[Senate Hearing 107-663]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 107-663

                      NATIONAL WATER SUPPLY ISSUES

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

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON FISHERIES, WILDLIFE, AND WATER

                                 OF THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 14, 2001


                               __________


  Printed for the use of the Committee on Environment and Public Works



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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      one hundred seventh congress
                             first session
                  JAMES M. JEFFORDS, Vermont, Chairman
MAX BAUCUS, Montana                  BOB SMITH, New Hampshire
HARRY REID, Nevada                   JOHN W. WARNER, Virginia
BOB GRAHAM, Florida                  JAMES M. INHOFE, Oklahoma
JOSEPH I. LIEBERMAN, Connecticut     CHRISTOPHER S. BOND, Missouri
BARBARA BOXER, California            GEORGE V. VOINOVICH, Ohio
RON WYDEN, Oregon                    MICHAEL D. CRAPO, Idaho
THOMAS R. CARPER, Delaware           LINCOLN CHAFEE, Rhode Island
HILLARY RODHAM CLINTON, New York     ARLEN SPECTER, Pennsylvania
JON S. CORZINE, New Jersey           BEN NIGHTHORSE CAMPBELL, Colorado

                Ken Connolly, Democratic Staff Director
                Dave Conover, Republican Staff Director
                                 ------                                

             Subcommittee on Fisheries, Wildlife, and Water

                     BOB GRAHAM, Florida, Chairman

JAMES M. INHOFE, Oklahoma            JOSEPH I. LIEBERMAN, Connecticut
MICHAEL D. CRAPO, Idaho              THOMAS R. CARPER, Delaware
BEN NIGHTHORSE CAMPBELL, Colorado    HILLARY RODHAM CLINTON, New York
                                     JON S. CORZINE, New Jersey

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page

                           NOVEMBER 14, 2001
                           OPENING STATEMENTS

Campbell, Hon. Ben Nighthorse, U.S. Senator from the State of 
  Colorado.......................................................     7
Corzine, Hon. Jon S., U.S. Senator from the State of New Jersey..    15
Crapo, Hon. Michael D., U.S. Senator from the State of Idaho.....     3
Graham, Hon. Bob, U.S. Senator from the State of Florida.........     1
Jeffords, Hon. James M., U.S. Senator from the State of Vermont..     4
Smith, Hon. Bob, U.S. Senator from the State of New Hampshire....    36

                               WITNESSES

Diester, Ane, associate vice president, Metropolitan Water 
  District of Southern California................................    23
    Prepared statement...........................................    46
    Response to additional questions from Senators Graham and 
      Crapo......................................................    64
Frederick, Ken, Senior Fellow, Resources for the Future..........    26
    Prepared statement...........................................    68
Hirsch, Robert, Associate Director for Water, U.S. Geological 
  Survey, Department of Interior.................................    13
    Prepared statement...........................................    42
Keys, John, Commissioner, Bureau of Reclamation, Department of 
  Interior.......................................................    11
    Prepared statement...........................................    38
    Responses to additional questions from Senator Graham........    41
Mink, Leland Roy, director, Idaho Water Resources Research 
  Institute......................................................    28
    Prepared statement...........................................    70
Parker, Hon. Mike, Assistant Secretary of the Army for Civil 
  Works..........................................................     9
    Prepared statement...........................................    37
Rutherford, Jay, director, Water Supply Division, Vermont 
  Department of Environmental Conservation.......................    25
    Prepared statement...........................................    65
Weber, Tom, Deputy Chief of Programs, Natural Resources 
  Conservation Service, Department of Agriculture................    16
    Prepared statement...........................................    44

                          ADDITIONAL MATERIAL

Article, The Loan Arranger.......................................    74
Statement, Association of State Drinking Water Administrators 
  (ASDWA), Association of State and Interstate Water Pollution 
  Control Administrators (ASIWPCA), and Council of Infrastructure 
  Financing Authorities (CIFA)...................................    72

 
                      NATIONAL WATER SUPPLY ISSUES

                              ----------                              


                      WEDNESDAY, NOVEMBER 14, 2001

                                       U.S. Senate,
                 Committee on Environment and Public Works,
            Subcommittee on Fisheries, Wildlife, and Water,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:37 a.m. in 
room 406, Senate Dirksen Building, Hon. Bob Graham (chairman of 
the subcommittee) presiding.
    Present: Senators Graham, Campbell, Corzine, Crapo and 
Jeffords.

  OPENING STATEMENT OF HON. BOB GRAHAM, U.S. SENATOR FROM THE 
                        STATE OF FLORIDA

    Senator Graham. Good morning. I call to order the Senate 
Committee on Environment and Public Works, Subcommittee on 
Fisheries, Wildlife and Drinking Water.
    I will give an abbreviated version of my opening statement 
and will be followed by our chairman, Senator Jeffords, and 
ranking member, Senator Crapo. Then we will proceed to the 
first panel.
    This hearing today is part of a series of hearings on water 
issues facing America. Today's focus is on the role of the 
supply of water and the appropriate position of the Federal 
Government. Another title for this hearing, which was developed 
back in the spring which might be slightly less obvious today, 
is ``Drought in America.''
    Over the last decade, America has experienced a significant 
decrease in water availability. There are numerous potential 
causes for this trend, including reduced rainfall, increased 
populations and changes in water use patterns. The availability 
of clean, fresh water at the time when you need it is something 
that most Americans have taken for granted. However, this is 
not the case globally. It is not the case in some areas of our 
country and it may not be the case in more areas if current 
trends continue.
    In 1997, the United Nations assessment of the fresh water 
resources of the world included some disturbing predictions 
about the availability of water resources in our future. The 
report states that water use has been growing at more than 
twice the rate of population increase during the 20th century. 
It goes on to say that by the year 2025 as much as two-thirds 
of the world population could be under stress conditions in 
terms of the availability of fresh water.
    Water shortages can impact public health, limit economic 
and agricultural development and damage ecosystems. This 
situation affects the United States, as well as other parts of 
the world. In 1900, U.S. water withdrawals for all purposes 
were 56 cubic kilometers per year. By 1950, total water 
withdrawals were 250 cubic kilometers per year. Water use 
peaked in the United States in 1980 with total withdrawals of 
more than 500 cubic kilometers per year. These changes 
represent a tenfold increase in water withdrawals in a period 
in which population in the United States increased by a factor 
of four.
    These statistics do not speak well for our future. The U.S. 
Census Bureau estimates that our population today is 
approximately 285 million people. The U.S. Bureau of Census 
estimates that by the beginning of the next century, 
approximately 99 years from now, our population will be 571 
million. If our consumption rates continue to grow during the 
next 100 years at the pace they did during the last, we will 
likely face even more significant water shortages than we are 
already feeling.
    No part of the country is unaffected by this. In my home 
State of Florida, we experienced a severe drought that lasted 
for the better part of this year. The lack of rain was part of 
a 7-year drought cycle and the State was eventually forced to 
implement unprecedented levels of drought mitigation. I know 
the members of this committee could cite similar examples from 
their States and their regions of the country.
    Today, it is our hope to learn more from our witnesses 
about these trends and identify any fundamental issues that are 
driving them. For example, are we experiencing a cyclical 
downturn in rainfall or are there more basic changes in climate 
or other natural systems at work? Are the changes we are seeing 
due to conditions in our current water supply system that mask 
the true cost of a given unit of water to consumers?
    I also plan to discuss with each of the witnesses ideas for 
appropriate sets of public policy initiatives that the Federal 
Government should undertake. I hope to use the results of these 
discussions in our subcommittee's work on water infrastructure 
legislation over the course of the next few months. In 
particular, we will be using information gathered today to 
answer questions such as, What is the value of a given unit of 
water? How can we assure that our treatment of water 
infrastructure cost gives transparent price signals to water 
users who can use that information to make good decisions about 
the quantity of water they use?
    I recognize that some of the recommendations we receive 
today could fall outside the immediate jurisdiction of this 
subcommittee. Should this occur, Senator Crapo and I will pass 
those recommendations on to the appropriate other Senate 
committees.
    I am particularly pleased to welcome our Federal witnesses 
today from the U.S. Army Corps of Engineers, the Bureau of 
Reclamation, the U.S. Geological Survey, the Department of 
Agriculture and the Environmental Protection Agency's Office of 
Waste Water Management.
    We will commence the panel after opening statements from, 
first, Senator Crapo, then Senator Jeffords.

 OPENING STATEMENT OF HON. MICHAEL D. CRAPO, U.S. SENATOR FROM 
                       THE STATE OF IDAHO

    Senator Crapo. Thank you very much, Mr. Chairman.
    I commend your efforts to address this complex issue. I 
have maintained for some time that water was going to 
increasingly become one of the most critical issues we deal 
with in our Nation, and I appreciate the attention that you are 
giving to our Nation's water infrastructure needs.
    I also appreciate our witnesses joining us here today to 
share their thoughts on the subject of water supply and to 
discuss ideas related to the appropriate role of the Federal 
Government in addressing this issue. Issues of water supply are 
critical to Idaho and throughout much of the country, as are 
these continuing drought issues that the chairman has 
mentioned. I am also a member of the Senate Committee on 
Agriculture where we are marking up portions of the Farm bill 
today, Mr. Chairman, and I apologize that I am going to have to 
leave rather early in this hearing to get to that Ag Farm bill 
markup, where we are also dealing with issues directly related 
to water. But this morning, please accept my apologies. I will 
keep my opening comments brief.
    Idaho, like many other regions of the country, is currently 
experiencing a severe drought. Numerous Idaho counties were 
declared disaster areas this past summer because of the 
severity and persistence of this drought. Close coordination 
between Federal agencies, State agencies and the power industry 
was necessary to reduce adverse impacts to water users, to our 
power generation and to natural resource protection. Add to 
this the projection that the population in the West is expected 
to increase by 30 percent in the next 20 to 25 years, and it is 
not hard to envision that these and other water supply issues 
will only intensify in the future.
    In the past, Congress has repeatedly recognized the primary 
jurisdiction of the States and local governments in managing 
and developing water supplies. This has been reinforced over 
the years in numerous Federal statutes relating to water 
resources. I have personally been a strong advocate of the need 
to protect the sovereignty of the States in regard to water 
right jurisdiction. Therefore, I would encourage all of us to 
keep in mind the critical role of the States in managing water 
rights when we address the role that the Federal Government 
might take in dealing with national water supply issues.
    I also recognize the valuable role the Federal Government 
has provided and should continue to provide in the form of 
technical assistance and expertise to State and local 
governments relating to their management of water resources. 
The legislation the chairman just mentioned, which deals with 
our Clean Water Act and the water infrastructure needs of our 
Nation are good examples of the kinds of things the Federal 
Government can do to assist without intruding on the 
jurisdiction of the States to control the management and 
allocation of water rights.
    I also want to take this opportunity to specifically 
welcome John Keys and Dr. Roy Mink who are both here today. 
John Keys is currently the Commissioner of the Bureau of 
Reclamation at the Department of Interior. Prior to this 
assignment, he served as the Regional Administrator for the 
Bureau in Boise, ID. His work with irrigators, stakeholders and 
local communities was invaluable in helping to resolve many of 
the potential conflicts that arise from the competing interests 
in water resource issues. We are sorry to see him leave Idaho, 
but I am pleased that he has moved on to share his expertise 
with the Bureau nationally.
    Roy Mink is the past president of the National Institute of 
Water Resources and currently serves as the director of the 
Idaho Water Resources Research Institute at the University of 
Idaho. His research work in hydrology at the University of 
Idaho has made that university one of the Nation's leading 
institutes in natural resource management, and water resources 
in particular. His role as president of the National Institute 
was instrumental in helping Congress' reauthorization of the 
Water Resources Research Act in the last session. The Institute 
provides critical research and expertise to Federal, State and 
local governments in the complex issues surrounding water 
resource management.
    I look forward to hearing their testimony and the testimony 
of all the witnesses here. Those who I can't hear personally, I 
promise you I will read your testimony as you submit it for the 
record.
    Mr. Chairman, the Western States Water Council has 
submitted written testimony to the subcommittee that I request 
be added to the official record of this hearing.
    Senator Graham. Without objection.
    Senator Crapo. In closing, I would just like to also note 
my good friend Mike Parker is here. I served with him in the 
House of Representatives and I am glad to see you here now 
working with the Corps.
    With that, I once again thank all of our witnesses for 
joining us today to provide testimony on this important issue, 
and I thank you for holding this hearing, Mr. Chairman.
    Senator Graham. Thank you, Senator, and I appreciate the 
importance of your participation in the committee markup. 
Whenever it is necessary for you to leave, you will be missed, 
but we know you are doing your duty.
    Senator Crapo. Thank you very much.
    Senator Graham. Senator Jeffords.

OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Senator Jeffords. Thank you, Mr. Chairman.
    I appreciate being here today. I am looking forward to the 
testimony, and I want to thank the witnesses also for being 
here.
    When we think of water supply issues, we most often think 
of agriculture and the West or Midwest. However, I suspect that 
we will hear today that water supply issues, whether the issue 
is too little water or too much water, impact all areas of the 
country.
    Right now, Vermont is in its sixth month of very dry, 
drought-like conditions. The municipal water system serving the 
largest population centers generally have adequate supply--like 
Lake Champlain. However, the large majority of rural Vermonters 
draw their water from individual wells. Many, many of these 
wells are stressed by drought. Well-drillers are booked solid 
through the end of the year.
    With winter fast approaching, it is that much more 
difficult to deal with water supply issues and there is little 
hope of wells or springs recharging once the ground freezes. 
There are no established programs through which the State can 
assist these individuals, many of whom are economically 
challenged. The USDA Rural Development Program does have some 
assistance available to rural homeowners, but this program is 
often not ideally structured to meet the needs of Vermonters. I 
am deeply concerned about the rural families of Vermont and 
their well-being over the long winter. I believe that if some 
action is not taken, portions of the State will truly be facing 
a crisis in the coming months.
    I want to share with the committee and our witnesses the 
story of one Vermonter that is reminiscent of the pioneering 
days of westward expansion in our Nation. An elderly woman who 
lives alone in rural Vermont is faced with an almost 
insurmountable burden in the coming winter. Her well has run 
dry, and like many Vermonters she may not be able to get a new 
well drilled before the winter sets in. To survive the winter 
and gather water for the most basic of bathing, cooking and 
cleaning needs, she will be traveling half a mile to her 
nearest neighbor's home and carry water through the snow back 
to her house.
    I plan to work over the next few weeks with my colleagues 
in the subcommittee and in the full Congress to ensure that 
USDA's Rural Development Program has the resources and the 
ability to provide assistance to those in crisis due to water 
shortages this winter.
    I also plan to work with my colleagues to make emergency 
grants, if required, through the Environmental Protection 
Agency to ensure that the people of Vermont have access to the 
most basic services that every American enjoys. I am pleased 
that this subcommittee is taking a thorough look at the water 
policy issues facing our Nation before proceeding with water 
infrastructure legislation in January.
    I want to take a few minutes to introduce Mr. Jay 
Rutherford who is one of the witnesses today on our second 
panel, and hails from Waterbury, VT. Jay is director of the 
Water Supply Division for the Vermont Department of 
Environmental Conservation, a position he has held since 1992. 
In this capacity, Jay is responsible for management of the 
State's Drinking Water Program, Groundwater Protection Program, 
and the Drinking Water State Revolving Fund. He administers the 
State's Comprehensive Source Protection Plan.
    Prior to assuming the directorship of the department, Jay 
oversaw the administration of both the drinking water and waste 
water grant and loan programs for the State. He was also 
responsible for the development and implementation of these 
programs' information management systems. Jay has also had 
experience as an engineer consultant, a software author, a 
public school teacher and a Peace Corps volunteer. He received 
his BS in civil engineering from the University of Vermont and 
is a registered professional engineer.
    I am very pleased that Jay can be here with us today to 
offer the benefit of his expertise on water issues in Vermont, 
as well as the cumulative knowledge of the association. I also 
hope that we will continue to utilize his expertise in 
administration of the water and waste water grant and loan 
programs for Vermont as we proceed with the water 
infrastructure legislation.
    Thank you, Mr. Rutherford, for joining us. I am sorry that 
I have to depart for other obligations.
    Senator Graham. Thank you very much, Senator.
    [The prepared statement of Senator Jeffords follows:]

        Statement of Hon. James Jeffords, U.S. Senator from the 
                            State of Vermont

    I want to thank our witnesses for appearing today before the 
Subcommittee to discuss this critical issue with us. When we think of 
water supply issues, we most often think of agriculture in the arid 
west or Midwest. However, I suspect that we will hear today that water 
supply issues, whether the issue is too little water or too much water, 
impact all areas of the country.
    Right now, Vermont is in the 6th month of very dry, drought-like 
conditions. The municipal water systems serving the largest population 
centers generally have adequate capacity. However, the large majority 
of rural Vermonters draw their water from individual wells.
    Many, many of these wells are stressed by drought. Well--drillers 
are booked solid through the end of the year. With winter fast 
approaching, it is that much more difficult to deal with water supply 
issues and there is little hope of well or springs recharging once the 
ground freezes.
    There are no established programs through which the State can 
assist these individuals, many of whom are economically challenged. The 
USDA Rural Development program does have some assistance available to 
rural homeowners, but this program is often not ideally structured to 
meet the needs of Vermonters.
    I am deeply concerned about the rural families of Vermont and their 
well-being over the long winter. I believe that if some action is not 
taken, portions of the State will truly be facing a crisis in the 
coming months. I want to share with the Committee and our witnesses the 
story of one Vermonter that is reminiscent of the pioneering days of 
westward expansion in our Nation.
    An elderly woman who lives alone in rural Vermont is faced with an 
almost insurmountable burden in the coming winter. Her well has run dry 
and, like many Vermonters, she is unable to get a new well drilled 
before winter sets in. To survive the winter and gather water for the 
most basic of bathing, cooking, and cleaning needs, she will be walking 
\1/2\ mile to her nearest neighbor's home and carrying water through 
the snow back to her house.
    I plan to work over the next few weeks with my colleagues on this 
subcommittee and in the full Congress to ensure that the USDA's Rural 
Development Program has the resources and the ability to provide 
assistance to those in crisis due to water shortage this winter. I also 
plan to work with my colleagues to make emergency grants if required 
through the Environmental Protection Agency to ensure that the people 
of Vermont have access to the most basic services that every American 
enjoys.
    I am pleased that this subcommittee is taking such a thorough look 
at the water policy issues facing our Nation before proceeding with 
water infrastructure legislation in January.
    I want to take a few minutes to introduce Mr. Jay Rutherford who is 
one of our witnesses today on our second panel and hails from 
Waterbury, Vermont. Jay is the Director of Water Supply for the Vermont 
Department of Environmental Conservation, a position he has held since 
1992. In this capacity, Jay is responsible for the management of the 
State's drinking water program, groundwater protection program, and the 
Drinking Water State Revolving Fund. He also administers the State's 
comprehensive source protection plan program. Prior to assuming the 
directorship of the department, Jay oversaw the administration of both 
the drinking water and wastewater grant and loan programs for the 
State.
    He was also responsible for the development and implementation of 
those programs' information management systems. Jay has also had 
experience as an engineering consultant, a software author, a public 
school teacher, and a Peace Corps volunteer. He received a B.S. in 
Civil Engineering from the University of Vermont and is a Registered 
Professional Engineer. I am very pleased that Jay can be here with us 
today to offer the benefit of his expertise on water issues in Vermont 
as well as the cumulative knowledge of the Association.
    I also hope that we continue to utilize his expertise in 
administration of the drinking water and wastewater grant and loan 
programs for Vermont as we proceed with water infrastructure 
legislation.

    Senator Graham. We have been joined by Senator Campbell. 
Senator, do you have an opening statement?

OPENING STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR 
                   FROM THE STATE OF COLORADO

    Senator Campbell. Thank you, Mr. Chairman. Yes, I have a 
short one.
    I would also like to welcome the witnesses here. John Keys 
has a very fine reputation in our State, too--a man of sound 
voice on water management and I am happy to see him. My old 
colleague Mike Parker--I haven't seen you for a couple of 
years. Mike, it is very nice to see you here again. Let me 
maybe just make a couple of comments as a westerner, as Senator 
Crapo did, Mr. Chairman. There is an old saying, I think it was 
attributed to Mark Twain, who said, ``In the West, whisky is 
for drinking and water is for fighting.'' As many of us in the 
West know, prior to statehood, territories in the West had 
adjudicated their water claims in a system of water courts, and 
the Federal Government historically has recognize this 
distinction between the East and the West in the treatment of 
water and how the law reflects the differences.
    Unlike the eastern seaboard, in fact many other regions of 
the country, we are subject to very wide swings in water 
supply. In fact, in many of our States we store over 80 percent 
of the water we need for the year, as opposed to 15 percent in 
most of the eastern seaboard States. They say in many places in 
the East you can drill 15 feet, and I am sure in your State of 
Florida you can probably drill 15 or 20 feet and you will find 
water. There are places out in our States of Idaho and Colorado 
and Montana and Nevada you can drill 1,500 feet and you still 
won't find water.
    So we look at water as a property right, and in fact as you 
know in the West we can take it from the land and sell it 
separate from the land. We can sell water to one person and 
sell the land to somebody else. It has initiated a whole 
different kind of a system of law and how we use our water. To 
complicate it, we have to balance the needs of the National 
Parks, the endangered species, the agriculture, the public, the 
priority Indian tribal rights and a number of different 
compacts--interstate compacts between upper and lower basin 
States and compacts between our States and the United States 
and Mexico, too.
    So we have a whole different concept, as you might guess, 
in how we deal with water. But it does provide some particular 
challenges to the western water users. In my State, as an 
example, the continental divide runs right up the middle of our 
State. Eighty percent of our population in Colorado live on the 
front range, but eighty percent of the water is on the western 
side. That in itself creates a problem where we have more than 
enough water on one side of the mountain that we own under the 
compacts, and yet we have difficulty in getting it to the 
people who need it. So we have to look for some innovative 
approaches, particularly since, as I understand it, our State 
is going to grow about 30 percent in the next 20 years.
    I know that Congress generally appreciates that water is a 
scarce resource and that we look at it a little differently in 
the West. I think it is really important to recognize that a 
lot of the overdue water projects that were designed in the 
1960's to help us share the water among the scarcity of all the 
competing demands, some of them are long overdue. One of them, 
John Keys just told me, will probably get off the ground very 
shortly. The Adamsville Platte was authorized in 1968. So you 
can see are way behind on trying to provide the water to the 
people that need it in our States.
    In any event, I do look forward to the testimony. Like 
everyone, I have a conflict, too. I have a markup in 
appropriations at 10:30, but I am going to stay as long as I 
can.
    Thank you, Mr. Chairman.
    [The prepared statement of Senator Campbell follows:]

   Statement of Hon. Ben Nighthorse Campbell, U.S. Senator from the 
                           State of Colorado

    Thank you for holding this hearing on the Federal role in meeting 
water supply.
    Water is our most precious resource. As such, interested parties 
have fought over water since time-in-memorial.
    Water conflicts between competing users are most pronounced in the 
arid West, where water is a scarce resource.
    Prior to statehood, territories in the West have been adjudicating 
water conflicts through a system of water courts. The Federal 
Government historically has recognized the distinctions between the 
East and the West and the treatment of water in the law reflects those 
differences.
    Unlike other regions of the country, the West is subject to wide 
swings in water supply, and often experiences significant drought 
conditions, thereby reducing an already scarce resource.
    Western States must adjudicate water claims to find equitable 
distribution of water between a growing number of competing users. 
Making sure that there is enough water to maintain endangered species, 
national parks, agriculture, and the public at large, and honoring 
Indian water rights' claims, can be a challenging task.
    Furthermore, the geography of the West provides particular 
challenges in meeting the needs of water users. In my own State of 
Colorado, eighty percent of the water is on the Western slope, yet 
eighty percent of the people live east of the continental divide. That 
fact alone requires innovative approaches to getting the water to the 
people that need it. However, considering that Colorado's population is 
projected to grow more than forty percent (or 1.5 million people) by 
2015 underscores an already dire situation.
    We, in Congress, must appreciate that water is a scarce resource 
and that the Federal Government should continue to defer to Western 
States in adjudicating water rights. The Western water States are the 
best arbiter of water claims and the current system should be respected 
and preserved.
    It is important to address our Nation's aging water infrastructure. 
Yet, it is just as important to look ahead so that we will have secure 
water supplies in the West. Moving forward on planned water projects, 
such as the Animas La Plata, is the responsible and right thing to do.
    In planning for the future, States must know how much water the 
various Federal agencies of jurisdiction claim. Therefore, I would hope 
that those agencies expedi-
tiously quantify their claims so that interested States can apportion 
their water with forethought.
    Thank you Mr. Chairman. I look forward to the testimony of our 
witnesses.

    Senator Graham. Thank you, Senator.
    Again, I wish to express my appreciation to the panel. I 
know that you will provide us with some very insightful 
commentary based on your experience in these important issues.
    Our first panel is the Honorable Mike Parker, who has 
recently become the Assistant Secretary of the Army for Civil 
Works--Mike, thank you for joining us; Mr. John Keys, 
Commissioner of the Bureau of Reclamation, Department of the 
Interior; Mr. Robert Hirsch, Assistant Director for Water of 
the U.S. Geological Survey, also the Department of the 
Interior; Mr. Tom Weber, Deputy Chief of Programs, Natural 
Resource Conservation Service of the Department of Agriculture; 
and Mr. Mike Cook, Director of EPA's Office of Waste Water 
Management.
    Mr. Parker.

STATEMENT OF HON. MIKE PARKER, ASSISTANT SECRETARY OF THE ARMY 
                        FOR CIVIL WORKS

    Mr. Parker. Thank you, Mr. Chairman and members of the 
subcommittee, especially my friend, Senator Campbell.
    I appreciate the opportunity to speak to you today on the 
Army Corps of Engineers' activities to address the water supply 
issues of the Nation.
    In your call for this hearing, you asked that we respond to 
three specific questions. I will respond to your questions in 
order. First, you asked that we present our perspective on 
water supply in the United States today, including the extent 
to which there is or is not a water supply problem today or in 
the future; a description of that problem if we believe one 
exists, including regional differences; and a discussion of the 
potential cause of this problem.
    We believe the Nation faces many challenges in assuring an 
adequate water supply. These challenges now affect all regions 
of the country, not just the traditionally dry areas. The 
availability of reliable and clean supplies of water is crucial 
to the health of our citizens and to maintaining the Nation's 
economic prosperity both now and in the future.
    In a series of listening sessions the Corps held last year, 
citizens around the Nation voiced their concerns about various 
aspects of water supply at every session. At these listening 
sessions, the public called for better data to understand the 
scope and nature of the water supply problems we face. The last 
comprehensive assessment of the Nation's water needs was 
completed over 15 years ago.
    The public also told us that water supply is more than a 
local problem. Municipal leaders told us that supporting growth 
in an environmentally sustainable manner will require regional 
solutions. Consequently, new water supply projects that are 
feasible and efficient must often be located outside the limits 
of the municipalities that seek additional supplies. Technical 
leadership will be essential to integrate competing values 
across multiple political jurisdictions to reach consensus for 
regional water supply solutions.
    As an example, in landmark 1997 legislation, the State of 
Texas recognized these new realities and designated 16 regions 
to lead the development of future water supply. Larger 
communities within these regions were designated to take the 
lead for their regions.
    Your second question asked us to address the extent that 
the Federal programs under our jurisdiction work to ensure that 
State and local governments are meeting water supply needs. It 
has been longstanding policy that municipal and industrial 
water supply projects are considered the primary responsibility 
of non-Federal parties. The authorities under which the Corps 
of Engineers provides water supply storage are generally 
project-specific and a secondary purpose for the development of 
a project.
    We can provide water supply storage at completed projects 
by reallocating storage for other purposes and evaluate the 
potential for new water supply as part of planning multi-
purpose projects. At the present time, the Army operates 117 
reservoirs containing about 9.5 million acre-feet of storage 
authorized and available for municipal and industrial water 
supply use. We also maintain approximately 57 million acre-feet 
of storage for agricultural irrigation in 50 reservoirs. 
Overall, we have over 400 reservoirs that could be modified or 
have existing storage that may be available for reallocation to 
provide additional municipal and industrial water supply 
storage.
    I want to emphasize the Corps' involvement in water supply 
is founded on deference to State water rights. During the 
enactment of the Flood Control Act of 1944, Congress made clear 
that we do not own water stored in our projects. Our practice 
is to contract with non-Federal interests for water storage in 
our projects. Our policy is to continue our commitment to 
consistency with State water law.
    The Corps of Engineers is currently working with other 
Federal agencies and with State and local interests to help 
solve several large complex regional water problems. For 
example, as part of the Comprehensive Everglades Restoration 
Plan, the Corps of Engineers is undertaking a technical 
evaluation of complex systems and balancing competing demands 
for available water resources in the development of a 
comprehensive regional solution. This effort integrates diverse 
needs, objectives and ongoing complementary efforts of multiple 
Federal, State, local and other interest groups. Although the 
Federal interest is primarily environmental restoration, this 
interest is closely linked in the case of the Everglades with 
water quality improvement, water supply and flood damage 
reduction.
    Another example is the comprehensive assessment of the 
demands and water resources available on the Apalachicola-
Chattahoochee-Flint and Alabama-Coosa-Tallapoosa River systems 
to assist the affected States in reaching decisions on 
allocation of available water. These efforts included the 
development of alternative scenarios and options on which 
allocation decisions can be based.
    Your final question asked us to review what actions, if 
any, Congress should take to facilitate an efficient and 
effective Federal role in water supply. Participants in our 
listening sessions told us that they looked to cooperative 
efforts between the Federal Government and States in developing 
integrated regional management of water resources, including 
water supply. Our management of water must be based on economic 
and environmental benefits and cost. Decisions must be science-
based choices among a full array of alternative uses to which 
our watersheds and river basins may be put. In doing this, we 
must respect the primacy of State water law.
    Congress should work with the Administration to ensure that 
our Nation has the framework to provide integrated water 
management. This framework should include the appropriate roles 
of the Federal and non-Federal levels of government and the 
very powerful part that the private sector must play in any 
solution to our water resources challenges.
    In conclusion, I believe we are facing emerging water 
supply challenges. Consistent with the goals of the president, 
the Army Corps of Engineers stands ready to work with its 
sister agencies in contributing to the dialog. We will continue 
our stewardship of our existing projects to manage water 
storage for efficient uses, including water supply, and 
maintain our commitment to consistency with State water rights.
    Mr. Chairman, this concludes my statement and I would be 
pleased to address any questions that you or anyone on the 
committee may have.
    Senator Graham. Thank you very much, Mr. Parker. I 
appreciate that very constructive statement and look forward to 
some questions.
    Mr. Keys.
    Mr. Keys. Mr. Chairman, I am John Keys, Commissioner of the 
Bureau of Reclamation. It is certainly a pleasure to be here 
today. This is not our normal committee and it is nice to be 
able to talk to some other folks about water supply in the 
West.
    Senator Graham. We will try to treat you well enough that 
you will want to come back.
    Mr. Keys. That sounds good to me.
    I would first ask that my full written statement be made 
part of the record, if you would.
    Senator Graham. It shall be, yes.
    Mr. Keys. Good.

 STATEMENT OF JOHN KEYS, COMMISSIONER, BUREAU OF RECLAMATION, 
                     DEPARTMENT OF INTERIOR

    Mr. Keys. When first asked to testify here today on 
oversight on water resources in the West, I thought of several 
aspects of the problem that we should talk about, not the least 
of which is security at our facilities that our underway right 
now, the drought aspects, some of the infrastructure conditions 
that we are dealing with, and future for our water supply.
    First, with all of the recent attention on security, let me 
emphasize that all Bureau of Reclamation facilities are secure. 
We remain at a high level of security at all of those 
facilities over the West and we have paid particular attention 
to those high visibility, high risk facilities such as Grand 
Coulee, Hoover, Shasta, Glen Canyon and a number of others that 
could get some particular attention. Our power facilities and 
water supply facilities are included in that vigilance.
    With all of the work during this period in security areas, 
let me assure you that during that time we did not miss the 
delivery of a single acre-foot of water nor the generation of a 
single kilowatt hour of power. That system operated at its best 
during that time and we in reclamation were certainly proud of 
that.
    In the near future, you will see reviews of security at all 
of our facilities. The President just this week signed a bill 
that gives us law enforcement authority at all of our 
facilities, and we do appreciate the Senate's action on that. 
It allows us to contract for the coverage of law enforcement at 
our facilities, which we did not have before.
    In talking about drought for just a minute, a large portion 
of the Western United States is in the second or third year of 
a severe drought. Parts of the Columbia Basin this past year 
received just over 50 percent of their normal runoff. In other 
areas, the Rio Grande and the Pecos River received less than 
half of their water supplies this past year. California, 
Nevada, Utah, Colorado--all of those areas are still suffering 
from shortages of water this year.
    The Bureau of Reclamation projects worked well in supplying 
needed water during that time. In most of the areas, drought 
contingency planning ahead of time helped prepare a lot of 
those areas for the worst. In some of those cases, we got the 
worst. Another year of short water supplies in those areas 
could be devastating to some of our water users. We are right 
now continuing to work on water conservation programs, on 
drought contingency planning in those areas, but in some 
places, it is probably not going to be enough. If we don't 
receive above-normal runoff in some of those areas next year 
could be a very tough year for a lot of those folks.
    Now, our infrastructure around reclamation is an aging one. 
A lot of our facilities were built in the early 1900's. But 
Bureau of Reclamation facilities are being operated and 
maintained in a safe, reliable and sustainable manner. Our No. 
1 priority in reclamation is, and I hope it always will be, to 
continue that. We have one of the best safety advantage 
programs in the world, and we are implementing it to ensure the 
safety of those facilities around the Western United States.
    Our power operation and maintenance program with Bonneville 
Power Administration and the Western Power Administration are 
exceptional to get the most generation from all of our plants. 
We continue to supply irrigation water to over 10 million acres 
of farmland and domestic municipal and industrial water to more 
than 31 million people in the Western United States. Of course, 
we could use more dollars to work on and update these 
facilities, but we understand that dollars are short these 
days. Our programs will keep these facilities in a safe and 
operating mode with what we have for the time being.
    Looking at the future, over the past next 25 years, 
population in 17 Western States has increased at 32 percent 
growth rate. That compares to an overall growth rate of about 
19 percent in the rest of the United States. Nearly every water 
system in the West--the Colorado, the Columbia, the Missouri, 
the Rio Grande, the Great Basin--all of those are heavily 
developed and over-appropriated in most cases. This trend is 
expected to continue. It causes significant challenges to both 
the Bureau of Reclamation and other Federal, State and local 
water agencies.
    Many irrigation and municipal industrial water delivery 
systems will require substantial improvements to meet current 
engineering standards and to enable beneficiaries to deliver 
and receive the water supplies they need in order to meet the 
rising demands in the future. New facilities to meet 
agriculture and municipal and industrial conversion may be 
needed. As one of the fastest growing regions in the United 
States, water that was once used for irrigation is increasingly 
being converted to municipal and industrial usage.
    Because of the change in the location of usage, because of 
the changes in timing of when the water is needed currently, 
and because of the need for treatment of municipal and 
industrial water to make it potable, there is currently in 
insufficient infrastructure to meet these needs. In addition to 
converting the water from agriculture to municipal and 
industrial purposes, a new water supply will be needed to meet 
the growth of certain regions in the Western United States.
    While Reclamation has a significant and diverse mission----
    Senator Graham. Mr. Keys.
    Mr. Keys. Yes, sir?
    Senator Graham. Could you summarize the balance of your 
statement and the full statement will, of course, be in the 
record.
    Mr. Keys. You bet.
    The last point that I was going to make is one of the 
challenges we face is in meeting budgets to provide all of 
these facilities, and we would certainly be willing to work 
with our appropriations committees and those folks to provide 
those dollars. We would look forward to working with your 
subcommittee on the drought program and would certainly stand 
to answer any questions you may have.
    Senator Graham. Thank you very much, Mr. Keys.
    Our next witness is Mr. Robert Hirsch, Assistant Director 
for Water of the U.S. Geological Survey.
    Sir.

STATEMENT OF ROBERT HIRSCH, ASSOCIATE DIRECTOR FOR WATER, U.S. 
           GEOLOGICAL SURVEY, DEPARTMENT OF INTERIOR

    Mr. Hirsch. Thank you, Mr. Chairman, and members of the 
subcommittee. Thank you for the opportunity to report on water 
supply issues from the perspective of the U.S. Geological 
Survey.
    I am Robert Hirsch, and as Associate Director of the 
Survey, I am responsible for the water science programs of the 
USGS. Allow me to summarize my remarks and try to be as 
responsive as I can to your questions.
    In response to your first question, I would say that the 
water supply situation has become much more complex in recent 
years. The Nation's water infrastructure was designed primarily 
to meet a set of demands for water for irrigation, municipal 
needs and industrial needs. Over the years, conditions have 
changed. For example, center-pivot irrigation systems have made 
irrigation more practical in many regions, and populations have 
shifted from northeast to the southern and Western parts of the 
Nation.
    Of particular importance is the fact that water supply 
systems are now being called upon to provide water for in-
stream uses that were not part of the original design 
requirements. What this means is that there is a rapidly 
increasing conflict and competition for water nationwide. We 
see this in arid regions and humid regions alike. Experience 
has shown, however, that application of science can help cope 
with the conflict.
    To answer your second question, let me point out where 
science and the USGS science in particular can play a valuable 
role in resolving water supply problems. As competition gets 
stronger, there is a need for science that defines more 
precisely than ever the actual extent of the resource. We 
believe that the science of groundwater hydrology is crucial to 
water management not only in arid regions, but nationwide. 
Conjunctive use of surface and groundwater has great potential 
for making water supplies more drought-resistant. Groundwater 
is crucial to sustaining streamflow for habitat and for water 
supply. More and more, we find that our partners are asking us 
to explore the role the groundwater plays in maintaining 
adequate flow and temperature conditions in rivers.
    Second, we conduct scientific studies to support the use of 
emerging technologies such as artificial recharge, aquifer 
storage and recovery, and recharge of reclaimed waste water as 
pivotal parts of the water management equation. The science to 
support the use of these new technologies is a part of our 
strategic plan for the future of USGS groundwater science.
    Third, we provide hydrologic data that are crucial to the 
wise management of the resource and that support effective 
daily operational decisions, as well as long-term solutions. 
You will see a chart coming up in a moment here regarding our 
stream gages. We operate about 7,000 stream gages which monitor 
the flow of water in our Nation's rivers and streams. We freely 
provide the current and historical data to a wide range of 
users. This information is used for purposes that include water 
supply planning, flood risk assessment, water quality, water 
supply operations, streamflow forecasting, habitat assessment 
and personal planning of river-based recreational activities.
    Currently, we are in the process of modernizing the stream 
gauging network, and at the present time about 5,000 of these 
stations have satellite telemetry that enables us to provide 
near real-time data to all users via the Internet. One of the 
information products that comes from the stream gauges is 
called ``water watch.'' This is illustrated on the briefing 
board. These water-watch maps are constructed daily and are 
based on conditions for the preceding week at all the USGS 
stream gaging locations that have 30 or more years of record 
and have telemetry systems. Each dot on the map represents an 
individual gauge, and they are color-coded based on the long-
term record of flows at that site for the particular time of 
year. The colors range from red, which indicates record-
breaking low flows, to black indicating record-breaking highs.
    The patterns seen on yesterday's map shows a broad area of 
very dry conditions from northern Florida through Maine; a very 
wet area centered in Indiana; another focused around the Red 
River of the north; and dry areas in the Northern Rockies and 
the coastal regions of Oregon and northern California.
    Let me take a moment to mention four USGS programs most 
relevant to the water-supply question. First and foremost is 
the Cooperative Water Program that has been in existence for 
over 100 years. In this matching program, we cooperate with 
1,400 State, local and tribal governments. In recent years, the 
non-Federal contributions have greatly exceeded the Federal 
share. Today, the program involves about $63 million in Federal 
funds and about $120 million in non-Federal funds. The work 
undertaken includes the collection of water data and regional 
studies and models.
    Second, I would like to mention the Water Resources 
Research Institute Program. This cost-shared program is crucial 
to the development of the expertise and assistance to State, 
local and Federal Government on water issues. Roy Mink from the 
Idaho Institute will be here to testify later.
    Third, the Groundwater Resources Program conducts research 
on groundwater systems with an aim to providing a better 
overall characterization of the resource and better ability to 
predict how the resource will respond to stresses from 
development or climate change.
    Finally, the National Streamflow Information Program is a 
newly focused effort to provide support for the stream gaging 
network that measures the pulse of the Nation's rivers. We have 
worked closely with the Congress over the past 3 years, and 
thanks to your support and the support of hundreds of State, 
local and tribal agencies and our Federal partners, 
particularly the Army Corps of Engineers and Bureau of 
Reclamation, we have made good progress in modernizing and 
stabilizing the network.
    In response to your final question about congressional 
actions, let me simply acknowledge the strong support that 
Congress continues to show for these USGS water programs. I 
would also note that the USGS is currently preparing a report 
related to the topic of this hearing. It is being prepared in 
response to the following request from the House of 
Representatives Committee on Appropriations, and I quote from 
their report language:

          The Committee is concerned about the future of water 
        availability for the Nation. Water is vital for the needs of 
        growing communities, agriculture, energy production and 
        critical ecosystems. Unfortunately, a nationwide assessment of 
        water availability for the United States does not exist or at 
        best is several decades old. The Committee directs that by 
        January 31, 2002, the Survey prepare a report describing the 
        scope and magnitude of the efforts needed to provide periodic 
        assessments of the status and trends in the availability and 
        use of fresh water resources.

    We would be pleased to discuss this report with the 
committee at any time.
    Thank you for asking me to testify today, and I would be 
glad to answer any questions you may have.
    Senator Graham. Mr. Hirsch, the report that you just 
referred to, when will that be available?
    Mr. Hirsch. It will be available at the end of January, but 
we would be happy to discuss it with the committee as we are 
wrapping up our process of preparing it.
    Senator Graham. I am very pleased to know of that. The 
timing fits exceptionally well with our intention to begin to 
develop legislation in this and other areas relative to water 
use at about that period in January. Thank you.
    I would like to recognize the arrival of Senator Corzine of 
New Jersey, a member of our subcommittee. Senator Corzine, do 
you have any opening comments?

OPENING STATEMENT OF HON. JON S. CORZINE, U.S. SENATOR FROM THE 
                      STATE OF NEW JERSEY

    Senator Corzine. Thank you, Mr. Chairman. I appreciate your 
holding this hearing on a very important topic to the Nation. 
Actually, I noticed in Mr. Hirsch's formal remarks a 
recognition of a growing drought problem along the East Coast 
and the Delaware River Basin in particular, which is 
particularly important to my State of New Jersey, but the whole 
region. In questions, we will probe around a little more on 
that.
    I think this is a vital issue of importance to all our 
communities and I appreciate your holding the hearing in 
preparation for us moving forward with legislation. I look 
forward to working with you. I have a formal statement I will 
put in the record.
    Senator Graham. Without objection.
    Senator Corzine. Thank you.
    [The prepared statement of Senator Corzine follows:]

   Statement of Hon. Jon S. Corzine, U.S. Senator from the State of 
                               New Jersey

    Thank you, Mr. Chairman. I want to thank you for holding this 
hearing on our Nation's current and future water supply.
    My State of New Jersey has historically had adequate water supply 
thanks to its multiple rivers, substantial annual rainfall, and 
abundant groundwater. However, our status as the country's most densely 
populated State, as well as the 9th highest in population, means our 
water supplies are put under increasing stress. We now have areas 
approaching critical depletion. Future water supply management will 
require substantial investment in infrastructure and water resource 
development.
    I look forward to hearing from today's panelists on the outlook for 
our Nation's water supply and what role the Federal Government can play 
in meeting our citizens' water supply needs.
    Thank you, Mr. Chairman.

    Senator Graham. Thank you very much, Senator.
    Mr. Tom Weber, Deputy Chief of Programs, Natural Resources 
Conservation Service of the Department of Agriculture.
    Mr. Weber.

   STATEMENT OF TOM WEBER, DEPUTY CHIEF OF PROGRAMS, NATURAL 
   RESOURCES CONSERVATION SERVICE, DEPARTMENT OF AGRICULTURE

    Mr. Weber. Mr. Chairman and members of the subcommittee, 
thank you for the opportunity to appear here today and present 
views on behalf of the Department of Agriculture regarding 
water supply issues in our Nation.
    America's farmers are among the most productive in the 
world, but increasingly around this country farmers and 
ranchers are facing an ever-increasing concern about both the 
quality and the quantity of water. Recently, the Secretary of 
Agriculture Ann Veneman released ``Food and Agriculture Policy: 
Taking Stock for the New Century.'' This document is a long-
term view of the Nation's agriculture and food system. We 
propose that the policies in this document not only buildupon 
the past gains in resource conservation, but must prepare us to 
respond to emerging challenges such as the link between water 
supply and agriculture.
    This relationship is exemplified by the following facts. 
Nationwide, agriculture accounts for nearly 80 percent of all 
water consumption. A significant percentage of all cropland in 
the Western United States is irrigated. The 16 percent of the 
harvested cropland that is irrigated accounts for nearly one-
half of the value of all crops sold. Nationwide, nearly all of 
our orchard sales and a majority of the sales of vegetables and 
potatoes are produced on irrigated cropland.
    Demand for water is increasing, with added pressure from 
both municipal use and urbanization. We believe that 
Agriculture is uniquely positioned to be part of the solution 
to the water issues. The Natural Resource Conservation Service 
helps farmers and ranchers with on-farm water management. Some 
examples of programs and activities that can help include the 
following. We believe the best approach is to begin with a 
conservation plan. That is where a conservationist works 
directly with a farmer or rancher to plan their natural 
resource needs, to address their needs, including irrigation 
water management, and assist them in providing the technical 
know-how to implement those plans.
    The NRCS also offers valuable information to assist in 
resource planning, such as the snow survey and water supply 
forecasting program. This program provides for the Western 
States and Alaska information on seasonal availability of water 
from melting snowpack. This is through our system of automated 
snow telemetry equipment which provides weekly and monthly 
predictions of the resultant streamflows and is available as a 
web service.
    The National Cooperative Soil Survey is also a partnership 
effort in which we inventory the Nation's soil resources. The 
Survey produces comprehensive maps, descriptions and 
interpretations that land users and others can use to make 
resource decisions based upon water availability.
    In addition, the Natural Resources Conservation Service has 
the National Resources Inventory which gauges the condition and 
trends of natural resources around the Nation on over 800,000 
sample sites, and also serves to provide analysis of those 
resource trends and impacts.
    The Conservation Plant Materials Program identifies and 
distributes millions of native plants to address natural 
resource problems. As part of this effort, we evaluate drought 
tolerance of plants and work to develop these plants for the 
assisting of farmers and ranchers who face water shortages.
    I would also like to mention a couple of incentive 
programs. The first is the Environmental Quality Incentive 
Program which provides technical, educational and financial 
assistance to farmers and ranchers to protect their natural 
resources. On-farm water conservation practices such as drip 
irrigation do provide dramatic reductions in water use, while 
maintaining productivity, and are in part financed through this 
program.
    The Wetland Reserve Program also provides long-term drought 
prevention by protecting our wet areas--swamps and marshes--
that helps to conserve and store water. The Small Watershed 
Program involves State and other public agencies in water and 
land treatment projects. These are used to enhance flood 
control, watershed management, water conservation, industrial 
and municipal water supply and fish and wildlife purposes.
    We also have the Emergency Watershed Program which targets 
communities as opposed to individuals by relieving imminent 
threats to life and property caused by flood, fire, windstorm, 
drought and other natural occurrences. We believe this 
incentive and technical support programs can substantially 
improve on-farm water management and sound resource information 
can help make a difference.
    When the Congress enacted the National Drought Policy Act 
of 1998, a 15-member advisory commission consisting of farmers, 
ranchers and government officials and chaired by the Secretary 
of Agriculture did make several recommendations regarding NRCS 
technical assistance and funding for voluntary programs to help 
with drought mitigation. This commission also recommended 
expansion of the resource inventory technology capacity to 
assist.
    I would conclude that even if we are not able to control 
the weather, conservation programs can play an important role 
in helping local people with the tools and assistance they need 
to mitigate the effects of water shortages.
    I would be happy to answer any questions of the committee.
    Thank you, Mr. Chairman.
    Senator Graham. Thank you very much, Mr. Weber.
    Mr. Cook, who is representing the EPA today, will be 
available for questions, but I understand you do not have a 
statement. Is that correct, Mr. Cook?
    Mr. Cook. That is correct, sir. I might just say for the 
record my name is Michael Cook and I am Director of the Office 
of Waste Water Management at EPA.
    Senator Graham. Thank you very much, Mr. Cook.
    One question that I would like to start with is whether the 
drought that was outlined in the statistics I cited earlier and 
that several of you have mentioned in your presentations--is 
this a cyclical circumstance or do we have some reason to 
believe that the 21st century may be significantly different 
than the 20th century in terms of the natural production of the 
water upon which we depend? Mr. Hirsch, from the study that you 
have underway at the Geological Survey, what is your sense?
    Mr. Hirsch. Thank you for the question. It is always very 
difficult to make any prognostications about what precipitation 
or flow availability will do in the future. Even looking 
backward in time, I think what we find is a very episodic 
nature--episodic meaning periods of several years of departures 
toward very wet conditions on one hand or dry conditions on the 
other, and not really a cyclic pattern, but a kind of a 
variation from one to the other.
    One of the things we do see is that actually low flows in 
rivers have tended to be increasing across the Nation over much 
of the last century, and high flows have stayed relatively the 
same. We don't see any clear pattern of a climatic shift 
occurring that would portend a very different sort of climate 
for the next century, particularly as it relates to water 
resources.
    Senator Graham. Any other members of the panel have any 
comment on the question of is this a more or less conventional 
cycle of weather, or do the drought conditions that we have 
been experiencing for the past several years represent a more 
fundamental shift in climate?
    Mr. Keys, you referred to a set of statistics relative to 
increase in public supply water use in the United States. Those 
statistics indicate that between 1980 and 1995 on average the 
United States increased its use of public supply water by 16 
percent, but there were 16 States that more than doubled that 
percentage increase. Of those 16 States, 7 were States that 
were within the jurisdiction of the Bureau of Reclamation and 9 
were in States that were not in the Bureau of Reclamation's 
jurisdiction.
    The jurisdiction of the Bureau of Reclamation is largely 
based on the water patterns of the United States in the 19th 
and the early part of the 20th century where we had a 
relatively wet East and a dry West. Now that we are having 
other factors that are beginning to influence water supply and 
use that are causing States in the East to begin to experience 
some of the restrictions that were previously a western 
phenomenon. Based on your experience at the Bureau of 
Reclamation, do you have any advice for those States outside of 
your jurisdiction that are now beginning to experience the type 
of water limitations that have been historic in the West?
    Mr. Keys. Mr. Chairman, that is a heck of a question. I 
would just say that we work very closely with the other 
agencies--the Corps of Engineers, the U.S. Geological Service--
in trying to supply waters to all of those areas. The 
populations have built up around the project areas that 
Reclamation worked on in the early part of the 19th century. 
One of the biggest challenges to us right now is the conversion 
from those irrigation water supplies to municipal supplies to 
meet the demand brought on by a lot more people.
    One of those statistics that I talked about is the more 
than 30 percent increase over the past 20 to 30 years in 
population there. We have been working with the Corps and with 
the NRCS in those areas to try to make those conversions and 
still supply the irrigation waters.
    Do I have advice for the other Federal agencies? I think 
the only advice that I would give is to be sure that we are 
still working together, because they have their authorities, we 
have our areas, and certainly I think together we can meet the 
challenge.
    Senator Graham. That is a very encouraging, optimistic 
assessment of the future. I am hopeful that that will be the 
case.
    Mr. Parker, what have been in the Corps' experience the 
most encouraging developments in terms of means by which we can 
manage our water supply more effectively? For example, I notice 
that the State of Georgia, in conjunction with the Corps, is 
now considering adding a series of new reservoirs, particularly 
on the Flint River in order to better manage their water 
supply. What has been the Corps' experience as to the most 
effective specific or combination of management techniques for 
purposes of water supply?
    Mr. Parker. Senator, I think that the biggest thing is the 
realization of people around this country that there is a 
definite problem. More and more people understand that they 
have to take some action in order to offset that. What is 
interesting is it is spotty across the country. If you look at 
the State of Texas, they have taken some steps as far as 
looking at their entire State and seeing the problem; looking 
at it from a regional standpoint instead of a local standpoint. 
California has done a good job.
    In other States, not the entire State looks at it. In other 
areas of the country, it may be a county or a municipality that 
looks at it. More people realize that it is a national problem. 
We need to look at it in a regional way. The Everglades is a 
perfect example. Georgia is a good example. But you've got to 
look at it in a regional way and you've got to bring together 
all of the different agencies to bear on the Federal side, but 
also on the local side. Whenever you do that, if they start 
early enough in making decisions and making plans, then they 
are able to not have some of the problems that others have had, 
if they have that integration early on.
    I think that that is the way we are going to solve this 
problem, is that people have got to realize we have got to have 
a national priority, we have to have a national plan, and that 
is has to be regional in nature and that everyone has got to 
cooperate to make this thing work, but they've got to start 
planning together early to make it happen. We see good examples 
of that all over the country.
    Senator Graham. Would you suggest that in the legislation 
that we are going to be drafting that we should give some 
encouragement to States to look from a regional perspective at 
their water supply needs and options to meet future demands?
    Mr. Parker. I think you have to. I think that you are in a 
situation now, especially because of some of the problems in 
the country, where as Federal agencies we have got to make it 
easy for people to deal with us and be able to put together 
those plans. We have situations I am running into now in the 
Corps where we have people that have come along and the Corps 
wasn't involved until later on in the process. You know, they 
started making plans; spent a lot of money--in fact, wasted 
money, because if they had just planned properly, they could 
have saved themselves a lot of time and trouble, and a lot of 
their water problems would be solved.
    There has got to be more coordination, and the Federal 
Government is the only entity out there that can bring that 
coordination to bear--not forcing their will on local 
municipalities or local governments, but at least providing 
access to the information they need.
    Senator Graham. Mr. Cook, last year the Congress passed a 
pilot program which was to provide assistance to States and 
local communities for the development of alternative water 
sources. I recognize that that legislation was passed too late 
last year to receive an appropriation. Hopefully, there will be 
funds available for the next fiscal year. Could you describe 
what is the status within EPA of the commencement of planning 
to implement that program?
    Mr. Cook. Yes, sir. We set up a task force and initiated a 
concept paper on implementation, and then basically put that on 
hold when it became apparent there was not going to be an 
appropriation under that authority. We do continue to 
administer both our State revolving funds programs and also 
substantial grants programs to provide assistance for reuse and 
recycling and have provided a great deal of that over time, 
including in the State of Florida.
    Senator Graham. Has your initial work proceeded to the 
point that you have developed some criteria of what you will be 
looking for in alternative water source projects to be funded?
    Mr. Cook. No, not anything other than what was in the 
statutory language itself.
    Senator Graham. Mr. Weber, several of our colleagues are 
not with us now because they are on the Agriculture Committee 
and they are involved in a markup. I know that one of the 
titles of that legislation deals with conservation, including 
water conservation. Are there any recommendations that the 
Department of Agriculture is making to the Congress as it 
writes the 2001 Farm bill that relate specifically to the issue 
of availability of water for agriculture and other purposes?
    Mr. Weber. Thank you, Mr. Chairman.
    I am not aware of any specific recommendations other than 
what are in Secretary Veneman's Ag policy document, which does 
speak to water conservation as being a substantial issue from a 
resource protection and enhancement standpoint.
    Senator Graham. Are there any particularly encouraging 
practices that are currently underway that you think should be 
encouraged on a broader basis? Or are there new not yet fully 
tested areas or tactics for water supply that you think should 
be researched and developed on an operational basis?
    Mr. Weber. Mr. Chairman, I really believe there are 
tremendous technologies already available for a substantial 
improvement of efficiency of irrigation water management on 
agricultural lands, many of which are applied and can be 
applied to other land uses--things such a drip-irrigation 
systems, which are used heavily out in the western part of the 
country and some other parts of the country for fruits, 
vegetables, vineyards and those kinds of specialty crops; the 
underground irrigation systems that substantially improve the 
efficiency of water use. There are just a number of outstanding 
technologies that have been developed both from the government 
research side, as well as the private sector, that are 
available. It is an issue of management of these technologies, 
and also the capital investment needed to convert from other 
forms of irrigation that do pose some challenges, and that is 
where some of our financial assistance programs can assist 
agricultural producers.
    Senator Graham. Is it primarily a State responsibility to 
facilitate or even mandate the use of these more efficient 
irrigation systems for agriculture?
    Mr. Weber. From the USDA perspective, that would be a State 
or local responsibility to require any kind of conversion from 
existing irrigation to more efficient. Obviously, we work with 
those local folks, as well as landowners and those State units 
of government to help provide the technical know-how to 
facilitate that, as well as the financial assistance to help 
the conversion.
    Senator Graham. Senator Corzine asked if I would ask to the 
panel a question relative to the status of desalinization as a 
means of generating fresh water supply. Mr. Cook or any member 
of the panel who has some thoughts about what is the state of 
the science of desalinization?
    Mr. Cook. I guess in short, desalinization is being 
practiced particularly in Florida, to give a prime example, but 
also in other water-short areas. We at this point find the 
costs are coming down, though it is still quite a costly 
technology and is preferable to have a fresh water supply.
    Mr. Keys. Mr. Chairman, I might add that Reclamation has 
technical expertise in de-salting and are actually working with 
some projects on the ground right now. We have an agreement 
with Sandia Lab to do some research in the New Mexico area. I 
also know that the city of El Paso is moving into construction 
of a de-salting plant there in coordination with the Army base 
that is right close. So there are some things underway working 
with some of these folks. We have some good expertise out 
there.
    Senator Graham. Mr. Cook, I would like to go back to that 
legislation that Congress passed last year. At a hearing on 
that legislation prior to its enactment, the EPA testified that 
the Safe Drinking Water Act's State revolving fund should be 
used to meet State needs for augmentation of water supply. At 
that same hearing, it was established that the hierarchy of 
purposes for the State for the Safe Drinking Water Program did 
not include alternative water source development as one of its 
purposes. If it is still the EPA's position that water supply 
needs should be met through the Safe Drinking Water Act, do you 
have some recommendations of how that Act should be modified in 
order to make it available for purposes of the development of 
water supply?
    Mr. Cook. It continues, I think, to be both legislative and 
our policy to try to focus the drinking water SRF loans on 
improving the quality of what is delivered, as opposed to 
improving increasing the quantity. However, we do have the 
Clean Water State Revolving Fund which can and is being used on 
a large scale for projects that involve reuse and recycling of 
waste water. It is being used for high levels of treatment of 
sewage. It is being used for storm water management, which is 
eventually reinjected to reused in some fashion.
    So we actually have a very active program going on in this 
area, and it could be expanded easily if some States that have 
not to date funded these kind of projects simply changed their 
priorities somewhat. So I do not at this time see a need for a 
legislative change to the Drinking Water SRF when we have the 
clean water SRF which at this point has a much, much higher 
capitalization. It is capitalized at this point at over $80 
billion nationwide. I don't see a need for changing the 
drinking water SRF when we have the clean water SRF.
    Senator Graham. Gentlemen, thank you very much for this 
very helpful and instructive discussion of our water supply 
needs. As I indicated, early in the next year we will commence 
the process of trying to take these ideas and incorporate them 
into legislation, and we look forward to the opportunity to 
continue to work with each of you in that process.
    Thank you very much, and I apologize for that interruption.
    Our first witness on the second panel will be Ms. Ane 
Diester, who is associate vice president of the Metropolitan 
Water District of southern California. She is the agency 
spokesperson on conservation, drought management, water 
reliability and environmental issues, all of which the core of 
our hearing today.
    I am pleased to say that Ms. Diester has some Florida 
roots. Before going to California, she was appointed special 
assistant-executive director of the south Florida Water 
Management District.
    Did you go to California with Woody Woodraski?
    Ms. Diester. No, he followed me.
    Senator Graham. He followed you.
    [Laughter.]
    Senator Graham. Our second panelist will be Mr. Jay 
Rutherford, who is head of the Water Supply Division of the 
Vermont Department of Environmental Conservation, and has 
already been introduced by Senator Jeffords.
    Our third witness is Mr. Ken Frederick, Senior Fellow with 
the Resources for the Future. He has been a member of the 
research staff there since 1971 and has done research and 
writing on economic, environmental and institutional aspects of 
water resource use and management, and the potential impacts of 
climate change on the supply and demand for water.
    Mr. Leland Roy Mink, director of the Idaho Water Resource 
Research Institute and past president of the Board of the Water 
Resource Institute. Mr. Mink has also been previously 
introduced by Senator Crapo.
    Thank each of you for having made the effort to assist us 
in understanding issues of water supply. I look forward to 
hearing each of you testimoneys. We are requesting that 
testimony be restrained to 5 minutes.
    If you have a longer statement, that will be part of the 
printed record.
    Ms. Diester.

      STATEMENT OF ANE DIESTER, ASSOCIATE VICE PRESIDENT, 
       METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA

    Ms. Diester. Thank you, Mr. Chairman. It is a pleasure to 
be here today and to make these comments on this important 
topic, water supply.
    I have submitted comments for the record, and I believe you 
probably have a copy of those.
    In addition to my Metropolitan duties, I am also the non-
Federal chair of the National Drought Council, and I previously 
served as the Urban Water Representative on the National 
Drought Policy Commission.
    Lately, and as recent as this morning, there has been some 
discussion about water supply and security. Over the past 
couple of years, there has been a great deal of discussion 
about infrastructure. But the topic of today's hearing focuses 
on what I think is the most basic issue and the one we need to 
really address, basically our water resource supplies 
nationally.
    Searching for the answer from many sources to your three 
questions, I used the National Job Policy Commission final 
report which we submitted to Congress last year, and also the 
Scientific American article which came out in February of this 
year which featured a whole tapped out series of articles. I 
also looked at a lot of Army Corps documents, USGS documents 
and data, the World Water Commission reports, American 
Waterworks Association documents and papers, and numerous other 
scientific articles.
    What all of these sources have suggested is something I 
think we all know intuitively, and that is that fresh water is 
limited and the demands are going up.
    In my written comments, I have also provided some worldwide 
water statistics and a State by State snapshot of water supply 
availability for every State in the Union. In almost every one 
of the States, they are either facing now or about to face or 
have just recently faced some sort of supply shortage. 
Groundwater basins are being over-drafted. Conservation 
measures that have cushioned growth demands and dry weather 
conditions are becoming hardened, and increases in salt 
concentrations are beginning to limit recycling applications.
    In places where there are Federal water supply facilities, 
allocations are being exceeded and conflicts are rising. In the 
past few years, scientists and water policy specialists, at 
least out in the West, are beginning to interpret the real 
world impacts of climate change on water resource systems.
    So the short answer to your first question that you posed 
is yes, there is a water supply challenge today, and it is 
growing into a first class problem for the future. The 
potential causes are described in my written comments, but I am 
just going to hit them--just their titles today: natural 
resource limits; changing climate conditions and the 
uncertainties that that brings; ever-increasing water quality 
constraints and associated treatment impacts; growing demands 
and competition for resource supplies--and I'm certain 
regarding population growth, we found we have seven different 
projections for population growth in California, and the 
numbers range by about 20 million and it is hard to plan for 
that; the need for regional integrated resource plans 
throughout the country using both structural and non-structural 
solutions; the need for coordinated Federal water resource 
management policies, approaches and priorities; and the need 
for coordinated technical data collection, especially in the 
monitoring and prediction area; waste water use estimates and 
conservation and recycling advancements; the need for official, 
coordinated Federal conflict resolution practices; and the need 
for a shift in Federal funding priorities from response to 
readiness, emphasizing planning and preparedness.
    Question No. 2, asked about the effectiveness of the 
Federal programs in ensuring that State and local governments 
are meeting water supply needs. The answer I just gave to the 
first question really hits five of those need areas which 
directly relate to the Federal Government's role. Collectively, 
they relate to the need to reevaluate the ability of any single 
Federal agency to veto coordinated and collaborative plans 
which are put together to meet water supply needs.
    It also calls on the Federal program managers to work 
cooperatively within their existing jurisdictions and 
authorities in a participatory and transparent manner, and 
admittedly that is easier said than done. But as difficult as 
this task is, we can look to California's CALFED program and 
Florida's Everglades Restoration Program and many of EPA's 
National Estuary Programs for examples and successes and many 
lessons learned.
    Question No. 3, asked what actions Congress should take. I 
would begin with some general comments. First, begin by looking 
at some Federal-non-Federal collaborations that have worked and 
are still working. One of those is the Western Drought 
Coordinating Council; the Western Governors Association, and 
the Governor of New Mexico really spearheaded that; the 
National Drought Policy Commission, where I served along with 
the secretaries of many of the Federal agencies, private sector 
and many stakeholders; and now the National Drought Council. 
Then develop incentives for other collaborations like that to 
happen throughout the country, especially at the regional 
level.
    One way to do that is to support the national drought 
planning and preparedness legislation that the Western 
Governors Association is working on with Senator Pete Domenici. 
Included in that support is the administrative and 
implementation funding which that bill will have. They will be 
introducing that bill I believe in January 2002. Also, make 
sure that the National Drought Policy Commission report 
recommendations are implemented in that bill.
    Basically, it talks about shifting Federal priorities from 
response to planning, especially in the funding area. Provide 
incentives for scientists to share data and collaborate. In my 
attachments to my written comments, I have got a copy of the 
drought monitor map and report that USDA and NOAA and Rural 
Climate Centers and USGS and a number of Federal agencies and 
regional groups are putting together in a collaborative 
fashion.
    Develop and enact a Federal practice of multi-
jurisdictional conflict resolution. Also conduct a national 
assessment of the potential for regional watershed base-water 
management programs, which also include stakeholder input 
processes. I did include in my written comments some specific 
recommendations related to the Safe Drinking Water Act, the 
Clean Water Act, and the Endangered Species Act which further 
address these general comments.
    I am happy to answer any questions at the right time.
    Senator Graham. Thank you very much.
    Mr. Rutherford.

 STATEMENT OF JAY RUTHERFORD, DIRECTOR, WATER SUPPLY DIVISION, 
        VERMONT DEPARTMENT OF ENVIRONMENTAL CONSERVATION

    Mr. Rutherford. Thank you, Mr. Chairman. Good morning.
    I would like to thank Senator Jeffords for his 
introduction.
    Although I am a State employee, I am here today to speak to 
you on behalf of the Association of State Drinking Water 
Administrators, which represents the drinking water programs in 
the 50 States, the territories and the District of Columbia in 
their efforts to provide safe, potable drinking water to all 
Americans. The Association's primary mission is the protection 
of public health through the effective management of those 
programs that implement the Safe Drinking Water Act.
    In the 27 years since the passage of the Act, State 
drinking water administrators have been primarily involved in 
drinking water quality issues, less so with quantity, although 
a reliable source of drinking water is a prerequisite for good 
public health protection.
    The Association's members regulate public drinking water 
systems, which are those that serve 25 or more people per day. 
Public water systems have the benefit of both Federal and State 
regulation, and this oversight typically provides for improved 
source protection, planning and operation of those systems to 
the benefit of their customers.
    Mr. Chairman, in response to the questions that you posed 
in your invitation, we polled our member States over the 
weekend regarding the adequacy or capacity of their public 
water supplies. The responding States affirmed that each 
State's situation is unique, so I will necessarily speak 
generally about this matter. There are four points I would like 
to address.
    The first is that the States confirmed what we can see from 
the national drought maps, which is that declared drought 
conditions exist in all or portions of approximately half the 
States, and that these conditions do affect the supply of 
available drinking water, but to varying degrees.
    Second, from our members' perspective, the primary cause of 
these stresses is weather-related--lack of rainfall or 
snowpack. Some States also reported stresses attributable to 
population growth; to competition for use among agricultural, 
manufacturing and environmental initiatives; and did report 
that development was stressing some supplies in some areas, 
although this issue was less significant than the stresses 
caused by the weather.
    The third point is that most States are developing or have 
developed management systems to address the reliability of the 
water supply. These efforts usually involve multiple State, 
Federal and local agencies. In some States, water supply 
management is a requirement on the systems; in others, 
recommended.
    Finally, fourth, about half the States' drinking water 
programs are administered through their health departments and 
about half through the environmental departments. This 
distinction has led to a variety of lead agencies addressing 
water supply issues.
    The second question in your invitation requested an 
assessment of Federal programs' effectiveness in ensuring that 
State and local governments are meeting water supply demands. 
This is a difficult question to answer due to those unique 
circumstances in each State. The drinking water programs are 
generally involved in water supply matters, commonly as part of 
larger interagency efforts. In the Western States there is 
clearly a strong Federal-State relationship as well.
    The Source Water Assessment and Delineation Program in the 
1996 amendments to the Safe Drinking Water Act have given 
States a lot of flexibility to approach source water protection 
in ways that meet local needs and conditions. We feel that this 
is a good model for State and Federal cooperation.
    The overall message from the States, however, is that water 
supply matters are primarily State and local issues and the 
Federal involvement with the States should be limited to a 
facilitative or helping role in meeting the interests of those 
States.
    With respect to your third question regarding 
recommendations for the role of Congress in this matter, we 
suggest that the flexibility contained in the 1996 amendments 
to the Act is an excellent approach. The Drinking Water State 
Revolving Fund, in particular, provides States with the 
flexibility to creatively apply set-aside funds in ways that 
make the most sense to each State in the program. Additional 
support for the Fund would further enhance the Program's 
ability to carry out this work, and we encourage such support.
    I thank you very much for the invitation to be here today 
and would be happy to answer any questions.
    Senator Graham. Thank you very much, Mr. Rutherford.
    Mr. Frederick.

 STATEMENT OF KEN FREDERICK, SENIOR FELLOW, RESOURCES FOR THE 
                             FUTURE

    Mr. Frederick. Thank you, Mr. Chairman.
    Concerns about the availability of fresh water to meet the 
demands of a growing and increasingly affluent population, 
while sustaining a healthy natural environment, are based on 
several factors. My remarks here I will address only two of 
these: the implications of a greenhouse warming and the 
shortcomings of our institutions for allocating scarce supplies 
in response to changing supply and demand conditions.
    Greenhouse warming could affect the quantity, quality, 
timing, location and reliability of water supplies. The effects 
on water supply supplies and water management systems are 
expected to be among the most important impacts of global 
warming. But understanding the linkages between emissions of 
greenhouse gases and the climate, and then determining how 
climate change would affect water resources at geographic 
scales relevant for planning and management are daunting tasks.
    While there is a very wide range of hydrologic projections 
that come out of the different climate models, it makes it very 
difficult to draw any conclusions at these river basin levels. 
Some general conclusions about the likely impacts of global 
warming on water supplies do emerge from the research. Higher 
evapotranspiration rates may lead to decreases in runoff, even 
in areas with increased precipitation. More intense 
precipitation days are likely in some regions, which could 
contribute to an increase in flood frequency. The frequency and 
severity of droughts could increase in some areas as a result 
of a decrease in total rainfall, more frequent dry spells and 
greater evapotranspiration.
    Higher temperatures would shift the relative amounts of 
snow and rain, along with the timing of runoff in mountainous 
areas. This shift could increase the likelihood of flooding 
early in the year and reduce the availability of water during 
periods off high demand. The quality and quantity of fresh 
water in coastal areas might be adversely affected by higher 
sea levels and increased storm surges that push salt water 
further inland in rivers, deltas and coastal aquifers.
    Looking at the water institutions, there is cause for 
concern over the adequacy of our supplies. We have limited 
control over the resource. Most opportunities for increasing 
supplies are financially and environmentally costly. Current 
uses are depleting or contaminating some valued supplies, and 
the prospect of climate change introduces new uncertainties.
    Meanwhile, the demands for fresh water are growing with 
population and income. Many of the institutions that provide 
the opportunities and incentives to use, conserve or protect 
the resource continue to be rooted in a era when the resource 
was not considered to be scarce.
    On the other hand, there is reason for optimism as to the 
long-term adequacy of water supplies. The institutions that 
influence how supplies are managed and allocated among 
competing uses and the effectiveness and cost of efforts to 
protect aquatic environments and drinking water quality will 
determine the magnitude and the nature of future water costs.
    State institutions are primarily responsible for allocating 
waters within their borders, but waterflows do not conform to 
State boundaries. As the competition for water increases, all 
users within a hydrologic unit become increasingly 
interdependent. Consequently, Federal input is needed to 
promote water use efficiency and protect the interests of 
downstream States.
    The Federal Government currently manages much of the West's 
surface water supplies, supplies water to about one-quarter of 
the irrigated lands in the West, and is the source and enforcer 
of environmental legislation affecting water use, the trustee 
of Indian water rights and the holder of unquantified rights 
for water use on Federal lands. Carrying out these 
responsibilities to better meet the Nation's future water needs 
will be a major challenge.
    I offer just a few recommendations. Water marketing, which 
involves the voluntary transfer of rights to new uses and 
users, has great potential to increase water use efficiency. 
However, the Federal Government has taken a few steps to 
facilitate water marketing, but to date they have had little 
impact, and I think a much broader and active Federal role is 
needed.
    My remarks make a few other suggestions. Basically, I think 
in regard to water quality, we need to introduce more cost-
effective approaches to meet our water quality needs. It might 
include effluent fees that provide incentives to develop and 
adopt least-cost technologies, tradeable permits to pollute 
that establish an allowable quantity of pollution in 
watersheds, and provide incentives to achieve this level at the 
lowest cost.
    The interdependencies among water users and the 
interchangeability of ground and surface supplies are all too 
often ignored in management decisions because natural 
hydrologic regions have split into multiple political and 
administrative units. Integrated management of existing 
supplies and infrastructure, ideally at the river basin level, 
would also at the level of smaller watersheds, could be a cost-
effective means of increasing reliable supplies.
    Perhaps the most important measure that Congress could take 
to meet the Nation's long-term water needs would be to restore 
the Water Resources Council or a similar institution. Such an 
institution is needed to evaluate water investment and 
management decisions objectively from the perspective of their 
impacts on larger watersheds, to assess the third party impacts 
of interstate transfers, to counter the often conflicting 
objectives of differing Federal agencies, and to reduce or at 
least expose the inefficiencies that result from political log-
rolling and agency aggrandizement.
    I thank you and I am pleased to address any questions that 
you have.
    Senator Graham. Thank you very much, Mr. Frederick.
    Mr. Mink.

 STATEMENT OF LELAND ROY MINK, DIRECTOR, IDAHO WATER RESOURCES 
                       RESEARCH INSTITUTE

    Mr. Mink. Thank you, Mr. Chairman.
    I also wish to thank Senator Crapo for his earlier 
introduction.
    As he mentioned earlier, I am past president of the 
National Institutes for Water Resources and a member of that 
board at this time. The National Institutes for Water Resources 
represents the State water resource institutes which are 
partners among State universities; Federal, State and local 
governments; businesses and industries. It also works with 
nongovernment organizations aimed at solving water problems of 
supply and water quality at the local, State, regional and 
national levels.
    By way of background, the Water Resource Research Act of 
1964 authorized establishment of a Water Resource Research and 
Technology Center to be led by a land grant university within 
each State. These institutes are charged with arranging 
competent research that addresses water problems or expands the 
understanding of water and water-related phenomena; also aiding 
the entry of new research scientists into the water resource 
fields; helping train future water scientists and engineers; 
and getting results of sponsored research to the water managers 
and to the public. The institute in each State is responsible 
for working with researchers at other universities within their 
respective States.
    Congress passed Public Law 106-374 last year. This 
legislation reauthorized the Water Resource Research Act 
through the year 2005. The legislation is under jurisdiction of 
the Committee on Environment and Public Works, and Senator 
Crapo was one of the major sponsors of last year's 
reauthorization and I wish to thank him for that. The State 
Water Research Institute Program is under the general guidance 
of the Secretary of Interior and is administered through the 
U.S. Geologic Survey.
    Over the past 40 or more years, several reports have been 
submitted to Congress attempting to address the questions of, 
do we have enough water, and are we running out of water? 
Interestingly, the Senate Select Committee on National Water 
Resources, the so-called Kerr Committee, provided one of the 
earlier reports in 1961, over 35 years ago. Two other major 
assessments were conducted in 1965 and 1978 by the Water 
Resource Council. Just this last year, the National Research 
Council of the National Academy of Sciences issued a brief 
report on the research information and needs for assessing 
water availability and use.
    If you look through, all of these studies consistently 
indicate an inadequate water supply to meet future needs. They 
have suggested ways to potentially develop more resources. An 
example of that is waste water reuse, desalinization, water 
conservation, among other recommendations. The studies also 
indicated the need for hydrologic data to develop information 
and to develop management plans and better able to make 
management decisions. This all leads to developing the 
information and techniques to make better forecasts, especially 
as related to extreme conditions such as drought periods and 
flood frequency.
    In Idaho, as many of the Western States, water management 
has changed over the last 30 years, especially with the 
addition of new priorities. Early management strategy was to 
create more storage so water could be made available for basic 
needs of hydropower, food production and domestic consumption 
and use. During the past 30 years, a shift has occurred to add 
consideration of environmental concerns as a primary and a 
major needs. Primary examples or examples of this include 
minimum streamflows for aquatic species, which are important in 
our area to salmon and other fisheries; and also recreation in 
streams and rivers which has become an important consideration 
driving managing streams and reservoirs which have primarily 
been used traditionally for hydropower and irrigation purposes, 
to include these new uses that the public is demanding.
    As more diverse population growth occurs in the Western 
States, new priorities surface for the available water. As a 
result, the perception and often reality is there is not enough 
water to satisfy the existing and projected demands. We feel 
the major issue facing water managers in the 21st century will 
be inadequate and uncertain water supplies.
    Demands on the Nation's water resources are growing with 
increased population and industrial expansion. Since the supply 
is unchanged, with the exception of some potential climate 
impact changes, it indicates that we face increased challenges 
in meeting the growing demands. The degree of the problem or 
challenge is certainly associated with different regions of the 
country. Initially, the challenges are addressed by 
reallocation of water among competing demands, with higher 
demands--in other words, potable water use, drinking water--
being supplied by discontinuing lower value uses such as 
irrigation.
    This reallocation has social, economic and hydrologic 
effects and should be thoroughly and carefully evaluated. In 
some portions of the country, there are few alternatives for 
reallocation or alternative supplies. It is certainly important 
for the Federal Government to understand that demand is 
exceeding supply. Likewise, Federal agencies must work with 
States and local communities to develop alternatives to meet 
these existing and projected water demands.
    Taking the fact that the past national water supply studies 
have been rather quantitative and describe large basins, local 
and State water managers feel these projections in some cases 
have been of little use. These past national assessments have 
been mainly quantitative, being understood by engineers and 
hydrologists, but being of limited value to other professions 
such as social scientists.
    Many water managers in the West feel information and 
research certainly needs to be continued, and there is a 
Federal role in supporting this effort. Information needs to be 
targeted to users not only at the Federal levels, but at State 
and regional levels. There is also a strong feeling in the West 
that water management decisions are best made at these levels. 
Water information related to water quantity and quality should 
be designed to help meet the needs of these State and regional 
issues. That was cited back in a 1988 study, that the use of 
assessment means that its costs are justified by the benefits 
received by the users. These benefits should extend beyond the 
needs of just the Federal agencies.
    There are several recommendations that we have made with 
respect to Congress' role in evaluating potential for water 
supply through the Nation. These include development of 
improved and new innovative supply enhancing technology such as 
the waste water reuse area. We have not been very effective in 
reusing waste water and it is a source we feel can be used. We 
need to develop innovative technologies to prevent pollution. 
When we have a polluted water source, essentially it is not 
used for many beneficial uses.
    We need to increase the ability to forecast water 
availability and future impacts such as climate change and land 
use impacts on water supplies; encourage the support of 
regional and State water planning. We also need to support 
hydrologic data collection at the Federal level and have this 
information available to State and local agencies and groups. 
We need to encourage and support the regional characterization 
studies both in high population and in rural areas.
    In conclusion, I know that my fellow Water Resource 
Research Institute directors commend Congress for the 
recommendations contained in the fiscal year 2002 Interior 
Appropriations Act. This Act directs the USGS to undertake a 
report describing the scope and magnitude of efforts to provide 
periodic assessments of the status and trends in the 
availability and use of fresh water resources. This was 
mentioned by Bob Hirsch in his testimony.
    In addition, we also support the congressional 
recommendation for the National Academy of Science's study to 
examine Federal and non-Federal water resources research 
funding and allocation of the resources currently deployed to 
support the water programs. This seems to be a logical way to 
develop and understand whether we as a Nation are making an 
adequate investment in our water resources research.
    I have included several examples of State activities 
conducted by the water institutes in my written testimony, and 
I wish to thank you for your interest in this important matter 
and allowing me the privilege to speak.
    Senator Graham. Thank you very much, Mr. Mink.
    Ms. Diester, from your work, for instance, on the Drought 
Policy Council, have you identified any specific actions that 
you think the Federal Government should initiate or expand 
current programs to deal with the issue of water supply?
    Ms. Diester. Yes, sir. We actually have a whole list of 
recommendations in our summary report. We look at a couple of 
different areas. One is in the formal collaborative kinds of 
processes among Federal agencies, appointing coordinating 
councils or coordinating bodies or coordinating commissions 
with specific duties and responsibilities with shared 
information, shared visioning. Have some sort of funding 
mechanism that encourages that sharing.
    For example, everybody here has talked about the need for 
coordinated information--technical information, scientific 
information. One of the things that we did is that we worked 
with USDA and NOAA initially because they both had weather-
predicting abilities. We asked them, what would happen if you 
two worked together? After everybody got up off the floor, they 
decided that it was probably a good idea to look into that.
    We actually have brought in rural climate resources and 
local climate resources, and we have done that incrementally, 
and we created a process where every Thursday one of the 
Federal agencies--they rotate who is the lead in writing up the 
written comments--and they put out the drought map, the 
National Drought Monitor every Thursday with written comments. 
That's a good example. But you've got USGS that often needs 
State cosponsorship for their stream gages. That should never 
be a question. That is basic data and it needs to be fed in. 
USGS needs to be supported and they need to be fed into a 
coordinated data management system.
    So that is a key one--monitoring and prediction, 
forecasting and coordination.
    Another area is in the creation of an ongoing body which we 
call the National Drought Council, but it could be called 
anything. It could be Water Supply Management Council or 
something, that is funded with key Federal roles--who is in the 
lead role, which agency is in the lead role, identified. 
Currently, USDA is playing that role with the National Drought 
Council; and have implementation money in there for 
preparedness plans; and a safety net so that people who want to 
shift from response kinds of programs to readiness kinds of 
programs have maybe a 5-, 6-, 7-, or 10-year kind of transition 
period. We have documented all kinds of cost benefit of doing 
that.
    You pay for it in the back end, it costs three, four, five 
times. If you pay for it in the front end in terms of planning, 
like we do in southern California, you don't have those impacts 
and it saves a lot.
    Long answer.
    Senator Graham. I would like to suggest a policy question 
and ask any of the members of the panel who would like to 
comment on it. One of the arguments against Federal involvement 
in water supply is that the expectation is that that 
involvement will result in enhanced supply, and therefore will 
facilitate additional growth into an area. You could argue that 
water supply naturally ought to be treated as one of the 
fundamental restraints on growth--a means of directing which 
parts of the country can accommodate population increase.
    With that issue, is it appropriate for the Federal 
Government to be involved in augmenting water supply beyond 
that which nature is going to do? Would the consequences of 
such a Federal role be to distort land use and demographic 
patterns?
    Ms. Diester. I'll jump in. You are probably tired of 
hearing from me, but one of the things that we discovered in 
looking at the Federal role is that so much money is spent on 
response efforts in terms of floods, and bailouts in terms of 
crop impacts. If you take that money that is right now 
designated for impacts, and you shift it. In California, we see 
flood as simply the resource that we need for the dry periods. 
So we think of it as an opportunity instead of a problem. If 
you manage water that way, then you actually are maximizing the 
use of water.
    With respect to the issue of growth inducing, in some cases 
that probably is true; that increased water supplies would 
provide new growth. But the way to deal with that is to look at 
places like the State of Florida with the Growth Management Act 
of the 1980's, which really looks at the comprehensive land use 
and water use--you know that one very well--where you make 
those decisions based on the integrated process of land and 
water management, and not use one resource to sort of back-door 
a policy.
    Senator Graham. Any other members of the panel who wish to 
comment on that question?
    Mr. Frederick. I will make a few comments. I don't think 
historically water has been a very good indicator of where 
people are going to go. Certainly, we have had no trouble 
filling up our deserts and southern California with people. 
Santa Barbara is an area that I think attempted to limit 
development and growth by restricting access to water supply--a 
policy which ran into a lot of problems then in the early 
1990's when they had a very prolonged drought.
    It seems to me that the Federal Government is involved in 
water in so many areas and so many ways that the need for 
coming up with better ways to allocate the water in response to 
changing conditions, and also to come up with ways for 
protecting the ecosystems which are very important for the 
long-term quality of the water and availability of water, is an 
important government role. I guess I don't see that as a 
legitimate reason for not getting involved, as being one that 
is going to encourage excessive growth.
    People are going to somewhere, and if we can improve the 
availability and the cleanliness of the water, I am sure that 
will probably have some effect, but it seems to me that would 
be a positive.
    Senator Graham. Mr. Rutherford, you come from the New 
England area where you have a cluster of States also with a 
long common boundary with Canada. Are there any particular 
water supply issues that are a function of the political 
composition of the New England region of the United States? I 
ask that question from the background of someone who comes from 
a peninsula State where, with a few exceptions, we are 
relatively autonomous in our ability to influence water issues. 
It would seem to me that in New England, you are particularly 
integrated across political boundaries, including an 
international political boundary. I was curious as to whether 
there are any particular issues of water supply that are a 
function of that political geography?
    Mr. Rutherford. As you have probably heard from the 
testimony, I speak from perhaps a narrower perspective than 
some of the other folks who testified. But within the drinking 
water realm, I would say that within the United States, we do 
not have significant issues due to our being together. All the 
States work together, meet periodically throughout the course 
of the year, and address common issues associated with drinking 
water. We do not have a deep relationship on the Canadian side 
of the border, unless we have a crisis that might occur in 
either Quebec or in one of the States, where we typically do 
have communication links to work together.
    So I think our compactness and closeness, while perhaps 
might create some friction, in fact the ease of communicating 
from my perspective is that we have worked quite well together, 
and do not have any significant issues because of that 
closeness.
    Senator Graham. Mr. Frederick, you used the term ``water 
marketing'' in your statement. Could you elaborate on that?
    Mr. Frederick. I was referring to the voluntary transfers 
of water, and I mean, water marketing is increasing 
significantly in the Western States. Initially, it started in a 
significant way with water banks in California during the 
drought, first in the 1980's and then in the early 1990's. I 
think water marketing provides a way of transferring water from 
what are relatively low value uses to the higher value uses. It 
also provides a way of introducing incentives for irrigators to 
conserve. If they have no opportunity to do anything else with 
their water, they have limited incentive to adopt some of the 
more water conservation technologies that were referred to in 
the earlier panel. So I think it is certainly important from 
that perspective.
    You look at the enormous differences in the values of 
water--take California, for example, where a very sizable part 
of the water is used for relatively low-value crops. Then 
you've got urban areas that are spending an order of magnitude 
more to develop new supplies. It seems to me that this is going 
to become an increasingly important means of responding to 
changing supply and demand conditions.
    I also think that there is quite a bit the Federal 
Government can do to promote that, because a lot of this low 
value irrigation water is supplied by Federal facilities.
    Senator Graham. What would you recommend might be some of 
the ways in which the Federal Government could encourage the 
use of water marketing or other means of injecting a financial 
discipline on the use of water?
    Mr. Frederick. Well, let me mention a couple. One has to do 
with Indian water rights. I think it is important. One of the 
problems, or an important problem for encouraging markets is 
the lack of clearly identified water rights. To the extent that 
you can identify, accelerate the process of identifying the 
Indian water rights, but then making sure that the Indians are 
able to market the water off the reservation, I think is a very 
important measure. In 1992, there was legislation passed which 
made some of the water from the Federal Central Valley Project 
could be marketed. To my understanding, there actually hasn't 
been any marketing, but I think that type of measure is 
important. I don't know enough about the details to know if 
there is something additional that the Federal Government could 
be doing to facilitate marketing transfers.
    Ms. Diester. Well, certainly conjunctive groundwater use 
has been happening, particularly in the Central Valley. 
Metropolitan, for example, has contracts to store water outside 
of its boundaries, and it is really more of a water quality 
exchange program. But you are right--the whole notion of water 
transfers does rest in part around the whole notion of who owns 
the water. But another large issue is looking at third party 
impacts, which I think is a key issue. Everybody has their own 
definition of what that should include, but also looking at 
sort of that delicate issue of cost of conveyance and how much 
should the entity that is conveying the water be paid in order 
to make that transfer happen. So these are some of the sticky 
issues.
    Mr. Frederick. I might just add I brought a number of 
papers with me which I will leave with the committee, one of 
which was published this past spring with the title Water 
Marketing Obstacles and Opportunities, which discusses in quite 
a bit of detail and gives examples of what has worked, where 
the problems are.
    Senator Graham. Mr. Mink, you mentioned that the water 
resource institutes are based at the land-grant colleges in the 
various States. Is that correct?
    Mr. Mink. That is correct, Mr. Chairman. For the most part, 
all of our institutes are at the land-grant universities and 
that is designated in our authorization act. There are a few 
exceptions, and those can be made by the Governor of a State if 
he wishes to move it to a different institution.
    Senator Graham. So are you based at the University of 
Idaho?
    Mr. Mink. Yes I am, sir.
    Senator Graham. In Moscow?
    Mr. Mink. Right.
    Senator Graham. Is there some effort to establish national 
or regional priorities in water research, such as exploring the 
technologies that might enhance water supply which would be 
conducted at a specific institute, but which would have multi-
State application?
    Mr. Mink. Yes, Mr. Chairman. The Institute Program is 
highly recommending regional projects. In fact, part of our 
reauthorization, section 104(g) requires regional collaboration 
and collaboration among States on regional water issues. The 
resources that Congress has provided the institutes are 
competed competitively across the Nation, but it does require a 
collaboration between two or more States and looking at 
regional water issues--addressing regional water issues as 
defined by the water managers of the respective States.
    Senator Graham. What are the principal projects that you 
are conducting at your institute at the University of Idaho?
    Mr. Mink. We are looking at several projects, all the way 
from water supplies to the Boise metropolitan area, which is 
one of the most rapidly growing areas in the State. The 
forecast of having a water shortage for domestic water 
originally back in the 1960's forecasted that our supply would 
last until 2020, and we are at that stage right now, at the 
year 2000--about 20 years ahead of time because of increased 
population demands.
    We are also working with agencies--Bureau of Reclamation 
and U.S. Geological Survey in looking at the issues of water 
supply not only for agriculture and power, but also for salmon 
habitat, the endangered species, and working with the States of 
Oregon and Washington on how we might be able to fulfill the 
needs of the State, but at the same time provide water down for 
fish habitat in the river systems.
    We are also working with local communities, local rural 
communities on looking at their future water supplies, in small 
rural towns of less than 2,000 people, and assisting them in 
identifying future water supplies that they're having trouble 
with, both with respect to increased population--in some of our 
areas, two families move in and they've got a 100 percent 
increase in population--and also the water systems that have 
been degraded over time. A lot of them are very old and they 
are having some real problems, and the financial resources that 
these communities have are not able to manage those. So they 
cope with improving those.
    So we are providing technical support to these communities 
so they can better figure out where they go for supplies. Some 
of the impacts of arsenic is an example in water supplies--with 
a lower level of arsenic, we are finding that many of our 
natural groundwater reservoirs exceed this arsenic limit. So we 
are working with those communities on how we can best solve 
that problem and provide a safe drinking water source for them. 
So these are some of the examples we are working with.
    Senator Graham. Ms. Diester, gentlemen--thank you very 
much. This has been a very helpful discussion. I look forward 
to reading the papers that will be part of the record. Also as 
we move into the development of legislation, I hope that we can 
continue to call on your expertise in that process.
    Thank you very much.
    [Whereupon at 11:38 a.m., the subcommittee was adjourned, 
to reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]

      Statement of Hon. Bob Smith, U.S. Senator from the State of 
                             New Hampshire

    As the Ranking Republican of the Environment and Public Works 
Committee (EPW), I support conducting this hearing which will examine 
an issue of great importance to the Chair, Senator Graham. Chairman 
Graham has long had an interest in the issue of water supply. The 
situation in parts of his home State, Florida, as with other parts of 
the country, is dire. However, the EPW Committee is charged with 
ensuring the Nation's waters are clean, not whether there is an ample 
supply of water.
    According to The Authority and Rules for the Senate Committees for 
the 107th Congress, EPW has jurisdiction over water pollution and water 
resources. The Committee on Energy and Natural Resources has oversight 
over irrigation and reclamation, including water supply. The agency 
primarily responsible for helping communities meet their water needs is 
the Bureau of Reclamation which reports directly to the Energy 
Committee.
    The Corps of Engineers, which reports to the EPW Committee was 
authorized in 1958 to help communities with water supply if it was part 
of a larger project or the facilities were already available. For 
instance, if the Corps owns a reservoir for flooding which is going 
unused, it is permitted to use it as a water supply source for the 
local community. However, the Corps cannot finance or oversee projects 
whose sole purpose is to ensure an adequate water supply. The only 
exceptions are those projects authorized in the biannual Water 
Resources Development Act (WRDA). Senator George Voinovich (R-OH) and I 
argued to no avail against the inclusion of supply projects in WRDA 
2000 because they exceed the authority of the Corps and this committee 
which writes the WRDA bill.
    During the 106th Congress, this committee, against my 
recommendation, exceeded its jurisdiction and that of the Environmental 
Protection Agency (EPA) which the Committee oversees. Congress included 
Senator Graham's legislation to authorize EPA to administer an 
alternative water source pilot project. One of my primary concerns 
about having passed this proposal is that we are blurring the missions 
of the Federal agencies to the point that we will soon have as many as 
three agencies performing the same function: securing water supply. 
This is the very type of overlap and redundancy that Members of 
Congress so often criticize. Further, those three agencies will report 
to two Senate Committees, one of which doesn't have jurisdiction over 
the issue.
    I understand that this is a very important issue for Senator Graham 
and the people of Florida. It is also a concern in New Hampshire albeit 
not as large a problem. I believe that to the extent that the Committee 
can promote programs within its jurisdiction that may have a positive 
impact on water supply problems, it should. For instance, when 
adequately funded, the revolving loan programs under both the Safe 
Drinking Water Act (SDWA) and the Clean Water Act provide communities 
with the money necessary to ensure their water supplies are clean and 
safe, resulting in fewer contamination-caused supply problems. Further, 
the Environmental Protection Agency has promoted water recycling and 
reuse through the Clean Water Act. Again, provisions related to 
recycling and reuse seek to ensure a healthy source of water but also 
consequently address the supply problem.
    Senators Jim Jeffords and Mike Crapo and I are working closely with 
Chairman Graham on a proposal which will examine ways to extend the 
life of every dollar in the revolving loan funds. While addressing 
water supply needs is not a goal of this proposal, just as it is not a 
goal of the Clean Water Act or SDWA, if our proposal is able to meet 
its objectives, it may result in the easing of some supply constraints.
    Again, I fully understand the extent of Senator Graham's concerns. 
However, those concerns must be addressed within the rules of the 
Senate and the jurisdictions of its Committees.

                               __________
 Statement of Hon. Mike Parker, Assistant Secretary, Department of the 
                          Army for Civil Works

                              INTRODUCTION

    Mr. Chairman and members of the subcommittee: I am Mike Parker, the 
Assistant Secretary of the Army for Civil Works. I appreciate the 
opportunity to speak to you today on the Army Corps of Engineers 
activities to address the water supply issues of the Nation.
    In your call for this hearing, you asked that we respond to three 
specific questions, and I will respond to your questions in order. 
First, you asked that we present our perspective on water supply in the 
United States today including the extent to which there is or is not a 
water supply problem today or in our future, a description of that 
problem if we believe one exists, including regional differences, and a 
discussion of the potential cause of this problem.
    We believe the Nation faces many challenges in assuring an adequate 
water supply. These challenges now affect all regions of the country, 
not just the traditionally dry areas. The availability of reliable and 
clean supplies of water is crucial to the health of our citizens and to 
maintaining the Nation's economic prosperity both now and in the 
future. In a series of listening sessions the Corps held last year, 
citizens around the Nation voiced their concerns about various aspects 
of water supply at every session.
    At these listening sessions, the public called for better data to 
understand the scope and nature of the water supply problems we face. 
The last comprehensive assessment of the Nation's water needs was 
completed over 15 years ago. The public also told us that water supply 
is more than a local problem. Municipal leaders told us that supporting 
growth in an environmentally sustainable manner will require regional 
solutions. Consequently, new water supply projects that are feasible 
and efficient must often be located outside the limits of the 
municipalities that seek additional supplies. Technical leadership will 
be essential to integrate competing values across multiple political 
jurisdictions to reach consensus for regional water supply solutions. 
As an example, in landmark 1997 legislation, the State of Texas 
recognized these new realties and designated 16 regions to lead the 
development of future water supply. Larger communities within these 
regions were designated to take the lead for their regions.
    Your second question asks us to address the extent that the Federal 
programs under our jurisdiction work to ensure that State and local 
governments are meeting water supply needs. It has been long-standing 
policy that municipal and industrial water supply projects are 
considered the primary responsibility of non-Federal parties. The 
authorities under which the Corps of Engineers provides water supply 
storage are generally project specific and a secondary purpose for the 
development of a project. We can provide water supply storage at 
completed projects by reallocating storage for other purposes and 
evaluate the potential for new water supply as part of planning 
multipurpose projects. At the present time, the Army operates 117 
reservoirs containing about 9.5 million acre-feet of storage authorized 
and available for municipal and industrial water supply use. We also 
maintain approximately 57 million acre-feet of storage for agricultural 
irrigation in 50 reservoirs. Overall, we have over 400 reservoirs that 
could be modified or have existing storage that may be available for 
reallocation to provide additional municipal and industrial water 
supply storage.
    I want to emphasize that Corps involvement in water supply is 
founded on deference to State water rights. During the enactment of the 
Flood Control Act of 1944, Congress made clear that we do not own the 
water stored in our projects. Our practice is to contract with non-
Federal interests for water storage in our projects. Our policy is to 
continue our commitment to consistency with State water law.
    The Corps of Engineers is currently working with other Federal 
agencies and with State and local interests to help solve several large 
complex regional water problems. For example, as part of the 
Comprehensive Everglades Restoration Plan, the Corps of Engineers is 
undertaking a technical evaluation of complex systems and balancing 
competing demands for available water resources in the development of a 
comprehensive regional solution. This effort integrates diverse needs, 
objectives and ongoing complementary efforts of multiple Federal, 
State, local and other interest groups. Although the Federal interest 
is primarily environmental restoration, this interest is closely 
linked, in the case of the Everglades, with water quality improvement, 
water supply and flood damage reduction. Another example is the 
comprehensive assessment of the demands and water resources available 
in the Apalachicola-Chattahoochee-Flint and Alabama-Coosa-Tallapoosa 
River systems to assist the affected States in reaching decisions on 
allocation of available water. These efforts included the development 
of alternative scenarios and options on which allocation decisions can 
be based.
    Your final question asks us to review what actions, if any, 
Congress should take to facilitate an efficient and effective Federal 
role in water supply. Participants in our listening sessions told us 
that they look to cooperative efforts between the Federal Government 
and States in developing integrated, regional management of water 
resources including water supply. Our management of water must be based 
on economic and environmental benefits and costs. Decisions must be 
science-based choices among a full array of alternative uses to which 
our watersheds and river basins may be put. In doing this we must 
respect the primacy of State water law. Congress should work with the 
Administration to ensure that our Nation has the framework to provide 
integrated water management. This framework should include the 
appropriate roles of the Federal and non-Federal levels of government 
and the very powerful part that the private sector must play in any 
solution to our water resources challenges.

                               CONCLUSION

    In conclusion I believe we are facing emerging water supply 
challenges. Consistent with the goals of the President, the Army Corps 
of Engineers stands ready to work with its sister agencies in 
contributing to the dialog. We will continue our stewardship of our 
existing projects to manage water storage for efficient uses including 
water supply and maintain our commitment to consistency with State 
water rights.
    Mr. Chairman, this concludes my statement, and I would be pleased 
to address any questions that you or the committee may have.
                               __________
  Statement of John W. Keys, Commissioner, U.S. Bureau of Reclamation

    My name is John Keys. I am Commissioner of the Bureau of 
Reclamation (Reclamation). I appreciate the opportunity to be here 
today to discuss Reclamation's role and challenges in ensuring the 
adequacy of water supplies in the areas we serve.
    Before I discuss these issues, I would like to give the Committee 
some background on the Bureau of Reclamation--a water resources 
management agency within the Department of the Interior whose mission 
is to provide water and power in the 17 Western States\1\. I would also 
like to include a short overview of the facilities which Reclamation 
has developed and the benefits which they yield.
---------------------------------------------------------------------------
    \1\ This includes 17 States located west of the 100th meridian. 
These are: Arizona, California, Colorado, Idaho, Kansas, Montana, 
Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South 
Dakota, Texas, Utah, Washington and Wyoming.
---------------------------------------------------------------------------
                               BACKGROUND

    On June 17, 1902--almost one hundred years ago--President Theodore 
Roosevelt signed the Reclamation Act to develop and construct 
irrigation water delivery projects in the Western United States. The 
President's objective, and that of the Congress, in supporting this 
legislation was to stimulate agricultural development through irrigated 
agriculture in order to create economic opportunities in the arid lands 
in the West and thereby facilitate the settlement of the Western United 
States.
    Partially because of the success of this program, the 1930's saw an 
exponential growth in population in the west which meant that 
electricity and other types of water supply, in addition to irrigation 
development, were needed to meet increased demands. In response, 
Congress authorized numerous multi-purpose projects--thereby expanding 
Reclamation's focus from the construction of single purpose irrigation 
projects to the construction of facilities to provide hydroelectric 
power, municipal and industrial water supply, recreation, flood control 
and other benefits.
 bureau of reclamation's role in meeting the west's water supply needs
    As a result of its activities to meet the contemporary--and 
changing--water needs of the 17 Western States, Reclamation has become 
the largest water resources management agency in the west. Three of 
Reclamation's projects--Grand Coulee, Hoover and Shasta dams--are 
listed on the National Critical Infrastructure list. Reclamation 
administers or operates 348 reservoirs with a total storage capacity of 
245 million acre-feet, 58 hydroelectric powerplants with an installed 
capacity of 14,744 megawatts, and more than 300 recreationsites in the 
17 Western States. These facilities enable Reclamation to meet 
important needs and provide numerous benefits:
     We provide one out of five western farmers with irrigation 
water for 10 million acres of farmland that produce 60 percent of the 
Nation's vegetables and 25 percent of its fruit and nuts.
     We deliver water to more than 31 million people in the 
west, the most rapidly urbanizing region of the country.
     Our powerplants generate an average of more than 42 
billion kilowatt hours of energy each year, making Reclamation the 
Nation's second largest producer of hydroelectric power and the 11th 
largest generating utility in the United States. Reclamation produces 
enough electricity to serve 14 million people. Reclamation's Central 
Valley Project in California generated more than 6.5 billion kilowatt 
hours of energy in 1999 and serves approximately 2 million 
Californians. Because of the flexibility of Reclamation's hydropower 
system which can provide power at the peak times of day, its value to 
the West is significantly greater than the mere kilowatts generated. 
That value was clearly demonstrated last summer during California's 
electricity crisis. On numerous occasions, it was Reclamation's power 
that kept the lights on in California. And it was Reclamation's 
hydropower system that ensured the integrity and stability of the 
western power grid--when it was overloaded and on the verge of failing.
     Our projects support habitat with water for wildlife 
refuges, migratory waterfowl, anadromous and resident fish, and 
endangered and threatened species.
     Our reservoirs accommodate 90 million visits a year at 
more than 300 recreationsites.
     Reclamation's Indian and other rural water projects 
including the Mni Wiconi, Mid Dakota, Garrison, and Fort Peck projects, 
when completed, will provide water to thousands of rural communities 
who currently do not have access to potable water supplies.
    Additionally, Reclamation is helping to meet future water supply 
demand through broad programs promoting more efficient water use.
    Water Conservation. Through our Water Conservation Field Services 
Program, we provide water districts with technical and financial 
assistance to develop effective water conservation plans. While 
Reclamation has a role to play in water conservation, there also are 
opportunities for State and local entities to offer incentives through 
rate restructuring, low interest loans for farmers to install more 
efficient irrigation facilities, and rebates for installation of 
efficient appliances, landscaping retrofits, and toilets.
    Water Reuse. Recycled water is used for a variety of purposes, 
including agricultural and landscape irrigation, groundwater recharge, 
and industrial cooling. Reclamation's water reuse program assists 
western cites in enhancing their water supplies by providing funds for 
the 25 projects authorized under Title XVI of Public Law 102-575, as 
amended. Since 1992, the Congress has authorized water reuse projects 
in the States of California, Nevada, Utah, New Mexico, Texas, Arizona, 
and Oregon. NonFederal cost sharing partners pay at least 50 percent of 
the feasibility study costs and 75 percent of the construction costs. 
Total Federal costs for the 25 authorized projects is estimated at $600 
million. To date, approximately $205 million has been made available in 
Federal assistance.
    These projects are in various stages of planning, design and 
construction but all are estimated to be completed by 2012. Upon 
completion, they are expected to yield an additional 494,000 acre-feet 
water for beneficial use.
    Facilitating Voluntary Water Transfers. Approximately 85 to 90 
percent of the water consumed in the West is devoted to irrigated 
agriculture. In the face of rapid urbanization, the changing economics 
of farming, and the need to strike a balance with the appropriate 
protection of environmental values, voluntary transfers of water from 
willing agricultural sellers to willing buyers is one means by which 
the future water needs of the West will be addressed.

                           CURRENT CONDITIONS

    In many regions of the Western United States, particularly in the 
Pacific Northwest, the 2001 water year was very dry. This severe 
drought meant that there was below normal water inflow to some 
Reclamation facilities which required unprecedented steps to balance 
water deliveries, power production and environmental requirements to 
satisfy, to the greatest extent possible, multiple project purposes. 
While it is difficult to predict with precision future water 
availability, in many of the basins that were severely affected by 
drought this past year, like the Klamath Basin in Oregon and 
California, as well as other areas that were not impacted, Reclamation 
is working closely with the States, local governments, watershed 
councils and other interested stakeholders to identify alternative 
sources of water and to improve drought contingency planning.

                          MEETING FUTURE NEEDS

    Over the past 25 years, the population of the 17 Western States 
served by Reclamation has increased by 32 percent compared to a growth 
rate of only 19 percent for the rest of the United States--making the 
West the fastest growing area in the Nation. Nearly every major river 
system in the West--the Colorado, Columbia, Rio Grande and Missouri--is 
heavily developed and over appropriated. That trend is projected to 
continue. This create significant challenges to both Reclamation and 
other Federal, State and local water agencies.
    In addressing these challenges, it is important to emphasize the 
primary responsibility of local water users in developing and financing 
water projects. Reclamation has an important role to play, both in 
maintaining its significant investment in water infrastructure, and in 
using its expertise to help local communities meet their water needs. 
Also, as water demands intensify, it will become increasingly important 
to encourage efficient water management practices.
    New Facilities to Meet Agriculture to M&I Conversion. As one of the 
fastest growing regions of the United States, water that was once used 
for irrigation will increasingly be converted to M&I usage. Because of 
the change in the location of usage, because of the changes in timing 
of when the water is needed, and because of the need for treatment of 
M&I water to make it potable, there is insufficient infrastructure to 
meet those needs.
    New Projects to Meet Growth. In addition to converting the use of 
water from agricultural to M&I purposes, new water supply will be 
needed to meet the growth of certain regions of the Western United 
States.
    Aging Infrastructure. Having dependable supplies of water and power 
also requires that the infrastructure which Reclamation has developed 
over the past century be properly maintained and upgraded where needed. 
Many facilities built by the Bureau of Reclamation--both for irrigation 
and municipal and industrial (M&I) water delivery--were built prior to 
the development of current engineering standards. Approximately 50 
percent of Reclamation's dams were built prior to 1950. An appropriate 
level of annual maintenance of existing facilities is needed for 
beneficiaries to continue to deliver and receive the project water 
supplies they need in order to meet rising demands in the future, and 
to ensure that the benefits of Reclamation's projects can continue to 
be realized.
    As with our dams and water delivery systems, Reclamation must also 
maintain its powerplants. Sustained maintenance, replacement and 
modernization of equipment and machinery over time, are critical to the 
reliability of our hydro power system.
    Security. Given the importance of Reclamation's facilities for 
providing water and power and for protecting the public safety of 
downstream communities across the west, we have always placed a high 
priority on maintaining the safety and security of our facilities. 
However, in light of the tragic events that began on September 11, 
Reclamation has placed its facilities at a heightened state of 
security. While we are working closely with State and local law 
enforcement officials to supplement and complement our coverage, these 
agencies are facing constraints with their budgets and manpower 
capabilities.
    We appreciate the recent enactment of H.R. 2925 by Congress which 
authorizes the Secretary of the Interior to assign law enforcement 
personnel from Interior, and other Federal, State, local and Tribal 
agencies to enforce Federal law at Reclamationsites and on Reclamation-
administered lands.

                               CONCLUSION

    As you can see, Mr. Chairman, the Bureau of Reclamation has a 
diverse and important mission in working to help the arid west to meet 
its water and power supply needs--especially as this region continues 
to be the fastest growing in the Nation.
    We look forward to working with the subcommittee and with all water 
users and the interested public to develop ways to meet competing water 
needs and demands into our second hundred years of service to the west 
and to the United States. Thank you for the opportunity to participate 
in today's hearing.
    I would be pleased to answer any questions.
                                 ______
                                 
  Responses by Commissioner John W. Keys III to Additional Questions 
                          from Senator Graham

    Question 1. An issue associated with national water supply is the 
need to ensure and increase where necessary, the security of the 
Nation's water systems. How does the Bureau of Reclamation (BOR) 
envision covering costs for any additional security at BOR dams and 
distribution facilities? How will the security needs of BOR facilities, 
where operation and maintenance have been transferred to irrigators, be 
accomplished and funded?
    Response. Mr. Chairman, this is an incredibly important issue that 
Reclamation has been working to address. On April 4, 2002, I signed a 
policy to address the issue of how increased security costs are handled 
and in particular, how to expend the $30.3 million fiscal year 2002 
Emergency Appropriations for emergency expenses to respond to the 
September 11 terrorist attack, which are being used for counter 
terrorism protection measures on Reclamation owned lands and 
facilities. I have enclosed a copy of that policy for the record.

    Question 2. If the Federal Government were to increase its role in 
water supply services to the remaining 33 States, the Burreau would 
surely be required to help, if not lead this effort. Are you aware of 
problems on the east coast involving supply that you have not had to 
address with Western States?
    Response. When the Bureau of Reclamation was established 100 years 
ago this year, the Reclamation Act of 1902 authorized the agency to 
design and construct irrigation projects exclusively in the Western 
United States. While our authorities have been expanded over the past 
100 years to address municipal and industrial supply, hydroelectric 
power generation, recreation, fish and wildlife mitigation and 
enhancement, flood control, drought preparation and planning, and waste 
water recycling and reuse, we have continued to be limited in express 
authority to the 17 Western States. As such, we have dedicated limited 
attention to the water resource management issues associated with the 
eastern portion of the United States.
    While we have not closely evaluated the Eastern United States, in 
general I would expect that the water-related issues in the Eastern 
United States, mainly associated with quantity and quality, are very 
similar to those that we deal with in the west. The differences are 
most likely related to the relative degree of importance of each aspect 
of these issues. For example, the issue of water quality for human 
consumption purposes, while becoming an increasingly important issue we 
are dealing within the west, has historically been a relatively small 
part of our program. In the east, however, due to historically greater 
population density, water quality has been a significant issue for a 
long time. A significant issue is the conjunctive use of surface and 
groundwater supply demands, however there is a general lack of 
recognition of this inter-connectedness of surface water and 
groundwater in most States' water laws, which becomes a barrier to 
success in managing water in the East. In addition, one of the primary 
missions for Reclamation has, historically, been to build projects to 
deliver water for agricultural irrigation. In the east, irrigated 
agriculture is much less widespread.
    While Reclamation operates in the and West, drought issues in the 
East could have a significant impact to many citizens. In dealing with 
drought in the West, Reclamation has developed considerable resources 
and experience that could be of benefit to Eastern communities in times 
of water supply shortage.
    One significant difference in water supply issues would be related 
to the nature of the different legal systems for water allocation in 
the East as compared to the West. In the West, water law is based upon 
the prior appropriations doctrine--whereby water rights are based upon 
the first in time, first in right principle. This means that anyone who 
puts water to use has priority over others who began to use water on a 
later date. Water rights under this principle depend upon actual usage, 
rather than land ownership, as a property right interest to the right 
to use water.
    In the Eastern States, water is allocated based upon the riparian 
doctrine whose fundamental principle is that the owners of land 
bordering a waterbody acquire certain rights to the use of water. 
According to the Deportment of Agriculture, currently every eastern and 
Midwestern State that uses the riparian water rights doctrine, except 
South Carolina, has modified its laws to require water appropriations 
to secure a permit to divert water out of a water body. The net effect 
is very much similar to western prior appropriation doctrine in 
allowing depletion of the stream flows in a regulated manner by owners 
of non-riparian lands.
    Reclamation has significant technical capabilities that we have 
provided to other Federal agencies, such as the Federal Emergency 
Management Agency, involved in water issues in the East. While the 
majority of Reclamation's experience has been with Western States and, 
as such, we have not conducted any in-depth technical analysis of the 
water supply issues in the East, we believe there are many similarities 
in water supply issues between the West and the East that Reclamation 
has considerable experience and knowledge in dealing with over the 
course of the past 100 years.

    Question 3. What kind of budget and staff increases would the 
Bureau need if it were to expand coverage to the entire United States?
    Response. Since Reclamation operates almost exclusively in the 17 
Western States--we have not evaluated the water supply issues and needs 
of the east. Further, without a firm grasp of the issues to be 
addressed in this region, we do not have the data to put together even 
ballpark estimates for the budgetary or staffing needs to address the 
water supply issues associated with the East.
                               __________
     Statement of Robert M. Hirsch, Associate Director for Water, 
             U.S. Geological Survey, Department of Interior

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to report on the status of water conditions in the United 
States as monitored by the U.S. Geological Survey (USGS).
    The USGS is a science agency within the Department of the Interior 
with a history of 122 years of providing scientific information needed 
for the wise management of our Nation's natural resources. The study of 
water goes back to our very early years and the work of our second 
Director, John Wesley Powell, who focused much attention on the 
availability of water resources for the economic development of the 
West. The USGS of today consists of four major program areas: Geology, 
Geography, Biology, and Water. The USGS strives to combine these four 
disciplinary areas to provide more complete information and analysis 
regarding the resource and environmental issues facing our Nation.
    Hydrologically, conditions across the country are quite varied at 
the present time. The West is a mixture of above-normal flows in 
southern and coastal California, normal flows in Washington State, and 
below-normal flows in the northern and central Rockies, northern 
California and Oregon. Although the interagency U.S. Drought Monitor, 
which incorporates USGS streamflow information, continues to depict 
much of the Northwest as being in moderate to extreme drought, 
streamflows have moderated in some areas (such as Washington State) 
during the past 4 to 6 weeks. In the central third of the Nation, 
rivers and streams are generally flowing in the normal range, with 
above normal flows throughout Indiana, southern Michigan, and eastern 
North Dakota. Indeed, intense and persistent rains in October brought 
very high flows and flooding to much of the southern Great Lakes and 
northern Ohio Valley from the middle of October to early November The 
East, however, is a different story. Streams in the coastal States from 
Maine to Florida are reporting very low flows for this time of year, 
with many setting new daily and weekly records.
    The USGS water resources program provides reliable, impartial, 
timely information that is needed to understand the Nation's water 
resources.
    We operate about 7,000 streamgages, which monitor the flow of water 
in our Nation's rivers and streams, and we freely provide the current 
and historical data to a wide range of users. This information is used 
for purposes that include: water supply planning, flood risk 
assessment, water quality management (including calculation of Total 
Maximum Daily Loads under the Environmental Protection Agency's Clean 
Water Act Program), water supply operations, streamflow forecasting 
(done primarily by the National Weather Service, the Army Corps of 
Engineers, and the Natural Resources Conservation Set?vice), habitat 
assessments, and personal planning of river-based recreational 
activities. Currently, we are in a process of modernizing the 
streamgage network. At the present time, about 5,000 of these stations 
have satellite telemetry that enables us to provide near-real-time data 
to all users via the Internet.
    Using these data, and information from other agencies, I will 
describe the current surface-water situation across the Nation, as well 
as variations and changes that have occurred in recent weeks. To (to 
this I will rely on an illustration that we create daily and place on 
the USGS website. It is based on conditions for the preceding week at 
all USGS streamgaging stations that have 30 or more years of record and 
have telemetry systems. Each dot on the map represents an individual 
gage. They are color coded with red indicating that flows for the week 
were the lowest ever recorded for that time of year, brown indicating 
that flow was below the 10th percentile, orange was between the 10th 
and 25th percentile, green indicates ``normal'' (25th to 75th 
percentile), light blue is 75th to 90th percentile, dark blue is above 
the 90th percentile, and black represents record high flows for this 
time of year.

[GRAPHIC] [TIFF OMITTED] T1718.001

    The lowest flows currently are occurring in southern Virginia and 
western North Carolina. During the past several weeks, more than 3 
dozen streamgages have reported new record daily and weekly low-flows 
in this area. This pattern is also reflected in groundwater declines as 
monitored at a few USGS wells that report in realtime in this region. 
Other areas experiencing record low flows for this time of year include 
South Carolina, the Delaware River basin, and parts of New England.
    What's interesting about the pattern of dryness in the East is 
that, although it seems to have just recently appeared, it has actually 
been lurking around since early summer. Along the entire Eastern 
Seaboard, except for South Florida, flows have been varying between 
normal and below normal since July. There were no persistent rainy 
periods, particularly those associated with tropical storm systems, to 
produce and maintain elevated flows and, when below-normal to much 
below-normal precipitation occurred throughout the coastal States 
during October, the region was poised to experience fairly rapid 
streamflow declines. Although the reservoirs serving some metropolitan 
areas are at normal to above-normal levels for this time of year, such 
as those feeding the Potomac River upstream of Washington, DC, other 
systems are already showing signs of stress. Just last week, for 
example, storage in the Upper Delaware River Basin reservoirs declined 
to drought warning levels, triggering reductions in Delaware River flow 
targets and water diversions to New York City and New Jersey.
    I would like to focus for a moment on the Delaware River Basin, 
which encompasses more than 13,000 square miles in Delaware, New 
Jersey, New York, and Pennsylvania. As major river systems go, the 
Delaware River Basin is a small watershed--covering only about 0.4 
percent of the U.S. land area. Despite its small size, the Basin 
provides water to about 20 million people, about 7 percent of the U.S. 
population. Although not physically in the basin, New York City obtains 
about one-half its water supply from three reservoirs in the Upper 
Delaware Basin. As I mentioned previously, water supplies in the 
Delaware River Basin are showing signs of stress. On November 1, 2001, 
combined storage in the Upper Delaware Basin reservoirs was 98 billion 
gallons, or 36 percent of capacity, and continues to decline. This is 
57 percent lower than the level of storage that existed a year ago. As 
a result of these abnormally dry conditions, New Jersey, New York, and 
Pennsylvania have recently declared some level of drought alert for 
counties in the basin. Voluntary conservation measures are being 
requested in these areas. If storage continues to decline at the 
present rate, the Delaware River Basin could be in a drought emergency 
condition by early December, resulting in the imposition of mandatory 
in-basin conservation measures and restrictions.
    The precipitation Outlook for November to January, issued recently 
by NOAA, indicates normal conditions across most of the United States. 
The Southern Plains may receive above-normal rainfall, and parts of the 
Southeast below-normal rainfall. If such conditions were to occur, the 
water resources situation in South Carolina, Georgia, and northern 
Florida could only get worse. However, it is worth noting that we are 
now entering the time of the year when water demand goes down. 
Evaporation is reduced, and people will not be watering lawns, washing 
cars, or irrigating crops as during the summer months. So declines in 
streams and aquifers will be less noticeable to the average citizen now 
than in the late spring or summer. Still, normal rainfall would not be 
sufficient to restore deficient stream-and aquifer-levels to normal. It 
would take above normal precipitation over a period of weeks to months 
to do that. Thus, given current hydrologic conditions, the East Coast 
will need to average above-normal precipitation over the coming 4 to 5 
months to ensure that normal water supplies are available next spring 
and summer; particularly in those areas already experiencing shortages.
    The streamgaging network, that measures the ``pulse'' of the 
Nation's rivers (and enables LIS to produce a ``snapshot'' of 
conditions such as I have used here), is a priority for the USGS. We 
have worked closely with the Congress over the last 3 years and thanks 
to your Support, and the support of hundreds of State, local, and 
tribal agencies, we have made good progress in modernizing and 
stabilizing the network. We are working with our partners in ail effort 
to assure that these vital data continue to be available to water 
resource management.
    I should also briefly mention the importance of groundwater as an 
indicator of drought and as ail important aspect of the mechanisms 
available to communities, agriculture, and industry as insurance 
against drought. While our ground-water level monitoring networks have 
not been modernized to a level where we can provide the same kind of 
synoptic view of ground-water conditions as we presented for surface 
water, we anticipate improvements in the next few years. We believe 
that the science of groundwater hydrology is crucial to water 
management not only in and regions, but nationwide. Conjunctive use of 
surface and groundwater has great potential for making water supplies 
more drought resistant. Groundwater is crucial to sustaining streamflow 
for habitat and for water Supply. More and more we find that our 
partners are interested in the role that groundwater plays in 
maintaining adequate flow and temperature conditions in rivers.
    We also find that emerging technologies such as artificial 
recharge, aquifer storage and recovery, and recharge of reclaimed 
wastewater are pivotal parts of the water management equation. The 
Science to support the use of these new technologies is a part of our 
strategic plan for the future of USGS ground-water science.
    I thank the Subcommittee for this opportunity to testify and would 
be pleased to respond to any questions you might have.
                               __________
   Statement of Thomas A. Weber, Deputy Chief for Programs, Natural 
     Resources Conservation Service, U.S. Department of Agriculture

    Mr. Chairman, and Members of the subcommittee, thank you for the 
opportunity to appear today and present views on behalf of the United 
States Department of Agriculture, regarding water supply issues in our 
Nation. I am Tom Weber, Deputy Chief for Programs at the Department's 
Natural Resources Conservation Service (NRCS). The mission of NRCS is 
to provide leadership in a partnership effort to help people conserve, 
improve, and sustain our natural resources and environment. Our agency 
was created in response to the Dust Bowl days of the 1930's, helping 
farmers and ranchers manage and conserve water resources has remained 
among our principal activities.
    As most Members on this Committee are already aware, America's 
farmers are among the most productive in the world. They feed our 
population with the highest quality, safest, and most affordable food 
anywhere, while producing food for others all around the world. Today, 
farmers face new challenges, many associated with the use of natural 
resources. These include the soil health, air quality, and wildlife 
habitat issues. But around the country, farmers and ranchers face ever 
increasing concern for the quantity and quality of water.
    Persistent shortages of water and prolonged abnormal moisture 
deficiencies adversely and permanently affect vegetation, animals, and 
people. Recently, Secretary of Agriculture, Ann Veneman released, Food 
and Agriculture Policy: Taking Stock for the New Century. This document 
is our long-term view of the Nation's agriculture and food system, with 
emphasis on the conservation of natural resources. We propose that our 
policies not only buildupon past gains in resource conservation, but 
also must prepare us to respond to emerging challenges such as the 
inextricable link between water supply and agriculture. Without 
question, the future of our farms and water supplies are interdependent 
and are exemplified by the following facts:
     nationwide, agriculture accounts for nearly 80 percent of 
all water consumption.
     Three-quarters of all cropland in the Western United 
States is irrigated.
     The 16 percent of harvested cropland that is irrigated 
accounts for nearly half of the value of all crops sold.
     nationwide, nearly 100 percent of all orchard sales and 
more than 80 percent of the sales of vegetables and potatoes are 
produced on irrigated cropland.
    Throughout the country, demand for water is increasing, with added 
pressures from municipal use and urbanization. I would add that prior 
to coming to Washington, DC. I served with NRCS in California and also 
as State Conservationist in New Mexico. From my work in these States, I 
can attest that the experiences of the West on water supply issues may 
be a foreshadow of emerging conflicts in other regions of the country.
    While we are not being able to control the precipitation, we do 
believe that agriculture is uniquely positioned to be part of the 
solution to water issues. From its inception, NRCS has helped farmers 
and ranchers with on-farm water management. Following are a few 
examples of ways we can help:

                   CONSERVATION TECHNICAL ASSISTANCE

    We believe that the best approach is to begin with a proactive 
conservation plan and then implement it. NRCS field conservationists 
provide technical assistance to farmers and ranchers to develop 
voluntary resource conservation plans. Conservation technical 
assistance does not regulate or compel farmers to accept practices, but 
instead encourages them by demonstrating the benefits of conservation. 
In addition, NRCS field staff identify opportunities for other forms of 
USDA incentives-based conservation assistance, including cost-share, 
conservation easements, and other opportunities.

                   TECHNOLOGY AND RESOURCE ASSESSMENT

    NRCS also offers valuable resource information that assists with 
resource planning such as; Snow Survey and Water Supply Forecasts--The 
purpose of this program is to provide Western States and Alaska with 
information on the seasonal availability of water from melting 
snowpacks. NRCS field staff and partners collect data on depth and 
water equivalent of the snowpack at more than 1,200 manually read 
mountain sites. The automated snow telemetry (SNOTEL) provides daily 
and hourly data from additional 650 locations. The NRCS Water and 
Climate Center provides weekly and monthly predictions of the resultant 
stream flows via web services. These forecasts are used by individuals, 
Tribes, organizations, and State and Federal agencies to make decisions 
relating to agricultural production, fish and wildlife management, 
municipal and industrial water supply, urban development, flood 
control, recreation, power generation, and water quality management.
    The National Cooperative Soil Survey is a partnership effort to 
inventory the Nation's soil resources. The survey produces 
comprehensive soil maps, descriptions and interpretations. Land users 
employ this data to make resource decisions on their farms and ranches 
based upon water availability. Soils, especially high quality soils, 
resist degradation from drought and flooding, to quickly recover to 
agricultural productivity. We also conduct the National Resources 
Inventory. Through this effort, NRCS gauges the condition of natural 
resources at 800,000 sampling sites, and is able to provide analysis of 
the resource trends and impacts.
    The Conservation Plant Materials Program identifies and distributes 
millions of native plants to address natural resource problems. As part 
of this effort, NRCS evaluates the drought-tolerance of plants, and 
works to develop new vegetation that can assist farmers and ranchers 
who face water supply shortages.

                           PROGRAM ASSISTANCE

    NRCS also offers an array of opportunities to farmers and ranchers 
facing water-related concerns. Included in these, are the following 
programs:

                ENVIRONMENTAL QUALITY INCENTIVES PROGRAM

    This program provides technical, educational, and financial 
assistance to farmers and ranchers in high-priority regions for 
protecting soil, water, and related natural resources. Water 
conservation is one of the resource concerns brought forth from the 
locally led process that sets priorities for this assistance.

                        WETLAND RESERVE PROGRAM

    This program provides long-term drought prevention by protecting 
the swamps and marshes that conserve water and water-loving plants and 
animals. Landowners establish 30-year or permanent conservation 
easements or sign restoration cost-share agreements. Wetland 
restoration provides many water conservation benefits such as to 
augment low stream flows and provide water critical to wildlife.

          WATERSHEDS AND FLOOD PREVENTION OPERATIONS PROGRAM 
                       (SMALL WATERSHED PROGRAM)

    The Watersheds program engages State and other public agencies 
(called project sponsors) in water and land treatment projects. These 
partners enhance flood control, watershed management, water 
conservation, municipal and industrial water supply, recreation, and 
fish and wildlife protection. Since 1944, conservation partners have 
built more than 10,000 flood prevention structures across the country. 
Many of these structures have provided communities with additional 
water supplies crucial during droughts.

                 EMERGENCY WATERSHED PROTECTION PROGRAM

    This program is targeted to communities--as opposed to 
individuals--by relieving imminent hazards to life and property caused 
by floods, fires, windstorms, droughts and other natural occurrences. 
The Emergency Watershed Protection program is a recovery program. Other 
programs solve problems that predated the disasters or prevent future 
disasters. The Natural Resources Conservation Service provides 
technical assistance and pays as much as 75 percent of the costs for 
emergency repairs, such as removing debris from a stream. We also 
purchase easements from willing landowners on flood prone areas to 
prevent future crop losses.
    There are many challenges facing America's farmers and ranchers on 
water quality and quantity issues. We believe that incentives and 
technical support for improved on-farm water management, and sound 
resource data and assessment, can make a real difference. In 1998, 
Congress enacted the National Drought Policy Act. The law established 
an advisory commission to provide advice and recommendations on the 
creation of an integrated coordinated Federal policy designed to 
prepare for and respond to serious drought emergencies. The 15-member 
commission consisted of farmers, ranchers, and government officials 
from around the country and was chaired by the Secretary of 
Agriculture. The commission presented a report to Congress in May 2000 
entitled, ``Drought in the 21st Century''.
    The Commission made several recommendations regarding NRCS 
including support for technical assistance and funding for voluntary 
programs such as the Environmental Quality Incentives Program. The 
Commission also recommended expansion of resource inventory and 
technology capacity of NRCS as well as encouraging accelerated work 
with tribes, States, counties, and towns to develop and maintain 
drought preparedness plans.
    Congress is currently working toward reshaping agriculture policy 
for the future through reauthorization of the Farm Bill. Without 
question, water and agriculture will continue to weigh heavily into 
these discussions and consideration. One of the central themes is that 
future policies must square with today's realities. Without question, 
the reality that many of our Nation's farmers and ranchers face is an 
increasingly scarce supplies of water, and increasing pressure and 
competition for the water. It is difficult enough to be productive and 
profitable today in agricultural production, and adequate and 
affordable production inputs such as water are crucial. I would 
conclude by reiterating that even if we are not able to control the 
weather, conservation programs can play an important role in helping 
provide local people with the tools and assistance to mitigate the 
effects of water shortages.
    I thank the Chairman, and would be happy to respond to any 
questions that members of the Committee might have.

                               __________
    Statement of Ane D. Deister, Co-chair, Interim National Drought 
   Council, Associate Vice President, Metropolitan Water District of 
                          Southern California

    I serve as the non-Federal Co-Chair of the Interim National Drought 
Council with Secretary Ann Veneman, USDA, serving as the Federal Co-
Chair. The Council was formed last year through a Memorandum of 
Agreement, in response to the recommendations of the National Drought 
Policy Commission (NDPC), on which I served as the national urban water 
representative. The NDPC held a number of hearings across the Nation 
and submitted its final report and recommendations to Congress in the 
summer of 2000.
    Presently, I work in a senior management position with the 
Metropolitan Water District of Southern California, one of the largest 
regional water management agencies in the country. Previously, I worked 
for 15 years in Florida, including a top staff position at the South 
Florida Water Management District. These remarks reflect a diversity of 
experience and perspectives including the California and Florida water 
resource experience, work with multi-State and national drought 
management entities, and participation in the American Water Works 
Association (AWWA), Association of California Water Agencies (ACWA) and 
the Interstate Council on Water Policy (ICWP).
    In your invitation letter you asked that we address three things. 
These remarks are prepared with a short overview, followed by answers 
to the three questions, with further details provided in an attachment.

                                OVERVIEW

    Lately there has been a great deal of attention dedicated to the 
issue of water supply security. Previously, information was presented 
to Congress regarding the issue of aging infrastructure. However, the 
basic water supply condition in the world, Nation, regions, States, 
tribal areas, local jurisdictions and ecosystems is challenging today, 
and expected to become even more challenging in the future. The basic 
dilemma is that fresh water resources are finite, and demands on them 
are increasing, often resulting in competition, conflicts, and water 
wars with economic, environmental, agricultural, industrial and safety 
impacts felt by the water consuming public.
    In addition to the basic resource scarcity, the process of water 
supply decisionmaking is often equally challenging. The planning, 
preparedness and solutions to water supply problems are often delayed 
until they reach near crisis conditions, which may constrain and reduce 
the available approaches and options. As a result, some of the most 
cost-effective water supply measures such as conservation, recycling 
and groundwater conjunctive use may be overlooked, with more 
controversial supply options supported by well meaning managers, under 
emergency or near emergency situations.
    Finally, the role of the Federal Government has been helpful in a 
few specific instances. But overall some changes in the Federal role 
could result in measurable, cost-effective benefits for the water-using 
public.
    Question 1. Perspective on water supply problem today or in our 
future, a description of that problem, including regional differences, 
and discussion of the potential causes of this problem:
    The simple answer is yes there is a water supply problem in the 
Nation today, and indications are that these problems will become more 
difficult and severe in the near term. For many years in two diverse 
States--California and Florida--at opposite ends of the country, there 
has been a common phrase among water managers. That is, there is 
sufficient supply, but not in the right locations, at the right time or 
amounts to meet demands on a sustainable basis. At some point in the 
past 10 years California, Florida, Texas, Georgia, Washington, Idaho, 
Washington, DC, Maryland, Virginia and most of the other Western States 
have declared or come close to declaring drought conditions in their 
States. In many cases these declarations have covered consecutive 
years. With this increase in frequency of multiple year drought 
conditions, water managers today may be rethinking that old saying.
    The World Water Commission for the past couple years has been 
reporting on the global water supply picture, including:
     Only 2.5 percent of the world's water is freshwater
     Of that, \2/3\ is trapped in icecaps and glaciers
     Of the remaining \1/3\, 20 percent is in remote areas
     Of the remaining amount, 80 percent comes at the wrong 
times or in the wrong locations to meet the need
     Seventy percent of the world's water is used for 
agricultural purposes
     Increases over the next 2 decades are predicted:
         Human use by 40 percent
         Agricultural use by 17 percent
     As a result, aquatic ecosystems will be affected
    The attachment includes several pages of specific water supply 
problems, organized by State, with problems noted in almost every 
State. The source of the problems, the nature of the impacts vary 
geographically and hydrologically, but overall the factors contributing 
to the current and growing water supply challenges include:
     natural water resource limits;
     changing climate conditions and uncertainties;
     ever-increasing water quality constraints and associated 
treatment impacts;
     growing demands and competition for resource supplies and 
uncertainties regarding population growth predictions;
     the need for regional integrated resource plans throughout 
the country, incorporating a diversity of supplies including both 
structural and non-structural water supply solutions;
     the need for coordinated Federal water resource management 
policies, approaches and priorities;
     the need for coordinated, technical data collection, 
analysis, and integration including monitoring and prediction, water 
use estimates, advancements and applications for recycling and 
conservation;
     the need for official, coordinated Federal conflict 
resolution practices;
     the need for a shift in Federal funding priorities from 
response to readiness, emphasizing planning and preparedness 
activities.
    Each of these factors is discussed below.

                     NATURAL WATER RESOURCE LIMITS

    As previously noted, in the attachment, several pages list key 
water supply problems, constraints or challenges for almost every 
State. The Committee asked for regional differences to be shared in the 
testimony, and while there are differences such as groundwater versus 
surface supplies, the similarities are vivid and real. Virtually every 
State in the country is presently or on the verge of facing water 
resource supplies challenges or shortages. In some cases, such as in 
Southern California, the predicted reductions in supplies from the 
Colorado River, potential supply challenges associated with the State 
Water Project, and natural rainfall circumstances have led Metropolitan 
Water District to invest in a number of programs and water producing 
projects over the past 10 years. They include emergency surface storage 
(Diamond Valley Lake), development of groundwater storage and 
conjunctive use programs within and outside district service areas, and 
accelerated and enhanced recycling and conservation investments, all on 
a cost competitive basis. Yet, that is not the routine across the 
country, even though the challenges in each State mimic in their own 
way the challenges being faced by Southern California.
    Additionally, the term `drought', once defined by meteorological 
conditions, over the past few years has been extended and expanded to 
generally reflect any water shortage, or water curtailment 
circumstance. Water managers are using terms such as `regulatory 
drought' and `water-quality-driven drought' across the country today. 
The recent experiences in the Klamath Basin and earlier water supply 
curtailments of the State Water Project in California have been 
characterized by some as `regulatory droughts'. The growing problem of 
increasing salinity in water supplies resulting from a variety of 
sources and practices is an example of how changes in water quality may 
effectively reduce the amount of water to meet demands, hence the term 
`water-quality-driven drought'. The term drought management, then, has 
become one of comprehensive water resources management, and must 
consider environmental needs for water, as well as economic, 
agricultural, social, industrial and other human impacts associated 
with water supply shortages. After more than 5 years of reviewing the 
drought management needs across the country, and comparing those needs 
with Federal, State, tribal and local assistance and programs, we have 
identified significant service and assistance gaps that need to be 
filled to help the country deal effectively with this growing resource 
challenge.

                         CLIMATE UNCERTAINTIES

    There is general agreement among scientists that CO2 is 
increasing in the atmosphere and the majority of the scientific 
community believes that the climate has changed and will continue to 
change. There continues to be uncertainty regarding the degree of 
climate variability, the regional effects and potential impacts.
    However, despite the continued dialog regarding the degree and 
extent of climate change, there are some important projections that 
contribute to water supply challenges. They include:
     Shifts in precipitation type from snow pack to rain fall;
     Shifts in precipitation locations from north to south;
     Shifts in precipitation frequency and duration, evidenced 
by El Nino, La Nina and the Pacific Decadal Oscillation (PDO) effects;
     Shifts in precipitation amounts, and predictions of 
longer, multi-year droughts.
    The relevance of these shifts is that water supply and distribution 
systems designed for previous hydrologic regimes, may not be suitable 
for the emerging regime. In the west, the snow pack is in effect a 
`reservoir', which if reduced substantially, results in more rainfall, 
greater runoff and water supplies that may be out of sync with 
reservoirs, groundwater management basins and distribution networks 
currently in place. Both tree ring and remote sensing data point to 
extended periods of drought, throughout the country, encompassing 15-20 
years of consistently dry conditions. That same data reveals similar 
periods of flood conditions as well, with few years of `normal' 
conditions. Again, this information suggests an overall challenge on 
the horizon and increased probability of water supply shortages 
nationwide, and most certainly in the west.

              WATER QUALITY CONCERNS AND TREATMENT IMPACTS

    Salt water intrusion and contamination has emerged as a major water 
quality problem throughout the country, which often reduces the direct 
uses of water supplies and impacts the ability to recycle water. 
Various land use practices contribute to this problem, including 
intensive growth in coastal areas, agriculture, and other naturally 
occurring conditions exacerbated by growing water demands. Additionally 
as detection technologies have increased, the number of contaminants 
regulated by the Safe Drinking Water Act have also increased, with 
treatment cost rising exponentially. The attachment includes a couple 
of charts that illustrate this dramatic increase, with a significant 
jump occurring between 1990 and 1998. In 1990 there were approximately 
30 constituents with more than 80 in 1998. Arguments could be made on 
all sides of the discussion about this proliferation of water quality 
regulations, but nevertheless they do contribute to the challenge of 
meeting water supply demands.

               GROWING DEMANDS/COMPETITION FOR RESOURCES

    There are many classic water competition examples across the 
Nation, with only a very few of the current situations listed below:
     Floridan Aquifer--Alabama/Georgia/Florida
     California Bay-Delta and State Water Project
     Colorado River 7 basin States
     Texas Edwards Aquifer
     Minnesota groundwater--irrigation and domestic competition
     Delaware River Basin area on drought watch
     Ogallala groundwater basin management
    This is only a snap shot to illustrate the diversity of areas 
experiencing competition for resources and growing demands.
      existing and challenging regional integrated resource plans
    The National Drought Policy Commission and other national 
organizations have identified several successful models located 
throughout the country where integrated resource planning is occurring 
on a regional basis. Yet even these successful regional integrated 
planning bodies could benefit from a more collaborative relationship 
with the Federal Government. These successful models include:
     Florida's 5 Water Management Districts
     Metropolitan Water District of Southern California
     Santa Clara Valley Water District
     Delaware River Basin Commission
     Ohio River Basin Commission
     Susquehanna River Basin Commission
    Using the Metropolitan Water District as an example, the model can 
be based on a few key regional integrating planning strategies 
including:
     Invest in conservation and local resources--over past 10 
years 800,000 AF conserved and recycled, projected to reach 1.6 MAF by 
2020
     Reduce reliance on Bay-Delta during dry years to improve 
ecosystem management
     Keep the Colorado River Aqueduct full through innovative 
conservation, storage and water transfer programs
     Develop and implement a preferred resource mix, balancing 
local and imported water (IRP)
     Develop and implement a resource portfolio strategy for 
drought management, incorporating storage during surplus periods for 
use during dry periods (Water Surplus and Drought Management Plan)
    In addition, there are some newly framed regional compacts and 
other emerging regional areas where there is a need for greater 
integrated resource planning, including:
     U.S. and Mexico issues with the Rio Grande and Colorado 
River
     ACT-ACF, Georgia, Florida, Alabama issues (Apalachicola 
Bay, Atlanta, etc.)
     Texas SB 1 implementation
    These are not the only regional integrated planning examples, but 
they illustrate the types of existing regional approaches. However, 
there are many more situations where there has been no regional 
planning or coordination, resulting in existing and imminent water 
supply shortages and challenges. They also represent locations where 
there are missed opportunities for economies of scale and the benefits 
of share visioning and development of mutually beneficial solutions.
    need for coordinated federal policies, approaches and priorities
    The National Drought Policy Commission report, May 2000, identified 
more than 80 Federal programs related to Federal drought assistance. 
Despite a lot of investigation, analysis and evaluation we were unable 
to identify coordination among those programs. They are based in 
numerous Federal departments such as USDA, Bureau of Reclamation, Army 
Corps of Engineers, EPA, NOAA, SBA, and to some limited degree FEMA, 
which might explain some of the lack of coordination. However, we also 
discovered that multiple programs within the same department lacked 
coordination, as well.
    The recent experience in the Klamath Basin is an example where an 
upfront coordinated approach, and collaboration with the affected water 
users, in hindsight, would have been beneficial. Additionally, a 
similar situation, thought not quite as extreme as the Klamath, 
occurred a year or so ago in California regarding the management of the 
State Water Contract supplies. Again, these are not the only examples, 
but serve as an indication of the need. These examples also underscore 
the fact that the Federal Endangered Species Act and its State 
counterparts have largely become the main driver in the need for 
coordination among a diverse set of regulatory agencies that control 
today's water supply decisions.
    Yet there are some coordination and collaboration efforts occurring 
today, which warrant mentioning. One of the members of the National 
Drought Policy Commission and Interim National Drought Council is the 
US Army Corps of Engineers. They have extensive information on this 
topic, and have advised the commission and council members on 
challenges related to water supply development projects, and also on 
the success stories where a coordinated and collaborative approach was 
used. The Corps has been undergoing a transformation in the way they 
conduct business, and are moving more into the multiple purpose and 
multiple benefits arena as a result. Additionally, the Corps and the 
Bureau of Reclamation, in response to a recommendation made by the 
National Drought Policy Commission are developing an MOU to allow the 
Corps to perform drought management studies for the Bureau and to 
combine their expertise and effectiveness nationwide.
    The Western Drought Coordination Council, a collaboration between 
Western States, several Federal agencies, urban interests and other 
stakeholders, initiated by the Western Governors' Association, 
represents a successful regional coordination and collaboration effort 
between Federal and nonFederal participants. The National Drought 
Policy Commission and Interim National Drought Council also serve as 
models of collaboration and cooperation between Federal and nonFederal 
entities.
    As more and more coordination examples occur, there is increasing 
evidence of the cost savings, resource benefits and environmental and 
economic productivity rewards of coordination among Federal agencies 
and with States, tribes and local entities requiring assistance in 
water supply planning.

   NEED FOR COORDINATION, COLLABORATION OF SCIENTIFIC/TECHNICAL DATA 
                  COLLECTION, ANALYSIS AND INTEGRATION

    A specific successful data coordination project is the weekly 
production of the Drought Monitor map and report. This is a 
collaborative data sharing effort between USDA, NOAA, the National 
Drought Mitigation Center at the University of Nebraska at Lincoln, and 
several regional and local weather monitoring and prediction entities 
in both the public and private sectors. The group tracks the occurrence 
of drought across the country, with weekly updates reporting on current 
conditions and any changes since the previous report.
    This coordination effort points out the multiple benefits of shared 
visions, and coordinated scientific pursuit. There are many areas in 
which adequately funded coordinated data collection, analysis, and 
evaluation is needed from the Federal Government. A few areas of 
particular need are:
     Groundwater supplies and recharge and extraction rates of 
aquifers
     Water use consumption, demand forecasting, and accurate 
estimates of water supply and demand balance
     Conservation measures in urban, agricultural, commercial, 
institutional and industrial sectors
     Stream gages and other watershed monitoring
     Weather prediction and long term patterns and trends

       NEED FOR COORDINATED FEDERAL CONFLICT RESOLUTION PRACTICES

    There has been an increasing emphasis within Federal departments 
and agencies to use alternative dispute resolution and conflict 
resolution practices, particularly in regulatory disputes. There is 
also a slowly growing practice of using collaborative processes with 
Federal and non-Federal participants sharing data, agreeing on the 
issues and developing solutions. The CALFED and Everglades examples 
have been previously noted, and many others have occurred, for example 
in Sarasota Bay, Tampa Bay, Lake Tahoe, Santa Monica Bay and the 
Chesapeake Bay. However, there is a growing need for an officially 
sanctioned Federal practice of alternative dispute resolution and 
consensus based decisionmaking for water supply problems. There is 
increasing information in the legal and resource management literature 
illustrating successes at local, regional, and multi-State levels where 
participatory conflict resolution approaches were used to solve 
problems, planned for litigation expenditures were redirected to 
project and program implementation, and with lasting inter-group 
relationships created. Yet, there is less experience within the Federal 
Government among various departments and agencies, and between Federal 
and non-Federal partners and participants.

    NEED FOR SHIFT IN FEDERAL PRIORITIES FROM RESPONSE TO READINESS

    One of the primary recommendations from the National Drought Policy 
Commission is the need for the Federal Government to shift priorities--
particularly in funding decisions--from response or bailouts to 
readiness or planning and preparedness measures. There was also a 
caution to make sure that the shift occurs in such a way as to provide 
a reasonable transition for States, tribes and local entities to 
implement this change in priorities in their own areas. For example a 
safety net for true emergencies would need to be in place for a period 
of perhaps 10 years, for many agricultural programs to shift from an 
emergency to readiness paradigm.
    The National Drought Policy Commission report also documented the 
substantial savings of providing up-front solutions to water supply 
shortages and problems, studies such as the NSF funded ``Government 
Response to Drought in the United States: Lessons from the mid-1970's'' 
have shown that the Federal Government spent significant amounts on 
responding to drought impacts, including:
     $3.3 billion responding to the 1953-1956 drought
     at least $6.5 billion during 1976-1977 drought
     about $6 billion during the 1988-1989 drought
    But there are clearly other costs as reported in ``Drought and 
Natural Resources Management in the United States: Impacts and 
Implications of the 1987-1989 Drought'' (Riebsame, Changnon and Karl) 
which documented a reduction in crop production of nearly $20 billion 
and an increase in food prices of more than $12 billion because of the 
1988 drought. The report also noted the low flows in the Mississippi 
River caused barge shipping prices to double and triple leading to an 
estimated $1 billion in increased transportation costs. At one of the 
National Drought Policy Commission hearings the Texas Agriculture 
Commissioner, Susan Combs, reported that in 1996 and 1998 droughts in 
her State caused a loss of $4 billion in direct income with a total 
impact to the State's economy close to $11 billion.
    Question 2. Extent to which Federal programs are effective or 
ineffective in ensuring that State and local governments are meeting 
water supply needs.
    There are some effective Federal programs, such as California's 
CALFED program and Florida's Everglades restoration program. Both 
address the problem of resource scarcity and increasing competing 
demands for those resources. They both have used collaborative 
processes to help minimize conflicts, with a goal of environmental 
restoration and protection. But even with these successful models there 
have been occurrences when tough decisions had to be made regarding 
such options such as storage and conservation for water supplies.
    At the other end of the spectrum is the general issue of Federal 
agencies, with specific mandates and perspectives, and little incentive 
to cooperate, collaborate and develop a shared, mutually beneficial 
approach to water supply. This is partly due to the more than 80 
governmental programs in a dozen Federal entities, involved in water 
resource and drought related assistance programs. Yet there is no 
Federal forum for integrating the concerns, perspectives and mandates 
of various Federal departments and agencies, which also includes 
effective mechanisms for Federal and non-Federal participants to work 
collaboratively. Several parts of the discussion above provide further 
specifics on this question. Taken collectively several of them relate 
to the need to re-evaluate the ability of any single agency to veto 
coordinated plans to meet water supply needs. They are noted under the 
headings:
     Need for coordinated Federal policies, approaches and 
priorities
     Need for coordinated, collaborative scientific/technical 
data collection, analysis and integration
     Need for coordinated Federal conflict resolution practice
     Need for shift in Federal priorities from response to 
readiness
    Question 3. What actions should Congress take to facilitate an 
efficient and effective Federal role in water supply?
    Based on the above information, observation and experience, there 
are some basic ways in which the Federal Government could help the 
country resolve some of the water supply challenges. They include the 
following:
     Support a National Drought Preparedness Act, to create an 
ongoing Federal and non-Federal coordination and collaboration entity, 
with both administrative and program implementation funding;
     Implement the recommendations of the National Drought 
Policy Commission report, including:
         Shifting Federal priorities from response to planning 
        and preparedness, reflected in funding decisions and incentives 
        for regional Federal and non-Federal water supply coordination 
        entities;
         Provide incentives for scientists and managers to 
        collaborate to enhance observation networks, monitoring and 
        prediction and information delivery of pertinent water supply 
        information;
         Maintain a safety net of emergency relief, that 
        emphasizes sound stewardship of natural resources and self-
        help;
         Develop and enact a Federal practice of multi-
        jurisdictional conflict resolution and alternative dispute 
        resolution;
     Conduct a national assessment of the potential to use a 
regional approach to developing water supply plans and solutions, 
including resource assessment, economies of scale, watershed basis, and 
stakeholder input processes.
     Develop and fund a Federal practice of multi-
jurisdictional conflict resolution and collaboration with non-Federal 
partners and participants.
         LRe-evaluate the ability of any single agency to veto 
        coordinated plans to meet water supply needs.
    In addition to the broad topics addressed above, the water industry 
has gone on record regarding some specific measures, which are 
applicable to this discussion. They include specific actions by the 
Federal Government that would help facilitate some water supply 
solutions, without undermining the shared goal of protecting 
environmental and ecological resources.
     Under the general category of better coordinated and 
integrated water statues and programs:
         Develop effective, scientifically sound and 
        adequately funded programs to control polluted runoff.
         Amend the Clean Water Act to make protection of 
        drinking water sources one of its main purposes and to 
        specifically address drinking water contamination by non-point 
        and other sources.
         Develop water quality criteria for microbial 
        pathogens and all other pollutants subject to the Safe Drinking 
        Water Act, to limit the introduction of microbial pollutants 
        into the drinking water supplies.
     Amend Superfund to more effectively protect and remediate 
drinking water sources.
     Change the Clean Air Act to prevent contamination of 
drinking water supplies by MTBE and other oxygenates.
     In reauthorizing the Endangered Species Act (ESA), the 
American Water Works Association (AWWA) recommends:
         Develop a public policy review process that balances 
        species protection with the provision of public services 
        essential to public health, safety, and welfare.
         Allow for upfront agreement on reasonable and 
        necessary preventive or emergency repairs, maintenance and 
        safety modifications on existing water projects.
         Recognize the rights and responsibilities of the 
        owners of existing water rights.
         Ensure that ESA decisions are based on peer-reviewed 
        science conducted by acknowledged, independent experts in an 
        open, transparent, and interactive process.
    In summary, the questions you raised are relevant and needed to be 
raised. The solutions are not easy, but still need to be implemented. 
While there may be diverse water supply needs across the country, I 
believe you will find a host of individuals, groups and entities that 
will welcome the opportunity to be part of the solution. I appreciate 
the opportunity to provide testimony on this important topic and 
welcome the opportunity to answer questions, provide additional 
information or other means to further these endeavors.















































      
        Response by Ane D. Deister to Additional Questions from 
                       Senators Graham and Crapo

    Question 1. In your testimony, you identified a need for a shift in 
Federal priorities from assistance for response or ``bailouts'' to 
readiness. How would this shift in Federal priorities to readiness 
occur? How would this work within the framework that recognizes and 
defers to States and localities for water supply management 
development?
    Response. The simple answer is through a shift in funding 
priorities. Currently after-the-fact response programs, which are 
responsive in nature, often receive funding either through emergency 
provisions, or in the case of natural-based disaster through Stafford 
Act provisions with FEMA. Both grant and loan programs would ensure 
State and local rights, restrictions and priorities are maintained, as 
well.
    My suggestion is for a systematic, staged shift in Federal funding 
such that Federal loan and grant funds for drinking water, recycled 
water, and conservation projects and programs are increased over a 10-
year period, with concomitant reductions in funds allocated for 
response measures. In this way communities and utilities may plan and 
prepare for increased water demands from a growth management 
perspective that would maximize water conservation and facilities 
planning approaches systematically, in a cost effective and resource 
effective manner, to prevent emergency or other more costly situations. 
Eligible facilities and programs might include treatment plants (and 
upgrades to address water quality matters), storage (above and below 
ground) facilities, canal and conveyance lining and rebuilding, system 
audits, managed irrigation measures, residential, commercial, 
industrial and institutional conservation retrofits and other 
conservation and recycling activities. There are other cross resource 
opportunities that might be considered as well. For example, one of the 
major costs in water operations is electricity. There may be some 
energy efficient measures such as co-generation, use of ``green'' power 
and other measures that would contribute positively to two resource 
challenges simultaneously. Certainly, Federal incentives would be 
helpful.
    Again, this is the simple answer, and I would be pleased to provide 
additional information as well. I look forward to working with you and 
the committee on this important resource challenge. Management of fresh 
water resources is rapidly becoming one of the most pressing matters of 
our time. Steps to pro-actively prepare for new demands, couple with 
wise use of existing supplies will help us continue to provide water to 
fuel the economy, support and restore the environment. I welcome other 
invitations to be part of this effort nationally.

                               __________
Statement of Jay L. Rutherford, P.E., Director, Water Supply Division, 
  Vermont Department of Environmental Conservation, on behalf of the 
           Association of State Drinking Water Administrators

                              INTRODUCTION

    The Association of State Drinking Water Administrators (ASDWA) is 
pleased to provide testimony before the Senate Environment and Public 
Works Subcommittee on Fisheries, Wildlife, and Water regarding the 
Federal role in meeting water supply needs. ASDWA represents the 
drinking water programs in each of the 50 States, territories, and the 
District of Columbia in their efforts to ensure the provision of safe, 
potable drinking water to all Americans nationwide. ASDWA's primary 
mission is the protection of public health through the effective 
management of State drinking water programs that implement the Safe 
Drinking Water Act.

                                OVERVIEW

    For more that 25 years, State drinking water program administrators 
have been involved in issues primarily relating to water quality rather 
than quantity, although a reliable source of drinking water is a 
prerequisite for good public health protection. ASDWA's members carry 
out regulation of public drinking water systems that serve 25 or more 
people per day. Public water systems have the benefit of both Federal 
and State regulation and this oversight typically provides for improved 
source protection, planning, and operation of those systems to the 
benefit of the consuming public.
    In response to the questions posed by the subcommittee, ASDWA 
polled its member States regarding the adequacy or capacity of their 
public water supplies. The responses received emphasized that each 
State's situation is unique.

Is there a water supply problem?
    Declared drought conditions exist in all or portions of 
approximately half of the States. States generally concurred that these 
conditions either do or will affect the supply of available drinking 
water. From ASDWA members' perspective, the primary cause of stressed 
water supplies is weather-related--principally a lack of rainfall or 
snowpack. Some States also reported stresses attributable to population 
growth; competition for use among agricultural, manufacturing, and 
environmental initiatives; and, in some areas, stress due to 
development, although this issue was much less significant than 
stresses caused by the weather.
    Most States have developed, or are developing, management systems 
to address the reliability of their water supply. These efforts usually 
involve coordination among a variety of State and local agencies and, 
as needed, further coordination with selected Federal agencies. 
Slightly more than half of State drinking water programs are housed in 
Departments of Environment or Natural Resources, generally the State 
agency responsible for water supply management. The remaining State 
programs fall under the purview of Departments of Health where water 
supply management is not part of the program=s mandate. This 
distinction has led to a variety of lead agencies with regard to 
primary responsibility for water quantity issues. However, State 
drinking water programs, regardless of their location, all contain 
initiatives directed toward source water assessment and delineation as 
part of their responsibilities under the 1996 Amendments to the Safe 
Drinking Water Act (SDWA).

What is the appropriate Federal role?
    The 1996 SDWA Amendments offered State drinking water programs 
several opportunities to respond with enhanced flexibility to Federal 
requirements in a manner that targeted specific State needs and 
recognized that States frequently know how best to manage their 
resources responsibly. Federal water supply management initiatives may 
benefit from a similar approach. Water supply management is, of 
necessity, very different east and west of the Mississippi River.
    In the East, water supplies are generally more plentiful. States 
recognize, however, that plentiful does not mean unlimited. Many States 
already have well-and long-established interagency working 
relationships primarily to address drought but also to look at broader 
water management issues such as protection against contamination and/or 
smart growth. Many States have developed water management and 
conservation plans to respond to immediate short-term concerns such as 
water outages as well as longer range coordinated mechanisms to ensure 
continued sufficient water supply.
    For example, Georgia is developing a State Water Plan and a State 
Drought Plan that includes regional drought management models and a 
statewide comprehensive water conservation plan. As well, Georgia is 
studying ways to reduce agricultural water use while still protecting 
the prosperity of farmers and agricultural communities. These 
initiatives call upon the combined State level expertise of the 
Department of Natural Resources through both the Pollution Prevention 
Division and the Environmental Protection Division, the Departments of 
Wildlife Resources and Community Affairs, the Georgia Emergency 
Management Agency, the Georgia Association of County Commissioners, and 
the Georgia Municipal Association. Federal participation is principally 
through the U.S. Army Corps of Engineers.
    In Tennessee, the State has enacted legislation that will require 
registration and permitting for all interbasin transfers of water. A 
special panel has been created to consider water supply policies for 
the State. Tennessee expects that water supply legislation to conduct 
an inventory of water availability will be introduced and considered 
during the next legislative session. To respond to drought and other 
water shortage situations, the Department of Environment and 
Conservation works in collaboration with the State offices for economic 
and community development, policy and planning, and municipal pollution 
control. At the Federal level, Tennessee works with the Tennessee 
Valley Authority, Corps of Engineers, and the Environmental Protection 
Agency.
    Vermont, in contrast, has taken a different approach. The State's 
policy is to encourage rather than mandate water conservation 
initiatives at the local level. Conservation is perceived as a locally 
managed issue. However, for a number of years, Vermont has taken a 
conservative approach toward allowing development of new public 
drinking water sources. This long range planning effort has been 
instrumental in reducing drought impacts for those systems. 
Additionally, the State requires that all community water systems 
develop a Source Protection Plan which includes a contingency plan to 
address system failures and outages.
    Other States such as Connecticut, Rhode Island, and Minnesota 
require that all public water systems serving, generally, a population 
of 1,000 or more develop water management plans as part of the 
permitting process. Although drinking water is regulated under the 
Department of Health in these three States, each program is directly 
involved in working with the Department responsible for water supply 
management to address drought and conservation initiatives.
    In the West, water supply management has a very different history 
and tradition. Because supplies are so limited, water use has been 
bound by a complex allocation scheme known as water rights. Much of the 
water supply in the Western United States is controlled by the U.S. 
Bureau of Reclamation through its oversight and management 
responsibilities for Federal dams and reservoirs. Additionally, the 
U.S. Fish and Wildlife Service plays a critical role in water supply 
allocation as it strives to provide sufficient water to support 
endangered marine and other species. The Corps of Engineers also play a 
significant role in its management and restoration of wetlands as well 
as its more traditional dredging activities.
    Western States face unique water supply management challenges due 
to these water rights issues that force irrigated agriculture, 
technology and other industries, fish and wildlife, and the consuming 
public into an ongoing struggle for severely limited supplies. The 
significant level of Federal involvement adds yet another layer to the 
mix. However, States have proved adequate to the challenge through 
water management and conservation plans designed to address the needs 
of their particular combinations of geography, population, and limited 
sources of supply.
    States in the West have worked diligently to find the appropriate 
balance that addresses the concerns of these competing interests. 
California, for example, has its longstanding State Water Project that 
addresses supply concerns between the northern and southern regions of 
the State. California also participates in a State/Federal water supply 
partnership and has designed several regional and individual efforts to 
increase supply through water reuse, water banking, and increased 
surface storage systems. Additionally, California requires that any 
developer of a project with more than 500 service connections must 
identify an appropriate water source before receiving approval to 
proceed.
    The State of Washington, too, is working diligently to resolve some 
of its supply issues through adoption of smart growth plans, increasing 
water reuse capabilities, and developing water management plans. The 
State is working to determine how best to integrate these efforts and 
how to incorporate additional fish protection requirements into a 
comprehensive management strategy. The State expects that its next 
legislative session will focus largely on water supply management 
issues for public water providers as well as consideration of issues 
such as utility responsibilities for environmental management, water 
use efficiency, and water system infrastructure funding.
    Arizona has had a comprehensive water resource management plan in 
place for more than 20 years. The plan requires State regulation of 
groundwater use to ensure that dependable water supplies are available 
for current and future use. The plan places conservation requirements 
on both municipal and agricultural water use and promotes renewable 
water supplies. The State's Department of Environmental Quality has 
modified its regulations relating to reuse of effluent to allow more 
reuse while maintaining necessary water quality standards; thereby 
conserving potable water sources for human consumption and domestic 
uses.
    Each of these Western States has designed a water management plan 
that addresses its unique needs--whether it be water transfers between 
northern and southern California; water management plans to coordinate 
competing uses in water-rich Seattle or high desert Spokane, 
Washington; or water conservation planning and management for the arid 
Arizona desert. Each has developed a methodology that incorporates 
collaboration between and among different State agencies as well as 
cooperation with a host of Federal agencies and inclusion of public 
input through stakeholder involvement.
    In the drinking water arena, each of these States has also 
developed a plan for source water assessment and protection. These 
initiatives will allow States to further coordinate their water supply 
management activities through identification of areas that may need 
increased protection from contamination; areas that should not be 
developed as part of a prevention approach to protection; and the 
ability of source water protection initiatives to assist in directing 
State determinations for appropriate smart growth and other land use 
decisions.
    The clear message from State drinking water programs is that water 
supply matters must be addressed primarily at the State and local 
level. Federal involvement with the States should be limited to a 
facilitative role in meeting the interest of the States.
What, if any, actions should Congress take?
    State drinking water programs are reluctant to provide legislative 
advice or direction on matters not typically under their purview. ASDWA 
can recommend continued congressional support for programs such as the 
source water protection initiatives found within the SDWA that carry 
many incentives for participation, few overarching regulatory mandates, 
and allow States to pursue compliance strategies tailored to their 
individual needs. One of the best methods of support for these flexible 
programs is increased funding for the Drinking Water State Revolving 
Loan Fund (DWSRF). The DWSRF allows Federal funding, coupled with a 20 
percent State match, to create a loan program that distributes much 
needed infrastructure improvement dollars to qualified applicants as 
well as offer drinking water utilities the means to work toward 
protecting their drinking water sources; identifying and removing 
potential sources of contamination; and establishing reasonable land 
use or smart growth strategies. Each of these initiatives demonstrates 
an approach to effective water supply management. All are possible due 
to the flexibilities offered under the DWSRF for source water 
protection.
    ASDWA also reiterates that each State is unique in its needs, 
strategies, and solutions. States are in the best position to manage 
and coordinate the multi-level efforts among Federal, State, and local 
perspectives. As well, States are best positioned to balance competing 
priorities among local communities, interest groups, and Federal 
agencies as they are the only entity to have direct responsibilities to 
each of the participating parties. Tensions are often exacerbated when 
longstanding State-local working agreements are overridden by Anew or 
revised Federal mandates that can Aundo compromises that took years to 
reach. Almost without exception, States have programs in place to 
address drought conditions as well as water management plans that 
represent years of effort to reach a delicate balance that fairly 
represents competing interests.
    History has taught us that without cooperation in water supply 
management efforts, the economic consequences will be dire. Direct 
Federal intervention is not the only, and frequently not the best, 
solution. States must be allowed to manage their own resources--they 
are the primary stewards--and are responsible to the public that they 
serve.
    ASDWA appreciates this opportunity to provide information to the 
Subcommittee. ASDWA believes that each State faces unique challenges in 
addressing the issues surrounding water supply management. States have 
developed coordinated efforts that incorporate local and Federal 
perspectives within the construct of identified State needs. The 
Federal role should be both facilitative and supportive of these 
ongoing initiatives. From a drinking water perspective, one of the best 
ways to accomplish this is for continued Federal support for programs 
such as the DWSRF that offers the incentives and financial wherewithal 
to address identified water supply issues.

                               __________
   Statement of Kenneth Frederick, Senior Fellow, Resources for the 
                               Future\1\

    Thank you Chairman Graham, Ranking Member Crapo, and members of the 
subcommittee for the opportunity to testify on the Nation's water 
supply issues. I am Kenneth Frederick, Senior Follow at Resources for 
the Future, a nonprofit, nonadvocacy research and educational 
organization specializing in problems of natural resources and the 
environment since 1952. The views I express today are my own, not those 
of RFF.
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    \1\ Resources for the Future, 1616 P St., NW, Washington, DC 20036 
(email: [email protected]).
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    The United States is relatively well endowed with water, with an 
average annual precipitation of nearly 30 inches throughout the 
conterminous 48 States and large quantities of water stored in surface 
and groundwater reservoirs. Despite water's apparent abundance and 
renewability, water adequacy has emerged as one of the Nation's primary 
resource issues. Freshwater is a scarce and often threatened resource 
throughout much of the United States, but particularly in the and West. 
Supplies are being depleted or degraded by unsustainable rates of 
groundwater use, contamination, and damage to aquatic ecosystems.
    Concerns about the availability of freshwater to meet the demands 
of a growing and increasingly affluent population while sustaining a 
healthy natural environment are based on several factors: (1) the 
importance of reliable supplies of high-quality water for human and 
environmental health and economic development; (2) uncertainties as to 
the availability of supplies stemming from the vicissitudes of the 
hydrologic cycle and the threat that greenhouse warming might alter the 
cycle; (3) the high costs of developing additional supplies; (4) the 
Vulnerability of the resource to contamination; and (5) the 
shortcomings of our institutions for allocating scare supplies in 
response to changing supply and demand conditions.
    My remarks will focus on the implications of greenhouse warming and 
the institutional shortcomings, I will leave the committee with several 
papers that provide a more extensive discussion of these and other 
factors affecting the Nation's water supplies.

             HYDROLOGIC IMPLICATIONS OF GREENHOUSE WARMING

    Greenhouse warming could affect the quantity, quality, timing, 
location, and reliability of water supplies, The effects on water 
supplies and water management systems are expected to be among the most 
important impacts of global warming. But understanding the linkages 
between emissions of greenhouse gases and sulfur dioxide (which has a 
cooling effect) and the climate, and then determining how climate 
change would affect water resources at geographic scales relevant for 
water planning and management arc daunting tasks. Contrasting 
projections of runoff (that is, our renewable supplies) based on the 
two principal general circulation models used in the recent national 
assessment of the impacts of climate variability and change on the 
United States illustrate the uncertainties. Estimates based on the 
Hadley climate model indicate flooding could increase in much of the 
country, while those based on the Canadian model indicate increased 
water scarcity would pervade much of the country.
    While the wide range of projections from the different climate 
models makes it difficult to draw Conclusions at the river basin and 
watershed levels, some general conclusions about the likely impacts of 
greenhouse warming on water supplies do emerge.
     Precipitation is likely to increase in higher latitudes, 
particularly in winter.
     Higher evapotranspiration rates may lead to decreases in 
runoff, even in areas with increased precipitation.
     More intense precipitation days are likely in some 
regions, which could contribute to all increase in flood frequency.
    1 The frequency and severity of droughts could increase in 
some areas as a result of a decrease in total rainfall, more frequent 
dry spells, and greater evapotrans-
piration.
     Higher temperatures would shift the relative amounts of 
snow and rain along with the timing of runoff in mountainous areas. 
This shift could increase the likelihood of flooding early in the year 
and reduce the availability of water during periods of high demand.
     Higher temperatures and reduced flow could increase water 
quality problems in some basins.
     The quality and quantity of freshwater in coastal areas 
might be adversely affected by higher sea levels and increased storm 
surges that push saltwater further inland in rivers, deltas, and 
coastal aquifers.

                           WATER INSTITUTIONS

    There is cause for concern over the adequacy of our water supplies. 
We have limited control over the resource, most opportunities for 
increasing supplies are financially and environmentally costly, current 
uses are depleting or contaminating some valued supplies, and the 
prospect of climate change introduces new uncertainties. Meanwhile, 
demands for freshwater are growing with population and incomes. And 
many of the institutions that provide the opportunities and incentives 
to use, conserve, or protect the resource continue to be rooted in an 
era when the resource was not considered to be scarce.
    On the other hand, there is reason for optimism as to the long-term 
adequacy of water supplies. The institutions that influence how 
supplies are managed and allocated among competing users and the 
effectiveness and costs of efforts to protect aquatic environments and 
drinking water quality will determine the magnitude and nature of 
future water costs.
    State institutions are primarily responsible for allocating waters 
within their borders. But water flows do not conform to State 
boundaries. As the competition for water increases, all users within a 
hydrologic unit become increasingly interdependent. Consequently, 
Federal input is needed to promote water use efficiency and protect the 
interests of downstream States. The Federal Government currently 
manages much of the West's SUIT, waters, Supplies water to about one 
quarter of irrigated lands there, and is the source and enforcer of 
environmental legislation affecting water use, the trustee for Indian 
water rights, and the holder of unquantified rights for water use on 
Federal lands. Carrying out these responsibilities to better meet the 
Nation's future water needs will be a major challenge. Some 
recommendations follow.
    Water marketing, the voluntary transfer of water rights to new uses 
and users, has great potential to increase water-use efficiency, The 
Federal Government has taken a few steps to facilitate water marketing. 
The Department of Interior adopted a policy of facilitating transfers 
involving Federal facilities and established a framework for approving 
and administering interstate agreements for water transfers among the 
three Lower Colorado Basin States. The Central Valley Project 
Improvement Act of 1992 authorized the transfer of federally supplied 
water outside the project service area. However, these measures have 
had little or no impact on water use to date. A broader, more active 
Federal role is needed.
    Uncertainties surrounding unquantified Indian and federally 
reserved water rights hinder the assignment of transferable water 
rights. Providing the tribes with rights that could be sold off the 
reservations would foster water marketing as well as tribal welfare. 
Temporary and permanent transfers of federally supplied water could be 
promoted to facilitate transfers from low-value, inefficient 
agricultural uses to domestic and industrial uses. Providing irrigators 
an opportunity to sell unused supplies would promote transfers from 
low-to high-value uses and would provide irrigators incentives to 
conserve. With the introduction of transferable water rights, users 
would value water in terms of its opportunity cost--the value they 
could get by selling water--rather than the subsidized price they pay 
for it.
    The prospect of global climate change provides added reason for 
promoting water transfers and making the operation of Federal dams and 
reservoirs more responsive to changing conditions. The magnitude, 
timing, and even the direction of climate-induced changes in a region's 
water supplies are uncertain. The costs of building dams, reservoirs, 
and other infrastructure in anticipation of these uncertain changes are 
high. But reexamining operating rules, relaxing constraints on water 
use, and developing institutions to encourage voluntary exchanges of 
water through markets would make the system more efficient and better 
able to adapt to whatever the future might bring.
    The United States has made impressive gains over the last two 
decades in restoring and protecting its water resources. But resistance 
is growing to the enormous investments that continue to be made in 
treating industrial and municipal wastes because of high costs and 
diminishing returns. More cost-effective approaches to water-quality 
goals are needed. These might include effluent fees that provide 
incentives to develop and adopt least-cost technologies, and tradable 
permits to pollute that establish an allowable quantity of pollution in 
a watershed and provide incentives to achieve this level at the lowest 
cost. Nonpoint Source pollutants--such as runoff from farms, urban 
areas, and constructionsites, and seepage from landfills and septic 
systems--are now the principal sources of pollutants reaching the 
Nation's waters. Since these pollutants lack specific points of 
discharge where they can be collected and treated, watershed management 
with particular emphasis on the use of riparian or riverside lands must 
be employed to achieve significant further improvements in the quality 
of the Nation's waters.
    The interdependencies among water users and the interchangeability 
of ground and Surface Supplies are all too often ignored in management 
decisions because natural hydrologic regions are split into multiple 
political and administrative units. Integrated management of existing 
supplies and infrastructure, ideally at the river basin level but also 
within smaller watersheds, could be a cost-effective means of 
increasing reliable water supplies and resolving water conflicts in 
many regions. Perhaps the most important measure that Congress could 
take to meet the Nation's long-term water needs would be to restore the 
Water Resources Council or a similar institution. Such an institution 
is needed to evaluate water investment and management decisions 
objectively from the perspective of their impacts on larger watersheds, 
to assess the third-party impacts of interstate water transfers, to 
counter the often conflicting objectives of differing Federal agencies, 
and to reduce (or at least expose) the inefficiencies that result from 
political logrolling and agency aggrandizement.
    Thank you for your attention. I would be pleased to address any 
questions the committee might have.

                               __________
     Statement of Leland R. Mink, Director, Idaho Water Resources 
                           Research Institute

    Mr. Chairman: My name is Leland Mink. I am Director of the Idaho 
Water Resources Research Institute at the University of Idaho in 
Moscow, Idaho. In addition, I am past president of the National 
Institutes for Water Resources (NIWR) and a member of the Board of that 
organization. NIWR represents the State water resources research 
institutes, which are partnerships among State universities; Federal, 
State, and local governments; businesses and industries; and non-
governmental organizations aimed at solving problems of water supply 
and water quality at local, State, regional, and national levels.
    By way of background, the Water Resources Research Act of 1964 
which authorized establishment of a water resources research and 
technology institute or center which tend to be at the land-grand 
university in each State. These institutes were charged with (1) 
arranging for competent research that addresses water problems or 
expands understanding of water and water-related phenomena, (2) aiding 
the entry of new research scientists into the water resources fields, 
(3) helping to train future water scientists and engineers, and (4) 
getting the results of sponsored research to water managers and the 
public. The institute in each State is responsible for working with 
researchers at other universities within their State.
    Congress passed Public Law 106-374 last year. The legislation 
reauthorized the Water Resources Research Act through fiscal year 2005. 
The legislation is under the jurisdiction of the Committee on 
Environment and Public Works. The principal sponsor of last year's 
reauthorization was Senator Crapo.
    The State Water Resources Research Institute Program is under the 
general guidance of the Secretary of Interior and is administered 
through the U.S. Geological Survey.
    Over the past 40 or more years, several reports have been submitted 
to Congress attempting to address the questions of ``Do we have enough 
water?'' and ``Are we running out of water?'' Interestingly, the Senate 
Select Committee on National Water Resources, the so-called Kerr 
Committee, provided one of the earlier reports to Congress in 1961. 
(See Senate Report No. 29, 87th Congress, 1st Session).
    Two major water assessments were conducted in 1965 and 1978 by the 
Water Resources Council (See U.S. Water Research Council, 1968, The 
Nation's Water Resources: The First National Assessment of the Water 
Resources Council, and U.S. Water Research Council, 1978, The National 
Water Resource Second National Assessment). Just this year, the 
National Research Council of the National Academy of Sciences issued a 
brief report on the research and information needs for assessing water 
availability and use. (See Envisioning the Agenda for Water Resources 
Research in the Twenty-First Century, National Research Council 2001).
    All of these studies consistently indicate an inadequate water 
supply to meet future needs. They have suggested ways to potentially 
develop more resources. Examples include wastewater re-use, 
desalinization, water conservation, etc. The studies also indicated a 
need for improved hydrologic data to develop management plans and 
better able to make management decisions. This all leads to developing 
the information and techniques to make better forecasts, especially as 
related to extreme conditions such as drought periods and flood 
frequency.
    In Idaho, as in many of the Western States, water management has 
changed over the last 30 years, especially with the additional 
priorities. Early management strategy was to create more storage so 
water could be made available for basic needs of hydropower generation, 
food production and domestic consumption and use. During the past 30 
years a shift has occurred to add consideration of environmental 
concerns as a major need. Primary examples include minimum stream flows 
for aquatic species, which are important to salmon and other fisheries 
in our region, and recreation in streams and rivers which has become an 
important consideration driving managing streams and reservoirs which 
are primarily used for traditional hydropower and irrigation purposes. 
As a more diverse population growth occurs in the Western States, new 
priorities surface for the available water. As a result, the perception 
(and often reality) is there is not enough water to satisfy the 
existing and projected demands. The major issue facing water managers 
in the 21st century will be inadequate and uncertain water supplies.
    Demands on the Nation's water resources are growing with increased 
population and industrial expansion. Since the supply is unchanged 
(with exception of climate change impacts) it indicates that we will 
face increased challenges in meeting growing demands. The degree of the 
problem, or challenge, is certainly associated with different regions 
of the country. Initially, the challenges are addressed by re-
allocation of water among competing demands, with higher value demands 
(e.g., potable use) being supplied by discontinuing lower value uses 
such as irrigation. This re-allocation has social, economic and 
hydrologic effects and should be thoroughly and carefully evaluated. In 
some portions of the country there are few alternatives for 
reallocation or alternative supply. It is certainly important for the 
Federal Government to understand that demand is exceeding supply. 
Likewise, it must work with States and local communities to develop 
alternatives to meet existing and projected water demands.
    Taking the fact that past national water supply studies have been 
rather quantitative and describe large basins, the local and State 
water managers feel these projections have been of little use. Past 
national water assessments have been used primarily by Federal agencies 
and by technical people, such as hydrologists and engineers, but they 
have only been used to a limited extent by biologists and social 
scientists (See Osborne & Shabman, The Use of Water Resource 
Information: the Second National Water Assessment, 1988).
    Many water managers in the West feel water information and research 
certainly needs to be continued and there is a Federal role in 
supporting this effort. Information needs to be targeted to the users 
not only at the Federal level but also at the State and regional 
levels. There is also a strong feeling in the West that water 
management decisions are best made at these levels. Water information 
related to water quantity and water quality should be designed to help 
meet these State and regional needs. As cited in Osborne & Shabman in 
1988 and still holds true today ``use of the assessment means that its 
costs are justified by benefits received to the users.'' These benefits 
should extend beyond the needs of Federal agencies.
    Congress should take the role of first evaluating the potential for 
water supply crises throughout the Nation and then provide funding to 
critical areas for further analysis and evaluation of alternatives. 
Examples of items which Congress should consider to facilitate an 
efficient and effective role include:
     Develop and improve new and innovative supply enhancing 
technology
     Assess safety of waste water reuse
     Develop innovative technologies to prevent pollution
     Increase ability to forecast water availability and future 
impacts such as climate change and land use changes
     Encourage and support regional and State water planning
     Support hydrologic data collection efforts at the Federal 
level in cooperation with State and regional agencies and groups
     Encourage and support regional characterization studies 
both in high population and rural areas
    In conclusion, I know that my fellow water resources research 
institute directors commend Congress for the recommendation contained 
in the fiscal year 2002 Interior Appropriations Act. The Act directs 
the USGS to undertake a report describing the scope and magnitude of 
efforts needed to provide periodic assessments of the status and trends 
in the availability and use of freshwater resources. In addition, we 
also support the congressional recommendation for a National Academy of 
Sciences study to examine Federal and non-Federal water resources 
research funding and the allocation of resources currently deployed in 
support of water research programs. This seems to be a logical way to 
develop data to understand whether we, as a Nation, are making an 
adequate investment in water resources research.
    The following are several example of water supply research 
conducted in some of the State water resources research institutes that 
may be of interest to members of the Subcommittee:
     To address the problems of aquifer decline and decreased 
river flow, the Idaho Department of Water Resources (IDWR) is studying 
possible scenarios for managing the Snake River Plain Aquifer and is 
getting modeling help from the Idaho Water Resources Research 
Institute. Dr. Gary Johnson and Ms. Donna Cosgrove have developed 
numeric functions that describe the relationship between groundwater 
use and river depletion for each cell of a groundwater flow model of 
the Snake River Plain Aquifer. They have developed a spreadsheet that 
water managers can use to see how reduction of groundwater pumping at 
specific locations will affect the springs and the river. The State has 
adopted these tools for aquifer management planning and plans to use 
them to develop State water management regulations.
     In Nevada, a statewide reconnaissance of water resources 
was undertaken during the 1960's and early 1970's. The results continue 
to provide the basic information for planning and development decisions 
faced by resource managers at both local and State levels despite their 
design as reconnaissance-level efforts. Technological development and 
introduction of new investigative tools now provide the opportunity for 
more accurate assessment of available resources. Application of these 
tools has often indicated that significantly more water is available 
than previously believed in central Nevada and in southern Nevada. The 
Nevada Water Resources Center has played a key role in this effort.
     In arrid regions of the United States, water conservation 
and reuse are issues that receive a great deal of public attention. The 
search for ways to responsibly use and reuse water is vital to the 
sustainability of the water supply and thus the future of these areas. 
Wastewater treatment and reuse is one of the best water conservation 
options available to communities located in arid areas. Many large-
scale reuse efforts have been developed, such as the watering of golf 
courses with treated municipal effluent or the use of effluent for 
groundwater recharge. But the potential for wastewater reuse is not 
limited to large-scale projects supplied by community wastewater 
treatment facilities. It is also available to individual homeowners. 
Graywater recycling offers a way in which people can save and reuse the 
wastewater generated in their own home.
    To add to the understanding of and clarify the issues surrounding 
the safe and effective use of household graywater, in 1998 the Arizona 
Water Resources Research Center began an in-depth study of residential 
graywater reuse in the greater Tucson area. The study, supported by the 
Arizona Department of Water Resources, the Arizona Department of 
Environmental Quality, and the Pima County Department of Environmental 
Quality, looked at two separate aspects of graywater usage in the area: 
(1) the number of households currently using some portion of the 
graywater they generate and (2) the water quality of the residential 
graywater being generated and how that water quality affects the soil 
that is irrigated with that water.
     Researchers from the Alabama, Florida, and Georgia water 
resources research institutes came together to engaged in an 18-month 
interstate interdisciplinary research effort dealing with the 
allocation of water resources in both national and international 
settings. The findings have been used by the three State negotiating 
team to arrive at an equitable allocation formula for water shared in 
two basins.
     The Vermont Water and Resources and Lake Studies Center 
supporter, a researcher who has illustrated the use of least-cost 
optimization design to address the important problem of groundwater-
pumping, induced salt-water intrusion in coastal aquifers. This has 
resulted in remediation designs which has resulted in remediation 
designs resulting in 20 percent lower cost than those generated by 
existing technology. Savings resulting from this work should be 
substantial in cases requiring groundwater remediation.
    Thank you.
                               __________
 Joint Statement of Association of State Drinking Water Administrators 
 (ASDWA), Association of State and Interstate Water Pollution Control 
   Administrators (ASIWPCA), and Council of Infrastructure Financing 
                           Authorities (CIFA)

                               BACKGROUND

    The Clean Water and Safe Drinking Water Acts established their 
respective State Revolving Fund (SRF) programs as the primary financing 
mechanisms for water quality programs. To meet the challenge of 
financing the Nation's clean and safe water needs, the States are 
committed to strengthening and enhancing the SRF funding mechanisms. 
U.S. EPA's Needs Assessment Surveys for infrastructure and other water 
quality enhancement efforts (e.g., non-point source, source water and 
watershed protection measures), support annual appropriation needs of 
at least $3 billion for the Clean Water Programs and over $7.5 billion 
to ensure the provision of safe drinking water. In addition, water 
pollution control and water purification technology research and 
development lag behind water programs' management needs.
    State administrators agree that the State Revolving Loan Fund is 
the appropriate funding vehicle for the construction of drinking water 
and wastewater treatment and other water pollution control measures. 
The Clean Water and Drinking Water SRF programs have matured since 
their creation in 1987 and 1996, respectively, and the success of these 
unique programs has been clearly demonstrated. As of September 2001 the 
Clean Water SRF has provided nearly $34 billion--funding over 10,000 
loans, while the Drinking Water SRF has provided $3.2 billion in loans 
for over 1,500 projects.
    The SRF was created, in the first instance, to replace the 
Construction Grants program for municipal wastewater treatment 
facilities, with the goal of improving on the shortcomings of this 
grant-based funding approach. Congress, the Administration and the 
States were aware that the mechanism for providing grants to localities 
often: (1) was inefficient; (2) did not assure commitment to long term 
operations and maintenance; (3) was time consuming; (4) did not create 
a continuing revenue stream for future infrastructure needs; and (5) 
tended to inhibit timely compliance with State and Federal 
requirements.
    In response, Congress, the Administration, and the States worked 
together, in 1986-1987, to create the Clean Water SRF to assure a 
funding source for municipalities in perpetuity. Based on its 
examination of both the loan and grant programs, Congress again chose 
in 1996 to establish an SRF program under the Safe Drinking Water Act 
as the principal mechanism for financing for both public-and privately 
owned water systems.

                            RECOMMENDATIONS

    The three State organizations listed above support the passage of 
legislation addressing clean and safe drinking water infrastructure 
needs. Such legislation should provide additional funds to the SRFs for 
direct financing of pollution control measures, safe drinking water 
infrastructure and State implementation needs, and help support the 
necessary research and development to create the new control technology 
for the 21st century. States request that these funding commitments be 
made on a long-term basis for water and wastewater infrastructure, 
source water protection, non-point source, and other water protection 
and control mechanisms.
    To manage these programs in the most efficient manner, ASDWA, 
ASIWPCA and CIFA agree that Congress should:
     Provide the States with the ability to tailor financial 
assistance to accommodate the needs of small and disadvantaged 
communities. Congress should include the ability to extend loan terms 
to 30 years and to forgive a portion of loan principal repayment under 
the Clean Water Act and should limit any necessary targeted funding to 
exceptional and or unique circumstances.
     Delegate hardship determinations to States based on State 
criteria such as affordability as measured by local fiscal capacity. 
This is important for local governments because with a SRF loan subsidy 
for the entire project cost, a community can realize the same financial 
benefit as they would receive under a partial grant, without having to 
borrow the grant match at high interest rates. The small and hardship 
communities will therefore benefit financially under the SRF.
     Enable State programs to provide financing assistance and 
allow States to direct SRF funds to the greatest area of drinking water 
and pollution control needs, including nonpoint source, source water 
protection, TMDL implementation, animal waste control, land purchases, 
other watershed management projects, transmission and distribution 
projects, treatment, and storage for water supplies.
     Allow States to transfer funds between Clean Water and 
Safe Drinking Water SRFs, in amounts and at times as that best suit the 
water infrastructure financing needs in their States.
     Allow the States to use, for administrative purposes, 
whichever is greater of the following: 4-6 percent of the total 
capitalization grant; $400,000 per year, or \1/2\ of 1 percent of the 
current value of the SRF.
     Authorize the creation of a State-led forum comprised of 
the undersigned organizations, and representatives from the water and 
wastewater community and EPA to eliminate unnecessary and burdensome 
Federal requirements.
    States support the strengthening of existing SRF programs because 
history has demonstrated that grant-based programs often:
     Undermine the existing SRF programs in each State because 
communities will seek grants rather than loans;
     Necessitate costly and wasteful duplication of 
administrative structures that are already available in the SRFs;
     Result in confusion and burdensome red-tape for local 
communities who would have to choose among more funding programs to 
accomplish the same infrastructure construction purposes;
     Waste financial resources that could otherwise be used to 
construct more facilities to benefit local communities and revolve in 
perpetuity;
     Undermine State compliance efforts as systems delay 
implementation until grants become available; and
     Inhibit State efforts to ensure long-term facility 
financial, managerial, and technical capacity.

                                SUMMARY

    The undersigned organizations have worked together to develop a 
joint position because it has, over the years, become clear that: (1) 
the SRF is the appropriate mechanism for the design and construction of 
water and waster water treatment facilities; (2) the SRF can be 
enhanced to accommodate emerging needs of communities; and (3) the SRF 
needs to be funded at increased levels to accommodate the new 
requirements in the Clean Water and Drinking Water programs, as imposed 
by the Congress and the USEPA.

                               __________
    The Loan Arranger--Grants v. Loans: What's the Best Way to Meet 
              Michigan's Wastewater Infrastructure Needs?

    It has been said that competition brings out the best in people. 
When it comes to serving as a public official in municipal government, 
whether you are elected or appointed, competition for your time and 
energy is fierce!
    Some issues compete for an even scarcer commodity--your community's 
money. I would venture to guess that for most of you, one of the 
toughest of those competitors, an issue that takes an inordinate amount 
of your time and effort, and stands to demand a significant monetary 
investment, is your community's wastewater system.
    There are some good explanations why wastewater collection and 
treatment is garnering so much attention lately. The implementation of 
Michigan's Combined Sewer Overflow Control Program is well underway. 
Considerable efforts are also being expended to address sanitary sewer 
overflow problems. As these programs move forward, it is also becoming 
increasingly evident that huge amounts of money will be needed just to 
adequately maintain the extensive and aging wastewater infrastructure 
that exists in Michigan. All three of these demands are being felt 
against a backdrop of a heightened awareness of the importance of 
protecting Michigan's water resources and the public health of its 
citizens.

   JUST HOW MUCH MONEY WILL HAVE TO BE INVESTED TO MEET THESE NEEDS?

    The 1996 Federal Clean Water Needs Survey estimated Michigan 
communities would need to spend $4.9 billion over 20 years on their 
wastewater systems. Managing the Cost of Clean Water: An Assessment of 
Michigan's Sewer Infrastructure Needs, published in 2000 by Clean Water 
Michigan; estimates these costs between $2.7 billion and $5.8 billion: 
A report recently released by the Southeast Michigan Council of 
Governments (SEMCOG) estimates that over a 30-year period, needs in 
just the seven-county SEMCOG area will range between $5.7 billion and 
$10.1 billion to rehabilitate and upgrade existing wastewater systems. 
None of these estimates include the ongoing cost of basic operation and 
maintenance.

     WHERE WILL THE MONEY COME FROM TO MEET THESE STAGGERING NEEDS?

    Since 1989 local officials have usually sought financing for 
wastewater system improvements from the following sources:
     open market bonds which, like any borrowing, are backed by 
user fees, special assessments, and/or tax revenues;
     below-market-rate loan financing from the State Revolving 
Fund;
     grant and loan assistance from other Federal programs such 
as Rural Development; and
     special line-item appropriations from the Federal 
Government in the form of grants that nearly always require a 
substantial local match.

  HOW CAN THE STATE AND FEDERAL GOVERNMENT BEST ASSIST LOCAL UNITS OF 
  GOVERNMENT IN FINANCING WASTEWATER SYSTEM IMPROVEMENTS AND CONTINUE 
        MICHIGAN'S IMPRESSIVE TREND OF IMPROVING WATER QUALITY?

    That is the most important question. It is generally accepted that 
the most effective financial assistance program is one that maximizes 
the number of communities helped, and provides enough financial 
assistance to make local projects ``affordable'' to the ratepayers and 
citizens who will have to foot the bill.
    State and Federal agencies have tried a number of wastewater 
financial assistance approaches over the years, and after careful 
consideration of the pros and cons of these, I strongly believe the 
State Revolving Fund option is superior to the grant approach. There 
are a number of reasons for this:
    1. The SRF has more than 10 years of proven track record and is a 
well-established and functioning program. Any ``new'' grant program 
will require the creation of yet another level of bureaucratic 
structure/authority.
    2. 1State Revolving Fund assistance is streamlined, with a minimum 
of Federal requirements. There is a real cost to the community to meet 
the various Federal crosscutting requirements that accompany any 
Federal grant.
    3. SRF assistance is substantial, and makes a real difference in 
the cost of a project. Remember, a low-interest SRF loan is for the 
whole project, versus a grant, which funds only a portion of the 
project The balance of the grant-funded project must be financed at 
market rates. As a result, an SRF loan has a high ``grant 
equivalency.'' For example, a 2 percent low-interest loan from the SRF, 
at a time when market rates are at 6 percent, is equivalent to a 30 
percent grant.
    4. The SRF dollar can be ``stretched'' to provide more assistance 
to more communities, sooner, than other assistance approaches such as 
grants. For example, in the last 13 years, Michigan has provided $1.5 
billion in low-interest loans, from only $927 million in Federal and 
State match moneys.
    5. The SRF does in fact ``revolve,'' assuring continued financial 
assistance well into the future, unlike grant ``funding mechanisms, 
which provide assistance only once.
    6. The SRF can address affordability concerns by providing special, 
lower-interest loans to hardship communities. With ample program 
capitalization, Michigan could dramatically reduce the SRF interest 
rates for all communities.
    7. The SRF provides critical flexibility to the States to ensure 

THAT SPECIFIC STATE NEEDS ARE ADDRESSED IN THE MOST EFFICIENT FASHION.
                       WHERE DO WE GO FROM HERE?

    Clearly, Federal and State financial assistance to communities to 
address wastewater infrastructure needs must increase if we are going 
to adequately address the water pollution and public health concerns of 
our communities. The key to successfully meeting communities' needs in 
Michigan, as well as in other States, is to champion a higher level of 
Federal capitalization of the SRF, with States assuring the 
accompanying match. Governor Engler has pledged to assure State match 
dollars will be available to meet every available Federal SRF dollar.
    However,Federal funding has leveled off. From fiscal years 1998 
through 2001, the annual Federal appropriation has been $1.35 billion: 
The last administration attempted to reduce that amount by $500 million 
in fiscal year 2001. I worked closely with Governor Engler and 
Michigan's congressional delegation to convince Congress to restore 
that $500 million and assure the full $1.3 billion was available to 
communities for wastewater needs.
    Continued Federal funding of the SRF at this level would allow 
Michigan to award about $225 million/year in loan commitments. 
Unfortunately, the ``demand'' for SRF assistance far exceeds that 
amount. This gap will only continue to grow as our systems age and new 
collection/treatment challenges surface. Also, there is considerable 
discussion in Washington now to direct limited Federal funds toward 
grants instead of the SRF. If this occurs, even fewer needs will be 
met.
    Although we have taken great strides in Michigan in recent years, 
the task of meeting our needs in the area of wastewater infrastructure 
remains a daunting one. Reauthorization of Title VI of the Clean Water 
Act would provide the needed budget focus for the SRF, and increased 
Federal appropriations would send the right message that our wastewater 
infrastructure and our Nation's water resources continue to be a 
national priority. A fully funded, robust SRF is essential if Michigan 
communities are going to be able to afford to make the critically 
needed improvements to our wastewater infrastructure. I look forward to 
working closely with members of the Michigan Municipal League in making 
this a reality.

                  FUNDED PROJECTS FOR FISCAL YEAR 2001

    Another FiscaI Year has come to a close, with $255,615,000 awarded 
to ten wastewater projects from the State Revolving Fund (SRF), and 
$26,710,000 awarded to ten projects from the Drinking Water Revolving 
Fund (DWRF). To date, the SRF has assisted 184 projects with loans 
totaling $1.53 billion. In the DWRF to date, $158.9 million has been 
awarded to 62 projects.
    Following are the communities receiving loans n Fiscal Year 2001, 
with a brief description o the project and the loan amounts:


------------------------------------------------------------------------

------------------------------------------------------------------------
SRF Projects:
  Intra Co. Drain. Board for Lake   Relief sewers,           $20,670,000
   St. Clair, Macomb Co,.            rehab, sewer
                                     separation, RTB
                                     upgrades, Segment
                                     1A.
  Lansing.........................  CSO sewer                 10,860,000
                                     separation, Subarea
                                     013 South, Segment
                                     13.
  Port Huron......................  Sewer separation,          8,120,000
                                     Segment 4.
  Bay City........................  Wastewater treatment      42,435,000
                                     plant and retention
                                     treatment basin
                                     upgrade.
  Three Oaks......................  Sewer replacement          2,155,000
                                     and rehab.
  Detroit.........................  Connor Creek              82,200,000
                                     retention treatment
                                     basin (partial).
  Port Huron......................  CSO sewer separation         640,000
                                     Item 34.
  Trenton.........................  Replace sewers to          1,005,000
                                     correct SSOs,
                                     Segment 3.
  Monroe County, Carleton.........  Upgrade and expand         5,330,000
                                     the wastewater
                                     treatment plant
                                     (refinance).
  George W. Kuhn Drain. Dist......  12 Towns Retention/       82,200,000
                                     Treatment Basin
                                     Improvements,
                                     Segment 2.

DWRF Projects:
  Chelsea.........................  New production well,       6,110,000
                                     transmission main,
                                     softening
                                     treatment, Segment
                                     1.
  Lake Linden.....................  New well, ground           1,200,000
                                     storage, replace
                                     mains.
  Sunfield........................  Elevated storage             880,000
                                     tank, looping,
                                     remove hydro tank,
                                     repair.
  Hudson..........................  Replace pumps/             1,770,000
                                     motors, new iron
                                     removal facility.
  Milford.........................  Filter media               1,905,000
                                     replacement,
                                     upgrade/replace
                                     storage tank, Phase
                                     1.
  Sault Ste. Marie................  Replace, mains,            1,800,000
                                     looping, Segment E
                                     (partial).
  Flint...........................  Upgrade and expand         9,480,000
                                     the water treatment
                                     plant, Segment 3.
  Blissfield......................  Install nitrate              750,000
                                     removal equipment.
  Muir............................  New wells, elevated        1,850,000
                                     storage tank,
                                     replace mains
                                     (partial).
  Nashville.......................  New and replacement          965,000
                                     mains, WTP
                                     improvements,
                                     standby generator.
------------------------------------------------------------------------

                         FISCAL YEAR 2002 FUNDS

    We are still waiting for the Federal appropriation for the State 
Revolving Fund and Drinking Water Revolving Fund, before we can 
establish the Fiscal Year 2002 Fundable Range. As soon as we know how 
much money we will have available, we will post the information on our 
Section web site. The web address is www.deq.state.mi.us/ead/mfsect/

                           DAVIS BACON UPDATE

    In the Winter 2001 edition of The Loan Arranger, notification was 
provided that the prevailing wage requirements of the Davis Bacon Act 
would be reimposed in the State Revolving Fund. The reimposition was to 
be implemented under provisions of a January 17, 2001 Settlement 
Agreement between the EPA and the Building and Construction Trades 
Department of the AFL-CIO.
    It now appears that Davis Bacon requirements will NOT apply. We 
were informed in June that the EPA has reconsidered its decision and 
will not implement any terms of the settlement agreement. Although this 
may foster an extended legal battle between the EPA and th AFL-CIO, SRF 
recipients will not be required to pay prevailing wage rates. EPA's 
reversal is expected to be published in the Federal Register shortly.

       THE TIME IS NOW TO PREPARE FOR A LOAN IN FISCAL YEAR 2003

    The following Reverse Time Line is a valuable tool to show the 
basic sequencing of project plan preparation and provide a sense of the 
time needed to complete the process. The dates specified in the Time 
Line are flexible with the exception of the Project Plan Submittal 
Date, and are intended to assist you in the planning process.


------------------------------------------------------------------------
                                         DWRF                 SRF
------------------------------------------------------------------------
The Project Plan must be
 received by the Environmental
 Assistance Division, Michigan
 Department of Environmental
 Quality:
    Project Plan Submittal Date.  May 1.............  July 1
If the council meets on the
 first and third Thursdays of
 each month:
    Resolution of Project Plan    On or about April   On or about June
     Adoption.                     15.                 15
The final Project Plan must be
 available prior to the council
 meeting:
    Project Plan completed and    On or about April   On or about June
     available for public          14.                 14
     display.
To allow at least 1 week to
 incorporate public comments:
    Public Hearing held on the    On or about April   On or about June 8
     draft Project Plan.           8.
To provide the mandatory 30-day
 notice for the Public Hearing:
    Public Hearing notice on the  On or about March   on or about May 9
     draft project plan is         9.
     published.
To provide at least 1 week for
 incorporating MDEQ comments on
 the draft Project Plan:
    Draft Project Plan is         On or about March   On or about May 1
     completed.                    1.
To provide MDEQ staff with an
 opportunity to review and
 comment on the draft plan:
    Submit draft Project Plan to  On or about         On or about April
     the MDEQ.                     February 1.         1
Assume minimum\1\ of 3 months to
 complete the draft Project
 Plan:
    Council authorizes the        On or about         On or about
     engineering work.             November 1.         January 1
To ensure you are on the right
 track and to facilitate
 approval of the Project Plan:
    Preplanning conference with   On or about         On or about
     the community/consultant      October 1.          December 1
     and the MDEQ.
To initiate the Project Planning
 process:
    Council/Board decision to     On or about         On or about
     seek DWRF or SRF assistance.  September 15.       November 15
------------------------------------------------------------------------
\1\ The time necessary to complete a project plan varies greatly with
  the scope of the problem and size of the system being studied. Work
  may include research and some preliminary design; pilot testing;
  environmental agency contacts; analyses/evaluations; historical
  information; surveys; public involvement; rate structure development;
  mapping; etc.

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