamental position is that title transfers make sense only if 
the human and environmental systems associated with the water projects 
are made better because of transfer. During most of the long history of 
western water projects, environmental damage was simply taken as a 
matter of course, with predictable results. One can hardly consider a 
major water project now without stumbling over an endangered species 
issue.
    We can take Twain's approach and continue a century and a half of 
fighting eventually somebody may win, but more likely the fighting will 
simply continue. Or we can take the modern approach and ensure that an 
action, in this case transfer of ownership, that benefits one set of 
interests, water users, also enhances the public benefits of the 
project and the associated river system.
Some Federal water and power projects should remain Federal.
    Projects that play critical roles in watershed and river management 
for public purposes or are important to interstate, international, or 
treaty obligations should remain Federal. Some projects are simply too 
important to be able to adequately condition the transfers. For 
example, projects such as Hoover Dam/Lake Mead and Glen Canyon Dam/Lake 
Powell simply should remain Federal.
    As a corollary to the first principle, where public benefits cannot 
be ensured and enhanced in a transfer, because adequate terms cannot be 
crafted or the recipient will not accept the conditions, the project 
should remain Federal.
Water users are not entitled to project ownership; transfer is a new 
        benefit to be negotiated and for which consideration is 
        appropriate.
    Under the Reclamation laws, water users are in no sense entitled to 
project ownership when they complete their capital repayment 
obligations. The law and history are unambiguous on the point. ``Paid 
out'' does not mean ``paid for.''
    Under Reclamation law, agricultural water users are obligated to 
pay only pennies on the dollar of the costs for Reclamation projects. 
While water districts may argue they are due ownership when they 
complete payments, there is no legal claim that those payments built 
equity. In fact, because the projects were almost entirely subsidized 
with public funds, the argument in favor of enhanced public benefits is 
much stronger than any argument in favor of water user ownership. If 
water users are given a new benefit ownership and complete control of 
the facilities--the quid pro quo should be enhanced public benefits.
A decision to transfer a project should not be made until the 
        consequences of transfer are understood and the terms of 
        transfer determined.
    Because water projects affect so many interests, the terms of the 
deal determine whether a transfer is in the public interest. Congress 
requires that water projects proposed for construction be evaluated, 
and at least the general outline of the project determined, before 
considering projects for authorization. Congress should do no less in 
disposing of projects in which it has already invested the taxpayers' 
money.
    We suggest that Congress require environmental review and facility-
specific transfer plans that set the terms and conditions be completed 
prior to legislative action. As a less attractive alternative, Congress 
could authorize transfers while also directing the Secretary of the 
Interior to condition transfers in order to protect and enhance the 
public benefits. The appropriate time for legislation and the language 
used in that transfer legislation has been an issue since the topic of 
granting ownership to water users first arose. When transfers are 
directed before environmental review has been completed Congress is 
deprived of a thorough analysis of the transfer issues and Interior's 
ability to seriously consider the ``no action'' alternative is 
eliminated. Similarly, when transfer is directed before the terms of 
the deal are worked out, Interior's ability effectively to condition 
the transfer to protect the public interest and enhance public benefits 
is greatly reduced, if not eliminated.
    Please note that conservation organizations are not alone in their 
concern about terms and prior review. The Western States Water Council 
whose members are appointed by Western governors arrived at very 
similar conclusions in twice adopting a position on transfers of 
Federal water and power projects. In 1995, and again in 1998, the WSWC 
adopted a position on transfers that sets out their concerns with third 
party impacts, public costs and benefits, the change in applicable 
laws, and the need for a strong role for states. They urge Congress and 
the Administration to adopt a process and develop criteria and 
guidelines for project-by-project review of transfer proposals, with 
significant state involvement. (See Position No. 209 at http://
www.westgov.org/wswc/transfer.html). Trout Unlimited and the Henry's 
Fork Foundation agree with this position.
H.R. 4708
    HFF and TU appreciate that FMID faces a serious problem with the 
drought year reliability of its Reclamation water supply because the 
fishery faces the same problem. The principal reservoir FMID relies 
upon is Island Park, part of Reclamation's Minidoka Project, and the 
subject of the prior title transfer effort. During the last two drought 
years, FMID has only been allocated 62% and 42% of Island Park 
Reservoir storage because of the senior rights of other Minidoka 
Project contractors. Unfortunately, these dry years are all too common, 
and typically occur two or three years out of every ten. Every water 
user on the Snake River and the Minidoka project, including the 
fishery, faces the same set of problems.
    The centerpiece of this bill is transfer of a partially developed 
well field--Teton Exchange Wells and the associated State of Idaho 
water permit 22-7022. While the permit envisioned 45 wells totaling 670 
cfs of water, only five wells have been drilled, providing 
approximately 81 cfs. FMID has stated its intent to firm its water 
supply by drilling new wells and making more extensive use of the well 
field.
    Our immediate concern is that additional water extraction from the 
ground water system will have a deleterious effect on the Henry's Fork 
River and aquatic resources. The location of the new wells, the amount 
of water pumped from the existing and new wells, the type and location 
of delivery systems, location of water use, and return flows all have 
implications for fish and wildlife resources. We understand that other 
water users have concerns about possible injury to their rights as 
well. Despite TU's and HFF's longstanding relationship with FMID, we 
must oppose this legislation because of the uncertain, but likely, 
impact further development of this well field would have on the Henry's 
Fork aquatic resources.
    Our more fundamental concern is one of missed opportunity. The 
Henry's Fork needs a drought plan that addresses the needs of the 
agricultural community, the angling interests that now are a 
significant part of the local economy, and the ecological needs of the 
river. H.R. 4708 represents an approach to water problems from the last 
century, one that Mark Twain would recognize. The Henry's Fork needs an 
approach based on collaboration, communication, and a philosophy of 
shared pain and shared gain. Additional use of the Teton Exchange Wells 
may be an integral part of that approach to making an already stressed 
water system work more effectively and provide greater benefits to all 
the users.
    TU and the HFF request that the current legislative proposal be 
deferred while the various stakeholder groups are convened to see if 
there might be an alternative that meets everyone's needs. Such talks 
could be sponsored and facilitated by the Idaho congressional 
delegation and include everyone who has a stake in the outcome from 
Twin Falls upstream. The members of the Henry's Fork Watershed Council 
have demonstrated that they can be effective and work productively if 
given the opportunity. Missing this opportunity to encourage creating 
an effective drought management plan would be moving in the wrong 
direction.
    We have the following specific comments on H.R. 4708:
    1. LSection 2(a) directs transfer of the facilities by a date 
certain. Directing transfer limits, and may eliminate, the ability of 
the Secretary to effectively negotiate terms and conditions in response 
to the eventual NEPA and ESA process, reducing the value of a review 
process subsequent to legislation. Directing a transfer is appropriate 
in legislation after the environmental review is complete, and the 
terms of the transfer have been set through negotiation. Prior to 
reaching that point, a much better result is likely if the transfer is 
authorized, but not directed.
    2. LSection 2 creates some ambiguity in the facilities to be 
conveyed. Section 2(a) describes the facilities to be transferred 
specifically as the Cross Cut Diversion Dam, the Cross Cut Canal, and 
the Teton Exchange Wells. However, subsection (c) of Section 2 is 
broader and includes broader language describing the transfer of all 
United States rights, title, and interest ``in the canals, laterals, 
drains, and other components of the water distribution and drainage 
system that is operated or maintained'' by FMID. We understand that 
FMID may operate other facilities beyond those specified in Section 
2(a). Therefore, we suggest that the facilities to be transferred be 
identified in Section 2(c) specifically and not generally.
    3. LSection 3 specifies the cost to FMID of the transaction and the 
facilities. We reiterate the common sense position set out above that 
``paid out'' does not mean ``paid for.'' The asset value to the 
taxpayer of the transferred facilities has not been established and 
should be in the course of a thorough review of the transfer proposal 
and development of a drought management plan; after determining that 
value, a reasonable price can be set. We also are concerned that 
Section 3(a) in limiting the transaction costs to FMID may be setting a 
cap on any mitigation or environmental enhancement costs that could be 
required as part of the transfer. Until that assessment is done, the 
environmental costs cannot be quantified and should not be capped.
    4. LSection 4, concerning the Teton Exchange Wells, makes clear 
that FMID would receive not just the five wells it has been using, but 
also the permit for 40 additional wells and approximately 589 cfs of 
additional water. The heart of our concern is the transfer of this 
permit, and the possible development of some or all of the additional 
diversions, with attendant effects on aquatic resources.
    5. LSection 5 calls for NEPA analysis to be performed after 
Congress directs transfer. This process seriously limits the scope of 
NEPA review (by essentially eliminating the no transfer alternative 
from serious consideration) and greatly limits the ability of the 
Secretary to require terms and conditions that protect public 
resources. We suggest that at a minimum the legislation or legislative 
record make clear that NEPA analysis is to consider thoroughly the 
effects of development of the Teton Wells.
    6. LSection 7 is intended to legitimize use of Reclamation water on 
land not currently eligible for that water. Water spreading is a 
significant issue around the West that has typically been resolved, as 
in this case, by legitimizing what amounts to use of water contrary to 
law. While we do not have information about this particular situation, 
we note that the effect of this section is to expand the number of 
acres legally eligible for irrigation in a basin chronically short of 
water.
H.R. 5039
    Trout Unlimited and the Henry's Fork Foundation have not been 
directly involved with the Humboldt Project, subject of a transfer 
proposal in H.R. 5039. Trout Unlimited notes that many of the same 
issues we raise in comments on H.R. 4708 are also at issue in H.R. 
5039. Transfer of the Humboldt Project is, if anything, even more 
complicated because it includes a major reservoir, public recreation 
lands, and a desert marsh that serves an important ecological function. 
As a matter of policy, the transfer approach outlined above should 
apply to the Humboldt Project as well.
Conclusion
    Congress and Reclamation are far from solving the problem of how, 
when and under what conditions to transfer ownership of Federal water 
projects. In part, this is because each project is different, with 
different users, beneficiaries, and environmental issues. Therefore, 
the appropriate terms and conditions for transfer will differ from 
project-to-project as well. We suggest that the best approach parallels 
that which Congress follows when authorizing water projects. Congress 
should require facility specific transfer plans that develop the issues 
and find solutions before legislation is enacted. Just as with 
feasibility studies for new projects, results are best when the 
questions are asked, the public is involved, and the answers are found 
early in the process. And as recent revelations about the Corps of 
Engineers practices show, even that process is subject to flaws.
    The development that we find most appealing is that in some areas 
water users and conservation organizations are now actually talking to 
one another about how to manage rivers for their mutual benefit. We are 
very optimistic that common ground can be found in many, if not most 
cases. The wisest of the Reclamation contractors appreciate their 
rights and responsibilities as stewards of vital natural resources, 
just as conservationists appreciate the contributions of water users.
    Congress' goal should be to improve the benefits derived from the 
enormous Federal investment in western water resources. To be satisfied 
with the status quo in a deteriorating and increasingly complicated 
system, is not enough. Congress should only transfer Reclamation 
projects when it leads to human and environmental systems that are 
stronger, healthier and more resilient. We oppose H.R. 4708 and H.R. 
5039 because they do not meet that test.
                                 ______
                                 
July 3, 2002

The Honorable Mike Simpson
1440 Longworth House Office Building
Washington, D.C. 20515

The Honorable Mike Crapo
111 Russell Senate Office Building
Washington D.C. 20510

Re: H.R. 4708--Fremont-Madison Conveyance Act

Dear Congressman Simpson and Senator Crapo:

    The Henry's Fork Foundation (HFF) sends this letter on behalf of 
our approximately 2000 members who are dedicated to protecting the 
Henry's Fork watershed. The HFF mission is to ``understand, protect, 
and restore the unique values of the Henry's Fork River while doing so 
in the context of mutual respect for others that live and work in the 
watershed to ensure solutions are sustainable.'' In the context of both 
protecting the magnificent Henry's Fork fishery and mutual respect for 
others who live and work in the watershed, we submit the following 
comments regarding H.R. 4708.
    As you are undoubtedly aware, the HFF has collaborated on difficult 
resource issues for the past decade with the Fremont-Madison Irrigation 
District (FMID) and other stakeholders in the Henry's Fork watershed. 
We were the only conservation group--local, state, regional, or 
national--willing to sit down and have substantive talks and 
negotiations regarding earlier title transfer legislation involving 
Island Park Reservoir and the various ways to protect the fishery 
resource while still meeting the irrigation community's needs.
    With the collaborative nature of our past involvement in title 
transfer issues in mind, the HFF wants to reiterate once again our 
position regarding the transfer of title of Federal reclamation dams, 
canals, or any other type of irrigation works in the Henry's Fork 
watershed. The HFF believes that any type of title transfer legislation 
should have an environmental component to ensure that the Henry's Fork 
fishery resource is not only protected but also enhanced.
    The HFF also wants to emphasize that we are cognizant of the dry 
year water issues for the irrigation community in the Henry's Fork 
watershed. Recent conversations with Dale Swensen and FMID have helped 
frame these issues. The fact that the irrigation district--based on 
Minidoka Project storage and operations--has only been allocated 62% 
and 42% of Island Park Reservoir storage during the last two drought 
years is illustrative of the need for supplemental irrigation water for 
FMID users. Further, such dry year realities emphasize the nexus 
between water storage rights (i.e., who actually owns the water) in the 
upper Snake River Basin and Federal Bureau of Reclamation (BOR) 
operations during such years. In other words, during a dry year or 
drought cycle reduced stream flows during the winter months are 
inexplicably tied to broader system-wide BOR Minidoka Project 
operations and reservoir carryover, and not FMID rights or operations. 
These are classic dry year dilemmas that occur as foreseeable events 
almost every decade for a 2-3 year period.
    But fishery needs during drought years and cycles mirror those of 
the irrigators. The impact of such low flow years on the fishery 
resource in the Henry's Fork watershed is undeniable. Such impacts have 
been documented by numerous studies funded and carried out by the HFF 
and Idaho Department of Fish and Game (IDFG) highlighting the 
connection between low flows and the loss of spawning and rearing 
habitat, juvenile mortality, year-class strength, the loss of 
macrophyte habitat, and overall stream health. There is also the 
chance--depending on project operations--that Island Park Reservoir 
will reach such low levels that unnaturally high levels of sediment 
will be released downstream. These are enormously significant fishery 
concerns, but there is an economic fall-out as well. An economic study 
funded and completed by the HFF and published in the Intermountain 
Journal of Sciences in 2000 estimated the total annual value of the 
Henry's Fork fishery only between Island Park Dam and Hatchery Ford at 
$5,012,509.
    So with these dry year irrigation and fishery needs in mind, the 
HFF provides the following comments regarding a piece of legislation 
that aims to only provide for one piece of the overall economic well-
being and no mention of the ecological health of the Henry's Fork 
watershed. We have tried to break our concerns with the title transfer 
legislation into two specific categories. First, the HFF has a number 
of specific concerns regarding the current proposals and we have 
outlined those comments below. Second, we have some other policy and 
resource related concerns specific to the portion of the title transfer 
legislation pertaining to the Teton Wells. Finally, the HFF would like 
to reiterate some of the fishery resource needs in the Henry's Fork 
watershed, and advocate that the Idaho congressional delegation take 
the lead in getting a number of diverse stakeholders together to design 
a mutually agreeable and long-term solution to drought year problems in 
the upper basin.
Specific Comments Regarding H.R. 4708
    The ``shall'' language contained in Section 2 leaves the Secretary 
no flexibility regarding the transfer of the Federal assets described 
in the bill based on further environmental or any other type of 
analysis. This establishes bad precedent, doesn't give the Federal 
Government the necessary flexibility to avoid possible impacts to other 
water user contacts or obligations or the environment, and 
predetermines a course of action that may not be in the public 
interest.
    Section 2(a) (``Conveyance of Facilities'') describes the Federal 
facilities to be transferred very specifically as the Cross Cut 
Diversion Dam, the Cross Cut Canal, and the Teton Exchange Wells. 
However, subsection (c) of Section 2 includes broader language 
describing the transfer of all United States rights, title, and 
interest ``in the canals, laterals, drains, and other components of the 
water distribution and drainage system that is operated or maintained'' 
by FMID. Despite the key phrase ``water distribution and drainage 
system,'' the language of subsection 2(c) is unnecessarily broad and 
could be read to include other Federal project works. It is imperative 
to tighten up this language in light of past title transfer proposals 
that have included both Island Park and Grassy Lake Dams. Therefore, 
the HFF proposes that section 2(c) be amended to specifically identify 
included facilities as only those that are appurtenant to or associated 
with the Cross Cut Diversion Dam, Cross Cut Canal, and Teton Exchange 
Wells and operated or maintained by FMID.
    The HFF does not have any specific comments regarding the language 
in Section 4 (Teton Exchange Wells). However, see the section below for 
our comments regarding the extraordinarily important resource issues 
concerns associated with the future use of the Teton Exchange Wells. In 
addition, the FMID has stated both in meetings and in public statements 
that the use of additional wells will be capped at approximately 80,000 
acre/feet to provide supplemental water for its users. However, there 
is no explicit cap of the proposed additional use in the legislation.
    Section 5 of the proposed legislation should be expanded to 
identify specific issues to be assessed and analyzed in the NEPA 
process. Such issues include the possible impacts to existing surface 
and groundwater rights, diminished flows in the Henry's Fork between 
the point where water is diverted to fill the Cross Cut Canal and where 
well discharges would enter the river, and other impacts to temperature 
and other water quality parameters and aquatic habitat in the lower 
Henry's Fork watershed.
The Teton Exchange Wells
    The Teton Exchange Wells and the current and possible future water 
use associated with State of Idaho water permit 22-7022 provide the 
centerpiece for the proposed title transfer legislation. The original 
permit for these wells envisioned 45 wells totaling 670 cfs of water. 
However, to date only five wells have been drilled, providing 
approximately 81 cfs. During last year's drought season, the FMID used 
these wells to provide approximately 26,000 acre/feet of water to their 
users. The HFF concerns regarding the use of the Teton Exchange Water 
echo those of other stakeholders such as IDFG and the Upper Snake River 
Cutthroats Chapter of Trout Unlimited. From our perspective there are 
more questions than answers regarding the transfer of these wells.
    These concerns include regulatory issues pertaining to the 
relationship between the future use of additional wells and the current 
moratorium on new groundwater permits in the Upper Snake River Basin, 
the conjunctive management of surface and groundwater use in the State 
of Idaho, and aquifer recharge. Most importantly from a river health 
standpoint, the use of the additional water could have a deleterious 
effect on the Henry's Fork River. The location of the new wells, the 
amount of water pumped from the existing and new wells, the type and 
location of deliver systems, location of water use, and return flows 
all have implications for fish and wildlife resources. Finally, there 
has been very little substantive talk regarding the use of some of the 
well water as an exchange mechanism to provide water during strategic 
time periods in the Henry's Fork system from Henry's Lake downstream 
and benefit fish and wildlife resources.
The Henry's Fork Fishery
    Perhaps the biggest disappointment regarding the current title 
transfer legislation is that there was no attempt to include broader 
stakeholder representation to develop a global remedy--i.e., a drought 
management plan--to meet not only FMID needs but also those of the 
fishery. Neither the HFF nor the Henry's Fork Watershed Council has 
been part of this process. We have been forced into a corner regarding 
our stance on the current proposal; that is not where we prefer to be. 
The HFF made a commitment years ago to work whenever possible with 
irrigators and others in the watershed to develop innovative solutions 
to difficult natural resource problems. We remain committed to this 
type of approach.
    At the same time, perhaps the most important resource issue for the 
HFF's constituency now and for the foreseeable future will be water. We 
have yet to solidify a long-term drought response plan in the Henry's 
Fork watershed that adequately protects the fishery and aquatic 
resources. This void includes the lack of statutory, regulatory, or 
negotiated mechanisms to guarantee that sediment events are avoided, 
minimum winter flows established, and late-summer water quality effects 
remedied. Therefore, in addition to our consistent approach to 
collaboration in the watershed, the HFF also remains committed to 
finding creative solutions to the aforementioned water and fishery 
issues.
Conclusion
    The HFF would like to request that the current legislative proposal 
be delayed while the various stakeholder groups are convened to see if 
there might be an alternative that meets everyone's needs. The Idaho 
congressional delegation could help sponsor and facilitate talks that 
should include everyone who has a stake in the outcome from Twin Falls 
upstream. The HFF believes it is the ultimate irony that the Federal 
Government spends millions of dollars annually on a hatchery driven 
anadromous salmon and steelhead fishery in the lower river while some 
of the world's greatest wild and native trout fisheries--Idaho 
fisheries--dry up every ten years. The current title transfer approach 
should be broadened to include a more comprehensive fix to drought year 
water issues. We believe that legislation can be developed that meets 
everyone's needs.
    The HFF appreciates the opportunity to comment regarding the 
proposed legislation and the important water use and natural resource 
issues addressed therein. Please don't hesitate to call our office with 
any questions or comments.

Sincerely,

Scott B. Yates
Interim Executive Director
                                 ______
                                 
    Mr. Calvert. Mr. Raybould, why has the district proposed to 
put a cap on the administrative and NEPA costs associated with 
the title transfer for FMID?
    Mr. Raybould. Mr. Chairman, we believe that there needs to 
be some certainty into what those costs will be. I guess I was 
a little surprised when Mr. Keys said he didn't think he could 
do it for $80,000.
    We have already begun the NEPA process and it appears to us 
that it is going to be a relatively uncomplicated NEPA. The 
other work that has been done to date hasn't been too costly. 
We have had to deposit monies with the Bureau to have that work 
performed.
    We believe it can be done for $80,000 or less. If there is 
a cap in the legislation, it probably will be done for $80,000 
or less.
    Mr. Calvert. Well, could you work with the Department to 
see if you can't get that issue resolved prior to our full 
Committee markup which, I hope, is pretty soon? That apparently 
is an issue that we need to deal with.
    Mr. Raybould. Mr. Keys is a reasonable man and so are the 
local people. I am sure that we can come to some kind of 
agreement on that.
    Mr. Calvert. I would appreciate that.
    Mr. Hodges, how are you working with the Department of 
Interior on the issues as far as this legislation is concerned? 
Is it moving along pretty well?
    Mr. Hodges. Mr. Chairman, could you repeat that question?
    Mr. Calvert. On various issues. It seems like $40,000 is a 
number worth mentioning here. You might mention that or any 
other concerns.
    Mr. Hodges. OK. We have had some concerns on some issues.
    Mr. Calvert. Any technical issues or anything like that. We 
can get these resolved very quickly, I hope.
    Mr. Hodges. Yes, but we have already been exposed to the 
dilemma of administrative costs. We have some real concerns 
there. We have recently completed a Safety of Dams Project with 
the Bureau of Reclamation and the construction portion of the 
project was $3.1 million, however the administration cost of 
the project was $4.4 or $4.5 million.
    So, when you have admin costs exceeding construction costs, 
that may raise some concerns with us. That is kind of what is 
fueling our concerns on the administrative cost of the title 
transfer.
    Mr. Calvert. I see. That is quite a number for 
administrative costs. Well, obviously, if there is not a large 
discrepancy in the amounts of money for these NEPA and other 
associated costs, if we can come to the resolution from the 
Committee's perspective where we can get a relatively trouble-
free markup as we move down this road is what all of us would 
like to have.
    Mr. Hodges. I agree. My thoughts concur with Mr. Raybould, 
too. We don't think that the NEPA process and the admin costs 
are going to be as high as what the Bureau is predicting. We 
think we can work it out.
    Mr. Calvert. I appreciate that.
    Mr. Gibbons.
    Mr. Gibbons. Thank you very much, Mr. Chairman.
    Mr. Hodges, again, welcome. You would agree that the 
Pershing County Water Conservation District is willing to pay a 
share of these costs whether it be for administrative costs, 
the NEPA costs, the real estate transfer costs, et cetera.
    Mr. Hodges. Absolutely.
    Mr. Gibbons. And you would agree that you could work with 
the Bureau of Reclamation on resolving their concerns.
    Mr. Hodges. Absolutely.
    Mr. Gibbons. Do you have any suggestions that you would 
make with regard to resolving some of the concerns about 
transfer costs within this bill that we have already presented 
and introduced?
    Mr. Hodges. Well, transfer costs associated with the 
district or transfer costs also associated with the State, 
Congressman?
    Mr. Gibbons. Both.
    Mr. Hodges. The district has always recognized that they 
would pay their fair share. Lander County has always recognized 
and so has Pershing County recognized that they would have to 
pay their costs associated with the project.
    We thought the State was on board with that until about 2 
days before the bill was introduced. What we have been talking 
about and playing with is what if we good a different approach 
to keep this legislation alive?
    What if the water district was to pick up the 
administrative cost, the NEPA cost and some of the fair market 
value cost on the withdrawn lands on certain portions of the 
project just to keep this legislation moving and at any time in 
the future if the State feels that they have the money and they 
want to repay us just for the NEPA and costs associated with 
the title transfer for the lands that they had originally 
wanted, they could repay us back those costs and we would give 
them the lands that were already marked in the legislation.
    Mr. Gibbons. So, we could put in the bill language 
recognizing your agreement with the State or a potential 
agreement with the State to exchange some kind of property for 
value once you have paid it.
    Mr. Hodges. I think we can do that, Congressman.
    Mr. Gibbons. Mr. Malloch, I know that you are from 
Washington, D.C. Have you ever been out to the Humboldt 
Project?
    Mr. Malloch. I actually spent, in a prior life before I 
became a lawyer and a lobbyist, if that's what I am, I was a 
hydrologist. I have spent about 6 months in that part of 
Nevada, more up in the Elko area, but basically, every desert 
valley in Nevada that you can reach by road I've been to, and a 
number that you really shouldn't try to reach.
    Mr. Gibbons. Well, then we share a similarity. I was a 
hydrologist for the Federal Water Master in my prior life 
before becoming a lawyer. I can understand your position on 
this. My concern is, of course, that this project needs to go 
forward and one of the real issues here, of course, is the 
benefit to the public.
    Now, we have got new wetlands that are going to be created 
by the State of Nevada on this transferred or withdrawn land, 
et cetera, which was going to, of course, improve wildlife 
habitat which is a concern of your organization's. I would 
suppose that your agency or your organization supports those 
concepts.
    Mr. Malloch. Well, we absolutely support the concept that 
in the case of a transfer reclamation project there should be 
some real benefit and in this particular case, creation of some 
wetlands protecting it, enhancing the wetlands, is a very real 
public benefit and we appreciate that that is one of the things 
that is the purpose of this project.
    We understand that there are some real concerns that have 
been brought up today about who is going to pay, whether that 
really will happen.
    Mr. Gibbons. Well, those are concerns that you are not a 
party of. The payment is between the Bureau of Reclamation or 
the Federal Government and the beneficiaries of the project who 
have already paid that. I think we have already agreed that we 
are going to pay the fair market value for it.
    Mr. Malloch. I want to make sure that that happens and as I 
understand the state of the negotiations, it's a little bit in 
doubt right now. If that gets resolved, then I'm going to be 
much happier with the bill.
    Mr. Gibbons. OK, because without this bill there will be no 
wildlife habitat restoration, there will be no wetlands, there 
will be no resources conservation areas. In your familiarity 
with that area you understand the importance of that. So, it is 
important that we get your organization to support this bill, 
because without your support or without this bill there will be 
none of the benefits that you sit here and describe to us as 
the reasons why you are here.
    Mr. Malloch. I very much would like to see all of the 
issues get lined up and be in a position where we can support 
the bill publicly and wholeheartedly. That would be a very 
positive outcome.
    I had a very informative conversation with Mr. Hodges 
earlier today and I hope that we can be in that position.
    Mr. Gibbons. Thank you. Thank you, Mr. Chairman.
    Mr. Calvert. Mr. Simpson.
    Mr. Simpson. Thank you, Mr. Chairman. I appreciate you all 
being here today. Thanks, Jeff, for coming out from Idaho. I 
know it is not the best weather in the world to be out here, 
but I appreciate your being here.
    As you heard, some of the comments from Trout Unlimited 
were relative to these transfers ought to be of public benefit 
and also to the irrigation district that is receiving this. Are 
there environmental benefits that are going to occur by this 
transfer to the Fremont-Madison Navigation District?
    Mr. Malloch. Mr. Chairman, Congressman Simpson, there is 
not a specific environmental benefit that I can quantify, but 
we believe that if we manage the system properly in years when 
there is plenty of water, if we come up with a managed recharge 
plan at that time will add water to the aquifer and then draw 
that water back out through these ground water wells during dry 
periods, that it is going to put more water in the river.
    Now, less the small amount of that water that is 
consumptively used by our crops, it is going to provide more 
water in the system. There is a great likelihood that the 
carryover in Island Park Dam will be greater than it otherwise 
would be, so we won't need to impound as much water during the 
storage season and we will be able to have more water for 
winter flows.
    A lot of this, you just have to use some common sense and 
realize that more is better than less, in my opinion.
    Mr. Simpson. I know you have been working on this for quite 
some time, in face, ever since I was first elected 4 years ago, 
this is one of the first issues that we sat down and talked 
about. How long have you been working on it? With what local 
groups have you been working to address this?
    Mr. Malloch. Mr. Chairman, Congressman Simpson, it has been 
a long time. I would have to go back to a calendar and see, but 
I believe it has been about 4 years, maybe not quite that long. 
We have worked within our Henry's Fork Watershed Council. It is 
an organization that we put together in the watershed to deal 
with these issues.
    Within that group, the Henry's Fork Foundation has been the 
primary environmental group that has wanted to sit down and 
have discussions about how we could improve the watershed. The 
bulk of our time has been spent with them. We have also met 
with the greater Yellowstone Coalition, members of Idaho Rivers 
United, and the local Trout Unlimited people, as well as our 
own agricultural groups in the area.
    Mr. Simpson. Thank you. Mr. Malloch, you mentioned one of 
your concerns was the potential of additional wells being 
drilled and so forth. Is that right? Did I get that right?
    Mr. Malloch. It is not so much that that is a concern, FMID 
has stated its intent to develop additional water supplied by 
drilling more wells, if they can. Our question is: What are the 
consequences of additional groundwater pumping on the aquatic 
resource? That is a very real concern and the State of Idaho 
would have to deal with that as well.
    Mr. Simpson. Those are permitted through the State of 
Idaho, though?
    Mr. Malloch. They are.
    Mr. Simpson. Those questions would be addressed when they 
went to seek a permit to drill additional wells; would they 
not?
    Mr. Malloch. The impact on other water users would be 
addressed and we want to make sure that impact on the aquatic 
resources would be adequately addressed as well.
    Mr. Simpson. But the State of Idaho would do that according 
to State law, not this legislation or anything else. I mean you 
could oppose those well permits of whatever at the State level 
should you feel that those impact on other aquatic issues and 
so forth?
    Mr. Malloch. I can, absolutely. I would like to address one 
other thing that Mr. Raybould point out. We think that there is 
a real win-win solution here, too. As he points out, if they 
obtain more water, if they drill more wells, there will be more 
water in the system, a change from ground water to surface 
water, potentially.
    What we want to make sure is that the system is healthier 
as a result, not just that water users get additional water, 
but in fact the ecological system is healthier and from our own 
parochial interests that the fish flows are healthier as well.
    We think that there is a real win-win here, but that we are 
going to have to work through some of the complicated issues 
that Mr. Raybould alluded to.
    Mr. Simpson. I appreciate that and I appreciate your 
pointing out that Henry's Fork is one of the top, premier trout 
streams in the country. It brings a heck of a lot more 
fishermen out there and puts a lot more stress on the river, 
but nevertheless, it is.
    Mr. Malloch. Catch and release, catch and release.
    Mr. Simpson. I didn't get during the first part of your 
testimony, did you submit the Henry's Fork Foundation appendix 
that you had to your testimony as part of the record?
    Mr. Malloch. I believe I did. It is part of the printed 
record.
    Mr. Simpson. Part of the printed record?
    Mr. Malloch. Yes.
    Mr. Simpson. Because there is one part of it that I do have 
to take exception with, well, several of them, but one part 
particularly. It says, ``Perhaps the biggest disappointment 
regarding the current title transfer legislation is that there 
was no attempt to include broader stakeholder representation to 
develop a global remedy, i.e., drought management plan, to meet 
not only FMID, but also those of the fishery.''
    ``Neither the Henry's Fork Foundation or the Henry's Fork 
Watershed Council has been part of this process. We have been 
forced into a corner regarding our stance on the current 
proposal. That is not where we prefer to be.''
    I almost find that--I don't know if ``offensive'' is too 
strong a word or not, but I think it needs to be responded to 
if it is going to be part of the official record because I have 
seen the irrigation district and the meetings that they have 
had with these different organizations and to suggest that they 
haven't been part of the process of developing this 
legislation, I think, is outrageous.
    So, as long as this letter is part of the record, I wanted 
a response to that in the record. So, I appreciate it.
    Mr. Malloch. May I respond briefly?
    Mr. Simpson. Sure.
    Mr. Malloch. The Henry's Fork Foundation and the FMID had a 
very long and intense negotiation over a title transfer that 
was broader than this. It included Island Park Reservoir, 
Grassy Lake and that effort ultimately foundered for a variety 
of reasons. FMID took the least controversial parts of that 
proposal, the cross-cut canal diversion and these Teton wells 
and encapsulated it into the legislation you have here.
    My understanding is that FMID, and I was not, obviously, a 
direct participant, my understanding is that FMID did keep a 
number of entities in Idaho, including the Henry's Fork 
Foundation, apprised of what they were doing, but there was not 
sort of the negotiation and really getting in and wrestling 
with the problems that I think really needs to happen.
    Perhaps Henry's Fork Foundation and Trout Unlimited are 
responsible for not engaging adequately. Perhaps FMID shares 
some responsible as well.
    Mr. Simpson. I appreciate that version of it also. I do 
know that there was controversy relative to the Island Park 
Reservoir, the dam and Grassy Lake Dam and consequently, during 
that time it seemed that all the rest of the legislation, all 
the rest of the bills, seemed to be OK. Nobody had a problem 
with that. But they had two specific problems. That was Grassy 
Lake and Island Park.
    When they dropped that out, then we found problems other 
places that weren't a problem before dropping those out. 
Sometimes this is a process of attrition more than anything 
else.
    Do you have a version on that, Mr. Raybould?
    Mr. Raybould. Well, Mr. Chairman, Mr. Simpson, I would just 
like to say that we did not intentionally keep anyone out of 
this process. Our door was open. Our phone was on the hook. 
They were aware that we were going to proceed with this limited 
transfer.
    Discussions we had with the Executive Director of the 
Henry's Fork Foundation were open and we were very candid with 
him about what our intentions were.
    Mr. Simpson. Well, I appreciate that and let me just say in 
conclusion that there is nobody that cares more about the 
fisheries than Henry's Fork and I do and the irrigators do that 
also fish a heck of a lot and that people all over this country 
do. So, we do want to maintain that and I'm sure that the 
members of the Fremont-Madison Irrigation District feel the 
same way about it.
    I appreciate your testimony today.
    Mr. Calvert. Thank you. Are there any further questions for 
this panel?
    If not, this panel is excused. We thank you for your coming 
out to Washington, D.C. and testifying.
    The Members of the Subcommittee may have some additional 
questions for the witnesses and we will ask for you to response 
to those in writing.
    The hearing record will be help open for these responses 
until July 23, 2002.
    If there is no further business, I thank the Members and 
this hearing is adjourned.
    [Whereupon, at 3:23 p.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

    [A statement submitted for the record on H.R. 4708 by 
Norman M. Semanko, Executive Director and General Counsel, 
Idaho Water Users Association, follows:]

June 21, 2002

Subcommittee on Water and Power
House Committee on Resources
1522 Longworth House Office Building
Washington, DC 20510

Re: H.R. 4708--Fremont-Madison Conveyance Act

Dear Mr. Chairman:

    This letter is provided on behalf of the Idaho Water Users 
Association (IWUA) in support of H.R. 4708, the Fremont-Madison 
Conveyance Act. IWUA represents more than 300 irrigation districts, 
canal companies, water districts, public water suppliers, 
municipalities, hydropower interests, aquaculture companies, agri-
businesses and individuals. We are dedicated to the wise and efficient 
development and use of water resources. IWUA represents over two 
million acres of irrigated land and is affiliated with both the 
National Water Resources Association and the Family Farm Alliance. IWUA 
is proud to count Fremont-Madison Irrigation District among its many 
members.
    IWUA has strongly supported previous title transfer legislation for 
its members, including Burley Irrigation District and Nampa & Meridian 
Irrigation District. Of course, both of these bills were approved by 
Congress and signed by the President. We commend Representative Simpson 
for introducing H.R. 4708 and Representative Otter for cosponsoring the 
bill. We strongly urge your Subcommittee to give the legislation 
favorable consideration.
    IWUA adopted the attached resolution at its Annual Conference in 
January, 2002, expressing support for Fremont-Madison's proposed title 
transfer. We request that this letter of support and IWUA's resolution 
be included in the official hearing record as the Subcommittee 
considers the bill. Thank you.

Sincerely,

NORMAN M. SEMANKO
Executive Director and General Counsel

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