[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



 
       BUREAU OF RECLAMATION'S PROPOSED FISCAL YEAR 2004 BUDGET

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

                           OVERSIGHT HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                        Wednesday, March 5, 2003

                               __________

                            Serial No. 108-2

                               __________

           Printed for the use of the Committee on Resources



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                         COMMITTEE ON RESOURCES

                 RICHARD W. POMBO, California, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska                    Dale E. Kildee, Michigan
W.J. ``Billy'' Tauzin, Louisiana     Eni F.H. Faleomavaega, American 
Jim Saxton, New Jersey                   Samoa
Elton Gallegly, California           Neil Abercrombie, Hawaii
John J. Duncan, Jr., Tennessee       Solomon P. Ortiz, Texas
Wayne T. Gilchrest, Maryland         Frank Pallone, Jr., New Jersey
Ken Calvert, California              Calvin M. Dooley, California
Scott McInnis, Colorado              Donna M. Christensen, Virgin 
Barbara Cubin, Wyoming                   Islands
George Radanovich, California        Ron Kind, Wisconsin
Walter B. Jones, Jr., North          Jay Inslee, Washington
    Carolina                         Grace F. Napolitano, California
Chris Cannon, Utah                   Tom Udall, New Mexico
John E. Peterson, Pennsylvania       Mark Udall, Colorado
Jim Gibbons, Nevada,                 Anibal Acevedo-Vila, Puerto Rico
  Vice Chairman                      Brad Carson, Oklahoma
Mark E. Souder, Indiana              Raul M. Grijalva, Arizona
Greg Walden, Oregon                  Dennis A. Cardoza, California
Thomas G. Tancredo, Colorado         Madeleine Z. Bordallo, Guam
J.D. Hayworth, Arizona               George Miller, California
Tom Osborne, Nebraska                Edward J. Markey, Massachusetts
Jeff Flake, Arizona                  Ruben Hinojosa, Texas
Dennis R. Rehberg, Montana           Ciro D. Rodriguez, Texas
Rick Renzi, Arizona                  Joe Baca, California
Tom Cole, Oklahoma                   Betty McCollum, Minnesota
Stevan Pearce, New Mexico
Rob Bishop, Utah
Devin Nunes, California
VACANCY

                     Steven J. Ding, Chief of Staff
                      Lisa Pittman, Chief Counsel
                    Michael S. Twinchek, Chief Clerk
                 James H. Zoia, Democrat Staff Director
               Jeffrey P. Petrich, Democrat Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                   KEN CALVERT, California, Chairman
        GRACE F. NAPOLITANO, California, Ranking Democrat Member

George Radanovich, California        Calvin M. Dooley, California
Greg Walden, Oregon                  Jay Inslee, Washington
Thomas G. Tancredo, Colorado         Raul M. Grijalva, Arizona
J.D. Hayworth, Arizona               Dennis A. Cardoza, California
Tom Osborne, Nebraska                VACANCY
Rick Renzi, Arizona                  VACANCY
Stevan Pearce, New Mexico            VACANCY
Devin Nunes, California              Nick J. Rahall II, West Virginia, 
Richard W. Pombo, California, ex         ex officio
    officio
                                 ------                                
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on March 5, 2003....................................     1

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     3
        Prepared statement of....................................     4
    Napolitano, Hon. Grace, a Representative in Congress from the 
      State of California........................................     5

Statement of Witnesses:
    Keys, Hon. John W. III, Commissioner, Bureau of Reclamation, 
      U.S. Department of the Interior............................     6
        Prepared statement of....................................    10
        Response to questions submitted for the record...........    30

OVERSIGHT HEARING ON THE BUREAU OF RECLAMATION'S PROPOSED FISCAL YEAR 
                              2004 BUDGET

                              ----------                              


                        Wednesday, March 5, 2003

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 2:20 p.m., in 
room 1324, Longworth House Office Building, Hon. Ken Calvert, 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Calvert, Walden, Renzi, Nunes, 
Napolitano, Inslee, and Cardoza.
    Mr. Calvert. The hearing will come to order.
    The Subcommittee is meeting today to hear testimony on the 
Bureau of Reclamation's proposed Fiscal Year 2004 budget. Since 
this is a new session of Congress, let me take this opportunity 
to welcome our new Ranking Member, Mrs. Grace Napolitano. Not 
only is Grace a good friend, as you know, she is a 
distinguished member from the great State of California, and we 
are happy to see her in the position she is in.
    I would also like to welcome all the members, both old and 
new, and hopefully some of our older members will come on by 
here pretty soon to our first Subcommittee meeting.
    Let me say that I am certainly looking forward to working 
with Mrs. Napolitano on several issues in the past Congress and 
certainly some issues that are a priority for this Subcommittee 
as well as new issues to our members that are important.
    So at this point, I would like to have the members in 1 
minute or less explain what issues are of interest to them. 
This is not an opening statement, so please keep your comments 
to a minimum. And I will start with the Republican members of 
the Subcommittee, and afterwards Mrs. Napolitano will introduce 
her members, who, I am sure, will also express their interests 
and what is important to them.
    So, with that, Rick Renzi, you are recognized for 1 minute.
    Mr. Renzi. Thank you. Rick Renzi from Arizona. Thank you 
for coming over today and I look forward to your testimony.
    I wanted to mention just a few things that I am 
particularly interested in. In rural Arizona, in the highlands, 
as you know, water in Arizona, very scarce. Typically the 
headwaters of most of the rivers and streams in Arizona exist 
up in the mountains of rural Arizona. And what we are finding 
is that the water management policies of the past, particularly 
with our forests and the overgrowth of our forests, are now 
draining that downstream capability.
    So I would ask, please, as you move forward through the 
next year, that you focus in on the need for there to be a 
coherent water policy as it relates to forest health and water. 
The more we thin the forests, the more water matriculates down 
into the soil and then eventually comes out downstream and 
allows our downstream users, our ranchers and our farmers in 
Arizona. But without your input and without your kind of using 
your bully pulpit to really fight for water supply downstream 
as it relates to forest health, then we are going to go without 
a real champion. And we need that champion to be used here.
    So I just wanted to share that new aspect of how we can 
develop more water by thinning our forests and ask you to 
please consider that in the future.
    Thank you, Mr. Chairman.
    Mr. Calvert. I thank the gentleman, Mr. Renzi. I apologize.
    Mr. Nunes, another Californian.
    Mr. Nunes. Thank you, Mr. Chairman.
    Mr. Commissioner, it is good to see you here, and Mr. 
Raley, who is also here, thank you for coming in a few weeks 
ago and meeting with me. I just want to reiterate my priority 
for the State of California--there has basically been no new 
water storage projects built in nearly a generation. And if 
this continues to go on, even though I am one of the youngest 
Members of Congress, the State of California is going to run 
out of water. So if you are going to continue to meet the needs 
of urban, environment, and agriculture, we are going to have to 
have something done soon. So I have grave concerns about the 
CALFED process, and then, of course, you are familiar with, in 
my district, the local project on the San Joaquin River, which 
I was very glad to see in the omnibus bill. I look forward to 
hopefully ensuring that that is fully funded and we can get 
past the feasibility study phase--which we haven't been able to 
do in 35 years.
    So, with that, thank you very much, Mr. Chairman.
    Mr. Calvert. I thank the gentleman.
    Mrs. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chair. I would defer my 
speech at this stage--
    Mr. Calvert. Turn on your microphone.
    Mrs. Napolitano. But I would like to introduce the newest 
member of our Committee hailing from the great State of 
California, Mr. Dennis Cardoza, a good friend.
    Mr. Cardoza. Thank you, Mrs. Napolitano. It is a pleasure 
to be serving with you again. We served in the legislature 
together in California, and it is a pleasure to be serving on 
this Committee.
    As I look around the room and notice that we have seven 
members from California, we have several from Arizona and New 
Mexico, we have a majority, vast majority, from the West. You 
can certainly see that water and resources management issues 
are important to our part of the world.
    I am very concerned with achieving balance, making sure 
that while we protect endangered species that we don't make 
people endangered species. I am very concerned about adding new 
water resources to California. We are also a thirsty State that 
needs more opportunity with regard to water, and I look forward 
to working with the Chairman and the Ranking Member on these 
issues.

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

    Mr. Calvert. Thank you.
    We will now begin this hearing, and I want to thank people 
for attending, and certainly I see Bennett Raley here today. 
Thank you for attending also, and certainly the Commissioner, 
and we will begin this hearing at this time.
    Growing populations and changing values continue to place 
increasing demands on water supplies and river systems, 
resulting in water use and management conflicts throughout the 
country. These conditions continue to be particularly evident 
in the West. Over time, new laws and regulations were put in 
place to protect threatened and endangered species, to reduce 
or eliminate pollution, and to enhance recreational and scenic 
values. These and other factors, including record-setting 
droughts and scarce Federal dollars, significantly complicate 
water management in the West.
    There is greater interest in how to balance resources to 
meet these new stresses on existing fully appropriated water 
supply. There is great debate on the how the Bureau of 
Reclamation will plan for and manage the use of this renewable, 
yet sometimes scarce and increasingly sought after, water 
resource. Questions over how Reclamation will coordinate water 
policy with State and other Federal agencies, whether it is 
spending money on the right program, how it meets its ``core 
mission'' or what the ``core mission'' is or can be are 
important ones which need to be answered.
    Water users throughout the West need operational 
flexibility, new water storage and expansion of older ones, and 
capabilities for reclaiming and reusing water. With its vast 
expanse of water resource infrastructure and water management 
experience throughout the West, Reclamation will continue to be 
a principal player in providing reliable and safe water 
supplies for future generations.
    There is no single solution that works best for all water 
problems. As Reclamation enters the 21st century, it must adapt 
to changing circumstances that require a collaborative approach 
to resolving water resource management issues. Meanwhile, non-
traditional water supply sources are being demonstrated and 
implemented to a greater extent than ever before in response to 
an integrated approach to water resources management taking 
into account State water rights and institutions.
    Our Subcommittee is taking great interest in how 
Reclamation meets the goal of finding balanced and integrated 
approaches for water resource management. Today's hearing is 
one step toward helping the Bureau meet that goal. Throughout 
this year, the Subcommittee will continue to examine how 
Federal resources can best be spent and coordinated and where 
the Federal Government can help protect the environment while 
developing new water supplies.
    I look forward to working with the distinguished Ranking 
Member, Mrs. Napolitano, all Subcommittee members, the Bureau 
of Reclamation, and water stakeholders in this endeavor. Today 
we have the privilege of hearing from Reclamation's 
Commissioner, John Keys, III, who has dedicated his career to 
resolving how we can find a balanced water management approach. 
I certainly thank the Commissioner of the Bureau of Reclamation 
for being with us today and look forward to hearing from him on 
how his agency has prepared to meet these complex and awful--
and often controversial water resource challenges.
    And, with that--that wasn't a Freudian slip, I am sure.
    [Laughter.]
    Mr. Calvert. With that, I will recognize Mrs. Napolitano.
    [The prepared statement of Mr. Calvert follows:]

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

    Growing populations and changing values continue to place 
increasing demands on water supplies and river systems, resulting in 
water use and management conflicts throughout the country. These 
conditions continue to be particularly evident in the West. Over time, 
new laws and regulations were put into place to protect threatened and 
endangered species, to reduce or eliminate pollution, and enhance 
recreational and scenic values. These and other factors, including 
record setting drought and scarce Federal dollars, significantly 
complicate water management in the West.
    There is greater interest in how to balance resources to meet these 
new stresses on an existing fully appropriated water supply. There is 
great debate over how the Bureau of Reclamation will plan for and 
manage the use of this renewable, yet sometimes scarce and increasingly 
sought after, water resource.
    Questions over how Reclamation will coordinate water policy with 
state and other Federal agencies; whether it is spending money on the 
right program; how it meets its ``core mission'' or what that ``core 
mission'' is or can be are important ones which need to be answered.
    Water users throughout the West need operational flexibility, new 
water storage and expansion of older ones, and capabilities for 
reclaiming and reusing water. With its vast expanse of water resource 
infrastructure and water management experience throughout the West, 
Reclamation will continue to be a principal player in providing 
reliable and safe water supplies for future generations.
    There is no single solution that works best for all water problems. 
As Reclamation enters the 21st century, it must adapt to changing 
circumstances that require a collaborative approach to resolving water 
resource management issues. Meanwhile, non-traditional water supply 
sources are being demonstrated and implemented to a greater extent than 
ever before in response to an integrated approach to water resources 
management taking into account State water rights and institutions.
    Our Subcommittee is taking great interest in how Reclamation meets 
the goal of finding balanced and integrated approaches for water 
resources management. Today's hearing is one step towards helping the 
Bureau of Reclamation meet that goal. Throughout this year, the 
Subcommittee will continue to examine how Federal resources can be best 
spent and coordinated and where the Federal Government can help protect 
the environment while developing new water supplies.
    I look forward to working with the distinguished Ranking Member, 
Mrs. Napolitano, all Subcommittee members, the Bureau of Reclamation 
and water stakeholders in this endeavor. Today, we have the privilege 
of hearing from Reclamation's Commissioner John Keys III, who has 
dedicated his career to resolving how we can find a balanced water 
management approach. I thank the Commissioner of the Bureau of 
Reclamation for being with us today, and look forward to hearing from 
him on how his agency has prepared to meet these complex and often 
controversial water resource challenges.
                                 ______
                                 

  STATEMENT OF THE HON. GRACE NAPOLITANO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mrs. Napolitano. Thank you, Mr. Chairman, and I might add 
that I agree with your comments. Our members, I am sure, will 
be coming in. Most of them are in Committees, and they should 
be drifting in, and I would like the opportunity to be able to 
introduce them as they come in, as you probably would yours, 
too.
    Mr. Calvert. Without objection.
    Mrs. Napolitano. Mr. Chairman, your comments are so welcome 
to my ears, and I congratulate you again once more and again 
and again for serving your second term on this Committee. You 
have done a very, very credible job in bringing us to where we 
are at in many of the issues that are facing our Western 
States, not just California. And I look forward to the 
opportunity to work with you to help address and hopefully 
resolve some of the more critical water and power issues facing 
our Western States.
    The members, you have heard we have a great working 
relationship with Mr. Calvert and his staff, and I do encourage 
all our members to be active participants on the Subcommittee. 
And that means attending the hearings also. I am being 
facetious, but I think we need to drive the point home that if 
they are not at the meetings, they are going to miss out on 
information that will help them make decisions.
    Mr. Keys and Secretary Raley, we appreciate your appearance 
before the Committee this afternoon and welcome your testimony. 
I am, however, deeply concerned about the Bureau of 
Reclamation's budget proposal, and it is apparent to me 
resistance to use new and proven technologies to help improve 
the quantity and the quality of reliable water supplies through 
the West, and quite possibly eventually to the rest of the 
Nation. The Bureau was given clear authority from Congress over 
12 years ago through Public Law 102-575, enacted in 1992, 11 
years ago, to provide technical and financial assistance for 
communities that wish to consider water recycling projects as 
part of their overall water supply and management programs.
    In reviewing the Bureau's proposed budget numbers, it seems 
and we can conclude that the administration is openly opposed 
or even hostile to water recycling, and that is my view. The 
Bureau of Reclamation budget seeks $12.6 million to support the 
Federal cost share of Title XVI reuse projects, a very 
significant decrease from the congressional appropriation of 
$36 million for the 2003 spending bill.
    The Bureau proposes also a pot of new money of $11 million 
for four new initiatives cited on page 545 of the 2004 budget 
appendix book. One of these four initiatives is to expand the 
use of science to find a way to reduce the cost of water 
desalination and waste disposal, very credible, very 
commendable. I think we are still missing the boat in making 
sure that we continue recycling water to help States like 
California that have to meet Federal mandates.
    That said, for the Fiscal Year 2004 the budget documents 
have gone so far as to declare that water recycling ``is not 
one of Reclamation's core functions.'' This is on page 173 of 
the Performance and Management Assessment Book. It just doesn't 
make sense. Not only does it go against the 1993 public law 
mandated authority given, but also it does not adequately 
explain how or why desalination became a core mission over 
water recycling or when the decision was made or by whom.
    The proposal comes at a time when California is mandated to 
live on less water. Texas farmers along the U.S. border are 
suffering from severe drought to the water diversion in Mexico, 
and farmers are losing literally the farm.
    The Bureau of Reclamation has a responsibility and limited 
opportunities to use this engineering and water management 
expertise to help us solve water problems throughout the 
Western States through water recycling, amongst other things. 
Why would the agency reject an entire class of projects that 
can create new water supplies with minimal environmental impact 
and minimal Federal cost sharing? I believe that is 25 percent, 
if I remember correctly.
    The Bureau budget presents many hard challenges and is 
somewhat shocking to the many of us who had hoped that this 
administration would at least maintain the status quo in 
funding for recycling and desalination. It is unfortunate that 
it has chosen not to maintain support for the recycling 
projects but, in fact, makes a conscious decision to slash 
funding for overall recycling, desalination, conservation, and 
other critical rural projects.
    Turning their back on water recycling will not only 
complicate water management issues throughout the West, but it 
will also deliver negative economic and political impacts on 
neighboring States. We should all look closely at the budget 
priorities and question the intent, and we must have an honest 
approach to important budget matters that mean so much to the 
millions of the constituency we all serve in the West.
    I trust that we will take a more proactive and realistic 
approach and that we must have that full funding up front, no 
games, for the projects such as we have mentioned before. And I 
look forward to working not only with my Chairman but with both 
sides and also with the agencies to see where we can come 
together to make sure that we best serve all our constituents.
    Thank you, Mr. Chair.
    Mr. Calvert. I thank the gentlelady.
    I would like to recognize our witness for today. The 
Chairman now recognizes Commissioner John Keys to testify. 
Commissioner Keys, your full statement will be submitted for 
the record.

STATEMENT OF HON. JOHN W. KEYS, III, COMMISSIONER, U.S. BUREAU 
                         OF RECLAMATION

    Mr. Keys. Mr. Chairman, thank you very much.
    Mr. Chairman, Mrs. Napolitano, and members of the 
Subcommittee, it is my absolute pleasure to be here with you 
today, and I do appreciate this opportunity to sit and talk 
with you about our 2004 budget. We think that our budget is a 
good one, and I will certainly go into some details with you. I 
have with me today Bob Wolf, who is our chief financial manager 
for the Bureau of Reclamation, and he is here to help me answer 
questions that you may have.
    Mr. Chairman, we appreciate the support of the Subcommittee 
that you have shown over the past years to work with, and we 
look forward to continually working with you and the 
Subcommittee to further Reclamation's mission. Your staffs are 
first-class, and we have appreciated very much working with 
them.
    Mr. Chairman, we are in our centennial year. Reclamation 
was formed on July 17, 1902, when President Roosevelt signed 
the Reclamation Act. We started our centennial year with a nice 
celebration at Hoover Dam, and certainly we are trying to show 
that we are an agency that will go the next 100 years, at 
least, in meeting the water requirements of the Western United 
States.
    Currently, we are the largest wholesaler of water in the 
United States. We are the seventh largest power utility, 
operating 348 major dams and 58 power plants. Daily we serve 
water to 31 million people and 10 million acres of irrigated 
agriculture in the Western United States.
    The overall Bureau of Reclamation request for 2004 totals 
$878 million in current authority, and from our perspective, 
this budget is good news for the West. The request is citizen-
centered and founded on our President's principle of results 
rather than procedures. An example is the Western Water 
Initiative request for $11 million that I will discuss in more 
detail shortly.
    Our budget is a fiscally responsible request which will 
continue to provide funding to deliver water, provide a stable 
source of power for our growing population, keep our dams and 
facilities safe, and support sound environmental stewardship 
efforts. The Fiscal Year 2004 request for water and related 
resources account is $771 million. This will allow us to 
continue Reclamation's emphasis on delivering and managing 
water and power, two valuable public resources for which we are 
responsible.
    In cooperation and consultation with the States, tribal and 
local governments, along with other stakeholders and the public 
at large, Reclamation offers workable solutions regarding water 
and power resource issues that are consistent with the demands 
for power and water. With the need to pursue cost-effective, 
environmentally sound approaches to meeting these demands, the 
request continues to emphasize the operation and maintenance of 
Reclamation facilities in a safe, efficient, economic, and 
reliable manner.
    Mr. Chairman, in my prepared statement, there is not a 
reference to the Sumner Peck Settlement that I would like to 
read into the record that we just received early this morning, 
and certainly this affects some of the appropriations that we 
had talked with you folks about earlier. The Department of 
Justice has concluded that the judgment fund is available for 
the payment of the $5 million and $34 million installments due 
upon the consent judgment in Fiscal Year 2003. It will make 
such a recommendation to the Department of the Treasury.
    The Department of Justice has not made a determination as 
to the availability or source of funds for future-year 
installments. That takes a big cloud off of our 2003 
appropriations and how we get our work done for this year.
    Mr. Chairman, some highlights of our 2004 program. These 
are not in any specific order, but they are the highlights of 
our 2004 budget proposal.
    The Animas-La Plata Project in Colorado and New Mexico 
request is for $58 million for the project and will fund the 
construction contracts awarded in 2003 that are associated with 
critical path activities for that project. The principal 
facilities being worked on and started in 2004 will be the 
Ridge Basin Dam and the Durango pumping plant on the Animas 
River close to Durango, Colorado. This level of funding is 
crucial to complete the construction of this project within the 
timeframes required by the Colorado Ute Settlement Act 
Amendments of 2000. In December 2000, Congress enacted 
legislation to resolve the Colorado Ute Indian Tribes' water 
right claims and allowed construction of a smaller Animas-La 
Plata Project to proceed.
    The Columbia-Snake River Salmon Recovery in Idaho, Oregon, 
Montana, and Washington addresses the implementation of 
reasonable and prudent alternatives included in two biological 
opinions issued in December 2000. We have $19 million in our 
budget for that activity.
    The Klamath Project in California and Oregon provides 
funding for scientific studies and initiatives as a result of 
the 2002-2012 biological opinions and for the establishment of 
a water bank as required under those same opinions. Funding is 
about $21 million, and it will also be used to provide water to 
meet the Endangered Species Act compliance.
    That water bank is certainly a unique feature of what we 
are trying to do in the Klamath Basin. It actually sets up an 
amount of water to meet the Endangered Species Act and relives 
the rest of the water there of that burden while it tries to 
meet the requirements for irrigation of the farmland in the 
basin.
    The Drought program includes those activities related to 
administering the Reclamation States Emergency Drought Relief 
Act of 1991, as amended, to undertake activities that will 
minimize losses and damages resulting from drought conditions. 
The primary focus there for us is on drought contingency plans. 
We don't try to solve a drought while we are in it. We try to 
plan ahead of time with these contingency plans so that we are 
ready for them when they get there.
    The California Bay-Delta Restoration Fund Fiscal Year 2004 
budget request is $15 million. The funds will be used 
consistent with our commitment to find long-term solutions in 
improving water quality, habitat and ecological functions, and 
water supply reliability, while reducing the risk of 
catastrophic breaching of Delta levees. The Fiscal Year 2004 
budget contains funds for Bay-Delta activities including 
feasibility studies for Shasta Dam raze, for sites reservoir 
investigations, for Los Vaqueros reservoir investigations, and 
investigations in the San Joaquin Basin. These will be 
undertaken within existing statutory authorities for 
implementation of Stage 1 activities. These activities are 
included in the preferred program alternative recommended by 
CALFED and approved by the Secretary of the Interior. The 
majority of these funds will specifically address the 
environmental water account, storage, and program 
administration.
    Safety of Reclamation's Dams is one of the Bureau's highest 
priorities. About 50 percent of our Reclamation dams were built 
between 1900 and 1950. Ninety percent of these dams were built 
before the advent of current state-of-the-art technology and 
foundation treatment and before filter techniques were 
incorporated in embankment dams. We have $71 million in our 
program to support that program.
    Site security activities are ongoing and funding program 
improvements identified in Fiscal Year 2002 and 2003. Since 
September 11, 2001, Reclamation has maintained heightened 
security at its facilities to protect the public, its 
employees, and our infrastructure. The Fiscal Year 2004 request 
continues funding for those critical activities under the 
categories of critical infrastructure protection and continuity 
of operations.
    The Western Water Initiative will position the Bureau of 
Reclamation to continue its leading role in developing viable, 
economical, and sound solutions to the increased demands for 
water resources in the West. The budget proposes $11 million 
for the activity in Fiscal Year 2004. It will benefit Western 
communities that are struggling with increased water demands, 
drought, and compliance with the Endangered Species Act. The 
four components of the Western Water Initiative are:
    No. 1, enhanced water management and conservation 
activities. Here we are trying to look at activities that will 
stretch existing water supplies by looking at canal linings, 
new control facilities and technology, measurement facilities 
to help us get a handle on how our waters are being used.
    The second element is preventing water management crisis. 
That is giving us the opportunity to look 25 years into the 
future at where the hot spots might be, and they are tied to 
continued growth in our cities. They are tied to requirements 
by the Endangered Species Act and other things that are 
cropping up that require water and put extra demands on our 
facilities. What we are trying to do is look 25 years into the 
future, and those demands and requirements that would not be 
met with existing facilities.
    The third part of the initiative is the expanded science 
and technology program. There is the one where we are trying to 
take further looks and more focused looks at desalination. We 
are also trying to look at adaptive management programs where 
we are trying to adapt our facilities and their operations with 
the environment to take care of endangered species. A good 
example is the Colorado River flow from Glen Canyon through 
Grand Canyon.
    The third part of that initiative is peer review of 
science, taking a hard look at those sciences that we are 
developing to be sure that they are consistent with the project 
and the environment and what we are trying to do to deliver 
water.
    The fourth part of the initiative is strengthening the 
Endangered Species Act and our ability to work with that act, 
working with our own people so that they can get the best out 
of the facilities and still meet the Endangered Species Act.
    Mr. Chairman, to be successful in dealing with today's 
complex water issues, we know that collaboration is the key. We 
all must work together to forge workable solutions to find new 
ways to meet existing water supplies and make them go further. 
This means involved water conservation, improved investments in 
science and technology, and modernization of existing 
infrastructures. I would be more than happy to provide more 
detail to each of these projects and proposals for the record. 
In the meantime, I would be more than happy to answer any 
questions you might have today.
    [The prepared statement of Mr. Keys follows:]

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

    Thank you, Mr. Chairman, and members of the Subcommittee, Thank you 
again for the opportunity to appear before you today to support the 
President's Fiscal Year 2004 budget request for the Bureau of 
Reclamation. With me today is Robert Wolf, Director of the Program and 
Budget Group.
    Our Fiscal Year 2004 request has been designed to support 
Reclamation's core mission, as stated in DOI's Strategic Plan:
        ``Deliver Water and Hydropower, Consistent with Applicable 
        State and Federal Law, in an Environmentally Responsible and 
        Cost Efficient Manner.''
    Funding is proposed for key emerging projects which are important 
to the Department and in line with Administration objectives. The 
budget request also supports Reclamation's participation in efforts to 
meet emerging water supply needs, to resolve water shortage issues in 
the West, and to promote water conservation and improved water 
management.
    The Fiscal Year 2004 request for Reclamation totals $878.0 million 
in gross budget authority, an increase of $23.1 million from the Fiscal 
Year 2003 President's Amended Request of January 7, 2003, and a 
decrease of $33.3 million from Fiscal Year 2003 Enacted Level. The 
request is partially offset by discretionary receipts in the Central 
Valley Project Restoration Fund, resulting in net discretionary budget 
authority of $847.2 million, a decrease of $24.5 million over the 
Fiscal Year 2003 Enacted Level.
    Center to this is $11.0 million to launch a Western Water 
Initiative that uses collaboration, conservation, and innovation to 
make sure every drop of water counts. This initiative will provide a 
comprehensive forward-looking water resource management program that 
will respond to growing water demands. To be successful in dealing with 
today's complex water issues, we know collaboration is the key. We all 
must work together to forge workable solutions. We are looking for new 
ways to make existing water supplies go further. We must continue to 
develop strategies where water can be used more than once in order to 
satisfy multiple users and stretch existing water supplies even more. 
This means improved water conservation, investments in science and 
technology, and modernization of existing infrastructures.
    The four major components of the initiative are Enhancing Water 
Management and Conservation; Expanding Science and Technology Program; 
Preventing Water Management Crisis; and Strengthening Endangered 
Species Act (ESA) Expertise.
    This budget is good news for the West. Each year Reclamation is 
focused on customer value as well as increased accountability and 
modernization. This request is citizen-centered and founded on the 
Administration's principle of results rather than procedures. It is 
also a fiscally responsible request, which will provide funding to keep 
our dams and facilities safe, deliver water, provide a stable source of 
power for our growing population, and support environmental efforts.
Demonstrated Commitment and Accomplishments
    While performing its core mission, Reclamation delivered 10 
trillion gallons of water to over 31 million people in the 17 western 
states for municipal, rural, and industrial uses. Reclamation 
facilities stored over 245 million acre-feet of water, serving one of 
every five western farmers to irrigate about 10 million acres of land. 
Those irrigated lands produced 60 percent of the nation's vegetables 
and 25 percent of its fruits and nuts. As the largest water resources 
management agency in the West, Reclamation continues to administer and/
or operate 348 reservoirs, 56,000 miles of water conveyance systems, 
and 58 hydroelectric facilities, which generate 42 billion kilowatt-
hours annually.
    Reclamation also continues to manage approximately 8.6 million 
acres of Federal land, plus another 600,000 acres of land under 
easements. In addition, our facilities provide substantial flood 
control, recreation, and fish and wildlife benefits. Reclamation and 
its employees take very seriously their mission of managing, 
developing, and protecting water and related resources in an 
environmentally and economically sound manner in the interest of the 
American public.
    The Fiscal Year 2004 budget request demonstrates Reclamation's 
commitment in meeting the water and power needs of the West in a 
fiscally responsible manner. This budget continues Reclamation's 
emphasis on delivering and managing those valuable public resources. In 
cooperation and consultation with the state, tribal, and local 
governments, along with other stakeholders and the public at large, 
Reclamation offers workable solutions regarding water and power 
resource issues that are consistent with the demands for power and 
water. With the need to pursue cost effective and environmentally sound 
approaches, Reclamation's strategy is to continue to use the 
Secretary's four ``C's:'' ``Consultation, Cooperation and Communication 
all in the service of Conservation....'' These principles provide 
Reclamation an opportunity, in consultation with our stakeholders, to 
use decision support tools, including risk analyses, in order to 
develop the most efficient and cost-effective solutions to the complex 
challenges that we face.
    During the second session of the 107th Congress, both the Committee 
and Reclamation's stakeholders accentuated their concerns over the 
availability of water two decades from now. Our Fiscal Year 2004 
request includes measures that will be utilized to help assure that 
water will be available for a growing population when needed. Through 
our Western Water Initiative, Reclamation plans to develop a forward 
looking water resource management program that will respond to growing 
water demand.
    Furthermore, funding is proposed for key emerging projects that are 
important to the Department and the Administration's objectives. The 
budget proposal also supports Reclamation's participation in efforts of 
meeting emerging water supply needs, resolving water issues in the 
West, promoting water efficiencies, and improving water management.
    Moreover, Reclamation's request reflects the need to address an 
aging infrastructure and the rising costs and management challenges 
associated with scarce water resources. As our infrastructure ages, we 
must direct increasing resources toward technological upgrades, new 
science and technologies; and preventative maintenance to ensure 
reliability; which will increase output, and improve safety.
    More and more everyday we see how important water resource needs 
are to our state, local and tribal partners. Many states are developing 
statewide water plans or drought contingency plans to address resource 
utilization and stewardship against the backdrop of large population 
increases with the growing concern for sustainable development. 
Reclamation, in partnership with other Federal, state, local, tribal, 
and private entities, has consistently proven its ability to work with 
others to optimize water use. This technical capability is one of our 
most valuable resources.
Water and Related Resources
    The Fiscal Year 2004 request for the Water and Related Resources 
account is $771.2 million. The request provides funding for five major 
program activities: Water and Energy Management and Development ($331.3 
million); Land Management and Development ($41.3 million); Fish and 
Wildlife Management and Development ($90.4 million); Facility 
Operations ($176.8 million); and Facility Maintenance and 
Rehabilitation ($171.5 million). The request is partially offset by an 
undistributed reduction of $40.0 million, in anticipation of delays in 
construction schedules and other planned activities.
    The request continues to emphasize the operation and maintenance of 
Reclamation facilities in a safe, efficient, economic, and reliable 
manner, while sustaining the health and integrity of ecosystems that 
addresses the water needs of a growing population. It will also assist 
the states, tribes, and local entities in solving contemporary water 
resource issues.
Highlights of the Fiscal Year 2004 request include:
    Animas-La Plata in Colorado and New Mexico ($58.0 million). The 
Fiscal Year 2004 request includes $58 million for the project and will 
fund the construction contracts awarded in Fiscal Year 2003 that are 
associated with critical path activities. This level of funding is 
crucial to complete the construction of this project within the time 
frames required by the Colorado Ute Settlement Act Amendments of 2000. 
In December 2000, Congress enacted legislation to resolve the Colorado 
Ute Indian Tribes' water right claims and allowed construction of a 
smaller Animas-La Plata Project to proceed.
    Columbia-Snake River Salmon Recovery in Idaho, Oregon, Montana, and 
Washington ($19.0 million). This program addresses the implementation 
of Reasonable and Prudent Alternatives (RPAs) included in two 
Biological Opinions issued in December 2000. The first opinion was 
issued by the National Marine Fisheries Service (NMFS) entitled 
``Operation of the Federal Columbia River Power System (FCRPS), 
Including the Juvenile Fish Transportation Program, and 19 Bureau of 
Reclamation Projects in the Columbia Basin,'' and the second opinion 
was issued by the U.S. Fish and Wildlife Service (FWS) entitled 
``Effects to Listed Species from Operations of the Federal Columbia 
River Power System.''
    Those Biological Opinions superseded all previous FCRPS Biological 
Opinions and all actions will now be focused toward the new 
``reasonable and prudent alternatives (RPA).'' Section 7(a)(2) of the 
Endangered Species Act (ESA) requires Federal agencies to consult with 
NMFS and the FWS to ensure that agency actions will not likely 
jeopardize the continued existence of endangered or threatened species, 
or will not adversely modify or destroy their designated critical 
habitats.
    The FWS Biological Opinion is coordinated with the NMFS Biological 
Opinion, and calls for operational changes to the FCRPS, by way of 
additional research measures. A substantial majority of the action 
items resulted from the NMFS Biological Opinion, while the FWS action 
items included significantly increased regional coordination with the 
Federal regulatory agencies; aggressive actions to modify the daily, 
weekly, and seasonal operation of Federal dams; and the ``off-site 
mitigation'' of hydro system impacts.
    Klamath Project in California and Oregon ($20.8 million). The 
funding will provide for scientific studies and initiatives as a result 
of the 2002-2012 biological opinions and for the establishment of a 
water bank as required under those same opinions, as well as to provide 
water to meet ESA compliance.
    The request will also continue funding for studies and initiatives 
related to improving water supply and quality to meet agriculture, 
tribal, wildlife refuge, and environmental needs in the Klamath River 
Basin and to improve fish passage and habitat.
    Safety of Dams ($71.0 million). The safety and reliability of 
Reclamation dams is one of Reclamation's highest priorities. 
Approximately 50 percent of Reclamation's dams were built between 1900 
and 1950, and 90 percent of those dams were built before the advent of 
current state-of-the-art foundation treatment, and before filter 
techniques were incorporated in embankment dams to control seepage. 
Safe performance of Reclamation's dams continues to be of great concern 
and requires a greater emphasis on the risk management activities 
provided by the program.
    The Fiscal Year 2004 request of $71.0 million for the Safety of 
Dams Program is being made to provide for the reducing of public safety 
risks at Reclamation dams, particularly those identified as having 
deficiencies. The request provides for risk management activities 
throughout Reclamation's Safety of Dams inventory of 362 dams and 
dikes, which would likely cause loss of life if they were to fail. Pre-
construction and construction activities for up to 19 of these dams are 
identified for funding through the Safety of Dams Program. The Fiscal 
Year 2004 request includes $1.7 million for the Department of the 
Interior Dam Safety Program.
    Site Security ($28.6 million). Since September 11, 2001, 
Reclamation has maintained heighten security at is facilities to 
protect the public, its employees, and infrastructures. The 
supplemental funding in Fiscal Year 2002 was necessary to cover the 
costs of site security activities in three principle areas. The first 
area was for guards and law enforcement, the second area included 
reviews, studies, and analyses, and the third area was for equipment. 
The Fiscal Year 2004 request continues funding for those critical 
activities under the categories of Critical Infrastructure Protection 
and Continuity of Operations.
    Drought ($1.1 million). The program includes those activities 
related to administering the Reclamation States Emergency Drought 
Relief Act of 1991, as amended, to undertake activities that will 
minimize losses and damages resulting from drought conditions. The 
major component of the program relates to response activities taken 
during an actual drought to minimize losses or mitigate damages. The 
program also provides for assistance in the preparation of drought 
contingency plans.
    Desalination of Seawater and Groundwater ($775,000). This program 
provides a promising opportunity to expand water supplies for both 
coastal and inland areas. The 2004 budget contains increased funding 
for desalination research activities aimed at decreasing the cost and 
facilitating local implementation of desalination.
    Our research activities are carefully chosen to align with the 
Department's draft Strategic Plan and are developed in collaboration 
with stakeholders. We believe that cost shared research conducted at 
existing institutions is the quickest and most economical means to 
achieve our ambitious long-term goal of decreasing desalination costs 
by 50 percent by 2020.
    Sumner Peck Settlement ($34.0 million). The budget request provides 
payment to the plaintiffs towards the settlement of Sumner Peck Ranch 
Inc v. Bureau of Reclamation.
Western Water Initiative
    The new Western Water Initiative will position the bureau in 
playing a leading role in developing solutions that will help meet the 
increased demands for limited water resources in the West. The budget 
proposes $11.0 million, which will benefit western communities that are 
struggling with increased water demands, drought, and compliance with 
the Endangered Species Act. The Western Water Initiative involves:
    Enhanced Water Management and Conservation ($6.9 million). Funding 
will be used for the modernization of irrigation delivery structures 
such as diversion structures and canals. This will also allow 
Reclamation to use existing intrastate water banks where they are 
available, and to promote intrastate water banking as a concept to help 
resolve future water supply conflicts.
    Reclamation will develop alternative ways to balance the existing 
demands for water for agricultural, municipal, tribal, and 
environmental purposes. Examples include water management tools; 
inexpensive and accurate water measuring devices; and computer 
technologies that will allow remote sensing and automation. Moreover, 
new canal lining material, data collection and analysis systems should 
make predicting, managing, and delivering water much more effective.
    Preventing Water Management Crisis ($917,000). Funding will enable 
us to provide effective environmental and ecosystem enhancements in 
support of Reclamation's project operations through proactive and 
innovative activities. For example, we are exploring ways of addressing 
issues at projects by identifying and integrating long-term river 
system ecological needs within the context of regulated river 
management.
    Pilot projects will be selected from a list of critical areas based 
on the potential for cost savings resulting from the development of a 
program in advance of the occurrence of a crisis. Pilot projects are 
anticipated to include environmental enhancements that provide support 
for project operations or optimization of project operations for both 
water supply and environmental benefits. For example, in some cases, 
water release patterns can be modified to address environmental needs 
without impairing the delivery of water for authorized project 
purposes.
    Expanded Science and Technology Program ($2.7 million). 
Reclamation's Desalination Research and Development Program will be 
expanded to research cost reduction of water desalinization and waste 
disposal. Reclamation has developed much of the current desalinization 
technology used around the world today, and will continue to work with 
partners in the industry to accomplish this goal.
    Funding will also expand the effective use of science in adaptive 
management of watersheds. This cooperative effort with the USGS will 
assist Reclamation in reaching decisions that are driven by sound 
science and research, are cost effective, and are based on performance 
criteria.
    Funding will also provide for peer review of the science used in 
ESA consultations and other environmental documents issued by 
Reclamation. The National Academy of Science, USGS, and other Federal 
and state entities with science expertise will peer-review the science 
used by Reclamation in preparing Biological assessments. This 
initiative will improve Reclamation's use of science and technology to 
address critical water resource management issues.
    Strengthening Endangered Species Act (ESA) Expertise ($458,000). 
Funding will be used to strengthen ESA expertise and will produce 
identifiable mechanisms in order to achieve continuity in evaluating 
biological assessments and/or biological opinions. This initiative will 
enable managers to acquire a greater understanding of the purpose, 
process and requirements of the ESA as it relates to Federal actions 
that are important to carrying out Reclamation's water resources 
management mission.
Central Valley Project Restoration Fund
    The Fiscal Year 2004 Reclamation budget includes a request for 
$39.6 million and is expected to be offset by discretionary receipts 
totaling $30.8 million, which can be collected from project 
beneficiaries under provisions of Section 3407(d) of the Act. These 
funds will be used for habitat restoration, improvement and 
acquisition, and other fish and wildlife restoration activities in the 
Central Valley Project area of California. This fund was established by 
the Central Valley Project Improvement Act, Title XXXIV of P.L. 102-
575, October 30, 1992.
    The funds will be used to achieve a reasonable balance among 
competing demands for the use of Central Valley Project water, 
including the requirements of fish and wildlife, agricultural, 
municipal and industrial and power contractors. Reclamation is seeking 
appropriations for the full amount of funds of the estimated 
collections for Fiscal Year 2004.
California Bay-Delta Restoration
    The Fiscal Year 2004 Reclamation budget includes a request for 
$15.0 million. The funds will be used consistent with commitment to 
find long-term solutions in improving water quality; habitat and 
ecological functions; and water supply reliability; while reducing the 
risk of catastrophic breaching of Delta levees. Fiscal Year 2004 budget 
contains funds for Bay-Delta activities that can be undertaken within 
existing statutory authorities for implementation of Stage 1 
activities. Those activities are included in the preferred program 
alternative recommended by CALFED and approved by the Secretary of the 
Interior. The majority of these funds will specifically address the 
environmental water account, storage, and program administration.
Policy and Administration
    The request for Policy and Administration (P&A) is $56.5 million. 
P&A funds are used to develop and implement Reclamation-wide policy, 
rules and regulations (including actions under the Government 
Performance and Results Act) and to perform functions which cannot be 
charged to specific project or program activities covered by separate 
funding authority. These funds support general administrative and 
management functions.
Loan Program
    No funding is requested for any direct loans. Funding of $200,000 
is requested for program administration.
Performance Assessment Rating Tool (PART)
    During Fiscal Year 2002, all cabinet level agencies reviewed at 
least 20 percent of their programs in concert with the Office of 
Management and Budget. The Administration conducted these reviews using 
PART, a standardized format for program evaluation and management. 
Results from the PART process were one of many criteria used in making 
budget decisions. The three Reclamation programs that were reviewed 
were Hydropower, Water Reuse and Recycling Program (Title XVI), and 
Rural Water. Reclamation is currently addressing all deficiencies 
identified with respect to each program.
    Hydropower was rated ``moderately effective'' and Reclamation has 
begun developing long-term goals that will address the identified 
issues, such as aging facilities and the need for better performance 
measures. The Title XVI program review indicated that the program was 
``moderately well managed.'' However, Reclamation's oversight of 
individual projects is limited by strong local control, and the PART 
findings indicated that there is no clear linkage between Federal 
funding and progress towards outcomes.
    The Rural Water Supply Projects were rated ``results not 
demonstrated.'' Fiscal Year 2004 funding requests for this program has 
been reduced due to systemic program weaknesses, such as non-existent 
guidelines for eligibility; local cost share and program planning; and 
overlaps with other Federal agencies. The Administration intends to 
submit legislation this spring, establishing a Reclamation Rural Water 
Program with adequate cost controls and clear guidelines for project 
development.
President's Management Agenda
    Reclamation is engaged in a variety of activities designed to meet 
the Department's ``Getting to Green'' Scorecard requirements related to 
the President's Management Agenda (PMA). These activities are 
concentrated in five major components of the PMA: Expanding E-
Government, Financial Management Improvement, Human Capital, 
Performance and Budget Integration, and Competitive Sourcing.
    E-Government: Reclamation participates in a one-stop Internet 
access that provides citizens information about recreational 
opportunities on public lands and participates in the Volunteer.gov 
website which provides information on volunteer activities. We also 
recently completed an internal review of our web program and are in the 
process of implementing the recommendations from the review, including 
the development of a common website.
    Financial Management Improvement: Reclamation continues to make 
progress to ensure that our financial systems are compliant with the 
Joint Financial Management Improvement Program core requirements. To 
ensure that accurate and timely financial information is provided, our 
financial management program uses the Federal Financial System, the 
Program and Budget System, and its corporate data base system to report 
summary and transactions data on a 24-hour basis.
    Human Capital: Reclamation effectively deploys the appropriate 
workforce mix to accomplish mission requirements. The use of existing 
human resources flexibilities, tools, and technology is in a strategic, 
efficient, and effective manner. Our workforce plan addresses E-
Government and Competitive Sourcing and a plan is in place for 
recruitment, retention, and development of current and future leaders, 
in addition supervisors are encouraged to work individually with 
employees to develop Individual Development Plans.
    Competitive Sourcing: Reclamation's A-76 Inventory Consistency Team 
was established to ensure consistency in inventory reporting. The team 
established guidelines for commercial, commercial core, and inherently 
governmental functions that are specific to Reclamation's workforce. 
Two streamlined studies have been completed for 124 FTE and a tentative 
decision has been announced, moreover two additional streamlined 
studies are with the Independent Review Official and a preliminary 
planning is underway for the Express Review studies scheduled in early 
2003.
    Performance and Budget Integration: Reclamation continues to issue 
joint planning guidance through the Budget Review Committee process to 
provide budget targets, priorities, objectives, and goals. A Government 
Performance and Results Act (GPRA) planning calendar, including budget 
process and major milestones, has been developed. In addition, budget 
accounts, staff, and programs/activities are aligned with program 
targets.
FY 2002 Accomplishments Highlights and Future Planned Activities
    In Fiscal Year 2002, we delivered the contracted amount of water to 
our water users, thereby meeting our contractual obligations. However, 
severe drought conditions increased demand for water, and in some 
cases, the water delivered to the water users was not enough to meet 
the increased requirement. If snow pack runoff continues at or below 
normal levels and if the drought continues, there will be far less 
water to release to our water users during Fiscal Year 2003 and Fiscal 
Year 2004.
    Reclamation renewed 100 percent of the water service contracts 
expiring in Fiscal Year 2002, helping to ensure continued reliable 
service. An additional contract that was not planned for was also 
renewed for a total accomplishment of 114 percent.
    Reclamation also completed Safety of Dams modifications on four 
facilities in Fiscal Year 2002, the Caballo, Avalon, Clear Lake and Red 
Willow dams. Also, in Fiscal Year 2003, Reclamation anticipates 
completing Safety of Dams modifications at Deadwood Dam in Idaho and 
Salmon Lake Dam in Washington.
    Completion of these modifications improves overall facility 
condition by reducing risk and improving safety. In some cases, 
completion of the modifications increased Reclamation's ability to 
deliver water by removing restricted capacity requirements, and 
allowing the reservoir to be filled to full operational capacity, if 
needed.
    Reclamation's draft cost of power production per megawatt capacity 
for Fiscal Year 2002 was $6,855. This amount puts Reclamation within 
the upper 25th percent of the lowest cost hydropower facilities. 
Reclamation also achieved a 1.3 percent forced outage rate, which 
measures the amount of unplanned time out of service. This performance 
level is 56 percent better than the industry average forced outage rate 
of 3 percent.
    By the end of Fiscal Year 2002, Reclamation conducted over 130 
reviews of its recreational facilities to determine the state of its 
facilities, identify corrective actions, and determine needed 
improvements. Also in Fiscal Year 2002, Reclamation's partnerships and 
cost-sharing practices allowed Reclamation to complete additional 
corrective actions to improve more facilities than originally planned. 
This resulted in performance greater than 100 percent completion of the 
planned corrective actions.
    Reclamation completed 130 percent of its planned site security 
improvements. Moreover, funding was used to implement additional high-
priority security improvements at its high-priority facilities, which 
was well above the target originally established.
FY 2004 Planned Activities
    In Fiscal Year 2004, Reclamation plans to deliver 27.0 million 
acre-feet of water for authorized project purposes. In addition, we 
will complete the Safety of Dams projects at Wickiup Dam, Keechelus 
Dam, Pineview Dam, and Horsetooth Dam. This will reduce total reservoir 
restrictions and increase the available storage capacity by 127,300 
acre-feet. Reclamation will also complete projects or parts of projects 
that have the potential to deliver an additional 42,030 acre-feet of 
water, which will naturally be dependent upon water availability and 
operations.
    Reclamation plans to complete the Escondido and San Elijo Water 
Reclamation Program; the Olivenhain Recycled Water Project; the Yuma 
Area Water Resource Management Group bifurcation structure; portions of 
the El Paso Waste Water Reuse Project; canal linings; and other 
salinity reduction projects that increase water availability.
    Reclamation also plans to continue ranking within the upper 25th 
percentile of low cost hydropower producers, by comparing power 
production costs per megawatt capacity, Reclamation plans to achieve a 
forced outage rate 50 percent better than the industry average, which 
is currently 3 percent. While Reclamation anticipates completing the 
baseline condition assessments for 80 percent of the recreation 
facilities it manages, it plans to continue to maintain the overall 
facility condition rating assessed at the Fiscal Year 2003 baseline 
level.
    Reclamation intends to ensure that 14 percent of recreation 
facilities meet universal accessibility standards, thereby increasing 
access to recreation areas to the disabled from 8 percent in Fiscal 
Year 2003, in addition to maintaining the annual level of on-the-job 
employee fatalities and serious accidents at zero.
Conclusion
    This completes my statement. Please allow me to express my sincere 
appreciation for the continued support that this Committee has provided 
Reclamation. I would be happy to answer any questions you may have at 
this time.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Certainly I am sure you were pleased, as well as the entire 
Department of Interior, to hear that the Sumner Peck Settlement 
will be done through the judgment fund, as it should be, rather 
than out of the Interior budget. And so hopefully that will 
allow more flexibility for you this year, and hopefully we can 
work out in future years in potentially reallocating some of 
those resources.
    Mr. Keys. Mr. Chairman, it is a great relief for 2003, and 
it allows us to go ahead with those activities that we had 
already identified with you and our constituents.
    Mr. Calvert. And I would hope that as we take a look at 
those funds that are, in essence, freed up in your budget this 
year, you will take another look at--we will work together 
looking at Reclamation Title XVI and some other projects that 
are certainly important to all of us here in the West.
    Mr. Keys. Yes, sir.
    Mr. Calvert. I want to talk a little about regulatory 
streamlining. Too often, a government or a private entity will 
go through a process with one Federal agency and then get 
sidetracked by another Federal agency when construction 
activities are required. The end result is needless and costly 
delays. We see this time and time again.
    How difficult has it been for the Bureau to coordinate with 
other agencies on construction projects?
    Mr. Keys. Mr. Chairman, we have had excellent cooperation 
from the other agencies in the construction projects that we 
have underway currently. Currently under construction is the 
Animas-La Plata Project in Colorado after years and years of 
court debate. We have had good cooperation from both State of 
Colorado people and the Fish and Wildlife Service that works 
with us in that construction.
    The other activities that we have underway in construction 
are Safety of Dams Programs, and I will tell you that it takes 
work, and we take that work with the other agencies very 
seriously. But we have been able to work with them very 
closely.
    Mr. Calvert. I come from that background, the construction 
business, and many communities get involved in, as you are well 
aware of, the so-called one-stop shopping where we try to bring 
in everyone around the table and work through the process. And 
hopefully you do the same as far as all the various Federal 
agencies as you begin a project and attempt to get into a 
memorandum of understanding with these various organizations 
where everyone knows where their priorities are at and that it 
does not stop a project once it has been approved.
    Mr. Keys. Mr. Chairman, there are a number of efforts 
underway currently that we work with to make that happen. The 
Endangered Species Program for the Upper Colorado River Basin 
is one that is working very well now, where we have had all of 
those agencies together working on the endangered species and 
at the same time going ahead with construction on the Animas.
    We have the Adaptive Management Program in the river below 
Glen Canyon that we are working very closely with.
    There is an effort underway in the Lower Colorado River 
called the Multi-Species Conservation Program, where we have 
all of those agencies pulling together to give us coverage in 
all of those activities for the next 50 years. And that is the 
kind of activity I think that you are interested in, and we 
think that it is the only way to go.
    Now, at times, it doesn't happen that way and things get 
splintered, but for the time being, we are trying to pull all 
those together. We have similar efforts going on in the Snake-
Columbia system in Oregon, Washington, Idaho, and certainly we 
are trying to do some of those in California.
    Mr. Calvert. One other question, and then I will let the 
ranking Democrat ask some questions. But one thing on dam 
security--and I know that is extremely important, and certainly 
homeland security is something we all take very seriously. 
However, in a small community in northern California, as you 
are well aware, a roadway has been closed on the Folsom Dam. As 
you are also aware, I was able to move a bill in the last 
Congress which allowed for dam security that would allow the 
Department to pay back communities that had to use their funds 
for dam security and the rest.
    This has put that community certainly in a difficult 
situation, but at the same time, we understand we have to do 
what is necessary for our own security. But is there any way 
that we can work together--and maybe we should meet about 
this--in working out some interim solution until we have a 
permanent solution, which, of course, I would like you to 
become involved in, and that is to find a way that we can put a 
bridge structure in to replace that dam transportation system 
which has become integral to that community.
    Mr. Keys. Mr. Chairman, there is a vulnerability at Folsom 
Dam that if I lived below that dam--and I have a number of 
people that I work with that do--I would not be comfortable 
with traffic across that facility because of that 
vulnerability. And that is why we have closed the traffic 
across there.
    We are certainly more than happy to work with you and the 
other agencies involved to look at alternate routes of 
transportation there and work with you on a bridge. I would say 
that there are a number of entities that should be involved in 
that, and we would certainly look forward to working with you 
to get that done.
    Mr. Calvert. Thank you.
    Mrs. Napolitano?
    Mrs. Napolitano. Commissioner, since I worked in 
Sacramento, I knew a little bit about Folsom. We dealt with it 
when we were in the State House. And at the time, it was one of 
those issues that kept coming up and up, and recently I met 
with a group of folks from Folsom, including the police chief 
and others, the city folks, the county folks. And it seems 
that--you are right, I would be a little hesitant living 
downstream of that particular area. But, nevertheless, it is 
there, it has been there. That road has been used by the 
commuters--for how many decades? And it has been allowed, and I 
even told them you have poacher's rights, for that matter, 
because you have been utilizing it for so long. I guess the 
point being is that we now all of a sudden are closing it and 
making it hard for thousands of individuals who come from the 
northern area beyond Folsom and are impacting the quality of 
life of many of the people in that small community. Somehow we 
are saying, well, too bad, tough.
    If we had the vision years ago, we probably would have done 
something about it then. Apparently nothing was done at the 
time, or if it was considered, nothing came to fruition. My 
point being is that they have an issue that we need to follow 
through, and I did suggest to them that it would have to be a 
cooperative work in progress, if you will, of not only the 
Federal Government but State government and some of the local 
officials to come up with the answer. It isn't just in the 
Federal Government's hands, although the decision ultimately 
will have to be because it is a dam.
    And so I, along with the Chair, look forward to sitting and 
trying to figure out how we can come to some kind of a 
conclusion that will help both sides.
    Mr. Calvert. And potentially we can come up with an interim 
solution, maybe providing for additional security along the dam 
while we move forward with the long-term solution, which would 
be a bridge to replace that. But we don't have to discuss that 
at this time. Mrs. Napolitano, your time continues.
    Mrs. Napolitano. Thank you. I yield to Mr. Cardoza.
    Mr. Cardoza. Thank you, Mrs. Napolitano. And welcome, 
Commissioner Keys. I would like to discuss the process or lack 
of process in determining the annual California allocation for 
South of Delta water users. As you know, the CALFED Record of 
Decision states that in the first 4 years of Stage 1 of the 
CALFED program, anticipated allocations will be 65 to 70 
percent of existing contract totals in normal years. However, 
this year, for example, and in many years in the past, which 
was released in January, this year's initial forecast predicted 
that an allocation would be 55 percent for that South of Delta 
area.
    Then in February, when a drier forecast was predicted, the 
Bureau released a second allocation forecast which actually 
increased the allocation to 60 percent.
    My question--and while I am glad my folks are getting more 
water, how do you explain that in dry conditions that you can 
actually have a result of increased supplies for South of Delta 
contractors? And what actions is the Bureau taking to reach the 
allocation level set forth in the ROD?
    Mr. Keys. Mr. Chairman, Mr. Cardoza, the prediction of 
water supplies in California is one of the most complicated 
computations that you will ever see in your life. The 
allocation of Central Valley and the State water supplies for a 
given year are based primarily on four variables.
    First is the forecast of hydrologic conditions, in other 
words, the snowpack combined with how much of that we expect to 
run off.
    The second part of it is the amount of water that is 
already in storage as we start the season in the upstream 
reservoirs and in St. Louis.
    The third part of it is projected targets for the end-of-
year carryover, in other words, how much water do we have to 
have there to be sure that we are not digging ourselves a 
deeper hole for next year.
    And the fourth thing we have to consider are those end-
stream and delta regulatory requirements.
    Take all of that and put it together, we start in December 
of each year for the State water project and then in February 
for the Central Valley project with those initial allocations. 
And we pull it all together and make the best guess that we 
can, and we correct it as we go along.
    I would say that in that dry period last year, some of the 
requirements that we had put into the original estimates did 
not come true. Maybe we got a better runoff. Even though it 
appeared drier, sometimes we can get a runoff that comes 
quickly and we will get more water out of it than we do from 
the same snowpack when it comes off more gradually. Those kinds 
of things enter into an increase in a year like last year.
    Certainly, if you would like, I could provide for you for 
the record or for you individually a lot better and more 
detailed explanation of how we make those forecasts.
    Mr. Cardoza. I would appreciate that, Mr. Commissioner, 
both for the record and to me personally. I would also like to 
know--you know, the Record of Decision was pretty explicit. It 
said 70 percent was the goal, and we have not met that in most 
years. And so I would like to see what progress you are making 
along trying to get to where we can reach the goal in normal 
years.
    Mr. Keys. Mr. Chairman, Mr. Cardoza, we would certainly 
include that in the thing and show you the progression as we 
have come through the years.
    Mr. Cardoza. Thank you. My second issue I would like to 
explore is as it relates to wildlife refuge issues under CVPIA. 
As you know, the Secretary of the Interior is required to 
supply water to specified refuges. The act also states that the 
Secretary will diversify sources of water supply to refuges to 
minimize the possible adverse effects upon Central Valley 
project contractors. Further, the California Record of Decision 
requires that a plan be developed to identify alternative 
refuge supplies and conveyance.
    The reality, however, is that the water for the refuges has 
been made available primarily by reallocating it from South of 
Delta CVP Ag Service contractors, and efforts to develop the 
required plan do not appear to be in place.
    My question to you is: Can you describe the Bureau's 
intentions for developing such a plan as prescribed by the act?
    Mr. Keys. Mr. Chairman, Mr. Cardoza, the CVPIA and the act 
and how it works with us on supplying that water is based on 
one good principle, and that is willing sellers of water. 
Certainly there is the base level of supply and the level two 
supplies to the refuges, and we have contracted with those 
refuges to supply the amounts of water ahead of time.
    It also directs us to look for additional water to meet the 
remaining portions of the full supply or the level four 
supplies. And, again, we look to willing sellers to help us 
provide that water supply.
    Water users are not giving up water for it. We are 
purchasing that water for those level four supplies. Again, it 
is much more complicated than I have laid it out for you, and I 
would be more than happy to give you a detailed writeup to show 
you the different levels of supply and where those are provided 
from and how we have--the experience we have had in obtaining 
that water from willing sellers. So far, so good. But I know 
there are some entities that don't think we have had enough, 
but I would certainly supply that sort of detail for the 
record.
    Mr. Cardoza. Thank you. I appreciate it.
    Mr. Calvert. I thank the gentleman.
    Mr. Walden?
    Mr. Walden. Thank you very much, Mr. Chairman.
    Mr. Keys, welcome. We are delighted to have you here, and I 
appreciate all the work that you are doing. If you could only 
make it rain and snow at the appropriate times and the 
appropriate places, your job would be a lot easier and so would 
mine.
    I wanted to thank you for your efforts in the Umatilla 
Basin and certainly in the Klamath Basin. Yours and this 
administration's have been extraordinary in that respect. As 
you know, the Water Bank is coming together this week, and I 
understand that there is considerable interest among the 
farmers and ranchers in participating in that if yesterday's 
activities are any indication. Apparently 500 showed up, and 
the office ran out of their 300 application forms.
    Obviously, with a 40-percent water supply projected coming 
into Upper Klamath Lake, we face another very, very critical 
year in the basin. I again appreciate all that this 
administration is doing to help. The President has been very 
forthright about that.
    My question concerns funding. I guess I am encouraged, this 
new judgment issue working out favorably for you. Do you 
believe that you have the funding necessary within your budget 
to continue the very important long-term work while funding 
certainly this year's obligation for a Water Bank?
    Mr. Keys. Mr. Chairman, Mr. Walden, in Fiscal Year 2003 we 
are stretched, and we are working very diligently to pull that 
money together. So far we have most of it together, and we are 
actually doing some shifting around to get us through this 
year. Our 2004 proposal does provide adequate money.
    The one thing that we are--in 2003, we are finishing up the 
construction of the A Canal fish screen, and that certainly 
helps us, first off, protect those little fish coming out of 
Upper Klamath Lake. And the second thing is we get that big 
funding past us, so that helps us out. But we think we have 
enough in our 2004 budget to cover us.
    Mr. Walden. And that is, what, $10 or $12 million for the A 
Canal?
    Mr. Keys. Yes, sir.
    Mr. Walden. That is an extraordinary construction project. 
I don't think most people realize, when you hear about a fish 
screen, the size and the complexity of screening the A Canal is 
enormous, and your folks have done a great job.
    Mr. Keys. Mr. Chairman, Mr. Walden, there is one other 
aspect of that thing that is absolutely amazing, and that is 
that our folks are getting it constructed during this winter 
with no loss of service to the irrigation district there. They 
are doing a yeoman's job in getting it done.
    There is good news and there is bad news. The good news is 
we had a great construction season. The bad news is a great 
construction season produces 45 percent water supply.
    Mr. Walden. Mr. Keys, as you know, last session of Congress 
we were successful in passing legislation to provide for 
refunds, authorized refunds in the Klamath project. It has been 
my belief that people shouldn't have to pay for something they 
really didn't get and they had to maintain a system that didn't 
deliver water in 2001. Does the Bureau have a way to fund this 
year? And if not, is that in your 2004 request or is that 
something we need to work on differently?
    Mr. Keys. Mr. Chairman, Mr. Walden, we did get the 
authorization, but at the time we got it we had no funding to 
implement with. We do believe in what that authorization does 
for us and are certainly trying to find the funding to get that 
done.
    For the rest of the panel, the refund there is for 
operation and maintenance monies that folks paid ahead of time 
and then received no water. And like I said, we believe in 
that, and when we can find the funds, we will certainly 
implement that authorization.
    Mr. Walden. So the extent to which we could be helpful in 
finding those funds from some source, you would be appreciative 
even though you are going to stick with the President's budget 
because that is what you are paid to do. So I won't ask you to 
comment beyond that.
    I have another question, Mr. Chairman, if I could. This 
regards the whole TMDL issue as it relates up on the Snake 
River and Columbia River systems. Are you engaged in that 
discussion and its potential impacts?
    Mr. Keys. Yes, sir. Myself and my Assistant Secretary, Mr. 
Raley, are both deeply involved in that. It has the potential 
of great harm to the power system.
    Mr. Walden. I would like to explore that a little further. 
I don't know how much--do I have another minute or so, Mr. 
Chairman?
    Mr. Calvert. If it is a minute, we can do it. How is that?
    Mr. Walden. I will make my part short. Could you just 
inform this Committee the extent to which this new TMDL 
requirement by the EPA, if enforced, the effect that would have 
on power production which my friends to the south should be 
keenly interested in because if we have any surplus, we would 
like to send it your way even though sometimes we don't get 
paid for it, mind you. But that is a different issue. Could you 
talk about that? This is a critical issue that is just coming 
to light.
    Mr. Keys. Mr. Chairman, Mr. Walden, the TMDL requirement 
that Mr. Walden is referring to is the temperature requirement 
under TMDL, total maximum daily load. We are still evaluating 
the impact on the system. We are working very closely with the 
Corps of Engineers. It resulted because the State of Oregon did 
not have a system to implement TMDL, so EPA did it for them. 
And they have established a--
    Mr. Walden. Haven't they established a temperature gradient 
that calls for colder water?
    Mr. Keys. They have established a quality requirement at 
the mouth of the river that is more stringent than at the top 
of the river, and rivers normally get warmer as they go down 
the river and come through the storage facilities. And that is 
the difficulty that we are trying to deal with.
    Mr. Walden. Let me cut to the chase, if I could. My 
understanding is the potential is there that we could see no 
power production out of the Snake River dams if this is in 
force fully.
    Mr. Keys. Mr. Chairman, Mr. Walden, that is worst-case 
scenario.
    Mr. Walden. Thank you.
    Mr. Calvert. Before I move to the next questions, is there 
a way, if necessary, to do an emergency declaration to allow 
for a change in how you operate those dams based upon this 
initial order?
    Mr. Keys. Mr. Chairman, I don't know the answer to that, 
but we could certainly consider that.
    Mr. Calvert. I appreciate that.
    Mr. Inslee?
    Mr. Inslee. Thank you, Mr. Chair.
    I wanted to ask you about the Bureau's--this is kind of a 
broader topic, but the Bureau's thinking on global warming and 
its implications for snowpack and, therefore, irrigation and 
power production. We are just very, very concerned in the 
Northwest that the computer models seem to suggest a 
significant reduction in snowpack due to global warming in the 
next several decades. And inasmuch as it is our electric 
battery and our irrigation supply, that could potentially cause 
us great grief.
    I wonder if you can relate to us what efforts the Bureau 
has made to assess the nature of that threat and, two, talk 
about either mitigation or, if mitigation doesn't work, what we 
ought to be doing about that problem, because it really is of 
growing interest in the Northwest.
    Mr. Keys. Mr. Chairman, Mr. Inslee, we don't have an effort 
underway in Reclamation to do that. We do have people that are 
working closely with the U.S. Geological Survey, who are 
participating in a number of studies on behalf of the 
Government to look at global warming. We also have some folks 
that are working on studies that are being coordinated with the 
National Academy of Science on global warming. But in 
Reclamation, we don't have the capability of doing those kinds 
of studies.
    We are supportive of our sister agencies and certainly 
encourage them to do that and would look to the results that 
come out of their studies.
    Mr. Inslee. Do you think that is a role that you ought to 
play? And let me suggest in some nature you should, and let me 
tell you why it makes sense to me. You are sort of a service 
provider to a lot of folks for both irrigation and power, and 
if there is a threat to that supply, I would think that the 
Bureau would want to be in some fashion associated with dealing 
with that.
    Do you think that makes sense if you had the money, or is 
it just something that ought to be left to another agency?
    Mr. Keys. Mr. Chairman, Mr. Inslee, we don't have that kind 
of capability in Reclamation. That is why we depend on the 
Geological Survey, and we are working very closely with them. 
In other words, they represent us. They have the right kinds of 
people to deal with those issues. We just don't have that kind 
of expertise. We can't afford to keep that kind of expertise on 
staff.
    Mr. Inslee. Have they given you information about what is 
probably going to be happening with snowpack in regard to this 
phenomena?
    Mr. Keys. Mr. Chairman, Mr. Inslee, it is not that precise 
yet, and it has not come down to being able to say that this 
year's snowpack is less because of global warming and so forth. 
Our Department is watching it very closely. They are working 
with the USGS and other scientific agencies. We are watching it 
closely. It is just not that precise that we can say this 
year's snowpack is--
    Mr. Inslee. Right. Let me suggest we are never, ever going 
to have that degree of precision where you can say any 
particular year's snowpack is related to any particular year's 
global warming. But I am concerned that if you have not asked 
the other Federal agencies to give you predictions of long-term 
trends in snowpack that is going to have huge, I believe, 
impacts in the Northwest, it would seem that the Bureau would 
at least ask these other agencies to advise you so that you can 
become prepared with additional storage, if that works, or 
other ways of dealing with that on a long-term basis.
    So I would encourage you to think in those terms because 
you are sort of the service provider to a lot of our 
constituents. And if 15 years from now all of a sudden the 
snowpack is 30 percent less, which the computer models suggest 
it will be--maybe not 15 but 20 to 25 years from now--and the 
Bureau hasn't thought about how to deal with that issue, I 
think we are really going to be behind the eight ball. So I 
would encourage you to at least explore avenues for the Bureau 
to try to get those other agencies to help you in your mission, 
and I would like to work with you in any regard in that.
    Mr. Keys. Mr. Chairman, Mr. Inslee, we would certainly do 
that. I don't think the other agencies have the ability to 
predict. Every time I see the people from the GS, we talk about 
it, and we say, ``What is the snowpack going to be?'' And they 
say, ``That is your job to predict,'' because we are still--it 
is just not that far out there. It is not precise. And I don't 
know of any agency that has the ability to predict long term.
    Mr. Inslee. Well, I agree with you that there is no way we 
can predict in a particular year what the snowpack is going to 
be. But I guess what I am getting at, if the long-term trends 
are for significant reductions in snowpack, average years, is 
that something the Bureau you think should be doing something 
about right now to think about, or what do you think?
    Mr. Keys. Mr. Chairman, Mr. Inslee, we don't know that the 
long-term trends are to reduce snowpacks. That is what I am 
telling you. We don't know of an agency that has the ability to 
predict that.
    There are studies underway to see if that is a trend, but 
we have not seen those kind of predictions yet.
    Mr. Inslee. We will send you some.
    Thank you very much.
    Mr. Calvert. If I heard the gentleman correctly you might 
look into some additional storage, I would be happy to work 
with you on that.
    Mr. Inslee. Well, you know, that is the problem, because we 
don't have that many opportunities.
    Mr. Calvert. I will predict we need additional storage. How 
is that?
    [Laughter.]
    Mr. Calvert. With that, I will recognize Mr. Nunes.
    Mr. Nunes. Thank you, Mr. Chairman.
    Mr. Keys, since the last time we spoke, we have authorized 
a feasibility study on Upper San Joaquin River. In your 
proposed Fiscal Year 2004 budget, you have budgeted $1 million, 
yet there are other records that show that you are going to 
need $4 million in Fiscal Year 2004. Can you comment on that 
and on additional funding that you may need on this specific 
project?
    Mr. Keys. Mr. Chairman, Mr. Nunes, the studies that you are 
referring to will be started in Fiscal Year 2003 because of the 
CALFED authorization and the funding that came along with that 
for authorized studies. The 2004 monies keep that going.
    Currently, that is our capability, and certainly if there 
are other requirements out there, we would certainly be willing 
to work with you. But right now it appears that is what we 
need.
    Mr. Nunes. OK. It just appears to me that there could be a 
possible discrepancy from your proposed Fiscal Year 2004 budget 
and what has been budgeted previously to complete the project. 
So, as you know, I am very concerned to make sure we have 
enough funding to finish the project on time, the feasibility 
study.
    Another question. I don't know if this is the right time, 
but could you comment on the status of CALFED and what your 
thoughts are on where the process should go?
    Mr. Keys. Mr. Chairman, Mr. Nunes, CALFED is a process that 
started a number of years ago. We are doing everything that we 
can in Reclamation to accomplish work under the authorizations 
that we got this year on those storage facilities. Our 
Department is still working very closely with other entities to 
see if there is support for the CALFED program. And I think at 
the proper time our Department will make that decision.
    Mr. Nunes. So at this point, you have no decision on 
whether or not we should proceed with involvement in the CALFED 
process?
    Mr. Keys. Mr. Chairman, Mr. Nunes, it means that we have to 
work very closely with the State of California and all of the 
other entities there to be sure that all of us have a bill that 
we are all comfortable with. And certainly we have worked with 
Members of both the House and the Senate over the years on 
different proposals. I think once a proposal is together that 
all of us can look at and get behind, I think there are good 
possibilities there.
    We are fully supportive of the CALFED process. It is just 
not--there has not been that vehicle yet that we can all 
support. We are supportive of the process, but we would be more 
than happy to work with the people from the House or the Senate 
on a proposal.
    Mr. Nunes. Well, I am supportive of the process also, 
except when--the bottom line is--I think, Mr. Chairman, you 
know this, you mentioned it--we need new water storage, and 
this process has been going on for a decade. I have grave 
concerns that we are just barely in the feasibility study 
stage, which is, as you know, not even close to the stage of 
actually building any new water storage facilities.
    Thank you.
    Mr. Calvert. Well, we are going to be working on a CALFED 
bill, Mr. Nunes, together, all of us, and, by golly, we are 
going to--and I am sure your Department is going to love it, 
Mr. Keys. And Bennett is going to love it, too.
    Mr. Keys. Mr. Chairman, we will certainly look forward to 
working with you on that.
    Mr. Calvert. Mrs. Napolitano?
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Commissioner Keys, could you give me a clarification of the 
thinking of the Bureau of Reclamation on recycling?
    Mr. Keys. Mr. Chairman, Mrs. Napolitano, recycling is a 
good program. The Title XVI program that was authorized 12 
years ago certainly is one that the Bureau of Reclamation will 
continue to work to construct those projects that you have 
authorized and funded and certainly to finish the construction 
on those projects that are underway.
    The Bureau of Reclamation currently is operating under a 
flat budget. In other words, we are looking at no substantial 
increases in our overall request, and with all of the other 
requirements on the Federal treasury, that is kind of the way 
of life for us right now.
    There was a little--I know it doesn't seem significant, but 
from the official Fiscal Year 2003 to 2004, there was a small 
increase in our wastewater reuse and recycling budget. So what 
I am saying is that Title XVI is a valid part of our program. 
It is doing its job to help stretch water supplies in some of 
our States.
    It has been part of our program for over 10 years. It was 
meant at first to be a pilot and demonstration project to let 
us look at new methods for recycling, let us look at new uses 
of water, reuses of water. It was not meant to be a grant 
program, and certainly that is part of the problem that we get 
into.
    What we are trying to do is say that we have been at that 
10 years, and it is time to look at a--not a total refocus, but 
a shift in gears there to look at other technology, the other 
technology being desalination, which there seems to be great 
demands for our there.
    We are working with the local people in California who are 
trying to desalt ocean water. We are working with people in the 
Plains that are trying to desalt brackish groundwater. One of 
the problems in our rural water program is that the current 
solution is to drop a pumping plant into the Missouri River, 
put a treatment plant on it, and then run pipelines 120 miles 
out. And we are trying to find a smaller, more efficient 
desalting process that we can put on the ground out there 
instead of running these pipelines that far.
    In California, we also think that desalting can be a help 
in our work with the Colorado River. In other words, if the 
State of Nevada, for example, wanted to go to Long Beach and 
put some money into their desalting plant and the California 
people use water from desalted ocean water and then Nevada 
divert a like amount from the Colorado River, that sort of 
possibility is out there, and there is interest in that.
    So we are trying to find, I would say, the best use of our 
scarce funds to do the most good with, in other words, to be as 
efficient as we can. And we are trying to improve that 
technology for desalination.
    Mrs. Napolitano. But, Mr. Commissioner--and I don't want to 
seem like I am interrupting, but hasn't recycling proved to be 
a win-win in California and other States? It has provided other 
States the ability to see that it can work and how it can work. 
The fact that a lot of States are going to have a tough time 
trying to find a way to get rid of the brine if they go to 
desalting or when they go to desalting--which may--I am sure 
you are right. We need to find other alternatives, but not 
totally wipe out the assistance in recycling. And we have gone 
through great lengthy meetings in California over the 4.4 plan, 
the Colorado. And it is just something that if we are not able 
to continue putting the emphasis on recycling the water, by the 
time we get going on desalination in the areas, we will have 
already been at the deadline of 4.4 which is now there, unless 
Interior and Sacramento get together and are able to work 
something out. The point being is that this has been proven, it 
works. Yes, you weren't meant to be the total funder. If there 
is an issue of matching funds, what is then the adequate--
because in some of the reading information I had, it said the 
agency felt that the matching portion of it was inadequate. 
What would be adequate? We can't just throw the baby out with 
the bath water and say now we are moving to another new 
technology. It has been proven, but we have the desalter down 
at the bottom of the Colorado River that hasn't been used for 
years. I believe there is another one that--and I can't 
remember the other one, but there is another one. Why are we 
not putting those back on line in areas where we feel maybe we 
need to work on the water for the Colorado River water from 
Mexico and the U.S. at the mouth of the Colorado.
    There are all kinds of scenarios that we can argue about 
what is the workable plan. How did the agency get there? Who 
made the decision? Did you have input from the communities that 
we serve, both you and I, the Bureau and I, and the rest of us? 
Because it seems to me that these people are floundering for 
answers, and they are coming to us because they can't seem to 
understand where the Bureau is going with this new plan.
    The other one is the PART, the program assessment rating. 
There are questions about how you came up with some of the 
ratings and how it is going to help some of the institutions be 
able to deliver quality of water. And in terms of drought, you 
are correct. We need to--Jay Inslee pointed out we need to look 
at it before we get to the point of drought.
    Texas, for instance, the ability of the farmers, we should 
have had a plan there for them a long time ago. They are really 
literally losing the farm. If we have to go and negotiate with 
Mexico, then, by all means, let's go to the DOJ.
    I am just trying to find answers. How do we get to all 
these things? And how do we understand where the Bureau is 
heading without us understanding what drove you to that based 
on what we are experiencing in our backyard with our 
constituencies? Do I make myself clear, or am I muddled enough 
for you?
    Mr. Keys. Mr. Chairman, Mrs. Napolitano, I understand very 
well what you are saying. We are an old agency that has a very 
narrow mission in dealing with water and power in the Western 
United States. The Title XVI program was something that was 
entirely new to us, and what we worked with cities and entities 
to do is to try to prove the wastewater reclamation and reuse 
technology. And I think we have done a pretty good job of that.
    Mrs. Napolitano. You have done a great job. I am looking at 
your website, a copy of your website taken off of it the 4th. 
And it reads--and I will read this into the record.
    Mrs. Napolitano. Let's see. ``Our evolving mission places 
greater emphasis on water conservation, recycling, and reuse; 
developing partnerships with our customers, states, and tribes; 
finding ways to bring competing''--and then it goes on. It is 
still on your website. It is still part of your mission, and it 
is still part of the largest portion of your mission. And that 
is why I can't understand why that mission is evolving into 
something else. It says water reuse and conservation is 
another--``water quality works hand-in-hand with our most 
important goal of water reuse and conservation.''
    And so it is hard for me to understand as an individual who 
works with the communities why this is happening without any 
input from the locals or from this Committee or information for 
us to understand where you are headed and why. And I understand 
your budget constraints. We all are facing them, unfortunately, 
and I agree with you, we need to work a little closer together.
    I just need you to understand that there are a lot of 
issues that we have that I am bringing to the table because 
they are issues that are being brought to me not only from my 
constituents but from other members' constituents not even here 
in this Committee.
    Mr. Keys. Mr. Chairman, Mrs. Napolitano, we are certainly 
willing to work with you in the future on this. I would tell 
you that that is in our website because we are proud of what we 
have accomplished with those entities out there.
    Mrs. Napolitano. And I agree.
    Mr. Calvert. I thank the gentlelady.
    While we are on the subject of Title XVI, I might as well 
carry it on a little bit. Obviously, the wonderful thing about 
the Government we all serve is that we have three branches, and 
so we can all have our disagreements. I suspect that the House 
and the Senate may have agreed that Title XVI is part of the 
law today, and we may be able to help you out as far as finding 
additional funds to continue Title XVI. I think it is very 
popular, especially in my home State, but certainly I think as 
you know, we have looked into expanding Title XVI just beyond 
California at some point in the future. And it is a point that 
I want to make because my question is going to be about the 
quantification settlement agreement.
    As you know, we are under a lot of stress right now to meet 
our obligation to use the 4.4 million acre feet that has been 
allocated on the Colorado River. And in order to meet that, it 
is going to take more than just CALFED, though that is 
certainly an important part of the solution. It is going to 
take Reclamation. It is going to take desalinization. It is 
going to take conservation in a number of ways in order for us 
to meet our needs, not just in California but in many States 
throughout the West.
    And so I don't believe that from my perspective, and I 
think the perspective of many folks on both sides of the aisle, 
that Title XVI is going to go away. So I think we need to work 
together in the future to see if we can work it in a way that 
meets the Department's needs and at the same time we can make 
some headway.
    On the quantification settlement agreement, it seems from 
the reports that I have been reading and in talking to various 
folks that the four affected agencies may come to an agreement 
very soon, hopefully. As you know, in this process it has been 
a very complex and complicated deal. And I want to ask the 
question: Will the Bureau and the Department commit to work 
positively to--I guess in my old real estate vernacular--
``close the deal''? You know, I used to have this saying, 
``Don't let the perfect be the enemy of the good.'' And at this 
point, this is extremely important not just to the economy of 
California--and certainly it is--but to the economy of the 
entire Western United States if California doesn't have 
adequate water to meet its future obligations.
    And so hopefully if, in fact, these agencies do come to an 
agreement, the Department, the Bureau acts proactively to 
positively close this transaction. Any comment about that?
    Mr. Keys. Mr. Chairman, the Department of the Interior and 
the Bureau of Reclamation are still interested in settling--in 
working with the California parties regarding the efforts of 
work that we did up until December 31st. The Department is 
still willing to meet with California parties at the 
appropriate time to consider any proposal. We have actually 
offered to meet with all of the States and the parties the 12th 
and 13th of this month.
    But we have to do those meetings and efforts now in 
consultation with the Department of Justice. Many of the issues 
involved in the QSA now are subject--are a part of Federal 
litigation. But certainly we remain interested and are willing 
to meet and try to settle this thing.
    Mr. Calvert. Now, I understand--is there any legal 
impediment from dealing with anyone--you know, in my old life I 
used to get sued all the time and I would meet with those folks 
on a regular basis, nevertheless. Is there any legal impediment 
for you to meet or talk to or communicate with someone who is 
in a lawsuit? For instance, if the Sierra Club is suing you or 
some environmental agency is suing you, does that mean you 
don't meet with them anymore?
    Mr. Keys. Mr. Chairman, no. We are willing to meet with any 
of them at almost any time.
    Mr. Calvert. Well, that is important because, you know, we 
have got to move this process forward. And I understand that 
anytime we deal with water, there is a lot of emotion and hard 
feelings and so forth and so on. And I hope there are none in 
this case because we must move this deal forward.
    Mr. Keys. Mr. Chairman, we are willing to meet with them. I 
think what I was trying to say is we are willing to meet with 
them, we just have to take the right people with us now.
    Mr. Calvert. Yes. Well, you guys have more lawyers than 
most, I suspect. All right. I will leave it at that.
    Mr. Cardoza?
    Mr. Cardoza. Nothing further.
    Mr. Calvert. Mrs. Napolitano?
    Mrs. Napolitano. If I may, I would like to go for another 
couple of questions. I certainly would ask the Chair to reserve 
the right for us to submit questions.
    Mr. Calvert. Without objection.
    Mrs. Napolitano. From not only our members but from myself.
    There have been two studies that have been hanging fire for 
a long time. One of them has been the Hardy Phase 2 study. That 
is regarding the Klamath River. And the other one has been the 
Southern California Comprehensive Water Reclamation and Reuse, 
Public Law 102-575 and the comparable study for the San 
Francisco Bay area. And this has been not delivered, and I 
would like to ask if that could be accomplished as soon as 
possible.
    Mr. Keys. Mr. Chairman, Mrs. Napolitano, the study that you 
just mentioned on the wastewater reuse in Southern California 
is undergoing a revision at this time and should be available 
in the near future.
    The Hardy Phase 2 study is one that we are still waiting 
on. When we get that, it will be submitted to the National 
Academy of Science as part of their review of all of the 
science in the Klamath Basin on the proposals that have been 
made for the Endangered Species Act and the salmon there.
    Mrs. Napolitano. I certainly would like to know what the 
changes are, because we were privy to some of the information 
on the Southern California Comprehensive Water Reclamation and 
Reuse, and I would like to know what some of the changes are 
because apparently it did indicate a strong view on water 
recycling.
    Mr. Keys. Mr. Chairman, Mrs. Napolitano, I will be very 
candid with you. When we got the report, there was a lot of 
extraneous material there, and we are trying to be sure that it 
is concise so that we can all understand what is there.
    Mrs. Napolitano. Excellent, and I hope that it is clear to 
all of us.
    And the other question, one of the ones that has been in 
the back of my area has been the San Gabriel Basin restoration 
fund. The Bureau has proposed $1.3 million for clean-up 
activities. We were allocated $10 million in 2003 and $12 
million in 2002. And now the Bureau consistently wipes that 
amount out, and David Dreier, Chairman of Rules, consistently 
puts it back in. Is this a game we are playing?
    Mr. Keys. Mr. Chairman, Mrs. Napolitano, we are not playing 
a game. It is just trying to find the right conditions to get 
the work done and trying to use our monies most expeditiously.
    Mrs. Napolitano. It gets put back in. Why don't we just put 
it back in up front?
    Mr. Keys. Mrs. Napolitano, it was a new program last year, 
and we are certainly trying to get it back in the train.
    Mrs. Napolitano. It was--OK, you say new, but it has been 
around for a long time.
    I will then submit some other questions in writing that I 
certainly would like to have information to disseminate to all 
of my colleagues.
    Thank you, Mr. Chair.
    Mr. Calvert. Thank you.
    With that, I would have some additional questions I will 
submit in writing also so we can move on.
    [The Bureau of Reclamation's response to questions 
follows:]
                            Chairman Calvert
THE BUREAU AND THE PART PROCESS
    1) Question: OMB has implemented its Program Assessment Rating Tool 
(PART) to evaluate a program's purpose, management and results to 
determine its overall effectiveness. Discuss the relative importance of 
the new PART process in setting agency budget priorities, and the role 
of the Bureau of Reclamation in conducting PART analyses. Does the 
Bureau consult with the OMB in defining its core mission, particularly 
during the budget process?
    Answer: The PART process plays a significant role in setting agency 
budget priorities, as agencies work to implement the results of the 
PART ratings. Under the PART program, each agency self-assesses its 
programs using a standard tool, and OMB reviews and consults with the 
agency in setting a final rating. Reclamation is taking PART ratings 
into account in developing budgets for programs that have been rated. 
Also, Reclamation develops its overall budget, priorities, and mission 
statement in close consultation with the Department and OMB. The PART 
tool does not determine budget priorities and requests, but does inform 
the budget process.
TITLE XVI FUNDING
    2) Question: The Bureau's ``core mission'' states that it is ``to 
manage, develop, and protect water and related resources.'' Water 
reclamation and reuse are important methods to developing water, yet 
the Bureau maintains that these programs are not part of the ``core 
mission.'' How does the Bureau define the ``core mission?
    Answer: The Bureau's Core Mission, as stated in DOI's Strategic 
Plan, is ``to deliver water and hydropower, consistent with applicable 
State and Federal law, in an environmentally responsible and cost 
efficient manner.'' Although we recognize the importance of funding a 
variety of activities within our Water and Related Resources 
appropriation, including water reclamation and reuse, Reclamation feels 
that we must place a priority on those activities that are central to 
our mission.
    2b) Question: The fiscal year 04 Title XVI request amounts to $11.5 
million, representing a significant reduction over the last two years. 
Explain how the Bureau arrived at this funding level given the 
importance of providing assistance to projects that are proceeding to 
construction that depend on meaningful federal assistance.
    Answer: When developing Reclamation's budget we must consider our 
entire program and identify priority activities. Because the Title XVI 
program supports projects that promise to help alleviate potential 
water shortages, our fiscal year 2004 request for Title XVI work is 
actually about $1 million above that shown in the fiscal year 2003 
amended request. Reclamation is unable to fund all programs within the 
existing budget constraints.
WESTERN WATER INITIATIVE
    3) Question: What is the genesis of the Western Water Initiative? 
What stakeholder involvement did the Bureau seek in formulating the 
Western Water Initiative?
    Answer: Many parts of the Nation are struggling to deal with a 
drought of historic proportions while working with aging facilities 
that are of 19th century technology in a 21st century level demand for 
water. Recent crises in the Klamath River basin in Oregon and Middle 
Rio Grande basin in New Mexico--where farmers, Native Americans, fish 
and wildlife all were impacted by the water shortages--vividly 
demonstrate the consequences of failing to resolve the problem of 
demands for water by people and the environment that exceed the 
available supply.
    In the Klamath Basin, damaging social and economic impacts in the 
community, a decline in fish and wildlife habitat conditions, loss of 
traditional practices, and negative impacts to commercial and sport 
fishing industries all have been by-products of drought and the related 
conflicts over the use of water for farming, tribes, and the 
environment,
    In the Middle Rio Grande Basin, endangered minnows and drought have 
caused conflict over the use of storage water, earmarked for cities and 
farms, to improve minnow habitat. The result has been controversial 
court decisions that have undermined the water supplies for future 
municipal economic and population growth, and future farming and the 
environment in the Basin. There is a significant risk that additional 
water shortage crises will occur in the short term, mostly in the more 
arid parts of the United States, where population growth is the 
greatest.
    The Western Water Initiative is a strategic approach to predicting, 
preventing, and alleviating water conflicts such as these, and will 
assist in investing in water supplies that will support the people and 
economy in the coming decades. The focus of the Western Water 
Initiative is not just on increasing water supplies, but on better 
managing the water we have. The Initiative will do this by helping to 
develop long-term plans for water management, targeting areas that are 
most likely to have water conflicts, working to improve the use of 
science and the adoption of adaptive management plans for watersheds, 
and helping people Reclamation staff better understand what they must 
do to help Reclamation projects meet the requirements of the Endangered 
Species Act.
    We have heard from many of the water users on Reclamation projects 
in the West that they need assistance in improving their ability to 
manage water more efficiently. Some water delivery facilities are more 
than 60 years old and the modernization of existing infrastructure 
could add significant efficiencies to water delivery systems, providing 
the flexibility needed to help meet unmet water demands. Many 
Reclamation water districts cannot afford to make the improvements on 
their own. We have received many requests for state and local entities 
to use our science and technology to reduce the cost of desalination. 
This Western Water Initiative is responding to these pleas for 
assistance, financial and technical, to improving their ability to 
stretch water supplies in the West.
SALTON SEA RESTORATION PROJECT
    4) Question: The Department of Interior has indicated that it has 
carried out its responsibility under the Salton Sea Reclamation Act. 
Many others disagree and say that the Department could be doing more to 
resolve issues on Salton Sea remediation. Is the Bureau's proposed $1 
million for Salton Sea part of a long-term plan to issue a Preferred 
Alternative? If not, what are the Department's next steps?
    Answer: The Department fulfilled all reporting requirements, as 
related to P.L. 105-372 in January of 2000, when former Secretary 
Babbitt forwarded to Congress a draft Environmental Impact Statement/
Environmental Impact Report, a Strategic Science Plan, a Draft 
Alternatives Appraisal Report, and an Overview and Summary Report. 
Since that transmission in January of 2000, we have been continually 
refining and analyzing various alternatives to restore the Sea with 
particular emphasis on engineering feasibility and cost estimates. 
During this time we have also been encouraged by Members of Congress 
and others to assess partial restoration alternatives. In January of 
2003, we released a Salton Sea Study--Status Report, which further 
assesses various past and ``newer'' concepts. The Department will 
continue to work closely with the Salton Sea Authority, other federal, 
state, and tribal entities to further analyze and refine alternatives 
for restoring the Sea.
BUREAU POWER PRODUCTION
    5) Question: OMB's PART process rated the Bureau's power program as 
``moderately effective.'' Explain this analysis and whether the Bureau 
participated in this process.
    If you agree with OMB's assessment, what will the Bureau do to 
improve how it produces power?
    Answer: OMB and Reclamation collaborated on the evaluation of 
Reclamation's hydropower program, ultimately resulting in the 
``Moderately Effective'' rating. This collaborative effort involved 
Reclamation providing to OMB its own, internal assessment of its 
program, as well as a large amount of programmatic information. As 
perusal of the PART worksheet and summary sheet indicates, OMB found 
Reclamation's hydropower program to be generally well-run. However, it 
determined that Reclamation's long-term goals and measures were 
inadequate. OMB and Reclamation are working together to come up with a 
better way of defining Reclamation's long-term vision for its 
hydropower program, and of better tracking its progress toward reaching 
that vision.
DAM SECURITY AND SAFETY
    6) Question: September 11 understandably changed the way Bureau 
looks at securing its facilities from terrorist attacks. How is the 
Bureau spending site security funds appropriated by Congress?
    Answer: Reclamation is using site security funds to maintain a 
heightened level of security at facilities by using guards, law 
enforcement officers, surveillance, and security patrols, and 
implementing physical security improvements and upgrades.
    6b) Question: Will it need more funding for site security 
improvements, and, if so, will the Bureau continue its policy of not 
passing added security costs to its customers?
    Answer: Reclamation has prioritized and initiated identified 
security upgrades for the 55 most critical facilities where 
vulnerability risk analyses have been completed. Many of the initial 
security improvements are already in place, and work will continue in 
fiscal year 2003 on the remaining programmed improvements. As 
additional security risk analyses are completed in fiscal year 2003 and 
fiscal year 2004 we will program funds for further identified upgrades. 
At this time, we will continue our policy of not passing these added 
security costs on to our project beneficiaries.
    6c) Question: Does the Bureau have a plan to assist localities 
impacted by these security enhancements?
    Answer: Our efforts are aimed at protecting the public, our 
employees, and our facilities from adverse impacts of terrorist 
actions. We do meet with local officials and advise and educate the 
public on matters that may impact them.
    6d) Question: The Bureau is proposing that Congress raise the 
authorization ceiling for the Dam Safety Program. Because of this, the 
Bureau maintains that it will not be able to identify fiscal year 05 
actions since it does not have an appropriate spending ceiling. Explain 
why the Bureau cannot simply identify out year dam safety fixes without 
a raise in the Dam safety ceiling.
    Answer: Preparing the modifications reports that identify the out 
year dam safety fixes requires a commitment by the beneficiaries to 
repay their share of the cost of the modifications in accordance with 
the Reclamation Safety of Dams Act. The project beneficiaries are 
unable to commit to repayment if there is not sufficient authorization 
to indicate what the repayment terms will be.
RURAL WATER SUPPLY
    7) Question: The Administration argues there is significant overlap 
with other Federal rural water program. Where is the Bureau on 
establishing guidelines for a rural water supply program such as 
eligibility, local cost share and program planning?
    Answer: The Department is in the process of drafting legislation 
for review by OMB to establish a structured rural water program within 
the Bureau of Reclamation. While Reclamation has been directed by 
Congress to plan, develop and construct 13 specific and individual 
rural water projects since 1980, we have been extremely limited in our 
ability to work with the communities that are in need of assistance 
prior to the passage of the specific project authority. This has 
resulted in inefficiencies and increased costs. The proposed 
legislation will address the programmatic shortcomings identified in 
the fiscal year 2004 PART analysis of Reclamation's rural water 
projects. At this time several different options are being considered 
as a means of addressing those weaknesses, and it is premature to 
identify any specific actions.
CALIFORNIA WATER DEMANDS
    8) Question: California has used more than its share of the 
allotted 4.4 million acre feet per year of Colorado River water. 
Efforts are underway to reduce southern California's share of Colorado 
River water by utilizing Title XVI funding programs. Do you agree that 
these programs can help relieve southern California of its water needs?
    Answer: Yes. The water produced from Title XVI projects has been 
used to eliminate the use of potable water supplies, including Colorado 
River water, from activities such as landscaping and heavy industrial 
uses and replace those potable supplies with waste water.
    8b) Question: If so, why are Title XVI programs not part of the 
``core mission?
    Answer: When Title XVI passed in 1992, the Act directed the 
Secretary of the Interior (Secretary), acting pursuant to the 
Reclamation Act of 1902, as amended, to undertake a program to 
investigate and identify opportunities for water reclamation and reuse 
of municipal, industrial, domestic, and agricultural wastewater, and 
naturally impaired ground and surface waters, by the design and 
construction of demonstration and permanent facilities to reclaim and 
reuse wastewater, and to conduct research, including desalting of the 
reclamation of wastewater and naturally impaired ground and surface 
waters. The Bureau believes the initial goals of the Act have been met 
and we have helped prove that reclaimed water is a viable source of 
future water supplies.
    Although the Title XVI program does support water recycling 
projects that promise to help alleviate potential water shortages, 
Reclamation is not the only potential source of such funding and 
Reclamation has many important programs that must be funded. 
Reclamation is unable to fund all programs within the existing budget 
constraints.
OUTSOURCING
    9) Question: Section 208 of the fiscal year 03 Omnibus 
appropriations bill for the Bureau of Reclamation States: ``The 
Commissioner of the Bureau of Reclamation is directed to increase the 
use of private sector in performing planning, engineering and design 
work for the Bureau of Reclamation projects to 10 percent in fiscal 
year 03, and in subsequent years until the level of work is at least 40 
percent for planning, engineering and design work conducted by the 
Bureau of Reclamation.'' How does the Bureau of Reclamation plan to 
outsource?
    Answer: While the Bureau of Reclamation fully supports Congress and 
the Administration's effort to increase efficiency by increasing 
contracting opportunities, this is an area that will require additional 
review by the Bureau. We find overly prescriptive language of this sort 
may have an adverse effect in actual application. The Bureau currently 
contracts out a significant amount of our designing and engineering 
work. Increasing beyond these existing levels may not benefit project 
beneficiaries and/or the taxpayer.
UNDERFINANCING
    10) Question: In the fiscal year 03 Budget, $37.9 million was 
included for underfinancing. In the fiscal year 04 Request, $40 million 
was included for underfinancing. This figure is based on historical 
experience with contract problems, construction issues, weather 
problems and environmental compliance issues with projects. Can you 
explain what the consequences are to a district that might have been 
expecting their full appropriation from Congress and may end up with a 
9-15% reduction?
    Answer: You are correct that the amount of underfinancing requested 
by Reclamation is based on historical experience. The approximately $40 
million reduction in the request represents about 4.9% of the total 
scheduled program, which could reasonably be expected to be absorbed 
during a normal year due to non-budgetary delays. However, the $80 
million reduction for underfinancing in the Congress'' fiscal year 2003 
Omnibus Appropriations act is in excess of a 9% reduction and will have 
negative impacts on work planned. This was the highest level of 
underfinancing ever imposed upon the Water and Related Resources 
appropriation. Some water users and other Reclamation beneficiaries may 
experience delays in work accomplishment due to lack of funding in 
fiscal year 2003.
    10b) Question: How do they make up for this funding in their 
contracts for work?
    Answer: Some water users have the ability to borrow funds needed, 
or have non-federal funding sources to draw upon. Others may have to 
reschedule work or otherwise control the rate of expenditures.
    10c) Question: How long does it take for a district to get their 
money that Congress has appropriated while the Bureau assesses the 
underfinancing ramifications?
    Answer: In a normal fiscal year, Reclamation has an appropriation 
available from Congress at the start of October, and has completed the 
process of identifying likely slippages in accomplishment by the end of 
November or December. In fiscal year 2003, however, Reclamation had to 
operate under continuing resolutions for nearly five months. Matters 
were made even more difficult due to the fact that the underfinancing 
approved by Congress was more than double the amount recommended in the 
President's Request. Therefore, it will probably not be until April 
that the underfinancing can be distributed to the various projects and 
programs. We are hopeful that in fiscal year 2004, an appropriation 
will be available in a timely fashion, and with an appropriate amount 
of underfinancing that can be distributed without causing disruption.
    10d) Question: Is this figure spread evenly across the board to 
every line in the Bureau's Budget?
    Answer: No, underfinancing will first be applied to projects and 
programs that are experiencing slippages due to the factors you 
mentioned, such as construction issues, weather problems and 
environmental compliance issues. A good example is the large reduction 
in construction cost achieved by Reclamation's Safety of Dams effort on 
Horsetooth Dam in Colorado, where a refined plan to repair the dams 
there has saved money. However, the large amount of underfinancing 
approved by Congress in the fiscal year 2003 budget will have some 
negative impacts on project accomplishment. We recommend that the 4.9% 
underfinancing requested in fiscal year 2004 be approved as is, because 
that is an amount that we estimate can be absorbed as part of the 
normal process.
CENTRAL VALLEY PROJECT RESTORATION FUND
    11) Question: How does the Bureau plan to determine when any 
particular CVPIA mandate or objective is achieved for purposes of that 
Act, particularly new long-term contracting and changes to Restoration 
Fund payment requirements?
    Answer: Our contracting process is on-going. We are in the process 
of negotiating new long-term contracts, which will implement the 
provisions mandated by the Central Valley Project Improvement Act 
(CVPIA). These contracts are for a term of 25 years, and in the case of 
irrigation contracts, are renewable for an additional 25-year term, 
with continued renewals after each 25-year period, and for an 
additional term of 40 years to the extent they are for municipal and 
irrigation water. When a renewal contract is signed by both parties 
that stage of the process may be viewed as complete.
    Reclamation, in coordination with the U.S. Fish and Wildlife 
Service (USFWS), annually reviews the progress made in achieving the 
overarching goals set forth under the CVPIA. Based upon the progress 
made in achieving both the annual and long-term fish, wildlife and 
habitat goals of the program, USFWS and Reclamation determine budget 
priorities for executing efforts in the upcoming year. Ultimately, 
USFWS will make the determinations as to whether the fish, wildlife, 
and habitat mitigation and restoration actions enumerated under the 
CVPIA have been accomplished; e.g., USFWS would make the determination 
that the fish doubling goals have been achieved as outlined in the 
CVPIA.
    Payments required under CVPIA are a continuing mandate. In P.L. 
102-575, Title XXXIV, CVPIA, Section 3407 requires the Secretary to 
assess and collect annual mitigation and restoration payments during 
each fiscal year in an amount that can reasonably be expected to equal 
the amount appropriated each year to carry out the purposes identified 
in the CVPIA. In addition, Section 3407 states that upon the completion 
of the fish, wildlife, and habitat mitigation and restoration actions 
mandated under Section 3406, the Secretary shall reduce the sums from 
$50,000,000 to $35,000,000 per year and shall reduce the annual 
mitigation and restoration payment ceiling established under this 
subsection to $15,000,000 on a three-year rolling average basis.
    Based on the language in Section 3407(d)(2)(A), funding for 
activities authorized under CVPIA will continue for the foreseeable 
future.

                               * * * * *

                    Representative Grace Napolitano
WATER RECYCLING
    12) Question: Isn't the low Federal cost-share for water recycling 
projects (25%) a cost-effective way for the Federal government to 
participate in projects that can produce hundreds of thousands of acre-
feet of water every year?
    Answer: By limiting the Federal share to 25 percent of planning, 
design, and construction costs and prohibiting funds for operation and 
maintenance, Federal participation is a relatively small part of the 
total cost of water recycling projects. While Federal participation for 
individual Title XVI projects may be limited to 25%, the large number 
of these projects, if fully funded, could balloon to a substantial 
portion of Reclamation's budget.
    13) Question: What is the status of the ``Southern California 
Comprehensive Water Reclamation and Reuse'' study required under Title 
XVI of P.L. 102-575, and comparable study for the San Francisco Bay 
Area Water Recycling Program (BAWRP)? Why won't the Administration 
release these reports, which were partially paid for by local water 
agencies?
    Answer: The Administration is completing its review of the BARWRP 
Master Plan. The Southern California report is currently undergoing 
final processing through the Department of the Interior for transmittal 
to OMB. If approved, the reports will be transmitted to Congress.
    14) Question: If by the Administration's own analysis (in the 
Program Assessment Rating Tool, or ``PART'' process) water recycling is 
``important to meeting the West's future water needs,'' why does the 
fiscal year 04 budget request reflect a significant decrease in funding 
for these programs? How are the cuts consistent with the conclusion 
(from the PART analysis) that these projects ``are especially important 
in helping to shift California from its dependence on Colorado River 
water?
    Answer: The PART process for Title XVI generated extensive 
information on program effectiveness and accountability, including the 
need for additional performance measures. The principal PART findings 
for Reclamation's Title XVI Water Reuse and Recycling program (PART 
rating: Moderately Effective) indicate the program is moderately well-
managed, although Reclamation's oversight of individual projects is 
limited by the strong degree of local control. Improved performance 
measures are currently being developed that should facilitate better 
long-term planning and provide a clear linkage between Federal funding 
and progress towards outcomes. fiscal year 2004 funds will be directed 
to the completion of projects already under construction.
    We note that the Administration's fiscal year 2004 Budget requests 
$12.68 million for the Title XVI program, an increase of $1.13 million 
over the fiscal year 2003 request.
    15) Question: How was the new PART process used within the 
Administration to set or determine budget priorities for fiscal year 
04? Who selected agency programs for the analysis? Why was the Title 
XVI water recycling program, hydropower, and the rural water program 
selected over all the other Bureau functions?
    Answer: During formulation of the fiscal year 2004 budget, the 
Administration began using the Program Assessment Rating Tool (PART) to 
identify strengths and weaknesses of programs and to inform budget, 
management, and policy recommendations. Under the PART analysis 
conducted in 2002, the selected agency programs were considered to be 
well-defined functions that covered at least 20 percent of 
Reclamation's budget. Reclamation's PARTs for 2002 were also selected 
to coincide with analyses of similar programs in other agencies. They 
were selected with input from Bureau staff.
    16) Question: Was Bureau staff directed to review each Bureau 
program and project in accordance with the PART process? Or were these 
analyses performed by OMB without agency input?
    Answer: OMB worked in consultation with Bureau staff in developing 
the projects/programs selected for review, and in carrying out the 
analysis. The PART process is collaborative, driven by OMB's 
implementation of the President's Management Agenda, but done in close 
consultation and coordination with the Bureau. Ultimately, it is 
intended to be a useful management tool to all program managers, both 
at OMB and in the agency, that will ultimately result in better 
accountability to the taxpayer, better program management, and programs 
that focus on achieving results.
    17) Question: The PART analysis and the Bureau's budget documents 
state that the water recycling programs are not part of the Bureau's 
``core function.'' Has Congress defined the Bureau's ``core function'' 
in law? How can you justify the Administration's conclusions about the 
``core function'' of the Bureau of Reclamation when water recycling is 
clearly stated as an important part of the bureau's mission in at least 
three separate locations on the Bureau of Reclamation's current 
website?
    Answer: Although the Bureau's ``core function'' has not been 
defined by law, the Administration's use of the term generally refers 
to those programs that focus on water delivery and/or power generation. 
The purpose of the water recycling program is to identify and 
investigate opportunities for reclaiming and reusing wastewater and 
naturally impaired ground and surface water, and to provide financial 
and technical assistance to local water agencies for planning and 
development of water recycling projects. While in this regard, it is an 
important part of the bureau's mission, it does not focus on 
Reclamation's core function of delivering water and generating power. 
Budget constraints prevented the Bureau from funding this program at a 
higher level.
    18) Question: Under the PART analysis for Title 16 programs, 
Section IV: Program Results, Question 3, the question states: Does the 
program demonstrate improved efficiencies and cost effectiveness in 
achieving program goals each year? The analysis responds, No. The 
program is being administered at a 97% success rate and has little 
margin for demonstrating improved efficiencies and cost effectiveness. 
Therefore, the PART analysis did not add points towards the total Title 
16 score. Are water recycling projects being punished for meeting or 
exceeding efficiency criteria under PART process? How do other programs 
fare under this criterion?
    Answer: No, Title XVI programs are not being punished for meeting 
or exceeding these efficiency criteria. Titles XVI, as well as all of 
the other programs evaluated, were rated based on all of the criteria 
outlined and scored accordingly. One answer or the effect of one answer 
would be factored into the overall program evaluation but would not 
adversely affect the program's overall score. It is also important to 
note that the 97% score refers to the program's ``execution of 
necessary cooperative agreements and obligation of appropriated 
funds''. The PART found that this is a poor performance measure that 
does not focus on outcomes, and does not track program effectiveness or 
benefits to the taxpayer and water user.
    The Bureau of Reclamation is currently reviewing the PART 
evaluation of the Title XVI program in the context of making the 
necessary changes to improve the overall program efficiency. New, 
outcome-oriented performance measures are under development.
WESTERN WATER INITIATIVE
    19) Question: The $11 million request for the Western Water 
Initiative includes $458,000 for ``Endangered Species Act Training.'' 
Isn't this something the Bureau should have been doing all along, since 
the ESA was enacted in 1973?
    Answer: Reclamation has, of course, been training its employees 
with regard to the requirements of the ESA for many years. However, 
continuing litigation, new case law regarding the interpretation of the 
ESA, new listings and designations of critical habitat, and 
increasingly complex section 7 consultations required for the continued 
operation and maintenance of Reclamation projects (e.g., the Klamath 
and Middle Rio Grande Projects and the Federal Columbia River Power 
System) require a much higher degree of training for a larger number of 
employees than has been the case in the past. This component of the 
Initiative will enable Reclamation to expand ESA training throughout 
the Bureau so that it has sufficient expertise to fulfill its ESA 
obligations.
    20) Question: The new Western Water Initiative contemplates the use 
of Federal and state entities with science experience as well as the 
National Academy of Sciences to review Reclamation documents, such as 
biological assessments for endangered species, before they are 
submitted to the Fish and Wildlife Service. Won't this insert a new 
layer of outside review, possibly interfering with consultation with 
the wildlife agencies? How will the experts be chosen? Will there be 
guidelines to ensure that these ``experts'' are truly independent?
    Answer: The Western Water Initiative contemplates providing funding 
for peer review of science used in Endangered Species consultations and 
other environmental documentation. Peer review of science in advance of 
preparation of biological assessments can provide us with added 
assurance that the right questions were asked, that the right 
methodology was used, and that data were appropriately subjected to 
quality assurance and quality control procedures. As such, peer review 
does not add a new layer to nor interfere with ESA consultation, rather 
we believe it helps reduce scientific disagreements that can occur 
during consultation and which can bog consultation down. The Department 
of the Interior is in the process of developing peer review guidelines; 
however, until those are in place we would use generally accepted 
practices applied across the scientific community to insure 
impartiality. How experts will be chosen will depend on the type and 
scope of the issue to be peer reviewed.
KLAMATH
    21) Question: Why has the release of the Hardy Phase II report been 
delayed?
    Answer: The Hardy flow studies were activities directed by the 
Bureau of Indian Affairs and the Department of Justice. They would be 
the agencies to address this question.
    21b) Question: What is the current status of the report?
    Answer: The Bureau of Indian Affairs and the Department of Justice 
can provide answers regarding the status of the report.
    21c) Question: Does the DOI intend to continue Dr. Hardy's contract 
and issue the study?
    Answer: The Bureau of Indian Affairs and the Department of Justice 
can provide answers regarding the continuation of Dr. Hardy's contract 
and whether a study will be issued.
    21d) Question: When will the report be released and will the BOR 
re-consult based on the recommendations?
    Answer: Reclamation cannot provide a decision on re-consulting 
until completion of the report.
    22) Question: Does the budget request for the Klamath Project 
include any funding to investigate opportunities for land retirement in 
the project service area?
    Answer: No funding was requested by the Bureau of Reclamation for 
land retirement investigations.
    23) Question: Irrigation districts in the Klamath Project, the 
Klamath Water Users Association, and the government agencies in the 
Klamath Basin are operating under an arrangement that limits the amount 
of farmland allowed to be fallowed through government programs that pay 
irrigators to fallow land to help conserve water during this drought. 
This limit is 20,000 acres, or about 8% of the 230,000 acre Klamath 
Project. This fallowing for water conservation seems to be a good 
short-term method to help all interests in the Klamath--irrigators, 
fishermen, and tribes--manage scarce water supplies during the drought, 
but is it appropriate to set a limit of 8%, when it is expected the 
project will have only 50% of normal water supplies this year?
    Answer: The water bank is not intended to make up for water 
shortages resulting from the drought conditions. Rather, it is designed 
to meet the specific requirements of the Biological Opinions (BO) 
issued by the Fish and Wildlife Service and the NMFS for operation of 
the Klamath Project by the Bureau of Reclamation. The 20,000 acre 
limitation for land idling was a suggested requirement advanced by the 
Klamath Water Users Association in their proposal for a 2003 water 
bank. The proposal by the water users was not agreed to as the basis 
for the 2003 water bank because of the short time frame for 
implementation. Reclamation has not limited itself to a particular cap, 
rather it has determined that an appropriate mix of land idling and 
ground water makes more sense. Reclamation made an initial 
determination that 12,000 acres of land idling would provide 
approximately 30,000 acre-feet of water and that an additional 25,000 
acre-feet of ground water should be acquired to meet the water bank 
requirement of 50,000 acre-feet. Reclamation received offers for 
approximately 24,000 acres of land for the land idling program. Working 
in conjunction with the Oregon State University agricultural extension 
office, Reclamation has used a sophisticated modeling program to 
evaluate the lands offered and select properties that, if irrigated, 
have the greatest water requirements. In this way, lands selected for 
idling will provide the greatest benefit for meeting the BO 
obligations.
    23b) Question: Who proposed this cap?
    Answer: The Klamath Water Users Association in their water bank 
proposal suggested limiting the water bank land idling component to 
20,000 acre-feet. They also suggested the use of storage and ground 
water for meeting the water bank requirements.
    23c) Question: Were the economic interests--the fishing interests--
of the Lower Basin considered in this arrangement?
    Answer: The water bank is specifically for meeting the BO 
requirements of the endangered sucker fish and the threatened Coho 
salmon.
DRAINAGE SETTLEMENTS, CENTRAL VALLEY PROJECT, CALIFORNIA
    24) Question: How does the Bureau propose to fund the $34 million 
for the Sumner Peck settlement in fiscal year 2004?
    Answer: The $34 million is included in the President's fiscal year 
2004 budget.
    24b) Question: The Budget Documents indicate that funding to the 
Mid-Pacific Region has been increased from $158,776,000 to 
$178,876,000, but it is not clear where this money comes from. Given 
the recent language included in the fiscal year 2003 appropriations 
act, what authorities are now available to the Administration to fund 
this settlement?
    Answer: Reclamation has been advised that the Department of Justice 
has concluded that the Judgment Fund is available for the payment of 
the $5 million and $34 million installments due under the consent 
judgment, only for Fiscal Year 2003.
    25) Question: The Bureau made a payment last fall in partial 
settlement of the Britz drainage case. Under what authority was that 
payment made?
    Answer: The payment was made with the authority of 43 U.S.C. 377b.
    25b) Question: Where did the money for this initial Britz payment 
come from?
    Answer: Reclamation Trust Funds were used for the initial Britz 
payment.
SAN GABRIEL BASIN PROJECT
    26) Question: The Bureau's budget justification indicates the 
completion date for this project is delayed. Were affected Members of 
Congress consulted regarding this schedule change? Were funds for this 
project used to help finance the Sumner Peck settlement?
    Answer: The completion date for the San Gabriel Basin Project was 
delayed to 2006 based on a projection of construction schedules for the 
Rio Hondo Water Recycling Program and for the San Gabriel Basin 
Demonstration Project. The projection represents Reclamation's best 
estimate of when the construction work planned by the Central Basin 
Municipal Water District and the San Gabriel Basin Water Quality 
Authority will actually be completed, based on a comparison of project 
schedules and actual accomplishment to date. Due to the nature of the 
authorizing legislation, Reclamation has no control over the 
construction schedules for these projects, and is only providing the 
date that construction is likely be completed. No funds from this 
project were used to help fund the Sumner Peck settlement.

                               * * * * *

                      Representative Tom Tancredo
FRYINGPAN-ARKANSAS PROJECT
    27) Question: I want to ask you a question about legislation that 
my colleague Representative Hefley introduced last year, and plans to 
introduce again this year concerning reoperation and enlargement of the 
Fryingpan-Arkansas project in Colorado. That legislation contained--
among other provisions--an explicit statutory authorization for the 
Bureau to enter into longer term ``if and when'' storage contracts with 
the City of Aurora to use excess capacity in Pueblo Reservoir. I am 
hopeful that the affected parties can reach consensus and move forward 
on the bill this session.
    Answer: Last summer Reclamation, the District, and Aurora worked in 
a collaborative effort to develop language addressing concerns with the 
introduced legislation. The resulting substitute bill was forwarded to 
the Committee before the end of the last legislative session. We 
believe this substitute bill represents a solid compromise, addresses 
the concerns of the City of Aurora and promises to be very effective in 
helping a number of southern front range entities meet their water 
supply demands in upcoming years. The Bureau has expressed its support 
for this substitute bill to the proponents and has urged them to 
resolve their remaining differences.
    28) Question: Moreover, you indicated to me in a response to a 
letter I sent to Secretary Norton that the Bureau was examining 
existing law to ascertain more precisely the Bureau's authority to 
enter longer term storage contracts. Have you and your staff made any 
preliminary findings in that regard? My understanding is that the 
Department is working on a solicitor's opinion on the matter, and that 
the opinion is to be completed in April.
    Answer: The Office of the Solicitor is performing a detailed review 
of existing Reclamation laws to determine the range of flexibility that 
exists that would provide authority to Reclamation to store and convey 
non-project water in its facilities. This review will address 
Reclamation's authority to enter into storage contracts. We remain on 
schedule to complete the review.
    We have provided SECWCD and Aurora with letters confirming that 
Reclamation does have authority to enter into a long term contract with 
Aurora.
    29) Question: Finally, in that same vein, the drought has brought 
more attention to the water challenges faced by many municipalities--
like the City of Aurora--struggling with the issue of storage. 
Specifically, the issue of where these growing cities are going to 
store the new water supplies they are fortunate enough to acquire. Are 
you looking at the possibility of utilizing the excess storage capacity 
in other Bureau facilities across the county?
    Answer: Under Title 1 Public Law 102-250, the Reclamation States 
Emergency Drought Act, the Secretary of the Interior has the authority 
to enter into temporary contracts for the storage and conveyance of 
non-project water. However, such contracts have a 2-year maximum term, 
and the Governor of the State must request temporary drought 
assistance. So far this year, Colorado has been the only state that has 
requested a contract under Title 1, for the City of Aurora and City of 
Colorado Springs.
    Reclamation has broad authority under Title III of the Drought Act 
to store and convey non-project water at specific projects: Central 
Valley, Cachuma, Ventura River, Truckee Storage, and Washoe Projects. 
In addition, Congress has passed some project specific legislation 
allowing the storage and conveyance of non-project water at certain 
other project facilities: Weber Basin, City of Loveland, and Mancos 
Project.

                               * * * * *

                      Representative Steve Pearce
Operational Plans
    30) Question: What flexibility, or changes, will you make to the 
operational plans and flow regimes for the San Juan, Rio Grande, Gila, 
and Pecos Rivers due to extended drought?
    For the San Juan:
    Answer: In response to the current drought conditions, and the less 
than average snowpack forecast, Reclamation initiated discussions in 
September 2002, with water users on the San Juan River, the Fish and 
Wildlife Service and the New Mexico State Engineer's Office to develop 
a cooperative solution for ensuring an equitable water supply for all 
users on the San Juan in 2003. As a result, recommendations have been 
developed and endorsed by all major water users on the system. The 
recommendations contain a provision for all water users to share 
equally in shortages, if it is determined that a shortage will occur. 
The Service supports the shortage-sharing recommendations, and, along 
with the San Juan River Basin Recovery Implementation Program, was 
involved in developing the language in the recommendations, 
specifically as it relates to the endangered fish, the Colorado 
pikeminnow and razorback sucker, share in the shortages.
    Currently, the most probable inflow forecast anticipates a full 
supply will be available to all users. Reclamation plans to operate 
Navajo Reservoir in a very efficient manner, and diverters have 
committed to operate their systems in a similar efficient manner for 
2003.
    For the Middle Rio Grande:
    Answer: Reclamation will work within its authority to conserve 
water when possible. However, the operation of Reclamation facilities 
is often constrained by the legal framework of the Rio Grande Compact, 
project authorizations, and court orders related to endangered species 
issues and water rights. New Mexico is currently operating under 
Article VII restrictions of the Rio Grande Compact, which severely 
restrict the ability to capture and store native Rio Grande water in 
reservoirs upstream of Elephant Butte Reservoir. Endangered species 
issues and associated court orders related to the Rio Grande silvery 
minnow and the southwestern willow flycatcher require that minimum 
flows be maintained through various reaches of the Rio Grande. This 
often requires the release of water that otherwise would have remained 
stored in upstream reservoirs. To sustain the required flows, water 
must often be released during periods of the year when conveyance 
losses within the Rio Grande are greatest. Pending legal decisions may 
further define the scope of Reclamation's discretion to control the 
operation of various diversion and storage facilities within the Rio 
Grande Basin.
    Operational flexibilities that are being investigated by 
Reclamation include: minimizing conveyance losses of waters released 
from storage by timing releases to occur during the cooler months of 
the year when evapotranspiration losses are at a minimum; reducing 
evaporative losses charged to stored water by holding water in the 
topographically higher reservoirs; promoting conservation through 
technical assistance and training programs provided to agricultural, 
municipal, and industrial water users; investigating the concept of 
shortage sharing between the Navajo Reservoir and the San Juan-Chama 
Project. The San Juan-Chama Project now diverts a portion of water into 
the Rio Grand Basin that would otherwise flow into Navajo Reservoir and 
the San Juan River.
    For the Lower Rio Grande:
    Answer: The Bureau of Reclamation has issued a series of 
allocations monthly for the 2003 irrigation season. The allocations are 
based on the amount of available water in Project storage. The latest 
allocation is 14 percent of full allocation for the two irrigation 
districts and Mexico. Several meeting have been held to advise the 
water users on the allocation and to coordinate releases for efficient 
use of the available water supply. The next meeting with Mexico is 
scheduled for April 14, 2003.
    Projections based on the runoff forecast estimate that we will be 
able to allocate between 40 and 50 percent of a full allocation by 
August. Water is not allocated until it actually reaches project 
storage and Rio Grande Compact Credit waters are accounted for.
    For the Pecos River:
    Answer: Reclamation is considering modifying the method by which 
the Carlsbad Irrigation District moves water from the upper reservoirs 
on the Pecos River. Historically, the Carlsbad Irrigation District 
would make block releases to move water from Santa Rosa and Sumner Dam 
to Brantley Reservoir. Reclamation is considering reducing the duration 
of the block releases while maintaining minimum delivery efficiency of 
55 percent. No other changes are expected for the Carlsbad Irrigation 
District or the Fort Sumner Irrigation District.
    For the Gila River:
    Answer: In Arizona, the Bureau of Indian Affairs administers the 
Gila River in accordance with a strict body of law. Reclamation has no 
operational responsibilities associated with the Gila River.
    31) Question: How are you going to provide water for the Silvery 
Minnow, Gila Trout and other endangered species if there isn't any 
water in the rivers? Because there may be no water in New Mexico's 
rivers this summer, what kind of alternative means, for example using 
our hatcheries to ensure their survival, are you going to use to keep 
these fish alive, and allow human uses of the limited water supply?
    Answer: Reclamation is currently exploring the option of leasing 
water from the Fort Sumner Irrigation District to provide refugia for 
the use of the threatened Pecos bluntnose shiner. Reclamation is also 
exploring the possibility of leasing water from groundwater pumpers 
near Fort Sumner Irrigation District. We currently have approximately 
$80,000 available for such agreements. The total need is approximately 
$400,000. Reclamation is exploring other funding options.
    Reclamation has begun to release supplemental water it has acquired 
from willing San Juan- Chama Project contractors through lease 
agreements. This water is anticipated to last at least several weeks. 
Discussions are ongoing to determine if there are stakeholders 
interested in providing water willingly, and in accordance with state 
law, to yield additional supplemental water. Given current forecasts, 
Reclamation expects that inflow during spring runoff should meet the 
needs of both Indian and non-Indian irrigation along with March 17, 
2003 Biological Opinion flow requirements. Additional supplemental 
water is necessary to remain in compliance with the Endangered Species 
Act for the remainder of the year. Reclamation will store water at El 
Vado Reservoir to meet prior and paramount needs of Pueblos.
    During the course of discussions amongst Federal and non-Federal 
parties over the Service's final BO released March 17, 2003, strategies 
were developed to share in the responsibilities of ESA requirements. 
Absent a ruling from the 10th Circuit Court, Reclamation plans on using 
available supplies of supplemental water and exercising its discretion, 
as determined under a Federal District Court order, in curtailing 
Middle Rio Grande Project diversions to the level needed to remain in 
compliance with the BO requirements.
    Salvage efforts have transferred over 3500 silvery minnow to 
upstream areas and several hundred thousand eggs to rearing facilities. 
The Service released 100,000 silvery minnows December 1, 2002, for 
augmentation near Albuquerque, New Mexico, which is located higher in 
the basin. The Service expects to release another 30,000 fish near 
Albuquerque in April. The Collaborative Program continues to develop a 
Habitat Restoration Plan that takes into account the greater 
availability of water higher in the basin while being sensitive to the 
significance of the existing population of silvery minnow in the lower 
reaches. The Service's final 2003 BO places an emphasis on habitat 
restoration in the upstream reaches. Propagation and augmentation 
efforts continue with a goal of expanding silvery minnow populations 
throughout the Rio Grande corridor to reduce dependence on downstream 
populations of minnows.

                               * * * * *

                       Representative Devin Nunes
CENTRAL VALLEY PROJECT RESTORATION FUND
    32) Question: How much money is currently deposited in the CVPIA 
Restoration Fund (fiscal year 03)?
    Answer: As of January 31, 2003, $13,365,149 has been deposited into 
the Restoration Fund, during Fiscal Year 2003.
    33) Question: How much money, in total, has been deposited into the 
CVPIA Restoration Fund since the act was signed into law (from 
enactment to fiscal year 03)?
    Answer: Since P.L. 102-575, Title XXXIV, the Central Valley Project 
Improvement Act, (CVPIA) was enacted, $354,998,786 has been deposited 
into the CVPIA Restoration Fund.
    34) Question: Is there a detailed list of projects that have 
benefitted from the CVPIA Restoration Fund?
    Answer: Yes, there is a detailed list of projects and programs that 
have benefitted from the CVPIA Restoration Fund.
    34b) Question: Can you provide that list to myself and the 
Committee?
    Answer: The list is enclosed.
CALIFORNIA BAY-DELTA
    Considering that the Bureau of Reclamation has budgeted $1 million 
for the feasibility study on the upper San Joaquin River Storage 
Project in fiscal year 04--and considering that the CALFED Surface 
Storage Program Estimated Planning Costs estimates that it will cost $4 
million in fiscal year 04 for the Upper San Joaquin River Storage 
Project.
    35) Question: How is the Bureau of Reclamation going to bridge the 
gap to complete the study by June of 2006?
    Answer: Due to delays in receiving funds in fiscal year 2003 the 
completion of the feasibility study has been extended (from June 2006) 
to December 2006. The fiscal year 2004 budget amount of $1 million will 
be used to continue feasibility study planning activities and 
environmental analysis.

                               * * * * *

                     Representative Dennis Cardoza
CALIFORNIA BAY-DELTA
    As you know, the CALFED Record of Decision states that in the first 
four years of Stage 1 of the CALFED Program, anticipated allocation 
will be 65-70% of existing contract totals in normal years. However, 
this year's initial forecast, released in January, predicted that the 
allocation would be 55%. Then, in February when a dryer forecast was 
predicted, yet the Bureau released a second allocation forecast, which 
annually increased the allocation to 60%.
    36) Question: How do you explain that dry conditions can result in 
increased supplies for south-of-Delta contractors?
    Answer: The water supply for the Central Valley Project (CVP) Water 
Service Contractors South-of-Delta is often constrained by export 
capability rather than upstream storage and hydrology. Those 
constraints include physical capacity limitations, state permit 
requirements, and actions using water provided under P.L. 102-575, 
Title XXXIV, the Central Valley Project Improvement Act, Section 
3406(b)(2)--the 800,000 acre-feet--to provide Endangered Species Act 
protection and other fishery benefits. Another factor in making 
allocations is the assumed delivery patterns for the south-of-Delta 
contractors between the time that CVP storage in San Luis Reservoir is 
full and the time at which it reaches a low point near the end-of-
August. Changes to both the export constraints and the delivery pattern 
in the February forecast of operations resulted in the increase to the 
allocation. More (b)(2) water was assumed to be used for Delta outflow 
in February and less for export reductions later in the spring. After 
discussions with representatives of the agricultural contractors, we 
reduced the deliveries expected to occur during the San Luis Reservoir 
drawdown period that afforded much of the increase to allocations.
    36b) Question: What actions is the Bureau taking to reach the 
allocation level set forth in the ROD?
    Answer: Reclamation is looking at actions in cooperation with state 
and Federal agencies within the CALFED Bay-Delta Program to improve the 
allocations. Those actions may include: use of Environmental Water 
Account assets and use of the State's Banks Pumping Plant capacity to 
export CVP water supplies. However, due to continued dry conditions in 
February, the current March 1st forecast allocations remain at 60 
percent to south-of-Delta agricultural water service contractors. 
Projected upstream CVP reservoir storages at the end of the water year 
may be very near minimum targets. Therefore, achieving the allocation 
level in the CALFED Record of Decision will require an improvement in 
hydrologic conditions as well as actions to increase exports.
CENTRAL VALLEY PROJECT RESTORATION FUND
    As you know, the Secretary of the Interior is required to supply 
water to specified refuges. The Act also states that the Secretary will 
diversify sources of water supply to the refuges to minimize possible 
adverse effects upon Central Valley Project contractors. Further, the 
CALFED ROD requires that a plan be developed to identify alternative 
refuge supplies and conveyance. The reality, however, is that the water 
for the refuges has been made available primarily by reallocating it 
from south-of-Delta CVP agriculture service contractors and efforts to 
develop the required plan do not appear to be in place.
    37) Question: Can you describe the Bureau's intentions for 
developing such a plan as prescribed in the ACT?
    Answer: The Bureau of Reclamation is preparing an update to the 
1995 ``Least-Cost CVP Yield Increase Plan.'' This update, the ``Water 
Supply Improvement Plan,'' identifies projects intended to reduce the 
impacts on south-of-Delta CVP agricultural contractors from provisions 
of the Central Valley Project Improvement Act, including Level 2 refuge 
supplies, Trinity River restoration flow requirements, and the 800,000 
acre feet of yield dedicated to fish and wildlife purposes under 
Section 3406(b)(2).
                                 ______
                                 
    Mr. Calvert. I appreciate your attendance here today and answering 
our questions, as always, and thank you for coming. We are adjourned.
    [Whereupon, at 3:35 p.m., the Subcommittee was adjourned.]

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