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



 
                    S. 625, H.R. 2831 AND H.R. 3210
=======================================================================


                          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

                               __________

                      Wednesday, October 15, 2003

                               __________

                           Serial No. 108-68

                               __________

           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 Wednesday, October 15, 2003......................     1

Statement of Members:
    Gibbons, Hon. Jim, a Representative in Congress from the 
      State of Nevada............................................     4
        Prepared statement on H.R. 2831..........................     5
    Napolitano, Hon. Grace F., a Representative in Congress from 
      the State of California....................................     3
    Osborne, Hon. Tom, a Representative in Congress from the 
      State of Nebraska..........................................     1
        Prepared statement on S. 625, H.R. 2831, and H.R. 3210...     3
    Wu, Hon. David, a Representative in Congress from the State 
      of Oregon..................................................     5
        Prepared statement of....................................     6

Statement of Witnesses:
    Brian, Hon. Tom, Chairman, Clean Water Services Board of 
      Directors..................................................    20
        Prepared statement on S. 625.............................    22
    Hill, Jim, Water Reclamation Manager, City of Medford, Oregon    35
        Prepared statement on H.R. 3210..........................    37
    Limbaugh, Mark A., Deputy Commissioner, Bureau of 
      Reclamation, U.S. Department of the Interior...............     8
        Prepared statement on S. 625.............................     8
        Prepared statement on H.R. 2831..........................    10
        Prepared statement on H.R. 3210..........................    11
    Roder, Aileen, Program Director, Taxpayers for Common Sense..    32
        Prepared statement on H.R. 2831..........................    33
    Schank, Ernest C., President, Board of Directors, Truckee-
      Carson Irrigation District.................................    23
        Prepared statement on H.R. 2831..........................    31
        Letters submitted for the record.........................    26

Additional materials supplied:
    Smith, Hon. Gordon, a U.S. Senator from the State of Oregon, 
      Statement submitted for the record.........................    43














   S. 625, A BILL TO AUTHORIZE THE BUREAU OF RECLAMATION TO CONDUCT 
CERTAIN FEASIBILITY STUDIES IN THE TUALATIN RIVER BASIN IN OREGON, AND 
FOR OTHER PURPOSES (``TUALATIN RIVER BASIN WATER SUPPLY ENHANCEMENT ACT 
 OF 2003''); H.R. 2831, TO AUTHORIZE THE SECRETARY OF THE INTERIOR TO 
CONVEY THE NEWLANDS PROJECT HEADQUARTERS AND MAINTENANCE YARD FACILITY 
     TO THE TRUCKEE-CARSON IRRIGATION DISTRICT (``NEWLANDS PROJECT 
 HEADQUARTERS AND MAINTENANCE YARD FACILITY TRANSFER ACT''); AND H.R. 
 3210, TO AUTHORIZE THE SECRETARY OF THE INTERIOR, ACTING THROUGH THE 
 BUREAU OF RECLAMATION, TO CONDUCT A WATER RESOURCE FEASIBILITY STUDY 
  FOR THE LITTLE BUTTE/BEAR CREEK SUBBASINS IN OREGON (``LITTLE BUTTE/
             BEAR CREEK SUBBASINS WATER FEASIBILITY ACT'').

                              ----------                              


                      Wednesday, October 15, 2003

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                         Committee on Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to call, at 2 p.m., in Room 
1324, Longworth House Office Building, Hon. Tom Osborne 
presiding.

STATEMENT OF THE HON. TOM OSBORNE, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF NEBRASKA

    Mr. Osborne. The legislative hearing on the Subcommittee on 
Water and Power will come to order. The Subcommittee is meeting 
today to hear testimony on Senate 625, a bill to authorize the 
Bureau of Reclamation to conduct certain feasibility studies on 
the Tualatin River Basin in Oregon and for other purposes; H.R. 
2831, to authorize the Secretary of the Interior to convey the 
Newlands Project headquarters and maintenance yard facility to 
the Truckee-Carson Irrigation District; and H.R. 3210, to 
authorize the Secretary of the Interior, acting through the 
Bureau of Reclamation, to conduct a water resource feasibility 
study for the Little Butte/Bear Creek subbasins in Oregon.
    Mr. Osborne. I ask unanimous consent that Mr. Gibbons, 
Representative of the Second District of Nevada, and Mr. Wu, 
Representative of the First District of Oregon, have permission 
to sit on the dais after their testimony and participate in the 
hearing. So ordered.
    Our Subcommittee continues to seek balance in integrated 
water management approaches that ensure water and power 
available for communities in the West. Today we will focus our 
attention on three bills that improve the dependability and 
security of the water infrastructure for long-term use, 
recognize collaborative efforts on protecting endangered 
species habitat, and stress the importance of local leadership 
in resolving resource management issues.
    H.R. 3210, introduced by our distinguished Oregon colleague 
Mr. Greg Walden, authorizes a water management study of water 
supply sources and water control features of existing Federal 
and local water systems near Medford, Oregon. I look forward to 
hearing about how communities in the watershed are already 
working together to implement water use efficiency improvements 
and respond to Federal questions over cooperative study 
partnerships and funding sources.
    H.R. 2831, introduced by our distinguished colleague Mr. 
Jim Gibbons, authorizes the transfer of federally withdrawn 
land to the Truckee-Carson Irrigation District in Nevada. 
Presently the district leases the land for a minimal fee from 
the Bureau of Reclamation and uses the site for administrative 
offices and a maintenance yard for the Newlands Project. This 
legislation responds to the district's request for a full title 
to this parcel of land, and the transfer and future use would 
be in compliance with the memorandum of agreement between the 
district and Reclamation.
    Senate 625, introduced by the distinguished Senator from 
Oregon, Senator Gordon Smith, authorizes the Bureau of 
Reclamation to participate in a water supply feasibility study 
in the Tualatin River Basin in northwestern Oregon. I am 
interested in hearing about what cooperative efforts are 
underway to resolve water supply problems in the watershed and 
if any preliminary strategies have been thought out that 
include the development of new water supplies for long-term 
growth.
    These bills attempt to find a common solution to water 
problems and land management issues. These bills also emphasize 
the need for active local participation and a strong 
willingness to work together if success is to be realized.
    I thank our witnesses for coming here today and look 
forward to hearing from them on these important bills.
    [The prepared statement of Mr. Osborne follows:]

 Statement of The Honorable Tom Osborne, a Representative in Congress 
     from the State of Nebraska, on S. 625, H.R. 2831 and H.R. 3210

    Our Subcommittee continues to seek balanced and integrated water 
management approaches that ensure water and power are available for 
communities in the west. Today, we will focus our attention on three 
bills that improve the dependability and security of the water 
infrastructure for long-term use, recognize collaborative efforts on 
protecting endangered species habitat, and stress the importance of 
local leadership in resolving resource management issues.
    H.R. 3210, introduced by our distinguished Oregon colleague, Mr. 
Greg Walden, authorizes a water management study of water supply 
sources and water control features of existing federal and local water 
systems near Medford, Oregon. I look forward to hearing about how 
communities in the watershed are already working together to implement 
water use efficiency improvements and responses to federal questions 
over cooperative study partnerships and funding sources.
    H.R. 2831, introduced by our distinguished colleague, Mr. Jim 
Gibbons, authorizes the transfer of federally withdrawn land to the 
Truckee-Carson Irrigation District in Nevada. Presently, the District 
leases this land for a minimal fee from the Bureau of Reclamation and 
uses the site for an administrative office and a maintenance yard for 
the Newlands Project. This legislation responds to the District's 
request for full title to this parcel of land and the transfer and 
future use would be in compliance with a memorandum of agreement 
between the District and Reclamation.
    S. 625, introduced by our distinguished Senator from Oregon, 
Senator Gordon Smith, authorizes the Bureau of Reclamation to 
participate in a water supply feasibility study of the Tualatin River 
Basin in northwestern Oregon. I am interested in hearing about what 
cooperative efforts are underway to resolve water supply problems in 
the watershed and if any preliminary strategies have been thought out 
that include the development of new water supplies for long-term 
growth.
    These bills attempt to find commonsense solutions to water problems 
and land management issues. These bills also emphasize the need for 
active local participation and a strong willingness to work together if 
success is to be realized. I thank our witnesses for coming here today, 
and look forward to hearing from them on these important bills.
                                 ______
                                 
    Mr. Osborne. I now recognize Mrs. Napolitano, the Ranking 
Democrat Member, for any statement she may have.

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

    Mrs. Napolitano. Thank you, Mr. Chairman, and I will be 
very brief. I look forward to hearing from both the witnesses 
that are here, and I certainly welcome Congressman Wu, my 
colleague, and look forward to their testimony.
    With regard to Congressman Gibbons' bill, H.R. 2831, it is 
going to be especially telling for me because it raises 
questions that we have talked about and discussed regarding 
policies on transferring Federal property to local water 
districts. And while that is very laudable, because sometimes 
the locals can do a better job of handling some of the issues, 
I think we need to look at how we transfer the land without 
reimbursement for the taxpayer. So that is one of the things 
that I look forward to hearing and am very interested in 
listening to the testimony.
    I may have to step out because I am on the floor managing--
comanaging some of the day's business, and look forward to 
hearing the witnesses, and yield back the balance of my time.
    Mr. Osborne. Thank you.
    Mr. Osborne. At this time we will hear from Mr. Gibbons, 
who will be testifying on H.R. 2831.

STATEMENT OF THE HON. JIM GIBBONS, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF NEVADA

    Mr. Gibbons. Thank you very much, Chairman Osborne, and to 
the members of the Committee. I want to thank each of you for 
holding this hearing today to discuss H.R. 2831, the Newlands 
Project Headquarters and Maintenance Yard Facility Transfer 
Act. And as you know, this legislation requires the Secretary 
of Interior to convey to the Truckee-Carson Irrigation 
District, or TCID as it is commonly known, all right, title and 
interest of the Newlands Project.
    The Bureau of Reclamation and the TCID signed a memorandum 
of agreement on June 9 of this year specifying the details of 
that transfer. This transfer is of approximately 35 acres and 
will allow TCID to make permanent improvements on this land for 
the continued operation and maintenance of the Newlands 
Reclamation Project. The transfer is necessary so that 
financing can be obtained for those proposed improvements.
    This is important to note that in 1986, the Bureau of 
Reclamation certified that the TCID had repaid--let me say that 
once again, the Bureau of Reclamation has already certified in 
1996 that the Truckee-Carson Irrigation District has repaid to 
the United States the original construction charges that were 
designated for repayment. Included in the original construction 
charges was the cost of land on which the original headquarters 
and facilities were located. By 1975, the TCID had outgrown its 
original facilities and moved to the current site on which we 
are hoping to transfer in this legislation. And although the 
TCID had clearly paid for the land of the original facilities, 
they were never compensated or repaid for the transfer back to 
the Bureau of Reclamation when they were moved to their new 
location. And, in fact, a United States post office now sits 
where the original headquarters were located that TCID had 
already bought and purchased, but was never compensated for 
prior to this legislation.
    By asking the TCID to pay for their land, headquarters--
where their headquarters is currently located would be, in 
effect, asking them to pay for it twice. Yet some critics of 
this bill still maintain that it unfairly favors TCID and that 
the land is a taxpayer asset and should be treated accordingly. 
But as I have said, Mr. Chairman, the TCID has already paid for 
the land on which a headquarters facility sits, and to say that 
H.R. 2831 is a, quote, giveaway, end quote, is simply 
misleading and incorrect and misrepresents my legislative 
intent.
    Mr. Chairman, this legislation is of utmost importance to 
the Second District of Nevada. The Governor of Nevada, Kenny 
Guinn, sent me a letter expressing his support for this 
transfer along with the Churchill County commissioners and the 
Mayor of Fallon, the State Representatives Grady and 
Goicoechea, and State Senator Mike McGinness, who all represent 
this portion of Nevada. And I would ask unanimous consent to be 
able to submit those documents with my testimony for the 
record.
    Mr. Chairman, I want to thank you again for holding this 
important hearing today, and I look forward to answering any 
questions that any of the members of the Committee may have. 
And at this point in time, I yield back the balance of my time.
    Mr. Osborne. Thank you, Mr. Gibbons.
    [The prepared statement of Mr. Gibbons follows:]

 Statement of The Honorable Jim Gibbons, a Representative in Congress 
                        from the State of Nevada

    Chairman Calvert, thank you for holding this hearing today to 
discuss H.R. 2831, The Newlands Project Headquarters and Maintenance 
Yard Facility Transfer Act.
    As you know, this legislation requires the Secretary of the 
Interior to convey to the Truckee-Carson Irrigation District or TCID 
all right, title and interest of the Newlands Project.
    The Bureau of Reclamation and the TCID signed a Memorandum of 
Agreement on June 9th of this year specifying the details of the 
transfer.
    This transfer of approximately 35 acres will allow the TCID to make 
permanent improvements on this land for the continued operation and 
maintenance of the Newlands Reclamation Project.
    The transfer is necessary so that financing can be obtained for the 
improvements.
    It is important to note that, in 1996, the Bureau of Reclamation 
certified that the TCID had repaid to the United States the original 
construction charges that were designated for repayment.
    Included in the original construction charges was the cost of land 
on which the original headquarter facilities were located.
    By 1975, the TCID had outgrown its original facilities and moved to 
the current site in which we are hoping to transfer in this 
legislation.
    Although the TCID had clearly paid for the land of the original 
facilities they were never compensated when they vacated the lots.
    In fact, a post office now sits where the original headquarters 
were located.
    By asking the TCID to pay for the land where their headquarters is 
currently located would be, in effect, asking them to pay for it twice.
    Yet, some critics of this bill still maintain that this bill 
``unfairly favors the TCID'' and the land is a ``taxpayer asset and 
should be treated accordingly.''
    But, as I said, the TCID has already paid for the land on which a 
headquarters facility sits, and to say that H.R. 2831 is a ``give-
away'' is simply incorrect and misrepresents my legislative intent.
    Mr. Chairman, this legislation is of utmost importance to the 2nd 
District of Nevada.
    The Governor of Nevada, Kenny Guinn, sent me a letter expressing 
his support for this transfer along with the Churchill County 
Commissioners, the Mayor of Fallon, the State Representatives Grady and 
Goicoechea, and State Senator McGinness.
    Thank you again for holding this important hearing today and I look 
forward to hearing from our witnesses.
                                 ______
                                 
    Mr. Osborne. At this time, Mr. Wu will be testifying on 
Senate 625.

 STATEMENT OF THE HON. DAVID WU, A REPRESENTATIVE IN CONGRESS 
                    FROM THE STATE OF OREGON

    Mr. Wu. Thank you, Chairman Osborne and Ranking Member 
Napolitano, for holding this hearing on legislation which is 
absolutely crucial to the heart of the Congressional district 
which I represent. S. 625, the Tualatin River Basin Water 
Supply Act of 2003, authorizes the Bureau of Reclamation to 
conduct a crucial study to evaluating reliable, safe and cost-
effective water supply options to meet the long-term needs of 
the Tualatin Water Basin.
    Washington County, Oregon, and the Tualatin Water Basin 
have a population exceeding 470,000 people. It is the fastest-
growing county in Oregon and is playing a leading role in 
driving the region and State's economic growth. Since 1987, the 
number of jobs in Washington County has doubled to 
approximately 220,000. Demand for water in Washington County 
and the Tualatin Basin is expected to double by the year 2050, 
which means there is a need for an additional 50,000 acre-feet 
of water per year.
    The economy, environment and quality of life for the area 
are dependent upon successfully meeting the growing municipal, 
industrial, agricultural and environmental water demands. The 
feasibility study proposed centers on identifying and acquiring 
the additional 50,000 acre-feet of water. Major employers in 
the First Congressional District of Oregon, like INTEL, Nike 
and Techtronics, rely heavily on this water.
    Additionally, there are two fish species in the Tualatin 
drainage, spring chinook and steelhead, which are listed as 
threatened under the Endangered Species Act. Restoration of 
fish habitat will require more water as a cooling agent.
    Hagg Lake, which is formed by Scoggins Dam on Scoggins 
Creek, a Tualatin River tributary, was created in 1975 and is a 
Bureau of Reclamation facility. Water from Hagg Lake is 
currently used for municipal water supply, agricultural 
irrigation and river flow restoration needs in the Tualatin 
River watershed.
    This feasibility study will examine several different 
options for augmenting the water supply for Washington County. 
Such options include expansion of Hagg Lake by raising Scoggins 
Dam either 40 or 20 feet, transferring Willamette water to the 
area for irrigation purposes, expanding aquifer storage 
systems, increasing conservation and expanding reuse of clean 
wastewater for irrigation.
    S. 625 passed the Senate by unanimous consent on June 16 of 
this year. It is clear that this legislation enjoys broad 
bipartisan support, and I am confident that local agencies, in 
conjunction with the Bureau of Reclamation, will be exceptional 
stewards for this project. It is time that this House helps the 
study move forward so this community can make informed 
decisions about the future of its water supply.
    To speak to the extensive local support and financial 
contributions of the county and the region, Washington County 
Chair Tom Brian will be speaking momentarily. Thank you for 
making the trip, Tom, and again my thanks to the Committee for 
holding this hearing, and I look forward to working with you 
all to ensure the successful passage of this legislation.
    Thank you, Mr. Chairman.
    Mr. Osborne. Thank you, Mr. Wu.
    [The prepared statement of Mr. Wu follows:]

Statement by The Honorable David Wu, a Representative in Congress from 
                     the State of Oregon, on S. 625

    Mr. Chairman, I would like to start by thanking you for holding a 
hearing on this important legislation.
    S. 625, the Tualatin River Basin Water Supply Act of 2003 
authorizes the Bureau of Reclamation to conduct a crucial study to 
evaluate reliable, safe, and cost-effective water supply options to 
meet the long-term water needs of the Tualatin Basin.
    Washington County, Oregon, and the Tualatin Basin have a population 
exceeding 470,000 people. It is the fastest-growing county in Oregon 
and plays a leading role in driving the region and state's economic 
growth. Since 1987, the number of jobs in the County has doubled to 
approximately 220,000.
    Demand for water in Washington County/Tualatin Basin is expected to 
double by the year 2050, which means there is a need for an additional 
50,000 acre-feet of water per year.
    The economy, environment and quality of life of the area are 
dependent upon successfully meeting the growing municipal, industrial, 
agricultural and environmental water demands. The feasibility study 
centers on identifying and acquiring this additional 50,000 acre-feet 
of water. Major employers in my district like Intel, Nike and Tektronix 
rely heavily on such water.
    Additionally, there are two fish species on the Tualatin River, 
Spring Chinook and steelhead that are listed as threatened under the 
ESA. Restoration of fish habitat will require more water as a cooling 
agent.
    Hagg Lake, which is formed by Scoggins Dam on Scoggins Creek 
(Tualatin River tributary), was created in 1975 and is a Bureau of 
Reclamation facility. Water from Hagg Lake is currently used for 
municipal water supply, agricultural irrigation, and river flow 
restoration needs in the Tualatin River watershed.
    This feasibility study will examine several different options for 
augmenting the water supply for Washington County. Such options include 
expansion of Hagg Lake by raising Scoggins Dam either 40 or 20 feet; 
transferring Willamette River water to the area for the purpose of 
irrigation; expanding aquifer storage systems; increasing conservation; 
and, expanding reuse of cleaned wastewater for irrigation.
    S. 625 passed the Senate by unanimous consent on June 16, 2003. It 
is clear that this legislation enjoys broad support, and I am confident 
that local agencies in conjunction with the Bureau of Reclamation will 
be exceptional stewards of this project. It is time that the House 
helps this study move forward so that our community can make informed 
decisions about the future of its water supply.
    To speak to the extensive local support and financial 
contributions, Chairman Tom Brian of the Washington County Board of 
Commissioners is here. Thank you for making the trip Tom. Again, my 
thanks to the Committee for holding this hearing and I look forward to 
working with you all to insure the project's success.
                                 ______
                                 
    [NOTE: Letters submitted for the record by Mr. Wu have been 
retained in the Committee's official files.]
    Mr. Osborne. Anyone who wants to submit anything for the 
record can do so for up to 10 days after this hearing.
    Mr. Osborne. And at this time, Mr. Wu and Mr. Gibbons are 
invited to join the dais if they would care to do so.
    Mr. Gibbons. Thank you, Mr. Chairman, and before I do leave 
the table here, I do want to introduce Mr. Ernie Schank, 
President of the Board of Directors from the Truckee-Carson 
Irrigation District, and Fallon who is here to testify, one of 
my constituents, I want to welcome him here to this Committee 
as well. Thank you, Mr. Chairman.
    Mr. Osborne. Thank you for your testimony.
    Mr. Wu. Mr. Chairman, I thank you also. I accept your 
invitation to join the dais, but as so often happens, we will 
be leaving for the Rules Committee where we have a few items 
pressing before us this week and ask your forbearance and the 
forbearance of the witnesses who have traveled from Nevada and 
Oregon respectively.
    Mr. Osborne. We know that you will construct a very tight 
rule that will limit debate so we will get out of here early 
this week. So thank you for being here, and we will carry on 
without you. Thank you.
    Mr. Osborne. At this time, I would like to recognize the 
first panel of witnesses. Mr. Mark Limbaugh, Deputy 
Commissioner, External and Intergovernmental Affairs, Bureau of 
Reclamation. I now recognize Mr. Limbaugh to testify for 5 
minutes. Timing lights on the table will indicate when your 
time is concluded. All witnesses' statements will be submitted 
for the hearing record.

 STATEMENT OF MARK A. LIMBAUGH, DEPUTY COMMISSIONER, EXTERNAL 
      AND INTERGOVERNMENTAL AFFAIRS, BUREAU OF RECLAMATION

    Mr. Limbaugh. Thank you, Mr. Chairman. Before I begin, I 
would like to request that my written statement on these bills 
be submitted for the record.
    Mr. Osborne. Without objection, so ordered.
    Mr. Limbaugh. Mr. Chairman, members of the Subcommittee, 
distinguished Members of the House, I am Mark Limbaugh, Deputy 
Commissioner for the Bureau of Reclamation in Washington. I am 
pleased to be here today to present the Department's views on 
S. 625, Tualatin River Basin Water Supply Enhancement Act of 
2003; H.R. 2831, the Newlands Project Headquarters and 
Maintenance Yard Facility Transfer Act; and H.R. 3210, to 
authorize the Secretary of the Interior acting for the Bureau 
of Reclamation to conduct a water resource feasibility study 
for the Little Butte/Bear Creek subbasins in Oregon. While my 
written statements contain more detail, I would like to use 
this time to summarize our remarks.
    Let me begin with S. 625. S. 625 authorizes the Secretary 
of Interior in cooperation with affected local entities to 
complete a study feasibility of various methods to meet future 
water supplies for agriculture, municipal and industrial uses. 
Reclamation has been working closely with the regional 
wastewater entity, Clean Water Services, several municipalities 
in Washington County, Oregon, and the Tualatin Valley 
Irrigation District and others to develop a plan that will 
increase available storage for local use and preserve the 
important environmental benefits so valued by the local 
residents.
    A tremendous amount of local effort has been expended to 
develop useful information upon which the feasibility study for 
Reclamation may be based. Study partners have also invested 
considerable effort to begin the planning process at the local 
level with the assistance of Reclamation.
    A full range of potential approaches to meeting future 
water supply needs will be considered, including market-based 
and other economic incentives. As such, the merits of the 
proposed feasibility study are sound and reasonable, and 
therefore the administration can support S. 625. However, it is 
important to note that this study is not included in the 
administration's Fiscal Year 2004 budget request.
    [The prepared statement of Mr. Limbaugh on S. 625 follows:]

Statement of Mark Limbaugh, Deputy Commissioner, Bureau of Reclamation, 
               U.S. Department of the Interior, on S. 625

    Mr. Chairman, I am Mark Limbaugh, Deputy Commissioner of the Bureau 
of Reclamation (Reclamation). Thank you for the opportunity to testify 
on S. 625, the Tualatin River Basin Water Supply Enhancement Act of 
2003. The legislation authorizes the Secretary of the Interior, in 
cooperation with affected local entities, to complete a study of the 
feasibility of various methods to meet future water supplies for 
agriculture, and for municipal and industrial uses.
    Reclamation has been working closely with the regional wastewater 
entity Clean Water Services, several municipalities in Washington 
County, Oregon, the Tualatin Valley Irrigation District and others, to 
develop a plan that will increase available storage for local use and 
preserve the important environmental benefits so valued by the local 
residents. A tremendous amount of local effort has been expended to 
develop useful information upon which a feasibility study by 
Reclamation may be based. The study partners have also invested 
considerable effort to begin the planning process at the local level, 
with the assistance of Reclamation. A full range of potential 
approaches to meeting future water supply needs will be considered, 
including market-based incentives and other economic incentives. As 
such, the merits of the proposed feasibility study are sound and 
reasonable and therefore the Administration can support S.625. However, 
it is important to note that this study was not included in the 
Administration's Fiscal Year 2004 budget request.
    This concludes my statement. I will be glad to answer any 
questions.
                                 ______
                                 
    Mr. Limbaugh. Let me now turn my attention to H.R. 2831. 
Mr. Chairman, over the past several months, Reclamation has 
been working closely with the Truckee-Carson Irrigation 
District to work through issues on the title transfer of their 
headquarters property. And with several changes to the 
legislation, the Department would support H.R. 2831.
    In June 2003, Reclamation and the President of the 
District's Board of Directors signed an extensive memorandum of 
agreement governing the process for completing the proposed 
title transfer. However, the Department does have three issues 
of concern with H.R. 2831 as introduced.
    First, H.R. 2831 proposes to convey the Newlands Project 
Headquarters and maintenance yard facility, which includes 37 
acres of land that was withdrawn from the public domain for the 
development of the Newlands Project. However, Reclamation and 
the district has not attempted to negotiate the cost of the 
lands in the MOA. Therefore, we believe the legislation needs 
to address this issue. If lands were acquired for a project 
through fee title when the project was developed, in other 
words acquired land, then the cost of that acquisition would 
have been included in the repayment obligation of the district. 
These lands, however, were withdrawn from the public domain, 
and their fair value was never included in the district's 
repayment obligation. Therefore, in order to protect the 
financial interest of the United States and taxpayers, we 
recommend that the legislation be modified to ensure that the 
district be required to pay fair market value for those lands 
as a condition of the transfer.
    Second, H.R. 2831 directs the Secretary to convey the lands 
to the district. As a matter of principle, we normally object 
to mandatory transfer language that overrides the Secretary's 
discretionary authority in such matters. And while we support 
this transfer, we would recommend that the language in section 
2(a) of the bill be changed from ``shall'' to ``may.''
    Finally in the past, in title transfer bills, the Secretary 
was allowed to complete various public processes as soon as 
practicable and subject to all applicable laws. Virtually all 
the transfers that have moved through Congress have included 
this language, particularly those where compliance under the 
National Environmental Policy Act has not been completed prior 
to the legislation being introduced. In order for it to be 
internally consistent, and since section 2(c) requires that 
environmental reviews and remediation be completed, section 
2(a) should be modified as suggested in my written statement.
    While we have listed some concerns with the language of 
H.R. 2831 as drafted, we support the transfer of this land and 
believe the issues raised in my statement can be resolved. I 
would like to take this opportunity to compliment the District 
President Ernest Schank and the District's Board of Directors 
for their diligence and commitment in working with us on the 
issues surrounding this transfer. I would like to thank 
Congressman Gibbons and his staff for their cooperation. I look 
forward to working together to resolve these issues and to move 
forward with this transfer.
    [The prepared statement of Mr. Limbaugh on H.R. 2831 
follows:]

Statement of Mark Limbaugh, Deputy Commissioner, Bureau of Reclamation, 
             U.S. Department of the Interior, on H.R. 2831

    My name is Mark Limbaugh and I am the Deputy Commissioner of the 
Bureau of Reclamation (Reclamation). I am pleased to appear before this 
Subcommittee to provide the Administration's views on H.R. 2831. We 
have worked closely with the District on this transfer, and, with 
certain changes to the legislation as discussed more fully below, the 
Department would support H.R. 2831.
    H.R. 2831 directs the Secretary of Interior to convey the Newlands 
Project Headquarters and maintenance yard facility to the Truckee-
Carson Irrigation District. The facilities cover about 37 acres of 
Reclamation withdrawn property in Fallon, Nevada.
    Mr. Chairman, over the past several months, we have been working 
closely with the District to work through the issues associated with 
the title transfer of the headquarters property. In June 2003, 
Reclamation and the President of the District's Board of Directors 
signed an extensive Memorandum of Agreement (MOA) governing the process 
for completing the proposed title transfer. In general, Reclamation 
supports transferring title to state and local entities when it is in 
the mutual interest of affected parties. However, there are three 
issues of concern to the Department with H.R. 2831 as introduced.
    First, in its discussions with the District concerning the MOA, 
Reclamation did not attempt to negotiate the cost of the lands in the 
MOA. We believe the legislation needs to address this issue. If lands 
were acquired for a project through fee title when the project was 
developed, then the costs of the acquisition would have been included 
in the repayment obligation of the District. These lands, however, were 
withdrawn from the public domain; thus, their value was never included 
in the District's repayment obligation. Generally, withdrawn lands that 
are no longer needed for a Reclamation project are either transferred 
back to the Bureau of Land Management to be administered as public 
domain lands, or offered to the General Services Administration for 
disposal. In order to protect the financial interests of the United 
States and the taxpayers, we recommend that the legislation be modified 
to ensure that the District, as a condition of transfer, be required to 
pay the fair market value for those lands.
    Second, H.R. 2831 directs the Secretary to convey the Newlands 
project headquarters and maintenance yard facility. As a matter of 
principle, we have historically objected to mandatory transfer language 
because it overrides the Secretary's discretionary authority in such 
matters. While we support the transfer in this case, we recommend that 
the language in Section 2(a) be amended to state that the Secretary 
``may'' convey these lands, in order to preserve her discretionary 
authority in such matters.
    Third, we recommend that the language in Section 2(a) be further 
amended to read as follows: ``The Secretary may, as soon as practicable 
after the date of enactment and in accordance with all applicable law, 
convey to the Truckee Carson Irrigation District pursuant to the terms 
of the memorandum of agreement...'' Virtually all of the transfers that 
have moved through Congress have included this language, particularly 
those where compliance under the National Environmental Policy Act has 
not been completed prior to the legislation being introduced. This 
amendment would strengthen the bill by making it internally consistent 
with language in Section 2(c), which conditions title transfer on the 
completion of environmental reviews, remediation, and cultural 
clearances, and would have the added benefit of addressing any other 
reviews or processes not covered by the language in Section 2(c).
    In conclusion, Mr. Chairman, while we have some concerns with the 
language of H.R. 2831 as noted above, we support the transfer of this 
land and believe the issues raised in my statement can be resolved. I 
would like to take this opportunity to compliment District Board 
President Ernest Schank and the District's Board of Directors for their 
diligence and commitment in working with us on the issues surrounding 
this transfer. I would also like to thank Congressman Gibbons and his 
staff for their cooperation. I look forward to working together to 
resolve these issues and to moving forward with this transfer.
    That concludes my statement. I would be happy to answer any 
questions.
                                 ______
                                 
    Mr. Limbaugh. The final bill I am testifying on today is 
H.R. 3210, which would authorize the Bureau of Reclamation to 
conduct a water resource feasibility study in the Bear Creek/
Little Butte Creek subbasins of the Rogue River in southwestern 
Oregon, as well as prepare the associated environmental impact 
statement.
    It is Reclamation's understanding that a broad range of 
stakeholders have come together to achieve consensus on project 
goals and gain community support. The primary goals are to 
increase instream flows in Little Butte Creek and Bear Creek 
for threatened coho salmon and improve irrigation efficiencies 
within the three irrigation districts. The project would also 
improve the long-term viability of the three irrigation 
districts. The total estimated cost of this study has not yet 
been determined by Reclamation.
    Reclamation supports the study's goals and applauds the 
local collaborative effort to proactively address water 
resource issues that could become contentious in the future. 
However, the administration cannot support this legislation as 
drafted. Section 1(c) appears to be vague and does not appear 
to authorize funding for Reclamation to accomplish the other 
work contemplated under section 1(b) of the legislation.
    It is our understanding that some Congressionally earmarked 
funding has been obtained by the City of Medford via a grant 
administered by the U.S. Environmental Protection Agency. 
Reclamation understands that the grant is to fund a contract to 
the plan and complete the environmental impact statement on 
effluent reuse and other water conservation measures. We 
understand that the City of Medford will apply for the grant by 
March, 2004. Upon approval of the plan, grant funds will be 
released to complete the technical studies.
    Reclamation feasibility study authority is not needed for 
this work to continue. Section 1(c) of H.R. 3210 references 
report language which was included in conference report 108-10 
accompanying the Omnibus Appropriations Act for Fiscal Year 
2003. In reading the report, it is our understanding that this 
funding is for studies on effluent reuse, which is only one of 
the multiple needs identified in the bill. We would be pleased 
to work with Congressman Walden and his staff and the sponsors 
to help clarify Reclamation's role as well as the scope of the 
legislation in light of that role.
    Mr. Chairman, this concludes my testimony on these three 
bills, and I would be happy to answer any questions that you 
may have.
    [The prepared statement of Mr. Limbaugh on H.R. 3210 
follows:]

Statement of Mark Limbaugh, Deputy Commissioner, Bureau of Reclamation, 
             U.S. Department of the Interior, on H.R. 3210

    Mr. Chairman and Members of the Subcommittee, I am Mark Limbaugh, 
Deputy Commissioner of the Bureau of Reclamation. Thank you for the 
opportunity to testify on H.R. 3210, a bill to authorize the Secretary 
of the Interior, acting through the Bureau of Reclamation, to conduct a 
water resource feasibility study for the Little Butte/Bear Creek 
Subbasins in Oregon.
    This legislation would authorize the Bureau of Reclamation to 
conduct a water resource feasibility study in the Bear Creek/Little 
Butte Creek subbasins of the Rogue River in southwestern Oregon, as 
well as prepare the associated environmental impact statement. The 
study would investigate opportunities to implement water conservation 
measures within the three irrigation districts served by Reclamation's 
Rogue River Project and to increase water supplies, including use of 
reclaimed water from the City of Medford or potentially modifications 
to existing storage facilities.
    It is Reclamation's understanding that a broad range of 
stakeholders have come together to achieve consensus on project goals 
and gain community support. The primary goals are to increase instream 
flows in Little Butte Creek and Bear Creek for threatened coho salmon 
and to improve irrigation efficiency within the three irrigation 
districts. The project would improve the long-term viability of the 
three irrigation districts. The total estimated cost of the study has 
not been determined by Reclamation.
    The Bureau of Reclamation supports the study goals and applauds 
this local collaborative effort to proactively address water resource 
issues that could become contentious in the future. However, the 
Administration cannot support this legislation as drafted. Section 1(c) 
is vague and does not appear to authorize funding for Reclamation to 
accomplish the other work contemplated in Section 1(b) of the 
legislation.
    It is our understanding that some Congressionally earmarked funding 
has been obtained by the City of Medford via a grant administered by 
the U.S. Environmental Protection Agency. Reclamation understands that 
the grant is to fund a contractor to plan and complete the 
environmental impact statement on effluent reuse and other water 
conservation measures. We understand that the City of Medford will 
apply for the grant by March 2004. Upon approval of the plan, grant 
funds will be released to complete the technical studies. Reclamation 
feasibility study authority is not needed for this work to continue.
    H.R. 3210 would authorize Reclamation to conduct a feasibility 
study and environmental impact statement analyzing a variety of water 
needs and measures in the basin. However, funding for such activities 
is not included in Reclamation's FY 2004 budget request. Our initial 
review of the proposed scope of work associated with a feasibility 
study and NEPA compliance of this size has shown that these costs could 
be substantial. Given the report language, which was included in 
Conference Report 108-10, accompanying the Omnibus Appropriations Act 
for Fiscal Year 2003 and referenced in Section 1(c) of the bill, it is 
our understanding that this funding is for studies limited to effluent 
reuse, which is only one of the five needs identified in the bill. In 
our opinion, H.R. 3210, as drafted, is vague as to funding 
authorization in Section 1(c), and does not authorize funding for 
Reclamation to accomplish the other work contemplated in Section 1(b) 
of the legislation.
    We would be pleased to work with the sponsors to clarify 
Reclamation's role as well as the scope of the legislation in light of 
that role.
    This concludes my statement. I will be glad to answer any 
questions.
                                 ______
                                 
    Mr. Osborne. Thank you very much, Mr. Limbaugh, and remind 
the Members that the Committee Rule imposes a 5-minute limit on 
questions. And the Chairman will now begin with questions from 
himself.
    First of all, Mr. Limbaugh, what is the status of all 
project title transfers between Reclamation and water 
districts? How many have been completed? How many are pending? 
Have all those involved a cash settlement?
    Mr. Limbaugh. Mr. Chairman, I am not prepared today to 
enumerate on how many have been completed or pending, but there 
are many that have been completed and several that are pending 
currently. We can get back to you on those exact numbers.
    As far as the cash settlement goes, each transfer is 
unique, each transfer has a different circumstance of the 
other, and we can get back to you on how many are requiring a 
cash payment at that time.
    Mr. Osborne. Thank you.
    Is there decision criteria that Reclamation uses to decide 
when cash settlements are necessary?
    Mr. Limbaugh. Mr. Chairman, the single criteria normally 
would be applied when there are either streams of income to the 
United States that are being derived from the lands prior to 
transfer, or if the lands were withdrawn lands and never paid 
for to begin with. Then we would go through the proper 
procedures to identify a net present value of that income 
stream so the United States is made whole, or an appraised 
value of the land to come up with a fair market value for the 
transfer to occur.
    Mr. Osborne. And last, the agreement between the TCID and 
Reclamation does not include a cash settlement for the land 
transfer. Is this unusual?
    Mr. Limbaugh. Mr. Chairman, no. Most of these MOAs are 
simply a procedural instrument that allows for the process of 
the transfer to occur without any discrepancies or 
misunderstandings. These larger substantive issues are either 
handled in a separate agreement or through the legislative 
process.
    Mr. Osborne. Thank you. And at this time, I would yield to 
the gentlelady from California Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chair.
    I am very interested in your response for the Agency's look 
at two of the bills, that is the ones that are more in the area 
of research or studies. And I am wondering if the Agency can 
let this Subcommittee know some of the answers that were being 
asked by the Chairman in terms of what is being considered, 
what is--how much funding is there to cover what you have, and 
how do these not qualify.
    And I heard your answer in regard to Mr. Walden's 3210, 
that it is vague, and I can understand your wanting to go and 
get more solidification in terms of finding out who is 
responsible for what. I laud what they have done in terms of 
going finding money in other agencies that would make it easier 
for your Agency not to bear the whole burden.
    And in regard to Senate bill 625, we have considerable 
problems with water throughout the United States, and I am 
afraid the Agency is not looking at working to try to address 
them in terms of funding. I know you want to help, but the 
funding isn't there to be able to stretch the help that is 
needed by all the Members' districts that need water assistance 
to be able to make them viable communities.
    So I am wondering how the Department then is considering 
looking at this legislation plus other legislation in terms of 
being able to say, we agree we need to do it, and let us fund 
it, and come to this body requesting the increase in funding to 
be able to meet the demands on your Agency.
    Mr. Limbaugh. Well, Mr. Chairman and Mrs. Napolitano, those 
are very good questions. We certainly, in the case of the 
Tualatin, have partners that are coming to the table with 
substantial funding. This obviously allows us to leverage non-
Federal funding in a cost share or a partnership arrangement. 
And this certainly helps to meet--in a lot of areas meet the 
needs of these critical water-short areas. And we certainly 
look to those opportunities first in trying to get the most out 
of the Federal taxpayers' dollars when we look at studying 
water needs.
    As far as our priorities and what we are trying to 
accomplish through the Secretary's Water 2025 Initiative, we 
have identified many areas around the West that we think are 
going to be plagued with these types of problems very soon. And 
we are certainly looking at trying to prioritize in those areas 
studies and partnerships that will allow us to leverage the 
limited funds that we do have in meeting the needs in those 
areas.
    Mrs. Napolitano. But you didn't answer the question about 
the funding, coming to this body to request the funding to be 
able to help meet those needs.
    Mr. Limbaugh. And we certainly believe that in the Fiscal 
Year 2004 budget, we have requested $11 million for the Western 
Water Initiative that has made it through the House and 
partially through the Senate, now is in conference, that will 
begin that effort of looking at these priority areas, 
especially through Water 2025, as the Fiscal Year 2004 budget 
comes around to look at those things. So we are trying to 
address these issues with the limited funds.
    Mrs. Napolitano. But, Mr. Limbaugh, 11 million is a drop in 
the bucket for the need throughout the United States.
    Mr. Limbaugh. Mrs. Napolitano, in our opinion, the 11 
million is just the start.
    Mrs. Napolitano. Correct. It is seed money.
    Mr. Limbaugh. We are trying to look at this from this 
perspective, that as we begin that process, that we start 
looking at funding for these efforts, realizing the limitations 
that we do have on funding for all of our projects and all of 
our priorities.
    Mrs. Napolitano. Thank you.
    And one of the questions that I had that might not be 
answered thoroughly is you have heard the statement from Mr. 
Gibbons in regard to the fact that this was already in 2831, 
H.R. 2831--that this land was already paid for. Could you tell 
us how it is repaid? I understand what you are saying as to the 
withdrawn public lands, but can you tell us, has there been an 
appraisal after 1986 that might indicate the value of the land 
now? And I understand that, U.S. retains title of the projects 
even after they are repaid--how that would change this.
    Mr. Limbaugh. Mr. Chairman, Mrs. Napolitano, the appraisal 
of the property to date is not current, and it would have to be 
appraised. It is not a recent appraisal that would give us a 
good value for the land, and that would have to be done.
    I am sorry, what was the last part of your question?
    Mrs. Napolitano. That the United States retains title of 
the project even after the project completion.
    Mr. Limbaugh. Well, Mr. Chairman, Mrs. Napolitano, in the 
1902 Reclamation Act, it allows that once the repayment is 
made, the transfer of the operation and maintenance of the 
project to the project beneficiaries, but it still requires 
Congress to move to transfer the actual title of the 
facilities.
    Mrs. Napolitano. Mr. Chairman, there is no more time, so I 
will wait for the next round. Thank you.
    Mr. Osborne. Thank you, Mrs. Napolitano.
    At this time the Chair would like to yield to the gentleman 
from Nevada Mr. Gibbons.
    Mr. Gibbons. Thank you very much, Mr. Chairman, and I 
appreciate you yielding me time to ask questions.
    Mr. Limbaugh, I think it is important for us to truly 
understand what has happened here. And accordingly, let me say 
over 100 years ago, that the 40-acre site, which was the site 
of the current office and maintenance for the TCID, was 
withdrawn for Reclamation purposes as part of the Newlands 
Project, as you have stated. And all of the improvements of 
this property have been paid for by TCID, and the U.S. 
Government did not contribute to these improvements; is that 
correct?
    Mr. Limbaugh. Mr. Chairman, Mr. Gibbons, that is correct.
    Mr. Gibbons. Now, in 1996, TCID had repaid the original 
construction charges designated for repayment--or by 1996, 
which took them 92 years to pay off. The Newlands Project is 
considered to be a paid out project; is that not considered?
    Mr. Limbaugh. As far as I know, yes, sir.
    Mr. Gibbons. This 40 acres has actually been part of the 
Newlands Project from the beginning; is that correct? Now the 
original site that the property was on, the maintenance 
facility and the operations site, that was taken over by the 
Federal Government after they moved to this new 40-acre site, 
was it not, or retained by the U.S. Government?
    Mr. Limbaugh. Mr. Chairman and Mr. Gibbons, that is 
correct, it was never transferred to the district.
    Mr. Gibbons. And would you agree that there ought to be 
consideration for a fair market accounting of the costs that 
are involved? When you say, let us deal with the value of the 
property, of the 40 acres, we are not talking 40 acres, we are 
talking 35, because 5 of those acres are still occupied by your 
Department, Bureau of Reclamation. You have buildings on there 
that you have tied into this 40-acre parcel that belongs to 
this Newlands Reclamation Project. So we are only talking about 
35 acres; are we not?
    Mr. Limbaugh. Mr. Gibbons, 37 to be exact.
    Mr. Gibbons. But you still have part with your buildings on 
that?
    Mr. Limbaugh. Mr. Gibbons, we are planning on keeping the 
park under Federal control, Federal ownership for the buildings 
that we have on this site.
    Mr. Gibbons. You would say it would be fair to deal with a 
fair market accounting of the dollars and costs that TCID has 
put into each of these properties, one of which was taken--
remained in your custody, now used by the U.S. Government as a 
post office. There should be an accounting for those dollars, 
because these are taxpayers that have paid into the system that 
have not gotten a fair accounting of that money when they moved 
over to this other 40-acre parcel which is still part of the 
project, still part of the paid-out project. The Federal 
Government has never accounted for that money either they lost 
by moving to this other and yielding the property back to you.
    Mr. Limbaugh. Mr. Chairman and Mr. Gibbons, we would 
consider an accounting of the property issues that you 
describe, and we believe, however, that the withdrawn land 
still must have a fair value on them as well.
    Mr. Gibbons. I don't have a problem with assigning fair 
value, but I do want the Federal Government to account for the 
losses TCID has incurred to the Federal Government through 
changes with your concurrence that they have put into this 
property that went to the Federal Government that they have 
already paid for. So all I am asking for is a fair accounting. 
So those principles take part of this whole transaction.
    Now, I don't have a problem with must comply with all 
applicable laws. I think that part we can adjust in there. But 
I do also have in this brief time I have left a concern when 
you say change the language from ``shall'' to ``may,'' or 
``must'' to ``shall,'' or some change which gives you 
discretion, the problem I see there is discretion oftentimes 
takes so long on your part that it never comes about. As a 
result, the TCID people can't get the financing because you 
have delayed because whatever reason you want to come up with 
the actual transfer--it is just one bureaucratic hurdle after 
another that actually delays this. I am not being critical of 
you, but I am being critical in general of the process and the 
time it takes the Federal Government to do something.
    But I want to urge that we complete this process quickly, 
and that is why we put in the language that the Bureau of 
Reclamation shall transfer this, and it is just to move the 
project along.
    So with that, I will yield for any comments, but my time is 
up and thank you, Mr. Chairman, for this time.
    Mr. Osborne. Thank you, Mr. Gibbons.
    Mr. Pearce, do you have a question at this time?
    Mr. Pearce. I have no questions, but Mr. Limbaugh brought 
up the 2025, but I did want to ask questions about how the 
field hearings are going on that and what the feedback is and 
what the status is of the actual implementation of 2025. Where 
do we stand on that?
    Mr. Limbaugh. Mr. Chairman, Mr. Pearce, thanks for asking. 
The field hearings were held--there was eight hearings held 
across the West. They were conference-like meetings, and we 
literally had thousands of people attend those across the West. 
We are currently evaluating the results of those meetings for a 
report to the Secretary, and we look forward to trying to 
encapsulate what we have heard and any changes, updates, 
notifications or improvements to Water 2025 that we will 
eventually decide upon.
    As far as future meetings, we have a science conference 
that is sponsored by the USGS and Reclamation coming up 
November 4 in Denver, and we will be looking to the Science 
Committee for their comments and critique of Water 2025 as they 
see it.
    So we are still in the process. We are moving forward 
rapidly in coming up with a final plan that we will move 
forward with and hopefully get back with you and Congress about 
where we are going from there.
    Mr. Pearce. And do you anticipate doing any hearings with 
Congressional people? In other words, are you going to come in 
and explain to the Congressional Representatives, because the 
word that the people in New Mexico who listen to the hearings 
said that really they seem to have a predetermined course of 
the process, and that actually there is great concern that 2025 
is actually going to result in Federal takings of State waters 
and more Federal ownership or control of waters. And those tend 
to fly in the face of the Constitution, and water should be a 
private property right, number one. Number two, it should be a 
State right. There aren't many provisions in the Constitution 
where it becomes a Federal issue, and yet the great concern was 
that 2025 is moving a long way toward Federal ownership of 
waters, at least in the western part of the country there in 
New Mexico.
    So do you all envision bringing your anticipated programs 
in front of the Congressional Representatives in addition to 
the science communities and whichever communities you spoke 
with there in the previous round of hearings?
    Mr. Limbaugh. Well, Mr. Chairman, Mr. Pearce, we certainly 
could offer Congressional briefings or however--whatever method 
you would prefer to talk about Water 2025. And I am sorry that 
that is the message that is getting out to your constituents, 
because that is certainly not the intent of Water 2025. In 
fact, the 1902 Act limits Reclamation to act within State water 
laws and not abrogate the States' rights to appropriate their 
own water. So our authorities only exist through the States' 
laws. And we certainly want to use Water 2025 to uphold that 
and work within that context and not outside of that realm, and 
certainly not to promote more Federal ownership or 
responsibility, but actually promote less or a partnership with 
the local entities in trying to resolve issues at the local 
level before they become huge conflicts and crises that we have 
to deal with on a much grander scale.
    Mr. Pearce. I suspect there is a lot of subjectivity to 
that desire. I suspect, Mr. Limbaugh, that the desire to have 
less Federal ownership would depend on at what level projected 
Federal ownership was. And again, I have mentioned to your 
Department that it was in New Mexico that you brought the first 
suit to take ownership because you had provided money to a 
State, to an irrigation district, even though it was the only 
district that had paid off the obligation to the Federal 
Government, the only one--and that where is where you brought 
suit to take title and ownership and direct use of the water.
    I suspect when you say the Department's objective is to 
have less Federal ownership, it has to have some starting point 
and base point to really evaluate the intention. But my concern 
is that if the Federal Government is taking water from the 
States, it is going to be inappropriate. So I have vendored 
legislation with regard that the Federal Government cannot ever 
take water to accomplish any of its objectives because in the 
end it is not a Federal Government issue. So I suspect we will 
visit more on that. And if we can get that bill through this 
Committee and on to the floor, I think we can have a fairly 
energetic discussion about these things.
    Thank you.
    Mr. Osborne. Thank you Mr. Pearce.
    Mrs. Napolitano.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Mr. Limbaugh you mentioned the hot spots in the West with 
regard to water issues. Do those areas that your Agency is 
looking at include geographically the two bills that have study 
components in them?
    Mr. Limbaugh. Mr. Chairman, Mrs. Napolitano, at this time I 
don't recall exactly. I think they are in the hot spots, but 
they are not red or orange. There are three levels, red, orange 
and yellow, and I believe they are in the yellow. Maybe the one 
would be in the orange category, but I did not research that 
before I came.
    Mrs. Napolitano. Does the Water 2025 specifically address 
water recycling and water reuse?
    Mr. Limbaugh. Mr. Chairman, Mrs. Napolitano, it addresses 
four tools that we believe can be used currently and soon to 
help bring about a complete meeting of the needs in these areas 
to prevent conflict and crisis.
    Mrs. Napolitano. The answer is no.
    Mr. Limbaugh. No. The four tools are conservation, 
efficiencies in markets; the use of collaborative efforts, 
collaboration such as in the bills that we discussed today; the 
research into desalinization, improving water treatment 
technologies, and bringing the cost down; and also, fourth, 
removing institutional barriers and creating opportunities for 
cooperation between the agencies to help streamline the Federal 
efforts to help prevent conflict and crises in these areas of 
the West.
    Mrs. Napolitano. Which in essence does not include them. 
You include them in a roundabout way, but you do not include 
the direct effect this could have in the other areas of 
desalination and other such measures.
    Do you have any idea whether your field hearings are 
bringing the issue that it should be part of the 2025 plan?
    Mr. Limbaugh. We certainly have had a lot of comments about 
Water 2025 in our meetings and our meetings out in the West. We 
have had several comments about reuse and recycling that we are 
certainly going to consider as we look at how Water 2025 
continues to be improved. So, Mrs. Napolitano, they are--we are 
hearing from the people out in the West in these areas that 
utilize this methodology.
    Mrs. Napolitano. Well, unfortunately, as you well know, in 
California we are facing 2016 reduction out of the Colorado, 
which means that we--not just talking about Colorado, but most 
of the Western States are going to have to have help in being 
more proactive in maintaining or reducing their current 
allocation of the Colorado River. Without assistance from your 
Agency and other Federal agencies, this is not going to happen. 
This is not going to be a reality, and there are going to be 
some very harsh methods that are going to have to be employed.
    And I certainly would like to continue to stress the fact 
that recycling and reuse for--how many people refer to it, it 
should be a major portion of that thrust in allowing Western 
States--not only Western States, but a lot of States are 
beginning to understand--Texas, for instance--how important it 
is for them to be able to recycle and reuse their water because 
of the farming and droughts. I would hope that the Agency and 
my colleagues urge the administration to understand that it 
should be part of the inclusion, part of the tools that help in 
2025 water--how would I say--vision.
    And on the 2831, is there a precedent for this kind of 
request for land transfer?
    Mr. Limbaugh. Mr. Chairman, Mrs. Napolitano, again, I am 
unsure whether other title transfers have included withdrawn 
lands that were never originally in the repayment obligation. I 
am aware of several that have actually left the withdrawn lands 
out of the transfer, but I am unaware of any, and we can 
certainly get back to you as to whether or not there have been 
other transfers that have transferred withdrawn lands to 
project beneficiaries.
    Mrs. Napolitano. Thank you. And I will wait for the next 
round because I do have another one. Thank you, sir.
    Mr. Osborne. Any further questions, Mr. Gibbons, Mr. 
Pearce? Mrs. Napolitano?
    Mrs. Napolitano. I would like to make mention that 
apparently back in 1996, the Bureau issued guidance to managers 
on how the Agency should address withdrawn lands when conveying 
title of Bureau of Reclamation projects. These documents have 
not been revised or rescinded. Among other things, the 
framework and policy guidance say that, number one, the Federal 
Treasury and thereby the taxpayers' financial interests must be 
protected. And second, the Federal Government will be 
compensated for any fee, title interest in withdrawn lands 
which are transferred. And I thought I would add that to the 
record.
    There is also an area of--section of withdrawing the lands, 
which refers to 13.4 acres of land in the Minidoka Irrigation 
District boundaries, also had several problems that were 
identified. They were withdrawn from public domain. And for all 
this and all the Reclamation projects, the value was never 
included in the allocation of costs to be repaid by the 
beneficiaries. Consequently the irrigation district has not 
made any repayment or financial contribution to the Federal 
Government for these lands. Indeed, these withdrawn lands are 
jointly used as gravel resource for BID and MID.
    And third, these withdrawn lands provide access to the 
Snake River, et cetera.
    So I am wanting you to make a comment, please.
    Mr. Limbaugh. Well, as far as the policy goes, I think we 
are consistent with the policy in our testimony. As far as the 
Burley Irrigation District, I don't think those lands were--
were they transferred by Congress?
    Mrs. Napolitano. I have just been presented with this. I 
really hadn't had a chance to read this. Yes. They were 
transferred, and they did pay for the withdrawn lands.
    Mr. Limbaugh. That seems to be consistent with the policy.
    Mrs. Napolitano. This is the Senate bill 537.
    Mr. Limbaugh. Your comments are correct. I have a copy of 
the policy guidance, and I don't think our testimony deviates 
from that.
    Mrs. Napolitano. I did want to enter it into the record. 
Thank you.
    Mr. Osborne. I thank you, Mr. Limbaugh, for your testimony 
and Members for their questions. And members of the 
Subcommittee may have some additional questions for the 
witness, and we will ask you to respond to these in writing.
    Mr. Osborne. And at this time I would like to now recognize 
the second panel of witnesses.
    Mr. Limbaugh. Thank you, Mr. Chairman.
    Mr. Osborne. I would like to thank the members of the 
second panel. I would like to introduce the Honorable Tom 
Brian, Chairman of the Washington County Board of Commissioners 
and Chairman of the Clean Water Services Board of Directors, 
testifying on Senate 625; Mr. Ernest Schank, President of the 
Board of Directors, Truckee-Carson Irrigation District, 
testifying on behalf H.R. 2831; Ms. Aileen Roder, Program 
Director, Taxpayers for Common Sense, testifying for H.R. 2831; 
and Mr. Jim Hill, Water Reclamation Manager, City of Medford, 
Oregon, testifying on H.R. 3210.

  STATEMENT OF THE HONORABLE TOM BRIAN, CHAIRMAN, WASHINGTON 
COUNTY BOARD OF COMMISSIONERS AND CLEAN WATER SERVICES BOARD OF 
                           DIRECTORS

    Mr. Osborne. I now recognize Mr. Brian to testify for 5 
minutes. The timing lights indicate when your time is 
concluded. All witness statements will be submitted for the 
hearing record.
    Mr. Brian. Thank you, Chairman Osborne and members of the 
Subcommittee. I appreciate this opportunity to testify on 
behalf of S. 625, a bill to authorize the Bureau of Reclamation 
to conduct certain feasibility studies in the Tualatin River 
Basin in Washington County, Oregon.
    My name is Tom Brian. I am Chairman of the Washington 
County Board of Commissioners, and Chairman of the Clean Water 
Services Board of Directors. This testimony is submitted on 
behalf of all of the members of the Tualatin Basin Water Supply 
Partnership, a list of whom is provided in my written 
testimony.
    I would first like to thank our Congressman, David Wu, for 
his leadership in this matter; and I would also like to thank 
my friend and former colleague in the State Legislature, Mr. 
Walden, for his assistance on this and other matters important 
to us. Together, we are attempting to prevent a serious water 
shortage that could become critical in just a few years.
    The Tualatin Basin has increasing demands for municipal and 
industrial water, agricultural water, and water for 
environmental applications. With Mr. Walden's and Mr. Wu's 
efforts and your support, we can avoid the unfortunate 
shortages impacting other basins in the Northwest.
    Washington County, Oregon, has a population exceeding 
480,000. As Mr. Wu mentioned, it is growing rapidly. We have 
over 220,000 jobs. We are the home of Intel's largest research 
and most advanced research center, as well as NEC, Tektronix, 
Lattice, and many other businesses. Washington County is 
considered by many to be the economic engine of our State, with 
these high tech industries, and we worked very cooperatively to 
help them get situated there; but they moved to Oregon, in 
part, because of the clean and reliable and plentiful water 
because that is what they need to do their business. And, of 
course, along with them coming to Oregon, the population growth 
has followed.
    Washington County is also very proud of its agricultural 
community. The Tualatin River watershed has a large 
agricultural industry, over 27,000 acres of irrigated farmland; 
and also a rapidly growing nursery stock and specialty crop 
industry continues to expand.
    Efforts must also be made to improve the environmental 
health of the watershed to ensure its compliance with the Clean 
Water Act. Two fish species in the Tualatin River, the spring 
chinook and the winter steelhead, are listed as threatened 
under the Endangered Species Act. The restoration of fish 
habitat and maintenance of a healthy river will require more 
water. Expanding the Westside water source is also critical to 
the reliability and security of the Portland metropolitan 
region water supply system.
    With all of these competing needs, it is no wonder there is 
not enough water to go around. As municipal, industrial, 
agricultural, and environmental water demands grow, water 
suppliers will be unable to meet public water supply needs. It 
is estimated that the demand for water in the Tualatin Basin, 
after factoring for a strong conservation effort, is in excess 
of 50,000 acre-feet per year.
    The water resource agencies in the cities in Washington 
County and the Bureau of Reclamation have been working together 
collaboratively to meet the long-term water resource needs for 
all of these competing interests. In fact, the partnership has 
developed an integrated water resource management strategy that 
has resulted in the Tualatin Basin Water Supply Feasibility 
Study. The study will examine impacts and benefits of a range 
of source options for 50,000 acre-feet of needed water and 
select a preferred alternative as part of the EIS process.
    It is estimated the EIS and planning report for the 
Tualatin Basin Water Supply Project will cost $6.87 million. 
Local partners are funding the majority, $3.8 million. We are 
requesting $2.9 million from the Bureau of Reclamation. The EIS 
and study will allow the partners to determine a final best 
course of action to meet the needs of the basin. As you have 
heard, options include any combination of expanding the face of 
the Scoggins Dam and therefore enlarging Hagg Lake, transfer of 
river water from Willamette River for irrigation, and freeing 
up current impounded water and so forth.
    The EIS and study include an extensive public involvement 
process involving property owners, user groups, environmental 
advocate groups and others.
    To keep this important project moving forward, 
authorization for the Bureau of Reclamation and Federal funding 
in the amount of $2.9 million in Fiscal Year 2004 is critical, 
and we seek the Committee's approval of S. 625.
    Mr. Chairman, we thank you for this opportunity to submit 
our testimony on this matter. We have provided additional 
written testimony. We have provided numerous letters of 
support, both from the partners of this study as well as the 
City of Portland, a number of individual businesses and a 
number of business organizations. So again, we thank you for 
this opportunity to submit testimony on this very important 
matter to the Tualatin Basin of Oregon and the Portland region.
    I am available to the Committee for questioning.
    [The prepared statement of Mr. Brian follows:]

         Statement of Tom Brian, Chairman, Board of Directors, 
                          Clean Water Services

    Chairman Calvert, thank you for the opportunity to provide you with 
testimony in support of S. 625, a bill to authorize the Bureau of 
Reclamation to conduct certain feasibility studies in the Tualatin 
River Basin in Washington County, Oregon. My name is Tom Brian, 
Chairman of the Washington County Board of Commissioners and Chairman 
of Clean Water Services' Board of Directors. This testimony is 
submitted on behalf of Washington County, Clean Water Services, the 
Cities of Banks, Beaverton, Cornelius, Forest Grove, Hillsboro, North 
Plains, Sherwood, Tigard and Tualatin, as well as the Tualatin Valley 
Water District. All these are collectively known as the Tualatin Basin 
Water Supply Partnership.
    I would first like to take this opportunity to thank our 
Congressman, David Wu, for his leadership in this matter and on other 
matters of importance to Washington County and our citizens. I would 
like to also thank my friend and former colleague in our State 
Legislature, Mr. Greg Walden, a Subcommittee Member, for his assistance 
with this legislation and for his continuing service to all of Oregon. 
Together, we are attempting to prevent serious water shortages that 
could become critical in just a few years. The Tualatin Basin has an 
increasing demand for Municipal and Industrial water, Agricultural 
water and water for Environmental applications. With Mr. Walden's and 
Mr. Wu's efforts and your support, we can avoid the unfortunate 
shortages impacting other basins in the northwest.
    Washington County, Oregon, has a population exceeding 480,000 
people. Since 1987, the number of jobs in the County has doubled to 
over 220,000. We are the fastest-growing county in Oregon and 
considered by many the economic engine that drives the rest of the 
State. Washington County is home to the ``Silicon Forest,'' where 
companies such as Intel, NEC, Tektronix and Lattice have a major 
presence. These high-tech industries and other businesses need clean, 
reliable and plentiful water; that is one of the reasons they came to 
Oregon and why the population growth has followed.
    Washington County and the Tualatin River Watershed also have a 
large agriculture industry (approximately 27,000 acres of irrigated 
farmland) and a rapidly growing nursery stock, and the specialty crop 
industry continues to expand. With $214 million in gross farm sales, 
Washington County recently moved from being ranked fifth to third in 
the State. The nursery industry has become Oregon's number one 
agricultural commodity, located in large part in Washington County. 
This industry, too, is a large user of water.
    Investments in advanced wastewater treatment during the past three 
decades have resulted in the Tualatin River being healthier than it has 
been in generations. However, it still remains identified as ``water 
quality limited'' according to the Clean Water Act. Efforts must be 
made now to improve the environmental health of the watershed to ensure 
its compliance with Clean Water Act standards and its future economic 
vitality. Two fish species on the Tualatin River, Spring Chinook and 
winter steelhead are listed as threatened under the Endangered Species 
Act. Restoration of fish habitat will require more water. Expanding the 
Westside water source will provide critical stream flow augmentation 
and significantly, it is also critical to the reliability and security 
of the Portland Metropolitan Region water supply system.
    The Tualatin River, fed by a network of creeks that drain over 700 
square miles, is Washington County's only river. Nearly 80 miles in 
length, the Tualatin River begins in the Coast Range and meanders 
through forest, farm and city to its confluence with the Willamette 
River at the City of West Linn, Oregon. The watershed does not have a 
snow pack to sustain summer river flows.
    With all these competing needs for water, it is no wonder that 
there is not enough to go around. As municipal, industrial, 
agricultural and environmental water demands grow, water suppliers will 
be unable to meet public water supply needs unless additional sources 
are available by 2012. A solution must be found. The Tualatin Basin 
Water Supply Partnership has developed an Integrated Water Resources 
Management strategy as a framework to address water resources 
management within the watershed. It is estimated that the demand for 
water in the Tualatin Basin, after factoring for a strong conservation 
effort, will double by the year 2050. This means there is the need for 
an additional 50,000 acre feet of water per year.
    Scoggins Dam is located on Scoggins Creek, a Tualatin River 
tributary. It was created in 1975 by the Bureau of Reclamation and the 
dam creates Hagg Lake, an impoundment. Washington County, in 
partnership with the Bureau of Reclamation, operates a County park at 
the lake. Water from Hagg Lake is currently used for river flow 
augmentation, municipal/industrial water supply, and agricultural 
irrigation needs in the Tualatin River watershed.
    The water resource agencies in Washington County and the Bureau of 
Reclamation have been working collaboratively to meet the long-term 
water resource needs for all the competing interests. In fact, the 
partnership has developed an integrated water resource management 
strategy that has resulted in the Tualatin Basin Water Supply 
Feasibility Study (WSFS) and the partners and the Bureau of Reclamation 
signed a Memorandum of Agreement on March 12, 2002, defining the roles 
and commitments of the parties in conducting the study. The WSFS will 
study the impacts and benefits of a range of source options for 50,000 
acre feet of needed water and select a preferred alternative as part of 
an Environmental Impact Study (EIS).
    It is estimated that the EIS/Planning Report for the Tualatin Basin 
Water Supply Project will cost $6.87 million. Local partners are 
funding the majority, $3.8 million. We are requesting $2.9 million from 
the Bureau of Reclamation. The Bureau has sought small amounts of 
federal funds for the past number of years, but we are at the stage 
that requires more substantial investment. The EIS and Study will allow 
the partners to determine a final best course of action to meet the 
needs of the Basin. Options include, for example, any combination of: 
expansion of Hagg Lake by raising Scoggins Dam 20 to 40 feet; transfer 
of Willamette River water for irrigation freeing up current impounded 
water; expanded aquifer storage systems; increased conservation; and, 
expanded reuse of cleaned wastewater for irrigation. The EIS and Study 
includes an extensive public involvement process involving property 
owners, user groups, environmental advocate groups and others.
    It is important to the region to continue the timetable and work 
schedule set forth by the project partners. This includes completion of 
the Study by December 2004. Based on the Study's findings, we 
anticipate beginning the permitting requirements in January 2005, with 
final design in January 2006 and construction in January 2007. We hope 
to complete construction of the selected alternative in June 2010. 
While this is an ambitious schedule, it is achievable and is necessary 
to meet the projected water needs of this diverse and rapidly growing 
community.
    Authorization for the Bureau of Reclamation and federal funding in 
the amount of $2.9 million in Fiscal Year 2004 is critical, and we seek 
your Committee's approval of S. 625.
    The Tualatin Basin Water Supply Feasibility Study enjoys strong 
support from a wide range of municipal, industrial, business and 
agricultural stakeholders who understand the important role that 
meeting the long-term water needs of Washington County plays in 
maintaining the continued health of our environment and economy in the 
region. Key supporters of this project include:
      Clean Water Services;
      City of Beaverton;
      City of Hillsboro;
      City of Tigard;
      City of Tualatin;
      City of Forest Grove;
      City of North Plains;
      Tualatin Valley Water District;
      Tualatin Valley Irrigation District;
      Intel Corporation;
      Westside Economic Alliance;
      Portland Business Alliance;
      City of Portland; and
      Greater Hillsboro Chamber of Commerce.
    Thank you again for this opportunity to submit testimony on this 
important matter that is so important to the Tualatin Basin of Oregon. 
We have enjoyed a great working relationship with our partners at 
Scoggins Dam, the Bureau of Reclamation, and we expect this 
relationship to continue as we move forward. We at Clean Water Services 
are available at anytime if you, your staff or Committee members would 
like further information.
                                 ______
                                 
    Mr. Osborne. Mr. Schank.

 STATEMENT OF ERNEST C. SCHANK, PRESIDENT, BOARD OF DIRECTORS, 
               TRUCKEE-CARSON IRRIGATION DISTRICT

    Mr. Schank. Mr. Chairman, members of the Subcommittee, I am 
Ernest Schank, President of the Board of Directors of the 
Truckee-Carson Irrigation District, located in Fallon, Nevada. 
My day job is the owner and operator of the Newlands Project 
Farm, which has been in the family for four generations. I am 
here to testify in support of H.R. 2831.
    I would like to express my appreciation to Congressman Jim 
Gibbons of the Second Congressional District of Nevada in 
helping draft and introduce this proposed legislation and also 
for his testimony today, urging the support of this 
Subcommittee--his help is greatly appreciated--and also 
Commissioner Keys and his staff from the Bureau of Reclamation, 
who have been extremely cooperative and helpful in developing 
and implementing the memorandum of agreement between the 
Department of Interior and the district for the conveyance of 
the Newlands Project Headquarters and Maintenance Yards land.
    I have submitted written testimony to the Committee and ask 
it be included in the record. I will cover some specific points 
for the Committee in justifying the transfer of this land to 
the Truckee-Carson Irrigation District.
    This title transfer proposal is narrowly tailored to 
include 35.6 acres of a 40-acre parcel, which currently houses 
the office and maintenance yard of the TCID, and should not be 
viewed as a project title transfer. In 1902, after the 
Reclamation Act was passed and before the Newlands Project was 
authorized in 1903, this 40-acre parcel was withdrawn from the 
public domain for reclamation purposes in the Newlands Project. 
That was well over 100 years ago.
    Homesteaders to the project to those days would choose a 
parcel of withdrawn land, purchase a water right by contract 
from the U.S. Government, build improvements and develop the 
land, and then were issued a patent by the U.S. lands office.
    In 1918, TCID was organized as a not-for-profit, as a local 
governmental agency organized under the laws of the State of 
Nevada. Its purpose was to bond and build a drainage system 
which the reclamation system declined to construct.
    In 1926, the TCID entered into a repayment contract with 
the U.S. Government to take over operation and maintenance of 
the Newlands Project. At that time, the TCID moved into an 
office and maintenance yard on property acquired by the 
reclamation service for that purpose. Those properties are now 
within the city limits of Fallon. The cost of these properties 
was included as a project cost that has since been repaid by 
the TCID. Currently, the Fallon freight yard and the Fallon 
post office occupy these two properties.
    By 1972, the TCID had outgrown these original facilities, 
and in 1975 moved to the 40-acre parcel that is the subject of 
this title transfer proposal. The land was available because it 
was not suitable for growing crops and was, therefore, never 
homesteaded and patented, as were the acres that were 
irrigable.
    All of the improvements to this property have been made by 
TCID. The U.S. Government did not contribute to these 
improvements.
    In the early 1990s, the Bureau installed the field office 
tying into our improvements. It occupies 4.4 of the 40 acres 
and would remain with the U.S. Government for continued Bureau 
field office operations.
    By 1996, the TCID had repaid the original construction 
charges designated for repayment. Thus, the Newlands Project is 
considered to be a paid-out project under reclamation law.
    In 1996, the TCID entered into an operation and maintenance 
contract with Interior. Because of new mandates regarding water 
measurements and water control, TCID needs to expand our 
facilities. For every 20 measuring devices, we have to add the 
equivalent of one employee to take care of the added operation 
and maintenance involved. This transfer is necessary so that 
TCID can obtain financing for the necessary improvements, the 
first of which will be a new office building.
    There has been much discussion about the fair market value. 
As Mr. Limbaugh mentioned, each transfer is unique; ours is 
unique, given the history. As Mr. Gibbons has stated, we do not 
believe we should have to pay for this property twice. We 
believe the 35.6 acres should be transferred without further 
cost to the district.
    Over the course of history of the project, a number of land 
transactions have resulted in losses to TCID, including, in the 
1980s, a 64-acre tract of property, acquired by the U.S. to 
construct a dam at Lake Tahoe and to control the level of the 
lake, which was repaid by TCID, was taken and transferred to 
the Forest Service.
    The original office and maintenance yard also acquired 
property which were fully paid for by TCID. One property has 
been transferred to the United States Postal Service, the other 
is in the process of being transferred to the City of Fallon.
    The 1990 Settlement Act, Public Law 101-618, took 28,000 
acres of grazing land known as the Carson Lake Community 
Pasture from TCID's control and management and authorized 
transfer to the State of Nevada. That transfer is currently in 
the process of being implemented without compensation to the 
United States.
    In 1999, AB-380, a Nevada law implementing a water 
settlement among Federal, State and local agencies, was enacted 
to retire Newlands water rights for the benefit of Pyramid 
Lake. TCID was supposed to receive compensation for operation 
and maintenance to make TCID whole. TCID has suffered losses as 
a result of the retirement of these water rights, and has not 
yet received the benefits that they were promised.
    Since 1926, TCID has provided a service for the public by 
maintaining and operating the Newlands Project and delivering 
water in accordance with existing contracts at a minimal cost 
to the U.S. Government. It is important to emphasize that this 
land, this withdrawn land, will continue to be used for a 
particular public purpose, that is, the operation and 
maintenance of a Federal water project.
    In conclusion, the Governor of the State of Nevada has 
written a letter and, as Congressman Gibbons indicated, we have 
some other letters from some important elected officials that 
we would like to be included in the record.


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]



    Mr. Schank. I thank you for allowing me to testify and to 
appear before your Committee today.
    Mr. Chairman, TCID will commit to address any issues that 
might be raised in the legislative process, and I would be 
pleased to answer any questions that the panel may have of me.
    Mr. Osborne. Thank you, Mr. Schank.
    [The prepared statement of Mr. Schank follows:]

  Testimony of Ernest C. Schank, President of the Board of Directors, 
            Truckee-Carson Irrigation District, on H.R. 2831

    Mr. Chairman, Members of the Subcommittee, I am Ernest C. Schank, 
President of the Board of Directors of the Truckee-Carson Irrigation 
District (TCID) in Nevada. I am here to testify in support of H.R. 
2831.
    This legislation would require the Secretary of the Interior to 
convey the Newlands Project Headquarters and Maintenance Yard Facility 
to the TCID. This title transfer is narrowly tailored to only transfer 
ownership of federal land currently being used by the TCID for an 
office and maintenance yard facility.
    We would like to thank Congressman Gibbons for introducing this 
legislation to make this title transfer possible. We also would like to 
thank Commissioner Keys and the Bureau of Reclamation (BOR) for working 
cooperatively with us on this proposal.
    The Newlands Project, one of the first five Reclamation projects, 
was authorized on March 14, 1903, and provides for irrigation and other 
purposes in the lower Carson River Basin near Fallon, in western 
Nevada. Construction began in 1903 on the first project works, the 
Derby Diversion Dam and the Truckee Canal. The TCID was created under 
the laws of the State of Nevada in 1918 as a non-profit governmental 
agency to undertake the building of a drainage system and begin 
operating and maintaining the project works beginning in 1926 under 
contract with the United States.
    In 1926, the TCID entered into a repayment contract with the United 
States Government. The TCID moved into the office and maintenance yard 
previously occupied by the BOR. These properties were held in fee 
title, and the cost of those assets was repaid by the water rights 
owners of the TCID although a title was never transferred from the U.S.
    By 1975, the TCID had outgrown those original facilities, so we 
moved to a 40-acre parcel of land withdrawn for the TCID purposes in 
1903. The TCID built the office and maintenance shop facility on this 
land. The land was not irrigable because of the high clay and alkaline 
content of the soil. It was, however, suitable for an office and 
maintenance yard at one location whereas the previous facilities were 
at two separate locations. The lot where the office had been was 
eventually transferred by the Department of the Interior (DOI) to the 
United States Postal Service.
    This parcel and all of the improvements make up the hub of 
operation and maintenance of the Newlands Reclamation Project. The TCID 
has rented the 40 acres for a nominal fee from the BOR. The value of 
the land was increased significantly by the improvements made by the 
TCID.
    In 1996, the TCID entered into an operation and maintenance 
contract with the DOI. A part of that contract requires an aggressive 
water measurement program. This modernization in water measurement at 
each turnout and the increased automation of water control in the many 
canals and laterals require more employees, more computer and 
electronics space, and more storage space for records.
    In 1996, the BOR certified that the TCID had repaid the U.S. 
Government the original construction charges designated for repayment. 
At this time, the Newlands Project is considered to be a ``paid out 
project'' under Reclamation law. Although the original construction 
charges and other costs to the U.S. have been repaid, no title to any 
of the Newlands Project facilities have been transferred to the TCID.
    Although the U.S. Government has leased the land to the TCID for a 
nominal value, the lease will eventually expire and the TCID would like 
to own the land to make permanent improvements to existing facilities 
that have become outdated. The transfer of approximately 35 acres of a 
40-acre parcel of federal land is to allow the TCID to make permanent 
improvements on the land for continued operation and maintenance of the 
Newlands Project. The remaining approximately five acres will be 
reserved for a local Bureau of Reclamation field office. The transfer 
is necessary so that financing can be obtained for the improvements--
the first of which will be a new office building. The TCID has made all 
previous improvements to this land. In order to secure the necessary 
financing to make the improvements we need to own the ground upon which 
the improvements will stand. The TCID has outgrown its office and shop 
and needs to expand.
    The legislation would direct the transfer pursuant to a memorandum 
of agreement we have entered into with the Bureau. The conveyance would 
not occur until the National Environmental Policy Act has been fully 
complied with. Moreover, any necessary environmental site assessments, 
remediation or removal would have to be completed.
    The Governor of Nevada supports this title transfer. I would like 
to ask that the Subcommittee include the attached letter from Governor 
Guinn, dated July 11, 2002, in the record of this hearing.
    In closing, I want to emphasize that the TCID provides a service to 
the public by maintaining and operating the Newlands Reclamation 
Project and delivering water in accordance with contracts previously 
entered into between the United States and the water rights owners of 
the Project. We provide jobs and those employed thus provide assistance 
to the Counties, the State of Nevada and the U.S. Government as 
taxpayers.
    I am not aware of any opposition from any interested entity within 
the State of Nevada to this title transfer. Nevertheless, we will 
commit to addressing any issues that are raised as this legislation 
moves forward.
    This concludes my remarks. Thank you for allowing me to appear 
before your Subcommittee today. I would be pleased to answer any 
questions you might have.
                                 ______
                                 
    Mr. Osborne. Ms. Roder.

         STATEMENT OF AILEEN RODER, PROGRAM DIRECTOR, 
                   TAXPAYERS FOR COMMON SENSE

    Ms. Roder. Good afternoon, Chairman Osborne and other 
distinguished members of the Subcommittee.
    I am Aileen Roder, Program Director at Taxpayers for Common 
Sense (TCS), a national, nonpartisan budget watchdog group. 
Thank you for inviting me to testify today regarding H.R. 2831, 
which would authorize the Secretary of the Interior to transfer 
the Newlands Project headquarters and maintenance yard facility 
to the Truckee-Carson Irrigation District.
    Taxpayers for Common Sense strongly opposes H.R. 2831 as 
written. This bill would transfer title to approximately 35.6 
acres of withdrawn public land with no compensation to Federal 
taxpayers. These lands were withdrawn from the public domain 
for use in the Newlands Project. As such, their value was never 
included in the allocation of cost to be repaid by project 
beneficiaries.
    Under fair terms and conditions, both U.S. taxpayers and 
local interests can benefit from privatizing certain Federal 
assets. However, TCS opposes giving away Federal assets to 
narrow local interests at the expense of the American people.
    In its 1997 testimony regarding similar legislation which 
conveyed certain facilities in the Minidoka Project to the 
Burley Irrigation District, then-Bureau of Reclamation 
Commissioner Martinez stated that in land transfer 
negotiations, the Federal Treasury and, thereby, the taxpayers' 
financial interests must be protected. As part of that bill, 
13.4 acres of withdrawn lands were to be given to the Burley 
Irrigation District without compensation. As a result, 
Commissioner Martinez urged, ``Reclamation opposes these 
provisions. These assets should be accounted for in the 
valuation process in order to appropriately protect the 
financial interests of the Treasury.''
    Taxpayers for Common Sense has been concerned with these 
types of land transfers for years. In 1998, we testified on the 
Minidoka Project transfer. Then, as now, TCS urged that 
taxpayers deserve a fair return on the public's investment.
    Regrettably, the Federal land and transfer exchange system 
is rife with problems and controversy. In June 2000, the 
General Accounting Office documented numerous cases in which 
the Federal Government did not ensure that the land being 
exchanged was appropriately valued or that exchanges served the 
public interest or met other exchange requirements. H.R. 2831 
expands the problems associated with the Federal land exchange 
and transfer system by failing to require any payment 
whatsoever for the public lands being transferred to the 
Truckee-Carson Irrigation District.
    When selling public assets, the Federal Government should 
follow two guiding principles:
    One, make sure it is in the taxpayers' best interests to 
sell the projects. There may be cases where the best Federal 
action is to hold on to assets; for example, it may be 
appropriate for the Federal Government to maintain assets that 
are important for or play a role in relationships between 
States or treaties with other nations.
    And, two, get the best value for the asset. If the Federal 
Government does decide to transfer water projects to non-
Federal ownership, taxpayers deserve a fair price for those 
projects.
    In conclusion, H.R. 2831 is important not just for the 
assets it would transfer, but also for the example it would set 
for the hundreds of other Federal water projects that might be 
transferred to non-Federal ownership in the future. When 
considering this and other asset transfers, we urge Congress to 
be cognizant of its fiduciary responsibility to American 
taxpayers. Upon the sale of public assets, the United States 
should be in no worse a financial position than if the project 
continues to be under the control of the U.S.
    Some may regard this land transfer as too small to be 
worthy of debate. However, as the Federal Government faces a 
deficit of nearly $500 billion in Fiscal Year 2004, everything 
counts. If Truckee-Carson Irrigation District wants to complete 
a land transfer, it should pay the fair market value of this 
land as determined by an independent appraisal.
    Thank you again for the opportunity to testify today. I 
will be happy to answer any questions you might have.
    Mr. Osborne. Thank you, Ms. Roder.
    [The prepared statement of Ms. Roder follows:]

             Statement of Aileen Roder, Program Director, 
                Taxpayers for Common Sense, on H.R. 2831

    Good afternoon, Chairman Calvert, Congresswoman Napolitano, and 
other distinguished members of the Subcommittee. I am Aileen Roder, 
Program Director at Taxpayers for Common Sense (TCS), a national, 
nonpartisan budget watchdog group. I would like to thank you for 
inviting me to testify at this hearing regarding H.R. 2831, which would 
authorize the Secretary of the Interior to transfer the Newlands 
Project headquarters and maintenance yard facility to the Truckee-
Carson Irrigation District.
    Taxpayers for Common Sense strongly opposes H.R. 2831 as written. 
This bill, introduced in July by Congressman Jim Gibbons (R-NV), would 
transfer title to approximately 35.6 acres of withdrawn public land in 
the Newlands Project, a federal water project, to the Truckee-Carson 
Irrigation District with no compensation to federal taxpayers.
    According to the United States Code:
        The term ''withdrawal'' means withholding an area of Federal 
        land from settlement, sale, location, or entry, under some or 
        all of the general land laws, for the purpose of limiting 
        activities under those laws in order to maintain other public 
        values in the area or reserving the area for a particular 
        public purpose or program; or transferring jurisdiction over an 
        area of Federal land, other than ''property'' governed by the 
        Federal Property and Administrative Services Act, as amended 
        (40 U.S.C. 472) from one department, bureau or agency to 
        another department, bureau or agency. 1
---------------------------------------------------------------------------
    \1\ 43 U.S.C. 1702(j).
---------------------------------------------------------------------------
    The lands that H.R. 2831 would transfer to Truckee-Carson 
Irrigation District were withdrawn from the public domain for use in 
the Newlands Project and, as such, the value of these lands was never 
included in the allocation of costs to be repaid by project 
beneficiaries.
    Instead, H.R. 2831 unfairly favors the Truckee-Carson Irrigation 
District, which seeks to obtain title to lands in the Bureau of 
Reclamation's Newlands Project free-of-charge. TCS believes that the 
water project in question is a taxpayer asset and should be treated 
accordingly.
    Taxpayers for Common Sense favors privatizing or devolving certain 
federal assets to state or local government in appropriate 
circumstances. Under fair terms and conditions, both U.S. taxpayers and 
local interests can benefit from such transfers. However, TCS opposes 
giving away federal assets to narrow local interests at the expense of 
the people of the United States. Furthermore, there are some 
circumstances where transfer of an asset does not make sense.
Transfers Should Provide a Fair Return to the Taxpayers' Investment
    Since the release of its 1995 Framework for the Transfer of Title 
Bureau of Reclamation Projects, the Bureau of Reclamation has 
undertaken ``a program to transfer title of facilities that could be 
efficiently and effectively managed by non-Federal entities and that 
are not identified as having national importance.'' 2
---------------------------------------------------------------------------
    \2\ Framework for the Transfer of Title Bureau of Reclamation 
Projects, Bureau of Reclamation, August 7, 1995.
---------------------------------------------------------------------------
    In his 1997 testimony regarding S. 538, legislation to convey 
certain facilities of the Minidoka Project to the Burley Irrigation 
District, former Bureau of Reclamation Commissioner Eluid Martinez 
stated that in land transfer negotiations, ``The Federal Treasury and 
thereby the taxpayers'' financial interest, must be protected ... `` 
3 As part of S. 538, 13.4 acres of withdrawn lands were to 
be given to the Burley Irrigation District without compensation. As a 
result, Commissioner Martinez urged, ``Reclamation opposes these 
provisions. These assets should be accounted for in the valuation 
process in order to appropriately protect the financial interests of 
the Treasury.'' 4 I have attached Commissioner Martinez's 
testimony for the record. 5
---------------------------------------------------------------------------
    \3\ Testimony of Eluid Martinez, Commissioner, U.S. Bureau of 
Reclamation, regarding S. 538, May 15, 1997.
    \4\ Ibid.
    \5\ Commissioner Martinez's testimony is attached as part of the 
Energy and Natural Resources Committee Report 105-131, November 3, 
1997.
---------------------------------------------------------------------------
    In fact, Ralph DeGennaro testified on behalf of Taxpayers for 
Common Sense before this Subcommittee in 1998 regarding H.R. 1282, the 
House version of S. 538. In his testimony, Mr. DeGennaro urged this 
Subcommittee that taxpayers deserve a fair return on the public's 
investment and should receive a fair price for projects.
    Regrettably, the federal land exchange and transfer system is rife 
with problems and controversy. The General Accounting Office (GAO) has 
documented numerous cases in which the federal government ``did not 
ensure that the land being exchanged was appropriately valued or that 
exchanges served the public interest or met other exchange 
requirements.'' 6 This GAO report has been attached to my 
testimony.
---------------------------------------------------------------------------
    \6\ Land Exchanges Need to Reflect Appropriate Value and Serve the 
Public Interest (GAO/RCED-00-73).
---------------------------------------------------------------------------
    H.R. 2831 takes the problems associated with the federal land 
exchange and transfer system a step further by failing to require any 
payment whatsoever for the public lands being transferred to the 
Truckee-Carson Irrigation District. This bill is yet another example of 
a land transfer that is fundamentally unfair to taxpayers. As in S. 
538, the Truckee-Carson Irrigation District would pay nothing for title 
to public lands that rightfully belong to federal taxpayers.
    Underlying these kind of asset-transfer bills is the faulty logic 
that irrigation districts are entitled to own federal assets if they 
pay out their repayment obligations. However, paid out does not mean 
paid for. Only where explicitly spelled out in the authorizing law do 
water users have a claim to the title of these federal projects. 
Throughout the West, irrigators have been paying for the costs of 
supplying the water, not for ownership of the project. In many 
instances, they have not even been paying for the full cost of the 
water.
    According to the U.S. General Accounting Office 7, since 
1902 irrigators have managed to pay off less than one-third of the $3.4 
billion they owe for Reclamation projects. Billions more in costs have 
been shifted to taxpayers and other users. Even where irrigation 
districts have paid out the heavily subsidized payment obligations they 
were assessed, they still have not paid for all the other costs 
associated with the project. Irrigators have not even paid the full 
costs of capital of their portion of the projects, benefitting from 
huge interest subsidies. The lands to be transferred under H.R. 2831 
were withdrawn from the public domain without payment and therefore the 
value of the lands was never included in the allocation of costs to be 
repaid by project beneficiaries.
---------------------------------------------------------------------------
    \7\ In 1996, the GAO released a report (Information on allocation 
and Repayment of Costs of Constructing Water Projects GAO/RCED-96-109) 
that gave these figures for the Reclamation program as a whole from 
1902 to 1994:
      $21.8 billion has been invested in Reclamation
      $16.9 of that total is reimbursable by irrigation, power 
and municipal and industrial users;
      $7.1 billion of that total was allocated to irrigation. 
Of this:
       47% ($3.4 billion ) was shifted to electric power users under 
Irrigation Assistance;
        5% was written off by Congress;
       47% ($3.4 billion) was to be paid by irrigators at no interest.
---------------------------------------------------------------------------
    Unless otherwise stated in the law, irrigation districts have not 
paid for these federal assets. They can purchase them, but they are not 
entitled to a new taxpayer handout.
    TCS wants the federal government to follow these principles when 
selling public assets:
    1.  Make sure it is in the taxpayers' best interest to sell the 
project. This means that there may be cases where the best government 
action is to hold on to its assets. For example, it may be appropriate 
for the federal government to maintain assets that are important for or 
have a role in relationships between states or in treaties with other 
nations.
    2.  Get the best value for the asset. If the federal government 
does decide to transfer water projects to non-federal ownership, 
taxpayers deserve a fair return on their investment and should receive 
a fair price for those projects. We strongly urge the use of the market 
to determine a fair price where other obligations allow it.
Conclusion
    H.R. 2831 is important not just for the assets it would transfer, 
but also for the example it would set for the hundreds of other federal 
water projects that might be transferred to non-federal ownership in 
the future. When considering these and other asset transfers, we urge 
Congress to be cognizant of its fiduciary responsibility to American 
taxpayers. Upon the sale of public assets, the United States should be 
in no worse of a financial position than if the project continued to be 
held by the United States.
    Taxpayer lands should not be transferred to non-federal entities 
without taxpayers receiving a return on the investment. This 
legislation would give the land away to the Truckee-Carson Irrigation 
District free-of-charge. If Truckee-Carson Irrigation District wants to 
complete a land transfer, then it should pay the fair market value of 
this land as determined by an independent appraisal.
    Thank you again for opportunity to testify today and I would be 
happy to answer any questions you might have.
                                 ______
                                 
    Mr. Osborne. Mr. Hill.

       STATEMENT OF JIM HILL, WATER RECLAMATION MANAGER, 
                    CITY OF MEDFORD, OREGON

    Mr. Hill. Mr. Chairman, my name is Jim Hill, and I am the 
Water Reclamation Division Administrator for the Medford 
Regional Water Reclamation Facility, which provides wastewater 
treatment for over 120,000 customers in the Bear Creek Valley 
in southern Oregon. I am also the Chair of the Water for 
Streams, Irrigation, and Economy, (WISE) Project Advisory 
Committee.
    I want to thank you for the opportunity to come before this 
Subcommittee and testify on behalf of H.R. 3210, which would 
authorize the Bureau of Reclamation to be the lead agency on a 
water resource management feasibility study for the Little 
Butte and Bear Creek subbasins, also known as the WISE project.
    I also thank Congressman Walden, who took time out of his 
busy schedule last December to visit our reclamation facility 
and become better acquainted with the WISE project. His 
sponsorship of this legislation is greatly appreciated.
    Water is the lifeblood of the Rogue River Basin, which 
extends 135 miles from the pristine beauty of Crater Lake 
westward to the Pacific Ocean. It is essential for fisheries, 
outdoor recreation, and agriculture in the Bear Creek Valley, 
all of which are key components of the economy of southern 
Oregon. In light of the Federal listing of the coho salmon as 
endangered and increasingly stringent water quality 
requirements affecting both municipalities and agriculture, a 
coalition of agricultural, municipal and environmental 
interests, working in conjunction with the Bureau of 
Reclamation, formed the WISE project. The goals of the WISE 
project, which also embody the study goals of the Bureau's 
February 2001 Bear Creek/Little Butte Creek Water Management 
Study Appraisal Report are to:
    One, improve the effectiveness and efficiencies of the 
three irrigation districts in the Bear Creek Valley by 
improving existing canal systems, and increasing irrigation 
water supplies by reusing reclaimed effluent for irrigation; 
and
    Two, increase stream flows and improve the habitat for 
salmonids in Bear Creek and Little Butte Creek, which are both 
coho-producing tributaries to the Rogue River.
    The WISE project is a collaboration of virtually all 
parties in the Bear Creek and Little Butte Creek Subbasin with 
an interest in water resource management. Over 25 agencies and 
groups signed on in support of the WISE project. These groups 
include the Farm Bureau, cities through the valley, the 
irrigation districts, Oregon Water Trust, Headwaters, and the 
Sierra Club, to name a few. Irrigators, environmentalists, and 
municipalities all stand to benefit from the WISE project, and 
are active participants.
    The participants also signed a memorandum of understanding 
and formed the WISE Project Advisory Committee. Even with this 
local support, there is need for Bureau authorization to 
oversee the project.
    In another show of collaboration, a group of 25 growers, 
marketers, agency representatives and regulators from the Bear 
Creek Valley and also from the State of Oregon toured the 
Salinas Valley of California to look at their agricultural 
reuse project, which uses reclaimed effluent to grow the 
majority of the lettuce and artichokes consumed in the United 
States. These people are now firm supporters of the use of 
reclaimed effluent for agricultural irrigation and will be 
working with the WISE PAC.
    The WISE Project Advisory Committee, working with the 
Bureau, has identified several possible project alternatives 
for further consideration. At this time we need to begin the 
NEPA process. Due to the complexity of the project and the 
history of Bureau involvement in the Rogue Basin Project, the 
Bureau needs to be designated as the lead agency.
    Before the NEPA process can start, there needs to be filed 
a notice of intent by the lead agency. Therefore, it is 
necessary to authorize the Bureau at this time to work on the 
project. Local and state funding will be used to hire a 
contractor to clearly define the project scope and provide a 
detailed estimate of the cost to complete the feasibility 
study.
    The City of Medford has secured a Congressionally earmarked 
grant, administered by EPA, to hire a contractor to work on the 
feasibility study. Additional funds, if needed to complete the 
feasibility study, will come from a combination of additional 
grant funds and local support.
    On behalf of the City of Medford and the WISE PAC, I want 
to again thank you for the opportunity to speak on behalf of 
this legislation.
    [The prepared statement of Mr. Hill follows:]

   Statement of Jim Hill, Water Reclamation Division Administrator, 
                        City of Medford, Oregon

INTRODUCTION
    Ladies and gentlemen, my name is Jim Hill, and I am the Water 
Reclamation Division (WRD) Administrator for the Medford Regional Water 
Reclamation Facility (RWRF), which provides wastewater treatment and 
disposal for a majority of the Bear Creek Valley in southern Oregon. I 
am also Chair of the Water for Streams, Irrigation and the Economy 
(WISE) Project Advisory Committee.
    I want to thank you for the opportunity to speak before the 
Subcommittee on Water and Power of the Committee on Resources in 
support of H.R. 3210 (Walden), which would authorize the Secretary of 
the Interior, acting through the Bureau of Reclamation (BOR), to 
conduct a water resource feasibility study for the Little Butte/Bear 
Creek Subbasin in Oregon. This project has become known as the Water 
for Streams, Irrigation and the Economy (WISE) project. My testimony 
today will address the need for BOR authorization as lead agency to 
provide project review and oversight, a background of the WISE project 
to date, how local communities are collaborating to resolve water 
management issues, the impact of reuse on downstream water users, and 
the proposed funding mechanisms for the Feasibility Study and 
Environmental Impact Statement (FS/EIS).
NEED FOR BOR AUTHORIZATION
    The BOR was the architect for the Talent Project, which provides 
irrigation water for the growers in the Bear Creek Valley utilizing 
flows from Bear Creek and Little Butte Creek, the reservoir system 
connected to the two streams, as well as over 200 miles of canals. To 
address impending water supply and regulatory issues, the WISE project 
proposes to modify and supplement the Talent Project system to improve 
stream flows and water quality, improve irrigation system efficiencies, 
and utilize reclaimed effluent as an additional irrigation water 
source. Due to the complexity of the project and history of BOR 
involvement in the Talent Project, the BOR needs to be authorized to 
act as lead agency at the very beginning of the WISE project. Their 
role will be to provide technical review of the FS/EIS process, and 
assure that NEPA compliance is achieved. Medford, in conjunction with 
the WISE project partners, will hire a consultant to prepare the FS/EIS 
in accordance with BOR oversight.
BACKGROUND
    In September of 2000 the Medford Water Commission (MWC) prepared a 
scoping report for what was then called the Irrigation Point of 
Diversion (IPOD) project. The MWC withdraws water from the Rogue River 
just downstream from the confluence of Little Butte Creek. Little Butte 
Creek is prime coho salmon spawning habitat, but warms up during the 
summer because of withdrawals. The MWC is the regional provide of 
domestic water for the Bear Creek Valley. The intent of the IPOD 
project was to move the irrigation points of diversion from Little 
Butte Creek to the Rogue River downstream of the MWC treatment plant, 
thereby improving the water quality and quantity in Little Butte Creek 
for the salmon, while at the same time improving the water quality at 
the MWC treatment plant intake. The issue at hand was the cost of 
pumping the water back up into the irrigation system from the new point 
of diversion.
    At the same time the IPOD project scoping report was being 
prepared, the Bureau of Reclamation (BOR) was completing the Bear 
Creek/Little Butte Creek Water Management Study Appraisal Report, which 
came out in February of 2001. The purpose of the study was to analyze 
water conservation measures that would reduce losses in the irrigation 
delivery systems in the Bear Creek subbasin. The saved water would then 
be redistributed to (1) improve irrigation deliveries, and (2) enhance 
streams flows and improve water quality and fish habitat in Bear Creek 
and Little Butte Creek. One of the recommended options involved piping 
the Hopkins Canal, which serves the Rogue River Valley Irrigation 
District (RRVID), and putting in a pumping station to pump both stream 
water and reclaimed effluent from the Medford Regional Water 
Reclamation Facility (RWRF) into the pipeline. The RWRF reclaimed 
effluent was seen as an additional valuable source of irrigation water.
    The IPOD Steering Committee (Committee) that had been formed 
earlier was then expanded to include the RWRF, irrigation districts, 
environmental groups, and any other concerned interests. At this time 
the Committee recognized that additional outside funding assistance 
would be required for the project to go ahead, and asked BOR if funding 
assistance would be possible. The BOR pointed out that a Feasibility 
Study and Environmental Impact Statement (FS/EIS) would be required for 
the entire BOR Talent Project before the BOR could provide funding 
assistance.
    At this time it was noted that the IPOD scoping document and the 
BOR appraisal had very similar objectives. It was then decided to join 
forces, and letters of support for BOR participation in the IPOD 
project, signed by over thirty municipal, agricultural, and 
environmental interests, were sent to our Congressional delegation. The 
Committee then began identifying possible project alternatives to serve 
the entire BOR Talent Project area. Several preliminary alternatives 
were developed, all of which included the use of reclaimed effluent as 
a source of irrigation water. It was at this time that the IPOD project 
was first renamed the Little Butte/Bear Creek Water Management Project 
(LB/BC WMP), and then renamed again as the WISE project.
    In the fall of 2001 the Medford City Council set as one of its 
goals support of agricultural reuse as a beneficial use of summer 
effluent from the RWRF. Due to impending temperature standards on the 
Rogue River, the RWRF will be faced with expensive effluent cooling or 
discontinued river discharge during the summer months. With the letter 
of support for the IPOD project, Medford was fortunate enough to obtain 
a VA/HUD Congressional earmark of $894,000 for the project. The 
earmarked money will be administered as a grant by the EPA.
LOCAL COLLABORATION
    The WISE project is a collaboration of virtually all parties in the 
Bear Creek and Little Butte subbasins with an interest in water 
resources management. As a follow up to the IPOD Congressional letter 
of support, a Memorandum of Support was circulated for signature. Over 
40 agencies and groups signed on in support of the WISE project. These 
groups include the Farm Bureau, cities throughout the valley, the 
irrigation districts, Oregon Water Trust, Headwaters, the Cattleman's 
Association, and the Sierra Club, to name a few. Irrigators, 
environmentalists and municipalities all stand to benefit from the WISE 
project, and are active participants. The IPOD Steering Committee 
members also signed a Memorandum of Understanding and formed the WISE 
Project Advisory Committee (PAC). Even with this local support, though, 
there is a need for BOR authorization to oversee the project.
    In another show of collaboration, a group of 24 key growers, 
marketers, agency representatives and regulators toured the Salinas 
Valley agricultural reuse project, which uses reclaimed effluent to 
grow a majority of the lettuce and artichokes consumed in the United 
States. They are now firm supporters of the use of reclaimed effluent 
for agricultural irrigation, and will be working with the WISE PAC.
REUSE IMPACT ON DOWNSTREAM USERS
    The discharge from the RWRF constitutes approximately 1.5% of the 
total flow in the Rogue River. Withdrawal of the RWRF flow from the 
Rogue River with no replacement, therefore, will have a negligible 
impact on downstream users. It's also very important to note that the 
WISE project will use the reclaimed effluent to replace waters 
currently taken from Bear Creek and Little Butte Creek for agricultural 
irrigation. By improving system efficiencies and using reclaimed 
effluent for irrigation, the flows and water quality in both streams 
should be improved significantly. Since both streams are tributaries to 
the Rogue River, there will be a net benefit to the Rogue River.
FUNDING MECHANISMS
    The first phase of the WISE FS/EIS will be funded with a grant from 
the Oregon Watershed Enhancement Board (OWEB). The first phase will 
clearly define the project scope and provide a detailed estimate of the 
funding and time that will be required to complete the FS/EIS. The 
second phase of the FS/EIS will be funded with the EPA grant, 
supplemented by matching funds from Medford and other WISE partners. It 
is anticipated that additional funds will be required to complete the 
FS/EIS. Once the first phase defines those needs, Medford and the WISE 
partners will seek additional grant funding. It is the intent of 
Medford to work with the WISE partners to provide matching funds, if 
needed, to complete the FS/EIS.
                                 ______
                                 
    Mr. Osborne. Thank you, Mr. Hill.
    I would like to remind members of the Committee rule, 3(C), 
that imposes a 5-minute limit on questions. The Chair will now 
recognize members for any questions they may wish to ask the 
witnesses.
    I would like to begin the questioning by asking Mr. Brian 
this question. It seems that the efforts of all of the study 
partners to get the study to where it is today is very 
commendable. You have a lot of diverse interests. And when you 
try to get metropolitan users' and agricultural users' and 
fisheries' interests together, it is a daunting task.
    My question is, what did your efforts consist of to get 
everybody on board with the need for a study and a need to 
participate?
    Mr. Brian. Mr. Chairman, I guess I would call it 
enlightened self-interest. Everyone has a stake in the health 
of that basin and additional supply, whether they happen to be 
environmental advocates, fishery folks, Oregon trout, or our 
largest industrial user, such as Intel.
    The City of Portland has something at stake because our 
basin buys about 50 percent of its water from the Portland 
watershed. It is a different watershed. Theirs is snow-pack 
driven and ours is rain driven. There are years when just over 
the hill--and part of Portland is in Washington County, but 
just over the hill they may have a drought condition, and we 
are OK. Or the opposite has been true. Both conditions have 
occurred in the last 5 years. We are able to ship water back 
and forth.
    As we develop this new additional Westside resource, we 
will not have to buy water from them, which leaves them with 
more of their own water and solves their problem. So we have 
been able to bring together the Portland business alliance in 
the City of Portland, as well as all the Westside businesses. 
The irrigators are at the table with us.
    I guess we all share the understanding that this is an 
important project. It is a big project, and it requires all of 
us working together to accomplish it.
    Mr. Osborne. Thank you very much.
    Ms. Roder, is it possible that the cost of infrastructure 
improvements be considered and offset to the settlement costs 
of transferring the project to a non-Federal entity?
    Ms. Roder. Thank you, Mr. Chairman.
    I would say that there needs to be a negotiation process in 
which we can see what the fair market value is after an 
independent appraisal of the properties to be transferred; and 
then we can have the Bureau of Reclamation sit down with 
Truckee-Carson and discuss what lands have been transferred and 
paid for.
    But as the legislation is currently drafted, we are not 
seeing that. Instead, we are just supposed to assume that the 
Federal taxpayer and the Federal Government are going to be 
made whole. I think we should not rush the process, but really 
look at what the value of these lands are and ensure that the 
Federal taxpayer is getting a fair return on their investment.
    Mr. Osborne. Who would you have do this fair market 
appraisal?
    Ms. Roder. Mr. Chairman, I know there are independent 
appraisals outside of the Bureau of Reclamation. I know there 
is an appraisal system within the Federal Government. We 
believe that one needs to be done so we can really assess what 
the Federal assets that are being transferred here with these 
withdrawn lands are.
    Mr. Osborne. You are advocating just one agency or several 
agencies do the appraisal, and if so, how would you decide on 
which appraisal you would accept?
    Ms. Roder. I think that probably the best process would be 
to go outside the agencies. I know there are independent 
appraisals on the market and that we could go forward with 
that. But certainly the Bureau of Reclamation needs to be 
involved in the process, since it is Bureau lands which are 
going to be transferred.
    Mr. Osborne. Thank you.
    I yield to the gentleman from California, Mr. Baca.
    Mr. Baca. Thank you, Mr. Chairman.
    My first question is to Mr. Schank. I am quite familiar 
with Truckee and Carson because, as a State legislator, I used 
to go down there and participate in the Highway Patrol Truckee 
Tournament, which is a golf tournament for charity in that 
area. Every September I would spend time in that area raising 
money for charity.
    My question is, how much does the irrigation district 
presently pay to lease the land from the Bureau of Reclamation?
    Mr. Schank. I believe it is $10 annually.
    Mr. Baca. What is it, $100 every 10 years?
    Mr. Schank. Something like that. That is what sticks in my 
mind. I would have to get back on the exact number.
    Mr. Baca. Ms. Roder's question in terms of Federal assets: 
If there is a transfer and you are not paying, then what are 
the actual assets that you would be gaining, because you are 
spending very little right now, as it is, on the lease 
agreement? Would the revenues then increase tremendously if it 
was transferred to you and you, in turn, sold those reclamation 
or water rights?
    Mr. Schank. There are no water rights on this particular 
property. That is one of the reasons that we situated the 
office there in the early 1970s. It was not suitable for 
irrigation; therefore, it was not homesteaded, as were most of 
the irrigable grounds in the area.
    The answer to your question is, we are actually crazy to 
ask for the transfer when we are paying only $10 a year, but we 
need to build a new office and in order to get the financing 
available, you cannot get it when you have leased property.
    Mr. Baca. But we do not know what the fair market value is 
at this point, do we, for the transfer of the land?
    Mr. Schank. I am not sure what your question is.
    Mr. Baca. The Federal assets in terms of, if we did 
transfer it, what would be the Federal assets, we do not know 
what the fair market value would be, because I believe the last 
one was done about 6 years ago.
    Mr. Schank. The land is being used, as I stated, for the 
office and maintenance facility to operate a Federal 
reclamation project, and that is what it will continue to be 
used as.
    Mr. Baca. It seems like we still have a lot of questions to 
answer. Of the surrounding entities, what impact would it have? 
If we do transfer it, what other entities could be impacted 
that are close by?
    Mr. Schank. There are no other entities that I am aware of.
    Mr. Baca. Mr. Hill, there is no dollar amount authorized 
for reclamation to conduct the feasibility studies, and since 
2003, the omnibus appropriation bill provided $900,000 for this 
study through the VA-HUD and EPA grants.
    What is a ballpark estimate for completion of this study?
    Mr. Hill. Mr. Chairman and Mr. Baca, what we are doing 
right now, we are retaining a consultant to look at the 
projects and more clearly define what we see as the estimated 
cost to complete the feasibility study. We do not know for 
sure, and I would only be able to offer a ballpark estimate, 
but we anticipate it will be greater than the $900,000.
    I could give you something. A very preliminary estimate 
would be in the range of $2 million to $2.1 million.
    Mr. Baca. Is there anyone else interested in this 
particular land? You are asking for a land exchange; is there 
anyone else interested other than wanting to build a facility 
there?
    Mr. Schank. There is no one else that I am aware of. We 
have local government support.
    Ms. Roder. Not that I am aware of, Mr. Baca.
    Mr. Baca. Thank you. No further questions.
    Mr. Osborne. Thank you, Mr. Baca.
    I yield to Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman.
    Mr. Schank, if you had some rough value of the 64 acres 
used at Lake Tahoe for the dam and for the 28,000 acres of 
grazing rights you referred to and for the water that was 
retired, do you have any rough estimate of how much has been 
taken?
    Mr. Schank. The 64 acres at Lake Tahoe, I believe at the 
time it was transferred, it was conservatively valued at $8 
million. It is lakefront property.
    As far as the grazing area, all I can do on this area is 
tell you that prior to the settlement act that Truckee-Carson 
Irrigation District used, that withdrawn ground which was part 
of our original contract, we were allowed to use it for grazing 
purposes to offset district expenses, operation and maintenance 
expenses. We grazed 6,000 head of cattle.
    We continue in a limited way to graze under the State of 
Nevada--in a cooperative agreement with the State of Nevada and 
the Bureau of Reclamation, we currently graze less than 2,500 
head of cattle, and when that ground is transferred to the 
State, which is in the process of happening at the present 
time, it may be that we will not graze at all.
    Mr. Pearce. Ms. Roder, you said negotiations are not 
complete. As a watchdog group, would you all support the 
allocation of certain values to these properties that were 
previously taken? In other words, fairness exists from both 
directions. Would you all approve, if we added in the language 
of this bill, that the irrigation district would get the values 
of the previous properties that were taken from them without 
compensation?
    Ms. Roder. I think, Congressman, we need to look at what 
values have been assigned in terms of what has actually been 
paid by the irrigation district.
    I would also say I would love to have a 92-year loan from 
the Federal Government as well. I believe that they have 
received a lot of value from Federal taxpayers. I think that 
for most of us, living and paying high rents in D.C., we would 
like to have a $10-a-year rent as well.
    Some of the lands--and I do not know the situation with all 
of these lands associated with Lake Tahoe; I believe that may 
serve the needs of Truckee-Carson Irrigation District as well. 
I think we need to not rush to judgment in this instance and to 
look at withdrawn lands and see how much that needs to be 
repaid to the Federal taxpayer, as opposed to setting a 
precedent in which hundreds of other transfers throughout the 
West can occur.
    Mr. Pearce. I appreciate that, and I think it does not deal 
with the fact that there are hundreds of thousands of 
transactions daily that benefit people with no investment of 
their own, either private individuals or nonprivate. I think if 
you look at the FEMA rebuilding of areas that are flooded and 
areas hit by tornadoes, you see very low-interest loans for a 
variety of reasons. Very few of those have any public benefit; 
and it seems like your answer--I did not quite hear it, but I 
think your answer is that fairness does not exist both ways.
    If the Federal Government wants to take property, it can do 
just that, and it does not have to be accountable; but you, as 
a watchdog group, would hold them accountable if they do not 
exact from certain people some value.
    It is curious that we are going to hold an irrigation 
district, that is trying to actually operate a Federal facility 
to a standard that we are not holding people to. Almost all of 
the lakes that the Bureau of Reclamation owns, they lease 
property to individuals around that lake for very small sums, 
probably exactly $10 a year, maybe less, and they built 
personal residences to no benefit of an area, the economy of an 
area.
    So if we are going to apply your standards, we should apply 
them much more broadly than what you seem to be willing to do.
    Ms. Roder. I agree with you completely, Congressman. 
Certainly, when we are rebuilding with flood insurance, which 
is one thing you brought up, we agree completely that we should 
not keep rebuilding, year after year, flooded-out folks. I 
think we would agree with you and would be willing to talk 
about some of the valuations of other lands that we are 
leasing; and certainly throughout the West we have similar 
issues.
    Today the topic that I have been called upon to testify on 
is this particular land transfer, but we are more than eager to 
work with you on other things of this nature.
    Mr. Pearce. Thank you.
    My final comment is that when watchdog groups watch 
directions, both the heavy-handed Federal Government and the 
lack of getting value, it tends to have a little more zip to 
it.
    Thank you, Mr. Chairman.
    Mr. Osborne. Thank you, Mr. Pearce.
    Mr. Hill, when you say you want reclamation assistance to 
get through the beginning parts of this study, what do you 
mean?
    Mr. Hill. Mr. Chairman, what we are looking for is a couple 
of things.
    We use the Bureau to assist us in developing the scope for 
the feasibility study, and we also need to have them start us 
off preparing the notice of intent so they can be involved in 
the project from the very beginning. We have been working with 
them on a short, sort of a limited basis, and we need to 
continue doing so; but they need to be authorized before we can 
proceed ahead with the NEPA process. It is a formality that we 
have to have.
    Mr. Osborne. Do you have any specific dollar amount that 
you are looking for?
    Mr. Hill. I do not have a dollar amount that I am looking 
for. I was not really looking for a significant amount of 
funding. I have spoken with the local Bureau people who have 
been working on the project, and for this very first initial 
part of it, we would be talking probably in the range of tens 
of thousands of dollars, a limited amount of money. But I don't 
have a specific request.
    Mr. Osborne. Thank you, Mr. Hill. I imagine the more 
specificity we have the better, but we appreciate your 
testimony.
    Mr. Pearce, did you have any further questions?
    Mr. Pearce. No, Mr. Chairman.
    Mr. Osborne. I thank the witnesses for their valuable 
testimony and members for their questions. Members of the 
Subcommittee may have some additional questions for the 
witnesses, and we will ask you to respond to those in writing. 
The hearing record will be held open for 10 days for these 
responses.
    If there is no further business before the Subcommittee, I 
again thank the members of the Subcommittee and the witnesses, 
and the Subcommittee stands adjourned.
    [Whereupon, at 3:40 p.m., the Subcommittee was adjourned.]

    [A statement submitted for the record by U.S. Senator 
Gordon Smith follows:]

        Statement of The Honorable Gordon Smith, a U.S. Senator 
                        from the State of Oregon

    Mr. Chairman, I appreciate your convening this legislative hearing 
today to receive testimony on S. 625, a bill to authorize the Bureau of 
Reclamation to conduct certain feasibility studies in the Tualatin 
River Basin in Oregon. As you know, this bill--which I sponsored and is 
cosponsored by my colleague Senator Wyden--passed the Senate on June 
16, 2003.
    There is an existing federal Reclamation project in the Tualatin 
River Basin, which is a rapidly growing area west of Portland. 
Developed in 1975, Hagg Lake--the impoundment behind Scoggins Dam--
provides water for river flow restoration, municipal water supplies, 
and agricultural irrigation throughout the Tualatin River watershed. 
The lake also provides recreational opportunities, with park and 
recreational facilities operated by Washington County.
    The Tualatin River watershed contains the urbanized portion of 
Washington County, which includes the cities of Beaverton, Banks, 
Cornelius, Forest Grove, Hillsboro, North Plains, Sherwood, Tigard and 
Tualatin. This area, home to approximately 450,000 people, almost 
doubled its population in the last 20 years, and this trend is expected 
to continue.
    To better manage the existing resources of the Tualatin River Basin 
and to meet future water needs, several cities and districts partnered 
in 1997 to develop an Integrated Water Resources Management Strategy. 
This work identified the following areas of challenge in meeting future 
water supply needs: municipal and industrial demands that are expected 
to exceed supplies by 2011; maintaining existing irrigated agriculture; 
providing water for Spring Chinook salmon and steelhead populations 
recently listed under the Endangered Species Act; and providing 
additional flows to restore river flow and improve water quality, since 
the Tualatin River and its tributaries are considered water quality-
limited under the Clean Water Act.
    This bill is an important first step in helping these communities 
meet these future water supply challenges. It would authorize the 
Bureau of Reclamation to conduct feasibility studies in the Basin, in 
cooperation with the local communities which are already contributing 
significant financial resources to addressing these needs.
    It is imperative that these studies move forward expeditiously, 
since water supplies in the basin will be strained within 10 years. The 
Bureau of Reclamation actually sought funding for this study in its 
Fiscal Year 2002 and 2003 budget requests. Since that time, it has 
determined that it lacks sufficient authority to conduct these studies, 
which is why this bill is needed at this time.
    Mr. Chairman, I appreciate your willingness to conduct this 
legislative hearing on this issue of importance to so many of my 
constituents, and to the businesses that employ them.

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