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



 
                        H.R. 2828 AND H.R. 2641

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

                          LEGISLATIVE HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                        Thursday, July 24, 2003

                               __________

                           Serial No. 108-48

                               __________

           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 Thursday, July 24, 2003..........................     1

Statement of Members:
    Calvert, Hon. Ken, a Representative in Congress from the 
      State of California........................................     1
        Prepared statement of....................................     2
    Cardoza, Dennis A., a Representative in Congress from the 
      State of California, Prepared statement of.................    41
    Feinstein, Hon. Dianne, a U.S. Senator from the State of 
      California.................................................     2
        Prepared statement of....................................     5
    Miller, Hon. George, a Representative in Congress from the 
      State of California, Prepared statement of.................    15
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................     9
    Tauscher, Hon. Ellen O., a Representative in Congress from 
      the State of California....................................    13
        Prepared statement of....................................    14

Statement of Witnesses:
    Bague, Irela, Member of the Governing Board, South Florida 
      Water Management District, Representing Miami-Dade County, 
      Florida....................................................    22
        Prepared statement on H.R. 2828..........................    24
    Campirano, Eduardo A., Assistant General Manager and COO, 
      Brownsville Public Utilities Board, Texas..................    26
        Prepared statement on H.R. 2828..........................    29
    Habiger, General Eugene E., U.S.A.F., (Retired), President 
      and CEO, San Antonio Water System, San Antonio, Texas......    16
        Prepared statement on H.R. 2828..........................    17
    Moralez, Gloria, Businesswoman/Farmer........................    42
        Prepared statement on H.R. 2828 and H.R. 2641............    43
    Neufeld, Robert, President, Cucamonga County Water District, 
      California.................................................    30
        Prepared statement on H.R. 2828..........................    32
    Osann, Edward, Consultant, Natural Resources Defense Council.    50
        Prepared statement on H.R. 2828 and H.R. 2641............    53
    Somach, Stuart, Attorney, Somach, Simmons & Dunn.............    60
        Prepared statement on H.R. 2828 and H.R. 2641............    61
    Walthall, Brent, Kern County Water Agency....................    45
        Prepared statement on H.R. 2828 and H.R. 2641............    47
    Zlotnick, Greg, Director, Santa Clara Valley Water District 
      Board of Directors.........................................    66
        Prepared statement on H.R. 2828 and H.R. 2641............    68

Additional materials supplied:
    Capello, Mary G., J.D., Chief Executive Officer, Texas 
      Migrant Council, Inc., Letter submitted for the record.....    10
    Furman, Hal, Executive Director, U.S. Desalination Coalition, 
      Letter submitted for the record............................    11
    Miller, G. Wade, Executive Director, WateReuse Association, 
      Letter submitted for the record............................    12
    Marciochi, Don, General Manager, Grassland Water District, 
      Statement submitted for the record.........................    85
    Movahed, Ben, President, American Membrane Technology 
      Association, Letter submitted for the record...............    88


  LEGISLATIVE HEARING ON H.R.2828, THE WATER SUPPLY, RELIABILITY AND 
    ENVIRONMENTAL IMPROVEMENT ACT; AND H.R. 2641, TO AUTHORIZE THE 
  SECRETARY OF THE INTERIOR TO IMPLEMENT THE CALFED BAY-DELTA PROGRAM

                              ----------                              


                        Thursday, July 24, 2003

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 2:03 p.m., in 
Room 1324, Longworth House Office Building, Hon. Ken Calvert 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Calvert, Napolitano, Radanovich, 
Miller, Dooley, Cardoza, Rodriguez, Baca, and Nunes.
    Also Present: Representatives Pombo and Tauscher.

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

    Mr. Calvert. The hearing by the Subcommittee on Water and 
Power will come to order. The Subcommittee is meeting today to 
hear testimony on H.R. 2828, the Water Supply Reliability and 
Environmental Improvement Act, and H.R. 2641, the CALFED Bay-
Delta Authorization Act.
    We are certainly privileged and honored to be joined here 
today by the Senior Senator from the State of California, Mrs. 
Dianne Feinstein. And let me say, from a personal point of 
view, I can't think of anyone who has put more time and effort 
into the problems that we have in California when it comes to 
water. And as the Senator well, knows this is not a Republican 
issue or a Democratic issue. It is a problem that we all share 
south, north, Central Valley--all over the State of California. 
And certainly you have put much time and effort into trying to 
solve these issues, and I look forward to working with you as 
we, hopefully, can resolve the issue of CALFED and other water 
issues in the State of California this year.
    With that, I know that you need to get back to the Senate, 
so I am happy to recognize you for any statement you may have. 
Thank you, Senator.
    [The prepared statement of Mr. Calvert follows:]

           Statement of The Honorable Ken Calvert, Chairman, 
      Subcommittee on Water and Power, on H.R. 2828 and H.R. 2641

    Today's hearing is another step in the pursuit of finding balanced 
ways to improve our nation's water supplies and reliability. We are 
privileged to have the full Committee Chairman and Senator Feinstein 
here with us today.
    Over the course of this year, we have focused on water delivery 
enhancements as well as the development of alternative water sources 
through water recycling and desalination technologies. Earlier this 
summer, the Subcommittee held three well-attended hearings in 
California on different ways to enhance water supplies along with an 
oversight hearing on the CALFED crosscut budget.
    While we have learned much from these hearings, we have also 
reconfirmed the obvious: The math simply doesn't add up on how our 
current and future water demands will be met given dwindling supplies.
    H.R. 2828 is the first comprehensive step in helping us answer our 
water problems. It is a product of our comprehensive work to date. I 
have taken the valuable input presented by my Subcommittee colleagues, 
witnesses and stakeholders during and after our hearings to craft the 
``Water Supply, Reliability and Environmental Improvement Act.''
    This comprehensive bill is an important step in moving the ball 
forward. I'm proud to have many of my Democratic and Republican 
colleagues as original cosponsors of the bill and hope to have more 
support before we proceed to markup in September.
    H.R. 2828 is centered around the development of new technologies 
and programs to bring about needed improvements in how we manage our 
water resources.
    The bill sets up a coordinated, national performance-based 
competitive financing program to encourage the use of ongoing brackish 
and seawater desalination and water recycling programs. This 
Subcommittee has heard repeatedly of the value of these programs and 
it's a given that we build upon this success for all states. This title 
is important to areas, like New Mexico, Colorado and Arizona, which 
have very limited traditional water supplies.
    Based upon the purpose and structure of Sen. Feinstein's and our 
colleague George Miller's legislation, our bill contains a title which:
     LReauthorizes federal participation for four years in the 
CALFED program;
     LAttempts to bring more storage and conveyance to the 
CALFED picture;
     LProposes a ``right to know'' provision on how ecosystem 
restoration funding is being spent;
     LAllows for more conveyance only if Delta water users and 
wildlife are not negatively impacted and;
     LRecognizes how existing authorities are being used for 
CALFED-related projects.
    I applaud Senator Feinstein's and Mr. Miller's courageous steps in 
introducing their CALFED bills. Our legislation is very similar, some 
of our policies are different, but I'm confident we can work out these 
differences between ourselves and with others.
    Our legislation also recognizes a federal funding role for the 
Salton Sea, the importance of better coordination of federal permitting 
activities throughout the west and the development of a rural water 
supply program.
    H.R. 2828 is not perfect, but we cannot let the perfect be the 
enemy of the good. With the valuable hearings and the introduction of 
this and other bills, we are well beyond the starting line. While this 
is the first step in the legislative process, we are certainly closer 
to finishing this marathon.
    I stand ready to work with Chairman Pombo, Senator Feinstein, Ms. 
Napolitano, Mr. Miller, and other colleagues and stakeholders in the 
coming weeks before we head to a markup. I look forward to hearing from 
our distinguished panel of witnesses.
                                 ______
                                 

STATEMENT OF DIANNE FEINSTEIN, A UNITED STATES SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Feinstein. Thank very much, Mr. Chairman.
    Mrs. Napolitano, Mr. Nunes and Mr. Miller from our State, I 
want to, first of all, say to the three of you as California 
representatives on this Committee, that I really think we need 
to sit down and see where we go from here. I am somewhat 
concerned because our bills are on different wavelengths, as I 
understand them, and I am concerned that we get a bill.
    Senator Boxer has indicated to me that I am speaking for 
her as well this afternoon, and I am very proud to do that.
    I feel that the basic principles of a CALFED bill are two. 
First, it must be a balanced bill. I think we all know that 
California has different water needs and different water 
interests. So we need ecological restoration for environment, 
we need recycling and desalination, we need water quality and 
conveyance for our cities, we need storage, both groundwater 
and surface, for our farms and for others. So a CALFED bill 
that is going to pass, in my view, must even-handedly provide 
for all of these interests so Californians can rally around it.
    The bill I have introduced explicitly requires balanced 
implementation. In my house, some Republican senators in the 
last session were afraid that environmental projects, not 
needing authorization, would sail smoothly ahead, while storage 
projects, lacking congressional approval, would languish. To 
meet this concern, the Senate bill includes a provision 
requiring the Secretary of Interior to annually certify that 
the CALFED program is progressing in a balanced manner among 
all of its components. If it is found to be out of balance, the 
Secretary must revise the schedule.
    Secondly, my bill respects the fact that CALFED has a 
history, and respects past agreements that Californians have 
made. I think it is worth remembering that the drought of 1990 
and 1991, when Californians were fighting desperately over 
water, we all thought there had to be a better way than court 
cases and fights. Secretary Babbitt came out to California, the 
Bay-Delta accords were negotiated in 1994, essentially a time-
out on fighting was called while all parties tried to work 
together to develop a bill. At one time, as I recall, there 
were 17 different working groups as part of CALFED. And out of 
this Bay-Delta accord was negotiated the Record of Decision, 
culminating into 2000.
    Now the Record of Decision is CALFED's roadmap. The Record 
of Decision set forth commitments to attend to the water 
interests of all Californians--urbans, farmers, 
environmentalists. So the commitments in the Record of Decision 
really should and must be the framework that holds us together 
through the inevitable water conflict.
    Now, I know that not everyone celebrates every detail in 
the ROD. So what my bill does is adopt the Record of Decision 
as the framework for CALFED program components. This is 
compromise language. It has been negotiated at great length. 
And we need to keep its recognition that the Record of Decision 
is our roadmap.
    And finally, we need to keep a good handle on the Federal 
funding of the many different agencies involved in CALFED. To 
do this and, really, to meet the concern, again, of some of the 
Republicans on the Energy and Water Committee in the Senate, 
they were concerned that California would take all of the 
Bureau's allocation. So what we came up with was a cross-cut 
budget, showing the Federal funding of each of the different 
agencies. So the Senate bill sets forth a specific list of the 
projects to be funded and how much each would receive. As you 
know, it is $880 million authorization over 4 years. The 
Federal cost share is limited to a third. There is $102 million 
for planning and feasibility studies for water storage projects 
and an additional $77 million for conveyance.
    Now, I don't believe we can meet all of our future water 
needs without increased water storage that is environmentally 
benign, that is off-stream, and that provides flexibility in 
the system for us to increase water supply, improve water 
quality, and enhance ecosystem restoration. I have said this 
from the beginning. I have taken some flak for it--I don't much 
care. I know from my travels up and down the State and my 
discussions with virtually every facet of the water community 
now over the past 10 years, that it can't be any other way. So 
we need to be able to, in an environmentally sound way take 
water from the wet years and be able to save that water for the 
dry years that will inevitably follow.
    There's $100 million for ecological restoration. This means 
improving fish passages, restoring streams, rivers, and 
habitat, and improving water quality. We authorize $153 million 
for water conservation and recycling, including $84 million for 
desal and water recycling projects, leveraging substantial 
additional water supplies with relatively little Federal 
investment.
    The bill would also improve water quality for drinking 
through investment and treatment technology, several 
demonstration projects and water quality improvements in the 
Bay-Delta, the San Joaquin Valley, and other parts of the 
State.
    And then--and we actually took a page from your book, 
Congressman Calvert, and we included an expanded grants program 
for local and regional communities throughout California, 
including the northern part of the State. So we authorize up to 
$95 million for local California communities to develop plans 
and projects.
    We also have levee stability with $70 million, strong 
supporting science with $50 million, $25 million for program 
management, et cetera. And then there is $75 million for the 
environmental water account, with purchases available for 
environmental, water, and other purposes.
    So kind of in a nutshell, that is it, boiling down. I am 
concerned that we not come to loggerheads between the House 
bill and the Senate bill. I am concerned that we maintain the 
Record of Decision because this is the only thing around which 
we have agreement. And the minute we depart from it, we are 
going to lose people and we are going to have suits. And I 
think that is just as clear as the nose on my face. So I am 
really concerned that we do that.
    And second, that we move ahead in a balanced manner. If we 
do that, I think we can show to all of the many conflicting 
interests here that we are being fair to all parties. And 
absent that, I am very concerned that we won't get momentum and 
the ability to move on any particular bill.
    I would also like to thank the Chairman of the full 
Committee for being here, Mr. Pombo from California. And I 
understand my pal Ellen Tauscher is here as well. So I want to 
thank them for their continued interest.
    And I would like to ask one last thing. It is very hard--I 
have found it is very hard to get feedback back. And I have a 
commitment from Senator Domenici to move our bill now. And as I 
have said to both Mr. Pombo and Mr. Calvert, I would like to, 
if possible, see that the Senate bill is as close as we can to 
a House bill so that we can avoid conference problems and get a 
bill this session. It is my belief that if we don't get a bill 
this session, we may not get a bill.
    It is also good that Congressman Cardoza--I see Congressman 
Dooley. He's so little behind that dais, I didn't recognize 
six-foot-two of you. I am glad you are here as well.
    But please, the only way we are going to do this is to 
bring the parties together. We are not going to do it by moving 
them apart.
    That concludes my testimony.
    [The prepared statement of Senator Feinstein follows:]

 Statement of The Honorable Dianne Feinstein, a U.S. Senator from the 
                          State of California

    First, I want to thank Representatives Calvert and Napolitano for 
giving me the opportunity to testify on CALFED today. And to all my 
fellow members of the California delegation, I've enjoyed working with 
you on water issues, and we are going to need to work together even 
more closely over the next year.
    I want to speak plainly to you all--California needs a CALFED bill, 
and we need it now. If we don't act now, we are not going to have 
enough water to meet California's needs in a decade or two. It's as 
simple as that. The last time we increased our water infrastructure was 
the 1960's. Our population then was 16 million, less than half of the 
36 million we have now. And less than one-third of the 50 million we 
will have soon.
    We need to increase our water supply for our economy as well. 
California is the largest agriculture state in the nation, and we're 
the sixth largest economy in the world. We need water to run this 
economy. We all know how difficult it is to pass a CALFED bill. I want 
to share with you my perspectives on why I think that my bill, S. 1097, 
is a bill that we could pass.
    First, it is a balanced bill. California has many different water 
needs and interest groups that advocate for them. We need ecological 
restoration for our environment; we need recycling and desalination, 
water quality and conveyance for our cities, and we need storage, both 
groundwater and surface, for our farms. A CALFED bill that is going to 
pass must evenhandedly provide for all these interests, so Californians 
can rally around it.
    The bill I have introduced explicitly requires balanced 
implementation. Some Republican Senators were afraid that environmental 
projects not needing authorization would sail smoothly ahead, while 
storage projects lacking Congressional approval would languish. To meet 
this concern, the bill includes a provision requiring the Secretary of 
the Interior to annually certify that the CALFED program is progressing 
in a balanced manner among all of its components. If it is found to be 
out of balance, the Secretary must revise the schedule.
    Second, my bill respects that CALFED has a history, and respects 
the past agreements that Californians have made. It is worth 
remembering the drought of 1990-1991, when Californians were fighting 
desperately over scarce water. We figured there had to be a better way. 
So Secretary Babbitt came out to California, and we negotiated the Bay-
Delta Accords in 1994. We essentially called a timeout, while we tried 
to figure out a plan to work together.
    Out of the Bay-Delta Accords we negotiated the Record of Decision, 
culminating in 2000. The Record of Decision is CALFED's road map. The 
Record of Decision set forth commitments to attend to the water 
interests of all Californians, urbans, farmers, and environmentalists. 
The commitments in the Record of Decision are the framework that holds 
us together through the inevitable water conflicts. I know that not 
everyone celebrates every detail in the Record of Decision. So my bill 
adopts the Record of Decision as a framework for CALFED's program 
components. This is compromise language, negotiated at great length, 
and we need to keep its recognition that the Record of Decision is our 
roadmap.
    Finally, we need to keep a good handle on the federal funding of 
the many different agencies involved in CALFED. My bill meets this 
concern by requiring the Office of Management and Budget (OMB) to 
prepare a cross-cut budget showing the federal funding of each of the 
different agencies. The bill also sets forth a specific list of the 
projects to be funded and how much each one would receive.
    Let me briefly tell you the elements of my bill. It is an $880 
million authorization over 4 years. The federal cost-share is limited 
to one-third. There is $102 million for planning and feasibility 
studies for water storage projects--and an additional $77 million for 
conveyance.
    I don't believe we can meet all of our future water needs without 
increased water storage that is environmentally benign, that is off 
stream and that provides flexibility in the system for us to increase 
water supply, improve water quality, and enhance ecosystem restoration. 
We absolutely need to take water in wet years and store it for the dry 
years that follow.
     LNext, there is $100 million for ecological restoration. 
This means improving fish passages, restoring streams, rivers and 
habitats and improving water quality.
     LThe bill authorizes $153 million for water conservation 
and recycling, including $84 million for desalination and water 
recycling projects, leveraging substantial additional water supplies 
for California with relatively little federal investment.
     LThe bill would also improve water quality for drinking 
through investment in treatment technology demonstration projects and 
water quality improvements in the San Francisco Bay Delta, the San 
Joaquin Valley, and other parts of the State.
     LThe bill also includes a grants program for local and 
regional communities throughout California, including the northern part 
of the State. The bill authorizes up to $95 million for local 
California communities to develop plans and projects to improve their 
water situation.
     LThe bill also includes $50 million for watershed planning 
and assistance.
     LThe bill also includes other important provisions on 
levee stability, with $70 million, ensuring CALFED has strong 
supporting science, with $50 million, and $25 million for program 
management, oversight, and coordination.
     LFinally, there is $75 million for the environmental water 
account, which purchases available water for environmental and other 
purposes.
    I look forward to working with you to all to pass CALFED as quickly 
as possible. We absolutely need this legislation for California's 
future.
                                 ______
                                 
    Mr. Calvert. Well, that is great timing. But I want thank 
the Senator for your testimony. And certainly we share a common 
belief, I think all of us, that we want to kick--as George told 
me one time, we want to kick this can down the road. And we 
have been working on this a long, long time, as the Senator 
well knows, and in many aspects we are a lot--you know, we are 
very close. So hopefully we can work these things out as we 
move this process forward. We certainly respect the hard work 
that you have put into this and, hopefully, we can come to some 
resolution soon on this.
    Senator Feinstein. Thank you. And I would also like to 
acknowledge Congressman Nunes, whom I don't know very well. 
But, you know, welcome to a big fight. It has always been that 
way.
    [Laughter.]
    Mr. Calvert. It is always fun. Great. Thank you, Senator.
    Senator Feinstein. Thank you.
    Mr. Calvert. No other comments to the Senator? Mr. Pombo?
    Mr. Pombo. Mr. Chairman, just very briefly. I would say to 
Senator Feinstein we all appreciate a great deal the work that 
you have put into this and, I think more importantly, your 
openness to working with us. Both the Chairman of the 
Subcommittee and myself have been over to see you a number of 
times on this over the past couple of years. We appreciate your 
openness to working with us. The only way that this is going to 
move forward is if we work together and try to stay on the same 
page.
    Obviously, Ken and I both want our bill to coincide very 
closely with what moves through the Senate so that we can get 
through conference and, hopefully, get it to the President's 
desk as rapidly as possible.
    So I just want to thank you for your willingness to work 
with us and with the Committee. Your staff has been great to 
work with, and I thank them for all the work that they have put 
into this as well, and hopefully this is something that in the 
not-too-distant future we can all be happy that we passed it 
and, as George said, we kicked the can down the road.
    Senator Feinstein. Thank you. I really appreciate that, Mr. 
Chairman. It really means a lot coming from you. And I just 
want you to know, I am available. You all have my home numbers 
in California and here and, you know, don't hesitate to use 
them.
    Mr. Pombo. I forget what that is. Can you give it to me?
    [Laughter.]
    Senator Feinstein. I will get it to you.
    Mr. Pombo. But thank you.
    Senator Feinstein. You are very welcome.
    Mrs. Napolitano. Senator, one last word, and that is thank 
you so much. Appreciate your coming and being open. As you can 
see this is all California up here.
    Senator Feinstein. Right. Right.
    Mrs. Napolitano. So we are very, very key on it. It is just 
getting our ducks in a row and being able to accept those 
things that we know we can work together, and work on the 
others to conclusion that is going to be helpful to all of 
California, as you have indicated. Thank you, ma'am.
    Senator Feinstein. Thank you.
    Mr. Calvert. Thank you, Senator. Mr. Baca?
    Mr. Baca. Thank you very much, Mr. Chairman. Senator 
Feinstein, thank you very much--
    Senator Feinstein. Hi, Joe. Good to see you.
    Mr. Baca. --for sharing your thoughts and your ideas. As 
you know, the Inland Empire is where we have the majority of a 
lot of the growth and we look at water and water problems in 
that area, and perchlorate in some of the other areas that--
along with our Chairman here, Ken Calvert, as well--that 
impacts our area along the Santa Ana River. So we appreciate 
your leadership and your vision in this area and we look 
forward to solutions to problems in funding, especially as it 
pertains to water. So thank you very much.
    Senator Feinstein. Thank you very much. I just want to--let 
me say on funding, can't get any more appropriations without an 
authorization. We need $15 million this year; could only get 7 
so far. And my hope had been to be able to get some of the 
feasibility work done that we need to get done to know whether 
something works or not. So it is a real disadvantage not having 
an authorization bill.
    Mr. Calvert. Mr. Cardoza.
    Mr. Cardoza. Very briefly, Mr. Chairman. I just want to 
echo the other statements of the members of this Committee in 
thanking you, Senator Feinstein, for your hard work over a 
number of years on this issue. And frankly, we wouldn't have 
gotten as far as we've gotten in this process without your 
leadership and we won't get to conclusion without your 
leadership. So thank you.
    Senator Feinstein. Oh, I don't know about that. But we have 
just got to do it, and I appreciate those comments. Appreciate 
even more a bill. Thank you.
    Mr. Calvert. Thank you very much, Senator.
    Senator Feinstein. Thanks very much--
    Mr. Calvert. OK, have a great day.
    Senator Feinstein. --Mr. Chairman. Thank you all.
    Mr. Calvert. Thank you very much.
    We are going to have a series of votes here. As I 
understand it, this may be a couple of hours. We have seven or 
eight votes, several of which are 15-minute votes, several of 
which are 5-minute votes. So we are going to ask our panel to 
please forgive us for awhile, but we are going to recess until 
immediately after the last vote, and come back. It could be as 
long as 2 hours. Hopefully less, but it could be as long as 2 
hours.
    We are recessed.
    [Recess.]
    Mr. Calvert. The hearing is reconvened. First, let me again 
apologize. This is going to be a long day--longer for us than 
for you, but it may not seem that way yet.
    Today we are here for the same purpose. We heard from 
Senator Feinstein and certainly the hard work that she has 
done, but we are all here for the same purpose and that is to 
pass a comprehensive water supply bill. All of us here today--
Chairman Pombo, who I think will be back shortly; Senator 
Feinstein, as you heard from earlier; certainly Grace 
Napolitano, George Miller, Mrs. Tauscher--all of us. We 
certainly want to get a bipartisan bill that has the same goal. 
We may have some differences on how to meet that goal, but that 
is what this process is all about. That is why we come here to 
Washington, D.C. and try to work these issues.
    But it is an important step today to listen to all the 
various collective efforts. One thing we can agree on, I think, 
all of us agree that we need to give more flexibility to the 
system by adding more water to storage, conveying water when 
needed but protecting Delta water quality, providing water 
recycling and desalinization for our Nation; obviously 
compatibility of ecosystem restoration and the protection of 
private property rights; and certainly how our taxpayer dollars 
are spent, and we want to make sure that they are spent wisely.
    This bill that I am introducing today certainly will 
provide communities nationwide access to successful water 
recycling and desalination efforts. It provides a balance to 
CALFED. I remember when we all got in this in 1994, we all said 
we are all going to get better together, and that is what the 
intent of this legislation is.
    It puts storage on a level field with ecosystem 
restoration. It gives us the right to know how we are 
protecting our environment through land acquisition and 
ecosystem restoration activities. And it certainly protects the 
private property rights for willing sellers of water.
    Judging by the bipartisan cosponsors of our bill, which is 
growing, I think we have done something right and we are 
looking forward to the month of August, when we are going to, I 
am sure, hear from many people from many areas of California 
and throughout the country on this legislation. I am certainly 
glad we could be here for this legislation, and hopefully we 
can reach consensus on how we can bring water to our 
communities as soon as possible.
    I am going to keep my statement short since we may be 
called back in another hour or so. So hopefully we can also 
keep the process of this legislation short, where we can make 
sure we can get it signed into law in this legislative session.
    With that, I am happy to recognize the Ranking Member, Mrs. 
Napolitano, for her statement.

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

    Mrs. Napolitano. Thank you, Mr. Chairman. And thank you for 
convening this hearing today. And a welcome again to all our 
special guests and our witnesses. But I certainly wanted to 
take this opportunity to again thank you for your dedicated 
focus on the item that to a lot of us is more important than 
gold, and that is water. I think I can speak for the rest of 
the Subcommittee members on my side and commend you for your 
attention to the serious water problems--solving the serious 
water problems that are facing all of us in California and the 
rest of the western United States.
    And thank you for introducing this much-needed legislation. 
I totally agree with you on Title I. Some members, some 
organizations and I still have concerns about the bill, and 
there are many questions that are going to have to be answered. 
But your willingness to listen to the views of many interested 
parties should reassure all of us who are quick to criticize 
something we don't understand or need more clarification.
    I will continue to review your legislation with an open 
mind and urge my colleagues on the Subcommittee to do the same. 
I am hereby adding myself to your legislation, if I may be so 
bold, because I believe that that is what we need to move 
forward with. I look forward to a closer working relationship 
with you, and hopefully some of my colleagues on both sides 
will not begin to use this bill to get back, so to speak, on 
some areas that we feel we have been slighted or wronged on. It 
is too important to all of us, and I think we need to put every 
little peccadillo, if you will, aside. We need to work 
together. And I am looking forward to that, sir.
    Thank you, and look forward to the discussion.
    Mr. Calvert. Thank you. And I certainly thank the 
gentlelady for her support and look forward to working with her 
very closely as the days, weeks, and hopefully not too many 
months ahead of us go by as we work toward the successful 
conclusion of this bill.
    I would also ask unanimous consent that Ms. Tauscher be 
able to join us here on the dais. Hearing none, welcome.
    And with that, I would like to recognize the next panel.
    But before we do that, I am going to offer for the record 
letters from the WateReuse Association, the U.S. Desalinization 
Coalition, the Texas Migrant Council, Inc., and a CRS Report, 
``Authorities Related to Water Supply Reliability and 
Environmental Improvement Act.'' If there is no objection, 
these statements will be entered into the record.
    [The letters referred to follow:] 
    [GRAPHIC] [TIFF OMITTED] 88533.001
    
    [GRAPHIC] [TIFF OMITTED] 88533.002
    
    [GRAPHIC] [TIFF OMITTED] 88533.003
    
    [NOTE: The CRS Report entitled ``Authorities Related to 
Water Supply Reliability and Environmental Improvement Act'' 
has been retained in the Committee's official files.
    Mr. Calvert. Ms. Tauscher, do you have a short statement 
for the record?
    Ms. Tauscher. You will be the judge of whether it is short 
or not, Mr. Chairman. I think it is, though.
    Mr. Calvert. OK.

   STATEMENT OF THE HON. ELLEN TAUSCHER, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Tauscher. I appreciate you having me here today. I want 
to thank you, Mr. Calvert, and Ranking Member Napolitano, 
fellow Californians, because I would like to express my 
appreciation to you for recognizing the critical nature of the 
water supply crisis facing California and scheduling this 
important hearing today.
    I also want to thank Senator Feinstein for her strong 
leadership on this issue and her trademark tenacity in finding 
a workable compromise to move CALFED legislation through the 
Senate to the President's desk this year. Senator Boxer, who 
could not be here today, also deserves tremendous thanks for 
her work on water issues.
    Mr. Chairman, thank you for allowing me to sit in on this 
hearing today and to make a few comments about H.R. 2641, the 
CALFED authorization legislation that George Miller and I 
introduced last month. Our bill, the California Bay-Delta 
Authorization Act, brings the various stakeholders to the table 
and provides both the method and the means for Californians to 
heal the Bay-Delta and resolve our ongoing and future water 
supply shortages.
    This bill, which is very similar to the Feinstein-Boxer 
bill in the Senate, would provide a framework for addressing 
the many delicate and varied components of the California Bay-
Delta program, including water storage, ecosystem restoration, 
water supply reliability, water quality, conveyance, water use 
efficiency, water transfers, the environmental water account, 
levee stability, governance, and sound science. In the end, the 
final solution must fairly balance the competing needs of our 
growing population, agricultural interests, and the environment 
and adhere to the Record of Decision that California 
stakeholders worked so hard to develop.
    My District includes much of the Bay-Delta, so I am very 
familiar with its tremendous importance. Simply put, restoring 
the Bay-Delta is imperative for improving water quality locally 
and essential for the long-term supply solutions across the 
State. The ROD also identifies an important potential surface 
storage project in my region, the expansion of the Los Vaqueros 
Reservoir. Another regionally important water supply 
reliability project that would be advanced by CALFED is the 
Freeport project, which is the historic agreement reached by 
East Bay MUD and the Sacramento Region.
    Mr. Chairman, Ranking Member Napolitano, and the members of 
the Committee, we are facing a crisis in California that will 
make our State's energy fiasco look like a walk in the park if 
we fail to act. As you know, this year's energy and water bill 
contains no funding for CALFED but specifically states funding 
may be available if the program is reauthorized this year. We 
cannot afford to wait another year to act.
    Mr. Chairman, I applaud your leadership with Ranking Member 
Napolitano in holding field hearings and developing legislation 
to begin the process in the House. The time is now for 
Californians, regardless of party or region, to come together 
to advance comprehensive authorization legislation that will 
ensure the Federal Government is an active partner with our 
State in solving our complex water challenges. I pledge to work 
with you, Mr. Chairman, this Committee, and the California 
delegation to help craft a balanced bill that can move through 
the House and to the President's desk this year.
    I think it is vitally important to remember what Senator 
Feinstein said: If we find ourselves in a situation where these 
bills do not comport themselves closely enough that we find 
ourselves in a conference, we could lose this opportunity. So I 
hope that our effort will not only include finding a balanced 
approach but that we will work to find a way to get these bills 
to look as much alike as possible so that we don't lose in the 
bigger battle.
    I thank you for the opportunity to testify. I yield back 
the balance of my time, and I hope I was short enough.
    [The prepared statement of Mrs. Tauscher follows:]

   Statement of The Honorable Ellen O. Tauscher, a Representative in 
                 Congress from the State of California

    Chairman Calvert and Ranking Member Napolitano, I'd like to express 
my appreciation to you for recognizing the critical nature of the water 
supply crisis facing California and scheduling this important hearing 
today.
    I also want to thank Senator Feinstein for her strong leadership on 
this issue and her trademark tenacity in finding a workable compromise 
to move CALFED legislation through the Senate to the President's desk 
this year.
    Senator Boxer, who could not be here today, also deserves 
tremendous thanks for her work on water issues.
    Mr. Chairman, thank you for allowing me to sit in on this hearing 
today and make a few comments about H.R. 2641, the CALFED authorization 
legislation George Miller and I introduced last month.
    Our bill, the California Bay-Delta Authorization Act, brings the 
various stakeholders to the table and provides both the method and the 
means for Californians to heal the Bay Delta and resolve our ongoing 
and future water supply shortages.
    This bill, which is very similar to the Feinstein-Boxer bill in the 
Senate, would provide a framework for addressing the many delicate and 
varied components of the California Bay-Delta Program, including:--
water storage, ecosystem restoration, water supply reliability, water 
quality, conveyance, water use efficiency, water transfers, the 
Environmental Water account, levee stability, governance, and sound 
science.
    In the end, the final solution must fairly balance the competing 
needs of our growing population, agricultural interests, the 
environment and adhere to the Record of Decision that California 
stakeholders worked so hard to develop.
    My district includes much of the Bay Delta, so I am very familiar 
with its tremendous importance.
    Simply put, restoring the Bay-Delta is imperative for improving 
water quality locally, and essential for the long-term supply solutions 
across the state.
    The ROD also identifies an important potential surface storage 
project in my district--the expansion of the Los Vaqueros Reservoir.
    Another regionally important water supply reliability project that 
would be advanced by CALFED is the Freeport project, which is the 
historic agreement reached by East Bay MUD and the Sacramento region.
    Mr. Chairman, Ranking Member Napolitano and members of the 
Committee, we are facing a crisis in California that will make our 
state's energy fiasco look like a walk in the park if we fail to act.
    As you know, this year's Energy and Water bill contains no funding 
for CALFED, but specifically states funding may be available if the 
program is reauthorized this year. We cannot afford to wait another 
year to act.
    Mr. Chairman, I applaud your leadership in holding field hearings 
and developing legislation to begin the process in the House.
    The time is now for Californians, regardless of party or region, to 
come together to advance comprehensive authorizing legislation that 
will ensure the federal government is an active partner with our state 
in solving our complex water challenges.
    I pledge to work with you, this committee and the California 
delegation to help craft a balanced bill that can move through the 
House and to the President's desk this year.
    Thank you for the opportunity to testify and I yield back the 
balance of my time.
                                 ______
                                 
    Mr. Calvert. Perfect. I thank the gentlelady.
    Mrs. Napolitano. Mr. Chairman, I would like to submit for 
the record George Miller's statement.
    Mr. Calvert. Without objection, so ordered.
    [The prepared statement of Mr. Miller follows:]

Statement of The Honorable George Miller, a Representative in Congress 
                      from the State of California

    Chairman Calvert, Ranking Member Napolitano--I want to thank you 
both for including my legislation, H.R. 2641, in your hearing on Cal-
Fed reauthorization. I also want to take this opportunity to commend 
Senator Feinstein for doing the extremely hard work of crafting a Cal-
Fed compromise that has a very good chance of passing the Senate.
    As many of you know, Congress has failed to re-authorize Cal-Fed 
legislation for the past two sessions. There has never been other time 
in our state's history that it is more important to come together to 
ensure we have some control over the future of our water supply and 
water quality.
    Numerous policies and decisions coming out of the Bush 
Administration jeopardize not only our water supply but also our water 
quality.
    The future of the state's ability to utilize Colorado River water 
is uncertain.
    The Bureau of Reclamation is the process of renewing Central Valley 
Project contracts that could dedicate as much as 7 Million AF water for 
the next 25 - 50 years.
    The Bureau has failed to release two studies that evaluate the 
feasibility of water recycling and desalination projects. One of the 
study is for Northern California and one of the studies covers Southern 
California.
    In addition, there is continued conflict over the management of the 
Trinity River.
    Outside of the Department of Interior, Department of Defense and 
the Environmental Protection Agency are looking at policies impacting 
groundwater contamination problems posed by perchlorate and MTBE.
    Meanwhile, shifting demographics and rapid population growth are 
putting enormous pressure on our agriculture lands which not only serve 
as an influential economic sector but also as valuable open space.
    It is time for Congress to step up to the plate and enact Cal-Fed 
legislation so that we can move ahead with determining our own water 
future.
    I have introduced legislation, based largely on the bill introduced 
by Senators Feinstein and Boxer. They worked very hard in crafting 
legislation which addressed the concerns of their fellow Senators and 
greatly increased the likelihood that it would pass.
    I, along with Rep. Tauscher, have taken the model legislation 
drafted in the Senate and adopted it to the unique politics we face in 
the House.
    Specifically, we added some provisions which help assure our House 
Colleagues that water users in California are paying their fair share 
for water in addition to managing that water appropriately.
    I want to stress again that Congress needs to act quickly and pass 
a Cal-Fed reauthorization bill. It would be foolish to get bogged down 
in the same intrastate battles that have held up previous legislation.
    We need to move forward and I believe that the compatibility of my 
legislation and that of Senators Feinstein and Boxer make it very easy 
to quickly pass something through both the House and Senate and put on 
the President's desk.
    Thank you again for your efforts.
                                 ______
                                 
    Mr. Calvert. Our first panel with us is General Eugene E. 
Habiger, United States Air Force, Retired, President and CEO of 
the San Antonio Water System, Texas--welcome back; Ms. Irela 
Bague, Member of the Governing Board of the South Florida Water 
Management District, representing Miami-Dade County, Florida; 
Mr. Eduardo A. Campirano, the Assistant Manager and COO of the 
Brownsville Public Utilities Board; and Mr. Robert Neufeld, 
Member of the Board of Directors, Cucamonga County Water 
District.
    I now recognize General Eugene Habiger to testify for 5 
minutes. If you could please try to stay within that because of 
the timing today--and again, I apologize--so we can have some 
time for questions, I would appreciate that, General. With 
that, you are recognized for 5 minutes.

      STATEMENT OF EUGENE E. HABIGER, PRESIDENT AND CEO, 
                SAN ANTONIO WATER SYSTEM, TEXAS

    Mr. Habiger. Thank you, sir. It is good to be back. I would 
like to put my written statement into summary form and submit 
it for the record.
    Mr. Calvert. Without objection, so ordered.
    Mr. Habiger. Good afternoon. I am Gene Habiger, president 
and CEO of San Antonio Water System. And I am here today also 
representing the WateReuse Association.
    Chairman Calvert, members of the Subcommittee, I am honored 
to appear before you again. As you indicated last March, I was 
here to discuss the nature and extent of the challenges that 
both Texas and the Nation are facing to ensure a safe and 
reliable water supply.
    I want to commend this Subcommittee for its willingness to 
highlight the importance of water-reuse projects. Chairman 
Calvert, you and Ranking Member Napolitano have been staunch 
supporters of maintaining strong Federal partnerships with 
communities striving to develop innovative and alternative 
water supply projects.
    The WateReuse Association supports your proposal to 
establish a comprehensive, competitive grants program that 
would begin to address the needs of local communities' water 
supply shortages. There are a number of areas with the 
legislation that we would like to clarify as to how the program 
would be implemented.
    Title I of your proposed legislation would establish a 
nationwide competitive grants program to develop alternative 
water supply projects. The authorization of $100 million a year 
falls far short of the demonstrated requirement but, in my 
view, it is a realistic level, given today's budget 
environment.
    Title I provides for a complete overhaul of the way in 
which the Federal Government would implement water resources 
development policy. It would identify the value of a broad-
based response to meeting water supply shortages and, most 
significantly, it includes a coordinated approach by requiring 
the Secretary of Interior, acting through a newly established 
resources coordinator, to work with other Federal agencies to 
identify resources and other agencies that could be used to 
promote the development of such water supply projects.
    Mr. Chairman, the WateReuse Association is pleased that 
your legislation seeks to develop a comprehensive approach to 
meet the needs of the entire Nation. Reclaimed or recycled 
water is an important tool for the Nation's cities as they work 
to manage the water demands of a growing population. Nowhere is 
truer than in Texas, where over 100 recycled water systems put 
recycled water to beneficial use.
    For San Antonio, we have a mature recycled water program 
and our recycled water is an important part of our integrated 
approach to water resources management that relies on reducing, 
reusing, and recycling our water before developing new 
freshwater resources. Our recycled water is of very high 
quality, almost to drinking water standards. Only two cities 
compare to our water quality levels. They are San Jose and San 
Diego, California. Our 72-mile pipeline system took almost 6 
years and $125 million to design and build, but the benefits 
are obvious. And most importantly, the seed corn for our 
project was a $200,000 Federal study grant received in 1996.
    San Antonio is well recognized for our River Walk. Our city 
welcomes over eight million visitors a year, generating over $4 
billion in economic impact. Our recycled water system is 
designed to supply over a billion gallons of water a year into 
the San Antonio River, thus assuring, no matter what the 
drought conditions, a reliable source of water to sustain that 
economic impact to our city.
    Our recycled water is used at three military bases, 
numerous local businesses, which include Valero and United 
States Automobile Association, and we irrigate four of our 
municipal golf courses. San Antonio is committed to doing 
everything we can to conserve and reserve our existing 
resources. Additionally, a decision to invest in this source of 
supply is especially important for our community as we face 
limits on our historic water supply due to pumping caps in the 
Edwards Aquifer.
    In summary, the WateReuse Association and its members, 
including the San Antonio Water System, look forward to 
supporting you and other members of the Subcommittee to develop 
meaningful policy to meet the challenges of delivering safe and 
reliable water supplies.
    Thank you for the opportunity to appear here today. I look 
forward to answering any questions you may have. Thank you, 
sir.
    [The prepared statement of Mr. Habiger follows:]

Statement of General Eugene Habiger, U.S.A.F., (Retired), President and 
  CEO, San Antonio Water System, San Antonio, Texas, on behalf of the 
                         WateReuse Association

    Good morning. I am Eugene Habiger, President/CEO of the San Antonio 
Water System (SAWS), and I am here today also representing the Water 
Reuse Association. Mr. Chairman, Members of the Subcommittee, I am 
honored to appear before you again. In late March, I appeared before 
this Subcommittee to discuss the nature and extent of the challenges 
that both Texas and the nation are facing to ensure safe and reliable 
water supply. I also want to note that this Subcommittee is to be 
commended for its willingness to highlight the importance of water 
reuse projects. Mr. Chairman, you and Ranking Member Napolitano, have 
been staunch supporters of making certain that a strong federal 
partnership is maintained with communities that are striving to develop 
innovative and alternative water supply projects. We appreciate your 
recent statements in support of increases in the water reuse budget at 
the U.S. Bureau of Reclamation.
    The recent action by the House Committee on Appropriations 
reaffirmed its support of this partnership as part of the Fiscal Year 
2004 budget. I am pleased to have the opportunity to address you and 
comment on the Chairman's legislation to create a meaningful response 
to the national water supply shortage that communities are 
experiencing.
    Thank you for inviting me to share with you the importance of water 
desalination and water reuse projects not only for San Antonio, but 
also for many communities in Texas and our nation, and the role that 
the federal government can and must play to ensure these projects are 
successful.
Title I, H.R. 2828
    The WateReuse Association supports your proposal to establish a 
comprehensive competitive grants program that would begin to address 
the needs of local communities' water supply shortages. There are a 
number of areas within the legislation that we would like to work with 
you and the Subcommittee on to clarify some of our questions about how 
the program would be implemented. However, we believe the key point is 
that, should this important legislation be enacted into law, the nation 
will for the first time have a proposed policy that would establish the 
same priority for reuse and other alternative water supply programs as 
that which currently exists in water pollution control and drinking 
water quality. If this legislation is enacted, we hope to see similar 
gains made in the development of alternative water supply projects as 
witnessed in the advances in water quality through implementation of 
the Clean Water and Safe Drinking Water Acts. These advances are 
attributable to the strong federal partnership that was established 
through grants and loans to support the development of water and 
wastewater projects at the local level.
    Title I of H.R. 2828 would establish a nationwide competitive 
grants program to develop alternative water supply projects. The 
authorization of $100 million per year falls far short of the 
demonstrated need, but it is a realistic level given today's austere 
budget conditions at the federal level. We are equally supportive of 
the legislation's provisions to expand the existing commitment for the 
Title XVI program, thereby providing an important signal to those 
western communities that are currently confronting some of the most 
severe water shortages in the history of the West.
    Title I provides for a complete overhaul of the way in which the 
federal government would implement water resources development policy. 
It would identify the value of a broad-based response to meeting water 
supply shortages. The ability to tailor a response to the unique 
circumstances of an area is central to a successful partnership. Some 
communities will be in a position to rely entirely on water reuse--
other areas may find that a combination of reuse and desalination, for 
example, is a more cost-effective response to supply shortages. Title I 
offers the flexibility that is needed in local water resources 
development planning.
    In the past, the WateReuse Association has urged Congress to 
consider the fact that many federal agencies are involved in the 
development of water supplies and to provide incentives to promote the 
efficient application of reuse technologies. We are pleased to see that 
Title I would require just such a coordinated approach by requiring the 
Secretary of the Interior, acting through a newly established 
``resources coordinator,'' to work with other federal agencies to 
identify these resources in other agencies that could be used to 
promote the development of such water supply projects. The priority to 
use limited federal resources in an efficient manner is a sound goal.
    However, we are concerned that the goal may be problematic to 
achieve if only because of competing and long established, yet 
justified, priorities within each of these federal agencies. Instead, 
we would recommend that the Subcommittee revise this element of Title I 
to require each of the federal agencies to report to the Congress on 
ways in which their programs could be used to complement the 
alternative water supply activities in other federal agencies. If this 
revision were to be adopted, it would serve as an important complement 
to the bill's other provision, the creation of a multi-agency task 
force. The ability to combine the task force's accounting of existing 
resources throughout the federal bureaucracy with ways to coordinate 
the use of these resources would bring tremendous efficiencies to the 
development of water supply projects.
    Mr. Chairman, the WateReuse Association is pleased that your 
legislation seeks to develop a comprehensive approach to meeting the 
needs of the entire nation.
What is SAWS and Texas Doing?
    SAWS is a municipally owned water utility serving approximately one 
million people in South Central Texas. We provide drinking water, 
wastewater and recycled water service to nearly 300,000 connections 
including three military bases (Lackland AFB, Brooks City Base, Fort 
Sam Houston), numerous large businesses (USAA, Valero, and soon 
Toyota), four municipal golf courses, six universities and numerous 
other significant institutions.
    Currently, most of San Antonio's drinking water is pumped from the 
Edwards Aquifer, a massive underground reservoir. However, due to 
endangered species issues, our ability to rely solely on this unique 
resource is no longer practicable. The City of San Antonio/Bexar County 
community reached a significant milestone on October 19, 2000. On this 
day the San Antonio City Council via Ordinance # 92753 approved a 
multi-year funding mechanism (Water Supply Fee) for the construction 
and development of additional water resources to meet our projected 
water demands for the next 50 years.
    SAWS uses an integrated approach to achieve this task. As we strive 
to secure our water future, we are as concerned with managing demand, 
through our nationally recognized water conservation efforts, as we are 
with developing new supplies. Per capita water demand has reduced by 
approximately 32% over the last 15 years--we're using less water today 
than we did 20 years ago even though our population has grown. 
Desalination and water reuse are important components of our 50-year 
plan.
    Texas Senate Bill 1 (1997) created 16 regional water planning 
groups charged with developing water management strategies to meet 
Texas' water needs. The recommendations of each region are now part of 
the 2002 State Water Plan, Water for Texas.
    Desalination was a recommended water management strategy in several 
regions: The Far West Texas Region and the Coastal Bend Region, 
desalination of brackish groundwater was used as a strategy to provide 
approximately 67,000 acre-feet per year (AFY) in additional supplies. 
The desalination of seawater was recommended by the South Central Texas 
Region (San Antonio is a member) to provide up to  85,000 AFY. 
Currently in Texas, municipal desalination capacity is 25,750 AFY 
(source: 2002 State Water Plan).
    On April 29, 2002, Texas Governor Rick Perry directed the Texas 
Water Development Board (TWDB) to develop a recommendation for a 
demonstration seawater desalination project as one step toward securing 
an abundant water supply to meet Texas' future water supply needs.
    The TWDB has identified three sites for demonstration projects: 
Corpus Christi, Free Port, and Brownsville--all major cities along the 
Texas coast. All three projects envision starting at 25 mgd with the 
possibility of expanding to 100 mgd. SAWS is exploring opportunities to 
partner with Corpus Christi. The TWDB identified the possibility of 
funding for the desalination projects through existing State financial 
assistance programs and through the issuance and use of private 
activity bonds. Currently, two options exist for private activity bond 
proceeds to be used to finance large-scale water projects:
    1) LTWDB may apply to the Bond Review Board for a portion of the 
State Cap through the ``State Voted Issues'' category or,
    2) LPolitical subdivisions of the State may apply to the Bond 
Review Board through the ``All Other Issues'' category. If TWDB applies 
for an allocation of the State Cap though, a $50 million maximum is 
imposed. Political subdivision applications are further restricted to a 
maximum of $25 million per project.
    Neither of these amounts would be sufficient to provide the 
financing necessary for a large-scale water project.
    The Texas Water Development Board (TWDB) also did a survey of 
possible federal assistance:
     LArmy Corps of Engineers: The Water Supply Act of 1958 
(Public Law 85-500) and the Water Resources Development Act of 1986 
(Public Law 99-662) prescribe the Army Corps of Engineers' (Corps) 
authority related to water-supply initiatives. These acts authorize the 
Corps to cooperate with State governments and local entities to develop 
water supplies as part of multiple-purpose projects. Desalination 
plants typically are not considered multiple-purpose projects; 
therefore, the Corps does not usually have the authority to participate 
in planning or construction of desalination projects. The Corps has 
included a desalination plant in a reconnaissance study it is 
conducting with the Nueces River Authority as possible environmental 
remediation. The Corps is currently participating in a desalination 
project in El Paso, Texas. The Corps' involvement in the El Paso 
project is unique, however. Because the desalination plant will help 
meet water-supply needs of Ft. Bliss, the Corps may participate in the 
project as part of its mission to support the military base.
     LBureau of Reclamation: According to the Bureau's 
Guidelines for Preparing, Reviewing, & Processing Water Reclamation and 
Reuse Project Proposals Under Title XVI of the Public Law 102-575, As 
Amended, a demonstration project is defined as one that is sized 
appropriately to demonstrate practicality and that also promotes 
application of innovative technologies, promotes nontraditional 
application of current technology as yet unproven, or establishes the 
feasibility of recycling water to local institutions when an unproven 
technology is employed. Application of a known technology that merely 
demonstrates feasibility in a different site or geographic region or 
modification of an already successfully applied technology would not 
qualify as a demonstration project.
     LEnvironmental Protection Agency: The U.S. Environmental 
Protection Agency (EPA) has provided funding for desalination projects 
as authorized under the National Assistance Program for Water 
Infrastructure and Watersheds. Under the program, EPA may provide 
technical and financial assistance in the form of grants for the 
construction, rehabilitation, and improvement of water-supply systems. 
Typically the allocation of funding under this program is specified in 
the committee report that accompanies EPA's appropriations.
Brine and Concentrate Removal
    The reject brine and concentrate streams from seawater and brackish 
groundwater desalination plants have to be removed, disposed of and/or 
beneficially reused. The location of the desalination facility usually 
limits the brine and concentrate removal and disposal options.
    Typical removal options include any combination of the following:
    1. LReturned to Oceans, Bays and/or Estuaries
    2. LDeep Well Injection
    3. LDisposed of Via Landfills
    4. LBeneficial Reuse
    Beneficial reuse of desalination brine and concentrate is rarely an 
option at the current time; however, there is the need to have ongoing 
public/private research projects to include new treatment technologies 
exploring beneficial reuse options. Potential research projects for 
beneficial uses of the reject stream are as follows:
    1. LRoad or Soil Stabilization
    2. LDust Control
    3. LSoftener Regenerate
    4. LSalt Blocks for livestock and wildlife
    5. LCotton Root Rot Control
    6. LSpecific Chemical Recovery (i.e. magnesium for industrial 
consumption).
    There are several environmental concerns associated with brine 
removal and disposal, which need further study:
    Disposal of high salt content brine can be pipelined back to the 
ocean, but must be far offshore to assure that bays and estuaries are 
not affected by rise in salt content. Disposal of low salt content 
brine to surrounding areas has the potential of raising temperatures in 
bays and estuaries as well as possible increasing salt concentrations 
over time.
    Disposal of brine sludge and filters byproducts (if filtration 
methodology is used) through land filling is an option, however 
landfills are generally located at some distance from the desalination 
plants; therefore, it would be expensive to transport and process brine 
waste. Most landfills will only process solid waste; therefore, the 
desalination byproducts would have to be dried before processing.
    Disposal of brine byproduct via deep well injection poses potential 
environmental concerns.
    Clearly, the federal government could and should be doing more to 
encourage and assist state and local governments to undertake 
desalination projects. Title I of H.R. 2828 is a positive step in this 
process.
Water Reuse
    Reclaimed, or recycled, water is an important tool for the nation's 
cities as they work to manage the water demands of a growing 
population. Nowhere is this truer than in Texas--where over 100 
recycled water systems put recycled water to beneficial use. The 
reasons for such an abundance of reclaimed water applications in Texas 
range from the need to dispose of reclaimed water to meet water quality 
concerns in receiving streams or from the need to develop ``drought 
proof'' supplies for business and industry. San Antonio provides a good 
example of the critical role of recycled water for meeting water 
resource needs.
    In 2002, SAWS completed the first phase of its system to recycle 
treated wastewater effluent for irrigation and industrial uses. For San 
Antonio, recycled water is an important part of our integrated approach 
to water resource management that relies on reducing, reusing, and 
recycling our water supplies while developing new freshwater resources.
    SAWS currently operates one of the largest water recycling or 
reuse, programs of its kind in the county. Over the past 6 years 
facilities have been put into place to deliver up to 35,000 AFY of 
recycled water annually to potential customers for non-potable uses, 
such as industries, cooling towers, military bases, parks, and river 
maintenance. The program has matured rapidly from concept, design, 
construction, to operation. When added to the 30-40,000 AFY demand for 
recycled water by the city's electrical utility, City Public Service, 
the nearly 75 mgd system provides a cost-effective alternative to the 
Edwards aquifer. This system not only protects businesses and military 
bases from drought, but also benefits endangered species habitat by 
helping to curb the increasing demand on the Edwards aquifer.
    Our recycled water is of very high quality--almost to drinking 
water standards. Two cities comparable to our water quality levels are 
San Jose and San Diego. To further supplement our water supply, we 
began using recycled water for cooling lakes required for the city's 
electrical utility. This system now provides a drought-proof supply for 
industries, cooling towers, military bases, universities, municipal 
parks, golf courses and river maintenance.
    Our 72-mile pipeline system took about 6 years to design & > $125M 
to build--but the benefits are obvious.
    San Antonio is well recognized for its ``River Walk''. Our city 
welcomes over 8 million visitors a year--generating over $4 billion of 
economic impact. Our Recycled Water System is designed to supply 4,250 
acre-feet per year, or over a billion gallons, into the San Antonio 
River--thus assuring a reliable source of water year round.
Conclusions/Recommendations
    San Antonio has determined that we must do everything we can to 
conserve and reserve our existing resources. Additionally, the decision 
to invest in this source of supply was especially important for our 
community as we faced limits on our historic water supply due to 
pumping from the Edwards Aquifer, home to threatened and endangered 
species.
    For this reason, San Antonio may be uniquely positioned for 
achieving clear federal purposes as it implements its long-range water 
resource programs including desalination and recycled water. These 
purposes include, as a minimum, ecosystem restoration and protection of 
endangered species.
    In addition to the funds expended for the recycled water program, 
SAWS will invest in excess of $2.6 billion dollars over the next 50 
years to diversify its water supply. This will reduce our reliance on 
the Edwards Aquifer, provide us with a reliable water supply for San 
Antonio and help maintain the habitat of federally protected species.
    Other communities, which are not faced with endangered species 
issues, are looking into desalination and are using recycled water as a 
way to ensure that key industries and business interests are provided a 
secure source of water even during drought.
    Especially during these times of economic uncertainty, ensuring 
reliable water is critically important to protect our local, state and 
federal economies; and to protect jobs. As new systems are developed 
and put on line it should be expected that additional regulation would 
be forthcoming to protect the environment and public health.
    Just as local users are helping to achieve federal purposes, the 
federal government can assist communities further the use of 
desalination and recycled water by:
    1. LProviding grants or cost-share funds for desalination 
demonstration projects, water quality and the treatment needed for use 
of recycled water in certain applications (e.g. concrete for highway 
construction, industrial uses such as micro-chip or other specialty 
manufacturing, etc.);
    2. LProvide research assistance for studies related to beneficial 
uses for brine.
    3. LProvide assistance and training for design, construction and 
operation of recycled water systems;
    4. LCreate incentives for the reuse of water from wastewater 
treatment plants rather than discharging it into streams (supports 
Clean Water Act goals);
    5. LRequire the use of recycled water, for non-potable purposes, at 
federal installations, federal office buildings, for projects funded 
with federal funds, and by contractors when such supply is available; 
and
    6. LFund such uses from the federal budget rather than shifting 
those costs to the local communities.
    These are just a few ideas of policies and programs that could be 
developed to encourage the development of desalination and recycled 
water facilities throughout the nation.
    Such use of our precious natural resources is an important 
component of managing the needs of a growing population, protecting the 
environment and keeping our nation's economy vibrant.
    Again, Mr. Chairman, it is an honor to participate in this process. 
The WateReuse Association and its members--including the San Antonio 
Water System--look forward to supporting you and other members of the 
Subcommittee to develop a meaningful policy to meet the challenges of 
delivering safe and reliable water supplies to municipalities, 
industries, agriculture, and environment. Thank you for the opportunity 
to appear before you today, I would be pleased to answer any question 
you may have.
                                 ______
                                 
    Mr. Calvert. Thank you for your statement, General. Mr. 
Rodriguez would like to say a few things.
    Mr. Rodriguez. Mr. Speaker--Mr. Chairman, thank you for 
allowing me to just say a few words. I would just like to take 
a moment to recognize General Habiger because of San Antonio--
he is in charge of the water system, but in addition he has 
been president/chief executive officer of San Antonio Water 
System, the general also has over 35 years of experience in 
national security and nuclear operations. So I wanted to 
mention that. And prior to joining San Antonio Water System, 
the General was with the U.S. Department of Energy, Director of 
Security and Emergency Operations, as well as his role overseas 
of all security functions, including safeguards and security 
policies and cyber security and critical infrastructure 
protection and foreign visits and assignments and emergency 
operations functions.
    So we are real proud to have him there and he has done some 
tremendous work there. I just wanted to make sure to thank him 
for being here and also for taking the time, and also for 
taking the position, because he is also--one of the beauties of 
his efforts has been to diversify the water use in San Antonio, 
not only in terms of underground water, but also reuse as well 
as surface water. And we have one of the unique projects in the 
country and I think it is one of the largest what we call 
storage and retrieval, where we pump in water and then retrieve 
it when we need it in the hot summers. It is one of the unique 
projects that is recognized nationally.
    And I know that he is also exploring other possibilities 
of--you know. So I just wanted to make sure that--he is 
experienced in the military, and I want to thank you for that. 
Thank you.
    Mr. Calvert. Well, I thank Mr. Rodriguez. I think 
experience in war and the military and to go into water issues 
have probably been good training for you.
    Mr. Habiger. It was. Thank you, sir.
    Mr. Calvert. With that, we are happy to recognize Ms. Irela 
Bague to testify for 5 minutes. Thank you.

STATEMENT OF IRELA BAGUE, MEMBER OF THE GOVERNING BOARD OF THE 
  SOUTH FLORIDA WATER MANAGEMENT DISTRICT, REPRESENTING MIAMI-
                      DADE COUNTY, FLORIDA

    Ms. Bague. Chairman Calvert, members of the Subcommittee, 
my name is Irela Bague and I am a member of the Governing Board 
of the South Florida Water Management District from Miami-Dade 
County. I appreciate the opportunity to testify today on that 
portion of your legislation that would authorize a new 
competitive grant program to fund desalination projects, among 
other things.
    In the interest of the Committee's valuable time, I would 
like to submit--these are just going to be key points I am 
going to be addressing, and I would like to submit my written 
testimony.
    Mr. Calvert. Without objection, so ordered.
    Ms. Bague. Thank you. The mission of the South Florida 
Water Management District is to manage and protect water 
resources of Central and Southern Florida by balancing and 
improving water quality, flood control, natural systems, and 
water supply. The district covers all or part of the 16 
counties, stretching from the headwaters of the Kissimmee River 
near Orlando all the way to the Florida Keys, and coast to 
coast from Fort Myers to Fort Pierce. Our region encompasses 
the major population centers of Miami-Dade, Broward, and Palm 
Beach counties, along with the unique Everglades ecosystem.
    Over 6.5 million people live within the district's 
boundaries. And like other water resource managers throughout 
the U.S., we are struggling to address the long-term challenges 
posed by drought, increasing population, competing demands from 
business, agriculture, and the environment. These challenges 
recently led us to join together with water agencies from other 
states, including California and Texas, to form the United 
States Desalination coalition. This group is dedicated to 
advocating an increased Federal role in advancing desalination, 
both seawater and brackish water, as a viable long-term tool 
for meeting our Nation's water supply needs.
    Most experts agree large portions of the U.S. will face a 
water supply crisis of potentially immense proportions as the 
populations continue to grow and few new resources of water are 
available. In places like California, Florida, Texas, New 
Mexico, and Georgia, urban areas are already struggling to meet 
increasing demands. Water conservation and the emergence of 
water recycling have helped stretch available supplies, but are 
still insufficient. In addition, in certain regions of the 
country, the competition for limited water resources threaten 
the implementation of environmental restoration programs, such 
as the Everglades and the California Bay-Delta ecosystems.
    It is our belief that the answer in part lies with 
desalination of seawater and brackish surface and ground water. 
Consider for a moment some of the benefits of desalination. It 
provides a renewable supply of new water, regional security 
through supply redundancy, drought-proof supply, source of 
high-quality water, and no rights or third-party agreements are 
necessary.
    I respectfully submit that we stand at the threshold of a 
new era of water supply. Once considered by many to be 
financially out of reach, the new economics of desalination 
brought on by the tremendous advances in the areas of membrane 
technology now make it possible. Over the past decade alone, we 
have reduced the cost of desalinating one acre-foot, or 326,000 
gallons of seawater, from $2,000 to under $900. Throughout the 
U.S., there are a significant number of seawater and brackish 
water desalination projects under way in the planning or 
development stages. The most notable is the recently completed 
Tampa facility in my own State that will eventually produce 28 
million gallons of water for the Tampa Bay region. Other 
projects being considered in Florida include Fort Myers, Palm 
Beach, Fort Lauderdale, and Volusia counties.
    Whether or not these projects or others like them in 
California and elsewhere are built in time to address the 
mounting water-supply crisis is largely dependent on whether 
the Federal Government can commit to investing in this new 
infrastructure, as it has previously invested in potable water 
treatment, irrigation, flood control and wastewater treatment.
    That is why the legislation that you have introduced, Mr. 
Chairman, is so important. We applaud your efforts to establish 
a new competitive grant program that would in part help fund 
desalination projects and facilities. The U.S. Desalination 
Coalition recognizes that this is truly a work in progress, and 
we look forward to working with you and other Members of 
Congress to develop a comprehensive program to accelerate 
desalination in the United States.
    To that end, I would like to add several suggestions that 
we think should be at the center of any new desalination 
program.
    One, the benefits of desalination are national in scope, 
and a program designed to provide new Federal investment in 
these facilities must be made available to all 50 States.
    Second, despite the tremendous advances in membrane 
technology that have reduced costs of desalinating water, 
energy costs still remain high and they are responsible for 
approximately 30 percent of the overall cost of desalinated 
water. The best way to accelerate the development of these 
projects is to lower the net cost to a point where it is 
equivalent to other supplies.
    We believe that this can be best accomplished by providing 
energy assistance payments of approximately 62 cents per 
thousand gallons to entities that successfully develop 
desalination projects. We would recommend that these payments 
be limited to the initial 10 years of a project's operation. 
The U.S. Desalination Coalition has recommended a performance-
based, competitive system to provide this form of assistance on 
a pilot basis to a limited number of projects, and we hope that 
you will consider this as you move forward.
    And last, because brackish water desalination projects 
typically lack a large urban infrastructure and population base 
to repay capital construction costs, and concentrate disposal 
is more complicated and expensive, some form of construction 
grant assistance should be made available to entities 
developing brackish water desalination facilities.
    Mr. Chairman, we appreciate your leadership in attempting 
to comprehensively address America's water supply crisis. We 
and the other members of the United States Desalination 
Coalition look forward to working with you and other Members of 
Congress to develop the new Federal initiative to spur the 
development of the next generation of water supply projects 
based on desalination.
    In closing, I would like to leave you with a quote from 
President John F. Kennedy some 41 years ago: ``If we could 
produce fresh water from saltwater at a low cost, that would 
indeed be a service to humanity and would dwarf any other 
scientific accomplishment.'' Those are strong words coming from 
a man who launched our Nation's voyage to the stars, and are 
words worth pondering as we move further into the 21st century.
    Thank you so much for this opportunity to speak before you 
today, and I will be available to answer your questions.
    [The prepared statement of Ms. Bague follows:]

           Statement of Irela Bague, Governing Board Member, 
                South Florida Water Management District

    Chairman Calvert and Members of the Subcommittee, my name is Irela 
Bague and I am a member of the Governing Board of the South Florida 
Water Management District from Miami--Dade County. I very much 
appreciate having the opportunity to testify today on that portion of 
your legislation that would authorize a new competitive grant program 
to fund desalination projects among other things.
    The mission of the South Florida Water Management District is to 
manage and protect the water resources of central and southern Florida 
by balancing and improving water quality, flood control, natural 
systems and water supply. The District covers all or part of 16 
counties that stretch from the headwaters of the Kissimmee River near 
Orlando, all the way to the Florida Keys--and coast to coast from Fort 
Myers to Fort Pierce. Our region encompasses the major population 
centers of Miami-Dade, Broward, and Palm Beach Counties, along with the 
unique Everglades ecosystem. Over 6.5 million people live within the 
boundaries of our District.
    Like other water resource managers throughout the United States, we 
are struggling to address the long term challenges posed by drought, 
increasing population, and competing demands from business, 
agriculture, and the environment. These challenges recently led us to 
join together with water agencies from other States including 
California and Texas to form the United States Desalination Coalition, 
a group dedicated to advocating an increased Federal role in advancing 
desalination, both seawater and brackish, as a viable long term tool 
for meeting our Nation's water supply needs.
    Most experts, including the Department of the Interior, agree that 
large portions of the United States are facing a water supply crisis of 
potentially immense portions as the population continues to grow and 
few new sources of water are developed. In places like California, 
Florida, Texas, New Mexico, and Georgia urban areas are struggling to 
the meet the demands of exploding populations despite the fact that 
water supplies have remained the same or even decreased over the last 
ten to fifteen years. Water conservation and the emergence of water 
recycling as a tool for meeting non-potable demands have stretched 
available supplies farther and farther. But in many cases the savings 
resulting from conservation and recycling don't even begin to make up 
for water supply losses attributable to environmental restoration 
programs that have forced the dedication of huge amounts of available 
water to environmentally sensitive areas such as the Everglades or the 
California Bay--Delta ecosystem.
    As outlined in the Interior Department's Water 2025 white paper, 
policy makers increasingly have to deal with water supply crises 
resulting from failures of past policy makers to address competing 
demands of people and the environment for a finite water supply. As a 
result, there is a growing realization that the country cannot afford 
these kinds of crises. The social, economic, and environmental 
consequences of water supply crises are simply too severe.
    It is our belief that the answer, in part, to averting future water 
supply crises and ensuring that clean water is available to families, 
farms, and businesses lies in desalinating seawater and brackish 
surface and groundwater and making that water available for municipal 
and industrial uses. Consider for a moment some of the benefits of 
seawater desalination:
     LRenewable Supply of ``New'' Water Provided
     LRegional Security Through Supply Redundancy
     LDrought-Proof Supply
     LSource of High Quality Water
     LNo Water Rights or Third Party Agreements Needed
    So, given all of the benefits of desalination what, you may ask, is 
going on in the United States today? In some respects I would say that 
we stand at the threshold of a new era of water supply that will be 
characterized by the development of many new seawater and brackish 
groundwater desalination projects. This is due to a collision of three 
factors. The water supply crises I outlined, the recognized benefits of 
desalination that I just described, and--perhaps most importantly--the 
``new'' economics of desalination brought on by the tremendous advances 
in the area of membrane technology over the past decade have reduced 
the cost of desalinating an acre foot of seawater from $2,000 in 1990 
to under $900 today. The collision of these three factors is resulting 
in a rush by water utilities to plan for the development of 
desalination projects and facilities all across the United States.
    Throughout the United States there are a significant number of 
seawater and brackish water desalination projects in various stages of 
planning and development. The most notable is the recently completed 
Tampa facility in my own State that will eventually produce 28 million 
gallons per day of new water for the Tampa Bay region. Other projects 
being considered in Florida include Fort Myers, Palm Beach, Fort 
Lauderdale, and Volusia County.
    Whether or not these projects and others like them in California 
and elsewhere get built in time to address the mounting water supply 
crises is largely dependent on whether the Federal government makes a 
commitment to invest in this new infrastructure as it has previously in 
all manner of other important water related infrastructure including 
potable water treatment, irrigation, flood control, and wastewater 
treatment. That is why the legislation that you have introduced, Mr. 
Chairman, is potentially so important. We applaud your efforts to 
establish a new, competitive grant program that would in part help fund 
the development of desalination facilities. The U.S. Desalination 
Coalition recognizes that this legislation is truly a work in progress 
and we look forward to working with you and other Members of Congress 
to develop a comprehensive program to accelerate desalination in the 
United States. To that end I would like to enumerate several principles 
that we think should be at the center of any new desalination program.
    First, any program to provide financial assistance to entities 
developing desalination projects must be national in scope. The 
benefits of desalination are national in scope and any program designed 
to provide a new Federal investment in these facilities must be 
available to all 50 states.
    Second, we believe that at the center of any new program to 
accelerate the development of seawater and brackish water desalination 
projects there should be a mechanism created to provide energy 
assistance payments to entities developing these projects over a finite 
period of time. Despite the tremendous advances in membrane technology 
that have reduced the costs of desalinating water, energy costs remain 
high and are responsible for approximately 30% of the overall cost of 
desalinated water. The best way to accelerate the development of these 
projects is by lowering the net cost of desalinated water to a point 
where it is equivalent to other supplies. We believe that this can best 
be accomplished by providing energy assistance payments of 
approximately 62 Cents per Thousand Gallons to entities that 
successfully develop desalination projects. We would recommend that 
these payments be limited to the initial ten years of a project's 
operation. The U.S. Desalination Coalition has recommended a 
performance based, competitive system to provide this form of 
assistance on a pilot basis to a limited number of projects and we hope 
that you will consider this approach going forward.
    Third, because brackish water desalination projects typically lack 
a large urban population base with which to repay capital construction 
costs and the issue of concentrate disposal is more complicated and 
expensive, some form of construction grant assistance should be 
available to entities developing brackish water desalination 
facilities. Likewise, we do not believe that this form of assistance is 
necessary to encourage the development of seawater desalination 
facilities. The energy assistance payments previously described should 
be sufficient to encourage the rapid development of these facilities.
    Mr. Chairman, we appreciate your leadership in attempting to 
comprehensively address America's water supply crisis. We and the other 
members of the United States Desalination Coalition look forward to 
working with you and other Members of Congress to develop a new Federal 
initiative based upon the foregoing principles to address some of these 
problems and to spur the development of a new generation of water 
supply projects based on desalination.
    In closing I would like to leave you with a quote from President 
John F. Kennedy some 41 years ago:
    ``If we could produce fresh water from salt water at a low cost, 
that would indeed be a service to humanity, and would dwarf any other 
scientific accomplishment.''
    Those are strong words coming from the man who launched our 
Nation's voyage to the stars and they are words worth pondering as we 
move further into the 21st Century.
    Thank you again for inviting me to testify today. I would be happy 
to answer any questions that you may have.
                                 ______
                                 
    Mr. Calvert. Thank the gentlelady.
    Next, I will recognize Mr. Eduardo Campirano to testify for 
5 minutes, from Brownsville, Texas. You are recognized.

 STATEMENT OF EDUARDO A. CAMPIRANO, ASSISTANT GENERAL MANAGER 
       AND COO, BROWNSVILLE PUBLIC UTILITIES BOARD, TEXAS

    Mr. Campirano. Good afternoon, Chairman Calvert and members 
of the Committee. Thank you for the opportunity to testify 
before you today. My comments have been submitted to the 
Committee.
    My name is Eduardo Campirano, and I am the assistant 
general manager and chief operating officer for the Brownsville 
Public Utilities Board in Brownsville, Texas.
    The Brownsville Public Utilities Board is a municipally 
owned utility company providing electric, water, and wastewater 
services to the citizens of Brownsville, Texas, and the 
surrounding area. Brownsville is located on the southern tip of 
Texas along the U.S.-Mexico border and is currently one of the 
fastest growing metropolitan statistical areas in the United 
States. The Brownsville MSA experienced a 30 percent population 
growth from 1990 to 2000 with a fairly young population, where 
the medium age is 29 years of age.
    The area has experienced significant growth on both sides 
of the U.S.-Mexico border, and Brownsville in particular is 
experiencing unprecedented growth. This growth poses 
significant challenges to the Brownsville Public Utilities 
Board. With the increased issuance of building permits and the 
increased demand placed on the utility systems, there's a 
tremendous demand for infrastructure improvements and 
additional water supply.
    Brownsville and other communities in the lower Rio Grande 
Valley have been working together with the State of Texas and 
the Mexican State of Tamaulipas to solve our need to ensure our 
long-term water supply. This is the top environmental and 
quality of life issue for our entire region. The Brownsville 
Public Utilities Board has developed a water supply plan that 
projects a demand and supply of water for the City of 
Brownsville for the period of 2000 to 2050. At the current 
rate, water demand will deplete supply by the year 2010. 
However, we have not been idle in planning for our future water 
needs. The water supply plan incorporates various elements, 
including water conservation, increased surface water capacity, 
groundwater treatment and development, water reclamation, and 
desalination. However, employing these strategies is dependent 
on implementing legislative and funding initiatives.
    Several years ago, the Brownsville Public Utilities Board 
began planning the construction of the Brownsville Weir and 
Reservoir Project between the U.S. and Mexico on the Rio Grande 
River. This concrete gated Weir structure will create a 
riverine impoundment of water within the banks of the Rio 
Grande River located approximately four miles southeast of the 
City of Brownsville. The project can store up to 6,000 acre-
feet of water consisting of flood spills and releases from the 
Falcon Reservoir, excess and unused releases from the Falcon 
Reservoir, flood flows below the Falcon Reservoir, and Mexican 
water flow releases with Mexico's permission.
    The Brownsville Public Utilities Board is in the final 
stages of securing the Federal approval under the Section 404 
permit of the U.S. Corps of Engineers. The project cost is 
estimated to be $40 million, and significant funds have been 
spent to get the project through the State and Federal 
permitting process. As you well know, gaining the support of 
interest groups and guiding the project through permitting can 
be a very challenging task. While it has been frustrating to 
move the project through the maze of Federal and State reviews, 
we are near our goal.
    I am here today to testify about the importance of the 
Federal and local support to plan, design, and construct 
wastewater reclamation and desalination facilities. We know 
from our involvement in various associations and through 
professional contacts with others involved that Federal Title 
XVI programs and desalination funding have helped Western water 
utilities make the best use of their available water resources. 
The Brownsville PUB has received some planning assistance from 
the Bureau of Reclamation over the past 2 years to plan a 
wastewater reclamation project. We have also asked Congressman 
Solomon P. Ortiz to introduce some legislation to authorize the 
Brownsville PUB to seek Federal funds to match our 75 percent 
local share. We are currently exploring the potential for using 
reclaimed wastewater for an industrial project, and this type 
of funding partnership is an excellent arrangement for both 
parties.
    In addition to wastewater reclamation, the Brownsville 
Public Utilities Board is very interested in Federal 
desalination efforts. As I stated in my earlier remarks, we 
believe desalination is another viable option for meeting our 
water supply needs. Brownsville has substantial impaired 
groundwater, and our location provides strategic access to 
seawater, both of which are essential for our future water 
supply. We have two projects under way that utilize these water 
supply strategies.
    We are in the process of constructing a regional brackish 
groundwater desalination facility. This project provides for 
the deployment of a water supply source that is independent of 
the Rio Grande River, is not subject to water right purchases. 
The project does not have the prohibitive environmental, 
capital, or operating costs of a seawater desalination 
facility, while at the same time developing a water supply that 
is drought-tolerant and provides for improved water supply. 
Phase I of the project will produce 7.5 million gallons of 
water per day, with Phase II expected to double production of 
this high-quality water. We believe that Phase II will create 
the greatest opportunity to secure Federal participation in 
this project.
    In April of this year, the Government of Texas tasked the 
Texas Water Development Board with developing a recommendation 
for a large-scale demonstration seawater desalination project. 
This initiative resolves to add large-scale seawater 
desalination to a mix of water supply sources to meet the long-
term water supply needs of various regions of the State, as 
well as applying technologies that can be feasibly implemented 
in Texas. Brownsville is one of three proposed projects. Again, 
we believe this is a project with great opportunity for Federal 
participation.
    Before I close I would like to commend this Subcommittee 
for holding the hearing and providing the Brownsville Public 
Utilities Board an opportunity to present testimony on these 
issues. I did not present, nor do I have a strong position 
regarding, the method for Federal funding for reclamation or 
desalination projects. I know that many projects are earmarked 
in the appropriations process, and that process typically 
favors certain projects. The Brownsville PUB believes that it 
could successfully compete in the competitive grant approach. 
However, the difficulty with the competitive grant approach is 
the amount of funding that is made available to a particular 
program.
    Again, thank you for the opportunity to appear before this 
hearing. I commend you and the Committee members for your 
efforts and would be happy to answer any quest that you may 
have. Thank you.
    [The prepared statement of Mr. Campirano follows:]

  Statement of Eduardo A. Campirano, Assistant General Manager & COO, 
         Brownsville Public Utilities Board, Brownsville, Texas

    Good afternoon Chairman Calvert and Members of the Committee. Thank 
you for the opportunity to testify before you today. My name is Eduardo 
A. Campirano and I the Assistant General Manager and Chief Operating 
Officer of the Brownsville Public Utilities Board in Brownsville, 
Texas.
    The Brownsville Public Utilities Board is a municipally owned 
utility company providing electric, water and wastewater services to 
the citizens of Brownsville, Texas and the surrounding area. 
Brownsville is located on the southern tip of Texas along the US/Mexico 
border, and is currently one of the fastest growing metropolitan 
statistical areas (MSA) in the United States. The Brownsville MSA 
experienced a 30 % population growth from 1990--2000 with a fairly 
young population, where the median age is 29. The area has experienced 
significant growth on both sides of the US/Mexico border and 
Brownsville in particular is experiencing unprecedented growth.
    This growth poses significant challenges to the Brownsville Public 
Utilities Board. With the increased issuance of building permits and 
the increased demand placed on the utility systems, there is a 
tremendous demand for infrastructure improvements and additional water 
supply. Brownsville and other communities in the Lower Rio Grande 
Valley have been working together with the State of Texas and the 
Mexican State of Tamaulipas to solve our need to ensure our long-term 
water supply. This is the top environmental and quality of life issue 
for the entire region.
    The Brownsville Public Utilities Board has developed a water supply 
plan that projects the demand and supply of water for the City of 
Brownsville for the period of 2000--2050. At the current rate, water 
demand will deplete supply by the year 2010. However, we have not been 
idle in planning for our future water needs. The water supply plan 
incorporates various elements including water conservation, increased 
surface water capacity, groundwater treatment and development, water 
reclamation and desalination. However, employing these strategies is 
dependent on implementation of legislative and funding recommendations.
    Several years ago, the Brownsville Public Utilities Board began 
planning the construction of the Brownsville Weir and Reservoir Project 
between the U.S. and Mexico on the Rio Grande River. The concrete/gated 
weir structure will create riverine impoundment of water within the 
banks of the Rio Grande River located approximately four (4) miles 
southeast of the City of Brownsville. The project can store up to 6,000 
acre feet of water consisting of flood spills and releases from Falcon 
Reservoir, excess and unused releases from Falcon Reservoir, flood 
flows below Falcon Reservoir and Mexican water flow with Mexico's 
permission. The Brownsville Public Utilities Board is in the final 
stages of securing federal approval under the Section 404 permit of the 
U.S. Army Corps of Engineers. The project cost is estimated to be $40 
million and significant funds have been spent to date to get the 
project through state and federal permit processes. As you very well 
know, gaining the support of interest groups and guiding the project 
through permitting can be a very challenging task. It has been very 
frustrating to move the project through the maze of federal and state 
reviews, but we are near our goal.
    I am here today to testify about the importance of a federal and 
local partnership to plan, design and construct wastewater reclamation 
and desalination facilities. We know from our involvement in various 
associations and through professional contacts that the federal Title 
XVI Program and desalination funding have helped western water 
utilities make the best use of their available water resources. The 
Brownsville Public Utilities Board has received some planning 
assistance from the Bureau of Reclamation over the past two (2) years 
to plan a wastewater reclamation project. We have also asked 
Congressman Solomon P. Ortiz to introduce some legislation to authorize 
the Brownsville Public Utilities Board to seek federal funds to match 
our 75% local share. We are currently exploring the potential for using 
reclaimed wastewater for an industrial prospect and this type of 
funding partnership is an excellent arrangement for both parties.
    In addition to wastewater reclamation, the Brownsville Public 
Utilities Board is very interested in federal desalination efforts. As 
I stated earlier in my remarks, we believe desalination is another 
viable option for meeting our water supply needs. Brownsville has 
substantial impaired groundwater and our location provides strategic 
access to seawater, both of which are essential to our future water 
supply strategies. We have two (2) projects underway that utilize these 
water supply strategies.
    We are in the process of constructing a regional brackish 
groundwater desalination facility. This project provides for the 
deployment of a water supply that is a source of water independent of 
the Rio Grande River, and is not subject to water rights purchases. 
This project does not have the prohibitive environmental, capital and 
operating costs of a seawater desalination facility while at the same 
time developing a water supply that is drought tolerant and provides 
for an improved water supply. Phase I of the project will produce 7.5 
million gallons of water per day, with Phase II expected to double 
production of high quality water. We believe that Phase II will create 
the greatest opportunity to secure federal participation in this 
project.
    In April of this year, the Governor of Texas tasked the Texas Water 
Development Board with developing a recommendation for a large-scale 
demonstration seawater desalination project. This initiative resolves 
to add large-scale seawater desalination to the mix of water supply 
sources to meet the long-term water supply needs of various regions of 
the state, as well as applying technologies that can be feasibly 
implemented in Texas. Brownsville is one of three proposed projects. 
Again, we believe this provides a great opportunity for federal 
participation.
    I understand that there is significant interest in Title XVI, 
desalination research and project construction. I know that over the 
past ten (10) years, the Federal government has funded wastewater 
reclamation projects. While it might appear that a substantial amount 
of federal funds have been invested in reclamation projects, it pales 
in comparison to the water supply needs being experienced throughout 
various regions of the United States. As you are aware from your recent 
hearings, there is a very critical need to develop water supplies in 
growing areas of the country and in regions experiencing severe drought 
conditions. The Congress and the Administration should expand the 
funding for programs such as the Title XVI program and desalination 
efforts.
    Before closing, I would like to commend this Subcommittee for 
holding this hearing and providing the Brownsville Public Utilities 
Board an opportunity to present testimony on these issues. I did not 
present, nor do I have, a strong position regarding the method for 
federal funding for reclamation or desalination projects. I know that 
many projects are earmarked in the appropriations process, and that 
process favors certain projects. The Brownsville Public Utilities Board 
believes that it could successfully compete in competitive grant 
approach. However, the difficulty with a competitive grant approach is 
the amount of funding that is made available to a particular program.
    This concludes my testimony. Thank you again for the opportunity to 
appear at this hearing. I commend you for your efforts and I would be 
happy to answer any questions you may have.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Recognize Mr. Robert Neufeld from our part of the country, 
Cucamonga County Water District.

   STATEMENT OF ROBERT NEUFELD, MEMBER, BOARD OF DIRECTORS, 
          CUCAMONGA COUNTY WATER DISTRICT, CALIFORNIA.

    Mr. Neufeld. Thank you, Mr. Chairman, Ranking Member 
Napolitano, members of the Subcommittee. My name is Robert 
Neufeld. I currently serve as the Chairman of the Board of 
Directors of the Cucamonga County Water District in Rancho 
Cucamonga, California. I respectfully request that my written 
comments submitted be admitted for the record.
    Mr. Calvert. Without objection, so ordered.
    Mr. Neufeld. The Cucamonga County Water District is a 
retail water agency located in the western portion of San 
Bernardino County within the Santa Ana River watershed, and 
provides water and wastewater services to more than 150,000 
people. Our agency imports about 50 percent of its water supply 
through the Inland Empire Utilities Agency and the Metropolitan 
Water District. But 40 percent of our water supply comes from 
local groundwater and locally developed water sources, 
including an additional 10 percent that come from local 
mountain sources.
    Our service area overlies the upper portion of one of the 
largest groundwater basins in Southern California, the Chino 
Basin. This is an adjudicated basin under the direction of the 
Superior Court of the State of California and governed by the 
Chino Basin Watermaster Board of Directors.
    I was very fortunate to represent the Cucamonga County 
Water District on the Watermaster Board of Directors as chair 
for two and a half years, and we worked very diligently with 
members of this Committee and with members of the State large 
group to come up with monies to do water recycling and water 
reuse projects in that area. Additionally, I currently serve as 
a public member of the Water Quality Subcommittee for CALFED 
that addresses water quality issues in the context of the Bay-
Delta program.
    Today I will be testifying on water quality challenges 
resulting from the existence of perchlorate within our greater 
region.
    Throughout the Santa Ana watershed, approximately 30 water 
wells are currently shut down or out of production due to 
contamination from perchlorate or other volatile organic 
compounds. That is out of a total of a little over 300 wells 
that currently are at risk from perchlorate contamination.
    Within the Chino Basin, 39 wells of the 106 in that 
immediate Chino Basin area, according to the Chino Basin 
Watermaster, have detectable levels of perchlorate and more 
than one in three exceed the current State of California 
action-level standards for perchlorate.
    Estimates for remediation experienced by one of our 
neighboring water districts are in the range of $1-3 million 
per well, per wellhead treatment, to clean up the perchlorate. 
Projected across the entire Santa Ana watershed, the cost to 
maintain existing well production could range from $300 million 
to almost $1 billion. Such an investment would not produce a 
single drop of new water. It would merely return to production 
that which we have already lost.
    Perchlorate and VOCs are found in underground plumes 
traveling from various areas within our Basin through--
basically as a result of various department of Defense 
activities dating back to the beginning of the Second World 
War.
    Our ratepayers at the local water agencies throughout the 
region are functionally being asked to underwrite the cost of 
cleanup in 2003 for actions, activities, and programs conceived 
in the early 1940's. This is wrong. This is unreasonable. This 
is unacceptable.
    These water quality challenges impose restrictions, 
limitations, and outright reductions of available water to 
serve the citizens throughout our region. Our agency, the 
Inland Empire Utilities Agency, the Santa Ana Watershed Project 
Authority (SAWPA, which is familiar to many of you), the 
Metropolitan Water District, and many of our neighboring 
agencies have developed a strategy to address the problems and 
challenges. First, with regard to water quality, we have 
identified and are looking to remediate these water quality 
challenges. Second, with regard to water supplied, we are 
developing plans, programs, and projects to expand our local 
water supplies by reclaiming these lost sources.
    On Friday, July 11, 2003, my agency, the Cucamonga County 
Water District, hosted a regional meeting with our California 
State Senator, Nell Soto, representatives of other local water 
agencies, and J.P. Woodley, the assistant under secretary of 
defense for the environment with the Department of Defense, and 
other Federal officials to discuss perchlorate in our region 
and, most importantly, what could be done working together to 
clean up our contaminated waters. As a result of that meeting, 
a historic memorandum of understanding was executed between 
myself, two other water agencies, State Senator Nell Soto, and 
the Department of Defense, resulting in a memorandum of 
understanding to work together with DOD to address the 
perchlorate problems within the State.
    The agencies which signed the MOU are prepared to provide 
land, access to wells, water, staff time, and other resources 
to make sure that these projects are successful.
    If DOD, EPA, and other Federal and State agencies would 
work with us to clean up the perchlorate, the VOCs, and other 
impaired waters, then investments in water quality would 
certainly assist our efforts to expand our water supplies.
    These are positive developments. For our part, we pledge 
our cooperation and assistance and full participation.
    I know there are many other things that need to be said, 
but in deference to the time limits I will cut my remarks 
short.
    There is one thing that I do want to make sure gets 
included in the record today. In April of 2001, the Bureau of 
Reclamation completed work on a multi-year feasibility study 
entitled, ``The Southern California Comprehensive Water 
Recycling and Reuse Study.'' It concluded that 34 water 
recycling projects in Southern California could produce an 
additional 450,000 acre-feet of new water by 2010. The Inland 
Empire projects slated as part of that program would produce 
most of that through recycled water. The Department of the 
Interior has not submitted this report to Congress, as required 
by Section 1606(b) of Public Law 102-575 and notwithstanding 
repeated requests by the Resources Committee and this 
Subcommittee for that information. Our agency has completed a 
feasibility study and we are working very hard to move forward 
with this.
    Mr. Calvert, we are prepared to support your bill. We are 
looking forward to reviewing your proposal, evaluate it, and 
report back to you after Labor Day.
    Finally, Mr. Chairman, thank you, Ranking Member 
Napolitano, and the Subcommittee for your leadership and the 
opportunity to testify before you today.
    [The prepared statement of Mr. Neufeld follows:]

  Statement of Robert Neufeld, Member, Board of Directors, Cucamonga 
   County Water District, Rancho Cucamonga, California, on H.R. 2828

Introduction.
    Chairman Calvert, Ranking Member Napolitano and Members of the 
Subcommittee. I am Robert Neufeld. Presently, I serve as Chair, Board 
of Directors, Cucamonga County Water District based in Rancho 
Cucamonga, California (San Bernardino County).
    Cucamonga County Water District is a retail water agency, located 
in the western portion of San Bernardino County within the Santa Ana 
River watershed, and provides water and waste water services to more 
than 150,000 people. Our agency receives approximately 50% of its water 
supply from the Inland Empire Utilities Agency, a member agency of the 
Metropolitan Water District of Southern California (MWD). Approximately 
40% of our locally developed water supply comes from ground water and 
the remaining 10% comes from local mountain sources.
    Our service area overlays the upper portion of one of the largest 
groundwater basins--the Chino Basin--in Southern California. This is an 
adjudicated basin under the direction of the Superior Court, State of 
California and governed by the Chino Basin Watermaster.
    I represented Cucamonga County Water District on the Chino Basin 
Watermaster Board and served as Chair for two and a half years. 
Additionally, I currently serve as a public member of the Water Quality 
Subcommittee for CALFED that addresses water quality issues in the 
context of the Bay-Delta program.
    Today, the Subcommittee asked to testify on water quality 
challenges resulting from the existence of perchlorate within our 
greater region.
Perchlorate, VOCs and other Water Quality Challenges
    Throughout the Santa Ana watershed, approximately 30 water wells 
are currently shut down or out of production due to contamination from 
perchlorate or other Volatile Organic Compounds (VOCs). Today, some 300 
wells are at risk because of perchlorate.
    In the Chino Basin, 39 of the 106 wells, according to the Chino 
Basin Watermaster, have detectable levels of perchlorate. More than one 
in three exceed the current State of California ``action levels'' for 
perchlorate.
    Estimates for remediation, experienced by one of our neighboring 
water districts, are $1--$3 million per well. Projected across the 
Santa Ana watershed, the costs to maintain existing well production 
could range from $300 million to almost $1 billion. Such an investment 
would not produce a single drop of new water. It would merely protect 
what's already in production.
    Perchlorate and VOCs (such as those found in an underground plume 
traveling from the Chino Airport) are in our Basin and throughout our 
region as a result of various Defense Department activities dating back 
to the beginning of the second World War.
    The ratepayers of our water agencies, throughout our region, are 
functionally being asked to underwrite the cost of cleanup in 2003 for 
actions, activities and programs conceived in the early 1940s and 
thereafter. This is wrong. This is unreasonable. This is unacceptable.
    These water quality challenges impose restrictions limitations and 
outright reductions of available water to serve the citizens throughout 
our region.
    Our agency, Inland Empire Utilities Agency, the Santa Ana Watershed 
Project Authority (SAWAPA), MWD and many of our neighboring districts 
have developed a strategy to address these problems and challenges. 
First, with regard to water quality--identify and remediate water 
quality challenges. Second, with regard water supplied, develop plans, 
programs and projects to expand our local water supplies.
Perchlorate and DOD: New Opportunity To Address Chronic Water Quality 
        Issue
    On Friday, July 11, 2003, Cucamonga County Water District hosted a 
regional meeting with our California State Senator, Nell Soto, 
representatives of other local water agencies, and J.P. Woodley, 
Assistant Under Secretary of Defense, Environment (DOD) and other 
Federal officials to discuss perchlorate in our region--and most 
importantly, what could be done, working together, to clean up our 
contaminated waters. As a result, a Memorandum of Understanding was 
executed.
    We have agreed to work with DOD to find cleanup solutions and, most 
significantly, DOD has agreed to work with us. Together, we will 
evaluate new technologies and new ``on-the-ground'' solutions. This is 
positive. It is a first step. We are optimistic that this process will 
enable us--over time--to reclaim lost water production, and arrest the 
spread of perchlorate in the watershed.
    The agencies which signed the MOU are prepared to provide land, 
access to wells, water supplies, staff time and other resources to this 
new endeavor.
    If DOD, EPA and other Federal and State agencies work with us to 
cleanup perchlorate, VOCs and other impaired waters, then investments 
in water quality assist our efforts to expand our water supplies.
    These are positive developments. For our part, we pledge our 
cooperation, assistance and full participation.
Expanding Our Water Supplies: Drought-Proofing the Region
    The Santa Ana Watershed is one of the fastest urbanizing watershed 
in the Nation. As a result, demand for water is increasing in our 
District, Basin and Watershed. Severe drought visited us in the past 24 
months. Imported supplies to California from the Colorado River have 
been reduced by the Department of the Interior. Perchlorate threatens 
some 300 wells supplying drinking water to millions of people. And, the 
list goes on.
    We do not expect to receive more water from the State Water 
Project, and may well get less than we thought we would.
    We certainly will not get more water from the Colorado River, and 
may well get less.
    We can, nevertheless, expand our local water supplies.
    At the heart of our strategy--develop local supplies to ``drought-
proof'' our water district, the Chino Basin and Santa Ana Watershed.
    This can be accomplished through water recycling, groundwater 
storage in the Chino Basin and in Orange County and construction and 
operation of desalination plants, conservation and other similar 
projects.
    How would this be accomplished?
    Some of the initiatives include:
    In April 2001, the Bureau of Reclamation completed work on a multi-
year Feasibility Study (Southern California Comprehensive Water 
Recycling and Reuse Study). It concluded that 34 water recycling 
projects in Southern California could produce some 450,000af of new 
water by 2010. The Inland Empire projects are slated to produce the 
most new recycled water. The Department of the Interior has not 
submitted this report to Congress as required by Section 1606 (b) of 
Public Law 102-575 and notwithstanding repeated requests by the 
Resources Committee--and this Subcommittee.
    Our agency has completed a feasibility study for another new water 
recycling project. We will produce, before the end of the decade, more 
than 5,000af new recycled supplies. Customers have been identified and 
support for this initiative is very high.
    The Chino Basin Groundwater project, dedicated a few months ago and 
now under construction, will have the capacity to store 500,000af of 
water. Orange County Water District, also in our watershed, is 
constructing a similar project to store an additional 500,000af. 
Together, these two projects will store 1 million acre feet of water in 
two groundwater basins.
    Local projects are the backbone of our water quality challenges. 
Local projects are also the means building water supply capacity and 
drought-proofing our region.
The Calvert Bill
    The Calvert bill proposes a new office be established at the 
Department of the Interior to develop local water recycling, 
desalination, conjunctive use, groundwater storage and conservation 
projects throughout the Nation. We support this new initiative because 
it would commit the Federal government to provide assistance to 
communities who are trying to bring new water supplies online using 
innovative technologies.
    Mr. Chairman, you have asked that we--and all others--review your 
new proposal, evaluate it and report back to you after Labor Day. We 
will do that. We believe that this proposal is an excellent start.
    Finally Mr. Chairman, we thank you, Ranking Member Napolitano and 
all the Subcommittee Members for your leadership.
                                 ______
                                 
    Mr. Calvert. Well, I hope before Labor Day you will be able 
to take a look at that legislation and get that letter in.
    Mr. Neufeld. Absolutely.
    Mr. Calvert. We need your support, Mr. Neufeld. Thank you 
for your testimony.
    One thing in your testimony, Mr. Campirano, you mentioned 
what would be very helpful to you would be some way of 
coordinating or to improve a way to move these projects through 
the various maze of agencies that you all have to work with in 
order to get approval. This is in the legislation. Do you think 
that would be helpful to you?
    Mr. Campirano. Yes, sir, it would be very helpful.
    Mr. Calvert. Good. And certainly in the coastal States, 
obviously desalination is a growing curiosity, and I think 
beyond a curiosity, to many areas that are putting in 
desalination facilities beyond just pilot programs. And Ms. 
Bague, in your testimony you mentioned that the price of 
desalinated water has gone down from approximately $2,000 an 
acre-foot now to less than $900 an acre-foot.
    Ms. Bague. Yes, sir.
    Mr. Calvert. That is certainly one heck of an improvement. 
What kind of advances do you see in the future as far as 
desalination and the cost of desalination?
    Ms. Bague. Well, as far as my State is concerned and the 
district that I represent, I believe that any desalination 
projects implemented in my 16-county region would most 
definitely improve and alleviate the current demands that the 
Everglades Restoration Program is undergoing. As I mentioned in 
my testimony, we have competing demands from the urban areas 
that are continuing to grow and business and agriculture, and 
they are all competing with the natural system which we are 
mandated to protect.
    Mr. Calvert. Right. Thank you.
    And certainly in--I am going to be back in Texas, by the 
way. I am going to be there, I believe, in the first part or 
latter part of September. I think they are trying to set right 
now, I believe, for a hearing, again, on the Rio Grande, which 
has its difficulties, and we are trying to address those issues 
and we are going to try to address that in this legislation, to 
allow for these projects to move forward. And I know that in 
San Antonio you have done some great work on reclamation 
generally, and you and your community are to be congratulated. 
And you have looked at this legislation and you think it would 
be helpful?
    Mr. Habiger. Very helpful, sir. While some may criticize 
another, perhaps, layer of the bureaucracy regarding a central 
agency, from my observation we have nothing today, and this 
would be far better than what we have today. And I support it 
very strongly.
    Mr. Calvert. And, you know, obviously many of us don't like 
additional government, but in this case we believe that a 
coordinator would help target resources, and coordinate various 
Governmental agencies. As you know, we have a number of 
agencies in this town that are involved in water outside of 
just Interior, by the way--Department of Defense, EPA, et 
cetera, et cetera. And so we are hopeful that this will be 
helpful.
    And certainly your suggestions on how to make this work 
better we accept from all of you.
    With that, I recognize Mrs. Napolitano for her questions.
    Mr. Napolitano. Thank you, Mr. Chairman. Mr. Neufeld, I had 
to laugh a little bit when you were making a comment about the 
report for the Southern California Comprehensive Water 
Recycling Reuse Study, which this Committee has been asking for 
a long time, for years. Ten years, maybe? And we still have not 
received it. We have seen what we think are copies of the 
draft. But if you have any better luck than us, I wish you all 
the best.
    It is unfortunate that--one of the things that I did ask 
was whether or not that report was forthcoming, and the answer 
to me was that they were working on tweaking it and revising 
it. I said, well, whether they are tweaking it and revising it, 
the report was done, has been completed, and now there is a new 
direction that is being taken which we all have no idea where 
it is at other than--we look at the 2025 Water Plan that does 
not include things that are totally helpful to many States' 
ability to be able to handle their water issues, whether it is 
the shortages, the water cycle--drought water cycle, many 
things. And unfortunately, I don't know where the agencies are 
getting their information or who is advising them, but they 
certainly are not talking to the communities that are facing 
these harsh issues.
    So, thank you for being here, thank you for responding and 
coming at such short notice.
    Mr. Neufeld. My pleasure.
    Mr. Napolitano. Mr. Campirano, you indicated there were 
three that the Government of Texas had approved. Assumably one 
is Brownsville, and the other two are where?
    Mr. Campirano. Corpus Christi area and the Freeport area. 
All three on the Texas coast.
    Mr. Napolitano. OK, I am glad to hear that. There was 
another one, I believe, in Fort Bliss, that the Government 
installation was working with the local water folks with no 
help from the Bureau and others, and I was just wondering if 
that was one that finally got on the books with them.
    Mr. Campirano. Not to my knowledge.
    Mr. Napolitano. Thank you, sir.
    To all the witnesses, what type of Federal assistance would 
be most useful to you as municipal water managers? Would it be 
the grants, the loans, demonstration projects, or research? 
What do you think is more vital to what you do to be able to 
deliver to your constituency?
    Mr. Neufeld. Mrs. Napolitano, I believe that all of the 
above would certainly be beneficial, but the main thing that 
would be extremely beneficial is the spirit of cooperation that 
I believe would come with this particular bill. As I said in my 
comments, the memorandum of understanding that we signed with 
Mr. Woodley from the Department of Defense is the first of its 
kind. And basically it is not an admission of liability on the 
part of any Governmental agency. It is basically saying we 
realize that there is a problem, and we have got to put aside 
the past differences and find ways to resolve these particular 
problems. The memorandum of understanding basically says that 
we commit to work together, is all it does, and that we are 
hoping that through that, through the bill and through the 
other agencies with some of the monies that they may have 
through their R&D budgets or whatever, that we will find the 
way to solve these problems. And we believe that those are 
readily available.
    Mr. Napolitano. Thank you.
    Mr. Habiger. I would submit that while additional funding 
sources would be helpful, I think the policy that you are 
putting forward in this legislation is even more important. And 
let's get back to the coordinating agency. Water--and I am 
preaching to the choir--is going to be a growing problem and 
difficulty over time. And to put the infrastructure in place 
today, when we really need it five, 10 years from now so it 
will have a growing-in period, I think is the vital part of 
this legislation.
    Ms. Bague. And I would agree with my colleagues up here 
that most definitely we need a combination and a comprehensive 
plan, but we need your leadership and a policy in place to be 
able to move forward and take advantage of the new technology 
which I have mentioned.
    Mr. Campirano. I would obviously concur with the comments 
of the other panelists. In our case, for example, if we were to 
deploy a project today, we have an end user for reclaim 
projects and, obviously, part of our problem has been the 
infrastructure development. So, you know, assistance of any 
form that would help us expedite that could deploy reclamation 
projects very rapidly. But part of the coordination with the 
reclamation offices, in our case, also the State agencies, 
would be something that would facilitate a very serious look at 
the future deployment of all reclamation projects, certainly in 
our area.
    Mr. Napolitano. Thank you, panel. Thank you, Mr. Chairman.
    Mr. Calvert. Thank the gentlelady. Mr. Nunes?
    Mr. Nunes. Thank you, Mr. Chairman.
    Ms. Bague, you work with desalination plants down in 
Florida?
    Ms. Bague. I don't. I represent the Governor on the South 
Florida Water Management District Governing Board.
    Mr. Nunes. My question is really about desalination, 
because obviously the whole state of California borders the 
Pacific Ocean. So I was trying to get a feel from maybe 
yourself or the rest of the panel, could you give me some 
examples of some of the more successful desalination programs 
in the United States, if any of you know that?
    Ms. Bague. Well, we just completed a facility in Tampa Bay, 
and I noted that in my testimony. Basically we will be 
delivering about 28 million gallons per day to that Tampa Bay 
area.
    Mr. Nunes. And what percentage of the water use is that for 
the Tampa region? Do you know?
    Ms. Bague. I don't know right offhand. We can get that 
information to the Committee.
    Mr. Nunes. OK. That would be helpful for me.
    Ms. Bague. Absolutely, and we--like I said, this is a work 
in progress and there are things that we, the U.S. Desalination 
Coalition--and I am a member of that--would be able to work 
with the Subcommittee members in providing additional 
information and details on other plants and successes in 
desalination in other areas as well.
    Mr. Nunes. OK, thank you.
    Mr. Neufeld, you can comment on that question, but do you 
think that this desalination process is going to be the answer 
for our water issue and crisis that we face in California? If 
so, when do you think it would take place?
    Mr. Neufeld. Let me answer the second question first. And I 
would like to address the first item.
    I don't believe it is the answer. It is certainly part of 
the overall solution. There are far too many areas that we have 
to deal with to supply water to the various agencies within 
California. But I can say for a fact that we have had a great 
deal of success within our watershed area with a brackish water 
desalination project. That facility is currently up and 
running. It is producing in excess of 5 million gallons a day 
of potable water reclaimed from the dairy legacy that we had in 
the southern part of our groundwater basin. We have plans to 
expand that to a point where its ultimate, our ultimate build-
out there, will have 17.5 million gallons a day of fresh-water 
production from brackish water desalination. We are using 
micro-filtration. And I think the real key to success there is 
the combined effort of producing methane gas through digesters 
from the dairies, to produce the motive force for driving and 
powering the desalters there. So we are not impacting the 
electrical system there.
    But those types of approaches, looking at various aspects 
of it, we will deal with groundwater storage, desalination, 
imported water supplies, stormwater runoff recapture, recycle-
reuse are all part of the answer to the water problem in 
California.
    Mr. Nunes. If your District was to get up to the 17.5 
million gallons, what is that as a percentage of your need?
    Mr. Neufeld. It is not a tremendous large percentage of the 
need. I don't know the exact number. Because it is such a 
rapidly growing area, I mean, our demands increase every day. 
But it is also, addressing the issue of what do you do when you 
have brackish water that is high in nitrates, and you use this 
particular process to clean that up. So we are helping to clean 
up the environment at the same time that we are producing 
potable water.
    The particular area that we are looking at is in one of the 
fastest growing areas in Southern California. It happens to be 
within the dairy preserve of the Chino Basin area there--I 
think you are familiar with that. And in the future there, we 
are going to look at continued growth in that area, so we are 
going to have to produce additional new water supplies. We 
realize we are not going to get additional waters from the 
Colorado River, and obviously there is not an unlimited source 
of water from the northern part of the State.
    Mr. Calvert. Mr. Neufeld, just for the record on Mr. 
Nunes's question, how much an acre-foot on brackish water on 
those Chino desalters is that coming in at?
    Mr. Neufeld. It is about $500 an acre-foot, but it is very 
heavily subsidized. I mean, that is--we get incentives from the 
Metropolitan Water District subsidized by the local agencies. 
The local agencies in our area have made a very, very strong 
commitment, as you know, Mr. Chairman, to participate in this 
particular process. So we are not, you know, looking for a 
handout from the Federal Government, we are looking for 
assistance.
    Mr. Nunes. What would it be without the subsidies?
    Mr. Neufeld. I think it would probably be in that same 
range. We know that it is down below $1,000 an acre-foot now in 
that particular area, and we are hoping that, as the 
technologies improve, those costs will go down very 
significantly. I was quite encouraged to hear what is going on 
in Florida.
    Mr. Calvert. Just out of curiosity, the issue Mr. Nunes is 
talking about is not--just for the record--is not just salts 
that you are dealing with.
    Mr. Neufeld. That is true.
    Mr. Calvert. And that brings to the additional cost.
    Mr. Neufeld. That is true. That is correct.
    Mr. Nunes. Thank you. Thank you, Mr. Chairman.
    Mr. Calvert. Thank you. Mr. Rodriguez.
    Mr. Rodriguez. Thank you, Mr. Chairman. Let me also thank 
you for deciding to come to South Texas and the border there, 
because I know we had a series of issues with water and 
international agreements there that we have, and the water that 
is sold to us from Mexico as well as to Tamaulipas on the other 
side. I wanted to thank you for that, and look forward to 
working with you when you do that. My District goes all the way 
down. I have in fact Falcon Dam is in my area, and of course, 
you know, they are having a rough time with the quality of the 
water and the quantity of the water. And so the border there, 
things are only going to get worse with time. So we are 
really--you know, what you are trying to do here is extremely 
helpful and allows an opportunity for us to begin to look at 
how we can maximize some of those efforts.
    I also just want to thank the general for coming up here 
and, I guess, apologize for the whole--you know, we have had a 
series of votes down there. I know you had to wait awhile. But 
General, I want to thank you, because I know San Antonio is in 
a way also uniquely blessed. We have one of the best--Edwards 
Aquifer, one of the largest, I think in the country, yet it 
just--its size alone also feeds a variety of rivers, from the 
Guadalupe River to the San Antonio River to the San Marcos 
River, and a whole bunch of other creeks. So those rivers flow 
because of the Edwards water. And so when we pump to use that 
water, those river flows go down and create some difficulties. 
And the general has been doing a great job in those areas.
    I wanted him to touch base on especially an area that is 
unique, and that is the storage and retrieval, that maybe you 
might see a way of funding some of those projects because, 
especially in the hot areas like Texas, where we have water 
that now it is so difficult to store on the surface that we can 
store underground as a way of--you know. And I wanted to see if 
he could comment on some of that.
    Mr. Habiger. Yes, sir, I would be more than happy to. The 
San Antonio Water System began a project approximately 4 years 
ago for the storage of water in Carrizo in the southern part of 
Bexar County, which is about 35 miles south of the center of 
San Antonio. The idea was to take water out of the Edwards 
Aquifer during the plentiful periods during the fall and early 
spring, pump it out of the Edwards south to this area of 3,200 
acres that we have, and we have drilled wells, and then pump 
the Edwards water into this other aquifer near Carrizo, pumping 
in excess of 22,000 acre-feet into the Carrizo and storing it 
underground.
    Lots of advantages--security issues, you don't have to 
worry about; you don't have to worry about evaporation; our 
recovery rate on that water as we pump it out when we need it 
in the hot summer months is in excess of 99 percent. We have to 
treat it, because the water will pick up a little bit of iron 
and some other minerals, and then we will pump it back up to 
San Antonio in 60-inch pipes, to use it during the summer 
months.
    This project has been recognized in a number of national 
magazines, engineering magazines, as state-of-the-art. And in 
size, it is second only to a similar project in Las Vegas.
    We are excited about the project. It is on time, it is 
under cost, and it will be operational beginning in January of 
2004--and we didn't move the first piece of dirt until August 
of last year. So the project is moving very, very rapidly and 
very well.
    Mr. Rodriguez. Thank you, General. And I also, I know we 
had a similar project that at least was looked at in 
Brownsville in terms of storage and retrieval initially some 
years back. And the reason I was familiar with that, because we 
did some of the State legislation on that. And I know the 
Brownsville area is one on the bottom of the totem pole when it 
comes to the Rio Grande, and everyone gets a little bit of it 
before it reaches down there, Mr. Chairman, so I know 
Brownsville and the lower part, Cameron County, has been--I 
think it has about over 350,000 people or close to that, and 
then Hidalgo has over half a million people. Those are just on 
our side, not to mention the other side with Mexico, and they 
are all drinking the same water. And it has been difficult to 
provide.
    And I know that from a conservation perspective, and maybe 
just to get San Antonio and--Eduardo--excuse me.
    Mr. Campirano. Campirano.
    Mr. Rodriguez. Campirano, pardon. I don't have my glasses. 
I saw Eduardo, but I didn't see the Campirano. Pardon, Eduardo.
    I wanted to mention for them to maybe talk a little bit 
more about conservation, because I know that in the Valley we 
still need--the water flows openly in the summer, and those 
evaporation rates are over 50 percent. So I wanted to see if we 
could get some comments from both the general and Eduardo 
Campirano.
    Mr. Campirano. I can address the conservation efforts of 
the Brownsville Public Utilities Board as it relates to the 50-
year water supply plan. We estimate that through conservation 
over that period of time, we will need approximately 52,000 
acre-feet of water in the year 2050 to meet the projected 
demand. Through our conservation efforts, 12,000 acre-feet of 
water can be contributed toward meeting that demand. And that 
will come in the form of, again, replacing outdated 
infrastructure and going to more efficiency--not only in our 
operations, but also in working with the City of Brownsville--
through the building development and essentially creating more 
efficiencies in the way individuals use water, a heavy campaign 
of public education.
    We have seen our community respond to the drought situation 
with doing their part. An example of that would be in 2001, we 
had a peak of 33 million gallons a day usage for Brownsville in 
a particular given day. Through a heavy conservation effort and 
public education, in 2002 our peak was roughly at 23 thousand. 
So there was a significant reduction of water use. Of course, 
levying fines and being diligent from an enforcement standpoint 
is also a deterrent, but from our perspective conservation will 
be a significant part of meeting our 50-year projection for 
water supply.
    Mr. Habiger. Just let me say that water conservation is the 
cheapest form of water available today. And I tell you, folks 
in San Antonio should be very proud of what they have done. We 
have reduced per capita consumption by 32 percent in 15 years. 
It is cheap, it works. You have to go beyond the average 
residential user, you have to partner with industry. We just 
partnered with Frito Lay--they make potato chips and chips in 
San Antonio. They have come up with a scheme that is heavily 
committed to investment. We partner with them to help share 
that. We are going to have a significant reduction in their 
consumption. It works. I can't say enough about it.
    Mr. Calvert. I thank the gentleman. I thank the gentleman 
for his question.
    Mr. Rodriguez. Mr. Chairman, I apologize for going over the 
time.
    Mr. Calvert. No problem. Thank the gentleman.
    Mr. Dooley, do you have any questions for this panel?
    Mr. Dooley. I don't, Mr. Chairman.
    Mr. Calvert. Mr. Cardoza, any questions for this panel--any 
additional questions?
    Mrs. Napolitano. No additional questions, Mr. Chairman, but 
I would like to request that the comments from Mr. Cardoza be 
entered into the record.
    Mr. Calvert. Certainly. Mr. Cardoza's opening statement 
will be entered into the record.
    [The prepared statement of Mr. Cardoza follows:]

   Statement of The Honorable Dennis A. Cardoza, a Representative in 
                 Congress from the State of California

    Thank you, Mr. Chairman and Ranking Member Napolitano.
    I sit here cautiously optimistic with the progress we are making on 
CALFED and I would like to thank Mr. Calvert, once again, for the eye-
opening hearings he held in California earlier this month. As you know, 
this is a very important issue for the central valley and I believe 
that, now, more than ever, we need to push forward on many of the 
projects and issues addressed in both of the bills we'll be hearing 
today.
    I greatly respect Senator Feinstein's tireless commitment to this 
issue and she is to be applauded for her leadership. Her measure 
greatly advances this process and I look forward to working with her as 
we move forward. I also appreciate Mr. Miller's bill and his many years 
of effort to move these issues forward.
    And I must say that I am pleased with the emphasis Mr. Calvert's 
bill places on the need for additional surface storage projects, as 
well as addressing additional conveyance. While solutions for 
agriculture are critically important, we must not overlook water 
quality issues, particularly in the south San Joaquin area of the 
Delta.
    As I have said before, I think it is critically important that we 
provide new storage opportunities without further delay. For too long, 
these projects have been thrown to the sidelines for various reasons--
some legitimate and some no more than veiled attempts to thwart any 
storage facility from being built, regardless of is merits.
    That being said, I also believe that balance is important and we 
need to move forward in this debate with an honest dialogue that 
considers the long term implications if we fail to act.
    I wholeheartedly support the bill's focus on accountability for the 
many agencies linked to CALFED and I am particularly pleased to see 
many provisions that will be of particular benefit to my district, such 
as:
     LThe bureau's water supply and water yield study;
     LFunding for interties, drainage and the diversification 
of water supplies; and
     LEvaluation and implementation of the San Luis Reservoir 
lowpoint project.
    I am committed to working toward a solution that helps everybody's 
interests to be met, because if we don't, we will continue to face 
years of litigation instead of the workable solutions we were all sent 
here to develop.
    Thank you.
                                 ______
                                 
    Mr. Calvert. I want to thank this panel for your patience 
and coming out to see us. And thank you for your support in 
advance for this legislation. We need it. Let all your local 
members know. Thank you.
    Our next panel which is coming forward will be taking their 
chairs. If everybody could take their seats, we will get going 
here shortly.
    Our next panel, with us today is Ms. Gloria Moralez, who is 
a Businesswoman/Farmer; Mr. Brent Walthall, Kern County Water 
Agency; Mr. Edward Osann, Consultant with the Natural 
Resources Defense Council; Mr. Stuart Somach, 
Attorney with Somach, Simmons & Dunn--we can't have a water 
hearing without an attorney involved; and Mr. Greg Zlotnick, 
Director of the Santa Clara Valley Water District Board of 
Directors.
    Thank you for coming out today. And with that, first we 
will recognize Ms. Gloria Moralez for your testimony. We heard 
your testimony up in Northern California, and it is good to see 
you again.

       STATEMENT OF GLORIA MORALEZ, BUSINESSWOMAN/FARMER

    Ms. Moralez. Good afternoon, Chairman, and Congresswoman 
Napolitano, and members of the Subcommittee. My name is Gloria 
Moralez. I appreciate the opportunity to again testify before 
your Subcommittee as I did a few weeks ago in Tulare, 
California.
    I am a former farmworker and farmer. I am a businesswoman 
in Fresno, California. I am a member of the State of California 
Reclamation Board, and I am very familiar with the issue at 
hand. I know what life is like in the San Joaquin Valley, and 
water is one of the most critical needs. Our valley is the 
world's greatest garden, and Fresno County alone produces some 
250 different crops. In simple terms, we feed the Nation and 
the world.
    However, things would be quite different if one of our 
greatest generations of leaders had not had the vision to take 
the steps to develop the desert of the San Joaquin Valley into 
an oasis of farmland throughout Central California's Central 
Valley Project.
    Today, ladies and gentlemen, the need has arisen again to 
be far-sighted and visionary. I was a farmer for 20 years. I 
understand what we need to grow, harvest, and market 
California's crops. As a businesswoman for three decades, I 
understand the importance of the agricultural economy to my 
customers. I have a ground-level knowledge of how agriculture 
works and what it means to the farmworkers who make our 
agricultural economy function.
    Let me speak a moment about the farmworkers, because 
frankly these hardworking people are all too often forgotten 
when water and other farm-related issues are debated. According 
to the Migrant and Seasonal Farmworker Enumeration Profiles 
Study for California, as of September 2000, the San Joaquin 
Valley had some 400,000 migrant and seasonal farmworker jobs. 
These jobs are filled by people who depend entirely upon 
agriculture for their livelihood, most of whom are members of 
California's fastest-growing ethnic group. They are Hispanics. 
Hispanics are also the fastest-growing group of entrepreneurs, 
establishing new businesses in California and throughout the 
Nation. Furthermore, many new businesses, job creation, new 
housing, and other economic activity depend upon these 
farmworkers and agriculture in general. However, none of these 
activities can continue if we do not have enough water to 
sustain our State's agriculture and support California's 
population growth.
    Beneficiaries of additional water storage go way beyond our 
agricultural community. They include the many environmental 
groups who fervently want to enhance the San Joaquin River 
below Friant Dam by providing a source of water to restore 
flows and improve water quality. They include those whose lands 
and communities need improved flood protection. They include 
those who depend upon groundwater which needs to be recharged 
due to consistent overdraft. They also include all of us who 
need and use electricity by providing a supplemental source of 
Western and Valley power. They include those who enjoy water-
related recreation. They include farmers, farmworkers, farm 
communities, and all those who consume food and fiber grown on 
Valley farms. Finally, the beneficiaries of water storage 
include all of us. As you can see, beneficiaries of water 
storage include every one of us in this room.
    To serve these vital beneficiaries and needs, now is the 
time to invest in our water infrastructure. I believe all 
beneficiaries must pay their proportional share, but we need 
your help in authorizing and appropriating funds to maintain 
and improve these social, economic, and environmental needs.
    I am heartened by the renewed recognition being shown by 
Congress in California's water needs. I am encouraged by the 
CALFED Delta Program studies on additional California water 
storage, including the Upper San Joaquin River and the House's 
recent approval of $2 million to continue the feasibility study 
of the Temperance Flat Dam and Reservoir. I applaud the efforts 
of Chairman Calvert, members of this Subcommittee, the members 
of our Valley's congressional delegation, and others who 
recognize the need for additional storage. I urge the Bureau of 
Reclamation and the Department of Interior to recognize the 
need and support for storage and incorporate these needs in the 
new Water 2025 initiative.
    Increased water storage is important to all of us. We 
simply cannot permit our Nation to lose its ability to provide 
nutrition for itself and many around the world. We need to be 
growing more, not less, safe and affordable food. We should not 
be beholden to the world to feed us. Without water, we face 
this dire situation.
    Again, simply speaking, No water-No jobs. I ask that you 
direct your collective efforts toward authorizing and funding 
our water storage needs. As I acknowledged in Tulare, it will 
years to make new storage a reality, but in these past few 
moments our population has already grown. Now is the time to 
act.
    May we again be far-sighted and visionary. Let us be wise 
and make additional water storage in our region the No. 1 
priority to resolve.
    Thank you very much.
    [The prepared statement of Ms. Moralez follows:]

          Statement of Gloria P. Moralez, Businesswoman/Farmer

    Mr. Chairman and Members of the Subcommittee:
    As you may remember, my name is Gloria Moralez. I appreciate the 
opportunity to again testify before your Subcommittee as I did a few 
weeks ago in Tulare, California.
    I am a former farm worker and farmer, and I am a businesswoman in 
Fresno, California. I am a member of the State of California 
Reclamation Board and I'm very familiar with the issue at hand. I know 
what life is like in the San Joaquin Valley and water is one of our 
most critical needs. Our valley is the world's greatest garden and 
Fresno County alone produces some 250 crops. In simple terms, we feed 
the nation and the world.
    However, things would be quite different if one of our greatest 
generations of farsighted pioneers and visionary leaders did not take 
steps to develop the desert of the San Joaquin Valley into an oasis of 
farmlands through California's Central Valley Project.
    Today, Ladies and Gentlemen, the need has again arisen to be 
farsighted and visionary.
    I was a farmer for 20 years. I understand what we need to grow, 
harvest and market California's crops. As a businessperson for three 
decades, 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 who help make our agricultural 
economy function.
    Let me speak a moment about the farm workers because, frankly, 
these hard working people are all too often forgotten when water and 
other farm-related issues are debated. According to the Migrant And 
Seasonal Farmworker Enumeration Profiles Study For California, as of 
September 2000, the San Joaquin Valley had some 400,000 migrant and 
seasonal farm worker jobs. These jobs are filled by people who depend 
entirely upon agriculture for their livelihood--most of whom are 
members of California's fastest growing ethic population, Hispanic. 
Furthermore, many new businesses, job creation, new housing, and other 
economic activity depend upon these farm workers and agriculture in 
general. However, none of these activities can continue if we do not 
have enough water to sustain our state's agriculture and support 
California's population growth.
    Beneficiaries of additional water storage go beyond our 
agricultural community:
     LThey include the many environmental groups who fervently 
want to enhance the San Joaquin River below Friant Dam by providing a 
source of water to restore flows and improve water quality.
     LThey include those whose lands and communities need 
improved flood protection.
     LThey include those who depend upon groundwater which 
needs to be recharged due to consistent overdraft.
     LThey include all of us who need and use electricity by 
providing a supplemental source of Western and valley power.
     LThey include those who enjoy water-related recreation.
     LThey include farmers, farm workers, farm communities, and 
all those who consume food and fiber grown on valley farms.
     LFinally, beneficiaries of water storage include all of 
us.
    As you can see, beneficiaries of water storage include every one of 
us in this room.
    To serve these vital beneficiaries and needs, now is the time to 
invest in our water infrastructure. I believe all beneficiaries must 
pay their proportional share, but we need your help in authorizing and 
appropriating funds to maintain and improve these social, economic and 
environmental needs.
    I am heartened by the renewed recognition being shown by Congress 
in California's water needs. I'm encouraged by the CalFed Bay-Delta 
Program studies on additional California water storage--including the 
upper San Joaquin River and the House's recent approval of $2 million 
to continue the feasibility study of the Temperance Flat Dam and 
Reservoir. I applaud the efforts of Chairman Calvert, members of this 
Subcommittee, the members of our valley's Congressional delegation and 
others who recognize the need for additional storage. I urge the Bureau 
of Reclamation and the Department of Interior to recognize the need and 
support for storage, and incorporate these needs in the new Water 2025 
initiative.
    Increased water storage is important to all of us. We simply cannot 
permit our nation to lose its ability to provide nutrition for itself 
and many around the world. We need to be growing more--not less--safe 
and affordable food. We should not be beholden to the world to feed us. 
Without water, we face this dire situation.
    Again, simply speaking No Water = No Jobs. I ask that you direct 
your collective efforts toward authorizing and funding our water 
storage needs. As I acknowledged in Tulare, it will take years to make 
new storage a reality but in these past few moments our population has 
already grown. Now is the time to act.
    May we again be farsighted and visionary. Let us be wise and make 
additional water storage in our region the number one priority to 
resolve. Thank you.
                                 ______
                                 
    Mr. Calvert. I thank the gentlelady and I believe Mr. 
Rodriguez has a comment.
    Mr. Rodriguez. Mr. Chairman, once again I apologize for 
interrupting. I have another meeting to go to, but I wanted to 
mention that Gloria Moralez comes from a long family of being 
good activists. And I see that where she went to California, 
like our other leading lady, Grace, who is also a Texan, Gloria 
is also a Texan. And I know that she comes from a family of 
good veterans that in fact had received some medals for 
bravery. So I want to just acknowledge her and apologize that I 
am going to have to be leaving. But also thank her. She did 
good work in Texas, so I guess she is still doing good work 
wherever she is at in California.
    Mr. Calvert. Well, your loss is our gain, Mr. Rodriguez.
    Ms. Moralez. Thank you, Congressman, I really appreciate 
your words.
    Mr. Calvert. Thank you.
    Next, Mr. Brent Walthall. You are recognized for 5 minutes.

                 STATEMENT OF BRENT WALTHALL, 
                    KERN COUNTY WATER AGENCY

    Mr. Walthall. Thank you very much, Mr. Chairman.
    Good afternoon. My name is Brent Walthall and I work for 
the Kern County Water Agency located in Bakersfield, 
California. We are a State water contractor, the largest 
agricultural State contractor on the State Water Project, and 
the second-largest urban contractor--a little bit misleading, 
because the largest is, of course, Metropolitan, and we 
somewhat pale in comparison there.
    Thank you for inviting me to testify today. We often don't 
get the chance to testify from Kern County, and we certainly 
appreciate that opportunity today.
    Mr. Calvert. You might take that mike and just get a little 
closer. That would be great.
    Mr. Walthall. How is that? Is that a little better? There 
we go.
    I would like to present my testimony in two parts today. 
First, I would like to discuss some policy considerations and 
then a couple of programmatic considerations that are important 
to Kern County.
    If the real estate industry's axiom is location, location, 
location, then CALFED's is certainly balance, balance, balance. 
And there is some deep meaning behind that word. We hear it 
several times today and all too often in CALFED. But CALFED was 
born from an era of conflict in which regulatory agencies 
needed more water from water users and water users were 
unwilling to give that water up. As a result, that conflict 
meant nobody was winning.
    CALFED has remedied that by providing a pathway where 
everyone can win. That solution, though, depends on balanced 
implementation, because any imbalance means that one of those 
parties' better alternative is to leave CALFED. Being in 
balance is absolutely critical to the health of CALFED.
    There are several measures currently by which balance can 
be judged--some of them accurately, maybe some not. I would 
like to mention three of those today. Funding, which I believe 
probably isn't the best measure of balance but is one people 
gravitate to simply because we all understand money means 
projects. Last year, CALFED spent $400 million on ecosystem 
projects and $157 million on water supply projects. For those 
who view money as a yardstick, that shows an imbalance.
    Also, schedules of projects have shown an imbalance. For 
example, with the ecosystem projects, money equals projects, 
and there is very little process involved in implementing those 
projects. You don't have to do environmental documentation on 
many environmental projects, and it is much easier to take 
money and translate it into projects much more quickly.
    Conversely, projects that are water supply related 
typically do require quite a bit of either--at least design 
work, if not also a lot of environmental documentation and a 
lot of process there as well. So the schedules for water supply 
projects tend to slow down, or at least appear to slow down 
when compared to environmental projects.
    An example would be expanding Banks to 8500 cfs. This is 
part of a conveyance package of projects, and that project has 
been delayed for at least a year at this point. Other related 
conveyance projects--for example, resolving the San Luis low 
point problem or installing screens at Tracy Pumping Plant and 
some of the North Delta flood control projects--have also been 
delayed. Almost all of the projects within the conveyance 
package have been delayed.
    Sometimes that is just for technical reasons. For example, 
the fish screens at Tracy, it is a technical problem that they 
are trying to fix to both reduce the cost of those screens and 
improve their efficiency. That is probably a good reason for 
delay. But nonetheless, when the water supply projects are 
delayed, the optics are that they are not in balance anymore. 
So for those who use schedules as a metric, we see people 
beginning to believe that there is an imbalance there.
    One of the more accurate--in my opinion, accurate measures 
of that balance is how has the resource improved? And to date 
we have seen very good improvements in some of the fishery 
resources. Several of the listed species have shown strong 
recoveries in the last three to 5 years and several of the 
species that were of concern are also showing recovery. 
Conversely, however, water supply has not increased over the 
last 5 years. And this, for some people, shows another sort of 
imbalance.
    Those three kinds of things, most people view one of those 
as a metric for balance. And to the extent they look at those 
and see an imbalance, it is concerning to them.
    Restoring balance, however, is not at all difficult, and it 
requires just a couple of things. It requires much greater 
Federal participation. This can come in two ways. The hearings 
that this Committee held in the field were extremely helpful, 
if for no other reason than because they end up in a great deal 
of publications that are in California and the people who see 
those publications know that Congress is paying attention. And 
no one in CALFED speaks with a louder voice than Congress. The 
simple fact of paying attention is very helpful to the CALFED 
process.
    Finally, the thing that the Federal Government can do that 
is the most helpful is make the Federal agencies voting members 
and partners of the California Bay-Delta Authority. The Bay-
Delta Authority was set up by State legislation last year, 
acknowledging at the time that Congress would act on 
legislation later and then, simply because of Federal primacy, 
the State would have to come back and massage its own 
legislation to fit with what the Federal needs were. It was, 
however, an opportune time to pass State legislation, so they 
took that advantage. Having the Federal agencies specifically 
authorized to participate as voting members would be very 
valuable.
    Finally, I have to conclude by referring to one of the 
programmatic parts of CALFED that is most important to my 
agency, and that is the conveyance section of CALFED. Without 
conveyance, we cannot take advantage of many of the other 
aspects of CALFED. It is the most immediate improvement to 
water supply. It can be done within the space of the next year, 
and provides a significant improvement in both the reliability 
and the quantity of water that can move south. It also makes it 
very, very possible and much more beneficial to have storage in 
the northern part of the State. Without that ability to move 
northern water in storage reservoirs south to Southern 
California and San Joaquin Valley, the storage component of 
CALFED becomes less valuable. So conveyance, in our opinion, is 
the linchpin to making many aspects of CALFED work.
    With that, I will conclude my testimony and be available 
for questions at your discretion.
    [The prepared statement of Mr. Walthall follows:]

               Statement of Brent E. Walthall, Manager, 
         Bay-Delta Resources Division, Kern County Water Agency

INTRODUCTION
    My name is Brent E. Walthall. I am the Manager of the Bay-Delta 
Resources Division of the Kern County Water Agency. 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 Kern County. The State Water Project serves water to over 
22 million Californians and to 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. Chief among these is better 
communication and utilization of the knowledge and agreements developed 
through CalFED.
    The Kern County Water Agency would like to express its gratitude to 
Chairman Calvert for his leadership and interest in California's water 
issues. Water is essential to maintaining California's economy and 
quality of life, and California has benefited from the leadership of 
Chairman Calvert. That strong leadership is essential to resolving 
California's water problems in a way that expands our economy and 
improves our quality of life. The Chairman's active involvement in 
California's two biggest water issues, CalFED and the Colorado River 
4.4 Plan, have helped to move both issues closer to resolution. The 
Kern County Water Agency is supportive of the direction Chairman 
Calvert has charted in authorizing CalFED and looks forward to working 
with the Chairman, Congressman Miller and other members of the 
Subcommittee and Full Committee in this effort.
    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. These water supply projects, when coupled with continued 
implementation of CalFED's Ecosystem Restoration Plan provide a 
balanced program that benefits California's water supply and its 
environment.
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.
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. Direction from congress to implement these improvements will 
ensure they are accomplished in a manner that maintains CalFED's 
overall balance.
Joint Point of Diversion Should be Implemented
    Another significant improvement in conveyance that can be 
accomplished quickly is implementation of the joint point of diversion 
(``JPoD''). Use of the JPoD is currently limited by fishery 
restrictions that were part of a pre-Environmental Water Account 
agreement. Now that the EWA 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.
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.
    Language was included in H.R. 2641 that would require the state to 
pass legislation regulating the use of groundwater before any federal 
money would be available for storage or conveyance projects. The state, 
through the State Water Resources Control Board recently reviewed this 
issue and determined that the groundwater regulation was best left to 
those local agencies to whom the legislature has given that 
responsibility, and that the involvement of the state should be limited 
to a case-by-case basis where conflict occurs.
    CalFED's ability to implement its programs in a balanced manner 
would also be affected by a requirement for state groundwater 
legislation. If the state is not able to pass legislation then no 
federal money would be available for the storage or conveyance 
components of CalFED. As a result, balanced implementation would be out 
of CalFED's control and instead subject to the political winds of the 
legislature. Those who do not support CalFED could work to defeat state 
groundwater legislation thereby creating an imbalance that would stop 
work on all CalFED programs.
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 previously 
untested 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 regulations.
Failure of Effective Communications to Regulatory Agencies
    The usefulness of this improved scientific knowledge is directly 
related to its dispersal and utilization by the regulatory agencies 
that govern the Delta, largely through their control of regulation 
under the federal Endangered Species Act. The assumption that links 
water use to 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 science 
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 attempts to find a scientifically 
valid theory justifying listing.
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. However, full utilization of these 
temporary water transfers demands flexibility and prompt action. 
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
    Water transfer and groundwater banking programs require moving 
water in wet years when the water is available in the Delta. The 
challenge is moving the water to into groundwater banking projects 
south of the Delta. Banks pumping plant is the critical path that would 
allow more wet-year water to be stored for use in dry years. 
Cooperative use of Banks, or potential enlargement of the CVP Tracy 
pumping plant and Delta-Mendota canal are of equal importance for the 
federal 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 levees and ecosystems of the Delta, water supply and 
water quality. Many ecosystem improvements have been made 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 expand pumping capacity at the Banks Pumping Plant and 
implement the South Delta improvements to protect Delta users is a 
clear test of the viability of CalFED. The linkages between ecosystem 
improvements delivered thus far, and the scheduled water supply and 
quality improvements that are CalFED's ``next step,'' must be 
effectively communicated to regulatory agencies along with the 
supporting science.
    Failure of CalFED to deliver these benefits would severely cripple 
the process. We cannot fail to recognize 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 supply 
and its ecosystem. To fail to recognize this fact would be a harbinger 
of the inability to achieve the long-term decisions on 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 CalFED's balanced framework.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman for his testimony.
    Next, Mr. Edward Osann, the Natural Resources Defense 
Council.

            STATEMENT OF EDWARD OSANN, CONSULTANT, 
               NATURAL RESOURCES DEFENSE COUNCIL

    Mr. Osann. Thank you, Mr. Chairman and members of the 
Subcommittee. My name is Ed Osann. I am the president of 
Potomac Resources. I am a consultant to the Natural Resources 
Defense Council's Western Water Project, and I am appearing 
here today on their behalf.
    Before diving into the CALFED issues, Mr. Chairman, I just 
wanted to take a moment to commend you for your work and your 
interest in Title I, your recognition of the importance of 
accelerating the deployment of these advanced technologies for 
desalinization and water reuse. We applaud the establishment of 
a competitive grant program for this purpose. We are concerned 
that some of the features of Title I may ultimately frustrate 
the goals you are trying to achieve and that we support as 
well, and we would like to have a chance to offer some comments 
on Title I in writing for the record of the Subcommittee, with 
your--
    Mr. Calvert. This record will stay open for 2 weeks, so you 
can submit any additional comments for the record.
    Mr. Osann. Thank you, Mr. Chairman.
    With regard to CALFED, I would like to open by saying that 
NRDC has been involved in CALFED since its inception, and I 
would like to say clearly that we strongly support the CALFED 
approach of funding integrated solutions to California's 
complex water supply problems. And we support the balanced 
implementation of the CALFED Record of Decision. Among other 
things, we have demonstrated this support by helping to 
negotiate and pass Proposition 50, which is providing well over 
$1 billion to implement the CALFED program.
    Unfortunately, during the past year, a series of actions 
have demonstrated that the Federal administration lacks a 
commitment to the implementation of CALFED pursuant to the ROD, 
the Record of Decision. We have laid out some of these points 
in an attachment to our testimony, our letter to Senator 
Feinstein and--I won't repeat them here. But in short, these 
actions appear to us to include decisions to undermine, ignore, 
and defund the CALFED program.
    Obviously, Mr. Chairman, we have had relatively little time 
to really do justice to an analysis of your new bill, which was 
introduced yesterday. We would like to provide you with 
additional comments on the CALFED title to the bill.
    To assist the Subcommittee's deliberations here today, we 
just identified six principles that we believe would be central 
to any successful CALFED authorizing bill.
    The first is consistence with the Record of Decision. 
Senator Feinstein stressed this in testimony here today. The 
ROD is a carefully crafted document, and continuing support for 
the CALFED program will depend on respecting its structure and 
its components.
    Secondly, beneficiary pay is an important concept that we 
think underlies the CALFED program.
    Third, project-specific authorizations and permits.
    Fourth, consistency with State and Federal law.
    Fifth, balanced implementation, which we support.
    And finally, avoiding ongoing litigation, avoiding 
wandering into issues, like drainage or supply delivery 
assurances, will help move a bill.
    There are several key concerns with the new bill that I 
would like to identify here today. In the interest of time, I 
won't discuss them all, but I will talk about two or three of 
them, mention them briefly.
    The first is what we believe to be an ambiguous 
authorization contained in this bill. What is CALFED? What does 
the bill authorize Federal agencies to do? Neither the 
definitions in the bill nor the statement of authorization nor 
the authorization of appropriations in the bill clearly directs 
the Administration to implement the CALFED program as defined 
in the Record of Decision, or pursuant to the Record of 
Decision, or consistent with the requirements of the Record of 
Decision. Instead, the bill calls for a CALFED program that is 
consistent with the objective and solution principles of the 
Record of Decision.
    Now, at the end of my testimony, I attached--the last page 
of my testimony is the page of the ROD that lays out the 
objectives and the solution principles. This is the ROD, and 
these are the solution principles and objectives. These are all 
good words, and we support them, but they are quite general, 
quite broad, and provide nowhere near the specificity of 
direction to the Federal agencies to implement the CALFED 
program. And as Senator Feinstein said, it is the Record of 
Decision that we have all agreed upon over the last two or 3 
years.
    Secondly, we are concerned about what appears to be a 
rollback of the Clean Water Act. The bill would restrict the 
alternatives that could be considered in Clean Water Act 
permitting.
    Another area of concern is the apparent automatic 
authorization of construction. The bill contains a provision 
that would eliminate the requirement for any subsequent 
congressional authorization for potentially billion-dollar 
water storage construction projects. We believe such language 
is inconsistent with the Record of Decision. It is also 
inconsistent with the longstanding practices of the Bureau of 
Reclamation, the Corps of Engineers as well. And the 
disapproval mechanism that is contained in this provision would 
appear to be of doubtful constitutionality. If CALFED storage 
projects can be shown to be good investments, we believe they 
will obtain congressional authorization.
    Another point I would like to highlight would be the 
obstacles to environmental restoration. There are several pages 
of the bill that contain a number of new provisions, not 
included in the Record of Decision, that would have the effect 
of creating new legal requirements, or slowing down or stopping 
altogether, Federal involvement in CALFED ecosystem 
restoration--the CALFED Ecosystem Restoration Program. These 
requirements are not contained in the ROD and are not applied 
to any other programs. Just to point out that Title III of the 
bill provides $300 million in three lines of text for 
environmental restoration of the Salton Sea. And it just 
appears that there is a very asymmetric treatment of this 
subject in the bill.
    For the record, Mr. Chairman, we will provide additional 
detailed comments regarding how these points can best be 
remedied, recommendations to the Subcommittee. However, without 
amendments to these provisions, NRDC opposes the bill in its 
present form.
    Finally and briefly turning to the other CALFED legislation 
that was before the Subcommittee today, we would like to 
commend the sponsors of H.R. 2641 for including several 
provisions designed to address key concerns regarding CALFED. 
We have identified what some of those elements are in the 
testimony--I won't repeat them all, but clarifying the 
applicability of State and Federal law, the addition of the 
CALFED provisions requiring the development of a statewide 
groundwater management program, and the additional detail 
toward a credible beneficiary-pays financing strategy are all 
especially helpful and we would commend each of these 
provisions to the attention of the Subcommittee.
    In conclusion, Mr. Chairman, just to point out that, in our 
view, the genius of the CALFED program is in recognizing the 
wisdom and the imperative of solving the interrelated problems 
of what are resources management in California together. We 
urge you to ensure that the authorizing legislation and the 
Federal agencies' implementation of the CALFED program reflect 
this approach.
    Thank you for the opportunity to testify.
    [The prepared statement of Mr. Osann follows:]

               Statement of Edward R. Osann, Consultant, 
     Natural Resources Defense Council, on H.R. 2828 and H.R. 2641

    My name is Edward R. Osann and I am President of Potomac Resources, 
Inc. I am a consultant to the Natural Resources Defense Council's 
Western Water Project, and am appearing today on their behalf.
    The Natural Resources Defense Council is a national, non-profit 
organization of scientists, lawyers, and environmental specialists 
dedicated to protecting public health and the environment. Founded in 
1970, NRDC has more than 550,000 members nationwide, served from 
offices in New York, Washington, Los Angeles, and San Francisco. Thank 
you for inviting NRDC to testify here today.
Title I--Competitive Grant Program
    We commend you, Mr. Chairman, for your recognition of the 
importance of accelerating the deployment of advanced technologies for 
desalination and water reuse, as evidenced by Title I of the new bill. 
While we applaud the establishment of a competitive grant program for 
this purpose, we are concerned that certain features of this title may 
prove to be unworkable, and ultimately frustrate the accomplishment of 
the important objectives that you seek and that we support. We look 
forward to performing a more thorough review of Title I and would 
appreciate the opportunity to submit our recommendations for the record 
to strengthen this important proposal.
Title II--CALFED
    NRDC has been involved in CALFED since its inception and has 
followed closely proposed CALFED legislation. We strongly support the 
CALFED approach of finding integrated solutions to California's complex 
water supply problems, and we support the balanced implementation of 
the CALFED Record of Decision (ROD). NRDC has demonstrated this support 
by helping to negotiate and pass Proposition 50, which is providing 
well over a billion dollars to implement the CALFED program.
    Unfortunately, during the past year, a series of actions have 
demonstrated the Bush Administration's lack of commitment to the 
implementation of CALFED pursuant to the ROD. These actions should be 
carefully considered in crafting CALFED authorizing legislation. This 
disturbing pattern is discussed in greater detail in the attached 
comments regarding S. 1097, the CALFED bill introduced by Senators 
Feinstein and Boxer. In short, these actions include decisions to 
undermine, ignore, and defund the CALFED program.
    Obviously, Mr. Chairman, we have had little time to do justice to 
an analysis of the new bill that was introduced yesterday. In the near 
future, we will provide you with more detailed written comments. Our 
attached comments on S. 1097 explain our position regarding a number of 
issues that the House must also address in CALFED legislation. We hope 
that they will be of use to this Subcommittee.
Principles for Successful CALFED Legislation
    To assist the Subcommittee's deliberations on CALFED, we offer six 
principles that we believe will be central to any successful CALFED 
authorizing bill. Our comments on S. 1097 include recommendations in 
each of these areas.
    Consistency with the Record of Decision: The ROD is a carefully 
crafted document, and continuing support for the CALFED program will 
depend on respecting its structure. Its constraints and its 
interconnections were developed in close consultation with agencies and 
stakeholders. The Department of the Interior and other responsible 
agencies must take great care to ensure that their actions are 
consistent with the requirements of the ROD. Unfortunately, as 
previously discussed, at this point, it is clear that Interior does not 
support the ROD. We therefore urge that specific ROD requirements be 
included in this legislation. Further, we recommend that CALFED 
legislation avoid creating definitions and programs that are not taken 
from the ROD.
    Beneficiary Pays: In the past, massive taxpayer subsidies have 
encouraged wasteful and environmentally destructive water projects and 
practices. The CALFED ROD clearly indicates that any new CALFED surface 
storage facilities will not be funded as they have been in the past. 
The ROD also calls for new user fees to help finance the program. These 
requirements are also consistent with the Department of Interior's 
Water 2025 strategy. This fiscally responsible approach will eliminate 
the financing mechanisms that have, for some users, disguised the fact 
that conservation, wastewater reclamation, improved groundwater 
management and, in some cases, land retirement and transfers, are the 
fastest and cheapest sources of additional water supply. It will also 
provide cost-based incentives for water users to conserve.
    Project-Specific Authorizations and Permits: The ROD clearly 
indicates the need for project-specific authorizations and permits for 
large potential CALFED construction projects. We recommend that these 
requirements be carefully reflected in authorizing legislation.
    Consistency with State and Federal Law: The ROD was carefully 
written to reflect state and federal legal requirements. Authorizing 
legislation should also require implementation of the program to be 
consistent with state and federal law.
    Balanced Implementation: Unfortunately, as our detailed comments on 
S. 1097 indicate, several portions of the CALFED program are falling 
behind in implementation. Maintaining a successful program means 
maintaining balanced implementation, consistent with the requirements 
of the ROD. This does not mean, however, that every project discussed 
in the ROD will be constructed. Indeed, the ROD indicates that balanced 
implementation may proceed even if some proposed projects prove to be 
infeasible.
    Avoid Ongoing Litigation: Drainage and water supply delivery 
``assurances,'' for example, are the subjects of ongoing litigation. 
CALFED legislation should be designed to avoid divisive, and 
unnecessary, provisions in these areas.
Key Concerns with the New Legislation
    Upon initial review, we have identified a number of provisions that 
we believe conflict with these principles and that represent major 
obstacles to a successful CALFED program. I will discuss some of these 
concerns briefly. (All page numbers below refer to the draft bill print 
dated July 21, 2003 (5:27 PM).)
     LAmbiguous Authorization. What is CALFED? What does this 
bill authorize federal agencies to do? Neither the definitions (p. 3) 
nor the statement of authorization (p. 17) nor the authorization of 
appropriations (p. 48) clearly directs the Administration to implement 
the CALFED program as defined in the ROD, pursuant to the ROD, or 
consistent with the requirements of the ROD. This is a major obstacle 
that will fail to correct serious problems in the Administration's 
current approach to CALFED and lead to additional conflicts with the 
State of California. Without such a requirement, the federal CALFED 
effort will be cut adrift. Our comments on S. 1097 outline our 
recommendations for a straightforward approach that reflects the 
requirements of the Record of Decision. We look forward to an 
opportunity to support a bipartisan bill that would direct Interior and 
other agencies to implement CALFED in a manner consistent with the ROD.
     LClean Water Act Rollback. (p. 19) The bill would restrict 
the alternatives that could be considered in Clean Water Act 
permitting. This represents a serious and unwarranted rollback of 
federal environmental law. In light of the lack of a ROD consistency 
requirement, it also leads to an unfortunate irony. The Department of 
the Interior could implement nearly any water project in California, 
due to the lack of a ROD consistency requirement. However, this 
provision would limit the alternatives to those actions that could be 
considered. In short, it does not require Interior's proposed projects 
to be consistent with the ROD, but it does require alternatives to that 
project to be consistent with the ROD.
     LAutomatic authorization of construction. (p. 21) The bill 
contains a provision that would eliminate the requirement for any 
subsequent Congressional authorization for billion dollar water storage 
construction projects. Such language is inconsistent with the ROD. It 
is also inconsistent with the long standing practices of the Bureau of 
Reclamation, and its disapproval mechanism is of doubtful 
constitutionality. If CALFED storage projects can be shown to be good 
investments, they will obtain Congressional authorization.
     LDelta Pumps (p. 25). The provision regarding Delta 
pumping requires this project to be consistent with some, but not all, 
state laws. It also fails to include the requirement in the ROD that 
the project should only move forward if it will not harm fishery 
protection.
     LObstacles to environmental restoration. (pp. 32-36) The 
bill contains a number of new provisions, not included in the ROD that 
would have the effect of creating new legal requirements, slowing down, 
or stopping altogether, federal involvement in the CALFED ecosystem 
restoration program. These requirements are not contained in the ROD 
and are not applied to other programs.
     LReapplication of appropriated funds. (p. 49) The bill 
would allow Interior to take money appropriated by Congress for one 
CALFED action and spend that money on storage and conveyance. We 
believe that such thwarting of Congressional directions is 
inappropriate. In addition, by favoring only some program elements, it 
clearly is not designed to lead to a balanced program.
     LCompliance with current law. In several locations (pp. 
19, 25. 51, and elsewhere), the bill fails to require compliance with 
existing state and federal law.
    Mr. Chairman, as I previously mentioned, we will provide detailed 
comments regarding how these principles can best be reflected in your 
bill. However, without amendments to these provisions, NRDC opposes the 
bill.
H.R. 2641
    Turning briefly to the other CALFED legislation before the 
Subcommittee today, we have had a bit more time to analyze H.R. 2641, 
the CALFED authorizing legislation introduced by Representatives Miller 
and Tauscher. We would like to commend the sponsors of this bill for 
including several provisions designed to address key concerns regarding 
CALFED and S. 1097. These improvements include:
     LClarifying the applicability of state and federal law;
     LThe inclusion of key CALFED requirements regarding the 
South Delta Improvement Project and screened through-Delta diversion 
investigations;
     LThe elimination of an unnecessary drainage provision;
     LChanges to the refuge water supply provision designed to 
maintain Interior's focus on legally-mandated refuge supplies;
     LThe addition of the CALFED provision requiring the 
development of a state-wide groundwater management program; and
     LAdditional detail toward a credible beneficiary pays 
financing strategy.
    We commend each of these provisions to the attention of the 
Subcommittee.
Conclusion
    In closing, we believe that the cooperative and integrated approach 
embodied in CALFED is the best strategy to restore the Bay-Delta 
ecosystem and improve water quality and water supply reliability. The 
genius of the CALFED program is in recognizing the wisdom, indeed the 
imperative, of solving these problems together. We urge you to ensure 
that authorizing legislation, and Interior's implementation of the 
CALFED program, reflect this approach.
    We look forward to continuing to work with members of the 
Subcommittee. We would be pleased to offer specific language regarding 
our recommendations.
    Thank you for the opportunity to present these views.
    Attachments:
    1. LNRDC Comments on S 1097
    2. LObjectives and solution principles of the CALFED Bay-Delta 
Program as stated in the Record of Decision

                   NATIONAL RESOURCES DEFENSE COUNCIL

                             July 18, 2003

The Honorable Dianne Feinstein
United States Senate
Washington, DC 20510

Re: S 1097, CALFED Authorizing Legislation

Dear Senator Feinstein:

    On behalf of the more than 550,000 members of NRDC, I am writing to 
offer our comments and recommendations for further refinements to your 
CALFED authorizing legislation, S 1097. As you know, NRDC has been 
deeply involved in the CALFED program since its inception. We strongly 
support the CALFED approach of finding integrated solutions to 
California's water supply problems, and we support the balanced 
implementation of the CALFED Record of Decision (ROD). NRDC recently 
demonstrated this support by helping to negotiate and pass Proposition 
50, which is providing billions of dollars to implement the CALFED 
program.
    CALFED authorizing legislation has gone through many permutations 
in the past few years. NRDC has offered comments throughout this 
process. As you also know, NRDC supported one version of your CALFED 
authorizing legislation (see our letter of January 31, 2002). However, 
S 1097 differs significantly from that bill. We thank you for your 
continuing commitment to resolving California's water issues and look 
forward to continuing to work with you.
    Unfortunately, during the past year, several actions have 
demonstrated the Bush Administration's lack of commitment to the CALFED 
approach and support for the ROD. These actions should be carefully 
considered in crafting CALFED authorizing legislation. These actions 
include:
    Weakening Environmental Protections and the Environmental Water 
Account: The Department of Interior has recently issued new rules 
regarding the allocation of water to the environment under section 
3406(b)(2) of the Central Valley Project Improvement Act (CVPIA). The 
CALFED ROD included the careful resolution of issues regarding the 
implementation of this section of the CVPIA. This resolution served as 
a foundation of the CALFED strategy to resolve issues related to Delta 
water management. This foundational role is explicitly reflected in the 
ROD, as well as in CALFED's NEPA documents and the Biological Opinions 
of fisheries agencies. Unfortunately, Interior chose not to defend the 
ROD and their own CVPIA decision, in a suit brought by the Westlands 
Water District. Instead, Interior simply capitulated. This decision 
undermined the ROD and significantly weakened environmental protection. 
This decision went beyond the issues under consideration in federal 
court. It also directly undermined the regulatory baseline of the 
Environmental Water Account (EWA) (ROD, p. 56)--thus jeopardizing a 
CALFED program designed to provide increased environmental protection 
and improved water supply reliability. Finally, in making this 
decision, Interior failed to coordinate meaningfully with the State and 
all interested stakeholders--two cornerstones of the CALFED process. 
This decision demonstrates a fundamental lack of support for the ROD.
    Ignoring ROD Requirements Regarding Upper San Joaquin River 
Storage: The CALFED ROD indicates that the Bureau of Reclamation will 
study potential new surface storage, or its equivalent, on the Upper 
San Joaquin River for the purpose of restoring the river and improving 
water quality (ROD, p. 45). Unfortunately, however, the Bureau's 
recently released ``Investigation Report'' regarding the Upper San 
Joaquin River fails to reflect the requirements of the ROD. The Bureau 
has excluded all non-surface storage alternatives (e.g. groundwater, 
conservation) from its investigation. The Bureau has also abandoned the 
project purpose included in the ROD. The Bureau's report describes a 
project designed to deliver water to the West side of the San Joaquin 
Valley. Not only does this report ignore San Joaquin River restoration 
and water quality, the project it describes would exacerbate both of 
these problems--the very problems that the CALFED ROD intended this 
project to address. Finally, the Bureau's report fails to discuss how 
the CALFED beneficiary pays provision would be implemented, were a 
surface storage facility to be constructed in this area.
    CVP Contracts that Undermine CALFED: The Bureau's current 
negotiations regarding the renewal of CVP contracts ignores the CALFED 
program. In the Sacramento Valley, the Bureau's draft contracts propose 
to deliver more water than Sacramento Valley users have used in recent 
years. In fact, the Bureau's own analysis reveals that the draft 
contracts propose to commit to deliver more water than these 
contractors are capable of using beneficially. The Bureau has not 
studied the impact that this decision could have on the environment, on 
other water users or on the carefully crafted Delta strategy in the 
ROD.
    Failing to Fund CALFED: The Administration has failed to propose 
adequate funding for the CALFED program. (Existing authorizations would 
allow the Administration to propose funding for much of the CALFED 
program.) In fact, last December, Interior proposed a funding package 
for a land retirement settlement with Westlands farmers that would have 
diverted funds from CALFED-related activities. This proposal was 
opposed by the entire California House delegation.
    The state of California has increasingly expressed concern 
regarding the Bush Administration's lack of support for CALFED. CALFED 
authorizing legislation will only succeed in supporting a balanced 
program if it is carefully designed to address the problems discussed 
above. We look forward to working with you to craft a bill that will 
address these problems, that we can support and that will strengthen 
the California economy and environment. With this in mind, we offer the 
following comments and recommendations. We begin by noting progress 
made in several areas:
    Consistency with the ROD: We thank you for clarifying, in section 
3(b), that implementation of the CALFED program is subject to the 
``constraints of the Record of Decision''. However, given the concerns 
discussed above, additional detail is required. We offer several 
recommendations below to ensure that Interior's implementation of key 
provisions reflects the explicit requirements of the ROD.
    Meeting Water Quality Standards: We are pleased that section 
3(c)(3)(I)(i)(10) reflects the need to develop and implement a plan to 
meet ``all existing water quality standards for which the State and 
Federal water projects have responsibility.'' In particular, we believe 
that the Bureau must prepare a plan to meet State flow and water 
quality standards for the San Joaquin River and Delta. The State Water 
Resources Control Board has found that the Bureau is responsible for 
ongoing violations of these standards. In addition, a state court 
recently threw out the current plan to meet these standards, which is 
supported by the Bureau. A new plan is clearly required.
    Clean Water Act Permitting: NRDC has consistently recommended that 
CALFED legislation clarify that any CALFED surface storage projects 
will require permits under Section 404(a) of the Clean Water Act. S 
1097 references this requirement in Section 5(b)(8). However, to ensure 
that this provision will have the intended effect, we recommend moving 
it to the feasibility study section (5(d)).
    Authorizing Land and Water Acquisitions: We are pleased that your 
bill explicitly authorizes the purchase of land and water as part of 
the CALFED ecosystem restoration program (3(c)(3)(G)(viii)). This 
authorization is important to CALFED's success. However, the bill now 
includes another hurdle to ecosystem restoration, discussed below.
    We also offer the following recommendations for further 
improvements to S. 1097:
    Groundwater Management: The ROD indicates that ``CALFED agencies 
will support legislation that encourages groundwater management at the 
sub-basin level'' (ROD, p. 47). We are not aware of progress toward the 
enactment of this legislation. This would likely be state legislation. 
However, Interior could play an important role in its development. We 
recommend that the discussion of groundwater in section 3(c)(3)(A)(iii) 
be amended to include specific reference to the development and 
implementation of a state-wide groundwater management program. H.R. 
2641, for example, includes such a provision.
    User Fees: The ROD calls for the implementation of user fees to 
support the CALFED program (ROD, p. 38). We recommend that S 1097 
include a specific authorization for Interior to participate in the 
development of a comprehensive package of user fees designed to support 
the CALFED program and reflect the benefits received by specific users. 
Once funds from Proposition 50 are fully allocated, such user fees will 
be essential to maintaining a healthy CALFED program. This user fee, 
and the ``beneficiary pays'' section that follows, are also consistent 
with Interior's Water 2025 strategy.
    Beneficiary Pays: We are pleased that S 1097 discusses the ROD's 
``beneficiary pays'' requirement for the financing of any new surface 
storage facilities (5(d)). However, this provision currently lacks 
sufficient detail. Unfortunately, CALFED has failed to provide a 
definition of this ROD requirement. Unless specific requirements are 
included in this legislation, some stakeholders and the Bureau may rely 
on the very financing mechanisms that the CALFED plan seeks to change. 
We recommend that this section be amended to require a beneficiary pays 
financing plan including:
     LThe full recovery of all federal expenses regarding 
capital, interest, mitigation, operations and maintenance; and
     LA ``least-cost'' test regarding any public benefits, to 
ensure the proper allocation of any costs to the public.
    The EWA and the Regulatory Baseline: The EWA will only function as 
anticipated if the regulatory baseline described in the ROD is 
maintained (ROD, p. 55). Unfortunately, as discussed in our 
introductory comments, this regulatory baseline is no longer intact. We 
recommend that the authorization of the EWA (3(c)(3)(E)) require that 
the first priority for any federal funds for the EWA be the restoration 
and maintenance of this regulatory baseline.
    South Delta Improvement Program: As discussed above, the CALFED 
regulatory baseline for the current operations of Delta diversion 
facilities is no longer intact. If CALFED agencies cannot successfully 
implement this strategy at the current level of Delta diversions, it 
raises serious concerns about the wisdom of further increases in the 
pumping limits. Indeed, the ROD clearly states that the proposed 
increase should only take place if it avoids ``adverse impacts to 
fishery protection'' (ROD, p. 49) We recommend that section 
3(c)(3)(B)(i)(1) be amended to indicate that the proposed increases to 
8,500 cfs and 10,300 cfs may only move forward if the level of 
environmental protection in the regulatory baseline is restored and if 
the proposed operations do not cause ``adverse impacts to fishery 
protection.''
    North Delta Actions: To assure that implementation of this project 
is consistent with the ROD, we recommend that Section 
3(c)(3)(B)(ii)(II) be amended to include the following language, 
``including full consideration of the constraints identified in the 
Record of Decision regarding Delta Cross Channel operations strategies, 
water quality impacts, technical viability, and fishery concerns''.
    The Need for Specific Project Authorizations: Section 3(c)(3)(A) 
clearly, and appropriately, indicates that this section does not 
provide authorizations required for the construction of surface storage 
facilities. However, we are concerned that some may interpret sections 
3(b) and 3(c)(3)(F) as providing this authorization. In order to avoid 
potential confusion in the future, we recommend that these sections be 
amended to clarify that any construction of surface storage facilities 
will require additional project-specific congressional authorization. 
Alternatively, a provision could be inserted requiring that all 
projects that would receive a total federal investment of more than $20 
million must obtain a project-specific authorization.
    The Project Purpose for Proposed New Surface Storage Facilities: As 
discussed above, the Bureau is undertaking studies on the Upper San 
Joaquin River that are inconsistent with the clear requirements of the 
ROD. We recommend that, for each proposed facility discussed, section 
3(c)(3)(A) be amended to reflect the project purpose in the ROD. In the 
case of the Upper San Joaquin River, this project purpose is to 
contribute to the ``restoration of and improve water quality for the 
San Joaquin River and facilitate conjunctive water management and water 
exchanges that improve the quality of water deliveries to urban 
communities'' (ROD, p. 45).
    Drainage Authorization: We continue to recommend that section 
3(c)(3)(I)(i) be deleted. This provision addresses an issue that is 
currently in litigation. We appreciate the intent behind the addition 
of section 3(c)(3)(I)(i)(3). However, Interior has demonstrated that no 
further authorization is required in this area. This language should be 
deleted unless clear constraints are added to assure that, in the 
future, Interior's drainage program is coordinated with the state and 
other stakeholders, and integrated into a balanced CALFED program.
    Diversification of Refuge Water Supplies: We recommend that section 
3(c)(3)(M) be eliminated. The Department of Interior has not prepared a 
plan for the diversification of refuge water supplies. It is not 
possible, therefore, to determine how these funds would be spent or if 
there would be any benefit for wildlife refuges. The first priority 
regarding refuge water supplies should be the full implementation of 
the legally required level 2 and level 4 supplies. We are concerned 
that, as written, this provision could harm refuges by diverting 
attention from the provision of required refuge supplies and result in 
the expenditure of tens of millions of taxpayer dollars simply to 
purchase water for CVP contractors. Such purchases would be 
inappropriate.
    Land Acquisition Determination: We recommend that section 4(f) be 
stricken. We submit that state and federal agencies will be compelled 
by budget realities to avoid unnecessary land acquisitions. This vague 
requirement for a finding regarding the availability of public land for 
ecosystem restoration purposes would be certain to lead to confusion 
and litigation.
    San Luis Lowpoint: Given how little progress has been made in 
securing permanent Environmental Water Account assets (ROD, p. 57), we 
recommend that section 3(c)(3)(B)(iv) be amended to provide that at 
least half of the new storage created by this project will be dedicated 
to the Environmental Water Account.
    Statement of Balanced Implementation: We recommend that the 
statement of balance required by Section 5(b) be amended to include 
reports regarding progress in areas that have fallen far behind in the 
CALFED program, including: the achievement of the water purchase 
targets in the Ecosystem Restoration Program (ROD, p. 36); the 
restoration of the EWA regulatory baseline; implementation of water 
measurement requirements (ROD, p. 63); BMP certification (ROD, p. 62); 
implementation of a state-wide groundwater management program; and the 
implementation of user fees.
    Monthly Report Regarding South of Delta Deliveries: Section 4(g) 
currently requires a monthly report regarding South of Delta water 
deliveries. We believe that reports at this frequency would serve no 
useful purpose. In fact, we are concerned that this requirement would 
erroneously suggest that this provision of the ROD is a higher 
congressional priority than other program elements. Further, this 
provision is unnecessary because the annual report required in Section 
5 would result in a report regarding the entire CALFED program.
    Funding for Water Measurement and BMP Certification: We recommend 
that an additional $10 million be allocated to water measurement and 
BMP certification in sections 3(c)(3)(C)(iv) and (v). These programs 
have been falling far behind in the CALFED program.
    The EBMUD Contract: For the past few years, several environmental 
groups have been talking with EBMUD regarding the project they are in 
the process of evaluating. We recommend that the reference to the EBMUD 
contract in section 3(c)(3)(i)(8) be eliminated and that section 5(11) 
be amended to require a report on progress in developing a broadly 
supported project under this Bureau contract. Given that EBMUD and 
Sacramento County are not proposing the construction of a federal 
project, we believe that it would be most appropriately addressed 
through the report regarding progress in implementing complementary 
actions.
    A Short ``Clean'' Authorizing Bill: Finally, as you know, NRDC has 
consistently recommended that you consider a carefully crafted short 
CALFED authorizing bill. Experience over the past year has shown that 
it is extremely difficult to capture the detail and interconnections of 
the CALFED ROD in a long bill. We believe that a simple bill that is 
carefully crafted to reflect the constraints of the ROD and to clarify 
the need for additional project-specific authorizations and permits, 
could be the most productive path.
    Thank you again for your leadership in the CALFED program. We look 
forward to continuing to work with you.

Sincerely,

Barry Nelson
Senior Policy Analyst

cc: Senator Barbara Boxer
   Chairman Pete Domenici
   Senator Jeff Bingaman
   Congressman Ken Calvert
   Congressman George Miller
   Congresswoman Ellen Tauscher
   Assistant Interior Secretary Bennett Raley
   Resources Secretary Mary Nichols
   Patrick Wright, CALFED
                                 ______
                                 
MISSION STATEMENT
    The mission of the CALFED Bay-Delta Program is to develop a long-
term comprehensive plan that will restore ecological health and improve 
water management for beneficial uses of the Bay-Delta system.
OBJECTIVES
    CALFED developed the following objectives for a solution:
     LProvide good 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.
     LReduce the mismatch between Bay-Delta water supplies and 
current and projected beneficial uses dependent on the Bay-Delta 
system.
     LReduce the risk to land use and associated economic 
activities, water supply, infrastructure and the ecosystem from 
catastrophic breaching of Delta levees.
SOLUTION PRINCIPLES
    In addition, any CALFED solution must satisfy the following 
solution principles:
     LReduce Conflicts in the System Solutions will reduce 
major conflicts among beneficial uses of water.
     LBe Equitable Solutions will focus on solving problems in 
all problem areas. Improvements for some problems will not be made 
without corresponding improvements for other problems.
     LBe Affordable Solutions will be implementable and 
maintainable within the foreseeable resources of the Program and 
stakeholders.
     LBe Durable Solutions will have political and economic 
staying power and will sustain the resources they were designed to 
protect and enhance.
     LBe Implementable Solutions will have broad public 
acceptance and legal feasibility, and will be timely and relatively 
simple to implement compared with other alternatives.
     LHave No Significant Redirected Impacts Solutions will not 
solve problems in the Bay-Delta system by redirecting significant 
negative impacts, when viewed in their entirety, within the Bay-Delta 
or to other regions of California.

CALFED Bay-Delta Program
August 28, 2000
Record of Decision
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Next, Mr. Somach for 5 minutes.

             STATEMENT OF STUART SOMACH, ATTORNEY, 
                     SOMACH, SIMMONS & DUNN

    Mr. Somach. Mr. Chairman, members of the Subcommittee, my 
name is Stuart Somach. I am an attorney in Sacramento. And I am 
here from the perspective of representing individuals and 
entities, both agricultural as well as urban entities, within 
the Sacramento Valley.
    It is kind of a unique perspective in terms of CALFED 
because the problems generally that have been identified, that 
are being addressed in the CALFED program are not caused and 
have little to do directly with what happens in the Sacramento 
Valley, yet what is done in the Sacramento Valley can create 
solutions to the problems that need to be addressed in the Bay-
Delta context. But we tend to look at things like this 
legislation and other legislation from that perspective. It is 
perhaps a different context, a different perspective.
    I also represent other entities. I should mention that 
because we are aware of conflicts, for example, with other 
folks on the Klamath project that we represent. I raise that 
matter only because we know what happens when conflicts go 
unresolved for a long period of time. And it kind of teaches 
us--that type of experience teaches us why a situation or a 
solution like CALFED is a positive thing and one that, if 
possible, we should embrace and try to advance as an 
alternative to the kind of crisis situation that exists up 
there.
    I have gone to some length to discuss our views in my 
written testimony, and I would like to just simply summarize 
some of the elements of that testimony here rather than 
repeating all of it.
    The first major element that I want to mention here is 
issues associated with alternatives analysis and generally 
planning under the CALFED process. You know, CALFED 
contemplates integrated approaches toward water management and 
regulatory agencies, particularly the Corps of Engineers and 
EPA, seem to adhere to an overly rigid application of, for 
example, the Clean Water Act's Section 404(b)(1) alternatives 
analysis. And what this application does is it requires one to 
view each one of the CALFED potential solutions not as part of 
an integrated solution, but rather as alternatives, one to 
another. As a consequence, the ability to maximize benefits 
through full integrated water management is lost in favor of 
rigid analysis developed to deal with situations that are quite 
dissimilar from the CALFED situation.
    Section 201(c) of 2828 provides necessary direction and 
ensures that the CALFED quest for fully integrated water 
management solutions will not be hampered by an overly rigid 
regulatory mindset. And we think that this particular provision 
is a very positive addition to the CALFED discussion.
    Another area, obviously, that is dealt with in the bill is 
storage, and additional storage is critical, we believe, to 
addressing and solving CALFED problems. And to the extent that 
H.R. 2828 includes provisions advancing water storage, we of 
course believe that it is a step in a positive and the proper 
direction.
    I might add just quickly that if at all possible, more 
specific reference to specific storage projects, I believe, 
would make an even better piece of legislation. In particular, 
as you know, we support Sites Reservoir and believe that it 
should be specifically authorized and referenced within any 
CALFED bill. That reservoir in particular allows one to 
maximize and optimize the reasonable beneficial use of water by 
allowing the integration of existing direct diversion rights, 
existing storage rights in Shasta, available groundwater 
storage in a manner that will far exceed any arithmetic 
calculation of the amount of water that is available, and 
believe that because of those benefits, the Sites Reservoir 
ought to be specifically referenced within the legislation.
    Another critical element we believe that is important is 
coordination and regulatory streamlining as an element of the 
CALFED process. One of the fundamental problems that was 
identified early in the CALFED process was the multiple 
statutory, regulatory, and agency coverage, or overlap, on 
critical issues. We believe that the Section 202(a) provision 
in 2828 goes a long way toward addressing this particular issue 
and problem. In my testimony, I have suggested some additional 
language that might assist even further.
    Two further points I would like to make. One addresses the 
question of beneficiary-pays. That is a critical issue. But I 
fear that if one focuses on strict criteria associated with 
beneficiary-pays, it will distort the analysis of potential 
alternatives that exist in the Bay-Delta CALFED process. And 
very quickly, I think that an identification that would 
separate out beneficiaries of CALFED projects from those who 
participate in CALFED projects is a good differentiation to 
make because there are those that would, and in fact need to 
participate in CALFED projects that are not necessarily direct 
beneficiaries who ought to shoulder a great deal of costs 
associated with projects.
    Finally, I want to mention 2641. Many of the provisions in 
2641 are similar to the core provisions within 2828. We believe 
2828 addresses these issues in a better manner. But I want to 
highlight one thing. There is a clause within a provision 
within 2641 dealing with the regulation of groundwater, which 
we believe is simply bad legislation. It attempts to Federalize 
groundwater law at the expense of State and local law. If that 
provision were to find itself into a CALFED bill, we would 
oppose that provision. And in fact, I would go so far as to say 
that if that type of provision was actually enacted into law, 
the Sacramento Valley, clearly, would oppose not just the 
legislation but also CALFED itself.
    I thank you for listening to my comments, and I would be 
more than happy to answer any questions.
    [The prepared statement of Mr. Somach follows:]

               Statement of Stuart L. Somach, Attorney, 
           Somach, Simmons & Dunn, on H.R. 2828 and H.R. 2641

    Mr. Chairman and members of the Subcommittee, my name is Stuart L. 
Somach. I am an attorney with the law firm of Somach, Simmons & Dunn, 
located in Sacramento, California. We represent clients in California, 
Oregon, Nevada and Arizona on a variety of issues and matters, 
including those involving water and the environment. I have testified 
before this committee, and other House and Senate committees, on 
numerous issues and legislation, including hearings dealing with the 
Coordinated Operations Agreement, the Endangered Species Act, the 
Central Valley Project Improvement Act, and on prior versions of 
proposed CALFED legislation. I have read and am familiar with both 
bills under consideration here as well as with the CALFED Record of 
Decision. I have followed CALFED actions and activities closely since 
August 28, 2000.
    Among my clients are entities and individuals within Northern 
California. I am, for example, General Counsel for the Glenn-Colusa 
Irrigation District, the largest irrigation district in Northern 
California with the most senior water rights on the Sacramento River, 
and am Special Legal Counsel for the County of Sacramento and the 
Sacramento County Water Agency, the largest urban area within the 
central portion of Northern California. With this representation in 
mind, I first offer some context for my testimony.
    From the very beginning of the CALFED process, indeed, before the 
Record of Decision was issued, Northern California interests have been 
fairly clear that, in general, we were not responsible, in fact or in 
law, for the problems that exist in the Bay-Delta. In our view, those 
problems were created by others. As a consequence, we can only support 
solutions that solve problems in a manner that does not harm Northern 
California interests. We cannot support and will oppose solutions that 
seek to solve problems created by others at the expense of Northern 
California.
    I hasten to add that from the onset, Northern California has 
nonetheless been willing to work with CALFED to seek solutions that 
meet the test of no redirected adverse impacts while advancing 
substantially actions and programs that would improve the Bay-Delta. We 
are still willing to participate in these programs and, in fact, have 
initiated actions that, when completed, will substantially advance the 
CALFED goals.
    With the foregoing in mind, I offer the following comments with 
respect to the draft legislation at issue.
H.R. 2828 (Calvert)--Title 11--California Water Security and 
        Environment Enhancement Act.
1. Balance (Sections 201(b)(3); (c)(4), Section 203(a)).
    The concept of ``balance'' is critical to a successful CALFED. H.R. 
2828 (Calvert) deals with this issue by first stating in a clear and 
unambiguous manner that the CALFED program shall progress in a balanced 
manner and then provides specific direction on how this balance is to 
be evaluated and then achieved. Without these types of procedures there 
is little question in my mind that water supply storage and conveyance 
projects will lag behind other CALFED programs and projects and, 
indeed, may never be completed. In particular, the provisions of 
Section 203(a)(1)(B), dealing with storage, and (H), dealing with 
permitting, are of critical importance.
2. Administration of Activities (Section 201(c)).
    There has been a fairly large disconnect between the whole purpose 
and need for CALFED and the way regulatory agencies approach their 
missions.
    The CALFED program is multi-dimensional in nature and not only 
evaluates, on a programmatic level, numerous alternative approaches 
but, in light of the significant water related problems at issue, in 
fact incorporates multiple elements which in the normal context might 
be considered, in themselves, as alternatives, one to the other. In 
other words, the problems dealt with by CALFED are so significant that 
looking at one option as if it were in opposition to another is 
counter-productive to meeting CALFED goals.
    While all of the planning and actions associated with CALFED 
contemplate this integrated approach toward water management, 
regulatory agencies, particularly the United States Army Corps of 
Engineers and the Environmental Protection Agency, adhere to an overly 
rigid application of, for example, the Clean Water Act section 
404(b)(1) alternatives analysis. This requires one to view each of the 
CALFED potential solutions not as an integrated whole, but rather as 
alternatives, one to the other. As a consequence, the ability to 
maximize benefits through full integrated water management is lost in 
favor of rigid analyses developed to deal with situations dissimilar to 
CALFED.
    The law itself does not require this rigid application of 
regulatory standards. However, it probably requires specific 
congressional direction and guidance (contemplated in existing law) to 
make certain that regulatory review occurs in an appropriate fashion. 
Section 201(c) provides this necessary direction and insures that 
CALFED's quest for a fully integrated water management solution will 
not be hampered by an overly rigid regulatory mind-set. This goal might 
be further advanced through additional language such as the following:
     LAlternatives Analysis
    Pursuant to the provisions of 33 U.S.C. Sec. 1344(r), information 
of the effects, if any, of a discharge of dredged or fill material, 
including consideration of the guidelines developed under 33 U.S.C. 
Sec. 1344(b)(1), will be included in the environmental impact statement 
undertaken pursuant to the National Environmental Policy Act (``NEPA'') 
for any CALFED project or program requiring federal authorization and 
such environmental impact statement will be submitted to Congress prior 
to the authorization of the project or the appropriation of funds for 
the construction of the project.
3. Water Storage (Section 201(d)(1)).
    New additional water storage will be critical to addressing and 
solving CALFED problems. To the extent that H.R. 2828 (Calvert) 
includes provisions advancing water storage, it, of course, advances 
this critical issue. Nonetheless, H.R. 2828 (Calvert) should be more 
specific with respect to water storage projects and should mirror the 
type of language that is utilized to authorize water conveyance 
projects.
    We support a Sites Reservoir and believe that it should be 
specifically authorized and referenced within any CALFED Bill. Sites 
Reservoir will provide much needed storage and, consequently, a new 
water supply for California. However, in this context and specific to 
the congressional authorizations at issue here, we believe that a great 
mistake will be made and an opportunity will be lost if the feasibility 
of a storage project (like Sites) is viewed in a traditional fashion, 
with the ``yield'' of the reservoir merely divided up among a pre-
identified group of ``beneficiaries.''
    The ability to view Sites in a manner different from the 
traditional storage reservoir stems, in part, from its location within 
or adjacent to the Glenn-Colusa Irrigation District (``GCID'') and 
districts within the Tehama-Colusa Canal Authority. Initially, this 
allows the reservoir to be filled through the conveyance of water into 
the reservoir pursuant to a wheeling agreement with GCID for use of 
GCID's Main Canal and/or potentially through a wheeling agreement with 
the United States Bureau of Reclamation (``USBR'') or others for use of 
the Tehama-Colusa Canal.
    In addition, how one operates Sites should take into consideration 
opportunities presented by the fact that it can be integrated with 
local interests within the Sacramento Valley so that it is operated and 
managed in conjunction with local interests--direct diversion water 
rights, other surface water resources, including storage rights within 
Shasta Reservoir, and groundwater resources. Proceeding with integrated 
water management will provide direct and indirect benefits. These 
direct and indirect benefits include securing independent, reliable and 
certain supplies of irrigation, municipal and industrial (``M&I'') and 
environmental water of suitable quality for reasonable beneficial uses 
by local interests within the Sacramento Valley. They will also provide 
benefits to the environment, including improvements in Delta water 
quality, the availability of water for the Environmental Water Account 
(``EWA''), in management flexibility that will be made available in the 
Sacramento Valley, and a more dependable water supply for water users 
within the Delta as well as water users south of the Delta.
    How this could work is perhaps best described by way of simple 
example:
    GCID has 720,000 acre feet of senior direct diversion water rights 
and 105,000 acre feet of storage rights in Shasta Reservoir. It does 
not need any additional water and, of course, needs no water from Sites 
Reservoir. Nonetheless, in any given year it could assist others in 
maximizing the benefits that can be derived from Sites Reservoir. (The 
same is true with respect to some districts within the Tehama-Colusa 
Canal Authority.) This could occur in a number of ways.
     LIn year ``A,'' for example, there could be a need for 
greater cold water flows within the Sacramento River from Shasta. In 
this situation GCID and/or the Tehama-Colusa Canal Authority could 
forego taking all or some of its storage rights within Shasta in favor 
of taking warmer water from Sites Reservoir.
     LIn year ``B,'' for example, for whatever reason, it might 
be desirable for a period of time to avoid the diversion of any water 
from the Sacramento River. Again, for that period, GCID and/or the 
Tehama-Colusa Canal Authority could forego direct diversion from the 
Sacramento River in favor of diversion from Sites.
     LIn year ``C,'' a dry year, for example, it might be 
desirable, during critical months, to ask GCID and/or the Tehama-Colusa 
Canal Authority to utilize available groundwater, thereby allowing 
water within Sites, Shasta and the Sacramento River to be utilized for 
other purposes.
    The ability to operate in a flexible manner to maximize system-wide 
benefits is not unique to GCID or the Tehama-Colusa Canal Authority; it 
is a shared ability that could be exercised by other entities within 
the Sacramento Valley. Sites Reservoir should be specifically 
authorized within the CALFED Bill.
4. Water Supply and Water Yield Study (Section 201(d)(1)(D)).
    This provision or something like it is long overdue. Moreover, its 
integration with existing authority and work already undertaken as part 
of the CVPIA should maximize efficiency. We, however, need to move past 
study and fulfill the CVPIA promise that lost yield would be recovered.
5. Water Transfers (Section 201(d)(4)).
    Northern California water entities are willing and able to transfer 
water for beneficial use within the watershed of origin and elsewhere. 
In the past few years we have, for example, transferred water for 
agricultural use within the Westlands Water District and for urban use 
within the Metropolitan Water District of Southern California. We have 
also transferred water to the EWA.. This is in addition to local 
transfers to better match supply with demand within the Sacramento 
Valley. We have proven the benefits that can be achieved through 
transfers. Two things are necessary, however, to insure that transfers 
continue.
    First, the various regulatory agencies must act in a manner that 
facilitates, rather than hampers, transfers. The Section 201(d)(4)(B) 
provision with respect to permit streamlining is a good start in this 
direction. More needs to be done.
    Second, the underlying rights of those who transfer water must be 
honored. The transfer or refusal to transfer cannot be challenged 
through concepts of waste or beneficial use. A provision to this effect 
would make H.R. 2828 (Calvert) better.
6. Integrated Water Management (Section 201(d)(6)).
    Northern California has been at the forefront of integrated water 
management and supports the provisions of H.R. 2828 (Calvert) which 
advance this cause. In addition to the integrated water management 
concepts associated with Sites Reservoir, noted above, Northern 
California water interests have proceeded with Basin-wide Water 
Management Plans to maximize efficient use within the Sacramento Valley 
and have, in conjunction with the USBR, the Department of Water 
Resources, the United States Fish and Wildlife Service, the California 
Department of Fish and Game and various export water interests, 
developed an aggressive integrated water management program under the 
so-called ``Phase 8'' process.
    Another example of a project that will benefit from these 
provisions of H.R. 2828 (Calvert) is the Freeport Regional Water 
Project, a joint project involving the East Bay Municipal Utility 
District, Sacramento County and the Sacramento County Water Agency. 
This project has the potential of providing substantial water quality 
benefits to the Bay Area while insuring local urban supplies within the 
Sacramento Valley, thus fulfilling multiple CALFED goals.
7. Management--Coordination (Section 202(a)).
    A fundamental problem that was identified early in the San 
Francisco Bay-Delta Estuary process was the multiple statutory, 
regulatory and agency coverage (overlap) of critical issues. Indeed, 
the whole concept of CALFED was borne out of the unintended adverse 
consequences of uncoordinated activities conducted by multiple agencies 
seeking to address the same problem.
    In a critical way CALFED has, in fact, worked to focus attention on 
a coordinated set of goals and actions. Nonetheless, an important 
element still must be addressed. While agencies work, in part, within 
CALFED, at critical times they remove themselves from that process and 
retreat to their individual regulatory processes. Thus, critical CALFED 
programs and projects are still required to scale multiple, 
duplicative, regulatory processes which add costs and time to that 
which would otherwise be necessary and which consequently challenge the 
feasibility of any proposed project or program.
    The solution, we believe, is not in asking any regulatory body to 
abrogate its responsibility to another or in the modification of any 
underlying statutory program. Instead, we propose a ``regulatory 
streamlining'' or ``regulatory coordination'' process in which all 
project elements or a program are evaluated at one time and, in this 
context, all regulatory requirements are also made known (along with 
mitigation measures) at one time. In this manner duplicative and/or 
inconsistent regulatory mandates can be immediately identified, 
evaluated and dealt with; and a project or program proponent can 
understand, at that time, what its total requirements/obligations will 
be. In this way intelligent decisions on how to proceed or how not to 
proceed can be made with the knowledge of all relevant facts.
    This process is not unique. The Federal Power Act, 16 U.S.C. 
Sec. 791a et seq., provides for similar procedures associated with the 
licensing under that Act. Regulatory and other relevant agencies, under 
the provisions of the Electric Consumers Protection Act (``ECPA'') are 
required to notify the Federal Energy Regulatory Commission (``FERC'') 
and the project proponents of all of the regulatory conditions that 
must be included within a license. FERC, in turn, must include in any 
license issued under the Federal Power Act appropriate conditions based 
upon what is provided by those other regulatory agencies. See 16 U.S.C. 
Sec. 805j(1); Mine Reclamation Corporation, et al. v. Federal Energy 
Regulatory Commission, et al., 30 Fed.3d 1519, 1525 (D.C. Cir. 1994). 
There is no absolute veto of any regulatory requirement, but merely an 
``all cards up'' understanding of what will need to be done in order to 
proceed with a project. 1 Not only does this save a great 
deal of time, but it also allows the project proponents to make an 
intelligent business decision about whether and how to proceed. Id.
---------------------------------------------------------------------------
    \1\ 16 U.S.C. Sec. 803j(2) does provide FERC with a process and 
criteria that it must follow if it determines that recommended 
conditions will be inconsistent with the purposes and requirements of 
the Act.
---------------------------------------------------------------------------
    In our view, while a step in the right direction and clearly a good 
idea, Section 202(a) simply does not go far enough. Instead, we would 
propose language such as the following:
Regulatory Coordination
    The Secretary working with the Governor shall develop a regulatory 
coordination and streamlining program in which all permits, licenses or 
other approvals associated with the permitting approval of projects 
under this Act will take place. This regulatory coordination or 
streamlining program shall insure that all Federal and California 
agencies' respective regulatory programs will take place at one time 
and that they will be coordinated in a manner that reduces or 
eliminates process- or substantive-related duplication and 
inconsistencies, thereby reducing costs and time that would otherwise 
be required; Provided, that nothing herein is intended nor should it be 
construed to affect the substantive regulatory requirements that may be 
applicable.
    As in many situations, the problem faced by project proponents is 
not the need to comply with appropriate environmental obligations but 
the problem created by multiple, duplicate or inconsistent regulations. 
This problem is particularly troublesome in a situation as complex as 
the one presented by CALFED. The type of language proposed here, while 
not fully addressing all of the potential problems, will go a long way 
in remedying the situation that otherwise exists.
8. Beneficiaries Pay (Section 205(b)).
    There is, of course, a simple logic in the concept of beneficiaries 
pay. However, we must also guard against the abuse of the ``beneficiary 
pays'' provision of the CALFED Record of Decision being distorted by 
those who simply choose to utilize this provision as a means to block 
projects, including, for example, Sites Reservoir. It is not that 
identified beneficiaries should not shoulder appropriate financial 
responsibility, but that the rhetoric engendered by those currently 
repeating this beneficiary-pays mantra do so by constructing so-called 
rules or ``principles'' that reflect a very traditional view of project 
operation. In this traditional view, utilizing reservoir storage as an 
example, one would merely divide the yield of a reservoir among 
identified entities and individuals and thereby simply determine who 
and how much is to be paid by each of these entities and individuals. 
Proceeding in this manner precludes the ability to view projects in a 
non-traditional manner, thereby missing the opportunity to maximize its 
benefits.
    Identification of ``beneficiaries'' will, of course, be more 
difficult if one varies from the traditional view of project operation 
and management. Indeed, rather than starting with the identification of 
beneficiaries, one would start from the perspective of identifying 
management scenarios that would maximize the operation of the entire 
Sacramento River system over a period of years. In this manner, system 
maximization, and not beneficiary identification, will drive future 
analysis. The results of this analysis will identify beneficiaries 
rather than having the identification of beneficiaries drive the 
analysis.
    Beneficiaries, all beneficiaries, including the environment, should 
``pay'' for benefits received from all CALFED projects or activities. 
This requirement should not be limited to storage and conveyance 
projects as asserted by some and, in this regard, the provisions of 
Section 205(b) are well stated. In this context, some further 
legislative directive with respect to this issue, including focusing on 
the difference between a ``beneficiary'' of a CALFED project and a 
``participant'' would be helpful.
H.R. 2641--Calfed Bay-Delta Authorization Act
    H.R. 2641 contains many of the core provisions found in H.R. 2828 
(Calvert). In this context, we have already commented on them above. 
This Bill has the specificity with respect to certain issues such as 
the specific reference to Sites Reservoir and other storage, as well as 
specific inclusion and reference to the Freeport Project at Section 
3(c)(3)(I). These are positive provisions and should be carried forward 
in any final CALFED authorization legislation. However, we believe that 
other provisions of the Bill miss the point. As a consequence, we 
believe that H.R. 2828 (Calvert) is a far superior vehicle to authorize 
federal participation in CALFED.
    Notwithstanding the foregoing and, in any event, because of Section 
3(c)(3)(N), entities within the Sacramento Valley could never support 
H.R. 2641 and would oppose CALFED itself if H.R. 2641 were passed into 
law.
    As noted at the start, the Sacramento Valley is willing to assist 
in seeking solutions to problems that have been caused by others within 
the Bay-Delta. We are, however, unwilling to do so if the solution is 
at our expense. H.R. 2641 somehow adopts the misguided notion that it 
is appropriate to hold hostage Bay-Delta solutions until federally 
mandated groundwater management is forced on the Sacramento Valley. 
Proceeding in this manner is inappropriate. Moreover, it is not needed.
    Section 3(c)(3)(N) is inappropriate because there already exists 
extensive state and local law to regulate and manage groundwater within 
California, including within the Sacramento Valley.
    Section 3(c)(3)(N) is inappropriate because groundwater management 
is and should remain a matter of state and local law and should not be 
federalized.
    Section 3(c)(3)(N) is not needed because groundwater within the 
Sacramento Valley is already being managed and does not suffer from 
overdraft as may exist elsewhere within the State.
    Section 3(c)(3)(N) is not needed because entities within the 
Sacramento Valley are integrating groundwater in programs such as those 
discussed above in order to maximize the reasonable beneficial use of 
water to the benefit of those within the Sacramento Valley, the 
environment and to areas south of the Delta.
    I appreciate the opportunity to testify here today and would be 
happy to answer any questions you might have now or in the future, or 
to provide additional information if requested.
                                 ______
                                 
    Mr. Calvert. I thank the gentleman.
    Next, our good friend from Santa Clara Valley, Mr. Greg 
Zlotnick.

             STATEMENT OF GREG ZLOTNICK, DIRECTOR, 
      SANTA CLARA VALLEY WATER DISTRICT BOARD OF DIRECTORS

    Mr. Zlotnick. Thank you.
    Good afternoon, Mr. Chairman, Ranking Member Napolitano, 
members of the Subcommittee and staff. My name is Greg 
Zlotnick. I am an elected member of the Board of Directors of 
the Santa Clara Valley Water District. It is a pleasure and 
honor to appear before you today to comment specifically on 
Title II. I would also like to mention, however, our general 
support for the inclusion of Titles I and IV as very important 
for broadening the scope of the legislation and indicating an 
acknowledgment of water as an important issue nationally and 
Westwide, of course.
    I have submitted more detailed written testimony for the 
record.
    For those not familiar with Santa Clara Valley Water 
District, we are the primary water resources agency for the 
more than 1.8 million residents of Santa Clara County. We are 
the only agency that receives exports from the Delta through 
both State Water Project and the Federal Central Valley 
Project. Those exports account for about half of our water 
supplies in an average year and significantly more in a 
multiple dry-year scenario. Hence, our strong interest in the 
Delta and CALFED.
    I was asked to comment today on working with regulatory 
agencies. And our district has what I have come to realize is 
unfortunately a unique experience working with multiple Federal 
and State agencies. The strategies we have used can be applied 
to the CALFED program and other Western water programs to 
reduce permitting times and costs without compromising 
protection for the environment. The various resource agencies 
often have different perspectives, different sets of 
authorities and missions, and different views about which 
resource should be given priority. Addressing these conflicting 
and/or duplicative demands increases the length and cost of the 
permitting process and significantly inflates project costs, 
often without an appreciable impact on environmental 
protection.
    We have spearheaded proactive, collaborative efforts rather 
than simply succumbing to reactive, adversarial processes. This 
strategy, with the enthusiastic participation of State and 
Federal resource agencies, has led to many successes in the 
last couple of years--notably, a 10-year routine stream 
maintenance program, which has been touted by Assistant 
Secretary for Fish and Wildlife Craig Manson; our Fisheries and 
Aquatic Habitat Collaborative Effort, which balances and 
integrates drinking water, flood protection, recreation, and 
fisheries needs; and also our Guadalupe River Flood Control 
Project that protects the heart of Silicon Valley and which our 
partner, the Corps of Engineers, points to as a national model 
for multi-purpose urban flood-control projects.
    Your legislation, Mr. Chairman, recognizes the importance 
of agency coordination and collaboration by proposing the 
establishment of a centralized regulatory office. We support 
that concept. However, we think it is important that the 
project proponent be assured of close consultation as part of 
the agency coordination process and not left to only knock on 
the door of the multi-agency meetings. To be figuratively, if 
not literally, at the table with the agencies as they 
deliberate is critical.
    While we are receptive to the notion of local contributions 
to supplement agency staff resources, we believe the agencies 
could free up substantial resources by streamlining the 
permitting process for routine or similar projects, including 
more widespread use of general and nationwide-type permits. In 
addition, permit applicants with a demonstrated ongoing 
commitment to watershed stewardship should be given an 
incentive to continue such policies through a less cumbersome 
process using fewer staff resources.
    We support the broad authorization for CALFED 
implementation that these bills provide. The inclusion of 
complementary actions is especially important to my district 
and is necessary overall to ensure balanced implementation. We 
are particularly happy to see the San Luis Reservoir Low Point 
Improvement Project specifically called out in all three CALFED 
bills, as it cannot only improve the reliability and quality of 
deliveries to our service area and all of the San Felipe Bay 
unit, but also could quickly create approximately 200,000 acre-
feet of additional storage south of the Delta for multiple 
benefits, including the Environmental Water Account.
    Another important benefit of authorizing all elements of 
the Record of Decision and encouraging the use of current and 
ongoing authorities to contribute toward coordinated financial, 
regulatory, and staff implementation of the CALFED program is 
the powerful message it sends to the Federal agencies which 
you, as our representatives, fund and oversee. This legislation 
affirms that implementation of the CALFED program is a priority 
for California and the Nation and the Federal agencies should 
meaningfully incorporate the program into their long-term 
strategic planning and budgeting processes. In other words, 
CALFED should be considered mission critical and it is not 
going away.
    Finally, I would like to touch on the issue of water 
quality. Despite being a foundational element of the CALFED 
program, funding for the Water Quality Program has been 
severely lacking, particularly at the Federal level. During the 
first 3 years of the CALFED program, the Drinking Water Quality 
Program was funded at only 45 percent of what was envisioned in 
the Record of Decision, and of that 45 percent, only 1 percent 
came from Federal agencies. This is simply unacceptable, and 
more funds are needed. If we cannot look to developing new 
supplies, particularly in the near term, we must be able to 
ensure that we can continue to utilize and stretch those 
supplies we do have even in the face of increasingly stringent 
drinking water regulations and the threats of what have almost 
become contaminants du jour.
    Mr. Chairman and members of the Subcommittee, thank you 
again for inviting me to speak today about the authorization of 
the CALFED Bay-Delta program, which is so critical to the 
residences and businesses in Silicon Valley, all of California, 
and the Nation. We greatly appreciate your efforts to pass a 
funding authorization for this important program and look 
forward to working with all of you toward that end.
    I also commend you once again, Mr. Chairman, for your 
vigorous leadership, persistence, and close working 
relationship with Senator Feinstein as she seeks the support of 
her colleagues as you do from yours.
    I would be happy to try to answer any questions you may 
have about my comments or the issues raised today. Thank you.
    [The prepared statement of Mr. Zlotnick follows:]

            Statement of Gregory A. Zlotnick, Board Member, 
     Santa Clara Valley Water District, on H.R. 2828 and H.R. 2641

    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). On 
behalf of the Board of Directors of the District, I want to thank you 
for holding this hearing today on the Chair's bill and H.R. 2641, to 
authorize the CALFED Bay-Delta Program and improve water supplies in 
the West.
    The CALFED Bay-Delta Program has been called a model for resolving 
water conflicts in the American West: a collaborative, stakeholder-
based solution that emerged from years of litigation and regulatory 
gridlock. As the program matures, it is fundamentally changing the way 
state and federal agencies and stakeholders work together. If the 
program is not authorized, we risk a return to the conflicts and crisis 
management that for so many years threatened our state's water supplies 
and economy, and the Bay-Delta ecosystem.
    Today, the future of the CALFED Program is at risk because federal 
agencies lack the financial resources and, in some cases, the authority 
to carry out key elements of the program. The District would like to 
thank you, Chairman Calvert, for recognizing the importance of the 
CALFED Program to California and the other Western states, and for your 
tireless efforts to secure passage of a funding authorization for the 
program. We also want to recognize Representative Miller for his 
efforts to support the program. It is encouraging to see that the three 
CALFED bills introduced this year take a similar approach to 
authorizing the program.
    The region my agency serves, the Silicon Valley, has a particular 
interest in the outcome of the CALFED Program. Our region 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 program.
    We have been asked to speak today about the two CALFED bills before 
the Subcommittee, the Chair's bill, and H.R. 2641. My comments will 
focus on three issues that we believe must be addressed in federal 
legislation if the CALFED Program is to fulfill its promise: agency 
coordination and permit streamlining; use of existing agency 
authorities; and funding for water quality improvements.
    My comments on agency coordination and permit streamlining will 
draw on my agency's unique experience working with multiple federal and 
state agencies in the water resource and ecosystem restoration project 
permitting process. We believe that the strategies we have used in 
Santa Clara County can be applied to the CALFED Program and other 
Western water programs to reduce permitting times and costs, without 
compromising protection for the ecosystem. My comments on the other two 
issues stem from our role as an urban water agency charged with 
protecting the public health, and are ones that I think others in the 
urban community would echo.
    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 managing and serving as 
environmental steward for the county's creeks and streams, underground 
aquifers and district-built reservoirs.
    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.
    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 working other Bay Area water agencies to 
evaluate the feasibility of desalinated seawater as a future regional 
water supply option.
    We are very pleased that Title I of the Chair's bill recognizes the 
growing role of water reuse in meeting water supply needs in our state 
and throughout the West. We in the West face the dual challenges of 
meeting the water supply needs of growing populations and restoring 
threatened and endangered fish and wildlife populations. Faced with 
these pressures, we cannot afford to allow water that could be 
recovered to go unused. Funding made available through this bill can 
help support our efforts to maximize the use of recycled water in the 
county. As you know Mr. Chairman, we are jointly responsible for a 
Title XVI water recycling project in the City of San Jose, California 
and we are aggressively planning other reuse efforts in our county.
    The bill will also help my agency and others deal with the very 
real and serious consequences of groundwater contamination. In Santa 
Clara County, we have since January been coping with the reality of 
hundreds of private and public wells contaminated by perchlorate from a 
site used by the Olin Corporation to manufacture highway flares. We 
hope to keep the groundwater supplies usable in the near term through a 
combination of well head treatment, point-of-use treatment and other 
recognized treatment alternatives, but over the longer term, the 
groundwater basin cleanup must occur.
    We need federal funding to help defray these near- and long-term 
costs, even as we go through the lengthy process of trying to recover 
damages from the responsible party. The provisions in Title I of the 
Chair's bill regarding the cleanup and treatment of contaminated 
groundwater should be of great help to us. The basin in the southern 
part of our county that has been contaminated by perchlorate is the 
primary source of drinking water for many residents, making immediate 
action imperative. We are very grateful for your efforts, Mr. Chairman, 
to help us deal with this very serious problem.
Agency Coordination and Permit Streamlining
    Having provided you some background on our agency, I will turn my 
comments to the issue of agency coordination and permit streamlining. 
In carrying out our water resource management duties, my agency 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 state and federal agencies to obtain the permits 
for our 10-year stream maintenance program. Working with multiple 
agencies can pose unique challenges. One way we've addressed these 
challenges is by working with state and federal agencies in a 
collaborative or group forum at the beginning of the project effort, 
rather than working with them individually at the end.
    Often resource 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.
    Working in a collaborative forum at the front end of a project or 
program 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. Too 
often the sequential review process pits resource agencies against each 
other. Bringing related resource agencies together to help plan and 
develop multi-purpose projects leads to a smoother and more efficient 
permitting process, and also gives life to the projects by building 
multiple agency support and ownership.
    The Chair's bill recognizes the importance of agency coordination 
and collaboration by proposing the establishment of a centralized 
regulatory office. We support that concept, but would encourage you to 
consider a broader approach to the collaborative process. In the 
collaborative processes we conducted in Santa Clara County, we were a 
full participant in the multi-agency forum for project formulation, not 
an outside observer. Only by analyzing problems and developing 
solutions together were we able to develop projects that truly met the 
needs of the community, while satisfying all regulatory requirements. 
In our view, it is critical that the local project sponsor be a partner 
in the collaborative process and have a seat at the table along with 
the appropriate regulatory agencies.
    We are convinced that 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. 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. We intend to utilize 
this successful approach for future projects that we are developing as 
well.
    The FAHCE is one example of the benefits of a multi-agency 
collaborative process. 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 it 
allowed each of the agencies to have ownership in the project. And that 
ownership in turn translated into more efficient project permitting and 
support for a better project.
    Collaboration among federal and state agencies and project 
proponents is a powerful tool, but it also requires time and resources. 
Making this resource commitment up front, however, will produce payoffs 
in the form of better projects, fewer conflicts between resource 
agencies and project proponents, and a more efficient permitting 
process.
    Title IV of the Chair's bill provides for contributions from non-
federal agencies to expedite the permitting and environmental review 
process. While this could be appropriate in some situations, we think 
that the agencies could free up substantial resources by streamlining 
the permitting process for routine or similar projects, and projects 
proposed by agencies with a demonstrated commitment to watershed 
stewardship.
    One way to streamline the permitting process for routine projects 
is through the development of clear policies and guidelines and 
standardized training for agency staff that review projects. Consistent 
application of policies and guidelines at the field office level would 
make the permitting process more predictable for applicants, and would 
reduce the impact on applicants of turnover in agency staff. It would 
also allow the federal agencies to target their resources where they 
are needed most: at those more complex projects where the use of the 
collaborative process could provide the greatest benefits.
    We would also encourage the use of general permits for similar 
types of projects. 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. Applying 
this general permit concept to the CALFED Program could produce 
substantial savings and streamline the permitting process for many 
projects and, again, free up federal agency resources for use 
elsewhere.
    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 record of 
proven environmental stewardship. 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 through the permitting process more quickly. The benefits 
of this approach would be two-fold: to provide incentives for behavior 
that furthers the CALFED program, and to allow for the more efficient 
use of federal agency resources.
Use of Existing Agency Authorities
    The second issue I would like to talk about involves the use of 
existing agency authorities. We are pleased that both the Chair's bill 
and H.R. 2641 take the general approach of authorizing all the major 
elements of the CALFED Record of Decision. While we understand that the 
federal agencies can carry out many elements of the program under 
existing authorities, the broad authorization that the Chair's bill and 
H.R. 2641 would provide is important for two reasons.
    First, some key elements of the CALFED Program are not covered by 
existing federal authorities. One of the projects for which the Bureau 
of Reclamation lacks feasibility investigation authority is the San 
Luis Reservoir Low Point Improvement Project, a project of critical 
interest to my agency and other Central Valley Project and State Water 
Project contractors. Solving the low point problem could make available 
as much as 200,000 acre-feet of storage in the San Luis Reservoir, 
which is ``wet'' water south of the Delta. This project would not only 
improve the reliability of water supplies for state and federal 
contractors, it could also be an important tool for the Environmental 
Water Account. We are very pleased that the Chair's bill and H.R. 2641 
would authorize funding for the evaluation and implementation of this 
important project.
    The second reason it is important to authorize all elements of the 
Record of Decision is the powerful message it sends to the federal 
agencies: that implementation of the CALFED Program is a priority not 
only for California, but for the nation, and that the federal agencies 
must incorporate the program into their long-term strategic planning 
and budgeting processes in a meaningful manner, consistent with the 
role envisioned for them in the Record of Decision.
    The Chair's bill takes the additional step of directing the 
agencies to use existing funds and authorities to carry out the CALFED 
Program before funds are made available under the Act, and provides the 
Secretary the flexibility to allocate to storage and conveyance 
projects funds that cannot be used elsewhere in the program. With 
respect to the first point, we would encourage the federal agencies to 
coordinate their existing funding programs under the CALFED program to 
the extent possible. Doing so will result in a more efficient use of 
federal resources and is consistent with the approach envisioned in the 
Record of Decision. The Environmental Protection Agency and the Corp of 
Engineers, for example, have several funding programs that could be 
coordinated with the CALFED Program to achieve multiple benefits.
    With respect to the second point, we agree it is necessary to 
provide the Secretary some flexibility in funding allocations, but we 
also believe that flexibility should not be limited to storage and 
conveyance projects. From our perspective as an urban drinking water 
supplier, the Water Quality Program is seriously under funded and could 
make good use of any funds that could not be used for other programs.
Funding for Water Quality Improvements
    This brings me to my third issue, which concerns funding for water 
quality improvements. One of the CALFED Program's four objectives is to 
provide good water quality for all beneficial uses, including drinking 
water uses. And yet funding for the Water Quality Program has often 
taken a back seat to funding for CALFED's other programs. This is 
particularly true at the federal level. I offer as an example the fact 
that during the first three years of the CALFED Program, the Drinking 
Water Quality Program was funded at only 45 percent of the level 
envisioned in the Record of Decision, and of that 45 percent, only 1 
percent came from the federal agencies. We must reverse this trend to 
bring the program back into balance.
    The Chair's bill takes the important step of authorizing funding 
for the Drinking Water Program. It would provide additional funding 
under Title I, and also recognizes the important link between water 
quality and water supply issues. Water made unsuitable for drinking due 
to contamination is water lost to the system; water that must be 
replaced from our increasingly scarce supplies.
    Federal participation in the CALFED Drinking Water Program can, 
however, take many forms beyond providing funding. The following are a 
few examples:
     LThe Environmental Protection Agency can help CALFED 
achieve its objectives by providing assistance to stakeholder 
partnerships for watershed management and water quality monitoring; 
participating in the development of a statewide integrated plan to 
improve water quality and protect public health; and coordinating its 
existing water quality programs with the CALFED Program to achieve 
common objectives.
     LActions to protect fish and wildlife can sometimes 
adversely affect drinking water quality. The Fish and Wildlife Service 
can support CALFED's objectives by considering drinking water quality 
impacts in all of its ecosystem restoration activities.
     LWater quality and supply are linked in the Bay-Delta 
system. The Bureau of Reclamation should address the potential for 
water quality improvements in all of its storage and conveyance project 
studies.
     LThe Geological Survey can support the Drinking Water 
Program by contributing to the improved scientific understanding of 
water quality in the Bay-Delta.
     LThe Army Corps of Engineers can support CALFED's drinking 
water quality objectives by addressing water quality in its flood 
control and ecosystem studies.
     LThe Department of Agriculture - Natural Resource 
Conservation Service can support the Drinking Water Program by 
coordinating its water quality and resource management programs with 
the CALFED Program to achieve mutual objects.
    Many of these activities could move forward under existing 
authorities and with available funding, but the federal agencies lack 
direction and perhaps motivation to make the activities a priority. 
Highlighting the importance of water quality in the Chair's bill before 
the Subcommittee, and encouraging the federal agencies to coordinate 
funding for projects in the Bay-Delta solution area through the CALFED 
Program, would send to the federal agencies the clear message that 
drinking water quality is a key component of the CALFED Program, not an 
afterthought.
    Mr. Chairman and members of the Subcommittee, thank you again for 
inviting me to speak today about the reauthorization of the CALFED Bay-
Delta Program, which is so important to the residents and businesses in 
the Silicon Valley. We greatly appreciate your efforts to pass a 
funding authorization for this important program and we look forward to 
working with you toward that end. This concludes my testimony. I would 
be happy to answer any questions you may have.
                                 ______
                                 
    Mr. Calvert. Thank you. I thank the gentleman for his 
testimony.
    Mr. Osann, please, for the record, explain your views 
briefly on storage options pursued by CALFED.
    Mr. Osann. We believe in the balanced implementation of the 
CALFED program. Storage investigations are part of what is 
contemplated under the Record of Decision, and--
    Mr. Calvert. I guess beyond just the investigations.
    Mr. Osann. We support those investigations going forward.
    Mr. Calvert. How about within the Record of Decision, the 
storage options that are outlined within the Record of 
Decision. Do you support those storage options?
    Mr. Osann. I would like to suggest that we supply the 
answer to that for the record, Mr. Chairman. I would rather not 
extemporize here too greatly and cloud the record with 
something that we would have to correct.
    Mr. Calvert. We will look forward to your answer to that 
question. You also brought an issue up regarding, I think you 
referred to it as ``automatic approval.'' Have you read the 
Feinstein legislation?
    Mr. Osann. Automatic authorization?
    Mr. Calvert. Automatic authorization. You are opposed to 
that?
    Mr. Osann. Yes.
    Mr. Calvert. Have you read the Feinstein legislation?
    Mr. Osann. Yes, I have, Mr. Chairman.
    Mr. Calvert. Do you support her legislation?
    Mr. Osann. We have submitted some comments on it and we are 
continuing to review the Feinstein Bill as well.
    Mr. Calvert. Let me thank you for your statement of Title I 
of the bill, but are you--you realize that in the Feinstein 
legislation it states that the Secretary shall report to the 
Congress within 90 days after the completion of a feasibility 
study, or the review of a feasibility study, for the purpose of 
providing design and construction assistance for the 
construction of desalinization and regional brine lines 
projects. And in effect, that is an approval process. Would you 
support that for reclamation and desalinization?
    Mr. Osann. I would like to take a fresh look at it and 
provide you a comment for the record.
    Mr. Calvert. I guess the question is, if it is good enough 
for water recycling and desalinization projects, to be 
consistent in your perspective on this issue, do you support 
that over issues of storage which are outlined within the 
Record of Decision?
    Mr. Osann. I take your point, Mr. Chairman, and will be 
glad to provide you with a written response on that question.
    Mr. Calvert. On the issue of beneficiary-pays concept, as 
outlined in the Record of Decision for projects that are 
regional in scope, in benefit of a multiple number of users, is 
the environment a user of that water also?
    Mr. Osann. We did note the language of the bill that 
referred to the environment as a potential beneficiary. And 
certainly, recreational users have been beneficiaries and there 
have been beneficiary-pay mechanisms for sportsmen through 
Dingell-Johnson and duck stamps and a variety of mechanisms for 
many years. So there certainly are mechanisms that are 
potentially available for beneficiaries for recreation and fish 
and wildlife.
    Mr. Calvert. So you would agree, then, that environmental 
interests would be included in the beneficiary-pays as far as--
if that is consistent with your perspective?
    Mr. Osann. It certainly is conceivable. The language of the 
bill is a bit vague and uses some terms that are not defined. 
We would be glad to take a look at further refinements in that 
area.
    Mr. Calvert. There has been some discussion about--and I am 
getting back to storage a second--on the Sites Reservoir. Do 
you believe that there is some benefit in the Sites Reservoir?
    Mr. Osann. There may be some benefits in Sites, there may 
be some benefits in a number of surface storage projects that 
are contemplated. The question is whether the benefits will 
outweigh the costs.
    Mr. Calvert. Well, you know, I guess I have been here for 
awhile now. I was here in the beginning when we all came to an 
agreement back in 19--I believe that was 1993, 1994, when we 
all--almost, I think, all of us--signed on to the concept of 
CALFED. And I remember all of us getting together at that time 
and saying basically we are all going to get better together. 
And the environmental community, the agricultural community, 
the urban community all signed on to the concept that we were 
going to get better together. And part of that was, of course, 
that we had to fix some of the past sins, especially in the 
Bay-Delta, but elsewhere, and that at some point, though, the 
end, the carrot was that there would be water in the end, is 
the way I understood it. And I tell you this, from almost all 
of my colleagues--I am sure--I won't say 100 percent, but I 
would say a great majority of them believed at the end that 
these storage projects, including Sites and other storage which 
is outlined--with, by the way, in both my legislation and in 
Senator Feinstein's legislation--would be acceptable at the 
end. And I am hopeful that in your comments that you send back 
to this Committee for the record, that you will remember that. 
Because it is important that we go back to the people that we 
represent in California, that the significant amount of money 
that we are being asked to expend, and have expended, and more 
in the future, that at the end of this process, that we have 
water.
    With that, Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair. You just brought up 
some points and you got me to thinking about what really we 
need to do. And I made the statement while I was not only 
touring Northern California but also during the hearings, is 
that most of the Northern California, they use water 
basically--not basically, but most of the water goes for 
farming. Restoration of the ecosystem, the--as far as natural 
resources are concerned, for the Bay-Delta, for fisheries, for 
et cetera. And I keep saying Southern California uses for 
drinking most of the time. Because we have the numbers of 
people that drink water, the increasing numbers. And so there 
is a little bit of a difference as far as I'm concerned. Well, 
we are not going into the debate here, because I can start 
about the meters.
    Mr. Osann, there has been comments about those who say that 
CALFED has spent a tremendous amount of money on the ecosystem 
restoration projects. What is your answer to that?
    Mr. Osann. Well, CALFED contemplates, you know, expansive 
programs across a variety of purposes. And we have had 40 or 50 
years of ecosystem degradation. Even under current conditions, 
we have the San Joaquin River, which is the second-largest 
river in the State, you know, has reaches that are dry 2 years 
out of there, or more. And so it is going to be a big job to 
restore habitat, to restore fish and wildlife--it is going to 
be a big deal. But it is--we recognize that the fabric of 
CALFED involves addressing a number of inter-related--that 
these issues are inter-related and addressing a number of them 
concurrently, we sort of have to walk and chew gum here. And we 
are looking for a program to go forward on a balanced basis.
    Mrs. Napolitano. Well, again, I hear some of my colleagues' 
comment that no matter what the project for storage, that the 
environmentalists will not be in favor of them. And to me, that 
doesn't seem like the response I am looking for sitting at the 
table and trying to figure out how do we work together on 
these.
    Mr. Osann. We have--in the course of pursuing San Joaquin 
River restoration, as a for-instance, we have been supporting 
the storage exploration--investigation for the Upper San 
Joaquin River for purposes, as called for in the ROD, of 
habitat restoration and improving water quality in the Delta, 
including for the benefit of those who use Delta water for 
drinking water. We have conducted--for the last three or 4 
years, we have been conducting collaborative studies with the 
Friant water users on opportunities, including storage 
opportunities, for--that would provide the mechanism for 
accomplishing those purposes.
    However, the results have been, of these cooperative 
analyses that we have done with the Friant water users, that 
the surface water storage options pencil out to be the most 
expensive options to accomplish these purposes.
    Mrs. Napolitano. It is quite a convoluted issue.
    Now, going back to the regulatory streamlining, how do you 
see that need as a priority. Or if we are looking at--I would 
call it fast-tracking; I know my colleague over here has a 
different name for it--but the storage projects. How would you 
see the need for this regulatory streamlining have an effect on 
CALFED?
    Mr. Osann. Are you referring to the provision that provides 
for the authorization in this bill of storage projects?
    Mrs. Napolitano. Precisely.
    Mr. Osann. We think this is a major departure from the 
Record of Decision, and frankly, we view this as an impediment 
to passing the bill. I just observe that there probably hasn't 
been more interest in reforming the Corps of Engineers program 
today than there has been over the last 20 years. One of the 
key issues that keeps coming up in WRDA is inclusion of 
projects that don't have completed feasibility reports. And the 
Committees and the Congress and the administration by and large 
hold the line that projects that are authorized for 
construction have completed feasibility reports. And it seems 
to us that the bill, if this provision stays in it, would be 
headed for some difficult times ahead.
    Mrs. Napolitano. Thank you, Mr. Chair.
    Mr. Calvert. Mr. Nunes.
    Mr. Nunes. Thank you, Mr. Chairman. I want to first welcome 
Ms. Moralez, who comes from my area, and I want to thank you 
again for testifying before our Committee. And thank you for 
your prior testimony in Tulare.
    Also, it is good to see my old friend--Greg, it is good to 
see you again.
    I want to just go back to some of the questions that Ms. 
Napolitano and Mr. Calvert asked Mr. Osann. Maybe you didn't 
understand the first part of the question when Mr. Calvert 
asked you, because you said that you don't agree with the 
authorization upon completion of feasibility study. That was 
what you just explained to Ms. Napolitano, correct?
    Mr. Osann. Correct.
    Mr. Nunes. And yet you are supporting Mr. Miller's bill 
that does exactly that.
    Mr. Osann. We have identified several features of the 
Miller Bill, H.R. 2641, that we support. We have not provided a 
final set of comments on that bill, either.
    Mr. Nunes. But you are supporting the bill.
    Mr. Osann. I am not here today to provide a blanket 
endorsement to H.R. 2641, no, sir.
    Mr. Nunes. Mm-hm. But I find it very disingenuous that it 
is OK when it comes to support issues that you care about, but 
when it comes to issues that other folks care about, it is not 
OK and it is unconstitutional, to use the words that you used. 
I think that is what you said.
    So, you know, I haven't been here, as the other members of 
the Committee have been here, for 10 years working on CALFED. 
But at the end of the day, the other four people that are 
sitting here know that you can't continue to add people to the 
State of California and not have new yield somewhere, somehow.
    You know, there are a lot of us that are in favor of the 
San Joaquin River being restored. I agree with that, too. But I 
don't see how you can do that without building new storage on 
the San Joaquin River. And you talk about how do you explain 
during the droughts, prior droughts, had the water projects not 
been in place, what would have happened to rivers like the San 
Joaquin when you incur an eight- or 9-year drought? Would there 
have been fish there when water wasn't flowing?
    Mr. Osann. Well, you also have tremendous amount of 
consumptive use.
    Mr. Nunes. I understand that. But without the water project 
there, the rivers wouldn't run during these long periods of 
drought.
    Mr. Osann. That has certainly been the case for many of 
California's rivers, yes.
    Mr. Nunes. There are rivers in California that now run 
practically year-round because of the water storage projects. 
And I--
    Mr. Osann. It is good for habitat, yes.
    Mr. Nunes. And I am one of the opinion that water storage 
projects can be very beneficial to the environment, and we can 
do things like restoring water down the San Joaquin River. 
Yesterday we sat in with the folks looking at the through-Delta 
options that can improve water quality for the Delta.
    So, I am going to be very blunt with you here. We have 
folks from both sides of the aisle supporting this bill. We 
have every major city, farm organization, and labor group 
supporting new water storage facilities. My patience is going 
to grow very, very thin with groups like the NRDC if they 
continue to stall this process longer than what I feel it has 
already been stalled for. And I hope that you will, as Mrs. 
Napolitano asked, come to the table, let's work on this 
legislation, and let's move it.
    I mean, I think this is a good bill. Mr. Dooley's co-
sponsor, Mrs. Napolitano, Mr. Calvert. I think that it has been 
beneficial for the environment. And I just feel like you are 
going to put up what I call political roadblocks and not 
roadblocks that really have substantial data behind them. And 
much like this--I don't know what I did with your statement 
here--the problem that you have with automatic authorization of 
construction. You don't have a problem with it when it comes to 
the projects that you want, but you do have a problem when it 
comes to projects that you don't want. And I find that very 
alarming. And I hope that--I assume you are going to address 
this in some statement, as Mr. Calvert--you are going to 
provide some statement to the Committee?
    Mr. Osann. Yes. We have indicated to the Chair that we 
would.
    Mr. Nunes. Well, I look forward to reading that testimony.
    Ms. Moralez, since you live in Fresno County--can you 
comment on what your thought is for storage on the Upper San 
Joaquin River? I know you did it in your statement, I guess I 
should ask you, do you think that it would be beneficial for 
the environment, or do you think it would hurt the environment?
    Ms. Moralez. I believe it is going to help. I have been 
there 30 years and I have been very much a part of every aspect 
of what happens in the area because of my involvement in 
agriculture and the business community. Also, I am very 
committed to the environment myself. I want the San Joaquin 
River to flow again. And I think, realistically speaking, when 
you look at how do we divide the limited water we have, well, I 
doubt very seriously that any of us, even if you are 100 
percent strictly environmentally minded, that you are going to 
stop providing water for the people that live in the area or 
providing water for agriculture so that--to stop the production 
itself, or to stop the water to continue dealing with the issue 
of growth that we have.
    I think, realistically speaking, we can provide the water 
for the San Joaquin River, but we are going to be realistic and 
go and build additional storage. Without storage, I think we 
are going to go on fighting for the next 50 years and we won't 
resolve the problem.
    Meanwhile, the population growth is happening so fast in 
the Valley that I truly believe we will have a major economic 
and social problem.
    Mr. Nunes. Thank you. I assume my time has expired. Thank 
you, Mr. Chairman. Thank you, Ms. Moralez.
    Mr. Calvert. Mr. Dooley.
    Mr. Dooley. Yes, Thank you, Mr. Chairman. And thank you all 
for taking the time to come.
    I think what I would like focus on a little bit here are 
some of the opportunities for quicker fixes that can provide 
additional supplies of water, and one of those, Mr. Walthall, 
you identified in your testimony in terms of the increase in 
the pumping capacity, primarily at Banks, and how that is a 
critical component to improving the plumbing, which will 
provide additional water supplies. And there currently are, I 
guess, talks that are taking place now that are making 
progress. And I guess I would like to understand a little bit 
in terms of what is happening now and what the Calvert 
legislation would do to even expand upon that.
    Mr. Walthall. Certainly. I would be delighted to respond.
    The talks you are referring to are discussions between the 
CVP contractors, the Federal contractors, and the State 
contractors. And we spent a great deal of time last week with 
each other, probably more time than most people would have 
thought was healthy, given our past conflicts. And the 
resolution that came out of that was an understanding that 
expanding Banks's capacity, if it is to occur, has to benefit 
both projects. That is not something that was intuitively 
understood from the CALFED ROD, but it is a reality of how that 
project moves forward.
    One of the elements of the Chairman's bill that will 
facilitate that is a much quicker protection for some of the 
in-Delta water users. Specifically, when you increase pumping, 
you decrease water levels in the Delta. And the way you 
compensate for that is by constructing permanent barriers that 
allow the tides to flow in, raise those water levels, and then 
prohibit the tide from flowing back out. As a result, the water 
levels remain higher.
    Those permanent barriers are included in the Chairman's 
bill as something that needs to be accelerated in their 
construction. In other words, they are currently scheduled for 
2008, but the Chairman's bill would request that the Federal 
agencies accelerate that and work diligently with the State 
agencies who are leads for that project, and accelerate the 
permanent installation of those permanent barriers. The goal 
being that once you have provided those protections for the in-
Delta users more quickly, you can use to your greater advantage 
all 8500 cfs of new capacity.
    Mr. Dooley. Now, if we did construct those facilities and 
those barriers, they would have to be constructed in a manner 
that was consistent with all State and Federal laws that are 
currently in place?
    Mr. Walthall. Of course. Yes, sir.
    Mr. Dooley. Mr. Osann, in your testimony, I think you 
identified that you were concerned that the legislation wasn't 
providing that protection of all State and Federal laws. Where 
is the disagreement here?
    Mr. Osann. I am not sure I can speak with the specificity 
you are looking for this afternoon.
    Mr. Dooley. Your statement said the provision regarding 
Delta pumping requires a project to be consistent with some but 
not all State laws.
    Mr. Osann. Right.
    Mr. Dooley. So I just assumed that, you know, you would 
have some idea in terms of what State laws it wouldn't be 
subject to.
    Mr. Osann. Those that are not enumerated in the bill. The 
bill calls out certain laws in particular that pumping has to 
be consistent with, leaving other laws--perhaps the Fish and 
Game Code or other aspects of California State law--not 
covered, by inference.
    Mr. Dooley. Mr. Walthall, would you respond to that? I 
mean, I didn't know we could build anything that wasn't subject 
to every law that was on the book today.
    Mr. Walthall. And I am not exactly sure, too. I think it is 
more the storage provisions of the Chairman Calvert's bill that 
was probably objectionable to NRDC.
    Mr. Dooley. No, this is Delta Pumps, page 25 specifically, 
that had that citation in it.
    Mr. Walthall. --read that, Mr. Osann?
    Mr. Dooley. It is on page 4 of the testimony, I believe. 
But whatever--
    Mr. Walthall. I guess, let me respond in this way. The 
barriers are part of the overall South Delta Improvement 
program, which expands the pumping capacity. And that process 
is currently being handled by the State Department of Water 
Resources. And they are right now doing their EIR for that, 
which is under SEQA--State law, SEQA requires. They are doing 
that in tandem with the Bureau of Reclamation. Reclamation is 
the lead on the EIS. So both NEPA and SEQA are being complied 
with for the entire South Delta Improvement program, which 
includes the barriers and expansion of the pumps.
    Mr. Dooley. But then I guess, Mr. Osann, as long as it was 
complying with all these laws, you--I mean, the NRDC-- wouldn't 
have any problem with the increasing of the pumping capacity at 
Banks?
    Mr. Osann. Let me give you a response to that for the 
record.
    Mr. Dooley. All right. Moving on to another issue which is 
a little bit of a distinct--
    Is it all right if I go ahead and ask one other question 
here on this issue?
    Another issue where there is a difference in terms of an 
approach, between the Calvert proposal and the one that has 
been offered by Mr. Miller is how we meet refuge water 
supplies. And I guess I am a little bit--I don't understand 
why--you know, what the rationale is for the differences. Mr. 
Calvert's bill basically requires no more than $30 million to 
be expended to be complying with Level 2 and Level 4 refuge 
water supplies. Under Mr. Miller's proposal, it says no more 
than $30 million may be expended to comply with Level 2 and 
Level 4 refuge water supplies requirements as set forth in 
CVPIA. But they say no such funds shall be expended first to 
acquire the quantities of Level 4 water before the money can be 
spent to acquire the 26,000 acre-feet of Level 2, replacement 
supplies.
    What is the objective here? I am a little bit concerned 
that if I have my water users and contractors south of the 
Delta, is there a reason for me to be concerned about what 
would be the impact on this? Can someone respond? Greg, you are 
nodding your head.
    Mr. Zlotnick. Well, I am certainly not an expert, and I 
would defer to Brent. But my understanding is yes, they would 
be concerned, that it is essentially a flip-flop of what 
current priority is in terms of trying to find those supplies.
    Mr. Walthall. My recollection of the CVPIA is six or 7 
years old. But the way I understand that provision to work, it 
would change the order of which money pays for which level of 
refuge supplies. And I think the way it is in Congressman 
Miller's bill, it would mean that more of that money was a 
reimbursable expense of the CVP, rather than a nonreimbursable 
expense--in other words, a greater cost on the CVP's 
contractors.
    Mr. Dooley. OK. All right, thank you.
    Mr. Calvert. Thank the gentleman.
    I just want to point out for the record Section, I believe, 
207 on page 51 of the bill is Compliance With State and Federal 
Law. Nothing in this Act--it starts out--invalidates or 
preempts State water law or interstate compact governing water, 
et cetera, et cetera. Just for the record. As the gentleman 
well knows, especially in our State, nothing gets done without 
meeting both State and Federal law.
    On the Bay-Delta, and I would like to ask the gentlemen, 
Mr. Zlotnick and Mr. Somach, on the issue of the Sites 
Reservoir. Mr. Zlotnick first. Do you believe that the Sites 
Reservoir is important not just for storage reasons but for 
water quality issues that are important within the Delta?
    Mr. Zlotnick. If I may answer this way, Mr. Chairman. 
Because the investigations are going on right now in terms of 
all the storage, integrated storage investigations, I wouldn't 
want to conclude on any particular project. However, I will say 
that storage in general, whether, frankly, it is on the San 
Joaquin or off Sacramento in the north, whether it is Los 
Vaqueros, whether it is the low point project, whatever, 
storage today is now considered a tool for what you described 
as the need for increased flexibility in the system. And that 
is how our agency would look at it, to look at multiple 
benefits that could be provided by essentially providing 
additional buckets of water that could be filled when the water 
was available so we could utilize it when the system is 
depleted.
    And in terms of Sites, I will say that one of the important 
issues with respect to Sites in terms of multiple benefits is 
it is north of the Delta storage, which would potentially have 
a positive effect in how it was operated for water quality 
within the Delta.
    We also have the issue that has not been raised today, but 
which is out there on the horizon, and that is climate change. 
And in terms of what is happening to the snow pack in our 
State, both from a temporal aspect and where the snow or rain 
will fall, there is a potential to have Sites provide some 
additional flood control benefit in the Sacramento Valley 
potentially. And that is important. I served as vice chair of 
the Government's Flood Plain Management Task Force, and that 
was an important issue. We put into the recommendations of 
looking at that whole issue.
    So that would be important in the Sacramento Valley in 
particular as well. So if I could just answer it in terms of 
the flexibility that storage provides, then north of the Delta 
can help with water quality in the Delta.
    Mr. Calvert. I guess the--as I am getting to, there is 
environmental benefit to some of these--For instance, on 
Shasta, the additional 300,000 acre-feet in Shasta is--isn't it 
true that much of the benefit goes to cooling down the 
downstream water in order to help the salmon runs at--
    Mr. Zlotnick. Well, your initial comment about water 
quality--but there is no question that environmental benefits 
are part of the multiple benefits that storage could provide, 
whether it is cold water flows or it is the timing of flows 
into the system when fisheries need it.
    Mr. Calvert. Right. Mr. Somach, your comment on--I 
understand you spent a lot of time on the Sites Reservoir 
issue.
    Mr. Somach. We have spent quite a bit of time on the Sites 
Reservoir issue.
    Yes, I--you know, it is kind of funny. There is this notion 
of north versus south that always kind of comes up, and use of 
water in the Sacramento Valley for agricultural purposes. The 
underlying reality of the situation is that every drop of water 
that isn't consumed by crops in the Sacramento Valley returns 
to the system. It is one of the benefits, actually, of the way 
the system operates, is that one can actually go in there and 
optimize the utilization of water in a manner that ensures not 
only that the agricultural use in the Valley is sustained, but 
that every drop of water not consumed by crops up there moves 
into the system.
    Sites Reservoir really allows the folks in the Sacramento 
Valley to be an active participant in the CALFED process by 
providing more than could be provided with just top-down 
control-type of mechanisms that would force people to do things 
in one way or another. And the reason why it does that is 
because it allows flexibility and it allows alternatives. And I 
think what I mentioned before is the fact that one could take 
existing resources and meld them with Sites Reservoir in such a 
way as to actually increase the overall benefits of all of the 
existing resources, whether they be direct diversion water 
rights, storage water rights in Shasta, or groundwater.
    And I think the best example I can use is Glenn-Colusa 
Irrigation District, which lies adjacent to where Sites 
Reservoir will be. That district as 825,000 acre-feet of water 
and water rights that it relies upon from the Sacramento River. 
If that district cooperates in the context of the Sites 
Reservoir, it can do many things, including go to Sites 
Reservoir at various times to alleviate water-quality and other 
problems in the Sacramento River, where supply it otherwise 
would have taken from the Sacramento River is allowed to move 
down through the system.
    It can, in addition to that, at any given time utilize 
Sites Reservoir in conjunction with groundwater that it has 
available to it, allowing, in certain years, water that 
otherwise it would take from the Sacramento River, again, to be 
used for environmental and other uses through the Delta.
    Mr. Calvert. For instance, on the issue of--and I know this 
is an emotional subject to some--water transfers, but many in 
the environmental community are supportive of water transfers. 
If a voluntary seller of water for whatever reason--during 
times of plenty he wanted to sell some water to whomever--would 
a Sites Reservoir be helpful in having additional storage in 
order to store that water for--transfer that water later on?
    Mr. Somach. Yes, absolutely. In fact, over the last 3 
years, we have transferred water south to agricultural users in 
the Westlands Water District. And in fact, this year we are 
currently in the middle of transferring water to the 
Metropolitan Water District of Southern California. One of the 
problems in particular with the Metropolitan transfer was 
problems with storing water so that it would be available at 
appropriate--
    Mr. Calvert. Yes, I was going to ask that question. There 
was a problem of storage water in the State Water Project and 
the State reservoir--they didn't have the capacity. Isn't that 
true?
    Mr. Somach. It was a capacity issue both in the reservoir 
as well as a capacity issue given the existing conveyance 
problems through the Delta. Storage facilities like Sites would 
allow us, then, to back water up so that it could be available 
when there was available capacity.
    Mr. Calvert. What I am trying to get--is the system today 
we are operating at complete capacity? I mean, we are straining 
the system that we have because we haven't really added to the 
system in so long? And that is what this legislation attempts 
to do, is to provide some capacity to the system both in 
storage, conveyance, and obviously in our first title, to 
create yield through conservation and other purposes basically 
across the board.
    Any additional questions for this panel?
    Mrs. Napolitano. You just brought something else to mind, 
Mr. Chairman. Thank you for giving me the time. And that is, I 
have heard a lot of above-ground water storage, conveyance, 
everything else, but nothing about looking for aquifers of the 
capacity to expand aquifers. Can anybody answer that?
    Mr. Somach. Yes, I certainly can, and it really goes hand-
in-hand with this discussion of Sites Reservoir. One of the 
things that we are looking at in the context of Sites Reservoir 
is how better to integrate with that resource plus other 
resources we have up there that are available groundwater, so 
that we can maximize the ability to conjunctively use 
groundwater that is available in the Sacramento Valley with all 
these other resources.
    We just finished what is called the Phase 8 process, which 
was a process that involved the Fish and Wildlife Service, the 
California Fish and Game, the Bureau of Reclamation, Department 
of Water Resources, south-of-Delta CVP and SWP exporters on one 
side, and then the Sacramento Valley interests on the other 
side. And among the things that came out of it was the 
development of numerous projects, groundwater-related projects 
being among the foremost of those projects that will, No. 1, 
provide water for the Sacramento Valley, provide water for the 
environment in terms of Delta outflow, and also make water 
available for south of Delta to water uses.
    I might add that we are moving forward with a long-term 
look at what can be done if we expand the kind of program I 
have just discussed. And again--and I hate to sound like a 
broken record here, but Sites Reservoir looms very large in 
that long-term plan, because with it we can do so much more for 
all three of the elements I have just--
    Mrs. Napolitano. I think you missed my point, though. I am 
talking about aquifer storage--underground, to avoid 
evaporation because of the climate change we are talking about.
    Mr. Somach. Yes. And I should have mentioned that among the 
Phase 8 projects, in fact one that the Glenn-Colusa Irrigation 
District is, is to utilize the area around Stony Creek in the 
north as an injection and replenishment area, where we actually 
take available storage and we put water back into the ground 
and use it--again, in conjunction with all the other things I 
have talked about.
    Mrs. Napolitano. But has it been evaluated or have several 
areas been evaluated to be able to identify them at the time 
when you have excess water that can be stored and later maybe 
sold to Southern California because you have that water that 
you do not have need of?
    Mr. Walthall. If I could add just a little bit. Kern County 
Water Agency, actually, has been very aggressive in exactly 
that, actually. The Kern Water Bank, for example, is one of our 
larger projects, but within the Kern County area, over a 
million acre-feet of groundwater storage. That storage has very 
broad benefits. For example, the Metropolitan Water District of 
Southern California stores a significant amount of water, over 
400,00 acre-feet in Kern County groundwater basins. We have 
provided storage space to the Santa Clara Valley area--
    Mrs. Napolitano. Yes, I understand you have projects, but 
is there anybody looking at adding to--
    Mr. Walthall. Yes.
    Mrs. Napolitano. --finding additional aquifers or 
identifying those areas that might have contamination because 
of fertilizers and pesticides, which we found very, very 
heavily affected our San Gabriel Valley area, that we have had 
multimillion, about $95 million worth of cleanup, and how 
that--because it was explained to me that the top layer is 
contaminated and then the aquifers are below that. Well, how do 
we--we have the water, ladies and gentlemen. We just need to 
use it better. We need to be able to clean it, we need to be 
able to move it around so everybody has a win-win situation 
instead of fighting over what projects, the costs of the 
projects, and--you know the old adage, Whiskey is for drinking, 
water is for fighting.
    Questions? Answers? I get very frustrated listening to the 
different dialog, because the effect--the ecosystem, 
environmentalists, we need to protect, and the farmers want, 
and the others have shortages, and there is contaminated that 
prevents us from actually pulling water to be able to meet the 
needs of the people, especially in heavily populated areas. We 
have no other alternative, OK? We will have to go to bottled 
water. That is quite an issue.
    So you understand my frustration.
    Mr. Walthall. Certainly.
    Mrs. Napolitano. Thank you.
    Mr. Calvert. Thank the gentlelady.
    Mr. Nunes?
    Mr. Nunes. I would just like to maybe have each of the 
panelists offer a very short, brief answer to the question of 
if we don't create new yield in the next 15 to 20 years, your 
specific area that you folks represent, where will you get the 
water from? Why don't we just start on the left--my left?
    Mr. Somach. Well, if we don't create new yield, folks will 
be coming and attempting to take water away from the folks I 
represent. And so we see additional yield as absolutely 
essential in order to maximize and to maintain the kind of 
stability and reliability that we need to continue to operate 
in the northern part of the State.
    Mr. Nunes. Thank you.
    Mr. Walthall. In our area, we already invest heavily in 
water conservation and recycling and all of those kinds of 
things. They are not sufficient. And in your scenario, where 
would we get the water? We wouldn't. It would be a 
deterioration in quality of life.
    Ms. Moralez. In the San Joaquin Valley, which is part of 
the area he is talking about, absolutely, there is no real 
solution. The only solution is going to be additional storage. 
There is no question about it, no matter how we look at it. 
What water is available right now, as it is, it is difficult to 
provide the contracts that are on the records right now. The 
population explosion is happening. We can't stop that. The 
business expansion is occurring. The folks from San Francisco 
and Los Angeles are moving next to our backyard. So 
realistically speaking, we don't have any other resource. And I 
am sure we can look everywhere. We do have the snow, we have 
the meltdown, we have all those beautiful resources, but we 
have to find a way to store it. And the only way to store it is 
additional storage.
    Mr. Nunes. Thank you.
    Mr. Osann. There are a variety of ways to increase the 
yield of the system, ranging from water use efficiency and 
moist water reclamation and reuse to surface water storage and 
groundwater storage. And the CALFED Record of Decision is the 
path for exploring and implementing an optimal mix of all of 
those measures.
    Mr. Nunes. Thank you.
    Mr. Zlotnick. I would answer it this way, Congressman, for 
my colleagues are here. If we don't get the yield, the luxury 
of doing what we do for the environment is probably going to be 
much tougher to sell to the public, first of all. And second of 
all, for our area, we will have to invest in much more 
expensive technologies. And Brent, I think, hit it on the head 
when he said it is a quality of life issue, which is what we as 
elected officials are charged to try to protect and improve for 
our constituents. And then ultimately this will get to, for 
your area that serves not only California but the Nation, we 
are really talking about agricultural policy as well. You are 
not going to be able to do desal for crops. And so I think that 
is part of the mix that we get into here that is sort of left 
off the table a little bit, but hovers through the issue.
    And so in answer directly to your question, we would find a 
way to pay what we would need to pay to maintain some quality 
of life, but we have the luxury of that in our community. Not 
every community does.
    Mr. Nunes. Thank you. Thank you to the panel also, for your 
testimony. Thank you, Mr. Chairman.
    Mr. Calvert. Thank you. And I want to thank this panel. It 
has been a very interesting hearing today. I know it has been a 
long day for all of you. It is going to be a longer day for us, 
if that makes you feel any better--and tomorrow, too, by the 
way.
    But this is important. As Californians, we understand the 
difficulties that we operate under in our State, and water is 
right on top of the list. And we are attempting in this 
legislation to attempt to not just reclaim water and to 
conserve water and to convey water, but to store water and to 
get additional yield for additional needs in our State.
    You know, I know everybody is sick of hearing me say this, 
but you remember that movie ``Field of Dreams''--build it and 
they will come. Well, we have a saying up here, Don't build it 
and they will come anyway. So that is why we are here, to do 
something positive and to be for something rather than against 
everything. And that is what we are going to do with this 
legislation.
    So thank you very much. We are adjourned.
    [Whereupon, at 6:25 p.m., the Subcommittee was adjourned.]


    [Additional material submitted for the record follows:]

    [A statement submitted for the record by Don Marciochi, 
General Manager, Grassland Water District, follows:]

 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.
                                 ______
                                 
    [A letter submitted for the record by Ben Movahed, 
President, American Membrane Technology Association, follows:]
[GRAPHIC] [TIFF OMITTED] 88533.004


    [NOTE: Additional letters of support for H.R. 2828 have 
been retained in the Committee's official files.]

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