[Senate Hearing 107-253]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 107-253

 CALIFORNIA ECOSYSTEM, WATER SUPPLY, AND WATER QUALITY ENHANCEMENT ACT 
                                OF 2001

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                                 S. 976

    TO PROVIDE AUTHORIZATION AND FUNDING FOR THE ENHANCEMENT OF THE 
 ECOSYSTEMS, WATER SUPPLY, AND WATER QUALITY OF THE STATE OF CALIFORNIA

                               __________

                             JULY 19, 2001


                       Printed for the use of the
               Committee on Energy and Natural Resources

                                _______

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman
DANIEL K. AKAKA, Hawaii              FRANK H. MURKOWSKI, Alaska
BYRON L. DORGAN, North Dakota        PETE V. DOMENICI, New Mexico
BOB GRAHAM, Florida                  DON NICKLES, Oklahoma
RON WYDEN, Oregon                    LARRY E. CRAIG, Idaho
TIM JOHNSON, South Dakota            BEN NIGHTHORSE CAMPBELL, Colorado
MARY L. LANDRIEU, Louisiana          CRAIG THOMAS, Wyoming
EVAN BAYH, Indiana                   RICHARD C. SHELBY, Alabama
DIANNE FEINSTEIN, California         CONRAD BURNS, Montana
CHARLES E. SCHUMER, New York         JON KYL, Arizona
MARIA CANTWELL, Washington           CHUCK HAGEL, Nebraska
THOMAS R. CARPER, Delaware           GORDON SMITH, Oregon

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               Brian P. Malnak, Republican Staff Director
               James P. Beirne, Republican Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                BYRON H. DORGAN, North Dakota, Chairman
BOB GRAHAM, Florida                  GORDON SMITH, Oregon
RON WYDEN, Oregon                    JON KYL, Arizona
TIM JOHNSON, South Dakota            LARRY E. CRAIG, Idaho
DIANNE FEINSTEIN, California         BEN NIGHTHORSE CAMPBELL, Colorado
MARIA CANTWELL, Washington           RICHARD C. SHELBY, Alabama
THOMAS R. CARPER, Delaware           CHUCK HAGEL, Nebraska

  Jeff Bingaman and Frank H. Murkowski are Ex Officio Members of the 
                              Subcommittee

                      Patty Beneke, Senior Counsel
                        Colleen Deegan, Counsel


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Boxer, Hon. Barbara, U.S. Senator from California................    14
Cunneen, Jim, President and CEO, San Jose Silicon Valley Chamber 
  of Commerce, San Jose, CA......................................    59
Davis, Grant, Executive Director, the Bay Institute of San 
  Francisco......................................................    65
Dorgan, Hon. Byron L., U.S. Senator from North Dakota............    35
Feinstein, Hon. Dianne, U.S. Senator from California.............     1
Hall, Stephen K., Executive Director, Association of California 
  Water Agencies.................................................    47
Kyl, Hon. Jon, U.S. Senator from Arizona.........................     4
Miller, Hon. George, U.S. Representative from California.........     5
Moss, Richard M., General Manager, Friant Waters Users Authority, 
  Lindsay, CA....................................................    39
Nichols, Mary D., Secretary for Resources, State of California...    27
Norton, Hon. Gale A., Secretary, Department of the Interior......    20
Pace, Phillip J., Chairman, Metropolitan Water District of 
  Southern California, Los Angeles, CA...........................    62
Somach, Stuart L., Partner, Somach, Simmons and Dunn, Sacramento, 
  CA.............................................................    52
Tauscher, Hon. Ellen O., U.S. Representative from California.....    12
Wright, Patrick, Director, CALFED, Bay-Delta Program, Sacramento, 
  CA.............................................................    36

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    73

                              Appendix II

Additional material submitted for the record.....................    81

 
 CALIFORNIA ECOSYSTEM, WATER SUPPLY, AND WATER QUALITY ENHANCEMENT ACT 
                                OF 2001

                              ----------                              


                        THURSDAY, JULY 19, 2001

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:30 p.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Dianne 
Feinstein presiding.

          OPENING STATEMENT OF HON. DIANNE FEINSTEIN, 
                  U.S. SENATOR FROM CALIFORNIA

    Senator Feinstein. I would like to begin this hearing first 
of all with the announcement that the chairman of the 
subcommittee is Senator Dorgan, and he is at an Appropriations 
markup, which is where I should be too, but first things first.
    I want to welcome everybody and particularly the three 
legislators from California, my friend and colleague, Senator 
Boxer; Congresswoman Ellen Tauscher; and Congressman George 
Miller. And we will be taking your testimony in just a couple 
of minutes.
    I am delighted the Secretary of the Interior is here. 
Welcome, Madam Secretary. And also the head of the Department 
of Resources in the State, Mary Nichols, I am delighted that 
you could come back for this hearing.
    So we will get to you hopefully before too long. But I 
think it is very useful that you are here in this first row and 
listening to this testimony, because as Mark Twain once said, 
``In California, whiskey is for drinking, and water is for 
fighting.'' And it has been that way ever since.
    I have tried to break the cycle of that with this bill that 
is before us. And we tried very hard to find common ground and 
to bring the very disparate set of stakeholders together.
    These are the urban water districts, the agricultural water 
contractors and users, as well as environmentalists that 
obviously have an interest in water.
    I believe that the bill I have introduced represents a good 
compromise. The current version before the committee is the 
result of literally dozens of meeting with stakeholders. And it 
has gone through a number of drafts.
    I would also like to mention that I plan on submitting an 
amendment to my bill at the markup. And I think it improves the 
legislation.
    These amendments are presented after consultation with the 
Governor of the State of California, as well as with my 
colleague, Barbara Boxer, and knowing of Congressman Miller's 
concerns, to try to bring our bill a little closer to where you 
are.
    The first provision that we will amend addresses the 
assurance language that provides a promise that west side's 
agricultural contractors will get some benefit from this 
language. And I think the language we are evolving better 
reflects the record of decision.
    The second provision that we will change involves the 
procedure for instituting an expedited authorization process 
for three storage projects.
    Let me say right up front, this bill essentially 
preauthorizes $1 billion worth of environmental projects. Most 
of them are under $10 million; therefore, they go through.
    The scope and nature of many of them that are authorized 
are really not known at the present time. Nonetheless, we have 
a commitment to move, to restore the environmental ecosystem of 
the California water system and we intend to honor that 
promise.
    The expedited approval process that we are working on and 
the thrust and balance of this bill is that all elements of the 
bill move together, so that it is balanced. And that is because 
of the division among the stakeholders; so that the urban water 
users feel that they are getting substantial advances; the 
environmentalists feel they are getting substantial advances. 
The environmental water account, $50 million a year for four 
years, begins.
    And many of us believe very strongly that what happened in 
the Klamath basin is just a prelude to what is going to happen 
throughout the rest of the State. It may not happen because an 
endangered species shuts off a water flow to 1,500 farmers, but 
it should open our eyes as to the shortage of water.
    Our water system essentially was built when Pat Brown was 
governor and we were 16 million people. We are 34 million 
people and on our way to becoming 50 million people by 2020. We 
must learn from the electricity crisis and get ahead. So I feel 
very strongly that balance and moving concurrently is 
extraordinarily important.
    There are three water storage projects. One is the delta 
wetlands. One is raising Shasta dam. The other is Los Vaqueros 
Reservoir, raising it for water quality reasons. And the 
question is how to move this rapidly without holding up 
everything else. And therefore, what we have come up with is a 
180-day expedited approval process.
    Senator Boxer was concerned that it not be a 
preauthorization. We have accepted that concern. We have tried 
to work around it, but with an expedited procedure, whereby it 
would go through both houses within the 180 days.
    So the bill aims to move the ecosystem restoration, the 
water quality improvements and the water storage improvements 
concurrently.
    And I am delighted that Senator Kyl from Arizona is here, 
because I believe this bill also helps us take pressure off of 
the Colorado River, if we can do it right. And I know that is a 
concern of yours.
    For those of you who are not familiar with California water 
issues, who may or may not be in the audience, CALFED is a 
joint Federal/State program. The State owns one big water 
project. The Federal Government owns and operates a second 
large water project.
    And what we aim to do is bring them together in a concerted 
management under CALFED, where decisions can be made and we 
could move to do those things that we need to do.
    This really began for me in 1993 when a number of 
agricultural leaders and others asked if I could please sit 
down and bring the Secretary of the Interior in and see if we 
cannot get some coordination to keep everybody out of court.
    And Secretary Norton's predecessor was good enough to 
participate. And that was really the beginning of the CALFED 
project, which she, of course, is going to inherit. So it has 
been dozens of meetings with stakeholders, cities, counties.
    I would like to introduce into the record now 59 letters in 
support of this legislation, from agencies all over the State, 
from Humboldt County to San Diego County, including the 
Association of California Water Agencies, Ag-America, the 
Alameda District, the Association of Bay Area Governments, the 
Bay Area Council, Calaveros, California Sod Producers, city of 
Sacramento, city of Milbrae, Contra Costa, Delta Wetlands, East 
Orange County Water District, East Bay Municipal Utility 
District, Humboldt Bay Water District, Kern County, Kings 
County, Long Beach, Metropolitan Water District--the largest in 
the State--the Mojave Water Agency, the North of the River 
Municipal Water District, Orange County, Placer County, 
Riverside County, San Diego County Water Authority, San 
Francisco Bay Area Water Users, San Gabriel Valley Economic 
Partnership, San Jose Silicon Valley Chamber of Commerce, Santa 
Clara and on and on and on.
    And we have tried to keep all of these agencies, in what 
has been a very fluid process, advised as we move along.
    Now, here is what the bill does. It authorizes the CALFED 
program, as agreed to by the State and Federal Government last 
June. The CALFED program is estimated to cost between $8 and 
$12 billion total. This bill authorizes a Federal cost share of 
about $3 billion. It is limited to that over 7 years.
    It authorizes such sums as may be available, but if we were 
to have a number, the clear intent is that the Federal share 
would be about $3 billion.
    The State has already--and I think Ms. Nichols will talk 
about this--moved very aggressively in moving their portion of 
this forward. They passed a bond issue, so we have every reason 
to believe that the State is going to produce its share.
    Approximately $1 billion of the $3 billion is earmarked for 
ecosystem restoration. The Act authorizes projects, as I said, 
that require less than $10 million Federal appropriation, 
providing that these have received environmental review and 
approval as required by State and Federal law, and have a 
finding consistent with a record of decision.
    It also authorizes the environmental water account, which 
provides $50 million annually for 4 years to purchase water to 
enhance fisheries, to protect threatened and endangered species 
and to avoid takings issues.
    And we hope to create conditions where the State's water 
projects can operate reliably. This would provide an additional 
380,000 acre feet per year. Plus during the first year, there 
would be an additional 200,000 acre feet on top of the 300,000.
    The bill would authorize feasibility studies and reports 
for the potential storage projects, particularly the first 
tranche.
    The first tranche are the three I mentioned. The others are 
San Joaquin River Storage, San Louis Reservoir Bypass, the 
Freeport Regional Project, new ground water storage, South of 
Delta blending projects, Bay Area blending exchange projects 
and South Delta conveyance improvements.
    As I mentioned, the expedited review for the three we are 
talking about now, we believe, should provide about 950,000 
acre feet of new storage. That is taking water from the wet 
years and holding it for the dry years.
    The bill authorizes a new ecosystem enhancement program to 
ensure that the environmental objectives of CALFED are carried 
out. It sets up a water supply grant program to ensure that the 
storage and conveyance objectives of CALFED are carried out.
    So that is essentially, in a nutshell, what this bill does. 
And I would like to ask the distinguished Senator from Arizona 
if he has a comment, and then I will proceed to our colleagues.

      STATEMENT OF HON. JON KYL, U.S. SENATOR FROM ARIZONA

    Senator Kyl. Madam Chairman, just a very quick comment to 
compliment you for holding this hearing first of all, and also 
attempting to move this legislation.
    It is going to be very difficult and very complex, of 
course. And I know you appreciate that. But I think the effort 
to try to track as carefully as possible the record of 
decision, to try to get the parties together and to begin the 
process, knowing that it will be difficult is a very important 
one.
    I have a lot of questions that, I think, if we can get good 
answers to will help to move the bill forward, and I want to 
pledge to you that I am going to work very, very closely with 
you.
    Senator Feinstein. Thank you.
    Senator Kyl. My work prior to the time I came to the 
Congress involved a lot of reclamation issues, a lot of water 
issues in the practice of law.
    We have done a lot of these in the State of Arizona. And we 
have a big one coming along, so I have some familiarity with 
the difficulty of moving these projects forward and the 
difficulty of getting everybody together. And therefore, I want 
to help as much as I can to enable you to move forward with a 
bill, which meets as many of the needs as possible. And again, 
I appreciate your holding the hearing.
    Senator Feinstein. Well, I thank you very much, Senator. I 
think you know I have great respect for you. We work easily and 
well on other committee efforts and I really look forward to 
it.
    I hope we can move this bill, because there are some 
appropriations that we need to keep. So moving the bill is 
important. And I look forward to it.
    Now, I would normally go to my colleague, Senator Boxer. Do 
you wish to defer to the Congressman?
    Senator Boxer. Both colleagues, because they have votes 
close to pending, and I think we are okay for awhile, I think.
    Senator Feinstein. All right.
    Senator Boxer. Although this is beeping, so I am not so 
sure.
    Senator Feinstein. Between the two of you, which one--oh, 
see, women always give way.
    [Laughter.]
    Congresswoman Tauscher. Well, he is the senior member.
    Congresswoman Miller. Not the women in our House. I am 
honored.
    [Laughter.]
    Congressman Tauscher. He is not only my senior, he is my 
better.
    Senator Feinstein. Oh.
    [Laughter.]
    Congressman Miller. I am--oh, now, I am dead.
    [Laughter.]
    Senator Feinstein. Keep going, Ellen. You will get his 
support maybe.

               STATEMENT OF HON. GEORGE MILLER, 
              U.S. REPRESENTATIVE FROM CALIFORNIA

    Congressman Miller. Senator Feinstein, let me begin by 
thanking you and the members of the committee for taking this 
time to hear our concerns and to provide this opportunity to 
testify on the CALFED process and on your proposed legislation. 
I deeply appreciate it.
    I think that we are all committed to the very strong 
notion, if not truism, that CALFED is the best opportunity that 
we have had to bring about the kind of changes in the 
California water scene that is necessary, to provide the kind 
of flexibility to future Governors of that State, to address 
the changing California economy, which has undergone dramatic 
changes and, of course, the California growth and population, 
which has changed so many of the outlooks that we have had on 
water in our State over the last couple of decades.
    I have been at this the entire 27 years that I have been in 
the Congress of the United States. I think I was at it a little 
bit before then, when I grew up in a household where many 
weekends a year--it is hard for people today to understand 
that--Clarence Sawyer and James Boswell and the Delta farmers 
and others met in our living room week after week sorting out 
and allocating water in the State of California.
    I am not sure the Delta always won, but the process went 
forward. And we all recognized the complexities.
    You mentioned the Klamath Basin. It is the CALFED process 
and the adherence to it, and the progress that we have made to 
date that has kept this system, the largest water system in the 
Nation, out of the problems and the kinds of dramatic, 
Draconian choices that we have seen made in the basin.
    And I want to applaud Senator Bingaman for his attention to 
this, yours, and members of the committee, and Senator Boxer 
and Congresswoman Tauscher.
    As you mentioned, your legislation is evolving and we 
appreciate the fact that you have kept this in a fluid state, 
so that we could offer comments and you could respond and other 
people could take a look at it, and to see whether we are right 
or wrong.
    And I think major improvements have been made to this 
legislation, the changes that you have suggested. And really 
what I am left with is a number of questions that I think are 
very important in terms of our ultimate success.
    All of us from the West, know that water projects thread a 
very narrow needle in the Congress of the United States. And we 
have got to be together. We cannot be fighting one another.
    We almost have to be unanimous in everything to get it 
through when you talk Western water, because nobody west of the 
Mississippi thinks this is--this pertains to them. Then when 
you talk California water, that old needle gets a little bit 
narrower, and that is the needle that we are trying to thread 
here and I think we are all heading in the same direction.
    I think that when people understand the kinds of diversity 
and parties that were brought together in the CALFED process, 
the fact that stakeholders who had only thrown rocks at one 
another and only sued one another were forced to stay in a room 
and to stay in the process until we came to a near consensus--
not a complete, but a near consensus, I think speaks well of 
our State and what we have tried to do to reformulate the 
California system.
    One of the first questions I have is really the question of 
the South of Delta water assurances. And I understand what you 
are trying to do there, and I understand the importance of that 
with respect to holding CALFED together, that everybody who is 
currently a water user wants to make sure that, in fact, their 
right, their need, their concerns are addressed and have the 
full attention of the process.
    And the ROD spoke to increasing deliveries to these 
contractors to 65 or 70 percent of their current contract 
level, but the ROD does not make that an entitlement. It makes 
that that should be our best effort and that is what we should 
look forward to and we should do that respecting the economies 
that that water supports in terms of our agricultural 
community.
    My concern is really raised on page 15 with subsection 
three, which is one of the three things to be done to proceed 
in carrying out the intent of the Rod. And I say this as a 
question. I do not have a conclusion, and I do not want to 
suggest that my question--I just--I think we need to know 
whether or not this is beyond the allocation that we would 
expect in the first part of the environmental water account. 
And I say that not knowing.
    And to make sure that we are not creating an entitlement 
under that section, so that water has to go out and be 
purchased specifically for that purpose because, as we know, 
the environmental water account has a number of different draws 
on it, given what is going on in our economy and mother nature.
    And I just raise that question. And I do not know the 
answer. And it has been alleged to me in the last 24 hours that 
it does both and neither. So I do not know.
    Senator Feinstein. Can your staff work with ours and see if 
we can get that cleared away?
    Congressman Miller. Sure. I raise the question so that it 
is on the record, and I hope people in the room can help 
provide this.
    My concern is--and I come at this with a bias because the 
area that I represent--I do not want to create a handle which 
then creates litigation, which is then argued that this is 
somehow--this section is a bootstrap to a mandate for water 
beyond what the ROD says we will make our best good faith 
efforts to do. And that is a concern.
    Senator Feinstein. Can you just clear this up quickly? Are 
you talking about line 5, page 15, Environment Water Account 
Priorities and Operation? Is that the section?
    Congressman Miller. Well, I think the problem is we may be 
looking at a different--I am on page 15. I am in section 3, 
line 3.
    ``In the''--I do not want to get into this craziness in a 
hearing, but there are three things that must be done 
implementing that, ``develop environmental water account to 
protect and restore Delta fisheries; provide a foundation for 
regulatory assurances to ensure the water supply and 
reliability for Delta exporters; and three, increase deliveries 
in the manner and the extent prescribed in the record of 
decision South of Delta Valley Water project contracts,'' and 
on. I do not want to turn into a mandate, because that is not 
what the ROD does.
    Senator Feinstein. I understand.
    Congressman Miller. Later on, you say ``nothing in this 
sub-paragraph shall diminish or affect the rights--diminish or 
expand rights.'' And I appreciate that language and it is 
important.
    My concern is that subsection 3, in and of itself on its 
face creates that mandate without regard to contract or Delta 
water accounts. That is to be answered. That is my question. 
And obviously we cannot answer that here today.
    But I think it is one that must be, because it sets up a 
dynamic among water users and rights holders within the State. 
And you have already heard from the Friant people on the 
earlier language and you have heard from the environmental 
community, which have very, very real concerns.
    They come from a different direction, but their concerns 
are quite real. And so I lay that on the table for discussion. 
And, again, noting that you have already made changes in the 
section that I think are very helpful. And so this is to follow 
on to that.
    The other question is and you are struggling here with 
something that all of us as members of Congress, whether 
engaged in water or not--and that is a frustration with the 
legislative process and the timing and the extent it takes to 
get things done. And obviously the needs of CALFED, the needs 
of our State do not know legislative time tables.
    We will or will not have a drought. We will or will not 
have new people move to our State. We will or will not have new 
businesses open and acreage put into agriculture.
    We need these programs and projects to go forward. My 
concern is that as I read the legislation--and I say this not 
in a confrontational fashion, but again in a questioning 
fashion, that the report, the feasibility report will be done 
and then it will be offered. And I think my concern is that the 
question comes about the ability to amend that. That 
feasibility could be released and the Governor of the State 
could not be happy with the outcomes and would seek an 
amendment.
    You could seek an amendment. I could seek an amendment. Our 
opponents in one fashion or another, wherever they come from, 
would seek that. I do not know how you take away from a 
legislative body its ability to raise a point of order or to 
seek an amendment.
    I can understand how we can limit their time of debate, how 
we can schedule it for the floor, how we can say ``It has to be 
out of committee in X numbers of days,'' to expedite that 
process.
    But I do not think that you can tell us on something as 
complicated and as big and as important as California water and 
the projects contained in this legislation that we so 
desperately need that we can become a rubber stamp on that; or 
that the Congress or the Senate--the House or the Senate would 
do that.
    And so we have to keep the amendment process there. I think 
if you can get rid of the filibuster on this bill, if you can 
force the House to discharge the bill and get it to the floor 
and get a vote on it, that is in keeping with all of the rights 
of everybody who is pro or con in this situation. They should 
not be allowed to simply delay the consideration or the up or 
down vote.
    And I say that because I think it is a question of assuring 
success and also making sure that the feasibility study is 
something that we can deal with.
    In my years on the committee as chairman, as chairman of 
the Water Committee and as ranking member of both, I have 
authorized and we have spent billions of dollars coming back 
and making up for mistakes where things were expedited, and 
political power plays were made.
    And I do not think today any longer the Congress is going 
to spend that kind of money to do it. We have got to be able to 
look our colleagues in the eye from the West, from our 
neighboring States, and from those who are not from the West 
and say, ``This is on the level for the taxpayers, for the 
environment, for the good of our economy and our State.''
    And that may take some movement. I do not know that the 
environmental community will be comfortable, and this does not 
say whether they have a right or not to take at face value a 
feasibility report by Secretary Norton.
    Nor would the water users have been comfortable if 
Secretary Babbitt said take it up or down on a feasibility 
report that he would have written.
    That is just the nature of politics, and I do not know that 
we can change that. We should not let people just come in and 
delay and bog the process down.
    We have a House Rules Committee. They make sure that we do 
not get bogged down. I cannot address the Senate, but you know 
which procedures you have to try to expedite in that case.
    And finally I make this point on this one. On a project 
that I have supported, we tried to get Los Vaqueros to be a 
larger dam a number of years ago. We could not find any 
partners. We wanted the Federal Government. We wanted East Bay 
Mud. We wanted other people to participate.
    We went ahead and built it on our own, but that dam, which 
may be one of the most important components of this system in 
terms of management of the system--not a lot of yield on 
water--but in terms of management, certainly in a dry year and 
a critical dry year, that component is subject to a referendum.
    Senator Feinstein. We understand.
    Congressman Miller. And if this process is not on the 
level, I do not think I have to be too graphic to describe to 
people the kind of campaign that we would be engaged in in 
Congresswoman Tauscher's district and my district, in the 
service area and the site of that reservoir.
    That reservoir, when it is expanded, will raise a series of 
issues that go beyond the yield or the storage capacity or the 
quality. It will start to take away habitat. It is in the 
middle of a habitat conservation area now. It is going to take 
away recreational opportunities that will have to be amended.
    And you can understand the kind of dynamics if those of us 
who are elected officials are not able to present that the 
consideration of this went through the regular order, so that 
all of us had a say, had a chance to amend it and move it on. 
Not to delay it, not to filibuster it, but to deal with it, yes 
or no.
    But what we really want is a yes. We want all of this 
CALFED process to go forward. And that is really the two 
questions that I raise.
    And I do not pretend to, again, say what process would work 
in the Senate. But in the House, I think we have some built-in 
protections, because of a Rules Committee, but we can also use 
some time lines in terms of discharge of this report to move it 
on down the legislative process and get it over to you, or get 
yours over--your result over to the House.
    I think those are the two critical points. One is about a 
level playing field among water users. And the other is about a 
level playing field among the greater constituency that is 
concerned for a whole reason and different agendas about what 
goes on in California water.
    But I say this as one who was encouraged in the past, and 
we never really got there with the kinds of studies necessary 
on Shasta, who was a supporter of Los Vaqueros initially, and 
thinks that the expansion makes a lot of sense. I say that 
awaiting the feasibility report.
    But I think it is an important component of the kind of 
flexibility that I have preached about what this system, an 
integrated system, a Federal, State water system ought to be 
able to do to respond to future needs in our State.
    And the third one is the in-Delta thing. I do not know what 
the hell is going on there. But--sorry.
    [Laughter.]
    Congressman Miller. But we will sort that out. Thank you 
very much.
    Senator Feinstein. Oh, thank you.
    Congressman Miller. And I, again, want to say that these 
questions are offered because I think the clarity is important. 
And I think our success of what you are trying to do is 
important.
    We do not want to have a process where we end up with 
people voting it down. We want to end up with a process where 
we go forward in CALFED, because there is a lot of winners in 
this CALFED process.
    And there is a lot of complementary actions, as you have 
noted, that have to be done here. And the beneficiaries 
sometimes are a long ways away from the project, but the 
beneficiaries nevertheless are there in terms of our economy, 
in terms of our municipal systems and all the rest of it.
    You know all that. You do not need to hear that from me. 
But thank you very much, Senator.
    Senator Feinstein. Thank you. Thanks.
    Congressman Miller. And we have a vote, so please let 
Congressman Tauscher----
    Senator Feinstein. Yes. Senator Boxer, do you defer to 
Congresswoman Tauscher?
    Senator Boxer. Absolutely, yes.
    Senator Feinstein. All right. Congresswoman Tauscher, 
please proceed.
    [The prepared statement of Mr. Miller follows:]

     Prepared Statement of Hon. George Miller, U.S. Representative 
                            From California

    Mr. Chairman, Senator Feinstein and members of the subcommittee, I 
appreciate your providing me an opportunity to testify this afternoon 
about proposals to reauthorize the CALFED process.
    Let me begin by stating my belief that the CALFED process remains 
the best opportunity for all Californians to develop and implement a 
water program that meets the diverse future needs of our state. Over 
the years, when various stakeholders would threaten to quit the CALFED 
process, and I have always advised that there is no other way to 
proceed without encountering litigation, obstruction and long delays 
that jeopardize the future of California. So, we are all here with the 
same basic goal.
    As many of you know well, I come to this issue with a very long 
involvement in water policy over the past 26 years ago. As chairman of 
the House Committee on Natural Resources and its Subcommittee on Water 
and Power, or as senior Democrat on that committee for over a decade, I 
know the issues and the players. I know quite a bit about the precision 
that must go into drafting water legislation, and I have a lot of 
experience with people who seize on every vagueness or nuance to file 
lawsuits and delay the implementation of important reforms.
    It is with that extensive background that I speak today not about 
the details of legislation which continues to change. I applaud Senator 
Bingaman, Senator Feinstein, Senator Boxer and others who are 
demonstrating an interest in making modifications to address legitimate 
concerns about CALFED legislation. This legislation is evolving; it has 
changed to reflect many concerns we have raised, and I want to thank 
Senator Feinstein for incorporating changes. Some major questions 
remain, and I want to continue to work with all interested members to 
assure that in its final form, the bill is clear and concise and that 
it reflects the consensus and integrity of the CALFED process.
    I want to speak about principles that must be included in this 
legislation if it is to have credibility and, most importantly, if it 
is to maintain the alliance formed around CALFED and the Record of 
Decision last year. California must get its act together if we expect 
senators and representatives from other states to spend hundreds of 
millions, or billions, of federal dollars in our state.
    What is important is that we work together to minimize the dissent, 
and that we ensure that the legislation we craft serves the best 
interest of California as a whole. And we can do that if we abide by 
certain key principles.
    There has been much discussion over the ``south of Delta water 
assurances'' language in S. 976. The ROD spoke of increasing deliveries 
to these contractors to 65% or 70% of their current contract levels. 
But the ROD did not, and this legislation must not, alter the water 
rights of any party in the state. It does not alter the rights of any 
CVP contractor beyond those contained in an existing contract. It 
creates no right to a fixture contract, or to water or other terms in a 
fixture contract beyond those in existing law. After our experience 
with energy, we certainly need to be sure we don't mandate that water 
be purchased by the state at a high price and re-sold to contractors at 
bargain basement rates. To do any of these would upset the entire CVP 
contracting process, undercut the water flexibility goals of current 
law that serve all current and fixture contractors for water, and 
jeopardize the state's role in establishing water rights.
    I note the concerns raised by over 25 environmental organizations 
to inclusion of such language, and also the warning from Richard Moss, 
General Manager of the Friant Water Users Authority, who recently urged 
deletion of assurances language which creates ``legal fodder for those 
who have a history of using any claimed lack of clarity in federal law 
or contracts to bootstrap themselves to an improved water supply 
position at the expense of other.''
    As the former chairman and ranking member of the authorizing 
committee, I have grave concerns about any procedure that constrains 
debate or the opportunity for full review by the committee or the 
House. We rarely impose such conditions on legislation, and then it is 
typically on matter where there are internationally negotiated 
considerations or careful fiscal balancing like budget resolutions. I 
am skeptical that a water project in California rises to this level.
    But if you decide to include expedited authorization language for 
Shasta, Los Vaqueros, and the in-Delta project, it must be cautiously 
written. The most recent language for S. 976 that I have seen--dated 
July 18, 2001--still raises some serious concerns.
    The pre-authorization process anticipates introduction and 
expeditious consideration of a joint resolution concerning the three 
Stage 1 projects after completion of feasibility studies. But this 
language does not even require that the resolution track the 
feasibility study. And what if more than one resolution is offered; who 
determines which is considered? In the real world of legislation, such 
questions are fundamental since they determine whether you must defend 
or alter pending legislation.
    Once the legislation moves to the floor of the Senate or House, it 
is to be considered under tightly regulated rules. But water projects 
from New Mexico or North Dakota or Colorado don't receive such 
priority. Why California?
    This draft bill shuts out the House Rules Committee, cuts off the 
Parliamentarians, and infringes on the authority of other committees 
which could not raise points of order against germaneness even if their 
jurisdiction is impacted. Such a resolution in the House could waive 
the Budget Act and allow no point of order? Repeal the Endangered 
Species Act? Waive the Clean Water Act? Appropriate funds? I do not 
think that is realistic.
    While the intent is to expedite projects through this provision, it 
has been my experience that such efforts more frequently make projects 
more, not less, controversial. As chairman of the committee and 
subcommittee, we had to go back and reformulate the Central Arizona 
Project, the Central Utah Project, the Salton Sea recovery plan, the 
Garrison Project, and of course, the Central Valley Project itself. 
Each was facing bankruptcy, litigation, environmental crisis or 
political stalemate--sometimes all of them--because someone thought 
they could bend the system and fast track the project. Let's not slip a 
poison bill into this bill that inadvertently causes delays we all want 
to avoid.
    More important than my personal opposition is the all-but-certain 
response of skeptical local voters. Such a belief would doubtless raise 
strong opposition to an expanded Los Vaqueros project among Contra 
Costa County voters, who, as I have noted, must vote for any 
modification of the existing facility. Without such a local vote in 
favor of an expanded Los Vaqueros, a major storage feature favored by 
CALFED would be lost.
    I agree that we need to implement CALFED and promote water savings 
and efficiency, develop new supplies, and employ technology to expand 
our water supplies. Towards that end, I have recently introduced H.R. 
2404, ``The California Water Quality and Reliability Act of 2001'' 
which expedites feasibility studies and promotes groundwater storage 
and management and recycling--a plan that I believe can generate 
reliable water supplies, at lower cost and in a shorter time frame than 
other proposals.
    The key for success for this legislation is that Californians work 
together, realistically and cooperatively, to move CALFED down the 
road. We are making progress; we are in better shape today than we were 
a week ago.
    We can have a CALFED that promotes reasonable new water supplies, 
protects the environment, and respects taxpayers while also assuring 
the continued flexibility of the California water program so that we 
are able to meet the changing demands of a growing state. I look 
forward to working with members of the delegation and the Congress to 
assure that we pass that kind of CALFED legislation this year.

             STATEMENT OF HON. ELLEN O. TAUSCHER, 
              U.S. REPRESENTATIVE FROM CALIFORNIA

    Congresswoman Tauscher. Thank you, Senator, for chairing 
this meeting. And I want to thank Chairman Dorgan, and ranking 
member Smith and Mr. Kyl and Mr. Burns for attending. And I 
especially want to thank Senator Kyl for his offer of 
bipartisan support for, what I think, is going to be very 
important for California.
    We have a very important series of votes on the floor. We 
have just been called for them, so my statement is available.
    I just want to say very quickly that I want to thank you, 
Senator, for your leadership. I especially want to thank my 
colleague, Mr. Miller, my neighbor just to the north of me, for 
his decades-long leadership, and Senator Boxer for her support.
    I also want to thank Chairman Calvert for making this 
process open and receptive for members with differing 
perspectives on how this program should go forward.
    I think it is very, very vital that we reauthorize CALFED. 
And I think that we have to do it this year and in this 
Congress. And it is very important that we do it in a way that 
is reflective of the kinds of balance between supply and 
quality and ecosystem restoration that I think is embedded in 
your bill.
    And I really want to thank you for keeping such an open 
mind and bringing so many people together and of constantly 
moving to improve this bill, which I think goes a long way to 
making sure that we can deal with the kind of growth that we 
are going to have in California over the next 30 or 40 years, 
at the same time that we take care of the values that we all 
care about, improving our fisheries, making sure that we deal 
with threatened and endangered species, and obviously dealing 
with the fact that we have got some of the best farm land in 
the country.
    I represent, as does Mr. Miller, some of the urban users 
and obviously the Delta is in our backyard--his front yard, my 
back yard.
    Obviously, we are very, very committed to making sure that 
we have that ecosystem protected and restored. It is in 
desperate shape. It is the largest estuary in the West, and it 
is something that I think makes the Bay area what it is.
    And obviously we are very much interested in making sure 
that the ROD that so many people spent so many years working 
on----
    Senator Feinstein. Let me just stop you, because I hate 
acronyms back here. Washington functions--for those of you who 
do not know, the ROD is record of decision.
    Congresswoman Tauscher. Record of decision.
    Senator Feinstein. Sorry. Go ahead.
    Congresswoman Tauscher. And that record of decision was 
hard fought for many years, with many, many people working very 
hard, biting their tongues, staying at the table. And I want to 
thank you and others for their leadership in making sure that 
we had an ROD.
    But now that we have one, I believe that S. 976 is 
comprehensive and goes a long way to turning the goals of the 
ROD into realities for California. And I think that it is 
important that we continue this process, that we continue to 
move forward.
    On the assurances issue, the two pieces, I guess, that I 
really just want to talk about very quickly were on the issue 
of assurances. I want to be on the record for saying: For those 
users south of the Delta, I am glad that the new version of S. 
976 moves away from guaranteeing water deliveries.
    On the issue of this pre-authorization, I know that you 
have been working hard with Governor Davis and others on 
language that would be expediting and that would improve the 
opportunity for us to keep these fragile coalitions together.
    I think that this is very tough work and your diligence, I 
think, will pay off. But I am here essentially to represent the 
fact that we have, I think, many people that want to work 
together.
    I really appreciate what my colleagues have done. I am 
trying the best I can to make sure that we have, working with 
Mr. Calvert, the opportunity to get something done this year. I 
think if we do not do it this year, we are going to deeply 
regret it. And that will only accrue negatively to California 
and our opportunities in the future.
    So I want to catch this vote.
    Senator Feinstein. Thank you very much.
    Congresswoman Tauscher. I appreciate that.
    [The prepared statement of Congresswoman Tauscher follows:]

   Prepared Statement of Hon. Ellen O. Tauscher, U.S. Representative 
                            From California

    Thank you, Madame Chair, Chairman Dorgan, Ranking Member Smith and 
Members of the Subcommittee. I appreciate the opportunity to appear 
before you this afternoon and provide testimony on S. 967, the 
California Ecosystem, Water Supply, and Water Quality Enhancement Act 
of 2001. A bill with a big name and an equally big responsibility.
    I want to thank you, Senator Feinstein, for your leadership and 
foresight in crafting this bill to reauthorize the CALFED program and 
ensure California will be able to meet its growing water needs. I also 
want to thank my colleagues from California, Senator Boxer and 
Congressman Miller for their hard work on CALFED reauthorization. I 
would also like to commend Chairman Calvert for being open and 
receptive to Members' with differing perspectives on how to move this 
program forward.
    This week, this Committee and both Chambers of Congress are busy 
debating legislation to address our nation's energy needs. This is 
obviously of great importance to California and my constituents who 
have endured rolling blackouts and high energy costs in recent months. 
Given this Committee's busy schedule, I am thankful that it has made 
time to consider legislation to address California's water needs.
    As California continues to grow, its water needs grow with it. I 
believe that if we reauthorize the CALFED program this year, and are 
balanced and forward-thinking about our planning, we can avoid making 
water California's next crisis. The California Bay-Delta is one of our 
nation's largest estuaries and it is the largest estuary on the West 
Coast. It supplies drinking water for 22 million Californians, sustains 
a multitude of fisheries, including several threatened and endangered 
species, and irrigates seven million acres of the world's most 
productive farmland.
    The CALFED program consists of 18 state and federal agencies who 
work with urban, agricultural, and environmental stakeholders to manage 
this precious resource. As you know, Madame Chair, California water 
wars are something they make movies about back home. Managing this 
complex system is no easy task, and the smart men and women who labored 
over the last six years to develop this Record of Decision deserve to 
be commended. Given the mounting pressures on the Bay Delta, the goals 
identified in the ROD are balanced and timely.
    The ROD states and I quote, ``With the State's population expected 
to grow from thirty-four million today to fifty-nine million in 2040, 
the need to conserve, to build our capacity, and to manage our water 
system more efficiently is no longer just a goal, it is a reality.''
    I believe that S. 967 is comprehensive and goes a long way in 
turning the goals of the ROD into realities for California. I am glad 
that Senator Feinstein has made some changes to her original bill that 
reflects some of the concerns raised by Governor Davis and the 
environmental community. I understand that the new version moves away 
from ``Preauthorization'' of construction projects to more of an 
expedited review process. I agree with Senator Feinstein that these 
projects need to be moved forward in order to meet the timelines 
established in the ROD.
    I also believe that Congress must have adequate oversight over the 
environmental and economic reviews that these storage projects require. 
On the issue of ``Assurances'' for users South of the Delta, I am glad 
that the new version of S. 967 moves away from guaranteeing water 
deliveries. However, I am still concerned that during dry years, this 
section could adversely impact the health of the Delta and my 
constituents' water quality, as well as invite more litigation.
    I recognize that the agricultural community has legitimate water 
needs, and I believe that the language in the Record of Decision 
outlines the objectives to realistically move toward meeting those 
needs. As a Member representing a growing suburban district with the 
Bay-Delta in my backyard, I am committed to working to reauthorize 
CALFED this year. The Record of Decision identifies three potential 
storage sites, two of which are located in my District. Los Vaqueros, 
which offers potential water quality benefits through storage and 
blending; and the Delta Wetlands Project, or In-Delta Storage, which is 
an innovative storage project with multiple potential benefits. I am 
hopeful that the feasibility studies on these two projects can be 
completed expeditiously.
    I am also glad that S. 967 contains language that would authorize a 
feasibility study of the Freeport Regional Project, which is a joint 
effort between Sacramento and East Bay Municipal Utility District to 
provide a supplemental supply for both regions. The project is 
identified in the ROD as a ``complementary action'' and would be an 
alternate source of supply for families and businesses during a 
drought.
    As I mentioned before, the ROD contains many laudable goals, that 
if executed in a balanced and timely way, will restore the Bay-Delta's 
ecosystem, enhance water quality and improve water supply reliability 
for California businesses and farms. I applaud Senator Feinstein for 
her diligence in moving this authorization bill forward. I recognize 
that there are competing bills and amendments within our own 
delegation. I believe that these diverse perspectives will foster a 
healthy debate. And I am hopeful, that in the end, we'll be able to 
reach agreement to reauthorize this vital program this year. The health 
of the Bay-Delta ecosystem and our state's economy are depending on it.
    Thank you.

    Senator Feinstein. Thank you both very much. We really 
appreciate your taking the time to come over here.
    Congressman Miller. Thank you. We obviously want to work 
with you. If we can answer any questions----
    Senator Burns. We will both save the Nation.
    Congressman Miller. Do what?
    Senator Burns. We will both save the Nation.
    Congressman Miller. We do it every day, every day.
    [Laughter.]
    Senator Feinstein. Moving right along, Senator Boxer.
    Senator Boxer. Thank you so much.
    Senator Feinstein. We would be happy to have your 
statement.

         STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR 
                        FROM CALIFORNIA

    Senator Boxer. Thank you so much, Senator Feinstein and 
members of the committee.
    As Congressman Miller and Congresswoman Tauscher leave, I 
want to say what a pleasure it is to work, particularly with 
Congressman Miller, as the senior member of the Resources 
Committee. And he has been a great advisor to me, all the way 
back in my days in the House when we were trying to get this 
issue resolved, way back in the 1980's. He was the leader. And 
I think it is great that we are all working together.
    I want to start by thanking you, Senator Feinstein, for 
your leadership on this committee to develop a bill that will 
meet our needs. You and I and our staffs have worked closely 
together on this effort, and I hope we could continue to do 
that, as your bill is still a work in progress. And I think we 
need to work closely together.
    Yesterday, on the floor of the Senate, we teamed up and we 
saved the funding you had worked so hard to get in the 
Appropriations Committee for CALFED. And I think that it is 
important that we continue to work together on this.
    As you have stated eloquently: In California, as in many 
parts of the West, water is our life blood. And we all know 
there are many important interests competing for this scarce 
resource.
    For decades, those interests have been fighting. Water 
allocation was conducted through endless appeals and lawsuits, 
something we want to avoid, divisive ballot initiatives, which 
we want to avoid.
    These battles were painful. As a matter of fact, one of my 
very, very first forays into politics, when I was quite a bit 
younger in my home county, was over a water ballot initiative. 
We know that those debates and those fights prevented us from 
resolving our State's very real water problems.
    In 1994, a new State/Federal partnership called CALFED did 
promise a better way through a plan to provide reliable clean 
water to farms and businesses and millions of Californians, 
while at the same time restoring our fish, wildlife and 
environment. CALFED was and is committed to identifying a 
solution that all water users could share.
    I think this consensus approach is crucial, as I know you 
do. I must say that I do worry that so far we do not have a 
bill before us that reaches that consensus. Although it has 
tremendous support, it also has some opposition.
    And I would ask unanimous consent to enter in the record 
along with the support of your bill, 33 groups that have 
expressed deep concerns of opposition and support for my 
amendments.
    Some of those groups--I will just name a few--Save The Bay; 
Sierra Club; League of Conservation Voters; California League 
of Conservation Voters; Natural Resources Defense Council; 
American Rivers; Trout Unlimited; Pacific Coast Federation of 
Fishermen; League of Women Voters of California; Clean Water 
Action. And I could go on, but in the interest of time, I will 
just add California Sports Fishing Protection Alliance; 
Sacramento River Preservation. But there are a number of other 
groups.
    However, I think we can work together and bring everyone on 
board. And that is what my goal really is.
    What I would like to do today is first say that there is 
much in the bill that I really, really like. As we have worked 
together and you have taken many of my suggestions--not all, 
but some. And I appreciate that very much.
    But because we have a time constraint, know that I support 
a lot of the bill. I am just going to focus on a couple of 
areas with which I have a disagreement and hope that as we move 
together, we can perhaps be able to agree.
    So let me say that the two amendments that I actually did 
submit, I believe still are necessary. I have seen the latest 
version of your bill late last night. So my comments are 
directed to that version, knowing that you are still going to 
work on it.
    I think a lot of what I say mirrors Congressman Miller, but 
I will not say it in exactly the same way, and I will not be as 
colorful, but I will just get to where I think he is right.
    Well, the first concern is a provision that many do believe 
would confer a special guarantee of water rights to one water 
district. And Congressman Miller said he was not sure that it 
did.
    Attorneys that have spoken to me from the Natural Resources 
Defense Council and others say that even in the new version, 
you could say that the South of Deltas water users are getting 
special rights.
    I appreciate the fact that you took some of the language I 
had in the preamble of the legislation. That is where I think 
this ought to go, the mention of this west lands issue should 
go in the preamble.
    I think--we have discussed that. We have a disagreement. I 
think if it went there, it would be fine. It would clear this 
matter up, but this is your choice.
    I think at best that because it is in the main body of the 
law it creates ambiguity and I worry also, as George Miller 
does, that it would present a toehold for litigation.
    I believe the bill's water supply assurance language should 
be eliminated entirely or, in the amendment as I introduced, 
move it to the findings and it could be in no way interpreted 
to confer special rights.
    We have some letters that support that approach, which I 
ask unanimous consent to place in the record at this time.
    Senator Feinstein. Those letters will be entered in the 
record.
    Senator Boxer. Thank you.
    Senator Feinstein. Thank you.
    Senator Boxer. Thank you very, very much. The second issue 
is very near and dear to my heart. We have talked about it a 
lot, and staff to staff have talked about it a lot. And it 
involves the method of authorizing the three water storage 
projects, which may turn out to be just uncontroversial and 
breeze right through.
    I am pleased that the version of S. 976 that I saw 
yesterday does not authorize these projects prior to the 
completion of feasibility studies as the original bill did, so 
thank you for making that change.
    However, the new version of the bill expedites approval of 
these projects in a way that eliminates any Senator's right to 
modify or improve them, as Congressman Miller said. It also 
fails to require a hearing of this committee or even a vote of 
this committee. I would feel very strongly that at least a 
hearing in this committee would be very, very important.
    Did you respond to that point?
    Senator Feinstein. I believe the latest draft provides for 
a vote both in the committees and on the floor.
    Senator Boxer. Okay. Because the one we saw did not require 
a vote in the committee. It just said the committee had so many 
days to consider it.
    Senator Feinstein. Yes, we are happy to clarify that.
    Senator Boxer. And then if there is----
    Senator Feinstein. The intent is to have a vote.
    Senator Boxer. Excellent. That would be great. Excellent.
    Senator Feinstein. Yes.
    Senator Boxer. I think that is a big help because if there 
is a hearing or a meeting, then at least we can take a look at 
these projects. That would be a tremendous step forward.
    On the question of amending on the floor of the Senate, I 
want to tell you why I feel so strongly about this. As a member 
of the House in 1992, I was able to amend the Corps of 
Engineers' report--I just want to make this point, because it 
is so personal to me.
    I was able to amend the Corps of Engineers' report that 
recommended Auburn Dam--this was in 1992--so that instead, it 
authorized better flood control operation at Folsum, so that we 
were able to amend it and move it and change it.
    Under the latest draft of the bill that I saw, I would be 
unable to do that. You would not be able to do that. No member 
would be able to change it. And I think that a take-it-or-
leave-it package from Secretary Norton now, or whoever in the 
future years after we are long gone might be, I think that is 
not a good thing for Senators to give up their right.
    You have that normal, if you will, right to offer 
amendments, review and change. As a matter of fact I would go 
further. I think it would set a dangerous precedent that could 
be applied to environmentally harmful or, say, budget busting 
projects around the country. So I really like the idea of 
keeping our ability to amend, and I think that is important.
    My colleagues, I do happen to believe that normal 
congressional process works. For example, since 1996, 21 
California water projects have been authorized in the Water 
Resources Development Act through the normal congressional 
process, and I ask consent to place the names of these projects 
into the record.
    Senator Feinstein. Without objection.
    Senator Boxer. Thank you, Senator.
    I think the same could be done for these projects. I do not 
fear getting these projects authorized. I think these are going 
to be good. I think we team up. We go to Senator Bingaman, 
Senator Kyl, Senator Burns. I think we could do it, without 
short-circuiting the normal process.
    I ask unanimous consent to place in the record a number of 
letters that deal with this issue and also an editorial that 
appeared today in the Sacramento Bee.
    Senator Feinstein. Without objection.
    Senator Boxer. And I would say that one of these is from 
Taxpayers for Common Sense, which supports my amendment on 
this. And I think it lays out why they do not think we should 
short circuit the process.
    And the Sacramento Bee says, ``Tipping the scales now would 
be wrong. Each reservoir project deserves to be judged on the 
merits, how much it costs; how much water it provides; how much 
flexibility it gives the managers of the State's interconnected 
plumbing system; how it affects the environment; and who pays 
for it. The projects under study by CALFED are worthy of 
exploration, but it is inappropriate to judge them before all 
the facts are in.''
    So I think that if we take the normal process, then I agree 
with George Miller, selling these projects to all of these 
groups that are concerned, to our constituencies that may have 
to vote to them are important. The last point I would make, 
Madam Chair, in the last version we saw--and we have discussed 
this with your staff; they say it was a mistake--but I just 
want to put it on the record to make sure. It appears as if all 
the projects in phase one of the record of decision would be 
automatically authorized. In your original version, you said 
only those under $10 million. Now, that is gone. So except for 
these projects----
    Senator Feinstein. The mistake was leg counsel left off the 
$10 million.
    Senator Boxer. Okay. Okay. Then I am greatly relieved.
    Senator Feinstein. The $10 million is in there, which is 
really the bulk of the environmental projects which 
interestingly enough are all preauthorized.
    Senator Boxer. Yes. Well, we----
    Senator Feinstein. Without having to look at them or 
evaluate them.
    Senator Boxer. Well, if I just might say if you look at the 
history of our State, as you well know, it is the dam projects 
that--and I say that not as a curse word.
    [Laughter.]
    Senator Boxer. It is these supply projects that people do 
have more concern about.
    Well, I think, Madam Chair, I hope we can come together. I 
mean, I say that from the bottom of my heart. We have many 
options. We can work together on this bill, which I hope we 
will and because I think it is an omnibus bill, which I think 
is good.
    And if we can agree, we will resolve many issues; or we can 
do something in--we can take a very simple non-controversial 
reauthorization bill, if we have to.
    Senator Feinstein. But we----
    Senator Boxer. But I prefer to have our problems worked 
out. Did you want to----
    Senator Feinstein. No. I was just going to respond. See, I 
tried very hard with all of the groups for years to get 
consensus.
    Senator Boxer. Yes.
    Senator Feinstein. And I am of the view, very staunchly, 
that we cannot solve our water problems without additional 
storage. Now, Congressman Miller called it a dam. I do not call 
it a dam.
    Senator Boxer. Yes.
    Senator Feinstein. I call it a reservoir. I believe very 
firmly that we have to be able to take water from the wet 
years, recharge our aquifers, store it, keep it for the dry 
years.
    Now, I am aware of the fact after all of this that there is 
going to be objection no matter what, Madam Secretary, to any 
storage project. Now, it is not only dams; it is storage 
projects; that some people think this is a way to control 
population.
    I do not agree with that. I do not think you can control 
population. I mean, we are going to be 50 million people in 20 
years. I say: Let us get our State ready to be able to handle--
handle the problems that are--that are coming with increase in 
population, increase in high-tech, which takes high quality 
water, providing waters for farmers, which certainly it is the 
biggest ag State in the Nation. And we cannot do it without 
storage.
    That is where I am. I campaigned on it. I won a campaign on 
it. I am going to keep my word to the people, and I am going to 
fight this thing out.
    If we can agree on an expedited approval, I do not have a 
problem with that, as long as we move both elements of this 
whole thing together. But I am not going to find that we put $1 
billion into one thing, and the area that would give us the 
ability to go through those dry years is not touched.
    Senator Boxer. Well, I do not disagree with anything you 
said.
    Senator Feinstein. That is kind of where I am.
    Senator Boxer. I would just say I am a little more--I feel 
a little more hopeful, because I think that the CALFED process 
did bring people together. And the record of decision does try 
to deal with both the supply of the water, the new projects, 
plus environmental restoration, water for the farmers, for the 
urban. I think all that--I feel more positive about that now.
    We both ran winning campaigns. One of my platforms was 
keeping all the people together. I mean, that is what I want to 
do. I want to keep this consensus together.
    I firmly believe that the amendments I have brought to 
you--this is my belief, and you do not have to agree, and we 
will discuss it, but I think that those amendments would, in 
fact, bring more consensus, because I think by skirting the 
normal process, which is a huge decision for this committee to 
make if they want to do a special process, I think it creates 
some problems out there with a lot of people who are business 
people in the fisheries industry and elsewhere.
    So let me close this way: I could not agree more that we 
have to increase water for the entire State. And you know, the 
CALFED does not even deal with the entire State, per se. And I 
am working with Representative Farr on a bill called CalAqua 
that will provide hundreds of thousands of acre feet--actually 
more acre feet than these three projects, not as much so far in 
our bill as the entire authorization would eventually bring, 
but that would bring these hundreds of thousands of acre feet 
through methods such as ground water, recharged water 
efficiency, water recycling that we are--Sam Farr and I are 
very excited about working on. And I am very anxious to show 
you the bill when it is ready for introduction.
    I want to thank you for this opportunity to testify. You 
and I have great respect for each other. And we do not always 
agree on every little thing, but we agree on the end goal.
    This is an issue. You and I talked, and we said we have a 
crisis in California with electricity. We do not want a crisis 
with water.
    You do not want it. I do not want it. And I am looking at a 
way to make sure we can get projects built and not have 
lawsuits and not have delaying tactics, and not have our 
colleagues worry about new precedents for California that we do 
not have elsewhere.
    I am glad that your bill is still open to new ideas and we 
will stay close to it, and work with you.
    And, again, I thank you for your leadership on this 
committee.
    Senator Feinstein. Thank you. Thank you very much.
    Senator Boxer. All right.
    Senator Feinstein. I appreciate it. Thank you.
    Do you have any questions, Senator, or we will move onto 
the next panel. Thank you very much, Senator Boxer.
    Senator Boxer. Thank you, Senator.
    Senator Feinstein. All right. Thank you.
    [Pause.]
    Senator Feinstein. Secretary Norton and Secretary Nichols, 
if you would come forward please.
    [Pause.]
    Senator Feinstein. Madam Secretary, I would just like to 
welcome you, and I really thank you so much for sitting through 
the prior testimony. I really think it is important that you 
heard all aspects of this.
    And I want to thank you also for putting that $20 million 
again into the budget. We really appreciate the support of the 
administration on this. And so if we may, we will begin with 
you and then go to Secretary Nichols.

         STATEMENT OF HON. GALE A. NORTON, SECRETARY, 
                   DEPARTMENT OF THE INTERIOR

    Secretary Norton. All right. Thank you very much, Madam 
Chairman. I certainly do appreciate the opportunity to hear 
today's discussions so far and to provide the Department's 
comments on S. 976.
    I ask permission to submit my full remarks for the record 
and to summarize the Department's position here.
    Senator Feinstein. So ordered.
    Secretary Norton. S. 976 would authorize funding through 
the Department of the Interior as well as governance and 
management authorities for the implementation of the CALFED 
Bay-Delta program, a comprehensive, balanced and timely water 
management and environmental restoration program.
    The Bay-Delta is an area of critical environmental 
importance as well as the hub of the State's water supply 
system, providing drinking water for more than 22 million 
Californians, important habitat for over 750 plant and animal 
species, irrigation water for most of the State's $27 billion 
agricultural sector, and provides water that is essential to 
the manufacturing and commercial sectors of the State.
    The administration supports CALFED's goals of increasing 
water yield, protecting the environment, improving water system 
and supply reliability, water quality, and providing watershed 
management, water transfers and levee protection.
    As this committee can well appreciate, our new 
administration faced a substantial number of major resources 
issues of high priority. In the area of water, virtually every 
Western State has issues of concern and controversy demanding 
our attention.
    We just had two new officials, who took office this week, 
the day before yesterday. And that is the Assistant Secretary 
for Water and Science, Bennett Raley, and the Commissioner of 
the Bureau of Reclamation, John Keys. And they, of course, will 
be playing a very key role in the decisions that are made here.
    In addition, the White House yesterday announced two 
additional officials who will be involved when they are 
confirmed. And that is Craig Manson for Assistant Secretary for 
Fish, Wildlife and Parks, who is from California; as well as 
Steve Williams for Director of the Fish and Wildlife Service. 
In summary, we have two who have not yet been confirmed; and 
two who are brand new to their positions.
    The new ones have already offered great insights to us in 
their couple of days on the job. And we look forward to their 
insight, as we study the projects further.
    On the Columbia River, the Colorado River and in the 
Central Valley of California, among others, we are beginning 
our examination of multi-year, multi-million dollar planning 
and negotiating efforts.
    On all of the matters before us, one conclusion is 
universally applicable: We will continue to work towards 
solutions, and we will make decisions that reflect the 
President's commitment to the balanced and sensible resolution 
of resource issues affecting our Nation.
    Before I get into the specifics of the Department's 
position on CALFED, let me describe my own perspective on water 
issues. As attorney general for the State of Colorado, I came 
to understand that water issues need to be planned decades into 
the future and not just a few years.
    Well, California is obviously a fast growing State, as you 
mentioned in your remarks. Its population continues to expand 
rapidly, especially in water scarce areas like southern 
California. With more people comes the demand for more water.
    That is why I was pleased when I first talked with you, 
Senator Feinstein, about CALFED, to learn about your effort to 
grapple with California's long-term agricultural, municipal and 
environmental water needs. I greatly respect your leadership on 
this subject. And I am very pleased by the process that has 
brought together so many people to discuss these issues.
    More recently, my Department has experienced the problems 
that arise when there is insufficient water to meet all needs. 
In the Klamath Basin of Oregon and California, we have seen the 
tragic effect on farm families when there is not enough water 
for both agricultural and environment water needs. We are 
working now to find solutions for the future of the Klamath 
area.
    Throughout the West, we need to plan ahead to balance the 
competing demands for water. Through long-term planning, it is 
possible to create mechanisms that allow better, more fine-
tuned water management. This allows scarce water resources to 
be stretched to meet the needs of fish, wildlife, natural 
ecosystems, agriculture and people.
    I was pleased to hear that CALFED brought all of the 
affected interests to the table to hammer out compromises. This 
is clearly the process that we must pursue in order to balance 
water use and storage, with water for ecosystem maintenance.
    As part of my first trip to California as Secretary, I was 
pleased to have the opportunity to fly over the Central Valley 
and to look closely at the many projects that are a part of the 
California water system, and to see how interconnected those 
things are. This is a very important issue, and I really wanted 
to learn more about it.
    The Department of the Interior supports the comprehensive 
and integrated nature of the proposed actions and the 
commitment to a credible science program to support the CALFED 
decision making process. The manner in which Federal and State 
administrations have worked is a model for solutions to 
resource management problems.
    Clearly, significant progress has been made in the 
dedication of State and Federal monies for ecosystem 
improvements in the Sacramento, San Joaquin Delta and the San 
Francisco Bay.
    On the Federal side, Congress has already appropriated 
nearly $500 million for CALFED-related efforts, California 
Central Valley Improvement Act efforts, and CALFED-type 
initiatives.
    Obviously, outstanding issues still need resolution. And we 
are committed to finding those solutions with this committee, 
with Congress, with Governor Davis, and with the affected 
stakeholders.
    S. 976 is an important step forward. We support the 
purposes and many of the provisions of the bill. However, we 
still have a number of concerns with the bill as written, and 
we believe some modifications are needed.
    We must fulfill our obligation to taxpayers and scrutinize 
plans to make sure they are cost-effective. And we wish to 
stress the importance of several of the measures and to work 
with you on making appropriate changes.
    The history of the settlement of California and the ensuing 
development of its water resources is full of political and 
legal battles. Although agreement on water management may not 
be immediate, the CALFED program is a step in reaching a common 
vision.
    CALFED represents a new approach to an old problem. By 
combining the interests of State and Federal agencies with 
rural regulatory--with regulatory power over the Bay-Delta with 
those of urban, environmental and agricultural users, the 
CALFED program is moving California toward more equitable and 
efficient water and ecosystem management.
    Continued implementation of CALFED offers the opportunity 
for a long-term solution to the critical problems confronting 
the Bay-Delta. The Department is aware of the importance of 
meeting its environmental commitments and the importance to 
water users of adequate water supply reliability. For these 
reasons, the Department will continue to work through the 
CALFED process to improve the environment and increase the 
system's water management flexibility.
    We believe that the bill attempts to offer a balanced 
approach toward implementing the ROD commitments and would 
allow the Federal Government sufficient authority to continue 
to participate in the CALFED program.
    We look forward to working with the committee and others in 
Congress to address this administration's concerns. Thank you.
    [The prepared statement of Secretary Norton follows:]

         Prepared Statement of Hon. Gale A. Norton, Secretary, 
                       Department of the Interior

    I am pleased to appear before this subcommittee to provide the 
Department's testimony on S. 976, the California Ecosystem, Water 
Supply, and Water Quality Enhancement Act of 2001.
    S. 976 would authorize funding through the Secretary of the 
Interior, as well as governance and management authorities, for the 
implementation of a comprehensive, balanced, and timely water 
management and environmental restoration program in California commonly 
referred to as the CALFED Bay-Delta Program, as reflected in the 
Federal Record of Decision (ROD) issued August 28, 2000. The purpose of 
the program is to increase water yield and environmental benefits, as 
well as improved water system reliability, water quality, water use 
efficiency, watershed management, water transfers, and levee 
protection.
    As the Committee can imagine, our new Administration faced a 
substantial number of major resource issues of high priority upon 
assuming office. In the area of water, virtually every western state 
has issues of concern and controversy demanding our attention. With the 
confirmation of Assistant Secretary for Water and Science Bennett Raley 
and Commissioner of Reclamation John Keys we are able to begin dealing 
substantively with many of the issues before us. We await the 
nomination and confirmation of an Assistant Secretary for Fish and 
Wildlife and Parks and a Director for the Fish and Wildlife Service to 
further assist interagency efforts.
    On the Columbia River, the Colorado River and in the Central Valley 
of California, among others, we are beginning our examination of the 
results of multi-year, multi-million dollar planning and negotiation 
efforts. We are looking not only at the results of these enormous work 
efforts but also at the process used, both internal and external, and 
the information that was relied upon to make decisions. In addition we 
are examining the data which provided insight on the biological and 
socio-economic consequences of these major resource initiatives.
    On all of the matters before us, one conclusion is uniformly 
applicable: we will continue to work toward solutions and we will make 
decisions that reflect the President's commitment to the balanced and 
sensible resolution of resource issues across our Nation.
    In the case of CALFED, we find the comprehensive and integrated 
nature of actions proposed and the commitment to the development of a 
credible science program in support of the decision making process are 
all laudable. The manner in which federal and state administrations 
have worked may be considered a model for solutions to resource 
management problems. Likewise, we feel that we can secure similar 
success in achieving the goals of CALFED in the context of our 
responsibilities in all western states.
    Clearly, significant progress has been made in the dedication of 
state and federal monies for ecosystem improvements in the watersheds 
that constitute the Sacramento-San Joaquin Delta and the San Francisco 
Bay. On the Federal side, Congress has appropriated nearly $500 million 
for CALFED related efforts, for Central Valley Project Improvement Act 
and CALFED initiatives focused on improving the aquatic and terrestrial 
habitats of the CALFED solution area.
    A Record of Decision is in place that captures years of planning on 
all program elements of ecosystem restoration, levee system integrity 
and improvement, water supply and reliability improvements, water 
quality improvement, improved water use and efficiency, improvements to 
the upper watersheds, water transfers, storage, and conveyance.
    Congress needs to authorize the CALFED program so we can proceed 
with balanced progress on all resource fronts. The Department also 
recognizes that outstanding issues are still in need of resolution and 
we are committed to finding those solutions expeditiously and in 
concert with this Committee, with the Congress, the administration of 
Governor Davis and the stakeholders who have been so actively and 
constructively involved.
    I would like to express my deep appreciation to the Committee for 
your obvious commitment to making significant progress with the CALFED 
program. I also appreciate the consistent concerns demonstrated by this 
Committee that progress be made and for your work efforts in developing 
the bill being considered today. Your continued willingness to work 
with the Department and the Administration on this matter is of real 
and continuing importance to us.
    S. 976 is an important step forward. Clearly, additional 
authorizing legislation is required to proceed with the complete 
program. We support the purposes and many of the provisions of the 
bill. However, we also have a number of concerns with the bill as 
written, and we believe some modifications are necessary. We would like 
to continue working with the Committee to achieve a bill we can fully 
support and which will implement the CALFED program consistent with the 
ROD and agreements reached in the Bay-Delta Accord of 1994 and the 
CALFED framework agreement. We note that S. 976, like other CALFED 
legislation before the Congress, would be quite expensive.
    The results of the CALFED planning process reflect an attempt to 
balance competing needs and interests. The CALFED planning process 
brought together agricultural, urban, environmental and business 
stakeholders with the state and federal agencies in an effort to build 
agreements on the approaches to managing California's complex water and 
natural resource issues. We recognize that solutions to any set of 
problems as large and interconnected as those facing California will be 
complex. However, all interests must respect the needs and concerns of 
others. The CALFED ROD attempts to recognize the core interests of all 
the parties and build a solution that reduces the conflicts in the 
existing and long-established system and to balance competing interests 
for comprehensive progress. In addition, consideration should be given 
to analysis of impacts of the ROD on tribal trust assets, as discussed 
in the ROD. With the support of Congress and the State of California, 
CALFED can lead the way in a collaborative process that includes 
extensive participation of all stakeholders to provide many long-term 
solutions to California's water management and infrastructure 
improvement needs.
    The ``Fed'' side of the CALFED Program demonstrates a cooperative 
planning and coordination effort among ten Federal agencies, including 
U.S. Fish and Wildlife Service, the U.S. Bureau of Reclamation, the 
U.S. Geological Survey, and the Bureau of Land Management, within the 
Department of the Interior, as well as the U.S. Environmental 
Protection Agency, National Marine Fisheries Service, U.S. Forest 
Service, Natural Resources Conservation Service, U.S. Army Corps of 
Engineers, and Western Area Power Administration.

                     CALFED HISTORY AND BACKGROUND

    The CALFED Bay-Delta Program is a response to the water management 
and ecosystem problems that came so clearly into focus in the drought 
of 1987 to 1992 experienced within the Bay-Delta system. Furthermore, 
the historic and ongoing conflicts between water management for supply 
and fishery protection give rise to the urgency of the CALFED program. 
The waters of Sacramento and San Joaquin Rivers converge in the 
Sacramento-San Joaquin Delta, which is the largest estuary in the West 
Coast, and discharges into the San Francisco Bay and to the Pacific 
Ocean. The Bay-Delta is a maze of waterways and channels that carry 
over 40 percent of the State's total runoff to the Bay and provides 
drinking water for more than 22 million Californians, important habitat 
for over 750 plant and animal species, irrigation water for most of the 
$27 billion agricultural sector, and water essential to the 
manufacturing and commercial sectors of the State. Over the past 
decades, California has witnessed declines in water quality, fish, 
wildlife and associated habitat, and the reliability of water supplies. 
The goals of CALFED, which the Administration fully support, are to 
reverse all these trends.
    In December 1994, the State and Federal governments signed the Bay-
Delta Accord, which signaled a new approach to managing the Delta and 
finding solutions to longstanding problems in California. In 1995, 
CALFED was initiated as a cooperative, interagency effort to reduce 
conflicts in the Bay-Delta, modernize water management and 
infrastructure, and to make investments aimed at reducing stressors for 
species and improving the habitat. The CALFED Program has been 
envisioned as a three-phase process:

   Phase I objectives were to identify and define the problems 
        confronting the Bay-Delta System and develop a mission 
        statement, program objectives, and alternative actions for 
        further study. During Phase I CALFED concluded that each 
        program alternative would include a significant set of program 
        actions which were grouped into elements to address problems 
        associated with the ecosystem and water management 
        infrastructure.
   Phase II objectives were to develop a preferred program 
        alternative, conduct a comprehensive programmatic environmental 
        review process, and develop an implementation plan focusing on 
        the first 7 years (Stage 1 of implementation). Phase II 
        objectives were achieved through issuance of the Final 
        Programmatic Environmental Impact Statement/Environmental 
        Impact Report (IS/AIR) in July 2000 and a Record of Decision 
        signed on August 28, 2000.
   CALFED is currently in Phase III, a long-term process 
        implementing specific actions to achieve the goals of the 
        CALFED program. Phase III objectives are to implement the plan 
        selected in the IS/AIR over the next 25 to 30 years. Stage 1 of 
        implementation, for the first 7 years, is underway. Site-
        specific, detailed environmental review and feasibility level 
        analysis will occur during Stage 1 prior to implementation of 
        each proposed action.

                     CALFED PROGRAM ACCOMPLISHMENTS

    In the past several years substantial progress has been made on a 
number of complex water and natural resource issues through the 
combined efforts of the public and state and federal agencies working 
together as CALFED. The greatest accomplishment of the CALFED effort so 
far is bringing all the State and Federal agencies together to produce 
the CALFED Record of Decision, signed August 28, 2000, which documents 
the comprehensive plan for improving California's water supply and 
water quality, as well as restoring ecological health in the Bay Delta. 
This Committee has received copies of the most recent annual report of 
accomplishments which details progress in many CALFED program areas. We 
particularly would like to bring your attention to the many creative 
approaches to addressing historic areas of conflict such as the 
Environmental Water. Account.
    Also of interest is the CALFED Science Program. We expect this 
program to provide peer review of the science and information 
underlying all elements of the CALFED program from adaptive management, 
to ecosystem improvement projects, to project operations and beyond, we 
expect CALFED to be supported by a strong and credible science program.
    Public workshops have been and are being undertaken by the program 
on scientific components of public controversies and are clarifying the 
state of scientific knowledge, thereby reducing the level of 
controversy. In the near term, these workshops include issues 
associated with Delta Cross channel operations, effectiveness of the 
Environmental Water Account for salmon and Delta smelt, salinity 
effects of levee breaches, and the use of scientific adaptive 
management. Additional workshops will be undertaken as topics are 
identified.

                             CALFED FUNDING

    From FY 1998 to FY 2000, Congress appropriated $190 million for the 
CALFED Ecosystem Restoration Program and an additional $30 million for 
other program elements, including projects to improve water supply 
reliability. These funds were provided through an account in the Bureau 
of Reclamation budget, but funding for specific projects or programs 
has been transferred to participating Federal agencies based on plans 
developed by CALFED. As noted above, CALFED agencies have used these 
and other funds to screen water diversions for the benefit of fish and 
farmers, restore degraded habitat, establish an environmental water 
program, develop conjunctive use projects and develop a state and 
federal water operations plan. No funds were provided for this account 
in FY 2001, largely because the appropriations committees deferred to 
the authorizing committees to review the Program and develop any needed 
legislation.
    The ROD outlines a partnership of State, Federal, and private 
funding, and estimated that a total of $8.7 billion from state, 
federal, and private sources would be needed for the Program's 
implementation. According to Governor Davis, the State is moving 
forward to finance implement actions called for in the ROD. In order to 
support the Federal side of this unique partnership, it is important 
that appropriate legislation be enacted to authorize Federal Government 
participation as contemplated by the ROD.

                           BENEFITS OF S. 976

    The Bay Delta is the hub of the State's water supply system and an 
area of unsurpassed ecological importance. Single-purpose efforts to 
solve problems in the past have failed to adequately address the 
comprehensive nature of the Bay-Delta resources and problems and the 
conflicts between supply and demand. S. 976 would provide authorization 
for continued Federal participation in the CALFED Bay-Delta Program and 
to meet Record of Decision commitments. As such, the Administration 
supports many elements of this bill, recognizing that some modifying 
language may be needed.
    In particular we are supportive of three primary principles 
outlined in the bill.
    Balanced Approach--The authorizing language meets the CALFED 
principle of comprehensive planning by outlining and providing 
authority to carry out a water supply plan to promote the ecological 
health and improve water management in the Bay Delta.
    Measurable Goals and Objectives--The legislation would provide for 
developing measurable goals and objectives for implementing and 
documenting ``significant'' progress in achieving the ROD's program 
elements and the proposed ecosystem enhancement and water supply 
program actions. Further, the legislation calls for utilizing credible 
and objective scientific review and basing decisions on the ``best 
available, independently peer-reviewed information.''
    Governance, Local Coordination, and Public Involvement--The 
legislation affirms that the participating Federal agencies would help 
operate the Bay-Delta Program through a permanent governance structure 
that encourages local and regional partnerships in implementing the 
Program. The legislation also specifies that State area-of-origin 
rights would be preserved. Further, the legislation recognizes the need 
for participating Federal agencies to cooperate with state, local, and 
tribal governments, non-governmental organizations and the public to 
obtain input on program implementation planning, design, technical 
assistance, ecosystem restoration, and peer review of science efforts.

                          CONCERNS WITH S. 976

    Despite the progress that has been accomplished through the CALFED 
Bay-Delta Program, the Administration has some significant concerns 
relative to the legislation before the Subcommittee today. In addition 
to the major concerns noted below, we would like to work with the 
Committee to address technical and other changes as it considers this 
legislation.
    Cost Sharing--One of the central components of the ROD is the 
notion of ``beneficiary pays,'' whereby users who benefit from 
investments in the infrastructure should pay for those benefits. The 
ROD contemplated the Federal Government, the State, and project 
beneficiaries each sharing roughly one-third of the costs of 
implementation. S. 976 generally establishes a maximum Federal cost-
share of 50% for each project or activity, but does not otherwise 
indicate how the cost-share should be determined. We do not object to 
the 50% ceiling, however, we believe that the cost-sharing should 
otherwise be consistent with current law or policies. Depending on the 
project purpose, under current law local sponsors are required to 
provide up to 100 percent of a project's cost (e.g., for costs 
allocated to municipal and industrial water supply projects). We wish 
to stress the importance of clarifying and integrating cost-sharing 
measures into the program. We would like to clarify that assignment of 
operation and maintenance costs will be consistent with general 
policies.
    Project Authorizations--We are also concerned about provisions of 
the bill that seem to authorize construction of projects before they 
have completed the normal Administration review of economic and 
environmental feasibility. Some language also circumvents Congressional 
oversight of individual projects. Consistent with longstanding 
policies, we believe that authorization for construction should be 
provided only after the Administration and Congress have completed a 
full and favorable review of project economics and environmental 
feasibility.
    Authorization of Appropriations--Sections 3, 4, and 5 of the 
legislation state that appropriations are authorized ``. . . in such 
sums as are necessary . . .'' to carry out the actions authorized by 
the particular section. This appears to imply that there is unlimited 
funding authority for implementing the CALFED Program. Further, it is 
not clear whether all appropriations will be coming through the 
Department of the Interior, or whether the concept of a cross-cut 
budget will be employed and appropriations will be made directly to the 
participating Federal agencies which, in some instances, would lead to 
greater efficiency.
    Reporting and Oversight--In general, the reporting and oversight 
requirements are unclear; it is not apparent which agency is 
specifically responsible for the compilation of data for submission to 
Congress. The ROD states that the CALFED staff would be responsible for 
associated program reporting requirements, however the legislation 
implies that this would be the responsibility of the Secretary of the 
Interior.

                               CONCLUSION

    The history of the settlement of California and the ensuing 
development of its water resources is replete with political and legal 
battles. Although agreement on water management may not be immediately 
achievable, the CALFED Program is a step in reaching a common vision of 
actions needed for progress. CALFED represents a new approach to an old 
problem by combining the interests of state and federal agencies with 
regulatory power over the Bay Delta together with urban, environmental, 
and agricultural users, who each have a vested interest in the 
maintenance and improvement of the Bay-Delta. The CALFED Program has 
shown water managers, policy makers and the public how to move 
California toward more equitable and efficient water and ecosystem 
management. Continued implementation of the CALFED plan offers the 
opportunity for a long-term solution to the critical problems 
confronting the Bay-Delta. Specifically, the Department will continue 
to operate the Central Valley Project in accordance with the provisions 
of the State's Water Quality Control Plan, Central Valley Project 
Improvement Act, the Endangered Species Act, and other applicable 
statutes. The Department is aware of the importance of meeting its 
environmental commitments, and the importance to the water users of 
adequate water supply reliability. For these reasons, the Department 
will continue to work through the CALFED process to improve the 
environment, and increase the system's water management flexibility.
    We believe that the bill attempts to offer a balanced approach 
toward implementing the ROD commitments and would allow the Federal 
government sufficient authority to continue to participate in the 
CALFED program. We look forward to working with the Committee and 
others in Congress to address the Administration's concerns. Mr. 
Chairman, I would like to reiterate my appreciation to the Committee 
and others for continuing to work with the Department to address the 
significant water and environmental issues facing the West.
    I would be pleased to answer any questions you may have.

    Senator Feinstein. Thanks very much, Secretary Norton.
    Before I move to Secretary Nichols, we really appreciate 
your comments. I know you have staffing problems. Now, that 
they are getting solved and you got people on board, I think 
that is great.
    When do you think you would be able to provide us with some 
specifics in terms of what you would advise vis-a-vis changes 
or amendments?
    Secretary Norton. We will work with you to try to provide 
that information as we are able to reach decisions on 
particular points that we would like to offer you. We will 
certainly work with you as quickly as possible.
    Senator Feinstein. Because of the appropriation situation, 
we really need to move this bill as soon as possible.
    Secretary Norton. All right. Thank you.
    Senator Feinstein. Thank you very much, appreciate it.
    Secretary Nichols, thank you again for coming so far and 
appreciate hearing your testimony.

STATEMENT OF MARY D. NICHOLS, SECRETARY FOR RESOURCES, STATE OF 
                           CALIFORNIA

    Secretary Nichols. Thank you, Senator. You also have our 
written testimony and, if I may, I will just submit that for 
the record and----
    Senator Feinstein. Without objection.
    Secretary Nichols. Great.
    Let me just add a couple of comments, and then I know you 
are going to want to ask some questions of me and Secretary 
Norton.
    First of all, I would like to say how pleased I am by the 
support that we have received to date, knowing first-hand the 
difficulties of getting a new administration going and getting 
staffing. I appreciate very much the support that we have had 
from the Department of the Interior in moving the CALFED 
program forward to date.
    I have to say a word about consensus, as I wish to embrace 
not only your bill, Senator, and the process that you have been 
so ably steering here, but also my other Senator stands 
squarely with both of you in trying to achieve consensus on 
legislation.
    CALFED is often referred to as a consensus process. The 
fact is we went 6 years without really achieving a consensus 
until finally there were some deadlines facing us. And a small 
group of people who you helped to convene and to basically push 
and prod and cajole into achieving a final result said, ``This 
is going to be the result,'' and then went back to all the 
various stakeholders and said, ``We need your support on 
this.'' And we negotiated and we worked hard with them. And we 
achieved a result in the record of decision, which I believe is 
a consensus.
    But it never would have happened if we had just waited for 
people to miraculously achieve that degree of consensus on 
their own. There has to be leadership. And your leadership in 
moving forward with this bill is very much appreciated.
    Senator Feinstein. Thank you.
    Secretary Nichols. We want to associate ourselves with your 
efforts and also to say that we really appreciate the 
flexibility that you have shown and have indicated your 
willingness to show in making sure that you do bring all the 
parties along with you as you move forward.
    It is extremely important for California that we get this 
program reauthorized this year and also get the Federal funding 
that is needed to make all of these very ambitious programs for 
solving California's environmental and water supply problems 
work.
    Let me just say a word about how we approach some of the 
issues about the questions that have been raised about the 
legislation, specifically the language about assurances and the 
language about the expedited process. And really it arises from 
the same philosophical approach.
    When I was appointed to my position over 2 years ago by 
Governor Davis, he made it very clear to me that in dealing 
with California water issues, it was going to be absolutely 
essential that we keep all the stakeholders at the table in a 
situation where everyone felt a great deal of lack of 
confidence and lack of trust.
    We have a situation where we have very strong laws that 
mandate that we achieve improvements in our ecosystem. We may 
not have done it as well as we should or as quickly as we 
should. We certainly need better money--we need more money and 
better science and so forth.
    But in the area of assuring water supplies to our cities 
and to our farmers, we do not have a similar legal mandate. We 
do not believe that your bill creates a new legal mandate, but 
we do believe that it goes in the direction that the ROD tried 
to go of mandating the efforts of the agencies that be 
sincerely and seriously put behind those measures that we all 
agree are needed, if we are going to give a degree of 
assurance.
    That is the line that we have tried to walk. I know it is 
the line that you have been trying to walk. If the language 
does not make everybody sufficiently comfortable, you know, we 
are willing to work with you to improve it. But that is what I 
believe you have been trying to achieve.
    Senator Feinstein. Right.
    Secretary Nichols. And it is very much what the Governor 
wants to see happen.
    Secondly, with respect to the process on storage projects 
in particular, we named those three projects that you have 
identified in your bill as being projects that we thought had a 
high degree of likelihood of being able to survive very 
stringent environmental and economic reviews.
    We did not mandate the outcome. We said we will do the 
studies, and we put ourselves on a very aggressive time track 
to try to get those done.
    I want to be clear, and I know you have been clear, that we 
never intended to short circuit any of that process whatsoever 
getting to a recommendation. And we agreed that we would submit 
those to the Congress then for authorization.
    We understand that you have been grappling with the process 
to then expedite that authorization and to be able to get 
funding. We do not pretend to have the expertise in how the 
congressional process works that you have or your staffs have.
    But if there is anything that we can do to assist you in 
that effort, we would like to do that. And other than that, I 
would just like to say thanks again for holding this hearing 
and for helping to move the process forward.
    Senator Feinstein. Thank you very much.
    [The prepared statement of Secretary Nichols follows:]

    Prepared Statement of Mary D. Nichols, Secretary for Resources, 
                          State of California

    Mr. Chairman and members, thank you for convening today's hearing 
and for inviting me to testify on the ``California Ecosystem, Water 
Supply and Water Quality Enhancement Act of 2001'' (S. 976), introduced 
by Senator Dianne Feinstein.
    I would like to applaud Senator Feinstein at the outset for her 
leadership on California water issues. She has played an instrumental 
role in bringing together diverse parties in order to find consensus on 
an issue of tremendous complexity and importance to California and the 
nation.
    Before I address the specifics of the legislation, let me place the 
issue in a broader context.
    Over the past five years, the CALFED Bay-Delta Program has operated 
as a collaborative, cooperative effort among local, State and Federal 
governments. With the release of the ``Framework for Action'' and 
Record of Decision last summer, we have shifted gears in a significant 
manner. Planning is now taking a back seat to the actual process of 
implementing an ambitious, far-reaching set of projects and programs 
aimed at improving water management and restoring ecological health in 
the Bay-Delta system.
    In light of this major transition, it is important to emphasize 
that California alone cannot carry out the CALFED plan. CALFED has 
been--and must continue to be--a close working partnership between 
Federal and State agencies. Federal agencies play critical roles in 
implementing the CALFED plan. And federal funding is imperative for 
continued coordination and to maintain the forward movement towards 
solving California's water issues.
    In addition to maintaining the collaborative nature of the program, 
I want to briefly touch upon other fundamental concepts that should be 
incorporated in legislation to ensure that CALFED stays on track to 
meet its commitments.
    First, the Federal agencies need clear direction and authority to 
continue participation in CALFED coordination efforts and in 
implementation of the CALFED plan.
    CALFED presently consists of 24 member agencies, including 13 
Federal agencies. In order to ensure coordination and effective 
implementation, these agencies need clear direction to participate in 
the program.
    Second, the Federal agencies need authorization and funding to 
continue participation in the successful implementation of the 
commitments outlined in the CALFED plan.
    CALFED's ambitious scope and timeline require both State and 
Federal funding to ensure balanced implementation. California has 
invested heavily in CALFED. In last year's State budget, Governor Davis 
and the California Legislature appropriated over $500 million. While 
the current fiscal year State budget has yet to be finalized, we 
anticipate over $500 million again will be appropriated.
    If Federal funding is not provided in fiscal year 2002, CALFED will 
not stay on track and the momentum that has been created over the past 
six years will come to a grinding halt. Federal and State courtrooms 
will once again be littered with litigation regarding the California 
water crisis.
    Third, the Bush administration must direct the Federal agencies to 
take actions to meet commitments in the CALFED plan for which 
authorization already exists including the water supply targets for 
Westside San Joaquin valley farmers.
    The CALFED plan establishes a delivery target for Central Valley 
Project south-of-Delta agriculture water service contractors of 65-70% 
of contract entitlements in normal water years. More than simply a 
provision addressing a particular group of water users, this issue has 
come to represent CALFED's commitment to a balanced program that 
considers the needs of all stakeholders.
    Following years of litigation and after months of negotiations, the 
Record of Decision commits federal and state agencies to operate the 
CALFED program in ways that will increase water supply for south-of-
Delta agriculture water service contractors, while at the same time 
avoid additional litigation over the Endangered Species Act or water 
rights.
    While it may be tempting to mandate this target, legislating a 
specific outcome with respect to water delivery will immediately invite 
more litigation and gridlock.
    The commitment embodied in the Record of Decision is clear. The 
challenge for CALFED is carrying out that commitment. We have 
recommended amendments to federal authorizing legislation that is 
consistent with the ROD and unambiguously directs the Department of the 
Interior and the Bureau of Reclamation to implement the tools necessary 
to carry out those provisions. Senator Feinstein's bill contains this 
language.
    Fourth, legislation must be consistent with the CALFED Record of 
Decision (ROD).
    This is a vitally important issue from the standpoint of ensuring 
the continued support of stakeholder interests as well as the 
California Legislature. The CALFED ROD calls for a balanced approach to 
implementation. Furthermore, all aspects of the program are 
interrelated and interdependent. Ecosystem restoration is dependent 
upon supply and conservation. Supply is dependent upon water use and 
efficiency and consistency in regulation. Water quality is dependent 
upon improved conveyance, levee stability and healthy watersheds. The 
success of all the elements depends on expanded and more strategically 
managed storage.
    Mr. Chairman, these are some of the basic elements that must be 
included in any legislative proposal to reauthorize the CALFED Bay-
Delta Program. Conformity with the ROD is clearly our touchstone. At 
the same time, we fully realize that other elements that transcend the 
ROD have been incorporated in legislative efforts to reauthorize 
CALFED. Such provisions will be examined on the basis of whether they 
help achieve implementation of CALFED and whether they are consistent 
with the spirit and letter of the ROD.
    Based on the criteria I have outlined above, we believe that 
Senator Feinstein's bill meets the test. It recognizes the importance 
of the CALFED process, the Record of Decision, and the critical need 
for Congress to provide significant levels of federal funding for vital 
programs--a need that grows more marked with each passing week in a 
year that has brought California lower than normal precipitation. For 
these reasons, the State of California supports Senator Feinstein's 
legislation and urges expeditious consideration by this Subcommittee 
and the U.S. Senate.
    Governor Davis recognizes the need for CALFED reauthorization bills 
in the House and Senate to move forward this year to ensure adequate 
funding to meet California's pressing water needs. I assure you that 
the Governor and I look forward to working with interested Members of 
Congress to reconcile the differences among the bills to ensure that 
these efforts are consistent with the CALFED plan.

                CALIFORNIANS AND THE COUNTRY NEED CALFED

    I want to take a moment to offer a sense of the importance and 
scope of CALFED and what it means to the people of California and the 
nation.
    CALFED's integrated plan to restore ecological health and improve 
water management in the Bay-Delta is:

   The most complex and extensive ecosystem restoration project 
        ever proposed;
   The most intensive water conservation effort ever attempted;
   The most far-reaching effort to improve the drinking water 
        quality for over 22 million Californians;
   An unprecedented commitment to science and watershed 
        restoration;
   The most significant investment in storage, conveyance and 
        Delta levees in decades.

    The Central Valley of California includes over 80 percent of all 
irrigable land in our State and provides up to 50 percent of the 
Nation's fruits, nuts, and vegetables. Providing a consistent water 
supply to California farmers is clearly a matter of national economic 
importance. In addition, our commercial fisheries require a healthy 
river and Delta ecosystem. Central Valley salmon provide more than 50 
percent of the harvest from the California, Oregon and Washington 
coasts. Finally, Silicon Valley--a major engine of the national 
economy--requires a firm and high quality water supply.
    The CALFED program represents an innovative approach to addressing 
water in California. It will ensure adequate and reliable water 
supplies for its farmers, cities, and environment. It is the only 
program ever to win support from all major interest groups in all parts 
of this large and diverse State.
    In short, the benefits of the CALFED program will go far beyond 
California's borders. Ensuring adequate and quality water supplies will 
have tremendously positive economic and environmental impacts 
throughout the entire country. Congressional action to reauthorize the 
CALFED program this year is clearly in the national interest.

                               CONCLUSION

    More than six years of arduous negotiations have brought us to this 
point. CALFED has created a new framework for resolving competing 
demands on California's water resources. Now it is time to get on with 
the job. That will take hard work, a renewed commitment from the 
Federal government, and the financial resources to make it happen.
    Thanks to the leadership of Governor Davis and the California 
Legislature, combined with the wisdom of California voters in approving 
two successive water bond initiatives, California has delivered its 
share of funding. It is time for Congress to pass a reauthorization 
bill that provides urgently needed investments consistent with the 
CALFED plan.
    Thank you, Mr. Chairman. I would be happy to answer any questions 
you may have.

    Senator Feinstein. I am going to ask some specific 
questions quickly, if I might. And then I want to go to the 
other two Senators.
    Madam Secretary, as you are aware, some environmental 
groups have come out in opposition to this bill. I would like 
to know whether you and the Governor specifically support the 
assurance language that we have discussed with you, which we 
believe does not mandate, but replicates the ROD.
    Secretary Nichols. Yes, Senator, we have helped to draft 
that language and we do not believe that it has the problem 
that has been identified.
    However, I would hasten to add that I am not someone who 
has litigated these water cases over many years. I respect the 
comment that Congressman Miller made about his fear that there 
might be litigation that would result.
    And I know you have indicated a willingness to, you know, 
to look at that. But from our point of view, the need is there 
to give assurances, and we believe that the language there does 
that without specifically creating any new water rights.
    Senator Feinstein. Do you think it is possible for 
California to meet all of its future water needs without any 
new infrastructure whatsoever?
    Secretary Nichols. Absolutely not. Clearly, we are going to 
have to invest heavily in infrastructure and as my written 
testimony indicated, the State of California has already 
stepped up to the plate.
    We had $500 million last year and $500 million this year in 
bond money that the voters of California approved that is going 
towards projects that will do everything from improving water 
conveyance to dealing with leaky pipes and spills of sewage on 
our beaches.
    Our system is overtaxed as it is and we know we are going 
to have to be spending in the coming years and decades heavily 
to bring it up to what is needed.
    Senator Feinstein. Do you think it is possible for 
California to meet its water needs and wean itself from its 
overdraw of the Colorado River without a massive effort to 
institute CALFED?
    Secretary Nichols. Well, Senator, as you know, when we 
worked on the 4.4 plan and have worked hard with then Secretary 
Babbitt and with our neighboring States on trying to get 
California to within its mandated limits on what we can draw 
from the Colorado River, we made some commitments that we would 
do certain important physical projects that would help us 
achieve that goal.
    And a big part of what we were relying on was improvements 
in ground water, improvements in surface storage and conveyance 
that would enable us to get down to that level, as well as to 
very important conservation programs, both in the urban and 
agricultural sectors.
    Senator Feinstein. Thanks. Thanks very much.
    Madam Secretary, I heard that--and this--you did not 
mention it in your remarks and I have not had a chance to read 
your written remarks, but what we did, in our view, on the 
issue of beneficiary pay issue was essentially replicate the 
record of decision, which says there shall be beneficiary pays 
but CALFED will make that decision as to exactly the specifics.
    Now, I am aware that some environmental groups do not feel 
that that language is strong enough and they want to spell it 
out in bill language. I have been concerned about that, because 
once you do bill language, regardless of what circumstances 
are, you are stuck with it.
    Do you have concerns about the beneficiary pay language, 
and if you do, what would you like to see?
    Secretary Nichols. The cost area issue is one of those on 
which we would like to work with you closely to make sure that 
it is consistent with what we would like to see.
    Senator Feinstein. Okay. I would like to do that sooner 
rather than later, if that is an agreement.
    Secretary Nichols. Thank you.
    Senator Feinstein. Thank you, both, very much.
    Senator Kyl.
    Senator Kyl. Thank you, Madam Chairman. First of all, I 
would note that Secretary Norton is already working with some 
of us in Arizona on a project of ours. It is not exactly 
similar, but it is of the same general nature and Secretary 
Norton has been very helpful so far. And I am sure that, as she 
indicated, she will be as helpful in trying to work through 
some of the problems and issues with respect to this program.
    I had a couple of questions for Ms. Nichols, if I could. 
The CALFED briefing book, which has a lot of information in it, 
called CALFED Bay-Delta Program Briefing Book, July 2001,* has 
on page 20 a chart which shows the potential for about 3 
million acre feet of water that could be developed as a result 
of a combination of things, from urban conservation to 
agricultural conservation, water reclamation, conveyances and 
operations improvements, and supply improvements from new 
storage. The latter category would supply roughly half a 
million acre feet out of the 3 million, as I see it.
---------------------------------------------------------------------------
    * Retained in subcommittee files.
---------------------------------------------------------------------------
    And the comment under the chart reads, ``Partnerships with 
local and regional agencies to jointly implement water 
management programs and actions could increase California water 
supplies by nearly 3 million acre feet over the next 10 years, 
enough water to meet the needs of 6 million families for a 
year.''
    I checked with the Census. That is just about exactly the 
growth in population in California over the next 10 years 
projected, at least by the Census. So if we were able to do all 
of the things that are called for here, we would be--I do not 
want to say treading water, that would be the wrong metaphor, 
but we certainly would not be gaining on the problem.
    And while the chairman was kind enough to note a parochial 
interest that I have in this project from the standpoint of the 
citizens of Arizona, I can assure you that my primary interest 
here is in helping you, Senator Feinstein.
    I do not think that we have enough of a concern in Arizona 
over future California water use that Arizona has to be 
concerned about theft of our water. We need to help with this 
program, because it is a good idea in and of itself.
    But I do want to make the point that there is going to have 
to be a water development and storage component here that is 
robust enough to, not just keep up with population increases, 
but hopefully meet some of the needs that have been identified 
in the past.
    And given the fact that some of these estimates are 
probably fairly rosy, and that only one-sixth of the supply is 
newly generated water storage, I pose the question of whether 
you think there are other potential water development aspects 
of this that could be brought forth and, in particular, whether 
there are other potential sources of water development in the 
northern part of California.
    Secretary Nichols. Senator Kyl, I think I understand your 
question and, if I may, the chart that you are referring to and 
the comment, only refers to Federal- and State-sponsored 
storage projects. It does not refer to locally developed or 
regionally developed water district initiated water supply, 
water storage projects that are going on around the State right 
now.
    As a result of a number of factors, including increasing 
interests in water transfers within the State, as well as a 
great deal of interest in the southern part of the State in 
developing independent supplies, we see cities and water 
districts and irrigation districts all investing in a number of 
new projects that are designed to improve the overall supply 
situation, including water reuse and water conservation 
programs, as well as ground water management, conjunctive use 
and so forth.
    So we really do not mean to suggest that this is everything 
that is going on in the State to try to meet what we know are 
going to be some pretty demanding water needs in the future.
    Senator Kyl. If there is any information you could supply 
to the subcommittee that would help to edify us on that, it 
would be appreciated.
    Secretary Nichols. We would be happy to do that.
    Senator Feinstein. I think, too, we talked about the first 
tranche, the first three storage projects. Now, there is one 
that is more controversial than the first three and that is the 
Sites project. But that has a potential storage of 1,900,000 
acre feet, with the environmental review completion date of 
August 2004.
    And then there are a whole series of others as well. So 
back in that same book, there are other storage projects--I 
think the point that you make that is such a good point is 
there is no way California can meet its additional water needs 
in the future without storage.
    Senator Kyl. Yes. Yes.
    Senator Feinstein. No way.
    Senator Kyl. Yes. Thank you very much.
    Senator Feinstein. You are very welcome.
    Senator Burns.
    Senator Burns. Thank you, Madam Chairman. And I appreciate 
these hearings today. And I guess I have a little institutional 
knowledge in this situation, as we went through the wars of 
1992 in the California Water Settlement in the Central Valley 
Project. And every time I hear San Joaquin and Sacramento River 
and Friant and Trinity, a lot of those sayings bring back old 
memories.
    Madam Secretary Norton, I have some reservations. I think 
this legislation needs authorization. And I am very supportive 
of what the Senator from California is doing. But given the 
backlog of already authorized and unconstructed water projects 
that we have in this country now and looking at the bottom 
line, the cost of this one, are we going to have enough money 
to complete all these projects and say, does California have to 
get in line with the rest of us who have projects that have 
been authorized and have not been funded?
    Secretary Norton. Well, obviously there are intense 
pressures on the limited budget that we have. And we are 
working to stretch that as much as we can to meet the various 
needs, but it is correct that the projects do compete against 
each other, so we need to work with you all on trying to 
prioritize.
    Senator Burns. Well, I am in the authorization of this 
thing, because I feel a little bit of a relationship with the 
people who were promised water because they were having water 
taken away from them on the west side. And that was in 1992. 
And nothing has been done to deliver to those folks the water 
that they were promised after this whole process was completed.
    I have good friends that are out there on the west end, in 
the San Joaquin and those valleys and that is what I am 
concerned with here, is that I am not so much concerned with 
the Bay and the Delta, as I am with production agriculture and 
the base and the promises that were made to the agricultural 
producers of that area. So I am going to be very supportive of 
what Senator Feinstein is doing.
    I have no other questions. I just want to be a part of this 
discussion as it moves along, because there are some very 
familiar names on this witness list, even for today.
    I did not like the settlement before. I did not like the 
1992 settlement. In fact, I never did sign the conference 
report, because I felt like the approach was just wrong, and 
they were making promises that I knew that they could not 
fulfill, and they did not fulfill and maybe we have the 
opportunity to do that now.
    Senator Feinstein. Thanks very much, Senator.
    Mr. Chairman, if you would?

        STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR 
                       FROM NORTH DAKOTA

    Senator Dorgan. Madam Chairman, thank you very much. Let me 
apologize for my delay, and I appreciate your chairing this 
hearing.
    The full Appropriations Committee has been meeting on two 
appropriations bills, and I have been over in the Capitol 
dealing with that. And I asked if Senator Feinstein would be 
willing to chair this hearing.
    We appreciate the testimony of Secretary Norton and 
Secretary Nichols. Welcome. And I understand that your 
testimony has been positive and contributes a great deal to 
this committee.
    I will put a statement in the record for this hearing. But 
I understand how important this issue is. I understand that the 
opportunity for us to talk about S. 976, which Senator 
Feinstein has authored to authorize the California Bay-Delta 
program is a very important piece of legislation for California 
and the region.
    I am really pleased to be able to have this hearing and 
have the voices be able to express their interests. And I look 
forward to working with Senator Feinstein as we proceed with 
this authorization bill.
    [The prepared statement of Senator Dorgan follows:]

       Prepared Statement of Hon. Byron L. Dorgan, U.S. Senator 
                           From North Dakota

    Good afternoon. I'd like to welcome Secretary Norton, Secretary 
Nichols from California, Senator Boxer, Congressman Miller, and 
Congresswoman Tauscher here today to our Subcommittee. I am pleased 
that the importance of the CALFED program is recognized since the 
Secretary, Members, and other top officials are with us.
    Today, the Water and Power Subcommittee will receive testimony on 
S. 976, the ``California Ecosystem, Water Supply, and Water Quality 
Enhancement Act of 2001,'' introduced by Senator Feinstein to authorize 
the California Bay-Delta Program, as well as to provide for other 
activities relating to ecosystem enhancement and water supply.
    I understand from Senator Feinstein that this legislation is of the 
highest importance to the State of California in meeting future water 
needs for urban areas as well as for agricultural water use. I also 
understand that the program has yielded important ecosystem 
improvements and will continue to do so in the future. As a Senator 
from a state where water supply, water quality, and agriculture are 
significant issues, I appreciate the paramount importance of this 
subject.
    For that reason, I am pleased to learn more about this legislation 
from our witnesses today.
    The long-term Bay-Delta Program, which this bill would authorize, 
is the result of efforts by the federal government working in 
partnership with the State of California. It also represents the hard 
work of others--urban water agencies; agricultural water users; the 
environmental community; and cities. The program is intended to address 
ecosystem restoration; provide a more reliable supply of water for all 
water users; and improve water quality. Greater certainty with respect 
to water management in California and the West is critical, because 
water is such a critical resource for all of us.
    CALFED authorization has expired. Last year, the State of 
California and the federal government reached a landmark agreement on 
the best way to proceed to meet the State's water needs. Senator 
Feinstein believes that her legislation, S. 976, would ensure that the 
federal government would adhere to this agreement. I look forward to 
hearing from the witnesses and hope we can get to the bottom of this 
contentious, but important, issue.

    Senator Feinstein. Thanks very much, Mr. Chairman.
    Let me thank you very much, both Madam Secretaries. I 
appreciate it. Thank you so much.
    And we will go to the next panel, which is Patrick Wright, 
director of CALFED from Sacramento; Richard Moss, the general 
manager of Friant Water Users; Stephen Hall, the executive 
director of the Association of California Water Agencies; Grant 
Davis, executive director of the Bay Institute at San Rafael; 
and Phillip Pace, chairman of the board of the Metropolitan 
Water District of Southern California; Stuart Somach, partner 
of Somach, Simmons and Dunn, who represents many of the water 
contractors--I do not know quite who he is representing today, 
but we will find out--and James Cunneen, president and CEO of 
the Silicon Valley Chamber of Commerce.
    Welcome, gentlemen. Why we do not begin with you, Mr. 
Wright, as the executive director of CALFED? Welcome.

        STATEMENT OF PATRICK WRIGHT, DIRECTOR, CALFED, 
               BAY-DELTA PROGRAM, SACRAMENTO, CA

    Mr. Wright. Thank you, Senator. And I thank all of you for 
coming all the way out here from California. I want to join our 
previous speakers in applauding your leadership in bringing us 
out here and introducing a bill to try to bring us together and 
move these reauthorization bills forward.
    As you know, it has been just about a year since Secretary 
Babbitt and Governor Davis announced the CALFED Bay-Delta plan, 
the largest and most comprehensive water management plan in the 
Nation.
    As you know, it calls for one of the Nation's most 
ambitious ecosystem restoration programs and the biggest and 
largest investment in water infrastructure in over 40 years in 
the State.
    And we are off to a fast start. In just the program's first 
year, we have managed to allocate over $300 million up and down 
the State for water quality and water supply projects, over 
$150 million for ecosystem restoration programs.
    We have signed local agreements on both the Sites Reservoir 
project and the Los Vaqueros expansion projects to get those 
moving, with local support through a partnership with the 
agencies; 16 agreements with local communities to study ground 
water storage programs, which in the long run may end up being 
just as significant. Our staff estimates that just the projects 
that we approved and funded as pilots for further study have 
the potential for providing up to 300,000 acre feet in new 
yield or new delivery capability, so we think both surface and 
ground water storage projects are vital to make progress in 
meeting our long-term water needs.
    We also are mindful of the fact that it was very dry this 
year, and we have got to be very prepared in case next year is 
dry as well. So the Department of Water Resources working with 
the other agencies very quickly developed a drought contingency 
plan and managed in a very short time frame to facilitate the 
transfer of nearly 300,000 acre feet of water this year to 
areas that were facing the most severe shortages.
    We also launched an innovative environmental water account 
to provide more water for fish in ways that would not affect 
project allocations. And we also announced grant programs for 
local communities to meet their own water quality, watershed, 
ground water management needs, again, throughout the Bay-Delta 
watershed.
    And then finally, we hired a chief scientist to make sure 
that we have strong independent scientific review of all of our 
major program elements. We know that is going to be a very key 
element in building confidence and trust in this program.
    As you know, everybody has got a horror story about 
California water, but we know we are not going to be effective 
unless folks have confidence in the scientific review process 
that we apply to all of our projects, both the ecosystem 
projects, as well as the water management projects.
    Of course, all of this extraordinary progress this first 
year was made possible both because we previously had a Federal 
authorization to give us a down payment on the program, and 
because recently the voters of California saw the wisdom with 
your leadership and others in passing a bond act that gave us 
nearly $500 million last year, another $500 million this year, 
together with a substantial contribution from Governor Davis, 
as part of the general fund to get us going.
    But, of course, that is not going to be enough. We are 
going to continue to need strong Federal leadership and support 
to keep us on track and on time.
    Without these funds, we are going to have a tough time 
meeting the very aggressive time frames and commitments in the 
plan. I am particularly concerned about maintaining balance in 
the program, because the water bond, as wonderful as it was, 
does not provide money for all elements of the program.
    So we clearly need Federal money for those areas of the 
program that are not as well covered by the water bond, 
including the storage and conveyance projects that are part of 
the CDP that are largely dependent upon Federal funding. So we 
are definitely looking for your leadership and help in making 
sure that we get those projects back on track.
    As we head into our second year then, our highest priority 
will continue to be to try to meet those aggressive time frames 
and commitments that are in the plan, including the west side 
target that has been the source of discussion throughout this 
week and in the bills.
    We know that that commitment is one that we have got to be 
very serious about. We are going to move even more aggressively 
with our State and Federal partners back in Sacramento to 
increase your confidence that we are serious about meeting that 
ROD commitment.
    I have worked on this program, as you know, since its 
inception and even before that. And there is probably on 
average an article a month in the newspaper about how this 
program is in limbo or is in danger of collapse.
    But we are still here. We are now making great progress, 
because the stakeholders realized this is the only game in 
town. A balanced comprehensive plan is the only way to continue 
to make progress and a State/Federal partnership is the only 
way to continue to make progress.
    So again we look forward to your leadership in taking us to 
the next level, as we move towards a reauthorization bill that 
we can all support. Thank you again.
    [The prepared statement of Mr. Wright follows:]

   Prepared Statement of Patrick Wright, Director, CALFED, Bay-Delta 
                        Program, Sacramento, CA

    Thank you for inviting me to testify in support of federal 
authorization and funding for the CALFED Bay-Delta Program. I applaud 
the leadership of Senator Feinstein in introducing a bill to support 
the program, and I look forward to working with the Congress, the state 
and federal administrations, and stakeholder groups in California as 
the reauthorization bills move forward.
    It has been just over a year since the Governor and the Secretary 
of Interior announced the CALFED Plan--the largest and most 
comprehensive water management plan in the nation. The Plan is a 
balanced, comprehensive approach to reduce conflicts over our limited 
supplies, and to address the state's long-term water needs. It calls 
for one of the nation's largest ecosystem restoration programs, and 
provides specific deadlines for developing over 6 million acre-feet of 
new water storage projects the biggest investment in the state's water 
infrastructure in 40 years.

                       FIRST YEAR ACCOMPLISHMENTS

    After five years of planning and public input, the Program is now 
delivering on its promise. In the Program's first year, the CALFED 
agencies have:

   Allocated over $300 million from state and federal funds for 
        water supply and water quality projects throughout the state;
   Allocated over $150 million for ecosystem restoration 
        programs to protect and restore our depleted fisheries;
   Signed agreements with local partners to plan for major 
        surface storage projects in the Bay Area and Sacramento Valley, 
        and sixteen agreements with local agencies to study groundwater 
        storage programs;
   Developed a drought contingency plan, and made available 
        300,000 acre this year to areas facing water shortages;
   Launched an innovative Environmental Water Account to set 
        aside water for fish without reducing allocations to farms and 
        cities.
   Developed grant programs for local agencies to address 
        drinking water, water conservation, groundwater management, and 
        watershed protection projects throughout the state;
   Hired a Chief Scientist and launched an unprecedented effort 
        to apply independent scientific review to all major elements of 
        the Program.

                             FUNDING NEEDS

    This extraordinary progress was made possible because California 
voters saw the wisdom of investing in California's water future through 
the passage of Propositions 204 and 13 in 1996 and 2000, respectively. 
Last year, the State allocated over $500 million to the Program, and 
another $500 million is likely to be available next year.
    But the Program also needs significant federal funding to meet our 
objectives and maintain a strong state-federal partnership. The CALFED 
Plan calls for a $3 billion commitment from the federal government to 
match the state and local shares during the first seven-year stage of 
the Program. Without these funds, many key elements of the Plan will be 
significantly delayed or canceled. For the most part, we are on track 
and on time. But because of limited federal funds, we are falling 
behind on our schedules for expansion of Shasta Reservoir and other 
projects that depend primarily on federal funding.
    Has the Program ended all water conflicts in the state? No. As long 
as there are competing needs for limited water supplies, conflicts are 
inevitable. But investments in the Plan will help us better manage 
these conflicts. For example, through development of the Environmental 
Water Account this year, additional water was allocated to endangered 
fish without affecting other uses, and through our transfers program, 
300,000 acre feet was delivered to areas facing water shortages. 
Through these and other investments in the storage, conveyance, water 
use efficiency, and ecosystem restoration projects described in the 
CALFED Plan, we can develop the flexibility and reliability necessary 
to meet the state's long-term water needs.

                         SECOND YEAR PRIORITIES

    As we head into our second year, our top priorities include:
    First, continuing to meet the aggressive milestones and commitments 
in the plan. With federal support and funding, we can stay on time and 
track and maintain a balanced program.
    Second, strengthening our science program. We intend to hire 
additional staff and convene expert panels to improve the scientific 
basis of agency decisions, and to ensure that only the highest quality 
projects are funded.
    Third and most important, strengthening our partnerships with local 
and regional communities. The program will be successful only if it 
supports and builds upon collaborative efforts to address water issues 
at the local or regional level. Just last month, for example, we 
allocated $55 million to 178 groundwater management, watershed, and 
water use efficiency projects throughout the state. None of these funds 
are for state or federal agencies; they are all going to local 
communities to solve their most pressing water needs.
    With federal support and funding, the CALFED Program can continue 
to work with local partners in building the infrastructure necessary to 
provide high quality, reliability supplies for cities, farms, and the 
environment.
    Thank you again for hearing my testimony.

    Senator Feinstein. Thanks, Mr. Wright.
    Mr. Moss, representing the Friant Water Users. I guess 
1,500 individual--or is it more than that?
    Mr. Moss. 15,000, Senator.
    Senator Feinstein. I beg your pardon.
    Mr. Moss. 15,000 small family farmers with an average farm 
size of approximately 100 acres.
    Senator Feinstein. Thank you.

  STATEMENT OF RICHARD M. MOSS, GENERAL MANAGER, FRIANT WATER 
                  USERS AUTHORITY, LINDSAY, CA

    Mr. Moss. I appreciate very much the opportunity to appear 
here today, Ms. Feinstein, Chairman Dorgan and the rest of the 
members of the committee.
    I am Richard Moss, general manager of Friant Water Users. 
We have 25 member water agencies in our organization. We are 
part of the Friant division of the Central Valley Project; 
again, 1 million acres on the east side of the southern San 
Joaquin Valley, some of the world's most productive farmland 
generating in excess of $4 billion a year in agricultural 
production of high-value crops.
    The Friant Division gets its water out of the San Joaquin 
River tributary to the Bay-Delta from Friant Dam and Millerton 
Reservoir, northeast of Fresno.
    We are also indirectly dependent upon Delta exports, in 
that the Friant Division was put together back in the 1940's 
with an agreement with the people known as the Exchange 
Contractors, the original water right holders on the San 
Joaquin River.
    We get to divert their water rights at Friant Dam, in 
exchange for providing a substitute supply that is generated 
out of Shasta Reservoir in northern California and pumped and 
delivered out of the Tracy Pumps, the CVP pumps in the Delta.
    Thus we have really two reasons to have a significant 
interest in the success of CALFED, both as a direct diverter, 
and as well as a significant export interest.
    California, as you have noted, Senator, often is at a 
crossroads in terms of its water future. California now has a 
chronic water shortage. We really are on the verge of a water 
crisis.
    This chronic water shortage is especially bad in the San 
Joaquin Valley, where the majority of the impacts of regulatory 
water reallocation have focused. The region was already water 
short to begin with, which manifests itself in the form of 
ground water overdraft to the tune of almost 1 million acre 
feet a year.
    We are also faced with the prospect of trying to return a 
salmon run, a salmon fishery to the upper San Joaquin River 
below Friant Dam, where one has not existed for 50 years.
    We are studying actually how to do this in cooperation with 
the environmental community in a joint venture of how to 
restore a naturally reproducing fishery and to do so in a way 
that keeps our water users whole from a water supply and cost 
standpoint.
    Our studies will be completed in a number of months from 
now, but we do know one result, and that is: The restoration 
program will be very, very expensive.
    The Friant Water Users Authority is in support of S. 976, 
the California Ecosystem Water Supply, Water Quality 
Enhancement Act. The congressional authorization and funding of 
the CALFED program is vitally important.
    In S. 976 there is a real and needed commitment to 
environmental restoration and enhancement. There is a real and 
needed commitment to new infrastructure, including new surface 
storage reservoirs.
    There is a real and needed commitment to not only improving 
the hub of California's water system, the Bay-Delta, but also 
to go beyond the Bay-Delta and support water and environmental 
projects that were not fully contemplated as part of the CALFED 
plan.
    This last point is of great value to Friant in that we are 
concerned that the CALFED plan has not fully contemplated Upper 
San Joaquin River restoration. And thus we take great solace in 
the legislation in that it provides the ability to get projects 
and programs that were not--that are not--get them funded that 
were not prescribed as part of the original CALFED plan.
    We are also supportive of the clear desire in the 
legislation to accelerate the process of putting new 
infrastructure in place. We cannot afford decades of studies 
before we make meaningful improvements in our infrastructure.
    Unfortunately, ending in a negative note, we remain very 
concerned about the assurances to be provided one group of 
water users in California by the bill.
    We believe it clearly is the intent of the CALFED program 
to provide real improvements to those water users, and we 
support that intent. Where we get cross-wise is when you cross 
that line--and we have heard it today--of ``Does an 
improvement--is an improvement a goal, an objective, or is it a 
federally legislated mandate?''
    We must take great care in exercising in what we are doing 
here to make sure we do not create legal hooks for those water 
agencies who have a history of litigating early and often and 
in order to try to remedy their lack of water right priority.
    We have seen your most recent proposed amendments to the 
bill, and we are very concerned that it moves in the wrong 
direction in terms of crossing that line and----
    Senator Feinstein. Let me--you are saying on the assurance 
language----
    Mr. Moss. Yes. We are concerned that it is moving to more 
of a mandate as compared to less of one.
    Senator Feinstein. ``Pursuant to the ROD'' or ``subject to 
the ROD,'' is it that phrase?
    Mr. Moss. It is more than that. It is more than that, 
Senator.
    Senator Feinstein. Well, could you tell us exactly what it 
is?
    Mr. Moss. Well, we believe that the language, in fact, does 
create a Federal mandate to provide a certain level of water 
supply to those water users. So it is more than just the 
``pursuant'' language. We would have problems with the language 
beyond just the initial part of that sentence.
    Senator Feinstein. For me and my colleagues, we have two 
sides of the valley. And this is where there is the rub.
    [Laughter.]
    Senator Feinstein. The Friant users, 15,000 smaller farmers 
on the east side of the valley and the west side of the valley, 
which are larger agri-business type farms, with different water 
rights. And it is extraordinarily difficult to remedy this.
    Mr. Moss. It is, Senator. I guess I could offer that the 
level of concern is, I think, increasing in your proximity to 
the west side.
    If you are the only other CVP contractor south of the 
Delta, having gone through no less than 10 years of litigation 
on very similar issues of uncertainty over language and the 
law, and most recently a State application to take better than 
half of our water away, we are very concerned about how this 
legislation might provide that legal hook.
    And given that we have language now, potentially on both 
the House and Senate side, it really causes us to reassess our 
strategy in dealing with this issue. And I am not sure what my 
board will do. I will be talking to them next week about how we 
will go forward with both of these bills, both on the Senate 
and House side.
    Senator Feinstein. Well, do not rush off. Let us talk. I 
mean, we will find a way to solve this.
    Mr. Moss. I appreciate that very much, Senator.
    Senator Feinstein. Thank you.
    Mr. Moss. And thank you all for hearing my testimony and 
inviting me here today.
    [The prepared statement of Mr. Moss follows:]

 Prepared Statement of Richard M. Moss, General Manager, Friant Water 
                      Users Authority, Lindsay, CA

    Mr. Chairman and Members of the Committee, I very much appreciate 
being given the opportunity to testify before the Subcommittee to 
provide support for and comment on S. 976, the California Ecosystem, 
Water Supply and Water Quality Enhancement Act of 2001 and comment on 
the CalFed Program. I am testifying today as the General Manager of the 
Friant Water Users Authority and as a small citrus grower in the Friant 
Division service area.
    We now have a much better understanding of the blueprint for the 
CalFed actions anticipated over the next several years. Negotiations 
between state and federal administrations culminated last year in an 
agreement on a CalFed plan, supported by a record of decision and 
further agreement on how to implement that plan. We are now poised to 
pick up where we left off last fall in getting the needed federal 
authorization to begin actual implementation of this plan. I intend to 
update you herein with the most current views of the Friant Water Users 
Authority on the CalFed Program and how it should authorized. In that 
regard, I have attached as Exhibit A to my testimony the policy 
document adopted by the Friant Water Users Authority Board of Directors 
that provides these views in summary policy form.

                              INTRODUCTION

    I am Richard M. Moss, the General Manager of the Friant Water Users 
Authority. The Friant Water Users Authority is a joint powers authority 
formed under state law comprised of 25 member agencies that all get 
water from the Friant Division of the CVP.
    The Friant Division service area is comprised of approximately 1 
million acres of the world's richest farmland. It ranges from the 
southern part of Merced County, all the way to the Grapevine in Kern 
County. The majority of the service area is in Madera, Fresno, Tulare 
and Kern counties. This one-million-acre area annually produces about 
$4 billion in gross agricultural production. We grow a tremendous 
variety of crops. The majority of the area is dedicated to permanent 
plantings of grapes, nuts, tree fruit and citrus. We also have a 
significant amount of row and field crops, as well as leading the 
nation in dairy production. This area is truly unique in its quality of 
agriculture and in its ability to produce all of this on small family 
farms that average approximately 100 acres in size. The area is also 
renowned for its highly efficient use of irrigation water, having been 
a ``hot bed'' for the development of drip and low volume irrigation 
technology. We can boast of some of the highest irrigation efficiencies 
found anywhere in the world.
    The Friant Division service area is comprised of approximately 1 
million acres of the world's richest farmland. It ranges from the 
southern part of Merced County, all the way to the Grapevine in Kern 
County. The majority of the service area is in Madera, Fresno, Tulare 
and Kern counties. This one-million-acre area annually produces about 
$4 billion in gross agricultural production. We grow a tremendous 
variety of crops. The majority of the area is dedicated to permanent 
plantings of grapes, nuts, tree fruit and citrus. We also have a 
significant amount of row and field crops, as well as leading the 
nation in dairy production. This area is truly unique in its quality of 
agriculture and in its ability to produce all of this on small family 
farms that average approximately 100 acres in size. The area is also 
renowned for its highly efficient use of irrigation water, having been 
a ``hot bed'' for the development of drip and low volume irrigation 
technology. We can boast of some of the highest irrigation efficiencies 
found anywhere in the world.
    The Friant Division of the CVP consists of Friant Dam and Millerton 
Lake on the San Joaquin River northeast of Fresno, the 152-mile Friant-
Kern Canal that runs south all the way to Bakersfield and the 36-mile 
Madera Canal that runs north to the Chowchilla River. The Friant 
Division of the CVP annually delivers approximately 1.5 million acre-
feet of water. This water supply is principally used as a supplemental 
water supply, providing only 1.5 acre-feet per acre on average. 
However, there are some parts of the service area that rely totally on 
the Friant Division water as their sole source of supply. The area is 
blessed with good quality groundwater aquifers. Groundwater is the firm 
source of supply for the majority of the service area. The Friant 
Division is unique in the west in that it employs a two-class system of 
water deliveries. The Class 1 water is the first water to develop 
behind Friant Dam and is delivered to those parts of the service area 
that have limited or no access to groundwater supplies. The Class 2 
water develops only after the Class 1 demands have been met and is 
delivered to those parts of the service area that can rely on 
groundwater. Class 2 water is typically used to replenish the 
groundwater through ``in-lieu'' recharge--providing growers with 
surface water in-lieu of using their wells, and through direct 
recharge--percolating water in recharge basins, natural water ways and 
unlined canals into the underground aquifers. The Friant Division has 
been in service for 50 years and has been successful in arresting the 
serious condition of groundwater overdraft that existed prior to the 
project. It should be noted, however, that a condition of critical 
groundwater overdraft still exists in parts of the service area and in 
neighboring areas in the southern San Joaquin Valley.
    The majority of the water rights to the San Joaquin River allowing 
for the diversion of water at Friant Dam are based on purchase and 
exchange agreements with the individuals and entities that held rights 
on the San Joaquin River at the time the Friant Division was developed. 
The single largest of these agreements requires annual delivery of 
840,000 acre-feet of water to the central San Joaquin Valley near 
Mendota (commonly referred to as the Exchange Contract). Thus, the 
Friant Division is dependent upon other features of the CVP, including 
Shasta Dam, the Tracy Pumping Plant and the Delta-Mendota Canal, to 
facilitate this required exchange. It is important to note that if for 
some reason the U.S. Bureau of Reclamation is unable to meet the 
demands of the Exchange Contract out of Delta export supplies, the 
Exchange Contract provides for the release of water from Friant Dam to 
meet Exchange Contractor needs.

                       CALIFORNIA'S WATER CRISIS

    There are a number of factors that have led to the challenges, more 
accurately the crisis, we are facing in terms of a chronic water 
shortage for the state and in particularly for the San Joaquin Valley 
as a region.
    The state population growth is an underlying force that continues 
to drive the need for developing additional water supplies. Yet, we 
have placed very few new water projects on line over the past twenty 
years. This lack of new water supply infrastructure to meet growing 
population needs means that we have had to live off of the ``extra'' 
capacity of the system that our forefathers designed and built 30, 40 
or 50 years ago. That extra capacity is gone. There is now very limited 
ability to weather a one or two year drought, much less a drought 
comparable to even the most recent drought of the late 1980's and early 
1990's.
    Further straining the system's capacity and flexibility are the 
needs associated with the development of a new environmental ethic in 
the state and the nation that has sought to address a perceived lack of 
consideration given to the environment with the construction of much of 
our water supply system. I remember vividly discussing with my Central 
Valley Project manager counterparts how we were going to share the 
remaining unallocated yield of the CVP of some 1.2 million acre-feet as 
short a time ago as in 1989. Since that time, we have had the passage 
and implementation of the Central Valley Project Improvement Act and 
other regulatory actions to protect and enhance the environment that 
have resulted in less and less water being available for human uses, 
including agricultural production. A great deal of this lessening water 
supply impact has come to rest on the San Joaquin Valley as a region. 
Water supplies that were historically very dependable are now very 
unreliable. The region suffers from a well-documented groundwater 
overdraft that has been significantly worsened as a result of decreased 
availability of surface water supplies.
    The reliability of Friant Division water supplies is currently at 
risk as a result of at least two major actions or activities. In the 
first, litigation brought in 1988 by a number of environmental and 
fishing organizations seeks to return sufficient flow to the upper 
mainstem of the San Joaquin River for the restoration of a salmon 
fishery. Estimates of the need for additional water to restore this 
fishery range from 150,000 acre-feet to some 600,000 acre-feet per year 
on the average. If Friant water users were ordered by the courts to 
release existing supplies for this purpose, it obviously would have a 
major impact on the availability of water to Friant Division water 
users unless additional water supplies were developed to meet this 
need. It is important to note that a stay to this litigation was 
developed by the parties to the action in November of 1999 that allowed 
the parties a limited period of time to explore ways of restoring flow 
and natural processes to the upper mainstem of the San Joaquin River 
which would provide for the restoration of a fishery while not 
adversely impacting the available water supply or cost of water to 
Friant water users. The development of a plan of restoration has been 
progressing for a year, with study results expected to be available at 
the end of this year or early next year.
    The second risk to Friant Division water supplies lies within the 
fact that the region is now chronically water short. Generally, those 
areas of the San Joaquin Valley that were the last to develop their 
land and their rights to water are the first to be shorted when the 
inevitable droughts occur. In particular, with the loss of water supply 
reliability of waters being exported out of the Sacramento/San Joaquin 
River Delta, some of the water users served by the Delta export pumps 
apparently feel compelled to attack the water rights and water supplies 
of their neighbors within the region. These attacks have taken the form 
of several legal challenges to CVP operations or other legal 
maneuvering aimed at reallocating the very limited water supplies that 
exist for the balance of the region. It is important to note that not 
everyone suffering from the water supply cutbacks has taken this 
aggressive approach. Many, such as the Kern County Water Agency and 
others, look to a more cooperative approach to dealing with their water 
shortages; relying upon creativity and partnerships as compared to 
litigation and divisiveness. The legal challenges and attacks on our 
continued beneficial use of Friant Division water supplies have 
consistently been defeated. However, the cost of defending these claims 
has been extraordinary, both monetarily and in terms of the uncertainty 
and acrimony created.
    There also exists a threat to the continued use of the available 
water supplies for our agricultural economy that are driven by our own 
regional growth. The San Joaquin Valley is one of the fastest growing 
regions in the state. Balancing urban area growth with maintenance of 
the most productive agricultural region in the world presents constant 
challenges. Keeping prime farmland in production next to burgeoning 
cities is becoming more and more difficult. Moving growth to non-
irrigated lands, like the San Joaquin Valley's foothills, can only be 
accomplished if the new development brings a water supply with it. 
Given the region's already chronically water short condition, where 
will this water supply come from unless new supplies are developed?

       ACTIONS THAT FRIANT WATER USERS HAVE TAKEN TO IMPROVE OUR 
                        WATER SUPPLY RELIABILITY

    Friant water users believe strongly in joining with others to 
create mutually beneficial partnerships that address our problems and 
the problems of others.
    If you were to have asked what the greatest threat to Friant 
Division water supplies was four years ago, I would have said it was 
the potential of an adverse outcome in the effort to allocate the 
responsibility for meeting Bay/Delta water quality standards. The stage 
was set for a massive fight before the California State Water Resources 
Control Board between the major water users on the San Joaquin River 
upstream of the point where it enters the Bay/Delta, including entities 
such as Modesto Irrigation District, Turlock Irrigation District, 
Merced Irrigation District, the City and County of San Francisco, Delta 
Export interests, Friant water users and others. Coming out of the1994 
Bay/Delta Accord, the California State Water Resources Control Board 
was charged with allocating the responsibility for meeting the flow and 
water quality standards to the water right holders for waters tributary 
to the Bay/Delta.
    On the San Joaquin River, the responsibility for meeting the new 
standards was negotiated and agreed to by the major water right holders 
on the river. This agreement is known as the San Joaquin River 
Agreement and was formally adopted by the State Board in December 1999. 
The Friant Water Users Authority, on behalf of the Friant Division 
districts, was a major contributor to the development of this 
agreement. This agreement provides for a twelve-year timeframe to test 
theories of river flow augmentation combined with export pumping 
regimes and operation of a barrier at the head of the Old River 
Channel, designed to provide the greatest benefit, in terms of 
survival, for fall run Chinook salmon. The technical aspects of the San 
Joaquin River Agreement are known as the Vernalis Adaptive Management 
Plan or ``VAMP.'' In essence, twelve years have been provided for the 
users of waters from the San Joaquin River (including Friant water 
users) to develop a long-term sustainable plan for the protection of 
San Joaquin River fisheries based upon sound scientific evidence that 
will be generated from the VAMP analysis. This is considered by 
virtually everyone in the California water community to be a victory 
for compromise over conflict. These once adverse interests now meet 
several times a year to adaptively manage the experimental program and 
to optimize the value of the San Joaquin River Agreement to the parties 
and to the environment. It is certainty that, had the San Joaquin River 
interests chosen to fight rather than pursue creative solutions, we 
would all be either still before the State Board or in court rather 
than getting about the business of addressing water quality needs in 
the Delta.
    The previously mentioned stay in the litigation to restore a salmon 
fishery to the upper mainstem of the San Joaquin River should also be 
considered a valuable partnership activity on the behalf of Friant 
water users to address an issue of tremendous concern. While there is a 
considerable way to go to completion of a plan for restoration that 
keeps Friant Division water users whole from a water supply and cost 
standpoint, I have every belief that this effort will be a success. Ten 
years of litigation have led to this consensus-based attempt to find 
resolution to some otherwise intractable issues. The litigation has the 
potential to go on for at least another ten years. Even if the 
plaintiffs were successful, there would be no measurable improvement in 
the environmental condition of the San Joaquin River below Friant Dam 
for a long, long time. Environmental restoration is now being 
accomplished and, importantly, the economy of the east side of the San 
Joaquin Valley is being maintained.
    Lastly, let me mention the fledgling cooperative efforts between 
the Friant Water Users Authority and the Metropolitan Water District of 
Southern California (``MWD'') to find mutually beneficial ways to 
improve water management. Within the past year, Friant interests and 
MWD representatives began what we hope will be a productive partnership 
to assist MWD to significantly improve the water quality to its 
Southern California water users while at the same time improving the 
capabilities of Friant Division water districts to manage available and 
new water supplies to meet existing needs, including the need to 
develop water supplies for San Joaquin River restoration. This new 
partnership has great potential to provide significant benefits to the 
San Joaquin Valley and to Southern California. This partnership, when 
combined with the partnering efforts involved with San Joaquin River 
restoration, clearly has the potential to lead to actions that can 
benefit virtually the entire state.

   S. 976, THE CALIFORNIA ECOSYSTEM, WATER SUPPLY AND WATER QUALITY 
                        ENHANCEMENT ACT OF 2001

    As I know you are aware, the Friant Water Users Authority is 
supportive of S. 976, the California Ecosystem, Water Supply and Water 
Quality Enhancement Act of 2001 that was introduced by Senator 
Feinstein. Congressional authorization of the CalFed program and a real 
federal commitment to addressing California's water needs are vitally 
important, and S. 976 is therefore an important and needed bill. We 
very much appreciate the leadership of Senator Feinstein and this 
Committee in developing this legislation. We have sought to have it 
strengthened in a couple of regards in order to be more supportive of 
the actions and programs we have underway and actions and programs we 
foresee in the future, including those just previously mentioned.
    As noted earlier, in order to address a significant threat to the 
Friant Division's water security, we are developing and implementing a 
program of restoration for the upper mainstem of the San Joaquin River 
below Friant Dam. Congress clearly recognized the environmental 
tradeoffs it was making when it authorized the construction of the 
Friant Division of the CVP back in 1939. We expect Congress and the 
federal government to have a major role in the restoration of the river 
and return of a fishery. Our progress on the studies and development of 
a plan for restoration are ``out of synch'' from a timing perspective 
with the immediately needed authorization of the CalFed Program. We 
know the funding needs for the San Joaquin River restoration program 
will be significant and we are concerned that they have not been 
adequately considered in the CalFed Framework Agreement and the 
subsequent record of decision.
    However, we are pleased to see provisions contemplated in the 
California Ecosystem, Water Supply and Water Quality Enhancement Act of 
2001 that, with some additional clarification, could well address our 
concerns. The San Joaquin River is specifically noted for restoration 
in Section 4. Bay-Delta Program. As well a study of increased San 
Joaquin River storage is proposed. Additionally, Section 5. Water 
Supply Program would appear to allow projects for water supply 
development, water quality improvements and environmental enhancement 
to qualify for federal grant funding that may not be addressed or fully 
addressed in the CalFed Bay-Delta Program. We believe that with some 
assurance that our multi-benefit programs for environmental 
restoration, water supply improvement and water quality improvement can 
qualify under these sections, that we can compete effectively for such 
monies in the future to help meet our local water supply and river 
restoration needs.
    We would also like to see clarification in the legislation that the 
stated grant funding limits only limit the federal funding to be 
provided under the legislation and not the total federal funding that 
may be brought to bear on a project. This is especially important when 
considering the use of existing funding sources such as the CVPIA 
Restoration Fund where there is a clear overlap of purpose and the 
funding source is primarily provided by water and power users of the 
CVP, yet its use may be inadvertently limited on a project because of 
the federal funding caps contemplated in this bill.
    Certainly, creating a well funded, balanced and scientifically 
based program of environmental restoration of the Bay/Delta and its 
tributaries will be consistent with and supportive of our needed San 
Joaquin River restoration effort. Even if we are successful in 
returning the conditions favorable to an anadromous fishery below 
Friant Dam, the conditions all of the way down the river, through the 
Delta, through the Bay and to the ocean must also be conducive to 
successful salmon smolt out-migration and the return of the adults. In 
this regard, it is easy to understand why we believe CalFed must be 
authorized and the environmental restoration program get underway 
quickly in order for Friant water users to ultimately obtain their 
needed water supply security.
    New water supply infrastructure, including the new storage 
contemplated in the record of decision, must be supported and the 
regulatory hurdles leading to construction minimized. This does not 
mean abandoning existing law and regulation and running the risk of 
making environmental or economic mistakes. However, a plan of water 
supply development and water quality improvements that takes too long 
to come to fruition will only create new mistrust of the process and 
new reasons for individual interests to think and act only for 
themselves. Being able to move effectively and efficiently in making 
the necessary determinations to effect water system improvements is 
essential.
    Finally, we have experienced first-hand the cost and anguish of 
defending our water rights and water supplies from those who would 
interpret existing law to an end never intended by the legislature. We 
remain concerned about any current or future effort to weaken our 
ability to meet the needs of our service area, including the needs of 
the San Joaquin River, by those desperate for additional water supplies 
within the region. In that regard, we see great potential for the 
inadvertent upset of existing water rights and operational priorities 
for the CVP with otherwise well-intentioned law to provide assurances 
of a water supply where, truly, no assurance can be found. Clearly, an 
assurance to some has the potential to become a huge liability to 
others and must be avoided unless all interests are in agreement and 
the source of the assurance is clear.
    In this regard, as I know you are aware, the Friant Water Users 
Authority has been and remains concerned about language in this bill 
that has the potential to be interpreted as providing a certain water 
supply for south-of-Delta Central Valley Project agricultural water 
contractors at the expense of other stakeholders.
    The Friant Water Users Authority believes that it clearly is the 
intent of the CalFed record of decision to provide this assurance as an 
achievable objective within the context of other goals established as 
part of the CalFed Program. As such, the endorsement of the CalFed 
record of decision by Congress in its authorization of the CalFed 
Program is all that should be needed to provide federal agencies the 
directive to meet this objective. Mandating achievement of this 
objective, or even separately highlighting it, in the CalFed 
authorization is unnecessary and runs the risk of creating a legal 
nexus and confusion about Congressional intent on this most important 
issue. The obvious downside is creating legal fodder for those who have 
a history of using any claimed lack of clarity in federal law or 
contracts to bootstrap themselves to an improved water supply position 
at the expense of others. I, as well as others, have endeavored for the 
past several weeks to develop language changes that would provide the 
clarity needed to protect the universe of interests that could be 
affected by such language. I am concerned that such language changes 
are not achievable.

                                CLOSING

    In closing, let me extend my appreciation for the invitation to 
appear before the Committee today. The Friant Water Users Authority 
very much appreciates your interest in providing the San Joaquin Valley 
and all of California a safe and reliable water supply and a restored 
environment. It is difficult to limit my comments to just those noted 
above. I would encourage the Committee to review the policy statement 
of the Friant Water Users Authority on CalFed attached as Exhibit A to 
better understand why we support S. 976, the California Ecosystem, 
Water Supply and Water Quality Enhancement Act of 2001 and believe it 
clearly provides a vehicle for moving forward on these most important 
issues.
    We look forward to continuing to work with you. Thank you.

                               Exhibit A

                      FRIANT WATER USERS AUTHORITY

                   Policy Principles Regarding CalFed

    Recitals--In consideration of the policy principles regarding 
CalFed, the Board of Directors of the Friant Water Users Authority 
finds the following things to be true and correct:
    1. The Friant Water Users Authority was created to protect the 
water and water rights of its member agencies and to assist in 
maintaining an adequate, reliable and affordable water supply for the 
water users served by its member agencies;
    2. The Friant Division of the Central Valley Project is predicated 
upon a program of exchange of water between the U.S. Bureau of 
Reclamation and the entities and agencies known as the Exchange 
Contractors, memorialized as the Exchange Contract revised and dated 
December 6, 1967. Thus, the Friant Division is indirectly dependent 
upon exports of the U.S. Bureau of Reclamation from the Sacramento/San 
Joaquin River Delta;
    3. A number of Friant Water Users Authority member agencies have 
contracts for delivery of water from the U.S. Bureau of Reclamation 
taken directly from the Sacramento/San Joaquin River Delta;
    4. The region served by the member agencies of the Friant Water 
Users Authority is currently water short. This shortage manifests 
itself in the form of groundwater overdraft;
    5. The Friant Water Users Authority is currently engaged in a 
program of study and pilot project implementation resulting from 
litigation known as NRDC vs. Patterson which seeks to restore, on a 
mutually acceptable basis, the environmental values of the San Joaquin 
River downstream from Friant Dam while not adversely impacting the 
overall sufficiency, reliability and costs of water to the Friant 
Division of the Central Valley Project, more particularly described in 
the Mutual Goals Statement dated June 3, 1999;
    6. The Friant Water Users Authority is signatory and supports the 
San Joaquin River Agreement and the principles of cooperation and sound 
water management it represents;
    7. The Central Valley Project Improvement Act was passed into law 
in 1992. It made sweeping changes to the amount of water available from 
the Central Valley Project, the cost of water available from the 
Central Valley Project, the priorities for Central Valley Project 
deliveries and the terms of contracting for water with the federal 
government. As a result of the Central Valley Project Improvement Act, 
the Friant Division of the Central Valley Project currently pays an 
average of $20 million per year into the Central Valley Project 
Improvement Act Restoration Fund.
    Principles--The Board of Directors directs the Friant Water Users 
Authority's support of and participation in the CalFed Bay-Delta 
Program, as a means to further the interests of the Friant Water Users 
Authority and its members agencies, provided that implementation of 
CalFed is consistent with the following policy principles and 
guidelines:
    1. In meeting all of these stated principles, it is the belief of 
the Friant Water Users Authority that significant additional surface 
and ground water storage will be needed in the San Joaquin Valley and 
elsewhere within California.
    2. Implementation of CalFed should provide for opportunities to 
improve Friant Water Users Authority member agency water supply 
availability and reliability with no significant degradation in overall 
water quality. In no case should Authority member water supplies be put 
at greater risk or reduced in their sufficiency or reliability;
    3. CalFed should promote programs consistent with the goals of San 
Joaquin River restoration;
    4. The facilities depended upon, either directly or indirectly, by 
Friant Water Users Authority member agencies must be protected from 
degradation;
    5. Oversight and management of the CalFed Bay-Delta Program should 
achieve the following results:

          a. Provide opportunities for meaningful participation by 
        Friant Water Users Authority representatives in actual 
        decisions in prioritization, program calibration and regulatory 
        adaptive management;
          b. Decision making based upon the best available science;
          c. Provide long-term stability and regulatory assurances;
          d. Provide fiscal responsibility while providing value to 
        Friant Water Users Authority member agency water users;
          e. Provide a fair allocation of costs, commensurate with 
        benefits received.

    6. CalFed should recognize the regulatory and water supply baseline 
from which benefits are measured as being the conditions as they 
existed prior to the implementation of the protections for the winter 
run salmon and the passage of the Central Valley Project Improvement 
Act;
    7. CalFed should promote efficient water use through incentive-
based, cost-effective (to those paying the costs) implementation of 
conservation and recycling programs;
    8. Implementation of CalFed should be consistent with the San 
Joaquin River Agreement;
    9. Implementation of CalFed should not jeopardize the continued 
ability of the U.S. Bureau of Reclamation to perform under the Exchange 
Contract by providing water sources other then as a result of water 
releases from Friant Dam, in fulfillment of that contract; and
    10. Implementation of CalFed should not result in any involuntary 
redistribution or taking of water supplies or water rights from 
existing users currently putting water to beneficial use within their 
rights as provided for under state and federal law.

    Senator Feinstein. Mr. Hall of ACWA. Steve, if you would 
explain ACWA to everybody.

 STATEMENT OF STEPHEN K. HALL, EXECUTIVE DIRECTOR, ASSOCIATION 
                  OF CALIFORNIA WATER AGENCIES

    Mr. Hall. Sure. Thank you. Thank you, Senator.
    My name is Steve Hall. I represent the Association of 
California Water Agencies.
    Like you, Senator, we represent both the east side and the 
west side of the San Joaquin Valley, and so I feel your pain. 
And we also represent water agencies throughout the State of 
California, both agricultural and urban water agencies.
    I want to begin, if I may, by thanking you for your 
longstanding leadership, not just with this legislation, but 
for a long period of time; and most recently for your stirring 
and, fortunately, effective defense of the CALFED appropriation 
of $40 million last night on the Senate floor.
    It is money that is badly needed to keep this program 
viable and--in fact, if I may, I want to harken back to a 
couple of things you said last night in defending this 
appropriation.
    First, analogizing it to the energy crisis that we face in 
California: There are some very clear parallels between the 
energy crisis that we face and the water crisis that we are 
about to face in California.
    The water crisis is temporarily hidden, but it is very 
real; and we are in the first of what unfortunately could be 
several dry years, where we will definitely begin to overshadow 
our current energy crisis.
    And we could hopefully prevent it, if we are lucky enough 
to avoid some dry years in the next few and if we move with 
this legislation to try to bring the parties together and 
invest in our infrastructure, so we can avoid a similar crisis.
    The other comment you made last night that I think is 
analogous is what we are experiencing now in the Klamath. This 
bill, this program is very important to California. But I 
really think it is important throughout the West.
    I have the privilege of working with water professionals in 
other Western States. And everywhere I go, the issues, the 
problems are the same, whether it is in the Columbia Basin or 
on the Colorado River, in Klamath or in our Bay-Delta estuary, 
the growing tension between preserving our environmental values 
and serving a growing population throughout the West.
    If you read the popular press, you come to believe that 
there have to be winners and losers in this fight, that it is 
fish versus farmers; that farmers have to suffer in order to 
protect fish or vice versa; that somehow habitat and humanity 
cannot coexist.
    Well, CALFED is dedicated to the proposition that it need 
not be that way. And we can have a healthy ecosystem and a 
healthy economy. We can have a growing Western population and 
maintain robust fish and wildlife populations.
    Senator, beginning in the early 1990's, you began to take a 
leadership role in this. I think you have what very few 
political leaders have, a hard-wired genetic code that gives 
you the incurable optimism necessary to do this. I feel sorry 
for you----
    Senator Burns. Is that good or bad?
    [Laughter.]
    Mr. Hall. Well, it is bad for her, but it is really good 
for the rest of us.
    [Laughter.]
    Mr. Hall. Beginning first with Governor Wilson and then 
Governor Davis, with Governor--with President Clinton and now 
with President Bush, there seems to be one common denominator--
there were two Governors, two Presidents, and one Senator, who 
are willing to stick their necks out to try to get something 
done in California water.
    And the result is we now have a model program. The CALFED 
program is a balanced program of ecosystem restoration which, 
by the way, the water users fully support. It is in our 
enlightened self interest to support the ecosystem restoration 
because we need to have healthy fish populations or our water 
supplies become unreliable.
    The law requires it; our environmental ethic dictates it. 
We are going to have an environmental restoration program as 
part of this. We already do.
    It has got all of the water management tools that people 
talk about, conservation, reclamation, water transfers. It has 
got conveyance improvements. It has got a focus on drinking 
water quality, which we badly need in our system because we 
have increasing Federal mandates and a public that demands that 
their water be safe to drink. And there is only one way to 
provide that and that is to invest in the system.
    It has also got storage, which is controversial with some, 
but I could not agree with you more, Senator. We have to have 
it. It is an essential tool--not a desirable tool, an essential 
tool--to meeting our water needs in the future.
    We have all of these things in the package because we do 
need them all. And there is one other thing. We need to have a 
balanced implementation of these things. We cannot run out 
ahead in the implementation of one feature of this and leave 
the others behind because, you know what? In California, 
consensus breaks down quickly. It is a wonderful concept. It 
breaks down as soon as somebody gets what they want without 
bringing the others along.
    Senator Feinstein. Right.
    Mr. Hall. Senator, I cannot stress this importantly enough: 
The authorization process in your bill has to be correct so 
that we stay linked together, so that no one interest group 
gets out ahead of the other. If we fail to succeed in doing 
that, then I do not believe ultimately the CALFED program can 
succeed. So we are pledged to work with you in crafting 
legislative language that does that.
    Now, why should people across the country care? It is a 
wonderful program for California, but why should other people 
care? Well, first, the Federal Government should care because 
it has the largest single water project in the State.
    So if nothing else, the Federal Government should be 
interested in protecting its investment and continuing to 
deliver the water that it has contracted with people to 
deliver.
    Second, this will help California live within its $4.4 
million acre feet Colorado River entitlement, secondly. And I 
think most importantly, I spoke earlier in my testimony about 
the problems being similar throughout the West. Well, I think 
we now have a model program that can be used throughout the 
West to balance the needs of the environment with human needs 
and get past these thorny ESA and other water conflict problems 
that we face throughout the West. But we have got to pass this 
bill in order to make it a model and a precedent for other 
areas of the West.
    So in closing, I just want to urge the subcommittee--though 
I see that there are not many members of the subcommittee 
left----
    Senator Feinstein. Oh, that is all right. Staffs are here.
    [Laughter.]
    Mr. Hall. I got it.
    Senator Feinstein. Believe me, on this stuff, that counts.
    [Laughter.]
    Mr. Hall. I want to urge the subcommittee to mark this bill 
up promptly, to move it to full committee and to the Senate 
floor and let us get this program underway. It is long overdue 
and badly needed. And I will close again in thanking you, 
Senator.
    [The prepared statement of Mr. Hall follows:]

Prepared Statement of Stephen K. Hall, Executive Director, Association 
                      of California Water Agencies

                        I. INTRODUCTION/OVERVIEW

    Thank you for the opportunity to speak before you today. My name is 
Steve Hall, and I am executive director of the Association of 
California Water Agencies (ACWA), the largest and oldest collection of 
public water agencies in California. ACWA's members are responsible for 
90% of the water delivered in the state--our smallest member serves 
fewer than 50 people, and our largest serves 17 million urban southern 
Californians. My testimony today is intended to illustrate a looming 
water crisis that is waiting for California and the western United 
States. It's a real crisis, and one that we can go a long way toward 
preventing with the bill before you now, Senator Feinstein's S. 976.
    By all accounts, California is an engine of economic growth that 
provides momentum for neighboring western states and the nation. 
California is home to 11 percent of America's population, accounts for 
12 percent of our gross domestic product, 50 percent of the nation's 
fruits and vegetables, and serves as a research and development haven 
for high technology. California does all this with roughly 76 million 
acre-feet of water that is captured for human uses every year, or about 
35 percent of all the water that falls on the state annually.
    But California's contribution to the national economy is 
increasingly held hostage to an unstable water supply. New 
environmental regulations governing the allocation of water, layered 
atop progressively more stringent federal drinking water standards, are 
placing increasing demands on existing dams, canals and treatment 
facilities that in most cases were built decades ago. Too often, 
federal mandates dictating the quality or use of water have not been 
accompanied by the investments necessary to make those goals possible. 
At the same time, the inevitably of drought looms always on the 
horizon, threatening to further turn the screws on a tightening 
regulatory vise.
    We've seen this type of scenario before. In the years leading up to 
California's current energy crisis, the state's construction of new 
power generation and transmission facilities ground to a halt. A 
surplus of power enjoyed during the mid-1990s evaporated into a sharp 
electricity deficit last summer. Since then, California has had to 
struggle to keep the lights on, and while energy supplies are 
improving, the entire west is paying the price for this inaction. We 
run the same risk with water, with far more dire results. Fortunately, 
we have a bill before you today that will provide a good part of the 
investment needed to avert a near certain crisis.

                   II. OVERVIEW OF CALFED AND S. 976

    Beginning in the mid 1990s, Senator Feinstein worked with then-
Governor Wilson and later Governor Davis to develop a partnership 
between California and Washington to address the problem of growing 
water shortages. That partnership came to be known as CALFED.
    CALFED is a collaborative water effort undertaken by 19 state and 
federal resource agencies with jurisdiction in the Sacramento-San 
Joaquin Bay-Delta. It's mission is ``to develop and implement a long-
term comprehensive plan that will restore ecological health and improve 
water management for beneficial uses of the Bay-Delta System.'' The 
Bay-Delta region, referred to as CALFED's ``solution area,'' forms the 
hub of our water delivery system, and provides water to 23 million 
urban and rural Californians. It irrigates several million acres of 
farmland, which produce a significant portion of the national food 
supply. The Bay-Delta is a resource base for the entire western U.S.
    Founded in 1995, CALFED first received federal funding in 1996 
under a three-year, $430 million authorization to authorize the 
development of the full CALFED plan. This bill authorizes the 
implementation of that plan. The plan is focused on bringing water 
demand and supply into balance, restoring the ecosystem and conveyance 
capacity of the state's most important watershed and improving source 
water quality for over two-thirds of the state's residents.
    Why is that important beyond California? Because, the CALFED 
Program offers benefits for the entire western United States. First, 
because CALFED restores an ecosystem of national and international 
importance. The Bay-Delta is a central corridor for migrating birds on 
the pacific flyway, and supports more than 750 species of fish, 
mammals, and birds, many of them threatened or endangered. This fragile 
ecosystem is as significant as the Everglades, Great Lakes and 
Chesapeake Bay, where similarly broad state-federal projects have moved 
forward with bipartisan Congressional support.
    Second, if California is to solve its intractable water problems--
problems with ample potential to spill over into neighboring states--it 
must begin with the Bay-Delta. Within the complexities and competing 
ideas for how best to implement CALFED, there lies a genuine 
opportunity for Congress and the state to turn an environmental crisis 
into a lasting regional success.
    There are many more reasons for the federal government to take a 
leadership role in the Bay-Delta, ranging from compliance with the 
federal Endangered Species Act to the regulatory objectives of the U.S. 
Fish and Wildlife Service. It is an area where government can do its 
best work; to prevent a water crisis, to restore the environment, and 
foster cooperative relationships between the state, local and federal 
governments. The federal government is also a major stakeholder in the 
outcome of CALFED, since it operates the single largest water project 
in the state--the Central Valley Project.

                         III. URGENCY OF CALFED

    Efforts to resolve California's water problems are always going to 
be accompanied by controversy. There are too many interests, too many 
local and regional problems, and too few funds for any effort to please 
all parties all of the time. That is what makes leadership so essential 
to making real progress in the arid west.
    The millions of people streaming to California each year from other 
states and abroad are not going to wait for the perfect water pact to 
be settled before they make the state their home. The demand for food 
does not taper off while farmers consider uncertain water supplies. 
Floods will not wait for Delta levees to reach total readiness. 
California will have 15 million more people before CALFED's plan is 
fully implemented, and none of these factors can wait while we try to 
craft the perfect bill and the perfect Program.
    They won't wait, and neither will Congress. Several times during 
the past decade, Congress and the President have approved sweeping new 
drinking water quality standards--on arsenic, radon, perchlorate, 
cryptosporidium, and other water contaminants. As more is known about 
elements within our drinking water, policymakers and the people you 
represent aren't waiting to demand water of consistently higher 
quality, even at a consistently higher cost. Programs like CALFED are 
established to help address these health issues, and accommodate the 
increases in supply that are necessary to improve water quality.
    In the years since construction of the Central Valley Project and 
the State Water Project, no equally large water project has been 
contemplated or allowed to move forward in California. The very few 
local facilities built since the SWP often required years of public 
review and inevitable political controversy. Nevertheless, in the last 
30 years, only two regional reservoirs have been built in California, 
even though eight million people have come to the state during that 
time. Meanwhile, new awareness of environmental water needs and 
commitments to protect salmon have further directed away several 
million acre-feet of water to meet new environmental mandates. This 
rededication of resources, coupled with rapid population growth, has 
vastly destabilized California's water picture.
    The CALFED Program, and all it hopes to accomplish for California, 
will be at risk without S. 976, but with infinitely greater 
consequences, for wildlife, for agriculture, for our cities and for 
public safety. Five years of planning, and future of water wars, demand 
action now.
    Much has been written about California's energy crisis, and how 
stymied efforts to expand the state's water supply portend a crisis of 
even greater proportions for California water. ACWA agrees 
wholeheartedly with that analogy, and has worked hard to bring that 
message to Congress. Today, the Energy and Natural Resources Committee 
can decide whether to prevent a crisis, or end up responding to it two 
or three years down the road. We believe S. 976 and the CALFED Program 
is the solution. We urge you to work with Senator Feinstein in assuring 
its passage. ACWA is committed to assisting in that effort.

    Senator Feinstein. Thanks very much, Mr. Hall.
    Mr. Somach.

            STATEMENT OF STUART L. SOMACH, PARTNER, 
            SOMACH, SIMMONS AND DUNN, SACRAMENTO, CA

    Mr. Somach. Thank you, Senator Feinstein. I will answer 
your question, I guess, as to who I am here representing, 
first. It is probably a good idea.
    I actually have been asked and have somewhat the 
interesting task of representing two disparate client bases. 
The first is northern California. As you are aware, I am the 
general counsel of the Glenn-Colusa Irrigation District, the 
largest agricultural water district in northern California.
    GCID supports the CALFED process, believes that S. 976 is a 
really good bill. We support it. We think it is a good 
foundation for further discussion as we move through the 
legislative process.
    But I also am here representing districts located on the 
west side of the San Joaquin Valley, the folks that have been 
referred to several times in terms of the assurance language. 
And as I will focus on a little bit in a moment, the west side 
San Joaquin Valley landowners with respect to both CALFED and 
S. 976 have contrasting views of those processes and the 
legislation from those of my clients in Northern California and 
GCID.
    I wanted to note before I get into the substance of the 
legislation as it reflects to those two client bases, another 
client that I represent--because I think it is, in fact, most 
relevant to what is going on here. We have heard these clients 
referred to often today, but I represent the Klamath Project 
Water Users in southern Oregon and northern California.
    I am lead litigation counsel for them in litigation 
challenging what I consider to be an unfortunate and 
inappropriate decision of the United States to reduce to 
essentially zero the water supplies to the Klamath Project 
farmers.
    And I raise this representation here because it has made me 
keenly aware on a very personal level of the disaster that can 
accompany Federal regulatory decision-making if we do not 
adequately address environmental and water supply problems in a 
timely and appropriate manner.
    The Klamath experience teaches, among other things, that we 
cannot just nibble away at the edges of a problem, but rather 
we must address them directly, affirmatively if we are going to 
achieve success.
    And in this context, to the extent that my comments at 
times are blunter than perhaps I ought to be, it comes directly 
from the horrible disaster and agony that I am in--and I only 
am doing it in a representational manner. I am not the farmers 
that are experiencing the hardships that exist on the Klamath 
today.
    Let me move to GCID first. And I would just simply say that 
in general because of its location, because of the seniority of 
its water rights, GCID has enjoyed sufficient water supplies to 
allow it to provide irrigation water to lands within the 
district.
    We have not suffered shortages in the normal and ordinary 
way that folks south of the Delta have experienced shortages. 
Nonetheless and in spite of that favored position, we know 
first-hand what these regulatory limitations can do.
    We were the first, and for awhile, the only district to 
ever be shut down because of Endangered-Species-Act-related 
limitations. It had to do with faulty fish screens. We were 
shut down entirely.
    Thank heavens, working closely with State and Federal 
agencies pursuant to authority, cost-sharing, appropriations 
that you assisted us in obtaining over the last 10 years, we 
are done with what is now the world's largest fish screen at 
the cost of about $80 million of State, Federal and GCID 
monies.
    And it is that experience that we have learned from, that 
in spite of good water supply fortune, we must be concerned 
about the larger problems, both environmental and water supply 
that exists within the State. And as a consequence, that is 
what our support of CALFED and S. 976 derives from.
    And as you know in that context, we have worked closely 
with the northern California Water Association. And we have 
been working hard in terms of developing what we call 
integrated water supply management programs, ones where we take 
the entire water resource mix that we have available to us and 
we put them together. We use conjunctive use, surface water, 
stored water, and in terms of trying to meet first the 
Sacramento Valley's needs for water and then hopefully 
environmental and south of Delta water needs also.
    The idea is if we can better manage and utilize our water 
supply in the northern part of the State, we ought to be able 
to build and increase the pie. That is what we did. That is how 
we resolved what could have been very contentious litigation 
first before the State Water Resources Control Board and then 
before the courts, when we resolved through an agreement with a 
broad base of water users, including the State and Federal 
projects, through the Phase Eight Agreement, a management 
scenario that looks toward building projects as opposed to 
fighting over scarce water supplies.
    Integral to that solution is the Sites Reservoir Project 
that the Senator mentioned earlier. And I appreciate the 
detail, in fact, that you have in mind with respect to what 
that project is and what it does.
    Noticing my time, let me turn quickly to the assurances 
associated with the west side of the San Joaquin Valley. I 
heard Senator Burns talk about those assurances, and I was 
representing the whole of the Central Valley Project Water 
Association back in 1992.
    Those promises were made personally. They were made to the 
landowners. They were made within the litigation--legislation. 
Those promises, to date, have never ever been achieved.
    If there is a frustration with this issue, it is not one 
that is derived from anything other than the fact that this is 
not a clean slate that you are legislating on; it is one that 
begins at least back to 1992, where the west side was 
essentially getting 100 percent of supply. And today, after 
those promises, the west side is at about 45 percent of supply.
    We have looked at the language--the new language that you 
have proposed, and I think you mentioned the one comment that 
was provided to you, that the language ``pursuant to'' would 
make that language acceptable to the west side of the San 
Joaquin Valley and would shift our non-opposition but non-
support of the legislation to one where we could honestly 
support that legislation.
    I have heard a lot about mandates here. I am not certain 
that there is anything in any of the legislation that mandates 
anything. What we do think though is that the assurances, 
however you characterize them, ought to be moved out of the 
findings provision in the bill and made a substantive portion 
of the legislation, like other----
    Senator Feinstein. We did that. That is what somebody is--
was referring to earlier.
    Mr. Somach. That is right.
    Senator Feinstein. We did it at the Governor's request 
actually and moved it into the substance of the bill.
    Mr. Somach, we are going to run out of time----
    Mr. Somach. Yes, ma'am. I'm sorry.
    Senator Feinstein [continuing]. Because--but let me--you 
know, you are tough lawyer. I know that. Having said that, I 
wish you, while you are here, Richard Moss and the others could 
sit down with Patrick Wright on this language.
    We are trying to be within the record of decision. We are 
trying not to have a lawsuit challenging it. I know the 
Governor's feelings on it very well, because I talked with him 
before the implementation plan was announced on it. We just 
need to find a way.
    And so if I could ask Patrick: Would you sit down with both 
sides--I think Birminghan is here--is here somewhere too--and 
see if you can get something that follows the ROD that isn't 
going to be litigated and give me that language. Is that 
agreed?
    Mr. Wright. We will do everything we can to try to do that.
    Senator Feinstein. Oh, you hedged.
    [Laughter.]
    Senator Feinstein. The answer is ``Yes, Senator.''
    [Laughter.]
    Mr. Wright. We will be there. We will be there with them. 
Whether they will agree, that is----
    Mr. Somach. We want to fix the problem. We will be there 
also, Senator.
    Senator Feinstein. All right. Thank you. And thank you very 
much for your testimony.
    [The prepared statement of Mr. Somach follows:]

  Prepared Statement of Stuart L. Somach, Partner, Somach, Simmons & 
                          Dunn, Sacramento, CA

    Mr. Chairman and members of the subcommittee, my name is Stuart 
Somach. I am a water rights and environmental lawyer representing 
clients West-wide. In particular, and in the context of this testimony, 
I am General Counsel for the Glenn-Colusa Irrigation District 
(``GCID''), the largest agricultural water district in Northern 
California. GCID supports the CALFED process and believes that S. 976 
constitutes a good foundation upon which final legislation can be 
based.
    Also relevant to my instant testimony is my representation of the 
districts located on the west side of the San Joaquin Valley. As I will 
discuss below, the views of Westlands, and other west-side San Joaquin 
Valley landowners, with respect to both CALFED and S. 976, contrast 
with those of GCID.
    Finally, I must also note that I represent water users within the 
Klamath Project in Southern Oregon and Northern California and, in that 
regard, am lead litigation counsel for the Klamath Irrigation District, 
Tulelake Irrigation District, Klamath Project Water Users Association 
and named landowners in litigation challenging the unfortunate and 
inappropriate decision of the United States to reduce to essentially 
zero the water supplied to Klamath Project farmers.
    I raise representation of Klamath Project water users here, even 
though it is not directly relevant to CALFED or S. 976, because it has 
made me keenly aware of the disaster that can accompany federal 
regulatory decision-making if we do not adequately address 
environmental and water supply problems in a timely and appropriate 
manner.
    The Klamath experience teaches, among other things, that we cannot 
just nibble away at the edges of a problem, but rather we must address 
them directly and affirmatively if we are to achieve success.

                               GCID/NCWA

    As I noted earlier, I am General Counsel for GCID. GCID is the 
largest agricultural water district in Northern California. GCID also 
has among the most senior appropriative water rights on the Sacramento 
River and holds a water rights settlement contract with the United 
States. In return for GCID's acquiescence in the United States' 
diversion of water from the Sacramento River for the Central Valley 
Project (``CVP''), GCID is entitled to 105,000 afa of CVP water.
    In general, because of its location and the seniority of its water 
rights, GCID has enjoyed sufficient water supplies to allow it to 
provide irrigation water to lands within the district. Nonetheless, and 
in spite of its senior water rights, GCID knows first hand the impact 
of federal regulation. GCID was the first district to be enjoined from 
pumping water through district facilities because of Endangered Species 
Act limitations. This occurred when faulty fish screens took endangered 
winter run salmon as GCID attempted to undertake normal water 
diversions.
    Though initially attempting to avoid the reality of the problem, 
GCID ultimately realized that the situation required affirmative and 
positive action on its part. Consequently, working closely with state 
and federal agencies, and pursuant to authority and cost-share funding 
provided for within the Central Valley Project Improvement Act 
(``CVPIA''), a state-of-the-art fish screen was designed, permitted, 
and constructed. That screen (the largest flat plate fish screen in the 
world) and associated facilities will ultimately cost about $80 
million. Not even one winter run salmon has been taken since the 
district first took affirmative action to address the situation.
    I detail this history, at least in part, to explain the context for 
GCID's support of CALFED and the effort evidenced in S. 976. We have 
learned by experience that in spite of our good water supply fortune, 
we must be concerned about the larger problems, environmental and water 
supply, that exist within the state.
    In this context, GCID works closely with other Northern California 
water interests through the efforts of the Northern California Water 
Association (``NCWA''). NCWA is a geographically diverse organization, 
extending from California's Coast Range to the Sierra Nevada foothills, 
and nearly 180 miles from Redding to Sacramento. NCWA's members rely on 
the waters of the Sacramento, Feather, Yuba and American Rivers, 
smaller tributaries and groundwater to irrigate nearly 850,000 acres 
that produce every type of food and fiber grown in the region. Many of 
its members, including GCID, also provide water supplies to state and 
federal wildlife refuges, and much of this land serves as important 
seasonal wetlands for migrating waterfowl, shorebirds and other 
wildlife.
    Over the past years, GCID, working with NCWA and other Northern 
California water users, has worked diligently to improve both water 
supply and environmental protections within the Sacramento Valley. In 
this context, they have undertaken projects which will provide water 
security not only for Northern California, but for other regions of 
California as well.

 AN INTEGRATED WATER MANAGEMENT PROGRAM FOR THE SACRAMENTO VALLEY WILL 
             IMPROVE WATER SUPPLY, QUALITY AND RELIABILITY

    GCID and other Northern California water users have committed to 
help improve water supply reliability, water quality and environmental 
benefits. The Sacramento Valley's initiative and effort to help protect 
salmon and other aquatic species is unprecedented and is now recognized 
as one of the most progressive voluntary salmon restoration efforts in 
the United States. Today, more than a dozen NCWA members, representing 
over 500,000 acres of irrigable land, have either completed or are in 
various stages of developing screens to prevent fish entrainment at 
their diversions. This, of course, includes the GCID fish screen I 
mentioned earlier. Many NCWA members, including GCID, have also 
initiated far-reaching efforts to refurbish fish ladders, construct 
siphons, remove dams, create habitat conservation plans and implement 
other habitat improvement projects to enhance the environment, while at 
the same time improving water supply reliability.
    Additionally, GCID and other Northern California water users have 
embarked on an integrated water management program that has broad 
support from water suppliers and local governments throughout the 
Sacramento Valley. This integrated program includes these fish passage 
improvements (fish screens and siphons), groundwater management, 
evaluation of the Sites off-stream storage reservoir, flood protection, 
water use efficiency programs, potential expanded storage in Lake 
Shasta, intra-regional water transfers and exchanges, and water shed 
management.
    During the past year this integrated program led to an 
unprecedented water rights settlement among water users throughout 
California. This settlement, now known as the Sacramento Valley Water 
Management Agreement, and the ensuing integrated water management 
program, avoided the extremely contentious Phase 8 Bay-Delta water 
rights proceedings before the State Water Resources Control Board. The 
parties to the agreement include NCWA, the United States Bureau of 
Reclamation (``USBR''), the Department of Water Resources (``DWR''), 
the federal contractors in the San Luis and Delta-Mendota Water 
Authority, the State Water Contractors, and the Contra Costa Water 
District. This proceeding would have pitted these parties from 
throughout the state against each other. This integrated program will 
now serve as the heart of a regional strategy for the Sacramento 
Valley.
    The Sacramento Valley Water Management Agreement and integrated 
water management program focus on meeting 100% of the water supply 
demands within the Sacramento Valley during all year types, both now 
and into the future. Northern California water users believe that once 
the full demands within the Sacramento Valley are met, this integrated 
program will help make water supplies available for use in and beyond 
the Bay-Delta to meet water quality standards, and provide for export 
water users in the San Joaquin Valley, Southern California, the Central 
Coast, and as assets for the Environmental Water Account (``EWA'') and 
other environmental programs.
    The parties to the agreement will, during the next five months, 
prepare a joint work plan for short-term Sacramento Valley water 
management projects to implement the agreement that will describe this 
integrated program in more detail. Work plans on longer-term projects 
will follow.

SIGNIFICANT EFFORTS ARE NOW NECESSARY TO IMPROVE WATER SECURITY FOR THE 
                    SACRAMENTO VALLEY AND CALIFORNIA

    To improve water security for the Sacramento Valley, leadership is 
now critical to empower regional solutions, provide for infrastructure 
throughout California and streamline and reform the regulatory process 
to accomplish these goals. These efforts are essential and are all 
dealt with in S. 976. This forms the basis of our support for S. 976.
Empower a Regional Solution for the Sacramento Valley
    California history has shown that solutions to water problems in 
the state have typically been successful at the local and regional 
level. Very few solutions fit every part of our extremely diverse 
state. There have been few instances when a top-down, one-size-fits-
all, bureaucratic policy or law has helped the state or has been 
implemented. Instead, California water users are now poised to advance 
a series of regional solutions and local partnerships that will serve 
California's needs for many years to come. The integrated program 
described above is an example of a regional solution for the Sacramento 
Valley, but it can only be implemented with state and federal 
leadership empowering local interests to take the actions necessary for 
these programs to succeed. Any bureaucratic efforts to impose top-down 
solutions, like past efforts, are doomed to failure and have the 
potential to destroy the tremendous progress that has been made on 
these regional solutions.
    Like the Sacramento Valley integrated program described above, 
every regional strategy will include the appropriate mix of 
infrastructure needs, storage, conveyance, water transfers and 
exchanges, fish passage improvements, water conservation and 
efficiency, groundwater management, flood protection, watershed 
management and environmental improvements. To fully empower these 
regional solutions requires state and federal funding and the 
regulatory streamlining necessary to implement these programs.

Streamline and Reform the Regulatory Process
    With nearly 18 federal and state agencies under the respective 
executive branches that dictate California water policy, it is critical 
to coordinate and ultimately streamline the work of the numerous 
agencies with jurisdiction over water resources in California.
    The framework to create CALFED in June 1994 called for cooperation 
and collaboration between the federal and state agencies that oversee 
water in California. It is essential that these agencies continue to 
work together in this manner. Over the past seven years, CALFED has 
evolved from a concept to streamline agency efforts to a massive 
bureaucratic program. For CALFED to be successful as it transitions 
from a planning program to an implementation agency, it must move from 
a top-down bureaucratic organization to an organization that 
facilitates and fosters a series of regional strategies with local 
control and governance. Most notably, it must streamline the regulatory 
process to assure that these programs will be implemented. Specific 
examples include the facilitation of intra-regional water transfers and 
exchanges and expedited permitting by the United States Army Corps of 
Engineers and the Environmental Protection Agency.
    Significantly, this means that CALFED and its member agencies will 
serve in a more limited, albeit more effective, role to advance water 
and environmental policy in the state. It also means that CALFED will 
serve a critical role to coordinate regional strategies to ensure that 
they fit together in a manner that provides statewide benefits, and 
also provide a broad-based governance strategy and oversight capability 
to ensure appropriate and efficient implementation of all CALFED 
program elements.

Sites Reservoir
    S. 976 also recognizes the need for study and assessment of 
``north-of-Delta storage.'' This, of course, is a positive and 
essential element of S. 976. It is generally recognized that the 
fundamental water supply and environmental problems that currently face 
California cannot be properly addressed without the addition of surface 
water storage. In this context, Sites Reservoir was identified in the 
Record of Decision (``ROD'') as a critical element which should be 
pursued, along with local partners within Northern California, and that 
final decisions with respect to its feasibility and authorization 
should be made not later than 2004.
    Sites Reservoir, when constructed, will not only add generally to 
the overall state water supply but, operated in an integrated fashion, 
will allow Northern California, the CVP and State Water Project to 
better maximize the ability to fully utilize water resources available 
to them. In this context, GCID, USBR, the Department of the Interior 
and other state, federal and local interests executed, as provided for 
in the ROD, a Memorandum of Understanding to proceed with analysis and 
environmental review of the Sites Reservoir in order to allow for 
decisions on final authorization by 2004.
    S. 976 could be improved through more specific reference to Sites 
Reservoir, as is done in the ROD, instead of the generalized ``north-
of-Delta storage'' language currently utilized in the bill. Moreover, 
the addition of a time frame for analysis ending in 2004 would also 
make S. 976 more consistent with the ROD.

Implementation of the Record of Decision
    Much work was done by CALFED in preparation of the ROD. That 
progress should not be lost. As a consequence, S. 976 would be improved 
by clarifying that the project alternative screening process provided 
for in the ROD will be adhered to and that one CALFED program element 
will not be treated as an alternative to another CALFED program 
element. Again, among other things, this will allow the full 
integration of all water supply alternatives, maximizing the full 
utilization of the water resource.

Conclusion with Respect to GCID/NCWA
    While GCID/NCWA believe that language with respect to Sites 
Reservoir and project element alternatives analysis could be 
strengthened, they, nonetheless, fully support S. 976.

Westside San Joaquin Valley
    As with GCID/NCWA, the west side of the San Joaquin Valley view of 
CALFED and S. 976 is forged by circumstance and experience. 
Unfortunately, the west side of the San Joaquin Valley cannot support 
S. 976 in its present form. As you know, west side agricultural water 
users are among the south-of-Delta Central Valley Project agricultural 
contractors which, as acknowledged by the California Water Future, A 
Framework for Action, have been ``disproportionately affected by recent 
regulatory actions'' constraining operations of the state's water 
projects. Critical to the west side's support of the Framework for 
Action was its commitment that the normal year water supply for south-
of-Delta CVP agricultural contractors would be increased by fifteen 
percent, to sixty-five to seventy percent, with comparable improvements 
in other water year types. The west side's support for the Framework 
for Action was also predicated on assurances by Governor Gray Davis and 
then Secretary of the Interior Bruce Babbitt that they, along with 
other interested parties, would be allowed to participate in 
preparation of the Record of Decision to implement the Framework 
document. This was important to west side contractors because there 
were numerous ambiguities in the Framework for Action that created 
doubt that the water supply improvements described by the document 
could be accomplished.
    Notwithstanding these assurances, west side agricultural and other 
interested parties were excluded from the process that produced the 
CALFED Record of Decision. Rather than clarifying ambiguities in the 
Framework for Action, the ROD created additional impediments to 
implementation of CALFED Program elements intended to improve south-of-
Delta CVP agricultural contractor supplies. In addition, many of the 
program elements described in the Framework for Action and ROD, if 
implemented, will further reduce water supplies for south-of-Delta CVP 
agricultural contractors. Among these are proposals to build increased 
storage in the upper San Joaquin River watershed to capture flood flows 
that would otherwise be diverted by the San Joaquin River Exchange 
Contractors under their historic water rights. When these flows are 
diverted by the Exchange Contractors, demand on CVP Delta facilities is 
reduced, and more water can be supplied to south-of-Delta CVP 
agricultural contractors.
    For these reasons, west side agricultural contractors have 
consistently stated that their support of any CALFED authorization 
legislation would be contingent on the legislation assuring that the 
water supply commitments made in the Framework for Action will be 
accomplished.
    Westside agricultural contractors have been active participants in 
the CALFED Program from its inception because they hoped that the 
Program would restore to them the water reallocated to the environment 
under the Bay-Delta Accord, Endangered Species Act, and the CVPIA. 
Westside agriculture maintains that hope. However, it views 
authorization of the CALFED Program from the perspective of a water 
agency to whom promises were made in 1994 when it voluntarily loaned 
250,000 acre-feet of its water supply to CALFED agencies for 
restoration of the Bay-Delta Estuary. When then Secretary Babbitt 
signed the Bay-Delta Accord on behalf of the United States, he stated: 
``A deal is a deal, and if it turns out there's a need for additional 
water, it will come at the expense of the federal government.'' 
Interior abrogated this guarantee within two years. As the United 
States Fish and Wildlife Service determined additional water required 
for protection and enhancement of the Bay-Delta Estuary and species 
dependent on the Estuary, the water was taken from south-of-Delta CVP 
agricultural contractors. As things currently stand, west side 
agricultural contractors are only receiving forty-five percent of 
supply.
    We are mindful of S. 976's inclusion of south-of-Delta assurance 
language within its findings. If history had been other than it has 
been, this language might have been sufficient. However, every time 
Congress has addressed this issue, it has done so in a similar manner, 
leaving the accomplishment of the promises contained within the 
legislation to the discretion of federal agencies. In each case, those 
agencies have exercised their discretion to either ignore the findings 
or, worse, to somehow justify taking more water away from the west side 
of the San Joaquin Valley. It is in this context that the west side of 
the San Joaquin Valley cannot support S. 976 as it is currently 
written.

Conclusion With Respect to West Side of San Joaquin Valley
    The west side cannot support, but does not oppose, S. 976. The west 
side, however, would support S. 976 if the assurance language found 
within S. 976's findings were made a substantive provision of the 
legislation. This, of course, could and should be done to make clear 
that fulfilling these assurances is a mandate must be undertaken in a 
manner that does not adversely affect the water supplies of other CVP 
contractors.

                               CONCLUSION

    My view, consistent with what I have testified to above, is that 
CALFED and S. 976 are good things. As noted above, GCID supports CALFED 
and S. 976. Bluntness in pointing out what could and should be done to 
make both CALFED and S. 976 work better derives from the brutal 
experience of the Klamath Project. There we learned that a failure to 
fully address the whole of a problem in a timely manner only makes 
ultimate resolution more difficult or impossible.
    We have here the opportunity to avoid a Klamath disaster for the 
bulk of California. In addition to what is contained within S. 976, it 
should also be more specific with respect to Sites Reservoir, insure 
integrated water management through clarifying language with respect to 
program element alternatives, and provide solid substantive assurances 
to agricultural water users on the west side of the San Joaquin Valley.

    Senator Feinstein. Mr. Cunneen.

 STATEMENT OF JIM CUNNEEN, PRESIDENT AND CEO, SAN JOSE SILICON 
            VALLEY CHAMBER OF COMMERCE, SAN JOSE, CA

    Mr. Cunneen. Thank you very much, Senator.
    Is there any language that cannot be litigated in this 
society? I do not know. But thank you for including our voice 
in this hearing and the opportunity to appear before you today.
    I am Jim Cunneen. I am the CEO of the San Jose Silicon 
Valley Chamber of Commerce. We represent nearly 2,000 
businesses throughout the full spectrum of the economy in the 
San Jose Metropolitan area, so small retailers, small 
manufacturers, mid-level service firms and large high-tech 
employers that have built Santa Clara Valley's resilient 
economy.
    And I want to commend you for your conduct today in leading 
this meeting. It is a unique skill to be able to bring so many 
different groups together and do so skillfully and still stand 
for progress. And that means sometimes alienating certain 
groups. It is a difficult task.
    Senator Feinstein. Mr. Cunneen, I have had my moments.
    Mr. Cunneen. Yes.
    Senator Feinstein. I will tell you that. Some of the people 
at the table have witnessed them.
    Mr. Cunneen. As a former State legislator, I have had my 
frustrations, too. But I want to express our organization's 
support for your efforts and your bill as introduced.
    I have not had a chance to read all of the amendments, but 
we understand legislation is a work in progress. And to stay 
true to the record of decision will take real political skill 
on your part, and we stand ready to stand with you in that.
    We would urge you, though, to not stray too far from your 
original bill and continue to insist on the level playing 
field.
    I remember when we put the initiative on the ballot to fund 
a number of important water projects. Frankly, it was very 
difficult to get Republican votes at the time, because the 
funding was all for essentially environmental mitigation 
projects.
    There was no funding for storage projects. And I remember 
working closely with Governor Davis and in the end of the day 
providing the Republican votes, putting that together with him 
for the two-thirds majority on that issue with a new plan to 
provide some storage funding in our State budget, the last 
State budget that I had served with.
    So I know how difficult it is, but the record of decision 
is very clear about storage and conveyance elements and I am 
glad to hear your strong voice for that, as well, today. And I 
feel very comfortable in the direction that you are moving.
    I am here mostly to tell you today that our region will 
continue to be a high-tech and manufacturing leader, but it 
cannot do so without a clean and stable water supply. And that 
factor is an absolute prerequisite for future growth.
    And simply put, there is a lot at stake. We could fracture 
a community with the Nation's largest high-tech presence in a 
number of jobs and with a combined high-tech payroll of $56 
billion, with $22 billion of that in the city of San Jose 
alone.
    From the business perspective, it is very, very clear. If 
we are perceived by others as a region that is water short, in 
addition to the high cost of living, the traffic, the other 
things that burden the Bay Area, it will be difficult for us to 
sustain the businesses that complement the high-tech and 
biotech industrial base that is important to our nation's 
future and its standing in the global marketplace as well.
    We believe that the California and the Federal Government 
can find a way to assure residents and prospective businesses 
and the environmental community that we can successfully handle 
those issues in balance if we stick close to the knitting if 
you--as you have insisted on in this hearing, through phase one 
and the record of decision.
    So we think your leadership is essential in that process. 
We would like you to keep your focus on a couple of key areas. 
One, Federal investments in the Delta have to be increased. 
There really have been no substantial investments for many 
decades in that infrastructure.
    It is at the center of our water delivery system. And while 
the people of California did pass Prop 13 and I gave you a 
sense of some of the story of how that came together, it does--
this legislation has to keep the level playing field in mind 
for storage and conveyance elements, because that was not in 
there.
    Two, we believe that the CALFED process must also include--
if you do not include the storage elements, the point I want to 
make is that we are going to continue to rely on our allotment 
of the California--or Colorado River allotments.
    We always exceed what is California's allotment. And 
without those new storage facilities specifically delineated in 
the bill and with strong--whether we call it preauthorization 
language or whether we call it expedited process--we need to 
stay very clear and specific on those issues.
    So let me just conclude by saying we want to offer our 
committed support to this effort. We stand ready and our 
industry leaders that make up our Chamber of Commerce, that is 
high-tech CEO's, but also the business supply chain, stand 
ready to support your efforts as well.
    I have talked to many of them. What they want desperately 
is for us to avoid another energy crisis. They see CALFED and 
your efforts as one way to show that we have a plan in place, 
that there is light at the end of the tunnel, and that 
California can sustain its economic prosperity and leadership 
in the world.
    Boy, I will tell you, the energy crisis will pale by 
comparison if, in fact, there is a severe water shortage. We 
fear the dry year when it could impact our manufacturing 
process. So we would implore the U.S. Senate and the House to 
act very quickly on your legislation. And anything we can do in 
follow up to the hearing to bring parties together, we stand 
ready to do so.
    [The prepared statement of Mr. Cunneen follows:]

Prepared Statement of Jim Cunneen, President and CEO, San Jose Silicon 
                Valley Chamber of Commerce, San Jose, CA

    Chairman Dorgan, members of the subcommittee, thank you for the 
opportunity to appear before you today. My name is Jim Cunneen, and I 
am President and CEO of the San Jose Silicon Valley Chamber of 
Commerce. I am here to express my organization's support for Senator 
Feinstein's S. 976, a measure to re-authorize the CalFed Bay-Delta 
Program and provide the federal appropriation necessary for its 
implementation.
    The Chamber of Commerce represents a diverse network of small 
retailers, small manufacturers, mid-size, service-sector firms and 
large high tech enterprises--companies that have together created 
Silicon Valley's resilient economy. Representing nearly 2,000 
companies, our Chamber is the largest non-profit organization 
representing the entire supply chain of business enterprises throughout 
the San Jose Metropolitan Area.
    Even before the Silicon Valley became a household name, our members 
have been a part of the region's ups and downs. After years of 
expansion, the high tech `dot com' economy has been a volatile one in 
recent months. And while the media accounts can sound pretty grim, 
we're more confident than ever that Silicon Valley's technological 
revolution is far from over, and that our best days lie ahead.
    I'm here today to tell you that our region can continue to be a 
high-tech and manufacturing leader, but it cannot do that without a 
clean, stable water supply. This factor is an absolute prerequisite for 
future growth. Simply put, if reliability and water quality problems in 
the Bay-Delta are not resolved, we could fracture a community with the 
nation's largest high-tech presence and number of jobs, with a combined 
high-tech payroll of $56 billion, with $22 billion of that in San Jose 
alone.
    California and the federal government can find a way to assure 
residents and prospective businesses that the environmental and water 
supply challenges in the Bay-Delta can be successfully handled. The San 
Jose Silicon Valley Chamber of Commerce believes that S. 976 and CalFed 
Program are the best, most comprehensive way to do that.
    From the business perspective its straightforward: If we are 
perceived by others as a region that is water short (in addition to 
high cost of living, traffic congestion, and other issues), it will be 
difficult to be able to sustain the businesses that complement the 
high-tech and biotech industrial base that is so important to our 
nation and its standing in the global marketplace.
    We believe your subcommittee and policymakers at both the state and 
federal level must address these key areas:

   Federal investments in the Delta must be increased. The 
        Delta is at the center of our water delivery system. While the 
        people of California passed Proposition 13 in March 2000 
        providing nearly $2 billion, no new federal money was allocated 
        in the last session of Congress. Only with new federal 
        investment in this priority area can the Delta be restored to 
        deliver on its dual purpose--transporting water while 
        maintaining a healthy ecosystem that minimizes the new listings 
        of species.
   The quality of water deliveries from the Bay-Delta must be 
        improved. Contaminants, both natural and man-made, inhibit the 
        work of CalFed's ecosystem program, and threaten high-tech 
        manufacturing throughout our region.
   Any solutions within the CalFed process must include storage 
        and conveyance elements. While the Phase II Record of Decision 
        and EIR do include a call for surface storage, it lacks any 
        specifics. This is a crucial element to any fair, balanced 
        plan.

    I am here to tell you that S. 976 takes all of these critical 
factors into account.
    The industries and economic success of San Jose are radiating 
outward. In my area, 77 percent of all households have a computer, and 
the national figure is increasing. But if the success of Silicon 
Valley--in manufacturing, research and quality of life--are to take 
hold in other western communities, the state must improve the ecosystem 
and water management infrastructure of the Bay-Delta. I cannot stress 
enough the importance of water to the fulfillment of our promising 
future, and I cannot stress enough the importance of CalFed.
    Environmental restoration and an enhanced water supply are not 
mutually exclusive goals. They are attainable, but can only be realized 
with your support for S. 976 and the work of CalFed.
    I want to offer you our committed support for efforts to 
reauthorize the CalFed Program. While it has met with its share of 
controversy, CalFed still provides the best hope to ensure a reliable, 
clean water supply in an equitable fashion for the Silicon Valley--and 
all of California. You are to be commended for holding this hearing and 
for fostering an atmosphere of cooperation among the various sectors of 
the state's economy and major business and environmental stakeholders. 
Your continued leadership will be essential to create the positive 
political will to address the water supply problems facing California. 
Please be a part of those solutions by supporting S. 976.
    Thank you.

    Senator Feinstein. Thanks very much, Mr. Cunneen. I 
appreciate that.
    Mr. Pace.

  STATEMENT OF PHILLIP J. PACE, CHAIRMAN, METROPOLITAN WATER 
        DISTRICT OF SOUTHERN CALIFORNIA, LOS ANGELES, CA

    Mr. Pace. Thank you very much, Senator. Senator Feinstein 
and the other distinguished members of the committee, I would 
like to thank you for this opportunity to speak today about S. 
976, the California Ecosystem Water Supply and Water Quality 
Improvement Act.
    I am Phillip Pace, chairman of the board of the 
Metropolitan Water District of Southern California. We provide 
supplemental water to 17 million people in southern California 
through our 26 member agencies.
    High quality, reliable water is the life blood of Southern 
California's $750 billion economy. Metropolitan supports S. 976 
and we commend you, Senator Feinstein, for introducing it.
    California, like other Western States, struggles with its 
water resources, striving to balance urban, agricultural and 
environmental needs. As the largest contractor of California's 
State Water Project, which provides water via the Sacramento 
River, the San Joaquin Bay-Delta, Metropolitan has a measured 
stake in the outcome of this process.
    The Bay-Delta is the heart and lungs of California's water 
supply. Besides providing the drinking water for two-thirds of 
the State, the Bay-Delta nourishes a substantial portion of 
California's farms.
    It is the State's most important fishery habitat and home 
to more than 10,000 species of migratory fowl. In short, it is 
a national ecological treasure closely tied to California's 
economic health.
    S. 976 gives us the means to preserve that treasure, while 
benefitting all of the Western States. I believe it is one of 
the most important pieces of water environmental resource 
management legislation that has ever been proposed.
    Today, I will focus my remarks on just three issues: First, 
water quality; second, the need for a CALFED plan to assure our 
investments in local water resource development is successful; 
and third, the shifting of California to integrated resource 
planning.
    Metropolitan is committed to finding lasting ways to 
improve the reliability and quality of water supplies, while 
restoring the environment.
    These reasons are simple. Water quality affects the health 
and safety of all of our customers. Improvements in water 
quality are critical to reducing the cost of water treatment 
and delivery. And improvements in water quality determine 
whether the billions of dollars already invested in local 
reuse, conservation and ground water replenishment programs 
will succeed.
    The better our Bay-Delta water source is in quality, the 
more efficiently we can use the water that we receive from the 
Colorado River.
    Metropolitan's resource plan calls for doubling our efforts 
in recycling and ground water production. This is simply not 
possible without reducing the threat of salinity in the Delta 
water. The increase of salinity from Delta water will degrade 
our local ground water basins and impede efforts to recycle and 
reuse these limited supplies. Salinity, as many of you know, is 
already an issue, a big issue in the Colorado River.
    During the last decade, Metropolitan and its members have 
committed over $8 billion to resolve Delta issues, to better 
manage local water resources and to assure that California can 
live within its 4.4 million acre-foot allocation of water from 
the Colorado River.
    These objectives, however, really need a CALFED plan that 
coordinates efforts on a local, a State and a national level.
    On a recent trip to northern California to meet with 
agricultural interests, I was part of several discussions that 
centered on resolving local needs while assuring a State-wide 
supply of high quality water.
    Water policy makers recognize that the health of the 
economy and the environment are tightly linked, and that there 
are benefits to this integrated approach.
    S. 976 provides encouragement of local and regional 
partnerships. It requires balanced supply and ecosystem 
improvements.
    Just a decade ago, California endured, as we all know, a 
scorching 6-year drought. Then because of aggressive water--
since then, because of aggressive water management programs, we 
have averted further water-related crises, so far.
    The future of California depends on continuing this 
progress. The California--the CALFED legislation is really a 
step in the right direction.
    I urge you to move this legislation forward for the benefit 
of California and for the Nation. And I would like to thank you 
on behalf of the Metropolitan Water District for all of your 
hard work. Thank you very much, Senator.
    [The prepared statement of Mr. Pace follows:]

  Prepared Statement of Phillip J. Pace, Chairman, Metropolitan Water 
            District of Southern California, Los Angeles, CA

    Mr. Chairman, Senator Feinstein, other distinguished members of the 
Committee, thank you for the opportunity to submit this statement 
regarding S. 976, The California Ecosystem, Water Supply, and Water 
Quality Improvement Act. I am Phillip Pace, Chairman of the Board of 
Directors for the Metropolitan Water District of Southern California. 
Metropolitan provides supplemental water supplies to the economy of 
Southern California. Our service area encompasses more than 5,200 
square miles and serves the needs of 17 million people through 26 
member agencies. High quality, reliable water supplies are the 
lifeblood of Southern California's $750 billion dollar economy.

                 METROPOLITAN SUPPORTS SENATE BILL 976

    First, I would like to express Metropolitan's strong support for S. 
976 and commend the leadership and commitment that Senator Feinstein 
demonstrated through the introduction of this legislation.
    For decades, California, like other western states, has struggled 
with conflict over its water resources, striving to find balanced 
solutions for its urban and agricultural economies and its environment. 
We recognize that Metropolitan has a major stake in the outcome of this 
process. We are the largest contractor of California's State Water 
Project, which provides water to the Northern and Southern California 
urban economies and to the state's vast agricultural economy. 
Additionally, Metropolitan relies on the Colorado River, along with 
other California agencies and the other six Colorado River Basin 
states.
    The CALFED Framework agreement of June 2000 and the subsequent 
Record of Decision in August are a significant breakthrough in western 
water policy. As recently described in briefing materials developed by 
the California Bay-Delta Urban Coalition, the CALFED Bay-Delta program 
introduces innovative approaches to meet the needs of both the economy 
and the environment. This legislation not only serves California, but 
also our nation's interests. It implements a program that assures 
comprehensive achievement of regional health, economic and 
environmental program objectives. It also preserves a national 
ecological treasure, ensures necessary infrastructure for high-quality 
and reliable water supplies for our residents, industries and farms, 
and provides environmental benefits to California and other western 
states. I believe it is one of the most important pieces of water and 
environmental resource management legislation in history of the western 
states.
    I would like to focus my remarks today on three issues: water 
quality; the need for a CALFED Plan to assure our investments in local 
water resource development will be successful; and, third, the changing 
paradigm in California to an integrated resource approach.

                   WATER QUALITY IS OUR TOP PRIORITY!

    As a local businessman in Los Angeles County, I have been 
privileged to serve on Metropolitan's Board of Directors for the past 
five years, the past three as Chairman. During my tenure, our Board has 
made a commitment to find lasting ways to improve the reliability and 
quality of that supply, while restoring California's environment.
    Mr. Chairman, members of the Committee, the programs associated 
with the CALFED process must result in better water quality for our 
customers. The reasons are simple and the arguments credible:

   Water quality affects the health and safety of all our 
        customers;
   Improvements in water quality are critical to reducing the 
        cost of water treatment and delivery;
   Improvements in water quality will determine whether or not 
        the billions of dollars now being invested in local re-use, 
        conservation and groundwater replenishment programs will 
        succeed in the long run; and
   The better out Bay/Delta water source is in quality, the 
        more efficiently we can use water from the Colorado River, 
        which affects other Western states.

    However, increasing public health concerns and drinking water 
quality regulations have challenged our approaches to providing high 
quality, low-cost supplies to Southern California residents.
    Over the last decade, while drinking water quality regulations have 
become increasingly more stringent, little progress has been made to 
reduce contaminants and bring source water quality for Delta exporters 
in line with national averages.
    Increasing concentrations of salinity from Delta water also degrade 
our local groundwater basins and impede efforts to recycle and reuse 
our limited supplies. Metropolitan's resource plan also calls for 
doubling recycling and significantly increasing groundwater production. 
This is simply not possible without reducing the threat of salinity in 
Delta water imported into Southern California.
    Metropolitan is a nationally recognized leader in funding research 
and implementing new cost-effective treatment technologies. The 
technical challenges and costs of removing contaminants from drinking 
water supplies can be staggering. Currently, the best method to control 
water quality is at the source.
    If urban water agencies are forced to abandon quality at the source 
and instead rely on alternative treatment technologies, the cost of 
these alternative technologies will significantly exceed the cost of 
conventional treatment.
    Senator Feinstein's legislation will provide assurances that water 
quality projects, including those identified as ``complementary 
actions'' in the CALFED Record of Decision, are eligible and can 
effectively compete for funding within the CALFED authorization 
legislation.

  A CALFED PLAN IS ESSENTIAL TO ENSURE OUR LOCAL RESOURCE INVESTMENTS 
                           WILL BE SUCCESSFUL

    During the last 10 years, Metropolitan and its member agencies have 
taken key policy steps and committed significant funding to resolve 
issues in the Delta and to enhance our water quality and supply 
reliability through ``local'' resource programs. Altogether, the people 
of Southern California have invested more than $8 billion to better 
manage local water resources and to assure that California can live 
within 4.4 million acre-foot allocation of water imported from the 
Colorado River.
    These objectives, however, cannot be achieved without a successful 
CALFED plan.

          THE CHANGING PARADIGM--INTEGRATED STATEWIDE APPROACH

    Over the last few years, Metropolitan's Board members and I have 
actively engaged other water policymakers throughout California and the 
western states, in an effort to develop new approaches to solving 
resource conflicts.
    On a recent trip to Northern California to meet with agricultural 
interests, our discussions centered on resolving local needs while 
still providing statewide water supply, water quality, and 
environmental benefits. What we are seeing through these discussions is 
a changing paradigm on how to solve our water resource problems. There 
is recognition that the health of the economy and environment are 
inextricably linked, and that resource solutions provide enhanced 
benefits when resolved through integrated local and regional 
approaches.
    Senator Feinstein's legislation provides an excellent opportunity 
for implementing lasting solutions to California's water problems that 
will benefit all western states and the nation. S. 976 encourages local 
and regional partnerships and requires balanced water supply, water 
quality and ecosystem improvements and measurable progress in all 
CALFED Program areas.

                               CONCLUSION

    The energy crisis now gripping our state affords us a unique 
vantage point to contemplate the potentially severe effects that would 
ensue if our state were to succumb to a water crisis of similar 
magnitude. Just a decade ago, California's citizens and economy endured 
the scorching effects of a six-year drought (1987-92). Since then, 
thanks largely to aggressive water management programs, we have averted 
further water-related crises. The future of California depends upon 
continuing this progress through the enactment of legislation to 
implement the CALFED Bay-Delta Program.
    Your efforts to advance this bill signal leadership in the right 
direction. We believe the CALFED legislation has the ability to provide 
dramatic improvements for multiple beneficiaries.
    We at Metropolitan are dedicated to working on developing a 
workable approach to implement a balanced CALFED Bay-Delta program.
    Mr. Chairman, Senator Feinstein, members of the subcommittee, I 
look forward to working with you and members of the House of 
Representatives to ensure that Congress takes the necessary steps to 
safeguard California's vital water resources for all beneficial uses. I 
urge you to move this legislation forward for the benefit of California 
and the national economy and environment.

    Senator Feinstein. Thanks very much, Mr. Pace.
    Mr. Davis.

         STATEMENT OF GRANT DAVIS, EXECUTIVE DIRECTOR, 
               THE BAY INSTITUTE OF SAN FRANCISCO

    Mr. Davis. Thank you, Madam Chair. And I certainly admire 
your stamina and your patience and your drive on this.
    Senator Feinstein. Thank you.
    Mr. Davis. As a former staff member of a member of 
Congress, I also admire the staff members of the committee that 
are here sitting through this.
    Senator Feinstein. Absolutely.
    Mr. Davis. So I cannot agree with you more. And also I am 
privileged to be up here with the distinguished group of 
colleagues that work on California water.
    My name is Grant Davis. I am the executive director of the 
Bay Institute of San Francisco. We are celebrating our 20th 
year of working to protect and restore the San Francisco Bay-
Delta estuary. And I am very proud of that.
    We have been active over the years in efforts to implement 
innovative approaches to better manage California's water 
supply. The organization was heavily involved in the 
development of the Central Valley Project Improvement Act.
    And the Bay Institute was one of the three environmental 
groups that actually signed the Bay-Delta Accord. And as you 
know, the Bay-Delta Accord was the precursor to CALFED, where 
we all are here today.
    Our concern in doing this during the whole effort has been 
that to reverse a century, over a century, of destruction of 
the Bay-Delta environment--and this trend, as we all know, has 
worsened over the years--and we still want to maintain the 
economic and social benefits derived from managing the water 
supplies for multiple uses.
    In the interest of time--I noticed that you mentioned that. 
It is a big panel today. I want to ask that my remarks be 
submitted for the record.
    Senator Feinstein. Absolutely.
    Mr. Davis. And I have condensed my remarks.
    I would like to call attention--I have taken the liberty of 
providing a special CALFED handout. And I think it is very 
helpful. This was on our record of decision. It is from the Bay 
Institute's point of view and helps inform your colleagues and 
staff members.
    But what is most telling is the map that puts the projects 
that you are discussing in the context of the watershed. And I 
think you will find it helpful as a good resource tool.
    Senator Feinstein. Thank you.
    Mr. Davis. So I will put that in the record.
    Senator Feinstein. Thank you very much.
    Mr. Davis. I wanted to start off by just reminding members 
of the committee that we are involved in a tenuous balancing 
act, and that the Bay Institute and our environmental 
colleagues, as well as everyone here, have been putting in 
enormous hours over the years. I would say it is now going on 6 
years.
    We did reach a tenuous balance in the record of decision. 
And there are many, many good points of CALFED. I would say the 
ecosystem restoration program, a water account, a water 
efficiency program, getting into ground water management, we 
have made tremendous progress.
    But along this theme, just to point out where the concerns 
continue to arise in the record of decision, many folks are not 
aware that there really is over 1 million acre feet of surface 
storage that will likely come on line with the three projects 
that you are talking about in your bill, which will be the 
Delta Islands, Los Vaqueros and Shasta expansions, and plus the 
bypass south of the Delta.
    The environmental water account is something we are very 
proud to have contributed toward, helping to bring on a new 
tool. But what that also provides--and someone has not 
mentioned today--are the assurances to south of the Delta users 
that there will be no additional water supply impacts from 
endangered species protection measures.
    And this year, as you may know, we exceeded the take 
threefold on winter-run salmon. So we have a lot of work to do 
to refine these tools that we are bringing online. And we are, 
in the spirit of cooperation, willing to do so, and we are 
interested in continuing to improve and refine the process.
    So the message for the Bay Institute and hopefully our 
colleagues here is while we have concerns and any bill 
authorizing CALFED, the closer you could make that to the ROD 
that was agreed upon and be consistent, the more consensus you 
have.
    And to try and do new things that set a precedent are going 
to lead--I can speak for the colleagues that are currently 
opposing the legislation. They are about 30 environmental 
groups, that for the record, are in opposition, but are willing 
to work with you. They basically are looking for principles 
that would allow us to, in the spirit of what Congressman 
Miller and Senator Boxer talked about, not provide new 
precedent-setting language that could be litigated over and 
over. We are doing our best to stay out of that.
    [The prepared statement of Mr. Davis follows:]

    Prepared Statement of Grant Davis, Executive Director, The Bay 
                       Institute of San Francisco

    Mr. Chairman, members of the Committee, I would like to thank you 
for the opportunity to appear before you today. In particular, Senator 
Feinstein for the invitation to testify regarding S. 976, The 
California Ecosystem, Water Supply, and Water Quality Enhancement Act 
of 2001.
    My name is Grant Davis. I am Executive Director of The Bay 
Institute of San Francisco (TBI), a non-profit organization located 
just north of the Golden Gate Bridge. This year, TBI is celebrating its 
twentieth year working to protect and restore the ecosystems of the San 
Francisco Bay, the Sacramento-San Joaquin Delta and the rivers, streams 
and watersheds tributary to the estuary.
    TBI has been very active over these years in efforts to implement 
innovative approaches to better manage California's water supply. The 
organization was heavily involved in the development of the Central 
Valley Project Improvement Act (CVPIA) and was also one of the three 
environmental organizations that signed the historic Bay-Delta Accord. 
As you know, the Bay-Delta Accord set new water quality standards and 
was the precursor to the CALFED Bay-Delta Program.
    Our concern in doing so has been to reverse over a century of 
destruction of the Bay-Delta environment--a trend that has worsened 
catastrophically over the last two decades--while maintaining the 
economic and social benefits derived from managing the state's water 
supplies for multiple uses.

                       PUTTING CALFED IN CONTEXT

    Prior to providing specific comments regarding S. 976, I feel it is 
important to provide some context regarding the CALFED Bay-Delta 
Program:
    First, it is important to note that TBI and our environmental 
colleagues have devoted enormous amounts of time and energy working to 
help improve and shape the CALFED program. We sincerely want to see 
this program succeed in restoring the ecosystem and improving 
California's water supply reliability. We recognize the tremendous 
complexity of this challenge, the many risks involved, as well as the 
huge potential of the CALFED program.
    I have taken the liberty of enclosing a copy of one of TBI's 
publications entitled, ``CALFED Special: A Guide to the Record of 
Decision'' because Committee Members may find it helpful. This report 
includes a map of the extensive solution area of CALFED and highlights 
some of the major program elements contained in the final plan. I have 
included these elements in order to demonstrate briefly not only what 
the environmental community likes about this plan, but also to make 
clear just how much compromise has already occurred in order to strike 
this tenuous balance and release the Record of Decision.
    Some of the main components of CALFED's final plan are:

   a promising Ecosystem Restoration Program, which would 
        restore floodplains and tidal wetlands, acquire water for 
        instream flows and Delta outflows, improve fish passage, and 
        implement hundreds of other actions for endangered species, 
        habitats and ecosystem improvements;
   creation of a promising but also problematic new 
        Environmental Water Account (See Environmental Concerns Below);
   an innovative Water Use Efficiency Program that would use 
        financial incentives to promote aggressive urban and 
        agricultural conservation measures and water recycling;
   recharging the state's mined aquifers and using groundwater 
        in conjunction with surface supplies. This requires a 
        coordinated approach to managing groundwater supplies for their 
        own sake, as well as for conjunctive use. Major new groundwater 
        storage projects in the Central Valley are an integral element 
        of CALFED's approach to water supply reliability. In addition, 
        financial incentives and disincentives would be used to promote 
        completion of groundwater basin management plans and 
        measurement of groundwater;
   a new Science Program created to ensure that state-of-the-
        art research and analysis guide CALFED implementation. Under 
        this approach, actions will be designed to test competing 
        hypotheses about the most effective management approaches, 
        implementation activities will be monitored, and the results 
        assessed to help guide future actions. Samuel Luoma, Ph.D., a 
        distinguished Bay-Delta researcher with the U.S. Geological 
        Survey in Menlo Park, was hired as CALFED's Science Director.
     elements of the plan that concern the environmental community
   the proposal to add of over one million acre-feet of 
        expensive surface storage for ill-defined purposes by expanding 
        Shasta and Los Vaqueros Reservoirs, creating new storage on 
        Delta islands, and building a new bypass south of the Delta.
   Environmental Water Account designed to reduce endangered 
        species take at the giant state and federal water project 
        pumps. Delta exporters would receive an unprecedented assurance 
        that there will be no additional water supply impacts from 
        endangered species protection measures.
   a decision to build a controversial new diversion facility 
        on the Sacramento River (which some contend is the first leg of 
        the Peripheral Canal) if vaguely defined fishery protection and 
        water quality goals are not being met over the next few years.
   in increments over the next few years, the State Water 
        Project will be allowed to use the full, currently unpermitted 
        capacity of its pumps in the South Delta, which would increase 
        Delta diversions by over 50 percent. Even the new EWA would not 
        be able to fully mitigate for the additional impacts on 
        endangered species survival and positive flow conditions from 
        this proposed export-pumping regime.

 THE CALIFORNIA ECOSYSTEM, WATER SUPPLY AND WATER QUALITY ENHANCEMENT 
                          ACT OF 2001 (S. 976)

    I will not spend a great deal of time on specific language of the 
current bill, because I understand that negotiations currently underway 
may result in modified language. However, I will offer some principles 
that help inform our assessment of the bill. While we recognize and 
commend Senator Feinstein for the improvements that have been made to 
S. 976, TBI and the environmental community continue to have 
significant concerns with the legislation. As part of my testimony I 
have included a copy our letter of opposition to the bill which 
contains the signatures of over 30 regional, state and national 
environmental, conservation, and fishing organizations. Clearly there 
are provisions in this bill that threaten to wreak havoc with the 
careful balance that CALFED worked so hard to achieve in August of last 
year when it released its Record of Decision.
    A similar number of environmental and fishing organizations support 
H.R. 2404, the California Water Quality and Reliability Act legislation 
in the House sponsored by Rep. George Miller.
    Principles to assess a final bill authorizing CALFED. The final 
bill:

   should be consistent with the CALFED Plan and the Record of 
        Decision.
   assure that any new surface storage facilities offered by 
        CALFED receivefull Congressional scrutiny after required 
        evaluations are completed. We do not support efforts to 
        eliminate key checks and balances in the congressional review 
        process by preauthorizing facilities. The costs or the benefits 
        they will deliver do not justify these facilities. We strongly 
        support the amendment, which eliminates preauthorization 
        language for new water development in favor of establishing a 
        ``beneficiary pays'' requirement as was provided in the Record 
        of Decision.
   should not go beyond the CALFED plan in assuring deliveries 
        to CVP agricultural contractors. The current bill reads as a 
        finding that orders DOI to implement the assurances language. 
        If not amended this would likely end up in litigation.
   must not undermine the water rights of more senior water 
        users. As written, we believe that the bill could undermine the 
        water supplies for the Bay Area, Southern California and other 
        farmers in the Central Valley. We would recommend the 
        assurances section be pulled from the bill.
   must not promise that taxpayers will provide more water than 
        these districts' contracts entitle them to. It is unfair that 
        taxpayers must purchase or otherwise provide water that these 
        contractors are not now entitled to under their contracts.
   must not undermine key decisions regarding environmental 
        protection in the CALFED plan, which form the foundation for 
        the record of decision. If these are changed, the EIS and the 
        biological opinions would no longerbe valid. The plan would be 
        legally vulnerable and politically undermined.

    In conclusion, the tensions that exist between competing users of 
water will be exacerbated--if we do not more actively promote the tools 
available to more creatively manage California's Water supplies. We 
urge the Committee to help foster this spirit of creativity by 
supporting and promoting measures to improve agricultural and urban 
water use efficiency, increase groundwater banking and conjunctive use, 
create water savings from retiring drainage problem lands, and 
establish new environmental water assets. By passing CALFED authorizing 
legislation that more closely follows the guiding principles outlined 
above we will then be able to move forward.
    If agreement cannot be reached regarding CALFED legislation this 
year, the Committee might wish to consider passing a ``clean'' piece of 
legislation that is entirely consistent with the Record of Decision 
that would just authorize the program for another year.
    Mr. Chairman, this concludes my remarks. Thank you again for the 
opportunity to provide these comments. I would be happy to answer any 
questions at the appropriate time.

    Senator Feinstein. Let me respond to that, because I do not 
have a problem if we can move the process. But I have now been 
here long enough to know the games that can be played to 
prevent something from happening.
    And this is what concerns me very much. I mean, I have had 
discussions. I have had environmentalists tell me ``We will 
never support a new water storage project.''
    Well, you cannot solve the problem without it. So that is 
the purpose of the whole balanced approach. And I would very 
much appreciate your input. Work--you know, work with our 
staff. We want to be within the ROD.
    This is the whole direction. The people who did the 
drafting of this took--was to--in essence authorized the ROD so 
that CALFED can go ahead.
    But I am absolutely determined that it be balanced. I am 
determined that these things move ahead concurrently. I do not 
know who said it earlier, but that once one group gets what 
they want, then they stop supporting for the others.
    And that is why we have particularly worked so that the 
ecosystem restoration, environment water account, all of the 
water quality, the storage, the infrastructure, all of that 
moves simultaneously.
    I think it is extraordinarily important that we do that, or 
we end up spending money and not solving the problem. That is 
one of my real worries.
    So I appreciate all of your testimony.
    Patrick Wright, let me just get--because there is some 
questions here that I would like to give you in writing, but 
one just to get in the record--and I do not know whether you 
know the answers precisely.
    What has the Bay-Delta Program expended to date?
    Mr. Wright. Let me ask you to turn to the briefing book, if 
you have it. If you will look on the table--table two in the 
back under funding.
    Senator Feinstein. Give me a page.
    Mr. Wright. It is page--well, I guess it is an appendix, so 
there is no page number. But it is table two.
    Senator Feinstein. Okay.
    Mr. Wright. It shows the year one funding of--among all of 
the agencies, both those funds that were explicitly labeled 
CALFED and those funds from various agencies such as the 
CVPIA--CVPIA restoration fund that count towards meeting the 
CALFED objectives across the board.
    What this does not include is the roughly $220 million that 
were labeled for CALFED previously through the previous 
authorization.
    Senator Feinstein. Can you give me a number? What has 
CALFED spent to date?
    Mr. Wright. I would add $220 million to the number here.
    Senator Feinstein. Which number?
    Mr. Wright. To the total of--let me just see if there is 
a----
    Senator Feinstein. State subtotal, $528 million?
    Mr. Wright. Together with the Federal subtotal of $78 
million would give you the grand total between the State and 
Federal agencies for the first year.
    Senator Feinstein. All right. I trust that. Thank you. All 
right. We have that here then.
    And so the total Federal contributions to date are, if this 
is correct, $78 million?
    Mr. Wright. Yes. Since the record of decision.
    Senator Feinstein. $78 million?
    Mr. Wright. Right.
    Staff. Last year. I think that is the Federal contribution 
for last year.
    Senator Feinstein. Last year?
    Mr. Wright. Right.
    Senator Feinstein. Right. All right. And the total State 
contributions?
    Mr. Wright. Last year was $528 million.
    Senator Feinstein. Thank you. And what other contributions 
have been made?
    Mr. Wright. That is the sum total of all the State and 
Federal funding. There were some--because there are matching 
funds that go with a lot of these projects, we have a user 
local subtotal here that shows $221 million coming in from 
local communities, because a lot of these projects are cost-
shared.
    Senator Feinstein. All right. And I would like to enter 
this CALFED program into the record.*
---------------------------------------------------------------------------
    * The program has been retained in subcommittee files.
---------------------------------------------------------------------------
    I am not going to ask any other questions, but since we 
have you all back here, can you go ahead on that assurance 
language? Can you also take a look at the expedited review 
language with my staff and if you have any recommendation, will 
you let us know, say within 48 hours?
    Mr. Wright. We will all be back here next week for the 
House hearing, and we hope to have something by then.
    Senator Feinstein. Okay. All right. Thank you.
    And thank you very much, gentlemen. I truly appreciate your 
being here today. Thank you, ladies and gentlemen. The hearing 
is adjourned.
    [Whereupon, at 4:45 p.m., the hearing was adjourned.] 

                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

                  Association of California Water Agencies,
                                   Sacramento, CA, August 10, 2001.
Hon. Jeff Bingaman,
Chair, Senate Energy and Natural Resources Committee, Dirksen Office 
        Building, Washington, DC.
    Dear Senator Bingaman: Attached for your review are the Association 
of California Water Agencies' responses to questions posed July 30 by 
Senators Nighthorse Campbell and Kyl, relevant to S. 976.
    I appreciate the opportunity to respond to questions on this 
important piece of legislation, and encourage any members of the 
Committee to contact me if I may provide further information.
            Sincerely,
                                           Stephen K. Hall,
                                                Executive Director.

    Responses to Questions From Senators Bingaman, Campbell and Kyl

    Question 1. The Feinstein bill would authorize certain activities 
outlined in an August 2000 record of decision (ROD) on the CALFED 
program. However, why does this bill not appear to authorize 
implementation of the ROD in its entirety?
    Answer. ACWA believes S. 976 does have the effect of authorizing 
the full CALFED Program, by referring to the ROD as its guiding 
document in the legislation, directing federal agency participation in 
a governance structure, and by authorizing the full range of program 
elements within the Bay-Delta Program.
    Question 2. How is this going to affect California getting their 
share of Colorado River water down to the levels of the 4.4 plan which 
former Secretary Babbitt set?
    Answer. By modernizing California's water delivery infrastructure, 
including water recycling projects throughout the state, S. 976 will 
enhance the level of self-sufficiency of California's water supply. The 
programs authorized in the bill will improve Delta conveyance, thereby 
improving conditions for Delta export, and reducing the tensions 
between fisheries and water supplies. Eased pressure on endangered 
species imparts greater operational flexibility to California's entire 
network of reservoirs, canals and pumping stations. Under this improved 
scenario, meeting the obligations of the 4.4 plan will become far less 
onerous and far more likely.
    Question 3. It is proposed that this project will increase 
California water by 3 million acre-feet. Where is this extra water 
coming from and is there a chance part of this water will come from the 
Colorado River?
    Answer. California and its water agencies are committed to moving 
forward with the 4.4 plan, and equally committed to living within its 
4.4 million acre-foot Colorado River entitlement. The CALFED ROD 
contains an important balance of water conservation, recycling, 
ecosystem restoration and surface storage projects that together 
increase system-wide flexibility and expand the state's available water 
supply. None of the water supply gains contemplated by CALFED are to be 
realized through increased diversions from the Colorado River. On the 
contrary, CALFED will help to lessen them.
    Question 4. If this is not enacted, and since California is still 
obligated to meet its requirements in 4.4 plan, what will California 
have to do to meet its future needs and how will this affect Colorado 
water?
    Answer. The prospect of failure for S. 976 and the resultant 
consequences for CALFED are extremely severe. For years now, 
California's water system has been visibly strained by the burdens of 
growing population, increasing environmental mandates and looming 
drought. CALFED was conceived and meticulously planned to remedy this 
dangerous situation. If the state and federal agencies participating in 
CALFED were to lose the work and momentum that have gone into the 
program, there would be an enormous political and social cost. In the 
short term, California's water community would descend into resumed 
conflict and drawn out litigation. In the long term, healthy economic 
growth and environmental progress will all be sacrificed just to meet 
minimum demands for scarce water.
    It is unclear what measures California will have to take in the 
event of CALFED's failure, but meeting obligations under the 4.4 plan 
would become more difficult. For these reasons, the federal government 
must be an active partner in assuring success for CALFED.
    Question 5. With the already existing authorized water projects not 
being completely funded, like ALP in my home state of Colorado, will 
CALFED get funding before these other already authorized projects?
    Answer. CALFED first received federal funding in 1997 under the 
California Bay-Delta Environmental Enhancement and Water Security Act 
of 1996, which authorized a total of $430 million in appropriations for 
the program over three years. Actual appropriations totaled $220 
million. CALFED received no federal funding in 2001, and has stayed 
alive with funding from the state budget and two multi-billion dollar 
California bond measures.
    ACWA is keenly aware of the funding backlog for western water 
projects, and has been a strong supporter of the ``Invest in the West'' 
campaign. This is a coalition effort among several western water 
organizations, with the shared mission of securing the Bush 
Administration's support for a five-year plan to increase the Bureau of 
Reclamation's budget to $1 billion annually. With more resources 
devoted to water development, projects like CALFED and Animus La Plata 
can move forward to meet the growing water demands of the arid west. 
ACWA is committed to working with the Administration and Congress to 
increase the resources dedicated to western water management, such that 
CALFED implementation does not adversely impact funding for other 
projects in the west.
    Question 6. What are the cost estimates of these CALFED related 
projects?
    Answer. According to figures from the CALFED Program, costs for the 
first seven years of program implementation (aka Stage One) are 
estimated at $8.6 billion.
    Question 7. Who is supposed to pay for the projects?
    Answer. These costs are to be shared in thirds among the state 
government ($2.57 billion), federal government ($2.43 billion) and 
California's local governments and assorted agencies ($2.56 billion).
    Question 8. CALFED determined that beneficiaries should pay for new 
surface storage projects. What water users have agreed to pay full cost 
for water from these projects?
    Answer. The intent of the CALFED Program is to share costs for 
program implementation among all of the beneficiaries (the 
``beneficiaries pay'' provision). It is contemplated that the benefits 
will be identified as part of the detailed feasibility studies to be 
completed as part of the pre-construction work. At that time it is 
anticipated that the beneficiaries will agree to pay their part of the 
costs or the projects will not go forward.
    It is likely that the improvements contemplated by CALFED--similar 
to federal infrastructure investments that preceded the program--will 
provide substantial returns on the initial investment. For example, the 
federal Central Valley Project today is the backbone of California's 
$27 billion agricultural economy, providing half of the country's 
fruits and vegetables and generating billions in business activity and 
trade every year. Infrastructure investments of the type promised by 
CALFED will ensure that California continues to be an engine of 
economic growth for the west coast and beyond, and its restored 
ecosystem a resource of national significance.
    Question 9. What would the federal government's share of the cost 
of these projects be?
    Answer. See answer to question #7.
    Question 10. Would that federal investment be repaid?
    Answer. Yes. See answer to question #8.
    Question 11. Is there a signed cost share agreement for these 
projects?
    Answer. There is currently a cost share agreement between the state 
and federal governments. Other cost share agreements will be developed 
specific to the individual projects.
    Question 12. Why do these projects need an accelerated process for 
authorization that is not conducted for any other water project?
    Answer. This is a programmatic authorization, intended to authorize 
the full program. There will be additional Congressional review of 
individual projects, both in the authorizing and appropriating 
committees, as well as by the full Congress.
    In addition, the water supply projects described in S. 976 have 
already undergone all required environmental review and documentation. 
Unlike the ecosystem restoration objectives of CALFED, many of which 
have already been attained, no water supply projects have yet moved 
forward, despite the multi-year planning process behind the ROD and 
growing water demands. The authorization process outlined in S. 976 
will assure that with proper Congressional review, as additional 
ecosystem projects are implemented, water supply projects also make 
commensurate progress. This feature is intended to assure balanced 
progress among CALFED's four co-equal objectives.

                Responses to Questions From Senator Kyl

    Question. Aren't the ecosystem projects going to be scheduled ahead 
of water supply projects in the CALFED Program, and if so, what will 
the incentive be for the environmental community to support water 
supply projects once the ecosystem projects are completed?
    Answer. The challenge of maintaining unified support for CALFED has 
dogged the program since its inception, particularly on the issue of 
expanded surface water storage. Based on past experience, ACWA and its 
members are extremely concerned that the environmental community will 
have no incentive to support water supply projects if the ecosystem 
priorities of CALFED are allowed precedence over surface storage.
    For this reason, ACWA has sought assurances that water supply 
projects will be able to move forward in concert with CALFED's sizeable 
environmental agenda. We will continue to work with Senator Feinstein 
and the committee on developing appropriate linkage between ecosystem 
and water supply priorities within this legislation, which authorizes 
and directs the CALFED program.
    Question. What will this do, good or bad, to California's plan to 
live within a 4.4 million a/f annual Colorado River entitlement?
    Answer. This legislation, by authorizing the modernization of 
California's water delivery infrastructure, including water recycling 
projects throughout the state, will enhance the level of self-
sufficiency of California's water supply. The linkages between 
ecosystem projects and water supply in this legislation are intended to 
prevent ecosystem priorities from moving forward while CALFED storage, 
conveyance and other program elements become stalled. It is only 
through balanced implementation of CALFED's plan that California and 
the neighboring basin states can have confidence that California will 
be able to live within its 4.4 million acre-feet entitlement.
                                 ______
                                 
                               State of California,
                                          Resources Agency,
                                   Sacramento, CA, August 20, 2001.
Hon. Jeff Bingaman,
Chair, Senate Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: On behalf of the State of California, I am 
enclosing responses to twelve questions submitted by Senator Campbell 
(R-CO) regarding Senate Bill 976 introduced by Senator Feinstein (D-
CA). These responses were requested in your letters dated July 30, 
2001, sent to both Mr. Patrick Wright, Director of the CALFED Bay-Delta 
Program and me. Please consider this letter as the official response 
from Director Wright.
    Thank you for the opportunity to respond. If you have further 
questions or are in need of additional detail, please contact me at 
(916) 653-7310 or Director Wright at (916) 657-2666.
            Yours sincerely,
                                           Mary D. Nichols,
                                           Secretary for Resources.
[Enclosure]

              Responses to Questions From Senator Campbell

    Question 1. The Feinstein bill would authorize certain activities 
outlined in an August 2000 record of decision (ROD). However, why does 
this bill not appear to authorize implementation of the ROD in its 
entirety?
    Answer. S. 976 does authorize continued participation by Federal 
agencies in the CALFED Bay-Delta Program and Program projects costing 
less than $10 million.
    S. 976 would require the Secretary of the Interior and other 
Federal agency heads to participate in the administration of the Bay-
Delta Program. [Sec. 4 (c), ``Federal Role,'']. The Bay-Delta Program 
is defined as programs, projects, and activities included in the Record 
of Decision (Sec. 2 (4) (B), p. 2, II. 19-20). Further, S. 976 directs 
the Federal agencies, subject to availability of funds; to carry out 
all actions needed to implement ``Stage 1'' of the Bay-Delta Program. 
(p. 12, II. 12-19). Stage 1 is defined as programs and projects planned 
for the first seven years of the Bay-Delta Program, as specified in the 
Record of Decision (Sec. 2 (19), p. 5, I. 24 through p. 6, I. 2).
    Question 2. How is this going to affect California getting their 
share of Colorado River water down to the levels of the 4.4 plan which 
Babbitt set?
    Answer. S. 976 would authorize implementation of the Bay-Delta 
Program. Implementation of the Bay-Delta Program will involve 
additional water conservation and water reclamation activities, thereby 
reducing demand for Colorado River water supplies. These actions could 
reduce overall demand for water supplies in southern California from 
all sources, including the Colorado River. Additionally, the Bay-Delta 
Program will improve the reliability and quality of water delivered to 
southern California from the Delta. Improved quality of Bay-Delta 
supplies will allow further expansion in water reclamation, with 
attendant reductions in demand for water from all sources, again 
including the Colorado River.
    In addition to Bay-Delta Program actions, S. 976 proposes a grant 
and loan program to help finance local agencies' water supply projects 
that are not included within the Record of Decision. (Sec. 5, beginning 
on page 33). We anticipate that some of these projects would increase 
supplies available to southern California and thus reduce demand on 
Colorado River water supplies.
    Question 3. It is proposed that the CALFED program will increase 
California's water supply by 3 million acre feet. Where is this extra 
or new water coming from and is there a chance that part of this water 
will come from the Colorado River?
    Answer. About 2/3 of the projected additional supplies would come 
from better use of existing, developed supplies. The remaining 1/3 
would come from construction of additional storage facilities. None of 
these additional water supplies will come from the Colorado River.
    The Bay-Delta Program, if fully implemented, could develop up to 
2.9 million acre-feet (MAF) of additional water supplies. Sources 
include:

          690 thousand acre-feet (TAF) from urban conservation
          350 TAF from agricultural conservation
          310 TAF from water reclamation
          600 TAF from improvements in conveyance and water facility 
        operations
          900 TAF from expansion in water storage capacity

    All of these estimates are subject to further refinement as 
project-specific studies are completed.
    Water for these additional storage facilities will come from 
streams and rivers in the Sacramento-San Joaquin River watershed. 
Increased storage capacity would be used to store water during high 
flow periods for later release during times of need. The Bay-Delta 
Program does not include any plans for a net increase in California's 
allocation from the Colorado River.
    Question 4. If this bill (S. 976) is not enacted, and since 
California is still obligated to meets its requirements under the 4.4 
plan, what will California have to do to meet its future needs and how 
will this affect Colorado water?
    Answer. S. 976 would authorize funding for the CALFED Bay-Delta 
Program. Through implementation of ecosystem restoration programs and 
water management actions, the Bay-Delta Program will improve the 
reliability of existing water supplies exported from the Sacramento-San 
Joaquin Delta to California water-users. Southern California is home to 
half of California's population, and it is more than 60% dependent on 
imported water supplies. Much of that supply is from the Delta. 
Clearly, continued and improved reliability of Northern California 
exports is imperative.
    If S. 976 is not enacted, Southern California water users run a 
greater risk of reductions in water imported from Northern California. 
Reductions in Northern California exports would negatively impact the 
region's economy. More severely, the response might include adoption of 
new programs to fallow hundreds of thousands of acres of highly 
productive farmlands to provide water for urbanized Southern 
California. With agriculture providing one of every ten jobs in 
California, the adverse socioeconomic impacts of this scenario would be 
widespread and destabilize California's already depressed agricultural 
markets. Reduced Bay-Delta exports could destabilize the fragile 
consensus among California's users of Colorado River water, making it 
difficult to implement the Colorado River Water Use Plan and likely 
leading to extensive litigation, which could result in a renewal of 
interstate litigation before the U.S. Supreme Court.
    Dissention among the seven Colorado River Basin states would hinder 
their ability to effectively respond to new claims for use of River 
water, such as those expressed in pending litigation over extra-
territorial application of the ESA to species in Mexico or those for 
water for the Mexican delta.
    We believe the best approach to avoid negative consequences is 
Congressional authorization and funding for the CALFED Bay-Delta 
Program. Without implementation of the Bay-Delta Program, through S. 
976 or other appropriate legislation, it will be extremely difficult--
perhaps impossible--to ensure that California's 4.4 plan will be 
implemented.
    Question 5. With the already existing authorized water projects not 
being completely funded, like ALP in my home state of Colorado, will 
CALFED-get funded before other already authorized projects in other 
states?
    Answer. Decisions on Federal funding are the province of Congress. 
We anticipate that funding for the Bay-Delta Program will be balanced 
against other competing needs, both within the natural resources arena 
and the wider arena of all Federal government obligations. We also 
anticipate that Federal participation in the Program will be authorized 
this year, and that Congress may wish to appropriate funds for CALFED-
related projects under existing authorities.
    Question 6. What are the cost estimates of the CALFED related 
projects?
    Answer. CALFED agencies estimate the total costs for all Bay-Delta 
Program Record of Decision Stage 1 actions to be about $8.6 billion.
    Some projects would be constructed after Stage 1. Construction 
costs for these projects would be in addition to the $8.6 billion 
figure.
    Water supply projects authorized by Sec. 5 of S. 976 would be 
outside of the Record of Decision. We do not yet have an estimate of 
costs for water supply projects that would be funded under the Water 
Supply Program (Sec. 5 of S. 976). These costs would depend on the 
number and scope of water supply projects that local agencies wish to 
develop.
    Question 7. Who will pay for these projects?
    Answer. For projects covered by the Record of Decision, the CALFED 
agencies have proposed a financing plan that includes about 1/3 of the 
Program costs to be covered by the State of California (general 
revenues and bond revenues), about 1/3 covered by the Federal 
government, and about 1/3 covered by other sources, such as local 
agency cost-shares and fees and charges on users of Delta resources. 
The CALFED agencies have not yet developed recommendations for cost 
allocations for specific projects.
    For projects funded under the Water Supply Program (Sec. 5 of S. 
976), it is anticipated that costs would be shared between the project 
sponsors and the Federal government. It is possible that the State of 
California would also participate in the funding of these projects. In 
any case, cost share mandated by S. 976 limits the Federal portion to 
50 percent.
    Question 8. CALFED determined that beneficiaries should pay for new 
surface storage projects. What water users have agreed to pay full cost 
for the water from these projects?
    Answer. The CALFED agencies have indicated, ``a fundamental 
philosophy of the CALFED Program is that costs should, to the extent 
possible, be paid by the beneficiaries of the program actions.'' (ROD, 
p. 34.) This fundamental philosophy would apply to all elements of the 
Program, not exclusively to surface storage projects. Regarding water 
storage projects, the CALFED agencies have proposed that:

          The financing strategy for individual storage projects will 
        vary due to the design and planned operations of each project. 
        Final cost allocations, however, will be made based on the 
        principle of ``beneficiaries pay.'' Generally, the planning and 
        feasibility stages of surface storage projects will be pursued 
        with State and Federal public funding. If a project is 
        determined to be feasible, a cost allocation plan will be 
        prepared as part of the design phase, preliminary cost 
        allocations secured before construction begins, and final cost 
        allocation agreements implemented prior to project completion. 
        (ROD, p. 47).

    Therefore, we anticipate that, for any given surface storage 
project, there will be multiple classes of beneficiaries, including 
water users and the general public (for example, for environmental 
restoration uses of the project). Cost allocations cannot be finalized 
until additional studies of specific projects have been completed to 
determine potential magnitude and allocation of benefits. Under these 
circumstances, we do not expect any water user (or any other 
beneficiary or beneficiary group) to agree to any specific cost 
allocation at this time.
    Question 9. What would the Federal government's share of the cost 
of these projects be?
    Answer. For projects included in the Record of Decision, CALFED 
agencies have developed a preliminary financing plan that anticipates 
the total Federal government share to be about 1/3 of the Bay-Delta 
Program's total costs.
    Water supply projects to be authorized in the Water Supply Program 
(Sec. 5 of S. 976) would be outside the scope of the Record of 
Decision. For these projects, the Federal share would not exceed 50 
percent as mandated by S. 976. [Sec. 5(b)(4)(B), p. 37, II. 11-14.]
    Question 10. Would that Federal investment be repaid?
    Answer. Projects included in the Record of Decision may be 
financed, in part, by loans from the Federal government to local 
agencies or non-governmental organizations. We expect these loans would 
be repaid from the borrower's revenues. Other forms of Federal 
financial participation for Bay-Delta Program projects might include 
grants (either in money or in-kind services) to fund all or part of the 
costs of projects. Grants are usually not repaid.
    Costs for new supplies for broad public benefit would be shared by 
State and Federal governments and would not be repaid.
    Funding proposed in the Water Supply Program would be for both 
grants and loans [Sec. 5 (b)(4)]. S. 976 does not specify the 
proportion of funding to be dedicated to each type of support.
    Question 11. Is there a signed cost-share agreement for these 
projects?
    Answer. Cost-sharing agreements have been executed for some Record 
of Decision components, including for example, ecosystem restoration 
projects and groundwater storage projects.
    For water storage projects included in the Record of Decision, some 
agreements have been completed regarding the sharing of costs of 
planning and feasibility studies for groundwater storage projects. For 
reasons stated earlier, no cost-sharing agreements have been signed to 
date for surface storage projects.
    As projects get closer to implementation stage, cost-share 
agreements will be completed and executed.
    Question 12. Why do these projects need an accelerated process for 
authorization that is not conducted for any other water project?
    Answer. Accelerated authorization proposed in S. 976 could be an 
additional tool to ensure the CALFED Bay-Delta Program maintains 
balanced implementation throughout Stage 1. CALFED guidelines, already 
in place, will also ensure a balanced implementation strategy. The 
State of California believes that the storage projects specified in the 
bill and labeled for accelerated authorization; that is, enlarging 
Shasta Dam, enlarging Los Vaqueros Reservoir, and development of new 
in-Delta storage have merit and deserve further investigation. These 
projects will be considered during Stage 1. Upon completion of studies, 
either with or without accelerated authorization, appropriate 
documentation (including a description of the project, feasibility and 
operational studies, final environmental impact studies, certification 
by a statutorily-created public advisory group that the project is 
consistent with the Record of Decision, a cost-benefit analysis, a 
description of the project's benefits and beneficiaries, a cost 
allocation plan for the project, and financing and repayment plans) 
will be submitted to Congress.
    Our expectation is that as program components become ready for 
implementation, specific projects will be submitted for authorization 
consideration. In other words, as program components are deemed ready, 
each will be submitted for authorization.
                                 ______
                                 
                              Friant Water Users Authority,
                                      Lindsay, CA, August 20, 2001.
Hon. Jeff Bingaman,
Chairman, U.S. Senate, Committee on Energy and Natural Resources, 
        Washington, DC.
    Dear Senator Bingaman: This letter is in response to the letter to 
me from the Committee asking for responses to additional questions 
posed in follow-up to the hearing before the Subcommittee on Water and 
Power held on July 19, 2001 regarding the CalFed Program (S. 976) in 
California.
    Let me first note how much I appreciated being invited to testify 
before the Subcommittee. This opportunity provided the Friant Water 
Users Authority an excellent chance to clearly display our overall 
support for the legislation currently being considered for the 
authorization of the CalFed Program and to further explain the problems 
we have with proposed language in the bill that would extend federal 
``assurances'' of a water supply to a certain group of California water 
users.
    In response to the additional written questions raised by Senator 
Campbell, let me offer that I have reviewed the responses provided to 
you and Senator Campbell by Steve Hall on behalf of the Association of 
California Water Agencies (ACWA) who also testified at the July 19th 
hearing (response to questions dated August 10, 2001). I am in 
concurrence with the responses provided by ACWA and do not have any 
further comment to add.
    Thank you again for the opportunity to testify. Please feel free to 
contact me if there are further questions regarding my testimony.
            Very truly yours,
                                           Richard M. Moss,
                                                   General Manager.

                              Appendix II

              Additional Material Submitted for the Record

    [Due to the enormous amount of materials received, only a 
representative sample of statements follow. Additional 
documents and statements have been retained in subcommittee 
files.]

                              ----------                              

                                Taxpayers for Common Sense,
                                     Washington, DC, July 13, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.

Re: Opposition to California Ecosystem, Water Supply and Water Quality 
Enhancement Act of 2001 (S. 976)

    Dear Senator Feinstein: Taxpayers for Common Sense strongly opposes 
the ``California Ecosystem, Water Supply and Water Quality Enhancement 
Act of 2001.'' Although we recognize that there is an important role 
for the federal government in California water issues, we feel that 
federal participation must be limited, targeted, and cost-effective in 
order for the taxpayer to be served. S. 976 fails to meet this 
standard.
    We believe that S. 976 abandons CALFED's promise to approach 
California water issues in a balanced and fiscally responsible manner 
and instead returns to California's old habit of asking federal 
taxpayers to pay for its expensive water projects. S. 976 moves away 
from progress and innovative thinking in solving California's water 
supply issues in many ways:

   The Bill Comes With an Enormous Price Tag for Federal 
        Taxpayers. Earlier statements have estimated the cost of this 
        bill to be $3 billion (apparently based on estimates to 
        complete Bay-Delta Program Record of Decision (ROD) Stage 1 
        projects--FY 2000-07). However, S. 976 comes with a much 
        bigger, hidden price tag for federal taxpayers. The bill writes 
        a blank check by authorizing ``such sums as may be necessary to 
        pay for the Federal share'', and the federal share of building 
        three major projects, raising Shasta Dam, enlarging Los 
        Vaqueros Reservoir, and in-Delta storage, is 50%.
   S. 976 Allows Fast-Tracking of Major Water Projects. This 
        bill effectively preauthorizes three major water projects and 
        prevents full Congressional review of potentially wasteful and 
        incredibly expensive California water storage projects. To be 
        authorized, studies for enlarging Los Vaqueros Reservoir, 
        raising Shasta Dam, and in-Delta storage need only be approved 
        by one of three authorizing committees, the House Committee on 
        Resources, the Senate Committee on Energy and Natural 
        Resources, and the Senate Committee on Environment and Public 
        Works, cutting the rest of Congress out of the decision-making 
        process. The Secretary of the Interior submits reports for 
        construction projects to each of these committees. Unless all 
        three committees disapprove of the reports within 60 days of 
        submission, the three projects are authorized.
   The Legislation Abandons ``Beneficiary Pays''. The bill 
        abandons the principle of ``beneficiary pays,'' a key 
        protection for the federal taxpayer in the CALFED ROD. By not 
        requiring the identification of beneficiaries prior to 
        authorizing new projects, S. 976 will perpetuate the wasteful 
        cycle of forcing federal taxpayers, rather than the users who 
        are directly benefiting from the water, to foot the bill for 
        costly water projects.
   The Bill Provides Water Delivery Assurances for Central 
        Valley Water Contractors. S. 976 promises south-of-Delta 
        Central Valley agricultural water service contractors 65-70% of 
        their existing contract in normal years. This section catapults 
        many water users with junior rights to the front of the water 
        line to the detriment of users with more senior rights. Under 
        this section, the delivery of subsidized water to a small group 
        of Central Valley agricultural contractors becomes the highest 
        federal water priority in California. The bill also creates a 
        legal entitlement that will almost certainly be used by 
        contractors in existing and future litigation against the 
        federal taxpayer.
   S. 976 Sticks Federal Taxpayers with the Bill for Water 
        Assessment Required by California State Law. Under California 
        State law, the California Water Plan Update, a comprehensive 
        assessment of California water supply needs, must be completed 
        every five years. The bill drags the federal taxpayer into a 
        process required and led by California, and then sticks the 
        federal taxpayer with half the bill for completing the 
        assessment and projects generated by the assessment.

    Federal taxpayers should assist California in finding water 
solutions, but California--and more importantly, water users--must take 
the lead in implementing and funding these solutions. The ``California 
Ecosystem, Water Supply and Water Quality Enhancement Act of 2001'' 
will launch a new taxpayer-subsidized, dam-building era for water 
users. Taxpayers for Common Sense will work to find solutions, but, we 
believe S. 976, unfortunately, is more of a problem than a solution.
    We would be happy to further discuss this legislation with you. 
Please contact me at (202) 546-8500 x130 or [email protected] with 
questions or comments.
            Sincerely,
                                           Aileen D. Roder,
                              California Water Project Coordinator.
                                 ______
                                 
                         Natural Resources Defense Council,
                                  San Francisco, CA, July 18, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Washington, DC.
Hon. Barbara Boxer,
U.S. Senate, Washington, DC.

Re: The New Draft CALFED Reauthorization Bill (July 18, 2001 Draft)

    Dear Senator Feinstein and Senator Boxer: We have received the new 
draft bill that Senator Feinstein just released this afternoon in 
preparation for tomorrow's hearing, and we have been asked for our 
initial analysis. As you know, NRDC has many issues of concern with S. 
976, the Senator's current bill, many of which have been addressed in 
previous letters and comments. This letter focuses only on a few key 
issues, including the authorization for new construction actions and 
the attempt to create a federal statutory directive to increase water 
deliveries to south of Delta agricultural contractors, both of which 
are provoking opposition among many stakeholders in the CALFED process. 
Although we recognize that this draft responds to a number of concerns 
that were raised about previous drafts, many of the core problems 
remain.
    The new July 18 draft includes revised language on the so-called 
``west side assurances,'' a revised procedure for congressional review 
of new surface storage, and a blanket authorization for ``all actions 
necessary'' to carry out Stage 1 activities in the ROD. As is described 
more fully below and in our previous letters, NRDC cannot support this 
new version of the legislation and we urge you to amend it to restore 
the balance and consensus foundation of the CALFED ROD. Our concerns 
include the following:

   Eliminates Clean Water Act Review: The draft bill would 
        seriously undermine protections for clean water and wetlands by 
        allowing new and expanded dams to proceed without Clean Water 
        Act permits. Clean Water Act permits are normally required for 
        the construction and expansion of surface storage, because dams 
        destroy wetlands and have other harmful effects on water 
        quality. Rather than requiring the new projects to comply fully 
        with the Clean Water Act's permitting requirements, the bill's 
        authorization language would effect an end-run around these 
        requirements, allowing the new dams to proceed without any 
        Clean Water Act permit. There is no valid policy justification 
        for allowing large new dams to proceed without receiving a 
        Clean Water Act permit. There also is no valid policy 
        justification for failing to offer wetlands the highest 
        protections under the law--particularly in California, which 
        has already lost more than 90 percent of its wetlands, more 
        than any other state.
   Eliminates Essential Congressional Review: The draft bill 
        would severely curtail congressional review of projects seeking 
        authorizations. For example, the draft would not require any 
        committee hearings or vote. Given the long history of damaging 
        water projects, limiting congressional review is unacceptable. 
        If approved, this language could establish a damaging new 
        national precedent.
   Encourages Litigation and Threatens Environmental 
        Protections: The bill is virtually certain to trigger new 
        litigation by south-of-Delta irrigation interests as to the 
        adequacy of their taxpayer-subsidized water deliveries. It does 
        so by directing the federal government to increase water 
        deliveries to those irrigation interests by at least 15 percent 
        or up to 65-70 percent of their existing contract. If 
        deliveries in the future fall short of this new requirement for 
        any reason including preceding dry years or the need to reserve 
        some water to protect water quality or the environment--these 
        irrigation interests will be almost certain to sue to increase 
        their deliveries. This language is nearly certain to trigger 
        litigation to roll back current legal requirements to protect 
        the environment on the Trinity River, the Delta and Central 
        Valley wetlands. It is also likely to lead to an outrageous 
        legal claim that taxpayers must purchase water, at perhaps $160 
        per acre-foot and sell that water to CVP contractors at a 
        fraction of that price. Such a legal requirement would 
        represent a new right that would go far beyond the ROD and the 
        capacity of the Central Valley Project. It would also represent 
        disastrous public policy. The bill language about ``no effect 
        on contracts or law,'' while helpful in some respects, may fail 
        to protect against such lawsuits, for two independent reasons. 
        First, it fails to provide that the requirements in the bill 
        itself do not create new rights to water deliveries for water 
        users. Second, while it provides that nothing in this portion 
        of the bill affects any ``right'' under federal or state law, 
        it fails to provide that nothing in this portion of the bill 
        affects any existing requirement under federal or state law.
   Authorizes Additional Controversial Projects: The separate 
        authorization for the Bay-Delta Program construction actions in 
        Section 4 of the bill is sweeping and must be considered 
        separately from the procedures created on the three specific 
        storage projects discussed later in the bill. Section 4 directs 
        the Secretary to ``carry out all actions necessary to implement 
        stage 1'' including various preconstruction and construction 
        activities, without any language of limitation or pre-
        conditions. The list of actions discussed in the ROD that may 
        be eligible under this part of the bill is extensive. This list 
        could include Sites Reservoir, as well as a screened Delta 
        diversion, which could become the beginning of a Peripheral 
        Canal. Moreover, these actions could be converted by this 
        language into Federal projects, with all the CVP repayment 
        obligations (and subsidies) that might entail, even if CALFED 
        has not decided if there should be any federal role in these 
        projects.

    We have had little time to review this new draft. However, we 
wanted to provide these initial comments as rapidly as possible. In 
light of these numerous problems, we believe this new draft cannot be 
supported as written.
    Nevertheless, despite our concerns about certain aspects of the 
proposed bill, we firmly support the need for a consensus of interests 
in support of CALFED reauthorization that would make it possible to 
obtain CALFED funding. Unfortunately, this new draft fails to solve the 
many problems with S. 976 as introduced and will not achieve the needed 
consensus. We therefore urge you to work for alternate approaches that 
will achieve truly consensus-based authorization legislation.
    Thank you for considering our views.
            Sincerely,
                                   Barry Nelson,
                                           Senior Policy Analyst.
                                   Hamilton Candee,
                                           Senior Attorney.
                                 ______
                                 
                  Association of California Water Agencies,
                                     Sacramento, CA, July 19, 2001.

    Dear California Congressional Delegation: California business, 
labor and water leaders strongly support bipartisan federal legislation 
needed this year to authorize the crucial CALFED Bay-Delta 
implementation plan. We urge you to become a co-sponsor of H.R. 1985 
and to work with us in securing its passage.
    California is growing and will quickly outpace the modest 
investments made to its water infrastructure over the past 30 years. As 
the energy crisis has shown, there is a tremendous price to pay for 
being caught without adequate resources. There is broad agreement among 
our state's elected and opinion leaders that water will be the next 
crisis for California unless steps are taken now.
    With support from business, labor and water interests, California 
has committed substantial funding to begin that investment through the 
CALFED Bay-Delta Program. Today, federal action in the form of S. 976 
sponsored by Senator Dianne Feinstein and H.R. 1985, by Congressman Ken 
Calvert, is needed to keep the effort on track and prevent a water 
supply crisis in California's near future.
    Without an adequate water supply our environment and economy will 
be severely impacted. The Bay-Delta Program is the largest and most 
comprehensive environmental restoration project in our state's history. 
At the same time, the plan outlines needed improvements to water supply 
reliability and quality in the Bay-Delta--vital to public health and 
our quality of life.
    Whether it is megawatts of power or a reliable water supply, we 
can't afford to neglect our infrastructure. California jobs depend on 
it.
    California's water challenges demand the solutions offered in the 
Bay-Delta Plan. S. 976 and H.R. 1985 will help make that plan a 
reality.
            Sincerely,
                                       Action on Water Signatories.
                                 ______
                                 
                             Geothermal Energy Association,
                                     Washington, DC, July 25, 2001.
Hon. Jeff Bingaman,
Chair, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Chairman Bingaman: We appreciate the interest of the Senate 
Energy Committee in expanding renewable energy production, and would 
request that this letter on behalf of the members of the Geothermal 
Energy Association be included in the record of the Committee's 
hearings of July 19th. A full list of GEA's members is attached.
    Geothermal energy as making a substantial contribution to our 
energy needs, and has the potential to do much more. Nearly 2,800 
megawatts of geothermal power, producing 14-17 billion kilowatt-hours 
per year of electricity are in operation. High temperature geothermal 
resources supply about 6% of the electricity in California, 10% of the 
power in Northern Nevada, about 25% of the electricity for the Island 
of Hawaii, and significant power in Utah. Lower temperature resources 
provide substantial heat and energy for schools, homes and businesses 
throughout the West.
    Beyond its energy contribution, geothermal production contributes 
directly to state and local economies and to the national Treasury. To 
date, geothermal electricity producers have paid over $600 million in 
rentals, bonus bids and royalties to the federal government. Moreover, 
according to an analysis performed by Princeton Economic Research, it 
would be reasonable to estimate that the geothermal industry has paid 
nearly 6 times that amount in federal income tax, for a combined total 
of over $4 billion.\1\ If the economic multiplier effects were 
considered, the total benefits of geothermal energy to the local and 
national economy would be substantially greater.
---------------------------------------------------------------------------
    \1\ Princeton Economic Research, Inc., Review of Federal Geothermal 
Royalties and Taxes, December 15, 1998. (Figures expressed in 1998 
dollars.)
---------------------------------------------------------------------------
    All of the western states, from Texas to Washington, could see a 
dramatic expansion of geothermal energy use, including thousands of new 
megawatts of geothermal electric capacity, with proper incentives, 
expedited regulatory processing, and a strong research program to 
enhance technology.

 FINANCIAL INCENTIVES: EXTENDING THE PRODUCTION TAX CREDIT TO INCLUDE 
                           GEOTHERMAL ENERGY

    The most important measure that the Congress could take to spur the 
development of new geothermal electricity capacity would be the 
inclusion of geothermal energy in the list of eligible technologies to 
receive a 1.5-cent per kilowatt-hour production tax credit under 
Section 45 of the Internal Revenue Code. Extension of the production 
tax credit to new geothermal energy facilities would result in 
significant expansion of private sector investment in new geothermal 
power in the West.
    GEA also supports an inclusion of ``incremental'' production in the 
list of eligible technologies. Upgrading and refurbishing older 
geothermal power plants with higher efficiency turbines and other new 
technology can result in significant near-term additional generation. 
The new power production achieved should receive the tax credit.
    Extension of the Production Tax Credit to include geothermal energy 
is proposed in S. 596, the Energy Security Tax Incentive Act of 2001 
sponsored by Senator Bingaman, S. 389, the National Energy Security Act 
of 2001 sponsored by Senator Murkowski and S. 249 the Renewable Energy 
Development Incentives Act sponsored by Senator Reid.
    Expansion of Section 45 to include geothermal energy would help 
encourage investors to choose taking the risk of investing in new 
geothermal facilities. Geothermal power plants are capital intensive, 
costing several times more than a comparable natural gas power plant. 
Also, geothermal power plants require a significant up-front investment 
of time and money to define the geothermal resource, an investment that 
has been estimated to be as much as 40% of the cost of a new ``green 
field'' geothermal facility. Extension of the production tax credit to 
geothermal energy would help overcome these barriers and promote 
geothermal energy as a cost effective means to address clean air and 
climate concerns while providing reliable power to our homes and 
industry.

         RESOURCE POTENTIAL, REGULATORY AND PUBLIC LANDS ISSUES

    What is the future potential for geothermal energy in the West? 
What would the benefits of developing these resources be? These are 
difficult questions to answer, in part because the federal efforts of 
the U.S. Geological Survey and the Department of Energy to define the 
U.S. resource base have not been funded for many years. To be 
reasonably accurate, for geothermal energy a ``resource assessment'' 
would involve not only analysis but also surface exploration, selected 
drilling and updated modeling. While individual companies have 
conducted some exploration, much of that data is proprietary and since 
the collapse of power markets in the early 90's there has been little 
interest in high-risk investment.
    Earlier this year, the USGS and DOE testified on these issues 
before the House Resources Subcommittee on Energy. They restated their 
1978 estimate of geothermal potential in the West, over 22,000 MW, 
which is summarized by state in the attached table. However, the USES 
also indicated that this estimate is based upon assessment work done 
largely in the late 1960s and that there have been significant changes 
in our understanding of geothermal resources since then. Also, as you 
may notice from examining the attached table, many of the Western 
states with geothermal potential were never fully assessed by the USGS 
in its decades old analysis. An obvious conclusion is that a new 
geothermal resource assessment is needed, if not badly overdue.
    But, assuming that half of the estimated geothermal potential could 
be brought on line, the results would be of significant benefit to the 
West. A Princeton Economic Research study defines some of the direct 
economic benefits. The cumulative federal royalties from the new 
geothermal plants would reach over $7 billion by 2050, and estimated 
income tax revenues would exceed $52 billion in nominal dollars.\2\ For 
just royalties, alone, that would mean an investment of $3.5 billion in 
schools and local government facilities in the Western states through 
their share of federal royalties.
---------------------------------------------------------------------------
    \2\ Princeton Energy Research Inc., Op, Cit., volume I, page 17.
---------------------------------------------------------------------------
    Whether and when the economic benefits of further geothermal 
development are realized will greatly depend upon the action, or 
inaction, of the federal land management agencies. Today, about 75% of 
U.S. geothermal electricity production takes place on Federal public 
lands because that is where most of the resource is located. We expect 
that the resources yet to be developed also will be predominantly 
located on public lands. While the previous Administration espoused 
development of more geothermal resources in the West through its 
``GeoPowering the West'' initiative, too little was done to address the 
underlying problems that prevent investment in geothermal projects on 
public lands.
    New geothermal development requires the timely and reasonable 
administration of federal leasing, permitting, and environmental 
reviews by public land management agencies. Unfortunately, the recent 
past has been one characterized by bureaucratic delay and indecision by 
public land agencies; as a result, there has been a rapid decline in 
new geothermal energy development. Tens of thousands of acres of 
geothermal leases have been applied for in the West, but no action has 
been taken by federal agencies for years. Permit applications that 
should have taken days or weeks have taken months or years to process. 
Environmental reviews have been unnecessarily extensive, costly, and 
repetitive; and in areas where an EIS has been completed, decisions by 
federal agencies have been subject to years of delay and appeal.
    It is important that the Committee recognize that there are serious 
problems facing geothermal energy development on the public lands. In 
many ways, the problems facing natural gas development are mirrored for 
geothermal development, if not exacerbated by geothermal energy's 
higher risk and much higher capital costs.
    To mitigate these extraordinary delays and costs, we would 
encourage the federal land management and regulatory agencies to:

   Ensure that the processing of needed, clean energy projects 
        on public lands are handled with a sense of urgency and 
        priority. It is vital that bureaucratic delays be reduced from 
        years to months if not weeks.
   Eliminate repetition and duplication in the process. One of 
        the most recent projects to go through the federal process was 
        held up repeatedly while the same issues were examined over and 
        over again by different federal and state agencies.
   Strike a more responsible balance between our need for new, 
        clean energy supplies and other uses and values for the public 
        lands.
   Ensure reasonable access to public lands, including military 
        lands, and lease terms that reflect the public interest in 
        developing geothermal energy resources.

                        RESEARCH AND DEVELOPMENT

    The third priority for ensuring the expanded use of geothermal 
energy is having a strong research program at the Department of Energy. 
The DOE geothermal energy research program has been seriously 
underfunded for years. DOE's own geothermal energy Strategic Plan calls 
for a near-term annual budget level of $50-$60 million. This budget 
level would be consistent with recommendations made by the President's 
Committee of Advisors on Science and Technology (PCAST) in its 1997 
report. Critical technical needs include the development of advanced 
drilling, exploration and reservoir sensing, energy conversion and 
metals recovery, and enhanced reclaimed water injection. (By 
comparison, Japan is spending $150 million on geothermal energy 
research and development).
    A recent independent review by the National Research Council, 
Renewable Power Pathways, generally agrees with this conclusion. The 
NRC panel states:

          In light of the significant advantages of geothermal energy 
        as a resource for power generation, it may be undervalued in 
        DOE's renewable energy portfolio. Significant amounts of high-
        grade resources are available, and geothermal power 
        technologies can operate in a variety of duty cycles (from base 
        load to peak load conditions). . . . In addition, the United 
        States has taken the lead in successful commercial 
        demonstrations of geothermal energy for generating electricity 
        and heat at several sites and is the current technology leader 
        in the world among very active competitors in Europe and Japan. 
        (Renewable Power Pathways, page 53.)

    While DOE's geothermal research program has been undergoing 
fundamental change, we believe it is moving in a positive direction. 
However, it needs adequate funds to achieve its objectives and ensure 
the continued advance of geothermal technology.

                               CONCLUSION

    We appreciate the interest of the Senate Energy Committee in 
expanding the use of geothermal energy in the West. There are 
significant untapped geothermal resources throughout the West, and we 
welcome the opportunity to work with the Committee to develop the laws 
and policies that will encourage their greater use.
            Sincerely,
                                               Karl Gawell,
                                                Executive Director.
                                 ______
                                 

   Save The Bay  Sierra Club  League of Conservation 
   Voters  California League of Conservation Voters  
  Natural Resources Defense Council  American Rivers  
    Trout Unlimited  Pacific Coast Federation of Fishermen 
  Association  League of Woman Voters of California  
 Clean Water Action  Golden Gate Audubon Society  The 
 Bay Institute  Delta Keeper  Golden Gate Fishermen's 
   Association  Save The American River Association  
Environmental Water Caucus  California Trout  Northern 
      California Association of River Guides  California 
 Sportsfishing Protection Alliance  Planning and Conservation 
League  Community Water Rights Project  Friends of the 
 River  Endangered Habitat League  Mono Lake Committee 
   Salmonid Restoration Federation  Sacramento River 
Preservation Trust  Butte Environmental Council  Sierra 
     Nevada Alliance  CLEAN South Bay  Northcoast 
Environmental Center  Friends of the Trinity River  San 
               Francisco Chapter of Surfrider Foundation

                                                     July 12, 2001.

Re: Opposition to S. 976 as Introduced; Request to Support Boxer 
Amendments

    Dear Senator: The undersigned organizations support the CALFED plan 
and its call for a restored San Francisco Bay and Delta Estuary, as 
well as improved water supply reliability and quality for cities and 
farms. For this reason, we urge you to oppose S. 976 as introduced, the 
California Ecosystem, Water Supply and Water Quality Enhancement Act. 
We also urge you to support Senator Boxer's proposed amendments.
    In its current form, S. 976 would substantially undermine the 
CALFED Record of Decision (ROD) agreed to by 16 federal and state 
agencies. If enacted, this bill is likely to continue the debilitating 
water wars of the last three decades and further decimate California's 
environment and fishing industry. Major problems with S. 976 in its 
current form include:

   ``Pre-approval'' process for major new water development 
        facilities. The bill would bypass the usual congressional 
        review and authorization process for certain water projects and 
        deem them ``approved'' for purposes of receiving federal 
        appropriations once studies are completed, regardless of the 
        results of these studies, unless all of the relevant committees 
        disapprove the reports within 60 days--a near impossibility 
        given the Congressional calendar.
   No ``beneficiary pays'' requirement for pre-approved water 
        protects. The bill ignores CALFED's requirement that water user 
        beneficiaries pay for new facilities and would continue the 
        failed policy of subsidizing scarce water, thus encouraging 
        inefficient and environmentally harmful use of that water.
   Extraordinary legislative amendment of contracts giving new 
        guarantees to agribusiness out of water needed for endangered 
        salmon. The bill would give agribusiness a guarantee of 65-70% 
        of their current contract maximums--a benefit not provided by 
        those contracts which recognize that, as the junior users on 
        the system, these contractors are likely to receive less than 
        the maximum amount. This new water right would come at the 
        direct expense of the ecosystem and other water users. This 
        provision is likely to:

          Trump environmental protections for endangered fish and 
        wildlife.
          Give CVP contractors ``first call'' on CALFED funding for 
        storage and other water supply reliability tools.
          Create a new legal entitlement encouraging further 
        litigation.

   Imbalance in water development and ecosystem restoration 
        benefits. S. 976 focuses primarily on water development and 
        fails to fully implement the restoration, conservation and 
        water quality elements of the CALFED ROD. It also contains an 
        entirely new water supply program--over and above the 
        considerable development authorized as part of the CALFED 
        program. However, there is no parallel program addressing 
        critical ecosystem problems beyond CALFED. Other key omissions 
        include:

          No dedicated funding for restoration, in particular the $35 
        million annual water user fee called for in the CALFED ROD.
          No guarantee for environmental water of at least 100,000 AF 
        per year as called for in the CALFED ROD.
          No requirement to implement the CALFED agricultural and urban 
        water conservation programs.
          No requirement to establish a comprehensive drinking water 
        policy as called for in the CALFED ROD.

    Senator Boxer has introduced amendments addressing two of these 
issues. The first would eliminate the guarantee of new water to south 
of Delta contractors and limit litigation. While we believe the better 
course would be to strike the south of Delta assurances language 
entirely, the Boxer amendment is a substantial improvement over S. 976.
    The second amendment would eliminate the pre-authorization language 
for new water development in S. 976, and establish a ``beneficiary 
pays'' requirement for water projects consistent with the CALFED plan. 
We strongly support this amendment. Other changes are necessary to 
ensure that this bill fulfills CALFED's promise, but these amendments 
are key improvements.
    There is a need to authorize the CALFED program. However, in its 
current form, S. 976 strays far from the agreement reached after six 
years of study and negotiation. Critically, it is likely to undermine 
the restoration of the San Francisco Bay and Delta Estuary that CALFED 
was supposed to achieve. We urge you to oppose S. 976 as currently 
drafted and to support Senator Boxer's amendments. We understand that 
discussions are underway that may modify S. 976, and we look forward to 
productively engaging in those conversations. Thank you for your 
consideration of our views.
            Sincerely,
                    Cynthia Koehler, Save The Bay; Carl Zichella, 
                            Sierra Club; Betsy Loyless, League of 
                            Conservation Voters; Sarah Rose, California 
                            League of Conservation Voters; Barry 
                            Nelson, Natural Resources Defense Council; 
                            S. Elizabeth Birnbaum, American Rivers; 
                            Steve Malloch, Trout Unlimited; Zeke 
                            Grader, Pacific Coast Federation of 
                            Fishermen's Association; Roberta Borgonovo, 
                            League of Woman Voters of California; 
                            Marguerite Young, Clean Water Action; 
                            Arthur Feinstein, Golden Gate Audubon 
                            Society; Gary Bobker, The Bay Institute; 
                            Bill Jennings, Delta Keeper; Roger Thomas, 
                            Golden Gate Fishermen's Association; Felix 
                            Smith, Save The American River Association; 
                            Jean Auer, Environmental Water Caucus; Nick 
                            Di Croce, California Trout; Craig Bell, 
                            Northern California Association of River 
                            Guides; Jim Crenshaw, California 
                            Sportsfishing Protection Alliance; Gerald 
                            H. Meral, Planning and Conservation League; 
                            Michael Warburton, Community Water Rights 
                            Project; Elizabeth Reifsnider, Friends of 
                            the River; Dan Silver, Endangered Habitat 
                            League; Frances Spivy-Weber, Mono Lake 
                            Committee; Craig Bell, Salmonid Restoration 
                            Federation; John Merz, Sacramento River 
                            Preservation Trust; Lynn Barris, Butte 
                            Environmental Council; Laurel Ames, Sierra 
                            Nevada Alliance; Trish Mulvey, CLEAN South 
                            Bay; Tim McKay, Northcoast Environmental 
                            Center; Byron Leydecker, Friends of the 
                            Trinity River; Mike Paquet, San Francisco 
                            Chapter of Surfrider Foundation.
                  California Water Projects Since 1996

     1. American River Watershed (Flood control)
     2. Humboldt Harbor and Bay (Navigation)
     3. Marin County Shoreline (Restoration)
     4. Port of Long Beach (Deepening)
     5. San Lorenzo River (Flood control)
     6. San Lorenzo River (Restoration)
     7. Santa Barbara Harbor (Navigation)
     8. Santa Monica Breakwater (Navigation)
     9. Oakland Harbor (Navigation)
    10. Oakland Harbor (Deepening)
    11. San Luis Rey River (Flood protection)
    12. Folsom Dam Modification (Flood protection)
    13. South Sacramento County Streams (Flood protection)
    14. Yuba River Basin (Flood protection)
    15. Los Angeles Harbor (Navigation)
    16. Murrieta Creek (Flood protection)
    17. Pine Flat Dam (Flood protection)
    18. Santa Barbara Streams (Restoration)
    19. Upper Newport Bay (Navigation)
    20. Whitewater River Basin (Restoration)
    21. Upper Guadalupe River (Flood protection)
                                ------                                

                                        City of Sacramento,
                                    Sacramento, CA, April 17, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Senate Hart Office Building, Washington, DC.
    Dear Senator Feinstein: On behalf of the City of Sacramento (City), 
the County of Sacramento (County) and the East Bay Municipal Utility 
District (EBMUD), we want to express appreciation for your unwavering 
leadership in the United States Senate in the water resources area. A 
strong approach is needed to ensure that California has the tools and 
resources to manage California's water resources in a manner that will 
protect our environmental and economic prosperity into the future. We 
support the approach set forth in your April 5th draft federal 
authorization and funding measure, entitled the ``California Water 
Supply and Ecosystem Enhancement Act of 2001.''
    The City, County and EBMUD greatly appreciate the work that you and 
your staff have undertaken over the past six years to help resolve the 
water conflicts in California. Your current draft measure is the most 
recent of many contributions to help resolve these water conflicts in a 
manner that would provide benefit to all of the various interests. We 
strongly endorse the inclusion of the Freeport Regional Project in your 
draft measure, as it is vital to each of our interests and would serve 
to benefit multiple regions in the State.
    The City, County and EBMUD intend to work with all of the other 
stakeholder interests in California to help create the needed 
``critical mass'' of support for this measure. If California's 
interests cannot work for the common good, we may find ourselves 
without the national political support that will be needed to secure 
enactment of your important measure. If California water interests are 
unable to work together for a common solution, we may not find another 
opportunity for such a measure for some time.
    As you full well know, we in California (including those of us in 
the East Bay and Sacramento regions) cannot afford to delay 
implementing a solution that addresses our mutual water supply needs in 
an environmentally responsible manner. The City, County and EBMUD look 
forward to the introduction of your measure and will work closely with 
you and the other stakeholder interests to advance this important 
measure through Congress.
            Sincerely,
                                   CITY OF SACRAMENTO

                                   Robert Thomas,
                                           City Manager.

                                   COUNTY OF SACRAMENTO

                                   Terry Schutten,
                                           County Executive.

                                   EAST BAY MUNICIPAL UTILITY DISTRICT

                                   Dennis M. Diemer,
                                           General Manager.
                                 ______
                                 
                                The Delta Wetlands Project,
                                    Sacramento, CA, April 20, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.
    Dear Senator Feinstein: On behalf of the Delta Wetlands 
Partnership, I would like to express our thanks and support for your 
recent efforts on legislation to reauthorize the CALFED Bay-Delta 
Program. In particular, Delta Wetlands believes that the legislation 
that you released on April 6, 2001 represents a significant first step 
in the effort to reauthorize the CALFED Bay-Delta Program and we urge 
you to introduce this bill.
    There is a real need for continued improvement in the management of 
California's water system both with respect to increased protections 
for the environment as well as the development of new water supplies to 
serve California's future needs. One element of that program must be 
new water storage projects in California. The California Department of 
Water Resources estimates that, in the next twenty years, without 
additional water projects, California's water demand will exceed supply 
by up to 26% in drought years. In order to address this increasing 
shortfall, the CALFFD Bay-Delta Program identifies several water 
storage projects (including the potential acquisition or lease of the 
Delta Wetlands Project) and sets an ambitious schedule for 
implementation that requires that the CALFED agencies continue a high 
level of effort on the development and implementation of the storage 
elements. Thus, the urgency of reauthorizing CALFED this year not only 
lies in Congressional approval of the proposed measures in the Record 
of Decision but also in the need to continue authorization and funding 
of the development of these water storage projects so that they can be 
implemented on a timely basis.
    The Delta Wetlands Project can provide immediate water supply, 
water management and environmental benefits under the CALFED Bay-Delta 
Program. The Project has the capability of being implemented in the 
next three to five years and is in the process of receiving final state 
and federal permits required for construction and implementation of the 
project. At the same time, the Delta Wetlands Project also will create 
9,000 acres of new wetlands habitat in the Sacramento-San Joaquin Bay 
Delta and be implemented with a series of fishery, habitat and water 
quality protection measures.
    Delta Wetlands appreciates the work that you and your staff, Andy 
Moran and Warren Weinstein, have done in developing the CALFED Bay-
Delta Program reauthorization legislation. Moreover, we fully support 
your efforts in this regard and look forward to working with you to 
ensure that reauthorization is achieved in 2001.
            Sincerely,
                                           James L. Easton,
                                                   General Manager.
                                 ______
                                 
                          Santa Clara ValleyWater District,
                                      San Jose, CA, April 23, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.

Subject: California Water Supply and Ecosystem Enhancement Act of 2001

    Dear Senator Feinstein: The Santa Clara Valley Water District 
supports your draft legislation to re-authorize the CALFED program and 
to provide funding for the enhancement of the water supply and 
ecosystem in the State of California. We appreciate very much your 
continued leadership and interest in addressing the State's critical 
water supply, water quality and ecosystem needs. We concur with your 
assessment that California's electricity crisis is a stark lesson of 
failure to plan ahead to meet our growing needs. This lesson should not 
be repeated with water--our life-blood.
    I am pleased to report that my Board of Directors voted to support 
the introduction of your draft legislation and to continue our dialogue 
with you and your staff as the bill language gets developed and 
refined. We are delighted to see that a number of projects and programs 
critical to Santa Clara County's water supply, water quality and 
environmental needs are included in the legislation. We would like to 
continue to work with you and your staff to ensure that all the 
interests of the stakeholders are addressed and that no particular 
interest is advanced to the detriment of others.
    Thank you again for providing the opportunity to work with you on 
this important legislation that will provide statewide benefits for 
many years to come. We look forward to our continuing dialogue with you 
in the Senate and additional opportunities in the House when similar 
efforts begin.
            Sincerely,
                                       Stanley M. Williams,
                                           Chief Executive Officer.
                                 ______
                                 
                          Western Municipal Water District,
                                     Riverside, CA, April 24, 2001.
Hon. Dianne Feinstein,
Hart Building, Washington DC.

Support for Calfed Re-Authorization Legislation

    Dear Senator Feinstein: I am writing to express our support for 
your bill to re-authorize the CALFED program and to encourage you to 
proceed with this critical legislation.
    The Western Municipal Water District is a public agency that 
provides water supply, wastewater disposal, and water resource 
management to one-half million people within a 510 square mile area of 
western Riverside County. We were formed by public vote in 1954 to 
bring imported water supplies to this area. These supplies are 
purchased from the Metropolitan Water District and are mostly imported 
from Northern California via the State Water Project.
    Not only does Western import water, but, in our water resource 
management role, we work to improve and manage our local resources, 
with the goal of lessening our dependence on imported supplies. The 
CalFed process can help us succeed in this effort.
    A critical component of your proposed legislation is the Southern 
California Integrated Watershed Program, which would assist in 
developing significant new water supply and storage capabilities in 
Southern California, reduce the need to import water supplies, and 
provide significant environmental and water supply benefits for the 
Colorado River Basin States, for the San Francisco Bay Delta region, 
and for California as a whole.
    We would like to urge your efforts with this critical legislation 
that will help us better manage our limited water supplies throughout 
the state.
            Sincerely,
                                        Donald L. Harriger,
                                                   General Manager.
                                 ______
                                 
                          San Diego County Water Authority,
                                     San Diego, CA, April 24, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Senate Hart Office Building, Washington, DC.

California Water Supply and Ecosystem Enhancement Act of 2001

    Dear Senator Feinstein: The San Diego County Water Authority 
supports your efforts to enact the California Water Supply and 
Ecosystem Enhancements Act of 2001 that would continue implementation 
of the CALFED Bay Delta program. On behalf of the nearly 3 million San 
Diego County residents who rely on the Authority for a safe and 
reliable water supply, we look forward to actively participating in a 
process that ensures the success of this essential measure and the 
CALFED program.
    The 1987-92 drought proved that Southern California could no longer 
afford delaying a solution that addresses the state's mutual water 
supply needs. Your legislation authorizes a comprehensive water supply 
program that will help to bring water demands and supplies into 
balance. Your legislation also addresses key CALFED implementation 
issues in the areas of water quality, ecosystem restoration, storage 
and conveyance improvement, and conservation and reclamation. It 
contains appropriate requirements to use credible and objective science 
and reporting and performance milestones.
    We applaud your personal commitment to achieve a balanced solution 
that protects the essential resources of California. Your efforts and 
this legislation will result in substantial benefits to the entire 
state. The Authority looks forward to working with you and Congressman 
Ken Calvert to find common ground on these important issues. Thank you 
for your leadership in authoring legislation that will enhance 
California's environmental restoration, water quality, and water 
supply.
            Sincerely,
                                      Maureen A. Stapleton,
                                                   General Manager.
                                 ______
                                 
                  Association of California Water Agencies,
                                    Sacramento, CA, April 26, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Office Building, Washington, DC.
    Dear Senator Feinstein: Thank you for your letter of April 6, 2001 
inviting responses to your draft CALFED Authorization Legislation. We 
commend you for your leadership on this issue and continue to believe 
that you are one of only a handful of political leaders who can bring 
California's diverse interests together on this important issue. We 
support the introduction of your legislation and believe it could break 
the longstanding gridlock that has plagued California water policy.
    We are particularly heartened by the fact that your legislation 
recognizes the need to invest in our water infrastructure in order to 
avert a water supply crisis similar to the energy crisis California is 
now experiencing. Your legislation authorizes specific groundwater and 
surface storage projects, improvements to water conveyance, a rigorous 
program to improve scientific review, improved water project 
operational flexibility and demand management measures, all of which 
will be needed to assure that the water supply and water quality needs 
of the state will be met. Further, the study and analysis of additional 
storage and conveyance improvements will help assure that we meet 
California's future as well as its immediate water needs.
    As you know, Congressman Calvert, the chair of the House Water and 
Power Subcommittee has indicated his intention to introduce similar 
legislation. We look forward to working with you and Congressman 
Calvert in developing legislative proposals in the House and the Senate 
that are compatible and which provide the kind of clear guidance to 
federal agencies that we believe is necessary for the CALFED 
implementation plan to be successfully implemented.
    Toward that end we have attached a set of principles that ACWA 
adopted in December of last year. We will use these principles as our 
guide to assure that the final legislative package authorizes the 
CalFed implementation plan and the regulatory regime under which it 
operates in a way that assures a balance among environmental, water 
supply and water quality needs.
    Thank you again for your strong and decisive leadership and for 
your willingness to work with ACWA and its members in this endeavor.
            Sincerely,
                                           Stephen K. Hall,
                                                Executive Director.
                                 ______
                                 
            San Francisco Bay Area Water Users Association,
                                     San Mateo, CA, April 26, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.

Re: CALFED Legislation; Support

    Dear Senator Feinstein: The Bay Area Water Users Association 
(Association) is pleased to support your draft CALFED legislation, the 
California Water Supply and Ecosystem Enhancement Act of 2001. The 
Association represents 29 cities, water districts and other agencies in 
the San Francisco Bay Area. Association members provide water to 1.7 
million people, plus business and institutional customers in Alameda, 
Santa Clara, and San Mateo County.
    This legislation is important to their customers because all of our 
member agencies purchase water from the City and County of San 
Francisco and many also rely upon other sources of water, including 
both the State and federal water projects. The bill would authorize 
significant federal commitments to protecting California's ecosystem in 
conjunction with improving the water supply reliability situation 
within California through increases in water use efficiency and water 
storage.
    Your efforts to bring forward balanced CALFED authorization and 
appropriation legislation to Congress this year that addresses 
ecosystem restoration, water supply enhancement, and water supply 
reliability should be applauded and supported. We commend you for the 
continued leadership that you bring to resolving water supply and 
ecosystem issues in California, especially those related to the Bay 
Delta system.
    Thank you for the opportunity to work with you and your staff on 
this important legislation. We look forward to its swift passage and 
implementation. Please call me if we can be of any further assistance 
to you.
            Very Sincerely,
                                          Arthur R. Jensen,
                                                   General Manager.
                                 ______
                                 
                         North Coast County Water District,
                                      Pacifica, CA, April 27, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.

Re: CALFED Legislation; Support

    The Board of the North Coast County Water District is pleased to 
support your draft CALFED legislation, the California Water Supply and 
Ecosystem Enhancement Act of 2001. Passage of this legislation is 
critical to the future of our great State of California.
    The North Coast County Water District applauds your efforts to 
bring forward balanced CALFED authorization and appropriation 
legislation to Congress this year. The legislation would provide an 
opportunity to implement various water development projects that would 
not be considered without your legislation.
    The residents of Pacifica are expecting the District to meet their 
present and future water needs. Without assistance at the Federal level 
the District will be hard pressed to meet those water needs.
    Please encourage your fellow Senators to support your efforts on 
this legislation. The state should not miss this opportunity to build 
the foundation necessary to support California's water needs into the 
future. Let us heed the warning signs that were missed by the power 
industry. The District looks forward to swift passage and 
implementation of your legislation.
            Respectfully,
                                       Christine L. Hawkins
                                            President of the Board.
                                 ______
                                 
                                          City of Millbrae,
                                      Millbrae, CA, April 27, 2001.

Re: Support for CALFED Legislation

    Dear Senator Feinstein: The City of Millbrae is pleased to support 
your draft CALFED legislation, the California Water Supply and 
Ecosystem Enhancement Act of 2001. The City provides water to 
businesses and 21,394 residential customers.
    This legislation is important to our customers because we purchase 
100% of our water from the City and County of San Francisco. The bill 
would authorize significant federal commitments to protecting 
California's ecosystem in conjunction with improving the water supply 
reliability situation within California through increases in water use 
efficiency and water storage.
    Your efforts to bring forward balanced CALFED authorization and 
appropriation legislation to Congress this year that addresses 
ecosystem restoration, water supply enhancement, and water supply 
reliability should be applauded and supported. We commend you for the 
continued leadership that you bring to resolving water supply and 
ecosystem issues in California, especially those related to the Bay 
Delta system.
    We look forward to the passage and implementation of this important 
legislation.
            Sincerely,
                                             L.M. Sandrini,
                                          Director of Public Works.
                                 ______
                                 
                                        San Gabriel Valley,
                                      Irwindale, CA, June 28, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Building, Washington DC.

Re: S. 976 (Feinstein)--Support

    Dear Senator Feinstein: The San Gabriel Valley Economic Partnership 
(SGVEP) extends its support to S. 976. The Partnership is a coalition 
of public and private sectors working to sustain and grow the economic 
vitality of the Valley. Our goal is to attract more businesses, provide 
more jobs and create a ``business-friendly'' region. Your bill, ``The 
California Ecosystem, Water Supply and Water Quality Enhancement Act of 
2001,'' authorizes $3 billion to assist in the restoration of 
California's endangered water ecosystem and enhance California's water 
supply, reliability and quality of life for all interest.
    In addition, SGVEP is the lead organization in the effort to have 
several San Gabriel Valley cities designated as general expansion sites 
of the Port of Long Beach's Foreign Trade Zone #50. Thus, we believe 
that it's important to take heed of the 2001 state energy crisis, which 
in many ways foreshadows what could happen with water if California 
fails to plan for future growth. S. 976 would protect and restore 
endangered habitats and ecosystems; authorize the State-Federal CALFED 
partnership; and create off-stream water storage so that more water 
from wet years can be saved for use during dry years. Such measures 
ensure continued economic prosperity throughout our state and 
maintaining the competitive level of California State economy. SGVEP 
supports efforts to establish a reliable water supply through a 
balanced program of projects in the following areas:

   Ecosystem Restoration
   Improved Infrastructure
   Improved Water Management

    The future of California depends on managing our limited water 
resources wisely and responsibly. S. 976 represents a comprehensive 
approach to confront the water issues facing California's economy and 
overall quality of life. The San Gabriel Valley Economic Partnership 
appreciates your support of our region and proactive stance on this 
issue.
            Sincerely,
                                          Frank J. Marquez,
                               President & Chief Executive Officer.
                                 ______
                                 
                              Ducks Unlimited Inc.,
                                   Western Regional Office,
                                   Rancho Cordova, CA, May 2, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.

Subject: California Water Supply and Ecosystem Enhancement Act of 2001

    Dear Senator Feinstein: The Western Regional Office of Ducks 
Unlimited, Inc., through our Valley/Bay CARE Initiative, has been 
actively involved in the delivery of projects to protect, enhance, 
restore, and manage important wetlands and associated uplands in the 
Central Valley and San Francisco Bay.
    The CALFED program has been instrumental in providing the forum and 
funding to implement these critical ecosystem enhancements, many of 
which serve to benefit the critical role the Central Valley plays in 
providing habitat for migratory waterfowl. Absent a continued 
commitment in meeting the needs of California water supply and 
ecosystem enhancement, we risk further degradation of Central Valley 
wetland habitats. Current wetlands support up to 60% of the waterfowl 
in the Pacific Flyway during their annual migration. Accordingly, Ducks 
Unlimited, Inc. supports your draft legislation to re-authorize the 
CALFED program.
    We would like to continue to work with you and your staff to assure 
that actual on-the-ground ecosystem enhancement is continued, 
recognizing that current and future wetlands conservation is dependent 
on highly managed eater systems that must meet multiple purposes. It is 
also important to note that agriculture, either through common 
conveyance and drainage systems or winter flooding of crops such as 
rice, plays a critical role in maintaining wetland and associated 
riparian/upland habitats.
    Thank you for your leadership on this important legislation that 
will not only serve California, but also help meet the needs of North 
American waterfowl in the Pacific Flyway.
            Sincerely,
                                            Ryan Broddrick,
                         Director of Conservation, Valley/Bay CARE.
                                 ______
                                 
                               Chamber of Commerce,
                                   San Jose Silicon Valley,
                                        San Jose, CA, May 11, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Senate Hart Office Building, Washington DC.

Subject: California Water Supply and Ecosystem Enhancement Act of 2001

    Dear Senator Feinstein: On behalf of the members of the San Jose/
Silicon Valley Chamber of Commerce, I would like to commend you for 
your continued leadership and interest in addressing the State's 
critical water supply, water quality and ecosystem needs. By way of 
background, the San Jose Silicon Valley Chamber of Commerce represents 
nearly 2,000 companies covering the full spectrum of the business 
community.
    In particular, I write to encourage you to introduce your proposed 
legislation to re-authorize the CALFED program and to provide funding 
for the enhancement of the water supply and ecosystem in the State of 
California. The business community in Silicon Valley concurs with your 
assessment that California's electricity crisis is a stark lesson of 
failure to properly plan ahead to meet our growing needs. The business 
community does not want to see this lesson repeated with water supply.
    We are delighted to see that a number of projects and programs 
critical to Santa Clara County's water supply, water quality, and 
environmental needs are included in the legislation. Working with the 
Santa Clara Valley Water District, we look forward to the introduction 
of your proposed legislation and working with you and your staff as the 
bill language gets developed and refined to ensure that all interests 
of the various stakeholders are addressed, and that no particular 
interest is advanced to the detriment of others.
    Thank you for the opportunity to work with you on this important 
legislation that will provide statewide benefits for many years to 
come. Please do not hesitate to contact me should you have any 
questions or comments.
            Sincerely,
                                               Jim Cunneen,
                                                 President and CEO.
                                 ______
                                 
                       Association of Bay Area Governments,
                                         Oakland, CA, June 6, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.
    Dear Senator Feinstein: The Association of Bay Area Governments 
recently established the ABAG-CALFED Task Force (see attached roster of 
current members). Members of the task force and members of the Bay Area 
public believe that the core of the CALFED solution is restoration of 
the Bay and Delta. The road to California's water future relies on a 
long-term commitment to the restoration of the Bay and Delta. This 
integrated approach, promoted by CALFED, needs your full support.
    The Task Force supports the principles and actions proposed in both 
the CALFED Framework for Action and the Record of Decision. We believe 
that the CALFED Program provides a vision for how all Californians can 
work together to improve the Bay-Delta ecosystem, stabilize water 
supplies and improve drinking water quality through a robust, 
integrated and balanced program.
    We support your efforts to develop federal legislation that will 
re-authorize federal funding for the CALFED Program over the next 
several years. Our efforts to achieve critical CALFED objectives in the 
Bay Area are dependent on a reliable source of both state and federal 
funding. We believe that all elements of the CALFED Program must move 
ahead in a balanced manner that reflects both the CALFED Principles of 
Implementation and the specific programmatic commitments made in the 
ROD, and that any federal funding authorization for CALFED should be 
consistent with those principles and commitments. At the same time, at 
the regional level, we will educate local governments and the general 
public about the CALFED Bay-Area strategy, and ensure that the CALFED 
Program is integrated with local environmental restoration and water 
management efforts.
    Thank you again for your continued efforts on behalf of the CALFED 
Program.
            Yours very truly,
                                   Mike Rippey,
                                           Board of Supervisors, Napa 
                                               County,
                                           Chair, ABAG-CALFED Task 
                                               Force.
                                 ______
                                 
                                      Sweetwater Authority,
                                    Chula Vista, CA, June 20, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.
    Dear Senator Feinstein: I am writing on behalf of Sweetwater 
Authority to express our support for S. 976, the California Ecosystem, 
Water Supply and Water Quality Enhancement Act of 2001.
    As a local water retailer with a strong interest in the protection 
of both the supply and the quality of drinking water for our customers, 
Sweetwater Authority fully appreciates the magnitude of the challenges 
the State of California faces in this area. S. 976 is critical 
legislation that will provide comprehensive solutions to these pressing 
water needs in California. By working together on this statewide 
effort, we can ensure that the continuing growing demand for water is 
met in concert with the environmental protection, which is important to 
all.
    Thank you for taking the lead on this legislation to improve the 
availability, quality and reliability of water in our state.
            Sincerely,
                                            Al R. Sorensen,
                                                   General Manager.
                                 ______
                                 
                               Long Beach Water Department,
                                     Long Beach, CA, June 21, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Building, Washington, DC.

Re: Senate Bill 976 (Senator Feinstein)--CalFed Authorization--
Notification of SUPPORT

    Dear Senator Feinstein: It is my pleasure to communicate to you the 
Board of Water Commissioners' support for Senate Bill 976. The Board of 
Water Commissioners provides an uninterruptible supply of high quality 
drinking water to the 461,000 people in California's 5th largest city, 
the City of Long Beach. The City relies on imports to meet half of its 
drinking water needs, much of this water coming from the San Francisco 
Bay/Sacramento Delta watershed.
    S. 976 will increase water quality and reliability in the Bay/Delta 
impact area, which includes Southern California, by creating off-stream 
storage so that more water from wet years can be stored and used during 
dry years, and by authorizing about $3 billion in much-needed Federal 
spending for hundreds of important projects and programs in this 
watershed.
    On behalf of the Board of Water Commissioners, it is my pleasure to 
thank you for your efforts to secure long-term water reliability and 
quality for the people and economy of the State of California.
            Sincerely,
                                         Stephen T. Conley,
                           President, Board of Water Commissioners.
                                 ______
                                 
                      Lower Tule River Irrigation District,
                                    Porterville, CA, June 22, 2001.
Hon. Ken Calvert,
U.S. House of Representatives, Rayburn HOB, Washington, DC.
    Dear Representative Calvert: On behalf of the Board of Directors of 
the Lower Tule River Irrigation District, I am writing to express our 
District's support for the Western Water Enhancement Security Act of 
2001 (H.R. 1985). In addition, I would like to thank you for taking 
time to meet with myself and the District's Board President Robert 
Bowman in Washington D.C. on June 14th of this year.
    We believe that the Act goes along way in fulfilling the mission of 
the CALFED program by authorizing a long-term, balanced effort to 
address California's water supply and water quality needs. It is 
encouraging to see proposed legislation that balances the needs of the 
California water community and is not solely focused on environmental 
issues.
    Your legislation also recognizes the long neglected need of moving 
aggressively in the development of new storage and conveyance 
facilities. The strength of California and the future of our state lie 
in being pro-active in the development of water related systems that 
are critical to all elements of California.
    The success of the comprehensive effort envisioned by H.R. 1985 is 
vitally important to our District. We serve an agricultural water 
supply to more than 100,000 acres and countless family farms in the 
Friant Division on the east side of the San-Joaquin Valley.
    We commend you for your leadership on this difficult and complex 
issue and for your determination to move CALFED legislation forward 
rapidly. The Lower Tule River Irrigation District pledges to work 
constructively with you to improve H.R. 1985 to address important 
issues of concern to our District. .
            Very truly yours,
                                            Daniel G. Vink,
                                                   General Manager.
                                 ______
                                 
                                Kern-Tulare Water District,
                                    Bakersfield, CA, June 26, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.

Subject: Support for S. 976 and H.R. 1985

    Dear Senator Feinstein: The Kern-Tulare Water District strongly 
supports S. 976 and H.R. 1985; bipartisan federal legislation needed 
this year to re-authorize the CALFED Bay-Delta Program.
    The CALFED Program is the largest and most comprehensive water 
management and environmental restoration project in our state's 
history. It plans vitally needed improvements of water supple 
reliability and quality in the Delta, reducing the history of conflict 
between human water needs and the environment.
    Both S. 976 and H.R. 1985 implement the Program's Record of 
Decision. This document enables work to begin on specific ecosystem and 
habitat projects, and provides vital loan and grant resources for 
district projects throughout California. In the Delano area, the CALFED 
Bay-Delta Program's resources will improve water reliability, assist in 
upgrading distribution system facilities, improve water use efficiency, 
and improve energy use efficiency.
    As California continues to grow, we will quickly outgrow the 
investments made in water resources infrastructure over the past 30 
years. If something isn't done immediately, the state will soon face 
critical water shortages on a routine basis. We can't afford to neglect 
our infrastructure any longer.
    California's water challenges demand the solutions offered by 
CALFED. For that reason, the Kern-Tulare Water District urges your 
support for S. 976 and H.R. 1985.
            Sincerely,
                                           Steven C. Dalke,
                                                   General Manager.
                                 ______
                                 
                            Woodbridge Irrigation District,
                                     Woodbridge, CA, June 27, 2001.
Hon. Xavier Becerra,
Longworth House Office Bldg., Washington, DC.

Re: Support for S. 976 and H.R. 1985

    Dear Representative Becerra: The Woodbridge Irrigation District 
strongly supports S. 976 and H.R. 1985; bipartisan federal legislation 
needed this year to re-authorize the CALFED Bay-Delta Program.
    The CALFED Program is the largest and most comprehensive water 
management and environmental restoration project in our state's 
history. It plans vitally needed improvements of water supply 
reliability and quality in the Delta, reducing the history of conflict 
between human water needs and the environment.
    Both S. 976 and H.R. 1985 implement the program's Record of 
Decision. This document enables work to begin on specific ecosystem and 
habitat projects, and provides vital loan and grant resources for 
district projects throughout California. In our own community, the 
CALFED Bay-Delta program's resources will improve water quality, assist 
in flood control, upgrade pumping facilities, promote fish and wildlife 
restoration, recreation, public safety and drought assistance.
    California continues to grow, and will quickly outgrow the modest 
investments made in water over the past 30 years. As the energy crisis 
has shown, there is a tremendous price to pay for being caught without 
adequate resources--whether it is megawatts of power or a reliable 
water supply. We can't afford to neglect our infrastructure.
    California's water challenges demand the solutions offered by 
CALFED. For that reason, the Woodbridge Irrigation District urges your 
support for S. 976 and H.R. 1985.
            Sincerely,
                                        Anders Christensen,
                                                           Manager.
                                 ______
                                 
                           Calaveras County Water District,
                                    San Andreas, CA, June 27, 2001.
Hon. Congressman John T. Doolittle,
Longworth Building, Washington, DC.

Re: Support for S. 976 and H.R. 1985

    Congressman Doolittle: The Calaveras County Water District strongly 
supports S. 976 and H.R. 1985; bipartisan Federal legislation needed 
this year to re-authorize the CALFED Bay-Delta Program.
    The CALFED Program is the largest and most comprehensive water 
management and environmental restoration project in our state's 
history. The CALFED program provides for vitally needed improvements of 
water supply reliability and quality in the Delta, reducing the history 
of conflict between human water needs and the environment.
    Both S. 976 and H.R. 1985 implement the program's Record of 
Decision. This document enables work to begin on specific ecosystem and 
habitat projects, and provides vital loan and grant resources for 
district projects throughout California. Calaveras County Water 
District (District) is currently completing several surface water and 
ground water investigations within the Calaveras River watershed. The 
District intends to incorporate this information into an application to 
the CALFED Bay-Delta Program for a proposed Calaveras River Conjunctive 
Use Feasibility Study and Pilot Program. During drought periods New 
Hogan Reservoir on the Calaveras River does not provide adequate water 
for the growing areas of Jenny Lind and Rancho Calaveras in Calaveras 
County. Storing wet weather flow in the 70 square mile groundwater 
basin located in the Camanche/Valley Springs area of Calaveras County 
will provide a drinking water supply for these communities during 
periods of drought. Your support of funding for the above program would 
provide significant benefits to Calaveras County residents living 
within the Calaveras River Watershed. The District is looking to S. 976 
and H.R. 1985 to provide funding for this essential project.
    California continues to grow, and will quickly outgrow the modest 
investments made in water over the past 30 years. As the energy crisis 
has shown, there is a tremendous price to pay for being caught without 
adequate resources--whether it is megawatts of power or a reliable 
water supply. We can't afford to neglect our infrastructure.
    California's water challenges demand the solutions offered by 
CALFED. For that reason, the Calaveras County Water District urges your 
support of S. 976 and H.R. 1985.
            Sincerely,
                                           Simon Granville,
                                                   General Manager.
                                 ______
                                 
                             Alameda County Water Dustrict,
                                        Fremont, CA, June 28, 2001.
Hon. Pete Stark,
Cannon House Office Bldg., U.S. House of Representatives, Washington, 
        DC.
    Dear Representative Stark: The Alameda County Water District (ACWD) 
strongly supports S. 976 and H.R. 1985; bipartisan federal legislation 
needed this year to re-authorized the CALFED Bay-Delta Program.
    The CALFED Program is the largest and most comprehensive water 
management and environmental restoration project in our state's 
history. It plans vitally needed improvements of water supply 
reliability and quality in the Delta, reducing the history of conflict 
between human water needs and the environment.
    Both S. 976 and H.R. 1985 implement the program's Record of 
Decision. This document enables work to begin on specific ecosystem and 
habitat projects, and provides vital loan and grant resources for 
district projects throughout California. In our own community, the 
CALFED Bay-Delta program's resources will improve water quality, water 
supply reliability and assist in new water conservation programs.
    California continues to grow, and will quickly outgrow the modest 
investments made in water over the past 30 years. As the energy crisis 
has shown, there is a tremendous price to pay for being caught without 
adequate resources--whether it is megawatts of power or a reliable 
water supply. We can't afford to neglect our infrastructure.
    California's water challenges demand the solutions offered by 
CALFED. For that reason, ACWD urges your support for S. 976 and H.R. 
1958.
            Sincerely,
                                          James G. Gunther,
                                                   Board President.
                                   Rio Alto Water District,
                                     Cottonwood, CA, June 29, 2001.
Hon. Wally Herger,
U.S. House of Representatives, Washington DC.

    Re: Support for S. 976 and H.R. 1985

    Dear Representative Herger: The Rio Alto Water District strongly 
supports S. 976 and H.R. 1985; bipartisan federal legislation needed 
this year to reauthorize the CALFED Bay-Delta Program.
    The CALFED Program is the largest and most comprehensive water 
management and environmental restoration project in our state's 
history. It plans vitally needed improvements of water supply 
reliability and quality in the Delta, reducing the history of conflict 
between human water needs and the environment.
    Both S. 976 and H.R. 1985 implement the program's Record of 
Decision. This document enables work to begin on specific ecosystem and 
habitat projects and provides vital loan and grant resources for 
district projects throughout California. In Tehama County, the CALFED 
Bay-Delta program's resources will improve water quality, assist in 
flood control, upgrade pumping facilities, promote fish and wildlife 
restoration, recreation, public safety and drought assistance.
    California continues to grow, and will quickly outgrow the modest 
investments made in water over the past 30 years. As the energy crisis 
has shown, there is a tremendous price to pay for being caught without 
adequate resources--whether it is megawatts of power or a reliable 
water supply. We can't afford to neglect our infrastructure.
    California's water challenges demand the solutions offered by 
CALFED. For that reason the Rio Alto Water District urges your support 
for S. 976 and H.R. 1985.
            Sincerely,
                                            Roger Sherrill,
                                                   General Manager.
                                 ______
                                 
                                       Mojave Water Agency,
                                    Apple Valley, CA, July 3, 2001.
Hon. Dianne Feinstein,
U.S. Senate, Hart Building, Washington, DC.
    Dear Senator Feinstein: Thank you for your commitment to improving 
the quality and reliability of California's water supply through S. 
976. Mojave Water Agency (MWA) applauds you for your foresight in 
planning for California's water future.
    California's water supply needs strong legislation like S. 976 to 
ensure our water future. MWA is especially interested in the 
``comprehensive'' nature of the bill, which will fund projects in all 
parts of the State for the improvement of water supply reliability.
    With proper planning carried out collectively by local, State and 
Federal stakeholders, California can avoid a disaster happening to the 
water industry similar to what has occurred to the energy industry. S. 
976 is an important part of this plan. Thank you for introducing this 
important legislation.
            Sincerely,
                                         Kirby Brill, P.E.,
                                                   General Manager.
                                 ______
                                 
                       Water Replenishment District
                                    of Southern California,
                                       Cerritos, CA, July 12, 2001.
Hon. Dianne Feinstein,
Hart Senate Building, Washington, DC.

Re: S. 976 Support

    Dear Senator Feinstein: The Water Replenishment District of 
Southern California (WRD) appreciates the leadership that you have 
demonstrated with the introduction of S. 976. We are pleased to report 
that the WRD is in full support of your legislation. We are also in 
support of H.R. 1985 (Calvert) and commend the bipartisan effort to 
reauthorize the CALFED Bay-Delta Program.
    The WRD manages groundwater, which meets 40% of the water demand 
needs for 4 million residents in south Los Angeles County. As the 
regional groundwater management agency for 43 cities, WRD ensures that 
a reliable supply of high quality groundwater is available through our 
clean water projects, water supply programs, and effective basin 
management principles. Additionally, the WRD seeks to optimize the 
groundwater basins to decrease the region's dependence on imported 
water and increase usage of local water resources.
    The WRD looks to the CALFED Program as a vehicle to help reduce the 
conflict between the water needs of our state's population, economy, 
and the environment. As the largest and most comprehensive water 
management program and environmental restoration project in our state's 
history, the CALFED Program will provide for critical improvements to 
water supply reliability and Delta water quality.
    Both S. 976 and H.R. 976 implement the program's Record of 
Decision. This document enables work to begin on specific ecosystem and 
habitat programs, and provides vital loan and grant resources for local 
projects throughout California. For our own region, the CALFED Bay-
Delta Program will help to improve water quality and overall water 
supply reliability.
    A secure California water future requires the full range solutions 
offered by CALFED. The WRD have and will continue to contact other 
members of our congressional delegation to urge their support on your 
legislation and H.R. 976 to reauthorize CALFED.
            Sincerely,
                               Bruce A. Mowry, Ph.D., P.E.,
                                                   General Manager.
                                 ______
                                 
                        United Water Conservation District,
                                                   Santa Paula, CA.
Hon. Elton Gallegly,
Rayburn Building, Washington, DC.
Re: Support for S. 976 and H.R. 1985

    Dear Representative Gallegly: The United Water Conservation 
District strongly supports S. 976 and H.R. 1985; bipartisan federal 
legislation needed this year to re-authorize the CALFED Bay-Delta 
Program.
    The CALFED Program is the largest and most comprehensive water 
management and environmental restoration project in our state's 
history. It plans vitally needed improvements of water supply 
reliability and quality in the Delta, reducing the history of conflict 
between human water needs and the environment.
    Both S. 976 and H.R. 1985 implement the program's Record of 
Decision. This document enables work to begin on specific ecosystem and 
habitat projects, and provides vital loan and grant resources for 
district projects throughout California. In our own community, Ventura 
County, the CALFED Bay-Delta program's resources will improve water 
quality, assist in flood control, upgrade pumping facilities, promote 
fish and wildlife restoration, recreation, public safety and drought 
assistance.
    California continues to grow, and will quickly outgrow the modest 
investments made in water over the past 30 years. As the energy crisis 
has shown, there is a tremendous price to pay for being caught without 
adequate resources--whether it is megawatts of power or a reliable 
water supply. We can't afford to neglect our infrastructure.
    California's water challenges demand the solutions offered by 
CALFED. For that reason, the United Water Conservation District thanks 
you for your support for S. 976 and H.R. 1985.
            Sincerely,
                                         Daniel C. Naumann,
                                            President of the Board.
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