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



 
                        CALIFORNIA WATER SUPPLY

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

                        OVERSIGHT FIELD HEARINGS

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

             Saturday, June 28, 2003, in Tulare, California
           Saturday, June 28, 2003, in Elk Grove, California
             Tuesday, July 1, 2003, in El Cajon, California

                               __________

                           Serial No. 108-35

                               __________

           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
Randy Neugebauer, Texas

                     Steven J. Ding, Chief of Staff
                      Lisa Pittman, Chief Counsel
                 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                George Miller, California
Rick Renzi, Arizona                  Ciro D. Rodriguez, Texas
Stevan Pearce, New Mexico            Joe Baca, California
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 June 28, 2003, in Tulare, California.............     1

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     4
        Prepared statement of....................................     4
    Cardoza, Dennis, a Representative in Congress from the State 
      of California..............................................     9
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................     6
    Nunes, Hon. Devin, a Representative in Congress from the 
      State of California........................................    10
    Pombo, Hon. Richard W., a Representative in Congress from the 
      State of California........................................     4
    Radanovich, Hon. George P., a Representative in Congress from 
      the State of California....................................     7

Statement of Witnesses:
    Christopher, Marc E., Policy Advocate, Friends of the River..    33
        Prepared statement of....................................    36
    Clark, Thomas N., General Manager, Kern County Water Agency..    38
        Prepared statement of....................................    40
    Glover, Tom, Deputy Director, California Department of Water 
      Resources..................................................    10
        Prepared statement of....................................    11
    Moralez, Gloria P., Businesswoman/Farmer, Fresno, California.    23
        Prepared statement of....................................    25
    Nelson, Daniel G., Executive Director, San Luis & Delta-
      Mendota Water Authority....................................    26
        Prepared statement of....................................    28
    Upton, Kole, Chairman, Friant Water Users Authority..........    16
        Prepared statement of....................................    18
    Watkins, Keith, Second Vice President, Tulare County Farm 
      Bureau.....................................................    43
        Prepared statement of....................................    45

Additional materials supplied:
    Basila, Jon, Basila Farms, Madera, California, Letter 
      submitted for the record...................................    72
    Birmingham, Thomas W., General Manager/General Counsel, 
      Westlands Water District, Fresno, California, Letter 
      submitted for the record...................................    73
    Chedester, Steve, Executive Director, San Joaquin River 
      Exchange Contractors Water Authority, Letter submitted for 
      the record.................................................    74
    Cunha, Manuel, Jr., President, NISEI Farmers League, Letter 
      submitted for the record...................................    75
    Denham, Hon. Jeff, Senator, 12th District, State of 
      California, Letter submitted for the record................     3
    Fox, Dennis, Bakersfield, California, Letter submitted for 
      the record.................................................    76
    Houk, Randy, Manager, Columbia Canal Co., Statement submitted 
      for the record.............................................    77
    Huffman, Jared, Project Manager, San Joaquin River 
      Restoration Project, Natural Resources Defense Council, 
      Letter submitted for the record............................    78
    Kriebel, Barry F., President, Sun-Maid Growers of California, 
      Letter submitted for the record............................    81



                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 28, 2003, in Elk Grove, California..........    83

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................    84
        Prepared statement of....................................    85
    Cardoza, Hon. Dennis, a Representative in Congress from the 
      State of California........................................    88
    Herger, Hon. Wally, a Representative in Congress from the 
      State of California........................................    86
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................    86
    Pombo, Hon. Richard W., a Representative in Congress from the 
      State of California........................................    83

Statement of Witnesses:
    Aceituno, Michael E., Area Supervisor, Sacramento Area 
      Office, Southwest Region, National Marine Fisheries 
      Service, U.S. Department of Commerce, Prepared statement of   158
    Bobker, Gary, Program Director, The Bay Institute............   124
        Prepared statement of....................................   127
    Charlton, Mark, Deputy District Engineer for Programs and 
      Project Management, Sacramento District, U.S. Army Corps of 
      Engineers, Prepared statement of...........................   157
    Forster, Richard, Chair, Water Committee, Regional Council of 
      Rural Counties Representative..............................   106
        Prepared statement of....................................   108
    Herrick, John, General Counsel and Manager, South Delta Water 
      Agency.....................................................   109
        Prepared statement of....................................   111
    Majors, Dennis G., Engineering Program Manager, Metropolitan 
      Water District of Southern California......................   113
        Prepared statement of....................................   115
        Letter dated July 8, 2003, submitted for the record......   123
        Letter dated August 20, 2003, submitted for the record...   124
    Martel, Patricia, General Manager, San Francisco Public 
      Utilities Commission.......................................    92
        Prepared statement of....................................    93
    Nota, Christine, Regional Forester's Representative in 
      Sacramento, U.S. Department of Agriculture, Prepared 
      statement of...............................................   169
    Oller, Hon. Thomas ``Rico'', State Senator, First District, 
      State of California........................................    88
        Prepared statement of....................................    90
    Rodgers, Kirk C., Regional Director, Mid-Pacific Region, 
      Bureau of Reclamation, U.S. Department of the Interior.....   148
        Prepared statement of....................................   149
    Schwinn, Karen, Associate Director, Water Division, Region 9, 
      U.S. Environmental Protection Agency, Prepared statement of   155
    Sutton, Jeffrey P., Executive Director and CEO, Family Water 
      Alliance...................................................    95
        Prepared statement of....................................    97
    Van Vleck, Nicole, Board Member, Northern California Water 
      Association................................................   130
        Prepared statement of....................................   131
    Zlotnick, Gregory A., Board Member, Santa Clara Valley Water 
      District...................................................    99
        Prepared statement of...........................101




                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on July 1, 2003, in El Cajon, California............   177

Statement of Members:
    Bono, Hon. Mary, a Representative in Congress from the State 
      of California, Prepared statement of.......................   185
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................   177
        Prepared statement of....................................   178
    Hunter, Hon. Duncan, a Representative in Congress from the 
      State of California........................................   181
        Prepared statement of....................................   184
        Letters and documents submitted for the record...........   268
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................   179

Statement of Witnesses:
    Allen, Lloyd, President, Board of Directors, Imperial 
      Irrigation District........................................   202
        Prepared statement of....................................   204
    Anderson, D. Larry, Utah Commissioner, Upper Colorado River 
      Commission.................................................   195
        Prepared statement of....................................   197
    Burgess, Grace, Executive Director, San Gabriel Basin Water 
      Quality Authority..........................................   234
        Prepared statement of....................................   235
    Camp, Edwin, Chairman of the Board, Western Growers, Prepared 
      statement of...............................................   251
    Guenther, Herbert R., Director, Arizona Department of Water 
      Resources..................................................   199
        Prepared statement of....................................   200
    Hall, Stephen K., Executive Director, Association of 
      California Water Agencies..................................   241
        Prepared statement of....................................   243
    Nichols, Mary, Secretary, California Resources Agency, State 
      of California..............................................   191
        Prepared statement of....................................   193
    Ortega, Adan, Jr., Vice President, External Affairs, 
      Metropolitan Water District................................   209
        Prepared statement of....................................   210
    Puentes, Julie, Executive Vice President, Public Affairs, 
      Orange County Business Council.............................   247
        Prepared statement of....................................   249
    Rinne, William E., Deputy Commissioner, Bureau of 
      Reclamation, U.S. Department of the Interior...............   187
        Prepared statement of....................................   189
    Robbins, Steven B., General Manager-Chief Engineer, Coachella 
      Valley Water District......................................   207
        Prepared statement of....................................   208
    Spivy-Weber, Frances, Executive Director for Policy, Mono 
      Lake Committee.............................................   237
        Prepared statement of....................................   238
    Stapleton, Maureen A., General Manager, San Diego County 
      Water Authority............................................   211
        Prepared statement of....................................   213

Additional materials supplied:
    Bilson, Steven William, Chairman and CEO, ReWater Systems, 
      Inc., Letter submitted for the record......................   260
    Finnegan, Joan C., President, Municipal Water District of 
      Orange County, Letter submitted for the record.............   262
    Guardino, Carl, President and CEO, Silicon Valley 
      Manufacturing Group, Statement submitted for the record....   263
    Marciochi, Don, General Manager, Grassland Water District, 
      Statement submitted for the record.........................   264
    Pack, Anthony J., General Manager, Eastern Municipal Water 
      District, Statement submitted for the record...............   266


           OVERSIGHT FIELD HEARING ON CALIFORNIA WATER SUPPLY

                              ----------                              


                        Saturday, June 28, 2003

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                           Tulare, California

                              ----------                              

    The Subcommittee met, pursuant to call, at 9:02 a.m., at 
the Heritage Complex, 4500 South Laspina, Tulare, California, 
Hon. Ken Calvert [Chairman of the Subcommittee] presiding.
    Present: Representatives Calvert, Radanovich, Nunes, 
Napolitano, and Cardoza.
    Also Present: Representative Pombo (Ex Officio.)
    Mr. Nunes. I want to thank you and Congressman Pombo for 
arranging this hearing. I want to thank the other members of 
the Committee for coming out here to the San Joaquin Valley. 
And I especially want to thank all of you in the audience for 
taking the time to come to this official hearing of the U.S. 
Congress.
    It is very important that we show the folks back in 
Washington, D.C., that people are serious about water here, and 
I think that this is evident, Mr. Chairman, by the well-
attended audience that we have here this morning--especially on 
a Saturday morning--which is always difficult.
    With that, it is time to have the Boy Scouts, which is the 
Troop Number 251, under the direction of Troop Leader Joseph 
Nelson with us today, to post the colors.
    Please, rise as the scouts present our flag.
    [Off the record.]
    Ms. Conway. Thank you, very much. David has agreed to let 
me speak first. He said, ``Age before beauty.'' Actually, that 
is not what he said.
    On behalf of the county, I am very pleased to welcome you 
here. We appreciate Congressman Nunes in inviting the 
delegation here. To the Chairman and to the members, on behalf 
of the 400,000 members of Tulare County, welcome, and we 
appreciate your interest and your time.
    My board is here in full support; Chairman Maples, 
Supervisor Worthly, Supervisor Sanders, and myself. I know 
there are representatives from our neighboring counties. I saw 
Madera. I saw Kings. All of us welcome this hearing. The 
Chairman would probably say, as he is prone to do, ``As far 
back as he can remember, and he says that is forever, something 
like this has never happened,'' so we are very appreciative of 
the opportunity.
    ``Whiskey is for drinking. Water is for fighting for,'' so 
are the words of Mark Twain. I don't know if he had the Central 
Valley in mind when he said those words, but we appreciate this 
opportunity to share our thoughts with the Congressional 
Delegation and welcome them and their efforts to help us.
    Thank you, very much.
    Mr. Macedo. Connie and I spend so much time around each 
other, my wife is starting to wonder.
    I would like to welcome Congress here to the city of 
Tulare. We are very proud to be hosting this. We are very happy 
to see all of you from the neighboring communities in our town 
to--for such an important issue.
    I am going to keep it even briefer than Connie did, but I 
did want to make this statement: One of the things that is so 
important is that the farmer gets his water. I keep hearing, 
``The urban versus the agriculture.'' But if the farmer gets 
his water, he can continue to provide an affordable product to 
the consumer here in the United States. And as we know, we 
still eat cheaper in the United States than any other country 
in the world, so we commend this over to folks here today, and 
we wish you the best, and we thank you for coming.
    Mr. Nunes. Thank you. I also would like now to recognize 
some additional dignitaries and elected officials that we have 
in the crowd. Please, hold your applause.
    From the Tulare County Board of Supervisors, Supervisor 
Steve Worthly, Supervisor Connie Conway, Supervisor Jim Maples, 
Supervisor Bill Sanders. From Madera County, we have Supervisor 
Frank Bigelow, who I believe is here. I think that Vern Moss is 
here, who I saw earlier; Supervisor Vern Moss. We also have a 
councilman from the city of Fresno that I'm very delighted to 
see here, Mr. Duncan, Jerry Duncan. The mayor of Orange Cove, 
Mayor Lopez. Thank you, Mayor. The Mayor of Tulare, David 
Macedo. We also have from Congressman Cal Dooley's office, that 
is Shara Wolfe, if she would please stand also.
    Thank you, and if we could please give them a warm round of 
applause.
    I also want to thank the witnesses for taking time out of 
their schedule to come and testify before the Committee. I want 
to thank all of you for being here also this morning.
    Mr. Chairman, I ask for unanimous consent to submit the 
following for the record: The prehearing rally transcript, 
which I have available here. I want to also submit all the 
storyboards and video from the Friant Water Users Authority.
    I have a statement here by California State Senator Jeff 
Denham; a statement by the Westlands Water District; a 
statement by Basila Farms; and a statement by Sun-Maid Growers.
    Mr. Calvert. Without objection, so ordered.

    [The statement of Senator Denham follows:]

    [GRAPHIC] [TIFF OMITTED] 88057.013
    

    Mr. Nunes. Mr. Chairman, I yield back.

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

    Mr. Calvert. I thank you, gentlemen. I thank you, 
Congressman. Certainly you are very proud of your community, 
and your community should be very proud of Congressman Nunes. 
He is doing a great job in Washington, and thank you for 
helping organize this hearing today. So far, it is going great.
    We are also privileged and honored to have the Chairman of 
Full Committee of Resources with us today, Richard Pombo. I 
will ask Chairman Pombo for any opening statement he might 
have.
    [The prepared statement of Mr. Calvert follows:]

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

    Nearly, everyone agrees with the need for more water supplies, but 
too little has been done to meet the growing demands for this 
increasingly scarce resource. More than 30 years has passed since 
California has made any major investment to improve its storage and 
conveyance systems. To illustrate this point, thousands of acre feet of 
water were spilt recently from Friant Dam because of a lack of adequate 
storage capacity on the Upper San Joaquin. It's no wonder that many 
here today are concerned about having their short and long-term water 
needs met.
    Complicating this matter is a reduction of Colorado River 
deliveries to California. As most of you know, the state will have to 
reduce its dependency on the Colorado River from past levels by 18%. 
Complying with this requirement will not be easy, especially in light 
of demands placed on the water supply by an ever growing population and 
the reallocation of several hundred thousand acre feet of contracted 
water supplies for environmental needs over the past 10 years in this 
region.
    To hear firsthand from experts on the ground, the Water and Power 
Subcommittee is conducting a series of field hearings throughout the 
state over the next few days. We have started this process, here, in 
Central California where the need for a focus on water storage and 
water conveyance is most acute. My distinguished colleague, Mr. Nunes, 
has taken the first step in alleviating this problem through 
legislation, signed by the President, that requires a feasibility study 
on new surface water storage at Temperance Flat.
    Today's important and historic hearing will help us do even more. 
Hearing from today's experts will be yet another step in finding 
solutions. Today we will hear about ways to build surface water storage 
and enhance water banking efforts, how water supplies can be maximized 
by expanding water transfer agreements, and the efforts underway to 
improve moving water through the Delta while protecting in-Delta 
farming and fishery interests.
    I plan to use today's hearing as another step towards developing 
legislation to accomplish the goals we all share: more surface storage, 
better conveyance with water quality protections, private property 
rights protections, balanced CALFED implementation, and fiscally sound 
ecosystem restoration principles. I look forward to working with my 
colleagues as this Subcommittee marches forward on this important 
legislation.
    I welcome the Chairman of the Resources Committee, my other 
distinguished colleagues and the special guests we have invited here 
today, and I very much look forward to hearing how we can better work 
together to manage and share this valuable water resource.
                                 ______
                                 

  STATEMENT OF THE HON. RICHARD W. POMBO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Pombo. Well, thank you. I would like to start off by 
thanking Congressman Calvert for holding these hearings on this 
important issue that is facing California.
    As I think most of you know, water is vital to a healthy 
and productive California. Without a sufficient water supply, 
all of California from ag to urban, from environmental to 
industrial, will suffer.
    When farmland lays idle due to lack of water, the farmer, 
the farmworker, and the industries that supply the inputs to 
the farmer are negatively impacted. When cities are not able to 
provide water to industries or the population, jobs are lost 
and economies are depressed.
    California has not kept up with the growing demand for 
water. We have added very little surface storage over the past 
20 years; yet our needs have increased.
    With the ever-growing demand for water by urban and 
environmental needs, we need to find new water and storage 
options; trying to solve our water shortage needs by 
transferring water from agriculture to urban or environmental 
needs is not a solution. These transfers do not address the 
root of the problem, which is a lack of water.
    CALFED was put together to try and address many of these 
issues; yet after years of analyzing and spending hundreds of 
millions of dollars, one has to question, ``Where is the water? 
Have we all gotten better together?'' as the early CALFED 
mantra stated.
    With over $249 million just in Federal money, not to 
mention state money, being spent over the past 4 years on 
ecosystem restoration, and only $27 million having been spent 
on just to--spent on just studying the storage needs, one 
wonders, ``Are we moving forward and getting better 
together?''.
    In the Delta, the heart of the water system for the state 
of California, many problems still exist. Water quality is an 
important issue for many who rely on the Delta for their water; 
yet, it has not really improved significantly since CALFED has 
been established. And one question is if it will.
    Levee stability is critical not only to those who live in 
the Delta, but to the whole water supply system. Yet, it still 
takes money in studies and mitigation in some cases than to do 
the actual levee work necessary to ensure a safe and stable 
levee system. Was not CALFED supposed to streamline this 
process?
    In order for CALFED to be successful, it must address many 
of these outstanding issues. We must have more storage, better 
water quality, oversight on how many millions of dollars are 
being spent in coordination between the agencies to ensure a 
rapid permitting process for the necessary projects.
    I, again, want to thank Congressman Calvert and Congressman 
Nunes for all their work in putting together this hearing. Mr. 
Calvert in all the work he has done over the past several years 
on water issues of impacting California. I know this is an 
extremely important issue to all of us, and having the 
opportunity to be here and hear from the people in Congressman 
Nunes' district is beneficial for all of us, so thank you.
    Mr. Calvert. Thank you, Mr. Chairman.
    Mr. Calvert. Nearly everyone agrees with the need for more 
water supply, but too little has been done to meet the growing 
demand for the increasingly scarce resource.
    More than 30 years has passed since California has made any 
major investment to improve its storage and conveyance systems. 
To illustrate this point, thousands of acre feet of water were 
spilt recently from Friant Dam because of a lack of adequate 
storage capacity on the Upper San Joaquin. It is no wonder that 
many here today are concerned about having their short- and 
long-term water needs met.
    Complicating this matter is a reduction of the Colorado 
River deliveries to California. As most of you know, the state 
will have to reduce its dependency on the Colorado River from 
past levels by 18 percent; that is about 800,000 acre feet of 
water.
    Complying with this requirement will not be easy, 
especially in light of demands placed on the water supply by an 
ever-growing population and the relocation of several hundred 
thousand acre feet of contracted water supplies for 
environmental needs over the next 10 years in this region.
    To hear firsthand from experts on the ground, the Water and 
Power Subcommittee is conducting a number of field hearings 
throughout the state over the next few days. We started the 
process here in Central California where a need for a focus on 
water storage and water conveyance is most acute.
    My distinguished colleague, Mr. Nunes, has taken the first 
step in this problem through legislation signed by the 
President that requires a feasibility study on new surface 
storage at Temperance Flat.
    Today's important and historic hearing will help us do even 
more. Hearing from the experts will be yet another step forward 
in finding solutions. We will hear about ways to build surface 
water storage, enhance water banking efforts, how water 
supplies can be maximized by expanding water transfer 
agreements, and the efforts underway to improve moving water 
through the Delta while protecting in-Delta farming and fishery 
interests.
    I plan to use today's hearing as another step toward 
developing legislation to accomplish those goals we all share; 
more surface storage, better conveyance, and water quality 
protections, private property rights protections, balanced 
CALFED implementation, and fiscally sound ecosystem restoration 
principles.
    I look forward to working with my colleagues as this 
Subcommittee marches forward on this important legislation.
    We have other colleagues, of course, with us today 
throughout the state of California. And with that, I am going 
to turn it over to Mrs. Napolitano, the Ranking Democratic 
Member for her opening statement, from right there in Los 
Angeles, California.

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

    Mrs. Napolitano. Thank you very much, Mr. Chairman, and I 
agree with Chairman Pombo that you are to be commended for 
continuing dialog on California's most precious resource, and--
besides its people, its water.
    We appreciate thoroughly your attendance, because it is 
only through you--I am an old lady--through you that we can 
understand the issues more thoroughly and be able to grasp the 
types of legislation and the impact that it is going to have, 
not only on the farmers here in this northern part of 
California--understand I am from L.A., so you gather the 
difference.
    We must work together, north/south, for the benefit of the 
whole state. There is no other way. And I might add that--and 
very frankly, it may step on a few toes--many of my colleagues 
in Washington for the other states do not want to see 
California be able to get the assistance it needs to be able to 
put through the programs that are going to help.
    It is a matter of money, and the dissemination thereof, and 
I am telling you from my vantage point--I am not speaking for 
anybody else except for me--we must work together to be able to 
bring those programs together to get them passed, so that we 
can fund those projects that are going to help everybody 
maintain the life--promote California product, promote 
California economy, and promote California's great standing in 
this world.
    Mr. Chairman, we were here almost 2 years ago talking 
hopefully to try to get CALFED passed. It didn't happen. Let's 
hope that we can get more information that is going to bring 
all the partners together so that we have an equitable solution 
to getting CALFED passed.
    The feedback that we receive is not only necessary, it is 
critical. It is us understanding the local problems and local 
issues, and the impact on California's economy; not only in the 
north, but also in the south that is going to help us to be 
able to work together.
    I am here to listen and to learn, and I look forward to 
hearing the testimony. Thank you very much, Mr. Chairman.
    Mr. Calvert. Mr. Radanovich.

 STATEMENT OF THE HON. GEORGE RADANOVICH, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Radanovich. Thank you very much, Mr. Chairman. I want 
to thank Chairman Calvert and also Chairman Pombo, for holding 
this hearing today. I especially want to recognize--thank the 
witnesses, but also recognize one in particular, Kole Upton, 
who is Chairman of the Friant Water Users Authority, who is 
just about the only constituent I have left in the--since 
redistricting, is that I used to represent part of Tulare 
County as well.
    But, currently--and I think these statistics are worth 
putting into the record--currently, according to California 
Department of Water Resources, California's 78 million acre 
feet of developed water is allocated in the following fashion: 
46 percent of the water is used by the environment, 43 percent 
is used on farms, and 11 percent is used in homes and 
businesses.
    Water supplies for human uses, both ag and urban, have 
declined 14 percent since 1990. My concern with this trend is 
that our state's population is expected to grow approximately 
46 million by the year 2020. Without major water supply 
enhancements, our families will not have adequate drinking 
water in the near future.
    Furthermore, our state's $27 billion agriculture economy, a 
large portion of which is based here in the Central Valley, 
cannot continue to thrive without increased water yield through 
the construction of water infrastructure.
    Congress is working to ensure that such construction occurs 
as soon as possible. As many of you know, I have joined my 
colleague and friend, Devin Nunes, to push for the creation of 
water storage in the upper San Joaquin River above Friant. We 
are seeking to secure $4 million in the Fiscal Year 2004 
Federal appropriations to continue the upper San Joaquin 
Storage Feasibility Studies, which will lead to more available 
water in the Valley for agricultural, environmental, and urban 
uses.
    In addition, I have worked with my Valley colleagues this 
past few years to obtain about $1 million in Environmental--EPA 
funds--for environmental restoration efforts along the San 
Joaquin River.
    Phase 1 of the restoration effort is currently underway, 
and I am especially pleased that the Resource Management 
Coalition and the San Joaquin River Task Force--some of whose 
membership is here today--have been driving--have been the 
driving strength in my congressional district to make the 
endeavor a reality.
    The Task Force demonstrates a commitment of local residents 
and local elected officials who are taking action toward 
restoring the San Joaquin River in a meaningful way.
    For my part, I will soon be introducing legislation 
commissioning a National Academy of Sciences study to determine 
the best measures that can be taken to restore the San Joaquin 
River. The Academy will be required to report their findings to 
Congress, and I hope to work with my constituents and 
colleagues here today to move this legislation through the 
Congress.
    Though this hearing is not focused on this issue, I want to 
speak briefly about the CVPIA, or the Central Valley Project 
Improvement Act. It has been 11 years since this Act came into 
law, and our region has invested a great deal of resources to 
make this law work. Conservation, land retirement, crop changes 
have all been implemented by the agriculture community in order 
to achieve the objectives of the CVPIA.
    Water supply reliability, though, has suffered, and the 
region's agriculture water needs have gone largely unmet; even 
in normal and wet water years.
    To the detriment of both the environment and agriculture in 
the Valley, the CVPIA has significantly raised water prices. 
Tier pricing under the CVPIA, for example, has made it 
extremely expensive to operate conjunctive use systems. Growers 
pay enormous prices for the water to be stored, extracted, and 
delivered, and this creates a clear disincentive for ground 
water storage.
    A more flexible approach to tiered pricing would encourage 
contractors to conserve and reuse products. Such flexibility is 
necessary for CVPIA to be successful. I hope to hear 
suggestions today as to how the Act could be better 
administered.
    In addition, and even though we are not holding this 
hearing on this issue, I think it is important to mention 
something about CALFED.
    In 1994, CALFED was a program created to develop long-term 
solutions for all--as Chairman Pombo mentioned--for all water 
users creating a balanced process to provide for agriculture 
and environment and human uses.
    The motto back then as my Chairman mentioned, ``We all get 
better together.'' Unfortunately, this motto has not driven the 
CALFED process, and the people of California are the ones 
suffering.
    The vast majority of the $280 million of Federal funds 
spent so far on CALFED has been spent on environmental 
projects. Some of these environmental projects have merit; in 
fact, most of them do.
    However, the environment cannot continue to benefit both to 
the exclusion of agriculture and urban water needs, and I fear 
that if the CALFED program continues to place the environment 
ahead of human needs, our state will find itself in the midst 
of a water crisis of catastrophic proportions.
    Although I have been critical of CALFED, I am committed to 
working to renew the program's human purpose as outlined in its 
own mission statement ``to advance water management practices 
for all users.'' Simply put, this means that more water yield 
in the state, which means construction of more water 
facilities.
    Again, I want to thank Chairmen Pombo and Calvert for 
holding this important hearing, and I look forward to hearing 
the testimony of the witnesses.
    Thank you very much.
    Mr. Calvert. I thank the gentleman.
    Mr. Calvert. Mr. Cardoza, also a resident of the Central 
Valley.

   STATEMENT OF THE HON. DENNIS CARDOZA, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Cardoza. Thank you, Mr. Chairman. I am going to be very 
brief today. I want to thank you for coming to our great 
Valley. Thanks to Mrs. Napolitano for coming up here as well.
    We have a great working relationship of the Valley 
Delegation. Mr. Dooley, Mr. Pombo, and Mr. Radanovich, and I 
all work together very well on this issue, and I thank them for 
welcoming me into their club this year.
    I want to just say two things very quickly: First of all, 
that--for those of you who didn't hear, he said I was 
Portuguese, so I qualified. Well, I had the prerequisite.
    I just want to say a couple of things, and I will say it 
very simply. We need water storage. We needed it yesterday. I 
am here to listen to see how we are going to get it, and how we 
are going to move forward. And, personally, I am not for any 
more new initiatives that don't include new water.
    We have to have new storage. We have to have new supply or 
the Valley is not going to be able to compete economically. 
That just is not an acceptable alternative.
    So with that, I am ready to listen, Mr. Chairman. Thanks 
for coming to our part of the world.
    Mr. Calvert. I think we are evenly matched here. We have 
three Portuguese and the rest of us.
    With us today on the panel is Mr. Tom Glover, the Deputy 
Director of the California Department of Water Resources; Mr. 
Kole Upton, the Chairman of the Friant Water Users Authority. 
Ms. Gloria Moralez, businesswoman/farmer from Fresno; Mr. 
Daniel G. Nelson, the Executive Director to the San Luis & 
Delta-Mendota Water Authority; Mr. Marc E. Christopher, Policy 
Advocate for Friends of the River; Mr. Thomas Clark, General 
Manager of the Kern County Water Agency; and Mr. Keith Watkins, 
the second vice president of the Tulare Farm Bureau.
    I forgot Mr. Nunes. I just--I didn't forget, but he has an 
opening statement. Before we recognize our witnesses, Mr. 
Nunes, you have an opening statement?

STATEMENT OF THE HON. DEVIN NUNES, A REPRESENTATIVE IN CONGRESS 
                  FROM THE STATE OF CALIFORNIA

    Mr. Nunes. Well, thank you, Mr. Chairman. I don't know if 
it is good or bad for Mr. Cardoza and myself, but when you are 
the freshmen out, they oftentimes just forget about you. You 
sit on the end of the table, and by the time everyone has 
talked, there is very little left to say, so with that--I just 
want to--I do want to introduce, because I did forget, Mrs. 
Jenny Barker who is with Assemblyman Bill Maze's office. And I 
also want to introduce the mayor of Chowchilla, Mr. Harris, if 
they would please stand. I think they're here. There they are 
in the back. Thank you for coming.
    Mr. Radanovich stole all my thunder, which normally happens 
back in Washington also, but I just want to say that, to be 
very clear, that the only solution for the San Joaquin Valley, 
southern San Joaquin Valley, is another reservoir behind 
Friant. That is the only solution. You will hear lots of other 
solutions out there, but the whole Valley needs to rally behind 
this project, because it is one that is both feasible and 
viable for the people of this Valley, and will create new 
water, which is what the prior speakers talked about.
    So with that, Mr. Chairman, I look forward to the testimony 
of the panel, and I yield back.
    Mr. Calvert. I thank the gentleman.
    Mr. Calvert. We will start with Mr. Tom Glover, the Deputy 
Director of the California Department of Water Resources. Mr. 
Glover, we are operating under the 5-minute rule. I believe 
there is a timer here. We will have plenty of time for 
questions, please--we will attempt to do that. I know sometimes 
you may need a little bit of extra time, but we will try to 
keep to it.

STATEMENT OF TOM GLOVER, DEPUTY DIRECTOR, CALIFORNIA DEPARTMENT 
                       OF WATER RESOURCES

    Mr. Glover. Good morning, Mr. Chairman and members of the 
Subcommittee. My name is Tom Glover. I am Deputy Director for 
the State Water Project, Department of Water Resources.
    You have your--you have my testimony before you, and in my 
testimony, I talk about where we are with expanding our pumping 
capacity through the Delta, and also some information on the 
CALFED budget.
    What I would like to focus on this morning is where we are 
with the 8,500 in banks and our attempt to increase our pumping 
capacity through the Delta.
    As you recall, the CALFED ROD calls for 8,500 moving from 
6,680 cfs to 8,500 cfs pumping plant and eventually moving to 
10,300 cfs.
    Where we are with that, we are moving ahead with the 8,500 
cfs, and we are--also will be installing permanent barriers 
within the Delta for water quality and water level issues.
    Over the last couple of years, we have been meeting with 
our counterparts in the Federal Government, both reclamation 
and the Regulatory Fish and Wildlife working toward a solution.
    A series of meetings--we were not able to really narrow 
down a single preferred plan, so this year we are moving ahead; 
and we are moving our environmental documents ahead in kind of 
a wide range of operational alternatives all the way from the 
most friendly to the environment up to maximizing water 
deliveries.
    What we expect to do this year is we expect to by the year 
end of calendar year arrive at a preferred option. And by, 
let's see, late--that is in October of this year. By September 
of 2004, we are looking to secure our permits for the 
additional pumping capacity. And by the end of calendar year 
2004, we expect to be implementing the additional pumping 
capacity. In 2008, we will complete construction of the 
permanent barriers using the temporary barriers in the 
meantime.
    Another question that you had asked is our counterparts, 
the Federal Government, and our interaction with them to 
complete this project.
    Obviously, one of our most important counterparts is the 
Bureau of Reclamation. They operate the Central Valley Project. 
We operate the State Water Project. We are jointly responsible 
for water quality issues in the Delta.
    It is important that as we move ahead with increased 
pumping capacity, that we coordinate with our Central Valley 
Project most effectively utilize the additional capacity.
    Additionally, the regulatory folks that we deal with are 
U.S. Fish and Wildlife Service, and NOAA Fisheries. They will 
be submitting biological opinions on our selected projects.
    And, finally, United States Army Corps of Engineers, they 
will be submitting a Section 404 permit, and also a Section 10 
permit for the Rivers and Harbors Act.
    Obviously, for us to say that we will complete this project 
by the end of next year, we are going to have to work closely 
with our counterparts in the Federal Government to make this 
happen.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Glover follows:]

               Statement of Tom Glover, Deputy Director, 
           State of California Department of Water Resources

Introduction
    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity to be here today. My name is Tom Glover, and I serve as 
Deputy Director of the California Department of Water Resources. I am 
pleased to present the State of California's perspectives on the CALFED 
Bay-Delta Program and water supply issues impacting the Central Valley 
and the entire state.
    The Subcommittee has asked me to touch upon two topics. One relates 
to the efforts of the Department of Water Resources to increase the 
State Water Project's Delta export limit to 8,500 cubic feet per second 
and, ultimately, to 10,300 cfs, and to any Federal agency coordination 
or cooperation necessary to implement the increase. The second topic is 
the impact the State's budget shortfall is having upon funding the 
CALFED Program.
    The Department of Water Resources is a member of CALFED and is a 
State lead agency for the CALFED Program elements covering storage, 
conveyance, levees, water use efficiency, water transfers, and 
watershed management. In January of this year, the California Bay-Delta 
Authority was established to implement the CALFED Bay-Delta Program. 
DWR is responsible for implementing many of the individual projects 
within the CALFED Program and is integrally involved in developing the 
budgets for these efforts. Information contained in this testimony 
regarding funding for the CALFED Program overall has been developed by 
the Authority in close coordination with individual State and Federal 
agencies. For ease of presentation, I am covering both topics.
Efforts to Increase SWP Delta exports to 8,500 cfs
    The Record of Decision for the Programmatic EIR/S for the CALFED 
Bay-Delta Program calls for an increase in the maximum allowable 
pumping limit at the SWP export facilities from the current level of 
6,680 cfs to 8,500 cfs. The ROD also specifies a subsequent increase of 
the pumping limit to 10,300 cfs in association with new fish screens at 
Clifton Court Forebay and the construction and operation of permanent 
operable barriers in the south Delta.
    At the time the ROD was prepared, the cost of new fish screens at 
Clifton Court Forebay was largely unknown. Since that time, the 
projected cost of the envisioned fish screen facility has been refined 
and is estimated between $1.0 - $1.2 billion dollars. This large cost 
and the uncertainty among fish biologists of the value of screening for 
all endangered fish prompted a reassessment of the plan contained in 
the ROD for south Delta improvements.
    Considering these factors, the CALFED Program agencies decided in 
2002 to reduce the scope of the South Delta Improvements Program to 
address increasing the SWP export capability to only the 8,500 cfs 
level and constructing permanent operable barriers in the south Delta. 
Increasing the SWP export limit to 10,300 cfs will follow once the 
method of screening is defined. The exact method of screening Clifton 
Court Forebay will require additional study, which is expected to 
include a test facility at the Central Valley Project's Delta pumping 
plant. In addition to increasing the SWP export limit to 8,500 cfs and 
installing permanent operable barriers, the SDIP includes channel 
dredging and relocating some existing agricultural diversions in 
selected areas in the south Delta channels.
    Figure 1 illustrates the study area in the south Delta and the 
actions proposed under SDIP.
    Per the ROD, increasing the SWP export capacity to 8,500 cfs 
requires the development of a ``project-specific operations plan that 
addresses the potential impacts of increased pumping'' and that the 
plan ``will be developed through an open CALFED process''.
    With this requirement in mind, DWR convened a series of meetings 
with Federal and State representatives and various stakeholders between 
January 2002 and October 2002 to solicit input on the potential 
components of the operations plan for 8,500 cfs and to identify areas 
of agreement.
    Several alternative sets of rules for operating the SWP to the 
8,500 cfs limit were developed through this process. No single plan 
emerged as the obvious preferred operation. Because of significant 
outstanding issues associated with the operations plan, DWR and the 
Bureau of Reclamation have decided to issue a draft EIR/S for SDIP that 
encompasses a ``range'' of operation alternatives. It is anticipated 
that a specific 8,500 cfs operation plan will be identified by the end 
of 2003 and will consider other programs and activities related to 
Delta operations which require decisions this year. The related 
activities are the extension of the Environmental Water Account, the 
intertie connecting the California Aqueduct and the Delta-Mendota 
Canal, long-term contract renewals for the Central Valley project, and 
sharing the water made available under the settlement regarding the 
Sacramento River water users' responsibility for meeting Delta water 
quality standards.
    The schedule contained in the ROD has the 8,500 cfs operation 
beginning by mid-2003. Due to delays in identifying a preferred 
alternative for the operational rules governing the use of 8,500 cfs, 
this schedule has been delayed about one year. The current schedule for 
implementing the SDIP is as follows:
     LRelease SDIP Draft EIR/S for Public Review: Late October 
2003
     LIssue SDIP Final EIR/S: Early June 2004
     LSecure Permits for 8500 cfs and barriers: September 2004
     LImplement 8500 cfs operation: October 2004
     LComplete construction of permanent barriers: December 
2008
    State bond funds for $56 million are specifically earmarked for 
permanent barrier construction. The total estimated cost for barrier 
construction is $68 million. We anticipate the remaining $12 million 
would be paid by SWP and CVP contractors with possible cost sharing 
from the Federal Government.
Federal Agency Coordination/Cooperation
    Development, approval, and implementation of the SDIP requires 
coordination with and the cooperation of the Bureau of Reclamation, the 
U.S. Fish and Wildlife Service, NOAA Fisheries, and the U.S. Army Corps 
of Engineers.
    The Bureau, as the operating agency of the Central Valley Project, 
and DWR, as the SWP operating agency, coordinate very closely in the 
operation of the two projects. The projects are jointly operated to 
meet Delta water quality standards and the sharing of this 
responsibility is governed by rules contained in the Coordinated 
Operation Agreement (1986). When capacity is available at the SWP 
export facilities, water can be pumped for the CVP. Approval for this 
operation (commonly referred to as a joint point of diversion) is 
dependent upon maintaining sufficient water levels in the local south 
Delta channels for the agricultural diverters. Sufficient water levels 
are maintained by the temporary agricultural barriers currently being 
installed by DWR and, in the future, by the permanent barriers proposed 
in the SDIP. In addition, the Bureau is directed by the Central Valley 
Improvement Act to install the fish-protection barrier currently being 
installed by DWR, and proposed in the SDIP, and to mitigate the impacts 
of that barrier upon the local agricultural divertors downstream. For 
these reasons, the Bureau is the Federal lead agency for assuring the 
SDIP meets requirements under the National Environmental Policy Act. In 
addition, the Bureau is working closely with DWR to explore ways 
increasing the SWP export limit to 8,500 cfs can help recover some of 
the CVP water supply dedicated for fish and wildlife purposes under 
CVPIA.
    The U.S. Fish and Wildlife Service, NOAA Fisheries, and the U.S. 
Army Corps of Engineers are Federal permitting agencies for the SDIP. 
The resource agencies will be analyzing the impacts of the project upon 
fish and wildlife. DWR is working with these agencies to identify 
mitigation actions required under the Federal Endangered Species Act 
and other actions consistent with the CALFED Multi-Species Conservation 
Strategy for incorporation into the actions contained in the SDIP.
    The Corps of Engineers will be conducting an independent review of 
SDIP under Section 404 of the Clean Water Act and under Section 10 of 
the River and Harbors Act.
    Coordination between all agencies is an important factor for 
implementing the SDIP. However, inter-agency cooperation is essential 
in selecting the final operation rules for the 8,500 cfs limit, 
identifying the components of the selected project, and assuring 
operating to the 8,500 cfs limit begins in Fall, 2004. These components 
include the operation rules governing the increased export, the 
associated improvement in SWP water supply and the Environmental Water 
Account, commitments to funding for maintenance activities and local 
diversion improvements, and additional ecosystem actions to contribute 
to recovery of endangered species and improve conditions for non-listed 
species. For the SDIP schedule to be met, the selected project should 
be decided early next year and Federal permits received by September, 
2004.
    A related activity that requires close cooperation between State 
and Federal agencies is preparation of an updated Operations Criteria 
and Plan, or OCAP. This document will serve as a baseline description 
of the facilities and operating environment of the Central Valley 
Project and the State Water Project. We are committed to working 
closely with Reclamation to ensure that, together, we can produce an 
OCAP that properly describes our operations and can serve as a solid 
foundation for Endangered Species Act consultations and CVP long-term 
contract renewals.
Impact of State's Budget Shortfall on CALFED Funding
    The California Bay Delta Program is in the third year of program 
implementation. At the time the Record of Decision was signed in 2000, 
the financial status of the State and Federal Governments was much more 
positive. The ROD estimated that for the first 7 years (Stage 1) an 
estimated $8.6 billion (State, Federal and Local/Water User funding) 
would be needed to support all activities.
    Funding available to meet program objectives has been provided from 
all sources over the first 3 years of the program. As shown in the 
attached bar chart (Figure 2), funding has primarily been provided by 
State and local/water user sources. For the State contribution, even 
with the significant reduction in General Funds, the California Bay 
Delta Program has received substantial funding (approximately $450 
million each year), primarily from bond funds (Propositions 204, and 
13). Local funding has been provided primarily as part of the local 
cost share required for Title XVI recycling projects (ranging from $60 
to $200 million per year). Water user funding has averaged 
approximately $50 million each year, which includes State Water Project 
funds and CVP Restoration Funds. Federal funding has been primarily 
provided from the Bureau of Reclamation and has averaged approximately 
$50 million per year also.
    When the ROD was signed, it was anticipated that funding would come 
equally from Federal, State, and local user sources. To date, 60 
percent of the funding has come from the State, 32 percent from users 
and local funding, and 8 percent from the Federal Government.
    Also attached are bar charts displaying funding by program element 
(Figure 3) and by CALFED objective (Figure 4). These bar charts 
describe how the funding to date (Years 1-3) has compared to the 
funding projected in the ROD. The program elements that have been 
impacted the most due to lack of funding are Water Use Efficiency, 
Delta Levees, Drinking Water Quality and Science. While funding gaps 
have occurred through Year 3, most program elements will be receiving 
significant additional funding in Years 4, 5 and 6 from State 
Proposition 50 bond funds. The primary program element still affected 
by funding delays is the Drinking Water Quality Program, because 
Federal funding has not been made available and because funding was not 
specifically targeted for CALFED DWQ in Proposition 50.
    Future funding for the California Bay Delta Program in Year 4 is 
displayed in the attached table (Table 1) based on the Governor's May 
Revise (fiscal year 03-04) and the President's proposed budget (fiscal 
year 04). The primary funding available in Year 4 is from Proposition 
50. These funds are expected to support the Program for 2-3 years. 
After Year 5 additional funding will be needed from Federal, State and 
other sources.
Conclusion
    Mr. Chairman, this concludes my testimony. Thank you for inviting 
me to share the State's perspectives on these important issues. I look 
forward to answering any questions you may have.
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    Mr. Calvert. Mr. Kole Upton, Chairman of the Friant Water 
Users Authority.

              STATEMENT OF KOLE UPTON, CHAIRMAN, 
                  FRIANT WATER USERS AUTHORITY

    Mr. Upton. Can you hear me? Can you hear me now? OK. My 
name is Kole Upton. I am a farmer. I live in Chowchilla in the 
Friant Service area. I am a family farmer. I live on my farm. 
My sons live on my farm, and my dad started the farm years ago.
    There are 15,000 family farmers in the Friant Service Area. 
It consists of about a million acres, and it stretches from 
Merced County to the north, and Kern County to the south. 
Within the same service area, there is about 1 million people 
that also live in the Friant Service area that indirectly or 
directly depend on Friant Service Water to exist.
    Friant Dam was built to replenish the underground aquifer 
that was depleted during the '20's and '30's. It was presented 
as a government opportunity for people to come here and farm 
160 acres or better, and change the desert back into a garden. 
It is a government program that has been remarkably successful, 
but it is in jeopardy now because of lack of additional water 
storage.
    The key to Friant is its location. It is central in 
California, and, therefore, it is critical to solve the 
Californian's water needs. Whatever you do here is going to 
have an effect on the north and the south.
    We in Friant are trying to reach out and start working with 
people on either side of us in order to try and augment 
solutions. I don't think we can expect you folks in Congress to 
do anything for us with your colleagues in Congress if we can't 
get along together here in California.
    So one thing that we do and we are working with 
Metropolitan Water District of Los Angeles currently toward a 
water quality exchange. The water out of Friant is pure, and it 
comes in--in fact, it is so pure it cannot go in the ground in 
some places in Friant, and it needs some impurities. Well, 
Metropolitan has graciously agreed to provide the impurities.
    They receive some water from the Delta, and we can do a 
quality exchange, which will improve our reliability and also 
give us a powerful ally in water situation.
    We are also working with the people to the north; Merced, 
Modesto, Turlock, all the way and including the city and county 
of San Francisco, the VAMP Program, Vernalis Adaptive 
Management Program. This sweetens the Delta and does ecological 
enhancement in the river up in that area.
    To the west of us, we have finally made peace with the 
Westlands Water District. We are now working together with 
those folks, so that everybody in the Valley is working 
together.
    We have also reached out to nonwater folks, such diverse 
folks as the United Farm Workers, for instance, which farmers 
usually don't have a lot in common with, but one thing that we 
have found and they have found is that without water, we don't 
have farms, and their folks don't have jobs.
    I, last, commend the Board of Supervisors of Madera and 
Fresno counties. They unanimously put together the San Joaquin 
River Task Force, and invited many water interests to join, 
including us, exchange contractors, and other stakeholders. 
They are also gracious enough to invite the National Resources 
Defense Council, a national environmental organization, that 
has a lot of interest in this area, because of their lawsuits. 
Unfortunately, they refused to participate and refused to work 
with the local interests.
    Lastly, I would like to point out the building of 
Temperance Flat and how we should look at that, in my opinion. 
You are going to hear a lot of testimony that it is going to 
cost you $400 and $500 an acre foot to get that water out of 
Temperance Flat. That is the wrong way to look at that. I look 
at it the same as you look at a four- or five-year-old child, 
we spent $200,000, $300,000 educating that child in order to be 
a doctor, or God forbid, a lawyer, or something like that.
    We can very easily economically go across to another 
country and buy that Ph.D., and have them come here. But we 
are, as a society, like an educated population. That tells us 
what kind of people we were.
    It is the same with Temperance Flat Dam. We need to invest 
in our own infrastructure, invest in our own people, and invest 
in our own food supply for future generations. We do not want 
to depend on a foreign country for food supply. And the 
solution to that in the Central Valley is Temperance Flat.
    Lastly, you folks came here to have some question answered, 
I guess your question is: ``What do we need to help us in the 
future in the Central Valley?'' Congressman Nunes said it, ``It 
is Temperance Flat. When do we need it? We need it now.''.
    Thank you.
    [The prepared statement of Mr. Upton follows:]

                 Statement of Kole M. Upton, Chairman, 
                      Friant Water Users Authority

    Mr. Chairman and Members of the Subcommittee:
    I very much appreciate being given the opportunity to testify 
before the Subcommittee to provide information about the state of our 
water supply reliability in the Friant Division (Friant) of the Federal 
Central Valley Project (``CVP''). I would like to focus on a critical 
Federal role in helping develop much-needed additional water storage 
facilities on the upper San Joaquin River in Central California, 
particularly in the area known as Temperance Flat. I am testifying 
today as the Chairman of the Friant Water Users Authority and as a 
family farmer in the Friant Division service area.
    It is truly an honor and privilege to be invited to offer testimony 
to the Subcommittee. I am grateful for the Subcommittee's recognition 
that the concept and need for additional water storage in California is 
alive and very real, rather than being a dead issue as so many in the 
environmental movement would like to characterize the necessity for new 
dams and reservoirs. My testimony today will focus on the San Joaquin 
River, Friant's CVP water source, and its critical need for additional 
water storage for environmental enhancement, flood control and existing 
beneficial uses. However, it is important to note that the San Joaquin 
River's needs are, in many ways, merely a reflection on the vital 
necessity of meeting needs for future water storage created by rapidly 
growing population and environmental pressures elsewhere in California.
    As you know, Friant water from the CVP and San Joaquin River is the 
vital fuel that powers much of the multi-billion dollar economy and 
creates tens of thousands of jobs in parts of Merced, Madera, Fresno, 
Tulare and Kern counties. Friant Dam was built to supplement the 
underground aquifer that exists under the Friant service area. This 
aquifer had become depleted during the 1920's and 1930's. Thus, many 
farms and communities were literally drying up. Friant Dam achieved its 
purpose by initiating a process called conjunctive use, utilizing a 
combination of surface water and groundwater to provide an adequate, 
stable and affordable water supply. The surface water was used when 
available and the underground was saved for dry years and droughts. It 
is a process that until recently has worked remarkably well.
    Mr. Chairman, the issues and problems we are talking about here 
today are not about water. They are about people--the people of the San 
Joaquin Valley; the people most affected by any decisions made that 
impact water supplies. Friant water serves 15,000 farmers and 1,000,000 
acres. Through the percolation of its surface water to the underground 
aquifer, it also helps maintain the water supply for approximately one 
million people living in or near the Friant service area. Thus, 
anything that affects Friant deliveries will affect surrounding 
communities, their residents, their livelihoods and their way of life.
    One valley generation after another has made a living through hard 
work and sacrifice. The written testimony I am pleased to offer to your 
Subcommittee will examine this marvelous valley of ours, a land that 
has been created by determined people thanks to farsighted efforts to 
provide dependable supplies of water. I will also address our region's 
critical water needs, particularly in the development of additional 
supplies through new surface storage.
Introduction
    I am Kole M. Upton, Chairman of the Friant Water Users Authority. 
My ranch in southern Merced County receives CVP water through the 
Chowchilla Water District, of which I am a Director. The Friant Water 
Users Authority is a joint powers authority formed under state law 
comprised of 24 member agencies that all receive water from the Friant 
Division of the CVP.
    The Friant service area is comprised of approximately one million 
acres of the world's richest farmland. It ranges from the southern part 
of Merced County, all the way to the base of the Tehachapi Mountains in 
Kern County. The majority of the service area is in Madera, Fresno, 
Tulare and Kern counties. This area annually produces about $4 billion 
in gross agricultural production with a tremendous variety of crops. 
The majority of the area is dedicated to permanent plantings of grapes, 
nuts, tree fruit and citrus. Friant also has a significant amount of 
row and field crops, as well as leading the nation in dairy production. 
This area is truly unique in its quality of agriculture and in its 
ability to produce all of this on small family farms that average 
approximately 100 acres in size. The area is also renowned for its 
highly efficient use of irrigation water, having been a ``hot bed'' for 
the development of drip and low volume irrigation technology. Friant 
boasts of some of the highest irrigation efficiencies found anywhere in 
the world.
    The Friant Division consists of Friant Dam and Millerton Lake on 
the San Joaquin River northeast of Fresno, the 152-mile Friant-Kern 
Canal that runs south all the way to Bakersfield and the 36-mile Madera 
Canal that runs north to the Chowchilla River. Friant annually delivers 
approximately 1.5 million acre-feet of water. This water supply is 
principally used as a supplemental water supply, providing only 1.5 
acre-feet per acre on average. However, there are some parts of the 
service area that rely totally on the Friant Division water as their 
sole source of supply. The area is blessed with good quality 
groundwater aquifers. Groundwater is the firm source of supply for the 
majority of the service area.
    The Friant Division is unique among Reclamation projects in the 
West in that it employs a two-class system of water deliveries. Class 1 
water is the first water (some 800,000 acre-feet) to develop behind 
Friant Dam and is typically delivered to those parts of the service 
area that have limited or no access to groundwater supplies. Class 2 
water develops only after it becomes apparent to the U.S. Bureau of 
Reclamation that all Class 1 demands can be met. Class 2 water is 
delivered to those parts of the service area that can rely on 
groundwater. Class 2 water is typically used to replenish the 
groundwater through ``in-lieu'' recharge--providing growers with 
surface water in-lieu of using their wells, and through direct 
recharge--percolating water in recharge basins, natural waterways and 
unlined canals into the underground aquifers. The Friant Division has 
been in service for more than 50 years and has been successful in 
arresting a serious condition of groundwater overdraft that existed 
prior to the project. However, a condition of critical groundwater 
overdraft still exists in parts of the Friant service area and in 
neighboring areas in the southern San Joaquin Valley.
    Congress authorized the CVP in the late 1930s, taking the project 
over from the State of California when the Great Depression made it 
impossible for the state to sell general obligation bonds that had been 
authorized by voters to build the Project's initial stages, including 
principal Friant features, between 1938-57..
    The majority of the water rights to the San Joaquin River allowing 
for the diversion of water at Friant Dam are based on purchase and 
exchange agreements with the individuals and entities that held rights 
on the San Joaquin River at the time the Friant Division was developed. 
The single largest of these agreements requires the annual delivery of 
840,000 acre-feet of water to the western San Joaquin Valley near 
Mendota (commonly referred to as the Exchange Contract). As a result, 
the Friant is dependent upon other CVP features, including Shasta Dam, 
the Tracy Pumping Plant and the Delta-Mendota Canal, to facilitate this 
required exchange. If for some reason the U.S. Bureau of Reclamation is 
unable to meet the demands of the Exchange Contract out of Delta export 
supplies, the Exchange Contract provides for the release of water from 
Friant Dam to meet Exchange Contractor demands. Such a release has 
never had to be made.
    All of these arrangements and developments occurred because of 
recognition that hard work by the earliest valley generations could not 
overcome, on its own, a lack of available water supply. Most of 
Friant's one million acres had been developed to permanent crops but 
heavy pumping in the 1920s and 1930s overdrafted groundwater in many 
areas to the point of exhaustion and severe land subsidence.
    So the Federal Government made a deal with the people along the 
valley's East Side: In exchange for a water supply system, thousands of 
farmers and their communities agreed to invest in farms, homes, 
equipment, cities, towns and infrastructure to put the water to work. 
Congress gave its full blessing, later endorsed through Supreme Court 
decisions. The government provided opportunity. Valley folks seized it 
and made the most of it. Very few Federal programs have been so 
successful.
    Now this program stands in jeopardy because certain elements of the 
environmental community believe Congress made a mistake when it 
authorized the Friant Division. Those radical elements believe the 
purposes for which Friant was created should now be subordinated to the 
goal of re-establishing a salmon fishery that disappeared more than 
half a century ago. Perhaps Congress would make a different decision 
today if it were faced with a decision to construct the Friant 
Division; however, the reality is that your predecessors made a 
decision, and we are where we are.
California's Growing Water Supply Crisis and the San Joaquin River
    As officials of the Friant Water Users Authority have pointed out 
in previous testimony before this Subcommittee and other Congressional 
Committees, California is beginning to confront the reality of a 
chronic water shortage within the state and, in particular, the San 
Joaquin Valley as a region.
    Within the San Joaquin Valley and throughout California, population 
growth continues to drive the need for developing additional water 
supplies. Very few new water projects have been completed over the past 
25 years. The state has had to live off of the ``extra'' capacity of 
the systems our forefathers designed and built decades ago. Now, most 
of that extra capacity is gone. Only limited ability now exists to 
supply Californians during a drought of just a few years.
    At the same time, needs associated with the development of the 
environmental movement have had enormous impacts. Passage and 
implementation of the Central Valley Project Improvement Act (CVPIA) 
and other regulatory actions to protect and enhance the environment 
have resulted in less and less water being available for human uses, 
including agricultural production. The San Joaquin Valley certainly has 
suffered. Water supplies such as those in the Westlands Water District 
and elsewhere along the West Side that were historically dependable are 
now unreliable. The valley's well-documented groundwater overdraft has 
been significantly worsened as a result of lessening availability of 
surface water supplies.
    The reliability of Friant Division water supplies remains at risk 
as a result of litigation brought in 1988 by a number of environmental 
and fishing organizations. Remaining aspects of that litigation seek to 
return sufficient flow to the San Joaquin River for the restoration of 
a salmon fishery below Friant Dam. Estimates, many made by highly 
respected scientists, of the need for additional water to restore this 
fishery range in the many hundreds of thousands of acre-feet per year. 
If Friant water users were ordered by the courts to release existing 
supplies for this purpose, it obviously would have a major impact on 
the availability of water to Friant Division water users unless 
additional water supplies were developed to meet this need. 
Unfortunately, a stay to this litigation developed by the parties in 
1999 has ended because the NRDC's environmental coalition has opted to 
return the case to the courts.
    In so doing, the NRDC coalition has again vividly demonstrated the 
true colors of too many of those who so avidly wave the 
environmentalist banner to the detriment of the lives and well being of 
others. Far from being constructive members of society in search of 
workable solutions, too many of these individuals and organizations are 
radical elements that seek political and social power, and work with 
great skill and dedication to disrupt the broader ways of life to which 
the overwhelming majority of our nation's hard-working population 
subscribes. Inflexible and unreasonable positions taken by many in the 
environmental community on virtually all water-related issues seem to 
have become the standard by which everything else, including the 
realities of irrigated agriculture in the water-short San Joaquin 
Valley, are judged. The time has come to demand constructive, rather 
than obstructive, engagement by these radical environmental forces with 
their private agendas that are so detrimental to the well being of the 
American economy and broader society. The threat of their tiresome 
lawsuits should be no guarantee, as it is now, that these environmental 
organizations must be included in whatever the water-issue loop happens 
to be.
    Today, the pendulum has shifted so far toward environmental 
advocacy that those of us continuing to honor the deal made with the 
government 60 years ago and merely attempting to defend our families, 
our livelihoods and our way of life find ourselves heaped with scorn. 
Generally, the environmental advocates who are the most self-righteous, 
indignant and demanding tend to live the farthest away from the 
communities the more severe of their often-extreme policies would 
decimate and the lives they would leave shattered.
    There simply must be better solutions to our water issues than the 
sort of legal power plays Friant water users have had to battle for 15 
years. There has to be balance, fairness and compromise. Reality must 
be recognized. So must the fact that people's lives are at stake.
    Friant worked cooperatively with NRDC for four years in studying 
ways to enhance and improve the San Joaquin River. I am pleased that 
our four-year settlement process with NRDC and its environmental 
coalition made progress. We learned much about what can and cannot 
reasonably be done to enhance the San Joaquin River. This attempt at 
litigation settlement was especially fruitful in the early years and 
resulted in obtaining much valuable data and techniques about the 
effective use of water in restoration activities. An example is the 
tremendous increase in knowledge gained about the use of the same water 
for both agricultural and environmental purposes. It is a shame that 
NRDC opted to return to the courts rather that finish the job we all 
started four years ago.
    NRDC's solution and objective seems to be to have a salmon run on 
the river. Our analysis of the joint studies is that such a run is not 
reasonable, prudent or feasible. Until NRDC unilaterally stopped the 
appropriate studies, the data was showing the folly of spending the 
public's money in order to try to restore a salmon run in a reach of 
river that has largely been without riparian resources for such an 
extended period.
    One such study was the study of temperatures of the water in 
Millerton Lake behind Friant Dam. The type of fishery appropriate for a 
river system is largely temperature dependent. Cold water will permit a 
salmon fishery to survive. Warmer water provides optimal conditions for 
other types of fish and they are usually mutually exclusive. The 
studies showed that Millerton Lake's water temperatures are so warm 
that releases from Friant Dam, no matter the quantity, would not allow 
salmon to survive in the San Joaquin River above the Merced River. 
Furthermore, San Joaquin River water from Friant would, upon reaching 
the Merced River confluence, would be so warm that it would damage the 
existing salmon run on the Merced River. Since these results did not 
fit in to NRDC's preordained desired outcome, the study was stopped. It 
is irresponsible to spend the public's money on something that we know 
will not work, and would even harm an existing ecosystem.
    That said, let me assure the Subcommittee that Friant Water Users 
are committed to the San Joaquin River's environmental improvement and 
enhancement while preserving our way of life. We are continuing to work 
with other stakeholders who feel the same. We welcome any environmental 
group that wants to join constructively in this effort. Friant has 
consistently found ways to work with former adversaries in search of 
solutions that benefit all interests, and will continue to do that with 
respect to the San Joaquin River.
Effects of the Central Valley Project Improvement Act
    The Central Valley Project Improvement Act (CVPIA), which Congress 
enacted in 1992, has obviously had tremendous effects upon all aspects 
of the CVP. The CVPIA has contributed to problems related, in general, 
with the CVP's water supply and, in particular, to the conjunctive use 
program upon which the Friant system was largely planned, devised and 
implemented a half century and more ago.
    Prior to CVPIA's enactment, during wet years districts were able to 
bring in surface water at low cost during the winter months to 
encourage farmers to pre-irrigate row crops, fill up the lower profile 
of the root zones of crops such as alfalfa and orchards, and run water 
down creeks and other natural and artificial recharge systems. All of 
these activities had the effect of replenishing the underground aquifer 
and reducing the use of surface water during the hot months. Water 
costs have escalated ten fold since 1988 for Friant Users, with between 
a third to one half of the increase attributable to CVPIA charges. The 
impact has been to render groundwater recharge activities economically 
infeasible.
    Even though the CVPIA is not the focus of this hearing, let me say 
that 11 years after the law's passage, the time has come for a thorough 
Congressional review of this law.
The Need For Additional Surface Water Storage
    What is most needed to environmentally improve the San Joaquin 
River and sustain the valley's way of life are new sources of water. We 
know how to stretch existing supplies and we have discovered ways to 
beneficially reuse water. What we really need is more storage, behind a 
dam such as Temperance Flat in the upper end of Millerton Lake.
    Aside from the well-documented fact that the entire south valley 
region is water short, the reasons why additional storage is a 
necessity are fairly simple. The San Joaquin River must have a source 
of ``new'' water for any meaningful environmental and fishery 
enhancement to occur. Although opportunities for water reuse and 
groundwater banking may exist, they are obviously insufficient to 
capture and store the huge quantities of surplus flows generated during 
the flood events of hydrologic above average years.
    Millerton Lake's record makes clear that Friant Dam, with a 
reservoir storage of 520,500 acre-feet, is incapable of offering 
reserve storage. Millerton's water management shortfalls, both for the 
San Joaquin River and Friant water users, were dramatically illustrated 
during a pair of recent events, one of which occurred just this month:
     LIn 1997, a heavy autumn and early winter snowpack 
suddenly melted under the pounding of more than 20 inches of rain that 
fell in 24 hours as high as elevations of 12,000 feet in the San 
Joaquin River watershed. The result was a calculated natural flow that 
briefly reached a catastrophic level of 120,000 cubic feet per second 
and filled Millerton Lake to more than 10,000 acre-feet above capacity. 
Record releases of nearly 60,000 c.f.s. had to be made to the San 
Joaquin River, causing extensive damage to homes and farmlands along 
the river. Approaches to two bridges were washed away. The Bureau of 
Reclamation followed the immediate crisis with huge flood releases but, 
ironically, that winter's storm activity suddenly and completely 
vanished. Despite this massive flood release year, Friant's contractual 
water supplies ended up at only about 55% of contract amounts.
     LIn June 2003, a combination of circumstances--a cool and 
wet spring, already high reservoir storage, lack of early season 
irrigation demand and a mid- to late-May series of heat waves--caused 
Millerton Lake to fill and spill over Friant Dam into the San Joaquin 
River for several days. The situation compelled the Bureau of 
Reclamation to make ``Section 215'' (surplus) water available, even for 
non-long term Friant contractors. The spill wasn't all that much, 
adding up to about 8,300 acre-feet. However, this event occurred during 
a ``short'' water supply year that is only about 85% of average. 
Incredibly, because of the heavy movement of water to help evacuate 
Millerton Lake storage during the spill, it is possible that the 
overall Friant water supply declaration could end up being slightly 
decreased this year by the U.S. Bureau of Reclamation.
    In each of these cases, the lack of storage capacity in Millerton 
Lake was the culprit. If we could generate meaningful added supply on a 
regular basis, I assure you that Friant's expert water managers will 
figure out ways to do wonders for the environment and everyone else.
    Congress clearly recognized the environmental tradeoffs it was 
making when it authorized the construction of the Friant Division of 
the CVP back in 1939. We expect Congress and the Federal Government to 
have a major role in the restoration of the river and return of a 
fishery. That will require additional water storage.
    A new dam is desperately needed for this area. Temperance Flat is 
the right place for this dam. This dam would be an investment in the 
future of America. Do not be fooled by the creative accounting methods 
of those opposing any new storage structures. They will claim that any 
new surface storage would result in water costs of $400 to $500 per 
acre-foot and that no farmer could afford such a cost. Thus, they 
reason, no dam should be built.
    That is the wrong way to look at this situation. When a society 
invests in its own people, its own infrastructure and its future food 
supply, it is making an investment that will pay great dividends in the 
future. Why do we spend hundreds of thousands of dollars educating a 
child from age 5 until he or she achieves a Ph.D? Why not just save the 
expense and go hire someone with a Ph.D from another country and save a 
great deal of expense? The reason, of course, is that an educated 
society is a better society. It is an investment in the future and well 
worth it. Exactly the same reasoning holds true with the proposed dam 
and reservoir at Temperance Flat. Farmers with the help of the Federal 
Government have provided a low cost and reliable food supply for this 
country. That is something that this society should not discard. 
Relying on a potential enemy for a food supply is foolhardy. New water 
storage is an investment in agricultural self-reliance as well as 
environmental enhancement and meeting future needs created by 
inevitable population growth.
    New water supply infrastructure, including the new storage 
contemplated in the CalFed Bay-Delta Program Record of Decision, must 
be supported and the regulatory hurdles leading to construction 
minimized. This does not mean abandoning existing law and regulation 
and running the risk of making environmental or economic mistakes. 
However, a plan of water supply development and water quality 
improvements that takes too long to come to fruition will only create 
new mistrust of the process and new reasons for individual interests to 
think and act only for themselves. Being able to move effectively and 
efficiently in making the necessary determinations to effect water 
system improvements is essential.
Conclusion
    Mr. Chairman, valley people love their land and communities. Our 
people favor and will support realistic and reasonable river 
enhancement but valley people need the tools so they, their homes, 
their livelihoods and their way of life can be saved along with the San 
Joaquin River. More water storage is that solution, for the river's 
future and our own.
    Thank you once again, Mr. Chairman and members of the Subcommittee, 
for the opportunity to testify and be part of such an important 
process. I assure you that the Friant Water Users Authority and its 
member agencies stand eager and willing to work with you to make these 
goals a reality.
                                 ______
                                 
    Mr. Calvert. Ms. Gloria Moralez.

  STATEMENT OF GLORIA MORALEZ, BUSINESSWOMAN/FARMER, FRESNO, 
                           CALIFORNIA

    Ms. Moralez. Thank you very much, Mr. Chairman.
    Good morning, Mr. Chairman, members of the Subcommittee. My 
name is Gloria Moralez, and I am also a member of the State 
Reclamation Board of Directors, so I am familiar with the issue 
here at hand.
    I would like to thank you for the opportunity to testify 
before you, being that this is one of the most important and 
most critical issues that we have here in the Valley. As you 
may know, California is the world's leader in agricultural 
production in the Central Valley, and the primary reason for 
that is because many years ago, the State of California and 
Federal Government succeeded in developing the Central Valley 
Project.
    As a farmer, I understand the importance of all the 
peripheral services needed to grow, harvest, and market the 
Valley's crops. As a businessperson, I understand the 
importance of the agricultural economy to my customers.
    I have ground-level knowledge of how agriculture works and 
what it means for the farmworkers that make our agriculture 
economy function. According to the Migrant and Seasonal 
Farmworker Enumeration Profiles Study as of September 2000, we 
have approximately 400,000 migrant and seasonal farmworker jobs 
in the San Joaquin Valley that depend on agriculture for their 
livelihood. The constant population growth through new 
immigrants with limited job skills and the demand for these 
jobs will continue to grow as a world population grows.
    Hispanics are not only the farmworkers who depend on 
agriculture for farm labor jobs. We are, in fact, also the 
fastest growing racial group as well as the fastest growing 
ethnic group in establishing new businesses; however, none of 
these efforts can continue if we do not have enough water to 
sustain the needs of agriculture, job creation, new businesses, 
new housing, et cetera.
    I speak for every citizen that resides in the San Joaquin 
Valley with a clear understanding of our need for additional 
water storage to continue to enjoy a high quality of life that 
good jobs can provide. Everyone who lives in this Valley is 
tied in one way or another to agriculture, and we need your 
help in appropriating funding for water storage projects to 
maintain and improve the Valley's economic and environmental 
needs.
    Unfortunately, the current water storage in place such as 
Friant Dam, which holds only over half a million acre feet, is 
simply inadequate to provide for the level of water supply 
reliability needed to meet the ever-growing urban and rural 
population, and the ever-increasing demands of the environment.
    Historically, the Friant water contracts hardly ever get 
100 percent of their annual water supplies, even in wet years. 
We need to improve the water storage capability to meet the 
future needs of our Valley.
    As a member of the reclamation board, we have done some 
preliminary investigation to see how could we work with Friant 
Dam to enhance and have more water capacity; however, nothing 
that we have looked at looks feasible. Water storage in a more 
grand manner is necessary. Also the cost-benefit ratio that we 
will get by having more flood control and the safety for our 
citizens is of upmost importance.
    Increased water storage in this region will without a doubt 
take advantage of the volatility of nature's water delivery by 
capturing and containing its periods of abundant delivery to 
better satisfy the demands of beneficial use in the context of 
today's world.
    Possible benefits of increased storage are: Providing a 
reliable agricultural and domestic water supply; allowing 
deliveries to increase aquifer recharge; increasing electrical 
power producing potential; providing greater flood control 
ability; improving regional water quality; promoting river 
enhancements; and increasing recreational opportunities.
    In closing, I urge you that you please take our message to 
Congress and put all of your collective efforts into providing 
the necessary funding to adequately resolve this very urgent 
matter.
    Our participation here today is an event that will take 
years to resolve; however, in the past 5 minutes that I have 
spoken to you, our population has already grown. Let's be wise 
and place water storage in our region your No. 1 priority to 
resolve.
    Thank you very much.
    Mr. Chairman, I was requested by your office to please give 
a synopsis of this information into the record--
    Mr. Calvert. Yes, Ms. Moralez. I will recognize you in one 
moment.
    One thing I want to point out is that this is an official 
congressional hearing today, and any acknowledgments, either 
positive or negative, we would appreciate that not be done. We 
appreciate your cooperation in that matter. Thank you very 
much.
    With that, Ms. Moralez, you are recognized.
    Ms. Moralez. Thank you very much. (Further comments by Ms. 
Moralez in Spanish.).
    [The prepared statement of Ms. Moralez follows:]

         Statement of Gloria P. Moralez, Businesswoman/Farmer, 
                           Fresno, California

    Mr. Chairman and Members of the Subcommittee:
    I would first like to thank you for the opportunity to testify 
before the Subcommittee on an issue that is critically important to the 
San Joaquin Valley and the people that work and live here. As former 
farm worker, farmer and businesswoman I would like to explain to you 
why additional water storage projects are needed.
    As you may know California is the world's leader in agricultural 
production and the Central Valley is the primary reason for that 
success. However, this was only possible through the wisdom of 
legislators much like you who had great a vision. Through proper 
planning and hard work long ago, the State of California and Federal 
Government succeeded in developing the Central Valley Project. The 
Central Valley Project through its Friant Division generates literally 
hundreds of different crops delivered around the globe, resulting in 
hundreds of thousands of jobs and billions of dollars to the regional 
economy.
    As a farmer, I understand the importance of all the peripheral 
services needed to grow, harvest and market the Valley's crops. As a 
business person I understand the importance of the agricultural economy 
to my customers.
    I have ground level knowledge of how agriculture works and what it 
means to the farm workers that made our agricultural economy function. 
According to the MIGRANT AND SEASONAL FARMWORKER ENUMERATION PROFILES 
STUDY FOR CALIFORNIA as of September 20, 2000 we have approximately 
400,000 migrant and seasonal farm work jobs in the San Joaquin Valley 
that depend on agriculture for their livelihood. The constant 
population growth through new immigrants with limited job skills will 
continue to grow and the demand for these jobs will continue to grow as 
the world's population grows and agriculture continues to refine its 
technology to be more effective and productive. Hispanics are not only 
the farm workers who depend on agriculture for farm labor jobs: we are 
in fact also the fastest growing racial group as well as the fastest 
growing ethnic group in establishing our own businesses. However, none 
of these efforts can continue if we do not have enough water to sustain 
the needs of agriculture, job creation, new businesses, new housing, 
etc. I speak for every citizen that resides in the San Joaquin Valley 
with a clear understanding of our need for additional water storage to 
continue to enjoy a high quality of life that good jobs can provide. 
Everyone who lives in this valley is tied in one way or another to 
agriculture and we need your help in appropriating funding for water 
storage projects to maintain and improve the valley's economic and 
environmental needs.
    Unfortunately, the current water storage in place such as Friant 
Dam which only holds just over half a million acre feet is simply 
inadequate to provide for the level of water supply reliability needed 
to meet the ever growing urban and rural population, and the ever 
increasing demands of the environment. Historically, the Friant water 
contracts hardly ever get 100% of their annual water supplies, even in 
wet years. We need to improve the water storage capability to meet the 
future needs of our valley.
    Increased water storage in the region, will without doubt, take 
advantage of the volatility of nature's water delivery by capturing and 
containing its periods of abundant delivery to better satisfy the 
demands of beneficial use in the context of today's world.
    Potential benefits of increased storage are real, many'' and 
varied. They include:
     LProviding a reliable agricultural and domestic water 
supply
     LAllowing deliveries to increase aquifer recharge
     LIncreasing electrical power producing potential
     LProviding greater flood control ability
     LImproving regional water quality
     LPromoting river enhancements
     LIncreasing recreational opportunities
    In closing I urge you that you please take our message to Congress 
and put all your collective efforts into providing the necessary 
funding to adequately resolve this very urgent matter. Our 
participation here today is an event that will take years to resolve, 
however in the past five minutes that I have spoken to you our 
population has already grown, let's be wise and place water storage in 
our region your number one priority to resolve. Thank you
                                 ______
                                 
    Mr. Calvert. With that, Mr. Daniel G. Nelson, Executive 
Director, San Luis and Delta-Mendota Water Authority.

      STATEMENT OF DANIEL G. NELSON, EXECUTIVE DIRECTOR, 
            SAN LUIS & DELTA-MENDOTA WATER AUTHORITY

    Mr. Nelson. Good morning, Mr. Chairman, members of the 
Committee. Welcome to the San Joaquin Valley. My name is Daniel 
Nelson. I am the Executive Director of the San Luis and Delta-
Mendota Water Authority.
    And I would, first of all, like to commend the Chairman for 
his ongoing efforts in moving forward with the development of a 
balance in CALFED legislation; it is only through a balanced 
legislative effort that CALFED can be successful.
    And last but not least, I would like to commend Congressman 
Nunes for his leadership in advancing storage. Storage projects 
such as Temperance Flat are going to be necessary components of 
any long-term California program.
    And although additional storage is a critical component of 
any long-term California program, there are a couple of other 
components, and I have been asked to focus on those components 
of California water supply.
    I am going to use this graphic to assist in going through 
conveyance issues. First of all, as you can see in the northern 
part of the state, we have storage of Shasta, Whiskeytown, 
Trinity, Folsom and Oroville. In the southern part of the state 
is where the majority of the use is for both agriculture and 
the population. The dilemma that we have is the bottleneck here 
in the middle and the heart of the system, which is the Delta.
    The real challenge in managing California water resources 
is how it is that we manage and operate the Delta and move 
water from Northern California to the southern area while 
meeting the needs in the Delta?
    The points I want to emphasize regarding conveyance are, 
No. 1, conveyance is a very, very important component of how it 
is we manage water resources in the state. Two-thirds of the 
state's population rely on this dynamic and a major portion of 
agriculture economy as well.
    The second point is inherent to this system is protecting 
the agricultural uses and the water quality within the Delta, 
and also being able to enhance the fishery--the fishery uses 
and also protecting Northern California uses as well. Those 
protections are inherent to whatever plan that we use with 
conveying water through the Delta.
    To take the mystery away from this, there really are just 
two components that factor into how it is that--how much water 
we can move through this system. No. 1 is the pumping plants' 
capacity--and currently the Tracy pumping plant is at 4,300 to 
4,600 cfs, depending on the time of the year. And the Banks 
pumping plant is at 6680 cfs. CALFED in stage 1 anticipates 
that we can increase our permits up to 8,500 csf, and through 
an intertie increase the 4,300 to reliable 4,600 on the Tracy 
pumping plant side.
    The second component is the regulations and restrictions, 
essentially the rules that govern how it is that we operate 
these pumping plants and govern the windows of opportunities we 
have for using and moving this water through the Delta.
    There are three Federal statutes that simply govern this. 
One is the Endangered Species Act. The second is the Central 
Valley Project Improvement Act, and the third is the Clean 
Water Act. And these are the standard and regulation and how it 
is that govern how it is that we move water through the Delta.
    In summary, on conveyance, there are short-term needs that 
we need to accomplish immediately to accommodate this 
conveyance system. No. 1 is the permits at Banks need to be 
increased to 8,500 cfs immediately. This was the quid pro quo 
and the CALFED plan, and we have had delays of well over a 
year. We need to move on and increase the permits to 8,500 cfs.
    The second is we need to intertie that is called the CALFED 
ROD between the Delta-Mendota Canal and the State Aqueduct. 
This allows us to increase on the Federal side from 4,300 to 
4,600 on a consistent basis.
    Another project that is called for on the ROD is to address 
low point issues at San Luis Reservoir. In effect, once we are 
successful in doing this, we have 200,000 acre feet of 
additional storage, usable storage out at San Luis, if we can 
be successful in dealing with low point issues. It also 
implicates conveyance opportunities, because with that 
additional storage, we can move additional water in the 
springtime, when those pumps are usually off, because we don't 
have any storage opportunities to place that.
    Last but not least, we need to review the regulations that 
restrain the pumping in the Delta. We need to make sure that we 
are meeting the water quality and the environmental fishery 
objectives, but we need to make sure that we are doing this 
efficiently, and that we are using the best science available.
    I would now like to speak very briefly, obviously with 
these dynamics this takes an extraordinary amount of 
cooperation between the Federal project and the state project.
    Currently, that relationship is established by the 
Coordinated Operations Agreement that was developed in 1986. 
We--a lot has changed since 1986. And the projects have done as 
good a job as they possibly can in trying to use that as a 
tool, but be able to deal with the new circumstances that we 
find ourselves faced with. And there is tension between the two 
projects.
    But what I would like to emphasize is: I--I am very 
optimistic that there are opportunities for the two projects to 
coordinate, and, in some cases, integrate their operations, so 
that both projects benefit. We are committed to working with 
the state contractors in the state to accomplish that.
    Finally, on a fairly specific issue that is very important 
to our region--the Central Valley Project Improvement Act 
dedicated 250,000 to 400,000 acre feet to wildlife refuges. As 
part of that, they directed the secretary of interior to go out 
and to diversify those supplies to minimize impact.
    We have implemented a lot of the components of CVPIA that 
restore the environment, but we haven't implemented those 
components that would minimize the impacts to water users, and 
we need to. The CALFED ROD establishes that we do this. And so, 
we need to move forward with the diversification of Level 4 
supplies, which is a pretty good chunk or percentage of our 
water supply south of the Delta.
    Thank you very much.
    [The prepared statement of Mr. Nelson follows:]

          Statement of Daniel G. Nelson, Executive Director, 
                San Luis & Delta-Mendota Water Authority

    Mr. Chairman, members of the Subcommittee: Good morning and welcome 
to the San Joaquin Valley. I am Daniel Nelson, Executive Director of 
the San Luis & Delta-Mendota Water Authority (the Authority), and I 
appreciate the opportunity to appear before you today.
    At the outset Mr. Chairman, I commend you and the Subcommittee for 
holding this hearing in the San Joaquin Valley, where policies of the 
Federal Government have negatively impacted farmers, farmworkers and 
rural communities over the last decade.
    I also extend the Authority's ongoing appreciation for your efforts 
to address California's water problems in a balanced and realistic 
manner. Your commitment to introduce legislation that will ensure that 
Calfed moves forward to address water supply, environmental restoration 
and enhancement, and water quality issues on an equal basis is 
fundamental to the ultimate success of Calfed.
    Finally, I commend Representative Nunes for his leadership in 
seeking authorization to pursue additional water storage in the upper 
San Joaquin River basin. This is a vital first step in building the 
necessary foundation for new programs and policies to solve water 
problems in the San Joaquin Valley and throughout the state. New water 
storage is essential, and the Authority supports the feasibility 
evaluation of upper San Joaquin River storage projects proposed by 
Congressman Nunes.
Key Points of Testimony
    Today, I will address the opportunities that Calfed could provide 
this region, in terms of conveyance and coordination between the 
Federal and state water projects and refuges. At the outset, I will 
summarize my testimony.
     LConveyance of water through the Sacramento / San Joaquin 
River Delta to south of the Delta is a key component to the Calfed 
Program. Two thirds of the state's population and a significant portion 
of the state's agriculture rely on conveyance through the Delta.
     LA conveyance plan must include protections for in-Delta 
water users, water quality, environmental/fishery uses, and northern 
California uses.
     LThe two key factors controlling conveyance opportunities 
are the pumping plant capacities and regulations governing the 
operations of the facilities.
     LShort-term capacity issues can be addressed by 
implementing portions of the Calfed Record of Decision that:
      (1) Lincreases the State Water Project (SWP) Banks Pumping Plant 
permits to 8,500 cfs;
      (2) Lconstructs the Intertie between the Central Valley Project 
(CVP) Delta-Mendota Canal (DMC) and the State Aqueduct; and
      (3) Lfinalizes and implements the San Luis Reservoir Low Point 
Project.
     LRegulations at the pumping plants significantly restrict 
conveyance opportunities. These regulations need to be reviewed to 
assure that environmental/fishery objectives are being efficiently met. 
Moreover, the Calfed Science Program must ensure that good science is 
being developed and used in the review process.
     LCooperation and coordination between the Federal and 
state water projects is essential to implementing a balanced successful 
Calfed Program. There are many opportunities for further coordination 
of operations, including sharing of facilities that would benefit both 
projects, to benefit all water users in a balanced manner, and to avoid 
major conflicts between the projects. The Authority is committed to 
working with state and Federal agencies as well as SWP contractors to 
accomplish this.
     LCVPIA provides for the diversification of sources of 
water delivered as Level 2 refuge supplies. The Calfed ROD identifies 
improving the diversification of sources of supply as a means of 
improving CVP south-of-Delta supplies for CVP contractors. Appropriate 
resources should be dedicated to implement.
THE SAN LUIS & DELTA-MENDOTA WATER AUTHORITY
    The Authority is a joint powers agency organized under California 
Law. Its 32 member agencies are water and irrigation districts that 
contract with the Bureau of Reclamation for the receipt of water from 
the Central Valley Project (CVP). These member agencies provide water 
for irrigation to approximately 1,200,000 acres of land within the 
western San Joaquin Valley, San Benito County, and Santa Clara County, 
water for wildlife habitat including over 125,000 acres of critical 
waterfowl habitat within the Pacific Flyway, and water for municipal 
and industrial (M&I) use throughout the same area. The area served by 
the Authority's member agencies is among the most productive farming 
regions in the nation. Farmers in this region produce over 60 different 
commercial fiber and food crops sold for the fresh, dry, canned or 
frozen food markets; domestic and export. With an adequate water supply 
they could produce crops worth more than $2 billion dollars. One of the 
Authority's member agencies, Santa Clara Valley Water District, is 
responsible for providing water to 1.8 million people and to the vital 
high-tech computer industry known as ``SiliconValley''. This multi-
billion dollar industry is critical to the economic health of 
California and the nation.
    Agriculture, M&I and waterfowl habitat in our region depend 
significantly on conveyance of water through the Sacramento / San 
Joaquin River Delta, primarily at the CVP Tracy Pumping Plant. A 
bottleneck in this conveyance system results in water shortages to 
south-of-Delta users, even when water is plentiful and available for 
export. A major challenge for improving the management of California's 
water resources is addressing this bottleneck. This bottleneck has been 
illustrated in the form of an hourglass and is attached to this 
testimony, (Attachment 1).
    There are opportunities to improve in how we move water through the 
Delta to meet the needs of those south of the Delta while protecting 
fish, water quality and users in northern California and in the delta. 
The Authority stands committed to work with this Committee, other water 
users, state and Federal agencies and Calfed to accomplish this 
delicate balance.
    In addition, efforts are underway to better coordinate the 
operations of the CVP and the SWP. It is anticipated that through 
better cooperation and coordination between the two projects that 
significant water supply, water quality and environmental benefits will 
be realized.
CONVEYANCE ISSUES / OPPORTUNITIES
Background
    Californians are the beneficiaries of a miraculous plumbing system, 
which has provided the state the opportunity to develop prosperity and 
a life style envied by the world. California's plumbing system is 
comprised of two major categories of facilities, storage and 
conveyance. The storage facilities include a series of dams to store 
water in the winter and spring, when water is plentiful for subsequent 
use during dry periods. The conveyance facilities include pumping 
plants and canals to transport the water to far reaches of the state. 
The heart of this plumbing system is the Sacramento / San Joaquin River 
Delta (Delta), where two major river systems converge. In the Delta, 
the CVP and SWP operate major pumping plants to divert water for 
conveyance through the Delta-Mendota Canal (DMC), the Edmond G. Brown 
Aqueduct (Aqueduct), and the South Bay Aqueduct.
    Multiple factors affect water supply that can be made available 
through this system. They include weather, storage, upstream flows, in-
Delta regulations, and conveyance capacity. Much attention has been 
given to the need to enhance the state's water storage opportunities, 
and rightfully so. Increased demands for a growing population, water 
dedicated to the environment and the maintenance of a thriving 
agricultural industry necessitate that we expand storage availability. 
This is especially important to address the hydrologic volatility we 
have in the state by storing water during wet years for use in dryer 
years. Just as important as storage however is the ability to be able 
to convey this water to where it is needed. Indeed, because of 
increased regulations in the Delta, conveyance through the Delta has 
become the factor that most limits water supplies for a majority of 
Californians. This is especially so in below normal, above normal and 
wet year-types, when storage is generally sufficient, but limitations 
in conveyance cause shortages to south-of-Delta users.
Conveyance Considerations
    The conveyance plan needs to take into consideration the competing 
needs of the delta. In-Delta uses and in-Delta water quality, fishery 
and northern California uses need to be taken into consideration and 
protected as part of a successful conveyance plan.
Export Components of Conveyance (Refer to Attachment 1)
    The two major factors that limit the export of water from the delta 
are:
    (1) LCapacity at the pumping plants; and
    (2) LStandards / Regulations governing the use of the pumping 
plants.
Pumping Capacities at the SWP and CVP Pumping Plants
    The Harvey O Banks Pumping Plant (Banks) and the Tracy Pumping 
Plant have a capacity of 10,300 cfs and 4,600 cfs, respectively. Under 
current permits, Banks is restricted to 6,680 cfs, with the expectation 
that through Stage 1 of Calfed, the permit will increase to 8,500 cfs 
and longer term to 10,300 cfs. The CVP Tracy Pumping Plant permit is 
4,600 cfs, but is restricted to 4,300 cfs during certain times of the 
year when capacity on the upper DMC is limited. (See Intertie below).
[GRAPHIC] [TIFF OMITTED] 88057.006


Banks Pumping Plant Increased Permits to 8,500 cfs / 10,300 cfs
    A key feature of the Calfed Program is the increase of approved 
capacity of Banks Pumping Plant to 8,500 cfs. Increased pumping at 
Banks was part of the quid pro quo for other elements of the Calfed 
Program, including environmental and water quality improvements. As 
noted above, the Calfed ROD anticipated that increased pumping at Banks 
would occur in the short term, but delays of over a year have raised 
questions as to the sincerity of Calfed to move forward in a balanced 
manner.
Intertie
    As a result of subsidence a few miles downstream from the CVP Tracy 
Pumping Plant, the capacity on the DMC has been reduced to around 4,300 
cfs. An ``intertie'' from the DMC to the Aqueduct was identified by the 
Calfed ROD as the remedy for this issue. This intertie would allow 
water to be shuttled between the DMC and Aqueduct and would provide 
numerous operational benefits including restoration of pumping to 
historic levels (4,600 cfs) at the CVP Tracy Pumping Plant. This 
component of the Calfed Stage 1 Program should be funded and 
implemented immediately.
San Luis Reservoir Low Point Improvement Project
    The Calfed ROD identified the need to address water quality and 
reliability problems associated with low water elevations in San Luis 
Reservoir. Santa Clara Valley Water District (SCVWD) received a $14 
million Proposition 13 grant as the lead agency to study alternatives 
to resolving the low point problem. The goal of the Low Point 
Improvement Project is to increase the operational flexibility of 
storage in San Luis Reservoir and to ensure a high-quality, reliable 
water supply for the CVP San Felipe Division contractors. The increase 
in reservoir operational flexibility will benefit all CVP and SWP 
contractors. Specifically, the project has three primary objectives:
    (1) LTo increase the operational flexibility of the San Luis 
Reservoir by increasing the effective storage up to 200,000 acre-feet. 
This increase in effective storage will allow utilization of available 
delta conveyance in the spring of most years;
    (2) LTo ensure that San Felipe Division contractors are able to 
utilize their annual CVP contract allocation to meet their water supply 
and water quality commitments; and
    (3) LTo provide opportunities for project-related environmental 
enhancements and other improvements where feasible.
    In summary this project was a component of the Calfed package and 
enhances storage, conveyance and water quality. Support should be given 
to SCVWD to complete the study, environmental review process, design 
and implementation of the preferred alternative.
Standards and Regulations Governing the Use of the Pumping Plants
    There are several layers of regulations that govern the operations 
of the Delta CVP/SWP Delta pumping plants. The environmental/fishery 
and water quality protections are provided generally through three 
Federal statutes.
    (1) LEndangered Species Act;
        (a) LWinter Run Salmon
        (b) LDelta Smelt
    (2) LCVPIA
        (a) LDedication of 800,000 acre feet (af) of CVP yield for 
environmental purposes; and
    (3) LClean Water Act
        (a) L1995 State Water Resources Control Board (SWRCB) Water 
Quality Control Plan for the Bay-Delta.
    As a result of these regulations and standards the opportunities to 
move water through the delta have decreased significantly. It is 
primarily for this reason that south-of-Delta CVP M&I and ag service 
contractors have chronic shortages. Indeed, shortages are imposed on 
south-of-delta ag service contractors in wet years, when water north of 
the Delta is abundant.
    The Federal and state regulatory statutes provide broad discretion 
that allows the regulations to be implemented in a balanced and 
efficient manner. This discretion should include taking into 
consideration water supply objectives as well as meeting their 
environmental/fishery and water quality mandates.
Regulations, Good Science and the Calfed Science Program
    In the last few years, the Calfed Science program has engaged in 
the effort to develop better science. We have great hopes for the 
success of the Program in this regard.
    Better science could be the basis for a new generation of 
environmental requirements, ones that are more flexible, ones based 
more on real time conditions, and ones allowing tradeoffs that are good 
for both fish and water supply. It is not hard to conceive of 
requirements that, while providing more fish, also increase water 
supplies by an amount comparable to the construction of new reservoirs, 
simply by freeing up the conveyance capacity we already have.
    Of course, the trick is not just to develop better science, but to 
incorporate that science into better environmental requirements. It is 
not evident that this connection has yet been well established. 
Therefore, we look forward to an enhanced role for the Calfed Science 
Program in this area, namely, helping to ensure that better science 
results in better requirements.
    The new generation of environmental requirements should be framed 
by the same principles that apply to agricultural and urban supplies. 
All over the state, agricultural and urban water users are making great 
strides to improve their water use efficiency. They have considered new 
alternatives for matching supplies and needs. The results are 
impressive, and promise to be more so in the future. Now, it is time to 
apply the same principles of efficiency and broad alternatives to the 
use of environmental water.
    You do that by paying more attention to the science. What really 
works? What uses of water produce higher benefits and what uses do not? 
Where are we uncertain and where are we sure? Can we take a broader 
view of the problem? Are there alternatives that we haven't considered? 
What are they and can we substitute them for things that don't work 
well or cost too much?
    These are the questions we want the Calfed Science Program to 
address. In other words, we want the Calfed Science Program to supply 
the information that will allow transition to a new generation of 
requirements. We also want the Calfed Science Program to figure out how 
to ensure the timely use of this information.
COORDINATION AND COOPERATION BETWEEN THE CVP / SWP
Coordinated Operations Agreement
    In 1986 Congress approved an agreement between the United States of 
America and the State of California for the Coordinated Operation of 
the Central Valley Project and the State Water Project (COA). This 
agreement established in part the relationship between the operations 
of the two projects and provided under what circumstances the two 
projects could pump and how the two projects would share responsibility 
for meeting the then existing water, quality and fishery standards.
    Since 1986 much has changed. Fishery protection under the 
Endangered Species Act, the Central Valley Project Improvement Act, and 
water quality standards have significantly affected how the two 
projects operate. Conforming Project operations to these new conditions 
has been an ongoing challenge. To the credit of the state and Federal 
project administrators, they have been fairly successful at working 
through circumstances as they develop, but the COA is outdated. The COA 
no longer provides clear guidelines to govern the relationship of the 
two projects or how burdens of operational constraints imposed to 
protect water quality and fishery resources will be shared.
Joint Point of Diversion:
    An important component of conveyance in the Calfed ROD is the Joint 
Point of Diversion (Joint Point). Joint Point provides opportunities 
for CVP to utilize SWP Banks capacity, under certain conditions, for 
the wheeling of CVP water. At the time of the development of the ROD 
CVP contractors were advised that Joint Point opportunities would 
average around 184,000 af/year. Given the capacity at CVP Tracy Pumping 
Plant and the restrictions placed on pumping, this was an important 
component of the ROD for CVP contractors.
    As a result of many different factors including increased demand by 
SWP contractors south of the delta and the potential need by southern 
California SWP contractors for transfers of northern California water 
to replace lost Colorado River water, Joint Point status is uncertain 
at best, and nonexistent in some years. Certainly not the 184,000 af 
anticipated in the ROD.
    The dilemma is that the Calfed ROD created conflicting expectations 
for both SWP contractors and CVP contractors.
Dual Delta Conveyance
    One alternative for improving the conveyance of water from north of 
the Delta to south of the Delta that was rejected by the Calfed ROD is 
dual Delta conveyance, which would include an isolated diversion 
facility on the Sacramento River to convey water around the Delta. The 
ROD rejected this alternative as infeasible due to social and technical 
considerations based, in part, on the expectation that other 
alternatives ``ha[d] a high likelihood of success in a shorter time 
period.'' Calfed ROD at 27. The failure of these other alternatives to 
provide the expected improvement in conveyance has lead some south-of-
the-delta water users to question whether the feasibility of the dual 
Delta conveyance alternative should be reexamined.
Coordination and Cooperation Opportunities:
    Despite these conflicting expectations, there are opportunities for 
mutual benefits to both projects when taking a comprehensive approach 
at coordinating operations. Some have pointed to CVP storage and SWP 
conveyance as an opportunity for sharing those benefits both projects. 
This sharing could be the basis of a compromise. Better coordination of 
demands has also been identified as an area of project operations that 
could improve supplies for all south-of-Delta users.
CVP/SWP Coordination and Cooperation Summary:
    Better coordination and cooperation between the projects is needed 
and is achievable, and improved coordination and cooperation is 
essential to implementing a balanced Calfed program. The Authority and 
its members are committed to working with the appropriate Federal and 
state agencies as well as the SWP contractors to accomplish this 
objective.
REFUGE SUPPLY DIVERSIFICATION
    The CVPIA fundamentally changed the way the CVP operates and the 
allocation of CVP water. Among other things, CVPIA rededicated well 
over 1 million af of CVP water from historical uses to environmental 
purposes each year. CVP water was rededicated primarily through three 
provisions:
    (1) LSection 3406 b(2), dedication of 800,000 af of CVP yield for 
environmental/fishery purposes;
    (2) LRestoration of the Trinity River; and
    (3) LDedication of over 400,000 af of CVP water for wildlife 
refuges.
    The CVPIA also provided direction and authority for mitigation / 
minimizing impacts to water users as a result of the legislation. 
Examples of mitigation measures include:
    (1) LCVPIA, Section 3408j. A provision that calls for the Secretary 
of Interior to develop a plan to increase the yield of the CVP by the 
amount dedicated to fish and wildlife purposes; and
    (2) LCVPIA, Section 3406 d(1). A provision that calls for the 
replacement of water dedicated for Level 2 refuge supplies. 
Specifically the provision states: In implementing this paragraph, the 
Secretary shall endeavor to diversify sources of supply in order to 
minimize possible adverse effects upon Central Valley Project 
Contractors.
    (3) LCVPIA, Section 3406 d(5) further provides that: The Secretary 
is authorized and directed to construct or to acquire from non-Federal 
entities such water conveyance facilities, conveyance capacity, and 
wells as are necessary to implement the requirements of this 
subsection.
    Alternative supplies for refuges are directed and authorized in the 
CVPIA and the ROD commits Calfed Agencies to working on a plan for 
alternative refuge supplies and conveyance. This is an important 
component of Calfed for CVP contractors and should be implemented 
immediately.
CONCLUSION
     LConveyance of water from north of the Sacramento / San 
Joaquin River Delta to south of the Delta is a key component to the 
Calfed Program. Two thirds of the state's population and a significant 
portion of the state's agriculture rely on this conveyance through the 
delta.
     LA conveyance plan must include protections for in-delta 
water users, water quality, environmental/fishery uses, and northern 
California uses.
     LThe two key factors controlling conveyance opportunities 
are the pumping plant capacities and regulations governing the 
operations of the facilities.
     LShort-term capacity issues can be addressed by:
      (1) Lincreasing the SWP Banks Pumping Plant permits to 8,500 cfs;
      (2) Lconstructing the Intertie between the CVP DMC and the State 
Aqueduct; and
      (3) Lfinalizing and implementing a plan to address the San Luis 
Reservoir Low Point issues.
     LRegulations at the pumping plants significantly restrict 
conveyance opportunities. Through the Calfed Science Program, these 
regulations need to be reviewed to assure that we are efficiently 
meeting our environmental/fishery objectives and that good science is 
being developed and used in the review process.
     LCooperation and coordination between the Federal and 
state water projects is essential to implementing a balanced successful 
Calfed Program. We are optimistic that there are opportunities through 
comprehensive coordination of operations and sharing of facilities that 
would benefit both projects, assure that all water users are benefiting 
in a balanced manner, and avoid major conflicts between the projects.
     LCVPIA provides for the diversification of water dedicated 
to for Level 2 refuge supplies. This is noted in the Calfed ROD and is 
an important component for CVP south of delta contractors. Appropriate 
resources should be dedicated to implement.
    Thank you again, for the Committee's ongoing efforts to address 
these issues and for the opportunity to submit this testimony.
[GRAPHIC] [TIFF OMITTED] 88057.007


                                 ______
                                 
    Mr. Calvert. I would point out to the audience that this is 
an official congressional hearing. Any acknowledgments either 
positive or negative are not allowed. We appreciate your 
cooperation.
    With that, Mr. Marc Christopher, Friends of the River.

      STATEMENT OF MARC E. CHRISTOPHER, POLICY ADVOCATE, 
                      FRIENDS OF THE RIVER

    Mr. Christopher. Thank you very much, Mr. Chairman. My name 
is Marc Christopher, and I represent Friends of the River. 
Friends of the River, for those of you who don't know, it is a 
statewide river conservation organization committed to 
maintaining and restoring California's free flowing rivers.
    I appreciate the opportunity to talk here today about an 
issue that affects every living thing, humans and everything in 
California, and that is clean, reliable water.
    Certainly, in the upcoming years, the CALFED program will 
force both state and Federal decisionmakers to make value 
judgments about water that will affect the health of our 
citizens, the economy, and the environment.
    I submit that the success of the CALFED program could not 
be judged by short-term successes, but must be viewed as a 
commitment to long-term sustainability. Sustainability not 
gauged in months and years, but measured in decades and 
generations.
    I have been asked here today to present the 
environmentalist's perspective on CALFED, and I realize that 
probably it is not going to be very popular, but it is a voice 
that needs to be heard, and it is a voice shared by a lot of 
other Californians.
    To create sustainable solutions, one must accurately 
understand the current environmental problems we face. For 
modern California, is largely a history of dam building. These 
dams and water diversions have produced a robust agricultural 
economy and a vibrant manufacturing arena where, because of 
arid conditions, none could have existed before. These are good 
things.
    But for this success, our environment and the thousands of 
Californians that rely on it for their livelihood and their 
recreation have paid a heavy toll. Sixty percent of our native 
fishes are listed as endangered, threatened or on the decline, 
and 40 to 60 percent of the historical flows through the Delta 
are diverted. Water quality in the San Joaquin Delta is well 
below Federal and state standards and is among the poorest in 
the nation. Undammed rivers in California are so few that the 
U.S. Fish and Wildlife Service considers them to be an 
endangered ecosystem. The problems we face are real and 
substantial.
    Recognizing the importance of the Delta in a society that 
uses water in competing ways that nature provides us, only a 
finite amount of water, the CALFED program has invested a 
tremendous amount of time, money, and energy to provide a 
framework for solutions.
    The Record of Decision is a comprehensive plan that, if 
implemented as a whole, will work to improve the health of the 
Bay-Delta estuary. Now, I certainly do not feel comfortable 
with everything that is in the document; however, it gives a 
framework from which to work and resolve the conflicts that 
have been inhibiting us in the past.
    Billions have been spent in the last century on water 
development in California. And I would add that in comparison, 
CALFED's Program investment in restoration is relatively 
modest. It will take time to realize a quantifiable return on 
this investment.
    Presently, we are just starting to see some minor 
improvements in fish populations and water quality. We are 
encouraged by that. But the ``Program balance,'' so often 
referred to when discussing CALFED, cannot be quantified in 
terms of dollars spent but through sustainable success.
    The CALFED Record of Decision cannot be a document of 
tradeoffs. We must resist the ``If you get this, we are 
entitled to that'' mentality, because if we forgo real, 
sustainable improvements, the CALFED Program becomes a zero-sum 
game, and we have done our state and nation a grand disservice.
    Specifically, I have asked by the Subcommittee Chair to 
address the South Delta Improvement Plan, which centers around 
the issue of increasing pump capacity at Banks Pumping Plant by 
as much as 60 percent.
    The South Delta Improvement Plan was envisioned to provide 
water for fish habitat, conveyance, and restoring water 
quality. And if used properly, the plan could greatly benefit 
the environment while providing increased water supply 
reliability; however, if increased pumping capacity is used to 
divert excess water from the Delta and increases the amount of 
water exported south while requiring, at the same time, the 
public to pay for mitigation measures, the plan could undo 
environmental and water quality progress we have already made.
    For a number of reasons, we are somewhat skeptical of the 
plan. The CALFED Record of Decision sets forth no operating 
criteria and no definite studies that demonstrate that its 
operation can or will reduce the impact on sensitive fish 
species. The skepticism is further fueled by water baseline 
assurances envisioned by the ROD that are being undercut. And 
we have failed to investigate other ways of meeting the goals 
of the South Delta Improvement Plan without actually increasing 
pumping capacity.
    Beyond the CALFED Program, we must challenge the mind-set 
that has led us to this predicament. Every action we take will 
have consequences down the road. But there is reason for us to 
be optimistic on all sides.
    We are encouraged by the Bush administration's shift to 
focusing on constructing large dams and water diversions. Just 
last month, Interior Secretary Gale Norton in her Water 2025, 
``Vision for Resolving Water Conflict in the West'' called for 
Federal funding to be focused on technology for increasing 
``conservation and desalination.'' Recognizing their huge 
economic and environmental price tag, nowhere did the 2025 Plan 
call for the construction of more dams.
    We are also encouraged by the tremendous success many urban 
areas in the area of water conservation has worked. Their 
efforts at becoming more waterwise have led to some amazing 
results. For instance, the Metropolitan Water District of 
Southern California, serving nearly 18 million people put forth 
its blueprint for water supply reliability over the next 20 
years. It is calling for 50 percent of its water supply needs 
to be met through conservation, recycling, ground water 
storage, and local resources.
    This is an amazing thing. In the realm of desalination, 
programs that have been proposed, or in the works, or currently 
operating are estimated to produce 600,000 to 800,000 acre feet 
of water in Los Angeles, a city that in the last 10 years has 
grown by 1 million people, they use no more water.
    On the agriculture front, the practice that has proven 
successful in Australia, a study at the University California, 
Davis, is known as ``regulated deficit irrigation'' where water 
reduction at specific stages in crop development increases the 
quality in the product in profit for the farmer, and if 
utilized it could be 1.5 million acre feet of water in 
California in a year. Then in perspective, the city of Los 
Angeles uses about 800,000 acre feet of water.
    In conclusion, we face many important decisions. We are 
blessed to have a beautiful and vibrant economy and 
environment. It tells a story about who we are as a society. It 
is part of our national heritage as Americans. Let's embrace 
that. Let's embrace long-term sustainability. Tough decisions 
will have to be made, but the best solutions are those which 
help America and California create long-term sustainability.
    [The prepared statement of Mr. Christopher follows:]

          Statement of Marc E. Christopher, Policy Advocate, 
                          Friends of the River

    Mr. Chairman and Members of the Committee,
    Thank you for the invitation to submit comments on the important 
matter of protecting the water quality and ensuing a high quality of 
life for all Californians. My name is Marc Christopher and I am a 
policy advocate for Friends of the River, a statewide river 
conservation organization. Friends of the River has 5,000 members 
dedicated to the protection and restoration of California's free 
flowing rivers, streams and watersheds.
    In the upcoming years, the CALFED Program will force both state and 
Federal decision makers to make value judgments about water that will 
affect the health of our citizens, economy and environment. I submit 
that the success of the CALFED Program cannot be judged in the short-
term successes, but must be viewed as a commitment to long-term 
sustainability. Sustainability is not gauged in months and years, but 
is measured in decades and generations.
    To create sustainable solutions, one must accurately understand the 
current problems that have arisen from a society that relies on water 
is varied, and sometimes competing ways. The history of modern 
California is largely a history of dam building. These dams and massive 
water diversions have produced a robust agricultural economy and a 
vibrant manufacturing arena where, because of arid conditions, none 
could have existed. But, for this success, our environment and the 
thousands of Californians that rely on it for their livelihood and 
recreation, have paid a heavy toll. Sixty percent of our native fishes 
are listed as endangered, threatened or on the decline, and 40-60% of 
historical flows through the Delta are diverted. Water quality in the 
San Joaquin Delta, well-below Federal and state standards, is among the 
poorest in the nation. Undammed rives in California are so few that the 
U.S. Fish and Wildlife Service considers them to be an endangered 
ecosystem. The problems we face are not only real, but substantial.
    Recognizing that the Delta supplies water to two-thirds of all 
Californians, drives the agricultural economy and supports one of the 
most unique and diverse estuaries in the world--the CALFED Program has 
invested a tremendous amount of time, money and energy to provide a 
framework for solutions. The Record of Decision is a comprehensive plan 
that, if implemented as a whole, will work to improve the health of the 
Bay-Delta estuary. When sustainable improvements are recognized, 
certain traditional methods of increasing water supply will be 
explored, subject to environmental sustainability.
    Billions have been spent on water development in California. In 
comparison the CALFED Program's investment in restoration has been 
relatively modest, and it will take time to realize a quantifiable 
return on that investment. Presently, we are just starting to see some 
minor improvements in fish populations and water quality and there is 
already a cry for large expensive, government subsidized water projects 
that would likely negate any environmental improvements and cost 
taxpayers billions of hard-earned dollars. ``Program balance,'' so 
often referred to when discussing the CALFED Program, cannot be 
quantified in terms of dollars spent--but through sustainable 
successes. The CALFED ROD cannot be viewed as a document of trade-offs. 
We must resist the ``if you get this we are entitled to that'' 
mentality. For if we forgo real, sustainable improvements, the CALFED 
Program becomes a zero-sum game and we have done our state and nation a 
grand disservice.
    Specifically, I have been asked by the Sub-Committee Chair to 
address the South Delta Improvement Program, which centers around the 
issue of increasing the pumping capacity at Banks Pumping Plant by as 
much as 60% of its current allowed capacity and dredging significant 
portions of the river delta. I have also been asked to comment on the 
status of the San Joaquin River restoration efforts.
    The South Delta Improvement Program was envisioned to provide water 
for fish habitat and restore water quality, not to provide for 
``surplus'' water. If used properly, the Plan could greatly benefit the 
environment while providing increased water quality. However, if 
increased pumping capacity is used to divert more water from the Delta 
and increases the amount of water exported south while requiring the 
public to pay for environmental mitigation measures--the Plan could 
undue the environmental and water quality progress we have made.
    For a number of reasons, we remain skeptical that the original 
articulated goals of the South Delta Improvement Plan will be realized. 
The CALFED ROD sets forth no operating criteria and no definitive 
studies demonstrate that its operation can or will reduce the impact on 
sensitive fish species. The skepticism is further fueled by the fact 
that the water quality baseline assurances envisioned by the ROD are 
being undercut. And, we have failed to investigate other ways of 
meeting the goals of the South Delta Improvement Program without 
actually increasing pumping capacity.
    With regard to the San Joaquin River restoration settlement, at 
your hearing in Elk Grove a settlement negotiations representative will 
be available to answer some of the more direct questions you posed. 
However, many of the issues being debated are straightforward. Prior to 
the construction of the Friant Dam, the San Joaquin River supported the 
southern most run of Chinook salmon. Because the Dam does not release 
water for the environment, certain parts of the river dry up, or are 
completely overrun with pollution runoff. And, like the salmon, many of 
the fishermen that relied on the river for their livelihood disappeared 
or greatly suffered. After 15 years of court battles and negotiations, 
Friant water users have rejected the Federal mediators final compromise 
settlement. This is unfortunate as comprehensive studies conducted by 
Friant and the environmental coalition over the past four years 
demonstrate that a living river can be restored while preserving a 
strong and healthy agricultural economy. If the settlement negotiations 
accomplished anything, they demonstrated that there are dozens of water 
management measures that can be employed to benefit both farmers and 
the environment. We hope negotiations can resume, but unless there is 
some willingness by Friant to compromise it would be unrealistic to 
expect a settlement that can produce lasting benefit for what is left 
of the San Joaquin River.
    Beyond the CALFED Program and the San Joaquin River Restoration, we 
must challenge the mindset that has led us into this water predicament. 
Every dam we build, is a dam that will at some point in the future be 
filled with sediment and outlive its usefulness. Every drop more of 
water we continue to take from the Delta takes us a step closer to the 
collapse of a vibrant estuary, and the loss of a way of life for 
millions of Californians. Instead we must focus our resources on 
sustainable solutions. We need to clean up our groundwater and set up a 
system whereby it can be utilized efficiently (California remains one 
of the last states that has failed to comprehensively regulate 
groundwater). We continue to see great strides being made in 
conservation and wastewater recycling.
    We are encouraged by the Bush Administration's apparent shift away 
from focusing on constructing expensive dams and diversions. Just last 
month Interior Secretary Gale Norton in her Water 2025: Vision for 
Resolving Water Conflict in the West called for Federal funding to be 
focused on technology for increasing ``conservation and desalination.'' 
Recognizing their huge economic and environmental price tag, nowhere 
did the 2025 Plan call for the construction of more dams.
    We are also encouraged by the tremendous success of many urban 
areas in the area of water conservation and reclamation. Their efforts 
at becoming more water wise have lead to some amazing results. For 
instance, in March, the Metropolitan Water District of Southern 
California, serving nearly 18 million people, put forth its blueprint 
for water supply reliability over the next 20 years. MWD plans to meet 
over 50% of its supply needs through water conservation, recycling, 
groundwater storage, and local resources.
    We are slowly recognizing that one can no longer credibly pit 
environmental responsibility as an enemy of economic sustainability: 
that is if we want to measure economic success by quality of life and 
quality of jobs. Short-term economic gain at the expense of the 
environment means borrowing against the future. In California, cheap 
mining practices provided an easy way to extract precious minerals and 
produced large numbers of jobs and profits. A century later fish, birds 
and even humans continue to experience serious health problems due to 
mercury contamination and society continues to spend millions of 
dollars on trying to eliminate the problem. In the past half-century 
societies and nations that have failed to invest in conservation of 
water have paid dearly. Extensive studies document how the constant 
extraction of 40-60% of historic outflows from European and Asian 
rivers estuaries, not unlike the what is happening here in California, 
have forever destroyed the most vibrant and plentiful estuaries in the 
world, including the Caspian, Aral and Black Seas. And with the loss of 
these resources are the loss of jobs, food and a way of life. (See 
Rozengurt, M.A. 2002 ``The Agonizing San Francisco Bay Ecosystem,'' 
Hydrology Days. Ed. Jorge A. Ramirez, Fort Collins Co. pp. 245-257).
    In conclusion, we face many important decisions. When it comes to 
the most basic needs of society, will we elect to sustain one man's 
quality of life by degrading another man's quality of life, will we 
sacrifice the quality of life of the man who uses the fishing line to 
feed his family to protect the man who relies on the plow, or will we 
choose to find sustainable solutions that will help the most Americans 
for the longest possible period?
    In order to create long-term sustainability, tough decisions will 
need to be made, some will be asked to sacrifice, so that society may 
benefit. The best solutions are those which help America create long-
term sustainability.
                                 ______
                                 
    Mr. Calvert. Mr. Thomas Clark, General Manager of Kern 
County Water Agency.

          STATEMENT OF THOMAS CLARK, GENERAL MANAGER, 
                    KERN COUNTY WATER AGENCY

    Mr. Clark. Thank you, Mr. Chairman. Both Mr. Chairman, the 
big Chairman, and the slightly smaller Chairman.
    I really appreciate the opportunity to address you. I am 
the general manager of the Kern County Water Agency, the great 
county just to the south. I bring a welcome from our 
Congressman Bill Thomas, who has also been supportive in this 
process. I am also the president of State Water Contractors, 
statewide organization of 27 state water contractors, including 
Metropolitan Water District, so on behalf of Metropolitan, we 
welcome you. Welcome to the Central Valley.
    I am going to try to be brief, and touch on just a few 
important issues. I brought with me a very high-tech chart here 
to my left and to your right. To balance out Dan's chart to the 
right, the hourglass approach is--what I have tried to do is 
show you what I call ``The Window Approach.''.
    One thing--first thing I would really like to say--I will 
jump around a little bit here--first of all, Temperance--
Congressman Nunes, Kern County is in support of Temperance. It 
is something we would like to see move ahead. Through our 
Congressman Thomas, we support the legislation, and we would 
like to see things happen.
    Also, with respect to Congressman Pombo, I think one of the 
things that--while we are talking about these pumping plants or 
that type of thing, one thing we need to make sure that we do 
is protect the Delta.
    There has been a partnership between the projects on the 
Delta from the beginning. And this program that we keep talking 
on Banks Pumping Plant to improve pumping at Banks is kind of a 
partnership with the south Delta entrance. Alex Hildebrand who 
today is about 140 years old and has been working on this issue 
for many, many years--South Delta is equally important to the 
south Delta entrance, because with the temporary barriers and 
what we hope will be accelerated permanent barriers, it allows 
pumping in the south Delta to continue. It protects water 
levels and water quality.
    So while we talk about increasing pumping at Banks, we are 
also talking about protections to the south Delta. It is a very 
important piece. But if you look at this pumping window, I 
think the important thing to remember is that between Tracy and 
Banks--Tracy and Banks, if this pumping window was completely 
wide open without limitation, we can meet all the needs, all 
the existing needs, all the future needs for water supplies 
from the Delta. But after Tracy was constructed, then the Banks 
Pumping Plant--there are also pumping windows that close.
    And the first and foremost at the top of the chart is 
Number D1641. That is the State Water Resources Control Board. 
They have the responsibility to balance between exports from 
the Delta, in Delta uses to protect agriculture in the Delta, 
and water quality for fish and long life, so forth and so on. 
That is a balance that we all live with and we must respect.
    However, notwithstanding those protections, through the 
CALFED and the early phases of CALFED, some of the powers that 
be felt that, ``Well, that is really not good enough. We have 
got to provide increased protections.'' So when you see these 
pumping windows close, to provide that level of protections, we 
have got to provide increased protection.
    So when you see these pumping windows close for E purposes 
and then CVPIA, which you hear from Dan, these are additional 
reductions of pumping that have been imposed over and above.
    Now, those were imposed, we believe, without sound science. 
Now part and parcel of CALFED is to develop that science and 
test the system.
    The past person that I dealt with on the other side of the 
table, Mr. Mike Spear, who is now my leader on the state water 
project, my new director--which I am sure he will advocate 
strongly for our program for increased exports. These 
impositions of limitations on pumping, he acknowledged and 
others in the fishery role will acknowledge that they are to be 
tested and adjusted over time, based upon science.
    The early science today--there was a science symposium at 
CALFED that shows the linkage between pumping and mortality in 
fish is weak. It is not strong science. And one of the things 
that I think that you can help us with, is a decisionmaking 
process imposed CALFED, which takes the science and translates 
it into operational changes. So if the science doesn't support 
reductions of pumping, then translate that into an operational 
change so that we can then increase these windows.
    Because really what we are talking about right now in going 
to 8,500 at Banks is opening these pumping windows so water 
supplies can be managed south of the Delta. Now, the management 
of supplies south of the Delta is not just important to Kern 
County. It is not just important to Dan Nelson's group on the 
west side. It is also important on the east side.
    Today there is water that is exchanged through Kern County 
that moves up into the east side of the Valley. We are looking 
at improvements on our facilities in the South Valley, so we 
can move water into the eastern part of the Valley, and improve 
everybody's life down here.
    I think what I would like to leave you with is balance. I 
think this whole idea of CALFED was founded on balance. The 
early actions in CALFED have been environmental programs, and 
we have funded tens of millions of dollars in environmental 
programs. I take issue with our friends in the environmental 
community. We are now having people like the Sierra Club that 
are opposing water supply solutions; i.e., the Banks Pumping.
    This is all part of a package. So it isn't that the 
environmental improvements can be made on the front end, and 
now that it is time to make water supply water quality 
improvements that there be opposition. It is a packaged 
program.
    So, thank you, Mr. Chairman, both you and Chairman Pombo. 
Thank you for letting us be here today.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Clark follows:]

            Statement of Thomas N. Clark, General Manager, 
                        Kern County Water Agency

INTRODUCTION
    My name is Thomas N. Clark. I am the General Manager of the Kern 
County Water Agency, President of the State Water Contractors, Inc. (an 
organization of 27 public agencies which contract for water from the 
California State Water Project), and a member of the Bay Delta Advisory 
Committee. Other aspects of my experience and background are set forth 
in attached Exhibit A which is incorporated by reference.
    The Kern County Water Agency is the largest agricultural water 
agency, and the second largest municipal water supplier on the State 
Water Project. The Agency provides irrigation water to districts 
serving almost one million acres of the most productive farmland in the 
world, and provides municipal water to districts serving about 300,000 
residents of western Kern County. The districts and agencies comprising 
the State Water Contractors serve over 22 million Californians and well 
over a million acres of farmland.
    We strive to look for ``win-win'' solutions to our water problems--
solutions that benefit all stakeholders. CalFed held out that promise 
at its inception. It has had some successes, but it needs improvement 
to enable it to fulfill its promise. Enhancements in the communication 
and utilization of the knowledge and agreements developed through 
CalFed are necessary for continued success.
    In our view, the ability to use up to 8500 cubic feet per second 
(``cfs'') of existing capacity at the State Water Project's (``SWP'') 
Banks pumping plant (``Banks'') in the immediate future, with 
corresponding protections and improvements for South Delta water users, 
is a crucial test of CalFed's ability to fulfill its promise and its 
ability to survive. As the Chairman has said, we must ``face the 
reality of moving water south'' as a necessary element of CalFed. That 
reality has been compared to an hourglass with an excess of water above 
the chokepoint and an excess of demand below it. With appropriate 
protections for water users in the south Delta, that chokepoint can be 
loosened to make rapid improvement in our water supply situation and to 
provide benefits for all stakeholders. The Chairman has identified the 
critical elements: improving conveyance, streamlining environmental 
regulations, and enhancing below-ground and above-ground storage. This 
will improve yield and, coupled with recycling, desalination, and 
streamlined water transfers, enhance California's overall water supply 
picture. Through it all, it is important to protect the property rights 
of water users and to encourage mutually beneficial solutions that 
engage all responsible stakeholders.
IMPROVEMENTS IN CONVEYANCE
    The clearest case for improvements in conveyance is at the SWP 
Banks pumping plant in the south Delta. Improvements in storage have 
limited usefulness for two thirds of California's population and 
millions of acres of productive farmland unless that water can be moved 
through Banks. A key feature of the ``soft path'' alternative that was 
selected by CalFed is enhancement of the approved capacity at Banks. 
That capacity is currently artificially limited to 6,680 cfs by permit 
limitations administered by the Army Corps of Engineers under Section 
10 of the Rivers and Harbors Act. The CalFed through-Delta conveyance 
alternative we are attempting to implement was intended to be a package 
including ecosystem improvements and conveyance improvements along with 
other elements, including storage, with approval of 8,500 cfs pumping 
at Banks this month. That significant improvement in California's water 
supply can be achieved quickly with minor improvements to protect South 
Delta water users and Contra Costa Water District. Over 320 ecosystem 
projects have been implemented as part of the CalFed package as 
mitigation. Implementation of 8500 cfs at Banks also benefits water 
users north of the Delta by improving the ability to move water in wet 
years and providing funding that can help stabilize the agricultural 
economy north of the Delta.
Delays of Banks Pumping Plant Enhancements
    The delays in the implementation of 8500 cfs pumping capacity at 
Banks are indicative of a broader problem in CalFed: the regulatory 
agencies which comprise it are not utilizing the scientific and policy 
benefits that were the hallmark of CalFed. After thousands of hours of 
negotiation and public hearings, the CalFed agencies embarked upon the 
current alternative for improvements of the system: a balance of 
ecosystem, water supply, and water quality improvements involving 
minimal construction and no isolated conveyance around the Delta. Yet 
the CalFed agencies have fallen one year behind in approving a simple 
change in permitting while they re-examine issues that have already 
received exhaustive study.
Prioritize Banks Enhancements and Improvements for South Delta Water 
        Users
    To achieve balance, CalFed must prioritize the enhancements at 
Banks until 8500 cfs at Banks has been approved and progress toward 
restoring a balanced implementation is made. Physical improvements to 
protect the south Delta water users including dredging of channels, 
extension of South Delta user intake pumps and permanent operable 
barriers to prevent any harm to South Delta users should also proceed 
at a quicker pace. The improvements to protect other Delta water users 
should also proceed immediately including relocation of Contra Costa 
intakes, operational improvements, and progress on expanding Los 
Vaqueros Reservoir. Implementation of 8500 cfs at Banks will also 
maximize the utility of new storage space north of the Delta and 
facilitate funding of new storage as mutually beneficial uses are 
explored.
Joint Point of Diversion Should Implemented
    Another significant improvement in conveyance, which can be done 
relatively rapidly, is implementation of the joint point of diversion 
(``Joint Point of Diversion'' or ``JPOD''). Use of the JPOD is 
currently limited by fishery restrictions that were part of a pre-
Environmental Water Account agreement. Now that the ERWA is in place 
and functioning, those restrictions should be lifted to allow greater 
water supply benefit from the JPOD. The JPOD holds promise of improved 
cooperation between the State Water Project and Central Valley Project 
(``CVP'') as the proper implementation of mutual use of SWP conveyance 
capacity and CVP storage capacity is explored. The SWP has been a 
project where conveyance capacity utility has been hampered by 
inadequate storage north of the Delta. Similarly, CVP north of Delta 
storage utility has been hampered by inadequate conveyance capacity to 
south of Delta users. While capacity at Banks excess to the needs of 
SWP contractors can be made available, real potential exists for 
mutually agreed programs to trade CVP use of capacity at Banks for SWP 
use of CVP storage. Congressional authorizations to allow the CVP to 
enter into mutually agreeable programs to explore synergies between the 
two projects would be helpful.
IMPROVEMENTS IN SURFACE AND UNDERGROUND STORAGE
    There has been significant emphasis in prior hearings on surface 
storage. Development of additional surface storage is clearly needed 
and it should be developed without harming existing users. The 
development of surface storage takes significant time, however. 
Currently pre-feasibility and feasibility studies are proceeding and 
their progress should be closely monitored and encouraged. Time is of 
the essence as California seeks to avoid catastrophic effects when the 
next drought occurs. We cannot afford to wait while this work 
progresses, however; we must pursue development of additional 
underground storage in suitable aquifers so that precious water lost in 
wet years is minimized.
    Our Agency has been a leader in the development of underground 
storage utilizing existing vacant space in aquifers. This space, 
created by overdraft in prior decades, constitutes a valuable resource 
that is available to local agencies for storage of flows in wet years. 
That stored water can later be extracted, with appropriate protections 
for overlying users, for use during critically dry years. While it is a 
tremendous asset, it does have constraints that must be recognized. 
First, overlying users must be protected by appropriate protections 
tailored to the local site to prevent inadvertent exacerbation of 
overdraft and localized problems during the extraction phase. In Kern, 
these protections were only achieved through long, hard, negotiations 
between potential bankers and overlying users. Local control of the 
process also facilitates continuous monitoring to respond quickly to 
any problems that develop. Second, the nature of the underground 
storage or ``water banking'' makes extraction capacity critical. The 
ability to appropriately coordinate extraction with surface water 
supplies can greatly enhance flexibility and reduce extraction cost. 
Improvements mean not only the development of new pumping capacity, but 
also the enhancement of conveyance to facilitate exchanges with surface 
water supplies.
REGULATORY STREAMLINING
Improvement of Science
    CalFed has significantly improved the scientific processes for 
developing knowledge about the Sacramento-San Joaquin Delta. Through 
CalFed knowledge of the effects of actions taken in and outside the 
Delta has been improved. The facilitation of peer review of 
questionable theories has proven especially beneficial. Yet, the 
improving science has not been readily accepted by some regulatory 
agencies and very little of the new science has been used to modify and 
improve existing regulatory restrictions
Failure of Effective Communications to Regulatory Agencies
    The usefulness of this improved scientific knowledge is directly 
related to its dispersion and utilization by the regulatory agencies 
that govern the Delta, largely through their control of regulation 
under the Federal Endangered Species Act. The quasi-religious myth 
linking water usage to hypothesized declines of Delta species continues 
to persist in some regulatory circles. The reality is that the decline 
and recovery of species in the Delta is governed by many other factors. 
Ecosystem improvements have had significant successes in the recovery 
of species populations. Species in the Delta undergo natural variation 
in population size dependent upon a host of natural conditions. As the 
science of the Delta improves our understanding of these complex 
systems, regulatory agencies tend to be slow to accept the new 
scientific understanding and slower to apply it to their regulations.
Case in Point: Persistent Attempts to List Splittail
    A case in point is the continuing attempt by the U.S. Fish and 
Wildlife Service to list the Sacramento Splittail under the Federal 
Endangered Species Act. Most scientists, including those at the 
California Department of Fish and Game, do not believe the Splittail 
should be listed. In fact, the United States District Court for the 
Eastern District of California found that the previous listing of the 
species was arbitrary and capricious and ordered the Fish and Wildlife 
Service to reconsider. That reconsideration has been ongoing for years 
while Fish and Wildlife Service staff scrambles to find a 
scientifically valid theory justifying listing--no such theory exists 
in my opinion and the opinion of many others including the California 
Department of Fish and Game.
TRANSFERS AND WATER BANKING
Water Transfers as Tools for Efficient Water Management
    Our Agency has found temporary water transfers to be useful tools 
in the efficient management of water. Transfers help avoid significant 
pumping costs by reducing power usage and demand for pumping capacity. 
They can move water to areas in temporary need of water for return to 
the transferring area when it needs water. They can help match storage 
capacity with conveyance capacity. The combination of these uses can 
create tremendous flexibility in water management when they are not 
restrained by unnecessary red tape. Full utilization of these temporary 
water transfers demands flexibility and prompt action, however. 
Facilitation of the environmental reviews and approvals of such actions 
can yield tremendous gains.
    Long term and permanent transfers pose more significant issues. In 
particular, the impacts on local economies of water transfers, which 
may be essential for jobs and economic stability in the transferring 
communities, must be carefully considered and appropriate mitigation 
provided where impacts are found. In the long run however, rural 
communities must not be sacrificed for the benefit of others. Long term 
success in CalFed is only assured by enhancing the water supply for 
all.
Water Transfers Do Not Increase Overall Water Supply Automatically
    Water transfers can do many things, but they do not increase 
storage capacity by themselves. They do not increase conveyance 
capacity by themselves. They can facilitate mutually beneficial 
agreements between areas of the State to provide for increased storage 
and conveyance that will improve our water supply. For example, we have 
a number of programs with the Metropolitan Water District of Southern 
California (``Met'') in which Met water is transferred to Kern for 
storage in wet years for return to Met in dry years. These programs 
have involved utilizing the economic vitality of Southern California to 
fund improvements in our storage and conveyance capacity as part of the 
consideration offered by Met. Thus Met increases its dry year supply by 
transferring water to Kern in wet years and financing storage and 
conveyance improvements in Kern which provide benefits to all involved.
Increased Capacity at Banks as Critical
    These programs, however, require moving water in wet years. The 
water is primarily available in the Delta. The challenge is moving the 
water to storage and use south of the Delta. Banks pumping plant is key 
to that on the SWP. Cooperative use of Banks, or potential enlargement 
of the CVP Tracy pumping plant and Delta-Mendota canal are the key to 
the CVP.
CONCLUSION
    At its outset CalFed held out the promise of mutually beneficial 
improvements in the Sacramento-San Joaquin Delta system as a mechanism 
for improving the ecosystems of the Delta, water supply and water 
quality. Many ecosystem improvements have resulted in the Delta and our 
scientific understanding of the Delta has improved, but these 
improvements have not been effectively communicated within the Federal 
and state regulatory agencies delaying scheduled enhancements and 
improvements to water supply and Delta water quality. The ability of 
CalFed to effectively deliver on simple permitting of 8500 cfs capacity 
at Banks pumping plant and the South Delta improvements to protect 
Delta users for the eventual increase to 10,300 cfs is a clear test of 
the viability of CalFed and its ability to deliver on the mutually 
beneficial plan promised. The linkages between ecosystem improvements 
delivered thus far and the scheduled water supply and quality 
improvements must be effectively communicated to regulatory agencies 
along with the supporting science.
    Failure of CalFed to deliver these benefits would deliver a death 
blow to the process. Failure to recognize the linkages and deliver 
permitting in timely fashion would disregard the fact that improvements 
at Banks Pumping Plant (with appropriate Delta protections), and 
mutually beneficial agreements for the coordination of capacity and 
storage, hold the most immediate promise for improvement in 
California's water crisis. It would also be a harbinger of the 
inability to achieve the longer term creation of needed storage 
capacity. CalFed must improve its ability to communicate its policy and 
science successes to the regulatory agencies that participate in it. 
Absent that improvement, stakeholders will be forced to pursue their 
objectives outside its framework.
                                 ______
                                 
    Mr. Calvert. Next is Mr. Keith Watkins, the Second Vice 
President of the Tulare County Farm Bureau.

        STATEMENT OF KEITH WATKINS, 2ND VICE PRESIDENT, 
                       TULARE FARM BUREAU

    Mr. Watkins. Thank you, Chairman. Good morning. My name is 
Keith Watkins. I am a local farmer and farm manager for Bee 
Sweet Citrus. I served as second vice president of the Tulare 
County Farm Bureau, and I am on the California Farm Bureau 
Federations Water Advisory Committee, and I am Chairman of the 
Tulare County's Water Committee.
    I am glad you are here in Tulare to meet and talk with 
local farmers and officials today. I would like to commend the 
Resources Subcommittee on Water and Power for conducting a 
field hearing in the heart of California's agriculture.
    Tulare County is one of the top two counties in the Nation 
for ag receipts. The 2002 Ag Commission's Report valued Tulare 
County commodities at $3.2 billion.
    The top five commodities contain: Milk, oranges, grapes, 
cattle, calves, and peaches. This area is truly unique in its 
quality of agriculture and its ability to produce all of this 
on small family farms, that average about 100 acres in size. 
But none of this could be achieved without sufficient--without 
adequate water supply.
    As you can tell from today's weather, this area is a 
desert. And the ability to deliver water has made it bloom. The 
area is also renowned for its highly efficient use of 
irrigation water, having been a leader in the development of 
drip and low volume irrigation technology.
    The Members of Congress have a choice to make about where 
we grow the food we need to feed America. When we decide to 
import our food from other countries, we run several risks. We 
cannot ensure safety. We do not know what laws are in place to 
protect the environment. We do not know what labor codes are 
followed to protect field laborers and children.
    Our Congress could decide what is important is to produce 
food in California for the farmers following the most stringent 
environmental and labor laws in the world. Congress can decide 
what is important for America is to continue to enjoy a very 
safe, reliable, and high-quality food supply.
    California cannot produce the food needed to feed our 
nation without water, and America cannot continue to enjoy a 
safe, bountiful food supply without California. Congress needs 
to plan for its future. Because of a prior lack of leadership 
and planning, no new supplies have been developed in 
California. The water needed to accommodate our state's 
expanding population has come from agriculture.
    Another question Congress must answer is whether we 
conserve production agriculture for the environmental benefits 
it provides or make decisions that leave farmers no choice but 
to sell their land for urban development. Not only does urban 
development use more water than the agriculture land that came 
before it, but also the state loses ground water recharge 
capacity, valuable soils, the vegetation required to manage air 
quality and global warming.
    In large part one of the reasons why no new water supplies 
have been developed is because our Federal and state agencies 
have gotten so large that they are no longer able to resolve 
our water problems. These agencies are hopelessly bogged down 
in process. Past experience seems to suggest that new water 
supply and plants cannot be developed at the state and Federal 
level, because agents are afraid of being sued by environmental 
activists; and because of this fear, the agencies are lost in 
the endless process of negotiations with every special interest 
group in the state.
    The water plans that result from these endless planning 
processes are ineffective because the original plans were 
distorted so significantly that even if the plan were to be 
followed, the project would produce no new yield.
    With this reason, we believe water projects should be 
negotiated and developed at the local level. Because not all 
have a surface water unit, many growers must pump ground water, 
a condition of critical ground water to overdraft still exists 
in parts of the San Joaquin Valley.
    We can't continue to overdraft our ground water supplies. 
We must have a conjunctive use program that allows ground water 
recharge in wet years for use in the dry. We need assurances 
for areas of origin and protections of water rights and 
priorities.
    CALFED is violating its own solution principle by creating 
redirected impacts, solving one problem and creating another 
one somewhere else. Land retirement reduces water demand while 
devastating local communities and the area's economy. CALFED 
needs to partner with the local interests in the development of 
its projects and programs. CALFED is supposed to benefit 
everyone.
    Good science is the key. Sound, neutral science must be at 
the heart of all the decisions that drive the CALFED process 
and programs.
    While the water users have supported appropriations for the 
CALFED program, the Farm Bureau has been largely disappointed 
that a balanced program of actions has not emerged. CALFED 
needs to do a better job of prioritizing expenditure decisions 
where the greatest benefit can be derived.
    The original purpose of the CALFED long-term planning 
process was to improve water supply and water quality while 
reducing environmental conflicts in the Delta. Farm Bureau now 
feels that we must try and find our water supply and water 
quality improvements elsewhere, as significant changes in the 
Delta pumping are not on the horizon.
    We believe several new storage sites arose for that reason, 
including Temperance Flat, and will go a long way in solving 
both agriculture and the state's future water needs.
    New supply must be developed to support our state's growing 
demands. The San Joaquin Valley has the fastest-growing 
population in California. The environmental enhancements and 
river restoration projects alone require more and more water 
from already short supplies. The need for more water is real. 
Water is more expensive now than ever before. We believe the 
beneficiaries should pay for developing this new supply, and 
the beneficiaries are the growing urban and environmental 
needs.
    In closing, I would like to thank you for the invitation to 
appear today, and thank you for coming to Tulare County.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Watkins follows:]

        Statement of Keith Watkins, Tulare County Farm Bureau, 
                   California Farm Bureau Federation

    Good morning, my name is Keith Watkins, I am a local farmer and 
farm manager for Bee Sweet Citrus Packing. I serve as a vice president 
of the Tulare Farm Bureau and I am on the California Farm Bureau 
Federation's Water Advisory Committee and serve as the Chairman of the 
Tulare County Farm Bureau's Water Committee.
    I am glad you are here in Tulare to meet and talk with local 
farmers and local officials and to learn firsthand our concerns. I'd 
like to commend the Resources Subcommittee on Water and Power who are 
here today conducting a field hearing in the heart of California's 
agriculture.
    Tulare County is one of the top two counties in the nation for 
agricultural receipts. The 2002 Tulare County Agricultural 
Commissioner's Crop Report valued Tulare County commodities at $3.2 
billion dollars. Tulare County's top five commodities include: Milk, 
Oranges, Grapes, Cattle and Calves and Peaches. This area is truly 
unique in its quality of agriculture and in its ability to produce all 
of this on small family farms that average approximately 100 acres in 
size. The area is also renowned for its highly efficient use of 
irrigation water, having been a leader in the development of drip and 
low volume irrigation technology. We have some of the highest 
irrigation efficiencies found anywhere in the world
    As we see it, the members of Congress have a choice to make about 
where we grow the food we need to feed America.
    While we get our food from other countries, we run several risks; 
we cannot ensure its safety; we do not know what environmental laws are 
in place to protect the environment; we do not know what labor codes 
are followed to protect field laborers, including laws that protect 
children.
    Or, Congress can decide that continuing to produce food in 
California, where the farmers follow the most stringent environmental 
and labor laws in the world, is important. Congress can decide that it 
is important for America to continue to enjoy a very safe, reliable and 
high quality food supply.
    California cannot continue to produce the food needed to feed our 
nation without water, and America cannot continue to enjoy a safe 
bountiful food supply without California. However, if Congress decides 
that California's agriculture is important, then Congress needs to plan 
for its future. Because of a prior lack of leadership and planning, no 
new water supplies have been developed in California so the water 
needed to accommodate our state's expanding population has come from 
agriculture.
    A second question Congress must answer is whether we conserve 
production agriculture for the environmental benefits it provides or 
make decisions that leave farmers no choice but to sell their land for 
urban development. When farmers no longer have water because they are 
out bid by the government and urban water districts in the water 
market, farmers are forced to sell their land and the highest bidder is 
usually urban developers. Not only does the urban development that 
replaces agriculture often use more water than the agricultural land 
that came before, but the state loses groundwater recharge capacity, 
valuable soils, and the vegetation required to manage air quality and 
global warming.
    In large part one of the reasons why no new water supplies have 
been developed is because our Federal and state agencies have gotten so 
large that they are no longer able to resolve our water problems. These 
agencies are hopelessly bogged down in process. Past experience seems 
to suggest that new water supply plans cannot be developed at the state 
or national level because the agencies are afraid of being sued by 
environmental activists; and because of this fear, the agencies get 
lost in an endless process of negotiating with every special interest 
group in the state. The water plans that result from these endless 
planning processes are ineffective because the original plans are 
distorted so significantly that even if the plan were followed, the 
project would produce no new yield. For this reason, we believe that 
water projects should be negotiated and developed at the local level.
    CALFED was envisioned by the agricultural water community to 
resolve some long-standing problems, such as groundwater overdraft and 
insufficient infrastructure. Because not all lands have a surface water 
entitlement, many growers have to pump groundwater. A condition of 
critical groundwater overdraft still exists in parts of the Southern 
San Joaquin Valley. We did not think that CALFED would end up being a 
threat to the continued use of our current supplies. We needed 
assurances for areas of origin and protection of water rights and 
priorities.
    CALFED is violating its own solution principle by creating 
redirected impacts, solving one problem and creating another somewhere 
else. CALFED needs to partner with local interests in the development 
of its projects and programs. However, instead of being a process of 
collaboration and consensus, the implementation of CALFED projects and 
programs have not fully lived up to this promise. CALFED was suppose to 
benefit everyone.
    Good science is the key. Sound, neutral science must be at the 
heart of all of the decisions that drive the CALFED process and 
programs.
    While the water users have supported appropriations for the CALFED 
program, Farm Bureau has been largely disappointed that a balanced 
program of action has not emerged. CALFED needs to do a better job of 
prioritizing expenditure decisions where the greatest benefit can be 
derived. The benefits of ecosystem investment need to be better tracked 
and displayed.
    The original purpose of the CALFED long-term planning process was 
to improve water supply and water quality while reducing environmental 
conflicts in the Delta. Farm Bureau now feels that we must try and find 
our water supply and water quality improvements elsewhere, as 
significant changes in the Delta pumping are not on the horizon. New 
supply has been mentioned as a necessary component to addressing the 
problems of the Delta. However, it has to be done in combination with 
additional infrastructure improvements.
    New supply must be developed to support our state's growing 
demands. The San Joaquin Valley is the fastest growing area in 
California. The environmental enhancement projects and river 
restoration projects alone require more and more water from an already 
short supply. The need for more water is real. And water is more 
expensive now than ever before. We believe the beneficiaries should pay 
for developing this new supply, and the beneficiaries are the growing 
urban and environmental users.
    Thank you for the invitation to appear today and thank you for 
coming to Tulare County.
                                 ______
                                 
    Mr. Calvert. The first question I'm going to ask is a very 
easy question, and I would think--and I am not going to coach 
you on what the answer should be--so I ask the entire panel: 
Should Congress and the public be aware of Federal expenditures 
on CALFED-related issues? Is there anybody that objects to 
that? Let's put it that way. Everybody agrees it is unanimous, 
for the record?
    Witness Panel. Yes.
    Mr. Calvert. All right. May the record reflect the panel 
says, ``Yes.''.
    The next question is: Is it feasible to consider that 
before any money be expended to accomplish CALFED-related 
projects, that a 30- to 45-day period for congressional review 
be conducted? Yes?
    Witness Panel. Yes.
    Mr. Calvert. OK. The record is--now, here is the left 
question: Why is it then that the projects involving large-
scale construction be reviewed by congress, but other projects, 
i.e., Ecosystem Restoration, Water Shed Protection, do not 
follow the same requirements for congressional review?
    Let's start with Mr. Watkins.
    Mr. Watkins. I agree they should. Everything should be 
looked at when there is money being expended.
    Mr. Calvert. Mr. Clark?
    Mr. Clark. I agree. And I think all too often this process 
is, frankly, used as a way of hanging projects that some people 
oppose, and the regulatory process--very clearly all of them 
should be required to have review.
    Mr. Calvert. Mr. Glover?
    Mr. Glover. I concur.
    Mr. Calvert. Mr. Christopher?
    Mr. Christopher. I would have no opposition if the money 
comes from the Federal Government, then they have every right 
to review and look at it.
    Mr. Nelson. All expenditures should have to qualify.
    Ms. Moralez. I concur, and, furthermore, I have been there 
on the Hill when some of those expenditures are put in in a way 
where nobody realizes that--last minute many funds are 
expended, and I believe that that part, in particular, has to 
be reviewed very clearly.
    Mr. Calvert. Mr. Upton?
    Mr. Upton. I think Mr. Clark hit it a while ago where he 
said, ``The environmental things seem to take precedence.'' 
They seem to get a pass on all of their projects, whereas, ours 
seem to not. I think we should have to all play by the same 
rules.
    Mr. Calvert. Next question: If the Record of Decision is 
not authorized in a CALFED bill, how would that impact the 
ongoing operations that are being done under existing 
authorities with the intent of improving the operations of the 
CVP and the State Water Project? Do you understand that 
question?
    I will say it one more time: If the Record of Decision is 
not authorized--we know we have a Record of Decision--but say 
it is not authorized in a CALFED legislation bill, how would 
that impact these ongoing activities that are being done under 
existing authority, with the intent of improving the operations 
of both the CVP and SWP? Anybody want to start off with that?
    Mr. Clark?
    Mr. Clark. Mr. Chairman, if I think I understand the 
question correctly, it is really kind of a technical one. In 
terms of whether or not in the current round of legislation 
whether the CALFED--
    Mr. Calvert. Speak into the mike.
    Mr. Clark. I'm sorry--whether the CALFED ROD is authorized, 
I am not sure quite frankly whether it is or is not going to 
have a material effect. In fact, I think the intent of Congress 
is very important that Congress is, in fact, supportive of this 
process, and that you authorize Federal agencies to 
participate. I think that aspect is particularly important.
    But the CALFED ROD, as I understand it, is the Record of 
Decision that was the outcome of several years of negotiations 
between state and Federal agencies, and state and Federal 
agencies acknowledge that the CALFED ROD should not be static, 
in one place; in other words, it should change over time.
    So maybe--I don't think any of us up here are lawyers, 
but--thank God for that--I am not sure that the formal 
authorization of the ROD, what impact that would have.
    Mr. Glover. Actually, that is a very good question. There 
is a lot of uncertainty involved in what authorities the 
Federal agencies do have and--on implementing a lot of the 
other individual components that are now packaged into CALFED.
    I would like to comment that one authority that the Federal 
agencies do have and should be using is the discretion that is 
allowed them in implementing the Federal regulations. There is 
a tremendous amount of discretion of how it is that you 
implement the Central Valley Project Improvement Act, as an 
example. And at least a lot of the policies that have been put 
in place over the last decade, from our perspective, have been 
fairly imbalanced.
    We think that working within the existing statute you can 
accomplish a lot of the environmental and fishery goals that we 
have established for ourselves, but you can do it in a much 
more efficient manner. And as Tom pointed out, that would 
expand the windows of opportunity we have for moving water and 
accomplish those objectives as well.
    So the authorities can use discretion on implementing 
regulations that are in place regardless, and should be used, 
regardless if we do move forward with CALFED.
    Mr. Calvert. Mr. Christopher?
    Mr. Christopher. Yes. It is important to remember that this 
is CALFED, and it was created as a joint alliance between 
Federal and state government. Their participation and your 
participation in this would give a great deal of confidence to 
those who have invested a lot, currently in the process, and 
who are, frankly, a little bit nervous about the fact that a 
tremendous amount of money is missing from what had been 
planned, so that would be my response.
    Mr. Calvert. With that, Mrs. Napolitano, is recognized for 
5 minutes.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Mr. Christopher, I am just following up on your statement 
of ``money missing,'' and I am just wondering if you could just 
elaborate just a moment on that?
    Mr. Christopher. I wouldn't be able to put out specific 
dollar amounts, but it is substantial. I think in the 
President's budget it called for $10 or $15 million be 
allocated for the CALFED program. I think originally when this 
was signed back in 2000, I think we were talking about a 
hundred or hundreds of millions of dollars to be invested in 
that, so--
    Mrs. Napolitano. Are you talking about Water 2025?
    Mr. Christopher. No, I am talking about the CALFED.
    Mrs. Napolitano. CALFED?
    Mr. Christopher. What they projected the Federal 
participation would be, or, I guess, CALFED's year 2003.
    Mrs. Napolitano. Thank you.
    Mr. Upton, thank you for yesterday.
    I had an opportunity to get a firsthand look at your area 
and Madera, and was impressed. You also showed me the proposals 
for the Temperance area.
    Will you tell us how we should finance this project, and, 
second, do you believe that users or beneficiaries should be 
paying for the program?
    Mr. Upton. Yeah, I believe beneficiaries pay. As I said in 
my statement, I think this is an investment in the future. 
There is no way that farmers can afford to pay $500 in the cost 
of the dam. I look at this in the future by the United States, 
for supply that is guaranteed. So yes, there would definitely 
be some public funding.
    You have to remember that the Friant farmers are already 
paying about 40 percent of their cost of water now goes in for 
some kind of environmental fund. What the government uses it 
for, sometimes, is a mystery to us, but we are already paying a 
lot, and have paid a lot since 1992.
    Mrs. Napolitano. Thank you, Mr. Upton.
    There are other areas that I'd like to touch upon, but I 
must make a brief statement coming from Southern California, 
and having toured--been up here several times and looking at 
the community--farming community, as well as the great part it 
plays in California's economy. I'm very impressed.
    I can also tell you that when it comes to getting support 
in certain areas, it doesn't always equate; simply because, 
facts on facts, 80 percent of the water is used by farmers, by 
ag, and the rest of Southern California sometimes has to go 
through very stringent conservation times with that water that 
we have left. And we also have a problem with Colorado River, 
which does not impact you, but we need it in Southern 
California. That is a third of our water.
    We also must be able to explain to our constituency just in 
L.A. County alone is 11 million people, the county that I live 
in. We have no ag. We have many contaminated aquifers whereupon 
we get our drinking water that also need assistance, and that 
is one of the things that we are trying to do.
    We have many areas where we do underground water storage so 
that we can have some reliable water supply. Those are issues 
that we look at in conjunction with the needs of Northern 
California and the ag industry.
    I am very happy to continue to learn, and to be able to 
understand how that relates to what we need in our areas of the 
rest of Southern California, not even including San Diego, who 
is having all kinds of water problems.
    So I thank you much, and I will just turn it back to the 
Committee.
    Mr. Upton. I want to respond very quickly. I wanted to 
thank you for visiting Friant, and say that we meet with 
Metropolitan almost on a weekly basis in order to try to 
address your needs in a cooperative way.
    Mr. Calvert. Thank you.
    Mr. Pombo?
    Mr. Pombo. Thank you, Mr. Chairman. Yes. It strikes me in 
listening to the testimony from this panel, how far we have 
come in a relatively short period of time in terms of a 
recognition of what the competing issues are.
    Not very many years ago, many of the people on this panel 
had a very adversarial approach when it came to environmental 
restoration and the need to protect water quality and the 
dealing with the Delta, and, you know, we had those fights 
going on.
    In listening to the testimony by most of the people that 
are on this panel, there is a very broad recognition that as we 
move forward, we have to look at, ``How do we increase water 
supplies? How do we increase the ability to convey water from 
one area of the state to another at the same time that we are 
doing a better job of protecting the environment? And that is 
something that just didn't exist 20 years ago.
    And, you know, in listening to this panel talk about that, 
I think shows that we have come a long way in being able to do 
that. I think most of you recognize that that is our future. We 
have to--that we have to make that part of any new water 
systems that are put in place, and how we can do that.
    One thing that I do want to ask the panel is the proposal 
that has come up in recent years about developing some kind of 
a so-called one stop shopping, where you have all of the state 
and Federal agencies that put their cards on the table from the 
very beginning, they say, ``If you want to do this, you come 
in, all cards on the table and everything is out there,'' and 
they tell you what you have to do in order to move forward with 
that particular project.
    The idea of doing this has, I think, gained some steam in 
recent months and given everybody the ability to know what 
objections there are or what hurdles there are that you have to 
jump over in order to move forward with a project or in the 
management of your current projects.
    I would like the panel to comment on that idea, and I would 
like to start with Mr. Glover. The ability to have everybody, 
you know, so-called located in one place, one-stop shopping. 
``This is what you have to do.'' Instead of having the ability 
of one agency to play off of another agency to stop things from 
moving.
    Mr. Glover. As a project manager, you deal with a number of 
regulatory agencies, and to even make it more complicating, you 
have some Federal and some state. They have different 
standards. So in a number of instances, you are almost 
sandwiched between the two of them trying to figure out what 
you really need to do. They have a sit-down agreement 
initially. If you have NMFS and NOAA, and U.S. Army Corps of 
Engineers, and Regional Water Quality Board from the state, and 
Fish and Game to kind of give you guidelines and regulations. 
It would streamline the process and also reduce the cost of 
moving the projects.
    Mr. Pombo. So you would support the idea of doing that? I 
know it would make your life easier.
    Mr. Glover. As a project manager, it would simplify things 
quite a bit. It would also reduce the.
    Mr. Pombo. Would anybody else like to comment?
    Mr. Clark?
    Mr. Clark. Thank you. Actually, I think all of us would 
support what you are saying. I think one of the things we have 
run into is that while it is good plan--but once you get into--
in fact, one of the things that CALFED was founded on was to 
get all the regulatory agencies together in one room, and that 
everything was going to be done in the light of day; in other 
words, there were going to be joint decisions that were going 
to be made, and that these would have public review.
    One of the things that has happened to CALFED is that all 
of the Federal and state regulatory agencies, while they 
participate in the process, they reserve their right under law 
to perform as they are required; for example, the Endangered 
Species Act.
    So all these agencies when they sit down, various agencies 
have trumped in the process. So that while on the one hand, you 
may have a one-stop shop, but whether or not they are willing 
to acquiesce the decisionmaking process is the function of 
their legal authority.
    So I would think, Mr. Chairman, to the extent that you can 
get a legislative process, and I don't know, environmental, if 
you can get people that not only authorize them to participate 
in this type of process, but to have some kind of an outcome so 
that people just don't fall back to their regulatory powers and 
back into the individual pieces of time decision.
    It is a problem that you put your finger on. It is very 
serious and, in fact, right now, this Banks Pumping Plant, it 
is the Corps of Engineers that--Banks Pumping Plant today is a 
paper limitation. We do not have to go build anything. Today, 
if the paper limitation--the water, by the way, being lost by 
Metropolitan, on the issue of the Colorado River issue and the 
storage, was not a storage issue. It is a pumping issue.
    If we could have pumped that water, and we have--the pumps 
are in place. They are there today. If we could have been 
allowed to lift this limitation, regulatory limitation on the 
pumps, the water could have been pumped and saved, and it 
wasn't.
    Mr. Pombo. Mrs. Moralez?
    Ms. Moralez. To add onto that, being with the Reclamation 
Board of Directors, I see a lot of the conflict that occurs 
from one agency interpreting the law a certain way or the 
regulations, and then there is conflict with either state or 
Federal perspectives.
    I think another very important issue that maybe people 
don't like to bring to the table is because we have civil 
servants doing those jobs, some of them may have their own 
ideas or their personal biases with bias toward the environment 
or other biases, and they tend to interpret those regulations 
in a way that is more comfortable for their way of thinking, 
and then--I don't know how you deal with that.
    That is a very important issue that is creating some of the 
problems that we have to deal with regulations.
    The other part that I see is that a lot of those 
executives, top management or middle management, have a lot of 
power. And when you look at the composition of the people 
making those decisions and recommendations, there are certain 
relationships that are developed, and you have problems coming 
out of those relationships.
    I don't know how best to put it, but there is conflict that 
makes our life even worse; trying to get some of our projects 
going forward and working with the limited money that we have.
    The outreach also that has occurred has been, in my 
opinion, not very good. When we don't have the general public 
understanding what is going on and how our Federal funding is 
being spent, it is very difficult to get the support for us to 
get the public to understand that this money is not just water 
for the farmers or water for the environmentalists, this is 
something that affects every single human being in the state.
    Unless we do better outreach and public information to 
teach the public, it is going to be difficult for us to really 
get the support that we need to get the funding necessary to 
make these efforts go forward.
    Mr. Upton. I like the idea of a one-stop shop. I think one 
additional thing, of what I would like to see--and I don't know 
if you can do it legislatively--is to have a higher bar to be--
before a lawsuit could be filed to stop a project. Right now it 
seems like anybody with $25 to become an environmental 
organization, and get a Volkswagen bus can come in and stop the 
project. It increases the cost, and I think we need to address.
    Mr. Pombo. Just in conclusion, I know my time has expired, 
Mr. Chairman, but I can tell you that the Federal agencies 
right now, as frustrating as it is for a lot of you and for us, 
a lot of the decisions that they are making, are based on 
trying to avoid a lawsuit. And it really has nothing to do with 
the best way to run the project, or what is best for the 
environment, or what delivers the water the best, or anything 
else. It is how do we do this and avoid being sued?
    Everything that they are doing now is tied up in court over 
one thing or another, and that is destroying their ability to 
move forward, because everything is being done to try to avoid 
a lawsuit. That has gotten extremely frustrating for the 
bureaucracy that is in charge of doing this stuff, and for us, 
who have oversight over the agencies. The things that we all 
agree on that should be done, aren't being because lawsuits and 
because it is eating up their entire budgets, which is a real 
problem, but thank you.
    Mr. Calvert. Don't worry, Richard. I am not going to cutoff 
the Chairman.
    Mr. Cardoza. Thank you, Mr. Chairman. I would like to 
direct this to Dan Nelson.
    Dan, could you please describe your thoughts regarding the 
status of plans to diversify refuge water supplies?
    Mr. Nelson. Yes. And a brief background, as you know, the 
Central Valley Project Improvement Act, passed in 1992, 
fundamentally changed how it is we operate and maintain the 
Central Valley Project. I mean that in a very literal sense of 
the word.
    We operate entirely different than we did in 1992 and have 
experienced shortages since that time in trying to implement 
CVPIA.
    But along with the rededication of water for fish and 
wildlife purposes, there are provisions in CVPIA that call for 
the mitigation and the minimizing of the impacts to CVPIA 
contractors.
    Although over the last 10 years we have done a really 
comprehensive job in implementing the environmental 
improvements of CVPIA, we have not implemented the mitigation 
or the minimizing impacts provisions of CVPIA. And the best 
example is the refuge supply. Over 250,000 acre feet south of 
the Delta has been rededicated from historical uses, 
specifically agriculture, to wildlife refuges south of the 
Delta.
    That is a big, big chunk of water and certainly a good 
percentage of water that is available to agriculture south of 
the Delta.
    Along with provision of dedicating this water is a 
direction to the Secretary of Interior to diversify those 
supplies to minimize impacts. And there has never been an 
effort or resources to diversify those supplies.
    So what we are suggesting is that the Secretary of Interior 
initiate and--by the way, CALFED also acknowledges that there 
hasn't been a planned development and there needs to be a 
planned development and talks to the Secretary of Interior and 
the state of California to work through a plan with the rest of 
the CALFED agencies that would diversify these spots.
    A lot of it is centered in conveyance. The Delta is one way 
of doing it; another is development of ground water resources 
south of the Delta, and there are opportunities to do that. But 
the point is: We need to be serious about--about diversifying 
those supplies and dedicating appropriate resources.
    Mr. Cardoza. Thank you, Dan. You talk about a lot of 
conveyance. I am happy that you have discussed that today, 
because that is really something that we need to deal with. It 
is not just building the storage, which I advocate also, but 
getting it where it needs to be. I also want to mention an 
issue with me about credibility. Mr. Upton said in his opening 
remarks that water users are getting along more appropriately 
today, and I appreciate that and applaud that. Your cooperation 
with Westlands.
    Mr. Clark mentioned the issue of credibility, and the fact 
that you have to maintain Delta soundness and the South Delta 
issues are important, and you made those commitments. And I 
applaud that because that is part of my district as well, and 
that is important to me.
    My question to all of you is: I am very concerned as we go 
on here about people who make commitments, and then don't keep 
them once they get their part done. Certainly, if we are going 
to have this process move forward, we need to have a situation 
where honorable people can do honorable business and keep 
commitments. If you get your part of the deal and then take 
your toys and go home, that isn't going to make this process 
work.
    So if anyone has any comments with regard to that, I would 
be happy to--
    Mr. Nelson. Well, I would like to address that issue. That 
is something that we struggle with in our region. Back in 1993, 
we were one of the first agricultural groups that started 
working with other ag areas and urban areas and environmental 
communities on trying to figure out how it is that we were 
going to move forward with managing California resources.
    This was just post drought, and ESA issue and CVPIA, and so 
we were trying to make sense out of all this. Through all of 
that, we came up with Delta Accord. As you recall, as part of 
implementing the accord, we established standards on the Delta. 
And I recall on the podium on signing day--then Secretary 
Babbitt saying, ``A deal is a deal.'' And these are the 
regulations and standards that we are going to move forward 
with.
    Now, that was a short-term program. Now, we are going to 
work on this CALFED, which is a long-term program. We have less 
water today in our region available to us than we did back in 
1994 when we signed the Delta Accord.
    So, frankly, that is one of the things that we have really 
been struggling with. We bought off on the notion that 
everybody gets better together, and that we will move forward 
in a balanced way. We haven't experienced that, but we are 
still at the table, and we are still striving for that balance.
    Mr. Calvert. Thank you.
    Mr. Radanovich?
    Mr. Radanovich. Thank you, Mr. Chairman.
    Mr. Christopher, welcome to the Committee. I have got a 
couple of questions. First of all, let me ask this: Is Friends 
of the River a party with NRDC in the lawsuit of San Joaquin 
River lawsuit to restore the river?
    Mr. Christopher. We are.
    Mr. Radanovich. So you are familiar enough to probably 
answer some questions?
    Mr. Christopher. Very basic. I am not a party to the 
settlement negotiations, actually, but I believe later on this 
afternoon, there will be a person available at your hearing in 
Elk Grove who is party to that. I can answer some very basic--
    Mr. Radanovich. Do you have a plan to rewater the river? I 
think there was some discussion or some plans that were being 
put forward that had the idea of rewatering the river at no net 
loss to urban or ag water uses. Is that still your concept or 
idea?
    Mr. Christopher. Yes. We would like to think so. I 
personally haven't been involved with it, but over the last 4 
years, there have been seemingly very productive talks about 
different ways and ideas that we could get water back into the 
San Joaquin River, which is in some areas virtually dry; that 
would be beneficial for both, not only to regional farmers 
here, but downstream in the San Joaquin and better for the 
river itself.
    Mr. Radanovich. Do you have a handle as to how much water 
it is going to take to rewater the river?
    Mr. Christopher. I wouldn't have that statistic.
    Mr. Radanovich. Friends of the River doesn't have that 
information?
    Mr. Christopher. I can provide that. I would be able to 
provide that, yes.
    Mr. Radanovich. That would be terrific.
    Does Friends of the River have a specific plan in mind now 
that you could also provide me information on as to your 
opinion of, No. 1, what it would take, and how you would do it?
    Mr. Christopher. Oh, we would appreciate--
    Mr. Radanovich. If you can't speak to that now, but you 
will get me the information?
    Mr. Christopher. Would appreciate that.
    Mr. Radanovich. Let me ask you a question of the--earlier 
in my statement, and you can agree or disagree with the 
numbers, but if it is true that 46 percent of the state's water 
is used for environment, and 43 percent is used on farms, and 
11 percent is used in homes and businesses, and we are trying 
to make the state whole in water, do you support increased 
water storage if California has a means of making up for any 
future shortages that we may have?
    Mr. Christopher. First of all, you are referring to 
Bulletin 160, which was produced in 1998, currently, right now, 
the top members of the legislature in California, the--
    Mr. Radanovich. Actually, I am not. I am just speaking of 
Friends of the River, though. Is it the Friends of River's 
position to support increased water storage as means of 
bringing the state whole?
    Mr. Christopher. We would if they were along with the 
CALFED Record of Decision, and if they were environmentally 
benign, if beneficiaries paid as called for in the Record of 
Decision, and that we stay true to the Record of Decision. We 
would certainly support--we have supported the California 
Record of Decision and--
    Mr. Radanovich. Yes, but would you increase--would you 
support increased water storage that would be either on- or 
off-stream above ground water as a means of meeting some of 
these needs?
    Mr. Christopher. If those concerns were met, that were set 
forth in the Record of Decision, of course we would.
    Mr. Radanovich. You had made a statement earlier about, 
which is contrary to the view that I am coming from, about how 
we should not say, ``Listen. You are not going to get this 
unless I get this,'' when we are putting the stakeholders 
together, and try to move things forward. It has been kind of a 
bone of contention with me that in the stakeholder process that 
was agreed upon in 1995, ``We all get better together,'' That 
the vast majority of the money spent so far has been for 
environmental restoration.
    The reason why I bring that up is: There is a concern that 
if one particular party gets out too far against the other that 
they begin to work against the interest of the other 
stakeholders if they were satisfied, and that has been my 
concern all along.
    In the ROD is mentioned some storage projects, including 
Los Vaqueros, which was agreed upon by all people that signed 
this CALFED agreement back in December 1994.
    Are you aware or is Friends of the River party to any 
lawsuits that are being contemplated on Los Vaqueros Reservoir 
right now?
    Mr. Christopher. No, we are not.
    Mr. Radanovich. Is there any anticipation of filing a 
lawsuit?
    Mr. Christopher. Not on behalf of Friends of the River, no.
    Mr. Radanovich. Kole, can you give me an opinion of why the 
NRDC has decided to go back to court instead of continuing to 
work on the cooperative basis with Friant to develop a plan 
that we would rewater the river that would not take away water 
from agriculture?
    Mr. Upton. I can give an opinion. I think the water 
business is the people's business. And there are only three 
people that started this process with NRDC and carried it all 
the way through without any leaves or absences, and they are 
all on the Friant side.
    What happened was we started out with neutral goals to try 
to protect this $4 billion economy that we have in Friant. We 
have no water. No loss; that was the agreement.
    On the other side from NRDC, what they were seeking was a 
naturally producing salmon fishery. That was their goal. There 
was a lot of work on river restoration, on using the same 
molecule of water for both ag and environmental restoration. We 
didn't have a lot of successes. It worked really good for a 
couple of years.
    The studies we did on restoration and on the water supply, 
begin to reveal in the last year, that it was going to take 
anywhere from 300,000 to 1 billion acre feet of water to do the 
salmon fishery. And it was going to take about a billion 
dollars to redo the ponding beds and that kind of thing. But we 
could see from our perspective there was no way we can do that 
without sufficient storage and without affecting Friant.
    Every storage proposal we came up with was vetoed; even 
including putting gates on Mammoth Pools to give us 20,000 
acres was denied. At that point, then we tried a different 
strategy. Why not have a warm water fishery. You have salmon. 
That is what the studies showed. You can use additional money 
you saved to enhance a salmon fishery somewhere else. That way 
the salmon fishermen would be happy to get more fish. They 
would have a fishery right on the San Joaquin. That would meet 
the law and make people happy.
    At that point, 5 days before the study was--NRDC issued a 
press release and went back to court. You would have to ask 
them exactly why, and I told Mr. Lang, minority resource 
person, we were willing to meet anywhere at any time in front 
of you or anybody else and discuss this issue, because we are 
heavily involved in the task force in the environmental 
enhancement of the river.
    If you want my personal opinion, I think NRDC thinks all 
they have to do is convince one judge to give them what they 
want, and it is a lot easier than trying to convince all the 
state growers in the Valley.
    Mr. Radanovich. In your opinion, can the San Joaquin River 
be rewatered without increased water supply or without taking 
water away from agriculture or urban uses?
    Mr. Upton. Not as a salmon fishery, no way.
    Mr. Radanovich. Thank you.
    Mr. Glover, thank you for being here. I need to ask you a 
quick question. Your agency has been working on a 100-year 
event flood plain proposal for Fresno, Madera, and Merced 
Counties, or in that region; can you tell me whether it is 
DWR's position to set the flood plain there at 71,000 cubic 
feet per second?
    Mr. Glover. I can't answer that question, but I would be 
happy to get back to you on that issue with that answer.
    Mr. Radanovich. If you would, I would like the answer to 
that question. I also understand, in fact, I know of a fact 
that there is a model produced by Citizens of Madera County, 
and local water districts developed that demonstrates the flood 
plain can be set at 21,000 cubic feet per second, not the 
71,000.
    Given the disparity between those numbers, would you--would 
DWR be willing to sit down with some of these constituents that 
have this plan, and be willing to discuss this issue with him?
    Mr. Glover. I am sure I can answer that question as yes. I 
am sure we would be willing to discuss that issue.
    Mr. Radanovich. Mr. Upton, I had another question for you 
too. Would you be proposing and promoting the idea of increased 
water storage in Temperance Flat if CVPIA had made the mandate 
that a lot of the state's water resources shifted it from ag 
uses to environmental uses?
    Mr. Upton. I think we probably would be doing that anyway. 
I have heard about Temperance Flat for a number of years, and 
the fact that Friant Dam was built in the wrong place, and it 
should have been built at Temperance Flat because there is so 
much more capacity.
    Mr. Radanovich. But the fact is if not the increased 
environmental demand being brought on by CVPIA, whether good or 
not, parts of it are good, precluded the need for more water 
storage in your district, don't you think?
    Mr. Upton. Well, I have got to tell you, I have got to 
compliment Congressman Nunes, because I think so many of us in 
this water business have been brainwashed from listening to 
some of the environmentalists: ``No new dams. No trying to 
storage.'' We are trying to think of all these other ways to do 
this, but I can remember my dad, he started in the water 
business, saying that we needed Temperance Flat for the future. 
I think it should have been built years ago.
    I think, your point, yes, with all the environmental 
requirements and things that probably maybe wouldn't have come 
to the floor right now, it should have been done years ago.
    Mr. Radanovich. I guess what I want to make sure was 
brought up was the idea of when it is mentioned that, ``Gosh, 
Friant, if you want increased water storage, go pay for it.'' 
But I think the point needs to be made it probably wouldn't be 
pursuing something like Temperance Flat, had it not been that 
CVPIA pledged water for environmental uses over and above an 
increased demand for California's water supply for that, which, 
in my view, justifies state and Federal money being spent on 
Temperance Flat, and that the users of Friant should not be 
charged with the full cost of that proposal, because it is the 
state and Federal interest and the citizens of California that 
are deemed a higher priority in this water being used for 
environmental purposes and put the effort to get more water 
storage or put that to the front.
    I just want to make that case to justify the fact that it 
is in the public's interest to have increased water supply in 
California, and they should be participating in something like 
Temperance Flat.
    Mr. Upton. I agree with you.
    Mr. Radanovich. Sorry to put you on the spot like that. I 
think that is all for my questions. Thank you.
    Mr. Calvert. Thank you, Mr. Radanovich.
    Mr. Nunes?
    Mr. Nunes. Mr. Upton, in your testimony you talked about 
the Central Valley Project Improvement Act in regards to the 
restoration fund money. Could you expand on that a little bit? 
How much have Friant Water Users paid into the restoration fund 
and the other CVP users over the last decade?
    Mr. Upton. I think it has been over $100 million, if my 
figures are correct, and don't know; Dan Nelson is here.
    Dan, do you have that?
    Mr. Nelson. There is over $100 million.
    Mr. Nunes. $100 million total between all water users?
    Mr. Nelson. We can get the exact numbers to you, but I 
think it--we would be happy to forward those numbers to you, 
but my impression is that it comes out to about $35 million a 
year, and we have been paying into that for about 10 years now.
    Mr. Nunes. So would it be accurate to say possibly a little 
more?
    Mr. Nelson. Very possible.
    Mr. Nunes. I have asked, I think, twice, and this will be 
the third time, Mr. Chairman, for the Secretary of the Interior 
to provide me and the Committee a detailed report of where this 
restoration fund money has went to.
    Can any of you tell me where the restoration fund money is, 
because I can't seem to get anyone from the Department of 
Interior to be able to tell me, or did it disappear?
    Mr. Upton. We have asked the same question. We know for a 
fact that in mid or late '90's some of it went into the general 
fund.
    Mr. Nunes. Does anyone else--Mr. Christopher?
    Mr. Christopher. I can talk to a number of things, and I 
am--of where some of the money has gone. We are looking at 
restoring salmon fisheries, hopefully trying to get some of the 
endangered species off the list in the areas of Clear Creek and 
Battle Creek.
    Obviously, just like everybody else, people who rely on 
fishing environment for recreation in their income as well, we 
have run into problems with bureaucracy. Some of that stuff has 
been stalled up there. There has been wetlands rehabilitation 
here and outside the Bay Area.
    So those are some of the types of things that are being 
done with ecosystem restoration money. I wouldn't say that it 
has gone up in the thin air, but that would be my response to 
that.
    Mr. Nunes. Mr. Nelson?
    Mr. Nelson. One of the things that I think you need to be 
aware of and certainly something that would be appropriate for 
you to look at some fixes for the future and how the 
restoration fund was set up is: Generally, the restoration 
fund--the payments by the water users go directly into the 
Federal general fund. And a lot of times we may put--let's use 
hypothetically $35 million annually--into the restoration fund, 
but it gets lost in the Federal appropriations process, and so 
we don't necessarily get the benefits of the appropriations 
back to that $35 million.
    We ought to consider a local revolving fund to make sure 
that money--if the water user is going to put that kind of 
money forward for restoration, then they ought to be getting 
the benefit of it. And it ought to stay here in California and 
be used for what it was intended for.
    Mr. Nunes. I agree, but, I think, at the very minimum, Mr. 
Chairman, we should have, as was called for in the Central 
Valley Project Improvement Act, a report yearly as to where the 
money was spent, because we have yet to see an official report 
from the Secretary of the Interior since the signing of CVPIA.
    Mr. Christopher, you had another comment?
    Mr. Christopher. I was going to say that we have seen some 
increase of targeted fish species, such as salmon and steelhead 
coming back into the system, so I mean there are some positive 
signs here. It is not like it is all doomsday from that 
perspective. These are small, incremental improvements, so we 
are seeing something.
    Mr. Nunes. Mr. Christopher, if Temperance Flat was built, 
was authorized by the U.S. Congress, would the idea that we 
would use part of the water to restore the river, i.e., river 
restoration, would it be OK to use these restoration fund 
moneys to finance part of the building of that project?
    Mr. Christopher. I would have to look at any type of 
proposal, but if there was something that could be done in the 
process of doing Temperance Flat, which could restore to some 
degree, free-flowing river, that would be something that would 
be looked at, and that would be something that would be very 
attractive to people downstream of the river in places like--
    Mr. Nunes. That deals with the beneficiary pays theory?
    Mr. Christopher. If it was something that could be done, 
then I would say that would be something to look at. But, you 
know, with beneficiary pays, everybody agrees with the concept 
until they are identified as a beneficiary. So it would be 
something that would have to be looked at, and something that I 
personally--I don't think Friends of the River would put off 
the table.
    Mr. Nunes. Mr. Clark?
    Mr. Clark. I just--I really had to add my two cents on this 
issue. I think you are touching on a very important issue on 
beneficiary pays. It has come up a number of times in the 
context providing new water supply that the beneficiaries must 
pay. Nobody says anything whenever it is--we are talking about 
water being taken.
    When CVPIA was enacted and that 800,000 acre feet of the 
yield of the Central Valley Project was dedicated to 
environmental purposes, it was dedicated without compensation.
    When the State Water Resources Control Board enacted the--
    Mr. Nunes. So you are saying the beneficiary didn't pay in 
that instance?
    Mr. Clark. I think the beneficiaries pay is a two-way 
street. When water gets taken, there should be compensation. 
And, in fact, Kern County is involved in a very important court 
case on ESA to where the courts have found that taking one's 
water supply, water rights, is a compensable action under the 
ESA, and we are in the court of claims right now.
    And I think that is a very, very important issue, because 
we are getting--with all due respect to Mr. Christopher, when 
he said, ``Sure. We support surface storage if the beneficiary 
pays,'' well, the point is: That agriculture and the urban 
water users throughout this state have lost about 2 million 
acre feet in the last 10 years to new environmental protections 
and environmental programs. All of those came without 
compensation.
    Now, when it is time to make the water up, people are 
talking about beneficiary pay. And I am saying that this is an 
important issue that I would like to see you folks get involved 
in it, but I think it is a way of saying in code, ``We oppose 
new surface storage, because we know agriculture can't afford 
to pay.''.
    Thank you, very much.
    Mr. Nunes. Mr. Christopher, time is quickly expiring here, 
but I do have one more question.
    Are you familiar with the Kings River at all, and Senator 
Boxer's proposal to put the Rogers Crossing area into the Wild 
and Scenic Rivers Act?
    Mr. Christopher. Familiar with it, yes; vaguely familiar.
    Mr. Nunes. I assume you are in support of that?
    Mr. Christopher. Yes, Friends of the River has been working 
on that bill with Senator Boxer.
    Mr. Nunes. I would like to hear, and I know that we don't 
have any representatives from the Kings River here, but I do 
want to comment to this Committee, that I feel that is a bad 
idea to do that. And I also want to say that we should--at the 
same time we are studying these other rivers, putting water 
projects there, we should also be studying Rogers Crossing to 
possibly build a water storage project on that river also at 
the same time.
    Mr. Christopher, you want to comment, and then Mr. Upton?
    Mr. Christopher. With regard to the beneficiaries paying, 
you know, California has historically supported a very vibrant 
fishing economy; billions of dollars have come into California 
by people who make their living fishing and white-water 
recreation. $75 billion has been spent on white-water 
recreation. We extracted that water and decimated fisheries 50 
years ago; there was not compensation for those groups that 
relied on that a great deal.
    So you have to look at it in a historical context too, and 
weigh the different measures when looking at it.
    Mr. Nunes. Thank you.
    Mr. Upton?
    Mr. Upton. I would like to address your original question 
on CVPIA funding. One thing that we did is we had a joint study 
through the Bureau of Reclamation within RDC on temperature in 
the Friant Dam. The reason we did that is because the type of 
fishery that you have is dependent upon the temperature.
    What we were finding that the temperature in Friant Dam is 
so hot that the salmon would not be able to survive in the San 
Joaquin, even if it was linked up. Furthermore, even when it 
got to Merced where there is an existing salmon fishery, that 
water was so hot it was going to kill the existing ecosystem.
    So even though we put the money in, and I think the study 
has very valid results for what kind of fishery we are going to 
have, we didn't have control over it, so it is a dead issue.
    Mr. Nunes. Well, one of the things that I find is also 
interesting on this topic of water storage and how it relates 
to fish is that without water storage the drought that we 
suffered through the '80's and into the '90's, if there was no 
water projects there, I can't imagine that there would have 
even been any fish left after the eight or 9 years of drought 
that we went through.
    Just for the record, I think that Mr. Pombo, you have 
talked about this in the past, but they are not mutually 
exclusive. Water projects and fish are not mutually exclusive. 
I think that there are strong benefits by building some of 
these water projects.
    And I want to thank the panelists today and the Committee 
for coming up here--coming out to the San Joaquin Valley to 
listen to the panel. I would like to thank you in the audience 
for showing up this morning. Thank you, Mr. Chairman. I yield 
back.
    Mr. Calvert. I have a couple of questions. Mr. Pombo has a 
couple questions, and I think we have another round here.
    As you are probably aware of what is going on with the 
Colorado River with the quantification settlement agreement 
given to the upper and lower basin states, which we were unable 
to meet, and the Department of Interior has cut us back on the 
Colorado River to our protected right, that had an affect 
throughout the state of California; an immediate effect.
    One, Metropolitan, went up into Northern California and 
acquired water to offset its loss in the Colorado River, and 
acquired that water, as you probably have been reading in the 
paper of the conflict with the state on where to store the 
water in the interim, but that water has been acquired.
    I am going to ask a question that I think we need to have 
for the record. If you have water rights, and you own them, do 
you believe you have the right to sell that water.
    Start with Mr. Watkins?
    Mr. Watkins. I think as a water right holder, you would 
have the right to move that water as long as it wasn't 
detrimental to the area of the origin and wasn't detrimental to 
the neighboring areas.
    Mr. Calvert. Mr. Clark?
    Mr. Clark. I agree with the comment that was just made. I 
think there are things that we need to do to streamline the 
ability to make transfers of water statewide. Quite frankly, 
along with the environmental restrictions, really--the 
availability for sellers to other buyers.
    Mr. Calvert. Mr. Nelson?
    Mr. Nelson. Our area relies heavily on water transfers 
every year to make up for some of the shortages, so we 
certainly think that transfer is a major or should be a major 
component of how it is that we mandate water resources. There 
are, however, very real conditions and very real circumstances 
that we need to be aware of.
    What comes to mind at the top of the list, of course, is 
what we refer to as ``third-party impact''; especially in rural 
communities that rely on this water to be used locally for 
their rural economies.
    Ms. Moralez. I think that is an issue that is so crucial to 
the local economies, and I believe at this point that we may 
have some counties that are looking into it from the 
perspective of them trying to put a stop to water being 
transferred. However, they own the water rights, and that is 
their privilege.
    I think with time, we are going to be able to come up with 
a plan where they can--the water rights individuals may be able 
to exercise those rights, but within conditions that protect 
the local environment and the local economy.
    Mr. Upton. It is a third-party impact issue, and a lot of 
counties have established water committees and ordinances to 
look at that very thing, but I don't think you have an absolute 
right to do that and affect everybody else. It has got to be 
under certain issues.
    Mr. Calvert. The reason I bring that up is obviously, water 
transfers are going to be brought up as an issue. As a matter 
of fact, the NRDC has been a proponent of water transfers in 
the past. I find this--as you know, we are in a situation in 
Southern California--it certainly affects Northern California 
also--where the Imperial Irrigation District is attempting to 
work out an agreement with the city of San Diego.
    This is probably the mother of all water transfers. We are 
talking about a significant amount of water. Of the 4.4 million 
acre feet that is in the Colorado River, the Imperial 
Irrigation District has protected rights to 3.3 million acre 
feet of water.
    Now, we went through a lot of work to do this. And we 
cannot seem to get the support all of a sudden of the same 
organizations that say they are in favor of this.
    I want to ask Mr. Christopher: One, you mentioned in your 
testimony in the aspect of water transfers, it seems that if we 
could get to the point where we could work out the 
technicalities with them: Do you have the right to transfer 
water; and, two, do you have an ongoing right to how that water 
is utilized and what are the third-party impacts?
    I understand all of these other issues. In the past, I have 
headed papers and so forth on water market transfers, and 
conceptually these things have worked. But it is interesting 
that the environmental community now is shifting.
    Can you explain to us why in some of these water transfers 
now that--I am trying to find one that they are now in favor 
of. Can you explain?
    Mr. Christopher. Water transfers in general?
    Mr. Calvert. Yes.
    Mr. Christopher. Anytime you can take water from one area 
and transfer it to another place that is in need, and it can be 
done in a way, like you said, all the other technicalities are 
dealt with, it presents an opportunity for more water not 
having to invest a tremendous amount of more money in surface 
storage. It gives us an opportunity to do that, so I think that 
is why you see some of the--
    Mr. Calvert. This is an important aspect, because, 
obviously, many people in the environmental community are 
opposed to surface storage, opposed to off-stream--by the 
aspects of storage, but they always went back to water 
transfers and the concept of late is now that will--maybe now 
that some of these transfers are happening, all of a sudden we 
see opposition. The first we hear from them is the growth 
inducement impact of the water transfer, which we had never 
heard before until, obviously, that these were going to take 
place. Any comment?
    Mr. Christopher. I think the shift in the quantity of the 
amount of water that we are going to continue to convey, is it 
going to be a way of life whereby that is what we are going to 
rely on, that people are going to simply take water that they 
have rights to, and then sell that water down south is a matter 
of public policy. I think a lot of people are concerned about 
doing it on the large scale, because water is the basic need of 
every person and everything. This idea of taking it for a cheap 
price, and then selling it for a large price is disconcerting 
to some people.
    Mr. Calvert. If the environmental water community bought 
the water and put it into the environment, would that be a 
proper water transfer? Would that be at that point OK?
    Mr. Christopher. Well--
    Mr. Calvert. --if someone was--if a body was willing to buy 
that for environmental purposes?
    Mr. Christopher. You know, it comes down to the fundamental 
choice: Do we buy water--
    Mr. Calvert. I am just asking the question.
    Mr. Christopher. Do we buy water to supply our fish in our 
rivers and people that rely on them and use them? It is a 
fundamental choice. It is a value judgment we have to make. Are 
we going to go that route or not?
    Mr. Calvert. So that water shouldn't be paid for? Is that 
the answer to the question?
    Mr. Christopher. I am just saying, it is a value judgment 
that we have to make.
    Mr. Pombo. I would like to, I guess, go back to you, if I 
could. In the response to an earlier question on surface 
storage, you said that you would not be opposed to surface 
storage if it was one of the criteria--if it was 
``environmentally benign.''.
    Can you expand on that a little bit? That sounds like a 
very high bar to set.
    Mr. Christopher. Well, I mean there are studies that could 
be shown--let's say for example, Los Vaqueros Reservoir was 
funded and operated in a certain way, that it could actually 
benefit the environment in fisheries that we have invested so 
much money to try to restore.
    The problem with anything like this is that none of these 
have yet proven to be feasible. They're still in the beginning 
stages. Nobody has stepped forward to say, ``We want this 
water. This is how much we are willing to pay for it.'' 
Environmental reviews have yet to be done, so we were at the 
very beginning stage of some of these things. If it comes out 
and we see that the amount of water that Los Vaqueros contains 
and the way that it is operated can benefit the environment and 
those who make their livelihood on fishing, I don't think that 
we would come out in opposition.
    Mr. Pombo. So--and I am trying to understand this, because 
there is--I think we have to quit pretending that there is 
anything that we can do that is environmentally benign, because 
anything that man does impacts the environment. If we went in 
and took down all the dams that have been built in California 
in last 75 or 100 years, that would have a huge impact on the 
environment, and not necessarily good. In terms of fish and the 
fisheries in California.
    As Mr. Nunes said when you talk to some of the old-timers 
that have been around here for a long time, they will tell you 
about walking across these rivers during drought time when 
there was no water in these rivers, and now there is water 
running all the time.
    I go back on my own family, and I was raised in the Delta. 
My father was raised in the Delta, and they talked about when 
there were droughts, and there was no water in the Delta. The 
rivers that ran by my house were dropped during drought time. 
Now there is water all the time in there.
    So there are different impacts. Anything that we do is 
going to have an impact on the environment. When you talk about 
being ``environmentally benign,'' I think that--that is 
impossible to say that anything that we do is going to be 
``environmentally benign.'' What a lot of these guys are 
talking about is trying to build new surface storage, new water 
projects, and have as little impact on the environment as they 
possibly can in building those, and I think that is--I think 
that is a huge difference from what you are talking about.
    That is where I think that we need to bridge that gap in 
terms of people like you and others in the environmental 
community. I think people need to understand. You guys can all 
go out and talk, and you sound the same, and you sound like you 
are saying--in agreement in what you are saying, but you are 
not. There is a huge difference in what it is you are talking 
about. I think that is important.
    You talked about being environmentally benign. Building or 
expanding Los Vaqueros is going to have an impact on growth. It 
is going to have an impact on the ability of those communities 
to provide water for their cities in that area. That is going 
to have an impact on the environment.
    When you put ``rewater the San Joaquin'' that has one 
impact on Friant, and it has a different impact on my district. 
Good or bad, it has an impact. You know, all of these projects 
that we are going through and that we are talking about, there 
are dozens of them that are on the--in the planning stages that 
people are talking about. What is the impact on the environment 
if every one of those could there be a positive that comes out 
of it? How do we move forward in providing more water. Not just 
in my district--it is funny because to hear Grace talk about 
Northern California, I think this is Southern California.
    When you talk about the impact on--in my area, my farmers 
talk about this as being when we ship water south, and the 
impact that has on us. So California is obviously very complex 
when it comes to water, but at some point if you guys want to 
be honest participants in this process, there has to be 
something you are in favor of, and there has to be some kind of 
water project that is going to provide new net yield both for 
our cities and for agriculture that you are in favor of.
    Mr. Christopher. And, like I said before, when I say 
``environmentally benign,'' I am certainly realizing that every 
project will have impact in some way or form on the 
environment. There is an opportunity to use some of these in a 
beneficial way, and hopefully can benefit and satisfy some of 
the people up here too. We certainly hope that too. But I will 
just--I would like to add that we have more tools in our water 
supply toolbox than we did 50 years ago or 10 years ago.
    It is amazing to think of some of the advances that we are 
making in agriculture which could produce 150,000--1.5 million 
acre feet south in the next decade or two decades can produce 
800,000 acre feet.
    Not looking at it from the environmental perspective, but 
looking at it from the economic perspective, that could be 
beneficial to focus on those types of things in addition to 
water storage.
    Mr. Pombo. I do think that we have to concentrate on those 
things. Places like San Francisco should be doing that, and 
places along the coast should be doing more of that. I look at 
what agriculture has done in the last 20 years, the advances 
they have made in the use of water.
    Unfortunately, it seems like they get absolutely no credit 
for that whatsoever. We still get into the debate, ``Well, 
agriculture uses all of this water, and we should be 
transferring that to our cities.'' And they get no credit for 
the amount of water that they have saved through conservation. 
Everybody keeps talking about conservation; we are going to 
make it up through conservation. Well, agriculture has done its 
part, and they have continued to improve. They continued to use 
less and less water all the time, but that--that has an impact 
when they use less water. That has an impact on the environment 
in those areas when they are using less water. That, what we 
have seen in the Valley, and we have seen along the coast down 
south that when farmers use less water, it impacts the 
endangered species in those areas too. The endangered species 
didn't live here when this was a desert. A lot of the 
endangered species that exist in the Central Valley today are a 
result of agriculture being here.
    So when you take away the water from the farmers, that has 
an impact on the environment. So everything that we are doing 
has an impact. I just think that--at some point in order to be 
an honest broker in this process, the environmental community 
has to come forward and say, ``We want to build this, and we 
think that is a legitimate way of producing more new net yield 
into the system, so that we can avoid some of these problems in 
the future.''.
    Thank you, Mr. Chairman.
    Mrs. Napolitano. I feel very sorry for Mr. Christian. You 
guys ganged up on him.
    Being from Southern California--and yes, thank you for the 
remark ``This is Southern California'' or part of it; in that, 
we all must share the frustrations making CALFED--I am hearing 
the frustration from the panel of how Central Valley farmers 
are not benefiting as much from CALFED or little, for that 
matter.
    We don't belittle the Central Valley's plight. We have 
Superfund contamination in our areas that we use for drinking 
water. You use it for farming water, so you may understand. I 
invite the panel to join us in Southern California, so we can 
give you a tour of what we are faced with in Southern 
California.
    You may understand, we are here to listen to your plight. 
You need to listen to ours also, so that we can all work 
together.
    And while I tend to agree in many areas that we need to 
protect a lot of our species that we--thank you very much for 
the last tour. I was here about 3 weeks, a month ago. I was 
able to see some of the environmental areas and how--I toured 
the big Delta in a boat, got to a see a lot what really 
happens, so I understand a little bit more than I did maybe 
last year.
    I understand the need to protect it, but we were not even 
talking about how to protect the levee, so you do not have the 
intrusion of the salt water. There are many things that still 
have not been coming into the conversation about the cost and 
who is going to pay for it. Certainly the Federal Government 
has a great responsibility, and while we don't want everybody, 
especially farmers to continue shouldering the cost, we need to 
be able to be sure that the state and feds work with the; 
everybody, again, coming to the table and coming to those 
solutions.
    If we in Southern California and, as Mr. Glover--the State 
Department--California Department of Water Resources, if we 
were to build recycling and desal--desalination plants, it 
would reduce our need for water from the Delta perhaps by 
500,000 acre feet per year. If we were able to do that, would 
it still be necessary to build dams or aboveground storage?
    Mr. Glover. So the question is: In addition to the ground 
water facilities in Southern California, would we need to look 
at some storage facilities we are looking at part of the CALFED 
ROD?
    Mrs. Napolitano. Generally, yes.
    Mr. Glover. Well, looking at population projections over 
the next few years, I think that there is going to be a need 
for additional water, so I commend Southern California, 
particularly Metropolitan Water District, for their effort on 
recycling and ground water programs--so I think that is part of 
the package.
    I don't think we have looked at surface storage as the 
answer to all that ails us. We think it is a complete package 
with the reuse that is happening in Southern California and 
more efficient use of the water. So, in the long term, no. I 
don't see it really overcoming our need for additional surface 
storage.
    Mrs. Napolitano. Thank you. I tend to agree with you. 
Understand, a lot of folks don't realize that Southern 
California has gone to very high degree of recycled water 
usage, not only for commercial and industrial water uses, but 
green space, golf courses, and other areas.
    Certainly, something that I haven't heard in the 
conversation here is being able to reutilize the water? And 
there are no new resources of water. We are still using water 
that we have been using eons ago. It is just recycled by mother 
earth; rainfall or whether it is in aquifers. The important 
part in our area is that our aquifers are unusable because of 
reports--you are lucky you don't have reports in your area. 
Those are provided--thank you very much--by our Federal 
Government's defense industry--the providers for that industry. 
Those are cancer-causing, and unfortunately, we have those 
besides the use of fertilizers and other farm necessities back 
in the early 1900's, and we are now paying for that.
    Again, it is our drinking water; not our farming water, or 
not our industrial or commercial water. So you understand our 
plight is very different than yours. We need your understanding 
along that line.
    The other question I was going to pose possibly to Mr. 
Nelson is regarding the refuge water supply. Who should pay for 
the refuge--diversion of the refuge of water? Should it be a 
CALFED responsibility?
    Mr. Nelson. I would like to tell you that it should be a 
CALFED responsibility, but in actuality, CVPIA is fairly clear 
on who should pay that. It is a reimbursable expenditure, the 
replacement of these supplies by Central Valley Water Users.
    Mrs. Napolitano. Any additional comments?
    Thank you, Mr. Chairman.
    Mr. Nunes. Mr. Nelson, in your testimony you talk about the 
loss of going through the Delta and out to the ocean. How much 
water on an annual basis do we lose that goes out to the ocean?
    Mr. Nelson. I don't think that I can answer that. I would 
be happy to get that information, but off the top my head, I 
don't know that there is any--I don't know.
    Mr. Nunes. Several million acre feet?
    Mr. Nelson. I think so, yes.
    Mr. Nunes. And you talk--could you explain a little bit 
more about the--those pumping plants that you talked about 
there, and if those pumps were able to operate 24 hours a day 7 
days a week, how much more water we would have conveyed from 
the north to the south?
    Mr. Nelson. I certainly can answer that question on the CVP 
side. It would be in the range of 850,000 to 900,000 acre feet 
per year.
    On the state side, Tom?
    Mr. Clark. I think the simple way to answer that question 
is just to use real time this year. If we were able to wave a 
magic wand, which Congress could do, courts could wave a magic 
wand, ``We don't have this limitation at Banks anymore--paper 
limitation, so you accomplish your need.''.
    Right now, this year, if you look at CVP contract south of 
the Delta, their allocation is 70 percent, so they have about 
30 percent of their supply was stranded north of the Delta. 
That 30 percent represents about 600,000 acre feet. That 
600,000 north of the Delta that can't be pumped to the south. 
On the state project, we have a 90 percent allocation, so 10 
percent of our water was stranded this year and that would be 
another 400,000 acre feet--
    Mr. Calvert. If we can just interrupt for just 1 second, 
our court reporter is going to change her paper here. She is 
out of paper.
    [Off the record.]
    Mr. Clark. But if you look at this year, so you have got 
about 600,000 stranded--the reservoirs are full and spilling in 
the north, so there is 600,000 acre feet of CVP water that 
was--
    Mr. Calvert. About 1 million acre feet--
    Mr. Clark. About 1 million acre feet just this year that 
had we been able to pump even at just with the 8,500 Banks--
getting 800--
    Mr. Calvert. With the conveyance systems that we have now?
    Mr. Clark. And, by the way, I want you to know that this 
water could be pumped this year without having environmental 
impacts.
    Mr. Calvert. I have to add to that, because I think that is 
very important that 1 million acre feet of water could have 
been conveyed without any noticeable environmental impact at 
all.
    Mr. Clark. Right.
    Mr. Calvert. We have lost that forever. I want to make that 
point. That is very important.
    Mr. Nelson. I may add to that not only did we lose what we 
could have delivered this year, we would have been able to pump 
additional water that would have allowed us to go into next 
year with a buffer, of which California's water system no 
longer has a buffer that we can carry over from one wet year to 
the next.
    We used to have a system that could accommodate a couple of 
years of drought. We no longer have that. So in addition to 
losing 1 million acre feet in real deliveries this year, we 
also lose delivery potential in future drought years.
    Mr. Nunes. Mr. Clark, I thank you for pointing out the 
magic wand. I know these guys are keeping this magic wand from 
me. I am still trying to find it, but I am still working on 
that.
    Mr. Chairman, I hope that you will give me this magic wand 
when we get back.
    I want to go back a little bit to the Kings River, and I 
know that we don't have any representatives here, but I would 
like to get some general comments from Mr. Watkins and Ms. 
Moralez on whether or not--and folks that know about the Kings 
River--whether or not you are supportive of Rogers Crossing; if 
you agree that we should be looking at possibly building Rogers 
Crossing at Kings River also.
    Mr. Watkins?
    Mr. Watkins. I believe that with our population growth in 
the Valley here, and the state as a whole, we are going to need 
new storage projects built; Temperance Flat, Rogers Crossing; 
wherever they make sense, that is what we should be doing.
    Mr. Nunes. Thank you.
    Mrs. Moralez?
    Ms. Moralez. We--well, I concur, with him, and further than 
that, I don't want to comment. I just don't want to comment on 
this at this point.
    Mr. Nunes. OK. Thank you.
    Mr. Upton, do you want to comment?
    Mr. Upton. Some of our members are also Kings River, so I 
would defer to Gary with Fresno ID, because I certainly 
wouldn't want to answer a Kings River question without his 
advice.
    Mr. Nunes. Well, I didn't want to hold a hearing without 
talking about another good possibility and a place for storage, 
so with that, I know my time has expired.
    Mr. Chairman, thank you.
    Mr. Calvert. Mr. Cardoza, any final remarks?
    Mr. Cardoza. Mr. Chairman, I will be brief. I want to get 
back to the issue of credibility that I was talking about 
before, and we sort of got cutoff.
    I want to say that I feel like I am an environmentalist. I 
lived on the river in Sacramento on a boat. That was my home 
when I was in the legislature. I am very committed to that, but 
I believe that the environmental community is not being genuine 
when they agree to a process, they agreed to the ROD, and then 
when they get their restoration, they get their money in the 
water bonds--we have had two or three water bonds where they 
have substantial line share--yet there may be historic 
inequalities before, but I think the ledger is pretty flat now, 
or it has probably gone the other way. Now all of a sudden we 
are having new problems.
    We have to have it be ``benign.'' I just think that there 
are real issues, and I think they are doing a disservice both 
to themselves and the state and the people they want to serve. 
If we can do restoration--additional restoration, but we are 
not willing to do that if it continues to be one-sided, and if 
prior commitments aren't kept. I have real concerns about that.
    I am not trying to jump on Mr. Christopher. He just happens 
to be the person from the environmental community who is here 
today. I think taken in context that there is a fair share of 
criticism that needs to be leveled about this issue, and we 
need to start talking very strongly about making sure that 
people keep their commitments.
    What I am going to ask the panel to do now is, Mr. Clark, 
you wanted to say something before about that issue, and so I 
will give you that opportunity. I would like to go quickly down 
the line and have each member of the panel tell us what three 
storage projects they would all support.
    Mr. Watkins. I believe Farm Bureau would support Temperance 
Flat, Los Vaqueros, and, again, I haven't looked at Rogers 
Crossing, but it would be one.
    Mr. Clark. I would like to add Sykes to that. It is in 
Northern California on the west side of the, Valley, and not 
just for agriculture. It has opportunities because of the 
strategic location to provide Delta protection as well.
    I appreciate the opportunity to comment on the credibility 
issue. First of all, I want to tell you that within the 
environmental community there are people that stand by 
commitments, and people that we deal with regularly in terms of 
putting packages together, but I think it is important for 
those that step outside of the envelope of these deals and 
whether that is an environmental group or an ag group, that 
there has to be consequences. That is what CALFED was founded 
on, on was a package. And there are opportunities, quite 
frankly, that if there is a failure to balance within CALFED, 
there can be consequences.
    There is about $1 billion of environmental programs that 
are being funded through CALFED as we speak. And I will tell 
you, I for one, if the Sierra Club pursues this issue, and I 
would like Mr. Christopher to answer the question: Is the 
Sierra Club proposing to litigate Banks funding? If they are, I 
am going to be an advocate for withholding funding for all 
environmental programs until we balance the process.
    Thank you very much.
    Mr. Glover. I am going to dance around your question just a 
little bit.
    I think we knew that the CALFED process was front-loaded 
with ecosystem restoration projects, and I think that the next 
couple of years is very critical for the CALFED process. We are 
looking for conveyance improvements, and we are also looking at 
selecting a storage facility. So I think that this is an 
important process for CALFED, and I think one of the key 
components is for the Federal Government to be at the table and 
bring their checkbook.
    Mr. Christopher. I think beyond water supply and ecosystem 
restoration, quality and Delta levee integrity, we, in Friends 
of the River, signed on to the CALFED Record of Decision, and 
we fully expect to uphold the Record of Decision as it is 
written. If we back out, understandably we lose credibility; 
however, that we want to see the Record of Decision implemented 
as it was written as a whole. It was front-loaded with 
ecosystem restoration, because we all sat down at the table, 
and the public decided that the state of our Bay-Delta estuary 
is--people are losing millions and millions of dollars each 
year that rely on it for their livelihood.
    So when we sit down at the table, we need to think about 
long-term sustainability, and the like. So if projects go forth 
in the Record of Decision, and they have been outlined in a way 
that mimics the Record of Decision, I can't see us standing 
up--and we are not certainly going to be, ``Oh, build the 
reservoir. We are very happy about it'' and hold a big press 
conference, but we will support our commitments.
    Mr. Nelson. Obviously, our region is going to be focused on 
conveyance issues, but beyond that, the three storage projects 
that appear to be the most promising as benefits for CVP and 
other water users in the state are the enlargement of Shasta, 
Sykes Reservoir, and storage on the San Joaquin River, such as 
Temperance Flat.
    Ms. Moralez. Yes. I am very supportive of Temperance and 
Sykes and Temperance.
    Mr. Upton. The three storage areas I would like to see are 
Temperance Flat and, second, is bringing back the Friant Water 
Bank, which is 1 million acres of prime service area. Then, we 
can make some minor amendments to the CVPIA, and go back to 
utilizing the excess and floodwaters use that as a bank, which 
was so effective in the past. And third, I would like to see 
the case put on the Mammoth Pool. It is a real simple project; 
it can give us 20,000 acre foot of storage.
    Mr. Calvert. Thank you. I want to thank our witness. Thank 
the audience for your hospitality. I thank the community. I 
want to thank the Heritage Complex and International 
Agricultural Center for hosting this hearing. I want to thank 
the Friant Water Users for providing the informational graphics 
and displays. Fugazzi's for providing lunch. This is very 
important to the Congressional delegation. And the Bothoffs for 
providing breakfast.
    So, again, thank you for your hospitality. This is an 
important hearing. We are going off to Sacramento here shortly 
to listen to some issues regarding the Bay Delta and San Diego 
next week. Thank you, again. This hearing is adjourned.
    [Whereupon, at 11:45 a.m., the hearing was adjourned.]

    The following information was submitted for the record:
     LBasila, Jon, Basila Farms, Madera, California, 
Letter submitted for the record
     LBirmingham, Thomas W., General Manager/General 
Counsel, Westlands Water District, Fresno, California, Letter 
submitted for the record
     LChedester, Steve, Executive Director, San Joaquin 
River Exchange Contractors Water Authority, Letter submitted 
for the record
     LCunha, Manuel, Jr., President, NISEI Farmers 
League, Letter submitted for the record
     LFox, Dennis, Bakersfield, California, Letter 
submitted for the record
     LHouk, Randy, Manager, Columbia Canal Co., 
Statement submitted for the record
     LHuffman, Jared, Project Manager, San Joaquin 
River Restoration Project, Natural Resources Defense Council, 
Letter submitted for the record. NOTE: Attachments have been 
retained in the Committee's official files.
     LKriebel, Barry F., President, Sun-Maid Growers of 
California, Letter submitted for the record 
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                                ------                                



           OVERSIGHT FIELD HEARING ON CALIFORNIA WATER SUPPLY

                              ----------                              


                        Saturday, June 28, 2003

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                         Elk Grove, California

                              ----------                              

    The Subcommittee met, pursuant to call, at 2 p.m., in Elk 
Grove City Hall, 8400 Laguna Palms Way, Elk Grove, California, 
Hon. Ken Calvert [Chairman of the Subcommittee] presiding.
    Mr. Calvert. The oversight field hearing by the 
Subcommittee on water and power will come to order. If everyone 
will take their seats at the witness table, that is good.
    Before we begin, I would ask unanimous consent that 
Representative Wally Herger have permission to sit on the dais 
and participate in the hearing.
    Without objection, so ordered.
    We welcome you. We welcome the gentleman.
    Mr. Herger. Thank you, Mr. Chairman.
    Mr. Calvert. You are welcome.
    Although he needs no introduction at this hearing, we are 
privileged also to be joined by the Chairman of the full 
Committee on Resources, Richard Pombo. And I will defer to the 
Chairman for his opening statement.

   STATEMENT OF THE HON. RICHARD POMBO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Pombo. Well, thank you, Mr. Chairman. I would like to 
thank Congressman Calvert for holding these hearings on what is 
an extremely important issue facing California.
    As many of you know, water is vital to a healthy and 
productive California. Without a sufficient water supply, all 
of California, from agriculture to urban, from environmental to 
industrial, will suffer.
    When farmland lies idle due to lack of water, the farmer, 
the farm worker, and the industries that supply the inputs to 
the farmer are negatively impacted. When cities are not able to 
provide water to industries or to the population, jobs are lost 
and economies are depressed.
    California has not kept up with the growing demand for 
water. We have added very little surface storage over the past 
20 years, yet our needs have increased dramatically. With the 
ever-growing demand for water by urban and environmental means, 
we need to find new water and storage options.
    Trying to solve our water shortage needs by transferring 
water from agriculture to urban and environmental needs is not 
a solution. These transfers do not address the root of the 
problem, which is a lack of water. CALFED was put together to 
try and address many of these issues; yet after years of 
analyzing and spending hundreds of millions of dollars, one has 
to question, where is the water?
    Have we all gotten better together, as the early CALFED 
mantra stated? With over $249 million just in Federal money, 
not to mention State money, being spent over the past 4 years 
on ecosystem restoration, and only 27 million having been spent 
on the needs to study storage, one wonders, are we moving 
forward and getting better together?
    In the Delta, the heart of the water system for the State 
of California, many problems still exist. Water quality is an 
important issue for many who rely on the Delta for their water. 
Yet it has not really improved significantly since CALFED was 
established, and one questions if it ever will.
    Levee stability is critical not only to those who live in 
the Delta, but to the whole water supply system. Yet it still 
takes more money in studies, and mitigation in some cases, than 
to do the actual levee work necessary to do ensure a safe and 
stable levee system. Was not CALFED supposed to streamline that 
process?
    In order for CALFED to be successful, it must address many 
of these outstanding issues. We must have more storage, better 
water quality, oversight on how the millions of dollars are 
being spent, and coordination between the agencies to ensure a 
rapid permitting process for necessary projects.
    I again want to thank Congressman Calvert, and I look 
forward to working with him and the other members of the 
Committee on what is an extremely important issue.
    Mr. Calvert. I thank the gentleman.

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

    Mr. Calvert. Nearly everyone agrees with the need for more 
water supplies, but too little has been done to meet the 
growing demands for this increasingly scarce resource.
    More than 30 years have passed since California made major 
investments to improve its storage and conveyance systems. To 
vividly illustrate this point, the Department of Interior 
recently testified that Federal agencies have spent over 249 
million in the last 4 years on ecosystem restoration, while 
only a mere 27 million has been spent on feasibility studies 
for surface storage. No one denies the need for ecosystem 
restoration, but we can clearly see the lack of balance, 
especially when we have a water supply train wreck upon us.
    Complicating this matter is a reduction of the Colorado 
River delivery in California. As most of you all know, the 
State will have to reduce its dependency on the Colorado from 
past levels by 18 percent. That is approximately, when the 
river is full, about 800,000 acre-feet of water. Complying with 
this requirement will not be easy, especially in light of 
demands placed on the water supply by the reallocation of 
several hundred thousand acre-feet of contracted water supplies 
for the environmental needs over the past 10 years and a State 
water project conveyance system that does not have the ability 
to meet those demands.
    In an attempt to hear firsthand from those on the ground, 
the Water and Power Subcommittee is conducting a series of 
field hearings throughout the State over the next few days. We 
started this process this morning in Tulare, and we are here in 
northern California where the need for better storage 
conveyance is most acute. I note this location is particularly 
close to the Delta, which serves as the linchpin for water 
transfers that are based on market-based water transactions 
between private interests.
    Today, we will hear from the Federal witnesses on how our 
taxpayer dollars are being spent on CALFED-related objectives 
and whether there is a balance. We will also hear from experts 
on ways to improve water supply, how water supplies can be 
maximized by expanding water transfer agreements, and what 
efforts are under way to improve the movement of water through 
the Delta while protecting in-delta farming and fishery 
interests.
    I plan to use today's hearing as another step toward 
developing legislation while trying to accomplish the goals we 
all have: more storage, better conveyance, with water quality 
protection, private property rights protections, a balanced 
CALFED, and fiscally sound ecosystem restoration principles. I 
look forward to working with my colleagues as the Subcommittee 
marches forward on this important legislation.
    I certainly again welcome the Chairman of the Resources 
Committee, my own distinguished colleagues, and other special 
guests we have invited here today. I very much look forward to 
what we can do together to work out, to manage and share this 
extremely valuable resource.
    With that, I am happy to recognize Mrs. Napolitano, the 
Ranking Democratic Member, for her opening statement.
    [The prepared statement of Mr. Calvert follows:]

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

    Everyone agrees with the need for more water supplies, but too 
little has been done to meet the growing demands for this increasingly 
scarce resource. More than 30 years has passed since California has 
made any major investment to improve it's storage and conveyance 
systems. To vividly illustrate this point, the Department of the 
Interior recently testified that Federal agencies have spent over $250 
million in the last four years on ecosystem restoration while only a 
mere $27 million has been spent on feasibility studies for surface 
storage. No one denies the need for ecosystem restoration, but we can 
clearly see the lack of balance, especially when we have a water supply 
train wreck upon us.
    Complicating this matter is a reduction of Colorado River 
deliveries to California. As most of you know, the state will have to 
reduce its dependency on the Colorado River from past levels by 18%. 
Complying with this requirement will not be easy, especially in light 
of demands placed on the water supply by the reallocation of several 
hundred thousand acre feet of contracted water supplies for 
environmental needs over the past 10 years, and a State Water Project 
conveyance system that does not have the ability to meet these new 
demands.
    In an attempt to hear firsthand from those on the ground, the Water 
and Power Subcommittee is conducting a series of field hearings 
throughout the state over the next few days. We started this process 
this morning in Tulare and we are now here in northern California, 
where the need for better storage and conveyance is most acute. I note 
that this location is particularly close to the Delta, which serves as 
the lynchpin for water transfers that are based on market-based water 
transactions between private interests.
    Today, we will hear from Federal witnesses on how our taxpayer 
dollars are being spent on CALFED-related objectives and whether there 
is balance. We will also hear from the experts on ways to improve water 
supply, how water supplies can be maximized by expanding water transfer 
agreements, and what efforts are underway to improve the movement of 
water through the Delta while protecting in-Delta farming and fishery 
interests.
    I plan to use today's hearing as another step towards developing 
legislation which tries to accomplish the goals we all have: more 
storage, better conveyance with water quality protections, private 
property rights protections, a balanced CALFED, and fiscally sound 
ecosystem restoration principles. I look forward to working with my 
colleagues as this Subcommittee marches forward on this important 
legislation.
    I welcome the Chairman of the Resources Committee, my other 
distinguished colleagues and the special guests we have invited here 
today, and I very much look forward to hearing how we can better work 
together to manage and share this valuable water resource.
                                 ______
                                 

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

    Mrs. Napolitano. Thank you, Mr. Chairman.
    I agree with my colleague, the Chairman of the full 
Committee, in that we thank you for holding the hearings 
throughout the State of California so that we can have a better 
understanding of the California water challenges; and I 
appreciate the attendance of all the witnesses that we have had 
in the morning hearing and certainly here so that we can share 
information and be more informed and educated about what we 
need to do together.
    We did hold a Subcommittee hearing in the valley almost 2 
years ago where we thought certainly we would have the CALFED 
bill passed at that time. But, unfortunately, it wasn't to be. 
So we are hoping the feedback we are receiving from hearings--
which is not only necessary, it is critical--for us to better 
understand the local problems, will determine what kind of 
support we will be able to give a particular bill that deals 
with the issues of California that helps all of California.
    I am here today to listen and to learn. This is our best 
opportunity to understand the critical water issues affecting 
our communities. They are all our communities. We must stay 
focused on solutions, and by working together I am sure we can 
be productive and be able to reach conclusions that will help 
not only California economy, California ag, and California 
citizens.
    Thank you, Mr. Chair.
    Mr. Calvert. I thank the gentlelady.
    Mr. Herger, do you have an opening statement?

    STATEMENT OF THE HON. WALLY HERGER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Herger. I do. Thank you.
    Chairman Pombo, Chairman Calvert, members of the Committee. 
Thank you for having the field hearing and thank you for 
allowing me the opportunity to participate.
    There may be no issue more important than the management of 
our precious water resources. With water deficits projected by 
the Department of Water Resources to reach approximately 2.4 
million acre-feet in an average water year and 6.2 million 
acre-feet in drought years by the year 2020, we clearly face a 
tremendous challenge.
    Mr. Chairman, CALFED originally promised a solution to that 
challenge that would allow everyone to, quote, ``get well 
together.'' unfortunately, that promise has not been fulfilled. 
Instead of a program for north and south, rural and urban, 
agriculture and industry to embrace and move forward, the 
existing plan would allow some areas to get well on the backs 
of others. That will only lead to continued gridlock.
    CALFED has turned into a massive ecosystem restoration plan 
that proposes to address the State's dramatic water deficits 
situation, not by building additional infrastructure, but by 
acquiring land and water rights and taking agricultural lands 
out of production, causing significant impacts to the 
communities I represent. With a government body dominated by 
the State and Federal agencies, there is little, if any, local 
control or oversight. That sets a terrible and very worrisome 
precedent for the future management of our natural resources.
    I do not disagree that the State needs to share its water 
resources. To the contrary, we have to share, because this 
resource is far too limited and needs are far too great and 
growing. But the needs of the area of origin must be assured 
before excess water is permitted to flow elsewhere.
    When the problem is too many people and not enough 
supplies, the solution is to build water storage facilities 
that meet those needs. Only when there is enough water in the 
system will everyone truly get well together.
    CALFED has failed to make the hard decisions necessary to 
meet that challenge. Despite the investment of hundreds of 
millions of taxpayer dollars, it has only studied and restudied 
a limited number of storage options while our water needs have 
continued to grow. On-system reservoirs have been taken 
completely off the table, yet those facilities pose enormous 
potential for significant and cost-effective new water 
supplies, as well as other benefits like flood control and 
hydroelectricity.
    Our situation is so desperate and the possible impact to 
the economy and the public safety of another sustained drought 
is so serious that we simply cannot afford to take any option 
off the table because it is politically unpalatable. We should 
be vigorously pursuing every technically feasible opportunity.
    Congress should focus on helping California develop through 
a locally led process the water infrastructure that would meet 
the needs of our growing population. That will require a 
commitment to updating the Federal environmental laws and 
regulations that have gone so far off course as to prevent us 
from providing for human needs.
    Thank you, again, Mr. Chairman.
    Thank you to the witnesses. And I look forward to hearing 
your testimony.
    Mr. Calvert. I thank the gentleman.
    Mr. Cardoza.

 STATEMENT OF THE HON. DENNIS A. CARDOZA, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Cardoza. Thank you, Mr. Chairman. I wish to thank you 
and Mr. Pombo again for holding these hearings in the valley. I 
think it is critically important that we continue to shed light 
on the issues of the day and try to work through some of these 
challenges.
    As I said in the hearing in Tulare earlier this morning, I 
think it is critically important that we provide new storage 
opportunities that we are able to harness water in wet times 
and make sure we have that for a very thirsty valley in 
southern California in dry times. And I am totally committed to 
new water sources.
    In fact, I am opposed to two new initiatives that will not 
consider moving the ball down the field, I think, that we may 
have had in the past times when, in fact, we exploited the 
environment for water production. But I think now we are 
getting to a point where we really need to focus and make sure 
that there is balance in the system, that we have new storage 
that couples itself with some environmental work that we have 
done. That is all very good, but we can't get too one-sided in 
this process. I believe we need to make sure that there are 
conveyance opportunities to move the water where it needs to be 
when it needs to be there.
    And I am also very concerned that we have credibility in 
the process and that we don't have a situation where one side 
gets what it wants and then takes its ball and goes home, and 
that we don't ever move to the other part of the CALFED-ROD 
agreement. I believe that the farmers and the user community 
must have their day where we can actually resolve some of the 
problems, especially for the midpart of the valley, for the 
Delta, for the south part of the valley, for the west side; and 
everybody's interests need to be met, because if we don't, then 
we will get back and this will just be something that is 
litigated rather than legislated into compromise.
    And I think the hearing this morning was very positive, and 
I look forward to more progress this afternoon.
    Mr. Calvert. Thank you.
    Next, we recognize Senator ``Rico'' Oller to testify.
    Senator, please come on up. We certainly appreciate your 
coming out to testify in front of this Committee today.

   STATEMENT OF THOMAS ``RICO'' OLLER, STATE SENATOR, FIRST 
                DISTRICT, CALIFORNIA LEGISLATURE

    Mr. Oller. Thank you Mr. Chairman--Mr. Chairman, members.
    Mr. Calvert. We are trying to operate under a 5-minute 
rule, so we appreciate your coming out, testifying, and you are 
recognized.
    Mr. Oller. Four score and 7 years--no.
    Mr. Calvert. That is 3 minutes. You are doing good.
    Mr. Oller. California's water problems are not principally 
the result of inadequate water supplies; rather, they are the 
consequence of poor management and the allocation of that water 
supply.
    The CALFED program has historically concentrated on habitat 
preservation and restoration while ignoring new storage 
options. A budget analysis submitted by the White House Office 
of Management and Budget indicates that the Federal Government 
has spent 27 million for water storage compared to 249 million 
in ecosystem restoration in California over Fiscal Years 2001-
2003.
    It appears to me that CALFED has essentially ignored the 
water storage issue. At the same time, it has been hostile 
toward farming and the other economic interests that depend on 
reliable sources of water.
    Very unfairly, CALFED has gone out of its way to ensure 
that environmental activists are included in their 
decisionmaking processes, but often fails to even notify other 
competing parties. Consequently, very little storage yield has 
been generated in the last decade despite our growing 
population. Endless environmental lawsuits over storage are 
partly to blame, but bias toward environmental restoration 
efforts carried out by some Federal agency is as clear as 
Sierra snowmelt. In light of this apparent agenda, changes need 
to be made in the current scheme to bring some balance to 
CALFED.
    My primary concern is that there is currently insufficient 
accountability as to how taxpayers' dollars are being spent. 
Taxpayers deserve to know whether their money is being spent 
efficiently and fairly. We desperately need some 
accountability. For example, the Federal purchase of endstream 
flows and private land requires public and congressional 
scrutiny to justify each such purchase. New storage projects 
must clear very high hurdles before construction can begin. In 
fact, when it comes to Federal storage projects, both 
prefeasibility and feasibility studies must be done before 
Congress can authorize actual construction.
    By contrast, Category 3 grants are regularly distributed to 
applicants without any strings attached. The billions of 
dollars distributed under the guise of conservation and 
restoration projects are most often received by environmental 
activist organizations that are not even obligated to report 
how they have spent the public's money.
    Environmental restoration projects must bear more scrutiny 
in the interest of justice and taxpayer protection. We must 
ensure that these dollars are not wasted and that they are 
targeted toward projects that pass the common-sense test of 
cost-benefit analysis. For this reason, I ask the Subcommittee 
members to include provisions in the California water bill to 
require Federal regulators to submit detailed work plans to 
Congress on major environmental restoration initiatives over 
$50,000. Such plans should detail what the goals of the project 
are and how they will be achieved. They should, further, 
establish a timeframe for completion and a legitimate budget. 
California's water users and American taxpayers deserve no 
less.
    What is more important, Congress must shift the focus of 
the CALFED program toward new water storage. Through blind luck 
or divine providence, California has not suffered a major 
multi-year drought for many years. During this period of 
relative abundance, the State's population has grown rapidly, 
particularly in the driest parts of southern California. But we 
know from historical records that there will be dry spells 
ahead. We may not be able to predict when the next major 
drought will occur, but we know that it will inevitably exhaust 
our State's water resources. Aside from the suffering this will 
cause in our cities, we need to consider the potential impact 
on agriculture, which remains California's largest industry. To 
avoid such an economic disaster in the next drought, we need to 
start building dams and reservoirs now.
    Thank you for allowing me to testify before your 
Subcommittee, and I thank you for all you are doing for the 
people of California. Thank you.
    [The prepared statement of Mr. Oller follows:]

         Statement of The Honorable Rico Oller, State Senator, 
                  First District, State of California

    California's water problems are not principally the result of 
inadequate water supplies. Rather, they are the consequence of poor 
management in the allocation of that water supply. The CALFED program 
has historically concentrated on habitat preservation and restoration, 
while ignoring new storage options. A recent budget analysis submitted 
in the White House's Office of Management and Budget indicates that the 
Federal Government has spent $27 million for water storage compared to 
$249 million in ecosystem restoration in California over Fiscal Years 
2001-2003.
    It appears to me that CALFED has essentially ignored the water 
storage issue. At the same time, it has been hostile toward farming and 
the other economic interests that depend on reliable sources of water. 
Very unfairly, CALFED has gone out if its way to ensure that 
environmental activists are included in their decision-making 
processes, but often fail to even notify other competing parties. 
Consequently, very little storage yield has been generated in the last 
decade in California (despite our growing population). Endless 
environmental lawsuits over storage are partly to blame. But the bias 
toward environmental restoration efforts carried out by some Federal 
agencies is as clear as Sierra snow melt. In light of this apparent 
agenda, changes need to be made in the current scheme to bring some 
balance to CALFED.
    My primary concern is that there is currently insufficient 
accountability as to how taxpayers' dollars are being spent. Taxpayers 
deserve to know whether their money is being spent efficiently and 
fairly. We desperately need some accountability. For example, the 
Federal purchase of in-stream flows and private land requires public 
and Congressional scrutiny to justify each such purchase. New storage 
projects must clear very high hurdles before construction can begin. In 
fact, when it comes to Federal storage projects, both pre-feasibility 
and feasibility studies must be done before Congress can authorize 
actual construction. By contrast, Category 3 grants are regularly 
distributed to applicants without any strings attached. The billions of 
dollars distributed under the guise of conservation and restoration 
projects are most often received by environmental activist 
organizations that are not even obligated to report how they have spent 
the public's money.
    Environmental restoration projects must bear more scrutiny in the 
interest of justice and taxpayer protection. We must ensure that these 
dollars are not wasted and that they are targeted toward projects that 
pass the common sense test of cost-benefit analysis. For this reason, I 
ask the Subcommittee members to include provisions in a California 
water bill to require Federal regulators to submit detailed work plans 
to Congress on major environmental restoration initiatives over 
$50,000. Such plans should detail what the goals of the project are and 
how they will be achieved. They should further establish a timeframe 
for completion and a legitimate budget. California's water users and 
American taxpayers deserve no less.
    What is more important, Congress must shift the focus of the CALFED 
program toward new water storage. Through blind luck or divine 
providence, California has not suffered a major, multi-year drought for 
many years. During this period of relative abundance, the state's 
population has grown rapidly, particularly in the driest parts of 
Southern California. But we all know from historical records that there 
will be dry spells ahead. We may not be able to predict when the next 
major drought will occur, but we know that it will inevitably exhaust 
our state's water resources. Aside from the suffering this will cause 
in our cities, we need to consider the potential impact on agriculture 
(which remains California's largest industry). To avoid such an 
economic disaster in the next drought, we need to start building dams 
and reservoirs NOW.
    Thank you for allowing me to testify before your Subcommittee and 
thank you for all you are doing for the people of California.
                                 ______
                                 
    Mr. Calvert. Thank you. You did that with a minute to 
spare.
    Mr. Oller. I did all right?
    The only other thing that I would like to say is how much I 
appreciate the tenor and tone of the conversation in your 
opening remarks. That is refreshing, and it gives us cause for 
hope. Thank you.
    Mr. Calvert. Well, if you would like to stay there. Does 
any of the panel have any questions? Do you have any questions?
    Mrs. Napolitano. No questions. Except Rico and I served in 
the State assembly a few years back. And I am glad to see that 
you are very involved--
    Mr. Oller. Just across the aisle.
    Mrs. Napolitano. Just across the aisle where we could pass 
little notes.
    But, Rico, it is refreshing also to hear that the State 
house is looking very seriously at the issue of water, which 
has not been taken seriously by the State itself.
    Mr. Oller. We have been very lucky in that. Despite the 
fact that our water supply now is already insufficient, we have 
already experienced that because we haven't had a tough drought 
year, let alone several in a row.
    Mrs. Napolitano. Well, I would hope in the future that both 
sides of the house and both chambers can sit and talk about how 
important water is to the whole State and can act as one, 
because if we don't, other States are waiting for us to falter 
so they can take some of those funds away from California. That 
is how important it is and how critical it is for us to work 
together.
    Mr. Oller. Thank you very much.
    Mrs. Napolitano. Thank you.
    Mr. Oller. Thank you all very much for allowing me to be 
here.
    Mr. Calvert. Thank the gentleman.
    OK. We are merging a couple of panels together, and we are 
going to introduce everybody.
    I would like to recognize Ms. Patricia Martel, the General 
Manager at the San Francisco Public Utilities Commission; Mr. 
Jeffrey Sutton, the Family Water Alliance; Mr. Greg Zlotnick, 
the Director of the Santa Clara Valley Water District Board of 
Directors; Mr. Richard Forster, the Regional Council of Rural 
Counties--my new Lasik surgery works--Mr. Dennis Majors, 
Metropolitan Water District; John Herrick, South Delta Water 
Agency; Gary Bobker, the Bay Institute; and Nicole Van Vleck, 
Northern California Water Association.
    We thank you all for being here. We are operating under the 
5-minute rule, and it is an extremely important rule today 
because some of us have to catch airplanes a little later. So 
we would appreciate you staying within the 5 minutes so we have 
time for questions and answers.
    Mr. Calvert. So first I would like to recognize Patricia 
Martel for 5 minutes. Thank you.

        STATEMENT OF PATRICIA MARTEL, GENERAL MANAGER, 
           SAN FRANCISCO PUBLIC UTILITIES COMMISSION

    Ms. Martel. Thank you very much, Mr. Chairman. I am, as you 
said, the General Manager of the San Francisco Public Utilities 
Commission. On behalf of the city and county of San Francisco, 
and the 2.4 million Bay Area customers served by the Hetch 
Hetchy water delivery system, I would like to thank you and all 
the members of the Committee for field hearings in California 
which are examining the very critical issues that face 
California's water agencies.
    The San Francisco PUC is a department of the city and 
county of San Francisco. Our utility provides water to 
customers in four counties including San Francisco, as well as 
San Mateo County, Santa Clara County, and Alameda County. We 
also provide wastewater and municipal power services to the 
city and county of San Francisco. We deliver 260 million 
gallons of water a day to 2.4 million customers.
    The SFPUC is currently providing the very initial stages of 
a major rebuild of the Hetch Hetchy water delivery system. 
Portions of our water delivery system were built in the late 
1800's and early 1900's. Seismic risks, which result from the 
fact that a majority of our facilities lie above or adjacent to 
three major earthquake faults in the Bay Area, require 77 
separate projects to rebuild major facilities, including a 
major storage facility to the Calaveras Dam, which has been 
reduced to one-third of its capacity as a result of leakage 
problems.
    This is a 13-year program. The price tag is $3.6 billion. 
The capital improvement program of the SFPUC has been fully 
funded both by a $1.6 billion bond measure, authorized by 
voters in San Francisco last year, as well as $2 billion which 
will be contributed by our 29 wholesale customers. However, in 
order to take on this tremendous challenge of building 77 
projects in 13 years, the San Francisco Public Utilities 
Commission is under tremendous pressure to stay on schedule as 
well as to stay within budget.
    We have tremendous challenges with respect to State and 
local oversight. At the present time, we are required to report 
to five different State agencies and numerous local government 
oversight bodies to ensure that we make progress in 
implementing the improvements to the system, particularly 
because of the seismic risks and the threats to the reliability 
of our system.
    One area in which we anticipate delays in the potential 
implementation of this program successfully over 13 years will 
occur in the permitting stage. The city of San Francisco is 
absolutely committed to full and complete compliance with all 
applicable environmental laws and regulations. At the same 
time, we have some concerns about delays that could result in 
the permitting process. Permitting agencies at the Federal 
level, as well as at the State level, are often strapped for 
the financial resources required for timely permit processing. 
We have met with the U.S. Corps of Engineers both in Washington 
and in Sacramento, as well as U.S. Fish and Wildlife. In those 
discussions, we have identified perhaps the means by which we 
can partner with those agencies not to in any way affect the 
review process, but to ensure that all of the resources 
required for timely review will be made available to those 
agencies.
    We have heard from the agencies that the need for early and 
meaningful involvement in our projects is essential. However, 
they have expressed a concern about the lack of resources they 
have available to provide for meaningful consultations at early 
stages in the environmental process.
    In an effort to ensure a timely permitting process without 
in any way compromising the objectivity of that process, the 
PUC is seeking authorization to fund dedicated positions at 
various Federal regulatory agencies for timely permit 
processing.
    Representative Nancy Pelosi has been briefed on the 
proposal of the PUC to fund these supplemental resources in the 
Federal agencies in light of the huge challenges we face in 
building those 77 projects over 13 years. We are pleased that 
she has submitted legislative text to the Committee on 
transportation and infrastructure and has asked for its 
inclusion in this year's legislation. It is anticipated that if 
we are successful in our efforts at the Federal level, we will 
eventually incorporate the same kind of resources in the State 
agencies.
    The authorization has the potential to facilitate timely 
implementation of the capital program, ensuring that water 
supplies will be reliably maintained and delivered to our Bay 
Area residences and businesses. It could well become a model 
for enhancing the permitting process on other large-scale 
public-interest projects. Thank you very much.
    Mr. Calvert. I thank the gentlelady.
    [The prepared statement of Ms. Martel follows:]

            Statement of Patricia Martel, General Manager, 
               San Francisco Public Utilities Commission

    Good afternoon Mr. Chairman, I am Patricia Martel, General Manger 
of the San Francisco Public Utilities Commission. On behalf of the City 
of San Francisco and the 2.4 million customers in our water delivery 
system, I would like to thank you and the members of the Committee for 
holding field hearings in California to discuss the regional issues 
facing California's water agencies. Like other parts of the state, 
Northern California finds itself confronting the challenges of aging 
infrastructure, water reliability, and water quality.
    The Hetch Hetchy system, which provides the principal water supply 
for the City of San Francisco and 28 wholesale customers in the Bay 
Area, was constructed in the early part of the last century. As 
remarkable as this system is and reliable as it has been, it has begun 
to exhibit the signs of age. Among other things, it does not conform to 
modern day seismic standards. Two studies conducted in recent years--
the Facilities Reliability Study and the Water Supply Master Plan--
concluded that a rehabilitation of the system was needed to ensure 
continued reliable service.
    In November 2002, San Francisco voters approved a bond measure to 
finance the largest renovation of a water delivery system in San 
Francisco history. The $3.6 billion Capital Improvement Program (CIP) 
contains 77 projects that will repair, replace and seismically upgrade 
the water system's aging pipelines and tunnels, reservoirs and dams. In 
addition, the projects will prepare the system for meeting water demand 
during prolonged droughts and changing water quality regulations, and 
create additional opportunities for environmental stewardship. Projects 
are prioritized based on condition, seismic risk and operational 
deficiencies.
    As steward of the Hetch Hetchy Project for almost 100 years, the 
City knows well that it is essential to preserve and protect the 
regional environment that is host to the project. Indeed, the City 
contributes significant amounts of money and water to preserve and 
enhance environmental values in its watershed and create or restore 
fish habitat on the Tuolumne River, the San Joaquin River, Alameda 
Creek and elsewhere. Further, in the wake of the adoption of the CIP, 
the City publicly declined to support legislation introduced into the 
California State Assembly which would have truncated the application of 
state environmental laws to the CIP. Clearly, the City supports the 
environmental process as a primary responsibility.
    The San Francisco Public Utilities Commission plans to develop 
Habitat Conservation Plans for its two Bay Area watersheds in concert 
with state and Federal environmental agencies. These plans will be 
designed to protect rare and valuable habitat such as serpentine 
grasslands, old growth coniferous forests, fresh and saltwater marshes 
and riparian woods, and to identify appropriate mitigation for 
potential environmental impacts of major construction, such as habitat 
restoration or enhancement.
    This $3.6 billion CIP is an ambitious undertaking, but the City is 
committed to working closely with Federal, state, regional and local 
partners to meet project timelines and keep project costs on track. The 
program is designed to maintain water service to all 2.4 million 
customers during the entire 13 year construction period. Given the 
size, nature and duration of the program, it is critical that 
construction schedules be met. Any significant delay in any one of the 
interrelated projects can have profound impacts in other areas. Since 
the upgrades and repairs are being undertaken on a functioning system, 
delays can further threaten the reliability of the system.
    The area of greatest concern with respect to project schedule 
relates to environmental permitting. The San Francisco Public Utilities 
Commission is absolutely committed to full and complete compliance with 
all applicable environmental laws and regulations. However, permitting 
agencies are often strapped for staff or financial resources to conduct 
field studies, review project alternatives and their impacts, or 
process permit applications on shortened timelines. Multiple agencies 
will be involved in a consultative role, thus putting a premium on the 
timely sharing of information and findings. Resource constraints in any 
one agency can significantly postpone the work product of numerous 
other agencies, resulting in overall permit processing delays.
    In an effort to ensure a timely permitting process without, in any 
way compromising the objectivity of that process, the San Francisco 
Public Utilities Commission is proposing the establishment of a 
centralized office to house the staff who would process the permits on 
behalf of the various Federal agencies. This centralized office for a 
joint permitting task force would be established under the auspices of 
the U.S. Army Corps of Engineers, the agency responsible for overall 
agency coordination. The concept builds on the success of Section 214 
of the Water Resources Development Act (WRDA) of 2000, whose provisions 
allow a public entity to reimburse the Corps for the costs associated 
with permitting. The provision is limited to public entities because it 
is assumed that they are motivated solely by the public interest. It 
further requires the Secretary to ensure that acceptance of the funds 
will not impact impartial decision-making with respect to the permits.
    This provision of WRDA has been successfully employed by the Corps 
on projects in both its Seattle and Los Angeles offices. Section 214 of 
WRDA expires at the end of this fiscal year. The San Francisco Public 
Utilities Commission is seeking to broaden the model established under 
WRDA. Under the San Francisco approach, the ability of public entities 
to reimburse the Corp of Engineers would be expanded to include the 
U.S. Fish and Wildlife Service and the National Marine Fisheries 
Services. Both of these agencies have prominent consultative roles with 
the Corps in the permitting process.
    Further, the San Francisco model would authorize the Corps to make 
office space available to representatives of these Federal agencies. By 
physically co-locating the personnel involved in permitting, the joint 
permitting task force would facilitate interagency communications and 
consultations. If this joint permitting task force lives up to its 
potential, it could well become a model for permitting on other large, 
public interest projects.
    In crafting this proposal the San Francisco Public Utilities 
Commission has worked closely with the regional offices of the Federal 
agencies potentially involved. We have also worked closely with 
Congresswoman Pelosi, and we are pleased that she has submitted 
legislative text to the Committee on Transportation and Infrastructure 
and asked for its inclusion in this year's WRDA legislation.
    We are encouraged by the positive feedback we have received from 
the Federal agencies when we discussed this concept with them. From 
their viewpoint, delays occur when Federal agencies are consulted late 
in the planning process, and asked to approve a permit after the 
project description and preferred alternative have already been 
selected. The agencies prefer to have early and meaningful involvement 
before the project has already been defined, which the joint permitting 
taskforce model promotes. San Francisco Public Utilities Commission 
welcomes early agency involvement in its projects, and is willing to be 
a productive partner by contributing the resources necessary to support 
the agencies' efficient coordination and processing of permits.
    As the San Francisco Public Utilities Commission moves forward with 
the restoration and modernization of the Hetch Hetchy system, this 
joint permitting task force has the potential to significantly 
facilitate implementation of the CIP, ensuring that water supplies will 
be maintained to Bay Area residents and businesses. More importantly, 
this provision can establish a model for other large capital projects 
in California.
    On behalf of the San Francisco Public Utilities Commission, thank 
you for the opportunity to discuss this proposal. We look forward to 
working with your office on this matter.
                                 ______
                                 
    Mr. Calvert. Next, Jeffrey Sutton, Family Water Alliance.

       STATEMENT OF JEFFREY SUTTON, FAMILY WATER ALLIANCE

    Mr. Sutton. Chairman Calvert, members of the Subcommittee, 
I appreciate the opportunity to speak here today on behalf of 
Family Water Alliance. I am going to echo a lot of the 
sentiments already heard from the Committee itself, so I will 
try and sum up as best I can.
    CALFED poses both challenges and opportunities. The 
challenge of weighing, balancing, and attempting to resolve 
conflicts over competing demands for our natural resource is a 
hurdle not easily overcome. The opportunities presented by 
CALFED are the ability to overcome these challenges. Working to 
find solutions to the CALFED program goals is vital to the 
health and welfare of the entire State of California.
    As we have seen in the Sacramento Valley, the CALFED 
program has made great strides in terms of pursuing ecosystem 
restoration. On the other hand, many of the complaints from the 
agricultural sector and rural communities in regard to the 
CALFED program is how it has proceeded in an unbalanced 
fashion. The program is focused primarily on ecosystem 
restoration and environmental goals, ignoring the adverse 
effects associated with the conversion of agricultural land to 
habitat, forcing rural communities to carry the environmental 
burden.
    Most troubling is the fact that CALFED has completely 
failed to adequately address the need for increased water 
storage. As we heard before, California is growing at the rate 
of 600,000 people per year. With it, the demand for consumptive 
uses grows. The environmental demand for water is also 
increasing greatly. Meanwhile, we are being curtailed from our 
use of surplus Colorado River water.
    Conservation, recycling, desalination, and some voluntary 
water transfers will serve to satiate some of this increased 
demand; however, it is clear that we must increase surface 
storage to address the increased demands for water supply. If 
we don't begin to address this immediately, we will find 
ourselves in yet another crisis, much like the energy crisis, 
leading to further bad decisions to the detriment of the State.
    Turning to the issue of the land acquisitions, it is 
something Family Water Alliance has been extremely involved in 
through the process the Sacramento River Conservation Area. 
While these acquisitions may provide some benefit to the 
environment, it solely places the burdens associated therewith 
on the rural communities. The burdens include the following:
    When privately owned agricultural land is acquired by the 
State and/or Federal Government, it is taken off the county tax 
rolls, reducing the tax base of the county where the acquired 
land is located. In lieu, taxes are seldom paid in full, and 
this dynamic causes incredible strain on rural communities. One 
example is, there is over $600,000 for in-lieu taxes owed to 
Glenn County. Due to financial constraints, they are being 
forced to lay off 36 teachers right now. That is just one 
example.
    Further, taking agricultural land out of production is the 
equivalent of closing our factories in rural communities. The 
negative economic impacts are felt by agribusinesses, 
businesses unaffiliated with agriculture due to the fact that 
revenues are not multiplied throughout the local economy, the 
number of jobs are reduced, all of this placing further strain, 
including the resources available to county government.
    As agricultural land is converted to habitat under the 
theory of a ``willing seller,'' it intentionally attracts a 
variety of species in areas that have been historically used 
for agriculture. In numerous cases, this causes great damage 
and loss of compensation to farmers as a result of crop 
predation. These individual landowners, who have been the 
unfortunate and unwilling recipients of third-party impacts 
associated with land acquisitions, oftentimes then become the 
so-called ``willing sellers'' as a result of the pressures and 
profit losses associated with neighboring habitat.
    Along the same lines, the stated goal of many of the land 
acquisition programs is the promulgation of endangered species. 
Again, the unwilling and unfortunate neighboring landowners are 
exposed to regulations, sanctions, and prosecution pursuant to 
the ESA. These adverse consequences create more so-called 
``willing sellers.''
    Moreover, much of the land acquisition and ecosystem 
restoration in the Sacramento Valley is occurring within the 
flood control system. Filling the area between the levees of 
the Sacramento River and bypasses with riparian habitat serves 
to reduce the flood capacity of a system that is already being 
strained, compromising our safety and the protection our ag 
land was put in place for.
    Family Water Alliance has participated extensively with the 
SRCAF, which promotes the creation of a corridor of riparian 
habitat to find workable solutions to the problems discussed 
above in an effort to protect agriculture, the economic 
foundation of our rural community. However, we have found the 
agencies not too complying.
    I see I am running out of time. Let me sum up real quickly.
    One of the specific solution principles articulated in the 
CALFED Record of Decision is the requirement that any CALFED 
solution must have no significant, redirected, negative 
impacts. To date, CALFED is in breach of that self-directed 
mandate. Family Water Alliance respectfully requests that the 
CALFED refocus its efforts to proceed in a balanced fashion, 
working specifically to address the problem of redirected 
impacts on rural agricultural communities associated with land 
acquisitions and to address the need for increased water 
storage. Thank you.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Sutton follows:]

          Statement of Jeffrey P. Sutton, Executive Director, 
                         Family Water Alliance

Question Presented:
    Every region in the State recognizes that CALFED poses challenges 
and opportunities. As part of your testimony, please explain some of 
the opportunities that CALFED provides, and discuss the advantages and 
disadvantages of Federal land acquisition and easements.
Response:
    On behalf of myself and Family Water Alliance, I want to begin by 
expressing my appreciation to this Committee for inviting us to share 
our thoughts in regard to the CALFED Program. Family Water Alliance 
(FWA) is a nonprofit corporation whose mission is education and public 
outreach, providing a strong grassroots voice for the protection of 
private property rights and the continued economic viability of 
agricultural in the Central Valley.
    Family Water Alliance simultaneously promotes responsible 
environmentalism based on sound science and common sense, as 
illustrated by our Sacramento River Small Diversion Fish Screen 
Program. This program is largely funded by grants from state and 
Federal agencies, including CALFED, that have formed a cooperative 
partnership with FWA and the individual landowners to prevent the 
mortality of juvenile fish species. This program serves to protect our 
fishery resources and permits farmers to continue to irrigate crops 
without the fear of being in violation of the Endangered Species Act 
(ESA). Family Water Alliance is extremely proud of the success this 
program has had to date. NOAA Fisheries, a partner and supporter of 
this Program wrote the following: ``Dollar for dollar, FWA has perhaps 
been the most cost-effective recipient of CALFED funds to date.'' FWA's 
Fish Screen Program is a great example of a win-win, balanced solution 
that the CALFED Program has facilitated.
    As stated in the Question Presented, CALFED does pose both 
challenges and opportunities. The challenge of weighing, balancing, and 
attempting to resolve conflicts over competing demands for our natural 
resources is a hurdle not easily overcome. The opportunities presented 
by CALFED are the ability to overcome these challenges. Working to find 
solutions to the CALFED Program goals are vital to the health and 
welfare of the entire State of California.
    On the other hand, many of the complaints from the agricultural 
sector in regard to the CALFED Program is how it has proceeded in an 
unbalanced fashion. The CALFED Program has focused primarily on 
ecosystem restoration, ignoring the adverse effects associated with the 
conversion of agricultural land to habitat, forcing rural communities 
to carry the environmental burden, which I will discuss in more detail 
later.
    Most troubling is the fact that CALFED has completely failed to 
adequately address the need for increased water storage. Instead, the 
current trend has apparently shifted to focusing on the creation of a 
water market, taking more agricultural land out of production via 
fallowing programs to free up water for urban consumption. This may be 
the short-term solution to satisfy immediate demands for water, however 
it should not be viewed as the long-term solution. The sale of water 
from the agricultural sector carries with it many negative economic 
impacts, again causing further stress to the already depleted revenues 
of rural counties, negatively affecting businesses, employment, and 
various county social programs.
    California is growing at the rate of 600,000 people per year, the 
demand for water for consumptive uses and the environment will continue 
to increase. Conservation, recycling, desalination, and some voluntary 
water transfers will serve to satiate some of this increased demand. 
However, it is clear that we must increase the amount of storage 
capacity in California to boost water supply and to create the 
flexibility needed to address these competing demands.
    The time for prolonged discussion is over, the time for fighting 
over projects is over, the time for study upon study is over. We need 
the leadership of this country and this state to immediately realize 
the incredible need for increased water storage capacity in California, 
some hard decisions need to be made, and construction of the selected 
projects needs to be initiated. If we don't address this immediately, 
we will find ourselves in yet another crisis much like the energy 
crisis, leading to further bad decisions, to the detriment of all. 
CALFED has the opportunity to address the need for increased water 
storage, it states this very goal as one of its aims. However, to date, 
we have seen little progress made to find long-term remedies to this 
problem.
    Turning to the issue of Federal land acquisitions and easement 
programs. Family Water Alliance is very concerned about the impacts 
associated with the acquisition of agricultural land for the purpose of 
converting it to habitat. While these acquisitions may provide some 
benefit to the environment, it solely places the burden associated 
therewith on rural communities. Some say that these acquisitions are 
the will of the people as evidenced by the recent passing of 
Proposition 50 in California, which allocates substantial funds for 
state acquisitions. However, it should be noted that Proposition 50 was 
opposed by an overwhelming majority in the Sacramento Valley where much 
of the land acquisition is taking place.
    The negative impacts associated with land acquisitions are as 
follows:
    1. LWhen privately owned agricultural land is acquired by the state 
and/or Federal Government, it is taken off the tax rolls, reducing the 
tax base of the county where the acquired land is located. In lieu 
taxes are supposed to be paid to address this shortfall in county 
revenues, however, these payments from the state and Federal Government 
are not mandatory, and are often underpaid or not funded at all. This 
dynamic can cause incredible strain on a rural county where agriculture 
is the primary industry. For example, Glenn County is currently owed 
over 600,000 for in lieu tax payments that have not been forthcoming, 
yet due to budget constraints the County has been forced to lay off 
over 30 teachers, illustrating the strain land acquisitions have on 
rural counties ability to perform required services.
    2. LFurther, taking agricultural land out of production is the 
equivalent of closing our factories in rural counties. The negative 
economic impacts are felt by agribusinesses, businesses unaffiliated 
with agricultural due to the fact that revenues are not multiplied 
throughout the local economy, the number of jobs are reduced, placing 
further strain and depleting the resources available to county 
government.
    3. LAs agricultural land is converted to habitat under the theory 
of a ``willing seller'', it intentionally attracts a variety of species 
into areas that have historically been used for agriculture. In 
numerous cases, this has caused great damage and loss of anticipated 
compensation to individual landowners as a result of crop predation. 
These individual landowners, who have been the unfortunate and 
unwilling recipients of the third party impacts associated with land 
acquisitions, oftentimes then become the so-called ``willing sellers as 
a result of the pressures and profit losses associated with neighboring 
habitat.
    4. LAlong the same lines, the stated goal of many of the land 
acquisition programs is the promulgation of endangered species. Again, 
the unwilling and unfortunate neighboring landowners are then exposed 
to regulation, sanctions, and prosecution pursuant to the Endangered 
Species Act. To address these issues, landowners are often required to 
forego certain ordinary cultural farming practices, they can be 
submitted to obtrusive scrutiny by agencies, potential loss of 
productive farmland, and increased operating costs. These adverse 
consequences serve to create more so-called ``willing sellers, causing 
further third party impacts to the local economy and county government.
    5. LMoreover, much of the land acquisition and ecosystem 
restoration in the Sacramento Valley is occurring within the Flood 
Control System. Filling the area between the levees of the Sacramento 
River and the bypasses with riparian habitat serves to reduce the flood 
capacity of a system that is already being strained. Projects are 
currently assessed on a case by case basis, but the cumulative impacts 
on the flood carrying capacity of these projects is being ignored, 
compromising the safety of the communities along the River, and 
neglecting to protect the productive agricultural land which the flood 
system was erected to protect.
    Family Water Alliance has participated extensively with the 
Sacramento River Conservation Area Forum, which promotes the creation 
of a corridor of riparian habitat along the Sacramento River, to find 
workable solutions to the problems discussed above in an effort to 
protect agriculture, the economic foundation of our rural counties. We 
have proposed safeguards such as barriers and buffer zones to minimize 
and/or negate the problems stemming from neighboring habitat. We have 
advocated for an expedited grievance procedure to address these 
problems, and a mitigation fund to reimburse those that have been 
negatively impacted. We have studied and promoted the concept of 
crediting the SRCAF with mitigation credits to alleviate the pressure 
of the ESA on landowners who wish to continue to farm their land. We 
have pushed for a study of the cumulative impacts of ecosystem 
restoration within our flood control system, to assure we are not 
compromising the safety of the residents of the Sacramento Valley. We 
have advocated that all grants for land acquisitions have certain funds 
set aside to mitigate for the negative consequences which result from 
the creation of habitat and to guarantee the full payment of in lieu 
taxes by the agencies. Family Water Alliance has seen first hand the 
negative impacts associated with land acquisition programs, and have 
participated in an effort to find ways to address these concerns in a 
proactive manner, to no avail.
    One of the specific ``Solution Principles articulated in the CALFED 
Record of Decision (at Page 9) is the requirement that any CALFED 
solution must ``have no significant redirected negative impacts. To 
date, CALFED is in breach of that self-directed mandate. Family Water 
Alliance respectfully requests that CALFED refocus its efforts to 
proceed in a balanced fashion, working specifically to address the 
problem of redirected impacts on rural agricultural communities 
associated with land acquisitions and the need for increased water 
storage. Thank You.
                                 ______
                                 
    Mr. Calvert. Next, Greg Zlotnick.
    Good to see you again, Greg. You are recognized for 5 
minutes.

STATEMENT OF GREGORY A. ZLOTNICK, DIRECTOR, SANTA CLARA VALLEY 
               WATER DISTRICT BOARD OF DIRECTORS

    Mr. Zlotnick. Thank you.
    Good afternoon, Chairman Calvert, members of the 
Subcommittee, Chairman Pombo, and staff. My name is Greg 
Zlotnick. I am an elected member of the Board of Santa Clara 
Valley Water District. Thank you for holding this hearing, and 
thank you for the invitation to appear before you today. I have 
submitted written testimony that provides significantly more 
detail than just the few highlights that I will mention during 
my limited remarks.
    By way of background, the Santa Clara Valley Water District 
is the primary water resource agency for the 1.8 million 
residents of Santa Clara County, home of the Silicon Valley. 
What was once called the ``Valley of Heart's Delight'' also 
still produces some $300 million in annual agricultural output 
on more than 250,000 acres of crop and rangeland.
    We are a unique agency in many ways, but pertinent to 
today's hearing is the fact that we are the only agency in 
California that is both a State water project and Central 
Valley project contractor. As you can imagine, that puts us 
squarely in the middle of delta issues, and is why we believe a 
successful CALFED program is critical to our region. We often 
sit at the fulcrum of policy concerns involving either or both 
projects. We are also the only major urban water agency in 
California that has responsibility for local watershed and 
flood management.
    I have been asked to focus on our experiences with multi-
agency permitting issues. Regulatory agencies have different 
missions, which can lead to inconsistent direction to an 
applicant or outright conflict among the agencies over 
priorities. We have addressed this issue on large projects by 
taking the initiative to seek to work with State and Federal 
agencies in collaborative or group forums rather than 
individually, and together we develop clear, comprehensive 
requirements rather than piecemeal and/or redundant ones.
    For example, we worked with seven agencies to obtain the 
necessary permits for our unique and valuable 10-year routine 
stream maintenance program, which has been touted by Craig 
Manson, the Assistant Secretary of Interior for the Fish and 
Wildlife and Parks as a national model. Consequently, our staff 
has already begun in-channel routine maintenance work this 
season, fully 2 months prior to historic start dates. Since we 
do not have a secured annual permit with all the delay and 
costs of the regulatory groups associated with it, we are 
achieving more for our constituents and paying less for 
unproductive paperwork.
    Another example of a successful collaborative approach is 
our fisheries and aquatic habitat collaborative effort, or 
FAHCE. FAHCE was a proactive response to litigation implicating 
our water rights. We developed a transparent, technically 
rigorous, science-based assessment of what the true 
opportunities were and how much flow from our reservations was 
truly necessary. Participants, which included the agencies, the 
plaintiffs, and other local stakeholders, create a high degree 
of trust and partnership, resulting in unanimous support for 
the final agreement initialed last month.
    The lesson to be learned from the FAHCE and other 
experiences include:
    First, agree to jointly identify the problems. Often the 
presumption of a shared-problem definition proves false. So, 
take the time to get on the same page at the outset.
    Second, agree to use a science-based approach to making 
decisions. Participants must be willing to consider all the 
scientific data available and have the patience to fill data 
gaps, if possible, before imposing best-guess prescriptions.
    Finally, identify and evaluate solutions together.
    Another strategy is incentivizing good environmental 
practices by streamlining the regulatory process for 
applications with a track record of proven environmental 
stewardship. Too often the perception is, agencies seem to 
assume the worst of project proponents, and regulatory demands 
reflect the one-size-fits-all command and control bias. We 
firmly believe the regulatory process works best when local 
agencies are given maximum flexibility in developing and 
implementing needs to meet desired and required ends.
    Another important issue we all face is working to protect 
groundwater as a key water resource. In January of this year, 
we learned of significant perchlorate contamination in the 
southern part of our county, impacting hundreds of private 
groundwater wells, partly in Chairman Pombo's district. A 7-1/
2-mile plume of perchlorate has been identified.
    To date, the district has spent in the neighborhood of $1 
million for bottled water and well testing and staff time, and 
we have committed to spend another quarter of a million dollars 
to enable the city of Morgan Hill to install treatment 
technology to the public water supply well. We are looking to 
the State and Federal Governments to ensure that the parties 
responsible for this contamination pay for the damage they have 
caused and reimburse us sooner rather than later.
    The same should be true for any case of contamination, and 
I would like to thank you Chairman Pombo for the support that 
you provide as we serve to serve our mutual constituents.
    With respect to CALFED, generally we are pleased, Mr. 
Chairman, that you are again working on a western water measure 
that includes funding for the CALFED program so the Federal 
Government will be the partner we need.
    An important component of such legislation, which will help 
us to better ensure we can serve those who recently lost their 
wells to perchlorate as well as improve the viability for our 
entire county, is the San Luis Reservoir Low Point Improvement 
Project. This is a project that will not only benefit us from 
the San Felipe end of the CVP, but has the potential to create 
approximately 200,000 acre-feet of south-of-delta surface 
storage. As in the past, we look forward to working with you as 
your partner in that critical legislative effort.
    Ultimately, in an effort to improve relationships with 
regulators as local agency board leaders, there must be a 
sustained policy-level desire to change the dynamic and shift 
this confrontation and mistrust to true partnerships with the 
State and Federal agencies. I am proud that my board colleagues 
and I have provided that direction in our district. Working 
collaboratively and not as antagonists saves money and improves 
the environment. Our efforts in Santa Clara County illustrate 
that when we keep our eye on the ball, we can actually be very 
successful as a team comprised of the regulators and the 
regulated.
    Thank you again for the opportunity to appear today and for 
your collective interest and leadership on these issues. I 
would be happy to respond to questions at the appropriate time.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Zlotnick follows:]

            Statement of Gregory A. Zlotnick, Board Member, 
                   Santa Clara Valley Water District

    Good afternoon, Chairman Calvert, members of the Subcommittee and 
staff. My name is Greg Zlotnick and I am a member of the Board of 
Directors of the Santa Clara Valley Water District (District). I want 
to thank you for holding this hearing today on the CALFED Bay-Delta 
Program and ways to improve water supplies in California.
    The region my agency serves, the Silicon Valley, relies on the Bay-
Delta for about half of its water supplies. In very dry years, Bay-
Delta supplies can account for up to 90 percent of the water used in 
Santa Clara County. Given this, you can understand why the quality and 
reliability of these supplies is so important to the residents and 
businesses in our region, and why we have such a huge stake in the 
success of the CALFED Program.
    I was asked to speak today about the experiences my agency has had 
working with multiple Federal agencies with regard to permitting of 
water resource and environmental restoration projects and how those 
experiences can be applied to other local projects and the broader 
CALFED Program. Before I start, I want to state up front that some of 
our most successful projects have resulted from the involvement of 
multiple Federal and state agencies. As a result of our efforts we have 
found that, over time, success breeds confidence, positive 
relationships and support of local agency programs. But working with 
multiple agencies can also create significant challenges.
    Today I'm going to talk about three strategies that can be used to 
address those challenges: multi-agency collaboration; flexibility; and 
a regulatory framework that includes incentives and rewards as well as 
consequences. These strategies can be applied at the local level and at 
the broader CALFED Program level to decrease permitting times and 
project costs without sacrificing, and perhaps even improving, 
protection for the environment.
    For those of you not familiar with the Santa Clara Valley Water 
District, we are the primary water resources agency for the more than 
1.8 million residents of Santa Clara County, California. Our duties 
include providing wholesale water supplies to 13 local retail water 
agencies; protecting county residents and businesses from the 
devastating effects of floods; and serving as environmental steward for 
the county's creeks and streams, underground aquifers and district-
built reservoirs.
    We are unique in the San Francisco Bay Area in that about half the 
water used in our service area comes from local sources, primarily from 
our local reservoirs and groundwater basins. The Santa Clara Valley has 
the only sizable remaining drinking water basin in the Bay Area. 
Recycled and conserved water makes up a small but increasing portion of 
our total water supply and is a critical component of our plan to meet 
future demands. We're also looking at desalinated seawater as a 
potential future water supply.
    Santa Clara County receives its imported water through the Delta 
from the State Water Project and the Federal Central Valley Project. We 
receive our State Water Project supplies through the South Bay Aqueduct 
and our Central Valley Project supplies from the San Luis Reservoir. 
Some county residents also receive imported water from San Francisco's 
Hetch Hetchy system. Although we do not participate in the management 
of the Hetch Hetchy system, the system does provide some or all of the 
drinking water for 15 to 20 percent of our population, and we include 
that supply in our planning efforts.
    In carrying out our water resource management duties, we often must 
work with multiple Federal and state regulatory agencies with 
overlapping authority over the same resources. This is especially true 
for our flood protection and stream maintenance projects. For example, 
we worked with seven agencies to obtain the necessary permits for our 
unique and valuable 10-year routine stream maintenance program: the 
Corps of Engineers, Fish and Wildlife Service and National Marine 
Fisheries Service and, on the state side, the Department of Fish and 
Game, California Environmental Protection Agency, and both the San 
Francisco Bay and Central Coast Regional Water Quality Control Boards. 
We also work with multiple state and Federal agencies on issues related 
to operation of the State Water Project and Central Valley Project.
    I mentioned before that working with multiple agencies can pose 
unique challenges. Often agencies have different perspectives about the 
best way to protect natural resources, different sets of authorities 
and missions, and different views about which resource should be given 
priority. Addressing these conflicting demands can increase the length 
and cost of the permitting process and significantly increase project 
costs, often without any appreciable increase in the level of 
environmental protection.
    One way we've addressed this issue is by working with state and 
Federal agencies in a collaborative or group forum, rather than 
individually. This provides the agencies an opportunity to hear and 
understand the issues and concerns of the other resource agencies and 
helps reduce the opportunity for conflicting or duplicative permit 
requirements. I should note that the District is a full participant in 
this multi-agency forum, not an outside observer. The multi-agency 
forum is similar in concept to the Operations Group formed after the 
signing of the Bay-Delta Accord to allow stakeholders and Federal and 
state agency staff to discuss Delta operations.
    We think the multi-agency collaborative approach helps us achieve 
better results for the environment, at a lower cost. One example of a 
successful collaborative approach in our county is our Fisheries and 
Aquatic Habitat Collaborative Effort (FAHCE). FAHCE emerged from a 1996 
challenge to the District's water rights in the County's three largest 
watersheds that drain to San Francisco Bay. When faced with a legal 
complaint from environmental organizations that our water supply 
operations did not leave enough water to meet the needs of local 
fisheries, we could have dug in our heels. Instead we proactively 
responded by joining with the state and Federal resource agencies, 
local environmental groups and the complainant's representatives to 
develop a plan that balanced and integrated all the beneficial uses of 
the local watersheds.
    Participants in the FAHCE process, which included the District, 
Fish and Wildlife Service, National Marine Fisheries Service, 
California Department of Fish and Game, San Francisco Bay Regional 
Water Quality Control Board, City of San Jose, the Natural Heritage 
Institute (representing the complainant) and other non-governmental 
stakeholders, agreed to use a science-based approach to resolve the 
complaint. Existing data was evaluated and a study plan was developed 
to fill gaps in information necessary to construct robust and enduring 
solutions. All told we spent more than three years developing and 
analyzing scientific data, and another two years identifying and 
evaluating potential solutions.
    By jointly developing the body of technical data and openly 
evaluating and developing alternatives, participants created a high 
degree of trust and partnership. The agreement reached in the end 
balances and integrates drinking water, flood protection, recreation 
and fisheries--all beneficial uses of the local water resources. We 
credit the use of a jointly-developed science-based approach with the 
unanimous support the final agreement achieved.
    Another key feature of the FAHCE is a commitment to adaptive 
management, that is, a commitment to adjust and fine tune the plan as 
we go along. By setting up a process to monitor and adjust over time, 
all parties are more comfortable accepting conclusions. This approach 
will also help us target resources at those actions that appear most 
likely to provide the biggest near-term environmental benefits and 
long-term ecological health for the lowest cost in dollars and water 
resources.
    The FAHCE is one example of the benefits of a multi-agency 
collaborative process. By working with the regulatory agencies and 
other stakeholders in a collaborative manner, we were able to develop a 
plan that better secures our water rights, protects endangered species, 
and provides other important benefits to our region and the larger Bay-
Delta system.
    We employed a similar collaborative process for our Guadalupe River 
flood control project, a multi-million dollar project that protects the 
heart of Silicon Valley, San Jose, and a project that our partner, the 
Corps of Engineers, points to as a national model for multi-purpose 
flood control projects. Bringing in the resource agencies when an 
impasse was reached to help identify resources needs, then redesign the 
project, was a new approach, but this allowed each of the agencies to 
have ownership in the project.
    The CALFED Program is itself embarking on a process to allow 
stakeholders and agencies to discuss issues and jointly explore 
solutions to issues with crosscutting implications. We would encourage 
the agencies and stakeholders involved in that process to employ the 
lessons we learned from our FAHCE process.
    First, agree to jointly identify the problems. One of the first 
things we discovered when we sat down at the table during the FAHCE 
process was that we didn't define the problem the same way. Defining 
the problem jointly required that all parties be willing to look at the 
full range of scientific data available and fill in data gaps where 
needed. Only then were we ready to agree on the scope and causes of the 
problem and begin developing and evaluating solutions.
    Second, agree to use a science-based approach to making decisions. 
Participants must be willing to consider all the scientific data 
available, including data that has been developed since the adoption of 
the Bay-Delta Accord and establishment of the ``environmental 
baseline'' in the CALFED Record of Decision. Only by doing so can we 
target our limited resources where they will provide the greatest 
benefit.
    Finally, commit to identify and evaluate solutions together. 
Remember that collaboration is not the same thing as negotiation. 
Collaboration requires working together to identify the best solution 
that meets all parties' interests. By working together collaboratively, 
a solution can be developed that protects and restores the environment 
while also meeting the needs of Californians for safe and reliable 
water supplies at a reasonable cost.
    Multi-agency collaboration is a powerful tool, but it can also be 
time-consuming and expensive, and it is not appropriate for every 
project. The permitting process for more routine projects can be 
facilitated through the development of clear policies and guidelines, 
and standardized training, for agency staff reviewing projects. The 
current process allows agency staff wide latitude to demand changes to 
projects or even to stop them. It sometimes seems that these demands or 
regulatory actions are based more on opinion than scientific evidence. 
Changes in agency staff can also lead to new demands for changes and 
result in delays to project schedules and cost increases. The 
consistent application of policies and guidelines could help take the 
surprise out of the permitting process. We would also encourage the use 
of general permits for similar types of projects, such as the Corps of 
Engineers Nationwide Permit 31. General permits, if used as intended by 
Congress, could produce substantial savings for the CALFED Program.
    The Corps of Engineers has had in place for a number of years the 
concept and practice of a general permit, which takes several forms: 
regional, statewide and nationwide. The idea behind these permits is to 
cover either those activities that are similar in nature and cause only 
minimal individual and cumulative environmental impacts, or those that 
are developed to reduce duplication with another governmental 
regulatory agency and the impacts are minimal. There is no reason why 
these general permits should not apply to CALFED. Another key 
recommendation for streamlining the regulatory process is to name a 
point person from each agency, with a high level of authority in the 
regulatory process, to serve as a collaborative representative to keep 
projects moving.
    By proposing the development of clear policies and procedures, I do 
not mean to suggest that my agency supports the use of prescriptive 
regulations. On the contrary, we believe that the regulatory process 
works best when local agencies are given maximum flexibility in 
developing and implementing the means to meet the desired ends. We 
prefer regulations and guidance that are descriptive in the ends to be 
achieved, not prescriptive in the means to be employed. While Silicon 
Valley has suffered in the economic downturn, it remains a cradle of 
innovation and creativity, so provide us the ability to apply that 
creativity in our valley and, similarly, throughout the nation.
    The FAHCE process I discussed earlier is one example of a process 
in which flexibility by the regulatory agencies led to a better 
solution. Our Municipal Stormwater Management Program is another 
example. In the early 1990's, before the Environmental Protection 
Agency's stormwater regulations were released, my agency led a 
proactive and collaborative effort to organize a regional stormwater 
management program. As an early program, we were given greater 
flexibility to develop tools and solutions suited for our region. The 
partnerships we formed with Federal, state and local agencies and the 
private sector might not have been possible under a rigid, one-size-
fits-all regulatory mandate. The degree of flexibility and local 
control we were granted by the regulatory agencies was a key factor in 
the success of our program and why it was selected by the United States 
Environmental Protection Agency as the national first place program for 
an outstanding municipal stormwater management program.
    Let me provide another example of a situation that could be 
addressed through the more flexible application of regulatory 
requirements. We frequently find when dealing with multiple agencies 
that each agency imposes different monitoring requirements for its own 
purposes. What results is a fragmented approach to monitoring, when 
what is really needed is a more comprehensive watershed-based approach. 
By allowing local agencies the flexibility to apply resources where 
they will produce the most benefit, for example as part of a 
comprehensive monitoring program or to monitor constituents that 
represent a significant overall threat to the watershed, regulatory 
agencies can increase the level of environmental benefit for a given 
investment.
    It is really not surprising that giving local agencies greater 
flexibility in determining how to meet the desired ends can result in 
better outcomes. After all, agencies like ours have invested 
substantial resources in understanding how our local watersheds 
function. Federal agency staff, on the other hand, review projects in 
many watersheds and thus cannot develop the same knowledge of local 
conditions as local agency staff. Allowing local agencies the time 
needed to develop appropriate solutions for their watersheds pays 
dividends for the environment in the form of better projects, and 
ultimately furthers the Federal agencies' ability to achieve their 
missions.
    This brings me to the third strategy that we would like to see both 
Federal and state agencies apply more frequently and that is 
recognizing and thus incentivizing good environmental practices by 
streamlining the regulatory process for applicants with a track record 
of proven environmental stewardship. Federal and state agencies should 
``reward'' agencies like ours and others that have demonstrated an 
ongoing commitment to sound watershed management and environmental 
protection, not punish us by trying to raise the mitigation bar on 
projects that are environmentally benign or even intended to enhance 
the environment.
    One way to provide incentives for agencies that demonstrate a 
commitment to good watershed management is by providing those agencies 
greater flexibility in determining how to best meet the described 
regulatory ends. Another is to start the project review process from 
the assumption that these agencies' permit applications are complete 
and the projects appropriately defined. It simply does not make sense 
to spend the same amount of time and resources reviewing the projects 
of those agencies that have already demonstrated their commitment to 
watershed protection as it does to review the projects of agencies that 
have not made this commitment. Perhaps an approach to recognize and 
honor this commitment would be a pre-qualification list developed by 
the resource agencies. If a local agency has a history of positive 
achievement and a recognized commitment to stewardship, it should be 
able to move though the permitting process more quickly.
    Water conservation is another example of an area where agencies 
should be rewarded for good behavior, not punished with a one-size-
fits-all regulatory solution. Residents and businesses in the most 
populous Bay Area counties are using less water today than in 1986, 
even though our population has increased by almost 17 percent. In our 
service area, the typical resident used 20 percent less water in 2000 
than in 1986. Accomplishments in Southern California are similarly 
impressive.
    Water conservation programs in the Bay Area include rebates for 
ultra-low flow toilets, indoor and outdoor residential and commercial 
water use efficiency surveys, rebates for efficient clothes washing 
machines and dishwashers, public outreach and education programs and 
many other proactive programs. By 2020, District supported water 
conservation programs are expected to save 50,000 acre-feet a year--
enough water to meet the needs of 100,000 households.
    Despite this record of success, some participants in the CALFED 
process remain convinced of the need for more prescriptive water 
conservation requirements. Surely this is not the area where Federal or 
state agencies should concentrate their regulatory efforts. Far more 
can be accomplished in this area through the provision of grants and 
other incentives than through the use of a regulatory stick. Agencies 
that are actively trying to do the right thing, in this case conserve 
water, should be encouraged through the provisions of grants to help 
leverage local funds.
    It was in part through the availability of such financial 
incentives that our agency and other agencies and stakeholder groups in 
our region were able to develop a draft Watershed Action Plan and 
individual stream stewardship plans under the Santa Clara Basin 
Watershed Management Initiative. The participation of state and Federal 
agency staff in the process has also served as a form of incentive, as 
their participation ensures that the measures we identify under the 
Initiative are consistent with the interests of the state and Federal 
agencies and can move through the permitting process more quickly.
    Of course we recognize that carrots alone are not always enough. 
There must be real consequences for behavior that results in harm to 
our environment and water resources. This is particularly true in the 
case of groundwater contamination. Groundwater contamination is an 
issue of serious and growing concern for our county and the entire 
country, especially with rapidly improving detection technology and the 
increasing use of chemicals in our society.
    In January of this year we learned of a significant perchlorate 
contamination issue in the southern part of our county, located partly 
in Chairman Pombo's District. To date, a seven-and-a-half mile plume of 
perchlorate has been identified originating from a site that was used 
by the Olin Corporation to manufacture highway flares. The area 
involved is served solely by public and private wells, and the 
infrastructure is not readily available to provide centralized 
treatment or alternative water supplies. My agency, upon learning of 
this problem, immediately arranged for free well testing and the 
delivery of bottled water to concerned residents. Today we are still 
providing bottled water to residents of the affected area.
    The District has so far spent in the neighborhood of a million 
dollars for bottled water, well testing, and staff time, and we've 
committed to spend another quarter million dollars to enable Morgan 
Hill to install treatment on their Tenant Avenue well. We are looking 
to the state and Federal Governments to ensure that the parties 
responsible for groundwater contamination face real consequences and 
pay for the damage they've caused, while we cope with the realities of 
hundreds of homeowners with contaminated wells.
    We are hoping to address the perchlorate issue, with Federal 
assistance, in the near term through a combination of well head 
treatment, point-of-use treatment and other recognized treatment 
alternatives, although more work is needed to determine whether that is 
feasible. We are working to keep the groundwater basin usable through 
treatment, but over the longer term, the groundwater basin cleanup must 
occur.
    One alternative at the present point is to build facilities to 
deliver imported water to the affected area. Whether the final 
alternative is a groundwater treatment system or additional water from 
the Central Valley Project, the San Luis Reservoir remains a vital 
component of our water supply system. This further underscores our need 
to address the San Luis Reservoir low point problem, and other issues 
that threaten the quality and reliability of our existing Bay-Delta 
supplies.
    Unfortunately our situation is not unique. Throughout California 
our groundwater supplies are at risk from perchlorate, MTBE and other 
contaminants. Imagine the added stress the loss of these supplies could 
place on the Bay-Delta and Colorado River systems.
    That's why we were pleased to hear, Mr. Chairman, that you are 
considering introducing a western water measure that includes funding 
for the CALFED Program, including above ground storage and conveyance 
improvements such as the San Luis Reservoir Low Point Improvement 
Project, and a competitive grant program to help local agencies deal 
with problems such as groundwater contamination and serve the growing 
water needs of California and the West. As you are well aware, in 
California and in other states with interconnected water supply 
systems, few water supply issues are purely local problems. The efforts 
that local agencies make to protect and improve local supplies are an 
integral part of the larger solution to problems affecting the Bay-
Delta system and other river systems throughout the West.
    There is no question that local Board leadership is required to 
foster true partnerships with the state and Federal agencies and I am 
proud that my Board colleagues join me in providing that policy 
guidance at our agency. To move toward a proactive posture, and to put 
forth the initial offer of trust that must be reciprocated by the 
agencies, is a risk that is a bit more than a small leap. When 
presented with such an overture, the agencies must take advantage of it 
to further their mission and success, and not rebuff it.
    Working collaboratively and not as antagonists saves money and 
improves the environment and that's what should be the goal. Indeed the 
resource agencies as organs of government need to remember they work 
for the same people as my agency, and that is a perspective that is 
often lost or seemingly absent. Our efforts in Santa Clara County 
illustrate that when we all remember that and keep our eye on the ball, 
so to speak, we can be very successful as a team comprised of the 
regulators and the regulated.
    Mr. Chairman and members of the Subcommittee, thank you again for 
inviting me to speak today about some of the challenges that exist when 
dealing with multiple regulatory agencies. We believe, based on the 
successes we've had in our county, that incorporating multi-agency 
collaboration, greater flexibility, and incentives, rewards and 
consequences into the regulatory process can truly improve the 
permitting process at the local level and in the broader CALFED 
Program.
    This concludes my testimony. I would be happy to answer any 
questions you may have.
                                 ______
                                 
    Mr. Calvert. Richard Forster, Regional Council of Rural 
Counties.

STATEMENT OF RICHARD FORSTER, CHAIR, WATER COMMITTEE, REGIONAL 
                   COUNCIL OF RURAL COUNTIES

    Mr. Forster. Thank you, Mr. Chairman, and members of the 
Subcommittee. My name is Richard Forster; I serve as the County 
Supervisor in Amador County and as Chair of the Water Committee 
for the Regional Council of Rural Counties, better known as 
RCRC. Thank you for the opportunity to provide testimony on 
behalf of RCRC to the Subcommittee.
    RCRC is an organization of 29 rural California counties. We 
have 145 county elected supervisors in our membership. Our 
member county areas include the San Joaquin, Sacramento, and 
Trinity watersheds, as well as Imperial County. Collectively, 
our counties are also the source areas for the San Francisco-
Bay Delta's water. Over 80 percent of the water for the Delta 
comes from our membership area.
    RCRC member counties comprise just over 40 percent of the 
State's land mass and hold significant groundwater resources 
over which the counties exercise regulatory authority. Our 
local governments are required by State law to develop 
comprehensive general plans to sustain our environment and 
economies while providing for additional growth. Implicit in 
this charge is the need for adequate, high-quality, reliable, 
affordable water supplies.
    California's regions are highly diverse not only from the 
standpoint of rainfall and soils, but also in terms of water 
management options. The State of California has recognized this 
by dividing the State into 10 separate hydrologic regions which 
are utilized in the State Water Plan, as well as in the State 
Regional Water Quality Control Boards. Each of these regions 
has its own unique challenges and opportunities in terms of 
achieving new water supplies and improved water quality.
    There are regional approaches we know will work to achieve 
water supply and reliability gains within our membership area. 
These concepts have been discussed and examined as part of the 
State Water Plan update. One of the precepts of the new 
California Water Plan is to move the State toward regional 
self-sufficiency. These approaches include repairs to leaking 
infrastructure and conveyance systems, improvements to water 
treatment and wastewater treatment plants, reoperation of our 
existing reservoirs, increasing the capacity of existing 
reservoirs, and many more. What we most lack is funding to 
carry out these projects.
    Any serious effort to solve the water challenge before us 
is predicated on adequate funding and effective decisionmaking. 
Any decisionmaking structure for water supply and/or water 
management program should reflect the diversity of the State's 
hydrologic regions and maximize the knowledge and leadership 
skills within those regions. The decisionmaking structure 
should be comprised of a comprehensive membership which 
includes local elected officials from the affected areas, who 
are answerable to an electorate and who are responsible by 
State law for managing the land resources which give rise to 
the water supply.
    Along those lines, our member counties would like to see 
greater attention given to existing land use plans when 
restoration programs are developed in conjunction with water 
supply and management programs. For well over 100 years, 
California statutes have recognized counties' authority over 
land use planning decisions. We are charged with developing 
comprehensive general land use and resource plans, zoning 
ordinances and a process to approve orderly growth while 
protecting the environment and providing for a viable, vibrant 
economy. Therefore, from a county planning perspective, it is 
important for restoration programs involving land acquisition 
to recognize the existing land use template and respect a 
county's statutory authority over land use decisions with 
limited State or Federal involvement. In addition, the fiscal 
impact to county coffers when those lands are no longer in 
private ownership should be underwritten by the acquiring 
entity, and appropriate funding should be made available to 
operate and manage these lands.
    Moving on to the question of water rights, California has a 
diverse and, some would say, complex set of water laws. These 
laws are predicated on a priority system based on the time of 
filing for those rights. Source areas have been provided 
assurance that their long-term needs for water supply will be 
met through ``area of origin'' protection, also viewed by the 
State to be of senior priority. In contrast, both the State's 
California Water Project and the Federal Central Valley Project 
are junior water rights holders.
    We do not believe it would be prudent or effective to 
institute a program that overturns the fundamental assurances 
that exist in California's water laws. To the extent any 
program elevates one set of water users--for example, junior 
rights holders over senior--that water program would 
destabilize and perhaps overturn the State's water law 
priorities. Therefore, Federal involvement and setting 
priorities for California water should be consistent with State 
water law. Providing assurances for supply to junior rights 
holders is a slippery slope we urge you not to start down. Let 
California water law decide the priorities of use in this 
State.
    An additional threat to the stability afforded by 
California's existing water rights structure is the lack of 
assurance given to upstream diverters with respect to the 
implementation of the ESA under the current CALFED operating 
environment. Our counties are concerned that the Sacramento and 
San Joaquin watershed users should be required to provide any 
additional water needed to meet fisheries and/or water quality 
objectives.
    And checking my time, I am over, so I will conclude by:
    Mr. Chairman and members, while we recognize that a 
coordinated multi-goal approach to managing the State's water 
can be beneficial, there is a need for some modifications to 
make it work for Californians. We look forward to working with 
you and the California delegation on this endeavor, and I 
appreciate the opportunity to testify.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Forster follows:]

          Statement of The Honorable Richard Forster, Chair, 
          Water Committee, Regional Council of Rural Counties

    Mr. Chairman and Members of the Subcommittee:
    My name is Richard Forster. I serve as a County Supervisor in 
Amador County and as Chair of the Water Committee for the Regional 
Council of Rural Counties (RCRC). Thank you for the opportunity to 
provide testimony on behalf of RCRC to the Subcommittee regarding the 
challenge of increasing California's water supply, reliability, 
availability and quality.
    RCRC is an organization of twenty nine rural California Counties. 
We have one hundred and forty-five elected County Supervisors in our 
membership. Our member county areas include the San Joaquin, Sacramento 
and Trinity watersheds as well as Imperial County. Collectively, our 
counties are also the ``source'' areas for the San Francisco Bay-
Delta's water. Over eighty percent of the water for the Delta comes 
from our membership area. RCRC member counties comprise just over 40% 
of the State's land mass and hold significant ground water resources, 
over which the Counties exercise regulatory authority. Our local 
governments are required by State law to develop comprehensive General 
Plans to sustain our environment and economies while providing for 
additional growth. Implicit in this charge is the need for adequate, 
high quality, reliable, affordable water supplies.
    California's regions are highly diverse not only from the stand 
point of rainfall and soils, but also in terms of water management 
options. The State of California has recognized this by dividing the 
State into 10 separate hydrologic regions which are utilized in the 
State Water Plan as well as in its Regional Water Quality Control 
Boards. Each of those regions has its own unique challenges and 
opportunities in terms of achieving new water supplies and improved 
water quality.
    There are regional approaches we know will work to achieve water 
supply and reliability gains within our membership area. These concepts 
have been discussed and examined as part of the State Water Plan 
update. One of the precepts of the new California Water Plan is to move 
the State towards regional self-sufficiency. These approaches include: 
repairs to leaking infrastructure and conveyance systems; improvements 
to water treatment and waste water treatment plants; reoperation of our 
existing reservoirs; increasing the capacity of existing reservoirs; 
upper to lower watershed restoration projects; improved, locally 
controlled, groundwater monitoring and management; and new storage 
projects. What we most lack is funding to carry out these projects. Any 
serious effort to solve the water challenges before us is predicated on 
adequate funding and effective decision making.
    Any decision-making structure for a water supply and/or water 
management program should reflect the diversity of the State's 
hydrologic regions and maximize the knowledge and leadership skills 
within the regions. The decision making structure should be comprised 
of a comprehensive membership which includes local elected officials 
from the affected areas who are answerable to an electorate and who are 
responsible, by state law, for managing the land resources which give 
rise to this water supply.
    Along those lines, our member counties would like to see greater 
attention given to existing land use plans when restoration programs 
are developed in conjunction with water supply and management programs. 
For well over 100 years, California statutes have recognized counties' 
authority over land use planning decisions. We are charged with 
developing comprehensive General Land Use and Resource Plans, zoning 
ordinances and a process to approve orderly growth, while protecting 
the environment and providing for a viable, vibrant economy. Therefore, 
from a county planning perspective, it is important for restoration 
programs involving land acquisition to recognize the existing land use 
template and respect a county's statutory authority over land use 
decisions with limited state or Federal involvement. In addition, the 
fiscal impact to county coffers when these lands are no longer in 
private ownership should be underwritten by the acquiring entity and 
appropriate funding should be made available to operate and manage 
these lands.
    Moving on to the question of water rights--California has a diverse 
and some would say complex set of water laws. These laws are predicated 
on a priority system based on the time of filing for those rights (i.e. 
early diverters of surface waters typically have superior standing over 
later diverters and/or contractors). In addition, ``source areas'' have 
been provided assurance that their long term needs for a water supply 
will be met through ``area of origin'' protection--also viewed by the 
State to be of senior priority. In contrast, both the state's 
California Water Project (CWP) and the Federal Central Valley Project 
(CVP) are junior rights holders.
    We do not believe it would be prudent or effective to institute a 
program that overturns the fundamental assurances that exist in 
California's water laws. To the extent any program elevates one set of 
users needs--for example, junior rights holders such as the State CWP 
or Federal CVP above more senior rights holders--that water Program 
would destabilize and perhaps over turn the State's water law 
priorities. Therefore, Federal involvement in setting priorities for 
California water should be consistent with state water law. Providing 
assurances for supply to junior rights holders is a slippery slope we 
urge you not to start down. Let California water law decide the 
priorities of use in this State.
    An additional threat to the stability afforded by California's 
existing water rights structure is the lack of assurance given to 
upstream diverters with respect to the implementation of the ESA, under 
the current CALFED operating environment. Our counties are concerned 
that the Sacramento and San Joaquin watershed users would be required 
to provide any additional water needed to meet fisheries and/or water 
quality objectives.
    A related concern is associated with the ``commoditization'' of 
water through water transfers. A water transfer program that is 
dominated by one ``buyer'', that gives consideration or priority to one 
use over another or that results in long-term, substantial shifts in 
the culture of a community is problematic for rural counties. We agree 
that short term water transfers can play a crucial role in California's 
water supply management program and we are willing to participate in a 
fair solution-oriented process. However, over-reliance on transfers 
poses challenges to local governments as they struggle with the long 
term social and economic implications of such activities.
    Mr. Chairman and members, while we recognize that a coordinated, 
multi-goal approach to managing the state's water can be beneficial, 
there's a need for some modifications to ``make it work'' for all 
Californians. We look forward to working with you and the California 
delegation on this endeavor.
    Thank you for this opportunity to testify. I will be very happy to 
answer any questions.
                                 ______
                                 
    Mr. Calvert. John Herrick of the Delta Water Agency.

 STATEMENT OF JOHN HERRICK, GENERAL COUNSEL AND MANAGER, SOUTH 
                       DELTA WATER AGENCY

    Mr. Herrick. Thank you, Chairman Calvert and Chairman 
Pombo, Committee members, and Representative Herger.
    My name is John Herrick. I am general counsel for the South 
Delta Water Agency, which sounds more important than I am. But 
our agency is uniquely situated to be involved in the problems 
that CALFED is attempting to address. We are the end spot for 
the two river systems in the valley in California, and also the 
position where the export pumps are located, so we feel the 
effects of everything that goes on.
    CALFED was based on two premises, among others, which 
include to fix the Delta and for everybody to get better 
together. Getting better together is anathema to my clients, as 
we are what we call ``innocent third parties'' to the 
operations of the State and Federal projects. My constituents 
are harmed every year due to those projects' operations. We 
think that the approach of the State and Federal Governments 
should be, first, to mitigate the harm they are causing to 
people not involved in the projects and then seek ways to help 
California's water quality and quantity.
    There is a program that is proposed that didn't have 
anything to do with CALFED, but it is now under CALFED's 
umbrella, which institutes barriers in the south Delta which 
goes a long way to improve the water quality and quantities to 
my clients. However, that program is now in a project whose 
description is ``Increase exports as the State pumps up to 8500 
CSF a day.'' you will note that the project description is not 
``to improve or mitigate the existing harm.'' so we will have 
to see how that pans out.
    It is a very real threat that we embark upon, increasing 
that which causes the harm before we have cured the harm. And 
as an example, one of the diverters in my area whose land is 5 
feet below water level--below sea level, excuse me--and 
operates a siphon called me up last week and said his siphon 
won't work. Now, think about that. Someone's whose land is 
below sea level is unable to divert from the Delta. Those 
problems should be solved before we embark upon any other 
action which may increase that harm.
    Fixing the Delta also should include repairing the San 
Joaquin River. The southern part of the Delta certainly bears 
the impacts of the poor quality of water and lack of flow 
coming down the San Joaquin River. Those are a result of the 
Federal project operations. We think that the Federal 
Government should take a hand in that and, in conjunction with 
the State legislature, embark upon a program to improve, 
restore, whatever you want to call it, but to better the San 
Joaquin. That helps innumerable parties, including Delta 
interests, and it also helps fix the Delta.
    Each year of below-normal conditions, they release upwards 
of 100,000 acre-feet of pure water in the Stanislaus to dilute 
the waters of the San Joaquin. Now, my clients rely upon that, 
so we like that; but that is 100,000 acre-feet of water we 
release to reduce the concentrations of high salt. That is not 
right.
    The second issue I would like to touch on deals with how 
CALFED runs into conflict with California law, and was touched 
upon by the representative from the Regional Council of Rural 
Counties. Whenever you protect one group of users, and that is 
the exporters--and exporters need water, we don't deny that--
but whenever you protect them with a principle of no net loss, 
that is going to run into conflict with the existing California 
water right priority system, of which they are the junior 
members, generally. And the example of that is the 
environmental water account. The State and Federal Governments 
go purchase water in northern California to make up for lost 
exports.
    As the representative also said earlier, we have laws in 
California which protect those upstream users to the surface 
supply of water. They are supposed to get a larger percentage 
of that water supply as they grow. But CALFED's policy now is 
to purchase that surface water and encourage them to move to 
groundwater, the exact opposite of the statutes. Now, that may 
work in the short term, it may not, but it can't be a long-term 
policy if the State's laws say in the future, the north will 
use more of the stored water, the surface water, not less.
    And that brings us to the final issue I would like to touch 
upon, which everybody has mentioned and which is absolutely 
correct. We need more water. We don't necessarily need more 
storage, we need more yield. There has to be a greater pie to 
divide up. Nobody should be preferred under the program. It is 
the water of the State, it is not anybody's individual water. 
The State and Federal Government should ensure or try to ensure 
the pie is large enough for all beneficial users, because when 
it isn't, that is when we have the conflicts; that is when 
southern California needs to have additional exports, 
notwithstanding what those exports do to people. If we have 
enough water, then we don't have those conflicts.
    Now, that is a monumental task, but it is one that can be 
moved toward, I will say. And we agree that each area should 
move toward self-sufficiency. It doesn't mean they will be 
self-sufficient in a year or 2 or 10 years, but they need to 
move toward that. And that is where California's and the 
Federal Government's assistance should flow to help them do 
that.
    Thank you very much. And I will pass the mike on to Mr. 
Majors.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Herrick follows:]

        Statement of John Herrick, General Counsel and Manager, 
                        South Delta Water Agency

    My name is John Herrick. I am general counsel and manager of the 
South Delta Water Agency. Our agency was created by the California 
Legislature to protect the quantity and quality of water in the South 
Delta for all beneficial uses. Our area is in a unique position in that 
it receives not only the discharges from all upstream users, but it is 
the location where the State and Federal projects draw water from the 
Delta for export to water deficient areas.
    I understand this hearing is to examine the CALFED Program and ways 
to increase and improve water supply, reliability, availability, and 
quality. With regards to CALFED, that combination of agencies has its 
origins in negotiations between export contractors (those who rely on 
the State and Federal Projects for water), governmental agencies, and 
some environmental interests. All interests were not invited to the 
original discussions and negotiations. In 1994, environmental needs, 
especially those of the Endangered Species Act, increased, and there 
was a corresponding decrease in exports. It is exports which 
significantly impact fishery populations, and therefore exports were 
being decreased to address fisheries. To address this tension, those 
parties agreed to certain actions to provide for fisheries and also to 
maintain exports.
    As you might imagine, when one group's water supply is protected 
(the export contractors), other groups' supplies are at risk. CALFED 
was born out of this concept. Hence, water supply, reliability, and 
quality as set forth in the CALFED Record of Decision, or ROD, 
translate into supply, reliability, and quality for exports. This is a 
false priority and threatens existing California water rights.
    California water law has a priority system with riparian and pre-
1914 users at the top and other permitted and licensed users according 
to their original date of filing an application for a permit. The 
export projects of the State and Federal Governments are generally the 
lowest priority. In spite of this, the State and Federal Governments 
(including the regulatory agencies) agreed to a ``no net loss of 
exports'' principle even if ESA, water quality or third-party impacts 
suggested less exports.
    California law also sets up area of origin and Delta priorities 
under Water Code Sections 11460 et seq. and 12200 et seq. These 
statutes protect the upstream areas allowing them to recover and use 
water previously developed by the projects for export. To put it 
another way, the future development of upstream areas is supposed to be 
protected by their ability to get back water previously exported. To 
the contrary though, CALFED promotes the sale of upstream water 
supplies (both surface and ground water) for export. This will 
necessarily result in the continued reliance on this water by the 
exporters. When the next drought occurs, or when the upstream areas 
eventually seek to expand and grow and thus need the water, the 
conflict between the north and south will be of epic proportions.
    The answer of course is greater supply for all uses; something 
CALFED simply does not do. CALFED mandates increased exports over time, 
but only seeks to ``study'' new storage projects. Note the use of the 
word ``storage.'' The CALFED parties purposely use this word rather 
than ``new supply'' or ``yield.'' Yield is additional supply; storage 
rarely is. Of all the storage projects to be studied by CALFED, the 
amount of new yield is insignificant compared to California's existing 
and future needs. Notwithstanding the eloquent language in the CALFED 
ROD, it is simply redividing the same old pie; only this time, there is 
an open preference given to export interests by the State and Federal 
agencies.
    CALFED is supposed to ``fix the Delta.'' The South Delta Water 
Agency is a good example of what is actually occurring. The CVP 
decreased the flow in the San Joaquin River by an average annual amount 
of 345,000 acre-feet per year from April through September; with no 
provision for downstream Delta users who depended upon that supply. The 
Federal project also delivers water to the west side of the San Joaquin 
Valley without having built a Valley drain. The result? Up to one 
million tons of salt is delivered to the Valley with up to 400,000 tons 
draining back into the San Joaquin River in concentrations well above 
the downstream salinity standard.
    The State and Federal export pumps also lower the water levels in 
the South Delta to the point where local diversions are impaired or 
prevented. Some channels run dry and circulation is radically altered 
allowing the high salt concentrations from upstream to further 
concentrate.
    In addition, the Bureau through CALFED decided to reallocate New 
Melones water for fishery purposes. New Melones is on the Stanislaus 
River, a tributary of the San Joaquin. Under its permits, the Bureau 
must release water from New Melones to maintain water quality on the 
San Joaquin River in recognition of its culpability for polluting the 
San Joaquin. The CALFED process, however, reallocated New Melones water 
for fisheries such that there is now less water to meet the salinity 
standard, a pre-existing permit condition of the Bureau.
    Fixing the Delta would seem to suggest these issues be squarely 
addressed. Unfortunately, CALFED does not because it is geared to 
improving exports.
    To avoid the issue of first addressing current impacts, CALFED was 
founded in the idea of everyone ``getting better together.'' Besides 
not being implemented in practice, such a concept ignores basic 
fairness, water rights, and tort law. The South Delta has been 
adversely impacted by the export projects for over thirty years. 
Instead of seeking to mitigate the existing harm to innocent third 
parties, CALFED promises to ``improve'' water levels and quality in the 
South Delta while at the same time embarking upon increased exports.
    It should be the policy of both the State and Federal Governments 
to first mitigate the damage they cause before they propose to cause 
more damage or figure out how to mitigate an additional amount. The 
parties who say that such an approach is divisive are the ones who want 
to better their positions before the South Delta problems are solved.
    At this time, there is an ongoing temporary barrier program and a 
proposed permanent barrier program to address many of the concerns and 
issues related to the South Delta. That program will hopefully be 
successful, and we continue to work with the California Department of 
Water Resources to secure adequate protections for the area. If asked, 
I can more fully explain the barrier program; how it works, its 
shortcomings, and how CALFED affects it.
    What is needed to assist all beneficial users of water in 
California is legislative action to force CALFED or its constituent 
agencies to take actions in addition to the ROD and to limit some 
things the agencies currently do. I suggest the following:
    1. There should be both a State and Federal statute directing the 
restoration of the San Joaquin River. The USBR has seriously impacted 
the quality and quantity of water in that River to the detriment of 
many interests. Without such legislative directive, the regulatory 
agencies will continue on their never-ending process which to date has 
accomplished very little.
    2. The adverse impacts of the export projects should be mitigated 
before any additional exports are approved or implemented. Mitigation 
of existing impacts should not be combined with a project to increase 
exports, as history shows us that the increase in exports occurs and 
the mitigation may not.
    3. Standards in the South Delta should be implemented which would 
require decreased exports when water levels fall below certain heights 
in designated places. Reliance on mitigation can prove ill-founded, but 
mandatory standards protecting water levels could be enforced.
    4. Transfers of water should not be part of any long-term program 
to increase supplies to other portions of the State. Transfers should 
be limited only to emergencies and those instances where the seller 
decreases its consumptive use (or decreases the amount of water 
previously lost to beneficial uses). There can be no worse policy for 
the State of California than to have distant areas rely upon transfers 
of water when the total supply remains static.
    5. New supplies should be developed to address the current and 
projected water shortages in California. Each area of the State should 
move towards self-sufficiency so that the growth and economic 
prosperity of any region is not dependent upon a supply of water which 
may be needed in other parts of the State. Both State and Federal funds 
should be allocated for local projects to develop such new supplies.
    6. Groundwater should not be mined to support growth in any portion 
of the State. California's groundwater is steadily declining and is the 
reservoir upon which we rely in times of drought. Use of groundwater 
especially under conjunctive use programs should certainly be 
encouraged. However, encouraging the sale of surface supplies and 
forcing sellers to turn to groundwater reserves is at best a short 
sided policy.
    7. Area of origin laws and the Delta Protection Act statutes should 
be fully enforced and the involved State and Federal agencies should 
actively work to implement them not oppose compliance with these 
statutes until brought into Court.
    California's water problems are only just beginning. If we don't 
protect innocent third parties and fisheries from the effects of our 
complex system which redistributes the water of the State of 
California, we can never begin to solve the problem of future needs. 
Those future needs loom on the horizon. If we don't begin now to 
develop more supply, future generations will be limited by our 
shortsightedness.
                                 ______
                                 
    Mr. Calvert. Next, we are going to recognize Dennis Majors 
from the Metropolitan Water District. And he asked for some 
more time to go through the plumbing of the Delta, and we are 
happy to grant that. Mr. Majors is also known as the gentleman 
who built the Diamond Valley Reservoir, the last reservoir to 
be built in the State of California of any size. So the 
gentleman is recognized.

  STATEMENT OF DENNIS G. MAJORS, ENGINEERING PROGRAM MANAGER, 
       METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA

    Mr. Majors. Thank you, Mr. Chairman, and members of the 
Committee. I am an Engineering Program Manager with 
Metropolitan Water District, and for 2 years I also was the 
Delta Implementation Manager for CALFED.
    I have the sense you are not hearing me.
    Mr. Calvert. Maybe move that mike up closer to you.
    Mr. Majors. OK.
    I gained quite a bit of knowledge regarding the Delta 
system and how water is moved from north to south through that 
system. The Through Delta Plan is CALFED's preferred 
alternative from the Record of Decision and Final EIR/EIS, and 
it was issued in August of 2000.
    I want you to know that the Metropolitan Water District 
strongly supports and is dedicated to the success of the 
Through Delta Plan. We will take all appropriate actions to 
assure its implementation. However, I should say that, equally 
important, we are committed to the avoidance of adverse impacts 
to Delta farming or other interests, including effects to Delta 
water supply and water quality. I will focus my remarks today 
substantially on that issue.
    I don't know if you have the written testimony, but under 
Tab 1 of my written testimony I showed a number of Through 
Delta Improvements which convey water from the Sacramento River 
to the Delta and southerly export facilities.
    North Delta facilities include, for example, flow 
improvements of the Delta Cross Channel, flood control 
enlargements to the north Delta channels. Throughout the Delta, 
it includes levee improvements, maintenance dredging, and 
ecosystem restoration.
    The south Delta facilities include dredging of the 
channels, construction of permanent operable barriers to 
protect farming interests, water supply and water quality, and 
it also includes cost-effective fisheries measures.
    Dredging and permanent operable barriers in the south Delta 
are CALFED's first implementation package. I want to say that 
they are highly cost-effective, they can be accomplished in the 
near term, and are funded now for construction. So we need to 
move ahead.
    They include also a careful plan to protect Delta interests 
from the effects of implementation. In the north Delta, studies 
will conclude how best to operate Delta Cross Channel and other 
conveyance features to enhance water quality in the Delta while 
protecting fish and, potentially, Mr. Chairman, keeping the 
Delta Cross Channel open longer periods of time to improve our 
water quality in the Delta.
    Flood control improvements downstream, which also help 
water quality, are planned; and in my testimony I show a tab 
that shows various concepts of levee improvements that 
substantially improve the integrity of the entire Delta system. 
These are also funded through Prop 50 and through the State 
subventions program, so there is a funding source.
    Plans for achieving 8,500 cubic feet per second capacity in 
the south Delta are accompanied by additional dredging of Old 
River near the Delta, levee improvements, and also the 
installation of these operable barriers. The barriers, along 
with selective deepening of diversions and even additional 
portable pumping when water supply is very lean, particularly 
on the San Joaquin, are part of that kind of a concept, so that 
there will not be adverse effects to Delta farming interests 
either from a water quality or water supply perspective.
    Also, we show that those barriers have the potential--not 
the potential; what they actually do is that they accept water 
at high tide, so that these high levels of water can be 
maintained for water supply for the farmers while export 
pumping is going on. So there are protections there as well.
    Within the testimony, it also shows that barriers, by 
regulating them in the proper way, making small releases, can 
also improve water quality in the Delta region; and that is 
something that is critically important to all of us. Funds for 
this work are also in place in the form of bond issues.
    While permanent barriers can capture more water at high 
tide than the temporary barriers, I should point out that since 
1991, for over 12 years, there has been a system of temporary 
barriers in the south Delta so that water can be trapped at 
high tide; later on, when pumping takes place or at low tide, 
south Delta farmers have their water supply needs met.
    South Delta pumping at 8,500 cubic feet per second is 
planned to begin under the more limited capabilities of the 
temporary barriers while fully protecting south Delta 
agricultural diversion capability. This means these operations 
will not occur as frequently as when we have the permanent 
barriers.
    And what I would like to emphasize is, it is very important 
and I would say urgent to get these barriers, these permanent 
barriers in place as soon as possible. As we read the current 
schedules, the EIR for the south Delta is certified in next 
year and the permanent operable barriers are not in place until 
2008, and we consider that unacceptable. We think we can move 
quicker than that.
    So, in conclusion, Mr. Chairman, moving water through the 
Delta to export facilities comes with an commitment to protect 
Delta interests with a vital stake in water supply quality and 
levee system integrity. This is a commitment, as I say, that is 
integral with any plan to increase exports.
    And I would be happy to answer any questions, Mr. Chairman.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Majors follows:]

      Statement of Dennis G. Majors, Engineering Program Manager, 
           Metropolitan Water District of Southern California

    Thank you Chairman Calvert. I am currently an Engineering Program 
Manager with the Metropolitan Water District of Southern California, 
with responsibilities for guiding implementation of the CALFED Program. 
For two years, from 2000 to 2002, I was also CALFED's Delta 
Implementation Manager, where I gained detailed knowledge of the 
concept and operations involved in moving water south, across the 
Delta's system of channels and rivers, to the Federal and state water 
export facilities. The attached Disclosure Statement provides other 
supporting information on my qualifications relevant to this testimony.
Summary and Conclusions
    Under CALFED, the concept of conveying water across the Delta to 
export facilities is called the Through Delta Plan. This is CALFED's 
preferred alternative, contained in the CALFED Bay Delta Program's 
Record of Decision and Final EIR/EIS, issued in August 2000. The 
avoidance of adverse effects to Delta farming or other interests is 
inherent in this Plan.
    The conveyance of water through the Delta to export facilities in 
the south comes with a commitment to protect Delta interests with a 
vital stake in its water supply and water quality to maintain the 
integrity of their operations. CALFED will implement the Through Delta 
Plan through planned flood control improvements in the north Delta, 
ongoing levee and dredging programs throughout the Delta, dredging in 
the south Delta, and the use of permanent operable barriers in the 
south Delta to protect the region's water quality and water supply. 
Appropriate habitat improvements will be undertaken to maintain the 
integrity of the Delta system as a whole and a balanced approach to 
CALFED implementation.
    Metropolitan Water District strongly supports and is dedicated to 
the success of the Through Delta Plan and will take all appropriate 
actions to ensure its implementation. This Plan includes improvements 
in the north and south Delta, which are summarized in the numbered 
items below and illustrated on Tab 1. Items 4 through 9 of this list 
constitute the first major implementation package under the CALFED 
program, and will substantially improve water supply reliability for 
Southern California and other water users south of the Delta. These 
measures are highly cost effective, can be accomplished in the near 
term, and include a careful plan to protect all Delta interests during 
their implementation and operation.
    1. Lflow improvements at and near Delta Cross Channel,
    2. Lflood control enlargements to north Delta channels,
    3. Lcost effective measures to improve fish salvage in the south 
Delta,
    4. Longoing levee improvements throughout the Delta,
    5. Ldredging of channels in the south Delta,
    6. Lmaintenance dredging in various parts of the Delta to maintain 
channel capacity,
    7. Lthe construction of permanent operable barriers in the south 
Delta to maintain water quality and water supply to farming interests,
    8. Lcomplementary ecosystem restoration measures, and
    9. Lincreased pumping capacity at south Delta export facilities to 
8500 cubic feet per second.
    I will review these improvements and show how they allow the 
conveyance of water toward export facilities, while protecting Delta 
interests integrally linked to its water supply, water quality and the 
integrity of the system as a whole.
North Delta Improvements
    In the north Delta, the Plan consists of several actions to address 
flood control, ecosystem, water quality, fisheries, and water supply 
reliability concerns. These include:
    1. Ldredging and setback levees on the north and south forks of the 
Mokelumne River,
    2. Lflood control and habitat restoration on McCormack-Williamson 
Tract,
    3. Lrestoring habitat along Georgiana Slough,
    4. Lmodifying Delta Cross Channel operations, and
    5. Lthe feasibility of constructing an additional diversion to the 
Delta from the Sacramento River.
    At Tab 1, you will see these listed as Flood Control Improvements 
and Flow Improvements. I will highlight those facilities that most 
particularly improve flow capacity, channel integrity and water quality 
in the Delta.
Delta Cross Channel and the Through Delta Facility
    Near the Delta Cross Channel in the north Delta, studies will show 
how to operate the Cross Channel, along with other conveyance features 
in that area, to enhance water quality in the Delta while protecting 
fish--most particularly the downstream migration of salmon smolts and 
the upstream migration of salmon adults. We think CALFED can meet these 
goals in a complimentary manner in order to keep the Cross Channel open 
more of the year. The Cross Channel is now generally closed in the 
spring, open in the summer and fall, and partially open at other times 
of the year.
    We will determine how flow splits east from the Sacramento River 
into the Cross Channel and Georgiana Slough, or west from the 
Sacramento River into Sutter and Steamboat Sloughs, will let us best 
maintain higher water quality in the Delta and keep fish away from 
areas where they could more easily be diverted from the Sacramento 
River. Tab 1 shows the locations of these river and channel systems in 
the north Delta.
    We expect these answers late next year, with facility improvements 
to follow.
Flood Control
    CALFED is planning flood control measures in the north Delta, which 
will result in a final planning document next year. The measures will 
substantially improve the flood carrying capacity of north Delta 
channels, such as the north and south forks of the Mokelumne River that 
lead into the Delta. This is done through combinations of dredging, 
levee raising, and levee set backs to gain the needed flood capacity. 
As an example, Tab 2 highlights the concept of a set back levee, which 
has the added benefit of encouraging habitat growth (graphic 1). It 
also shows how dredged materials removed from the channel can be placed 
on the backside of the levees to strengthen their integrity (graphic 
2). These actions complement the movement of water through the Delta 
and improve water quality, and substantially improve the integrity of 
channel and levee systems to the benefit of farming and other 
interests.
Levees Improvements
    The Department of Water Resources has an active program to maintain 
and improve levees throughout the Delta on a continuous basis. This 
program is supported by state legislation that also requires net 
habitat enhancement with the improvement of any levee site. Levee 
improvements are thereby combined with unique habitat restoration 
opportunities. Levee integrity is enhanced, for example, by dredging 
material from the adjacent channel and placing dredged materials behind 
the levees for stability. Intermediate benches can also be provided on 
the waterside of the levees for greater stability. Habitat growth is 
encouraged in benched areas for restoration purposes and wave energy 
dissipation. Tab 2 further highlights the levee integrity improvements 
and habitat enhancement opportunities afforded by the levees program. 
Funding for such work is provided through the state subventions program 
on an annual basis, and through state bond issues, such as the recently 
passed Proposition 50. An active levees program is clearly 
complementary to the Through Delta Plan, proving added integrity to the 
conveyance of waters to export facilities, while guarding against 
catastrophic levee failures, causing severe damage to adjacent 
properties, and salinity intrusion and water quality degradation in the 
central Delta and at export facilities.
South Delta Improvements
    Plans for achieving a capacity of 8,500 cubic feet per second at 
Banks Pumping Plant in the south Delta would be accompanied by 
additional dredging on Old River, the installation of permanent 
operable barriers across Middle and Old Rivers and Grant Line Canal, 
the placement of a fish barrier at the head of Old River, as well as 
ongoing levee improvements. In addition, where found that barriers may 
not adequately protect farming interests from supply inadequacies, a 
program to selectively deepen diversions and provide portable pumps 
would be employed, upstream and downstream of the barriers. The 
barriers and selective diversion deepening and portable pump systems 
give the assurance that, as pumping takes place at export facilities, 
there will not be adverse effects to water levels and or water quality 
of Delta farming interests. Channel integrity is better maintained, and 
fish are diverted further away from pumping operations. Funds are now 
in place through state bond issues to make these improvements.
Dredging
    Dredging the Old River north of the export pumps is necessary to 
avoid sediment movement and channel scouring during peak diversions. 
Here, levee stability is enhanced by only removing material in the 
center of the channel and by maintaining flatter side slopes on the 
channel. Dredge materials would be placed on the backside of levees to 
reinforce their integrity, in a manner typical of dredging operations 
and levee improvements that are taking place throughout the Delta. Tab 
2, again demonstrates this concept. As noted above, state bond funds 
are in place to perform this work.
    Erosion along the banks of channels in the Delta is also a real 
concern to interests in these areas. Dredging, by adding to the area of 
the channel, means that the same amount of water now doesn't have to 
move as fast, resulting in less erosion.
Barrier Operations for Delta Water Supply
    Permanent operable barriers are designed to pass water under their 
gates and upstream at high tide so waters can be trapped and held at 
these high levels for agricultural diversions while export pumping is 
taking place in the south Delta. Tab 3 shows how water is trapped at 
high tide (graphic 1) and then held at high enough levels to allow 
farmers to divert to their fields (graphic 2). Barriers will be placed 
on Middle River and Old River and at the Grant Line Canal. The gates on 
these barriers give great flexibility to change operations in rapid 
response to farmers' needs. The barriers are also designed to let water 
pass freely past them during the periods of natural or regulated high 
flow or when water levels are high enough without the need for flow 
control. They also have the effect of helping keep fish away from the 
pumps during periods of export pumping.
    More recently, there have water level problems, due to siltation, 
upstream of the temporary barriers. In such circumstances, it has been 
recognized that additional dredging would be required to deepen the 
channels and maintain water availability to agricultural diverters.
    Operations at 8,500 cubic feet per second capacity are planned to 
begin initially under more limited capabilities of the temporary 
barriers, while fully protecting south Delta agricultural diversion 
capability. These limitations mean the use of the 8,500 cubic feet per 
second capacity may occur less frequently than when permanent barriers 
are fully operational. The planning documents for this work will be 
completed next year, allowing construction of the permanent barriers to 
proceed. We clearly recognize the urgency of completing the design and 
construction of these barriers, so they are fully operational at the 
earliest possible date.
Barrier Operations for Delta Water Quality
    It is essential to maintain adequate water quality throughout the 
Delta when export operations are taking place. Current operations of 
the Central Valley Project and State Water Project facilities provide 
regulated releases of waters to ensure that salinity is pushed 
substantially seaward from the Delta, thereby improving water quality. 
Mandatory salinity requirements are in place at various river and 
channel locations to ensure that acceptable salinity levels are 
maintained. Exports are made strictly within these regulatory 
requirements, which are complementary with the need to deliver high 
quality water to downstream users.
    We also recognize that water quality both upstream and downstream 
of the permanent operable barriers may degrade with lack of water 
movement. Here, the barriers themselves provide a useful tool, since 
small water releases can be made from time to time to maintain 
circulation and, therefore, adequate water quality. Tab 4 illustrates 
how circulation can be impeded at these barriers, if their gates are 
fully closed (graphic 1) and how a slight opening of the gates can help 
circulate water (graphic 2). In addition, the barriers have the 
potential to push fresh water to the main stem of the San Joaquin River 
and enhance quality.
Deepening of Agricultural Diversions
    We also know that in some of the areas of the Delta, both upstream 
and downstream of these barriers, certain agricultural diversions may 
not be low enough to reach the water levels even with the operable 
barriers in place. Selective deepening of these diversions will be 
done, in addition to the installation of operable barriers, so that 
water will be available under any circumstance. We are concerned about 
this because we know, for example, that being cut off from water for a 
period of days (or even hours in some cases) can cause substantial 
monetary damage to crops and farming operations. The state Department 
of Water Resources (DWR) has deepened several diversions over the last 
three or four years and more recently installed portable pumps where 
waters levels have dropped below agricultural diversion levels, 
primarily downstream of temporary barriers at Union Island. This 
diversion deepening and portable pump program provides added assurance 
to reliable agricultural supplies, and is expected to continue now and 
with the installation of permanent operable barriers, upstream and 
downstream of the barrier locations.
Maintenance Dredging
    Another condition that may occur with the installation of barriers 
is siltation buildup behind them over a period of time. It is 
recognized that such conditions can impair the permanent function of 
the barriers and the ability to maintain agricultural diversion 
capability on a continuous basis. It will be necessary to periodically 
evaluate this situation and remove sediment in channel reaches upstream 
of the barriers, keeping them operational and free from sediment, as 
necessary.
Temporary Barriers
    It is also important to note that DWR has installed a system of 
temporary barriers since 1991 to provide protection to Delta farmers. 
While the permanent operable barriers give more flexibility to assure 
water supply and quality to farming interests, the temporary barriers 
have nevertheless been very useful in maintaining supplies, 
particularly in the summer and fall when export deliveries from the 
Delta could affect farmers the greatest. The locations of these 
barriers are shown on Tab 5.
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    Mr. Calvert. Gary Bobker, the Bay Institute.

          STATEMENT OF GARY BOBKER, PROGRAM DIRECTOR, 
                       THE BAY INSTITUTE

    Mr. Bobker. Thank you, Mr. Chairman. Thank you, Mr. 
Chairman, members of the question. My name is Gary Bobker; I am 
the Program Director of the Bay Institute.
    There are three or four major points I would like to make. 
The first one echoes some comments that John Herrick made; and 
that is that in all the talk of the missing infrastructure of 
California's water supply system, the biggest missing 
infrastructure is rarely mentioned, and that is a conveyance 
system formerly called the San Joaquin River. In fact, it was 
the loss of the San Joaquin River 50 years ago, which flowed to 
the Delta, that has in a sense created or exacerbated most of 
the problems we are experiencing in Delta water management 
today.
    The fact is that for my friends in Central and South Delta 
Water Agency, my friends in Contra Costa Water District, the 
degradation of their water quality, the exceedences of water 
quality objectives in many years has been an ongoing problem 
that is caused in large part by the loss of the San Joaquin 
River flows.
    At the same time that there is a water quality problem, 
there is an equity in water supply problem, which a number of 
you have raised concerns about. At the same time that the 
bureau is scrambling to provide water for New Melones to meet 
downstream objectives, water is available upstream and in fact 
it was spilling from Friant Dam. That water does not make it to 
the Delta, and right now it is not required to.
    The fact is that because the main stem San Joaquin is not 
part of the system anymore, the folks in the Central Valley 
Project, folks in the State Water Project, folks in the Delta 
and folks upstream who have to meet Delta commitments are all 
pretty dramatically affected by that. And the fact--the 
environmental impacts, of course, have been exacerbated by the 
loss of a major part of the Delta's fishery and aquatic 
ecosystem. And that has put more pressure on the Sacramento 
River salmon and more pressure on those folks whose operations 
impact the Sacramento River salmon.
    That is not equitable and that needs to change. And 
hopefully soon we will welcome the San Joaquin River back to 
the water supply system, to its rightful place as a conveyance 
system rather than as a drain.
    The second point that I want to make--and I get to be the 
dog in the manger; we drew straws in the environmental 
community, and I get to be it today--is that surface storage is 
such a panacea that people point out to us, that is going to 
solve all our problems.
    You know, there are obvious issues that the environmental 
groups are always going to raise regarding the environmental 
footprint. We have heard the stories. I am not going to get 
into that now; I think everybody is familiar with those issues.
    I am going to get to the economic argument, which is 
basically that when you look at most surface storage 
facilities, the yield is very low and the costs are very high. 
They don't compete with most of the other alternatives 
available. If you look at combinations of different, other--all 
the other tools that are available to us, most of the time 
financially they are much more cost-effective.
    At the same time, when there--there are a lot of folks who 
are saying, you know, if we just had surface storage. We 
explained to them how we would solve all the problems, but when 
it comes time to identify who the beneficiaries are who are 
going to pay in part for surface storage facilities, all of a 
sudden the line is empty. CALFED is having a problem 
identifying some of the beneficiaries for some of the proposed 
projects.
    So, oddly enough, I have to give credit to the Bush 
administration for, I think, recognizing that, you know, the 
money is not there in the Federal and State budgets to pay for 
these extremely expensive facilities. And if people want them, 
they are going to have to pay for them, and right now nobody 
wants to.
    But there are other alternatives that can help meet 
California's water needs. And I think the water 2025 initiative 
that we are seeing from the Administration is, to the 
Administration's credit, a good sign. Obviously, there are a 
lot of things we don't agree with the Administration about, but 
again I have to give them credit for saying, you know, there 
are finite resources.
    Water is a finite resource. Money is a finite resource. And 
water supply planners need to recognize that.
    The fact is that CALFED appropriately recognized that 
investments in conservation and wastewater reclamation could be 
brought on-line quickly, brought in line quickly, and at costs 
of $150 to $450 an acre-foot, are quite competitive; but now we 
need to get the funding to be able to make that happen. If you 
really want to ameliorate some of the problems we are having, 
then we need to provide the seed money to get that going, and 
there will be significant local cost shares for conservation 
and wastewater reclamation investments.
    Desalination is something that over time the cost has come 
down. It is now probably equivalent to new surface storage and 
it is going to go down. NAD is paying $250 an acre-foot subsidy 
to encourage some districts to pursue desalination because they 
know it is a reliable supply.
    Groundwater: I mean, one of the funny things we can talk 
about new surface storage, which doesn't work unless you do it 
conjunctively with your management of groundwater, this State 
manages groundwater terribly. We need to both improve 
groundwater management planning and we need to reoperate our 
current facilities to use the ground better. Recent studies 
have shown that you probably get up to 1 million acre-feet just 
from reoperating existing reservoirs conjunctively with 
groundwater banking.
    And finally there are transfers. And I will just note, 
interestingly enough, that the market has interesting impacts 
on agricultural users. Urbanization, rather than the 
environment, is a big cause of conversion of land use, 
conversion of agricultural land use to urban areas. The 
acquisition of water from agricultural areas is to urban or 
out-of-basin users. The environment is a drop in the bucket 
compared to those other things, and you shouldn't scapegoat 
environmental uses of water and land because of that, I think.
    The CALFED: CALFED made very difficult decisions. It is 
difficult to solve everybody's problem completely. And it is 
important to look at how all the different pieces come 
together. And I think if you start to pick at that--I have a 
lot of problems with CALFED; there are things I don't like 
about it. But I think if you start to pick at it, you will 
unravel the benefits that it does. So I think that is important 
to consider also.
    Thank you, Mr. Chairman.
    Mr. Calvert. Thank you.
    [The prepared statement of Mr. Bobker follows:]

     Statement of Gary Bobker, Program Director, The Bay Institute

    Mr. Chairman and members of the Committee, thank you for inviting 
me to participate in today's hearing to examine the CALFED program and 
ways to improve water supply, reliability, availability and quality.
    My name is Gary Bobker. I am the program director at the Bay 
Institute, a nonprofit research, education and advocacy organization 
founded in 1981 to protect and restore the ecosystems of San Francisco 
Bay and its watershed. The Bay Institute has been deeply involved in 
the major California water policy initiatives of the last two decades, 
including passage and implementation of the Central Valley Project 
Improvement Act of 1992; negotiation of the Bay-Delta Accord and the 
San Joaquin River Agreement; drafting Proposition 204 and other water-
related bond measures; the intensive analytical and advisory process 
leading up to the CALFED Record of Decision; and the ongoing efforts to 
restore the San Joaquin River below Friant Dam, including the recent 4 
year settlement negotiations process with the Friant Water Users 
Authority (during which I co-chaired the team overseeing the 
development of water supply options to support the restoration effort). 
I currently serve on the Federal California Bay-Delta Public Advisory 
Committee. In addition, the Bay Institute's Bay Restoration Program 
Manager, Marc Holmes, was recently appointed as a public member to the 
new Bay-Delta Authority established by the state legislature.
    I would like to focus my remarks today on three very different 
issues regarding potential new sources of water supply.
    First, let me point out that the most exciting prospective new 
addition to California's water supply system is also, paradoxically, 
one of its oldest: the San Joaquin River.
    Restoring flows to the San Joaquin River below Friant Dam has 
enormous potential to help solve some of the most challenging and 
contentious water management problems in the Delta and the larger world 
of California's water supply system. Interestingly, it is little 
appreciated how much the loss of San Joaquin River flows has 
contributed to creating those very problems.
    Construction of the Friant project in the 1940s dewatered entire 
reaches of the San Joaquin River below the dam, broke the hydrologic 
connection between the river and the Delta, extirpated the spring-run 
chinook salmon run and devastated other salmon and steelhead 
populations, riparian habitat and other ecological values. The 
consequences were not simply limited to environmental destruction, 
however. The effects on Delta water supply and water quality were 
equally dramatic. (It is important to note that the diversion of the 
river not only hurts the Delta, it also violates state law. The state's 
top legal officials, including former Attorney General Dan Lungren, 
have repeatedly pointed out that all dams in California must release 
water for the downstream environment and the claimed exemption for 
Friant Dam--because it is Federally owned--is inappropriate and 
contrary to law).
    Loss of the river's flows means that water quality has been 
severely degraded for downstream users. Urban and agricultural 
diverters in the Delta have suffered for decades from a measurable 
decrease in quality at their intakes, and water quality objectives to 
protect drinking water and irrigation uses have been violated in a 
number of years. In addition, long standing upstream salt loading and 
in-Delta dissolved oxygen problems have been exacerbated by the 
insufficient quantity and low quality of the water that does make it to 
the lower reaches of the San Joaquin River.
    Loss of the river's flows means that some water users must pick up 
the slack for those who do not release water to the Delta. Because 
Friant Dam does not release water to maintain Delta water quality and 
environmental protection, water users along the San Joaquin's 
tributaries and in the Sacramento Valley must allocate additional 
supplies to meet downstream requirements, both in direct release 
requirements and in carriage water dedications. This inequitable state 
of affairs was recently illustrated by the juxtaposition of two 
seemingly contradictory events. While the Bureau of Reclamation was 
petitioning the State Water Resources Control Board to relax flow 
objectives for the lower San Joaquin River in June because it did not 
have sufficient supplies in New Melones Reservoir, water was spilling 
over the face of Friant Dam--water that did not reach, and is not 
currently required to reach, the Delta. Furthermore, water project 
operations in the Delta must often be modified to avoid causing water 
intake problems for in-Delta diverters because Delta exports are high 
and San Joaquin River flows are low.
    Loss of the river's fishery resources and habitat means that 
operation of the state and Federal water projects is constrained even 
more than is called for to mitigate for their adverse biological 
impacts. The combination of high exports and low river flows creates a 
hydraulic barrier to the outmigration of juvenile salmonids and an 
attractive nuisance for resident Delta fish species. The South Delta 
project operators are rightly expected to curtail pumping during 
periods of high risk to fish populations, but releases to the San 
Joaquin River are not similarly increased to share the burden of 
maintaining the Delta environment. Furthermore, the loss of genetic 
diversity and lack of access to upstream habitat areas drastically 
limits the ability of Federal and state resource managers to reverse 
the decline and promote the recovery of endangered resident and 
anadromous fish species, and puts greater pressure on the remaining 
Sacramento River stocks, all of which are experiencing long-term 
declines and are adversely affected by water supply operations in the 
Delta. It also means that commercial and recreational chinook salmon 
harvest is totally dependent on one source, Sacramento River fall-run 
production.
    Reforging the connection between this major river system and the 
critical Delta region is properly seen therefore as a solution not only 
to upstream environmental problems but as a key component in providing 
Delta conditions that ameliorate existing water quality problems, allow 
greater flexibility for water project operations and reduce endangered 
species impacts. Furthermore, my experience in working with the Friant 
water users and other parties in developing water supply strategies to 
support restoration of the river has convinced me that a number of 
cost-effective alternatives exist for reconnecting the San Joaquin 
River and the Delta (which I will touch upon later).
    The second point I would like to make is that new dams are not the 
answer to improving California's water supply reliability.
    Since I've been discussing the San Joaquin River, let's take new 
surface storage on the San Joaquin system as an example. Initial cost 
estimates for constructing a new facility at Temperance Flat are about 
$1 billion, and initial average annual yield estimates run up to about 
140,000 acre-feet depending on assumptions on operational constraints. 
Temperance Flat water would cost $800 or more an acre-foot, making it 
substantially more expensive than other water supply options.
    Specifically, Temperance Flat would cost two or three times the 
amount necessary to fund, and only generate one-half or one-third of 
the potential yield of, alternative water management approaches that 
rely on more efficient use of existing surface storage facilities, 
development of new groundwater storage capacity, and purchases in the 
water market.
    I won't attempt to address here the very serious environmental 
footprint and offsite impacts of building and operating new facilities 
like Temperance Flat. I will confine myself to asking a few critical 
questions: Who is prepared to pay for Temperance Flat, or for the other 
surface storage reservoirs being evaluated by CALFED and the Bureau of 
Reclamation? And why should the Delta environment or consumptive water 
users wait for risky projects decades in the making when so many 
cheaper and faster options exist?
    The salient fact experienced as the agencies evaluate the 
feasibility of new surface storage is that none of the interests who 
unceasingly promote the construction of new dams are willing to be 
identified as beneficiaries who should in any serious way contribute to 
the costs of these facilities.
    But anyone who follows the state of the Federal budget--not to 
mention California's budget problems--has to conclude that the days of 
Federal or state subsidies for expensive new infrastructure are past. 
This is especially true when the local cost-share is insufficient or 
non-existent.
    As Assistant Secretary Bennett Raley recently told the Rocky 
Mountain News, ``There is no money for building new dams. The areas 
where there are pressures for more water are going to be the ones that 
pay for the infrastructure.''
    Finally, I would like to discuss ways to improve water supply 
reliability that are more environmentally sound and economically 
efficient.
    When normally adversarial interests such as the Bush administration 
and environmental organizations agree, it's worth sitting up and taking 
notice. That's what is happening in terms of developing a long-term, 
proactive vision for managing scarce water resources in the semi-arid 
western states.
    In launching the Administration's Water 2025 initiative earlier 
this month in Denver, Secretary of the Interior Gale Norton's message 
was that conservation, not dams, is the key to future water management. 
Water 2025 emphasizes the central role of conservation, efficiency, 
markets and improved technology in meeting changing water demands.
    I wholeheartedly agree with the Secretary's list, and I would add 
to it a fundamental new principle for California: local self-reliance. 
The competition between local and out-of-basin uses of water, the 
fragility of the Bay-Delta/Central Valley watershed environment, the 
uncertain effects of climate change on the state's already highly 
variable hydrology, and the need to secure a greater share of local 
funding sources for new water supply initiatives, all encourage a shift 
toward lessening each region's dependence on imported water supplies 
and maximizing the more efficient use and reuse of existing supplies 
and of existing storage capacity. That in fact is the trend being 
followed by the managers of some of the state's largest water 
districts, who have been investing heavily in implementing urban 
conservation best management practices, wastewater reclamation and most 
recently desalination.
    The CALFED Record of Decision set a target of investing $1.5 to 2 
billion in state and Federal funds (with an equivalent cost-share from 
local sources) for water use efficiency and wastewater reclamation in 
the first seven years of Stage 1. The ROD notes that ``the Stage 1 
investments reflect the fact that many of the water use efficiency 
measures can be brought on line in a relatively short time frame'' (p. 
64) and estimates the annual cost of implementing urban water 
conservation measures at $150 to $450 per acre-feet. Securing adequate 
Federal and state funding to implement this ROD commitment represents 
the quickest and cheapest way to create significant new water supply in 
California, and one that will be fully matched by local interests.
    Desalination is the next water supply frontier. Although there 
remain important environmental and energy issues to be addressed, 
desalination has improved dramatically in recent years. The 
Metropolitan Water District of Southern California offers a $250 per 
acre-feet subsidy to districts implementing desalination pilot 
projects. The subsidy is cost-effective because the price of 
desalinated water, once prohibitively expensive when the technology was 
new and untested, is now roughly equivalent to the cost to Southern 
California of imported water, but represents a more reliable source. 
Technology improvements and competition for supply will soon make 
desalination cheaper and far more attractive than imported water. MWD 
is considering raising its target for new supply from desalination 
projects to 150,000 acre-feet (or equal to the estimated yield of most 
proposed surface storage reservoirs).
    There are also millions of acre-feet of unused storage capacity in 
the least expensive, least impactful, ``pre-fabricated'' reservoirs 
ever used--namely, the vast groundwater basins of the Central Valley. 
The CALFED Record of Decision set a target of facilitating and funding 
groundwater and conjunctive use projects with a total of 500,000 to 1 
million acre-feet of additional storage capacity by 2007. Implementing 
these projects will allow for the increased operational flexibility and 
local self-reliance that water managers need in the current 
environment.
    And it doesn't take new surface storage facilities to fully exploit 
these groundwater opportunities. Recent studies by the Natural Heritage 
Institute for the Bureau of Reclamation indicate that re-operating the 
nine largest existing Central Valley reservoirs to recharge groundwater 
basins could create an average annual additional yield of one million 
acre-feet. That is enough water for as many as 10 million residential 
customers. (More information on these studies is available online at 
www.conjunctiveuse.org).
    To be most effective, these water management tools must not be used 
in a piecemeal fashion but implemented according to a coordinated and 
comprehensive planning effort. For instance, a two year study by the 
URS Corporation for the Friant Water Users Authority and a coalition of 
environmental and fishing groups headed by the Natural Resources 
Defense Council found that about 400,000 acre-feet of new supply could 
be created on the east side of the San Joaquin Valley by a combination 
of reservoir reoperation, long and short term water purchases, 
efficiency improvements, downstream recapture of releases, and 
groundwater banking. The cost of implementing this approach is 
significantly less than relying on new surface storage. (The full study 
can be downloaded at www.dpla.water.ca.gov/sjd/sjrmp).
    Pursuing a combination of conservation, desalination, groundwater 
banking, and a regulated water market would allow California to obtain 
a more reliable water supply and greater actual yield than all of the 
surface storage projects proposed for evaluation by CALFED or the 
Bureau of Reclamation, at a fraction of the cost. Continued Federal 
funding and support for conservation, desalination, and groundwater 
banking programs provides the impetus for innovative and cost-effective 
new projects that attract significant local funding and can help 
increase the resilience and flexibility of the state's water supply 
system because they can be implemented in the near future.
    Again, thank you for the opportunity to make these comments.
                                 ______
                                 
    Mr. Calvert. Nicole Van Vleck of the Northern California 
Water Association, you are recognized.

                STATEMENT OF NICOLE VAN VLECK, 
             NORTHERN CALIFORNIA WATER ASSOCIATION

    Ms. Van Vleck. Thank you, Mr. Chairman and Subcommittee 
members. I am a rice farmer, and I am a managing partner and 
owner in Montna Farms in Sutter County, California. I represent 
today the Northern California Water Association as a Director 
on their board, and we appreciate the opportunity to testify 
today on the positive efforts that are now under way to 
implement the Sacramento Valley Water Management Program.
    The program is a grass-roots, collaborative effort to 
increase water supplies and provide environmental needs in the 
Sacramento Valley. Most notably, this regional program is built 
upon local partnerships in the Sacramento Valley that has 
really led to unprecedented collaboration with historically 
warring parties here throughout California, including southern 
California, the San Joaquin Valley, the central coast, and 
certain parts of the Bay Area.
    The ability to transfer water is critical to this program's 
capacity to meet the unmet demands in the Sacramento Valley and 
to help improve our water supply and our quality--water quality 
here throughout the State. Essential to any water transfer is 
the recognition of the fundamental property rights for those 
who hold water rights. The importance of water rights to local 
communities is also extremely dependent upon these area-of-
origin water resources, and also the belief that the actual 
water right holder should determine the disposition of the 
water right to be transferred.
    NCWA represents 70 water suppliers, such as districts and 
user water companies and individual landowners that rely on the 
waters of the Sacramento, Yuba, and Feather Rivers and its 
smaller tributaries and the groundwater to irrigate nearly 
890,000 acres of farmland in California's Sacramento Valley. 
Many of our members also provide water supplies to State and 
Federal wildlife refuges. Much of this land serves important 
seasonal wetlands for migrating waterfowl, shorebirds, and 
other wildlife. We also represent Sacramento Valley counties 
and the business leadership within the region.
    To fully appreciate the significance of the program and set 
the stage for future implementation, we will provide a bit of 
background on Phase 8 Bay-Delta proceedings followed by a brief 
description of the program and its importance as a regional 
strategy and collaborative effort here in northern California.
    The State Water Resources Control Board for the past decade 
engaged in proceedings to determine the responsibility to meet 
water quality standards within the Sacramento-San Joaquin 
Delta. The State board completed Phases 1 through 7 of this 
proceeding and then focused on Phase 8 involving the Sacramento 
River and its tributaries. And in the proceeding, DWR and the 
Bureau and the operators of State and Federal export projects 
claimed that certain water right holders in the Sacramento 
Valley must either cease their diversions or release water from 
storage to help the water quality standards within the Delta.
    The Sacramento Valley water users, which NCWA represents, 
strongly believe that their water use has not contributed in 
any way to the water quality programs in the Bay-Delta, and as 
senior water right holders and water users within the watershed 
and counties of origin, they are not in any way responsible for 
meeting these standards. However, in light of these divergent 
positions, proceeding with Phase 8 would have involved highly 
adversarial administrative hearings and litigation that could 
have lasted for more than a decade, and, most importantly, 
these would distract and likely prevent any progress toward 
really meeting the water supply needs in California, including 
the CALFED process.
    With this in mind, the State board, upon the request of the 
Sacramento Valley water users, DWR, and the Bureau, and export 
water users, agreed in April of 2001 to defer the Phase 8 
proceedings and, instead, allow the parties an opportunity to 
develop a cooperative approach to increase water supplies for 
environmental needs within the Sacramento Valley.
    More than 40 water suppliers in the Sacramento Valley have 
executed the Short-Term Agreement, and as a result, the Phase 8 
process was automatically dismissed in January of this year.
    Northern California water districts and companies have 
proposed more than 50 projects that will be part of both short- 
and long-term work plans, and have been developed by a team of 
leading hydrologists and engineers to complete this process. 
The parties are currently preparing a program of environmental 
review and will jointly seek public funds to implement many of 
these projects.
    The program includes work plans which will comprise an 
integrative water management package to do the following in 
northern California:
     LProtect Northern California water rights and 
supplies,
     LFacilitate groundwater planning and protections,
     LProvide unmet demands within the Sacramento 
Valley for local needs,
     LProvide water use sufficiency measures,
     LDevelop local water management projects for local 
use and water quality control plan relief, and
     LFinally, propose a sites reservoir as an integral 
part of a long-term program.
    The integrated water management program described includes 
fish passage improvement, groundwater management, water 
transfers and exchanges, and flood protection, and is an 
exciting example of a regional solution for the Sacramento 
Valley that can only be implemented with State and Federal 
leadership empowering local interests to take the actions 
necessary for this program to succeed.
    Thank you.
    Mr. Calvert. Thank you.
    [The prepared statement of Ms. Van Vleck follows:]

             Statement of Nicole Van Vleck, Board Member, 
                 Northern California Water Association

    The Northern California Water Association (NCWA) appreciates the 
opportunity to testify today on the positive efforts that are now 
underway to implement the Sacramento Valley Water Management Program 
(Program). The Program is a grassroots, collaborative effort to 
increase water supplies and provide for environmental needs in the 
Sacramento Valley. Most notably, this regional program for the 
Sacramento Valley, which is built upon local partnerships in the 
Sacramento Valley, has also led to unprecedented collaboration with 
historically warring parties throughout California, including Southern 
California, the San Joaquin Valley, the Central Coast and certain parts 
of the Bay area.
    The ability to transfer water is critical to the Program's capacity 
to meet unmet demands in the Sacramento Valley and to help improve 
water supplies throughout the state. Essential to any water transfer is 
the recognition of the fundamental property right of those with water 
rights, the importance of water rights to local communities dependent 
upon area of origin water resources, and the belief that the actual 
water right holder--the owner of the water right--should determine the 
disposition of the water to be transferred.
    NCWA represents seventy water suppliers and individual landowners 
that rely upon the waters of the Sacramento, Feather and Yuba rivers, 
smaller tributaries, and groundwater to irrigate nearly 890,000 acres 
of farmland in California's Sacramento Valley. Many of our members also 
provide water supplies to state and Federal wildlife refuges, and much 
of this land serves as important seasonal wetlands for migrating 
waterfowl, shorebirds and other wildlife. We also represent Sacramento 
Valley Counties and the business leadership in the region.
    To fully appreciate the significance of the Program and to set the 
stage for future implementation, we will first provide background on 
the Phase 8 Bay-Delta proceedings followed by a description of the 
Program and its importance as a regional strategy for Northern 
California.
BACKGROUND
A. The Phase 8 Bay-Delta Proceedings
    The State Water Resources Control Board (SWRCB) for the past decade 
has been engaged in proceedings to determine the responsibility to meet 
water quality standards in the Sacramento-San Joaquin Delta (Delta). 
The SWRCB completed phases 1 through 7 of this proceeding (Decision 
1641) and it then focused on Phase 8 involving the Sacramento River and 
its tributaries. In this proceeding, the Department of Water Resources 
(DWR) and the Bureau of Reclamation (Bureau), as operators of the state 
and Federal export projects, claimed that certain water right holders 
in the Sacramento Valley must cease diversions or release water from 
storage to help meet water quality standards in the Delta. The 
Sacramento Valley water users NCWA represents strongly believe that 
their water use has not contributed to any water quality problems in 
the Bay-Delta and, as senior water right holders and water users within 
the watershed and counties of origin, they are not in any way 
responsible for meeting these standards.
    In light of these divergent positions, proceeding with Phase 8 
would have involved highly adversarial administrative hearings and 
litigation that could last for more than a decade. Importantly, these 
proceedings would distract and likely prevent any progress toward 
meeting the water supply needs in California, including the CALFED 
process. With this in mind, the SWRCB, upon the request of Sacramento 
Valley water users, DWR, the Bureau and export water users, agreed in 
April 2001 to defer the Phase 8 proceedings and instead to allow the 
parties an opportunity to develop a cooperative approach to increase 
water supplies and provide for environmental needs in the Sacramento 
Valley and throughout California.
B. The Short-Term Settlement Agreement
    Building upon the earlier ``Stay Agreement,'' which led the SWRCB 
to defer the Phase 8 proceedings, the parties in December 2002 executed 
the ``Short-Term Implementation Agreement'' for the Program. More than 
forty water suppliers in the Sacramento Valley have executed the Short-
Term Settlement Agreement (Agreement) (see attached list) and it has 
been executed by the Bureau; DWR; the United States Fish and Wildlife 
Service; the California Department of Fish and Game; the State Water 
Contractors representing agricultural and municipal water users in 
Southern California, the Central Coast and the San Joaquin Valley; and 
Contra-Costa Water District. As a result of the Agreement, the Phase 8 
process was automatically dismissed by SWRCB order on January 31 and 
the parties are now beginning to implement the Program.
THE SACRAMENTO VALLEY WATER MANAGEMENT PROGRAM
    Northern California water districts and companies have proposed 
more than fifty projects that will be part of both short and long-term 
workplans that are being developed by a team of leading hydrologists 
and engineers. Unlike many past efforts, local water users have 
proposed these workplan projects and they will be managed and 
controlled by the local interests rather than DWR or the Bureau. 
Additionally, the parties are currently preparing a program 
environmental review and they will jointly seek public funds to help 
implement many of these projects.
    The Program will include workplans that together will comprise an 
integrated water management package that will do the following for 
Northern California.
     LProtects Northern California Water Rights and Supplies
    The Phase 8 proceedings were automatically dismissed by SWRCB order 
on January 31. As a result, DWR and the Bureau remain obligated under 
SWRCB order to meet the Delta water quality standards. This means that 
Northern California water users can fully exercise their water rights, 
which benefits and protects every water user in Northern California 
upstream of the Bay-Delta. This also allows Northern California water 
users to immediately begin the management efforts that will be 
described below.
     LFacilitates Groundwater Planning and Protections
    The foundation for the workplans is a commitment to conduct local 
groundwater studies and monitoring throughout the Sacramento Valley to 
protect Northern California's groundwater resources. This includes 
groundwater-planning projects proposed by local agencies seeking 
funding from state and Federal agencies. Additionally, the Agreement 
and the workplans contain a strong commitment to groundwater monitoring 
and protections in every Program area.
     LProvides for Unmet Demands in the Sacramento Valley
    The Agreement recognizes that demands in the Sacramento Valley may 
vary and that certain demands will need to be provided for within the 
watershed and county of origin. Preliminary focus will be on the 
Tehama-Colusa Canal on the western side of the Sacramento Valley, where 
certain initial water contract qualities were slighted in the 1970's. 
In addition, these contractors have received as little as 25% of their 
already short supplies in 1991 and 1992 and only 60% of supplies in 
2001. There are also assurances that Feather River supplies can be 
fully utilized in the Sutter Bypass/Butte Slough region on the east 
side of the Valley. The long-term workplan will explore other means by 
which additional unmet demands will be met.
     LProvides for Water Use Efficiency Measures
    Local water suppliers have identified a number of water use 
efficiency measures that will be implemented to provide environmental 
benefits and operations and maintenance benefits for local water 
suppliers to more fully and efficiently use water throughout the 
Sacramento Valley.
     LDevelops Local Water Management Projects for Local Use 
and for Water Quality Control Plan Relief
    Locally developed and managed water projects located throughout the 
Sacramento Valley will be implemented to provide water quality control 
plan relief for DWR and the Bureau in below normal, dry and critically 
dry years. These projects will also help assure that local water needs 
are met and, if so, water can be made available for export needs. This 
will include the conjunctive management of surface and groundwater and 
the re-operation of existing storage facilities.
     LSites Reservoir as an Integral Part of the Long-Term 
Program
    Sites reservoir will be an integral part of the long-term program 
to meet local needs in the Sacramento Valley, to help meet water 
quality objectives in the Delta, and to provide water for export or 
environmental purposes. DWR, the Bureau and local partners in the 
Sacramento Valley are currently conducting the environmental review and 
feasibility studies for north of delta offstream storage.
A REGIONAL STRATEGY FOR THE SACRAMENTO VALLEY
    The Sacramento Valley Water Management Program provides the 
foundation for a regional strategy to ensure that local water needs are 
fully met in the Sacramento Valley while helping to improve water 
supplies throughout the state. California history has shown that 
solutions to water problems in the state have been most successful at 
the local and regional level. The integrated water management program 
described above, which includes fish passage improvements, groundwater 
management, water conservation and efficiency, water transfers and 
exchanges, flood protection, watershed management and environmental 
improvements, is an exciting example of a regional solution for the 
Sacramento Valley, but it can only be implemented with state and 
Federal leadership empowering local interests to take the actions 
necessary for these programs to succeed.
    To fully empower these regional solutions also requires state and 
Federal funding and the regulatory streamlining necessary to implement 
these programs. CALFED in its 2001 Annual Report recognized the 
importance of this Program as a regional solution:
    ``Regional strategies are also beginning to emerge. From the 
Sacramento Valley Water Management Program to water quality exchange 
programs in the Bay area and Southern California, local groups are 
developing collaborative, multi-purpose projects to meet their most 
pressing water needs.''
    We look forward to working with Congress in the efforts that will 
be necessary to empower regional solutions like this integrated water 
management program and to help provide the funding that will be 
necessary to successfully implement this program.
                                 ______
                                 
    Mr. Calvert. We thank all the witnesses for their 
testimony, and now we will get into some questions.
    I asked this same question to the prior group we were with 
this morning in Tulare, and so I will give you the opportunity 
to answer the same question. The first one is easy:
    Should Congress and the public be aware of the Federal 
expenditures on CALFED-related issues? Does anybody oppose that 
concept? I didn't think so. So it is unanimous, right, for the 
record? Everybody says yes.
    If yes, is it feasible to consider that, before any money 
be expended to accomplish CALFED-related projects, that a 30- 
or 45-day period for Congressional review be conducted? Does 
that sound like a reasonable idea? Any objection to that?
    Mr. Bobker. Mr. Chairman, no objection, just a 
clarification. What level of project review are we talking 
about? I mean, there are literally hundreds of measures that 
are being implemented through all different kinds of processes. 
So I just--from an administrative or managerial standpoint, 
what do you have in mind?
    Mr. Calvert. All these projects would be submitted to 
Congress for review, and we would have a period of time to 
either accept them or reject those plans. So it would just 
give, since we are funding them, we would like to have the 
opportunity to take a look at those projects.
    And so, last, I guess--and this is the most important 
question. Why is it then that projects involving large-scale 
construction be reviewed by Congress, but other projects, i.e., 
ecosystem restoration, watershed protection, do not follow the 
same requirements for Congressional review? Is there any 
comment on that? And, do you believe that they should? Greg.
    Mr. Zlotnick. I would just comment, I want to follow up a 
little bit on Gary's question. You are talking about new 
projects or ongoing projects as well?
    Mr. Calvert. Well, ongoing projects usually are staged, and 
we would still have the opportunity to review how those dollars 
are expended.
    Mr. Zlotnick. Sure. And I guess my initial reaction is that 
Congress, of course, has an oversight responsibility, and I 
don't think there is anything that would say that that 
shouldn't take place at whatever level. And the only concern 
would be that if you had investment in projects ongoing, for 
example, the San Luis Low-Point project, for us, is one that is 
a phased project. And, you know, obviously, we would assume 
that it would stand on its merits, but--
    Mr. Calvert. And, quite frankly, the primary reason for 
such an issue is that projects that happen that we fund that we 
hear about later, that happen and we do not have the 
opportunity to review. So this is something that is important 
not just to myself, but I know to the Chairman feels the same 
way and most of us do, that we ought to have an opportunity to 
take a look at these projects. And if we are going to fund 
them, and we believe in a representative Democracy, we should 
have that opportunity.
    Mr. Zlotnick. I guess I would just react, I had a 
conversation with Chairman Pombo in his office last fall, I 
believe it was. And the whole notion of accountability is 
something that is very important to all of us. We have heard 
about the transparency issues, that understanding of how these 
things tie together and balance. And I think that is something 
that I and my agency would be very supportive of.
    Mr. Calvert. And we have gone through a prospect budget 
analysis, we are finally getting some better numbers; we need 
to understand what we spend and what we are doing. And, Gary, 
any last comments?
    Mr. Bobker. Well, obviously, I agree with Greg. You know, 
Congress has the responsibility, has the ability and 
responsibility to provide a level of accountability that it 
thinks is appropriate. I think, from a managerial perspective 
and just from a good public-policy perspective, the difference 
between a billion-dollar project and a billion-dollar program 
is a different one. I think that you want to receive 
information on the billion-dollar project and the billion-
dollar program. But the billion-dollar program may be made up 
of hundreds or thousands of small investments. And do you want 
to really look at each of those investments or rather provide 
the guidance and oversight to the program? And I think that is 
the difference between--
    Mr. Calvert. The answer to your question is yes. And we 
argue during the appropriation process over small, small 
projects. Trust me, we get into arguments over $50,000. So we 
are not immune to that, and we certainly are capable of doing 
that.
    Mr. Herrick, Mr. Majors, I want to hear this correctly; I 
want to make sure. This is a very important point here. As I 
understand it, the permanent barriers, you both believe, are 
extremely important in order to maintain water quality within 
the Delta. Is that a correct statement?
    Mr. Herrick. Absolutely, Mr. Chairman. It is how we get 
there which is the question. This year, we had a problem of 
water levels above, upstream of the temporary barriers. There 
shouldn't have been a problem upstream. And the modeling which 
DWR does did not predict it and still does not predict it. So 
we are very concerned that the program that we developed for 20 
years that we think is the mitigation and the protection for 
us, there may be something wrong. And so that is why we 
caution, fix first, then increase.
    Mr. Calvert. Well, we have the supposed fixer here. Mr. 
Majors, any comment on the difference between the temporary 
barriers and the permanent barriers?
    Mr. Majors. Well, the difference between the temporary and 
the permanent barriers are the permanent barriers have the 
ability to store a lot more high-tide water. OK? They give you 
a lot more flexibility in that regard. John mentioned the 
recent problems upstream is calling into question the use of 
the permanent barriers. There is really three things that you 
have in place to make those barriers operate. One is the 
barriers themselves, where you trap water at high tide and make 
water available to the farmers. But the other is extra little 
contingencies that I would call them, like upstream dredging to 
create more depth, for example, and deepening of diversions, 
and even portable pumps, for example, in a real critical 
period.
    So I have got a feeling what is going to happen, as we go 
through this over the next few years of development, is you 
will have a suite of, perhaps you would call it, additional 
contingencies on top of the barriers for selected situations. 
And I think that is how you are going to see it play out.
    So I think there are answers. Clearly, there are answers 
here, but we have to be aggressive in applying them all.
    Mr. Calvert. My time has expired. I will have some other 
questions with regard to that.
    Mr. Pombo.
    Mr. Pombo. Thank you, Mr. Chairman.
    Mr. Majors, just while we are on you; just so I understand, 
though, your answer, you support the fix before the increase in 
pumping? I mean, that, one has to follow the other. Am I 
accurate in that?
    Mr. Majors. Well, I am just going to say, as currently 
planned in the program, once you have a certified EIR/EIS for 
8,500 csf of diversion out of the South Delta, that will start 
operating. However, it will start operating under the very 
limited conditions of temporary barriers. So it is not going to 
be a full operation that you would experience when you have the 
permanent operable barriers. It gives you more flexibility. 
So--and then I go on to say, when I look at the gap between the 
time that the certified EIR is done, 2004, and then the 
implementation of the permanent barrier, 2008, it really brings 
the question before us, can't we do it quicker? So--
    Mr. Pombo. I think you understand my concern or hesitation. 
You have a very interesting presentation that you have put 
together, very informative. And when you look at all of this 
that you have put together, this is all in my district. So, 
obviously, I have a very high rate of interest in this.
    Mr. Bobker, I read your testimony, your full testimony with 
interest in trying to figure out what your position was on a 
lot of these different issues. You talk extensively about the 
San Joaquin, which is also in my district, and one of the 
things you talk about in your testimony is waste water 
reclamation, desalinization, conservation, you know, a number 
of other things. And in your testimony you state that the ROD 
supported this, that there should be funding behind this. You 
lean heavily on that in your statement here. In regards to the 
San Joaquin, how does that replace the need for water 
management upstream on the San Joaquin in terms of developing 
new water sources there so that we can restore the San Joaquin?
    Mr. Bobker. Well, there was a study that was performed for 
the Environmental Coalition and National Resources Defense 
Council, Banks, and others for Friant water users which looked 
at potential sources of water supply to improve water supply 
conditions in the upstream areas and offset the releases to 
release from Friant Dam to San Joaquin, which found that many 
of those tools would help to mitigate impacts of restoring the 
river and help meet local needs.
    For example, desalination. I mean, is that just an urban 
issue? Well, the fact is that there is brackish and salty waste 
water from oil refineries and others which, you know, is now 
recognized as a source of supply, and I think it is an is 
underutilized one.
    Mr. Pombo. But if we are talking about $800-an-acre-foot 
water, that is not a practical supply for agriculture.
    Mr. Bobker. I don't think it is a practical supply. I don't 
think that the costs right now are representative of where the 
costs are going to be. I think desal costs, in general, are 
going to continue to go down.
    Mr. Pombo. I would agree with you on that. I do think that, 
as technology develops, that that will continue to go down.
    Mr. Bobker. I think there are also--
    Mr. Pombo. When you talk about the answers that you come up 
with in your testimony, there is very little, if any, of that 
that can happen up the San Joaquin that would allow more water 
to come down. I think, when you are talking about the Delta as 
a whole, these help and there is no question that these help. 
And we have had those discussions in different urban areas in 
northern and southern California, that it does make a 
difference to begin to do some of these things. But when you 
are specifically talking about the San Joaquin, I don't see a 
close tie-in to these things and being able to release more 
water through the San Joaquin.
    Mr. Bobker. In the specific case of the San Joaquin above 
the confluence of the Merced, there is--I mean, we--a lot of 
things are controversial Valley-wide in southern California. In 
the specific case of the San Joaquin in Friant, I think there 
are some other factors in play. There are flood flows that can 
be captured in a variety of different ways. They can be banked 
in the groundwater. There is underutilized groundwater capacity 
there. In fact, there is an overdraft. One of the things that 
we looked at is the ability to recapture it after its release 
potentially in the Delta. So when you add that, when you add 
through the groundwater banking, recapture, recirculation, and 
the market together, I think that you could actually meet, 
potentially, all of the needs upstream in restoring the San 
Joaquin River. Then, again, I commit people to look at the 
study.
    Mr. Pombo. I would have to look at that and try to figure 
out, how do you get there without doing more than that?
    Finally, you support the ROD, the CALFED process, all of 
that. You have been very involved with that over the years. But 
let me ask you this, as part of that CALFED process and the 
ROD, it also talked about increased storage, and, do you 
support that?
    Mr. Bobker. I support the processes established by the ROD 
to evaluate new surface storage.
    Mr. Pombo. No. I mean building new surface storage, not 
just evaluating. I mean, actually new surface storage and new 
net yield.
    Mr. Bobker. OK. Do I support specific projects which are in 
Delta storage, Los Vacaros, and Shasta Expansion? I am not sure 
that I am convinced any of them is worth constructing, that any 
of them pencils out economically; and there are environmental 
concerns. I am not sure they will survive the environmental 
documentation process, or in the case of Los Vacaros, survive 
the voters choice. But I am willing to live by the ROD process 
as laid out to evaluate and make decisions about moving forward 
with them. I think that in the case of the other two surface 
storage projects, there were major concerns that CALFED 
identified, which is why they did not decide to move forward 
with them but rather to simply continue the evaluations. And, 
again, I am willing to fight those fights within the CALFED 
process. I think it is, you know, about as fair a process as 
you are going to get.
    Mr. Pombo. Well, I know my time is expired, Mr. Chairman, 
but I think you can understand the concerns that many of us 
have that not everybody is getting better together. And that as 
long as we are doing projects that you like, it is a great 
process; and if you are doing projects that somebody else 
likes, that we will fight that out.
    Mr. Bobker. But that is true of everything. It is not just 
true of--I think everybody focuses on what they don't like. But 
the fact is, that every stakeholder can point to some part of 
CALFED and say, you know, oh, I don't like that. That is 
getting ahead. Where is mine? I mean, I can do that, too. I can 
run through a number of things that have to do with the 
environmental water count versus real ecosystem restoration and 
where the money is going. I think we could look at land 
acquisition issues and say that CALFED has actually worked with 
the property owner and land user community to try and make sure 
that they are doing restoration on public lands first and also 
doing wildlife-friendly agriculture as a priority. There are a 
lot of ways that we fight these things out within the process.
    Mr. Calvert. I thank the gentleman. Any other questions? 
Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Mr. Bobker, I was reading your testimony, and I have got to 
tell you I agree with you in the areas where you are talking 
about maximizing the more efficient use and reuse of the 
existing water supplies.
    We don't have any new water supplies. And, unfortunately, 
the problems that this area, Central Valley, has are quite 
different than the LA area in terms of water delivery, quality 
of water, contamination. And then I just heard that you have 
got reports that we are dealing with in our area, with PCVs 
that go along, just like everybody else in the southern 
California area.
    One of the things that I am concerned about is information 
that will help all of us work together. And some of the 
information you have, I would certainly like to sit down and 
talk to you later. But I am just wondering, what about some of 
the areas of the Banks Pumping Plant? How do you feel that is 
going to affect the Bay Area? What is the effect it is going to 
have? If their increase in water transfers to the southern 
California area, how is that going to affect the Bay-Delta Area 
and also the farming community?
    Mr. Bobker. Sure, 8,500--to use the specific example of the 
use of the currently nonpermitted export capacity, 8,500 in and 
of itself, I think, is not good or bad. It is how you use it. 
And the fact is, that under the right conditions, having the 
excess capacity, I think, could be beneficial. I think we could 
use it to increase the flexibility of the system to protect, to 
cut exports when we have a fishery problem and to pump 
additional water when we have conditions of low risk. So as a 
tool, potentially, you know, there are some good things about 
it. The real concern is about the yield and the guarantees.
    And some of the issues that John raised earlier in 
expressing his concerns about the environmental water count is 
that there seems to be a presupposition that, no matter what, 
there is not going to be any impact on the Central Valley 
Project and the State Water Project. And I am not against the 
State Water Project giving the Central Valley Project more 
water, per se. What I have a real problem with is the idea that 
we are going to use this excess capacity; and if there is any 
problem, then the public has to pay, to take care of the 
problem through the environmental water count.
    I think that there is a fundamental inequity there. And I 
think it calls for a new approach. It calls for a different 
approach to how we use excess capacity, where no one has 
guaranteed that water, but we actually use it in the best 
interests of all the different beneficial uses. And, 
unfortunately, while--you know, it is really funny. I hear a 
lot of folks that, some who I work with well, some who I am 
very adversarial with, you know, complain about the regulatory 
demand and control approach. But, you know, when it comes to 
8,500, they want that yield, they want it guaranteed, no 
flexibility at all there. Well, I recommend the same 
flexibility for the new tools, the new water supply tools. I 
don't think anybody should be guaranteed that water. It is the 
public's water. Let us use it in a way that benefits fish, 
cities, and farms. And right now, I am not sure we are going 
there. I think we are going down the old path of, you know, I 
have got mine, and if you want to get your benefit, you pay for 
it.
    Mrs. Napolitano. Well, one other question, and I will 
follow up on that, is that you stated in your testimony that 
the Bureau of Reclamation indicated that reoperating the nine 
largest existing Central Valley reservoirs to recharge 
groundwater could create an average of an annual yield of one 
million acre-feet. Is that being looked at as part of the 
solution to the water issue, the reuse? We call it recycling in 
southern California, you can call it water reuse or reuse or 
whatever. It is the same concept, it is one other tool to be 
able to get to where we all need to go.
    Mr. Bobker. Well, I think that the Bureau has paid for 
these studies that you are referring to, and CALFED has 
actually invested, you know, quite a bit of money. Well, it is 
not CALFED, it is the Department of Water Resources through 
Prop 13 in the planning and construction of new groundwater 
storage. Some pretty exciting studies. The problem I see is 
that we invest money in some of these things but we don't 
coordinate it. You know, in order to have a really efficient 
system, we need to make sure that we are coordinating our 
groundwater banking activities, our surface storage activities, 
our Delta conveyance activities. And right now, I am not sure 
that we have all the tools to do that.
    Mrs. Napolitano. Well, what I am hearing, sir, is that we 
reuse water that is water not going into the river for the 
river flow or for use by ag or others, so that we are taking 
water away from the reuse itself by melding it within the river 
even after it has been treated. Yet, we are saying, put more 
water, portable water in the river. And it just doesn't quite 
make sense why we are not utilizing that methodology.
    Mr. Bobker. I am not sure I follow you.
    Mrs. Napolitano. Well, in utilizing recycled water, you are 
not dumping that water, you are putting it back to use, whether 
it is industrial or commercial use or green lawn or even ag 
use. It is not going back into the river. Ours goes into the 
ocean. We have no rivers practically in our area.
    Mr. Bobker. Right.
    Mrs. Napolitano. So that the argument is, then the river is 
not getting that water to sustain it?
    Mr. Bobker. Well, I think that is more of an issue, I 
think, for the Central Valley. I am not familiar with the 
impacts of recycling and waste water reclamation on streams in 
southern California. My sense is that it is not the issue that 
it is elsewhere. But I am really not familiar with the southern 
California implications.
    Mrs. Napolitano. Well, I am looking at this area being a 
little more concerned about all water recycling, all water use, 
all water conservation, and all water storage including the low 
ground, rather than above ground, for issues of evaporation, et 
cetera.
    Thank you, Mr. Chairman.
    Mr. Calvert. Thank you.
    Mr. Herger.
    Mr. Herger. Thank you. Thank you, Mr. Chairman.
    I would like to follow up if I could, Mr. Bobker, on some 
questioning that Mr. Pombo had, and really seek your support, 
if I could, your cooperation working with this.
    CALFED, which I know you are an important part of, the 
premise of it to begin with was that we would all get well 
together. And I am very blessed to represent one of the richest 
agricultural districts in the world with some two-thirds of the 
water in the State of California either originating or flowing 
through our 2nd Congressional District down the upper 
Sacramento Valley. The good news is that we have plenty of 
water. The bad news is that it all comes in the wintertime. The 
good news, again, is that we have this incredibly good growing 
season where it doesn't rain in the summertime. And, 
fortunately, those who came before us had the foresight to put 
reservoirs in that can store it in the wintertime, or at least 
some of it, so that we could use it, utilize it during these 
desert condition times in the summertime. The bad news, again, 
is that the last reservoir, major reservoir, we put in was more 
than about 30 years ago. And during that period of time our 
population of our State has almost tripled.
    And I guess my question is, we have been talking about 
storage. And I know the CALFED talks about Sites, which is 
offstream. I understand that it has a number of positive 
environmental pluses in that it would help the fish in a number 
of ways and help protection during critical migration periods 
allowing water for it, also additional water quality in the 
Delta which would be helpful to the environment.
    My question is, would you be able to help us with this and 
the raising of Shasta, but first of all with the Delta or with 
the Sites? Could we somehow work together and not maybe have a 
society that has put men on the moon and brought them back 
again, again some 30 years ago? I would think that we could 
work together and not be suing each other so much so where we 
wouldn't make it completely infeasible to build these 
reservoirs. Is there some way you could work with us, rather 
than against us on this?
    Mr. Bobker. Well, with all due respect, Mr. Herger, I have 
been and many of my colleagues have been working together with 
our colleagues in the hydrolyte brotherhood and sisterhood. I 
mean, that is what CALFED is all about. I mean, I spent much 
more time than I care to remember, you know, working through 
the CALFED process and trying to come to collaborative and 
consensus solutions to problems. It doesn't mean we are going 
to agree on everything. We continue to have major environmental 
and economic concerns about things like Sites Reservoir. I will 
point out, though, that I think there are some other--I think 
there are other approaches that need to be utilized. I think 
that groundwater management in the Sacramento Valley could be 
dramatically improved. And while I have concerns about the 
long-term management, the long-term planning process of the 
Phase-A process, the Sacramento Valley Water Management 
Agreement, I think that the short term has been very positive. 
And, you know, I really give credit to those folks who are 
looking at all kinds of innovative new projects. And I think 
that is the way to go, and I think we need to see how 
successful those are.
    I note also that, you know, one assumption that is 
dangerous to make is that population growth means an equivalent 
amount of water supply development. One unit of water does not 
equal one person. We have seen that in southern California. We 
saw that in Los Angeles, where the population went up and up 
and up, but water use remained stable. The fact is that as we 
become better water managers, we use our existing supplies more 
efficiently. And that is, I think, incumbent both just as good 
public policy, but also as California's Constitution requires, 
I think that is something we really have to prove. And we 
haven't gone the full nine yards on using our water 
efficiently. That is my personal belief.
    I will also note that in the Sacramento Valley, that, you 
know, the major users, the Sacramento contractors, the CVB, you 
know, in most years don't use their full entitlement. And in 
fact, you know, so I am not sure that the crisis is there that 
people think there is. But we have been, as I say, the bottom 
line is that we are working to define the places where we can 
meet on things like how do we manage groundwater, how do we 
reoperate the system so that we meet all our needs? And we will 
continue to do that.
    Mr. Herger. Now, I happen to agree with you; I think there 
is much we can do and much we are doing. And I do want to 
commend you in the areas you are working with us to conserve. 
There is much we can do to be more efficient. But would you 
agree that when a State almost triples and will almost double 
again in the next 20 years, that there comes a point when we 
have basically conserved all we can conserve; that we, 
basically, become efficient as we can become, and there comes a 
time when we need more reservoirs to store more water? Would 
you agree with that? And is there some way that you could, 
rather than fighting against us on Sites Reservoir, that you 
could work with us on that, as well as the conservation part, 
which I believe there is a limit? And many feel we are 
approaching that limit right now?
    Mr. Bobker. Is there a time when you run up against the, 
you know, sort of the maximum of conservation? Well, probably. 
I just don't think we are anywhere near there. I mean, I really 
think we are--
    Mr. Herger. How close do you think we are? Let us say it 
takes 15, 20 years when you start a project to finish it. Do 
you think within the next 10, 15 years we will be there if we 
started building it now? Or, what do you think? Thirty, 50? 
What is the radical environmental community's slide on when 
that time is?
    Mr. Bobker. Well, I can't speak for the radical 
environmental community.
    Mr. Herger. Well, I will take your answer.
    Mr. Bobker. I will speak for the sellout environmental 
community.
    Mr. Herger. When is it? I mean, 50, 100 years? Is there any 
period of time there? Does the State grow by triple, five 
times, a hundred times? Is there any time there where you think 
that you would support a Sites, which they say is going to help 
the environment?
    Mr. Bobker. Well, again, you know, I disagree with the 
fundamental analysis of the benefits that Sites will provide.
    Mr. Herger. No matter how much the State grows in 
population?
    Mr. Bobker. Well, a bad choice is a bad choice.
    Mr. Herger. What is your good choice of getting more water 
once we run out? Is there a good choice?
    Mr. Bobker. Well, I do not think that we have run out of 
water. I think that there are many options for us to use it 
more wisely. But the final point I want to make is that--and 
again, I hear all this, food for your thought, which is just 
that things like Sites only work very well--I mean, if every 
year was January 1997, where we had this huge flood, yeah, you 
could take water out of the system. Who cares. Right? But that 
is not the way the system works. Most of the time, we don't 
have that kind of surplus. And the only way that facilities 
like Sites make sense is if you start taking water in time 
periods when it actually has an effect on the environment and 
on downstream water users. So ultimately, those facilities 
don't work very well, and we think we really need to look at 
the other tools and maximize those.
    Mr. Herger. So basically, you never see a time when you 
would see a new reservoir, more storage, no matter how big the 
State got, regardless?
    Mr. Bobker. I will not categorically state that I would 
never support a new surface storage reservoir. I will not say 
that.
    Mr. Herger. But you can't see any time in the future, no 
matter how far it is, that you could estimate that that might 
be?
    Mr. Bobker. I currently would support the use of the Tulare 
Lake Bed as a surface storage reservoir.
    Mr. Herger. Thank you, Mr. Chairman.
    Mr. Calvert. Thank the gentleman.
    Ms. Martel--Dennis, excuse me. I am sorry.
    Mr. Cardoza. Thank you, Mr. Chairman.
    I have been gearing up here for quite a while. I will 
explode if I don't talk very quick here.
    I want to start by asking a question to the representative 
from the Metropolitan Water District, Mr. Majors. I understand 
that one of your representatives, Mr. Quinn, recently met with 
representatives from the San Joaquin River Exchange contractors 
and from the Friant Water Users Authority. At the meeting, he 
indicated that MWD was prepared to support further developments 
of storage projects on the upper San Joaquin. Can you give us 
your take on that, on the record, please, sir?
    Mr. Majors. My understanding of the meeting was that there 
were issues raised regarding could any beneficial supplies that 
are developed in that region be helpful to a Metropolitan Water 
District. And I think we have an open mind on that in terms of 
how it could benefit us from, say, a water quality exchange, 
you have heard of that kind of concept, where we are trading 
Sierra water for the State Water Project water. And those 
things are being considered. I think we are in a curious mode 
at this point and have an interest.
    Mr. Cardoza. OK. Thank you.
    I have to--based on this morning's hearing that we were at 
and this hearing where we heard Mr. Bobker's testimony, I think 
we shouldn't purse words, sir. I think that what we are seeing 
is a very concerning trend to me that the environmental 
community has gotten its projects or is going to get its 
projects front-loaded, and there is a plan to oppose any kind 
of additional storage, any kind of additional projects that are 
going to put more water in the process. And you support 
conservation, you support--well, I support that, too. I think 
we need all these things, but I have to tell you that I think 
that what is happening here is very disingenuous. I think that 
there was an agreement that, you know, we were going to move 
together, and now there is, I sense it, there is a backing 
away. And I have been pushing the water user community when I 
was in the legislature in a sense to get at the table, come to 
an agreement, work with the environmental community, and I have 
got to tell you that they were frustrated a lot of the time. 
And now, just today, it has become much more sharply into focus 
of why. Because every time there is an agreement, it seems like 
there is a backing away. And there is a serious credibility 
issue. I heard it this morning, that is why I raised it at that 
hearing, and I mentioned it in my opening remarks, and I have 
got to tell you that I am very concerned about the process 
based upon the kind of testimony I heard from the environmental 
community both in Tulare and from you, sir, today.
    Mr. Bobker. Mr. Cardoza, I would like to make two points in 
responding to you. The first is that, actually, CALFED is often 
described as getting better together. That is not quite right.
    CALFED was established for restoring the ecosystem and 
protecting beneficial uses, and to address problems that needed 
to be addressed. The fact that ecosystem restoration projects 
are moving forward is because we have a highly degraded 
ecosystem that is in big trouble, and the fact that it was in 
big trouble was interfering with the operations of water 
projects and having other effects that people were not very 
happy about, and they wanted to have a proactive response. So 
there is a some good reason for why environmental protection 
efforts moved forward.
    The second thing I want to say, and I want to make this 
very clear, is that I don't know what the source of your 
information is, but if anyone is telling you that the 
environmental community made a deal that, in return for 
environmental projects moving forward that they would support a 
water management solution that included new surface storage, 
then you are receiving falsehoods because that is not true. I 
and other representatives of the environmental community from 
the very beginning--
    Mr. Cardoza. But, sir.
    Mr. Bobker. --of the process--
    Mr. Cardoza. Wait. It is my time. I have not heard anything 
that has come forward in the hearings today where anyone is 
coming forward and saying, well, we will support this. You 
won't go on record as saying you will support anything. There 
is a sincere lack of positive commitment that is coming from 
the environmental community that I have heard to anything that 
is progressive to deal with the population problems Mr. Herger 
is talking about--there is real growth coming--and I have got 
to tell you that I am somewhat distressed by that.
    Mr. Bobker. We disagree on the nature of the proper 
responses to deal with the competing demands for water. We 
don't think that the one-size-fits-all tool that everybody is 
harping on is the right one. We think that there are more cost-
effective ways to do it, and we think that there are ways that 
have less environmental impact, and we think the analysis bears 
it out. I will also point out that everybody has things they 
don't like. There are Representatives here today who would say 
they don't like the environmental water count, they don't like 
the ecosystem restoration programs and land acquisitions. They 
don't like--there are all things that we have problems with.
    Mr. Cardoza. Well, there certainly are different issues 
that we need to deal with. South Delta has sincere issues that 
we need to deal with. There are a number of issues. There are 
issues that we need to deal with. But to say that you can't 
tell us anything you are for, you want it all on your terms, is 
the way I am reading the testimony today. And it makes others 
who want to do the right thing not be willing to negotiate and 
make a deal, because, frankly, you have to be able to make a 
deal. And if you are not ever willing to keep a deal--and that 
is what I have heard today. I have heard that we have sort of 
gone down paths, but it has always got to be on our terms. And 
I think there has got to be a more balanced approach. And I am 
just not hearing the balanced approach. I am an 
environmentalist, sir. I mean, I really am. I used to live on--
    Mr. Bobker. And I am a water user.
    Mr. Cardoza. Absolutely. And there has to be a balanced 
approach between those two issues, and I am not hearing it. And 
it is frustrating to me, because I don't think that we are ever 
going to get to the solutions that this State needs as long as 
that attitude persists.
    Mr. Calvert. Thank the gentleman.
    I want to get right back to you, Ms. Martel.
    Mr. Bobker, I assume you are opposed to the Feinstein 
legislation?
    Mr. Bobker. I think the Feinstein legislation could be 
improved. I understand that--
    Mr. Calvert. Sir, for the record, are you for it or against 
it, as it stands today?
    Mr. Bobker. As it stands today, we would not support it. 
No.
    Mr. Calvert. And you don't support it because it has Sites 
Reservoir on it, the Shasta Expansion, and other water storage 
capability within the bill?
    Mr. Bobker. No. We think that the issues about the funding 
for facilities needs to be addressed.
    Mr. Calvert. You don't believe that Federal money ought to 
go into water storage capability?
    Mr. Bobker. Well, I think that unlike other water, the many 
other water management tools that we do support, this one seems 
to attract a very low match.
    Mr. Calvert. For the record, your institute falls against 
the Feinstein legislation.
    Ms. Martel, during the process of--and I assume this is a 
very large undertaking, Hetch Hetchy, and I think it is a noble 
goal that you have to improve water quality and delivery to the 
people of the San Francisco area. Are you through all your 
environmental documentation at this point?
    Mr. Martel. No, Mr. Chairman. Actually, we are in the 
preliminary stages, and that is the reason why, as I discussed 
earlier, that we are seeking a collaborative approach to all 
the regulatory reviews and environmental process at this stage 
in time to pave the way so that we can meet, complete our 
program.
    Mr. Calvert. Well, I understand that the road that you are 
traveling down, you expect--now, you have people that are 
opposed to your improving this system and to make sure that it 
is ready for the future population of the San Francisco area 
and the people who live there presently?
    Ms. Martel. Well, frankly, Mr. Chairman, some of the same 
issues related to the environmental community that we have just 
been listening about are going to confront us as we move 
forward with our program.
    Mr. Calvert. That is a surprise. Now, when you had your 
bond issue, what was the vote of the bond issue to pay to 
improve Hetch Hetchy? How much did the people vote to approve 
that bond issue? What is it $1.6 billion?
    Mr. Martel. Yes, Mr. Chairman.
    Mr. Calvert. What was the percentage of that?
    Mr. Martel. About 53 percent of San Francisco's voters 
approved that.
    Mr. Calvert. So a majority of the people who live in the 
San Francisco area support this project?
    Mr. Martel. Yes, indeed, they do, Mr. Chairman. And 29 of 
our wholesale agencies, serving about 1.4 million people, are 
contributing $2 billion.
    Mr. Calvert. A considerable amount of money.
    Mr. Zlotnick, in your area, you have a little reservoir 
there and you want to make it bigger. Isn't that correct?
    Mr. Zlotnick. Are you talking about San Luis?
    Mr. Calvert. I am thinking of nearby, the Los Vacaros.
    Mr. Zlotnick. In Contra Costa.
    Mr. Calvert. What is that, at 500,000 acre-feet, presently?
    Mr. Zlotnick. I believe so. It is not my district, so.
    Mr. Calvert. Is 100? They want to go to a 1.5 million, I 
think.
    Mr. Zlotnick. And then the board of directors just recently 
decided to put that--
    Mr. Calvert. Put it on the ballot. What did it pass by the 
first time?
    Mr. Zlotnick. Anyone back there know?
    Mr. Calvert. I guess you could ask Mr. Pombo; it is in his 
district now.
    Mr. Zlotnick. I think it was--I don't think it was as close 
as 53 percent.
    Mr. Calvert. I think it was over 60 percent.
    Mr. Zlotnick. At that time, I think it was. Now, the big 
issue there is the benefits where it would go.
    Mr. Calvert. And every one of us at this table are elected 
officials. Every one of us. We stand election, we understand, I 
think, the political consequences of the decisions we make. And 
I was here, as Mr. Pombo was here, as Mr. Herger was here, when 
the original CALFED deal was approved. And all of us, I 
believe, or at least Richard and I, know. And I don't know 
about Wally at the time; he can testify to that. But we stood 
behind the CALFED process because we believed there was a 
deal--that there was a deal, that we wanted to get through this 
process together to develop additional water. So I just want to 
make sure that we put that on the record; that we are here, I 
think everyone on this panel is, that we believe there is a 
water problem in this State, and we are trying to figure out a 
way to take care of it in a reasonable way and not to be 
unreasonable about it.
    With that, is there any other questions for this panel? 
Because I know that we have to move on here to the next panel 
so we can all get on our airplanes.
    Mrs. Napolitano. One question for Mr. Forster, please.
    Mr. Forster, how does the Regional Council for Rural 
Counties feel about increasing the pumping of the Banks, the 
pumping plant?
    Mr. Forster. I think we could support that if some other 
solutions were brought into the process. As you know, the 
CALFED, the scope in CALFED doesn't include many of the 29 
counties within RCRC. Namely, if you look at the Trinity Basin, 
the Klamath Basin, Mono Lake, Imperial, all of those areas are 
not included within the scope of CALFED. So we don't believe 
CALFED goes far enough, we don't think it provides a solution 
for the whole State of California.
    Mrs. Napolitano. Fair enough. Thank you.
    Mr. Calvert. Any other questions?
    Mrs. Napolitano. One more statement. And that is, the last 
is, southern California goes on very, very crucial water 
conservation when we have drought; and yet, I lived in 
Sacramento for 6 years, never paid water. I wish that were the 
case in southern California, because let me tell you, it is not 
only expensive, but it is very, very critical for us. It is our 
drinking water. It is water that we have to rely on. And with 
the many, many contaminated sites that we have found, both 
aquifers and above ground, we are in a fix, too. So keep that 
in mind when you are talking about water.
    Thank you.
    Mr. Pombo. Ms. Napolitano, if you would just yield for a 
second. I understand what you are saying in terms of 
Sacramento. But that is not typical for northern California. In 
the city where I was a city councilman, we have very severe 
water restrictions every time there is a drought, and it is 
very similar if not more restrictive than what you go through 
in southern California.
    Mr. Calvert. OK. We thank this panel, and we appreciate 
your coming out and during this, especially you, Mr. Bobker, 
being the designated hitter today. Hittee.
    We are going to ask our third panel to come up and take 
their seats. I am going to ask, in the interest of time, while 
you are taking your seats, we are going to go ahead and have 
the Bureau of Reclamation give their testimony, and then we are 
going to get right into questions. We are going to, obviously, 
allow the other folks here to submit their statements for the 
record. And, by the way, we will be able to accept additional 
information in the next 10 days. If some of you would like to 
submit any additional information, you certainly may. But we 
will get right into questions because we are under a time 
crunch here. And with that, everybody got their seats, got 
their name tags in front of them.
    Our witnesses today are Mr. Kirk Rodgers the Regional 
Director of Mid-Pacific Region, U.S. Bureau of Reclamation. Ms. 
Karen Schwinn, the Associate Director of the Water Division, 
Region 9, Environmental Protection Agency. Mr. Mark Charlton, 
the Deputy District Engineer for the Project Management 
Planning, U.S. Corps of Engineers. Mr. Michael E. Aceituno, 
Area Supervisor, Sacramento Area Office. And Chris Nota, 
Regional Foresters, representing the Pacific Southwest Region, 
U.S. Forest Service. You know, Chris, you seem so alone over 
there. If we have an extra mike, or you can share a mike, you 
can move your seat over there. We don't want you to be all by 
yourself, especially on the left side of the room.

 STATEMENTS OF KIRK C. RODGERS, REGIONAL DIRECTOR, U.S. BUREAU 
 OF RECLAMATION, MID-PACIFIC REGION; KAREN SCHWINN, ASSOCIATE 
DIRECTOR, WATER DIVISION, U.S. ENVIRONMENTAL PROTECTION AGENCY, 
   REGION 9; MARK C. CHARLTON, DEPUTY DISTRICT ENGINEER FOR 
 PROGRAMS AND PROJECT MANAGEMENT, SACRAMENTO DISTRICT; MICHAEL 
    ACEITUNO, SACRAMENTO AREA OFFICE SUPERVISOR, OFFICE OF 
    PROTECTED RESOURCES, NATIONAL MARINE FISHERIES SERVICE, 
     NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, U.S. 
DEPARTMENT OF COMMERCE; AND CHRISTINE NOTA, REGIONAL FORESTER'S 
 REPRESENTATIVE IN SACRAMENTO, U.S. DEPARTMENT OF AGRICULTURE.

    Mr. Calvert. OK. Mr. Rodgers, you are recognized for 5 
minutes.

       STATEMENT OF KIRK C. RODGERS, REGIONAL DIRECTOR, 
         U.S. BUREAU OF RECLAMATION, MID-PACIFIC REGION

    Mr. Rodgers. Thank you, Mr. Chairman and members of the 
Subcommittee. As has been mentioned, my name is Kirk Rodgers, 
and I am the Regional Director for Reclamations, Mid-Pacific 
Region.
    I appreciate the opportunity to appear before you today to 
discuss the CALFED Bay-Delta Program. Today, my testimony will 
focus on the Federal authorities employed by Interior to 
implement the CALFED Program and related activities. I will 
also address for your consideration the need for further 
authorizations and the importance of pursuing an overarching 
CALFED legislation.
    I would like to introduce my counterparts who are here 
today to answer questions from their specific agencies. With me 
is Steve Thompson from the U.S. Fish and Wildlife Services. And 
he is also joined by Wayne White. And then also my Assistant 
Regional Director, Susan Ramos, who are off to my right here.
    Before I discuss the subject of authorities, I would like 
to reiterate Interior's support of the CALFED Program and the 
concepts imbedded in the ROD. It has been 3 years since the 
issuance of the ROD, which was in August of 2000. And we have 
made significant progress in achieving the goals and objectives 
of the CALFED Program. However, with the creation of the new 
California Bay-Delta authority, there is a heightened need for 
program authorization for two things. One is to clarify the 
Federal role in the governance structure associated with the 
Bay-Delta Authority. And, two, it would be to fully implement 
the programs with the breadth and scope outlined in the ROD.
    The State legislation mandates that the authority sunset on 
January 1st, 2006, unless there is Federal authorization. We 
believe broad CALFED Program authorization will be the most 
effective approach in clarifying our future participation in 
the program.
    Let me first focus on the authorities Federal agencies are 
using. Each of you should have received a comprehensive matrix 
in your packets today. There is data developed by our agencies 
in there. I would like to apologize that we weren't able to 
fully complete the table that you sent us in our invitation to 
testify today, but we are working diligently on that, and we 
will complete that soon. But we believe the table you have will 
be a very useful tool toward that end.
    The matrix shows that many of the program elements are 
covered under our existing authorities. The first element on 
the matrix is the storage program. Reclamation is the Federal 
lead on the four storage investigations. We believe we have 
sufficient authority to complete these investigations, and at 
the last hearing on CALFED you expressed interest in the 
storage program schedules, and I have those with me today and 
they should be part of your packets. Assuming that adequate 
funding and construction authorization is provided, we 
anticipate construction to be initiated in 2007.
    The next program is conveyance. It also shows that we 
essentially have authority. Together with the State, we are 
currently working on the South Delta Improvements Program and 
the DMC, California Aqueduct Intertie. I would like to note 
that the Federal participation in the Bank's Expansion to 
10,300 would require feasibility authority as would San Luis 
Low Point.
    Reclamation and Fish and Wildlife Service are pursuing 
water use efficiency projects under CVPIA Authority and 
Reclamation needs implementation authority to advance water 
recycling, reuse projects beyond the study level, and 
additional authority is required to provide grants and 
cooperative agreements for agriculture and urban conservation 
projects.
    Moving on to water transfers and EWA. No new legislation is 
needed for transfers, but long-term EWA authorization is 
needed. And this is one of major areas on which authorization 
is required.
    I am concerned about time. I would just go on to say that 
in order to implement EWA over the long term, it would be best 
to have the program authorized as a division in the ROD to 
provide the necessary flexibility.
    The next program listed in the matrix is Ecosystem 
Restoration Program. Fish and Wildlife Services engaged in 
numerous aspects of the program, and together with reclamation 
has established several restoration programs using CVPIA 
authorization. These programs are integrated with CALFED's 
Ecosystem Restoration Program, and include things such as the 
Anadromous Fish Restoration Programs, Spawning Gravel, and 
Riparian Habitat Restoration, Fish Screening, and others. There 
are restoration grants that Fish and Wildlife Service has 
available to it that they have authorities for.
    So, for the most part we believe we have many authorities 
that we presently that--in place and are usable to us. So in 
summary, I would share with you that your desire to see 
legislation introduced that would provide Federal agencies with 
the necessary program authorization to advance CALFED's. 
Remember, we need it for our role in the Bay-Delta, and would 
just encourage that we proceed with it on that basis. Thank you 
again for the opportunity to testify and answer questions at 
the appropriate time.
    [The prepared statement of Mr. Rodgers follows:]

Statement of Kirk C. Rodgers, Regional Director, Bureau of Reclamation, 
          Mid-Pacific Region, U.S. Department of the Interior

Introduction
    Chairman Calvert and members of the Subcommittee, I appreciate the 
opportunity to appear before you today to discuss the CALFED Bay-Delta 
Program. Last month the Subcommittee was briefed on the CALFED Program 
Budget Crosscut. Today my testimony will focus on the existing Federal 
authorities and discretion employed to implement the CALFED Program and 
related activities. I will also address for your consideration the need 
for further authorization and the importance of pursuing an overarching 
CALFED program authorization.
Brief CALFED Background and Support
    Before I discuss the subject of authorities, I would like to 
reiterate the Department's support of the CALFED Program and the 
concepts embedded in the CALFED Bay-Delta Program Record of Decision 
(ROD). We particularly support the principle of balanced progress 
across all elements of the Program. There are four equally important 
objectives--water supply reliability, levee system integrity, water 
quality, and ecosystem restoration--that are being implemented through 
eleven program elements, that need to move forward concurrently to 
ensure overall Program success. It is important that our Federal role 
and participation enable us to respond to these program objectives in a 
balanced manner.
    It has been almost three years since the issuance of the CALFED 
Program ROD in August 2000. During this period significant progress has 
been made in achieving the goals and objectives of the CALFED Program 
through the collaborative efforts of State and Federal resources. 
However, our ability to move forward on a broad basis is limited until 
the Program is fully authorized. Furthermore, with the creation of the 
new State agency, the California Bay-Delta Authority (Authority), there 
is a heightened need for Program authorization to clarify the Federal 
role and participation in the implementation of CALFED Program 
activities. The Authority was established by State legislation to 
provide a permanent governance structure for the collaborative State 
and Federal implementation efforts. The State legislation stipulates 
that the Authority will sunset on January 1, 2006, unless Federal 
legislation has been enacted authorizing the participation of the 
Federal agencies in the Authority.
    We believe that the most effective approach to clarify our 
participation in CALFED governance and emphasize the importance of a 
balanced approach to CALFED implementation is through Federal 
legislation that provides overarching program authorization. To that 
end, we share your desire to see legislation introduced that would 
provide Federal agencies with the necessary program authorization to 
advance CALFED plan implementation efforts in conjunction with State 
and local interests.
Federal Authorities for CALFED Program and Related Activities
    Attached is a matrix entitled ``Federal Authorities for ROD and 
Related Activities.'' This matrix displays by CALFED program element: 
(1) existing authorities; (2) our discretion in interpreting and 
applying such authorities to meet CALFED objectives; (3) the method of 
implementation, i.e., contracts, grants, loans, cooperative agreements, 
direct performance by agencies; and (4) example projects being pursued 
under the CALFED program. The matrix also identifies areas where 
additional Federal authority is needed to complete specific activities. 
The eleven program elements include: storage, conveyance, water use 
efficiency, water transfers, environmental water account, ecosystem 
restoration, watersheds, drinking water quality, levee stability, 
science, and program oversight.
    With respect to the Department of the Interior, the Bureau of 
Reclamation has three primary authorities currently being utilized to 
undertake CALFED related activities. The three authorities include the 
comprehensive Central Valley Project Improvement Act (Title 34 of P.L. 
102-575), the Reclamation Act of 1902, and the Central Valley Project 
(CVP) Operation and Maintenance responsibilities. The various sections 
of CVPIA provide authorities to pursue a majority of the program 
elements of CALFED including storage, conveyance, water transfers, 
water use efficiency, and agricultural drainage-related activities. The 
Reclamation Act of 1902 provides general planning (pre-feasibility 
level) authority. Pursuant to that authority, we are using our 
discretion to perform CALFED storage and conveyance activities. Our CVP 
Operation and Maintenance responsibilities permit us to pursue CALFED 
activities that directly involve CVP changes in facilities and 
operation requirements.
    Authorities used by the Fish and Wildlife Service are numerous key 
existing legislation includes he Endangered Species Act of 1973 (16 
U.S.C. 1361 et seq., as amended) which provides authority for informal 
project consultation and establishment of the Cooperative Endangered 
Species Conservation Fund; the Fish and Wildlife Coordination Act (16 
USC 661-667e), which allows administrative contributions and 
participation in water operations; the Central Valley Project 
Improvement Act (Title 34 of P.L. 102-575), which provides a mechanism 
for funding of aquatic and terrestrial restoration efforts; and the 
Land and Water Conservation Fund (16 USC 4601-4601-11), which 
authorizes land acquisition for threatened and endangered species, 
among other purposes.
    The Geological Survey is operating under existing program 
authorities to implement the science program including providing the 
CALFED lead scientist, improving communication of scientific knowledge, 
and facilitating the use of best available science.
    The matrix is a comprehensive effort by the Federal agencies 
(ClubFED) actively engaged in the implementation of the CALFED Program 
ROD. The ClubFED agencies include, with the Department of the Interior, 
the U.S. Fish and Wildlife Service, the U.S. Bureau of Reclamation, the 
U.S. Geological Survey, and the U.S. Bureau of Land Management, as well 
as the U.S. Environmental Protection Agency, the National Oceanic and 
Atmospheric Administration Fisheries Service, the U.S. Forest Service, 
the Natural Resources Conservation Service, the U.S. Army Corps of 
Engineers, and the Western Area Power Administration. Representatives 
from several of the member agencies are here today and will provide 
testimony on the details of their respective authorities.
    A review of the matrix indicates that minimal Federal authorization 
is required to implement the CALFED Program. There appear to be three 
principal areas for which the cognizant Agencies need Federal 
legislation:
    (1) Lauthorization to implement a long-term Environmental Water 
Account in a fashion that supports the vision and flexibility 
envisioned in the ROD;
    (2) Lauthorization to study and construct Delta levees as 
identified in the CALFED ROD; and
    (3) Lauthorization to establish the Federal role in the CALFED 
governance structure.
    In addition, there are project-specific gaps in agency authorities 
that need to be addressed in order to fully participate and complete 
the actions articulated in the CALFED Program. These would be addressed 
in the normal project development and review process. However, we 
believe that a broad overarching CALFED authorization would effectively 
fill these authorization gaps and also underscore the importance of 
balanced implementation efforts; and more clearly define the Federal 
role in the CALFED Program governance structure.
Conclusion
    Clearly, significant progress has been made under current 
authorities and appropriated funds to achieve many of the goals and 
objectives outlined in the CALFED ROD. Specifically, through Federal, 
State, and public collaborative implementing efforts, progress has been 
made in improving water supply reliability and the ecological health of 
the Bay-Delta Estuary, a region of critical importance to California. 
The Federal authorities that provide our participation to address these 
efforts have been utilized as reflected in the attached authorization 
matrix and program element listing. In addition, we are in the process 
of preparing the expanded authorities table as requested by the 
Subcommittee. To that end, we share your desire to seek legislation 
that would provide Federal agencies with necessary Program 
authorization to implement the CALFED ROD.
    This concludes my testimony. Mr. Chairman, I would like to 
reiterate my appreciation to the Committee and others for continuing to 
work with the Administration to address the significant water issues 
facing California. I would be pleased to answer any questions.
    Attachment: ``CALFED Bay-Delta Program Federal Authorities for ROD 
and Related Activities''
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    [The prepared statement of Ms. Schwinn follows:]

    Statement of Karen Schwinn, Associate Director, Water Division, 
             U.S. Environmental Protection Agency, Region 9

    Good afternoon. My name is Karen Schwinn. I am an Associate 
Director in the Water Division at the United States Environmental 
Protection Agency's Region 9 office in San Francisco. I am pleased to 
be here at the Committee's Elk Grove field hearing to discuss issues 
related to EPA's statutory authorities available to assist in the 
implementation of the CALFED Bay Delta Program.
    EPA has been an active participant in the CALFED planning process 
since its inception in 1995 and was a signatory to the CALFED Record of 
Decision in August 2000 (ROD). Since the adoption of the ROD, EPA has 
continued to support the CALFED Program through our participation in 
the implementation effort, especially in the drinking water quality and 
watershed program elements, where we are one of the Federal lead 
agencies.
    The Federal Authorities Matrix that has been provided to the 
Committee by the Department of the Interior is a summary of the primary 
funding authorities that EPA currently has to support CALFED 
implementation. These authorities are contained in the Clean Water Act 
and Safe Drinking Water Act. I will briefly discuss EPA's two largest 
funding programs currently available to support CALFED implementation. 
I will then mention several smaller programs that EPA administers 
directly.
    As the Subcommittee knows, EPA is responsible for setting national 
standards for a variety of environmental programs. One of the key roles 
of EPA's regional offices is to work with our State and tribal partners 
as they develop their environmental programs consistent with these 
national standards and then to delegate responsibility for issuing 
permits and monitoring and enforcing compliance to them. The State of 
California has requested and received formal program authorization 
under both the Clean Water Act and the Safe Drinking Water Act. This 
means the State is responsible for permitting and enforcement under 
these statutes. EPA's role is mainly oversight and technical 
assistance. Consistent with this principle of state delegation, most of 
EPA's program funding is directed to the States.
    The substantial majority of EPA funds available for CALFED 
implementation are the State Revolving Fund (or SRF) programs under the 
Clean Water Act and Safe Drinking Water Act. With Fiscal Year 2002 
funds, for example, EPA provided approximately $95 million directly to 
the State of California Water Resources Control Board for the Clean 
Water SRF Program and will award approximately $80 million to the State 
Department of Health Services for the Drinking Water SRF Program. Most 
funds provided to the States under these SRF Programs must be made 
available to project proponents as loans, not as grants or contracts.
    Under the Clean Water SRF Program, EPA provides a grant to the 
State who, in turn, makes loans to communities, individuals and other 
entities for activities to improve water quality. As money is paid back 
into the SRF, new loans are made to other recipients. The program was 
initially used to build and improve wastewater treatment facilities. 
Although this is still the largest area of expenditure, loans are also 
increasingly used for estuary improvement projects, non-point source 
projects, stormwater run-off controls, water recycling and water 
conservation. The State has established a priority-setting system, 
consistent with the provisions of the Clean Water Act. On an annual 
basis, the State solicits projects and ranks proposals according to 
their priority system. Their resulting proposed expenditure plan is 
available for public review and comment. Several projects funded 
through the Clean Water SRF Program have been noted in the CALFED 
Cross-cut Budget as supporting CALFED goals and objectives, including 
water recycling projects and wetlands restoration projects.
    The Drinking Water SRF Program was established in 1996 in the 
amendments to the Safe Drinking Water Act. Like the Clean Water SRF, 
EPA provides a grant to the state to capitalize revolving loan funds. 
The State then provides loans to drinking water systems for 
infrastructure improvements needed to ensure safe drinking water. 
States may also use a portion of these funds for activities to prevent 
drinking water contamination, such as enhanced water system management 
and source water protection. As with the Clean Water SRF Program, the 
State has established a priority-setting system consistent with the 
Safe Drinking Water Act and has a public process to solicit and rank 
projects.
    Although there is EPA oversight of the SRF programs, these funds 
are, by Congressional design, subject to the direction and priorities 
developed by the States, within the limitations of the statutes. In 
addition, again because of the deference to the states that is built 
into these SRF programs, reports back to EPA from the states about how 
the SRF funds have been allocated are somewhat summary in nature. For 
this reason, we rely on the state agencies to prepare the project-
specific accounting of its SRF allocations for the CALFED cross-cut 
budget process.
    Aside from our grants to the states, there is a relatively limited 
amount of money that EPA directly controls. In recent years, this has 
included funding for the National Estuary Program, wetlands protection 
program, and various Special Appropriations grants included in the 
Agency's annual appropriations legislation. In these cases, EPA relies 
exclusively on grants, not contracts. These grants are done under one 
of several authorities in the Clean Water Act or Safe Drinking Water 
Act. As indicated on the Federal Authorities Matrix, EPA typically 
relies on either Clean Water Act Section 104(b)(3) or Safe Drinking 
Water Act Section 1444 as that grant-making authority. These sections 
allow EPA to fund studies and demonstration projects that have some 
nexus to water pollution. To the extent that the CALFED Program intends 
to fund water quality activities beyond studies and demonstration 
projects, such as for operating water treatment or recycling plants, 
the CALFED agencies need to rely on the authorities of the State (using 
their EPA grant funding as appropriate) or other Federal agencies.
    That concludes my prepared remarks, Mr. Chairman. I would be happy 
to answer any questions that the Committee may have.
                                 ______
                                 
    [The prepared statement of Mr. Charlton follows:]

 Statement of Mark C. Charlton, Deputy District Engineer for Programs 
    and Project Management, Sacramento District, U.S. Army Corps of 
                               Engineers

Introduction
    Chairman Calvert and members of the Subcommittee, I appreciate the 
opportunity to appear before you today to discuss authorities and 
discretion provided to Federal agencies in meeting the goals and 
objectives of the California CALFED Program. My testimony will focus on 
the authorities and programs of the U.S. Army Corps of Engineers as 
well as the capabilities of the Corps of Engineers to support the 
CALFED program.
    The Corps of Engineers supports the concepts in the CALFED Bay-
Delta Program Record of Decision (ROD) setting forth the activities to 
be undertaken under CALFED. In particular, we support the principle of 
balanced progress across all elements of the Program. Without balanced, 
integrated progress, conflict and stalemate results and all 
stakeholders and resources suffer. By implementing a broad range of 
complementary programs CALFED can maximize the prospects that the 
interests of all agencies and stakeholders are recognized and 
addressed.
    The high priority missions of the Corps of Engineers, as 
established by the Administration, are flood damage reduction, 
navigation, and environmental restoration. The Corps of Engineers is a 
project-funded agency. Corps districts are funded by project, with only 
minimal programmatic funding for limited coordination activities. Corps 
Civil Works projects are cost shared with a local non-Federal sponsor. 
Corps projects are authorized according to a 2-step process. Initially, 
a study is authorized and funded. A decision document, such as a 
feasibility study, is completed and submitted to Congress. Congress 
authorizes construction based on findings and recommendations in the 
feasibility report. Funds are only appropriated annually for these 
studies and projects. Congress also authorized a number of programs for 
small projects where the Corps does not need to use the 2-step 
authorization process. This is called the Continuing Authorities 
Program (CAP).
    The Corps of Engineers has no broad discretionary authorities or 
programs available to support CALFED. The Corps supports the CALFED 
goals and objectives through the initiation and development of 
individual studies and projects aligned with the agency's high priority 
missions. As presented to the Committee at the May 15, 2003, hearing on 
the CALFED Bay-Delta Program Budget Crosscut, there are Category A and 
B projects. The Corps has three Category A projects that are directly 
coordinated with CALFED and over 40 Category B projects that have 
related and overlapping CALFED program objectives. The three Category A 
projects are: the Delta Study, a flood damage reduction study that may 
only have limited ability to meet CALFED levee stability goal; a 
feasibility study of the Cosumnes and Mokelumne Rivers to address 
ecosystem restoration; and, an ecosystem restoration construction 
project in the Delta on Prospect Island. The Prospect Island project is 
ready for construction but is delayed because of last minute cost-
sharing problems.
    The Corps has over 20 Continuing Authorities Program (CAP) projects 
in the CALFED Category B ecosystem restoration program. The Corps 
currently has an ongoing study for Napa Valley Watershed Management 
that is aligned with the CALFED Watershed Management program element. 
The Corps Farmington Groundwater Recharge project is under construction 
in the Stockton area. The mission's authority for this project was 
specifically authorized by Congress for groundwater recharge and is 
aligned with the storage element of CALFED's Category B program. The 
Corps has many projects in the CALFED geographic solution area that can 
be characterized as integrated regional water management activities. 
These projects include: Guadalupe River, Los Angeles County Drainage 
Area, Napa River Flood Control, Wildcat and San Pablo Creeks, Santa Ana 
Mainstem Project, Sacramento and San Joaquin River Basin Comprehensive 
Study, Coyote and Berryessa Creeks, Fairfield/Cordelia Marsh. Finally, 
Section 509(b) of the Water Resources Development Act of 2000 (WRDA 
2000) provides stand alone authority of the Corps to use funds provided 
by others to carry out ecosystem restoration projects and activities 
associated with CALFED.
    The Department of the Interior has provided a matrix of the 
``Federal Authorities for ROD and Related Activities''--the Federal 
partnership deems as the existing and potential authorization required 
for the implementation of CALFED Record of Decision signed in August 
2000. As displayed in the table matrix the U.S. Army Corps of Engineers 
has project authorizations in the program elements of storage, 
ecosystem restoration, and Integrated Regional Water Management Plans, 
but may need additional authority to co-manage several components of 
the levee system integrity program.
    The Corps of Engineers' capabilities are enhanced by its partnering 
with hundreds of scientific and architect-engineers firms. The Corps 
relationship with private industry is integral to its success 
delivering its mission activities to the country that stretch far 
beyond its mission goals. The Corps has a record of success in bringing 
complex and controversial projects to successful completion by 
partnering with and integrating diverse groups of stakeholders. Most 
notably are the Guadalupe River project in San Jose and the Napa Flood 
Control project, both award winning projects which are in construction.
    Thank you for the opportunity to testify before this Committee. I 
believe we have an opportunity, working together, to solve the 
significant water issues facing California. Mr. Chairman and Members of 
the Committee, this concludes my statement, and I would be pleased to 
address any questions that you or the Committee may have.
                                 ______
                                 
    [The prepared statement of Mr. Aceituno follows:]

   Statement of Michael Aceituno, Sacramento Area Office Supervisor, 
   Office of Protected Resources, National Marine Fisheries Service, 
  National Oceanic and Atmospheric Administration, U.S. Department of 
                                Commerce

    Good afternoon, Mr. Chairman and members of the Committee. I am 
Mike Aceituno, Sacramento Area Office Supervisor for Protected 
Resources, National Marine Fisheries Service (NOAA Fisheries), 
Department of Commerce. I am here representing Bill Hogarth, Assistant 
Administrator for Fisheries at the National Oceanic and Atmospheric 
Administration. I want to thank you for the opportunity to be here 
today to address the discretion and authorities granted to NOAA 
Fisheries to undertake activities related to the California Bay-Delta 
Program (CALFED).
    NOAA Fisheries is committed to the concepts of CALFED and believes 
that they are consistent with our overall mission: ``To conserve our 
Nation's living marine resources--including anadromous fish.'' Central 
to our mission is the maintenance of the health of the ecosystems upon 
which anadromous species rely within California. CALFED's approach 
recognizes that, in order to reverse the decline in ecosystem health 
which has been observed over the past several decades within the San 
Francisco Bay/Sacramento and San Joaquin Delta watershed, an integrated 
approach aimed at ecosystem restoration, improved water supply 
reliability and water quality, and improved levee system integrity is 
necessary. What we've learned is that management objectives associated 
with these programs are often interrelated and interdependent and that 
in the long-term a balanced, comprehensive approach is necessary. NOAA 
Fisheries recognizes the importance of such an approach and, as I 
mentioned, is committed to the concept. To this end we have been an 
active participant in the CALFED process since its beginning in May 
1995, and anticipate continued involvement within the framework of the 
newly formed California Bay-Delta Authority.
    I have been asked to address the Subcommittee today regarding NOAA 
Fisheries' existing authorities and discretion allowing us to perform 
activities within the CALFED Program under the following categories: 
water storage, water conveyance, water use efficiency, water transfers, 
ecosystem restoration, watersheds, water quality, levee stability, 
science, and water supply reliability. In addition, I have been asked 
to address the adequacy of these authorities and the need for new 
authorities to complete activities that NOAA Fisheries is responsible 
for within the CALFED program.
Existing Authorities related to CALFED
    NOAA Fisheries' continued involvement and participation in the 
CALFED Program are authorized in several statutes: 1) the Endangered 
Species Act; 2) the Magnuson-Stevens Fishery Conservation and 
Management Act; 3) the Anadromous Fish Conservation Act; 4) the Federal 
Power Act; and, 5) the Fish and Wildlife Coordination Act.
    The Endangered Species Act (16 U.S.C. 1531-1543; Pub L. 93-205, as 
amended) authorizes NOAA Fisheries, along with the U.S. Fish and 
Wildlife Service, to conduct certain activities to provide for the 
conservation of species which are in danger of extinction throughout 
all or a significant portion of their range or likely to become so in 
the foreseeable future. NOAA Fisheries hasis ESA responsibilitye for 
marine species and Pacific salmon and steelhead. Within the CALFED 
focus area these include the endangered Sacramento River winter-run 
Chinook salmon, the threatened Central Valley spring-run Chinook 
salmon, and the threatened Central Valley steelhead.
    Section 4(f) of the ESA requires the development and implementation 
of a recovery plans for a listed species if it will promote the 
conservation of the species., Section 7 requires consultations with 
Federal action agencies to engage in consultation with NOAA Fisheries 
for actions that may affect a listed specieson an ongoing basis, to 
ensure that their actions are not likely to jeopardize the continued 
existence of a listed species or destroy or adversely modify designated 
critical habitat for the species.avoid or minimize the impacts of their 
activities on listed species, and Section 10 authorizes reviews of non-
Federal activities which may affect listed species. Both Section 7 and 
Section 10 provide NOAA Fisheries to allow for the issuance of 
incidental take of listed species in certain circumstancespermits. NOAA 
Fisheries is actively working with the CALFED program in the 
development and implementation of its Multiple Species Conservation 
Strategy (MSCS) through early coordination and has recently established 
the Central Valley Technical Recovery Team to develop a Section 4(f) 
recovery plan for listed salmon and steelhead within the CALFED focus 
area.
    The 1996 amendments to the Magnuson-Stevens Fishery Conservation 
and Management Act (MSA) (16 U.S.C. 1801 et seq) set forth new mandates 
for NOAA Fisheries and Federal action agencies to protect important 
marine and anadromous fish habitat. Federal action agencies which fund, 
permit, or carry out activities that may adversely impact Essential 
Fish Habitat (EFH) are required to consult with NOAA Fisheries 
regarding potential adverse effects of their actions on EFH. Essential 
Fish Habitat is defined in the MSA as ``...those waters and substrate 
necessary to fish for spawning, breeding, feeding, or growth to 
maturity...''.
    NOAA Fisheries regulations further define ``waters'' to include 
aquatic areas and their associated physical, chemical, and biological 
properties; ``substrate'' to include sediment, hard bottom, structures 
underlying the waters, and associated biological communities; 
``necessary'' to mean the habitat required to support a sustainable 
fishery and the managed species' contribution to a healthy ecosystem; 
and ``spawning, breeding, feeding, or growth to maturity'' to cover a 
species' full life cycle.
    Within the CALFED focus area, the Pacific Fisheries Management 
Council has delineated EFH for west coast groundfish, coastal pelagic 
species, and Pacific coast salmon. Pacific salmon occur throughout the 
CALFED focus area while groundfish and pelagic species occur only 
within San Francisco Bay and the western extremes of the Sacramento-San 
Joaquin Delta.
    The Anadromous Fish Conservation Act (16 U.S.C. 757a-757g; P.L. 89-
304, as amended) authorizes the Secretary of Commerce, along with the 
Secretary of the Interior, to enter into cooperative agreements with 
States and other non-Federal interests, to protect anadromous fishery 
resources. Pursuant to the agreements authorized under this Act, the 
Secretary may, among other activities, conduct investigations, 
engineering and biological surveys, and research and study and make 
recommendations regarding the development and management of streams and 
other bodies of water consistent with the intent of the Act.
    The Federal Power Act (FPA) (16 U.S.C. 791a-828c; Act of June 10, 
1920, as amended) provides authority to NOAA Fisheries to recommend 
conditions to protect, mitigate damages to, and enhance anadromous 
fish, including related spawning grounds and habitat for those 
hydropower projects licensed by the Federal Energy Regulatory 
Commission (FERC). Section 18 of the FPA provides authority for NOAA 
Fisheries to issue mandatory fishway prescriptions when we determine it 
necessary to ``maintain all life stages of such fish.'' The fishway 
prescription requires the licensee to construct and maintain a fishway, 
which can include project operations necessary for the fishway to 
function.
    Additionally, FERC must ensure that the proposed hydropower project 
preserves other aspects of environmental quality, and be best adapted 
to a comprehensive plan for developing the waterway; for providing 
adequate protection, mitigation, and enhancement of fish and wildlife, 
and for other public uses. FERC hydropower projects are licensed for 
30-50 years, and it is during the relicensing process (or during the 
original licensing process, in the case of a new project) that NOAA 
Fisheries exercises our authority, although there are provisions to re-
open a license. The FPA presents NOAA Fisheries with a superb tool for 
restoring access to habitat and for benefitting our trust resources. 
The science and engineering of fishways and hydropower operations has 
improved immensely since the time that many of these hydro projects 
were licensed.
    The Fish and Wildlife Coordination Act (16 U.S.C. 661-666c; Act of 
March 10, 1934, as amended) requires that wildlife, including fish, 
receive equal consideration and be coordinated with other aspects of 
water resource development. This is accomplished by requiring 
consultation with NOAA Fisheries, and the U.S. Fish and Wildlife 
Service, whenever any body of water is proposed to be modified in any 
way and a Federal permit or license is required. This consultation 
determines the possible harm to fish and wildlife resources, and the 
measures that are needed to both prevent the damage to and loss of 
these resources, and to develop and improve the resources, in 
connection with water resource development. NOAA Fisheries submits 
comments and recommendations to Federal licensing and permitting 
agencies and to Federal agencies conducting construction projects on 
the potential harm to living marine resources caused by the proposed 
water development project, and submits recommendations to prevent harm.
Summary of NOAA Fisheries CALFED Involvement
    NOAA Fisheries has been an active participant in the CALFED Bay-
Delta Program since it began in May of 1995 to address the complex 
issues that surround the San Francisco Bay/Sacramento-San Joaquin Delta 
estuary and watershed. We were actively involved in the planning phase 
and helped develop the CALFED Programmatic Record of Decision (ROD), 
signed on August 28, 2000. Since then, we have continued our 
involvement through the implementation phase.
    Within our existing authorities, NOAA Fisheries' role has been to 
provide overall program oversight and coordination in cooperation with 
all CALFED agencies, State and Federal. More specifically, we have been 
actively engaged, through our Southwest Region, in the development and 
implementation of the Ecosystem Restoration Program, and the 
Environmental Water Account. Our Southwest Regional Office and 
Southwest Science Center have also provided support to the CALFED 
Science Program. NOAA Fisheries has sat on the CALFED Policy Group, the 
CALFED State-Federal Management Group and a variety of subcommittees 
addressing such issues as ecosystem restoration, water supply and water 
operations, and science.
Adequacy of current authorities and discretion
    NOAA Fisheries believes that existing authorities are adequate to 
provide for our continued involvement in the CALFED Bay-Delta Program 
and to implement the program within the scope of the August 2000 CALFED 
ROD. However, in order to fully participate as a member of the newly 
formed California Bay-Delta Authority, programmatic authorization may 
be necessary. While we believe that our current authorities are 
adequate to implement NOAA Fisheries' portion of the CALFED program, 
any changes to the scope of the CALFED program would require 
examination to determine the adequacy of existing authorities in 
implementing the proposed changes.
    Mr. Chairman, that concludes my prepared testimony. Again, thank 
you for this opportunity to appear before you today. I would be pleased 
to answer any questions you or members of the Committee may have.
                                 ______
                                 

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    [The prepared statement of Ms. Nota follows:]

  Statement of Christine Nota, Regional Forester's Representative in 
              Sacramento,, U.S. Department of Agriculture

    Mr. Chairman and Members of the Subcommittee:
    Thank you for the opportunity to be here today. I am Christine 
Nota, Representative to the Pacific Southwest Regional Forester for the 
Forest Service in California. I appreciate the opportunity to appear 
before you to briefly discuss the USDA Forest Service role in the 
CALFED Bay-Delta Program.
Forest Service Participation
    The Forest Service's involvement in the CALFED Bay-Delta Program 
dates back to 1997 during the planning process. The Forest Service was 
a signatory to the CALFED Record of Decision in August 2000. The Forest 
Service played an active role in developing the Watershed Program, 
which expanded the original scope of the CALFED program to include the 
``watershed'' lands that contribute flow to the Bay-Delta ecosystem. 
The Watershed Program goals closely mirror the Forest Service mission 
of ``caring for the land and serving people.''
CALFED Program
    The mandate of CALFED is to develop and implement a long-term 
comprehensive plan that will restore ecological health and improve 
water management for beneficial uses of the Bay-Delta System.
    Specifically, two of the direct functions of CALFED are as follows:
     LProvide improved water quality for all beneficial uses;
     LImprove and increase aquatic and terrestrial habitats and 
improve ecological functions in the Bay-Delta to support sustainable 
populations of diverse and valuable plant and animal species.
    These functions relate directly to Forest Service programs and 
activities to protect the public's natural resources, restore 
ecological health, and improve water management.
The Forest Service Link to CALFED Bay Delta Program Goals
    While the Forest Service does not have direct management 
responsibilities for lands in the Bay-Delta area, the Agency manages 
more than fifty percent of the lands that feed water into the Bay-Delta 
system. Just over eighty percent of the water that finds its way to the 
Bay-Delta runs off National Forest System lands. That means the health 
of those forests and the upper watersheds is a critical factor in 
meeting CALFED Bay-Delta Program goals. The Forest Service does not 
have any direct authority for implementation of specific CALFED Bay- 
Delta program elements. For that reason our agency is not shown on the 
Federal Authorities Matrix. However, the management of the National 
Forests contributes directly to the attainment of the goals of several 
of the elements in the CALFED Bay-Delta program. Various National 
Forests also surround many critical water storage reservoirs, including 
Lake Shasta, the largest reservoir for the Central Valley project.
    In managing National Forest System lands, the Forest Service's 
primary focus is the protection, maintenance and restoration of these 
lands. Day to day work on every National Forest in California is 
directly related to forest and watershed health and contributes to the 
attainment of CALFED's goals and objectives.
Complementary Forest Service Community Programs
    The Forest Service has many programs that complement the efforts of 
CALFED. The Agency's State and Private Forestry program provides 
funding and technical assistance to the State and local communities for 
land stewardship and watershed protection activities. In addition, 
funding is provided to the State and local communities through the 
National Fire Plan and other sources for work that helps protect 
watersheds and communities from intense and damaging wildfires, 
including the support of local community Fire Safe Councils. The Forest 
Service also provides direct support for fifteen Resource Advisory 
Councils (RACs) across California through the Secure Rural Schools and 
Community Self Determination Act of 2000 (P.L. 106-393). The Act 
requires that one-half of the work the RACs fund address watershed 
restoration or road improvement needs. In many cases, the local RACS 
are exceeding the fifty percent requirement. These activities encourage 
and foster active participation and interaction between local 
communities and the local Forest to improve stewardship of local 
watersheds.
    In conclusion, the Forest Service believes that the cooperative 
CALFED Bay-Delta Program and its goals are critical in meeting 
California's water needs for the future. We will continue to support it 
through our work on the land and our participation in the CALFED Bay-
Delta Program.
    This concludes my statement. I would be pleased to answer any 
questions that Members of the Subcommittee may have.
                                 ______
                                 
    Mr. Calvert. We thank you for your testimony. And you 
mentioned something about starting construction in 2007. When 
you say that, construction on what?
    Mr. Rodgers. On the schedules that we have, and I believe 
in the packet we provided, there was Shasta, Sites, Friant, and 
all of those programs that we have feasibility authorization to 
study, we can conclude that by 2005 with proper authorization--
excuse me, with proper funding, we have the authority to 
proceed. If once we provide to you the documents that you are 
going to need to make those determinations about whether we 
should proceed with construction or not, we estimate that will 
take about 2 years. We could start as early as 2007 on any 
improved projects.
    Mr. Calvert. So you believe that, based upon your existing 
authorization, that you move forward as long as we provide the 
funding that is necessary to do this. And by the way, I am 
going to ask the question: Is CALFED necessary in order to 
provide the funding to move forward to build these projects?
    Mr. Rodgers. Is CALFED legislation?
    Mr. Calvert. Is CALFED legislation necessary to give you 
the necessary authorization, or can that money be given to you 
other ways?
    Mr. Rodgers. We believe we presently have the authorization 
for those specified projects that are in this document which is 
in your packet. Now, I will just quickly read that. For Shasta, 
Expansion North of Delta Offstream Storage, read that as Sites; 
In-Delta Storage. Las Vacaros expansion, and Upper San Joaquin 
River Storage, which is the Friant or similar.
    Mr. Calvert. Is there a number, an approximate number that 
you can give us of money that you need to have appropriated in 
the next number of years to make sure this stays on schedule?
    Mr. Rodgers. I do have that information. I will have to dig 
for it. It is in my packet. I don't have it off the top of my 
head.
    Mr. Calvert. And you are assuming that the 2007 is if the 
environmental documentation goes without a lot of hiccoughs?
    Mr. Rodgers. I realize that is a large assumption, and that 
is correct.
    Mr. Calvert. Any other comments, obviously, from the panel 
about the statement that Mr. Rodgers just made about being able 
to move this process forward? And we have been working on this 
for a number of years, obviously, so it is nothing that--and I 
guess we could start with Ms. Schwinn with the EPA. Have you 
been following this process that has been moving along?
    Ms. Schwinn. I have been, I would say, I have been 
following it in a general sense. I have seen the schedules that 
Mr. Rodgers has prepared. I am not intimately familiar with any 
of the projects to comment on them. We will get more involved 
with you in the project once we have a permanent application 
before the Corps of Engineers.
    Mr. Calvert. Would the Corps confirm that this process is 
moving along and that you are working with Reclamations?
    Mr. Charlton. Yes. Mr. Rodgers' assumptions, as he stated, 
are extremely optimistic, but we are aware of them. We do work 
with him.
    Mr. Calvert. From my point of view, it is not all that 
optimistic. We would like to have it sooner than later. But we 
certainly would encourage everyone at the table to work 
together to make sure that these time lines are adhered to.
    With that, Mr. Pombo.
    Mr. Pombo. Thank you, Mr. Chairman. In the previous panel, 
you heard testimony talking about a one-stop-shop idea. And I 
would like to have some comment from the panel about that idea. 
And, in particular, they were talking about San Francisco PUC, 
but just in general, I would like to have comments from the 
panel about us proceeding with legislation that would authorize 
that. I guess we could start with Army Corps.
    Mr. Charlton. Your reference was to the concept of 
collaboration of partnering with the San Francisco PUC. Yes, we 
have talked with them. We are very supportive of what they are 
doing and the process. The process of partnering and 
collaboration has been very productive for the Corps of 
Engineers and many of our partners in particular; Greg Zlotnick 
who has testified before you with the Sacramento Valley Water 
District. We have been very successful with the Tuolomne River 
Project where we had just not our cost-sharing partners, but 
other stakeholders to include environmental groups sitting at 
the table. The Project had been sued at one point. The National 
Heritage Institute later actually withdrew their lawsuit as we 
progressed, and that project is under construction today in 
downtown San Jose.
    In particular, the San Francisco PUC mentioned their desire 
to support the Corps of Engineers through additional resources 
and funding and our ability to dedicate individual resources 
people to review their permit applications. We do support that. 
As you know, Congress senses in a sense the funding for our 
regulatory funding very difficult for us to adjust the 
resources to the workload, and we are always very shorthanded. 
There are many advantages to that. The individual, when you can 
commit a resource like that, becomes very familiar with the 
projects, the processes, the people, the circumstance of the 
communities, and the environment. So we have been very, very 
supportive of their initiative for partnering and collaboration 
in that sense.
    Mr. Pombo. Before I make all of you say the same thing, is 
there anybody that disagrees with his answer, and is there 
anybody that would have difficulty with proceeding with this 
idea?
    Let me ask you about the CALFED process in general. As the 
Chairman said, I was supportive of this from the beginning. I 
thought it was necessary for us to have a CALFED process, but 
have always been somewhat apprehensive about the idea of, a 
deal is a deal, and we put together a ROD and move forward with 
that. Can any of you give me an idea as to what your opinion is 
on the ROD? I mean, is this a package that is supposed to move 
forward? Or is this a broad outline that you can pick out the 
projects you like and support those and oppose the others? Go 
ahead.
    Mr. Aceituno. I believe that--by the way, for the record, 
my name is Mike Aceituno with the National Marine Fisheries 
Service. But I believe that when the ROD was signed, at least 
my agency felt that the ROD represented a full package and that 
it would be implemented in a certain progression. And eco-
restoration was part of it, obviously a part that we were very 
interested in. But there are other elements of the CALFED 
Program that are also identified in that original package. And 
we expected it to proceed on a time line that was identified at 
that time, although we knew it was an aggressive time line. And 
I think--I kind of forgot what I was going to say the rest. But 
that is--
    Mr. Pombo. But you saw it as a package and with time lines, 
and we were going to move forward on different parts of it.
    Mr. Aceituno. Yes.
    Mr. Pombo. Would anybody else like to comment on that? 
Because obviously there is some confusion both at the hearing 
we had this morning and this hearing that we had this afternoon 
about what exactly that ROD was representing.
    Mr. Rodgers. Perhaps I could comment. I agree with Mr. 
Aceituno that it was conceived as a package. Although I would 
add that there is recognition that it was--many of the things 
that were addressed in there were at the programmatic stage or 
level that would require further review and evaluation. And 
that, as those evaluations and reviews and feasibility studies 
developed into either good projects that needed to go forward 
because they were supportable, they should; and if those same 
reviews demonstrated that there were some question or concern, 
that those projects may need to be rethought or substituted 
with something that was more workable. I think there was that 
degree of flexibility and understanding in there. But in 
general--
    Mr. Pombo. In that, though, you are not just talking about 
water storage projects, you are talking about all of the 
projects?
    Mr. Rodgers. That is correct.
    Mr. Pombo. So, you know, when you are talking about 
ecosystem restoration or, you know, some of the other things 
that were proposed as part of the ROD, some of those just may 
not make sense once you get into studying them. And we may not 
go forward.
    Mr. Rodgers. That is my understanding, Mr. Chairman.
    Mr. Pombo. That is kind of the way I saw it as it was put 
together. And, you know, I find it interesting in some of the 
testimony we have, that it talks about the CALFED Record of 
Decision set a target of investing $1.5 to $2 for water use, 
efficiency, waste water reclamation, as if this was a--you 
know, we had to do that, but on some of the other parts of the 
ROD, they were mere suggestions and we don't necessarily have 
to move forward. And a lot of my constituents had some real 
serious reservations about CALFED to begin with, because they 
were afraid that we would end up in this situation that we find 
ourselves in today, that some of the stuff we would fund and 
some of the stuff we wouldn't.
    I would like to add, Mr. Chairman, I know my time has 
expired. But I have found it interesting today to listen to all 
of those who testified in front of your Committee that talked 
about how we all sat down at the table and came up with CALFED, 
and how all of the stakeholders were at the table. Well, to the 
best of my knowledge, none of us were there and Congress was 
not part of that process. And you had a lot of people that were 
sitting down at the table coming to an agreement, and Congress 
was not part of it. And we have been, in many ways, shut out of 
that process. Every time I have asked about how money is being 
spent, I have gotten a lot of blank stares. And that has been a 
concern of mine from the very beginning.
    I will say, in conclusion, with this panel, I think you 
guys are doing the best job you possibly can in terms of trying 
to implement this in a very, very difficult budget situation, 
and a very difficult situation in terms of all of the lawsuits 
that have been piled on top of you. And I realize how difficult 
that is in getting your job done. But I will commend you on the 
effort that you have put forth over the last several years to 
try to move this whole project forward. Thank you for that.
    Mr. Calvert. Mr. Herger.
    Mr. Herger. Thank you, Mr. Chairman.
    And I want to echo the comments of Mr. Pombo in 
appreciation of what you are attempting and doing.
    Mr. Calvert, Mr. Chairman, I would like to mention that I 
did support CALFED when it came through. I had great concerns, 
but I supported it. I felt it was something we needed to try to 
do. My concerns were that even though, as again was talked 
about as you undoubtedly recall when we were originally 
bringing out CALFED, was this idea of getting well together. By 
the way, that is something we don't ever hear, I hear very 
rarely any more, this getting well together. And my concerns 
were that the environmental community ultimately would sabotage 
us, would sue us, would do everything they could to stop our 
project, which is regrettably exactly what has happened.
    But Mr. Rodgers, expressing this concern with the CALFED 
Program is that, in my opinion, is not being implemented in--
or, it is being implemented in an unbalanced manner despite the 
rhetoric which would suggest the opposite. As you are aware, 
California Department of Water Resources has predicted that 
California would face water deficits of approximately 2.4 
million acre-feet in an average water year and 6.2 million 
acre-feet in drought years by the year 2020. And as you know, 
the Department of the Interior recently released an assessment 
of western water supply titled Water 2025, in which the 
Department states, quote: Five realities of western water. And 
just to paraphrase those five realities: One, western States 
are experiencing explosive population growth; No. 2, water 
shortages are historically frequent in western States; No. 3, 
water shortages result in conflict; No. 4, current facilities 
are aging; and No. 5--let me emphasize this--crisis management 
is not effective in dealing with water problems. And I 
emphasize the last point, because we can see how true this 
statement is if we look north to the Klamath Basin. This region 
of the State is immersed in crisis, resulting in detrimental 
impacts of the area's economies and its citizens, and this is a 
part of the district I represent on the Oregon border. Indeed, 
I believe it is a crisis in the Klamath Basin which inspired 
Interior to develop Water 2025.
    To further quote the report: Interior predicts that the 
potential for conflict in the Central Valley, the area served 
by the Bay-Delta, is, quote, highly likely.
    I personally believe that we avoid the next crisis by 
bringing balance to CALFED and expanding our State's water 
supply and PERC water yield. My question to you is, how 
important do you think it is that California build new water 
storage facilities to meet our future demand and avoid the 
crisis predicted by U.S. Interior?
    Mr. Rodgers. I believe that new facilities are an essential 
part of the overall piece that we have to consider.
    Mr. Herger. In April of this year, we experienced an 
unusually wet month. Were we able to store all the water that 
we were blessed with in April using our current facilities 
storage?
    Mr. Rodgers. We were not.
    Mr. Herger. Would a Shasta raise and Sites Reservoir 
enhance our abilities to capture water for use later in the 
year during the height of summer and irrigation season?
    Mr. Rodgers. We could have used more storage in Shasta this 
year.
    Mr. Herger. And I want to thank you, Mr. Rodgers. And Mr. 
Chairman, I would like to reiterate my concern that CALFED, as 
it is currently being implemented, is not proceeding in a 
balanced manner. Unless CALFED accelerates its schedule with 
respect to surface water storage, it will defy what it 
originally professed as its motto, quote: We will all get well 
together, and violate one of the solution principles of not 
redirecting impacts into other regions of the State.
    Thank you again, Mr. Chairman.
    Mr. Calvert. Thank you, Mr. Herger.
    In closing, I want to thank this panel. I have a couple of 
points that I want to make. I still remain an optimist that we 
can redraft CALFED and clarify some of the intent that we have. 
Certainly, I think that we share really by all the panelists 
about where we need to go in the State of California. And I 
think we share by most of the leaders in Sacramento also that 
we have a water problem in the State of California that, as Mr. 
Herger pointed out, is evidenced in Klamath. We are having 
problems, as you all know, down south with Imperial Irrigation 
District and Colorado River, and that problem has a ways yet to 
work it out. And we certainly, I have heard no one that doesn't 
support conservation, groundwater storage, all of the other 
issues that we are dealing with and we must deal with, 
desalinization, reclamation. And we are attempting to do all of 
that. And certainly CALFED legislation we intended will touch 
on most all of those subjects. But surface storage is part of 
the solution, along with all those other concepts, and we need 
your help and your agency's help to move this forward. Because 
it was the intent, and I can say that with all clarity, that it 
was the intent that we would move together and that we would 
all get well together, as Mr. Pombo and Mr. Herger pointed out. 
And that is necessary if this legislation is going to be 
successful and the Federal funds are going to continue to come 
into this process or additional Federal funds that are 
necessary to complete this.
    So, with that, are there any other comments as we close 
this hearing? Hearing none, we are adjourned.
    Thank you.
    [Whereupon, at 4:25 p.m., the Subcommittee was adjourned.]
                                ------                                



                        CALIFORNIA WATER SUPPLY

                              ----------                              


                         Tuesday, July 1, 2003

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                          El Cajon, California

                              ----------                              

    The Subcommittee met, pursuant to call, at 11 a.m., at the 
El Cajon City Council Chambers, 200 E. Main Street, El Cajon, 
California, Hon. Ken Calvert [Chairman of the Subcommittee] 
presiding.
    Present: Representatives Calvert and Napolitano.
    Also Present: Representatives Hunter, Bono, and Davis.

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

    Mr. Calvert. The oversight field hearing by the 
Subcommittee on Water and Power will come to order. The 
Subcommittee is meeting today to hear testimony on California 
water supply and issues. Before we begin, I ask that 
Representatives Duncan Hunter, Mary Bono, and Susan Davis have 
permission to sit on the dais and participate in the hearing.
    Hearing no objection, so ordered.
    As all of us are painfully aware, California is faced with 
a dwindling water supply while demands grow every day. Southern 
California's problems are very acute because imported Colorado 
River water has been reduced almost 20 percent while questions 
remain about our domestic water supply.
    This hearing is part of a comprehensive effort to find 
answers to these growing problems. The Subcommittee heard from 
leading water experts in Central and Northern California on 
Saturday to discuss their needs and potential solutions. Today, 
we'll look at ways to diversify and improve our region's water 
supply with the hope of finding some answers and gaining better 
understanding on others. By focusing on these tough issues, we 
can help meet our water needs through the environment and 
foster a better business climate.
    First and foremost, everyone here in California must work 
together to find a resolution on the most pressing issue of the 
day: Quantifying our uses of the Colorado River water.
    Parties have been arguing for years on how the state can 
reduce its overdependency on the Colorado River water. While 
Congress should not mediate inter-California water-use 
negotiations, it can help if and when a California agreement 
happens. And we can hope it only comes very soon. In working 
with the Interior Department to reinstate Colorado River 
Surplus Guidelines, this will pay tremendous dividends in 
transitioning our state out of its overdependency.
    Unfortunately, California agency negotiations on this issue 
and the related issue of the Salton Sea have yet to bear any 
fruit. But I hope we can have a frank and meaningful dialog on 
this issue today.
    While the Interior Department's Part 417 determination on 
the Imperial Irrigation District's water use and the recent 
competing proposals before the four water agencies will 
continue to alter the negotiation landscape, one thing remains 
clear: Agreement must be found and found soon. Once this 800-
pound gorilla is off Southern California's back, only then can 
our region begin to have certainty in meeting our water needs.
    Another key part in solving the certainty equation and 
adding more flexibility to our region is the delivery of water 
through the Sacramento-San Joaquin Delta. This Subcommittee 
heard testimony on Saturday about how we can improve water 
deliveries to our region through the State Water Project 
without harming the Delta's fisheries and farms.
    Southern Californians who wish to enter into water transfer 
agreements with farming interests in the north should have 
assurances that there will be adequate storage and conveyance 
mechanisms to cover those market and property right based 
transactions through a new and improved Delta delivery system.
    While we have imported water tools, we must also continue 
our local efforts to drought-proof the region through 
technologies such as water recycling and desalination. Southern 
Californians have thought outside the box in devising water 
recycling, desalination, and groundwater banking programs. I've 
worked consistently with my colleague, Grace Napolitano, for 
these projects in Washington and will continue to recognize 
their value in the water-use portfolio in the west.
    As I alluded to earlier, Congress doesn't have all the 
answers, but we can certainly try to help when and where we 
can. In that light, the Subcommittee will soon use what it has 
learned in this and the other hearings to craft legislation to 
assist California and other western states in developing 
balanced water supply portfolios.
    I look forward to working with my colleagues here today in 
moving this bill forward. I welcome the special guests we've 
invited here today and very much look forward to hearing your 
thoughts about how we can better work together to manage and 
share this valuable resource.
    [The prepared statement of Mr. Calvert follows:]

 Statement of The Honorable Ken Calvert, a Representative in Congress 
                      from the State of California

    As we are all painfully aware, California is faced with dwindling 
water supplies while demands grow every day. Southern California's 
problems are very acute because imported Colorado River water has been 
reduced almost 20% while questions remain about our domestic water 
quality.
    This hearing is part of a comprehensive effort designed to help 
find answers to these growing problems. The Subcommittee heard from 
leading water experts in central and northern California on Saturday to 
discuss their needs and potential solutions. Today, we will look at 
ways to diversify and improve our region's water supply with the hope 
of finding some answers and gaining better understandings on others. By 
focusing on these tough issues, we can help meet our water needs, 
improve the environment and foster a better business climate.
    First and foremost, everyone here in California must work together 
to help find a resolution on the most pressing issue of the day: 
Quantifying our uses of Colorado River water. Parties have been arguing 
for years over how the state can reduce its overdependency on Colorado 
River water. While Congress should not mediate inner-California water-
use negotiations, it can help if and when a California agreement 
happens--and we hope it comes soon--in working with the Interior 
Department to reinstate Colorado River surplus guidelines. This will 
pay tremendous dividends in transitioning our state out of its 
overdependency.
    Unfortunately, California agency negotiations on this issue and the 
related issue of the Salton Sea have yet to bear any fruit, but I hope 
we can have a frank and meaningful dialogue on this issue today. While 
the Interior Department's Part 417 determination on the Imperial 
Irrigation District's water use and the recent, competing proposals 
between the four water agencies will continue to alter the negotiation 
landscape, one thing remains clear: agreement must be found AND FOUND 
SOON. Once this 800 pound gorilla is off southern California's back, 
only then can our region begin to have certainty in meeting our water 
needs.
    Another key part to solving the certainty equation and adding more 
flexibility to our region is the delivery of water through the 
Sacramento-San Joaquin Delta. This Subcommittee heard testimony on 
Saturday about the how we can improve water deliveries to our region 
through the State Water Project without harming the Delta's fisheries 
and farmers. Southern Californians who wish to enter into water 
transfer agreements with farming interests in the north should have 
assurances that there will be adequate storage and conveyance 
mechanisms to cover these market and property right based transactions 
through a new and improved Delta delivery system.
    While we have our imported water tools, we must also continue our 
local efforts to ``drought-proof'' the region through technologies such 
as water recycling and desalination.. Southern Californians have 
thought outside the box in devising water recycling, desalination and 
groundwater banking programs. I have fought consistently with my 
colleague Grace Napolitano for these projects in Washington and will 
continue to recognize their value in the water-use portfolio of the 
west.
    As I alluded to earlier, Congress doesn't and shouldn't have all 
the answers. But, we can certainly try to help when and where we can. 
In that light, the Subcommittee will soon use what it has learned in 
this and the other hearings to craft legislation that assists 
California and other western states in developing balanced water supply 
portfolios.
    I look forward to working with my colleagues here today in moving 
this bill forward. I welcome the special guests we have invited here 
today, and I very much look forward to hearing your thoughts on how we 
can better work together to manage and share this valuable water 
resource.
                                 ______
                                 
    Mr. Calvert. With that, I would like to recognize Mrs. 
Napolitano, the Ranking Democrat, for any opening statement she 
may have.

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

    Mrs. Napolitano. Thank you, Mr. Chairman. It's great being 
in San Diego, given the weather we're going to be having in Los 
Angeles. But I certainly want to convey to everybody my 
appreciation for the Chairman's vision in having hearings given 
the last term, the last Congress, where we had people--we had 
hearings up and down the state, and even in Utah, where we get 
a better picture of California's water plight versus other 
states.
    And what affects California affects the rest of the nation, 
specifically in the western states. And it's an issue that goes 
back to the old adage that whiskey's for drinking, water's for 
fighting. I believe we can do without the fighting.
    I believe we can work together to try to bring about 
solutions to the contaminated aquifers that we have, to the 
perchlorate that are showing up in installations that the 
government had in our areas, and the fact that we're going to 
have to meet the 4.4 plan before too long.
    If we do not work with the Federal Government, if we don't 
work with the Administration--and I'm hoping that all of you 
will understand that the Bureau of Reclamation--and I know the 
gentleman here won't be able to speak to it, but I can--they're 
not making recycling a priority anymore. And I think that is 
asinine. That's wrong. Because that's what's going to help 
California meet the 4.4, at least one of the tools we will 
have.
    And for them to cut the budget from 30-some-odd million to 
10, or a little over 10, is actually saying, California, you're 
going to do without. You're going to have to come up with your 
own funding to be able to do the recycling projects. And, to 
me, we need to work every single method that we have to help 
California reach the 4.4 and continue California's economy, 
because this all works together. It's all hand in hand.
    I know we've had hearings that we've heard things that 
sometimes are a little hard to take, especially from those of 
us in the LA area where we have 11 million people, in trying to 
get potable water to those individuals.
    My colleagues in Northern California are fighting for water 
at farms. That's 80 percent going to farming, the other 20 for 
residential and commercial and industrial. And yet we are not 
getting a fair share, to my estimation. That's my personal 
opinion.
    So we need to work together so we have an adequate potable 
water supply, all of us. We're here to learn. I'm here to 
ensure that we all understand the plight of the other areas in 
Northern California and toward the Bay-Delta a couple months 
ago.
    And I've been to the hearings in Northern California. I 
understand the plight. And I'm very, very receptive to ideas 
that are going to help not only Northern California, Central 
California and Southern California come up with a solution so 
that we can all meet the 4.4. Because, otherwise, there is no 
forgiveness in that plan.
    And we also need to protect the ecosystem, the Bay-Delta, 
and all the other areas, because, otherwise, we will not have a 
reliable water supply. The ``how we do it'' is where we are 
coming from. And I agree with Mr. Calvert that we need to work 
together, and we need to ensure that we don't have any more 
delays. Because this Government is not going to forgive 
California. Believe me, they will not forgive California. So we 
need to come to the table with a solution that we all have a 
win-win situation, whether it's short term, with an eye for the 
long-term solution.
    So I'm looking forward to hearing from the witnesses. And 
hopefully, as the Chairman indicated, we should be able to come 
up with a piece of legislation that we can all embrace and work 
toward equitably, fairly, and for the benefit of the rest of--
all of California, not just any one part of it. Thank you, Mr. 
Chairman.
    Mr. Calvert. Thank you, gentlelady. And we're pleased to be 
in my friend and colleague's district of El Cajon.
    Also, my Chairman, Chairman of the Armed Services 
Committee, Mr. Hunter, would you have an opening statement?

 STATEMENT OF THE HONORABLE DUNCAN HUNTER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Hunter. Well, thank you, Mr. Chairman. Thank you for 
coming to our great district. And thanks to Mrs. Napolitano and 
my colleague, Susan Davis. Last time we were here, we were 
having an R&D hearing. And, Mary Bono, my great colleague from 
the desert area, thank you so much for being with us.
    And I've got a prepared statement, Mr. Chairman, that I'd 
like to submit for the record, if I could, and I'll just 
summarize it.
    Mr. Calvert. No objections? Statement, please.
    Mr. Hunter. Grace, you said we need to have some good ideas 
on how to solve the water crises in California. And two great 
communities came together with a great idea a couple of years 
ago, and those were the communities of Imperial Valley.
    And the IID, the Imperial Irrigation District, for all 
practical purposes, is the Imperial Valley, because all the 
folks in that valley vote for their board members. And, of 
course, water is everything to the valley, most productive, 
arguably, along with Coachella. My colleague represents the 
most productive land in the world acre for acre. And those 
folks and the folks in San Diego County came up with a great 
idea for solving water problems.
    And the idea was that it's difficult for a farmer who's 
getting 140 bucks a ton for alfalfa hay to pay for the highest 
technology in water conservation when they're getting that kind 
of money from agriculture.
    And yet because water is increasingly precious, upwards of 
5- and $600 per acre foot on the margin for urban users, it 
makes sense for folks, if they have an opportunity, to share in 
some of the fruits of conservation. It makes sense for folks in 
urban areas to pay to the farming communities the moneys that 
would be used to save some of that water in doing things like 
putting in things like water pump vac systems and more lining 
of canals. And so for the city folks to pay the folks in 
Imperial County, and if that works as a model in other areas, 
the dollars that it cost to do that increased technology water 
conservation, and in turn be allowed to share in the fruits of 
some of that conservation.
    And that was the essence of this agreement that was made 
between the community of San Diego and the great folks of 
Imperial Valley. And that deal marched on, Mr. Chairman, and 
became really the linchpin in our being able to live within our 
means as a state; that means live within the 4.4 program with 
the other basin states, the Colorado River, now inclined to 
take more and more of their fair share.
    And as a condition for making that agreement, we were 
allowed in California to have a glide slope; that is, we didn't 
have to come immediately under the 4.4, we would have a 15-year 
glide slope and be able to ramp down gradually, and there would 
be a minimum of discomfort for Californians in coming under our 
rightful allotment of water.
    That moved along until the Metropolitan Water District, 
which has always been the big gun in water usage and water 
control in the state, stepped in and decided it didn't like the 
deal.
    And, Mr. Chairman, I remember the days when we put together 
the initial umbrella agreement of the QSA and Metropolitan 
dragging its feet all the way. We finally got them to sign up 
to the basic concepts of the deal, and then we had another 
problem. And that problem was, as we were moving along toward 
the water conservation plan that had to accompany this deal--
because if you have less waste water coming off the field 
because you have a water pump vac system, for example, the flow 
into the Salton Sea is reduced and the Salton Sea shoreline 
goes down and, then you have an environmental problem.
    In the waiting days of year before last, it was announced 
to us by the Fish and Wildlife on the Federal side and Fish and 
Game on the state side that they couldn't quite make this thing 
work. The last linchpin of that was that they figured they 
couldn't train pelicans to feed out of ponds.
    We've gotten up to a mitigation lake that was some 5,000 
acres in size. We were going to have a hatchery that did 
nothing but feed pelicans. And it was announced to us they 
didn't think we could feed these pelicans on time, and, 
therefore, we couldn't guarantee we would have a conservation 
deal put in place that would handle endangered species.
    So the community of Imperial County and the community of 
San Diego County are faced with a massive exposure. And that 
is, if they went ahead with this deal, at some point in the 
future you could have literally billions of dollars in 
environmental exposure accruing to the party that was asked to 
make the transfer; that is, the good people of Imperial Valley. 
That's not fair.
    It's also not good business. Nobody sells a gas station if 
they think they're going to take on--or buy a gas station if 
you think you're going to take on a billion-dollar 
environmental exposure from where the sun now stands.
    And nobody makes a water deal if you think you're going to 
take on a billion-dollar exposure, potentially a billion-dollar 
exposure. So that problem had to be handled, and I know the 
state weighed in to try to solve that problem.
    We now are on the verge of putting this QSA together with 
some safeguards that have been engineered between the State and 
IID and Coachella. And hopefully we can get this QSA passed 
this summer.
    But the Department of Interior weighed in, Mr. Chairman, in 
what I think is a way that accrued to the detriment of all 
people in California who have issues with water and will have 
issues with water in the future. And that is that they weighed 
in to punish the one party which had said yes to their request 
for agreement on a water deal, and that was the Imperial 
Valley. And they went in under kind of a botched 417 agreement 
or 417 rule and denied Imperial County its allotment of water 
for this last year.
    And Imperial County fought back. They had to fight back. 
They had to protest in court. The lifeblood of their valley was 
being taken away by the Federal Government. And they won in 
court.
    With that, the Department of Interior asked the judge in 
their pleadings if they could come back and try again to take 
Imperial County's water. And they are moving forward on what is 
known as a 417 right now, which is a scrub of the water use of 
Imperial County.
    Mr. Chairman, I think that goes exactly the wrong way for 
trying to put a deal together. You don't turn to--when you have 
a number of parties to a deal, you don't turn to the party 
which said yes to the deal and punish them.
    And you don't similarly incentivise one of the parties who 
said no, which is the Metropolitan Water District, to continue 
to say no. Because if they say no, and the Federal Government 
goes after Imperial Valley's water and gets some of it, it will 
go, then, to, guess who, the Metropolitan Water District.
    So, Mr. Chairman, we're in a position where we need to come 
off this 417 procedure. The Federal Government needs to approve 
Imperial Valley's request for water this year. We need to roll 
up our sleeves and finish the QSA this summer.
    And I'll just say to my friend, Ms. Napolitano, my great 
friend who represents a great many folks in the urban area, it 
is in the interest of your folks to have new conservation 
measures put in place throughout the state in farming areas 
where the water that is saved and paid for by moneys that come 
from urban areas, some of that water can be shared in by your 
consumers. That's an efficient, effective use of water. So less 
water goes up in evaporation, less water sinks in the desert 
sands, and more water goes to beneficial uses, whether it's 
agriculture or the grand people of Imperial County or Coachella 
or folks that live in cities.
    And so last, Mr. Chairman, let me just say, I don't 
represent Imperial Valley anymore. I represented them for many 
years. Now, they deserve better than this. These folks went 
into Imperial County, 115-, 120-degree heat, no air 
conditioning, and built the most productive area in the world 
acre for acre with respect to agriculture. They have been 
threatened with lawsuits for years if they didn't do more to 
conserve water.
    Then they were told in the middle of this process they 
would be sued by the environmental interests if they did 
conserve water, thereby having less waste water go to the 
Salton Sea. So they're put before the box of being sued if they 
don't conserve water and sued if they do conserve water. It's 
not a fair position for them to be in.
    The fair thing to do is for the Federal Government to move 
ahead and encourage this QSA. And the fair thing to do for the 
Metropolitan Water District, while it may hurt their corporate 
ego, is to work with the team, get this QSA passed, and let's 
move on to a bright future for this state.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Hunter follows:]

Statement of The Honorable Duncan Hunter, a Representative in Congress 
                      from the State of California

    Mr. Chairman and members of this Subcommittee, thank you for 
holding this hearing on California's Colorado River use--priority of 
mine has been the proactive resolution of present and potential water 
conflicts over California's use of the Colorado River and I truly 
appreciate your attention to this matter.
    Looming over us for years has been the growing impatience of our 
Western neighbors toward California for our overuse of Colorado River 
water. As a result, they developed a plan to allow our state 15 years 
to ramp down to our 4.4 million acre foot annual allotment if we were 
to approve the complex Quantification Settlement Agreement (QSA) by the 
December 31, 2002 deadline. The deadline was to create a sense of 
urgency with the Imperial Irrigation District, the San Diego County 
Water Authority, the Coachella Valley Water District and the 
Metropolitan Water District to agree to a plan that implements on-farm 
conservation measures while transferring water from agriculture to 
urban areas in order to meet growing municipal needs.
    Because the Imperial to San Diego water transfer--a key component 
of the QSA--might have impacted the Salton Sea's several endangered 
species, Federal and state environmental laws proved to be obstructive. 
Because Imperial did not want to put themselves at risk of billion 
dollar lawsuits for implementing water saving measures that impact the 
Sea, they elected, understandably, to seek protection as a condition of 
any water sale. San Diego understood this and continued working as a 
team with Imperial toward the shared goal of finalizing a long term 
water transfer from Imperial under mutually agreeable terms.
    In the waning days of 2002, following long and contentious 
negotiations between stakeholders, an amended QSA was developed that 
would provide the needed protections for Imperial and funding to 
mitigate impacts to the Salton Sea. However, the Department of 
Interior, shocking many, sent a letter to the water agencies informing 
them that should the agencies fail to approve the QSA by December 31st, 
Interior would reduce Imperial's water order and increase Metropolitan 
and Coachella's by--coincidentally--the same amount. Later, 
confidential emails between Interior and Metropolitan personnel were 
later discovered that detail the cooperation between the two entities 
to reallocate the water. The result is not hard for anyone to fathom--
Interior provided the impetus for the failure of the QSA by offering to 
Metropolitan and Coachella free water that they would otherwise have to 
pay for under a successful QSA. Hence, the QSA failed when it was not 
signed by the deadline.
    In the new year, Interior took steps to immediately reduce 
California's draw from the Colorado River to 4.4 million acre feet. 
Although the water reduction would logically come from Metropolitan's 
or Coachella's allotment given that Imperial's are the most senior 
water rights among them, Interior did as it promised and redistributed 
the water to the other two agencies. Thankfully, a U.S. District Judge 
saw the recklessness of Interior's action and reversed the 
reallocation, essentially instructing the agency to go back and go by 
the book.
    The consequence of Interior's behavior has resulted in one of the 
largest assaults on property rights the West has seen. Interior has 
been instructed to complete a never before used Part 417 Process to 
determine the efficiency of the Imperial's water use, which no doubt 
will result in a reduction in the community's water rights because of 
the pre-disposition Interior has against Imperial's irrigation 
practices.
    One of the greatest priorities the Bush administration has in the 
West has been the preservation of the rights of property owners and the 
protection of states' prerogatives. Interior's actions set a precedent 
that we should all fear. They are opening the proverbial pandora's box 
when they step into a state issue and unilaterally reallocate water 
amongst California water agencies without regard to long held property 
rights. The long term consequences of this radical action will be fully 
realized when a future administration, with powerful designs on rural 
water, will not feel restrained because the precedent will have already 
been established.
    The Department of Interior should abandon this potentially 
disastrous course of action and work toward a solution by encouraging 
the water agencies to stay the course and come to an agreement on a 
final QSA. The excuse that Interior is under ``court order'' to 
complete the 417 Process is unfounded. I have asked Interior to delay 
the process and concentrate on bringing parties together to complete 
the QSA, and I would encourage Interior to make that case to the 
presiding judge--he just might agree.
    We do not need threats and heavy handed tactics--we need solutions 
to Western water problems and we need water security in California. 
This historic water transfer will provide water supply diversity to San 
Diego and a badly needed economic boost for the Imperial Valley. 
Further, it is the cornerstone of California's plan to live within its 
means--a plan in which all participating water agencies, as well as all 
Colorado River users, share an interest. I encourage the Department of 
Interior, as well as the four water agencies to work with us toward 
this goal.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    My friend and colleague, Ms. Susan Davis, is unfortunately 
suffering from laryngitis.
    Mrs. Napolitano has graciously offered to act as her 
translator or speaker of the day.
    Mrs. Napolitano. It's my good pleasure. Susan and I served 
also in the State House, Mr. Chairman, so I'm very, very 
familiar with Susan. She's pleased to be here, will join with 
the colleagues and the community for a fair and comprehensive 
as well as an adequate and timely resolution to the issue. And 
I'm sure she's willing to listen and make her comments in 
writing.
    Mr. Calvert. You're already a star by having the shortest 
opening statement.
    Now, my friend, Mary Bono, who represents--we represent 
Riverside County together, and a great friend, for her opening 
statement.
    Mrs. Bono. Thank you, Mr. Chairman.
    First, Grace, you usually are busy speaking Spanish to me 
and for me and translating, so--
    Mrs. Napolitano. Buenos dais.
    Mrs. Bono. Buenos daas.
    I want to thank you, Mr. Chairman, for having this hearing, 
and it's certainly always a pleasure to be with you and Duncan, 
almost the entire Salton Sea task force here together, so it's 
nice to be with you.
    I would just like to say that your remarks, Mr. Chairman, 
were very right, and I have some written remarks, also, I'd 
like to submit for the record.
    Mr. Calvert. Without objection, so ordered.
    [The prepared statement of Mrs. Bono follows:]

Statement of The Honorable Mary Bono, a Representative in Congress from 
                        the State of California

    Thank you, Mr. Chairman, for allowing me take part in this hearing. 
I value your leadership and dedication to resolving the complex matters 
surrounding CalFed, the QSA and other water issues around the State of 
California and the nation.
    California, and Southern California in particular, has come to a 
crossroads. We are now forced to deal with a wide array of issues, 
including ag to urban water transfers, increased demand for water in 
our neighboring states, the environment and the broad question of how 
we manage the limited resource at our disposal. I have always held the 
belief that these issues are interlinked and therefore, we must deal 
with them as a whole.
    However, over the past year, negotiations on resolving the QSA have 
proceeded in stops and starts, often on a piecemeal basis. The 
inability to come to an agreement on how best to balance these 
interests is unacceptable. But, we must continue moving forward. It is 
my hope we can soon find a path towards an agreement by all the 
participants coming to the table in good faith and with a will to 
arrive at a compromise.
    As public officials, we must keep in mind that this impasse not 
only affects the region and our neighboring states, but also has a 
tremendous negative impact on the average citizen.
    Farmers in the Coachella Valley are worried about having enough 
water to put crops into our grocery stores as local officials question 
if there will be enough water to sustain development activities that 
create jobs and bolster our local economy.
    And while the Coachella Valley Water District is doing its best to 
walk this tightrope, it needs closure and a fair deal to meet these 
demands.
    There is also a great deal of concern in the local community about 
whether or not our air quality will be protected if we see the size of 
the Salton Sea shrink due to water transfers. Please understand that I 
realize urban areas need water and that in order to accommodate other 
priorities, the Sea itself must change form and adapt to current 
circumstances. We can grapple with this fact. However, in order to 
contend with this problem, we again need a degree of certainty as well 
as responsible public policy that does not leave our area like another 
Owen's Valley.
    I look forward to being part of this continued dialogue.
    Thank you, Mr. Chairman and I yield back.
                                 ______
                                 
    Mrs. Bono. But then to expand upon what I think Duncan 
said, firstly, we have worked tirelessly on this. And it really 
is a great opportunity here. I think those of us who care 
deeply about the Salton Sea, and not only the Salton Sea but 
the areas surrounding the Salton Sea, recognize that the Salton 
Sea has sort of become the keystone in this larger water 
policy. And whether that's good or it's bad, I guess it depends 
on which side of the equation you're standing on. But we really 
do have an opportunity here to move forward.
    All of the players with the Salton Sea have recognized that 
it's OK, and it actually is beyond OK, it's necessary to change 
the scope of the Salton Sea. Nobody has decided it needs to 
stay exactly what it is today, but I believe they're willing to 
reduce the size of the sea through one plan or another. If we 
can just now get the feds and the state to recognize this 
really is an opportunity to move forward with transferring 
water and creating, perhaps, water out of what was previously 
just all within the sea of it. Now we can actually transfer 
this water on to further use.
    It really is a great time, and I'm happy to have the Bureau 
of Rec here, who is really the biggest partner we have in this 
whole thing. So I welcome you and I look forward to your 
remarks and all of your great ideas on getting this done. So if 
I can just encourage you to see this as a golden opportunity to 
move forward.
    But I've always said, it's very shortsighted to single out 
water policy at the expense of air quality. And if you look at 
Owens Valley--Ken, you a long time ago gave me the Cadillac 
Desert when I was first elected, and I thought I was going to 
have the Gabor sisters living in the Palm Springs area or 
something silly. I didn't know it was about water policy. But 
all you have to do is look back 100 years to Owens Valley to 
see what we did and the horrible consequences. And, if we can, 
in fact, this time, instead, be proactive here and address 
these issues before they come up.
    And those of you who have heard me speak before have heard 
me talk about the stench from the Salton Sea. And forgive my 
word ``stench,'' but there's no other word to call it. And it's 
awful. And it's a health hazard. And it's also invasive. If we 
don't address that as we address changing the scope of the sea, 
then we're going to be in for larger problems. And as Duncan 
talked about, re-educating the pelicans to feed off of the 
ponds, that's not really the sole environmental issue. It is 
not as much about the birds and the fish as it is, in my view, 
air quality.
    So, with that, Mr. Chairman, again, I'll submit my written 
statement for the record, and I welcome the witnesses. Thank 
you for being here, and I look forward to your testimony.
    Thank you, Mr. Chairman.
    Mr. Calvert. I thank the gentlelady.
    We have a number of witnesses today, so we've changed 
things a little bit. We're putting everybody together. That way 
it gives us an opportunity, the panel, to ask questions of 
everyone. We have quite an audience here today. I was joking 
with my friends here that the meter is running.
    We have quite a few folks out there working for various 
agencies, so a lot of interests.
    So, with that, we're going to start with Bill Rinne. He's 
the Deputy Commissioner with the Bureau of Reclamation. Mr. Bob 
Johnson could not join us today.
    Bill, we're going to be under the 5-minute rule because of 
the number of witnesses we have, and it leaves us more time for 
questions. So any--this is for all the witnesses, any 
additional comments, we'll be happy to enter them into the 
record.
    With that, Bill Rinne.

STATEMENT OF WILLIAM E. RINNE, DEPUTY COMMISSIONER, U.S. BUREAU 
           OF RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Rinne. Thank you, Mr. Chairman.
    Before I begin, I'd like to impress that my written 
testimony be submitted into the record.
    Mr. Calvert. Without objection, all testimony will be 
entered into the record.
    Mr. Rinne. Mr. Chairman and Honorable Members of the 
Congress, my name's Bill Rinne, and I'm Deputy Commissioner 
with the Bureau of Reclamation at the Department of Interior.
    It's a pleasure to be here today representing the 
Department to offer testimony with respect to the Secretary's 
role as watermaster on the lower Colorado River and to comment 
briefly on the recent meetings on the Era of Limits of the 
Colorado River.
    First, with regard to authority and limitation of the 
Secretary in the management of the lower Colorado River, the 
legal framework applicable to the management of the lower 
Colorado River is unique in the United States. The role of the 
Secretary in matters relating to the Colorado River management 
is authorized and constrained by numerous legal authorities 
collectively known as the ``Law of the River.'' Within that Law 
of the River, two particular parts, the 1963 Supreme Court 
case, Arizona v. California, and the 1928 Boulder Canyon 
Project Act, are key to identifying the constraints and 
limitations on the Secretary of the Interior as well as her 
role in managing the river.
    The primary structure that controls the operation of the 
Colorado River is Hoover Dam, and Hoover Dam is authorized with 
the 1928 Boulder Canyon Project Act. And, also, within that 
act, are a lot of the activities that are associated with the 
Secretary's role in the lower Colorado.
    For more than 60 years, water supplies in the Colorado 
River basin have been made possible for Reclamation to meet all 
water needs within the lower basin states of Arizona, 
California, Nevada. The water storage, the dams and reservoirs 
are among the most reliable, if not the most reliable, of 
anyplace in the United States. We're able to store up to a 4-
year supply if the conditions warrant, which is very unusual 
anywhere else in the United States.
    Nevertheless, the current drought in the basin demonstrates 
that water is a finite resource in the Colorado River. For 
instance, today I was looking at our records, and Lake Mead is 
about 61 percent full, behind Hoover Dam, and that is the 
lowest it's been in over 30 years, the last 30 years. So we're 
really standing at a low point.
    The studies that we've been doing indicate that the river 
should supply enough water to meet the lower basin's annual 
consumptive use apportionment of 7.5 million acre-feet for many 
years to come. However, the studies also show there will be 
fewer years where surplus will be available as it has been in 
the past few years.
    The Colorado River's flow, as most of you know, is 
generally derived and for the most part from snowmelt from the 
mountains in Wyoming and Utah and Colorado. This year this has 
been very erratic. Since we've been keeping records since 1906, 
it's from a low of about 5 million acre-feet a year up to a 
high of 4 million acre-feet runoff.
    This year, to put it in perspective, our April through July 
runoff, that is, the snowmelt runoff portion of it, is 
estimated to be about 54 percent. And that's probably a pretty 
good figure because we're getting close to the last part of the 
month and most the runoff has occurred off the mountains. And 
our projection for the water year of 2003 is at 57 percent of 
those averages. Now, that's an improvement, a definite 
improvement over last year, which was extremely dry in water 
yield.
    The Law of the River specifies who can use the water, for 
what purpose, and how much. Until 2003, as I mentioned, water's 
been available for Arizona, California, and Nevada. All that's 
changed now with the development and use in Nevada, Arizona and 
continued use in California. And so at the current time, 
there's no unused water, available basic water, on the Colorado 
River.
    The Secretary's Interim Surplus Guidelines that were put in 
place in 2001, they want to point out that they would not 
guarantee the surplus of water to be available, even at this 
time, depending on what the levels of Lake Mead are. And then 
the Surplus Guidelines have been suspended at this time. But at 
the same time, even given that, it would not be an unlimited 
supply of surplus water.
    What are some of the future strategies, and what do we need 
to do with regard to ``Era of Limits''? With the ongoing 
drought earlier this year, Bob Johnson, our regional director 
of the lower Colorado region and his people put on seven 
educational workshops in the three lower basin states. The 
intent of these workshops was to talk about a yield and the 
storage and the drought conditions to kind of help the public 
and people, the water users, to understand the issues that face 
all of us, not just the Reclamation as a water manager.
    Out of those discussions and ongoing discussions with the 
seven basin states, we have--we've talked about, what can we do 
to improve just our management of the Colorado River? And the 
areas that we're focusing on: We have been doing more to 
improve our management on the lower Colorado River, our 
accounting, make sure we really are paying attention to the 
amounts of water that are being used. Things like the banking, 
interstate banking regulations, which were put in place in 
2000--Am I there?
    Mr. Calvert. You need to wrap it up.
    Mr. Rinne. OK. I'll wrap it up.
    The final analysis, we'll just have to all work better than 
ever before, whether we're user or whether we're manager, to 
provide the necessary water in the southern Nevada, Southern 
California, and Arizona area.
    That concludes my testimony. I'd be pleased to answer any 
questions.
    [The prepared statement of Mr. Rinne follows:]

          Statement of William E. Rinne, Deputy Commissioner, 
         Bureau of Reclamation, U.S. Department of the Interior

    My name is William Rinne. I am a Deputy Commissioner with the U.S. 
Bureau of Reclamation at the Department of the Interior.
    Mr. Chairman. It is a pleasure to be here today representing the 
Department of the Interior to offer testimony with respect to the water 
management role of the Secretary of the Interior in the Lower Basin of 
the Colorado River and the recent public meetings the Bureau of 
Reclamation has held regarding ``the Era of Limits on the Colorado 
River.''
Management of the lower Colorado River
    The legal framework applicable to the management of the Lower Basin 
of the Colorado River is unique within the United States. The role of 
the Secretary in matters relating to Colorado River management is 
authorized and constrained by numerous legal,, collectively known as 
the ``Law of the River.'' The Law of the River is principally defined 
by the 1922 Colorado River Compact, the Boulder Canyon Project Act of 
1928, the water delivery contracts entered into under Section 5 of that 
Act, the Federal reserved rights of Indian tribes, the Mexican Treaty 
of 1944 and the Minutes which apply its terms, the Colorado River 
Storage Project Act of 1956, the Colorado River Basin Project Act of 
1968, the Colorado River Basin Salinity Act of 1974, and other Federal 
statutes.
    Within the ``Law of the River,'' the clearest and most important 
articulation of the Secretary's role as ``watermaster'' of the lower 
Colorado River is found in the 1963 opinion of the U.S. Supreme Court 
in the case of Arizona v. California:
        ``All this vast, interlocking machinery--a dozen major works 
        delivering water according to congressionally fixed priorities 
        for home, agricultural, and industrial uses to people spread 
        over thousands of square miles--could function efficiently only 
        under unitary management, able to formulate and supervise a 
        coordinated plan that could take account of the diverse, often 
        conflicting interests of the people and communities of the 
        Lower Basin States. Recognizing this, Congress put the 
        Secretary of the Interior in charge of these works and 
        entrusted h[er] with sufficient power, principally the Sec. 5 
        contract power, to direct, manage, and coordinate their 
        operation.''
    The Secretary's actions, as delegated to the U.S. Bureau of 
Reclamation (Reclamation), are specifically directed and limited by the 
permanent injunction entered by the Court in the 1964 Decree, as 
supplemented, in that case. The Supreme Court's Decree enjoins ``the 
United States, its officers, attorneys, agents and employees'' from 
operating the regulatory structures controlled by the United States 
except in strict accordance with the provisions of the Decree. The 
primary structure that controls operations on the lower Colorado is 
Hoover Dam, a magnificent engineering achievement that remains one of 
the Southwest's critical structures for water and power. Hoover Dam was 
constructed under the authority of the Boulder Canyon Project Act--the 
statute that authorizes many of the activities within the Secretary's 
watermaster function.
The Era Of Limits
    For more than six decades, water supplies in the Colorado Basin 
have made it possible for Reclamation to meet all water needs within 
the Lower Basin states of Arizona, California and Nevada. The water 
storage reservoirs and hydroelectric production facilities constructed 
in the Colorado River system make it one of the most reliable and 
robust water management systems in the United States. Nevertheless, the 
water of the Colorado River system is a finite resource that must be 
managed carefully to maximize its utility while sustaining its long-
term resource values.
    While reservoir storage within the Colorado Basin protects against 
the variability of the annual runoff that reaches the Basin, the 
current drought in the basin demonstrates that existing facilities and 
practices do not assure continuity in meeting water demands in the 
Basin. For instance, today Lake Mead stands lower than it has since the 
summer man first set foot on the moon in 1969.
    In light of how increased demands and the current drought reinforce 
chronic water supply problems, Reclamation initiated a series of 
educational workshops to explain basic information about the Colorado's 
yield, storage, and usage to the citizens who rely on the river. Seven 
educational workshops have been held this year in all three Lower Basin 
States.
    As part of its ongoing management of regulatory structures in the 
Colorado Basin, Reclamation conducts numerous studies to make the most 
educated projections we possibly can about future water supplies from 
the Colorado River. These studies incorporate data such as the River's 
hydrologic history, current water supply information, projected 
population growth, projected water demand and other factors that are 
used to conduct hydrologic simulations of future water conditions.
    Studies conducted to date indicate the river should supply enough 
water to meet the lower basin's basic annual consumptive use 
apportionment of 7.5 million acre-feet (maf) for many years to come. 
But they also tell us there will be far fewer years when surplus water 
will be available as compared with the recent past.
    In June 1990, Reclamation, recognizing the finite nature of the 
Colorado River resource and the growing demand for Colorado River water 
in the southwest United States, observed that ``we begin to enter an 
era envisioned by those far-sighted planners who made the hard choices 
when the compacts and laws governing the river were written...a new 
era...an era of limits.''
    Let me review a few basic principles: The Colorado River's annual 
flow is comprised mostly of snowmelt that flows from the high mountains 
of Colorado, Wyoming and Utah. This annual flow can vary greatly. Since 
record-keeping began in 1906, the annual river flows have ranged from a 
low of five million acre-feet to a high of more than 24 maf.
    The water storage system that exists on the Colorado River today 
was built to ``even out'' these annual periods of highs and lows, 
ensuring a year-round supply of water for use by the seven Basin States 
and Mexico.
    The Law of the River specifies who can use Colorado River water, 
how much they can use, and under what conditions. As recently noted by 
U.S. District Court Judge James Robertson: ``[A] Supreme Court 
injunction, an international treaty, Federal statutes, and contracts 
between the government and water users account for every acre foot of 
lower Colorado River water.'' Within this system, the Secretary of the 
Interior is authorized to operate and manage the Colorado River in 
consultation with the Colorado River Basin States.
    The 1922 Colorado River Compact apportioned water between the upper 
and lower basins of the Colorado River. Within the Lower Basin, the 
Boulder Canyon Project Act of 1928 allocated 7.5 million acre feet 
among the Lower Basin states of Arizona (2.8 maf), California (4.4 maf) 
and Nevada (0.3 maf). This statute also required all Colorado River 
water users in the Lower Basin to have valid contracts with the 
Secretary for that water.
    Until 2003, water has been available to Arizona, Nevada and 
California beyond their basic annual entitlements because:
     LThe water storage system that has been built on the 
Colorado River ensures a stable, long-term water supply. While droughts 
impact the river's water supply, the storage system has carried the 
river through several periods of drought.
     LWinter snowfall in the headwaters of the Colorado River 
system in past years has been sufficient to refill the system's 
reservoirs as recently as 2000.
     LColorado, Wyoming, Utah and New Mexico were not using all 
of their Colorado River water supply.
     LColorado, Wyoming, Utah and New Mexico also did not need 
to rely so extensively upon water stored in Lake Powell to protect 
against demands upon the Upper Basin's other reservoirs to deliver 
Colorado River water to Mexico under the US-Mexican Water Treaty.
     LUntil the mid-1990's, neither Arizona nor Nevada fully 
used its basic apportionment of Colorado River water, making unused 
water available for use by California.
    Today the Lower Basin states of Arizona, Nevada and California are 
each using their full basic Colorado River apportionments. As a result, 
there is no ``unused'' water in the Lower Basin. While demand for water 
has increased, the current drought has reduced supply. Thus, the Bureau 
must more carefully consider optimal management of the limited supplies 
of the Colorado River.
    In the recent past, Lower Basin use has exceeded 8.5 maf (one maf 
over basic apportionment). We project that in future years the Colorado 
River may not supply enough water to meet increasing demands in the 
three lower basin states. In most years, these states will receive only 
their basic annual entitlement of 7.5 maf. There will be future years 
when extra water is available, but those years will be the exception, 
not the norm. The Secretary's Interim Surplus Guidelines, adopted in 
2001, do not guarantee that surplus water will be available if surface 
levels in Lake Mead are too low.
River Management in the ``Era of Limits''
    Through its recent workshops and as part of its ongoing 
consultations with the representatives of the Basin States, Reclamation 
has been considering appropriate strategies for the future management 
of the Colorado.
    How the River is managed impacts all Colorado River water users, 
particularly in the lower basin. Everyone with a right to Colorado 
River water must carefully consider how they manage and use that water. 
State and Federal law requires that it be used reasonably and 
beneficially. In cases of limited water in storage, as in 2003, misuse 
by even one user may have a direct and immediate impact on the 
availability of water for others.
    Improvements in River management made by Reclamation include:
     Lenhanced measurement systems will allow for more accurate 
accounting of Colorado River water use as Reclamation prepares its 
Decree Accounting reports each year--and will also give water users 
more accurate information on which to manage their supplies;
     Lnewly developed interstate water banking regulations 
provide a means for water users in different states to help each other, 
which should result in significant water savings each year and help 
stretch the available water supply to meet the Southwest's growing 
water demand.
    In addition, Reclamation's water management activities, undertaken 
in concert with the lower basin states, will continue to include:
     Llimiting diversions to authorized uses of Colorado River 
water;
     Lenhanced attention to unauthorized uses of Colorado River 
water;
     Ladherence to water orders and entitlements;
     Lpublic education efforts on the need to manage and 
conserve the precious and limited water supplies of the Colorado.
Careful Colorado River Management Benefits Everyone
    Information gathered in studies the Bureau conducted show that it 
is important for all Colorado River water users and managers to examine 
how we use water. We need to manage use se we do not excessively 
deplete reservoirs to the detriment of future needs, detrimentally 
affect the River's water quality, or diminish the economic well-being 
of the many communities that depend on the river for water supply.
    Reclamation is committed to do its part to help ensure that the 
waters of the Colorado River are managed and used wisely to achieve the 
greatest benefit possible for the many who depend on these waters.
    We will have to work together better than ever before in this new 
era. Whether you are a water manager, a water provider, the grower who 
waters a crop, or one who draws water out of a tap, we all have an 
important role to play in how the Colorado River will be managed and 
used in the future. Together, we can manage the River and our reliance 
upon it to meet our mutual needs.
    This concludes my testimony. I would be pleased to answer any 
questions you may have.
                                 ______
                                 
    Mr. Calvert. Thank you very much.
    And with us today is Mary Nichols, Secretary of Resources 
Agency.
    Thank you for coming down from Sacramento, Mary, and you're 
recognized for 5 minutes.

             STATEMENT OF MARY NICHOLS, SECRETARY, 
                  CALIFORNIA RESOURCES AGENCY

    Ms. Nichols. Thank you, Mr. Chairman.
    You also have my written testimony, and I won't attempt to 
summarize it. I just want to make three quick points and look 
forward to your questions and to the discussion.
    The California water policy and program for the last four 
and a half years, since I've been Secretary for the Resources 
Agency under Governor Davis, has had three principal elements 
to it.
    The first, which you, Mr. Chairman, have been a leader in, 
is the CalFed program where the Governor helped forge the final 
record of decision and has been committed to implementing the 
program, and we're seeking Federal authorization and hopeful 
that we'll finally be able to achieve that.
    Second is the QSA, completion of the Colorado River 
quantification agreement, and the pieces of that agreement 
which include the water transfer, the historic water transfer, 
from agricultural Imperial County to the San Diego area.
    And the third has been to provide money from the taxpayers 
of the State of California through some historic bond acts, 
which have been passed since we were able to complete the 
agreements for CalFed. And those agreements in turn have led us 
to an ability to go to the voters now three times and to raise 
billions of dollars to invest in California's own water 
infrastructure.
    And these three items are, as I think you suggested in the 
letter that you sent, closely related to each other. We believe 
that it is still possible to complete the QSA this year. We are 
working hard to try to bring the parties together and to keep 
them together to make that happen. The state has committed 
substantial amounts of money to help deal with some of the 
impacts that have been caused as a result of environmental 
issues that were raised during the completion of the QSA.
    We believe very strongly that the QSA should reflect the 
potential for restoration of the Salton Sea because we agree 
very strongly with the members who've said that the sea can't 
be ignored and that there is a way that we can link a creative 
alternative for maintaining the sea and its valley use to 
completion of the water transfer and the QSA. And we're 
committed to working with you to help bring that to reality.
    We do see the QSA in context of the historic CalFed 
agreement and process in part because the failure to have a QSA 
has already resulted, as you all know, in action by the 
Department of Interior to reduce California's ability to have 
access to surplus water on the Colorado River.
    We were disappointed in the way in which that decision was 
made. We feel that the Department has erroneously interpreted 
its obligations to defer to California law on matters of how 
water is used within the State of California and how we judge 
beneficial use. But we recognize that failure to complete the 
QSA on time was a triggering point and that the action that was 
taken in suspending the Guidelines was one that was really 
unavoidable.
    However, the impact of this is immediately shown by actions 
of the Metropolitan Water District in pursuing other options 
which included in increased purchases of water for Northern 
California.
    And while we recognize that, again, the long-term future 
and the medium-term future of California lies in increasing 
numbers and volumes of transfers, voluntary transfers between 
agricultural and urban users, the connection there between the 
Southern California situation and the problems of the north 
couldn't be more clear.
    We were very lucky this year that we have been blessed with 
rain and snow in the north, and so we weren't dealing with a 
shortage that had to be allocated. But the interconnection 
between our state is--between all of us in the state is very 
apparent.
    And so I'm here mainly to pledge to you that we will 
continue to work to try to get the QSA done. We'll find 
whatever tools we can and look forward to working with you and 
answering your questions.
    [The prepared statement of Ms. Nichols follows:]

                 Statement of Mary Nichols, Secretary, 
                 Resources Agency, State of California

    Mr. Chairman and Members of the Subcommittee, thank you for 
inviting California to participate in today's field hearing. I am 
pleased to be here this morning on behalf of Governor Davis.
    As the Subcommittee requested, my testimony today will explain the 
role that the State has played in recent negotiations among the local 
agency users of Colorado River water, focusing on how California 
expects to cope with the new era of limits on the river. From the 
State's perspective there is, of course, a close connection between the 
reliability of Southern California's water supplies from the Colorado 
River and the region's needs with respect to the CALFED Bay-Delta 
program. That is, deficiencies in Colorado River water supplies will 
have to be made up from other sources, the Delta being one of those 
sources.
Background
    As members of this Subcommittee are aware, the four involved local 
water agencies--Metropolitan Water District of Southern California, San 
Diego County Water Authority, Coachella Valley Water District, and 
Imperial Irrigation District--were unable to reach agreement on the 
Quantification Settlement Agreement package at the end of last year. 
This lack of agreement resulted in Federal suspension of the Interim 
Surplus Guidelines that were in effect in 2002 and had provided MWD, 
the most junior water user of the four, with a full Colorado River 
Aqueduct last year. When former California Department of Water 
Resources Director Tom Hannigan testified before you last year in La 
Quinta, he described how the Guidelines were intended to provide a soft 
landing for the local agencies while they carried out actions to reduce 
their use of river water. The Guidelines increase the likelihood that 
MWD's Southern California service area would continue to experience a 
full Colorado River Aqueduct through 2016 via Federal declaration of 
surplus conditions.
    By suspending the Guidelines, the Department of the Interior 
reduced the local agencies' 2003 water orders to bring California down 
to its basic interstate apportionment of 4.4 million acre-feet this 
year. Unfortunately, this action has spawned a new round of litigation, 
as well as putting listed species at the Salton Sea at increased risk 
of harm. DOI's action ignored the long-standing principle of Federal 
deference to state water management, and California's public trust 
doctrine. Now the State is faced with attempting to remove obstacles to 
QSA execution in the face of competition from the ongoing litigation 
and from the DOI administrative proceedings resulting from the 
litigation. Despite California's repeated requests for a meeting, it 
appears DOI is too engaged with its work on the litigation to 
intensively discuss the Federal aspects of conditions that must be met 
before the QSA execution. As you may be aware, forty-one members of the 
State Legislature recently signed a letter to Secretary Norton 
requesting that DOI support efforts by the State and by the local 
agencies to finalize the QSA.
    California's abrupt reduction to 4.4 maf this year is already 
creating impacts. Farmers in the Coachella Valley are paying an 
additional $15 million for water to make up the 2003 cutback, resulting 
in a doubling of their base water rate for the next five years. As MWD 
testified in the litigation over this year's water orders, the reduced 
Colorado River water supply ``will manifest itself as real hardships to 
Metropolitan and its service area. There are no other alternatives 
available to prevent or further minimize these hardships''. Impacts are 
also being felt by other Lower Basin states, especially Nevada. Las 
Vegas, a community highly dependent on the Colorado River, has also 
lost its access to surplus water provided by the Guidelines in the 
absence of a QSA. Lack of a QSA, and its related uncertainties, are 
jeopardizing the cooperative spirit with which the Basin States have 
been working to address Colorado River water management.
State Role in Recent Negotiations
    Governor Davis, concerned over the loss of surplus water to 
California in 2003, called the local agencies together in Sacramento 
this past January, to ascertain their interest and willingness to 
continue negotiating the proposed QSA. There was concurrence that the 
attempt should be made. The Governor has accordingly devoted 
substantial Administration resources to facilitating agreement among 
the agencies. A milestone was reached in March when, after many long 
hours of effort on everyone's part, the agencies' negotiators adopted a 
proposed QSA package to recommend to their boards of directors. The 
proposed package--which included drafts of the numerous agreements 
linked to the QSA as well as the QSA itself--was presented to DOI and 
to the Basin States for their review. This step represented a major 
accomplishment in the QSA process, given the long-standing differences 
among the agencies. In fact, one Federal representative characterized 
it as Hell having finally frozen over.
    With adoption of the proposed agreement package, attention then 
turned to addressing the conditions precedent for QSA execution. The 
conditions include: State legislation allowing the ``take'' of 
California fully protected species and providing funding to support QSA 
implementation, including the provision of a $150 million State loan 
guarantee; IID grower sign-ups for the conserved water to be 
transferred to SDCWA; settlement and dismissal of IID v. U.S. 
concurrent with the QSA's effective date, and; resolution of DOI 
issues--including payback of past overruns (2001 and 2002) and a policy 
for managing future inadvertent overruns--that would allow 
reinstatement of the Guidelines' surplus water concurrent with the 
QSA's effective date. I am pleased to report that the relevant bills 
have been moving through the Legislature, the loan guarantee has been 
arranged, and IID and SDCWA have waived the grower sign-ups provision 
in favor of IID itself standing in as the guarantor. As I alluded to 
earlier, we have been unable to address with DOI the important issues 
associated with Federal approval of the QSA, and litigation regarding 
this year's water orders remains in process.
    The most recent activities associated with fulfilling the 
conditions precedent have stemmed from MWD's new objections to the use 
of State funding to support QSA implementation, and from desires by a 
variety of stakeholders to more closely tie the QSA and IID-SDCWA water 
transfer to Salton Sea restoration. We are working through these issues 
now. The Davis Administration strongly supports preserving 
environmental benefits provided by the Salton Sea. Proposition 50 
provided $50 million of State bond funding for the sea, and the 
Governor in his May Revise of the budget earmarked $10 million of that 
amount for a feasibility study of new and potentially promising 
concepts of restoration.
Living with Reduced Colorado River Water Supplies
    Unfortunately, California is already living with reduced supplies 
in 2003, although not in the manner in which we would have hoped. As 
then-Director Hannigan testified to you last year, the desired outcome 
was that the local agencies would have executed the QSA in time to 
avoid suspension of the Guidelines. The Guidelines' surplus water is 
one element in California's draft Colorado River Water Use Plan, which 
describes actions to be taken in the near-term to reduce California's 
use of river water, and identifies other actions that need further 
evaluation before they can be implemented. Actions identified for near-
term implementation by the local agencies include lining the remaining 
unlined sections of the U.S. Bureau of Reclamation's All-American and 
Coachella Canals (with State-provided funding), the proposed IID-SDCWA 
transfer, and development of groundwater conjunctive use and storage 
projects. The draft Plan also describes actions that may be taken by 
individual water retailers or water users, especially within urbanized 
Southern California, to reduce their dependence on imported water 
supplies. These actions, including water conservation, water recycling, 
and groundwater management projects, are eligible for State financial 
assistance from voter-approved bond measures.
    As an aside, I would like to point out that California has made 
substantial financial assistance available to the local agencies to 
assist in Plan implementation. Subcommittee members may recall the $235 
million in State general funds authorized for lining parts of the All 
American and Coachella Canals and for MWD's groundwater storage 
projects. Additional financial assistance provided by recent State bond 
measures is available to help agencies in Southern California improve 
reliability of their local supplies and reduce their reliance on 
Colorado River water. Statewide, the 1996 Proposition 204 made 
available $85 million for water recycling, groundwater recharge, and 
water conservation loans and grants. Proposition 13 in 2000 provided 
$395 million for water recycling, groundwater recharge and storage, and 
water conservation loans and grants, as well as $235 million for Santa 
Ana River watershed grants (including groundwater reclamation/water 
conservation/water recycling). Last year's Proposition 50 provides $461 
million specifically to Southern California, for drinking water 
projects to help agencies reduce Colorado River use and for integrated 
regional water management projects. Proposition 50 also provides $825 
million for CALFED implementation--funding that will help firm up the 
reliability of State Water Project supplies to Southern California.
    Many of the measures in California's draft Colorado River Water Use 
Plan, however, are not likely to be implemented in the absence of a 
QSA, at least not without prolonged litigation. For example, proposed 
agricultural to urban water transfers such as the MWD-Palo Verde 
Irrigation District transfer could not be implemented without further 
detailing of the agencies' rights and priority use of Colorado River 
water. The now-in-force Seven Party Agreement of 1931 makes only a 
partial division of California's interstate apportionment of Colorado 
River water and does not fully quantify the 3.85 MAF of water contained 
in its first, second, and third priorities and allocated to the 
agricultural agencies.
    MWD, the most junior of the involved California agencies involved 
in the QSA negotiations, asserts that it can continue to deliver 
reliable water to its service area absent a QSA. However, State 
legislation enacted last year that linked city and county land use 
decision-making to water supply availability raises the bar with 
respect to demonstration of long-term assured supplies. Wetter 
conditions in Northern California this year allowed for nearly full SWP 
deliveries to Southern California, helping lessen some short-term 
impacts. A year-to-year reliance on full SWP supplies or water 
transfers from Northern California, however, is not a key to long-term 
reliability for Southern California.
Conclusions
    We remain convinced that a QSA that takes into account Salton Sea 
restoration options is California's best course for living in an era of 
limits on the Colorado River. We are very close, and we are optimistic 
that the local agencies will be able to work through the remaining 
issues standing between QSA implementation and us. I want to assure 
you, Mr. Chairman, that the Davis administration is committed to 
helping the local agencies ensure that benefits provided by the Interim 
Surplus Guidelines can be returned to California.
    Thank you for the opportunity to appear before you today. I look 
forward to answering any questions you may have.
                                 ______
                                 
    Mr. Calvert. Thank you.
    With us with the upper basin state, representing the upper 
basin, is Mr. Larry Anderson, Director of the Utah Division of 
Water Resources.

   STATEMENT OF D. LARRY ANDERSON, UTAH COMMISSIONER, UPPER 
COLORADO RIVER COMMISSION AND DIRECTOR, UTAH DIVISION OF WATER 
                           RESOURCES

    Mr. Anderson. Thank you, Mr. Chairman, ladies and 
gentlemen. It's an honor for me to be here today.
    The Colorado River is an important economic recreational 
and environmental resource for the citizens of the upper basin. 
A significant portion of the basin's economy revolves around 
and is supported by the use of the Colorado River and its 
tributaries for power generation, recreation, irrigation, as 
well as municipal and industrial water for many of our growing 
communities.
    With the goal of protecting the upper basin states' current 
and future uses of the Colorado River, Utah joined with the 
other six basin states in responding to the request by the 
Secretary of the Interior to develop a plan by which the short-
term needs of the lower division states, specifically 
California, could be met during a transition period while 
California developed and implemented a plan to reduce its 
normal uses of Colorado River water to 4.4 million acre feet, 
which is the amount allowed under the Law of the River.
    After several years of discussions and negotiations among 
the seven basin states, a consensus plan was developed. The 
plan resulted in the development of the Colorado River Interim 
Surplus Guidelines, as adopted in the Secretary of Interior's 
record of decision, dated January of 2001.
    The Surplus Guidelines allowed the Secretary to provide 
water to meet municipal and industrial uses in the lower basin, 
again, particularly in California, during the interim period of 
2001 to 2016. The Colorado River reservoirs were projected to 
be relatively full because the upper basin states demands are 
currently less than allocated to them by the Law of the River.
    The Interim Surplus Guidelines allowed California 15 years 
to implement conservation programs to reduce its annual demand 
of Colorado River water from its current use of 5.2 million 
acre-feet to its apportionment of 4.4 million acre-feet, a 
reduction of 800 acre-feet annually.
    During this 15-year timeframe, the other basin states 
agreed to give California an increased assurance the surpluses 
will be declared that municipal and industrial water demands 
will be met during the transition period. It has been referred 
to as a soft landing for the California's Colorado River water 
agencies.
    Of great interest and concern to the basin states are the 
problems California's Colorado River water agencies have had in 
reaching an agreement on the QSA, which is a necessary step the 
California water users must take to meet the requirements of 
the Interim Surplus Guidelines. We fully expected California to 
have this plan in place and finalized by December 31st of 2002, 
with all necessary agreements, compliance documents and a QSA. 
The deadline for finalizing the agreement was not met. We were 
disappointed that California agencies would let this happen.
    The QSA will make it possible for California to reduce its 
use of Colorado River water, as well as make it possible to 
convert or transfer agricultural water to M&I uses for Southern 
California. While we are very concerned over the bickering 
between the water users, we still anticipate and expect the 
agencies to solve these problems and complete the QSA.
    Permanent quantification of California's agricultural use 
of Colorado River water was a basic premise for the other basin 
states to support the Guidelines. The QSA will protect all 
other Colorado River Basin water users from additional demands 
from California and is the principal protection sought by the 
other basin states.
    In conclusion, the State of Utah continues to support the 
Interim Surplus Guidelines and the finalization of a permanent 
QSA by California. All due diligence needs to be exercised by 
California's Colorado River agencies to implement the QSA. A 
successful agreement will reduce major causes of contention in 
the basin.
    But as long as California's Colorado River agencies fail to 
complete an acceptable QSA, we expect the Secretary of Interior 
to continue the suspension of the Interim Surplus Guidelines 
and limit California's use of Colorado River water to 4.4 
million acre-feet annually.
    Thank you very much.
    [The prepared statement of Mr. Anderson follows:]

Statement of D. Larry Anderson, Utah Commissioner, Upper Colorado River 
       Commission, and Director, Utah Division of Water Resources

IMPLEMENTATION OF THE INTERIM SURPLUS GUIDELINES
    The Colorado River falls more than 12,000 feet as it flows from the 
Rocky Mountains to its outlet in the Gulf of California. The river has 
a huge drainage basin that covers over 244,000 square miles. The seven 
Colorado River Basin States (Arizona, California, Colorado, Nevada, New 
Mexico, Utah, Wyoming) comprise about one-twelfth of the area of the 
continental United States. Despite the size of the watershed, the 
Colorado River ranks only sixth among the nation's rivers in volume of 
flow, with an average annual undepleted flow in excess of 17.5 million 
acre-feet (MAF) (15 MAF at Lee Ferry, the compact division point). 
Demands on the Colorado River are not limited to needs within the 
basin. In fact, more water is exported from the basin than from any 
other river in the country. The river provides municipal and industrial 
water for more than 24 million people living in the major metropolitan 
areas of Los Angeles, Phoenix, Las Vegas, Salt Lake City, Denver, 
Albuquerque, and hundreds of other smaller communities in the seven 
states. It also provides irrigation water to about 2.0 million acres of 
land. The river has over 60 MAF of storage capacity and 4,000 megawatts 
of hydroelectric generating capacity. The river is often described as 
the most regulated river in the world. Considering its importance to 
the basin states, Native American Indian Tribes and Mexico, the 
agreements that have been reached to divide the river's water must be 
considered of the utmost importance.
    Most of the flow of the Colorado River originates high in the 
mountains of the Upper Basin States of Colorado, New Mexico, Utah and 
Wyoming. The Colorado River is an important economic, recreational, and 
environmental resource for the citizens of the Upper Basin States. A 
significant portion of the economy of the Upper Basin States revolves 
around and is supported by the use of the Colorado River and its 
tributaries for power generation, irrigation, and tourism as well as a 
water supply for growing populations. Thus we are intimately involved 
and vitally concerned with the management of the Colorado River.
The Law Of The River
    Because of the critical role of water in the arid west, the 
Colorado River has been the subject of extensive negotiations and 
litigation. This has resulted in the development of a complex set of 
Federal laws, compacts, court decisions, treaties, state laws and other 
agreements collectively known as ``The Law of the River''. The 
principal documents forming ``The Law of the River'' include:
     LThe Colorado River Compact of 1922;
     LThe Boulder Canyon Project Act of 1928;
     LThe Mexican Treaty of 1944;
     LThe Upper Colorado River Basin Compact of 1948;
     LThe Colorado River Storage Project Act of 1956;
     LThe U.S. Supreme Court's Arizona v. California decision 
and decree of 1964;
     LThe Colorado River Basin Project Act of 1968;
     LCriteria for Coordinated Long-Range Operation of Colorado 
River Reservoirs of 1970;
     LMinute 242 of the International Boundary and Water 
Commission of 1973;
     LThe Colorado River Basin Salinity Control Act of 1974;
     LThe Grand Canyon Protection Act of 1992;
     LColorado River Interim Surplus Guidelines of 2001
    In addition to these documents, several other Federal and state 
laws impact the use of the river. Some of these are: California's Self 
Limitation Act, Federal Endangered Species Act, National Environmental 
Policy Act, Clean Water Act, and the Wild and Scenic Rivers Act. 
Currently a key document is the yet to be completed California Colorado 
River Quantification Settlement Agreement which revises and quantifies 
the water use priorities in California of its Colorado River water 
allocation.
Interim Surplus Guidelines
    One of the most important issues in the Colorado River Basin today 
is the increased municipal and industrial water demands in the Lower 
Division States of Arizona, California, and Nevada versus their 
available water supply as allocated by ``The Law of the River''. Unless 
and until the Lower Division States take the necessary steps to live 
within their basic entitlement of 7.5 MAF per year, there will continue 
to be contention in the basin. With the goal in mind of reducing basin 
wide contention and enhancing the Upper Basin States' ability to 
develop and use more of their Colorado River water without impacting 
the Lower Division States, Utah joined with the other Six Basin States 
in responding to a call from the Secretary of the Interior to develop a 
plan by which the short term needs of the Lower Division States, 
specifically California, could be met during a transition period while 
California develops and implements a plan to limit its use of Colorado 
River water to the amount allowed under ``The Law of the River''. After 
months of intense discussions and negotiations among the Seven Basin 
States, a consensus plan was developed. This consensus plan resulted in 
the development of the Colorado River Interim Surplus Guidelines 
(Guidelines) as adopted in the Secretary of the Interior's Record of 
Decision (ROD) dated January of 2001.
    The Surplus Guidelines allow the Secretary to provide water to meet 
municipal and industrial (M&I) uses in the Lower Basin, particularly in 
California, during an interim period 2001- 2016 (while Upper Basin 
States water demands are at less than full development). Water users in 
California have been using approximately 5.2 MAF annually over the past 
20 years, 800,000 acre-feet more each year than their basic 
apportionment as determined in Arizona v. California. The Guidelines 
allow California 15 years to implement conservation programs to reduce 
its demand for Colorado River water from 5.2 MAF to its compact 
allocation of 4.4 MAF. During this 15-year time frame, the other Basin 
States have agreed to give California a greater assurance that annual 
surpluses will be declared and M&I water demands will be met from 
reservoir storage during this transition period.
    These Guidelines are structured in such a way as to also provide 
protection to the other Six Basin States against the potential impacts 
of dry hydrology during the next 15 years. This protection will reduce 
the allowable California M&I water demands that can be met by surpluses 
as the reservoirs are lowered because of drought. The Upper Basin 
States have continued to support the consensus reached by the Seven 
Basin States. We strongly urge and expect the Federal Government and 
the Secretary of the Interior to continue to follow through on the 
commitments of all parties including enforcement of the provisions of 
the Interim Surplus Guidelines if California does not meet the 
benchmarks set forth in the Guidelines and the ROD. It is critically 
important that California make the anticipated progress in reducing its 
annual Colorado River water use over the fifteen- year interim period. 
We, the Upper Basin States, strongly believe that appropriate 
enforcement is critical to protecting our rights to the water allocated 
to our states under ``The Law of the River''. It was only on this basis 
that the other six states agreed to the provisions that were 
incorporated into the now promulgated Interim Surplus Guidelines.
California Water Use Plan for the Colorado River and the Quantification 
        Settlement Agreement
    Of great interest and concern to all the Colorado River Basin 
States is the success of California in developing a way to live within 
its 4.4 MAF allocation, which is inextricably linked to the Interim 
Surplus Guidelines ROD. This includes the necessary steps California 
water users must take to meet the requirements of the Guidelines ROD. 
The Upper Basin States have supported, and tried to facilitate through 
the Guidelines, California's development of a way to get down to 4.4 
million acre-feet of annual use. We fully expected California to have 
this plan in place and finalized by December 31, 2002, with all 
necessary agreements and compliance documents executed. When the 
December 2002 deadline for the finalization of California's agreements, 
including the Quantification Settlement Agreement (QSA) was not met, we 
wholeheartedly encouraged and supported the Secretary of the Interior 
in her suspension of surplus deliveries under the provisions of the 
Interim Surplus Guidelines. Her decision was in keeping with the 
Interim Surplus Guidelines ROD.
    The QSA is the overarching agreement that will make it possible for 
California to reduce its use of Colorado River water. While we are 
concerned over the bickering between the California Colorado River 
water agencies, we still anticipate and expect these agencies to solve 
their problems and complete the QSA, as the viability of the Guidelines 
hangs in the balance. Permanent quantification of California's 
agricultural use of Colorado River water was one of the basic premises 
of the other Six Basin States for negotiating and supporting the 
Guidelines. This quantification will protect all other Colorado River 
Basin water users from additional demands from California and is the 
principle protection sought by the Basin States. The Upper Basin States 
have and still encourage Congress and Federal agencies to provide 
support for and facilitate these agreements wherever appropriate, and 
if necessary, expedite any required Federal review processes.
    The inter-related issues of Colorado River water use in California 
and the Salton Sea protection and restoration efforts have complicated 
this matter. While the Salton Sea has become an important wildlife 
habitat, it also should be recognized the Salton Sea is a manmade 
habitat dependent upon agricultural inefficiency and resultant return 
flow. Any water dedicated for use in the Salton Sea will have to come 
from existing water uses in the area, which may conflict with the 
transfer of agricultural water to municipal use. Given the relationship 
between the Salton Sea and the QSA, the impacts of these efforts need 
to be carefully evaluated and separated.
Conclusion
    In conclusion, I state the strong support of the State of Utah for 
the Interim Surplus Guidelines and the finalization of a permanent QSA 
by California. Our support has been demonstrated in the close working 
relationship of all seven of the Colorado River Basin States in the 
development of the Guidelines and our continued efforts in the arena of 
the Seven Basin States' discussions concerning the Colorado River, the 
QSA and the issues surrounding the Salton Sea. California's plans for 
the Colorado River and the QSA are inextricably linked to the 
Guidelines. All due diligence needs to be exercised by California's 
Colorado River water agencies, Congress, Federal agencies, and the 
other Six Basin States to achieve the worthy goal of implementing this 
plan and consummating the Quantification Settlement Agreement. As long 
as California's Colorado River water agencies fail to complete an 
acceptable QSA, we expect the Secretary of Interior to continue the 
suspension of the Interim Surplus Guidelines and limit California's 
water use to 4.4 MAF per year.
                                 ______
                                 
    Mr. Calvert. Thank you, gentleman.
    And with us from the lower basin states is Herb Guenther, 
the Director of Arizona Department of Water Resources.

             STATEMENT OF HERB GUENTHER, DIRECTOR, 
             ARIZONA DEPARTMENT OF WATER RESOURCES

    Mr. Guenther. Thank you, Mr. Chairman, members, ladies and 
gentlemen in the audience.
    I am also pleased to be here to testify before the 
Committee. The issue has been defined many times over. I'm sure 
you're more than familiar with it. My testimony addresses both 
the water bank and the ISG as it relates to the importance to 
the basin states.
    Suffice it to say, we are extremely interested in putting 
these cats back in a bag somewhere and bringing this issue to 
closure. I think it is perhaps the most important water issue 
that we will deal with in this young 2001 first decade.
    This is an opportunity that will be gone if we do not cease 
it within the next several months. And the reason I say that is 
because the world will become much more complicated as we 
approach the 2004 era as the Presidential political scene 
becomes more intense.
    I believe that the QSA that is currently proposed is very 
near acceptance by all parties. If we can just put the final 
touches to it, if we are successful in getting the financing 
for the issues that need that financing, I believe we can bring 
this to closure before Thanksgiving.
    I am very optimistic that not only can the basin states, 
the six remaining basin states outside of California, resolve 
our outstanding issues--and they're minor, but they will 
require some work. And they deal with primarily foul ramps, 
conversion from fouling to actual solid conservation measures, 
and the like. I think those are all virtual issues and very 
easy once we sit down and talk about them.
    At the same time I met with Assistant Secretary Raley last 
week before he went into the Grand Canyon, and he has also 
agreed to participate so that members of this department can 
come to closure on their remaining outstanding issues which 
deal with the Secretarial Implementation Agreement. Again, 
we're very confident those issues are virtual.
    So we look forward to working feverishly at this time to 
try to solve the remaining outstanding issues both in the basin 
states and with the Secretary, and then we will be prepared to 
move forward at such time as all the conditions present are 
met, including the funding.
    It is a complex matter as you're well aware. The QSA is 
necessary to activate the ISG. The QSA is also necessary to get 
the Secretarial Implementation Agreement to activate the 
Interim Surplus Guidelines. After the Interim Surplus 
Guidelines are activated, then the Metropolitan Water District 
in Arizona will have to enter into an Interim Surplus 
Guidelines agreement which will allow Arizona to forgo their 
rights to 46 percent of surplus flows, make those available to 
Arizona--or California and Nevada. And, in exchange, we have a 
shortage sharing agreement for up to one million acre-feet with 
the Metropolitan Water District.
    We look forward to a QSA that activates the SIA, which then 
will activate the ISG and will lead to the ISGA. We should be 
momentarily--we should enjoy momentary tranquility on the 
system.
    I know the Salton Sea, as Congresswoman Bono has said, is 
the keystone to our difficulties which we've been having with 
this potential QSA. I would actually say it's been the 
controlling interest in this establishment of the QSA. It is a 
very complex and challenging issue both politically and 
biologically.
    And I believe eventually and ultimately it will come down 
to a benefit/cost analysis as to what actually can be done to 
salvage all or part of the Salton Sea.
    So from the lower basin states' standpoint, we stand ready 
to assist the agencies in California. We stand ready to work 
with the other basin states. We stand ready to work with the 
Secretary of the Interior to resolve any remaining outstanding 
issues and bring this issue to a successful conclusion.
    Mr. Chairman, I thank you for the opportunity to comment.
    [The prepared statement of Mr. Guenther follows:]

                 Statement of Herb Guenther, Director, 
                 Arizona Department of Water Resources

    As the Director of the Department of Water Resources, I represent 
the State of Arizona regarding Colorado River issues. Arizona holds a 
contract with the Secretary of the Interior for 2.8 million acre-feet 
of water from the Colorado River. The Colorado River provides the 
largest dependable water supply for our long-term growth and 
development. Our largest water project is the Central Arizona Project, 
which imports over 1.5 million acre-feet of Colorado River water to 
central Arizona. The water is used to supply municipal customers, 
Indian Tribes and irrigated agriculture. Many of our cities are, or 
will be, completely dependant on the Colorado River to meet their 
dependable water supply needs. However, the Central Arizona Project has 
the lowest priority water right in the lower Colorado River Basin. That 
means that Arizona is very concerned about future shortages. We cannot 
tolerate long-term over use by other states that will deplete the water 
supplies stored in Lake Mead.
    We also understand that the probability of shortages will increase 
dramatically in future years as the upper basin states develop their 
water uses. To avoid catastrophic shortages to our cities in the 
future, Arizona has begun to recharge, or bank, Colorado River to save 
water for the dry years ahead.
    Arizona has very deep aquifers and conditions favorable for 
recharge. When water is available, we extend the opportunity Nevada and 
California to recharge water for later recovery to meet those states' 
needs. So far, Arizona has banked approximately 80,000 acre-feet for 
the Southern California Metropolitan Water District and over 100,000 
acre-feet for Nevada.
    Water banking is expanding in Arizona as we study the means to bank 
water to help resolve Indian water rights settlements. We are now 
engaged in planning for the potential use of the water bank for more 
than municipal water shortages.
    Water banking is an essential water management strategy for Arizona 
and our neighboring states. Even so, the amount of water and storage 
sites is limited, causing Arizona to carefully evaluate the priorities 
of use.
    Several years ago, Arizona entered into discussions with the U.S. 
Bureau of Reclamation, water agencies in Southern California and the 
states of Nevada, Colorado, New Mexico, Utah and Wyoming about reducing 
California's water uses from nearly 5.4 million acre-feet of use to 4.4 
million acre-feet of use that is the normal apportionment of water for 
California. Due to the water rights priority system in California known 
as the Seven-Party Agreement, the Metropolitan Water District (MWD) 
would have had to reduce its Colorado River use by more than half to 
meet the overall reductions in water use for the State of California. 
Metropolitan believed that their customers and member water agencies 
would be severely impacted by such reductions. Metropolitan asked for a 
time of transition, a ``soft landing'', to quantify water rights and 
make arrangements for water transfers from the higher priority 
agricultural water districts to MWD. To implement a transition plan, 
the Secretary of the Interior had to determine that surplus water was 
available to ``over-deliver'' water to MWD.
    Arizona and the other basin states agreed to make interim surplus 
water available to Southern California if the California water agencies 
committed to a defined, enforceable program to reduce their dependence 
on Colorado River water over their basic entitlement, in a way that 
avoids undue risk of shortage and other impacts to the other Basin 
States. One of the keys to such a program is the quantification of the 
agricultural priorities in Southern California, which is necessary to 
serve as a baseline from which any transfers from agricultural 
priorities to the Metropolitan Water District and San Diego could take 
place. Another key is the degree of certainty that the plan will be 
implemented, so the States can be assured California will be prepared 
to live within its apportionment at the end of the interim period. 
Based on California's willingness to quantify its water rights and 
implement a reduction program, the Secretary adopted Interim Surplus 
Guidelines (ISG). To make the ISG work as intended, Arizona had to 
agree to waive its rights to some surplus deliveries of water that 
would have been available to us under the ``law of the river''. Arizona 
did so to help California accomplish its ``soft landing''. However, 
surplus deliveries and Arizona's waiver of surplus water rights were 
contingent upon adoption of the California Quantification Settlement 
Agreement (QSA). The Southern California water agencies did not execute 
an acceptable QSA by the end of 2002, causing the suspension of water 
deliveries pursuant to the ISG, and expiration of Arizona's waiver to 
surplus water.
    As a result of the suspension of surplus under the ISG, MWD and 
Southern Nevada may suffer a shortage of water supplies this year. In 
response to this shortage, MWD and Nevada have requested withdrawals of 
water from the Arizona Water Bank. If the ISG surpluses are not 
reinstated, we will expect that MWD and Nevada will request to use the 
Arizona Water Bank during the Interim Period to offset the loss of 
surplus water. The ability to bank water is limited, and Arizona has to 
preserve capacity and water for its citizens, including Indian tribes 
before it can expand the banking for other states.
    It is essential for California to execute the QSA to bring 
stability to water management in the lower Colorado River basin.
    The Governors' representatives of the six basin states, have 
reviewed the most recent set of draft agreements constituting the QSA 
between California's Colorado River water contractors, which the 
California agencies presented to us in March of 2003. The Southern 
California water agencies have requested our comments concerning the 
current draft QSA. We continue to support the ISG as the mutually 
agreed upon means of providing California the ``soft landing'' it 
requested in order to implement the California Plan. Our support for 
the ISG is contingent on the development and implementation of a QSA 
and its required appurtenant agreements among the California agencies. 
If the QSA is executed, Arizona stands ready to sign an agreement to 
waive its rights to surplus for the Interim Period.
    We encourage the State of California to continue its efforts with 
the four southern California agencies to negotiate and settle the 
quantification and transfer agreements. We also encourage the 
California legislature to authorize funds and enact enabling 
legislation necessary for the implementation of the QSA and the 
California Plan.
    It is very important for the proper administration of the Colorado 
River Basin that long-term agreements be adopted, leading to permanent 
solutions for sharing of the limited water supplies within California. 
We also believe that strong commitments by the southern California 
agencies to the California Plan will minimize the need for the 
Secretary of the Interior to exercise secretarial authorities under the 
Law of the River.
    The six states do, however, have concerns with some provisions in 
the current draft QSA, as proposed in March 2003. For these reasons, 
the basin states have created a small group to work directly with the 
California agencies to resolve issues we have with the current draft 
agreements. We hope the Secretary will join us as we attempt to resolve 
all outstanding issues. Arizona is certain that the remaining issues 
can be solved to the satisfaction of all concerned. We are committed to 
continuing the mutual working relationship we have with the state of 
California, its water agencies and the Department of the Interior. The 
history of that relationship has been the successful resolution of many 
difficult issues we have faced on the Colorado River.
                                 ______
                                 
    Mr. Calvert. Thank you. Thank you, Herb. And I think the 
Middle East peace negotiations are complex.
    Next with us is Lloyd Allen, the President and Board of 
Directors of the Imperial Irrigation District.
    You'll be recognized for 5 minutes.

   STATEMENT OF LLOYD ALLEN, PRESIDENT, BOARD OF DIRECTORS, 
                  IMPERIAL IRRIGATION DISTRICT

    Mr. Allen. Chairman Calvert, Congressman Hunter, members of 
the Subcommittee, my name's Lloyd Allen. I'm a farmer in 
Imperial Valley. I appreciate the opportunity to talk to you 
all about the status of the Quantification Settlement 
Agreement.
    Thank you, Daisy.
    As you know, this is of critical importance to the people 
of Imperial Valley. And I didn't know whether I was going to 
grow any wheat this year or not when I got that first turkey, 
but I did, and I have a damn good crop. Thank you. We greatly 
appreciate your efforts to focus the attention on the QSA.
    I'd like to take this opportunity to thank Chairman 
Calvert, Congressman Hunter, and members of the Committee who 
work real, real hard to bring peace on the river through the 
implementation of the QSA.
    I prepared a written statement. It's over there somewhere. 
You can have it, and I'll leave it with you. However, I'd like 
to take this opportunity to say a few words and comments on the 
importance of this hearing and the need for decisive action and 
leadership from the Subcommittee.
    Preliminarily, it is important for you and the Subcommittee 
to understand that the IID is fully committed to the QSA. We 
have, in fact, approved the QSA in its present form. We know 
that other basin states and the Department of Interior may have 
suggestions, maybe some changes. And we don't have it as a take 
it or leave it. We're willing to work it, regarding QSA deal 
terms. And we're, therefore, prepared for face-to-face meetings 
with the State's Interior and California parties on this issue.
    However, it's important for you to appreciate that we have 
thus far been able to get Interior to negotiate the negotiating 
team. The Interior favors placing its efforts in the direction 
of the 417. Proceedings have explained to us that it cannot 
ever take both tasks in one time. That sounds not too very good 
to me, because I was in (inaudible) and California at the same 
time. Interior has also obviously chosen sides in this inter-
California dispute, favoring urban Southern California 
interests over interests of agriculture.
    Be that as it may, the time has come to put our efforts in 
settlement negotiations regardless of the slant of the playing 
field. If we are to succeed with implementation of the QSA, the 
Interior's attitude must change. The Interior must bring its 
outstanding QSA issues to the negotiating table so that the 
interested parties may address those issues and bring the QSA 
to completion.
    It is also critical that cooler heads prevail in the 
context of the 417. I think you can appreciate that this is 
just the beginning of what is likely to be a far-reaching 
imperfect confrontational litigation. IID urges all parties, 
including the U.S. Government, not to go in that direction. 
Your leadership is needed to facilitate the filing of a motion 
jointly from the IID and the Federal Government to stay 
proceedings with the Federal court in San Diego. We remain 
convinced that the court will welcome such a motion and will 
support the parties in working on a settlement as opposed to 
promoting administrative and judicial litigation.
    Finally, Mr. Chairman, your leadership and influence in 
this Subcommittee are needed in order to convince our neighbors 
at MWD to support the QSA. MWD has followed a very confusing 
path in recent months, and such action has contributed to a 
lack of confidence in the QSA in some circles. While this is 
indeed unfortunate, the majority of interested parties continue 
to recognize the QSA is in the best interest of the State of 
California and the six basin states in the California water 
agencies including MWD.
    In my written testimony, I explain three recommendations I 
feel critical to ensure success of the QSA: We need face-to-
face negotiations among the water agencies, Interior, and other 
states, including California, to begin immediately. A motion to 
stay proceedings must be filed by the United States and IID in 
the Federal court in San Diego. This Subcommittee should hold 
periodic oversight hearings during the next several months in 
order to ensure implementation of the QSA.
    Mr. Chairman, I've lived and farmed in the Imperial Valley 
for many years, and I've witnessed two other situations of 
difficulty and challenges that have confronted our community. 
Whether it be past market conditions, hostility of the Federal 
Government, and 100 years of the history of our community has 
successfully faced these challenges, and we are prepared to do 
so, the same, in this situation.
    My long years of experience have demonstrated to me that 
when it's possible, settlement is preferred when trying to 
protect against confrontational litigation. A settlement that 
is beneficial to all interested parties is within reach. We 
simply need to join forces to make progress and set aside our 
differences. Bring in our mitigation lawyers, and allow common 
sense and public good to prevail. I sincerely hope that with 
your assistance we will succeed.
    I have with me today John Carter, IID's chief leading 
counsel, and together we're prepared to answer any questions 
you may have. Thank you for the opportunity, and we look 
forward to working for you.
    And it's pretty damn hot at our home, and it's nice to be 
here in San Diego.
    [The prepared statement of Mr. Allen follows:]

       Statement of Lloyd Allen, President, Board of Directors, 
                      Imperial Irrigation District

    Chairman Calvert, Congressman Hunter, and members of the 
Subcommittee, my name is Lloyd Allen and I am President of the Imperial 
Irrigation District (IID) Board of Directors. I appreciate the 
opportunity to speak to you today about the status of the 
Quantification Settlement Agreement (QSA). As you know, this is a 
matter of critical importance to the people of the Imperial Valley, and 
therefore we greatly appreciate your efforts to focus attention on the 
QSA. Let me also take this opportunity to thank Chairman Calvert, 
Congressman Hunter, and others who have worked tirelessly in their 
efforts to bring peace to the river through the implementation of the 
QSA.
    To appropriately outline the history of the development of the QSA, 
and to follow the often times tortuous route that has brought us to 
where we are today, would take many pages of testimony. In the interest 
of time and brevity, I will not take that approach but will instead 
attempt to focus on a few central points that I think are critical to 
understanding the present circumstances. I will also provide several 
recommendations that I believe will ensure success.
    Although we have been at what seems to be the ``eleventh hour'' for 
the QSA several times in the past, I truly believe that we are now 
facing the critical point where the QSA must be implemented, with 
broad-based support, or the protracted and far-reaching litigation that 
has commenced will pass the point of no return. While IID is fully 
prepared to protect its senior water rights in the courts, the halls of 
Congress, and elsewhere, we believe that the wiser course is settlement 
through implementation of the QSA. This is a time for leadership, 
diplomacy, dedication to the public interest, and good old common 
sense.
    This is also a time of general confusion and misinformation because 
the QSA is so complicated and several interested parties are pursuing 
courses of action that are difficult to understand. With that 
background in mind, I would like to briefly outline several points that 
I believe are important to understanding the present circumstances.
    First, I believe that there continues to be mistrust directed 
toward IID, and some parties even suggest that IID cannot be trusted to 
``do the deal.'' As to this point let me be emphatically clear: the IID 
Board of Directors has already approved the QSA and as President of the 
Board I have signed the relevant documents, including the long-term 
transfer agreement with San Diego. In other words, IID supports the 
QSA, IID has approved the QSA, and IID stands ready to address with any 
interested parties continuing concerns about the terms of the QSA.
    Some parties have recently suggested that IID's position is one of 
``take it or leave it'' in regard to the QSA documents that have been 
approved and executed. That is not a correct statement. While IID would 
prefer to have the QSA documents remain largely as presently 
structured, so as to avoid further public hearings in the Imperial 
Valley and then another vote of the Board, we have never in any way 
suggested that this is a take it or leave it deal.
    We appreciate that other basin states and the Department of the 
Interior (Interior) may suggest modifications to some of the terms in 
the documents. IID is fully prepared to engage those discussions and to 
take appropriate action in the event of a substantive change in the 
deal terms. I make note, however, of the obvious--the more onerous the 
changes in the direction of IID the more we face potential political 
difficulties within our community. But that is the same with other 
parties as well and we are therefore nevertheless prepared to proceed 
as long as all interested parties appreciate the political risks.
    Second, some parties have suggested that IID should dismiss its 
suit against the United States government so as to show good faith in 
the direction of completing the QSA. Again, let me be perfectly clear: 
IID is prepared to dismiss its suit against the Federal Government as 
soon as the Part 417 proceeding is dismissed and the QSA has been 
executed. Let me emphasize--IID is not interested in protracted and 
confrontational litigation. But IID will not abandon its legal defenses 
while it is under attack and it is not reasonable to ask or expect us 
to do that.
    Let me also state that IID has been and remains fully prepared to 
negotiate with Interior, the basin states, and other interested parties 
at the same time that IID defends itself in the ongoing 417 proceeding. 
Such action puts an enormous strain on the limited IID budget, but we 
recognize that time is of the essence and there is no other 
alternative. We respectfully suggest that all other parties, including 
the powerful United States government with huge resources, must be 
compelled to follow the same approach.
    Third, this Subcommittee, other Members of Congress, and the White 
House should all be focused on facilitating face-to-face negotiations 
over remaining deal terms for the QSA. Since the first of the year IID 
has had only one meeting with Interior and the Department of Justice, 
which was not on the substance of the QSA. Mr. Chairman, since time is 
of the essence it is not helpful for me to mince words or beat around 
the bush--IID and the QSA parties have been stiff-armed by Interior in 
this process. We have been the victims of a concerted effort by 
Interior to ignore the QSA in favor of the 417 proceeding. If noting 
else comes out of this hearing, it will be a success if you and others 
in Congress help us to achieve face-to-face negotiations with Interior 
and others so as to complete the QSA.
    Fourth, it is indeed unfortunate that for reasons that are largely 
unknown Interior has decided to choose sides in this struggle between 
the southern California water agencies. California has not sought to 
avoid the 4.4 million acre-feet (maf) limitation. The internal dispute 
is over how to divide the 4.4 MAF apportionment. Interior has chosen to 
side with the junior right holders whose demands for water has 
increased with urban sprawl and population growth.
    In contrast, it is interesting to note that while the Babbitt 
Administration took actions that were contrary to the interests of IID, 
their representatives also maintained a measure of risk for the other 
agencies. As a result, the negotiation playing filed remained largely 
level. The Norton Administration, however, has decided to support the 
southern California urban interests against IID, and therefore the 
incentives to remain at the settlement table have been disrupted. MWD 
now questions the viability of the QSA especially when Interior seems 
to be suggesting that it will aid MWD in trying to take water from IID 
with no regard for compensation, environmental compliance, and other 
important factors. Again, this is where your Subcommittee and the other 
members of Congress can provide direction and leadership--the Secretary 
is supposed to be a neutral water master, not a spear-carrier for MWD.
    Fifth, it is difficult for all of us, including the other basin 
states, to fully understand the positions advanced by MWD in recent 
weeks and months. For example, I suggest you put yourself in the 
position of another basin state who was told a few years ago that MWD 
desperately needed the Interim Surplus Guidelines (ISG) water over the 
fifteen year 4.4 California water-diet transition period, only to be 
told recently by MWD that the ISG water is really of very little 
importance. Similarly, others of us are trying to make sense out of 
MWD's current passion for protecting the fiscal well being of the State 
of California.
    In the end IID suggests that this Subcommittee and other interested 
parties should be more focused on the State of California. The 4.4 MAF 
is California's apportionment to the river, and therefore the state has 
strongly stepped forward in recent months to protect the overall 
interests of its citizens. The state has repeatedly emphasized the 
statewide importance of the QSA, the importance of peace among the 
agencies, and the importance of the reinstatement of the ISG special 
surplus water. As I emphasized above, this is a situation where 
leadership will be critical and it is IID's view that the combined 
leadership of this Subcommittee, other members of Congress, and the 
State of California will cause the QSA to be implemented in the end, 
with the cooperation of MWD.
    Sixth, let me emphasize the relevance of the Federal and state 
environmental laws in this whole process. Over the past four or five 
years IID and the other QSA parries have struggled endlessly with the 
Endangered Species Act (ESA), NEPA, the Clean Air Act, and other laws 
in our efforts to bring the QSA to completion. We all know by now that 
if water use within IID is cut back there will be a corresponding 
impact in the amount of water going to the Salton Sea. This impact, we 
are told by state and Federal wildlife agencies, requires consultation 
and mitigation under the ESA because of the effect on listed species, 
and will require compliance with other laws in regard to air quality 
and other matters.
    Curiously, however, Interior is now on a path to cutback IID's 
water use by probably several hundred thousand acre feet per year (via 
the 417 proceeding), but Interior has done nothing in the direction of 
environmental compliance to support that action. Now, this course of 
action might be attributable to Federal agency arrogance and a notion 
that Interior simply does not need to pay attention to the 
environmental laws, or Interior has cobbled together a legal argument 
as to why under these circumstances it need not comply with these 
important Federal laws. Whichever is the case, IID suggests that this 
Subcommittee should investigate this issue carefully and thoroughly. 
Maybe it goes without saying, but many interested parties are likely to 
disagree with Interior on either point of justification, and therefore 
we can rest assured that this action, too, will lead to protracted and 
confrontational litigation. That is not, we suggest, the sensible and 
productive path to follow.
    Finally, I would like to mention the unfortunate tension that we 
are experiencing at this eleventh hour within the basin states. While 
most of the states have expressed support, and even exceedingly strong 
support in some cases, for the need to place emphasis on the completion 
of the QSA while slowing down or stopping the 417 proceeding, our 
neighbors in Colorado have expressed somewhat contrary views. I think 
it is exceedingly important to recognize the unique position of the 
State of Colorado at this point in time: Colorado provides on average 
about 70% of the water in the Colorado River; nevertheless, Colorado 
has a smaller apportionment than the State of California; Colorado has 
been impacted significantly by the recent drought while those of us 
below the giant reservoirs have had the blessing of carry-over storage; 
and Colorado is in the process of exploring the ways and means to fully 
utilize its Colorado River apportionment.
    The reasons that impact on a basin state's positions in any given 
situation can be complex and sometimes parochial. Nevertheless, in 
recent years we have seen a new paradigm of cooperation among the basin 
states, and an effort to coordinate to the degree possible for the 
common good. In this situation we urge this Subcommittee to reach out 
to the State of Colorado in an effort to fully understand its concerns 
and to address those concerns to the degree possible. IID firmly 
believes that the QSA is in the best interest of the QSA parties, the 
State of California, and the other six other basin states including 
Colorado. It would be exceedingly helpful to have Colorado lend its 
support to the successful completion of this process.
    On the basis of these points of understanding let me provide the 
following recommendations to ensure successful completion of the QSA:
    1. That this Subcommittee facilitates a series of face-to-face 
negotiation meetings to be attended by the QSA parties, representatives 
of the basin states, and Interior and the Department of Justice. 
Interior and all other parties should be requested to put forth all of 
the QSA issues that they believe must be addressed so as to move the 
agreements to execution.
    2. That the United States and IID jointly file a motion to stay 
proceedings with the Federal court in San Diego. The purpose of the 
motion would be to have the court recognize and understand the 
seriousness of the QSA settlement effort, and have the court approve 
Interior's temporary stay of the 417 proceeding in an effort to finish 
work on the QSA implementation.
    3. That this Subcommittee schedules a series of oversight hearings 
to be conducted over the next several months so as to monitor progress 
on the completion of the QSA. All of the interested parties should be 
compelled to attend and report on their progress in implementing the 
QSA.
    Mr. Chairman, it may be a somewhat tired phrase but it is true--
water is the lifeblood of my community. Along with the other IID Board 
members I am duty-bound to protect IID's senior vested water rights, 
and I can assure you that IID will do everything within its power to 
defend its interests--up to the highest court of the land. But I can 
also tell you that I have been around a long time and I have seen the 
results of courtroom battles and other forms of confrontation. When it 
is possible, I prefer settlement over litigation--and that is the 
current position of the IID Board.
    IID stands ready to assist in any way possible to ensure that the 
QSA is implemented as soon as possible. I appreciate the tensions that 
exist between IID and Interior, and between IID and MWD and Coachella. 
But we are prepared to work cooperatively and in good faith with our 
QSA partners and the Federal Government to make the QSA a reality. With 
your assistance, and with the assistance of your Subcommittee and other 
members of Congress, I am confident we can reach that goal.
                                 ______
                                 
    Mr. Calvert. It's only 100 degrees out here, Lloyd.
    Mr. Allen. Well, it's about this many more than that over 
there.
    Mr. Calvert. Next, Mr. Steven Robbins, General Manager and 
Chief Engineer of the Coachella Valley Water District.

STATEMENT OF STEVEN B. ROBBINS, GENERAL MANAGER-CHIEF ENGINEER, 
                COACHELLA VALLEY WATER DISTRICT

    Mr. Robbins. Thank you, Chairman Calvert, Members of 
Congress.
    Mr. Calvert. And congratulations to you on your promotion.
    Mr. Robbins. Thank you.
    The Coachella Valley Water District believes that the QSA 
is the single most important component of the California 4.4 
plan in California's effort to reduce its Colorado River water 
dependency. Coachella Valley Water District is totally 
committed to the QSA and will continue to work toward its 
implementation.
    This year, as we know, for the first time California was 
held to 4.4 million acre-feet. Under the current priority 
system, the CVWD has the lowest priority of the agricultural 
water districts. This year when water orders were approved, 
Coachella had an approved water order. Due to all the legal 
wrangling that went on in April, our water order was reduced. 
We lost a third of our water, approximately 110,000 acre-feet 
of our water.
    Because that happened a third of the way through the year, 
to spread that loss out over the remainder of the year meant we 
only had half of our normal water for the rest of the year. 
That is a severe impact on the Coachella Valley Water District. 
Many of our farmers turned to groundwater, and the groundwater 
basin is already severely overdrafted. And even when turning to 
groundwater, it's not enough pumping capacity in our aquifer to 
make up for that water that we had lost.
    As a result of that, we had to turn to one of the other 
water districts, to Palo Verde Irrigation District, to--we 
implemented a fouling program with them to protect our half-
billion dollar ag economy. We spent 12 million dollars to get 
through the rest of this year and doubled our water rates to 
deal with what is going on right now.
    With the QSA, none of this would have happened. We would 
have water, and things would be good. Without a QSA, 
irregardless what happens with the 417 process, we face 
uncertainties every year and challenges of, perhaps, extreme 
amounts of money to cover our water needs.
    Throughout this process, the primary obstacle to getting 
the QSA done has been the Salton Sea. The environmental issues 
surrounding that have just killed the whole process. As most of 
you know, the Salton Sea is 25 percent saltier than the ocean, 
and it's getting saltier every year. Without intervention, with 
or without transfers, the Salton Sea will not survive as we 
know it.
    Recently some have tried to hold the transfers and QSA 
hostage to Salton Sea restorations. We don't believe that 
that's the way to do it. If you go back and look at the Salton 
Sea Reclamation Act, the Salton Sea Reclamation Act 
specifically recognized that restoration should accommodate 
transfers. And we believe that that's what should happen and 
that the transfers should be able to move forward.
    Excuse me. It's imperative that state officials and Federal 
officials act quickly to resolve the issues of the Salton Sea. 
From an environmental standpoint, the Salton Sea right now is 
on the edge. It will die quickly with or without the transfers 
without intervention. Delaying the QSA does not help the Salton 
Sea. Under the current QSA, we have committed to no impact on 
the Salton Sea for the next 15 years. Believe me, if something 
doesn't happen with the Salton Sea in the next 15 years, again, 
there will be no Salton Sea as we know it today.
    Coachella Valley Water District is dedicated to a Salton 
Sea solution, but this can't be tied to the transfers. Both 
issues must be resolved, and they must be resolved quickly. In 
conclusion, Coachella Valley Water District is dedicated to the 
QSA, dedicated to the Salton Sea restoration. But if we don't 
get a Salton Sea solution, it's the growers and the people of 
Coachella Valley who are going to suffer most out of this whole 
deal because we are caught in the middle. Thank you.
    [The prepared statement of Mr. Robbins follows:]

    Statement of Steven B. Robbins, General Manager-Chief Engineer, 
                    Coachella Valley Water District

    The Quantification Settlement Agreement is the single most 
important component of California's effort to reduce its Colorado River 
water dependency. The Coachella Valley Water District remains totally 
committed to the Quantification Settlement Agreement as it has been 
throughout the multi-year process. We will continue to work toward its 
implementation.
    Under the current priority system, the Coachella Valley Water 
District has the lowest priority for agricultural water from the 
Colorado River. Unfortunately, this year we lost nearly a third 
(108,000 acre feet) of our Colorado River supply when a Federal judge 
ruled that the Bureau of Reclamation had committed a procedural error 
in its process for allocating water to Imperial Irrigation District. 
Because, this loss came late in the year its affect was more like a 50 
percent cut for the remainder of the year. In an effort to keep their 
permanent crops alive, water users have had to activate wells to mine 
the already overdrafted groundwater basin. Additional overdraft 
increases concerns of surface subsidence, water quality impacts and 
permanent loss of storage capacity. Even this additional groundwater 
pumping could not fill our water needs.
    To obtain the additional water that was needed to protect the 
Valley's $529 million agricultural economy, we were forced to spend an 
additional $12 million to initiate a fallowing project in the Palo 
Verde Valley. This gave us access to additional water to help us get 
through the summer months but also resulted in our water rates 
doubling.
    If the QSA had been in place we would have had a fixed entitlement 
and not been blindsided by a mid-year cutback. Without the QSA we face 
these same uncertainties and potential costs every year. These 
uncertainties, if not resolved, will have long term impacts on the 
valley's economy.
    The primary obstacle to implementing the QSA has been the Salton 
Sea. The sea was created between 1905 and 1907 when the entire flow of 
the Colorado River was accidentally diverted into the Salton Sink. It 
has been maintained since with irrigation drainage water from Imperial 
Valley, Mexicali Valley in Mexico and the Coachella Valley.
    Because the Salton Sea is located in the second lowest spot in the 
United States, just slightly higher than Death Valley, it has no 
natural outlet. The water arriving there evaporates and concentrates. 
While it still supports a fish population, it is significantly saltier 
than ocean water and getting saltier each year.
    Without intervention by man, the Salton Sea will soon become too 
salty to support a fishery which will severely impact the bird 
populations at the Sea. With or without water transfers, immediate 
action is needed at the Salton Sea if the Sea as we know it is to 
survive.
    The QSA parties fully expected the Federal Government, in 
accordance with the Salton Sea Reclamation Act, to move forward on a 
separate track with plans to fund a Salton Sea solution before it 
became an issue with the QSA. The Act specifically recognized that 
restoration should accommodate transfers as contemplated under the QSA. 
Unfortunately this has not happened and some are now trying to hold the 
QSA hostage to Salton Sea restoration. The current QSA will have no 
measurable impact on the Sea for 15 years. It is imperative that State 
and Federal officials work together and quickly to solve the problems 
of the Salton Sea before it is too late. Delaying the QSA does not help 
the Salton Sea. Without immediate intervention by the Federal 
Government the Salton Sea will die.
    The foremost concern amongst the QSA agencies is the threat that 
they may face extremely large environmental costs as a result of being 
saddled with the task maintaining the Salton Sea.
    Coachella Valley Water District, as part of the Salton Sea 
Authority, is dedicated to restoring the Salton Sea but this has to be 
a separate issue from the QSA. The Federal Government must take 
immediate steps to separate the two issues, get the Salton Sea 
restoration on track and get the QSA approved.
    To reiterate, Coachella Valley Water District has consistently 
supported the QSA and will continue to do so. Our water users have the 
most to lose if the process fails.
                                 ______
                                 
    Mr. Calvert. Thank you, gentleman.
    Next, Mr. Adan Ortega, Vice President of the External 
Affairs operation for the Metropolitan Water District.
    Mr. Ortega. All right, Chairman Calvert. I'd like to 
respectfully request that my testimony be entered into the 
record.
    Mr. Calvert. No objections? Your testimony will be entered 
into the record. All testimony will be entered into the record.

    STATEMENT OF ADAN ORTEGA, JR., VICE PRESIDENT, EXTERNAL 
  AFFAIRS, METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA

    Mr. Ortega. Thank you, sir.
    I bring greetings from MWD's Chairman, Phillip Pace, who 
also sends his regrets for not being able to be here.
    Metropolitan's position on the QSA is we're not of the 
premise that our board of directors has a fiduciary 
responsibility to carefully examine the benefits and risks in 
various QSA proposals to Southern California ratepayers.
    Recently, at the request of the Administration of Governor 
Davis, Metropolitan has provided an alternative timetable and 
financial strategy to resolve outstanding QSA issues within the 
framework we and other parties signed under the Governor's 
leadership on March 12th, 2003. Essentially, Metropolitan's 
board supports studying a Salton Sea restoration/water supply 
plan, as advanced by State Senator Mike Machado. This includes:
    One, a 3-year period to undertake a study to determine if 
the Salton Sea can be reconfigured to a smaller area, desalt 
agricultural runoff for use on nearby farms, and free up 
Colorado River supplies for use in urban areas. This would 
include a substitute supply for Imperial Irrigation District/
San Diego County Water Authority transfer for this 3-year 
period.
    Two, provisions to return to the original IID/San Diego 
County Water Authority transfer if the Salton Sea restoration 
plan proves infeasible.
    And, three, a QSA funding alternative in the event that the 
IID/San Diego County Water Authority transfer moves forward, 
that is implemented upon the principles that, (a) beneficiaries 
should pay for the benefits to be provided by the QSA, and, (b) 
public bond funds should be used for the purposes that reflect 
the intent of the voters.
    We believe that this is a viable alternative because 
permitting the use of bond funds on both the water reliability 
projects as intended by the voters will demonstrate 
California's commitment to live within its 4.4 million acre-
feet apportionment on the Colorado River and provide 
consistency with the CalFed record of decision allowing 
Southern California to stabilize its dependence on the Bay-
Delta, all while allowing uncertainties created by the Salton 
Sea to be thoroughly vented. By contrast, the IID/San Diego 
County Water transfer starts with 10,000 acre-feet per year and 
grows by only 10,000 acre-feet per year producing 100,000 acre-
feet by 2017; and the drought on the Colorado River has had 
significant impacts on projections of available surplus which 
are substantially diminished for the term ending on 2015.
    Metropolitan also holds that a subsidized market transfer 
policy precedent under the current standing QSA proposal cannot 
be sustained by the State of California in future years and 
will damage long-term transfers and exchanges critical to the 
CalFed process and the Colorado River. During the past 4 years, 
Metropolitan has undertaken transfers and exchanges with many 
agencies throughout the state and has implemented them while 
bearing the full cost.
    Under the current and alternative proposals presently on 
the table, Metropolitan pays the full cost for QSA components 
and more. This includes the full cost of the existing MWD/IID 
transfer, the full cost of the Palo Verde/MWD transfer, and we 
are contributing to the costs for the Coachella/IID transfer 
for the promise of an option to purchase water Coachella 
chooses to forego.
    The critical question is whether San Diego and IID will pay 
for the benefits that they each will secure through the QSA 
deal. Metropolitan's position is that sacrificing the trust of 
the public by redirecting voter-approved bonds will jeopardize 
future financing for programs that are critical for the state 
including the CalFed program. The local projects afforded by 
Proposition 50 and Proposition 13 provide long-term water 
reliability while creating jobs and community awareness.
    Finally, the challenge before us is to recognize a new 
reality in Southern California's water supply picture. 53 
percent of the region's supply reliability hangs on local 
projects. Completion of the QSA is presently on the table in 
bringing 2 to 3 percent water supply benefit. Transfers are a 
major component of long-term storage strategies. In a dry year, 
up to 26 percent of Southern California's supplies will come 
from stored waters south of the Delta. This is the reality 
which the Metropolitan Board is addressing in harnessing 
resources to meet water needs of its service area.
    Originally, Mr. Chairman, we envisioned that our chief 
negotiator would be preoccupied with matters in Sacramento. So 
now, with your permission, I'd like to introduce Dennis 
Underwood, MWD Vice President for Colorado River matters, who 
will join me in answering questions. Thank you very much.
    [The prepared statement of Mr. Ortega follows:]

   Statement of Adan Ortega, Jr., Vice President, External Affairs, 
           Metropolitan Water District of Southern California

    My name is Adan Ortega and I serve as Vice President for External 
Affairs at the Metropolitan Water District of Southern California 
(MWD). Thank you Chairman Calvert and members of the Subcommittee for 
the opportunity of providing you with introductory testimony regarding 
Metropolitan's position on the Quantification Settlement Agreement 
(QSA).
    Metropolitan's current position on the QSA is borne out of the 
premise that our Board of Directors has a fiduciary responsibility to 
carefully examine the benefits and risks in various QSA proposals to 
Southern California ratepayers.
    Recently, at the request of the Administration of Governor Davis, 
Metropolitan has provided an alternative timetable and financial 
strategy to resolve outstanding QSA issues within the framework we and 
the other parties signed under the Governor's leadership on March 12, 
2003. Essentially, Metropolitan's Board supports studying a Salton Sea 
restoration/water supply plan, as advanced by State Senator Mike 
Machado, which includes:
    1. A three-year period to undertake a study to determine if the 
Salton Sea can be reconfigured to restore a smaller sea, desalt 
agricultural runoff for use on nearby farms, and free up Colorado River 
supplies for use in urban areas. This would include a substitute supply 
for Imperial Irrigation District/San Diego County Water Authority (IID/
SDCWA) transfer for the three-year period.
    2. Provisions to return to the original IID/SDCWA transfer if the 
Salton Sea restoration plan proves infeasible.
    3. A QSA funding alternative, in the event the IID/SDCWA transfer 
moves forward, that is implemented upon the principles that (a) 
beneficiaries should pay for the benefits to be provided by the QSA and 
the IID/SDCWA transfer, and (b) public bond funds should be used for 
the purposes that reflect the intent of the voters.
    We believe that this is a viable alternative because permitting the 
use of bond funds on local water reliability projects as intended by 
the voters will demonstrate California's commitment to live within its 
4.4 million acre-feet (af) apportionment on the Colorado River; and 
provide consistency with the CALFED Record of Decision allowing 
Southern California to stabilize its dependence on the Bay-Delta--all 
while allowing the uncertainties created by the Salton Sea to be 
thoroughly vetted. By contrast the IID/SDCWA transfer starts with 
10,000 af per year and grows by only 10,000 af per year, producing 
100,000 af per year by 2017; and the drought on the Colorado River has 
had significant impacts on projections of available surplus which are 
substantially diminished for the term ending in 2015.
    Metropolitan also holds that a subsidized market transfer policy 
precedent under the current standing QSA proposal cannot be sustained 
by the State of California in future years and will damage long-term 
transfers and exchanges critical to the CALFED process and the Colorado 
River. During the past four years Metropolitan has undertaken transfers 
and exchanges with many agencies throughout the state and has 
implemented them while bearing the full cost.
    Under the current and alternative proposals presently on the table, 
Metropolitan pays the full cost for QSA components and more. This 
includes the full cost of the existing MWD/IID transfer; the full cost 
of the Palo Verde/MWD transfer; and we are contributing to the costs of 
the Coachella/IID transfer for the promise of an option to purchase 
water Coachella chooses to forego.
    The critical question is whether San Diego and IID will pay for the 
benefits that they each will secure through a QSA deal. Metropolitan's 
position is that sacrificing the trust of the public by re-directing 
voter-approved bonds will jeopardize future financing for programs that 
are critical for the state including the CALFED program. The local 
projects afforded by Proposition 50 and Proposition 13 provide long-
term water reliability while creating jobs and community awareness.
    Finally, the challenge before us is to recognize a new reality in 
Southern California's water supply picture. Fifty-three percent of the 
region's supply reliability hangs on local projects. Completion of the 
QSA as presently on the table may bring a 2% to 3% water supply 
benefit. Transfers are a major component of long-term storage 
strategies. In a dry year, up to 26% of Southern California's supplies 
will come from stored water south of the Delta.
    This is the reality which the Metropolitan Board is addressing in 
harnessing resources to meet the water needs of its service area.
    Thank you very much.
                                 ______
                                 
    Mr. Calvert. Thank you.
    Next, Maureen Stapleton with the San Diego County Water 
Authority.

 STATEMENT OF MAUREEN A. STAPLETON, GENERAL MANAGER, SAN DIEGO 
                     COUNTY WATER AUTHORITY

    Ms. Stapleton. Good morning, Chairman Calvert, members of 
the Committee. I appreciate the opportunity to speak to you 
today. I also have submitted testimony, but I really want to 
focus on some critical issues, I think.
    We all talk about the importance of the QSA, but I want to 
get to some specifics about what the QSA really means.
    First, the QSA is not merely a transfer between San Diego 
and IID. It is not just Interim Surplus Guidelines and surplus 
supplies for Metropolitan. The QSA is actually a comprehensive 
set of documents that represents eight major water programs 
that will yield up to 36 million acre-feet of agricultural to 
urban transfers through the term of the QSA, 36 million acre-
feet. We're not talking just about some water. We're talking 
about millions of acre-feet that could be opened up and 
available to California.
    I think, also, you heard from Resource Secretary Mary 
Nichols, that in addition to just the water transfer programs, 
we recently--our discussions have focused on how to incorporate 
the potential restoration of the Salton Sea into the final QSA 
documents. And we are working very hard to try to make that 
work and, as you heard earlier, really incorporate this 
opportunity.
    Second, I want to talk a little bit about the result of not 
having the QSA this year. You heard from the basin states 
representatives that we were to have finished this business by 
December of last year, and we were unable to do so. Chairman 
Calvert, you said in your opening statements that California's 
loss as a result of not completing the QSA was about 20 percent 
of our Colorado River supplies. In actuality, for urban 
California, it was more than 50 percent of our Colorado River 
supplies. I think that really talks to a great deal about the 
significance of the implications of not having the QSA and, as 
you heard, our need, then, to go to Northern and Central 
California to replace those supplies.
    I have a chart here I'd just like to show you briefly, 
which is--basically you can see in the chart, the blue is the 
Colorado River supplies, and the pie chart on the left shows 
historically what we do. Two-thirds of our supplies of imported 
water come from the Colorado River, about a third from the 
state water project. This year we have flipped that. Over two-
thirds of our water has had to come from Northern California 
this year through the ecologically sensitive Bay-Delta. Through 
the challenges that we're facing through CalFed, this year 
alone we've had to take over 1.4 million acre-feet out of 
Northern California to make up the loss we felt in urban 
Southern California of the lack of the QSA. Thank you.
    Third, I want to talk about what the future would look like 
without the QSA. Mother nature is a very fickle partner to us. 
And, as you know, unlike the Colorado River that has a lot of 
storage, about 60 million acre-feet, and has gotten us through 
these very dry years on the Colorado River, we are not so 
fortunate on the state water project. Mother nature goes up and 
down each and every year on the state water supplies. And as 
you can see from this chart, on the left-hand side was the 
drought of the late '80's and the early '90's. At that point in 
1991, we had a 20 percent allocation of our state water project 
supplies. You can also see just in the past few years alone on 
the state water project in 2000, we went to 100 percent, 
followed by the very next year in allocation of 39 percent of 
state water project supplies. This is not something that you 
want urban Southern California to rely upon for our economy and 
our 17 million people. Thank you.
    I want to show you what a dry year would look like if we 
are not able to open up the Colorado River again and open up 
the ag-to-urban transfers. You can see in a dry year at 20 
percent, we are missing about one-and-a-half million acre-feet 
of water with the state water project only delivering 400,000 
acre-feet and the Colorado River 600,000. Even if you add the 
local storage and the various storage programs that we have 
available, you'll see the pink section is the additional water 
that we can bring in a one-, possibly 2-year dry circumstance. 
But you have to have water in normal years in order to store it 
for dry years. If you're living from hand to mouth each and 
every year in water supplies, you won't get the water you need 
to store it for future years. Thank you.
    And, finally, I want to talk about where we're at today. I 
think we're at a fork in the road. There's lots of issues going 
on. We can argue about state and Federal investments and water 
projects. As Resources Secretary Mary Nichols said, we've been 
very fortunate in California that our state has in fact passed 
three water bonds upon which we've invested in a variety of 
water supplies. Some of the debate has been around giving up 
local projects to do the QSA. That's not true. We need them 
both. We need the QSA to provide the foundation. We need new 
local projects to give us the water we need for the growth that 
we can anticipate in California in the next few years.
    We have a very clear decision to make. As I said, we're at 
a fork in the road. I think one fork leads us to uncertain 
water supplies and the potential for lengthy and costly 
litigation. I think the other path gives us the QSA, and that 
will provide us long-term reliability, certainty, and 
ultimately peace on the river. We in California, with the 
assistance of our representatives in D.C., need to make a very 
careful and thoughtful decision about which path we take.
    Thank you, Chairman Calvert and the members, for this 
opportunity and your continued leadership on this issue.
    [The prepared statement of Ms. Stapleton follows:]

          Statement of Maureen A. Stapleton, General Manager, 
                    San Diego County Water Authority

    Urban Southern California receives its imported water supplies from 
two primary sources: the State Water Project, which depends upon the 
ecologically sensitive Bay-Delta; and the Colorado River. The Colorado 
River has been the historic backbone of Southern California's water 
supply reliability, providing annually two-thirds of the water supplies 
the Metropolitan Water District of Southern California serves to 17 
million Californians--half of the state's population. The Colorado 
River is the foundation for much of the state's $1.4 trillion economy.
    Under the Law of the River, the Secretary of the Interior is the 
Watermaster for the Lower Colorado River. Assistant Secretary Bennett 
Raley has been overseeing the progress of the Quantification Settlement 
Agreement (QSA), a comprehensive program that would reduce California's 
historic over-reliance on the Colorado River. California's basic annual 
apportionment from the Colorado River is 4.4 million acre-feet. (An 
acre-foot is 325,851 gallons, or enough water to serve the annual needs 
of two families of four.) For decades, California has drawn more than 5 
million acre-feet a year. In 2002, California drew more than 5.3 
million acre-feet of water from the Colorado River.
    The QSA is a package of eight core, long-term Colorado River water 
supply agreements between four California water agencies: Metropolitan 
Water District of Southern California, Imperial Irrigation District, 
San Diego County Water Authority and Coachella Valley Water District. 
Under the QSA, up to 36 million acre-feet of water would voluntarily 
shift from agricultural use to urban use, thereby reducing California's 
over-reliance on the Colorado River.
    Under the QSA, the Secretary of the Interior and the other six 
Colorado River basin states (Nevada, Arizona, New Mexico, Utah, 
Colorado and Wyoming) agreed to give California a 14-year ``soft 
landing'' to implement the water supply programs and gradually reduce 
its draw on the river to its 4.4 million acre-foot basic annual 
apportionment. However, the agreement required the four California 
water agencies to execute the QSA by Dec. 31, 2002; the agencies missed 
the deadline and, to date, the QSA has not been signed. As a 
consequence, the Secretary of the Interior cut California back to its 
4.4 million acre-foot basic annual apportionment this year. Because of 
the priority system to Colorado River water, the Metropolitan Water 
District will absorb all of the cutback. Metropolitan has already lost 
about 300,000 acre-feet this year and, as every month goes by, 
Metropolitan loses another 50,000 acre-feet. By the end of 2003, 
Metropolitan could lose more than 650,000 acre-feet of its Colorado 
River supplies.
    Fortunately, opportunity to almost immediately restore much of the 
lost Colorado River supplies is close at hand: execution of the QSA. 
The primary ``sticking point'' is the use of $200 million of state bond 
funds to ensure that environmental impacts associated with the QSA 
program are mitigated and other environmental protections are put into 
place. Placed into the context of spending for CalFed environmental 
restoration, this is a small sum. In the context of water supply 
investment--the amount of water obtained per state dollar spent--this 
is an incredible bargain for the state, producing far more water than 
any other conceivable use of the funds. This money would restore more 
than 500,000 acre-feet per year to Metropolitan, beginning this year. 
California must soon reverse its recent history of urban water supply 
loss. The QSA offers a way to maintain a very large regional water 
supply, at a low cost, and without impacts to other states that share 
the Colorado River.
    It is imperative that all interested parties focus their entire 
attention on completing the QSA, so that California's water supply 
reliability can be restored now and for the future. It is simply 
inexcusable to allow our attention to be diverted from this absolutely 
vital task. And yet the Department of the Interior has suspended 
participation in the QSA, stating that its must instead concentrate on 
Colorado River water rights litigation. Ironically, that litigation, 
Imperial Irrigation District v. United States, is exactly the 
controversy that the QSA will prevent.
    The litigation was brought by IID after Interior, on December 27, 
2002, notified IID that its water order for 2003 would be cut by more 
than 300,000 acre-feet. In making its decision, Interior for the first 
time used its yearly process of assessing water orders, under 43 Code 
of Federal Regulations Part 417, to determine that a river contractor 
would not reasonably use its requested order. IID, faced with the 
choice of either accepting the loss of water based on alleged waste or 
contesting Interior's decision, sued in Federal court on January 10, 
2003.
    On March 18, 2003, the Court granted IID's motion for a preliminary 
injunction to restore its water order because of an abuse of the Part 
417 process by Interior. The Court then remanded the proceeding to 
Interior to conduct a renewed Part 417 process. That process is under 
way and will probably extend into October. After October, if the 
litigation continues, the Court must tackle the central issues of the 
case, and it is entirely likely that it will take years to resolve. In 
the end, the outcome, while it may benefit some water users and their 
customers, will be disastrous for other users, and may have 
implications to the six Colorado River basin states.
    The QSA will provide benefits to all the involved water agencies, 
settle legal disputes that have festered for decades, and make court 
battles such as IID v. U.S. totally unnecessary. The Arizona v. 
California lawsuit, which began in 1952, is an example of the kind of 
litigation process that may be expected if the QSA fails. In that 
litigation, California challenged Arizona's entitlement to the river. 
The case went to the U.S. Supreme Court, where California lost its 
challenge in 1964. The Court's opinion did not address all of the 
issues, and the resumption of conflicts caused the Court to issues 
supplemental decrees in 1979 and in 1984. The case is still open.
    We need to dedicate our time and resources on resolving the QSA. 
Right now we are facing a fork in the road. One road leads to an 
uncertain water supply and potential lengthy, costly litigation. The 
other road will give us the QSA. Governor Davis and his team worked 
hard to produce a revised QSA statement that was signed by the 
negotiators of all four California agencies. These agency negotiators 
pledged to recommend the QSA to their respective Boards of Directors. 
It is imperative in order for us to achieve success that the Secretary 
of Interior and her staff dedicate the necessary resources and focus 
required to reach the successful conclusion of the QSA. It is this path 
that will provide us long-term water reliability, certainty, and 
ultimately, peace on the river.
                                 ______
                                 
    Mr. Calvert. Thank you.
    We're going to start our questions now. And we're going to 
continue the 5-minute rule on questions, but I'm sure there 
will be time for more than one round of questions. And I'll 
start with our own Department of Reclamation, Bureau of 
Reclamation.
    Mr. Rinne, how has Interior supported the negotiations with 
the state and other water agencies regarding the USA? In other 
words, have you guys gotten in the middle of this? Have you 
provided guidance, helped to close this deal? How would you 
portray your position is?
    Mr. Rinne. I would probably do it in two ways.
    Prior to the end of last year, 2002, we actively, right up 
to the end, worked along with all the parties closely to try to 
bring this to conclusion.
    Mr. Calvert. What are we--obviously, we all know the 
results at the end of 2002. They weren't good.
    What have you done since then?
    Mr. Rinne. Since that time, there have been at least--as we 
went along, we look to California, within California parties, 
to come to agreement on a QSA, and have kind of stood ready 
from that point to meet with them after that.
    Mr. Calvert. Oh. What about proactive steps? Is there 
anything you've done--rather than step back and obviously 
looked at the warring parties here, is there anything the 
Bureau's done to step in here and act as a facilitator?
    Mr. Rinne. We have not tried to facilitate the--what's been 
primarily--again, we look at that as primarily a California 
matter. This, again, goes back, Mr. Chairman, to the idea that 
we really have been relying on California parties to kind of 
come together. At this point in time, I guess the best way to 
say it is, this has really come to a QSA that they've agreed 
to.
    Mr. Calvert. My suggestion is that you ought to involve 
yourself in this negotiation as soon as possible.
    Next question, without a QSA, what is the certainty that 
the Interim Surplus flow can be implemented?
    Mr. Rinne. Without a QSA to sustain the amount, it would 
not--it would remain suspended.
    Mr. Calvert. Is that an acceptable situation to the Bureau?
    Mr. Rinne. We, along with the others, the other states, and 
in California itself, Mr. Chairman, have worked tirelessly to 
get the Interim Surplus Guidelines there to do that, provide a 
very soft landing. So we would like to see that.
    Mr. Calvert. In the meantime, obviously the Department has 
been active proactively in another aspect regarding Part 417. 
And I understand an announcement will be made shortly.
    And how will the process work to finalize those actions if 
and when--maybe you can give us an idea, to all of us up here, 
what is 417, just for the record, and when do you plan on 
implementing that or announcing the results of that?
    Mr. Rinne. The first thing--I will respond to that, Mr. 
Chairman. I would like to say that, just to open, I understand, 
and I really appreciate the interest and importance of this 
particular issue, 417. But I do want to say in my remarks here, 
I want to steer clear of any of the substance of the actual 417 
analysis going on.
    What the 417 is, to answer your first question, is it's a 
court-ordered process of Reclamation's going through to review 
the water order, the 2003 water order, or water needs for 
Imperial Irrigation District.
    As far as when--the second part is when the determination 
will be made. That's really a matter for the lower Colorado 
region director. As you're probably aware, the determination--
first initial determination is the regional directors. And a 
lot of the timing of that is going to depend on how long it 
takes to get through the volume of material. I think that 
people who are close to this, a tremendous amount of 
information was submitted during the comment period, 20, 30 
boxes of things. And I know the staff are working on it, and 
other regional directors are working toward this. So as soon as 
that can be completed and a determination then thereafter made, 
then the regional director actually will issue an initial 
determination. So it's really in his court to do that.
    Mr. Calvert. Now, obviously this has gotten the attention 
of not just people in California, obviously other folks too. 
Because the concept of beneficial use is certainly something 
that I'm sure that others are looking at. Because if, in fact, 
the Secretary as the watermaster for the lower basin can act to 
redistribute water within a state, in effect, will the 
Secretary act to do that outside of just this issue, Imperial 
Irrigation District? Wouldn't, in fact--theoretically, in fact, 
this occurs, would the Secretary by definition look at other 
areas for this very same concept?
    Mr. Rinne. Mr. Chairman, the short answer is no.
    The legal framework on Part 417, as I think you're aware, 
is unique to the lower basin of the Colorado River and unique 
to the three lower basin states.
    Mr. Calvert. But it does affect--I would ask the State of 
Arizona, how does the State of Arizona feel about that?
    Mr. Guenther. Mr. Chairman, we don't like it. We feel like 
the Secretary exceeds their authority in this, that this is a 
state's rights issue, that the water is apportioned among the 
states and belongs to the people of the state, and it's up to 
those people to determine what is beneficial to them in each 
individual circumstance.
    Mr. Calvert. And that's how you interpret the law?
    Mr. Guenther. Mr. Chairman, I don't try to interpret the 
law. Sometimes I just have a gut feeling on what's right and 
what's necessary with regard to Secretarial powers within the 
lower Colorado River.
    Mr. Calvert. Thank you, gentleman.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair. And it's an 
interesting question that you're posing there, and I'd like to 
follow up on that.
    Do the agencies in Southern California and particularly the 
lower Colorado River actually own the water, or is it more 
correct to say they have rights to use the water? Does the 
Secretary impose any conditions over the use of the water?
    Mr. Rinne. The water--the rights to use are to the lower 
basin states, California, Arizona, Nevada. They have a right to 
the use of that water. All the Secretary does as watermaster is 
actually act to manage to deliver that water. That's the 
responsibility. But in that delivery, the Secretary must make 
sure that the water that's delivered is what's necessary for 
reasonable and beneficial use.
    Mrs. Napolitano. Well, that makes sense, except that 
sometimes we don't get that determination in areas where we 
need it.
    You mentioned about the 417 process. What's the timeframe 
for that evaluation?
    Mr. Rinne. Again, Congresswoman, the way I would answer is, 
keeping in mind the first step in the 417 process is to the 
regional director of the lower Colorado region to make a 
determination, initial determination. What's going on right now 
is the regional director and his staff are going through all 
the material that was submitted in during the comment period 
from interested parties, and there were a variety of them. And 
the regional director follows, actually, a very stringent 
procedure that's set out in the court process. There's some 16 
factors to look at, technical factors, technical analysis. So 
he will go through that.
    I would just be speculating as to when his determination 
comes, but the first step is the regional director is to do 
that. I know they're working real hard, and the volume was 
tremendous. Literally, when we closed the comment period, there 
was lots of information there. So I know he's working hard on 
it.
    Mrs. Napolitano. If I would have known that, I probably 
would have submitted something myself. This is the first I've 
really heard about a 417 process, which I think you need to be 
sure that the Administration, that Secretary Raley, Assistant 
Secretary Raley, informs the Committee so that we are aware of 
what the processes are being utilized.
    Also, one of the things that bothers me--and I've sat for a 
number of years both at the state level, and I've gone through 
the water fights with the former Assemblyman, then Senator 
Cortesi, as well as Assemblyman and now Senator Costa, and 
essentially, a lot was done. We've had--and I keep saying to 
people that most the people who pay for that water are Southern 
Californians.
    My concern is and continues to be, is that--and I totally 
agree. We need to protect the Bay-Delta. We need to protect the 
ecosystem. We need to protect the fisheries. We also need to 
protect other areas, especially in urban areas. And somehow 
we've been given some of the tools. And with the Bureau's 
recently new water 2025, you do not include in there--and I'm 
not saying it's your fault or that you have the answers, but 
that Secretary--Secretary Raley, in Claremont College, 
Claremont McKenna College, in your former area, I think it was, 
stated that the program is not intended for California, that 
California needs to solve its own problems it created.
    Unfortunately, that's not going to help the rest of the 
western states, and I'm concerned whether that is really going 
to be the thrust of the Department's 2025 thrust. Because if 
you do, you're hurting the whole economy of the western United 
States. And the fact that water recycling is not part of any 
goal of your Reclamation is not necessarily where we need to go 
to be able to meet the 4.4 and 2025--or 2016, rather.
    And so I'm requesting--I'm begging, if you will, 
reconsideration of those programs that are helping us meet the 
4.4. And I'd like your comments on that, sir. I don't want to 
put you on the spot, but you're on the spot.
    Mr. Rinne. My comment would be on the water 2025 as a 
general matter. I think that my understanding of what we're 
trying to do here obviously is not to come in west-wide and 
impose a Federal solution on all the water requirements, but 
certainly we'd like to come west-wide and come alongside the 
state and the local users as well as Congress to see if there 
are things we might do to help where we see crisis and conflict 
coming.
    And I know I'm speaking to the choir here, in effect, but 
the population growth in the west and the southwest is 
tremendous. The water supply is stretched; that's why we're 
sitting here today. I think the vision is more along the lines 
it's not that the Federal Government's hoping to come up with 
a--the Secretary's coming up with a big bag of money, but to 
help out where we can in a solution. And so I see it as a west-
wide kind of approach.
    On water recycling, what I would say is it's not so much an 
opposition to it; it's more of a focus, trying to put a focus 
more toward things like desal, try it again just like we did in 
water recycling, try to bring out things that will help in 
reaching water needs. So part of the thrust would be, to the 
extent we could, in one of the parts that I think you're 
probably aware, in the water 2025, is the desal type of 
emphasis, to try to get that cost of desal down to the point 
that it does become one of those tools that I think--personally 
think that would probably help a lot in the west.
    So it's a tough situation, and I think we continue to work 
where we can on that. And I will carry back your other 
questions.
    Mrs. Napolitano. Thank you.
    And, Mr. Chairman, I beg your indulgence one more second, 
but isn't there quite a difference between desal and recycling 
water costs? And we have proven that we can recycle cheaper 
than being able to get more water.
    I could also go in and start talking about cleaning up and 
desal too. The water's there; we just can't get to it.
    Thank you Mr. Chairman.
    Mr. Calvert. Thank you, gentlelady.
    Mr. Hunter.
    Mr. Hunter. Thank you, Mr. Chairman.
    Mr. Rinne, you described this 417 procedure as court-
ordered, did you not?
    Mr. Rinne. That's correct.
    Mr. Hunter. Let's go back to the genesis of this 417. The 
Secretary made a number of statements to the effect that they 
would very closely scrutinize the water use of parties that 
didn't cooperate with the QSA over the last several years. 
After the first of the year, we still didn't have a QSA. 
Imperial Irrigation District made its request, its annual water 
request, and the Federal Government turned it down, basically 
held onto it, said, ``We're not going to agree to this 
request.'' That was the first 417, even though it wasn't done, 
according to the Federal judge, in an appropriate manner. But 
that was--the initial 417, was it not?
    Mr. Rinne. Congressman, the process--and I think you're 
fairly close on that, but may be just a little different. Every 
year--
    Mr. Hunter. Yeah, every year you've asked--made your water 
request.
    Mr. Rinne. Every year all the water contractors in the 
lower basin come into the water orders, and Part 417 has been 
in effect since '64. It is very true that the 417 process is 
not the same rigor and technical analysis that we're going 
through at this time, has not been done before. But the 417 
process is a process that determines the request from water 
contractors and then a response by the regional director and 
determination, is that water order appropriate for that year.
    The particular time--so I come back to the point of your 
question--is that at the end of the last year, we had already 
received the Imperial Irrigation District's water order. It's 
true that we did not accept the amount that they requested and 
approved a lesser amount.
    Mr. Hunter. Yeah. And did that have any anything to do with 
the fact a QSA hadn't been agreed to yet? Of course it did, 
didn't it? Well, I mean, let's be candid.
    Mr. Rinne. We--what I would tell you again, and tell it to 
you in all candidness, is that the approval of water orders and 
water use, we've taken it very seriously. I personally was 
doing it for 5 years.
    We look every year at--
    Mr. Hunter. Well, listen, I understand that. Are you 
telling me there was absolutely no connection between the fact 
that we had just failed to meet the December 31st deadline that 
the Secretary set for us to make the QSA and the fact that very 
shortly after that, having failed to do that, you refused the 
Imperial Irrigation District's water order?
    You're saying there's no connection.
    Mr. Rinne. No.
    Mr. Hunter. You're under an obligation to tell the truth as 
you know it. Are you telling me there's no connection 
whatsoever?
    Mr. Rinne. Connection in my mind is it's a close looking, 
in a very watertight year, Congressman, at the use and the 
amounts of water being used. So that in the best judgment of 
the--in the best judgment through the Department, first through 
our regional director and then, as you know, that particular 
water order would have been approved by the Assistant 
Secretary, that that was the proper amount of water to provide.
    Mr. Hunter. In that case, this was, as you just said, a 
closer scrutiny than you normally show--than you normally 
undertake for somebody's water request, was it not?
    Mr. Rinne. In that particular process, we also look, I 
think--I would remind you we also looked closely at Coachella, 
looked at Metropolitan. We issued water orders for all of 
California understanding that--
    Mr. Hunter. What factor led you to use what you called a 
deeper (inaudible) than you used in other years? What fact did 
you see that prompted you to do that with respect to IID?
    Mr. Rinne. Water--just think of the water--well, just 
overall, just think of the water supply, Congressman, and where 
we were sitting with the amount of water we had, 4 years of 
drought, those type of things. And as they go on, to clarify, 
too, is the determination would have not been--would not--I sat 
down and figured out the factor. And I don't know that you were 
asking me what I would consider.
    Mr. Hunter. Let's get to the statement you just made that 
this was a court-ordered requirement. And you're nodding your 
head again, and that's apparently your understanding.
    I've got with me your pleadings, that is, the Interior's 
pleadings, to the judge when the judge threw it out the first 
time. You then--and I'm reading, and I quote from your 
pleadings, ``Interior has developed a proposed remedy''--this 
is after it had been thrown out the first time--``which fully 
meets the substantive and procedural concerns identified by the 
court and its ruling. Interior proposes to undertake a new 
revised use for the Imperial Irrigation District's 2003 water 
allocation through the 417 process.''.
    So you asked to be ordered to relook IID's water use, 
didn't you?
    Mr. Rinne. We were, as you know--
    Mr. Hunter. These are your pleadings, and I'd like you to 
answer the question. Did you not ask and propose that you 
record another 417?
    Mr. Rinne. The court--my understanding, the court found--in 
the first process, the court found that, in fact, we had not 
followed a meticulous procedure, 417, which are--what I believe 
you're reading from is a proposal as to how we would accomplish 
the 417. And then the court came back with--
    Mr. Hunter. But the court didn't order that you do a new 
417 until you asked them to order that you do a new 417; 
correct?
    Mr. Rinne. The way I would answer that is that you do have 
the pleading, and that--so, as you say, that's--
    Mr. Hunter. And I'll make a copy of this available.
    For you to see how the court--how you were ordered to do 
this.
    Mr. Ortega, you've heard from the other water districts to 
the effect that a QSA is a linchpin to California's water 
future. It appears all the other parties are ready to go with 
this. Now, Matt has held this thing up on the basis that you 
think this is a--breaks your fiduciary duty to the people of 
this state with respect to the use of their money on water 
projects.
    And so you've made this proposal, and I've read the 
proposal under which San Diego and Imperial County would pay 
and be responsible for most of this Reclamation of the Salton 
Sea. It's six bucks an acre-foot. 70 percent of that would fall 
on the people of Imperial Valley. You say you don't want to see 
the people of the State of California make this payment. You 
think it's better that the Valley make this payment.
    Isn't the government of the State of California elected by 
the people? Isn't that true?
    Mr. Ortega. Congressman, that's true.
    Mr. Hunter. And I'm assuming that the people of the State 
of California through their regular processes have determined 
to come up with this several hundred millions of dollars to 
meet these environmental obligations.
    Who is the Metropolitan Water District to try to set aside, 
basically, that determination which is representative of the 
will of the people? If you presume that they elect their 
representatives and elect their Governor and that that is their 
intent, why are you holding things up?
    Mr. Ortega. Congressman, with all due respect, we recognize 
that there are moneys in Proposition 50 that can address Salton 
Sea mitigation. There's a general misunderstanding of where the 
200 million dollars--or at least 150 million dollars of that 
amount would go to. It doesn't go to Salton Sea restoration; it 
goes to what they call in valley impacts, mitigation impacts 
within the Imperial Valley. That is not a Salton Sea 
mitigation. And, therefore--
    Mr. Hunter. Well, then, let's revise the question. So 
you're saying that part of the money goes to mitigation for the 
Sea, some 50 million. The balance of the money goes to this ag 
community which is going to lose because the ag community is 
not going to be doing as much ag operation as has been done in 
the past, which is the lifeblood of that community. So it goes 
to make up for some of that.
    Now, if the people of the State of California have decided 
that the water deal is important enough to make these payments 
to try to keep the Valley whole, and they are elected by the 
people of the State of California, and Metropolitan Water 
District is not elected by the people of the State of 
California, by a very small part of the people of the State of 
California, who are you, the Metropolitan Water District, to 
tell the people of the State of California that they can't 
spend these moneys as they see fit to make what every district 
except you have described as the absolute linchpin to 
California's water future?
    Why are you holding this up?
    Mr. Ortega. Congressman, we believe that the subsidies that 
this transfer entails may hold up agricultural-to-urban 
transfers throughout the state. The fact of the matter is--
    Mr. Hunter. Let's hold you up right here, Mr. Ortega. Then 
that would accrue--in your estimate, you think that's going to 
be bad for the water users of the people of the State of 
California at one time. You think they're making a bad judgment 
here. Nonetheless, why can't it be their judgment? They're the 
people who use the water, both agricultural and urban. They are 
represented by their state representatives, the assemblymen and 
senators and their Governor. They, as a government of the State 
of California, have made this decision that it's worth it to go 
to this community that depends on water as a lifeblood of its 
economy and make these arrangements to free up water to help 
everyone in the state. We've all agreed that the water is a key 
issue for everyone in the state.
    Why are you usurping this decision by the state 
representatives and the government? If the government of 
California says they're willing to do it, who are you to stop 
this thing? You want to take over criminal justice next?
    Mr. Ortega. Congressman, with all due respect, we don't 
believe that we're usurping the process.
    Mr. Hunter. Well, you're stopping the deal.
    Mr. Ortega. We are participating in a process. The 
legislature has not included their deliberation in allocating 
these funds toward this purpose. And if the legislature were to 
conclude that that's a wise use of the state's funds that have 
been approved by the voters, Metropolitan would respect that.
    But as participants in this process, we believe it's our 
obligation to our ratepayers to interpret that these bonds were 
allocated by the voters. They spoke for themselves for a 
certain purpose, which is local projects, and that does not 
include covering the cost of a water transfer. And that's what 
our board has advocated. But it would respect any decision that 
the legislature would come to.
    Mr. Hunter. Well, if it doesn't--and, Mr. Chairman, I'll be 
finished just a second.
    If it doesn't cover--if--you're saying money is being 
misused by the state, then a lawsuit would fall that would 
invalidate that law, would it not, if this is an invalid or 
illegal use of moneys by the State of California. But it really 
isn't, is it?
    Mr. Ortega. We believe it's more simple than that, 
Congressman. We believe that--
    Mr. Hunter. And illegal, is it not? Are you claiming this 
is an illegal use of moneys?
    Mr. Ortega. We believe that we are subject to the judgment 
of the people. And if we're telling people in a bond campaign 
that the moneys are going to be used in one way, and then it is 
used in a different way, next time we go to the voters to 
collect funds, to collect CalFed or other things, our 
collective credibility is at stake. And that's what we believe.
    Mr. Hunter. Let me ask one last question, then, final 
question for you.
    If all the other water districts, San Diego, Imperial, 
Coachella, are for this agreement, Mr. Rinne, it's your 
position that the Department of Interior supports the 
agreement, is it not, the QSA?
    Mr. Rinne. The Department of Interior certainly--at that 
point certainly would sit down and talk and try to work through 
the QSA. The reason I--
    Mr. Hunter. Thank you for the overwhelming vote of 
confidence.
    If it's your understanding that all the other water 
districts support this, Mr. Ortega, is it your statement that 
you're going to kill this water deal because of the factors 
that you've just discussed?
    If there's no movement--in other words, if the State will 
not accommodate you and if the deal refuses to put this burden 
that the State's picking up on the people of Imperial Valley, 
refuse to do what you have proposed in your proposal, is it 
your position you're still going to kill the deal?
    Mr. Ortega. Congressman--
    Mr. Hunter. Because sometime you've got to make a choice.
    Mr. Ortega. Of course. We're committed to working with the 
state administration. The Governor's office requested our 
response to a financing tactic which took place about 2 weeks 
ago. We submitted our response. The other parties have 
submitted their responses. Metropolitan does not really know 
anything. This is very different than when we found ourselves 
on December 9th of 2002 when the Imperial Irrigation District 
did vote no on the previous QSA that the parties had 
considered.
    Nobody has voted no here. The only thing that has happened 
is that Metropolitan would like to see unresolved issues with 
the other basin states come to a conclusion. And, also, we 
would like to make sure that the financing passes scrutiny for 
the long-term health of our reliability in Southern California.
    Mr. Hunter. Thank you, Mr. Chairman.
    Mr. Calvert. Ms. Davis?
    Mrs. Napolitano. Ms. Davis is through Ms. Napolitano.
    Susan is wanting to ask anybody that can answer the 
question of what is missing in Senator Machado's proposal of 
principles? Anybody?
    Mr. Allen. Mr. Chairman, may I refer that question and 
answer to one of our attorneys, David Osias?
    Mr. Calvert. Ask how many people in the audience are 
attorneys?
    Mr. Allen. Why don't you ask how many are farmers.
    Mr. Calvert. For the record, will the gentleman enter his 
name?
    Mr. Osias. David Osias, outside counsel for the Imperial 
Irrigation District.
    And the proposal by Senator Machado had a concept rather 
than a detailed proposal for joining Salton Sea restoration 
with the transfers. What was missing, to go to the specific 
question, is how the QSA would be treated while Salton Sea 
restoration feasibility is studied; that is, the proposal that 
has hit the public domain of a possible desalination plan and 
the use of desalinated water for something either in lieu of 
transfer or use in Imperial Valley.
    The feasibility of that from a technical perspective, 
diking the damming, whether that's even possible across the 
earthquake faults, isn't known. The environmental review for 
that isn't know. And the financial feasibility and cost of that 
isn't known. And so the proposal itself did not identify what 
should happen in the meantime.
    Now, the responses that were addressed here sort of took 
two paths. One was we'll put the QSA on hold until the answers 
are known. The other was--from the other three agencies was let 
the QSA go forward with a substitution concept if those things 
turn feasible. And the third, which we discussed with Senator 
Machado, is they're not necessarily mutually exclusive anyway, 
that you could actually do both and accommodate it.
    So what was missing is what would happen while studying 
would go on and what would happen if the Salton Sea wasn't 
found to be feasible to be restored in that manner.
    Mrs. Napolitano. Anybody else want to respond?
    Mr. Calvert. Any response?
    Mr. Ortega. Mr. Chairman.
    Mr. Calvert. Mr. Ortega.
    Mr. Ortega. From the Metropolitan's perspective, we're 
anxious to work with the other parties in looking at all of the 
various alternatives in finding a lasting solution to the 
Salton Sea that would not trump the overall reliability that we 
must plan upon.
    The Interim Surplus Guidelines afford us the opportunity 
for transfer for surplus water on the Colorado River for a 
limited time, and, also, we're going to be depending on this 
transfer from IID and San Diego. And an unfortunate thing that 
could happen if we get to the end of the period that we're 
eligible for surplus, you are depending on the San Diego-IID 
transfer, and then the Salton Sea rises again is a factor 
because we ignored it.
    And this transfer history has been embedded with latent 
issues that have come back and haunted us, whether it's the 
issue of third-party impacts of the Salton Sea. You have 
perchlorate that's an issue that's looming right now. And then 
you also have the Navajo nation lawsuit as well. So we believe 
we need to take this time to embrace those uncertainties and 
vent them through. And we're looking forward to those 
discussions with the other parties.
    Mr. Calvert. Mrs. Stapleton.
    Ms. Stapleton. Thank you, sir.
    I think what is most interesting about the proposal and the 
work that we're doing now is that we're trying to incorporate 
the opportunities into the final QSA. This is radically 
different than where we were just even in December in that we 
didn't have to paper the deal yet. This deal is completely 
papered. On March 12th, the four parties, the negotiators, 
signed that the deal was acceptable and that they would 
recommend it to their boards upon completion of the conditions 
precedent. So--
    Mr. Calvert. And that included Metropolitan?
    Ms. Stapleton. That included Metropolitan's negotiators at 
the table who did sign that they would recommend support to 
their board upon completion of the conditions precedent. That 
is correct.
    I think with the Salton Sea is we do have an opportunity 
to, and under the State's leadership and Senator Machado's 
leadership, we are looking at a mechanism to execute the QSA to 
allow it to move forward, at the same time analyzing the 
feasibility of the restoration and providing for the 
opportunity for substitution or addition of that water as a 
result of those feasibility studies becoming complete. That is 
a positive step.
    Mr. Calvert. Ms. Nichols.
    Ms. Nichols. I just wanted to add one additional thought, 
if I may, and that is that one of the opportunities that also 
arises as a result of the Machado proposal, which we also 
support in concept and want to work through, is that it gets 
back to the opportunity to invest in valley conservation as 
part of the overall future. It's an issue that, as the focus 
has shifted to the Salton Sea, has kind of slipped from the 
front burner.
    But the long-term viability of agriculture in Imperial is 
still linked to improving the efficiency of water use if that 
can be done in a cost-effective manner. And that was at the 
heart of the original San Diego-IID deal. It's kind of moved 
off to offstage. But I think from an environmental perspective, 
the issue of improving conservation and maintaining the 
viability of farming there is something that we at the state 
level also want to see happen.
    And so by allowing for this substitution of water, 
potentially, or addition of new supplies of water, in the long 
run, we're really expanding and improving on the way that water 
is being used in Southern California. We think that's one of 
the benefits that needs to be looked at as well.
    Mr. Calvert. Thank you.
    Ms. Susan Davis, unfortunately, must leave. We thank you 
for coming here today, and she appreciates the hearing and the 
witnesses. And I hope you get better.
    Next, Mary Bono.
    Mrs. Bono. Thank you, Mr. Chairman.
    First off, Director Guenther, I believe, I know you're 
specifically water, but can you tell me that Arizona actually 
has no adverse impacts from a deteriorating Salton Sea? Are you 
aware of any? Does the smell ever reach over into Quartzsite?
    Mr. Guenther. Congresswoman Bono, only on a bad day. We're 
not sure where the smell is coming from.
    Mrs. Bono. Oh, I can tell you where it's coming from.
    Mr. Guenther. But, I mean, you know, I've studied the 
Salton Sea as a biologist. In fact, this panel right here is 
ranked by biologists. Mr. Rinne and myself both studied 
extensively desert environments, so we're familiar with not 
only the challenges but the odors associated with the salt 
marshes and decay and seasonal deterioration of biological 
compounds.
    Mrs. Bono. So only on a bad day. Now, could it be said that 
if the shoreline recedes because of these transfers that those 
bad days would happen a lot more often?
    Mr. Guenther. Congresswoman Bono, I don't really have that 
capability to predict. I do know that when you have a body of 
water from which there is no outflow, and you continue to load 
it with nutrients and salt, that that is the formula for a dead 
sea.
    Mrs. Bono. But you don't know about a receding shoreline; 
correct?
    Mr. Guenther. About a receding shoreline?
    Mrs. Bono. The question is, is a receding.
    Shoreline--if more of these contaminants are exposed when 
the shoreline recedes, what will happen to the air quality? 
That's the big question here.
    So if I--I know I should move along here. Because I wanted 
to ask that question. Thank you very much for that. Thank you 
for saying yes, you smell it in Arizona. That's all I needed to 
know.
    But to move on to--and only on bad days too.
    The question is--and it gets to my new friend from 
Arizona--I think people think when they see me, they think the 
Salton Sea, that I've--and I've said it before--that I've got 
this passion for the sea to stay exactly as it is, and I don't. 
I have a vision for a quality of life for people who live 
around the Salton Sea. And to keep some sort of sea alive, in 
my view, is critical because of the endangered species that it 
supports. So we agree on that, all of us here.
    But nobody here, Mr. Chairman, has ever done a study or can 
tell me with any certainty--even Mr. Robbins from Coachella 
Valley, and I ask the question to you, sir, what will happen 
when the shoreline recedes and this is exposed? You of all 
people might have that answer.
    Have you, in fact, studied that question, what will happen 
when these contaminants or whatever will be suddenly exposed, 
is airborne, and the people of the Coachella Valley and 
Imperial Valley then live with that.
    Mr. Robbins. Currently the Salton Sea authority is looking 
at that right now because it is a big unanswered question. 
Comparisons to the Owens Valley have been made. I don't think 
those are valid comparisons. The soils are very different in 
Coachella Valley. The temperatures are very different.
    Mrs. Bono. Well, Mr. Robbins, you are free to prove that 
point. Nobody has stood in front of you saying, ``Don't prove 
to us the air quality won't suffer.'' You can completely 
convince everybody that the air quality will be fine to all of 
you. I pose the question--or put the challenge out, say to us 
air quality will be fine. And you haven't done it. And the 
reason you haven't done it is because you're afraid what you'll 
find out. And the people of the Coachella Valley are saying, 
enough.
    Yes, we know this is the keystone for water policy in 
California. ``Keystone'' meaning the center part of the arch 
which supports the entire arch. That is what we understand, and 
we are willing--we have changed the notion of the Salton Sea. 
It could be one-third the size it is now. The environmentalists 
so far are even OK on this. We've come a long way, and you know 
that. But nobody is saying air quality.
    And I--Mr. Chairman, in the Committee I sit on in Congress 
is the Congress Committee, and I sit on the Energy and Air 
Quality Subcommittee, and we realize you can't divorce energy 
from air quality. I don't know how you think you can divorce 
air quality from water transfers. And in my view--thank you. 
I'm glad somebody's happy about it. That's why we're here. 
Until we all recognize this is a factor, we're going to be 
here. We're going to be in this room day in and day out having 
this discussion until we realize the Salton Sea must be saved, 
some part of it, for the endangered species, and it must be 
saved--or the air quality must be addressed. We can do that. 
Heaven forbid--we built the Diamond Valley Lake. What was the 
price tag on that, Mr. Ortega?
    Mr. Ortega. 1.8 billion dollars.
    Mrs. Bono. 1.8 billion dollars, from a valley. And from 
nothing, and we built that. We can do this if the players 
finally realize it has to be done and quit thinking they can do 
this for free. And I've said we're transferring water, we're 
also transferring money. Until you study both, we're going to 
be in this room.
    And we've had this, Ms. Stapleton, all of us have had this 
in the state, we've had this hearing. And until we say let's--I 
know, what's my question, Mr. Chairman, and I'm lecturing. I'm 
on my soap box. Ms. Stapleton is anxious to say something. 
Please do.
    Ms. Stapleton. Congresswoman Bono, I think you make a very 
good point. It is--air quality is one of the standards that we 
must achieve in the overall environmental mitigation and 
enhancement program. Actually, part of that 200 million that 
we're seeking from the State Funding, a huge chunk of that 
money is going to air quality. And you're absolutely right 
here, until we get down to the details of exactly what's going 
to happen, we do not, in fact, know what is the best 
opportunity, project, or program to address air quality. But I 
think you can hear from all four agencies that air quality is a 
standard we must meet, and it is something that we will achieve 
through the implementation of the enhancement programs.
    I would like to point out one thing, which is, if the 417 
process is such that there is a large portion of water taken 
from Imperial Valley as part of this process, it will exceed 
the amount of the loss to the Salton Sea then equivalent to the 
19th year of implementation of the water transfer.
    Mrs. Bono. Well, actually, you gave that to the Bureau.
    Ms. Stapleton. Absolutely. Yes. And that's something that 
needs to be watched by everyone is that the implications of the 
417 process on the Salton Sea could be horrific.
    Mrs. Bono. So this leads me to my--and I thank you, Mr. 
Chairman, you gave me a note. I said, ``How long do we have for 
questions?'' And you said, ``As long as we need.'' Big mistake.
    One last point, where we're all getting here, I think, is 
to the Bureau of Rec. We have been waiting and waiting and 
waiting and trying to engage you all in determining a solution. 
And you are all very, very reluctant to do that, and you have 
put it back in our laps. We are not engineers. We don't have 
engineers on our staffs.
    Can you explain the reluctance, the hesitancy of the Bureau 
to actually come up with a solution?
    Mr. Rinne. Congresswoman, I will respond by saying--and I 
think, hopefully, you're aware of some of this, that there have 
been ongoing efforts with the Salton Sea inquiry with 
Reclamation. And even your comments about maybe the scope or 
the size with what ultimately the sea should look like, we've 
been working closely with people in the field with Salton Sea 
authority to see what other kinds of things might be looked at 
as far as concepts.
    And, again, I bring up, and I think one of the things that 
we probably need to look at is the geotechnical or subsurface 
nature of the Salton Sea, would it support dikes or some kind 
of an option that would be smaller. So I don't think--and, I 
think, going back to the Act, I think the Act asks us to study, 
you know, and we have been working--I know you've been with us 
for a long time and you're very much aware of that.
    We continue to work closely with the Salton Sea authority 
on this thing and trying to identify kinds of things we might 
do. I think that as far as any alternative, final alternative, 
we don't see that as something that's within the authority of 
the act. We're not authorized to go out and fix the issue of 
the Salton Sea at this point, only to study the alternative.
    Mrs. Bono. Thank you, Mr. Chairman.
    Mr. Calvert. Thank you, gentlelady.
    Ms. Nichols, just for the record, how important is it to 
the state that the involved parties--that the Interim Surplus 
Flow Guideline be implemented?
    Ms. Nichols. Well, I think it's fair to say we wouldn't 
have invested the kind of time that has been invested by the 
Governor's office, Secretary of Agriculture, by myself, and a 
number of members of the Legislature if we didn't believe that 
getting the Interim Surplus Guidelines back is a critical part 
of providing for California's water future in the most cost-
effective and least disruptive way possible.
    We realize that the agreement was one that was reached 
prior to the current Federal administration, but we also 
understand that Secretary Norton intends to continue to abide 
by the Guidelines that were adopted.
    We are concerned, because after the failure of the--to meet 
the deadline by the four water agencies just on Christmas Eve--
on New Year's Eve, rather, of this year, that we heard that the 
bar had been raised, that there might be new actions that would 
be required of California, and we've not been able to get any 
clarification as to what that means.
    We don't know, sitting here today, whether if all the 
parties were to sign the QSA and we were to submit it, that 
would result in the Interim Surplus Guidelines being 
reinstated. And we obviously are anxious to get clarification 
on that point.
    But--although, again, recognizing, as others have said, 
that weather is variable and we don't know on a year-to-year 
basis exactly how much water might be available to California 
as a result of the Interim Surplus Guidelines. We feel that it 
would be beyond foolish. It would be reprehensible for us to 
walk away from the opportunity to have that 15-year soft 
landing that was intended by the Guidelines.
    Mr. Calvert. While you're here, I want to ask a couple of 
questions. Obviously when the Quantification Settlement 
Agreement was not agreed to as of the end of the year, as you 
mentioned, certain things started occurring: Metropolitan went 
north and bought some water from some rice farms up in Northern 
California; this has affected the entire state. And that has a 
direct effect on how we get that water from the northern part 
of the state down to the southern part of the state. And how 
the pumps are being operated at the banks right now is 
certainly an issue that we talked about when we were up in 
Northern California.
    And describe to us the process in which you're going to 
work on to increase the pumping capacity at banks and still 
maintain water quality.
    Ms. Nichols. Well, Mr. Chairman, one of the key ingredients 
of the CalFed program has been to try to increase the amount of 
pumping on the state water project, and the state and the 
Federal water projects have been working very diligently on the 
operation.
    As you learned, and it came out, I believe, during your 
hearings over the weekend, much of the early work by the CalFed 
has been addressed to water supply reliability and water 
quality, keeping the ability that the water delivery is stable 
through, in effect, purchasing water for the environment 
through the environmental water guidelines.
    Mr. Calvert. That's obviously important. As you well 
understand, we front-loaded a lot of the environmental 
litigation in the CalFed process. There is a number of folks, 
including myself, that are frustrated about the ability to 
deliver water from the north to the south, especially after the 
large investments that we've made.
    And one of the things was a comment--and I'll move for 
another question--is that the barriers, the temporary barriers 
on salt water intrusion into the Delta, apparently is not as 
successful as we would like them. We'd certainly like to move 
forward on permanent barriers so we can get the pumping 
capacity up to 8500 CFS as quickly as possible following your 
own environmental guidelines.
    And we believe that that pumping should take place, and 
that's extremely important based upon what's happening today, 
certainly with the Quantification Settlement Agreement. We want 
to come to an agreement as soon as possible and hope that we 
can by Thanksgiving, at least as the gentleman from Arizona has 
stated. But just in case, we better have our insurance policy 
in our back pocket. That means we'll need to get our pumping 
capacity back up.
    One other question for Mr. Rinne. On the issue of the 417, 
if in fact the Federal Government involves itself in this 
allocation of water in California and reallocates water from 
Imperial County--and obviously we'll hear about this from Mr. 
Allen--if in fact that happens, what happens to the liability 
issues on third-party impact if in fact that water is 
reallocated and less water, in effect, by definition is going 
into the sea? Does that mean the Federal Government takes on 
the total liability of the Salton Sea because of that?
    Mr. Rinne. Congressman, if I may, if I'm understanding your 
question, our position would be that--it would be no.
    Mr. Calvert. Why would that be the case? I mean, if 
you're--it's affected by--because of the Federal Government, by 
its actions, if in fact there's a reallocation of water, less 
water for Imperial County, less water going into the city, why 
wouldn't that change the liability over to the Federal 
Government?
    Mr. Rinne. The view, or our position on that, Congressman, 
would be that if you think about 417 and approval of water 
orders, think about California and include IID, Coachella, 
Metropolitan, once there has been an approval on whatever the 
amount of water would be, and I'll switch back to the IID, that 
amount of water, it's not a--not something discretionary that 
we're going to--we have a choice as to whether to do the 417, 
you know, to follow the reg. We would have to follow--we would 
have to carry it through. And we would look to the priority 
system in California. That's what--as a matter of fact, that's 
what's happening now just with reduction of Coachella and to 
Metropolitan.
    Mr. Calvert. That's going to be another case in court, I 
suspect.
    With that, the court reporter needs to change her paper, 
and I'll let her do that.
    [Off the record.]
    Mr. Calvert. Ms. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair.
    I ask the members' consent that the official record of the 
Subcommittee hearings on Saturday, June 28th and also today's 
hearing remain open through the close of business until 
Thursday, July 31st for additional comment.
    Mr. Calvert. Without objections.
    Mrs. Napolitano. Thank you, Mr. Chair.
    I have a question that's been in the back of my mind for 
the three major Southern California water agencies about the 
cost of water.
    How much does your agency pay per acre-foot to the 
Department of Interior? I'd like for each one of them to please 
answer.
    Mr. Allen. We don't pay anything for the price of water 
because of your reclamation. Isn't that correct, Mr. Carter?
    Mr. Carter. That's correct.
    Mr. Allen. Thank you.
    Mr. Robbins. Same answer for Coachella.
    Mr. Ortega. Mr. Underwood has just informed me that it's 
about 25 cents per acre-foot.
    Mrs. Napolitano. Stranded costs. Would you explain stranded 
costs, please, Mr. Ortega.
    Mr. Ortega. Ms. Congresswoman, stranded cost is when you 
make an investment that you cannot derive that independently 
from.
    Mrs. Napolitano. The infrastructure.
    Mr. Ortega. It could be depending on how things go with a 
given project. That is one of the things, for example, that is 
part of the QSA package where there's a 150 million dollar loan 
guarantee out of the state infrastructure bank that's there to 
help to prevent that there be any stranded costs should this 
deal end prematurely for any reason.
    Mrs. Napolitano. Thank you.
    Ms. Stapleton?
    Ms. Stapleton. Yes, ma'am.
    Mrs. Napolitano. I'm just curious as to how much the water 
is going to cost in your area. Do you have any idea?
    Ms. Stapleton. Right. As a member of the Metropolitan Water 
District, we pay the Metropolitan fees. We do not pay the 
Bureau directly. And those fees are set by Metropolitan and 
paid for by all our member agencies. So it's $350 an acre-foot 
for untreated water.
    Mrs. Napolitano. $350. And I'm going into Northern 
California, and it was like $70 an acre-foot. And, of course, 
probably my state pays for more than 7600 an acre-foot; is that 
correct?
    Ms. Stapleton. Right. By the time it gets through the 
retail systems, our farm retail agencies probably pay between 
5- and $750 an acre-foot. That's what their ratepayers pay.
    Mrs. Napolitano. And may I ask the same question of Arizona 
and Utah.
    Mr. Allen. Mr. Chairman, might I ask Mr. Carter to explain 
the answer?
    Mr. Calvert. Mr. Carter.
    Mr. Carter. Yes.
    Mr. Calvert. And I believe Utah and Arizona will be 
recognized also, after Mr. Carter.
    Mr. Carter. Yes. Thank you, Mr. Chairman.
    Just an additional response to the question of the 
Chairman. The water that IID and Coachella receives is received 
through a contract because of prior rights to water on the 
River, and our contract provides that the there is no cost for 
that delivery. And what the district then does, of course, is 
charges the users in the Valley, both Coachella and in IID's 
situation, for the cost of the delivery within the Valley, 
unlike Metropolitan Water District, who did not have prior 
rights to Colorado River water.
    Mr. Calvert. Thank you.
    Mr. Anderson, on behalf of the other basin states.
    Mr. Anderson. As far as Utah's municipal water costs, they 
would vary anywhere from maybe $50 an acre-foot to $250 an 
acre-foot depending on where the water's coming from. Central 
Utah project water is, I understand, delivered to the Salt Lake 
Valley for $250 an acre-foot.
    Mr. Guenther. In Arizona, we just pay the cost of delivery. 
That varies, of course, depending on the pumping requirements 
and electrical power generation requirements. And then any 
additional treatment, of course, is added to that. So our water 
used on the river is very inexpensive, and the water used in 
central Arizona for the central Arizona project can run up to 
probably $200 an acre-foot.
    Mrs. Napolitano. Thank you, sir.
    Ms. Nichols. Hi, Mary.
    Mrs. Napolitano. Just a question that hasn't even begun to 
be discussed, and that's the uranium mines have contaminated 
the Colorado river for the last decade and a half up in Moapa, 
and the fact that we're not even considering should that become 
a problem for the southern states that it provides the water 
to, the fact that the solidity is increasing up in Colorado.
    Would you mind kind of going over what we as a state are 
going to be facing should anything--maybe mother nature decides 
to go right through that ten and a half million tons of 
contaminated uranium right 750 feet from the river and deliver 
that to us. What's going to happen if we lose that ability to 
access water from Colorado?
    Ms. Nichols. I appreciate your efforts to bring attention 
to that issue, and I know that you and others have been trying 
to get something done about curtailing it and to try to prevent 
this damage from occurring. But at a fairly low level--and I 
don't have the details with me. We could get you some 
information on that. We're aware of the fact that the water 
could be rendered undeliverable, unusable, and obviously that 
would be a tragedy not only for the people who depend on the 
water, but for the whole ecosystem that would be affected. So 
it's a very grave concern.
    Mrs. Napolitano. I'll now pass the questioning to the other 
gentleman. Thank you, Mr. Chairman.
    Mr. Calvert. Thank you.
    Mr. Hunter.
    Mr. Hunter. Thank you, Mr. Chairman.
    Mr. Chairman, one thing that I didn't do when we opened 
this hearing is just acknowledge your leadership and the great 
job you're doing not just for your district but for the entire 
State of California and your very important chairmanship, and 
to Ms. Napolitano, too, for everything she's done and to Mary 
Bono for her great work on the Salton Sea. You've got a big 
load, Mr. Chairman. You've got massive, massive issues here.
    And I guess--I think it's clear with this--what this 
hearing is basically shaping up in terms of a theme or the 
story of this water deal. You've got a QSA which would, I 
think, be readily signed by all parties except Metropolitan. 
And I think it's time for Metropolitan to come to the table, 
sign this deal, and accept the terms that the elected 
representatives of California have put in place in terms of the 
help that they are going to give the participants in the water 
deal to make it economically feasible to go through with this.
    I would just ask the participants--Maureen Stapleton has 
done a great job with the San Diego County Water Authority. San 
Diego's ready to go with this deal, the QSA; is that right?
    Ms. Stapleton. Yes, sir.
    Mr. Hunter. Mr. Robbins, I take it Coachella feels this is 
critical, is that right?
    Mr. Robbins. That is correct.
    Mr. Hunter. And, Mr. Allen, the Valley, the Imperial 
Irrigation District, the people of Imperial Valley are ready to 
go with the agreement; is that right?
    Mr. Allen. We sure are.
    Mr. Hunter. And so, Mr. Ortega, you are the last party that 
needs to agree to this. And I've--you've explained why you 
think it's not in the interest of Metropolitan to sign this 
thing up. But, you know, we're in a business in which 
compromise is the order of the day. And I would hope that the 
Metropolitan Water District would finalize this agreement by 
being the last party to agree to sign it and do that in an 
expeditious manner, because California's future depends on it.
    And all creatures which are created by the State of 
California, including big water districts, can be dissolved by 
the State of California or adversely affected by the State of 
California. So I would hope that Met would get on board here 
and make this thing go. Obviously you've received other cards 
and letters to that effect from folks.
    Is there any--do you see--in the next several months, do 
you see a way we can get through this without Met getting its 
way in terms of putting this burden on Imperial Valley?
    Mr. Ortega. Congressman, Mr. Chairman, Metropolitan agreed 
on March 12th to take before its board the QSA once the 
conditions precedent that are therein stated are fulfilled, and 
there's several items that need to happen within that framework 
before anybody signs. IID, for example, must resolve its issues 
with the Federal Government. The State of California must pass 
the appropriate environmental and financing legislation, if its 
necessary. There is the Arizona payback issue that needs to be 
resolved amongst the parties, and those issues are outstanding.
    We have provided within the sponsorship of the Governor of 
California a proposal that we hope to engage the other parties 
with within the coming weeks. Our CEO, our chief negotiator, 
our general counsel, our chairman, and our negotiating team are 
very heavily involved, and we are looking forward and are 
encouraged that we can have a long-term solution that doesn't 
leave the Salton Sea, for example, with an outstanding issue 
that we're going to come back and have to visit when my son's 
in high school in 15 years. So we're hoping for a long-term 
solution.
    Mr. Hunter. But your proposal, the one that I see 
summarized here, proposes to have a $6 an acre-foot paid for by 
the participants in the transfer. And the shorthand on this is 
that basically the people of Imperial County who experience 
approximately a 23 percent unemployment rate now would bear the 
70 percent of the burden of that particular outlay.
    Is the proposal that we've got summarized here, is that the 
proposal you're talking about bringing forth with great gusto 
to the State? Are we talking about the same proposal?
    Mr. Ortega. Congressman, you are correct. There is an issue 
of who pays. And with the Chairman's permission, we'd like to 
submit a chart that will illustrate where the contention is.
    Mr. Ortega. In this chart, there's a small sliver here that 
pertains to the cost of the transfer. The question is who pays. 
Under the Metropolitan proposal, IID would pick up a fraction 
of the cost. And the benefit that we perceive that they get is 
that they'll be able to get an overall subsidy through the 
other parties to sell water in the long term at market rates.
    Also, in the proposal that was made by the three parties, 
that cost would shift to the State. And we're looking forward 
to dealing with the State and engaging the State and the other 
parties to come to an accommodation on who pays.
    The fear that we have is the precedent. And that precedent 
is that water transfers in the State of California, given the 
history that we've been instrumental in creating over the last 
several years, cannot afford to subsidize water transfers. And 
once you have this precedent out there, it will become very 
difficult to sustain this, especially given all the other 
challenges and other municipal issues out there before us 
today.
    Mr. Hunter. What you've offered, though, Mr. Ortega, in 
your proposal is something that should be equally, if not more, 
repugnant than what you've just described. And that is that 
farming communities which are asked to give up a portion of 
their water for the use of other Californians, now for that 
privilege of giving up the use of their water to other 
Californians, get to have attached to their responsibility 
massive environmental liability.
    And I don't see how you can hold that out as a model for 
other farm districts, which might at some point want to come 
forth and say, we'll tell you what, if you will finance these 
conservation measures, we'll undertake them and we'll share the 
benefits with you.
    And I think it's clear to all parties that it was never 
intended that Imperial Valley be liable for the reclamation of 
the Salton Sea. For practical purposes, that's the effect of 
your proposal.
    I see you disagree with that notion.
    Mr. Ortega. Congressman, with all due respect, what we 
believe is that all over California agricultural districts have 
come forward. The Sacramento rice deal--it took us 3 months to 
negotiate it. It's taken 7 years to get us here on the IID 
proposal. IID should not be held liable for the Salton Sea. We 
do have a proposal that we've set forth that would prevent that 
liability and that would address long-term issues to assure 
that forever, hopefully, IID would not have to be liable. So I 
think we're closer than we think.
    Mr. Hunter. Thank you, Mr. Chairman. Mr Chairman, I just 
wanted to note, too, that Glenn Baxley is here, who's Ms. 
Congresswoman Bono's husband, who is a great baseball player in 
this town, and San Diego needs great baseball. We'd like to 
sign him up before he leaves.
    Mr. Baxley. They need more than one.
    Mr. Hunter. Thank you, Glenn.
    Mr. Chairman, once again, thank you for holding this 
hearing. Thanks to all the parties for your participation. We 
need to make this deal. We need to make it now. We need to get 
it done before the summer's over. Thank you.
    Mr. Calvert. Ms. Bono, you have any further questions for 
this panel? We'd like to move to the next panel, our last 
panel.
    Mrs. Bono. Is that a hint, Mr. Chairman?
    Mr. Calvert. What's that?
    Mrs. Bono. Is that a subtle hint? No. I recognize we're 
down to the final hour, and I'm happy to move to the next 
panel.
    Mr. Calvert. I appreciate that.
    Any other questions? Thank you very much.
    We thank this panel. We appreciate your coming out and 
doing this, and stick around. I'm sure we'll have more 
questions for you later.
    Next, I would like to recognize our next panel, Ms. Grace 
Burgess, the Executive Director of the San Gabriel Water 
Authority; Ms. Francis Spivy-Weber, the Co-Convenor of the 
Southern California Water Dialogue; Mr. Stephen Hall, the 
Executive Director of the Association of California Water 
Agencies; and Ms. Julie Puentes, Executive Vice President of 
Public Affairs for the Orange County Business Council.
    [Recess.]
    Mr. Calvert. Thank you. And, again, we're back and 
reconvened at our hearing. And just to reiterate, we're under 
the 5-minute rule. We thank this panel for being here, and 
we'll start off with Ms. Grace Burgess, Executive Director of 
the San Gabriel Water Quality Authority. We thank you very much 
for attending, and you're recognized.

        STATEMENT OF GRACE BURGESS, EXECUTIVE DIRECTOR, 
           SAN GABRIEL BASIN WATER QUALITY AUTHORITY

    Ms. Burgess. Thank you, Mr. Chairman. Good afternoon.
    Mr. Chairman, Committee members and staff, my name's Grace 
Burgess. I'm the executive director of the San Gabriel Basin 
Water Quality Authority. And let me also express my 
appreciation to Congresswoman Grace Napolitano for inviting us 
as an agency to testify this afternoon.
    Our agency was created by the State Legislature in 1993 to 
plan, coordinate and accelerate the San Gabriel Basin 
groundwater cleanup efforts. Since its inception, the WQA has 
funded projects that have removed many, many tons of 
contaminants from the groundwater basin, and we're in the 
process of constructing four more major groundwater treatment 
systems, multiple treatment terrains involved, that will supply 
28,000 gallons per minute just with those four major projects 
that are actively in construction or design.
    We've benefited from two Federal programs in the San 
Gabriel Basin. First was the Title 16 through the United States 
Bureau of Reclamation Program. And, also, more recently, the 
Restoration Fund, which is also administered through the United 
States Bureau of Reclamation. These two programs have been the 
catalyst in the success of our remediation efforts. Both 
programs have enabled us to continue the collaborative approach 
of merging cleanup with water supply. It's allowed us to 
leverage Federal dollars, local funding and responsible 
parties, the businesses who cause the contamination, to come to 
the table and work together and address all of these problems 
at the same time.
    Through the leadership of Congressman David Dreier and the 
members of the San Gabriel Valley Congressional Delegation, 
Congress created the Restoration Fund in December of 2000. The 
Restoration Fund will provide 75 million dollars in Federal 
funding for groundwater cleanup in the main San Gabriel Basin. 
And I'd like to add that the basin serves probably about one 
and a half million residents and citizens alone and is 
threatening an aquifer just south of us, which is the Greater 
LA Area Central Basin, which is another 3 million residents.
    The Restoration Fund has provided much needed funding for 
local groundwater cleanup efforts, and we've provided this as 
an incentive to participate in the cleanup. And when there is 
no PRP money, responsible parties money, coming forth, the 
Restoration Fund is a godsend because we've spent millions on 
our own local use since the early '90's.
    The Title 16 program, the other Federal program, has also 
provided much needed capital funds to build wellhead treatment 
and stop the flow of contamination. In the northern part of our 
valley--OK. In the northern part of our valley, which is the 
base of the San Gabriel mountains, the flow is pretty slow. The 
migration is about 3 feet, 5 feet per year. But the further 
south toward the central basin and the Greater LA Area, it 
flows at 3 feet per day. And so it's a problem that has 
escalated not only because of the time involved in trying to 
clean this up, but also the new contaminations that are found 
because of detection levels and other better science, and 
perchlorate being the main problem.
    In the time period since the Basin Restoration Fund and the 
Title 16 program were made available to the Water Quality 
Authority, many projects have been allocated funding. Those 
projects have already been built, and several others are 
currently under construction, and completion is expected very 
soon.
    We've just recently closed our third round of Federal 
funding applications to all of the constituents, water 
providers, in the valley, and we have 14 brand-new projects 
that were unexpected, ranging from perchlorate problems to--one 
for dioxane and NDMA and all kinds of BOC suits. And so we have 
a lot of problems, and the reliability on our own basin is 
critical. It is a huge reservoir of water, natural resource 
that can be used to store water, if only we could clean that 
up.
    Water from our wells, without the contamination problems, 
it's very, very inexpensive to pump. It's $50 an acre-foot, 
approximately. But with the current price of the Colorado River 
water, MWD water, it's something that would be--it has become 
very, very difficult for us to handle. So we've tried to 
address our problem, clean up our contamination, and rely on 
our own water, which is still less than MWD water. And it does 
help the rest of the state, who doesn't have to--so that we 
don't have to rely on that water source.
    So Federal assistance is key to us not impacting the rest 
of the state. It's a huge issue, and we appreciate the 
Federal--the Congress and everybody's assistance and appreciate 
our time today.
    [The prepared statement of Ms. Burgess follows:]

            Statement of Grace Burgess, Executive Director, 
               San Gabriel Basin Water Quality Authority

    Good afternoon, Mr. Chairman, Committee members and staff. My name 
is Grace Burgess and I am the Executive Director of the San Gabriel 
Basin Water Quality Authority (WQA). Let me express my appreciation to 
Congresswoman Grace Napolitano for inviting the WQA to testify this 
morning.
    The WQA was created by the California State Legislature in 1993 to 
plan, coordinate and accelerate the San Gabriel Basin groundwater 
cleanup efforts. Since its inception the WQA has funded projects that 
have removed over 10 tons of contaminants from the groundwater basin.
    The WQA has benefited from two Federal programs the San Gabriel 
Basin Restoration Fund and the Title XVI program. These two programs 
have been a catalyst in the success of our remediation efforts. Both 
programs have enabled us to continue the collaborative approach of 
merging cleanup with water supply. It has allowed us to leverage 
Federal dollars and local funding to bring all parties to the table and 
work in a manner that addresses multiple issues at the same time.
    Through the leadership of Congressman David Dreier and the members 
of the San Gabriel Valley Congressional Delegation, Congress created 
the San Gabriel Basin Restoration Fund in December of 2000. The 
Restoration Fund will provide $75 million in Federal funding for 
groundwater restoration projects in the Main San Gabriel Basin. The San 
Gabriel Basin Restoration Fund has provided much needed funding for 
local groundwater remediation efforts. Congressman Dreier and his 
colleagues moved to establish the Restoration Fund as a means of 
expediting the remediation of groundwater.
    The San Gabriel Basin Restoration Fund has provided an incentive 
for the Responsible Parties in the basin to participate in the cleanup 
and reach funding agreements with affected purveyors. The funding has 
also allowed the San Gabriel Basin Water Quality Authority, Watermaster 
and the affected purveyors to fund projects without PRP participation. 
Without this additional Federal funding the potential for additional 
well closures would be great and the need for imported water a 
necessity.
    The Title XVI program has provided the San Gabriel Basin with the 
ability to provide much needed wellhead treatment, stem the flow of 
contaminants, stabilize water rates and most importantly deliver safe 
and reliable drinking water to the residents of the San Gabriel Basin.
    In the time period since the San Gabriel Basin Restoration Fund and 
Title XVI program were made available to the San Gabriel Basin Water 
Quality Authority, ten projects have been allocated funding. Seven 
projects have been built and another three are currently under 
construction with completion expected by the end of summer.
    Without the funding for the treatment facilities local water 
producers would have been forced to shut down water wells due to 
migrating contamination. The closures would have forced local water 
purveyors to become reliant on Colorado River water at a time that the 
state's allotment is being cutback. This would have severely impaired 
our ability to provide water for users in the basin and forced us to 
rely on imported water.
    Water from wells in the San Gabriel Valley, is relatively 
inexpensive to pump and supply to homes and businesses. The current 
price for an acre-foot of treated, ready-to-drink Colorado River water 
in the high-demand summer period is $425. The typical cost to pump, 
treat and deliver an acre-foot of local San Gabriel Basin groundwater 
is $50.
    It is vital that we restore the basin's aquifer. Once we are able 
to remediate the contamination it is our belief that the Valley will be 
able to use the aquifer to meet all of the basin's water needs. 
Removing harmful contaminants from our communities groundwater supply 
will allow local water producers to better meet the needs of local 
residents at affordable rates and makes certain that the basin is able 
to meet the water supply needs of future generations.
    The Federal assistance provide by the San Gabriel Basin Restoration 
Fund and the Title Xvi program have allowed us to carry out our mission 
of facilitating groundwater cleanup and providing a clean, reliable 
drinking water supply for the 1 million residents of the San Gabriel 
Basin.
    Thank you for allowing me to testify on the progress and success of 
the cleanup of the San Gabriel Basin today.
                                 ______
                                 
    Mr. Calvert. Thank you, gentlelady. And we'll say goodbye 
to Mrs. Bono.
    Mrs. Bono. Thank you, Mr. Chairman.
    Mr. Calvert. Next, Ms. Frances Spivy-Weber is recognized 
for 5 minutes.

               STATEMENT OF FRANCES SPIVY-WEBER, 
                      MONO LAKE COMMITTEE

    Ms. Spivy-Weber. Thank you. I am here representing the Mono 
Lake Committee. I'm also the co-chair of the Southern 
California--the Southern California Committee for--that is made 
up of organizations that are public agencies, private agencies, 
and we call ourselves the Southern California Water Dialogue 
because we are trying through dialog to find ways to meet the 
water needs of Southern California, particularly, and in 
cooperation with Northern California.
    The issue that I was asked to focus on today is our methods 
to ensure a reliable water supply to Southern California 
regardless of a quick resolution to the Quantification 
Settlement Agreement.
    I want to underscore something that Maureen said in her 
testimony earlier, and that is that it is not a question of one 
or the other should there be a Quantification Settlement 
Agreement or local projects or other projects. We must have 
both. Even with a Quantification Settlement agreement, the 
aqueduct will only be 80 percent full. So I will focus on these 
other issues that are going to be essential if we're going to 
have the flexibility that we need as a region.
    Yes, sir?
    Mr. Calvert. I'm sorry. Go ahead.
    Ms. Spivy-Weber. Among those--I won't go through all of the 
ones that are in my testimony, but I will mention those where 
the Federal Government is extremely important. One has been 
mentioned by Congresswoman Napolitano, and that is recycled 
water.
    Right now the region, Southern California, uses about 
450,000 acre-feet of recycled water per year. Over the next 10 
years, we could increase--we could double that amount to 
900,000 acre-feet of water, but the Bureau has now decided to 
act to put in its 2004 budget only 12 million dollars rather 
than the normal 34 million that has been allocated in the past. 
We are saying that we--the Federal Government is saying that it 
does not value the ability of this region to create a 500 
million acre-feet over the next 10 years. This is extremely 
important water.
    Another area that I work in very--that I work in a lot is 
water conservation. The Metropolitan Water District of Southern 
California has estimated that over the--by 2025, at least 1.1 
million acre-feet of water can come from conservation. Again, 
the Bureau has the opportunity to invest largely in these new 
conservation measures, many of them affecting landscape water 
use, also commercial, industrial, and institutional water 
investments. And I think this is a conservative estimate of 
what we can achieve over the next 20 to 25 years.
    A third area that is extremely important is brackish water 
desalination brine lines. In Southern California, right now, 
about 75,000 acre-feet of brackish water is being desalted and 
used and made a valuable part of our water supply. By 2015, 
Southern California agencies estimate this amount could 
increase to 200,000 acre-feet, again, an extremely important 
area for investment by the Bureau.
    We heard from the previous speaker about contaminant 
treatment. Again, in Southern California, there are tremendous 
groundwater basins that need to be cleaned up, and investments 
in those cleanups will make this area much more self-
sufficient, particularly in a drought or in a situation of an 
earthquake or other global warming, whatever the tragedy might 
be in the future that we would have to face. If we have these 
projects, these local projects, this local capacity to be 
flexible, we will be much better able to weather those storms. 
And those storms will come. We know that. We know that from the 
past.
    Other areas that are offering promise, certainly we heard 
about water transfers from Northern California earlier today. 
Storm water runoff and making better use of storm water runoff 
is important. In Los Angeles, we get 12 inches of rain a year. 
That water is being captured in some demonstration projects now 
in the San Fernando Valley and captured in cisterns, going back 
to old-fashioned technologies, at schools and institutions, and 
that water is being used for landscape watering. And, again, 
this offers an opportunity in many parts of Southern California 
to make better use of storm water as a water supply.
    Watershed management is increasing. Ocean desalination has 
been mentioned a few times today already. It's estimated that 
ocean desal at this point could supply 150,000 acre-feet per 
year. We have a State task force that's looking at what the 
issues are associated with ocean desal, and my hope is that we 
will be able to figure out ways to use it.
    I don't think ocean desalination is--or any of these 
measures are the answer. All of them must be pursued, and the 
Federal Government, I hope, will be a strong partner and player 
in pursuing these.
    And, finally, I would like to wear my Mono Lake Committee 
hat and emphasize how important it is that the Bay-Delta 
authority work with the stakeholders to--and this would be the 
Federal part of the CalFed program as well, to develop a 
mechanism to ensure that investments in these water supply, 
water stretching activities actually will in part accrue--the 
benefits will, in fact, accrue to the environment. For example, 
the San Diego Watershed Project Authority has set the goal of 
being able to roll off the Delta for 3 years during a drought.
    The question that many of us had is, how will we be sure 
that this benefit does, in fact, give water to the environment? 
And my suggestion is that possibly the investments in meeting 
our drought-year options down in Southern California could 
become part of the environmental water account. Those 
investments would count toward the environmental water account. 
And I thank you for this opportunity.
    [The prepared statement of Ms. Spivy-Weber follows:]

   Statement of Frances Spivy-Weber, Executive Director for Policy, 
             Mono Lake Committee, Redondo Beach, California

    Thank you for this opportunity to meet with the House Subcommittee 
on Water and Power. I wear several water policy hats in Southern 
California and statewide. Regionally, I serve as the co-chair of the 
Southern California Water Dialogue, a multi-stakeholder group that 
meets monthly to discuss water issues. The Dialogue also serves as a 
Southern California focal point for the CalFed Bay-Delta Authority, 
providing information to CalFed about the region and transmitting 
information about the region to CalFed. CalFed has provided the 
Dialogue with a consultant staff person for 18 months, who works 
closely with the volunteer steering committee and other Dialogue 
participants.
    Statewide, I serve on the CalFed Bay-Delta Public Advisory 
Committee and am co-chair of the Water Use Efficiency Subcommittee. 
This year, I am the convener of the California Urban Water Conservation 
Council, and I am a member of the State Advisory Committee to the 
California Water Plan. My organization, the Mono Lake Committee, 
supports my work on regional and statewide water policy because Mono 
Lake, located at the northernmost end of the Los Angeles Aqueduct, is 
being restored to health in large part because the Committee was 
successful is having state and Federal funding made available to Los 
Angeles for conservation and water reclamation projects. These projects 
are supplying more than enough water to replace the water being left in 
Mono Basin streams that feed Mono Lake.
    The goal of this hearing is to consider methods to ensure a 
reliable water supply to Southern California regardless of a quick 
resolution to the Quantification Settlement Agreement, commonly called 
the QSA. I must add to this goal the need for high quality drinking 
water in the region.
Current Supplies
    Water supplies used in Southern California come from several 
sources. Those sources include about half from imported water supplies 
and the other half from local supplies within the coastal plain of 
Southern California. The imported water sources are from northern 
California via the State Water Project (SWP); the Colorado River (CRA); 
and the Los Angeles Aqueduct (LAA). Local supplies are primarily 
groundwater and southern California mountain streamflow, recycled, and 
desalinated brackish groundwater. In addition, the region has 
successfully reduced demand for water over 15% since the mid-1980s 
through implementation of conservation Best Management Practices.
State Water Project
    MWD has imported an average of 1 MAF from the State Water Project 
during the past decade. However, during a drought, SWP delivery to MWD 
can be as low as 400,000 AF. The maximum deliveries to Southern 
California during wet periods are limited to about 1.7 MAF because of 
pumping limitations in the State Water Project. The proposed South 
Delta improvements might increase wet year pumping by approximately 
200,000 AF.
Colorado River Deliveries
    California has a long-term allocation of 4.4 million acre-feet per 
year from the Colorado River, with 3.85 MAF allocated to Imperial 
Irrigation District, Coachella Valley Water District, Palo Verde 
Irrigation District and the Yuma project, and 550,000 to MWD. In past 
years, the MWD has imported an additional 700,000 AF of surplus water. 
The Colorado River delivery to MWD with QSA is about 900,000 AF, 
compared to historic averages of 1.2 MAF, resulting in keeping the 
Aqueduct at 80% capacity.
Eastern Sierra Nevada
    Los Angeles Department of Water and Power imports between 300,000-
400,000 acre-feet of water per year, but in future years it is likely 
to import less than 200,000 acre-feet on average, because of dust 
control and restoration obligations in the Owens Valley and the Mono 
Basin
Drought Imports
    If drought occurs throughout California and/or the West, southern 
California could face importing as little as 1.1 million acre-feet of 
water. To make up the 50% shortfall, the region must turn to 
conservation measures, transfers, local groundwater and surface water 
storage withdrawals, and new local supply projects. In addition most of 
these supplemental measures can be used to improve water quality, storm 
water management and address groundwater contamination. These measures 
will be the focus of my presentation.
Groundwater, Recycled Water, Desalinated Brackish Water
    The Southern California region produces on average about 1.3 
million-acre feet per year of groundwater. During droughts the 
groundwater production can increase by approximately 500,000 AF. The 
region uses approximately 450,000 acre-feet per year of recycled water 
and 75,000 acre-feet of desalinated brackish water. Both recycled water 
and desalinated groundwater will increase significantly over the next 
decade. Recycled water is projected to double to about 900,000 AF over 
the next ten years, and groundwater desalting will more than double to 
200,000 AF by 2015.
Demographics of the Region
    Southern California includes the counties of Imperial, Los Angeles, 
Orange, Riverside, San Bernardino, San Diego, and Ventura with a 
population of approximately 19.6 million people. In 2025, the Southern 
California Association of Governments and the San Diego Association of 
Governments predict the region's population will be in the range of 
26.4 million people. While there is still significant agriculture in 
the region, the trend is toward greater urbanization.
Methods to Achieve Water Supply Reliability and Water Quality in the 
        Region
    In order for Southern California to achieve water supply 
reliability and water quality in the region, its water agencies and 
citizens must enhance the current sources of local water supply, as 
well possibly add new technologies and approaches.
Groundwater
    The Southern California region produces on average about 1.3 
million-acre feet per year of groundwater, and during droughts an 
approximately 500,000 AF can be produced. Groundwater storage and 
conjunctive use are strong candidates for meeting the region's water 
supply and water quality needs. A recent study by the Association of 
Groundwater Agencies found over 22 million acre-feet of unused capacity 
in Southern California groundwater basins, and while much of this 
capacity may not be feasible, the following groundwater basins are 
identified as having the potential of an approximately 1 million acre-
feet per year increase in annual operational yield for the region: 
Ventura County Basins, San Fernando Valley, Main San Gabriel Basin, 
West and Central Basins, Orange County Basin, Chino Basin, San Diego 
County Basins, Mojave River Basins, and Coachella Valley Basin.
Recycled Water
    The region uses approximately 450,000 acre-feet per year of 
recycled water. An unpublished Bureau of Reclamation Study estimated 
the region's additional potential is 451,500 acre-feet per year over 
the next ten years. Now is the time for the Department of the Interior 
(and the Bureau of Reclamation) and the Congress to increase its 
financial support of Title XVI grant funding in Southern California. 
Currently the Bureau of Reclamation has requested only $12 million in 
its FY 2004 budget. During the past few years, Congress has 
appropriated about $34 million each year. This is the most cost 
effective investment the Bureau could make in new supplies.
Conservation
    Through urban conservation Best Management Practices (BMPs) and 
strong community-based programs, the region has successfully reduced 
demand by 15% since the mid-1980s. The Metropolitan Water District of 
Southern California (MWD) currently estimates conservation savings at 
653,800 acre-feet per year. MWD's urban target for 2025 is 1.1 million 
acre-feet, an additional 446,000 acre-feet per year. And, in my opinion 
this target will be surpassed with new and aggressive programs to 
reduce landscape water use and to target commercial, industrial and 
institutional customers to use new devices that save water in cooling 
towers, x-ray machines, spray-rinse valves in commercial kitchens, 
water brooms, as well as low-flow toilets and landscape savings. In 
addition, there is opportunity for improvements in some agricultural 
sectors.
Water Transfers
    In 2003, MWD concluded eleven water transfer agreements with 
Northern California farmers in the amount of 167,200 acre-feet. Not all 
the offers for water sales were accepted, indicating possibly greater 
potential in the future.
Contaminant Treatment
    Water quality, rather than supply, is likely to be the limiting 
factor in meeting Southern California's water needs. Source water 
protection of imported water and local groundwater basins and drinking 
water quality treatment projects are essential to achieving the water 
supply and water quality goals of the region.
Brackish Water Desalination
    Salt loading in Southern California is a large problem that is 
growing. A number of agencies desalt approximately 75,000 AF of 
brackish water to expand the region's water supply, particularly 
groundwater. By 2015 southern California water agencies estimate this 
amount will increase to 200,000 AF and will continue to increase as 
imported water supplies become less reliable. Investments in additional 
treatment and brine lines will be critical to increasing usable locally 
impaired water supplies.
Storm Water Runoff
    Projects are underway in Los Angeles, Orange, and San Diego 
counties and at the Inland Empire Utility Agency to examine the 
potential water supply benefit from capturing and reusing rainfall. For 
example, it rains 12 inches a year in Los Angeles, and much of this 
water is shunted off into storm drains. There are demonstration 
projects in Los Angeles County where schools and institutions have 
buried cisterns under their landscape and are collecting and filtering 
storm water for use in future irrigation. There are many, similar 
opportunities throughout the region.
Watershed Management
    There are 40-50 watershed organizations in Southern California. 
Investments in watershed projects and in building greater capacity of 
these groups will contribute to better coordination among surface and 
groundwater suppliers, water quality agencies, development agencies, 
environmental and business interests. The result should be greater 
water savings, efficiencies, and improved water quality. The Santa Ana 
Watershed Project Authority, the largest of the watershed organizations 
in the region, is committed to being able to role off the State Water 
Project for three years in a drought if it can implement its watershed 
plan.
Ocean Desalination
    Several water agencies and local jurisdictions are examining the 
feasibility of ocean desalination. It is estimated that ocean 
desalination could supply 150,000 acre-feet per year. There is great 
interest in tapping into ocean water as a source of new water for the 
region. The State of California has established an ocean desalination 
task force to look at the feasibility of this approach, and many 
anticipate this will become a part of the water supply mix for the 
region in the future. The hurdles for ocean desalination include 
environmental concerns, growth in previously inaccessible places along 
the coast, and cost, particularly energy costs.
Environmental Benefits from Local and Regional Water Supply Investments
    Wearing my Mono Lake Committee hat, it is also very important that 
the CalFed Bay Delta Authority work with stakeholders to develop a 
mechanism to ensure that investments in water supply reliability and 
water quality described above also have direct benefits to watersheds 
and aquatic systems in the region and in the Delta. For example, when 
the Santa Ana Watershed Project Authority (SAWPA) sets a goal of being 
able to roll off the Delta for three years during a drought, there must 
be a clear way of tracking this benefit back to more water for the 
Delta ecosystem. Perhaps SAWPA's capacity to meet drought year supplies 
could be a part of the Environmental Water Account.
    Thank you again for this opportunity to share with you the many 
ways in which the region is attempting to meet its needs over and above 
the important efforts to find a resolution to the Quantification 
Settlement Agreement. I will be pleased to answer any questions now or 
in the future.
                                 ______
                                 
    Mr. Calvert. Thank you, gentlelady.
    And with the ACWA, Association of California Water 
Agencies, old friends, Mr. Stephen Hall.

  STATEMENT OF STEPHEN HALL, ASSOCIATION OF CALIFORNIA WATER 
                         AGENCIES, ACWA

    Mr. Hall. Thank you, Mr. Chairman. I would be remiss if I 
didn't begin by thanking you on behalf of the California Water 
Community for your leadership on these issues. Not very many 
political agents invest the time and energy that you have, and 
we very much appreciate it. And the Ranking Member, Ms. 
Napolitano, was not too far behind you, and we appreciate all 
of your efforts.
    Mrs. Napolitano. Thank you.
    Mr. Hall. I was asked to respond to the same question as 
Frances Spivy-Weber. And let me just say in response to the 
question about whether California can meet its needs with or 
without a QSA, I begin by saying the QSA is an extremely 
important component in meeting our water needs. We believe that 
it can be done, it should be done, and that it will be done.
    We represent the four agencies that are parties to this 
agreement, and we also represent some 450 other water agencies 
around the state who are all looking anxiously at this 
agreement hoping that it gets done. Because what we've learned 
today and in the past is that all of our water supplies are 
inextricably linked, and what affects one source of supply 
affects the other.
    That's why we so strongly agree with your statement, Mr. 
Chairman, that the current impacts on the Colorado River makes 
it even more important that we resolve the issues in the Bay-
Delta and that we firm up the water supplies, the water 
quality, and the environmental health of the Bay-Delta so that 
we can continue to meet the state's water needs regardless what 
happens with the QSA. Though, I have to say, again, my 
association very strongly supports the work of the agencies in 
trying to reach an agreement there.
    We also agree, Mr. Chairman, with the seven points that you 
made in your press releases about the important elements 
embedded in CalFed; that is, surface storage, improved 
conveyance, streamlining environmental regulations, providing 
new yield through conventional means as well as desalting and 
recycling, banking and transfers, protection of property rights 
including area of origin protections, and groundwater 
management.
    We've been working on CalFed for a long time, not only 
because it's a blueprint for California to resolve its 
conflicts and to put policies and plumbing and technology and 
water transfers in place to meet our needs, but we really do 
believe that it can be a model for the west.
    As you'll look around the west, you see Klamath; you see 
the silvery minnow issue in New Mexico; you see the Columbia 
River, the Colorado River. All of these major rivers throughout 
the west have very similar conflicts to what we're seeing in 
California and the Bay-Delta. And we think CalFed is the right 
approach to resolving those.
    In fact, if you look at the Department of Interior's recent 
issuance of its 2025 plan that rolled out, it looks remarkably 
similar to CalFed. And Interior officials will acknowledge 
that's not an accident. They looked at CalFed when they put it 
together because they agree it's a blueprint. That's why we 
think CalFed has to be a full partnership between the state and 
Federal Governments and local water agencies.
    We think the Federal Government, in particular, has a very 
real interest in seeing the CalFed program succeed. It's the 
operator of the largest water project in the state, the central 
valley project. It has very broad environmental regulatory 
responsibilities through the Endangered Species Act, the Clean 
Water Act, the Safe Drinking Water Act, and others. And I think 
it's clear now that if we can resolve these issues in the Bay-
Delta, it can be a precedent for solving them in other river 
systems through the west.
    It was little noticed, but very important, the testimony 
you received from the Federal agencies in Elk Grove. I read 
that testimony carefully. It says the right things. It says 
they have all the authorities that they need, virtually. 
Unfortunately, they don't often act like they have all the 
authority they need. They're not very heavily engaged in the 
CalFed process. The Department of Interior has been 
substantially more involved than the other Federal agencies 
that have responsibilities, and I think it's fair to say the 
Department of Interior has not always agreed with the Davis 
administration on how best to proceed, but at least they've 
been at the table.
    That has not been true of the United States Environmental 
Protection Agency, nor has it been entirely true of the Army 
Corps of Engineers. They don't engage--they don't even work 
together collaboratively as Federal agencies to try to figure 
out who's got what responsibilities and how it's going to be 
exercised. And that has to change. We will not succeed unless 
it does. That's why we need authorizing legislation at the 
Federal level.
    And here are a few of the elements that we think must be 
embedded in the legislation which we hope you will introduce 
soon and which we expect to support: It needs to direct and 
authorize the Federal agencies to participate. It needs to 
provide specific authorities where those are needed beyond what 
they already have. It needs to provide for a crosscut budget 
among those agencies so there's proper accounting of 
expenditures. It needs to address water quality concerns 
including improved source water quality in dealing with such 
issues as perchlorate and other contaminants in ground and 
surface water. It needs to authorize enough Federal funding to 
get the jobs done.
    I know you, Mr. Chairman, and other Members of Congress 
have been frustrated over the lack of progress of some elements 
of CalFed, particularly surface storage and conveyance. I can 
tell you I co-chair the Water Supply Subcommittee, Bay-Delta 
Public Advisory Committee, and right now we're falling far 
behind on our schedule for surface storage investigations 
because there is not enough money either at the state or the 
Federal level. We need to improve that funding source in order 
to keep the program in balance.
    The legislation needs to make it clear that private 
property rights in area of origin protection will be in place. 
And, finally, it needs to authorize participation at the 
Federal level under governance structure so that we have a 
lasting partnership between the state, Federal Governments and 
local agencies that endures beyond present administrations on 
into the future.
    Let me tell you, Mr. Chairman, I think you know this, but 
I'll repeat it, we've worked closely with you, and we respect 
very much your leadership on this issue. We pledge our 
continued support as you move forward with the legislation.
    [The prepared statement of Mr. Hall follows:]

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

INTRODUCTION:
    My name is Steve Hall. I am the Executive Director of the 
Association of California Water Agencies (ACWA). We represent local 
water agencies across the state of California and our members are 
collectively responsible for 90% of the water delivered in California. 
Our smallest member serves fewer than 50 people and our largest serves 
over 17 million urban Southern Californians. The purpose of my 
testimony is to respond to the question posed by the Subcommittee 
regarding a reliable water supply in California with or without a 
Quantification Settlement Agreement (QSA) among the California agencies 
using Colorado River water as well as to provide background on water 
management in California, to describe the measures being taken by local 
water agencies and the additional resources that will be needed to meet 
the state's water needs into the future.
WATER DEVELOPMENT IN CALIFORNIA:
    Today California's water systems support over 35 million people in 
one of the world's largest economies. The state's water infrastructure 
is a network of projects, large and small, assembled over decades and 
with scores of different funding sources. ACWA and its member agencies 
have played a major role in every one of California's major water 
development efforts and have, in recent years, been among those leading 
the way toward restoration of aquatic environments throughout the 
state.
    Much of California's water development has been the result of three 
inescapable facts regarding natural water distribution in the state. 
The first of these facts is that most of California's population 
centers and leading industries are located far from where precipitation 
and resulting runoff occur. Second, that the precipitation occurs 
almost exclusively during the months of November and April with the 
other months of the year being virtually dry. Third, the precipitation 
and runoff patterns from year to year are highly variable with many 
years below normal or dry and other years above normal or wet.
    These three facts have mandated that California develop storage and 
conveyance systems that capture water when and where it occurs and 
transport it when and where it is needed. It is a system that has 
allowed California to grow and to prosper, but in recent years has 
become increasingly unreliable, both because investment in the 
infrastructure system has slowed considerably and because of 
reallocation of water away from homes, farms and businesses back to the 
environment in response to the Endangered Species Act and other 
environmental laws.
    These two very powerful forces have been directed primarily at 
those projects that have exported water from one hydrologic basin to 
another, either in the Bay-Delta, the Owens Valley or from the Colorado 
River. Local supplies have become increasingly important to the state, 
as imported supplies have declined in reliability and in absolute 
yield. Increasingly, local water agencies have developed and extended 
local supplies through progressive conjunctive use of surface and 
groundwater, water conservation, water reclamation, desalting and other 
innovative means. This initiative on the part of local agencies has 
allowed them to meet most of the state's water needs despite 
reallocation of water supplies and despite dwindling investment in 
infrastructure at the state and Federal level. However, without some 
changes in policy and plumbing, these local initiatives will yield 
diminishing returns as water demand through conservation and 
reclamation hardens and as opportunities become fewer and more 
expensive to pursue.
LOSS OF RELIABILITY AND IMPORTED WATER SUPPLIES:
    One of the lessons of the last several decades is that for those 
areas of the state, including southern California where we are today, 
that depend upon imported water supplies, those supplies are not a 
panacea. For Southern California that began when Los Angeles Department 
of Water and Power lost much of its supply from the Owens Valley 
through the Mono Lake decision. Following that, imported supplies from 
the Bay-Delta through the State Water Project became less plentiful and 
less reliable. By way of example, two of the last four years have been 
above normal runoff, while two have been dry or below normal. In that 
four-year period, the State Water Project has never delivered 100% of 
Southern California's contract supply and it has in one year delivered 
as little as 39% of the contract supply.
    Another threat to water reliability comes from the prospect of 
losing drinking water supplies due to contaminants like perchlorate. In 
California, perchlorate has been detected in 75 of the 832 (9%) public 
water systems that have sampled for it. Contaminated drinking water 
wells have been found in eastern Sacramento County (up to 260 ppb in 
raw water) near Aerojet General Corporation's facility, and in Los 
Angeles County (up to 159 ppb) at an Aerojet facility (Azusa), the 
Whittaker-Bermite site (Santa Clarita), and the Jet Propulsion 
Laboratory (Pasadena), among others. Additionally, perchlorate has been 
detected in monitoring wells in Lincoln, Tracy, San Jose, and 
Hollister, as well as at Edwards Air Force Base and El Toro Marine 
Corps Air Station in Southern California. The Las Vegas Wash, which is 
a large source of perchlorate contamination, empties into Lake Mead. 
This has caused low but significant levels of perchlorate contamination 
(5-9 ppb) in the Colorado River, which has in turn found its way into 
southern California aquifers through a variety of routes.
    Finally, the Colorado River supply that California has been using 
has now been reduced back to California's entitlement of 4.4 million 
acre feet annually. While intense negotiations and efforts have been 
underway to allocate that reduced supply, no agreement has been reached 
and the threat of continued conflict and resulting economic hardship 
remains. Furthermore, the entire state has a stake in seeing the 
Colorado River issues settled because the state's water system and 
economy are inextricably bound together. What affects one region of the 
state, particularly a region as important as Southern California, has 
ripple affects throughout the state.
LESSONS LEARNED:
    While differences of opinion remain about how to best proceed on 
some of these difficult issues, one conclusion has been reached by 
political leaders across the political spectrum and water managers 
throughout the state. That is, the current unreliability and 
uncertainty on the Colorado River and in the Bay-Delta are 
unacceptable. An economy and an environment as important as 
California's cannot be held hostage to indecision and inaction.
    The Subcommittee has asked how California can meet its needs 
regardless of a quick resolution of the quantification settlement 
agreement. My response is that settlement of the QSA is essential to 
the long-term stability of California's water supply and the values 
that rely upon that supply. If the current proposal for a QSA is not 
acceptable then another one needs to be developed and consensus 
reached. For the sake of our environment and our economy, for the sake 
of our relationship with other Colorado River Basin states, for the 
sake of progress on important water issues around the state, a 
resolution must be found to the allocation of water among the Colorado 
River agencies in California. ACWA applauds the hard work and 
leadership displayed by all of those that have worked so hard up until 
now to reach an agreement. We acknowledge the difficulty in resolving 
the many issues surrounding the QSA, particularly with the added 
complication of Salton Sea preservation. Nevertheless, the state cannot 
afford the luxury of impasse and we urge the parties to continue 
working until some agreement can be reached.
    California's oscillation between periods of drought and flood make 
an expansion of our current water storage capacity a necessity. And 
whether through pumping groundwater, conjunctive use, surface water or 
even desalination, the water supply has to be impounded in storage to 
give us a starting point. All of the tools for developing storage are 
needed if California is to have a reliable water supply, meet the needs 
of our 35 million residents, plus the 15 million more people projected 
to move here before 2020.
    In Orange County and the Inland Empire, groundwater storage and 
conjunctive use programs are moving Southern California closer to 
possessing its own independent regional water supply. These local 
agencies are today running their groundwater programs from the point of 
recharge to removing salt at the bottom of the basin. This is extremely 
significant, since successful groundwater recharge in the Inland Empire 
and elsewhere could enable that community to use no imported water from 
the Delta for up to three years during a drought. To ``drought proof'' 
any community holds obvious promise for water reliability in southern 
California, and for all communities dependent on the Bay-Delta.
    In addition to these programs, new sources of developing water are 
essential. Significant advances in membrane and other technologies have 
dramatically reduced the costs associated with seawater desalination. 
Seawater desalination treatment cost was approximately $2,000 per acre 
foot in 1990. In 2003, this cost has drastically decreased, with 
treatment costs down around $800 per acre foot. On a per acre foot 
basis, the cost of seawater desalination is now within striking 
distance of the cost of water imported to the southern California 
coastal region from northern California and the Colorado River.
    Five seawater desalination plants with a combined capacity of 180 
million gallons per day of high quality drinking water have been 
proposed by water agencies in San Diego, Orange, and Los Angeles 
Counties. These and other plants currently in the planning stage of 
development could produce over 200 million gallons of water within ten 
years.
    A continued Federal leadership role in funding these programs will 
ensure their success and the realization of the potential benefits to 
the Bay-Delta and the rest of the state.
CALFED BAY-DELTA PROGRAM:
    In addition to Colorado River, California must resolve the 
conflicts among the competing needs in the Bay-Delta system. The 
conflicts among ecosystem needs (principally fisheries), in Delta users 
and export users must be resolved. The Bay-Delta system is the state's 
most important watershed both economically and environmentally.
    The CALFED Program was established to resolve those conflicts and 
has developed a plan that will meet that test. Now, that plan must be 
fully implemented and in a balanced manner. However, for the 
implementation to continue, the Federal Government must become a full 
partner in decision-making and financing implementation. That is why 
ACWA applauds the leadership of this Subcommittee and particularly its 
Chairman, Mr. Calvert, in passing legislation last year out of this 
Subcommittee and the full Resources Committee to authorize CALFED at 
the Federal level. We thank the Chairman for holding a series of field 
hearings to gather additional information in preparation for 
introducing new legislation this year and we pledge ACWA's support and 
assistance in crafting that legislation and securing its passage. We 
think it is particularly important that the Subcommittee has called as 
witnesses, representatives of the participating Federal agencies to 
determine what, if any, additional authorities those Federal agencies 
need in order to become full partners in the CALFED program 
implementation.
    This is important because if the CALFED program can be fully 
implemented we believe many of the problems in the Bay-Delta can be 
solved and the opportunities for improvements in water supply 
reliability, water quality and ecosystem restoration are huge in their 
potential.
    Program implementation will also provide a number of new 
opportunities for progress in innovative, technologically advanced 
solutions to further utilization of local supplies and stretching 
imported supplies. The prospects for more intensive conjunctive use of 
surface and groundwater in Southern California and elsewhere, the 
opportunities for reclaiming wastewater, desalting sea and brackish 
water, water transfers and water conservation will all be greatly 
improved through the Bay-Delta program. One of the cornerstones of the 
program has become development of regional plans to maximize water 
management in every area of the state that uses water from the Bay-
Delta system.
SUPPORT CALFED AUTHORIZATION LEGISLATION:
    Let me repeat and repledge our support for legislation to authorize 
CALFED at the Federal level. ACWA has worked since the creation of 
CALFED to authorize the program at the state and Federal levels. The 
state authorization is in hand, Federal authorization is needed. We 
have worked and will continue to work with Chairman Calvert and other 
members of the California delegation to craft and support such 
legislation. As the Chairman and his colleagues begin the work of 
writing that legislation, ACWA has several points that it wishes to 
have considered. First, I have attached to this testimony principles 
adopted by the ACWA Federal Affairs Committee and Board of Directors, 
which guides the association in evaluating any CALFED legislation that 
is developed. We urge the Subcommittee to consider these principles as 
it writes CALFED legislation. Beyond that, we believe the following 
elements should be included in any legislation authorizing CALFED.
    1. LThe authorities for all involved Federal agencies need to be 
clear and unambiguous, not only in authorizing Federal participation, 
but in directing agencies to work collaboratively with each other and 
with the State of California in implementing the CALFED program.
    2. LA crosscut budget should be developed and utilized annually to 
properly account for expenditures for each agency on the various CALFED 
programs.
    3. LProtection of areas-of-origin and Delta water users should be 
clearly spelled out in the legislation as well as protection for 
private property owners.
    4. LPromote a climate conducive to voluntary water transfers and 
improved conveyance mechanisms for moving water through the Delta.
    5. LRegulatory coordination and streamlining for approval of all 
permits, licenses and other requirements for the building and 
implementation of water projects.
    The CALFED Program and all it hopes to accomplish for California 
will be at risk without Congressional support, with grave consequences 
for wildlife, agriculture, for our cities and for public safety. Six 
years of planning and the threat of a future defined by protracted 
water wars demand your action now.
    Much has been written about California's energy crisis, and how 
stymied efforts to expand the state's water supply portend a crisis of 
even greater proportions for California water. ACWA agrees 
wholeheartedly with that analogy, and has worked hard to bring that 
message to Congress. The House Resources Committee can begin the work 
to prevent a crisis, or end up responding to it two or three years down 
the road. We believe a balanced CALFED Program is the solution. We urge 
you to work on behalf of assuring its passage, and ACWA is committed to 
assisting in that effort.
                Association of California Water Agencies
            Principles for Federal Legislation to Authorize 
                      CALFED Plan Implementation:
                                May 2003
Authorization
    1. LThe legislation must assure that commitments made in the 
framework agreement are kept.
    2. LThe legislation must result in ongoing balance among the 
ecosystem, water quality and water supply elements of the program.
    3. LThe legislation must provide funding for and otherwise assure a 
functional Environmental Water Account (EWA) that provides ESA 
protections such that there will be no additional involuntary, 
uncompensated taking of water from water users.
    4. LThe legislation should be consistent with the Federal Record of 
Decision (ROD).
    5. LThe authorizations provided by this legislation should not 
sunset.
Funding
    1. LAny local cost share identified in the legislation must be tied 
directly to and commensurate with benefits received.
    2. LAny local contributions must be tied directly to ongoing, 
adequate state and Federal funding.
    3. LThe legislation should, to the maximum extent possible, assure 
appropriations adequate to meet the milestones identified in the ROD.
    4. LThere should be provision in the legislation for local cost 
sharing to be made by cash or in-kind contribution.
Governance
    1. LThe legislation must provide for regulatory decisions to be 
peer reviewed by the Bay-Delta program science panel.
    2. LImplementation of regulatory decisions must be through the Bay-
Delta program and must be consistent with the principles presented in 
the ROD.
    3. LThe governance structure must include a strong executive or 
executives who have enough authority to assure cooperative, coordinated 
actions by the participating state and Federal agencies, and to prevent 
unilateral actions by those agencies.
    4. LThe legislation must make the Bay-Delta program governing body 
responsible for ensuring balanced implementation of the program.
    5. LThe legislation must make the Bay-Delta governing body 
responsible for implementation of the integrated science program.
    6. LThe legislation must not establish an independent ecosystem 
program governing body.
    7. LThe legislation should not seek to amend CVPIA but must fully 
integrate implementation of the CVPIA anadromous fish doubling plan 
into the Bay-Delta program.
                                 ______
                                 
    Mr. Calvert. Thank you, gentleman.
    Julie Puentes of the Orange County Business Council.

 STATEMENT OF JULIE PUENTES, EXECUTIVE VICE PRESIDENT, PUBLIC 
            AFFAIRS, ORANGE COUNTY BUSINESS COUNCIL

    Ms. Puentes. Good afternoon. Thank you very much, Mr. 
Chairman, for having me here today. And thank you especially 
for your leadership. I'd like to echo what was just said about 
your leadership and the energy that you and the other 
Subcommittee members are devoting to these very important 
issues today.
    Well, as you would expect, representing a business 
organization, I'm here to kind of plead the case of business 
and industry for resolution of California's water challenges. 
And I'd like to tell you just a little bit about our 
organization, why water is especially critical to the economy 
such as we have in Orange County. And certainly some of what I 
have to say about the Orange County economy applies in other 
parts of the state as well.
    The Orange County Business Council is the leading business 
organization in Orange County. We're a countywide economic 
development organization dedicated to economic prosperity 
across the county. So we address issues that have an impact on 
our businesses' ability to remain viable in Orange County and 
in California.
    Infrastructure issues are a big part of our public policy 
agenda. Water's a big part of our infrastructure agenda.
    We are, as I mentioned, concerned primarily with economic 
prosperity and, obviously, we can't maintain economic 
prosperity without clean and plentiful water supplies. Very 
simply, no water, no business.
    What really concerns us now about the business climate in 
California and applies, of course, to Orange County is that 
businesses are already finding reasons not to locate or stay or 
expand in California. We don't want to see them have one more 
reason, that is, the lack of available water supplies, for 
making those decisions. We're facing a time when nearly one-
fifth of California businesses are already choosing to expand 
out of the state rather than within the state. And, again, we 
don't want to give them one more reason to make that decision.
    Orange County's diverse economy includes a range of 
businesses: High-tech, biotech, pharmaceutical, manufacturing, 
tourism, and professional services. And we have an economic 
input of about 135 billion dollars. The county is one of the 
highest job growth areas in the state and nation, and our job 
growth is projected at 20 percent over the next 20 years. So 
you can see we have a stake in making sure that we have the 
infrastructure required to sustain that economic growth.
    18.4 percent of Orange County's jobs are in high-tech 
industry, and that ranks the County sixth in the U.S. In terms 
of high-tech jobs. As you well know, communities compete for 
high-tech industries because high-tech jobs pay higher than the 
average wage, and the multiplier effects for the local economy 
easily outpace those of other industries. But high-tech 
industries often rely upon large amounts of clean water for 
their operations. A day without water can be economically 
devastating. Let me talk for just a moment about what that 
really means.
    The immediate impact, of course, is a halt in production 
for some industries. But the ensuing impact is up to 2 weeks to 
clean and reset equipment to standard, eliminate bacteria from 
lines, sanitize, and retest. And when you have companies that 
are producing at the rate of a million dollars worth of product 
each day, you can see the impact of a day without water upon a 
high-tech region, upon the companies, upon the water lines, 
upon the employees, and upon the region.
    All of this is why in conjunction with ACWA, MWD, and 
others, Orange County businesses are participating in 
conservation programs and supporting our local water agencies 
in pursuing innovative solutions such as our Groundwater 
Replenishment System that you may have heard about and 
desalination.
    Specific to today's hearing, we'd like to encourage your 
support of the following actions: First, reauthorization of the 
CalFed program and the Federal appropriation that is necessary 
for program implementation. We do believe that CalFed 
represents our best hope to insure that the Bay-Delta continues 
to provide a reliable clean supply of water for all of 
California. And Federal investments in that project, therefore, 
must be increased.
    The State did pass Prop 13 in March of 2000 that provided 
nearly 2 billion dollars, but we've not seen any state or 
Federal money other than that appropriated in the last couple 
years. And only with new Federal investment in this priority 
area can the Delta be restored to deliver on its dual purpose 
of transporting water and maintaining a healthy ecosystem.
    As was just mentioned, storage is a very big concern to us. 
Burgess made you see that the last water bill failed to include 
any meaningful storage provisions. We're hopeful that 
legislation underway under review this year may get to that. 
But we believe that it's very important, and we'd like to see 
more specifics concerning storage as part of the CalFed 
process.
    Third, Federal guidance in developing a plan for California 
to live within its allotted 4.4 million acre-feet of water, the 
Colorado River, I think we've kind of beat that one to death 
today, so I'll move on.
    Lastly, voluntary water transfers, we support them. We do 
think it's an important--that they're an important component of 
Southern California's array of tools for enhancing and 
improving water supplies. But we have not had a chance to read 
the MWD's most recent proposal on the transfer. Traditionally, 
our organization supports user fees in concept, but we do not 
yet have an official position on that plan.
    In conclusion, I'd like to thank you, Congressman, once 
again for holding this hearing, for fostering an atmosphere of 
cooperation among all of us who are working together to promote 
clean adequate water supplies for our homes, businesses, and 
communities. We pledge our continuing support in this effort. 
Your leadership is essential as we move forward, and we thank 
you very much for the opportunity to address you today.
    [The prepared statement of Ms. Puentes follows:]

         Statement of Julie Puentes, Executive Vice President, 
             Public Affairs, Orange County Business Council

    Good morning. I'm Julie Puentes, Executive Vice President Public 
Affairs for the Orange County Business Council.
    Thank you, Chairman Calvert, for inviting our organization to 
address the Subcommittee today. I'd like to express our support for 
your tireless efforts on California water issues, including the all-
important CALFED program and Colorado River issues.
    The Orange County Business Council is the leading business 
organization in Orange County. We are a private-sector alliance of 
companies that represents hundreds of local enterprises from small 
shops to giant, multi-national companies. The Business Council provides 
the forum for businesses to join together--often in conjunction with 
government and educational institutions--to invest in the growth and 
prosperity of the fifth largest county in America.
    The Business Council's interest in water issues is inextricably 
related to its primary mission: economic prosperity. Our region cannot 
maintain economic prosperity without clean and plentiful water 
supplies: No water means no business. If there is an insufficient or 
unreliable supply, business will have one more reason not to locate or 
expand here. At a time when nearly one-fifth of California businesses 
are already planning to expand and/or relocate out of the state, we 
cannot give them one more reason. Restoring the state to its proper 
place in the global economy requires that we ensure a clean and 
reliable supply of water for our homes and businesses.
    Orange County's diverse economy includes high-tech, biotech 
pharmaceutical, manufacturing, tourism, and professional services with 
an economic output of about $135 billion. The county is one of the 
highest job growth areas in the state and nation, with job growth 
projected at 20 percent over the next 20 years.
    18.4 percent of Orange County's jobs are in high technology, 
ranking the county 6th in the U.S. in terms of high tech jobs. 
Communities compete for high tech industry because high tech positions 
pay higher salaries than average, and the multiplier effects for the 
local and state economy easily outpace those of other industries. But 
high tech industries often rely upon large amounts of clean water for 
their operations. A day without water can be economically devastating. 
The immediate impact is a halt in production. The ensuing impact is up 
to two weeks to clean and reset equipment to standard, eliminate 
bacteria from lines, sanitize, and re-test. At the rate of $1 million 
per day of lost production, you can see the impact of a day without 
water upon a high-tech region.
    That's why, in conjunction with the Metropolitan Water District and 
its member agencies, Orange County businesses are participating in 
conservation programs, and we are supporting our water agencies in 
pursuing innovative solutions such as the Groundwater Replenishment 
System and desalination. Specific to today's hearing, the Orange County 
Business Council is supporting the following actions by Congress and 
the California legislature:
     LRe-authorization of the CALFED program and the Federal 
appropriation necessary for program implementation.
    CALFED represents our best hope to insure that the California Bay-
Delta continues to provide a reliable, clean water supply for all of 
California. Therefore, Federal investments in the Delta must be 
increased. While the State of California passed Proposition 13 in March 
2000 providing nearly $2 billion, no new Federal money was allocated in 
the last session of Congress, and state legislation providing for 
governance of CALFED failed in the final days of the 1999-2000 session. 
Only with new Federal investment in this priority area can the Delta be 
restored to deliver on its dual purpose of transporting water while 
maintaining a healthy ecosystem.
     LStorage.
    Any solutions within the CALFED process must include storage and 
conveyance elements. While the Phase II Record of Decision and EIR do 
include a call for surface storage, it lacks any specifics. This is a 
crucial element to any fair, balanced plan.
     LFederal guidance in developing a plan to stay within our 
allotted 4.4 million acre-feet a year of Colorado River water.
    We believe local resource programs can help the state cut its 
dependence on the Colorado River and Northern California water. A 
competitive, businesslike process for the allocation of public bond 
funds is necessary to ensure that the funds are used as prudently as 
possible.
     LVoluntary water transfers.
    Voluntary water transfers comprise an important component of 
Southern California's array of water supplies but water must not be 
dependent on public subsidies. The Business Council has not had a 
chance to read Metropolitan Water District's most recent proposal on 
the Colorado River transfer deal but has traditionally supported user 
fees in concept.
    In conclusion, Chairman Calvert, the Orange County Business Council 
would like to thank you for holding this hearing and for fostering an 
atmosphere of cooperation among those of us working to promote clean 
and adequate water supplies for our homes, businesses and communities. 
Your leadership is essential as we strive to address water supply 
challenges that as best as possible meet the legitimate needs of the 
people of this state.
                                 ______
                                 
    Mr. Calvert. Thank you for your testimony.
    We're also joined at the panel by Jasper Hempel for the--
he's Chairman of the Western Growers, and anything--if you have 
questions regarding the agriculture, he's here to answer those 
questions.
    [The prepared statement of Mr. Camp follows:]

           Statement of Edwin Camp, Chairman, Western Growers

    Good morning, Mr. Chairman and members of the Subcommittee on Water 
and Power.
    My name is Edwin Camp. I am President of D.M. Camp and Sons, a 
diversified farming operation in Bakersfield, California. We grow 
potatoes, table grapes, processing tomatoes and a variety of other 
crops. Our farming operation cannot survive without an adequate, 
reliable and quality water supply.
    I serve on the Board of Directors of the Arvin-Edison Water Storage 
District. Our district is innovative in so many ways and we have 
implemented new water conservation, water banking and water transfer 
programs. We have to continue to use new technology as it becomes 
available to be even more water efficient.
    I also have the privilege of serving as the Chairman of the Board 
of Western Growers, a California and Arizona agricultural trade 
association that represents 3500 growers, packers, shippers and 
processors of fresh fruits, vegetables and nuts. Every one of our 
members is dependent on a reliable water supply.
    Thank you for coming to California and holding these hearings on 
the most pressing water and water related issues. I also want to thank 
you for your past and continuing leadership on California and western 
water issues. You have been tireless on behalf of California and its 
water needs and Western Growers and I sincerely appreciate it.
    The CALFED program that you have encouraged and your efforts to 
reauthorize CALFED are exemplary. As I explain later, without the 
CALFED efforts we would be a lot further away from solving current 
water problems than we are today.
    My goal this morning is to explain to you some of the very critical 
water issues that our members face and to suggest to you how your 
Committee can assist the California and Arizona fresh produce industry 
in developing a comprehensive water solution.
    Annually, Western Growers surveys its members to identify important 
issues and to prioritize legislative and regulatory initiatives our 
growers and shippers wish to see pursued by the association.
    Water has always ranked as the number one issue--until this year 
when workers compensation costs and reform took the top spot. But, I 
guess you don't want to hear about that although we would love for 
anyone to find a solution to this very vexing and very expensive 
problem.
    This year, water supply and water quality were ranked number two by 
our members. Because these issues are so important to our members and 
because we are a geographically diverse organization, we created a 
Water Task Force to examine each water policy or issue that may arise. 
Our geographical diversity is of great benefit to Western Growers, but 
it can also create tension on water issues because different regions of 
California and Arizona may have water policy differences or 
disagreements with other parts of each state.
    The Water Task Force is designed, therefore, to provide a forum to 
drive water policy discussion and consensus among our various growing 
regions. We are also unique in that we include water district 
representatives on our Task Force. This has allowed for greater 
dialogue and a better understanding of water policy because everyone's 
views--grower and water district's alike--are heard and generally 
incorporated into a Western Growers' water policy consensus.
    Our task force has identified approximately 30 important to Western 
Growers local, regional, state and Federal water issues. I have 
narrowed that list down to10 that are relevant to your Committee 
hearing today, but for time reasons, I will only speak to the first 
five.
    Western Growers' top 10 water policy issues include:
     LAdditional water storage and supply;
     LPreservation of water and property rights;
     LComprehensive and workable water transfers between 
willing buyers and sellers while preserving water rights;
     LConveyance system enhancement and modification;
     LReauthorize CALFED;
     LRegional implementation of water policy strategies;
     LResolve conflict between environmental, urban and 
agricultural water uses;
     LConservation techniques and new technical strategies such 
as desalination;
     LStudy and review economic and third party impacts of ag 
land retirement;
     LWater quality issues such as irrigation return flow 
waivers.
    Mr. Chairman, I know that you have heard these same policy concerns 
from the many other farm groups and water interests that have 
previously testified before your Subcommittee.
    However, I believe our concerns about water bear repeating again 
and again until state legislative and/or congressional action is taken 
to resolve these critically important matters. In fact, Western Growers 
strongly urges you and your Committee to aggressively address these 
issues in future policy debates and incorporate solutions to these 
problems in future legislation that you may introduce.
    Additional water storage and supply: Western Growers is sad and 
surprised that some people in California just don't get it! If you grow 
California's population by 50% and environmental and urban water use 
greatly expands, we simply must have more water! Yet, we have been 
hamstrung in our efforts to obtain additional water supply and storage 
due to political and environmental opposition. This attitude defies 
logic, because we cannot continue to provide for expanded environmental 
and urban water use without either expanding storage facilities or by 
taking water from farmers.
    It is very shortsighted, not to say illegal, to just take water 
from farmers. Why does California want to become dependent on food and 
fiber from other states or countries? Why do we want food from other 
countries that don't provide the same wages and working conditions or 
have the same stringent environmental regulations that California 
farmers are required to adhere to? This will occur if farmers continue 
to be forced out of business because they cannot obtain a reliable 
water supply.
    Moreover, farms are very important to the environment. Farms 
provide beautiful and scenic open space and provide habitat to an 
extremely large number of species, endangered and otherwise. To allow 
farms to be paved over for lack of water will only hasten California's 
urbanization that we are all trying to avoid.
    In the mid-1990's, Western Growers and other farm groups backed 
California initiatives that were largely ecosystem and habitat 
rehabilitation measures. We agreed to support these initiatives on the 
basis that once the environmental issues were dealt with, water storage 
and additional water supply would follow. We were misled.
    We must complete the storage projects that are on either on the 
drafting boards or underway. Enlargement of Shasta Lake, building the 
Sites Reservoir, enlarging Los Vaqueros and providing for additional 
groundwater and Delta storage are all critical projects that must be 
completed.
    That is why reauthorization of CALFED is so critical. CALFED has 
allowed for planning and feasibility studies to be conducted on these 
projects. But, we must get beyond planning and feasibility; we must 
build the projects and that is what has been lacking to date.
    Preservation of water and property rights: Water and property 
rights are fundamental rights guaranteed by the U.S. Constitution. 
There are those who will say that the solution to California's water 
problem is to just take water from farmers. This view is ill founded 
and illegal.
    Recognizing and encouraging this fundamental right will reap 
enormous dividends in the future, I believe. If farmers and other water 
rights holders are assured of the vestment of those rights, they are 
far more likely to agree to structured water transfers, water 
conservation and water use efficiency.
    Western Growers strongly believes that protecting water rights will 
provide a solid foundation for sound water policy and is the 
fundamental policy position from which all water policy follows.
    Comprehensive and workable water transfers between willing buyers 
and sellers while preserving water rights: Water transfers for water 
banking, inter regional water transfers for short term farming needs, 
water transfers for environmental and water quality enhancement and 
water transfers to assist some ailing farm sectors have proven to be 
enormously beneficial and successful.
    Western Growers strongly believes that additional short-term water 
transfers must be encouraged. We believe some water supply problems can 
be avoided if additional facilities and new conveyance systems are 
built, water rights are preserved and cooperative government agencies 
facilitate water sales and transfers between willing sellers and 
willing buyers.
    Conveyance system enhancement and modification: Western Growers 
doesn't have the answer to this problem, but we know that without 
enhancing the system, water supply and water transfers cannot be 
maximized.
    The Western Growers Water Task Force encourages continued efforts 
to increase Banks pumping, maximize the Tracy Pumping Plant capacity 
and other measures to better move water through the system.
    Reauthorize CALFED: Again, I want to thank you, Mr. Chairman for 
your leadership on this critically important matter. Without CALFED, we 
would not see the significant progress that has been made on so many 
water issues.
    Surface storage planning and feasibility studies, groundwater 
projects, water transfers, Bay-Delta Science Consortium water 
conservation and water quality projects have all been CALFED driven and 
Western Growers greatly appreciates these accomplishments.
    Western Growers is committed to strongly supporting CALFED 
reauthorization. Obviously, we are looking forward to your future 
legislation so we can examine the details.
    The Western Growers Water Task Force is concerned about land 
fallowing as an element of CALFED and the third party and local 
economic impact such a policy may have. But, until we see the new 
CALFED reauthorization language, we will reserve our comments.
    In closing, Mr. Chairman, let me again give you my thanks for 
inviting Western Growers to participate in this hearing. We look 
forward to jointly solving the many water issues we have ahead. I will 
be happy to answer any questions you may have.
                                 ______
                                 
    Mr. Calvert. With that, I'll start some questions for this 
panel. First, Ms. Burgess, obviously I agree with you. 
Unfortunately for the rest of California, or Southern 
California particularly, and which we found in Northern 
California, the perchlorate issue is everywhere and not just 
California. So certainly I, I know Grace, we're both very 
committed toward finding solutions, not just in the San Gabriel 
Valley but throughout the state, and really in finding--the 
easiest water we can find is the water in our own backyard. We 
just have to go clean it up. That's going to take money. And 
certainly I believe there's a Federal role to play here. And it 
certainly is leveraging local dollars and state dollars into 
fixing this problem. So you certainly have my support on that.
    And, certainly, from the testimony that Ms. Spivy-Weber, I 
agree with everything you said. Any amount of water that we can 
additional yield, we can pick up, either from conservation, 
reclamation, conjunctive use, groundwater storage, surface 
storage, I'm for it all, because it's going to take every bit 
of it to meet the future demand.
    Mr. Hall, I have a couple of questions. You mentioned the 
testimony up in Elk Hill. We have a gentleman, by the way, from 
the Bay Institute--I don't know if you read his testimony--and 
it was more interesting than the Q and A that took place.
    Mr. Hall. My understanding is you guys gave him a hard 
time.
    Mr. Calvert. Well, it was easy to do.
    I'll explain. He made the statement--and, as you know, I 
was in Congress originally when we came to an agreement, all of 
us, Duncan, myself, it was unanimous on both the Democratic and 
Republican side to come together on the issue of CalFed. And 
the deal was that we're all going to get well together. What 
that means is that environmental community was going to win. We 
had some environmental mitigation that had to take place, and 
we understood that, that that had to happen. The urban 
community would get well in this. The agricultural community 
would get well in this. And especially the folks in the Central 
Valley that had their allocations cut back, as you well know, 
that we would get there.
    Well, Mr.--our friend made the comment that there was no 
deal. He said there was never a deal, that the fact that now 
that they have the environmental mitigation, the amount of 
money that we front-loaded into the CalFed process, that he led 
the impression that he is going to fight all the water storage 
that we have in the record of decision, including Sites 
reservoir, the expansion of Shasta, the upper San Joaquin, and 
Las Vaqueros.
    So I want to give you the opportunity to comment about 
that. Because, obviously, I have got--ultimately as a salesman, 
I've got to go back and sell my members on the fact that we've 
got to redo CalFed and make sure that at the end of the process 
that there's water that we can additionally yield from CalFed, 
that we fix the environmental problems that admittedly that 
have been there, but at the end of the day we get water out of 
this deal.
    So what is your comment about those things?
    Mr. Hall. With all due respect to my good friend Gary 
Butler, he's just plain wrong on the facts. That clearly wasn't 
the deal. It was a deal that was well understood by Governor 
Wilson, when he started this process, Governor Davis, when he 
took it over, and Interior Secretary Babbitt as the Secretary 
of Interior. And they didn't represent it as anything else. It 
was also, of course, embraced by the entire California 
delegation including both of our senators. And to suggest 
otherwise is revisionist, to be polite.
    And I'm not surprised particularly that the environmental 
community--elements of it, I should say, not all, elements of 
the environmental community have fought some aspects of the 
CalFed program from the time the planning began. They have been 
particularly strongly opposed to additional surface storage.
    Mr. Calvert. As you well remember, Mr. Hall, they all 
signed off on this agreement.
    Mr. Hall. Having said that, they signed a framework 
agreement in June of 2002 which very clearly--excuse me, June 
of 2000, which very clearly laid out surface storage as part of 
it. Now, they would say, I suppose, that they agreed to study 
it, not to support it.
    Here's where I am. I've been debating them on this point 
for a number of years. I had a full head of hair when we 
started this process. I've stopped debating them. The process 
is underway. CalFed is going to study projects and make a 
recommendation. I'm not going to argue with Gary about the 
merits of those projects and whether we should be studying 
them. I'm working to fund the studies. And then when CalFed 
makes a recommendation, I'm going to work to fund their 
recommendations.
    Mr. Calvert. Carrying this on, our friends in the city of 
San Francisco, as you well know, are going under a very 
ambitious project to rebuild hedge edging and the conveyance 
system in the city of San Francisco, which we certainly support 
them on. And I believe that system supports approximately 3 
million people in the Bay Area.
    They've asked to have a streamline of Federal agencies 
fast-track, if you may, of dealing with EPA and dealing with 
the Corps of Engineers and other Federal agencies which you 
mentioned in your testimony.
    As a matter of fact, Ms. Pelosi has introduced a bill in 
the process and has asked for help to streamline it. And I 
think we ought to do that. But at the same time--and I'd like 
to work with Ms. Napolitano on other things and our Committee 
to possibly do the same through the CalFed process. If, in 
fact, it's good for San Francisco, it's certainly good for the 
CalFed process, that we can have this government streamlining 
and bidding through these agencies and getting these permits 
where we can get these projects underway.
    Do you think that's a good idea?
    Mr. Hall. I do. San Francisco is another member of ours, 
and we support them in their efforts. But I cannot think of any 
projects that have been subject to more scrutiny than those 
studied by CalFed. So I think there aren't, probably, any 
better candidates for streamlining a regulatory review than 
those in the CalFed process.
    Mr. Calvert. And one last comment to Ms. Puentes. 
Certainly, I can't think of anything really more important to 
the economy than water, really, water and air. If you don't 
have those two basic elements, you're dead. And that just 
doesn't apply to Orange County, obviously. That applies to the 
entire State of California, and certainly to San Diego. Orange 
County is blessed with groundwater and blessed with getting a 
significant amount of its water supply without having to import 
water, unlike San Diego, which is totally, almost totally 
dependable on imported water. So it's even more important in 
this region.
    And, with that, I recognize Ms. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair.
    Steve, does CalFed mean to address the beneficiary pays 
principal, or how would you think that we could insert or 
resolve it through CalFed?
    Mr. Hall. Did you say the beneficiary pays principal?
    Mr. Calvert. Yes.
    Mr. Hall. Yes, I think it does need to, and it has 
essentially said that it will when it issued its record of 
decision. But in order to identify who should pay, you have to 
identify who the real beneficiaries are, and that is best done 
project by project.
    So when a project comes to Congress to be authorized, I 
fully expect--because we're not--through this CalFed 
legislation, we're not going to authorize Interior projects. 
Those would have to be authorized separately. And it's those 
that I think people are really concerned about that the true 
beneficiaries pay. So when they come back to Congress, my full 
expectation is that CalFed will bring with its package a 
recommendation as to how the costs of the project should be 
allocated, and we support that.
    Mrs. Napolitano. OK. And the new question would be, how 
would the pumping increases at banks impact Southern 
California's water supply?
    Mr. Hall. The pumping increases? Well, I cannot think of 
any single element of CalFed that would do more as quick--would 
provide more water more quickly than increasing banks to 8500. 
Obviously it has to be done while protecting the environment 
and protecting the water quality. And--
    Mrs. Napolitano. Well, given that those would be addressed.
    Mr. Hall. Yeah. It's got more bang for the buck than any 
other element of CalFed.
    Mrs. Napolitano. And the second would be?
    Mr. Hall. I think in terms of just pure yield, it's 
groundwater storage. Just coincidentally, they fit together.
    Mrs. Napolitano. And the third, going down the list?
    Mr. Hall. I think what we would call the soft path 
approaches, conservation, reclamation, desalting, the 
combination of those things probably do more. Then everybody 
talks about surface storage in relationship to yield. It's very 
much needed, but it's not a yield issue. It's to help the 
system operate so that we can protect the environment and pump 
at higher levels and fill groundwater basins and manage the 
system more effectively for human uses. It's a system 
flexibility tool; it's not for yield, per se.
    Mrs. Napolitano. It costs more and takes longer to set up, 
I think.
    Mr. Hall. Actually, it's very competitive with most of the 
other sources. It's more expensive than groundwater banking. 
But once you get past groundwater banking and improve 
conveyance of the Delta, all of the items are in the same 
ballpark in terms of the cost.
    Mrs. Napolitano. Then what Delta water quality protections 
would you support, and what stops the north to south water 
transfers from happening?
    Mr. Hall. What was the first part of your question? I'm 
sorry.
    Mrs. Napolitano. What Delta water quality protections would 
ACWA support?
    Mr. Hall. Well, obviously, those that are currently in law 
and those that are necessary to protect the in-Delta water 
users and the environment. And those are fairly well spelled 
out in the record of decision. They're not precise in terms of 
a numeric standard, but they are pretty accurate in terms of 
the beneficial uses that they have to protect, and we support 
those.
    In terms of--I'm sorry, I lost the last part of your 
question.
    Mrs. Napolitano. What stops north to south water transfers 
from happening?
    Mr. Hall. The biggest single obstacle is the lack of 
effective conveyance across the Delta. If we get to 8500, you 
will see more water being able to move north to south. Won't 
necessarily see greater volumes of water moving north to south, 
but we will be able to do it more efficiently.
    Mrs. Napolitano. In visiting the Bay-Delta area and touring 
some of the areas and flying over the farmland and some of the 
pumping stations, we kind of get to realize that the role that 
water plays in our economy is great, and we need to help 
sustain that, of course. But I'm afraid some of the things that 
they're not facing right away, they're beginning to find 
perchlorate, they're beginning to find they exist in some 
areas, that they're going to end up having the same water 
quality problems and cleanup that we in Southern California 
face.
    And I'm not sure if any of the--because when I spoke to 
some of the ranchers and some of the water folks, I'm not sure 
that that's within their focus yet. And I think maybe we need 
to do a better job getting information to them as to what 
pesticides and insecticides are doing to the aquifers.
    Because we pump a lot of our water from the aquifers, and 
right now we do not have the quality of water we should have. 
And we have wells being closed for the last two decades because 
of the contaminated aquifers being drawn from and the wells 
themselves are contaminated.
    What would you think of--what's your answer to trying to 
work together on that?
    Mr. Hall. What I would say is, as you know, we work closely 
with your office and others on the perchlorate issue and other 
contamination issues, and we very much appreciate your 
leadership. Because we don't have enough water to go around as 
it is, we certainly can't afford to foul our nest in the way 
that we have done in the past. So we appreciate Chairman 
Hunter's lead of dealing with the Department of Defense on 
perchlorate issues, and your work on it as well.
    We want to see a standard set. We want to see those who are 
responsible to clean it up, whoever they are and whatever the 
contaminant is, so that our public drinking water supplies can 
be kept safe. And that's whether it's perchlorate, MGDE, or 
whatever else.
    With respect to agriculture, it's interesting you say that 
because, as my good friend Mr. Hempel knows quite well, the 
State of California is dealing very aggressively right now with 
the issue of ag runoff. And ACWA, because we represent both 
urban and agricultural water districts, we're right in the 
middle of that, and I'm actually pretty optimistic we're going 
to be able to come up with a regulatory scheme that meets the 
needs of the state in terms of protecting beneficial uses, but 
doing so without putting farmers out of business. I'm more 
confident today than I've been in some time that we can do 
that.
    Mrs. Napolitano. Thank you. Thank you, Mr. Chair.
    Mr. Calvert. Thank you.
    Mr. Hunter.
    Mr. Hunter. Thank you, Mr. Chairman. And thank you, again. 
And thank you to Grace for your very thorough hearing on these 
important issues.
    And let me just ask the members of this panel who have 
testified, it's my understanding that you all support the QSA, 
making this agreement?
    Mr. Hempel. We're neutral on it. Western Growers is neutral 
because it pits farmer against farmer.
    Mr. Hunter. OK. So Western Growers is neutral?
    Mr. Hempel. Yes.
    Mr. Hunter. Ms. Puentes?
    Ms. Puentes. Yes, we are. I mean, I can't say to the 
specifics of it in terms of the terms of the deal, but 
conceptually, I guess we are.
    Mr. Hunter. Making an agreement?
    Ms. Puentes. Yes.
    Mr. Hunter. Mr. Hall?
    Mr. Hall. We are supportive of having a QSA.
    Ms. Spivy-Weber. Ditto.
    Mr. Hunter. We're getting broader and broader on this 
strong commitment here. OK.
    Ms. Spivy-Weber?
    Ms. Spivy-Weber. Yes, we--the Mono Lake Committee certainly 
thinks that getting a QSA is going to be extremely important, 
but not enough for Southern California.
    Mr. Hunter. And, Ms. Burgess?
    Ms. Burgess. While we don't have an official position on 
it, I would encourage anything that would help the water supply 
issues that California faces.
    Mr. Hunter. Thank you.
    Mr. Chairman, I think you and Grace have gone over the very 
important issues with this panel. Once again, I just want to 
thank you and Ms. Napolitano for being down here, for making--
taking a lot of time out of your very busy schedules to be--to 
have this hearing on probably the most critical issue for 
California today. So thank you, and let's keep working this 
issue, and let's see if we can't get the holdout to sign up to 
this deal.
    That's a member of your organization, aren't they, Mr. 
Hall?
    Mr. Hall. They are.
    Mr. Hunter. Good. Then maybe you can lean on them.
    Thank you, Mr. Chairman, appreciate it.
    Mr. Calvert. I thank you. Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair. I didn't know if you 
wanted to add another round, because I have a few things.
    Mr. Calvert. You can go ahead and ask the questions, and 
I'll finish it up.
    Mrs. Napolitano. Thank you. Actually, it's to Ms. Burgess, 
if you have any idea, if you have funding mechanisms within 
your agency that are being used to implement new water supply 
technologies; i.e., water recycling, desal? I know they've come 
a long way. They've brought desal further down to a more 
manageable level. It used to be way uneven.
    Is there anything in the pending offer that we may--I hear 
there's--somebody that's come up with a new way to be able to 
deal with the perchlorate.
    Ms. Burgess. Yeah, we were the first to deal with the 
perchlorate to treat drinking water in our valley. And since 
that time, technology has changed and improved, and we have 
now--although, it's all the same on an exchange, there's two 
different methods now, and we're now testing both in our 
valley. And we have found that depending on the concentrations 
of perchlorate that you're dealing with, one method works more 
cost-effectively than the other. And we are running both and 
being viewed as, you know, a template or a pilot area for all 
of these. And so, yes, the competition is out there, and we 
welcome it. It's been really terrific.
    Mrs. Napolitano. Great. Well, I don't know whether my 
colleagues have heard this, but many of my other colleagues 
from other states always look to California for new and 
innovative methodology. They want us to go ahead and do the 
stumbling and pave the way, if you will, so that they don't 
have to reinvent the wheel. I just wish they'd put money behind 
it.
    Ms. Puentes, you testified that certainly in water supply, 
it's one of the key issues to a better business climate. Would 
you kind of touch upon what business is doing to help move this 
along?
    Ms. Puentes. Well, one of the three initiatives of the 
Business Council is our advocacy program. So one of the things 
that we're doing is speaking out on behalf of business for 
programs and strategies that we think will help improve water 
quality and water supply both locally and in Sacramento and 
here today, of course. So advocacy is one thing that we are 
doing.
    Also, we're very engaged in research that assesses Orange 
County's water supply. And then, third, just helping to make 
our members more aware of just how important water is and 
what's on the table. We'll be sponsoring a major event in 
September on that topic with the theme Innovative Solutions 
kind of headlining that event. So it's primarily in the 
advocacy area and also in helping to build consensus.
    I guess I would just add that we also work very closely 
with our water agencies locally and with other governmental 
officials on business climate issues, and this would, of 
course, be one, so fostering partnerships.
    Mrs. Napolitano. Thank you.
    One of the things I certainly want to impress upon not only 
this panel but the other panel is that we need to engage the 
people we serve, and that's your water constituents, not just 
the members. And the advocacy starts with the children because 
they carry that into the home. So you need to work together to 
be able to get the message of conservation and pollution and 
other areas that children will call attention to their parents 
about the misuse of water.
    So, Mr. Chair, I thank you. Thank you to the panel, and 
thank you.
    Mr. Calvert. Thank you.
    A little housekeeping here, Mr. Doug Sawyer is in the 
audience today, and he's Chairman of the San Diego Regional 
Chamber of Commerce. And he has a statement that we are going 
to submit for the record.
    Any objection?
    Mr. Calvert. Closing today's testimony, I want to thank all 
the witnesses that were here today and the panels before that 
gave their testimony in answering our questions. I think that 
as Maureen Stapleton said earlier, we are at a fork in the road 
in California. We have experienced some difficulties in our 
state. But I can't think of anything that can become more of a 
crisis point that we can't fix readily than water.
    We certainly have budget problems. We have transportation 
problems. We have education problems. We have no lack of 
problems.
    But water is something that we can't fix overnight. It 
takes time to build infrastructure. It takes time to get 
approvals. It takes time to deliver the water to wherever the 
people need it. So as we have these hearings, we try to educate 
people to the problem and try to educate people that we must 
come to an agreement, to a consensus. A good buddy of mine 
who's an attorney told me that consensus is highly overrated. 
But in this business, this is extremely important, because 
without that consensus, we will have a modern tragedy here in 
California that we can't afford to have.
    So, with that, I thank you, and I want to thank the staff 
for all the hard work they did. I thank Congressman Hunter for 
allowing us to come to his Congressional district. I'd like to 
thank Ms. Napolitano. And everybody have a great Fourth of 
July.
    [Whereupon, at 2:28 p.m., the Subcommittee was adjourned.]

    The following items were submitted for the record:
     LBilson, Steven William, Chairman and CEO, ReWater 
Systems, Inc., Letter submitted for the record
     LFinnegan, Joan C., President, Municipal Water 
District of Orange County, Letter submitted for the record
     LGuardino, Carl, President and CEO, Silicon Valley 
Manufacturing Group, Statement submitted for the record
     LMarciochi, Don, General Manager, Grassland Water 
District, Statement submitted for the record
     LPack, Anthony J., General Manager, Eastern 
Municipal Water District, Statement submitted for the record

[GRAPHIC] [TIFF OMITTED] 88057.045

[GRAPHIC] [TIFF OMITTED] 88057.046

[GRAPHIC] [TIFF OMITTED] 88057.047

[GRAPHIC] [TIFF OMITTED] 88057.048


            Statement of Carl Guardino, President and CEO, 
                   Silicon Valley Manufacturing Group

    Mr. Chairman and members of the Subcommittee:
    I want to thank you for the opportunity to provide this statement 
for the record on the importance of clean and reliable water supplies 
to the Silicon Valley business community. As President and CEO of the 
Silicon Valley Manufacturing Group, I am speaking for the interests of 
180 of Silicon Valley's most respected employers who provide nearly 
225,000 local jobs. Our organization was founded in 1977 by David 
Packard on the premise that local employers should be actively involved 
in working with government to find innovative solutions to issues like 
housing, transportation, permit streamlining, education and the 
environment. The Manufacturing Group is proud to have been a long-
standing supporter of the Bay-Delta CALFED program, whose goal is to 
provide reliable, high quality water while balancing the needs of 
agricultural, urban and environmental water requirements.
    The importance of clean, reliable and adequate water supplies to 
the Silicon Valley business community cannot be overstated. The 
Valley's high tech and pharmaceutical/biotech industries demand a 
consistent, high quality supply of water to support their 
manufacturing, research and development needs. Many of our high tech 
manufacturers have additional treatment processes in place to remove 
any traces of metals, organic materials and salts from incoming water 
supplies. Variable water quality can result in costly plant shut downs 
as treatment processes are recalibrated. Variations in the quality of 
water supplies from the state and federal projects can have serious 
financial consequences for companies vulnerable to water quality 
changes. Actual or potential interruptions of our imported water 
supplies resulting from the San Luis Reservoir low point problem, or 
failure of the state and federal pumping and conveyance facilities, 
could have devastating financial consequences. Uncertainty of supply 
discourages investment, increases operating costs, and over-reliance on 
our groundwater aquifer has long-range negative impacts on our local 
water supplies.
    Continued availability of safe and reliable water supplies is also 
critical to the quality of life in our region. Business leaders 
recognize that water supply and water quality are important barometers 
of their own, and their employees, quality of life. Based on my 
personal knowledge of business leaders' concerns, I can say that if we 
do not have clean water and a healthy environment, we will not attract 
employees to our region.
    Silicon Valley businesses are doing their part to use water wisely 
and maximize our local resources. Our region is very fortunate to have 
one of the only sizable remaining drinking water basins in the San 
Francisco Bay Area. In fact, we are unique in the Bay Area in that 
local water supplies account for about half the water used in the 
County. The Manufacturing Group and its members are actively involved 
in efforts to protect our local watersheds and groundwater basins from 
pollution, and to conserve and recycle water. In fact, it is in part 
through the business community's efforts that Santa Clara County uses 
less water today than in 1986, even though our population has increased 
by almost 17 percent. Now we are looking to the federal government to 
do its share to help address water supply issues in California.
    Mr. Chairman, I want to thank you for your efforts to authorize and 
provide funding for the CALFED Program, which is so important to the 
economy of the Silicon Valley. Meeting the region's and the state's 
current and future water needs will require the combined efforts of 
local communities, the state and federal governments, the business 
community, and other stakeholders. On behalf of the Silicon Valley 
Manufacturing Group, I want to thank you for being willing to take on 
one of the most complex public policy issues facing us today--water--
and for giving me an opportunity to speak about the critical importance 
of this issue to the Silicon Valley business community.
                                 ______
                                 

 Statement submitted for the record by Don Marciochi, General Manager, 
            Grassland Water District, Los Banos, California

    Mr. Chairman and members of the Subcommittee, I am Don Marciochi, 
General Manager of the Grassland Water District. The District 
appreciates the opportunity to submit written testimony on the June 28 
and July 1, 2003 Field Hearings on California Water Supply and the June 
24, 2003 Legislative Hearing on H.R. 2828 and H.R. 2641.
    The Grassland Water District contains over 60,000 acres of 
privately-owned wetlands in western Merced County, California. The 
District lands in combination with state and federal refuges and other 
privately-held wetlands comprise the approximately 180,000 acre 
Grassland Ecological Area designated by the United States Fish and 
Wildlife Service (``USFWS''). These lands are managed as habitat for 
migratory waterfowl, shorebirds, and other wildlife. The wetlands of 
western Merced County are a critical component of the remaining Central 
Valley wetlands and constitute the most important waterfowl wintering 
area on the Pacific Flyway. These wetlands are acknowledged by the 
Merced County General Plan to be highly valuable wildlife and 
vegetation habitats, and international treaties have recognized the 
habitat as a resource of international significance. The restoration 
and enhancement of this critical Central Valley wildlife area is one of 
the leading success stories of the Central Valley Project Improvement 
Act (Public Law 102-575) (``CVPIA''). The protection of the public 
investment in the restoration of the Grassland Ecological Area and the 
continued viability of this major component of the local economy are 
entirely dependent on development of a stable, long-term water supply 
as required by the CVPIA.
    The District strongly supports the Calfed Bay-Delta Program and its 
objective to develop and implement a plan to improve water management 
and restore the ecological health of the Bay-Delta ecosystem. Our 
comments focus on one area of concern and alternative wording that will 
ensure consistency between H.R. 2828 and the CVPIA.
I. THE CVPIA
    The CVPIA was enacted in 1992. Since that time, progress toward 
restoration of the Central Valley refuge habitats represents one of the 
most significant environmental success stories in the State of 
California. This progress toward restoring the health and viability of 
the refuges is entirely dependent on development of a stable, long-term 
water supply as required by the CVPIA.
A. LEVEL 2 WATER
    The CVPIA sets forth three mandatory duties with respect to refuge 
water supplies. First, the Secretary of Interior (``Secretary'') must 
deliver specific quantities of ``level 2 water'' to the refuges. 
According to Section 3406(d)(1),
        Upon enactment of the CVPIA, the quantity and delivery schedule 
        of water delivered to each of the specified wetland habitat 
        areas shall be in accordance with level 2 of the Dependable 
        Water Supply Needs table as set forth in the Refuge Water 
        Supply Report and two-thirds of the water supply needed for 
        full habitat development for those habitat areas specified in 
        the San Joaquin Basin Action Plan/Kesterson Mitigation Action 
        Plan (``Action Plan'').
    Level 2 water shall be provided through long-term contractual 
agreements provided, however, that the Secretary shall be obligated to 
provide such water whether or not such long-term contractual agreements 
are in effect. The Secretary has determined that the Grassland Water 
District is an appropriate party to provide such water supplies to the 
privately managed wetlands specified in the CVPIA and has entered into 
a long-term contract with the District for such water supplies. 
1
---------------------------------------------------------------------------
    \1\ Contract Between the United States and Grassland Water District 
for Water Supply to Lands Within the Grassland Resource Conservation 
District, Contract No. 01-WC-20-1754, January 19, 2001.
---------------------------------------------------------------------------
B. LEVEL 4 WATER
    In addition, by 2002, the Secretary must deliver full ``level 4 
water'' to the refuges. According to Section 3406(d)(2), by 2002, the 
quantity and delivery schedules of water measured at the boundaries of 
each wetland habitat area shall be in accordance with level 4 of the 
``Dependable Water Supply Needs'' table, as set forth in the Refuge 
Water Supply Report, and the full water supply needed for full habitat 
development for those areas specified in the Action Plan. Level 4 water 
shall be acquired by the Secretary through voluntary measures that 
include water conservation, conjunctive use, purchase, lease, 
donations, or similar activities, or a combination of such activities 
that do not require involuntary reallocations of project yield.
C. PROGRAM FOR THE ACQUISITION OF LEVEL 4 WATER
    The Secretary is further authorized and directed to develop and 
implement a program for the acquisition of a water supply to fulfill 
the Secretary's obligations to deliver level 4 water, as set forth 
above. 2 The program should identify how the Secretary 
intends to utilize, in particular, the following options: improvements 
in or modifications to the operations of the project; water banking; 
conservation; transfers; conjunctive use; and temporary and permanent 
land fallowing, including purchase, lease, and option of water, water 
rights, and associated agricultural land.
---------------------------------------------------------------------------
    \2\ CVPIA Section 3406(b)(3).
---------------------------------------------------------------------------
D. DIVERSIFICATION OF LEVEL 2 WATER
    In contrast, diversification of level 2 water sources is 
discretionary under the CVPIA. According to Section 3406(d)(1), the 
Secretary shall ``endeavor'' to diversify sources of level 2 water in 
order to minimize possible adverse effects on Central Valley Project 
contractors.
II. IMPACT OF H.R. 2828 DIVERSIFICATION PROVISION
    California's progress toward restoring the health and viability of 
the refuges is due almost entirely to the Bureau of Reclamation's 
delivery of level 2 water supplies each year and to the Bureau's 
increasing deliveries of level 4 water supplies. While the quantities 
of level 4 water supplies have fallen short of the statutorily mandated 
quantities, these water supplies have been the lifeblood in 
revitalizing the health of these critically important wetland habitats. 
Changes to the current system of identifying, allocating and delivering 
level 4 water threaten to undo the historic progress that has been 
achieved.
    The language contained in Section 201(d)(13) of H.R. 2828 
3 undermines the order of priority for delivery of refuge 
water supplies as set forth in the CVPIA. Section 201(d)(13) provides 
that up to $30 million may be authorized for fiscal years 2004 through 
2007 to diversify sources of level 2 refuge water supplies and modes of 
delivery to refuges and to acquire level 4 refuge water supplies. 
4
---------------------------------------------------------------------------
    \3\ H.R. 2828 was introduced by Representative Calvert on July 23, 
2003.
    \4\ The language is identical to the diversification language in 
Section 3(c)(3)(M) of S. 1097, the Calfed Bay-Delata Authorization Act, 
introduced by Senator Feinstein on May 21, 2003.
---------------------------------------------------------------------------
    The CVPIA mandated delivery of full level 4 refuge water supplies 
by 2002. The Secretary has not yet fully complied with this mandate. By 
allowing funds to be expended to diversify level 2 water sources before 
full delivery of level 4 water has been achieved, H.R. 2828 appears to 
allow the Secretary to use funds interchangeably for diversifying level 
2 sources and acquiring level 4 water. This de facto reprioritization 
threatens the water security of the refuges, is inconsistent with the 
CVPIA and is inconsistent with the expressed goals of H.R. 2828 to 
improve the quality and reliability of California's water supplies and 
to restore the ecological health of the Bay-Delta watershed.
III. ALTERNATIVE WORDING FOR H.R. 2828
    California's Central Valley refuges welcome the opportunity for new 
funds to support water acquisition for the refuge system, but strongly 
urge the Congress to make clear that new sources of funds made 
available under the Calfed authorization respect the current law's 
priority for delivery of full supplies. For example, H.R. 2828 should 
include a hold harmless with respect to the amount of level 4 water 
that is supplied currently to the refuges. Including a hold harmless 
ensures that the $30 million would not divert funds that have been and 
are being used to meet level 4 refuge water requirements.
    A second option is to replicate the priority for delivery of full 
level 4 water supplies prior to diversification of level 2 water. 
Section 201(d)(13) of H.R. 2828 could be amended to read as follows:
        (13) REFUGE WATER SUPPLIES - Of the amounts authorized to be 
        appropriated for fiscal years 2004 through 2007 under this Act, 
        no more than $30,000,000 may be expended to comply with the 
        Level 2 and Level 4 refuge water supply requirements set forth 
        in section 3406(d)(1)(2) of the Central Valley Project 
        Improvement Act. Such funds shall be expended first to acquire 
        the quantities of Level 4 water specified in section 3406(d)(2) 
        of the CVPIA and second to acquire 26,000 AF of Level 2 
        replacement water. Any remaining funds may be expended to 
        diversify sources of Level 2 refuge water supplies.
    In sum, the absence of a hold harmless or prioritization pursuant 
to current law could be damaging to the refuges and the species that 
inhabit them.
    Thank you for the opportunity to provide written testimony to the 
Subcommittee.
                                 ______
                                 

            Statement of Anthony J. Pack, General Manager, 
                    Eastern Municipal Water District

    The Eastern Municipal Water District (EMWD) provides water supply, 
wastewater treatment and water recycling services to a population of 
over 510,000 people in a service area covering over 550 square miles of 
the southwest portion of Riverside County, California. EMWD is located 
in one of the most rapidly growing areas of the State, and along with 
other local water agencies, faces the challenge of securing reliable, 
affordable water supplies to meet the growing needs of its customers.
    EMWD is a member agency of the Metropolitan Water District of 
Southern California (MWD). EMWD currently purchases 80% of its potable 
water supply from MWD and is therefore, ultimately dependent on 
continued water deliveries from the Sacramento Bay Delta and the 
Colorado River. EMWD is investing heavily in local water supply 
management and development in an effort to limit its dependence upon 
imported water. Local water supply development efforts include:
    1) LWater Recycling--EMWD has constructed over 125 miles of large 
diameter pipeline, 14 pump stations and over two billion gallons of 
surface reservoir capacity to recycle treated wastewater from its five 
(5) Regional Water Reclamation Facilities. EMWD currently sells over 
26,000 acre-feet per year of recycled water, nearly 70% of all treated 
wastewater. EMWD has also developed conceptual plans to expand its 
recycled water distribution system and upgrade system-operating 
characteristics as land use changes shift demand from agricultural to 
municipal uses.
    2) LDesalination--EMWD has constructed the first of three (3) 
planned brackish groundwater desalters. These facilities will treat 
high-salinity groundwater, producing potable water, while protecting 
adjacent high-quality groundwater basins and offsetting salinity 
increases resulting from water recycling. Conceptual plans have also 
been developed for several regional brine lines for the disposal of 
high-salinity wastes from municipal and industrial water treatment.
    3) LGroundwater Recharge and Conjunctive Use--EMWD has developed 
plans to utilize local groundwater basins to store imported water 
available during periods of hydrologic surplus (winter, spring) for 
subsequent recovery during periods of high demand. Additionally, 
imported water could be stored for emergency use as a means of reducing 
demands on the Sacramento Bay Delta during periods of drought. 
Conjunctive use storage of imported water in local basins will be cost-
effective, will result in improved reliability, and help reduce 
environmental impacts on the Bay Delta. The facilities needed for the 
first phase of EMWD's Groundwater Recharge and Conjunctive Use Program 
are currently being designed.
    4) LGroundwater Management--EMWD is developing and implementing 
comprehensive groundwater management plans (GMP's) in concert with 
other local water agencies and agricultural property owners. These 
plans are quantifying groundwater rights, limiting over-production and 
developing strategies to solve local and regional groundwater problems. 
These GMP's will help local agencies and farmers to avoid time-
consuming and costly adjudication of water rights and will provide the 
technical data and institutional framework needed to protect and 
optimize the use of local groundwater.
    In addition to on-going work to develop and manage local water 
resources, EMWD is working cooperatively with other water agencies in 
Southern California to develop integrated regional water supply plans. 
The goal of these regional plans is to provide a cooperative framework 
for sharing the benefits of local resource development and coordinating 
the use of imported water to ensure the highest level of water supply 
benefit while minimizing environmental impacts. Examples of significant 
regional planning efforts include:
    1) LMWD's Integrated Resources Plan (IRP)--The IRP is MWD's master 
plan for future water supply. The IRP describes the development over 
time of a blend of local and imported water resources sufficient to 
meet the future water supply needs of MWD's member agencies.
    2) LSouthern California Integrated Watershed Program (SCIWP)--Along 
with the other four (4) members of the Santa Ana Watershed Project 
Authority (SAWPA), EMWD has participated in developing the SCIWP. This 
plan describes the programs and facilities needed for regional 
integration of surface water, regional groundwater, water recycling, 
groundwater remediation and groundwater banking in the Santa Ana 
Watershed, which covers over 2,650 square miles and is home to 5.1 
million people. The goal of the SCIWP is to optimize the use of the 
area's local and imported water resources to drought-proof the entire 
region, allowing SAWPA's member agencies to reduce or eliminate the use 
of imported water during periods of extreme drought.
    3) LSouthern California Comprehensive Water Reclamation and Reuse 
Study (SCCWRRS)--EMWD, along with the U.S. Bureau of Reclamation and 
other agencies in Southern California, actively participated in 
developing the SCCWRRS. The study evaluated the potential for water 
recycling in Southern California, and identified customers and 
facilities needed to triple water recycling over the next 20 years. 
This level of water recycling would significantly reduce the region's 
dependence upon imported water.
    The successful implementation of EMWD's local water supply projects 
as well as the regional plans I've discussed, ultimately depends upon 
two critical factors; the continued delivery of reliable supplies of 
imported water, and the ability of Southern California water agencies 
to fund the extensive infrastructure improvements needed to optimize 
the use of available water resources.
    1) LImported Water Supply Reliability--The reliability of Southern 
California's imported water supply has historically been dictated by 
hydrologic variability. However, over the last 20 years, political 
pressures resulting from recognition of increasing urban demands and 
conflicts over environmental water needs have resulted in additional 
uncertainty over the availability of imported water. Without reliable 
estimates of the long-term quantity of imported water available for use 
in Southern California, local agencies will be unable to develop 
accurate water supply plans. Action to resolve this problem is needed 
in two (2) areas:
         LCALFED Bay-Delta Program--Southern California needs 
        to know how much water will be available from the Sacramento 
        Bay-Delta and the State Water Project. This cannot be 
        accomplished until conflicts among ecosystem needs, in-Delta 
        users and export users are resolved. The CALFED Program 
        provides a framework for resolving these conflicts. 
        Implementation of CALFED will require full partnership with the 
        federal agencies central to resolution of the Bay Delta 
        conflicts. It is imperative that CALFED be authorized at the 
        federal level and that the involved federal agencies receive 
        the authority needed to become full partners in the CALFED 
        Program implementation.
         LQuantification Settlement Agreement (QSA)--The most 
        divisive issue among Southern California water agencies is the 
        question of Southern California's entitlement to imported water 
        from the Colorado River and how that entitlement should be 
        divided among competing interests. The QSA must be finalized to 
        allow water supply planning and the development of cooperative 
        water transfer agreements to proceed. Appropriate federal 
        agencies need to continue working constructively with the State 
        of California, southern California water agencies and the other 
        Colorado River Basin states to develop the long-term agreements 
        required for successful resolution of the many difficult issues 
        we have faced on the Colorado River.
    2) LInfrastructure Funding--Implementation of Southern California's 
Water Supply plans will place a significant financial burden on local 
agencies. In many cases, the pace of new water supply development will 
depend upon the ability of local agencies to secure new sources of 
infrastructure funding. Such funding, will in many cases, be difficult 
to justify, particularly for new sources of supply such as desalted 
groundwater and recycled water where there is typically a mismatch 
between sales revenue and operational/capital amortization costs. The 
State of California has recognized this problem and has recently passed 
several bond issues to provide grants and loans as a means of 
encouraging agencies to implement new water supply projects.
    It is important to Southern California that the federal government 
continues to support and expand existing programs to provide funding 
for water resource management and development. Continued federal 
reauthorization for the Water Resources Development Act, the Small 
Reclamation Water Resources Projects Act and Title 16 Water 
Conservation Programs will provide Southern California agencies a 
stimulus to invest in new, innovative water supply programs, and 
accelerate the completion of needed water supply projects.
    EMWD also encourages the Department of the Interior to present the 
SCCWRRS to Congress as originally intended. The recycled water projects 
documented in the SCCWRRS represent one of the largest single sources 
of new water supply available for Southern Californians. However, the 
scope and magnitude of this program will require a cooperative 
partnership between the federal government, the State of California, 
and local participating agencies. The first step in the process will be 
congressional review of the SCCWRRS.
    Southern California's water supply problems are not insurmountable. 
The ideas and technology to solve our problems are available. If the 
political process can be managed and stay focused, we are certain that 
Southern California water supply issues can be resolved to the 
satisfaction of all concerned.
                                 ______
                                 

    NOTE: The following information was submitted for the 
record by The Honorable Duncan Hunter (CA-52). All of the 
information listed below has been retained in the Committee on 
Resources' official files and can be viewed upon request.
    Letters from individuals regarding the water consumption at 
the Barona Indian Reservation:
     LList of families experiencing water shortages
     LLetter from John Peterson, County Groundwater 
Geologist, County of San Diego to Mr. Robert Bowling, Regarding 
Groundwater Levels in the Old Barona Road Area
     LLetter from Richard Hensle, Chair, Lakeside 
Community Planning Group to Honorable Dick Murphy, Mayor, City 
of San Diego, Regarding City of San Diego's negotiations with 
the Barona
     LLetter from Dianne Jacob, Supervisor, Second 
District, to Frances Gesiakowski, Regarding Groundwater levels 
in the neighborhood and interest in accessing water from San 
Vicente Reservoir
     LMemo from Councilmember Donna Frye to 
Councilmember Jim Madaffer, Chair, Natural Resources and 
Culture Committee, Regarding Barona Water Pipeline Project
     LLetter to Robert Bowling, Old Barona Road 
Association from the County of San Diego, Regarding Old Barona 
Road
     LLetter from Lauren M. Wasserman, Director, 
Department of Planning and Land Use to Land Owner, Highway 67 
and Wildcat Canyon Road Areas, Regarding Mapping Programs, 
Groundwater Impacted Basins

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