[Senate Hearing 111-339]
[From the U.S. Government Publishing Office]



 
                                                        S. Hrg. 111-339
                       MISCELLANEOUS WATER BILLS

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



                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   ON
                                     

                            S. 1757

                            S. 1758

                            S. 1759



                                     

                               __________

                            NOVEMBER 5, 2009


                       Printed for the use of the
               Committee on Energy and Natural Resources



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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                  JEFF BINGAMAN, New Mexico, Chairman

BYRON L. DORGAN, North Dakota        LISA MURKOWSKI, Alaska
RON WYDEN, Oregon                    RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota            JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana          SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington           JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey          JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan            BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire

                    Robert M. Simon, Staff Director
                      Sam E. Fowler, Chief Counsel
               McKie Campbell, Republican Staff Director
               Karen K. Billups, Republican Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                   DEBBIE STABENOW, Michigan Chairman

BYRON L. DORGAN, North Dakota        SAM BROWNBACK, Kansas
TIM JOHNSON, South Dakota            JAMES E. RISCH, Idaho
MARIA CANTWELL, Washington           JOHN McCAIN, ARIZONA
BLANCHE L. LINCOLN, Arkansas         ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont             JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   JEFF SESSIONS, Alabama
JEANNE SHAHEEN, New Hampshire

    Jeff Bingaman and Lisa Murkowski are Ex Officio Members of the 
                              Subcommittee


                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Bennett, Hon. Robert F., U.S. Senator From Utah..................     8
Boxer, Hon. Barbara, U.S. Senator From California................     6
Candee, Hamilton, Altshuler Berzon LLP, Representing Grassland 
  Water District, San Francisco, CA..............................    29
Connor, Michael L., Commissioner, Bureau of Reclamation, 
  Department of the Interior.....................................    11
Feinstein, Hon. Dianne, U.S. Senator From California.............     3
McIntyre, Martin R., General Manager, San Luis Water District, 
  Los Banos, CA..................................................    20
Stabenow, Hon. Debbie, U.S. Senator From Michigan................     1

                               APPENDIXES
                               Appendix I

Responses to additional questions................................    41

                              Appendix II

Additional material submitted for the record.....................    55


                       MISCELLANEOUS WATER BILLS

                              ----------                              


                       THURSDAY, NOVEMBER 5, 2009

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:35 p.m. in 
room SD-366, Dirksen Senate Office Building, Hon. Debbie 
Stabenow presiding.

 OPENING STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM 
                            MICHIGAN

    Senator Stabenow. It's my pleasure to call the subcommittee 
to order. Our Ranking Member Senator Bennett will be joining us 
right now. Welcome. That's wonderful. That was great timing.
    Senator Bennett. Thank you.
    Senator Stabenow. Some great timing. It's my pleasure to 
welcome everyone to the hearing today. We have 3 separate bills 
pending before the subcommittee.
    Senator Bennett is here as our ranking member. We'll hear 
about 2 bills that he is sponsoring. In addition we're very 
pleased to have Senator Feinstein, Senator Boxer here with us 
today, who have introduced a bill and will speak to the 
committee about that bill as well.
    Our bills today cover several different subjects in the 
area of water resources management.
    S. 1757 introduced by Senator Bennett will allow the 
prepayment of amounts due to repay the United States for 
construction costs relating to a portion of the central Utah 
project.
    A second bill is Senator Bennett's and Senator Hatch's will 
reallocate certain costs associated with the development of 
hydroelectric power within the Bonneville unit of the central 
Utah project.
    S. 1759 introduced by Senator Feinstein and Senator Boxer 
relating to transfers of water between water contractors within 
the Central Valley project in California.
    So we look forward to your testimony. I now turn it over to 
Senator Bennett for his comments.
    Senator Bennett. Thank you, Madame Chairman. I will 
withhold, in deference to our 2 colleagues who are here. Let 
them talk about their bills first, or their bill. Then I'll 
launch into the fascinating description of the intricacies of 
the Central Utah project after they're through.
    Senator Stabenow. Alright. We will take that. We're pleased 
to have Senator McCain here as well. If you had a brief opening 
comment, we would welcome that as well.
    Senator McCain. No, Madame Chairman. I thank you for having 
this hearing. I thank our witnesses.
    This is a real emergency crisis in California of 
proportions the likes of which we have not seen in that State. 
Arizona and California share many challenges and water is one 
of them. This situation argues for action as quickly as 
possible.
    I thank you for holding the hearing. I appreciate the 
witnesses, all of them, being here today.
    Senator Stabenow. Thank you. Let's begin with Senator 
Feinstein. Welcome.
    [The prepared statement of Mr. Costa follows:]

    Prepared Statement of Hon. Jim Costa, U.S. Representative From 
                         California, on S. 1759
    On October 7, 2009, I joined with Congressman Cardoza in the House 
of Representatives and Senators Feinstein and Boxer in the Senate to 
introduce the ``Water Transfer Facilitation Act of 2009.'' This 
legislation builds upon and makes permanent the language that we passed 
in the Energy and Water Appropriations bill, which was originally 
limited to only two years. The Water Transfer Facilitation Act of 2009 
is one step in a host of efforts to bring more water to the San Joaquin 
Valley amidst of a three-year drought and ongoing water crisis. Given 
the severity of California's water crisis and the need for short-term 
solutions to prepare for the coming growing season., I thank Chairwoman 
Stabenow for moving quickly to hold this hearing and I am pleased to 
participate by submitting this testimony today.
    The immediate impacts of the Delta smelt biological opinion have 
directly contributed to the devastation of the Westside of the San 
Joaquin Valley in my Congressional District. Water supply reductions 
coupled with an economic downturn has led to overwhelming unemployment 
in Valley cities, reaching as high as 30% and 40%. With tens of 
thousands of jobs lost and approximately 500,000 acres of some of our 
nation's most productive farmland fallowed, the Westside has been 
absolutely devastated. Given that this region supplies the nation with 
nearly half of its fresh fruits and vegetables, this is a cris that not 
only threatens our local communities, but also the security of our 
nation's food supply. Of equal concern to the farmers and farmworkers 
in the San Joaquin Valley is the shadow of the salmon, green sturgeon 
and steelhead biological opinion that will reduce future water 
deliveries, and the livelihood they depend on.
    This legislation is intended as a critical lifeline to reduce 
unnecessary delays in water transfers at a time when San Joaquin Valley 
farmers have been hardest hit by water supply reductions due to both 
changes in hydrology and regulatory restrictions. It would allow for 
new water transfers of an estimated 250,000 to 300,000 acre-feet of 
water per year, depending on the water year. The bill would grant the 
Bureau of Reclamation the authority to approve voluntary water 
transfers between sellers and buyers within the Valley. It would also 
streamline environmental reviews for water transfers by ensuring that 
they occur on a programmatic basis, instead of the current project-by-
project basis.
    Transferring water between aand within counties is a vital tool for 
water districts and indivudal farmers during periods of drought. While 
I have consistently maintained that the best solution would be to have 
the federal and state pumps fully operational, the inflexibility of the 
Endangered Species Act has left us with limited solutions until it can 
be successfully modified. This legislation makes permanent the ability 
to transfer water to our Valley's farms when it is most needed, 
therefore providing our farmers with interim solutions and allowing 
them to continue to grow crops and support our local economy. More will 
need to be done to protect the Valley's water on a short, mid, and 
long-term basis, and I will continue that fight.

                                ------                                


       STATEMENT OF HON. DIANNE FEINSTEIN, U.S. SENATOR 
                        FROM CALIFORNIA

    Senator Feinstein. Thank you very much. I appreciate being 
able to do this promptly as does Senator Boxer because I have 
to chair Intelligence at 3. I know she has commitments as well. 
So thank you very much.
    Senator Bennett, good to see you again and Senator McCain 
as well.
    The bill, this bill which is co-sponsored by Senator Boxer 
would facilitate additional water transfers of up to 250,000 to 
300,000 acre feet in California's Central Valley which has been 
particularly hard hit by prolonged drought. It does so by 
granting new authority to the Bureau of Reclamation to approve 
voluntary water transfers. By simplifying and expediting 
environmental reviews for Central Valley water transfers.
    I think this is a reasonable and timely way to mitigate the 
most important impacts of a water crisis in California. 
California is in its third year of a prolonged drought 
primarily caused by depleted seasonal rainfalls. Right now key 
supply reservoirs are at 42 percent of capacity. The forecast 
for next year's runoff are very uncertain and not good.
    At the same time restrictions have been put in place that 
limit how much water can be sent south through the Sacramento-
San Joaquin delta pumps because of concerns about endangered 
and threatened species in the delta. This summer agricultural 
users on the west side of the San Joaquin Valley, these are the 
most junior water rights holders, received only 10 percent of 
their allocation from the Federal Central Valley project. 
That's the lowest ever in history.
    This week California legislators finally approved a viable 
water bond and a package of bills to address the water 
infrastructure problems of the State. Now that's a 
breakthrough. But it's going to take time. But the valley can't 
wait for a long term solution.
    The one thing we can do and I think without litigation or 
harassment in the short term is to facilitate voluntary water 
transfers. Moving water from those regions in the valley, 
generally the east side that have extra water to those that 
need it most, namely the west side. This past summer some water 
users in the San Joaquin Valley received their full allocation 
of Federal water while others, particularly those on the west 
side, had to fallow fields and cut down trees because there 
wasn't enough water to sustain crops.
    Westlands Water District for example, comprises more than a 
half a million acres of some of the most productive farmland in 
the country. But more than half, 220,000 acres were fallowed 
last summer. To date, the Bureau of Reclamation has authorized 
transfers of 600,000 acre feet of water around the Central 
Valley.
    But more could have been available had the agency developed 
a more efficient process for considering and improving 
voluntary transfers. That's what this bill would do. There are 
3 key parts.
    The first would provide new authority for the Bureau to 
permit San Joaquin Valley water transfers. It removes 2 
restrictions from the CVPIA, California Valley Project 
Improvement Act, for transfers of water. Those restrictions 
unnecessarily limit the amount of water people can transfer 
even if they were all in the San Joaquin Valley or within the 
same division of project contractors.
    This legislation eliminates those obstacles and allows 
those transfers to occur. So that water can be moved back and 
forth based on need, provided all other conditions of the CVPIA 
and other environmental laws, are met. These conditions are 
already waived for transfers within the same watershed. The 
Bureau estimates that this first provision could make up to 
100,000 to 150,000 acre feet of water available for transfer.
    The second key provision directs Interior to facilitate 
transfers throughout the Central Valley by doing programmatic 
environmental review rather than individual review on each 
transfer which only holds everything up. If you can evaluate it 
environmentally as a program, that makes the best sense. This 
past year the process was so complicated and uncertain that 
many water users just simply didn't apply for transfers. We 
need to ensure that willing sellers are not kept from willing 
buyers by red tape.
    The Bureau has already committed to address this. And this 
bill ensures that it does so expeditiously without waving any 
environmental laws. Water users and Reclamation estimate that 
this provision could facilitate up to 150 to 200,000 acre feet 
of transfers a year.
    The third and final provision requires the Department to 
make recommendations on how to facilitate future water 
transfers more efficiently and expeditiously.
    Now I know that transfers alone cannot provide the entire 
solution. They're costly. They're still constrained by pumping 
restrictions, State law and the very real limits of our water 
supply infrastructure.
    Yet, I really believe this legislation will provide much 
needed help at a time of great hardship and controversy. It is 
supported by many water users including and I'd ask that these 
letters, Madame Chairman, be put in the record.
    Senator Stabenow. Without objection.
    Senator Feinstein. The San Luis Water District, The Conaway 
Preservation Group, The Westlands Water District, Reclamation 
District 2035 out of Woodland, California, The Association of 
California Water Agencies, The San Joaquin River Exchange 
Contractors, The San Luis and Delta Mendota Water Authority, 
The Banta Carbona Irrigation District, The Northern California 
Water Association, The Tehama Colusa Canal Authority, Friant 
Water Users, which is a main source of water transfer, Glen 
Colusa Irrigation District and 2 page letter, again Friant.
    So if those could go in the record I would appreciate it 
very much.
    Senator Stabenow. Without objection.
    Senator Feinstein. Now, just to conclude this is, in my 
view, after spending a great deal of time on this and other 
areas of water in California the most prudent thing we can do 
to handle a problem that may be more exacerbated next year. 
It's viable. It's voluntary transfers. It's from people who 
have enough water who are willing to transfer it to those who 
do not.
    So there should be no objection to this legislation as a 
very practical kind of no nonsense way to facilitate water use 
in a valley that's really hard pressed as Senator McCain 
correctly stated.
    [The prepared statement of Senator Feinstein follows:]

    Prepared Statement of Hon. Dianne Feinstein, U.S. Senator From 
                               California
    Chairman Stabenow, Senator Bennett and Members of the Subcommittee, 
let me thank you for holding a hearing on the ``Water Transfer 
Facilitation Act.''
    This bill, which is cosponsored by Senator Boxer, would facilitate 
additional water transfers of up to 250,000 to 300,000 acre-feet in 
California's Central Valley--which has been particularly hard hit by 
the prolonged drought. It does so by granting new authority to the 
Bureau of Reclamation to approve voluntary water transfers, and by 
simplifying and expediting environmental reviews for all Central Valley 
water transfers.
    I believe that this is a reasonable and timely way to mitigate the 
most urgent impacts of the water crisis in California. And I appreciate 
the opportunity to brief you on this critical bill.
                       the present water shortage
    California is in the third year of a prolonged drought, primarily 
caused by depleted seasonal rainfalls. Right now, key supply reservoirs 
are at only 69 percent of average and 42 percent of capacity. And the 
forecasts for next year's runoff are very uncertain.
    At the same time, restrictions have been put in place that limit 
how much water can be sent south through the Sacrament-San Joaquin 
Delta pumps, because of concerns about endangered and threatened 
species.
    This summer, agricultural users on the west side of the San Joaquin 
Valley--the most junior water rights holders--received only 10 percent 
of their allocation from the federal Central Valley Project, the lowest 
ever.
    This week, California legislators finally approved a viable water 
bond and a package of bills to address California's water 
infrastructure problems. This was a major breakthrough. But the Valley 
can't wait for a long-term solution--they need help now.
                        water transfers can help
    One thing we can do to help in the short-term is facilitate 
voluntary water transfers, moving water from those regions in the 
Valley that have extra water to those that need it most.
    This past summer, some water users in the San Joaquin Valley 
received their full allocation of federal water, while others, 
particularly those on the Westside, had to fallow fields and cut down 
trees because there wasn't enough water to sustain crops. Westlands 
Water District, for example, comprises more than 500,000 acres of some 
of the most productive farmland in the country, but more than 220,000 
acres were fallowed last summer.
    To date, the Bureau of Reclamation has authorized transfers of 
600,000 acre-feet of water around the Central Valley--but more could 
have been available had the agency developed a more efficient process 
for considering and approving transfers.
    And that's exactly what this bill would do.
                          waiving restrictions
    There are 3 key parts to the legislation.
    The first provision would provide new authority for the Bureau of 
Reclamation to permit San Joaquin Valley water transfers. It removes 2 
restrictions from the Central Valley Project Improvement Act for 
transfers of water. Those restrictions unnecessarily limited the amount 
of water people could transfer even if they were all in the San Joaquin 
Valley, or within the same Division of project contractors.
    This legislation eliminates those obstacles, and allows these 
transfers to occur, provided all the other conditions in the Central 
Valley Project Improvement Act and other environmental laws are met. 
These conditions are already waived for transfers within the same 
watershed.
    The Bureau of Reclamation estimates that this first provision could 
make up to 100,000 or 150,000 acre-feet of water available for 
transfer.
            expediting and streamlining environmental review
    The second key provision directs Interior to facilitate transfers 
throughout the Central-Valley by doing programmatic environmental 
review, rather than individual review on each transfer (as is current 
practice).
    This past year, the process was so complicated and uncertain that 
many water users didn't apply for transfers. We need to ensure that 
willing sellers are not kept from willing buyers by red tape. The 
Bureau has already committed to address this. This bill ensures that it 
does so expeditiously without waiving any environmental laws.
    Water users and Reclamation estimate that this provision could 
facilitate up to 150,000 or 200,000 acre-feet of transfers each year.
    The third and final provision requires the Department to make 
recommendations on how to facilitate future water transfers more 
efficiently and expeditiously.
                               conclusion
    I know that transfers alone cannot provide the entire solution--
they are costly, and they are still constrained by pumping 
restrictions, state law, and the very real limits of our water supply 
infrastructure.
    Yet I believe this legislation will provide some much needed help 
at a time of great hardship and controversy. It is supported by many 
water users--and I ask that their letters of support be included in the 
record. I recognize that some Valley stakeholders have concerns about 
specific language, but I am confident that we can resolve these issues 
by working together.
    In the meantime, I will continue to work on additional short-term 
and long-term solutions, and I look forward to working with the 
Committee on them.
    Again, I thank the Chair and the Members of the Subcommittee for 
devoting their time this afternoon to considering this legislation. 
Thank you.

    Senator Stabenow. Thank you very much, Senator Feinstein. I 
know this is an extremely serious issue.
    Senator Feinstein. Thank you.
    Senator Stabenow. Welcome Senator Boxer.

         STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR 
                        FROM CALIFORNIA

    Senator Boxer. Thank you so much, Madame Chairman. Thank 
you very much, Senator Bennett, Senator McCain, for being here.
    Yes, this bill S. 1759 is called the Water Transfers 
Facilitation Act of 2009. I'll try not to be repetitive. My 
colleague was very clear on what this does. Simply put Senator 
Feinstein and I have introduced this legislation to facilitate 
voluntary water transfers within the San Joaquin Valley.
    Friends, this is about getting water where it is needed, 
when it is needed. It is common sense. It's about finding ways 
we can all come together to find pragmatic solutions to the 
crisis of the drought rather than everyone just going into 
their corners.
    I want to point out that anyone who knows the history of 
California knows that when it comes to water people tend to go 
to their corners. We're trying to break through. In that regard 
I wanted to show some bipartisan support.
    I can assure you that Senator Feinstein, the letters that 
you put in there, some of those individuals signing those are 
Republicans, some are Democrat, some are independent. We have a 
letter here today to both of us from Senator, from, I'm sorry, 
Governor Arnold Schwarzenegger writing to express his support 
for our bill. So we feel really good about this.
    We feel this isn't the be all and end all. But this is a 
very good step. Three years of below average precipitation have 
restricted water supplies.
    We know in agricultural communities in the San Joaquin 
Valley, where more than 500,000 acres of crop land have been 
fallowed, there's an economic struggle going on. And that's why 
we're moving and hopefully swiftly. We're deeply concerned 
about the crisis and the impacts of it.
    This legislation, as we said, will facilitate these water 
transfers among some of the water users. You heard about some 
of them.
    It will improve flexibility in water management.
    It will provide water to those communities who need it 
most.
    I want to thank Representatives Cardoza and Costa. They 
worked with us to include a measure in the Energy and Water 
Appropriations bill that temporarily allowed these voluntary 
water transfers between water users on the east and west side 
of the San Joaquin Valley. This provision became law last week.
    All of the affected water districts negotiated and 
supported that amendment. Again, that's unusual. I'm very 
pleased.
    In addition to being so grateful to my colleague, I am so 
grateful to Senator Bingaman. He worked with us on that 
amendment. He committed to hold these prompt hearings. Madame 
Chairman, you were so gracious to set it at a time that we 
could both be here.
    This bill builds upon the provisions that we got in there 
for 2 years. It would make it permanent. The water users on the 
east and west sides of the valley, again, have written very, 
very strong letters that Senator Feinstein has put in the 
record. The Governor has, and as Senator Feinstein has stated, 
this is signaling kind of new day for us. We've had some 
breakthroughs in the legislature in California.
    Farmers who have excess amounts of water now have to fallow 
their fields in order to transfer water to other farmers. Our 
legislation would provide flexibility to move water around the 
valley. The bill directs, as you heard, the Department of the 
Interior to use a more pragmatic approach to environmental 
review so that all the transfers will still have to undergo 
applicable reviews, but they'll be conducted in a more 
efficient and timely fashion.
    I want to close just by reiterating that the Bureau of 
Reclamation has told us in writing through email that the 
Feinstein/Boxer legislation will transfer as much as 250,000 to 
300,000 acre feet of water per year to communities in need. 
This is 130 to 150 percent more water than the west side got 
from the Federal water project last year. To put this amount 
into perspective 300,000 acre feet of water would serve 600,000 
typical families for 1 year. So this is not a trivial transfer.
    I am committed to working with the committee, the 
Administration, my colleagues and all of our stakeholders to 
advance this bill. I can't thank you enough, both of you. I 
feel, we feel, so strongly that this would send such a good 
signal to our people back home that we're thinking about them 
and we're going to take moves to ease their problems.
    Thank you very much.
    [The prepared statement of Senator Boxer follows:]

 Prepared Statement of Hon. Barbara Boxer, U.S. Senator From California
    Madam Chairman, thank you for holding this hearing today to discuss 
S. 1759, the Water Transfers Facilitation Act of 2009. Senator 
Feinstein and I have introduced this legislation to facilitate 
voluntary water transfers within the San Joaquin Valley.
    This is about getting water where it's needed, when it's needed. 
It's about finding ways we can all come together to find pragmatic 
solutions to the water crisis, rather than everyone just going to their 
corners.
    Three years of below-average precipitation have restricted water 
supplies for much of California. Drought conditions have particularly 
affected agricultural communities in the San Joaquin Valley, where more 
than 500,000 acres of cropland have been fallowed, further compounding 
existing economic struggles in this region.
    I am deeply concerned about this crisis and the impact it is having 
on agricultural communities in the San Joaquin Valley. That's why 
Senator Feinstein and I joined to introduce the Water Transfers 
Facilitation Act of 2009. This legislation will facilitate voluntary 
water transfers among some water users in the San Joaquin Valley, 
improving flexibility in water management and providing water to those 
communities who need it most.
    Senator Feinstein and I worked with Representatives Cardoza and 
Costa to include a measure in the Energy and Water appropriations bill 
that temporarily allowed voluntary water transfers between water users 
on the east and west sides of the San Joaquin Valley. This provision 
became law last week. All of the affected water districts negotiated 
and supported that amendment, and I am very pleased.
    I am grateful to Senator Bingaman for not only working with us on 
that amendment but also for committing to hold prompt hearings on 
permanent legislation building upon that successful amendment. The 
Feinstein-Boxer Water Transfers Facilitation Act of 2009 permanently 
extends and builds upon the provisions in the 2-year Energy and Water 
appropriations amendment.
    The water users on the east and west sides of the valley who will 
benefit from this legislation have written many strong letters of 
support for the Feinstein-Boxer bill, as has the Governor of 
California, and I ask unanimous consent that these letters be entered 
into the record.
    Now, farmers who have excess amounts of water need to fallow their 
productive fields in order to transfer water to other farmers 
experiencing shortages. Our legislation provides more flexibility to 
move water around the valley.
    The bill also directs the Department of the Interior to use a more 
pragmatic approach to environmental review for water transfers so that 
appropriate transfers can be approved more quickly. Transfers will 
still have to undergo all applicable reviews, but those will be 
conducted in a more efficient and timely way.
    Finally, the legislation requires the Department of the Interior to 
prepare a report and submit recommendations on how to facilitate water 
transfers throughout California, including between the state and 
federal water projects. This will guide future efforts to improve the 
flexibility of water management statewide.
    The Bureau of Reclamation has told us that the Feinstein-Boxer 
legislation will transfer as much as 250,000 to 300,000 acre-feet of 
water per year to communities in need. This is 130 to 150 percent more 
water than the west side got from the federal water project last year. 
To put this amount into perspective, 300,000 acre-feet of water would 
serve 600,000 typical families for one year.
    I am committed to working with the Committee, the Administration, 
and our stakeholders to advance the Water Transfer Facilitation Act of 
2009. I thank the Committee for considering this important legislation, 
and look forward to working with my colleagues to secure its passage 
through the Senate.

    Senator Stabenow. Thank you, Senator Boxer. I look forward 
to working with Senator Bennett, with Chairman Bingaman as we 
move forward on this legislation. I know this is a crisis for 
California as well as surrounding areas.
    So we thank you for your leadership on this important 
issue.
    Senator Boxer. Thank you. Thank you.
    Senator Stabenow. Given the time I know that both of you 
need to be excused. So we appreciate your coming and your 
testimony. Before moving on to Mike Connor, the Commissioner of 
Reclamation, I'd like to turn now to Senator Bennett to speak 
about the 2 bills that he's sponsoring before the committee.

  STATEMENT OF HON. ROBERT F. BENNETT, U.S. SENATOR FROM UTAH

    Senator Bennett. Thank you very much, Madame Chairman.
    S. 1757 grants prepayment authority to the Uintah Water 
Conservancy District for its contract with the U.S. Bureau of 
Reclamation for construction of the Jensen unit of the Central 
Utah project. Those that are familiar with Utah names will 
recognize all of those. Others will find them completely new.
    But the Jensen unit provides municipal, industrial and 
irrigation water to the city of Vernal and surrounding areas. 
It's been, it was completed in the 1980s. Now in the 1980s we 
had the bust side of the boom and bust cycle in energy prices 
and exploration.
    There's a lot of energy in the Uintah basin where Vernal 
is. We were in the bust. The conservancy district amended their 
agreement with the Bureau to reduce the amount of subscribed 
water.
    Now we've gotten into the boom side when the price of oil 
went back up. The Uintah basin has seen unprecedented growth in 
energy development industry. That means an increased demand for 
municipal and industrial water.
    Besides considering completion of the Burns Bench pump 
station, the district in this circumstance has re-evaluated its 
financial arrangement with the Bureau and decided that it would 
be beneficial to pay the remainder of its contract obligations 
to the Bureau early. That may be a little different than we 
usually hear around here that somebody wants to give the 
Federal Government some money.
    But S. 157--pardon me, S. 1757 would allow the districts to 
prepay the contract by 2019 instead of requiring the payment be 
stretched out until 2037. Included in the bill is a requirement 
that the district pays the present value of the whole amount 
without early repayment. So that keeps the Federal Government 
whole on the issue.
    It's good for the conservancy district. It's good for the 
Federal Government. I would hope it would not be particularly 
controversial.
    Now the second bill, S. 1758, would indefinitely defer sunk 
costs assigned to power generation in the central Utah project. 
We would do this because it will allow for economical 
development of 50 megawatts of hydropower on the Diamond Forks 
system of the Bonneville unit. The Colorado River storage 
project allowed for power development and allocated system 
costs for repayment and these costs have grown over time and 
now make any hydropower facility developed at Diamond Fork $161 
million in the hole before any dirt has been turned.
    So if we want the power and we do. S. 1758 would 
indefinitely defer power allocation costs similarly to the 
costs associated with municipal and industrial water which were 
deferred and then prepaid in 2005. This is a pattern that we've 
seen before. By permanently affixing and deferring system wide 
costs that have been allocated for repayment by power features, 
hydroelectric power generation at Diamond Forks system can go 
ahead and will become economic.
    So that is the purpose of the second bill. As I said, I am 
sure everybody found that fascinating. But it is important to 
the people in Utah. I believe be a good deal for the Federal 
Government as well.
    Thank you for allowing me to go through that explanation. I 
look forward to spending time with our witnesses on all 3 of 
these bills, the 2 Utah bills and the California bill.
    Senator Stabenow. Thank you, Senator Bennett. Possibly the 
prepayment bill could start a trend. I don't know. But we----
    Senator Bennett. I'm not holding my breath.
    [Laughter.]
    [The prepared statement of Senator Bennett follows:]

  Prepared Statement of Hon. Robert F. Bennett, U.S. Senator From Utah
   Thank you all for being here. It is with great pleasure that 
        I have the opportunity to act as the ranking member of this 
        hearing on 2 necessary Utah bills, S. 1757 and S. 1758, and S. 
        1759, that addresses some of the water challenges faced by 
        farmers in the Central Valley of California.
S. 1757
   S. 1757 grants prepayment authority to the Uintah Water 
        Conservancy District (UWCD) for its contract with the U.S. 
        Bureau of Reclamation (BOR) for construction of the Jensen Unit 
        of the Central Utah Project. The Jensen Unit provides 
        municipal, industrial, and irrigation water to Vernal and the 
        surrounding communities and has since its completion in the 
        1980's.
   Due to economic hard times in Uintah County in the mid- to 
        late `80s, the conservancy district amended their agreement 
        with the Bureau of Reclamation to reduce the amount of 
        subscribed water.
   Since then, the Uintah Basin has seen unprecedented growth 
        in the energy development industry and demand has increased for 
        municipal and industrial (M&I) water from the UWCD. Besides 
        considering completion of the Burns Bench pump station, the 
        district has reevaluated its financial arrangement with BOR and 
        found that it would be beneficial to pay the remainder of its 
        contract obligations early.
   S. 1757 would allow the UWCD to prepay the contract by 2019 
        instead of requiring the payment until 2037. Included in the 
        bill, is a requirement that UWCD pays the present value of the 
        whole amount due without early repayment, thus keeping the 
        federal government whole.
   S. 1757 is good for both the conservancy district and the 
        federal government. The federal government would receive 
        payment early and would be kept whole in relation to present 
        value of the contract obligation, while UWCD would be allowed 
        to reduce its long-term debt obligations.
S. 1758
   S. 1758 would indefinitely defer sunk costs assigned to 
        power generation in the Central Utah Project, allowing for 
        economical development of 50 megawatts of hydropower at the 
        Diamond Fork System of the Bonneville Unit.
   The Colorado River Storage Project (CRSP) allowed for power 
        development and allocated system costs for repayment. These 
        costs have grown over time and make any hydropower facility 
        developed at Diamond Fork $161 million in the hole before any 
        dirt has been turned.
   S. 1758 would indefinitely defer power allocation costs, 
        similarly to costs associated with municipal and industrial 
        water which were deferred and then prepaid by 2005.
   By permanently affixing and deferring system wide costs that 
        have been allocated for repayment to by power features, hydro 
        electric power generation at the Diamond Fork System will 
        become economic.
S. 1759
   I appreciate that Senator Feinstein and Senator Boxer are 
        here with us today.
   I recognize all the work that they have undertaken to find 
        solutions for many of the water challenges that California is 
        currently facing.
   S.1759 seeks to add some flexibility to California's water 
        system by streamlining the water transfer process and allowing 
        additional water transfers to occur within the central valley.
   Earlier this year, at their request, language was added to 
        the Energy and Water Appropriations bill, to provide a 
        temporary fix to allow water to be transferred in Central 
        Valley of California.
   The bill before us today provides additional authority for 
        these types of transfers to continue.
   As we discuss this bill today I look forward to hearing 
        whether these water shortages are mainly caused by drought, or 
        if, as we have heard on the Senate Floor several weeks ago, 
        caused by federal regulations.
Conclusion
   Once again, I thank the witnesses for your presence and 
        thank you, Senator Stabenow, for conducting this hearing. I 
        look forward to hearing the testimony today.

    Senator Stabenow. Thank you very much for your leadership 
on these 2 bills.
    We welcome Mike Connor, the Commissioner of Reclamation, 
who is going to speak about all 3 of the bills that are on our 
agenda today. We welcome you, Commissioner Connor. We'd 
appreciate if you take 10 minutes to summarize your testimony. 
Then we will have a few questions.
    Thank you.

    STATEMENT OF MICHAEL L. CONNOR, COMMISSIONER, BUREAU OF 
            RECLAMATION, DEPARTMENT OF THE INTERIOR

    Mr. Connor. Thank you. Madame Chairwoman, Senator Bennett, 
I'm Mike Connor, Commissioner of the Bureau of Reclamation and 
I'm pleased to provide the views of the Department of the 
Interior on the 3 bills before the subcommittee today. As you 
note I will quickly provide a summary of those 3 bills and I've 
submitted my written statements for the record.
    The first bill is S. 1757, the Uintah Water District 
Repayment legislation mentioned by Senator Bennett. This 
legislation would allow for prepayment of the current and 
future repayment obligations of the Uintah Water Conservancy 
District in Utah. The Department supports S. 1757 and 
acknowledges improvements made to the bill since its passage by 
the House in September.
    The District's current contract from 1992 requires them to 
repay about $5.5 million through the year 2037 at the project 
interest rate of 3.2 percent with annual payments of about 
$226,000. My written statement provides more detail on this 
legislation. But in summary, the Department believes that the 
proposed legislation will provide for terms favorable to both 
the District and the United States and provide flexibility to 
address any future situations that could affect the District's 
ultimate repayment obligation as determined by a final cost 
allocation for the Jensen unit of the CUP.
    The second bill is S. 1758, the Bonneville Unit Clean 
Hydropower Facilitation Act. S. 1758 would facilitate the 
development of hydropower on the Diamond Forks system of the 
Utah project pursuant to the Central Utah Project Completion 
Act, otherwise known as CUPCA. The provisions of S. 1758 
increase the likelihood of private hydropower development by 
indefinitely deferring repayment of $161 million in 
reimbursable costs that would otherwise have to be repaid by a 
private developer of hydropower on the Diamond Forks system.
    Current law requires repayment of this $161 million in 
costs which were incurred in developing the Diamond Forks 
system and allocated to the power generation purposes of the 
project. Since S. 1758 would defer responsibility for these 
costs it would effectively reduce the cost of private 
hydropower development at this site. The Department understands 
and appreciates the legislation's goal of facilitating the 
development of hydroelectric power on the Diamond Forks system.
    Nonetheless, the Administration has serious concerns about 
losing the ability to recoup the Federal investment made in 
these facilities. The Federal Government may benefit in the 
midterm from annual payments from the use of facilities that 
would paid if a leasee entered into a lease of power privilege 
arrangement as a result of this bill. We acknowledge that.
    These payments are estimated at $400,000 a year beginning 
the year of the project as completed continuing for the life of 
the project. However the long term fiscal implications are 
unclear as to how the Federal Government would be whole for the 
loss in repayment of the $161 million in sunk costs. We 
estimate the loss would amount to approximately $5.3 million a 
year for 50 years if hydropower could be developed under the 
current law. This concern is consistent with the views 
expressed before the House Natural Resources Committee in May 
earlier this year.
    The last bill I'll speak to is S. 1759, the Water Transfer 
Facilitation Act. The Department supports S. 1759 with minor 
modifications. The Central Valley of California is experiencing 
a third year of drought which has drained the resources of both 
the state water project and the Central Valley project.
    The prolonged drought coupled with environmental needs in 
the California Bay Delta region has created severe hardship 
especially to farmers, farm workers and related economies on 
the west side of the San Joaquin River Valley. The Department 
is cognizant of the need for creativity and flexibility in 
meeting the water demands of those served by the Central Valley 
project. Particularly during this period in which we are 
working toward long term solutions to California's water 
crisis.
    If enacted S. 1759 will strengthen Reclamation's ability to 
facilitate appropriate water transfers. This year in the CVP 
Reclamation has facilitated the transfer of over 600,000 acre 
feet of water by and among CV contractors as well as users of 
the State Water project. This has been a record for Reclamation 
since on average there are approximately 250,000 acre feet of 
transfers which are processed between the Central Valley 
project and the State Water project.
    Specifically within the CVP itself Reclamation has approved 
a total of 168 individual transfer totaling approximately 
435,000 acre feet of Federal contract water. All were 
accomplished within the accelerated water transfers program 
which are those within the same watersheds and counties. An 
additional 9,156 acre feet of water was transferred among 
Sacramento Valley contractors using transaction specific 
environmental documentation.
    Separate from the transfer program Reclamation approved the 
delivery of a large volume of water that was rescheduled or 
held over in storage from the 2008 water year. This was 
approximately 390,000 acre feet of water. As clear from this 
year's activity the Department supports facilitating the 
transfer of water to areas experiencing shortages.
    Reclamation does however have a continued obligation to 
ensure that transfers are not detrimental to the operations of 
the CVP, do not cause harm to third parties, including tribal 
interests and does not create adverse environmental 
consequences. To that end if S. 1759 is enacted, Reclamation 
will review its procedures and put in place effective and 
efficient administrative guidelines to ensure that the water 
transfers addressed by the bill can't take place consistent 
with other legal obligations that exist within the Central 
Valley project. This review will not, however, apply 
traditional consumptive use and historic use criteria pursuant 
to the terms of the bill.
    I would also like to note that S. 1759 may have some 
financial implications associated with its provisions. Because 
of the adversity of CVP contractors and the many different 
scenarios under which water transfers take place. However, 
Reclamation would only be able to fully calculate the financial 
impacts at the time of the given transfer. An example is 
provided in my written statement.
    Finally the Department recommends several technical 
corrections to the legislation as set forth in my written 
remarks. One of these corrections however, has already been 
addressed recently in the recently enacted 2010 Energy and 
Water Appropriations bill. This concludes my prepared remarks. 
I'm happy to answer any questions the Subcommittee may have.
    [The prepared statement of Mr. Connor follows:]

 Statement of Michael L. Connor, Commissioner, Bureau of Reclamation, 
                       Department of the Interior
                                s. 1757
    Madam Chairwoman and members of the Subcommittee, I am Mike Connor, 
Commissioner of the Bureau of Reclamation. Thank you for the 
opportunity to provide the Department of the Interior's views on S. 
1757. The legislation allows for prepayment of the current and future 
repayment contract obligations of the Uintah Water Conservancy District 
(District) of the costs allocated to their municipal and industrial 
water (M&I) supply on the Jensen Unit of the Central Utah Project (CUP) 
and provides that the prepayment must result in the United States 
recovering the net present value of all repayment streams that would 
have been payable to the United States if S. 1757 were not enacted. S. 
1757 would amend current law to change the date of repayment to 2019 
from 2037. The legislation would also allow repayment to be provided in 
several installments and requires that the repayment be adjusted to 
conform to a final cost allocation. The Department supports S. 1757.
    The District entered into a repayment contract dated June 3, 1976, 
in which they agreed to repay all reimbursable costs associated with 
the Jensen Unit of the CUP. However, pursuant to Section 203(g) of the 
Central Utah Project Completion Act of 1992 (P.L. 102-575) the 
District's contract was amended in 1992 to reduce the project M&I 
supply under repayment to 2,000 acre-feet annually and to temporarily 
fix repayment for this supply based upon an interim allocation 
developed for an uncompleted project. The 1992 contract required the 
District to repay about $5.545 million through the year 2037 at the 
project interest rate of 3.222% with annual payments of $226,585. The 
net present value of the amount remaining from this income stream 
starting in 2009 is $4,028,443.\1\
---------------------------------------------------------------------------
    \1\ All net present value figures cited in this testimony were 
calculated by discounting the payment stream to the year 2009 using the 
rate fro 30-year Treasury constant maturities for the week ending 
October 9, 2009. The exact net present value will fluctuate based on 
the date of the calcualtion and the Treasury rate.
---------------------------------------------------------------------------
    However, the costs allocated to the contracted M&I supply, and the 
M&I supply available through additional contract amendments, may be 
significantly revised in the future upon project completion and Final 
Cost Allocation. An additional currently unallocated cost of $7,419,513 
is expected to be allocated to the contracted 2,000 acre-feet.\2\ These 
are the costs that paragraph 3 of S. 1757 requires to be included in 
the prepayment. Assuming that the costs allocated to the contracted 
2,000 acre-feet will be increased by $7,419,513 with the reallocation 
in 2019, the net present value of the stream of benefits from this 
reallocation is $4,924,701. Therefore, under Reclamation's assumptions, 
the net present value of the total stream of benefits anticipated under 
this contract is $4,924,701 plus $4,028,443, or $8,953,144. The 
contracted M&I amount is $4.1 million and the adjustment amount is $7.4 
million. In total non-discounted dollars, the Conservancy District owes 
the Federal government $11.6 million.
---------------------------------------------------------------------------
    \2\ This allocation will be subject to revision should there be 
additions to the project.
---------------------------------------------------------------------------
    Under Reclamation law, water districts are not authorized to prepay 
their M&I repayment obligation based upon a discounted value of their 
remaining annual payments.
    This legislation would authorize early repayment by the Uintah 
Conservancy District to the Federal government. Because there is an 
interest component to the M&I repayment streams to be repaid early, 
early repayment without an adjustment for interest would result in 
lower overall repayment to the United States. To keep the United States 
whole, the Bureau of Reclamation would collect the present value of the 
whole amount that would be due without early repayment. Thus, given 
Reclamation's assumptions the present value of the payments collected 
under this legislation will be at least $8,953,144, although the 
legislation allows some flexibility in the timing of the repayment and 
under some scenarios the total amount due could be higher.
    The language in S. 1757 has been amended from the language 
contained in an earlier version of this legislation, H.R. 2950. The 
amended language clarifies that this legislation requires that the 
Federal government be paid what it is owed by the Conservancy District. 
Because the United States supports the goals of providing for early 
repayment under this contract, and S. 1757 clearly establishes that 
early repayment under this legislation must be of an amount equal to 
the net present value of the foregone revenue stream, the Department 
supports this legislation.
                                s. 1758
    Madam Chairwoman and members of the Committee, I am Michael Connor, 
Commissioner of the Bureau of Reclamation. I am pleased to be here 
today on behalf of the Assistant Secretary for Water and Science who 
oversees the Central Utah Project Completion Act activities to present 
the Administration's views on S. 1758, the Bonneville Unit Clean 
Hydropower Facilitation Act. The proposed legislation is associated 
with development of hydropower on the Diamond Fork System, Bonneville 
Unit, Central Utah Project.
    The Central Utah Project Completion Act (CUPCA) provides for the 
completion of the construction of the Central Utah Project (CUP) by the 
Central Utah Water Conservancy District (CUWCD). CUPCA also authorizes 
programs for fish, wildlife, and recreation mitigation and 
conservation; establishes an account in the Treasury for deposit of 
appropriations and other contributions; establishes the Utah 
Reclamation Mitigation and Conservation Commission to coordinate 
mitigation and conservation activities; and provides for the Ute Indian 
Water Rights Settlement.
    Hydropower development on CUP facilities was authorized as part of 
the Colorado River Storage Project Act (CRSPA) under which the Central 
Utah Project is a participating project. The development of hydropower 
on the Diamond Fork System has been contemplated since the early days 
of the CUP. The 1984 Environmental Impact Statement on the Diamond Fork 
System described the construction of five hydropower plants with a 
combined capacity of 166 MW of power.
    However, these hydropower plants were never constructed and the 
1999 Environmental Impact Statement on the Diamond Fork System 
presented a plan which specifically excluded the development of 
hydropower, stating `` . . . there are no definite plans or designs, 
and it is not known if or by whom they may be developed.''
    Although hydropower development was not included, construction of 
pipelines and tunnels for the Diamond Fork System were completed and 
put into operation in July 2004. Under full operation the Diamond Fork 
System will annually convey 101,900 acre-feet of CUP Water and 61,500 
acre-feet of Strawberry Valley Project Water.
    In 2002 CUPCA was amended to authorize development of federal 
project power on CUP facilities. With this new amendment plans for 
hydropower development at Diamond Fork were included in the 2004 Utah 
Lake System Environmental Impact Statement and the 2004 Supplement to 
the Definite Plan Report for the Bonneville Unit (DPR). These documents 
describe the construction of 2 hydropower plants on the existing 
Diamond Fork System for a total generating capacity of 50 MW.
    Section 208 of CUPCA included provisions that power on CUP features 
would be developed and operated in accordance with CRSPA and CUP water 
diverted out of the Colorado River Basin for power purposes would be 
incidental to other project purposes.
    There are 2 options for hydropower development on the Diamond Fork 
System: 1) federal project development or 2) private development under 
a Lease of Power Privilege contract with the United States.
    Under the first option the CUWCD would construct the Diamond Fork 
hydropower plants under contract with the United States and contribute 
an upfront local cost share of 35 percent of the construction costs. In 
addition to the hydropower construction costs, the costs associated 
with conveyance facilities upstream of the Diamond Fork would have to 
be repaid by the non-Federal project sponsors.
    The DPR allocates costs of the CUP according to project purposes. 
The reimbursable costs allocated to power are $161 million based upon 
the costs of developed features upstream of the Diamond Fork System. It 
is anticipated that under this option, these allocated costs would be 
repaid through an arrangement among Interior, CUWCD, and the Western 
Area Power Administration (WAPA).
    Under the second option, private hydropower could be developed. 
Although the DPR and 1999 EIS describe federal hydropower development, 
they also provide the option for a Lease of Power Privilege arrangement 
with the United States. Under this arrangement Interior would implement 
a competitive process to select a lessee for private development of 
hydropower at Diamond Fork. The lease arrangement would require 
repayment of the $161 million of upstream costs plus annual payments to 
the United States for the use of the federal facilities, amounting to 
at least a 3 mil rate paid by the lessee to the United States.
    S. 1758 does not preclude federal development of hydropower, but it 
does increase the likelihood of private development. If enacted, this 
bill would indefinitely defer the $161 million in costs allocated to 
power development in the Diamond Fork System under section 211 of 
CUPCA, thus reducing the cost of hydropower development at this site. 
This bill would increase the likelihood that a private developer would 
pursue a Lease of Power Privilege arrangement because the private 
developer would not, under this legislation, be required to repay the 
$161 million of construction costs that were allocated to power as 
would be required under existing law.
    We understand and appreciate the goal of this legislation of 
facilitating the development of hydroelectric power on the Diamond Fork 
System.
    However, the Administration has serious concerns about losing our 
ability to recoup the Federal investment made in these facilities as 
set forth in this legislation. The Federal government may benefit in 
the medium term from the annual payments for the use of Federal 
facilities that would be paid if a lessee entered into a Lease of Power 
Privilege arrangement for production of hydroelectric power on the 
Diamond Fork System. Assuming only a summer water supply as under 
current deliveries, these payments are estimated at about $400,000 a 
year starting the year that the project is completed and continuing for 
the life of the project. However, because payment of $161 million of 
allocated power costs would be postponed indefinitely, it is unclear 
what the long-term fiscal implications of enactment of this legislation 
would be and how the United States Treasury would be made whole. This 
legislation would potentially permanently postpone anticipated receipts 
to the U.S. Treasury at the expense of the Federal taxpayer. While it 
is not clear at this time whether a nonfederal developer would propose 
a hydroelectric project at Diamond Fork under current law, if this were 
to occur, repayment of the allocated power costs would begin after the 
hydroelectric project is completed and average $5.3 million a year for 
50 years.
    Section 5 of S. 1758 would prohibit the use of tax-exempt financing 
to develop any facility for the generation or transmission of 
hydroelectric power on the Diamond Fork System. This provision was 
added to the bill to prevent any loss of revenue to the federal 
government as a result of the financing mechanism used for development 
of hydropower at this site.
    Further analysis would help to determine whether this legislation 
to facilitate private development of hydropower at Diamond Fork would 
provide sufficient benefits to justify the costs.
                                s. 1759
    I am Mike Connor, Commissioner of the Bureau of Reclamation. I am 
pleased to be here today to provide the views of the Department of the 
Interior (Department) on S. 1759, the ``Water Transfer Facilitation 
Act.'' The Department supports S. 1759 with modification as explained 
below. Further analysis would help to determine the role that this bill 
could play in providing improved flexibility and efficiency for water 
management in the Central Valley.
    The Central Valley of California is experiencing a third year of 
drought which has strained the resources of both the State Water 
Project under the jurisdiction of the State of California, and the 
Central Valley Project (CVP) operated by Reclamation. The prolonged 
drought has created severe hardship especially to farmers, farm 
workers, and related economies on the west side of the San Joaquin 
River valley. The Department is cognizant of the need for creativity 
and flexibility in meeting the water demands of Californians served by 
the Central Valley Project. The Department supports facilitating the 
transfer of water from those areas having available water supplies to 
areas experiencing shortage to the extent that water transferred is not 
detrimental to the operations of the CVP, does not cause harm to third 
parties, and does not create adverse environmental consequences.
    When they are done right, water transfers move water from willing 
sellers to willing buyers in transactions that can improve economic 
well-being, increase efficiency in water use, and protect against 
negative externalities. There are many situations where water transfers 
during periods of drought can be used to ensure that available water is 
used in areas where it is most needed, and S. 1759 is aimed at 
facilitating these efficient water transfers. We recognize the 
potential of voluntary water transfer as a mechanism to increase 
flexibility into our water management system and respond to changes in 
available water resources. However, we are also committed to 
implementing review processes for all water transfers that will 
effectively protect the broad range of interests that can be impacted 
by changes in water use. Our goals as a Department include ensuring 
efficient use of available water infrastructure as well as maintaining 
vibrant communities and protecting the environment.
    Together with the California State Water Code, current Federal law 
in Section 3405(a)(1) of the Central Valley Project Improvement Act of 
1992 (CVPIA) (Public Law 102-575, 106 Stat. 4709) prescribes those 
conditions under which CVP water is transferable. While the proposed 
legislation establishes that water transfers between and among 
specified South of Delta divisions are presumed to meet the historical 
and consumptive use requirements of subparagraphs (A) and (I) of 
section 3405(a)(1) of Public Law 102-575, the proposed legislation does 
not change the obligation of the Department to protect the public 
interest and the integrity of the CVP, and to otherwise act in 
accordance with the provisions of the CVPIA. To this end, if the 
proposed legislation is enacted, Reclamation will review its procedures 
and ensure that administrative guidelines are in place as necessary to 
assure that transfers of water continue to serve the overall public 
interest. Specifically, Reclamation will continue to ensure that 
transfers take place without significant adverse impacts to other water 
users, federal programs, Indian tribes, CVP operations, or the 
environment. We suggest that these guidelines be expressly incorporated 
into the items we report to Congress under Section 4(a) of the bill, 
under which Reclamation would submit reports to Congress on the status 
of efforts to help facilitate and improve the process for water 
transfers within the Central Valley and water transfers between the CVP 
and the State Water Project.
    Under the CVPIA and contract provisions, Reclamation must approve 
proposed water transfers and cannot approve transfers unless the 
transfer is consistent with California water law. Transfers are on a 
willing buyer, willing seller basis, and Reclamation facilities can be 
used to deliver transferred water only when approved by Reclamation. 
Reclamation collects various charges, including operation and 
maintenance charges, incremental conveyance costs, and CVPIA 
restoration fund charges, together with the cost of service rates, as 
required by law from the entities that transfer the water (the 
transferors). Because of the diversity of CVP contractors and the many 
different scenarios under which water transfers take place, if S. 1759 
were enacted there would probably be some financial impacts that 
Reclamation would only be able to fully calculate upon completion of a 
given transfer. For example, depending on the contract in place with 
specific CVP contractors, the legislation could generate additional 
revenue for the CVPIA restoration fund and for the San Joaquin River 
Restoration fund in some years in the Friant Unit of the CVP. In this 
area in 2008, Friant contractors could have transferred about 40,000 
acre-feet to west-side CVP contractors in the San Luis Unit under the 
proposed legislation. The transferred water would have been subject to 
the CVPIA restoration fund charges (about $9) under Title X of Public 
Law 111-11, Section 10009(c)(1)(B), as well as Friant surcharges, 
resulting in additional revenues to the Restoration Fund.
    If enacted, S. 1759 could strengthen Reclamation's ability to 
facilitate appropriate water transfers. We would note, additionally, 
that Reclamation already has a robust water transfer program. This year 
in the CVP, Reclamation has facilitated the transfer of over 600,000 
acre feet of water by and among CVP contractors, as well as users of 
State Water Project water. This has been a record for the Reclamation 
since on average there are approximately 250,000 acre feet of transfers 
which are processed by the CVP and State Water Project. For figures 
specific to only the federal CVP, Reclamation has signed off on a total 
of 168 individual transfers totaling approximately 435,286 acre feet of 
federal contract water. All were accomplished within the accelerated 
water transfers program using programmatic environmental documentation. 
An additional 9,156 acre feet was transferred among Sacramento Valley 
contractors using transaction-specific environmental documentation.
    Separate from the transfer program, a large volume of water was 
delivered that was ``rescheduled,'' or held over in storage, from the 
2008 water year. Of the 337,307 acre feet of water rescheduled in San 
Luis Reservoir from 2008 into 2009, approximately 12,518 acre feet were 
eventually transferred, approximately 50,000 acre feet remains in San 
Luis, and the remainder was delivered to the party rescheduling it. 
Friant Division contractors rescheduled approximately 55,615 acre feet 
in Millerton Reservoir, and of that, 11,848 acre feet were transferred. 
Cross Valley Contractors rescheduled 6,063 acre feet of water from 
2008, all of which together with 11,550 acre feet of 2009 contract 
supply was transferred to Westside contractors. These transfers were in 
addition to the accelerated transfers described above.
    In addition to the suggested change to Section 4(a) above, the 
Department would also like to offer a technical change to the proposed 
legislation. The Department suggests that the initial reporting in 
Section 4(a) be set at 6 months from the date of enactment to provide 
adequate time for meaningful information to be available to Congress. 
Accordingly, we suggest editing the reference in Section 4(b) to delete 
``Not later than July 15, 2010'' and to call for Reclamation to update 
the report every 180 days after the date on which the initial report is 
submitted to Congress.
    With regard to Section 3 of S. 1759, the Fish and Wildlife Service 
has confirmed that the Service could provide a programmatic biological 
opinion to Reclamation on water transfers if this is determined to be 
appropriate. The consultation process would begin with a request from 
Reclamation for consultation accompanied by a biological assessment 
that describes Reclamation's water transfer program and evaluates the 
potential effects of the program on listed and proposed species and 
designated and proposed critical habitat and determines whether any 
such species or habitat are likely to be adversely affected by the 
program. The Service could potentially expedite a programmatic 
biological opinion, subject to the availability of appropriations.
    I would also like to note that Reclamation is currently working 
with the California Department of Water Resources in developing 
consistent evaluation criteria for a long-term, programmatic water 
transfer program designed to provide for water transfers from State and 
Federal contractors North of the Delta to contractors South of the 
Delta. These transfers will continue to be subject to the consumptive 
and beneficial use requirements in the State Water Code.

    Senator Stabenow. Thank you very much, Commissioner. Let me 
first talk about S. 1758 and ask you if this legislation is 
enacted would the Department of the Interior initiate a 
competitive bidding process to issue a lease of power privilege 
for the right to develop hydroelectric power at the Diamond 
Fork system facilities?
    Mr. Connor. Yes, that's typically the process to initiate 
an open competition or inquiry of interest amongst whoever 
wants to express that interest for at least a power privilege 
arrangement.
    Senator Stabenow. What are your plans to develop green 
energy including hydroelectric power?
    Mr. Connor. The Bureau, as Secretary Salazar has pointed 
out here in front of this Committee, the Department has a very 
broad agenda in the area of green energy, renewable energy 
resources. Reclamation, in particular, has put it in the 
category of 3 different areas that we're looking at hydropower 
development and another area that we're looking at renewable 
energy development.
    With respect to the 3 areas of hydropower development, the 
first is we are conducting a review of our current facilities 
looking to those opportunities that we think exist for putting 
hydro generation units on those existing facilities. So new 
units on existing facilities.
    There was a study done pursuant to the 2005 Energy Policy 
Act which required us to look at those opportunities. We were 
going to take another look at that study with its renewed 
emphasis on renewable energy development. We might have a few 
more identified potential projects than these 6 that were--that 
came out of that particular report.
    A second area is our long standing Reclamation program 
which we're going to give more emphasis to which is up rating 
and increasing efficiency at existing hydroelectric units. Over 
the last 30 years I think the figure is and if I'm wrong I'll 
correct it for the record, is something in the neighborhood of 
1,800 megawatts in capacity has been created just through 
efficiency gains in up rating and re-building some of these 
units. 1,800 megawatts of capacity is approximately the 
capacity of Hoover Dam generation facilities.
    As an ongoing effort right now we are up rating 2 units at 
Grand Coulee Dam which will result in a yield of 110 megawatts 
of additional capacity which is the equivalent of a large wind 
farm. So there's some pretty significant gains that could be 
made through the efficiency program.
    Last we are looking at trying to facilitate low head, 
hydro, small hydro opportunities. We have a lot of creative 
thinking going on amongst our water user communities and power 
communities where they are looking at using drops in their 
canal structures since water is flowing through there putting 
in canal generation units. Through the 40 million dollars we 
made available through Recovery Act funding we allocated $40 
million for water conservation efficiency and renewable energy 
type projects.
    We did one in Oregon that was a win/win for many projects--
aspects. We invested $2 million in to lining of about a mile of 
canal. Actually taking an unlined canal out of service, 
replacing with a pipeline, putting in a 0.75 megawatt unit 
turbine on that pipeline system saving 29 cubic feet per second 
of water that we allocated to the stream for fish purposes.
    So those are the type of projects that we're going to do 
with respect to hydro power. We've already done some. We're 
going to look to expand that in fiscal year 2010.
    The last area is just non hydro renewables whether it be 
wind, solar, geothermal. We are going to look to try and 
integrate some of those renewable energy opportunities into our 
water operations. If we can do that and use some of our project 
needs for power through those renewable energy resources we can 
save our hydro power resources and keep more on the grid.
    Senator Stabenow. Great. Thank you very much. It'd be 
helpful to gain some understanding of some of the general 
mechanics of the legislation addressing the California water 
transfers.
    I wondered if you might speak to what the bill does. For 
example, section 2 relates to certain conditions that the 
Bureau of Reclamation must follow in evaluating water transfers 
within the Central Valley project. That relates to transfers of 
irrigation water among certain projects and contractors within 
certain divisions.
    Can you confirm that all of those divisions are located 
below the pumping stations in the delta that take water from 
the Sacramento Valley to the San Joaquin Valley?
    Mr. Connor. The provisions of section 2 of the bill, our 
interpretation has been that they are south of delta 
facilities. That those are the districts and facilities 
indicated by the legislation there has been, I know, some 
discussion about that point. Maybe some clarification may be 
necessary.
    But that's been our interpretation in looking at the bill.
    Senator Stabenow. Ok. Thank you.
    Senator Bennett.
    Senator Bennett. Thank you very much. You make reference in 
your comment about the amount the Federal Government would lose 
under 1758. The amount they would lose if it were developed 
under present law.
    But you acknowledge that the best way to facilitate hydro 
power development at Diamond Fork is to allow this bill to 
pass. Do you believe that if we do not allow this bill to pass 
that there will be hydro development there? Because you'll lose 
it all----
    Mr. Connor. Right.
    Senator Bennett [continuing]. If there is no hydro 
development on at Diamond Fork.
    Mr. Connor. Yes, Senator Bennett. Thank you for that 
question. I would just caveat, as you know, the Central Utah 
project and its operations are run out of the Assistant 
Secretary's office.
    Senator Bennett. Yes.
    Mr. Connor. So, I may supplement some of these answers for 
the written record. But I think in reviewing this matter there 
has been some economic analysis in a definite plan report that 
the Department had done with respect to hydro power 
development. The economic analysis, as I understand, this is a 
2004 definite plan report, did show that there was economic 
viability of a project that could take into account that $161 
million in sunk cost.
    So that was the Department's perspective. That you could 
repay those costs, still develop sufficient hydro power 
resources and recoup that and make it a viable economic 
enterprise. So from that standpoint we think there should be 
able to be hydro power development.
    Having said that, it's safe to say there was controversy or 
there was disagreement about that economic analysis.
    Senator Bennett. Yes.
    Mr. Connor. There has not yet been hydro power development 
to date.
    Senator Bennett. So we've had 5 years of experience since 
the time someone opined that yes, it should go forward. We've 
had 5 years of experience without it going forward.
    Mr. Connor. Yes, right.
    Senator Bennett. Is that a safe summary here?
    Mr. Connor. That's correct.
    Senator Bennett. Ok. I'm leaning on that 5 years experience 
to say let's not let another 5 years go by without any money 
coming into the Federal Government. The $161 million has been 
spent. It is indeed a sunk cost.
    If we do not have any hydro power there as the 5&ars we've 
had indicate we will not have. Then the 161 is never going to 
be repaid. But if we can indefinitely defer the repayment and 
thus lure somebody on to build the dam and create the power, 
then indefinitely deferred is not the same thing as cancel. The 
Congress can come back and say, alright, now you've got a 
viable activity going on and these are the terms we want.
    Isn't that a viable thing to look forward to?
    Mr. Connor. That certainly is a strategy that could play 
out. I certainly understand that. I think that in the interim 
as Congress decides how it will proceed with this bill we will 
continue to look at the economics and keep your office updated.
    Senator Bennett. I'm a businessman. I look at it in terms 
of cash-flow, Madame Chairman. The cash has already flowed. An 
opportunity to get some of it back is something that's 
attractive to me.
    Thank you very much.
    Senator Stabenow. Thank you, Senator Bennett.
    At this point unless we have further questions I would 
thank Commissioner Connor very much for your testimony.
    We would move to our second panel of Martin McIntyre, 
representing the San Luis Water District.
    Hamilton Candee, representing the Grassland Water District.
    So we welcome and again, appreciate very much you're 
traveling here today to be able to speak about what I know is a 
very important topic for both of you. Thank you very much.
    Mr. McIntyre is you would take about 5 minutes to summarize 
your testimony we would appreciate it. Then Mr. Candee, if you 
would do the same as well, we would appreciate it. Then we will 
open it for questions.
    Welcome.

  STATEMENT OF MARTIN R. MCINTYRE, GENERAL MANAGER, SAN LUIS 
                 WATER DISTRICT, LOS BANOS, CA

    Mr. McIntyre. Thank you, Madame Chair, Senator Bennett. I'm 
grateful to be here today. My name is Martin McIntyre. I am the 
General Manager for the San Luis Water District.
    I would like to make clear, however, that today I represent 
more than just the San Luis Water District and its 
constituents. I'm carrying with me today the hopes, the needs 
of cities, communities, industry and thousands of family farms 
in the San Joaquin Valley. I consider that to be a substantial 
burden. Hopefully I will represent those interests fairly and 
effectively today.
    I'm grateful to speak in support of S. 1759 and want in 
particular to thank Senators Feinstein and Boxer for their 
sponsorship of this bill. As you've heard previously and 
undoubtedly know from your own experience, the San Luis Water 
District, the San Joaquin Valley and indeed the entire State of 
California is experiencing a severe social and economic crisis 
driven by limited availability and reallocation of water 
supplies throughout the state. The decisions that we make in 
the next year or 2 will have a profound impact on the economy 
and the people of California.
    I'd like to tee up my comments very briefly, if I might, by 
referring you to a map that I believe was handed out to you 
earlier. So that perhaps we can become geographically oriented. 
I'm going to draw your attention to several features on the 
map.
    If you look to the far left hand corner of the map you will 
see the state and Federal pumping plants identified as CVP and 
State Water Project Banks Pumping Plant. Just to the north or 
to the left off the map is the Sacramento San Joaquin delta of 
which there's been much information shared of late. All of our 
water supply on the west side largely comes through the San 
Joaquin delta. It has become a choke point for both the state 
and Federal water projects.
    So the west side of the valley is to the bottom of your 
page where the San Luis Water District is located. On the upper 
side of the map in green is the Friant unit. There are 2 
critical lines both in a reddish color running from the pumps 
all the way along the west side and south as far as Los 
Angeles. That is the California aqueduct. It is one of the 
carotid arteries, if you will, of water supply and economic and 
social well being within the state.
    To the north is the Friant Kern canal. They both converge 
down at the right side of your map. Those projects serve at 
least a significant portion of water supply to 25 million 
people within the state. They service to the north, Silicon 
Valley, to the south, all the way to Los Angeles commercial and 
industrial centers. It is indeed a critical artery through 
which water supply flows. So the bill before you would affect 
only those areas reflected on this map and not those areas 
north in the delta region.
    The west side of the San Joaquin Valley is a consequence of 
environmental, regulatory actions in the delta have seen in the 
past 15 years their water decline from their contracted supply 
from an average approaching 100 percent of that contract supply 
all the way to an average of 35 percent of contract supply. 
Shockingly this year our allocation was 10 percent. That has 
led to some pretty extraordinary dislocation of families and 
economies in the Central Valley.
    I have seen farmers with fear and anger in their eyes as 
they see their family legacies, second and third generation 
farms, at risk. We've seen food lines hundreds of feet long 
where unemployed farm workers are receiving food handouts to 
feed their families. We have tried to adapt to this changing 
environment.
    We've done so with extraordinarily aggressive 
implementation of water efficiency programs, drip irrigation, 
lining channels, piping facilities, fallowing ground. We have, 
in San Luis Water District 100 percent of our agricultural 
water is metered. But none the less we have been unable to 
satisfy the water supply needs. We fallowed over 500 square 
miles of some of the most productive Ag land in the world.
    In simplest terms this bill would simply help facilitate 
some transfers between the east side of the San Joaquin Valley 
on the map I referred to on the west side. In practice, 
however, water transfers are generally very complex. Can 
require 6 to 8, 10 months in order to accomplish and often miss 
the critical target for irrigation season or urban needs.
    I was going to present to you today a brief summary of the 
extraordinary efforts we've gone through this year to move 
water 25 miles reflected on your map right in the center of the 
map with the red arrow from the green area to the blue area. As 
a consequence of limited facilities and other restrictions 
however, it was necessary to gain approvals from 5 different 
agencies to execute half a dozen agreements. To transfer that 
water all the way down the northerly artery, across the valley 
and wheel it back up all the way to the San Luis reservoir on 
the north end of the California aqueduct.
    That process was fraught with risk, cost and in fact, took 
us 9 months to accomplish. We're still not certain the water 
will actually be received.
    So this bill is a welcome aid in facilitating some portions 
of those complex transfers. But indeed the largest solutions, 
as expressed by both of the Senators that testified earlier, 
requires a much broader perspective and must address a 
declining bay delta area where food webs have collapsed, 
species populations have collapsed. We believe that the state 
and Federal pumps that provide the life blood to the state have 
been disproportionately blamed for the decline of species. We 
encourage a broad re-visitation of the biologic opinions that 
were issued for delta smelt in particular in view of recent 
science that has become available.
    I thank you for the opportunity to speak today. I trust 
that we will be able to avoid some of the impending human 
tragedy that is on the horizon.
    [The prepared statement of Mr. McIntyre follows:]

   Statement of Martin R. McIntyre, General Manager, San Luis Water 
                          District, on S. 1759
    Chairwoman Stabenow, honorable members of the Committee: Good 
afternoon, I am Martin McIntyre, General Manager of the San Luis Water 
District, and I greatly appreciate the opportunity to appear before you 
today.
    I am here in support of S. 1759, the Water Transfer Facilitation 
Act of 2009. I frequently speak on behalf of the San Luis Water 
District but today I also represent the hopes and needs of a much 
larger constituency including cities, industry, thousands of family 
farms, their employees and many water districts served by the Central 
Valley Project (CVP).
    I was asked to testify before this committee because the San Luis 
Water District will live or die by the success or failure of water 
transfers. In 2009, with only 10 percent CVP allocation, failure to 
transfer adequate supplies of supplemental water would have resulted in 
the loss of tens of thousands of acres of high value permanent crops. I 
have been personally responsible for oversight of numerous transfers 
and negotiating the withering gauntlet of agreements, administrative 
approvals, and regulatory processes required for a one time single year 
transfer.
    The social and economic tragedy that has been unfolding for years 
is now upon us. In 2009, a combination of prior regulation, 3 years of 
below normal precipitation and new Endangered Species Act regulations 
have resulted in a meager 10 percent allocation of CVP contract 
supplies to districts lying south of the San Joaquin/Sacramento Bay 
Delta (Delta). Over 500 square miles of productive land has been 
fallowed, threatening farms, families, cities and counties with 
unprecedented economic hardship.
    Worse still, the US Bureau of Reclamation has advised that in 2010 
we will receive only 10 to 30 percent water supply allocation under 
average hydrology and only 25 to 40 per cent allocation in the wettest 
of years. Prior to Biologic Opinions (B.O.s) rendered in the past 2 
years, south of Delta CVP allocations averaged 65 percent. Current 
hydrologic modeling forecasts a decline of average annual allocations 
to 35 percent as a consequence of the recent smelt and salmon B.O.
    California's water supply is in crisis. The Delta is in crisis. 
Numerous species, habitat and levees are all in serious decline. 
Twenty-five million people and 3 million acres of prime agriculture 
depend on water supply from the Delta. There are many troubling causes 
for decline of Delta species including:

   Collapse of the food web
   Toxic runoff
   Invasive species
   Thousands of unscreened water pumps throughout the Delta
   Changes ocean conditions

    Despite all these other critical impacts, decline of Delta aquatic 
species has been historically blamed on the State Water Project and 
Central Valley Project pumps that support much of the State's 
population and agriculture. Until we address the primary causes of 
Delta decline, California's water supply security will continue to 
erode.
    Under these increasingly dire circumstances, we cannot survive 
without exercising all available tools, including the tools to be 
provided by S 1759, the Water Transfer Facilitation Act of 2009.
    Central Valley Project water users support S. 1759 because it would 
expedite our ability to employ water transfers as one tool to make the 
best use of our limited supplies. We thank Senator Feinstein and 
Senator Boxer for introducing this legislation. Congressmen Jim Costa 
and Dennis Cardoza have introduced companion legislation in the House, 
and we urge Congress to move forward on these bills as soon as 
possible.
            s 1759-what it would do and what it would not do
    In the Central Valley, irrigation districts and water agencies have 
for decades exchanged and transferred water to each other as a means of 
getting surplus water to water short areas. These water transfers are 
regulated by California water law and by federal and state 
environmental laws, including the Endangered Species Act (ESA) and the 
National Environmental Quality Act (NEPA). Transfers of water in 
federal Central Valley Project are subject to an additional level of 
regulation under the Central Valley Project Improvement Act 1992 
(CVPIA).
    One of the major purposes of the CVPIA was to ``assist California 
urban areas, agricultural water users, and others in meeting their 
future water needs.'' (CVPIA, Section 3405(a)). The law affected water 
transfers in 3 major ways. First, it allowed, for the first time, CVP 
water to be sold by individual water users to entities outside the CVP 
service area. The authors of the legislation intended this provision to 
``open up'' CVP supplies to major urban areas, such as Los Angeles, and 
generate revenue for CVP environmental restoration through transfer 
fees. Second, it allowed certain water-rights holders in the San 
Joaquin and Sacramento Valleys to transfer water made available to them 
by the CVP under settlement contracts with the federal government. 
Third, the CVPIA made these newly-authorized transfers subject to 
review and approval by the Interior Department, through the Bureau of 
Reclamation, according to a set of criteria written into the Act.
    The CVPIA has not achieved its goal of facilitating water transfers 
to help Californians meet their water needs. The envisioned transfers 
of water out of the CVP service area to urban water agencies have not 
occurred for several reasons, including environmental restrictions on 
the Bay-Delta pumps. Transfers among agencies within the CVP service 
area have been slowed and even discouraged by the Bureau's application 
of CVPIA.
    Before the Act, water agencies within the CVP routinely transferred 
water among themselves, often on short notice, in compliance with state 
law. Now, those transfers are subject to months of review by the 
Bureau. Moreover, CVP users believe that the Bureau is misinterpreting 
the CVPIA by applying the water transfers criteria intended only for 
the new transfers specifically authorized by the Act to historical 
transfers within regions of the CVP. The result is that some once-
routine transfers are now not possible. S. 1759 is intended to 
facilitate water transfers among agencies within the CVP south of Delta 
service area by removing some of the bureaucratic impediments that 
discourage transfers or make them unnecessarily slow by doing the 
following:

   First, Section 2(a) of the legislation would deem that 
        transfers among water districts within the same region of the 
        CVP south of the Bay-Delta have met the two CVPIA criteria 
        (3405(a) (1) A and I) that were originally intended for only 
        transfers outside of the CVP, for transfers between the 
        Sacramento and San Joaquin Valleys and transfers from the 
        Settlement Contractors.

    The purpose of the criteria is to ensure that agencies transfer 
only water that they actually have and could otherwise use so that 
transferring agencies do not impact the supplies of other water users. 
These ``consumptive-use'' and ``historic-use'' safeguards make sense 
for transfers that would move water through the Delta from the 
Sacramento Valley to the San Joaquin Valley or to a region entirely 
outside of the CVP service area. But they don't make sense for 
transfers among agencies within the same region that are sharing the 
same limited regional water supply.

   Section 2(a)(1) of the bill deems that the CVPIA 
        ``consumptive-use'' and ``historic-use'' criteria are met by 
        transfers among CVP water agencies (``contractors'') in 
        specific Divisions of the Project south of the delta. This 
        would allow some south-of-delta agencies to make water 
        available for transfer they otherwise may not have made 
        available under the Bureau's interpretation of the two criteria 
        and in general are wet year excess water. This provision would 
        apply only to transfers among agencies south of the Delta. 
        Transfers through the Delta and transfers to outside agencies 
        beyond the CVP service area would still have to meet criteria 
        in (3405(a)(1)A and I) of CVPIA .
   Section 2(a)(1) of the bill deems that the criteria are met 
        by transfers between CVP contractors and other agencies that 
        are within the same CVP Division and hold temporary CVP water 
        supply contracts or once held temporary or long-term CVP water 
        supply contracts. These are non-CVP irrigation districts within 
        the service area of the Friant Unit of the CVP and intermingled 
        with Friant districts. They receive water from the Kings, 
        Kaweah and other rivers that flow through the Friant service 
        area, and overlap the same groundwater aquifers as Friant 
        districts. Temporary CVP contracts allow them to buy flood 
        water from the CVP, when it's available.

    Transfers among Friant CVP contractors and neighboring non-CVP 
districts have historically been used to make the best use of 
groundwater storage opportunities. The Bureau's application of the 
CVPIA consumptive-use and historic-use criteria to these water-
management transfers has made them more difficult, and in some cases 
impossible. S. 1759 would ease this impediment and allow for improved 
management of surface and groundwater supplies.

   Section 2(b) (1) ensures that any transfer affected by S. 
        1759 not interfere with implementation of the San Joaquin River 
        Settlement.
   Section 3 of the bill would facilitate transfers within the 
        entire CVP by directing the Interior Department to use existing 
        authority to develop a programmatic environmental review of CVP 
        water transfers. All CVP water transfers are subject to review 
        under ESA and NEPA and currently a new review, stand-alone 
        environmental review for each transfer even though many of the 
        elements examined are common to most transfers. A programmatic 
        approach allows the regulatory agencies to develop a framework 
        addressing these common elements so that they don't have to be 
        examined anew for each transfer. Individual transfers would 
        still be subject to separate environmental reviews, but reviews 
        could be done faster within a programmatic framework.

    S. 1759 would not create any new water transfer authorities.--It 
would not waive or shortcut reviews of transfers under federal or state 
environmental laws, and it would not reduce revenues from environmental 
fees paid into the Central Valley Project Restoration Fund. It does not 
affect reviews of north-south transfers through the Delta or outside of 
the CVP.
    S. 1759 also does not create new water.--It removes some of the 
hurdles and expedites the efficient transfer and management of 
dangerously short and unreliable water supplies. Transfers help us buy 
time until long-term solutions are developed to return adequate and 
stable water supplies to California agriculture. But time is running 
dangerously short.
    S. 1759 does not create ``Paper Water''.--When the transfer 
provisions of the CVPIA were being assembled, it was clear that 
transfers of CVP water that had historically been provided to certain 
CVP contractors in settlement of water right issues associated with the 
development of the CVP, were going to be in play in terms of the new 
transfer capabilities to be provided by the proposed changes in law. In 
particular, the ability to transfer Sacramento River water rights 
settlement water supplies, as well as water supplies provided in 
settlement or exchange of San Joaquin River water rights, were now 
proposed to be able to be transferred.

    There was concern among existing CVP water service contractors from 
throughout the Project that some of this transfer potential for water 
rights settlement water supplies could adversely impact the 
availability of their CVP contract water supplies as some of the 
established water right settlement contract amounts had never been all 
put to use. To the extent this water hadn't been put to use, it would 
be available for use as Project contract yield to the CVP water service 
contractors. Similarly, there were Municipal and Industrial CVP 
contracts that were still in a ``build up'' period that had a history 
of not using all of their CVP contract entitlement which raised similar 
concerns among the other contractors relative to the potential for 
transfers to occur with water that did not have a history of being put 
to use (e.g.. the term ``paper water'').
    Thus, the conditions associated with both Sections 3405(a)(1)(A) 
and 3405(a)(1)(I) were intended to protect CVP contractors from the 
potential that water which never had a history of being used (and thus 
was available to become part of the CVP yield for the balance of the 
CVP contractors) could now be transferred. The proposed changes 
modifying the application of these two sections of the CVPIA contained 
in the subject legislation would only apply to transfers as between CVP 
contractors south of the Delta (San Luis, Delta-Mendota, Mendota Pool, 
Cross Valley, San Felipe and Friant Divisions). The potential for 
``paper water'' transfers for CVP contractors south of the Delta has 
never existed and does not exist today. While temporary surpluses of 
water for an individual contractor may exist from time to time (due in 
particular to local annual hydrologic conditions) there are no 
contractors that have contract entitlement amounts that otherwise go 
unused unless transferred. This is especially true under the water 
shortage conditions that exist for all CVP contractors south of the 
Delta resulting from reduced Delta pumping for protection of endangered 
species or resulting from new releases of water for San Joaquin River 
restoration. Thus, the proposed language does not increase the 
potential for ``paper water'' transfers. However, it does remove a 
significant impediment that was inadvertently created with the passage 
of the CVPIA and the unfortunate application of Sections 3405(a)(1)(A) 
and 3405(a)(1)(I) to transfers that used to occur with limited review 
which now are virtually precluded from occurring, all at a time when a 
great need exists to move water within the Project due to the 
previously mentioned conditions of water shortage.
The San Luis Water District-A ``Westside'' District
    The San Luis Water District (SLWD) serves 66,000 acres located on 
the western side of the fertile San Joaquin Valley (See Figures 1 & 
2)*. Historically, adequate supplies of water, fertile soils, an ideal 
climate and innovative farming practices have been combined to produce 
superior yields of high value crops which feed both the country and the 
California economy. In the past ten years there has been a growing 
shift from row crops to permanent crops (trees and vines).
---------------------------------------------------------------------------
    * Figures 1 and 2 have been retained in subcommittee files.
---------------------------------------------------------------------------
    SLWD irrigation facilities are among the most efficient anywhere. 
District facilities include 52 miles of pipelines, 14.3 miles of lined 
canals and only 3.3 miles of unlined canals. SLWD does not own or 
operate any wells. On-farm irrigation efficiency is estimated to 
average greater than 80%. Water use efficiency in San Luis Water 
District includes the following features:

   Over 96 percent of the distribution system is piped or lined
   Over 80 percent of the irrigated lands are served by drip or 
        micro systems
   Less than 8 percent of irrigated lands are served by furrow 
        and flood irrigation
   100 per cent of District and grower turnouts are metered
   100 per cent of on farm tail water retained/reused
   Zero spill at conveyance system terminus points

    Despite this extremely efficient system, in 2009 about 25 percent 
of the District irrigable land has been fallowed and over 80 percent of 
annual crops have been abandoned due to cut backs in water supply. Even 
more ominous, the survival of permanent crops and family farms now hang 
in the balance.
    San Luis Water District's only long term source of water supply is 
a contract with the US Bureau of Reclamation (Reclamation) for up to 
125,000 acre feet per year from the San Luis Unit of the Central Valley 
Project (CVP). Groundwater is extremely limited and generally of very 
poor quality. Due to factors discussed below, our CVP supply has become 
so unreliable that high value permanent crops are at serious risk. A 
single water short year could result in loss of permanent crops and 
associated capital investment.
The Westside CVP
    The SLWD is situated roughly in the middle of a 3,300 square mile 
region of the California San Joaquin Valley generally known as the 
Westside of the San Joaquin Valley. This region (about the size of 
Delaware and Rhode Island combined) is located south of the California 
Bay-Delta (Delta) and extends roughly from the City of Tracy in the 
north to Kettleman City in the south and generally bordered on the east 
by the San Joaquin River and extending to the west into San Benito and 
Santa Clara (Silicon Valley) counties.
    Common to SLWD and 28 other Westside water purveyors south of the 
Delta are CVP water supply contracts administered by the Reclamation. 
The CVP is the largest single water project in the Nation. The Project 
provides water for farms, homes, factories, and the environment. It 
produces electric power, and provides flood protection, navigation, 
recreation, and water quality benefits from California's great Central 
Valley to major urban centers in the San Francisco Bay Area. Water 
provided by the CVP to the Westside serves more than 1.3 million acres 
of highly productive farm land, 1.7 million Californians from small 
rural towns to the ``Silicon Valley'', and countless waterfowl 
dependent upon more than 100,000 acres of important wildlife management 
areas situated in the Pacific Flyway.
West Side Water Supply Impacts
    For over 15 years, Central Valley Project contractors--particularly 
agricultural service contractors on the Westside of the San Joaquin 
Valley such as the San Luis Water District--have been experiencing a 
steady decline in both the volume and reliability of their water 
supply. Beginning with the listing of winter-run Chinook salmon in 
1989, followed by implementation of the Central Valley Project 
Improvement Act and Clean Water Act, the region endured a gradual 
decline in average annual CVP water allocations from nearly 100% prior 
to 1989 to current estimates of only 35%. As discussed below, this has 
severely strained the social and economic fabric of communities 
throughout the Westside.
Supply Management and Water Use Efficiency
    In order to cope with this water supply decline, water districts 
and farmers throughout the Westside implemented new management 
practices, technologies, and strategies to improve the efficiency of 
their water use, conserve supplies, and acquire supplemental water. 
These changes have garnered worldwide attention and have established 
the Westside as the most water efficient agricultural producing region 
in the world.
    The following strategies have been widely adopted throughout the 
area:

    Conservation.--Tens of millions of dollars have been invested to 
conserve water so that it can be spread to as many acres as possible. 
Drip irrigation for permanent crops is standard and is also being 
implemented on a broad scale for row crops. Canals and ditches have 
been lined to reduce losses; low interest revolving loan programs have 
been implemented to encourage investment in conservation and water 
reuse.
    Transfers.--Transfers are active at the farm, district and 
Authority regional level. However many types of transfers require long 
lead times and entail uncertain approvals. Inter-region transfers are 
contingent upon Delta export pumping capacity, which has been virtually 
eliminated by recent B.O.s
    Crops.--In order to afford the investments in conservation and to 
be able to compete in costlier water markets, farmers have had to 
convert to high value vegetable and permanent crops. Trends over the 
last 15 years have shown a gradual and consistent conversion.
    Groundwater.--Unfortunately, groundwater in the region is generally 
spotty in both availability and quality. Monitoring programs have been 
implemented to track groundwater levels, drawdown, recovery rates and 
subsidence to determine sustainable yield and to maximize sustainable 
use.
    Land Fallowing/Retirement.--Unfortunately, even after aggressively 
implementing conservation, transfers, and groundwater programs there 
hasn't been enough water available to irrigate all of the 1.1 million 
Westside acres. 300,000-400,000 acres have been idled either by farmers 
consolidating their supplies or through district programs.

    Despite the foregoing effort, recent, rapid, and successive federal 
Endangered Species Act actions have crippled the effectiveness of much 
of these prior strategies and investments due to severe operational 
limitations that have been imposed on the CVP by the FWS and NMFS to 
protect ESA listed delta smelt, Chinook salmon, green sturgeon, 
steelhead, and Southern Resident killer whales. These limitations 
dramatically reduce the Westside's ability to supplement its 
chronically short contract supplies of water with traditional transfers 
from the north to the south.
Regulatory Actions and the Future of Westside Agriculture
    In December 2008, the FWS issued a new Delta Smelt opinion on the 
continued operations the CVP and SWP. No estimate has been produced as 
to the population level benefits of the actions imposed by the FWS; 
however, adverse impacts upon the water supply of the CVP and SWP are 
generally agreed to average approximately 750,000 acrefeet of water per 
year. Numerous suits have been filed over the new opinion.
    In June 2009, the NMFS issued a new opinion Salmon, Steelhead and 
Green Sturgeon opinion further impacting the continued operations the 
CVP and SWP. No estimate has been produced as to the population level 
benefits of the actions imposed by the NMFS; however, adverse impacts 
upon the water supply of the CVP and SWP are estimated to average 
450,000 acre-feet of water per year. Numerous lawsuits have been filed 
over the new opinion.
    Many in the academic and non-federal scientific communities point 
to impacts being caused by factors other than the CVP and SWP exports, 
such as invasive species, pollution, the thousands of non-CVP and SWP 
diversions, legal and illegal harvest, ocean conditions, and climate 
change. Lately, the federal fish agencies have begun to acknowledge 
that these other factors are contributing to the decline of species. 
But despite a growing body of scientific evidence demonstrating the 
significance of these other factors, they have done nothing either to 
estimate their importance or, more importantly, to curb their impact.
    While benefits to fish through the FWS and NMFS historical 
management practices have been elusive, the adverse impacts to water 
users have been immediate, widespread and devastating. In a span of 
less than 2 years, farmers south of the Delta have seen their CVP water 
supplies cut from 65 percent of contract to 35 percent on average, an 
almost 50% percent reduction.
    In summary, the Westside's ability to supplement its chronically 
short contract supplies of water with traditional transfers from the 
north to the south is severely limited and thus the ability to more 
effectively transfer and/or exchange water between the Westside and 
Eastside of the San Joaquin Valley, as well as within divisions, is 
critical in order to meet immediate water needs.
    Without tools that can provide immediate and meaningful relief to 
the Westside, the future of agriculture throughout the region is in 
extreme peril. The loss of agriculture throughout the region will 
disproportionately affect the small, rural communities that are based 
on this economy.
``Eastside'' CVP, (Friant Division)
    The Friant Division is located on the east side of the San Joaquin 
Valley and serves approximately 15,000 farms on nearly 1 million acres 
of highly productive agricultural lands (See Figure 2). A number of 
cities and communities, including Fresno, Orange Cove and Lindsay, 
receive all or a significant portion of their water supply directly 
from the Friant Division. The Friant Division's water supplies, which 
historically averaged about 1,250,000 acre feet per year, come from the 
San Joaquin River via exchange with the historical water rights holders 
who are to receive a more reliable water supply from northern 
California CVP facilities. The Friant Division is predominantly 
permanent crops. Some contractors are wholly dependent upon Friant 
supplies. Other contractors have supplemental supplies, including 
groundwater. Friant is a ``conjunctive use'' services area. In wet 
years, Friant supplies are used to recharge groundwater aquifers which 
are relied upon to make water deliveries in dry years.
California water conditions--Impacts to Friant Water Division
    Pumping reductions in the Delta as a result of environmental 
regulations are also affecting the Friant Division. Earlier this year, 
for the first time in the nearly 60 years of the project, Reclamation 
was concerned that it could not deliver northern California water to 
the Exchange Contractors. The Exchange Contractors could then call upon 
their historical water rights from the San Joaquin River. Up to 200,000 
acre feet of Friant water could have been lost. Unfortunately, modeling 
demonstrates that this risk will continue if conditions in the Delta 
are unchanged.
    Cross Valley CVP water supplies (128,000 acre feet) also come from 
northern California and those contractors reside within the Friant 
Division. Delta conditions have severely limited delivery of those 
water supplies and those diminished deliveries are impacting 
groundwater supplies for both the Cross Valley contractors and 
neighboring Friant contractors.
    Friant, Reclamation and the NRDC recently settled an 18 year old 
lawsuit over San Joaquin River operations and its effect on salmon 
fisheries which was supported by federal legislation, advanced by 
Senator Feinstein, earlier this year. The Settlement has two goals--
restore the river system and salmon fishery and avoid or reduce water 
supply impacts to CVP contractors. Water released from Friant Dam can 
be recovered in the Delta. However, recent biological opinions have 
called into question whether restoration flow releases can be 
recaptured in the delta and returned to Friant.
    The delta pumping restrictions affecting water supplies in the 
Friant Division could result in the fallowing of over one hundred 
thousand acres of permanent and annual crops with significant economic 
impact to the eastside of the San Joaquin Valley and the loss of 
specialty crops, such as fruits and nuts, to the entire Nation.
The Benefits of Transfers within the Friant Division of the CVP
    One of the key features of the Friant Division is the conjunctive 
use of surface and groundwater. Since the inception of the Project, wet 
year water has been used to replenish groundwater supplies. In certain 
instances, ground water recharge has been accomplished by transferring 
water to non-long term contractors within the Friant Division 
boundaries who share in a common groundwater basin. That transferred 
water is then used instead of groundwater (``in-lieu recharge'') or put 
into recharge facilities for direct groundwater recharge. Given the 
hydrological volatility of water supplies in the Friant Division, wet 
year conditions may suddenly occur and the opportunity to transfer the 
wet year water is short as a result of limited storage capability at 
Friant Dam.Transfer approvals are needed quickly to take advantage of 
groundwater recharge capabilities in wet years.
Case Study-Friant Division (East Side) Transfer
    Since the passage of CVPIA, transfers of wet year water to non-
long-term CVP contractors have become increasingly difficult. The 
proposed legislation contains a provision which would statutorily meet 
the transfer conditions of the CVPIA that are currently causing 
restrictions and delays in transferring water.
    As an example, in the last wet year cycle, some Friant contractors 
were able to reduce irrigation demands due to rainfall into late May. 
One of the Friant districts, who has limited direct groundwater 
recharge facilities, desired to transfer water to a non-CVP contractor 
in the Friant Division who could recharge the groundwater using their 
facilities. The consumptive use condition in the CVPIA had the affect 
of thwarting this transfer. The water was ultimately put to beneficial 
use but by means not nearly as efficient and effective. Relief from the 
current CVPIA provisions for this type of transfer would improve the 
ability to use wet year conditions to recharge groundwater. Delays as a 
result of these provisions could result in a loss of water supplies to 
an already water supply deficient area.
Case Study Eastside to Westside Water Transfer
    Many water transfers are extraordinarily complex, requiring 
numerous agreements, multiple exchange partners and various state and 
federal agency approvals, long processing times and multiple 
environmental documents. These processes add risk, time and cost to 
transfers. In many cases it is simply not possible to complete a 
transfer during the timeframe water is available. Due to a lack of 
conveyance facilities and excessive requirements, some seemingly simple 
transfers can become very complicated. One example:

    San Luis Water District (SLWD) is a Westside CVP contractor in 
Fresno County experiencing a zero water supply allocation in early 
2009. Fresno Irrigation District (FID) is an Eastside CVP contractor 
also in Fresno County. FID owns and operates a water bank. In 2009 FID 
had surplus banked water to sell. In April terms were struck for a one 
time transfer of 10,000 acre feet, contingent on successful completion 
of environmental documents and various approvals.
    The transfer required:

   Negotiation and execution of four agreements
   Completion of federal environmental assessment
   Approval by Reclamation
   Approval by State Water Resources Control Board
   Approval by Department of Water Resources
   Approval by State Water Contractors
   Approval by City of Fresno

    Despite the most diligent of efforts involving over twenty 
professionals, it was not until 6 months later, in the last feasible 
month, before transfer water actually began its 300 mile journey from 
FID to SLWD which have facilities separated by less than 25 miles. 
Throughout the entire process there was no certainty that the essential 
water would actually be transferred.
Human Impacts of Westside Water Shortages
    In January and February 2008, pumping constraints imposed upon the 
CVP and SWP by the U.S. District Court for the Eastern District of 
California intended to protect delta smelt cost the projects 
collectively approximately 600,000 acre-feet of water. The impacts of 
regulation would have been worse except that drought took over, 
resulting in the driest March through May on record. Dr. David Sunding, 
Professor of Agricultural and Resource Economics at UC Berkeley, 
estimated the average statewide economic effect of protecting the 
threatened delta smelt under the constraints imposed by the Eastern 
District Court would exceed $1 billion and could eclipse $3 billion 
through lost crops and more expensive water. While the potential 
statewide impacts of these regulations is staggering, they in fact 
impact regions differently, and disproportionately affected the San 
Joaquin Valley's Westside agricultural region due to lack of 
replacement supply and diminished transfer opportunities.
    As a result of the water supply shortages manifested in early 2008, 
water supply rationing was imposed in June by the CVP upon south-of-
Delta contractors and the water supply allocation was cut from 45% to 
40%. These actions occurred in the heart of the Westside's growing 
season and resulted in economic impacts estimated by Dr. David Sunding 
to exceed $175,000,000 and 700 jobs in a matter of weeks. These impacts 
were in addition to those that had already rippled through the region 
as a result of the Eastern District Court constraints.
    Lack of transfer water has caused districts and individual growers 
to increase their reliance upon local groundwater and surface supplies. 
Forecasted economic impacts indicate potentially significant effects 
upon the region and State. The most recent analysis conducted by the UC 
Davis Department of Agricultural and Resource Economics suggests that 
the economic impact upon Central Valley agriculture due to 2009 water 
supply reductions resulted in 21,000 lost jobs and reductions in income 
exceeding $703 million. These findings are dependent upon an assumed 
ability of farmers to increase groundwater pumping, which is locale 
dependent and likely to increase production costs substantially.
    Land fallowing along the Westside has exceeded 350,000 acre feet 
and 500 square miles of highly productive land. Unemployment rates 
through many parts of the Westside exceed Depression era levels. Food 
lines are common in several rural Westside communities and need has 
often outstripped the ability of the food banks to provide. Currently, 
the Central Valley food bank is out of money. They have been serving an 
estimated 30,000 people through the summer, which is traditionally the 
best period for agricultural employment. Sadly, demand for social 
services is peeking at a time when the ability of local and state 
government to respond is also severely depressed due to the broader 
global economic downturn.
    Residents in the rural community of San Joaquin standing in relief 
line to receive food imported from China.
    The fact is regulatory impacts upon the CVP and SWP are affecting 
more than just water supplies. Rural communities, big cities, 
development, and environmental restoration are all being impacted. 
Currently there is a large, concerted, and long overdue effort to 
overhaul California's water supply infrastructure and regulatory 
paradigm. However, many solutions lie too far out in the future and 
cannot satisfy the critical and urgent need for meaningful improvements 
now. Reforming the transfer provisions of the Central Valley Project 
Improvement Act is one important and readily available tool.
    Attachment 1: Letter* from Del Puerto Water District to the 
Honorable Ken Salazar, Secretary of Interior.
---------------------------------------------------------------------------
    * Letter has been retained in subcommittee files.

    Senator Stabenow. Thank you very much for your testimony. 
Mr. Candee, welcome.

      STATEMENT OF HAMILTON CANDEE, ALTSHULER BERZON LLP, 
    REPRESENTING GRASSLAND WATER DISTRICT, SAN FRANCISCO, CA

    Mr. Candee. Thank you very much. Thank you, Madame 
chairwoman and members of the subcommittee. I appreciate the 
invitation to testify before you today on S. 1759.
    My name is Hamilton Candee. I'm a partner in the San 
Francisco law firm of Altshuler Berzon. I'm appearing today on 
behalf of the Grassland Water District which is a contractor of 
the Central Valley project located in Merced County and a 
beneficiary of water transfers in the CVP.
    Grassland Water District is part of the larger Grassland 
Resource Conservation District which encompasses approximately 
60,000 acres of wetlands which is one of the most important 
wetland complexes west of the Mississippi.
    Grassland Water District delivers water to privately owned 
wetlands as well as to neighboring state and Federal wildlife 
refuge areas pursuant to a contract with the Bureau of 
Reclamation.
    Grasslands is also a participating organization within the 
Central Valley joint venture. An entity that is specifically 
referenced in the 1992 Central Valley Project Improvement Acts, 
CVPIA, for its central role in promoting and facilitating the 
acquisition of adequate water supplies for wetland habitat 
including state and Federal wildlife refuges. In working on 
this transfers bill we've been working closely with some of the 
NGO's in the Central Valley Joint Venture including National 
Audubon, California Audubon, Defenders of Wildlife and Ducks 
Unlimited.
    While Grasslands is supportive of the goals of S. 1759, we 
believe certain changes are needed to ensure that there are no 
unintended adverse impacts of the legislation on the refuge 
supply issue and to reaffirm the importance of meeting the 
goals of CVPIA with respect to wetlands and refuge areas. We 
appreciate the encouragement we have received from the authors 
of the legislation to provide suggested language improvements. 
We look forward to working with the committee and with the 
bill's co-authors to identify ways to address each of our 
concerns.
    My written testimony and the attachments set out a more 
detailed statement of the predicament faced by Central Valley 
Refuges and the importance of the water supply provisions to 
address the ongoing predicament. In the interest of time I'll 
be providing a short summary. I ask that the full written 
statement be put into the record.
    Between the 1850s and the 1950s the wetlands in the Central 
Valley went from 4 million acres down to less than 300,000 
acres. Things continued to get worse between 1950 and 1970. 
Then when the drought hit in the 1970s the situation became 
much, much worse.
    During the latter part of the 1970s the greatly reduced 
wetland water supplies and in some instances eliminated all 
wetland water deliveries. The combination of drought and poor 
wetland water supply reliability resulted in significant 
impacts to wetland habitat and water bird populations. Partly 
in response, the North American Water Fowl Management Plan was 
enacted. That's what led to the Central Valley Habitat Joint 
Venture that I mentioned.
    Those groups worked together with Congress. In 1992 the 
Central Valley Project Improvement Act was enacted. In summary 
the CVPI was to provide key wetland basins with sufficient 
water supplies for the purpose of achieving optimum habitat 
management in all but the most critically dry years.
    There have been several long term water conveyance like 
contracts and agreements negotiated after the passage of CVPIA. 
Unfortunately the original program of CVPI was to provide what 
they call level 2, which is the historic water supplies and the 
basic mitigation supplies that were expected for all of the 
refuges, but also a level 4 supply. The difference was that 
level 2 would be provided right at the outset when the bill was 
passed and then level 4 would come in over time over 10 years 
and it would be acquired through transfers.
    Unfortunately the level 4 supplies have never shown up in 
the full amount. I attached a chart at the end of my testimony 
that shows what the level 4 supplies are supposed to be 
according to Congress, according to the act in 1992. What 
they've actually been delivered is far short of the actual 
level 4 target.
    Grassland Water District and the other organizations in the 
joint venture, the NGO's will be providing separate written 
comments. But I want to focus on 2 areas where we're concerned 
there may be an impact from the transfer legislation, the goals 
of the 1992 CVPIA with regard to refuges.
    The first is we understand that it's the intent of the 
authors to preserve all the existing protections of the Federal 
and State environmental laws. But we feel that that issue needs 
to be clarified. It's not 100 percent clear as you read through 
the bill that all the protections that are already in the CVPIA 
will be preserved.
    We think there are different ways you could do that. You 
can do it by amending section 2(a), by amending section 2(b) or 
you could put in a separate stand alone provision. We're happy 
to work with Senator Feinstein and Senator Boxer's staff and 
the committee staff on what's the best way to accomplish that. 
But we think this intent which apparently is implicit in the 
intention of the authors needs to be made more explicit.
    Second, we are concerned that the protection and 
restoration of wetlands will become more difficult as a result 
of this bill as it opens up the transfers market. There's more 
demand for the transfers and the price goes up. The competition 
to move that water around becomes more intense. There could be 
negative impacts on the wildlife refuges. So there should be 
one or more mitigation measures to try to address that.
    One measure that we would recommend which is consistent 
with the philosophy of the bill in terms of facilitating 
transfers would be to make it easier for State and Federal 
wildlife refuge managers to move water from one refuge to 
another. You have this unusual situation now where some refuges 
in the north will not need their full supply in a particular 
year where some of the refuges in the south need a lot more 
water. They would like to move the water from one refuge to the 
other. But it's very hard to do that and sometimes what happens 
is the water just ends up going back into the general pot and 
being distributed to cities or farms without any attention 
given to how you could move that water from one refuge to the 
other.
    It's actually--it's a doable thing. In fact even the 
current contracts with the refuges anticipate that that would 
be the first thing that you would do with any extra water. So 
we'd like to propose language, if it's ok with the chair to the 
subcommittee, to suggest how that could be accomplished as a 
mitigation measure.
    Senator Stabenow. We'd be happy to have that information 
given to staff. Work with you on that.
    Mr. Candee. Thank you very much.
    The Wetlands of the Central Valley of California have 
national and international significance. Are truly an important 
resource for our state and country. The CVPIA Congress made 
clear that these refuge areas need to receive an adequate water 
supply through both level 2 and the level 4 programs.
    While we support the goal of facilitating water transfers 
that are at the heart of S. 1759, we urge the committee to 
revise the legislation as needed to ensure that these 
unintended adverse impacts to Central Valley Wetlands are 
avoided and mitigation is provided.
    Thank you.
    [The prepared statement of Mr. Candee follows:]

     Prepared Statement of Hamilton Candee, Altshuler Berzon LLP, 
        Representing Grassland Water District, San Francisco, CA
    Thank you Madam Chairwoman and Members of the Subcommittee. I 
appreciate the invitation to testify before you today on S. 1759, The 
Water Transfer Facilitation Act of 2009, which is intended to 
facilitate and expand voluntary water transfers in the Central Valley 
Project in California. My name is Hamilton Candee and I am a partner in 
the San Francisco law firm of Altshuler Berzon LLP. I am appearing 
today on behalf of the Grassland Water District, which is a contractor 
of the Central Valley Project (CVP) located in Merced County and a 
beneficiary of voluntary water transfers in the CVP. Grasslands is a 
participating organization within the Central Valley Joint Venture, an 
entity that was specifically referenced in the 1992 Central Valley 
Project Improvement Act (CVPIA) for its central role in promoting and 
facilitating the acquisition of adequate water supplies for Central 
Valley wetland habitat, including national and state wildlife refuges 
and privately owned wildlife habitat. In its work on the proposed 
transfers legislation, Grasslands has been coordinating its efforts in 
particular with Audubon California and Defenders of Wildlife, and with 
Ducks Unlimited and California Waterfowl Association, all founding 
members of the Joint Venture. A recent brochure prepared by Joint 
Venture members about Central Valley wetlands and the importance of the 
CVP refuge water supplies is attached to my testimony.
    While Grasslands is supportive of the goals of S. 1759, we believe 
certain changes are needed to ensure there are no unintended adverse 
impacts from the legislation and to reaffirm the importance of meeting 
the goals of CVPIA with respect to wetlands and refuge areas. We 
appreciate the encouragement we have received from the authors of the 
legislation to provide suggested language improvements and we look 
forward to working with the Committee and the staff to Senators 
Feinstein and Boxer to identify ways to address each of our concerns. 
My written testimony sets out a more detailed statement of the 
predicament faced by Central Valley wetlands and the importance of 
fully implementing the CVPIA's refuge water supply provisions to 
address this ongoing predicament. In the interest of time I will be 
providing a short summary of this testimony today but I ask that my 
full written statement, including the attachments, be included in the 
record of this hearing. Thank you.
Background
    The loss of wetlands since the 1850s has been well documented by a 
variety of publications and reports. Surveys in the 1850s estimated 
there to be over 4 million acres of wetlands in California's Central 
Valley. By the 1950s, expanding development decreased Central Valley 
wetlands to an estimated 290,000 acres. Continued decline of Central 
Valley wetlands occurred between 1950 and 1970. Water supplies for 
managed wetlands during this period were not secure. Most managed 
wetlands depended upon agricultural irrigation return flows, low-
priority water contracts, or non-binding agreements for their water 
supplies. This situation continued during the 1970s until a severe 
drought during the latter part of the decade greatly reduced wetland 
water supplies, and in some instances, eliminated all wetland water 
deliveries. The combination of drought and poor wetland water supply 
reliability resulted in significant impacts to wetland habitat and 
water bird populations, and in particular, wintering waterfowl.
    Partly in response to this crisis, the North American Waterfowl 
Management Plan (NAWMP) was enacted in 1986 and the Central Valley was 
identified as one of the major focal points for addressing the needs of 
North American waterfowl. The Central Valley Habitat Joint Venture 
(CVJV) was formed in 1988. Based upon the findings of the subsequent 
1989 federal Report on Refuge Water Supply Investigations, one of the 
top priority goals of the CVJV became securing firm, reliable water 
supplies for managed Central Valley wetlands. Several CVJV partners 
worked closely with Congress to include wetland water supply provisions 
within the Central Valley Project Improvement Act (CVPIA) of 1992. In 
summary, the CVPIA was to provide key wetland basins with sufficient 
water supplies for the purpose of achieving optimum habitat management 
in all but the most critically dry years. To date, the CVPIA remains 
the most important legislative action ever taken to protect and restore 
Central Valley wetland habitat.
    The CVPIA authorized and mandated that historic water supplies and 
2/3 of baseline CVP mitigation requirements (collectively called 
``Level 2'' supplies) must be provided by the Secretary of the Interior 
from the Central Valley Project. In addition, the incremental water 
supplies necessary for wetlands to operate at full habitat development 
levels (known as ``Level 4'' supplies) were to be acquired through 
purchase from willing sellers and provided in 10% increments per year 
until 2002, when full water supply requirements were to be met. These 
full water levels have not been achieved, due in large part to federal 
and state budget shortages, inconsistency in the timing of water 
deliveries, and increases in water costs on the spot market. This 
shortfall has been a serious problem for Grassland Water District and 
other federal and state wetlands in the Central Valley. As we analyze 
the new proposed legislation, our goal is to ensure that the bill does 
not inadvertently aggravate this shortfall by making it even more 
difficult for Interior officials to carry out their Level 4 mandate, as 
well as the related diversification goal of CVPIA that also depends on 
transfers to succeed.
    Since enactment of the CVPIA in 1992, delivery of water supplies of 
adequate quality and quantity to public refuges and the privately-
managed wetlands of the Grassland Resource Conservation District (GRCD) 
has improved wetland habitat quality and benefited many wetland-
dependent wildlife populations, including waterfowl, shorebirds, 
colonial water birds, and several threatened and endangered species. 
These benefits have been documented in annual reports to Congress and a 
variety of studies and reports conducted by individual refuge units.
    Several long-term water conveyance/supply contracts and agreements 
were negotiated during the 1990s that increase the reliability of the 
CVPIA water supplies to be delivered over the 25-year contract term. 
However, water costs have also escalated as 2 water acquisitions to 
meet CVPIA, urban, and agricultural needs resulted in a sharp increase 
in spot market prices, further stressing limited budgets. Even if fully 
realized, CVPIA's refuge water supply provisions did not resolve the 
issue of firm and reliable supplies to all the NWRs, WAs and private 
wetlands in the Central Valley. The CVPIA required the Secretary of the 
Interior to investigate and report to Congress the water supply needs 
for the remaining private wetlands of the Central Valley and those 
lands included in the CVJV wetland restoration objective. This 
investigation, known as the ``Central Valley Wetlands Water Supply 
Investigations of December 2000,'' identified available water supplies 
for existing private wetlands and water supply requirements to meet the 
wetland restoration goal of the CVJV 1990 Implementation Plan.
    We strongly believe that the refuge water supply provisions are 
among the Act's greatest achievements to date. Vast increases in 
restored wetland acreage, seasonally flooded spring and summer habitat, 
bird use numbers on Central Valley wetlands, and increases in non-
waterfowl wetland dependent species are but a few examples of what the 
CVPIA has already accomplished. Despite these successes, we are 
concerned that this recovery cannot be fully realized without the 
Bureau of Reclamation being given the resources to meet their statutory 
Level 4 refuge water supply obligations, and could be further impacted 
in future years due to the rapid increase in water costs and increased 
competition for CVPIA Restoration Fund dollars. I am attaching a chart 
that shows the shortfall in Level 4 deliveries, and how that shortfall 
has increased in recent years as the spot market price of water has 
gone up.
The Water Transfers Legislation
    Grassland Water District and several of the individual 
organizations within the Joint Venture will be providing written 
comments in the days ahead making specific suggestions for changes to 
the legislation to prevent adverse impacts to wetlands. For example, 
some of these comments will focus on clarifying the provisions of 
Section 3 of S. 1759 to ensure that the call for expedited 
environmental review does not create unintended consequences; others 
will address the concern that Section 2's expanded exemption from CVPIA 
not allow for ``paper water'' transfers by which a particular district 
might try to sell water that it is not currently using, water which in 
fact may be in use by other water users or wetland areas.
    In my present testimony, I wish to draw the Subcommittee's 
attention to two particular problems, which we believe are easily 
solved without causing any harm to the goals of the bill. First, we 
understand it is the intent of the authors of the legislation to 
preserve existing protections of federal and state environmental laws 
that are otherwise applicable to water transfers, with the sole 
exception of the expanded exemption in subsection 3405(a)(1)(m) of the 
CVPIA as provided in Section 2 of the present bill, and the directive 
for programmatic environmental reviews in Section 3 of the bill. 
Unfortunately, because of the structure of the legislation, especially 
its status as a standalone bill rather than an amendment to CVPIA, this 
intention is not as clearly reflected in the legislation as it should 
be. In particular, we believe the numerous protections for wetlands and 
refuge water supplies provided in the CVPIA must be clearly reaffirmed 
as conditions on the newly expanded transfers authorized by this 
legislation. We believe this 3 can be easily achieved in different ways 
(for example, by revisions to either Section 2(a) or to Section 2(b)) 
and will be submitting proposed language under separate cover to make 
clear that, just as the San Joaquin River Settlement is now protected 
in the current version of S. 1759, all other applicable provisions of 
federal and state law, including but not limited to NEPA, the 
Endangered Species Act, the CVPIA and state water transfer laws, are 
also fully preserved.
    Second, we are concerned that the protection and restoration of 
wetlands under CVPIA will become more difficult as a result of the 
measures provided in this bill and, therefore, believe one or more 
mitigation measures are needed to help counteract this unintended 
adverse impact. This impact will result from the reduction in available 
water for acquisition by refuges, the increasing market price for 
acquired water as more buyers are seeking that available water, and 
potentially through increased priority placed on water supply transfers 
authorized by this bill. To help counteract this adverse impact, our 
recommendation is to include language within the bill to facilitate and 
expand a particular kind of voluntary transfer that will assist wetland 
areas, specifically language that facilitates transfers from one refuge 
area to another.
    We believe this language will also help reduce costs to the Federal 
Government, assist Interior in meeting its existing CVPIA obligations, 
and encourage efficient use of refuge water supplies by federal, state 
and private wetland managers. While some may believe that Interior and 
its refuge customers already have the ability to accomplish such 
refuge-to-refuge transfers, the fact that they are not at all common 
and that refuge water in the Sacramento Valley that is not needed in a 
particular year is returned to the CVP for general delivery to urban or 
agricultural customers before the water supply needs of other CVPIA 
refuges are met, indicates that further authority and direction from 
Congress is needed. We would note that this mitigation provision would 
not only help Interior meet its Level 4 obligations, it would also help 
promote the diversification of Level 2 supplies, which requires more 
surface water supplies to be successful. Again, in the coming days we 
and other organizations within the Joint Venture intend to provide the 
Committee with specific language proposals to accomplish this 
straightforward mitigation concept within the structure of S. 1759.
Conclusion
    The wetlands of the Central Valley of California have national and 
international significance and are truly an important resource for our 
state and country. In the CVPIA, Congress made clear that these refuge 
areas need to receive an adequate water supply through the combined 
Level 2 and Level 4 programs. While we support the goal of facilitating 
water transfers that is at the heart of S. 1759, we urge the Committee 
to revise the legislation as necessary to ensure that unintended 
adverse impacts to our Central Valley wetlands are minimized and to 
ensure that refuge-to-refuge transfers are specifically authorized to 
provide mitigation for the inevitable impacts that are caused.

    Senator Stabenow. Thank you very much to both of you for 
your testimony. We'll turn to questions now.
    First, Mr. McIntyre, welcome again. In general your 
testimony is supportive of the provisions of S. 1759. Do you 
think there are more areas in which we could facilitate 
transfers between the east side and the west side water 
districts and improve the water transfer process?
    Mr. McIntyre. I do, Madame Chair. I would encourage and 
have invited the Bureau of Reclamation to engage in workshops 
to identify and distinguish between practice and protocol and 
statutory requirements.
    We believe that we could substantially expedite the 
transfer of water supplies if we did a comprehensive re-
visitation of past practices and determine which of those are 
required by law, which are appropriate and which are 
unnecessary. While at the same time exercising due diligence to 
comply with both state and Federal environmental laws.
    Senator Stabenow. Thank you. Speaking of environmental 
laws, other than the Endangered Species Act which I know we 
have heard concerns about. Are there other factors that 
contribute to a decreased water supply for irrigators in the 
district?
    Mr. McIntyre. There have been a series of decisions all 
intended to shore up a declining delta habitat and delta 
species set. But those are goals and objectives that I believe 
Mr. Candee and I would strongly agree on. It's the approach 
that has been taken by virtue or by virtue by the way the 
Endangered Species Act is written that allows what we believe 
to be the more significant causes of the decline of the delta 
to remain unaddressed. While the focus remains on the state and 
Federal water supply pumps which surely are not responsible for 
the introduction of invasive species or the collapse of the 
food web on which all those species, important native species, 
depend.
    So as I mentioned earlier we encourage the National Academy 
of Sciences review of the recent biologic opinions in an 
expanded view of the delta and how to resurrect it, species and 
habitat. We do not believe that will occur without a 
comprehensive view and the introduction of the best and most 
currently available science.
    Senator Stabenow. Thank you very much.
    Mr. Candee, in your testimony you indicated that you're 
concerned about the protection and restoration of wetlands. 
That would be more difficult as a result of certain measures in 
the bill. I wonder if you might speak further because how would 
enactment of the bill result in a reduction in available water 
for acquisition by the refuges?
    You've talked about the refuges somewhat related to that, 
but and an increased market price for the acquired water. 
Shouldn't the opposite be true that an additional supply of 
water would result in lower prices?
    Mr. Candee. Actually it appears that one of the effects of 
the bill could be to increase the demand, but not necessarily 
the amount of water that's available. So for example the, right 
now there are certain contractors who are able to access water 
that's put on the market. I think one of the goals of the bill. 
I think the authors are quite clear, is to make it easier, 
broaden that group.
    For example in CVPIA those 2 provisions that are referenced 
in section 2 are exempted only for a very limited group. 
There's a very limited exemption. What section 2 of the new 
bill does is broaden that to all of the south of delta 
divisions in the CVP.
    So clearly that will enable more people to compete for that 
same block of water since right now the Interior Department is 
currently one of the people in the market, one of the groups in 
the market, trying to acquire water to meet its obligations for 
refuges. It just seems logical that that will increase the 
demand and increase the price. If you look at that chart at the 
end of my testimony, it shows that as the price was going up 
the supply for the refuges was going down. I think there's a 
limited amount of money that's been made available.
    One of the things that Grasslands and other groups have 
asked for is additional funding support for acquiring that 
water. I understand earlier this week the state legislature 
also finally kicked in some State money for that as well.
    Senator Stabenow. Thank you very much.
    Senator Bennett.
    Senator Bennett. Thank you very much, Madame Chairman.
    Mr. McIntyre, let's talk about the pumps. Even if the 
legislation were passed how much impact would these transfers 
have in meeting your needs if there are no changes made in the 
pumps?
    Mr. McIntyre. Proportionately speaking it's a relatively 
limited benefit compared to returning the pumps to their prior 
permitted capacity. Even if we just go back 2 years ago. 
Essentially in the past 2 years we've lost.
    There may be some dispute in these numbers. But not clearly 
is there any dispute on the order of magnitude. Our average 
reliability 2 years ago, 2 \1/2\ years ago, was roughly 65 
percent of our contract amounts. Today best modeling efforts 
appear to indicate that we're at 35 percent with much greater, 
more likely occurrence of very low allocations from 0 to 10 
percent at which point essentially all of the permanent 
cropping and many of the business enterprise on the west side 
will collapse. There is simply insufficient transfer water 
south of the delta available to sustain those crops in a 0 to 
10 percent environment.
    Senator Bennett. Alright. So your economy and your crops 
are threatened. How much of that threat comes from red tape or 
environmental considerations and how much of it comes from the 
physical ability to deliver the water?
    If the red tape were to be resolved could the water be 
delivered? Is the water available? Could it be there in a 
timely fashion?
    Mr. McIntyre. If I could refer you back to the map. At the 
left hand side or the upper end of the map, above that point 
resides the Sacramento San Joaquin River Delta System, 
otherwise known as the Bay Delta. The primary reason that we 
cannot move water through those facilities is not as a 
consequence of the facilities themselves, but the environmental 
constraints.
    Senator Bennett. It's not a technical problem.
    Mr. McIntyre. Correct. Correct, it is. So your question is 
difficult to answer directly because there is the physical 
capacity to return our average supply to 65 percent. It is the 
environmental constraints imposed by the recent smelt and 
salmon biologic opinions that have further restricted the 
operation of the pumps.
    Senator Bennett. So it's our concern for the smelt that is 
causing the unemployment, driving out of people from their 
homes and their jobs and so on. It isn't the drought.
    Mr. McIntyre. In all fairness to----
    Senator Bennett. I'm not saying the concern of the smelt is 
right or wrong here. But I'm just wanting to see where the 
water is really----
    Mr. McIntyre. Yes.
    Senator Bennett [continuing]. Why the water is really being 
held up.
    Mr. McIntyre. I understand. The water is being held up as a 
consequence of a combination of drought. Although we had near 
average precipitation this year and a 10-percent CVP water 
supply allocation.
    But as to the fairness issue the delta is in serious 
crisis. The issue we take with the response to that crisis is 
that the focus has been pump centric. In other words, 
notwithstanding all of the many other factors causing delta 
habitat and food chain decline the pumps are the vehicle that 
has been subject to a media restrictions.
    We think, frankly, that you could shut the pumps off all 
together and we would continue to see decline of the smelt and 
other species in the delta because of the collapse of the food 
web and toxic intrusion into the delta.
    Senator Bennett. So just so that I understand exactly what 
I think you're saying. The delay in delivering the water and 
the fact that they're getting only 10 percent is more of a 
regulatory factor than it is a physical factor. You have 
average rainfall.
    But you're getting only 10 percent of the water in the 
place where it's desperately needed because of delays based on 
regulation rather than any physical inability to deliver the 
water. Is that a safe summary of what you're telling me?
    Mr. McIntyre. That's generally true, yes.
    Senator Bennett. I see. Thank you very much.
    Senator Stabenow. Thank you, Senator Bennett.
    Senator McCain.
    Senator McCain. Do you have any response to the colloquy 
that just took place between Mr. McIntyre and Senator Bennett?
    Mr. Candee. Grassland Water District didn't ask me to come 
here to talk about those particular issues, but I understand--
--
    Senator McCain. Alright, then never mind.
    Mr. Candee. I do have----
    Senator McCain. I'll talk to Mr. McIntyre, then. I was just 
giving you the opportunity. If you don't want it----
    Mr. Candee. As an individual can I just make one comment?
    Senator McCain. Sure.
    Mr. Candee. That is both the state government and the 
Federal Government earlier this year issued written statements 
that it's really more the drought than any regulatory 
restrictions that has caused any of the water cutbacks this 
year. I think one of the interesting things is earlier this 
week the state legislature finished 2 months of unbelievable 
work trying to come together on a delta package. What's 
interesting is that you had farmers and environmentalists 
working together.
    You had legislators from the north and the south. You had 
Democrats and Republicans. It was very difficult for them to 
come to agreement. But they were trying to come up with a 
package of bills to go with a lot of these issues.
    Finally after an all night session they did reach 
agreement. So I think that's a pretty interesting development. 
Senator Feinstein referenced that earlier.
    Senator McCain. Thank you. Also unfortunately the state is 
not empowered to address some issues such as the Endangered 
Species Act and others that are Federal law.
    Mr. McIntyre, is it true that 500,000 acres or nearly so 
were fallowed this year, that 13 percent of our Nation's food 
supply and it's believed to have cost about 40,000 jobs in 
these rural farming communities which already had a 40 percent 
unemployment rate? Are those numbers pretty accurate?
    Mr. McIntyre. Excuse me. I believe they are generally 
accurate. I can speak specifically to the 500 square miles of 
fallowed ground. We believe it's in excess of that number and 
chose one that was easily defensible.
    I believe that cumulatively over the past 2 years as a 
consequence of continuing declines in water supplies that we're 
seeing close to 40 percent unemployment in some of the smaller 
communities in those rural areas. Tremendous hardship, human 
hardship, as you might imagine associated with that.
    Senator McCain. So really what we're doing is maybe not 
endangering the existence of human beings, but certainly we are 
endangering their way of life that, as I understand, is 
multigenerational. Is that correct?
    Mr. McIntyre. I believe that that is undeniable.
    Senator McCain. So the 6-month study that was enacted in 
the Interior Appropriations bill is not much comfort while we 
await a 6-month review of the biological opinions by the 
National Academy of Sciences. Is that really comforting for the 
farmers and their families out there?
    Mr. McIntyre. We are grateful for any opportunity to 
revisit, in any manner, the biologic opinions including the 
National Academy of Science studies provided that the 
appropriate questions are submitted to the Academy.
    Senator McCain. Would that provide any short-term relief 
for the families?
    Mr. McIntyre. It will not provide relief for this coming 
water supply year as best as we can tell.
    Senator McCain. What if we passed an amendment to suspend 
the biologic opinions for 1 year. Would that have helped?
    Mr. McIntyre. Yes, I believe it would.
    Senator McCain. As you know that was voted down as an 
attempt to do so the Administration spent over $400 million in 
stimulus money to help modernize California's water 
infrastructure including $40 million by the Bureau of 
Reclamation to help Central Valley farmers. Has any of that--
has any benefit from this spending been realized?
    Mr. McIntyre. Not to this point. But they are moving 
aggressively with the $40 million projects which essentially 
are ground water related projects. We do have numerous shovel 
ready projects that we believe would be exceptional candidate 
for stimulus money should those funds be returned or deemed 
inappropriate for some of the original applicants.
    We stand in line, hat in hand, eagerly waiting any analysis 
of that matter.
    Senator McCain. It's a human tragedy that I visited out in 
your part of the country. Even been on several occasions, even 
before it got this serious. You know it really does seem that 
at least in the short term we may have our priorities upside 
down here when you have 40,000 jobs and a way of life 
disappearing.
    I will match my environmental record against anyone. But 
I'm not sure that those people who voted for the Endangered 
Species Act and other acts intended that the consequences would 
be unemployment as high as 60 percent as a direct result of it. 
I don't know what can be done, Mr. McIntyre. But I think we owe 
the people there at least some straight talk.
    That is that the environmental community has more influence 
here than those 40,000 families who have lost their jobs. They 
ought to be told exactly what the prospects of them ever 
regaining their former way of life. What has sustained not only 
them, but 13 percent of America's food supply. At least we owe 
them that.
    I wish the Administration would be more forthcoming in 
telling them exactly what they can expect in the months and 
years to come. So far I don't think that's the case. So I 
extend my thanks to you for your service. I extend my sympathy 
to the families who what, 5, 6 generations have farmed out 
there and done so much for America.
    But there are some of us who will continue to try to get 
you relief rather than lip service even if we're unsuccessful, 
we won't quit trying. Thank you, Madame Chairman.
    Senator Stabenow. Thank you, Senator McCain. Finally I 
would just have a question for each of you.
    First of all, Mr. Candee, would waiving the Environmental 
Species Act provide additional water to the farmers that we're 
all concerned about?
    Mr. Candee. You know it's interesting. Governor 
Schwarzenegger's top water official wrote a letter recently to 
the Senate saying that they did not support that as an 
emergency relief measure. I think part of the reason both the 
Republican Administration and the Democratic leadership in the 
State Legislature focus so much on the recent delta 
legislation, the package of water bills that just passed, is 
because they want to look at solutions that are really going to 
work on the ground.
    So I think there's not a big cry for waiving Federal 
environmental laws. I think the hope is that's there's going to 
be progress on the State legislation moving forward.
    Senator Stabenow. Mr. McIntyre, could you speak to the 
positive aspects of S. 1759 in terms of ways that you believe 
this will help the situation which obviously is a crisis.
    Mr. McIntyre. Yes, thank you for that question. We believe 
that solutions to our current dilemma, dire though it is in the 
current environment, and I mean that the physical environment 
and the political environment necessarily must be incremental 
in nature. We consider this to be an important incremental step 
in helping us bridge the gap between our 10 percent water 
supply allocation and a time during which we will see a more 
comprehensive and realistic delta restoration plan that doesn't 
unduly focus on the state and Federal water pumps which are the 
lifeblood of the state.
    So I'm very grateful for this bill to put it in shortest 
form.
    Senator Stabenow. Thank you very much.
    Senator Bennett.
    Senator Bennett. Just one last quick question. Has this 
affected farmer's ability to get financing on their crops?
    Mr. McIntyre. You know, you must have some background in 
agriculture. One of the extraordinary parts of farming is that 
most farmers are ``all in'' as the term goes every year. They 
hock land and equipment and other assets in order to gain loans 
for purposes of buying this very expensive supplemental water, 
for buying seed, for buying fertilizers.
    Yes, indeed, I am fielding an increasing number of calls 
from lending institutions looking for some confidence that if 
they loan the money the water will follow. That discussion is 
becoming increasingly difficult. It is the first critical chalk 
stone that gets kicked out of the viability of agriculture is 
the inability to obtain Ag loans for each year's startup.
    Senator Bennett. Thank you very much, Madame Chairman.
    Senator Stabenow. Thank you very much. Thank you to both of 
you for traveling here and for speaking about this important 
legislation. I'd like to note that the subcommittee has 
received additional written testimony on the bills before us 
today. That testimony, as well as written submissions from our 
witnesses today, will be made part of the official record.
    Senator Stabenow. For the information of Senators and 
staff, questions for the record are due by close of business 
tomorrow.
    Without further questions this hearing is adjourned.
    [Whereupon, at 3:50 p.m. the hearing was adjourned.]
                               APPENDIXES

                              ----------                              


                               Appendix I

                   Responses to Additional Questions

                              ----------                              

   Responses of Michael L. Connor to Questions From Senator Stabenow 

                                s. 1759
    Question 1a. Your testimony indicates that the Bureau of 
Reclamation is currently working with the State of California to 
develop evaluation criteria for a long-term, programmatic water 
transfer program.
    Is that the program that Reclamation will request consultation on 
with the Fish and Wildlife Service? Will that result in a programmatic 
biological opinion that covers water transfers throughout the Central 
Valley Project?
    Answer. Reclamation is working with the State of California to 
obtain a programmatic biological opinion covering transfers from 
Federal and State contractors located north of the Delta to contractors 
south of the Delta. This process will involve consultation with the 
U.S. Fish & Wildlife Service (FWS) as well as the National Marine 
Fisheries Service after which programmatic biological opinions will be 
provided by those agencies. These biological opinions will cover 
transfers from North of Delta to South of Delta contractors but they 
will not cover water transfers between contractors who are both located 
South of Delta which S. 1759 addresses.
    Question 1b. How long do you anticipate it will take for 
Reclamation to have the biological assessment for the water transfer 
program completed?
    Answer. The Bureau of Reclamation (Reclamation) is working towards 
the goal of issuing the final biological assessment in the spring of 
2011.
    Question 1c. Your testimony indicates that the Fish and Wildlife 
Service could potentially expedite a programmatic biological opinion 
subject to the availability of appropriations--what additional 
appropriations will be required?
    Answer. The FWS allocates its Endangered Species Act funding based 
on a number of factors that help determine the priority of projects or 
office needs. If other projects are no longer going to be carried out, 
it may be possible to reallocate or reprogram these resources to help 
expedite the programmatic biological opinion.
    Question 2a. Your testimony indicates that Reclamation has already 
approved water transfers covering over 400,000 acre-feet of water this 
year.
    Can you provide the committee an accounting of those transfers?
    Answer. To date in the 2009 Water Year, transfers among CVP 
contractors north of the Delta amounted to approximately 105,230 acre-
feet. Transfers south of the Delta among CVP contractors accounted for 
246,739 acre-feet on the Westside of the San Joaquin Valley and 
approximately 83,317 acre-feet within the Friant Division.
    Question 2b. Is the programmatic environmental documentation that 
was used to evaluate those transfers still in place and available for 
use to review future transfer applications?
    Answer. Yes. These transfers are accomplished pursuant to 3 
programmatic environmental documents, each of which covers a period of 
5 years. Reclamation obtains updated programmatic environmental 
documents upon the expiration of the existing documents, and these 
documents are available for transfers occurring within the relevant 5-
year timeframe.
    Question 3a. Section 2 (a)(2) relates to transfers of water among 
several different categories of contractors but requires that the 
transfers occur within a Central Valley Project division.
    Does this provision relate to transfers that would occur both north 
and south of the Delta as long as the transferred water remains within 
a particular division?
    Answer. Yes. The ``North of the Delta'' category includes the 
American River Division, Sacramento River Division, and Eastside 
Division (San Joaquin River tributaries). The ``South of the Delta'' 
category includes the Friant and Delta divisions; the San Felipe and 
San Luis units comprise the Delta Division.
    Question 3b. Under this provision, if a potential transfer will not 
remain within a division, would it still be subject to the entire, 
existing list of requirements under the Central Valley Project 
Improvement Act?
    Answer. Section 2(a)(2) must be read in conjunction with section 
2(a)(1). Taken together, only those transfers of CVP water from North 
of the Delta to South of the Delta would still be subject to all 
Central Valley Project Improvement Act requirements.
    Question 3c. Does this provision of the legislation enable 
transfers of water from north of the delta to south of the delta?
    Answer. This legislation does not change the status quo with 
respect to transfers of CVP water from North of the Delta to South of 
the Delta. Currently, water may be transferred from North of the Delta 
to South of the Delta upon a showing that the water was made available 
for transfer through a savings in consumptive use or groundwater 
substitution.
    Question 3d. Can Reclamation provide an inventory of the various 
types of contractors that fall into those categories?
    Answer. Reclamation's Mid-Pacific Region has approximately 104 
current water service contractors whose capital repayment and charges 
for operations and maintenance are factored into their water service 
rate. Three of these 104 contractors have separate water service and 
capital repayment contracts. In addition, there are145 settlement 
contractors, and 4 exchange contractors. There are approximately 11 
former temporary water service contractors. CVP contractors are listed 
on the internet with the CVP ratebooks at http://www.usbr.gov/mp/
cvpwaterrates/ratebooks/index.html
    Question 4a. Your testimony indicates that if S. 1759 is enacted, 
Reclamation will develop administrative guidelines to ensure that 
transfers take place without significant adverse impacts to other water 
users, federal programs, Indian tribes, Central Valley Project 
operations or the environment--are these criteria consistent with the 
criteria that are currently used to evaluate water transfers within the 
Central Valley Project--or are they new criteria that would be 
developed through the new guidelines?
    Answer. These criteria are consistent with criteria currently used 
to evaluate water transfers.
    Question 4b. How quickly would Reclamation be able to develop these 
administrative guidelines?
    Answer. If this legislation is passed, Reclamation will have the 
guidelines in place for the 2010 Water Year.
    Question 4c. Will these guidelines ensure that third parties such 
as the Hoopa tribe will not be adversely impacted by the transfers 
facilitated by this legislation?
    Answer. The goal of the guidelines would be the prevention of any 
adverse impacts to third parties. The guidelines will require that all 
environmental documentation be completed prior to transfer approval. 
This documentation must address third-party impacts.
    Question 4d. Will these criteria ensure that the interests of the 
wetlands and the Bay Delta are not adversely affected?
    Answer. It would be the goal of the guidelines to prevent adverse 
effects to wetlands and the Bay Delta. The guidelines will require that 
all environmental documentation be completed prior to transfer 
approval. This documentation must address environmental impacts to the 
Bay Delta and wetlands, among other issues.
    Question 5. Regarding the water acquisitions currently required by 
Section 3406 of the Central Valley Project Improvement Act for wildlife 
refuges, will enactment of S. 1759, help, harm or have no effect on 
those acquisitions?
    Answer. Reclamation does not have information as yet to determine a 
positive or negative effect on the refuges. Market forces, hydrology 
and other variables come to play on refuge water supplies, particularly 
Level 4, but we anticipate that this legislation will have no effect 
upon acquisitions of water for refuges. Reclamation could use this as 
an opportunity to facilitate transfers between CVP contractors and the 
refuges, and also between refuges. Facilitating these transfers could 
have mutual benefits to both the contractors and the refuges.
    Question 6. Your testimony indicates that it is difficult to 
calculate the financial impacts of S. 1759, but can the Administration 
ensure that it will be administered in a way that revenues for the 
environmental restoration fund will be protected?
    Answer. Payments to the Restoration Fund are required for all water 
delivered to a CVP contractor, including water which is transferred. 
There should be no adverse impact to these collections, and if 
anything, collection could increase to the extent water transfers 
result in increased deliveries of water.
        questions regarding the drought conditions in california
    Question 7. Please describe the factors that contribute to the 
decreased water supply available to water supply contractors within the 
Central Valley Project? For example, how much have the drought and low 
reservoir supplies contributed to the reduction in water supplies?
    Answer. The 2009 Water Year represents the third consecutive year 
of dry conditions in the Central Valley. The result was decreased 
runoff to all the major river systems and lower than normal contract 
allocations for many CVP water service contractors. CVP exports South 
of the Delta were further limited due to new fishery protections 
required by the 2008 FWS Biological Opinion. For the 2009 Water Year, 
approximately 75 percent of the reduction in the combined exports of 
the CVP and State Water Project (SWP) was related to low runoff, and 
the remaining 25 percent was attributable to the new delta smelt 
protections under the FWS biological opinion.
    Question 8. Attempts have been made to try to prevent the 
application of the Endangered Species Act within the Bay Delta system -
would the Administration support those efforts? What would the 
anticipated consequences be if such a provision were to be adopted?
    Answer. The Administration is not in favor of suspending 
application of the Endangered Species Act (ESA). We are currently 
collaborating with the National Academy of Sciences (NAS) to help them 
research whether there are any ``reasonable and prudent alternatives'' 
(RPAs), that, based on the best available scientific data and analysis, 
(1) would have lesser impacts to other water uses as compared to those 
adopted in the FWS' and National Marine Fisheries Service's biological 
opinions, and (2) would provide equal or greater protection for the 
relevant fish species and their designated critical habitat given the 
uncertainties involved. We will thoroughly review and consider the 
analysis, conclusions, and recommendations from the NAS report and use 
that information as we continue to work with partners to address the 
drought that California is facing.In addition, the Administration is 
supporting the expedited review of and, if feasible, construction of 
projects such as the Intertie that may provide new water supply 
reliability benefits to CVP and SWP customers. The Administration 
believes that strong potential exists to improve water supply 
reliability while protecting endangered and threatened species. These 
twin goals have been achieved in many other river basins across the 
West. Suspending application of the ESA could result in irreparable 
harm to the Bay-Delta ecosystems when alternative solutions exist and 
are being sought.
    Question 9. There are a lot of factors that contribute to the 
health of the Bay Delta--what is the Administration doing to protect 
and stabilize the situation? For example, the Department of the 
Interior, collaborating with the Department of Commerce, is 
commissioning the National Academy of Sciences to conduct a study with 
respect to the biological opinions relating Delta. What are the 
Administration's plans for implementing the recommendations of the NAS 
study?
    Answer. The Administration is supporting ongoing efforts to improve 
our understanding of the Bay-Delta ecosystems and our management of 
human uses of the system. We support the National Academy of Sciences 
(NAS) review of the implementation of the biological opinions governing 
Central Valley Project and State Water Project operations. The NAS has 
extraordinary public respect and is the right independent entity to 
conduct this review. Both the Department of the Interior and the 
Department of Commerce have sought to structure the NAS review to 
ensure that its findings and recommendations address the most pressing 
management questions and are implementable. The Administration plans to 
follow-up on all recommendations that are likely to improve the 
concurrent management of the Bay-Delta ecosystems and water project 
operations.
    The Administration supports the ongoing development of the Bay 
Delta Conservation Plan, which potentially may frame future water 
project operations in a system of habitat and ecosystem conservation 
measures that are being designed to contribute to the recovery of 
endangered and sensitive species and ecosystems while also improving 
the reliability of water supplies. The Administration also supports the 
ongoing Pelagic Organism Decline (POD) investigation. The POD 
investigation is a collaborative effort of 6 Federal and 3 State 
agencies to determine why multiple open-water Delta fish species 
populations declined sharply after 2001. The POD investigation has 
uncovered evidence suggesting that multiple factors, including food web 
changes, toxic chemicals, and water project operations have each 
contributed to the historical declines of these species. The 
Administration is committed to fully exploring all factors that may be 
contributing to excess mortality of endangered and sensitive species, 
so that important initiatives like the Bay Delta Conservation Plan can 
benefit from the best available science.
    Question 10. In the interim, while the NAS study is being 
conducted, are there other measures that can be taken to help alleviate 
the drought conditions? Please describe the efforts the Administration 
is undertaking to address the drought conditions in California?
    Answer. Please see attached fact sheet.
    Question 11. There has been discussion about legislation to address 
specific endangered species in other states, such as the silvery minnow 
in New Mexico. Can you describe that situation and the actions taken by 
Congress, and explain whether that situation is applicable to the 
current situation in the California Bay Delta?
    Answer. Some argue that an ESA exemption was used earlier this 
decade to address an ESA-water rights crisis, similar to the one in the 
CA Central Valley, in the Middle Rio Grande involving the endangered 
Rio Grande silvery minnow. The legislative language in question, 
attached to the 2004 Energy & Water Appropriations bill, P.L. 108-137, 
Section 208 (2003), provided protection from legal challenge to a 2003 
FWS biological opinion (BiOp) addressing the impacts of Reclamation's 
Middle Rio Grande water operations on the endangered silvery minnow. In 
other words, the silvery minnow rider called for compliance with the 
Endangered Species Act through compliance with the biological opinion. 
As such, the water project is in compliance with the ESA only so long 
as there is full compliance with the BiOp. The silvery minnow rider 
created added incentives for all stakeholders to take the actions 
necessary to protect the silvery minnow, because if they don't follow 
the BiOp, the rider's protections disappear.
    The silvery minnow situation stands in stark contrast to 
legislative proposals to exempt the Central Valley water project from 
the Endangered Species Act, to operate it without a Biological Opinion 
of any kind, or to reinstate biological opinions that have already been 
determined to be scientifically insufficient by the Federal District 
Court. Whereas such proposals would eliminate the ESA's protections for 
the listed species, the silvery minnow rider implemented the ESA's 
protections for the minnow by reaffirming the BiOp.
    The second part of the minnow rider eliminated the Secretary's 
discretion to unilaterally reallocate San Juan-Chama (SJ-C) project 
water away from Reclamation contractors to provide flows for the 
silvery minnow. The SJ-C is a trans-basin diversion that diverts water 
from the San Juan Basin and delivers it to the Rio Grande basin in New 
Mexico where it supplements the water supply available to sustain the 
minnow. Since the use of this water (an imported supply) was not 
responsible for degrading the minnows' habitat, Congress decided it 
should not be reallocated to provide flows for the minnow absent a 
willing seller arrangement. No similar protection was provided for 
native Rio Grande water.
    The silvery minnow BiOp contained an incidental take statement that 
required reconsultation should the amount of minnow mortality exceed an 
established limit. To this date, no such reconsultation has been 
necessary because minnow mortality has not exceeded the limit 
established by the BiOp. Consistent with regulations for all Biological 
Opinions (50 CFR Sec. 402.16), reinitiation of the silvery minnow BiOp 
may also be triggered if (a) new information reveals effects of the 
agency action on listed species or critical habitat in a manner or to 
an extent not considered in the BiOp, (b) the agency action is 
subsequently modified in a manner that causes an effect not considered 
in the BiOp, or (c) a new species is listed or critical habitat 
designated that may be affected by the action. The silvery minnow BiOp 
also specified additional reinitiation requirements specific to this 
consultation. These include required reinitiation if any of the 
following occurs: (a) deviations from any environmental commitments, 
(b) densities of silvery minnows fall below current levels in the 
Angostura Reach, (c) no ``wet years'' (as defined in the BiOp, 
excluding years in which Compact Article VI or VII storage restrictions 
are in place) occur within 6 years of the BiOp issuance, or (d) a net 
loss of southwestern willow flycatcher habitat.
    Responses of Michael L. Connor to Questions From Senator Bennett
                                s. 1759
    Question 1. We are disappointed that the State of California was 
not able to testify today regarding this bill----
    Can you generally describe the relationship or interactions between 
the Bureau of Reclamation and the State of California relating to the 
transfers process?
    Answer. Reclamation and DWR work together on a daily basis to 
coordinate the joint operations of the CVP and SWP. Reclamation and DWR 
worked cooperatively on the 2009 Drought Water Bank and have undertaken 
the joint development of programmatic environmental documentation and 
guidelines to cover north to south transfers on a long-term basis. 
Reclamation and DWR use the combined export capacity of the two water 
projects to take maximum advantage of transfer windows for all north to 
south transfers.
    Question 2. Can you please describe what Reclamation's current 
process is for review of an application to transfer water from one 
district to another? How will enactment of S. 1759 speed the process 
up?
    Answer. A written application describing the entire transfer 
transaction is submitted to one of Reclamation Mid-Pacific Region area 
offices. Reclamation then prepares a reimbursable agreement and upon 
receipt of the requested deposit, Reclamation begins evaluating the 
transfer in accordance with the CVP Water Transfer Guidelines. The 
transferor's (seller's) request must include, where appropriate, a 
description of how the water to be transferred is being made available, 
as well as a description of the facilities to be used, and the timing 
of the conveyance of the water, the name of the transferee (buyer). If 
the transfer is not covered by an existing programmatic environmental 
document, appropriate environmental documentation, including ESA 
compliance, must be prepared before approval. The area office 
determines if additional costs for the use of additional facilities 
must be collected. If the transfer is approved, an approval letter is 
then sent to the transferor district. S. 1759 will speed up the process 
by mandating additional programmatic environmental documentation be in 
place, reducing the time needed to develop such documentation on an 
individual basis, and by eliminating the need for conclusive proof that 
the water for transfer was made available through savings in 
consumptive use. As always, transfers will still be subject to the 
availability of capacity through a combination of CVP and SWP 
facilities.
    Question 3. Does Reclamation have any way of quantifying the amount 
of additional water that may be available to be transferred to some of 
the water districts that are currently suffering from a lack of water 
if this legislation is enacted?
    Answer. The quantity of water considered for transfer varies 
significantly from year to year. It depends upon several factors, many 
of which are beyond the control of Reclamation. Hydrologic conditions, 
commodity prices, and availability of Delta pumping capacity are a few 
of these conditions.
    Question 4. Do you know the percentage of districts that have a 
groundwater supply available to supplement the surface water supply? 
Can you provide any estimate of the amount of groundwater pumping that 
may occur in any given year?
    Answer. Overall, Reclamation estimates that approximately 65 
percent of CVP contracting districts have a groundwater supply 
available to supplement surface water supply (counting only those 
districts that have wells that can pump in excess of 1,000 acre-feet 
per year).
    Question 5. President Obama recently signed the Energy and Water 
appropriations bill that contains short term provisions that are 
similar to the provisions in S. 1759. What has Reclamation done to 
implement that new law? Would Reclamation do anything differently to 
comply with S. 1759 if it is enacted?
    Answer. Reclamation is unaware of any transfer applications made 
since the enactment of the appropriations bill so we have not had the 
opportunity to implement the new law. If S. 1759 is enacted, 
Reclamation will undertake preparation of the programmatic 
environmental documentation for transfers from the eastside to the west 
side of the San Joaquin Valley.
    Question 6. One of the requirements of Section 4 of the bill is 
that Reclamation must submit updated reports to Congress regarding the 
water transfer program until the Commissioner ``determines that no 
further Federal action would be warranted or authorized''--How will 
Reclamation make that determination?
    Answer. Reclamation would make this determination on the basis of 
whether new water transfer applications are still being submitted and 
the environmental documentation called for in this Act is in place.
    Question 7. Is the current infrastructure in California able to 
handle the increased transfers as envisioned in this bill or will new 
connections need to be built--pipelines, interties, etc?
    Answer. Reclamation does not envision that new infrastructure will 
need to be constructed as a direct result of this legislation.
    Question 8a. Could the San Joaquin River be utilized to move 
transferred water? What impact does the San Joaquin River Settlement 
have on potential water transfers?
    Could the San Joaquin River be utilized to move transferred water?
    Answer. Yes, the river could be used to transfer water. However, a 
permit from the State Water Resources Control Board for an additional 
point of diversion on the San Joaquin River would be required to 
transfer project water out of Millerton Lake.
    Question 8b. What impact does the San Joaquin River Settlement have 
on potential water transfers?
    Answer. There would potentially be limited times of the year during 
March and April where there is no available channel capacity to 
transfer water in the San Joaquin River because of pulse flows required 
by the Settlement. Proposed transfers from May-February should not be 
affected by Settlement flows.
    P.L. 111-11 contains provisions substantially similar to many of 
the provisions in the current legislation. Although worded slightly 
differently, the impact of that law is to authorize the same transfers 
as S. 1759 authorizes in Section 2(a)(2). The 111-11 language requires 
two conditions precedent to transfers: the first is release of Interim 
or Restoration Flows and the second is conversion of the current 9(e) 
water service contracts to 9(d) repayment contracts. Upon fulfillment 
of the conditions precedent, and upon submission of a narrative 
describing how the transfer will mitigate the effects of the 
Restoration and Interim flow releases, the contractors can transfer any 
portion of their contract allotment other than the water used for 
Interim and Restoration flows without a showing of a savings in 
consumptive use and without regard to the limits established by the 
CVPIA historic use provision.
    Question 9. How have reduced deliveries in wet years impacted 
groundwater supplies, in particular, as they relate to conjunctive use 
projects?
    Answer. The Friant Division was originally conceived as a 
conjunctive use project. Transfers during dry years will impact 
groundwater supplies by both drawing on those supplies through 
groundwater pumping and because the aquifer will not recharge if 
surface water is being transferred. In general, Reclamation believes 
that groundwater pumping during dry years depletes the aquifer and 
transfers of water decrease the amount of recharge. Friant Division 
contractors will thus have an incentive to limit the amount of water 
that they make available for transfer in order to manage their 
groundwater supplies to ensure availability of water when it is needed.
                                s. 1758
    Question 1. Under current regulations, what is the likelihood of 
hydropower being developed on the Diamond Fork Unit?
    Answer. In October 2004, the Central Utah Water Conservancy 
District completed the Supplement to the 1988 Definite Plan Report for 
the Bonneville Unit (DPR). The DPR Power Appendix and Financial and 
Economic Appendix provide a detailed analysis of federal power 
development on the Diamond Fork System. Although the analysis 
determined federal power development would be feasible based on the 
October 2004 DPR Supplement, power development at Diamond Fork could 
not begin until after the Utah Lake System has been constructed. It is 
uncertain when or whether federal power would be developed at Diamond 
Fork.
    Question 2. If hydropower is not developed on the Diamond Fork, how 
will the $161 million allocated to power generation be recouped?
    Answer. If hydropower is not developed on the Diamond Fork System 
as contemplated in the DPR, the costs allocated to power generation 
would be re-allocated to the remaining project uses. The Municipal and 
Industrial, Irrigation, and Fish and Wildlife water users would be 
obligated to pay a proportionately larger share of the project costs.
    Question 3. If hydropower is installed at Diamond Fork, how much 
will federal revenues increase due to annual power fees?
    Answer. If federal power is developed on the Diamond Fork System, 
in accordance with the DPR, the revenue generated is expected to be 
approximately $5.3 million annually. The revenues would be used to 
repay the capital costs of power development ($161 million) and the 
operating and maintenance costs allocated to power.
    Question 4. According to CBO, hydropower sponsors would be required 
to pay $400,000 in fees beginning in 2015. So from 2015-2019, the 
federal revenues would increase by $2 million.
    Answer. If private power is developed on the Diamond Fork System as 
an alternative to federal power as described in the DPR the private 
developer would be required to enter into an agreement with the United 
States under the authority of a ``Lease of Power Privilege.'' A lease 
payment to the United States by the private developer would be 
negotiated. In the past, similar private power developments on 
Reclamation projects have resulted in a lease payment to the United 
States of 3 mils or $3 per mega-watt hour. Under the Diamond Fork 
System scenario and with the current water supply a 3 mil payment to 
the United States would equal approximately $400,000 annually.
    Question 5. It seems to me that you aren't getting anything now, 
and are very unlikely to in the future because the cost structure in 
place doesn't make it feasible. With this legislation, you will at 
least receive $2million in power fees, on a system that already been 
built out and largely paid for.
    Answer. If federal power is developed at the Diamond Fork System it 
would not be built until after the Utah Lake System is constructed. The 
power would be marketed by the Western Area Power Administration with 
estimated revenues of $5.3 million annually. The revenues would be used 
to repay the capital costs of power development and costs allocated to 
power.
    If private power is developed at the Diamond Fork System no federal 
investment would be required. Under existing law, private developers 
would provide the capital costs and a portion of the revenues would be 
paid to the United States under a Lease of Power Privilege.
    In general the federal government has to be careful to ensure that 
its policies are fiscally responsible over the long term. We need to 
look not only at years 2015-2019, but at future fiscal years to 
determine what the overall impact would be on the Treasury.
          Attachment.--California Drought Response Fact Sheet
    California is in the third year of dry hydrologic conditions. While 
the most adversely affected by the drought conditions are the water 
service contractors north and south of Delta, Reclamation is working 
with all water users on short and long-term actions to improve 
California's ability to deal with droughts and low water supply 
allocations. Some of these actions include facilitating and supporting 
water transfers, utilizing groundwater banks, and further diversifying 
water supplies.

   California is in the third year of drought conditions, 
        resulting in reduced runoff and lowered reservoir levels. 
        Precipitation in some river basins in 2009 was near-normal, but 
        the runoff up and down the Sacramento and San Joaquin Valleys 
        has consistently been at only 65-70% of normal. The run-off is 
        a good measure of the water available to fill California's 
        reservoirs and inform the Bureau of Reclamation's allocations. 
        The smaller basins responded well to the late-season 
        precipitation: the American River Basin's Folsom Reservoir 
        nearly filled and the San Joaquin's Friant Division is now at 
        100% Class 1 and 23% Class 2 deliveries. But while some areas 
        were aided by the improved weather conditions, the South-of-
        Delta area still felt the effects of the continued dry 
        conditions. As it relates to westside Central Valley Project 
        (CVP) agriculture, the dry conditions in the spring of 2008 and 
        early winter of 2008/2009 (drought related), combined with the 
        late winter and spring 2009 pumping restrictions (ESA and 
        regulatory related), resulted in a 10% allocation. Dry 
        hydrologic conditions resulted in a loss of about 1,600,000 
        acre-feet of water and pumping curtailments in the Delta to 
        protect delta smelt resulted in a loss of about 500,000 acre-
        feet of water. This 2,100,000 acre-feet of water could have 
        been delivered to agricultural and urban users. For the CVP, 
        these reduced supplies have fallen predominantly on the water 
        service contractors in the west side of the San Joaquin Valley 
        who hold junior water rights.
   For the 2009 water year, Reclamation and the water users 
        worked together to minimize the impacts of 3 consecutive dry 
        years. The CVP water allocation for 2009 equates to about 80 
        percent of 5-year average of the overall amount of water 
        delivered to all CVP contractors; however, CVP water 
        allocations vary by type of contractor (e.g., water service, 
        urban, water rights, refuge) and by geographic location; 
        therefore reductions in allocations do not affect all water 
        users the same. As mentioned above, the most adversely impacted 
        CVP contractors are those on the west side of the San Joaquin 
        Valley where the allocation to agricultural water service 
        contractors is only 10 percent or about 195,000 acre-feet of 
        water and M&I is 60 percent or about 83,000 acre-feet.

    In 2009, water contractors worked to secure water from alternative 
sources to address the needs of their customers by acquiring water from 
willing sellers and by increasing groundwater pumping. State and 
Federal Contractors participated in the 2009 Drought Water Bank, 
transferred Yuba River Accord supplies, and purchased water from the 
Sacramento Valley and Stanislaus River water districts contractors. 
South-of-Delta contractors have also utilized Federal facilities 
pursuant to Warren Act contracts to move water acquired from non-
Federal sources south-of-Delta.

   The contract water supply compared to the actual allocations 
        for both north-and south-of-Delta as of August 2009 are as 
        follows:

      
    
    
      
   In order to alleviate effects of the drought in 2009, 
        Reclamation continues to coordinate actions and activities with 
        numerous Federal and State agencies, including the U.S. Fish 
        and Wildlife Service, National Marine Fisheries Service, the 
        California Department of Water Resources, State Water Resources 
        Control Board, California water users, and many other water 
        entities. Following are specific activities that are being 
        implemented:

    Water Transfers--Reclamation is working closely with the California 
Department of Water Resources to use the flexibility of the CVP and SWP 
facilities to accommodate water transfers and exchanges among water 
districts to make the most effect use of limited supplies. Reclamation 
has worked to facilitate critical ``North to South'' transfers to CVP 
contractors totaling 146,000 acre-feet. Since January 2009, more than 
136 local transfers, totaling some 340,000 acre-feet, have been 
approved between willing sellers and buyers throughout the CVP. Of 
this, some 230,000 acre-feet were south-of-Delta transfers (including 
transfers of rescheduled water).
    Banked Groundwater--Reclamation is prioritizing the review and 
approval of proposals for the return of previously banked groundwater. 
As of July 17, Friant Division Contractors withdrew 7,016 acre-feet and 
Westlands Water District withdrew 6,063 acre-feet from existing 
groundwater banks.
    Rescheduling--Reclamation approved requests from water contractors 
to ``reschedule'' (carryover) 2008 water supplies they had conserved in 
San Luis and Millerton Reservoirs into 2009. The total water 
rescheduled in San Luis Reservoir was 336,701 acre-feet and 55,615 
acre-feet in Millerton Reservoir (Friant Division).
    Consolidated Place of Use--Reclamation and the California 
Department of Water Resources filed a joint petition in March 2009 with 
the State Water Resources Control Board to Consolidate the CVP and SWP 
Places of Use to increase operational flexibility. In May, the State 
Water Resources Control Board adopted an Order approving the petition 
which allows CVP and SWP water to be delivered within the same 
overlapping area which aided in facilitating transfers and exchanges of 
water among both sets of contractors.
    Refuge Level 2 Water Supply Deliveries--Reclamation continues to 
coordinate with Federal and State refuge managers on scheduling 
delivery of their WY 2009 contracted water supplies of 422,251 acre-
feet to months outside the agricultural season. Further, groundwater 
wells are being installed to help supply water to the refuges, thus 
freeing up CVP supplies for agricultural and urban use.

   During his Town Hall Meeting in Fresno on June 28, 2009, 
        Secretary Salazar announced his appointment of Deputy Secretary 
        David Hayes to lead the Federal response to California's water 
        supply and related environmental issues in coordination with 
        the State and stakeholders. Further, the Secretary has assigned 
        Associate Deputy Secretary Laura Davis and Reclamation 
        Commissioner Michael Connor to co-chair the Federal Drought 
        Action Team, which includes representatives of the U.S. 
        Department of Agriculture, U.S. Environmental Protection 
        Agency, NOAA Fisheries, Small Business Administration, U.S. 
        Army Corps of Engineers, U.S. Department of Labor, the Council 
        on Environmental Quality, and the Office of Management and 
        Budget. The team meets regularly to ensure maximum attention to 
        ways the Federal agencies can assist in marshaling existing 
        resources to respond to and mitigate the impacts of the drought 
        on California water users.
   On Oct 23, 2009, the U.S. Fish and Wildlife Service 
        announced the creation of the Bay-Delta Fish and Wildlife 
        Office, located in downtown Sacramento. This new office will 
        focus on conservation issues related to the increasingly vital 
        Delta.

    The Secretary has also elevated Federal involvement and leadership 
in the development of the State-led Bay Delta Conservation Plan (BDCP), 
a collaborative planning process that seeks to provide for a 
sustainable Sacramento-San Joaquin Delta to address the needs of 
several threatened and endangered species while improving water system 
reliability south of the Delta. Reclamation has executed Financial 
Assistance Agreements with the California Department of Water Resources 
to assist in the completion of planning efforts, environmental 
documents, and technical studies.

   The Department has allocated $40 million in American 
        Recovery and Reinvestment Act (ARRA) funds for drought relief 
        projects to help reduce impacts as quickly as possible in the 
        short term and with a major emphasis on minimizing impacts in 
        WY 2010. The projects include temporary pipelines and pumps, 
        new domestic and irrigation water wells, well-enhancement 
        projects, and a groundwater monitoring effort. Many of the 
        projects will help preserve permanent crops and associated jobs 
        in the San Joaquin Valley, an area experiencing economic 
        hardship and high unemployment rates.
   Reclamation has allocated $134 million for 27 projects 
        approved under the Title XVI (water recycling and reuse) 
        Program; over $22 million will be spent on 6 projects in the MP 
        Region. These projects will provide 13,000+ acre-feet of 
        recycled water per year, reduce dependence on existing potable 
        water supplies and improve water supply reliability.
   Reclamation finalized a funding agreement with the Tehama 
        Colusa Canal Authority (TCCA) to build an interim pumping plant 
        at Red Bluff to allow for pumping of an additional 500 cubic 
        feet per second (cfs) of water to TCCA for irrigation starting 
        in May 2009. This is in addition to existing pumping capacity 
        of about 465 cfs. The interim pumping plant will allow the 
        gates of the Red Bluff Diversion Dam to remain open, providing 
        unimpeded fish passage for threatened and endangered salmon, 
        steelhead, and green sturgeon, as well as other fish species.
   With funding provided by the ARRA and other water 
        conservation programs, Reclamation is encouraging water use 
        efficiency projects to accelerate implementation of 
        conservation activities through cost-shared grants:

           ARRA--Reclamation has solicited proposals for $40 
        million in ARRA Challenge Grants for water use efficiency 
        projects. 4 grants will be awarded to San Joaquin Valley water 
        districts totaling almost $11 million. An additional project in 
        Sacramento for urban water meters will be awarded for $5 
        million. Projects in the Mid-Pacific Region include expanding 
        existing groundwater water banks and development of new 
        groundwater banking facilities, water marketing, automating 
        water delivery structures, and installation of water meters. 
        Awards will range from $1-$5 million. In all, projects in 
        California totaled over $27 million of the program's $40 
        million.
           Water Marketing and Efficiency Challenge Grants--
        Reclamation is currently awarding eight Water Marketing and 
        Efficiency grants to San Joaquin Valley Contractors for $2.4 
        million. Awards are for $300,000 each and projects include 
        ground water banking facilities, flow measurement, and system 
        automation.
           CALFED Water Use Efficiency Grant Program-Two 
        projects were awarded in the San Joaquin Valley for $1.6 
        million. Projects will provide benefits to the Bay-Delta while 
        providing better water management to the districts.
           Water Conservation Field Services Program-
        Reclamation has awarded five grants in the San Joaquin Valley 
        for system automation, flow measurement control, and mobile 
        irrigation labs for land owners to aid in efficient irrigation 
        practices. Awards totaled $175,000.

   On July 31, 2009, the Mid-Pacific Region issued 
        Rescheduling/Carryover Policy and Guidelines for the 2010 water 
        year, which runs from March 1, 2010, through February 28, 2011. 
        Historically, Reclamation has released the Guidelines late in 
        the water year; however, recognizing contractors' need to make 
        plans in preparation for the 2010 water year, the Region 
        committed to publishing the 2010 Water Year Guidelines by 
        August 1, 2009. In addition to the Guidelines, which apply to 
        allocated CVP water only, the policy also addresses storage 
        priority for various types of Project and non-Project water to 
        be stored in San Luis Reservoir, some of which may be kept in 
        storage well into the 2010 water year.
   As California's population continues to increase, 
        Reclamation is working with the State on longer-term plans and 
        projects to prepare to manage future water supply shortages, 
        improve available supplies, and minimize hardships. Projects 
        include:

           Bay Delta Conservation Plan (BDCP): The BDCP is a 
        collaborative planning process that seeks to provide for a 
        sustainable Sacramento-San Joaquin Delta to address the needs 
        of several threatened and endangered species while improving 
        water system reliability south of the Delta. Reclamation and 
        the Department of Water Resources have jointly entered into 
        Financial Assistance Agreements to provide and aid in the 
        development and completion of planning and environmental 
        documents, along with technical studies.
           Delta-Mendota Canal (DMC) and California Aqueduct 
        Intertie Project: The Intertie would connect the DMC and 
        Aqueduct via a new pipeline and pumping plant to help meet 
        water supply demands, allow for maintenance and repair 
        activities, and provide the flexibility to respond to CVP and 
        SWP emergencies. The project was identified as a proposed 
        action in the August 2000 CALFED Bay-Delta Program Programmatic 
        Record of Decision. A Record of Decision is planned to be 
        signed in December 2009 allowing initiation of construction.

           Other Storage Projects: As a component of CALFED, 
        Reclamation is studying storage projects related to water 
        supply and reliability, including the Shasta Lake Water 
        Resources Investigation, North-of Delta Offstream Storage 
        Investigation (Sites Reservoir), Los Vaqueros Reservoir 
        Expansion Investigation, and the Upper San Joaquin River Basin 
        Storage Investigation.
                                 ______
                                 
   Responses of Martin R. McIntyre to Questions From Senator Bennett
    Question 1a. Please describe the direct economic contribution of 
agriculture in the Central Valley of California.
    Answer. Agricultural production and processing are especially 
important to the Central Valley. The University of California estimates 
that in the Central Valley, considering the economic ripple effects, 
24% of private sector employment and over 18% of private sector labor 
income is attributable to these sectors.
    Question 1b. Please describe the percent of the private sector 
labor force that is directly related to California farms and the 
processing sectors.
    Answer. According to the University of California, approximately 
7.3 % of the state's private sector labor force is directly related to 
California farms and food processing sectors alone. The majority of 
these jobs exist in the San Joaquin Valley. According to the USDA, 
total California farm and farm related employment is significantly 
larger and was approximately 2,750,000 in 2002 (13.8 % of Ca. labor 
force).
    Question 1c. What % of the California state labor income can be 
attributed to these industries?
    Answer. According to the California Department of Agriculture, 
direct California farm receipts in 2007 totaled $36.6 billion or about 
13% of the Nations total gross farm receipts. Almost 6% of California 
labor income is attributable to farms and closely related processing 
industries. In 2007, California agriculture accounts for $11 billion in 
international exports.
    Question 1d. How many jobs are created in your area for every $ in 
farm sales, both directly and indirectly?
    Answer. Every $1 billion in farm sales generates about 18,000 jobs.
    Question 1e. Please describe how much of the agricultural 
productivity in your area is driven by water. If there is less water 
available, how much will this impact the productivity level?
    Answer. Over 95% of agricultural production in this area is 
directly related to irrigation. Reduced water deliveries will result in 
reduced productivity of nearly one for one. In other words, a 1% 
reduction in water supply results in approximately 1% in reduced 
productivity for affected lands.
    Question 2. Please describe why over the last ten years there has 
been a growing shift from row crops to permanent crops (trees and 
vines).
    Answer. The shift in cropping patterns is depicted in the graphic 
below. Factors that have driven the shift from row crops to permanent 
crops during the past 10 years include the following:

   Increased water supply costs-Increased costs have forced 
        more growers to seek out high value permanent crops to offset 
        sharply increased production costs.
   Water conservation investments-substantial capital 
        investment is necessary to implement high efficiency irrigation 
        systems. Those costs can be better absorbed in higher value 
        permanent crop environments.

    Question 3a. As indicated in your testimony, your on-farm 
irrigation efficiency is estimated to average greater than 80%. Please 
describe why in 2009 you had to fallow 25% of your irrigable land, and 
why you had to abandon 80% of your annual crops.
    Answer. There are three primary reasons for increased fallowing and 
abandonment of annual crops:

   2009 saw the lowest water supply allocations in the history 
        of the Central Valley Project (CVP): In March of 2009, the US 
        Bureau of Reclamation notified west side water Districts that 
        contracted South of Delta (SOD) CVP water supply allocations 
        would initially be zero and that under any circumstances 
        allocations were likely to remain very low. Planting decisions 
        must be made in late winter/early spring based on available 
        water supply forecasts.
   No reliable alternative water supplies: Any and all 
        supplemental water supplies (water transferred from elsewhere) 
        are uncertain and require long lead times. A grower cannot 
        afford the great expense of planting annual crops without an 
        assured water supply.
   Water costs: Under such circumstances supplemental water, if 
        available, is very expensive. Supplemental water costs 
        delivered to the west side of the San Joaquin valley in 2009 
        averaged over $400 per acre foot. A cost above that which 
        annual crop markets can support.

    Question 3b. At what point are your permanent crops at risk?
    Answer. Permanent crops located SOD were at risk this year and will 
remain at risk until or unless Delta pumping constraints are returned 
to the 65% average reliability available prior to the implementation of 
the Delta smelt Biologic Opinion (B.O.). Even for the most profitable 
permanent crops, $400 acre foot water costs are not sustainable. 
Additionally, with post B.O. average CVP allocations at about 35% the 
occurrence of years when CVP yields zero agricultural water supply 
increases substantially. At that point little to no supplemental water 
would be available and permanent crops would die or become seriously 
damaged.
    Question 4. Please describe the process you undertook to transfer 
water within the CVP prior to the implementation of CVPIA. Furthermore, 
describe what you may consider a routine transfer that historically had 
occurred but now is not possible.
    Answer. Prior to the implementation of the CVPIA, or more 
accurately the interpretation of the CVPIA by the Reclamation, 
transfers were considered a contract right and water was moved around 
within the CVP with a relatively simple notification of Reclamation by 
the contractor and the subsequent approval of what, in essence, was a 
water schedule change involving the transferring contractor and the 
receiving contractor. Transfers were viewed as an operational issue 
where the change in the point of delivery and the timing of the 
delivery as a result of the transfer needed to be checked for potential 
operational impacts. It was not viewed as a significant federal action. 
Thus, there was a real ease in moving water among Project contractors.
    Prior to CVPIA, Project contractors included entities that did not 
have long-term contracts, but either contracted with Reclamation on a 
temporary basis (one-year contracts) or on a short-term basis 
(contracts of up to fifteen years in length). These entities would have 
access to Project supplies that were in excess of the contractual 
demands of the long-term contractors.
    Transfers to and from temporary or short-term contract neighboring 
districts which shared common groundwater resources occurred commonly. 
These same transfers can no longer occur without meeting the 
``consumptive use'' test and without undergoing individual review.
    Question 5. Prior to the implementation of the Central Valley 
Project Improvement Act (CVPIA) were transfers occurring within the 
Central Valley? In general, how long did it take for water to be 
transferred amongst different entities once an agreement was made on a 
transfer?
    Answer. Transfers within divisions of the CVP occurred regularly. 
There were transfers occurring annually to balance annual vagaries in 
supply and demand as between contractors. Temporary surplus or 
shortages among contractors of available water supplies were easily 
managed. Most of the CVP was in a water surplus condition and supplies 
were highly reliable. The Friant Division of the CVP was more isolated 
from the main CVP storage reservoirs on the Sacramento, Trinity and 
American rivers and thus was more subject to shortages, but only in the 
driest years was water sought from other parts of the CVP. Some water 
was obtained in the drought year 1977 from other parts of the CVP for 
the Friant Division, but this was Project water set aside by 
Reclamation as a drought water bank and not transfer supplies from 
another CVP contractor.
    As noted above in response to the previous question, transfers were 
largely viewed as operational issues. Typically there was little 
concern associated with the changed point of diversion or timing of the 
diversion as a result of the transfer. In most circumstances, a call 
could be placed to Reclamation's operations personnel, who would 
verbally approve a transfer on the spot. Follow up paperwork sufficed 
as the official request for the transfer along with the appropriate 
response from Reclamation's contracting officer both of which often 
trailed the actual movement of the water. Transfers were thus approved 
very quickly. If there was concern as to canal capacity or reservoir 
operations resulting from Reclamation's initial review of a transfer, 
there would be a delay until Reclamation could validate or dismiss 
their concerns, but the delay usually entailed a couple of days at the 
most.
    Question 6. As referenced in your testimony on page 11, you 
indicate that prior to Biologic Opinions (B.O.s) rendered in the past 
two years, south of Delta CVP allocations averaged 65%, but now are 
forecasted to be only between 10--30 %. How much of this reduction can 
be attributed to the B.O.s?
    Answer. Hydrologic modeling reveals that the combined water supply 
impacts of the two recent B.O.s will cause the average annual south of 
Delta, CVP agricultural allocation to fall from 65% to 35%. These 
impacts are summarized in the table* above. The Committee's question is 
more difficult to answer.
---------------------------------------------------------------------------
    * Table has been retained in subcommittee files.
---------------------------------------------------------------------------
    The forecast of a water supply allocation of between 10--30% 
presented on page 2 of my testimony refers specifically to 2010 and 
takes into consideration circumstances as they now exist, including the 
effects of drought and regulatory restrictions to the degree they are 
currently understood. Predicting how much of the potential reduction is 
drought and how much is regulatory is a difficult task due in large 
part to the wide range of discretion available to the United States 
Fish & Wildlife Service (FWS) to curtail pumping by the Central Valley 
Project (CVP) and State Water Project (SWP). While it is difficult to 
predict how severely FWS decisions will impact next year's water 
supply, we can look to how 2009 was affected by implementation of the 
2008 FWS biological opinion.
    According to the Department of the Interior, FWS actions resulted 
in the loss of 500,000 acre-feet of water in 2009, thus exacerbating 
the effects of the natural drought by over 30%. Other estimates are 
higher. There is no evidence, however, that these actions resulted in 
any improvement to the fish population level. On the contrary, current 
delta smelt trawl data indicates abundance is at an all time low 
despite two consecutive years of severe operational curtailment of the 
CVP and SWP. If this water had been available, the water allocation to 
our farmers would have likely risen from 10% to 25%, a two-and-a-half 
fold water supply increase, mitigating many of the economic, social, 
and environmental impacts that savaged our rural, agricultural region.
    Of even greater concern, these severe impacts do not include any of 
the effects from the United States National Marine Fisheries Service 
(NMFS) biological opinion, which was not issued until June, after the 
period it would have affected the 2009 water supply. However, it will 
impact the 2010 water-year in ways that are far from fully understood. 
Disagreements about interpretation of the biological opinions and 
questions over how they might be implemented and potential conflicts 
between their prescribe actions, for example, are hampering development 
of the Bay Delta Conservation Plan. Although these vagaries make 
forecasting incredibly difficult; we can suggest the likely ranges of 
impact using conservative assumptions.
    Currently, analyses conducted by the California Department of Water 
Resources indicate that on average the long-term adverse water supply 
impacts attributable to issuance of the two biological opinions upon 
people who rely on water from the CVP and SWP will create losses 
ranging between 650,000--1,040,000 acre-feet due to the FWS biological 
opinion, and between 230,000--530,000 acre-feet of additional loss 
under the NMFS. These levels of impact are based upon assumptions 
regarding the ``likely'' application of FWS and NMFS discretion and the 
best available computer simulation modeling of data collected over an 
82 year hydrologic record.
    Question 7. On page 10 of your written testimony you include the 
chart that depicts the rededication of CVP & SWP water supplies since 
1992. You estimate that more than 3 million acre-feet of water has been 
rededicated for environmental purposes. Do you see these actions as the 
main cause for water shortages in the Central Valley?
    Answer. Absolutely. While droughts inevitably occur, the regulatory 
rededication of CVP and SWP supplies has resulted in chronic shortages, 
particularly for the CVP agricultural water service contractors south 
of the Delta. Deliveries of CVP water to the Westside began in 1952. 
From that time until winter-run Chinook salmon were listed as 
threatened in 1990, the CVP delivered full water supply entitlements to 
agricultural service contractors in every year but one, 1977, when 
allocations were limited to 25% due to drought. Since 1990 however, the 
CVP has only delivered full water supply entitlements three times. 
Three (1995, 1998, 2006). At first the impacts of the changing 
regulatory paradigm were difficult to perceive because of an ongoing 
drought and the lack of computer modeling capability. In 1993 though, 
when drought conditions finally abated, south-of-Delta agricultural 
water supplies only rose to 50%. At that point, the effects of the 
rededication became quickly and painfully evident.
    Comparing the current drought conditions with previous events will 
help to distinguish the effects of accumulated regulations versus the 
effects of drought. On March 31, 1977, the CVP had 3,035,300 acre-feet 
of water stored in its northern California reservoirs. This point in 
time is the driest on record and yet the CVP was able to deliver to its 
south-of-Delta agricultural contractors 25% of their contract supply 
plus some additional water to help protect permanent crops. In 1991, 
the fifth year of a protracted drought, the CVP was again forced to 
curtail its deliveries to Westside farmers to only 25% of contract 
supply. Under these true drought conditions, CVP storage ran 
approximately 37% and 44% of capacity, respectively. This year however, 
northern CVP storage stood at 5,033,200 acre-feet or 61% of capacity on 
March 31 and yet the project was only able to provide its south-of-
Delta agricultural customer 10% of their water supply. The difference 
between these ``dry'' periods is attributable entirely to changes in 
the regulatory constraints placed upon the CVP since the early 1990s.
    Another indicator of the impact regulation is having comes from the 
California Department of Water Resources, which announced on December 1 
an initial 2010 water supply allocation for the State Water Project of 
only 5%. While it is true that these initial allocations often 
increase, it is informative to compare conditions the State is 
assessing in making the initial allocation determination. At the 
beginning of the 2009 water year, storage at their primary reservoir, 
Lake Oroville, was at 31% of capacity while at the beginning of the 
2010 water year Oroville storage was at 38% of capacity. This 
improvement is due in part to the fact that northern California 
precipitation in the 2009 water year was 93% of normal. Further, 
current northern California precipitation is at 144% of average for 
this time of year. Yet, despite better conditions at this point in the 
2010 water-year, the initial 2009 allocation forecast was for 15% of 
supply. A key difference between the 2009 and 2010 supply forecast is 
the added regulatory burden of the NMFS biological opinion, which was 
issued after it could have affected the 2009 water supply situation.
    While the magnitude of the impacts of the FWS and NMFS biological 
opinions will not be fully understood until the current drought abates, 
the immediate effects are sadly well known. More land will be fallowed, 
more people will lose their farms and businesses and jobs, small, rural 
communities will become poorer, and people will suffer more depression, 
drug and alcohol abuse, domestic violence, and divorce.
    The regional environment will also be further impacted. Expansion 
of unirrigated fields will produce more dust, compounding the already 
significant number of respiratory ailments associated with the San 
Joaquin Valley, particularly asthma. More unirrigated fields also means 
more habitat for non-native plant species such as Russian thistle (aka 
tumbleweed), which, upon maturity, breaks from the soil and is 
transported with the wind. This migration can threaten remaining native 
plant ecosystems, impact crops and infrastructure such as highways and 
canals, and produce rashes and allergic reactions among people exposed 
to the noxious weed. In short, the Westside region, which was developed 
and sustained for over half a century by water promised by the United 
States, will continue to bear the disproportionate brunt of the adverse 
impacts resulting directly from the FWS and NMFS biological opinions.
                              Appendix II

              Additional Material Submitted for the Record

                              ----------                              

  Statement of Donald A. Christiansen, General Manager of the Central 
                    Utah Water Conservancy District
                                s. 1757
    I am grateful to be able to submit written testimony in support of 
S. 1757. I want to thank Senator Robert F. Bennett for introducing this 
bill on behalf of the Uintah Water Conservancy District (District). The 
District was formed in 1956 for the purpose of ``conserving, developing 
and stabilizing supplies of water for domestic, irrigation, power, 
manufacturing, municipal and other beneficial uses, and for the purpose 
of constructing drainage works''. The District operates and maintains 
the Vernal and Jensen Units of the Central Utah Project which was 
authorized by Congress as part of the Colorado River Storage Project 
Act of 1956.. The District encompasses almost all of Uintah County, 
Utah in eastern Utah adjacent to the border of Colorado.
    At the time of its construction (1984-1987), The Jensen Unit was to 
provide 18,000 Acre Feet (AF) of M&I water to the residents of Uintah 
County. 6,000 AF were to be developed with the construction of Red 
Fleet dam and another 12,000 AF were to be developed at a later date 
with the construction of the Burns Bench Pump station on the Green 
River in Jensen, Utah. Due to the economic bust in the mid to late 80's 
there wasn't the demand for water that had been foreseen and an 
amendatory contract was signed in 1989 with the Bureau of Reclamation 
reducing the amount of water subscribed to by water providers to 2,000 
AF.
    The Bureau desires to do a final cost allocation on the Jensen 
Unit. If that allocation were done without developing the remaining 
12,000 AF, the cost per AF would be approximately 2.5 times as much as 
if the 12,000 AF were developed. A Block Notice was issued to the 
District from the Bureau of Reclamation for the 2,000 AF and the 
District contracted with the municipalities, water improvement 
districts, and a private company for all of that water. Since that time 
the additional 4,000 AF of M&I water has remained unsubscribed. The 
Bureau of Reclamation took 700 AF to increase the conservation pool in 
the reservoir which leaves 3,300 AF of available water. The Burns Bench 
pump station will not be constructed until all of the M&I water 
available in Red Fleet is subscribed to. In the past year, due in large 
part to the projected growth, the District has received requests for 
all of the remaining M&I water available in Red Fleet. Vernal City and 
Ashley Valley Water and Sewer have each requested 1,000 AF, Maeser 
Water has requested 675 AF, Jensen Water has requested 175 AF, Uintah 
County in conjunction with Jensen Water has requested 150 AF, and a 
private company has requested 300 AF.
    The price of the water was set by the amendatory contract. The 
amount per AF was based on the cost of the Jensen Unit (including an 
estimated cost of the pump station) divided by 18,000 AF. The resulting 
cost is $5,555.21 per AF and is payable by dividing that amount by the 
number of years remaining until 2037 with the last payment being made 
in 2037. Water purchased in 2006 would be paid for at a rate of $179.07 
per AF per year for 31 years. The District approached the Bureau about 
the possibility of discounting those payments at either the 3.222% rate 
used by the Bureau to calculate the repayment or the federal funds rate 
at the time of the discounting. According to the Bureau, the amendatory 
contract does not allow for prepayment. The District then determined 
that it would seek legislation similar to that used by the Central Utah 
Water Conservancy District that has allowed for prepayment of the 
repayment contracts for the Bonneville Unit. Prepayment of our contract 
with the Bureau will substantially reduce the cost of water to the 
District. S. 1757 will also produce a substantial payment to the 
federal treasury which we estimate to be between $4-5 million.
    S. 1757 directs the Secretary of the Interior to allow for 
prepayment of the specified contract between the United States and the 
Uintah Water Conservancy District providing for repayment of municipal 
and industrial water delivery facilities under terms and conditions 
similar to those used in implementing provisions of the Central Utah 
Project Completion Act. It also provides that the prepayment: (1) may 
be provided in several installments to reflect substantial completion 
of the delivery facilities being prepaid; (2) shall be adjusted to 
conform to a final cost allocation; and (3) may not be adjusted on the 
basis of the type of prepayment financing utilized by the District. The 
Senate bill reflects amendments made to the House companion at the 
suggestion of the Administration. These amendments insure that the 
entire amount of the repayment contract will be prepaid.
                                 s. 1758
Introduction
    Mr. Chairman, my name is Don Christiansen and I am General Manager 
of the Central Utah Water Conservancy District (District), the State 
sponsor of the Central Utah Project. I appreciate the opportunity to 
submit written testimony in support of S. 1758 which was introduced by 
Senator Robert F. Bennett and Senator Orrin G. Hatch. The Bonneville 
Unit of the Central Utah Project develops water for communities in 10 
counties covering three Congressional Districts. We express 
appreciation to our elected representatives for their introduction of 
this bill which will clear away sunk system-wide costs which constitute 
an economic roadblock to the development of clean hydropower in the 
Diamond Fork feature of the Bonneville Unit.
The District is an experienced developer of hydropower
    The District has a proven track record of developing non federal 
hydropower on federal facilities of the Bonneville Unit. At an 
important dam in Summit and Wasatch counties, we worked from the 
initial design of the Jordanelle Dam to facilitate outlet plumbing for 
the eventual installation of the recently constructed Jordanelle 
hydropower plant. The District has been involved in each step of this 
very successful project which has a maximum capacity to generate 12 
megawatts of hydropower at Jordanelle dam. The project has been 
certified by the Low Impact Hydropower Institute as ``Green Power''.
    The plant began commercial operation on July 1, 2008. The District 
developed the Jordanelle power plant in partnership with Heber Light & 
Power (a local public power entity) which purchases and markets the 
energy. Since it was originally anticipated that federal power would 
not be developed at Jordanelle dam, none of the costs of the dam or 
system-wide project costs were allocated to power. Therefore, during 
the negotiation of the Lease of Power Privilege one of the negotiation 
points was to determine a reasonable fee to be paid to the federal 
government that would not push the cost of the power beyond market 
conditions. The negotiated fee is 3 mills per kilowatt hour escalating 
at 3% per annum.
Potential for Diamond Fork Hydroelectric Power Plants
    The Supplement to the 1988 Definite Plan Report for the bonneville 
Unit (2004) and the Utah Lake Drainage Basin Water Delivery System 
Final Environmental Impact Statement (September 2004) detail the 
proposed power facilities that could be built at Diamond Fork. In 
general, two hydroelectric power plants would be located in Diamond 
Fork Canyon. they are at:

          1. The Sixth Water Flow Control Structure with a capacity of 
        45 MW and,
          2. The Upper Diamond Fork flow Control Structure with a 
        capacity of 5 MW

    The potential Diamond Fork power plants have some similarities and 
yet some distinct differences from the Jordanelle power plant. Of 
particular importance is the manner in which power costs have been 
assigned by the Department of the Interior. $161. million in Strawberry 
Collection System sunk costs have been assigned to be recovered from a 
future Diamond Fork power plant. This significantly complicates 
hydropower development at Diamond Fork. In essence, any developer of 
power at Diamond Fork starts in an economic ``hole'' of $161 million 
before installing any power turbines or constructing any transmission 
lines.
    Moreover, power generation at Diamond Fork is based ont he ``run of 
the river'' (generation which is incidental to water releases), and 
therefore Diamond Fork hydropower has less value in energy markets 
because it cannot be scheduled to meet peak demands. In fact, Section 
208 of PL 102-575 places limitations on the operation of the power 
plants at Diamond Fork. The Central Utah Project Completion Act or 
``CUPCA'' says; ``Use of Central Utah Project water diverted out of the 
Colorado River Basin for power purposes shall only be incidental to the 
delivery of water for other authorized project purposes. Diversion of 
such waters out of the Colorado River Basin exclusively for power 
purposes is prohibited.'' Hence, flow releases through the Diamond Fork 
System of aqueducts and pipelines would be dictated by Central Utah 
Project (CUP) and Strawberry Valley Project (SVP) water needs and would 
be used for electric energy generation at the hydroelectric power 
plants as a secondary purpose.
Legislation is needed to defer sunk system costs allocated to Diamond 
        Fork Power
    Because the power costs allocated to Diamond Fork make the project 
uneconomic, we approached the Utah delegation with a remedy to defer 
these costs similar to other costs that have already been deferred. The 
costs allocation was initially done using the Use of Facilities (UOF) 
method as directed by the Comptroller General in a letter of January 
26, 1994. Application of a strict UOF allocation of costs to power 
resulted in an allocation of $540.3 million to power. This ammount 
would result in a power rate significantly higher than its market 
value. Consequently, a modified use of facilities approach was used to 
calculate the power allocation. Under this approach, the cost allocated 
to power is $161.0 million.
    Even with the modified use of facilities approach this amount 
allocated to power makes power development very expensive and 
infeasible. At a time when the demand for energy is skyrocketing and 
the need for renewable energy is paramount, the sensible approach of S. 
1758 is to defer the costs assigned to power and allow development of 
this valuable resource. As was done with Jordanelle dam, the fee paid 
to the Federal government for the investment in facilities which make 
power development feasible could be negotiated through a competitive 
Lease of Power Privilege process. Current market conditions and 
construction costs would be known and a reasonable fee could be 
established.
Conclusion
    S. 1758 reflects modifications made to the bill in the House 
Resources Committee to address PAYGO conccerns. The bill was amended to 
preclude the use of tax exempt financing on the project. While we would 
have preferred to use all our tax advantaged financings available to 
us, we understand that Congressional budget rules makes this 
impossible. The District stands ready to initiate a process to apply 
for the right to develop clean hydropower at Diamond Fork if the 
economic hole created by the allocation of sunk system-wide costs is 
deferred. We strongly urge your approval of this important legislation 
as soon as possible.
                                 ______
                                 
                             Defenders of Wildlife,
                                         California Office,
                                 Sacramento, CA, November 19, 2009.
Hon. Debbie Stabenow,
Chairman, Subcommittee on Water and Power, U.S. Senate, Washington, DC.
Re: Testimony on S. 1759

    Dear Senator Stabenow: Defenders of Wildlife appreciates the 
opportunity to present written testimony on S. 1759 and to suggest 
recommendations to improve this bill. (Attached) This testimony is 
presented as part of the hearing held by the Subcommittee on November 
5, 2009. Defenders of Wildlife has invested, and continues to invest, a 
great deal of time and energy in the effort to protect and conserve the 
Central Valley's natural resources, including its grasslands, wetlands, 
and waterways.
    We thank you for the opportunity to provide our views on this bill. 
We look forward to working with you and your Subcommittee staff as this 
bill moves forward in the legislative process.
            Sincerely,
                                               Kim Delfino,
                                       California Program Director.
  Attachment.--Statement of Kim Delfino, Defenders of Wildlife, on S. 
                                  1759
    Defenders of Wildlife appreciates the opportunity to present 
written testimony on S. 1759 and to suggest language to avoid any 
unintended consequences. The goal of S. 1759 is an important one: to 
expedite necessary water transfers in California while maintaining the 
integrity of Central Valley ecosystems. With adequate planning and 
foresight, these water transfers can bring water to areas experiencing 
shortages due to drought without compromising the surrounding 
environment. At the same time, if water transfers are not done 
carefully and pursuant to existing environmental laws, they could 
result in further degrading an already struggling environment in the 
Central Valley.
    Defenders of Wildlife has invested, and continues to invest, a 
great deal of time and energy in the effort to protect and conserve the 
Central Valley's natural resources, including its grasslands, wetlands, 
and waterways. In addition to serving as a member of the Bay Delta 
Conservation Plan Steering Committee, Defenders is also a founding 
member of the Central Valley Joint Venture (CVJV). As you already know, 
based on the testimony presented by the Grasslands Water District--an 
important partner with the CVJV, there are specific concerns about the 
potential impacts of poorly designed water transfers on the Central 
Valley wetlands and wildlife refuges and associated migratory bird 
populations.
    The following are three specific issues we have identified in S. 
1759 with suggested amendments to clarify and resolve those issues:

          1. Clarify that S. 1759 will continue to ensure that water 
        transfers will comply with all applicable laws and agreements 
        and will not undermine the environmental protections inherent 
        in the Central Valley Project Improvement Act.

    Section 3405(a)(1) of the Central Valley Project Improvement Act 
(``CVPIA'') was carefully negotiated to assure that water transferred 
in the Central Valley Project did not interfere with the water intended 
to be used in the system to meet fish and wildlife protections and 
restoration obligations. We are concerned that Section 2(a) of S. 1759, 
which overrides subparagraphs (A) and (I) of CVPIA Sec.  3405(a)(1), 
will take away the carefully negotiated safeguards established by 
Congress when it enacted the CVPIA. We do not believe that the intent 
behind S. 1759 is to weaken those fish and wildlife protections or 
result in transfers not conditioned by existing environmental 
protection laws, but we are concerned that this section as currently 
written could have this unintended consequence.
    In order to address these concerns, we suggest the following 
amendment to Section 2(b):

          (b) Condition--A transfer under subsection (a) shall be 
        subject to the condition that the transfer does not 
        contravene----
            (1) the San Joaquin River Restoration Settlement Act 
        (Public Law 111-11; 123 Stat. 1349), including the priorities 
        described in Section 10004(a)(4)(B) of that Act (123 Stat. 
        1350) relating to implementation of paragraph 16 of the 
        Settlement (as defined in Section 10003 of that Act (123 Stat. 
        1349));
            (2) the Settlement.; and
            (3) all other applicable federal and state laws, including 
        but not limited to the Endangered Species Act, National 
        Environmental Policy Act, the Central Valley Project 
        Improvement Act, except as expressly amended by subsection (a) 
        above, and state water transfer laws.

          2. Clarify that the directive for expedited review in S. 1759 
        is not intended to result in a limitation of the scope of 
        environmental review or in the partial exemption of 
        environmental review.

    Defenders recognizes the need to ensure expeditious environmental 
review for water transfers. The language in Section 3(a) will ensure 
that such review is not delayed while the seasonal window for water 
transfers closes. However, Defenders is concerned that such language 
will give the impression that Congress has created a partial exemption 
for environmental review of water transfers. Moreover, we believe that 
when the ``expedited'' permitting language in Section 3(a) is read in 
conjunction with the singular directive in Section 3(b) to address 
concerns regarding Giant Garter Snake, there is a risk that Section 3 
could be interpreted as narrowly limiting environmental review to only 
Giant Garter Snake. Therefore, in order to ensure that the intent of 
this provision is not to limit the scope of all applicable 
environmental reviews, Defenders suggests deleting Section 3(b) and 
adding the following language to Section 3(a):

     . . . shall initiate and complete, on the most expedited basis 
practicable, the programmatic development of all applicable 
environmental compliance required for implementing voluntary water 
transfers within the Central Valley Project.

          3. Ensure that S. 1759 does not result in adverse impact to 
        Central Valley refuges and wetlands.

    Wildlife refuges also experience water shortages during prolonged 
drought. In compliance with CVPIA Section 3406, water is required to be 
delivered to wildlife refuges to maintain the habitats for migratory 
birds and associated wetland species. Our Central Valley refuges and 
wetland areas already struggle to maintain a water supply to meet 
minimal wildlife needs in a landscape that has already lost more than 
95% of its historic wetlands. We share the concerns that have been 
raised by the Grasslands Water District in their written and oral 
testimony regarding the potential impacts to Central Valley wetlands 
and wildlife refuge water supply from this bill. We fully support the 
suggested amendments by the Grasslands Water District to facilitate the 
use of carry over storage for unused refuge water supplies; to 
facilitate transfers between and among federal, state, and private 
wetland areas that receive Central Valley Project water; and to direct 
the Bureau of Reclamation to develop and implement a process for 
securing the necessary budget for fully implementing Level 4 water 
supplies that are authorized under the CVPIA. We believe that the 
Grasslands Water District's suggested amendments to S. 1759 will ensure 
no impairment of the goals of the CVPIA with respect to wetlands and 
wildlife refuges.
    We thank you for the opportunity to provide our views on this bill. 
We look forward to working with you and your Subcommittee staff as this 
bill moves forward in the legislative process.
                                 ______
                                 
                                Environmental Defense Fund,
                                                    Washington, DC.

Hon. Dianne Feinstein,
U.S. Senate, Washington, DC.
    Dear Senator Feinstein: Environmental Defense Fund greatly 
appreciates your efforts to help resolve California's pressing water 
issues. In particular, we thank you for bringing balance to the 
discussions and fending off attempts to undermine fundamental 
protections of existing law, including, but not limited to, the federal 
Endangered Species Act (ESA).
    EDF is engaged at all levels to find solutions to these problems, 
including work to help structure the recently enacted state 
legislation, participation on the Bay Delta Conservation Plan (BDCP) 
steering committee, open dialogue with key players in the agricultural 
and municipal water sectors and engagement with the Department of the 
Interior on various issues. EDF has long believed that voluntary water 
transfers, particularly among users south of the Delta, have an 
important role in sensible allocation of available agricultural water, 
especially during drought.
    It is in this context of constructive engagement that we offer our 
support for S 1759, the Water Transfer Facilitation Act of 2009, as 
amended and passed by the Senate Committee on Energy and Natural 
Resources this week. We support the report language suggested by 
Grasslands to ensure that the wetlands and refuge issues are fully 
addressed, and look forward to working with you and the Committee to 
ensure its inclusion.
            Sincerely,
                                             Mary E. Kelly,
                                 Senior Counsel, Rivers and Deltas.
                                 ______
                                 
                                  Westlands Water District,
                                       Fresno, CA, October 6, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
RE: Water Transfer Facilitation Act of 2009

    Dear Senator Feinstein: I am writing on behalf of Westlands Water 
District to express its support for your bill, the Water Transfer 
Facilitation Act of 2009, authorizing certain transfers of water in the 
Central Valley Project and other purposes. Water transfers are a 
critical tool for providing water supplies for areas that are faced 
with chronic water supply shortages. However, the approval process for 
many transfers often distract from their usefulness. Your legislation 
will bring important reform to existing transfer authorization thus 
increasing the efficacy of this essential water management tool.
    As you are keenly aware, the chronic water supply shortages 
impacting the area of the San Joaquin Valley served by the Central 
Valley Project demands that water users in the affected area rely on 
water transfers. Moreover, the need to transfer water is often urgent 
and in response to climactic conditions that are frequently sporadic 
and ephemeral. Regrettably, bureaucratic process can unnecessarily 
thwart successful execution of a transfer. The clarity your legislation 
brings to existing authorizations will only improve the capability of 
water managers throughout the State to effectively respond to the 
ongoing crisis and put our scant water resources to use even more 
efficiently.
    The westside of the San Joaquin Valley is inarguably the most 
transfer dependent region of the State. Your efforts to address this 
important matter are greatly appreciated. If there is anything I can do 
to be of help in connection with your efforts, please let me know.
            Very truly yours,
                                      Thomas W. Birmingham,
                                    General Manger/General Counsel.
                                 ______
                                 
                              Endangered Species Coalition,
                                  Washington, DC, November 2, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Bldg., Washington, DC.
Hon. Barbara Boxer,
U.S. Senate, 112 Hart Senate Office Bldg., Washington, DC.
RE: California Conservation Groups concerns with S-1759, Water 
Transfers Facilitation Act, 2009

    Dear Senators Feinstein and Boxer: The below listed organizations 
have come together to provide this input to you for consideration in 
the pending water transfers legislation, S-1759. We respect the need to 
transfer water to affected communities and farmers to reduce the 
economic impacts caused by drought related shortages. It is vital to 
ensure this effort is accompanied by key provisions to protect against 
unintended consequences and to mitigate the effects of unavoidable 
impacts. Unlimited or poorly designed water transfers can have very 
serious and negative impacts to the environment in areas where the 
transfers begin, and as such, additional protections may be needed. We 
offer these recommendations and comments on the pending bills (S-1759 
and HR 3750).

          1. Water for Refuges
          There is concern this transfer legislation could put 
        additional, unintended demand on already limited wildlife 
        refuge water, both state and federal. This, in turn, can result 
        in increased cost for refuge water, and/or reduced availability 
        of both level 2 and level 4 water under CVPIA. To alleviate 
        this possibility, we recommend the legislation allow refuge-to-
        refuge transfers. This would make the system both flexible and 
        fair, by allowing wetlands managers the ability to move 
        available wetlands CVPIA water to the areas in the most need. 
        Thus, they would operate like any other water user in the 
        system, putting diminished water supplies to best use.

          2.Water Transfers should only be for use in the Central 
        Valley
          As we understand it, the purpose of these bills is to provide 
        flexibility in the water system in order to assist agricultural 
        communities and farms impacted by ongoing drought, and not to 
        incentivize speculation in the water markets. To this end, the 
        bills should place some limitations on the transfers to ensure 
        that the transferred water is used for agriculture and farming 
        in the Central Valley (or to support refuges in the Central 
        Valley) and not sold on a secondary market. If some of the 
        transferred water in wet years is to be banked, as a hold-over 
        for another year, some system of accounting, monitored by BOR 
        and available to the public, must account for that water, and 
        show that it is subsequently used as intended for farming and 
        agriculture in the Central Valley and not re-sold or re-
        transferred out of the system to other uses.

          3. Impacts to Groundwater Must be Included in the PEIS and 
        Report
          One of the impacts of great concern is the possibility for 
        increased groundwater over-draft resulting from efforts to 
        replace transferred surface water. In the Sacramento valley, 
        where nearly 2/3 of the transfers are likely to originate, 
        groundwater replacement of transferred water in the 1990s led 
        to dry or polluted wells, and negative impacts to nut farms 
        dependant upon wells for irrigation. Much of the farming in the 
        Sacramento valley, other than rice, is well dependant. For 
        example, the Tuscan Aquifer, which lies under several 
        Sacramento valley counties, is currently a healthy aquifer, 
        unlike many over-drafted aquifers in the Tulare basin (see USGS 
        facts sheet 2009-3057). It is also connected to several surface 
        streams in the western Sierra, like Butte Creek, Deer Creek, 
        and Mill Creek, which supports 98% of the remaining California 
        Spring Chinook salmon, a federal ESA listed species. It is 
        likely that a lower Tuscan Aquifer would result in reduced 
        stream flows and elevated stream temperatures, thus putting ESA 
        listed fisheries at risk.
          We would make two recommendations relative to groundwater. 
        One, that groundwater replacement of transferred water is 
        prohibited. If water is transferred, the associated irrigated 
        land must be either fallowed or planted in crops requiring 
        reduced water consistent with that transferred. Second, because 
        there is no state law on groundwater monitoring, we would 
        recommend the federal government initiate and fund a USGS 
        Tuscan groundwater aquifer study to determine its functional 
        capacity, especially under drought conditions.

          4. Comprehensive Environmental Review is Needed
          Section 3 of the Senate bill calls for preparation of a 
        Programmatic Environmental Impact Statement and we agree that 
        completing the programmatic review is essential. In Section 3, 
        sub-section (b), mentions ``all applicable environmental 
        reviews, permitting, and consultations, including the 
        environmental documentation needed to address concerns with 
        respect to the Giant Garter Snake.'' However, it is clear that 
        a comprehensive EIS will also need to look at impacts to other 
        aquatic, riparian, and wetland dependent species in the Delta 
        and Central valley watersheds that may impact transfer timing 
        and amounts whether or not these species are called out by name 
        in the bills.
          We appreciate the opportunity to provide inputs designed to 
        reduce negative impacts and un-intended consequences from these 
        transfers. Though it is important to help impacted communities 
        and farms if possible, it is also vital to do so while 
        continuing to protect our natural resources and wildlife 
        species that are already under significant stress.
            Sincerely,
                                Dr. C. Mark Rockwell, D.C.,
California State Representative, Endangered Species Coalition, Penn 
                                                        Valley, CA.
                                             John Beuttler,
Conservation Director, California Sportfishing Protection Alliance, 
                                                      Berkeley, CA.
                                            Allen Harthorn,
             Executive Director, Friends of Butte Creek, Chico, CA.
                                             Robin Huffman,
Board member and Advocacy Coordinator, Butte Environmental Council, 
                                                         Chico, CA.
                                      Florence M LaRiviere,
Chairperson, Citizens Committee to Complete the Refuge, Palo Alto, 
                                                                CA.
                                                Dan Silver,
         Ex. Director, Endangered Habitats League, Los Angeles, CA.
                                            David Phillips,
       Director, International Marine Mammal Project, Earth Island 
                                           Institute, Berkeley, CA.
                                               Tara Hansen,
  Executive Director, California Native Plant Society, Sacramento, 
                                                                CA.
                                              Lloyd Carter,
President. Board of Directors, California Save Our Streams Council, 
                                                        Clovis, CA.
                                 ______
                                 
                  Association of California Water Agencies,
                                                   October 5, 2009.
Hon. Dianne Feinstein,
331 Hart Senate Office Building, Washington, DC.
Hon. Barbara Boxer,
112 Hart Senate Office Building, Washington, DC.
RE: ACWA support for Water Transfer Legislation

    Dear Senators Feinstein and Boxer: Thank you for introducing water 
transfer legislation for the Central Valley Project (CVP) which ACWA is 
pleased to support. As California's water supply challenges multiply, 
this legislation can provide greater flexibility for management of CVP 
water supplies. As you know, ACWA's 450 public agency members are 
collectively responsible for 90 percent of the water delivered in 
California for residential and agricultural uses.
    California's water supply situation is dire and worsening. Three 
years of below average precipitation along with heavy regulatory 
restrictions through the ESA and Biological Opinions, have seriously 
diminished California's water supplies. Under these conditions, it is 
essential that short term actions, such as provided by your legislation 
to flexibly enable water supplies to move across the San Joaquin 
Valley, be pursued.
    Again, thank you for introducing water transfer legislation. ACWA 
looks forward to working with you to secure its passage in an expedited 
manner.
            Sincerely,
                                             Timothy Quinn,
                                                Executive Director.
                                 ______
                                 
                                     Altshuler Berzon, LLP,
                              San Francisco, CA, November 18, 2009.
Hon. Debbie Stabenow,
Chair, Subcommittee on Water & Power, U.S. Senate Washington, DC.
Hon. Dianne Feinstein,
331 Hart Office Building U.S. Senate, Washington, DC.
Hon. Barbara Boxer
112 Hart Office Building U.S. Senate, Washington, DC.
RE: Supplemental Comments & Suggested Revisions to S. 1759 re Water 
Transfers

    Dear Senator Stabenow, Senator Feinstein and Senator Boxer: I 
appreciated the opportunity to present testimony at the November 5, 
2009 hearing of the Subcommittee on Water and Power of the Senate 
Energy and Natural Resources Committee on behalf of Grassland Water 
District to comment on S. 1759, the Water Transfer Facilitation Act of 
2009. We also appreciated the Subcommittee's invitation to submit these 
additional comments and recommended changes to the legislation.
    As I indicated at the hearing, we believe some improvements to the 
bill are needed to ensure protection of the Central Valley refuges that 
have been so severely impacted by development of the Central Valley 
Project and which are supposed to receive additional water supplies 
through CVPIA, in some cases through voluntary acquisitions and 
transfers. As we indicated in our testimony, one part of this 
protection would involve more explicit reference to the prior 
protections of the CVPIA as continuing to be applicable to all of the 
new, expanded transfers facilitated by this bill. I will suggest 
specific language in that regard below.
    The other key part of this requested protection would be in the 
form of mitigation measures which should be included in the legislation 
to help offset the inevitable impacts that the bill will cause to the 
refuge water supply program of CVPIA. I have attached a separate 
document that outlines these proposed measures in the form of a new 
section to the bill. Each of these modest measures represents sound 
public policy that is consistent with the purposes and provisions of 
the CVPIA, but which will benefit from further legislative 
authorization to ensure they are actually carried out.
    We appreciate your considering our views. We would be happy to 
provide additional information if it would be helpful.
I. Suggested language to reaffirm the protections of CVPIA and other 
        applicable laws
    Right now, the only federal law explicitly referenced as a 
condition of the new transfers is the San Joaquin River Restoration 
Settlement Act. Like many other stakeholders, we believe it would be 
more reasonable and provide better protection for the public to broaden 
that condition to include all applicable laws, including the CVPIA. 
Here is our proposed replacement language for Section 2(b):

          (b) CONDITION--A transfer under subsection (a) shall be 
        subject to the condition that the transfer is consistent with:
          (1) The provisions of the Central Valley Project Improvement 
        Act (except to the extent section 3405(a)(1) is expressly 
        modified by subsection (a) above), the National Environmental 
        Policy Act, the San Joaquin River Restoration Settlement Act, 
        and all other applicable provisions of federal and state law; 
        and
          (2) The Settlement in Natural Resources Defense Council v. 
        Rodgers, CIV-S-88-1658-LKK (E.D. California), as identified in 
        Section 10003 of Public Law 111-11; 123 Stat. 1349.
II. Suggested language to provide mitigation for adverse impacts to 
        refuges and wetlands
    As we indicated in our prepared Testimony for the November 5th 
hearing, Grasslands and other participants in the Central Valley Joint 
Venture believe there are a number of ways that the provisions of S. 
1759 could adversely impact the acquisition of sufficient water for 
Central Valley refuges and wetland areas. Accordingly, we have proposed 
three specific, albeit modest provisions which we request be added to 
the legislation to help address these unintended consequences and to 
help ensure these adverse impacts will be properly mitigated. The 
proposed language is attached and includes provisions (a) to facilitate 
use of carry over storage for unused refuge water supplies, (b) to 
facilitate transfers between and among federal, state and private 
wetland areas that receive CVP water, and (c) to direct Reclamation to 
develop and implement a process for securing the necessary budget for 
fully implementing Level 4 water deliveries that are authorized by the 
1992 CVPIA.
    Thank you again for considering our additional views on this 
legislation.
            Sincerely,
                                           Hamilton Candee,
                             On behalf of Grassland Water District.
     Attachment.--Proposed Amendments to S. 1759 (Water Transfers 
                      Facilitation Act): 11-18-09
       sec. 6. mitigation for central valley wetlands and refuges
    In order to help offset potential adverse impacts to Central Valley 
refuges and other wetland areas receiving water supplies under section 
3406(d) of the CVPIA (collectively ``CVPIA refuge areas''), and in 
furtherance of the purposes of CVPIA, the Commissioner, in consultation 
with the Director of the US Fish and Wildlife Service, shall within 180 
days of the enactment of this Act, and consistent with applicable law, 
do each of the following:
    (a) Develop and implement a plan, a copy of which shall be 
submitted to the relevant oversight committees of Congress, to ensure 
that refuge water supplies that are provided pursuant to CVPIA section 
3406(d) will be offered ``carry-over'' water storage opportunities in 
CVP storage facilities equivalent to those afforded other CVP water 
uses, including agricultural and municipal & industrial contractors. In 
the plan, the Commissioner shall also identify the terms and conditions 
established by the CVP for ``carry-over'' storage opportunities for 
irrigation customers as well as the terms and conditions for ``carry-
over'' storage that will be offered to federal, state and other CVPIA 
refuge areas receiving water pursuant to section 3406(d).
    (b) Develop and implement a process to facilitate and expedite 
water transfers between CVPIA refuge areas, to enable those waters 
conserved by any CVPIA refuge area in any given year to be offered and 
delivered to any other CVPIA refuge area for the purpose of meeting the 
goals and purposes of CVPIA, including achieving Level 4 water supply 
needs and furthering Level 2 diversification opportunities as 
referenced in Section 3406(d).
    (c) Develop and submit to the Congress projected one year, 3 year 
and five year budgets for the long-term acquisition of water supplies 
necessary to provide to CVPIA refuge areas their full Level 4 water 
supply needs as identified pursuant to the CVPIA. The Commissioner 
shall also identify where in the future budget request for the Bureau 
of Reclamation funds will be allocated to meet these projected budgets.
                                 ______
                                 
                                        Audubon California,
                                 Sacramento, CA, November 18, 2009.
Hon. Dianne Feinstein,
Attn: Leah Russin,
U.S. Senate, Washington, DC.
Re: Comments on S. 1759

    Dear Ms. Russin: We appreciate the opportunity to comment on 
Senator Feinstein's bill, S. 1759 (bill). Audubon California respects 
the need to transfer water to affected farmers in order to help reduce 
the loss of agricultural productivity and to minimize unemployment due 
to the drought. Such efforts however, need to be accompanied by key 
provisions to protect against unintended consequences and to fully 
mitigate for adverse impacts. Previous state and federal laws 
addressing water transfers have recognized the potential for adverse 
impacts and the need for third party protections. S. 1759 should as 
well.
    Unlimited or poorly designed transfers can cause significant harm 
to Valley farmers, communities and the environment unless they are 
handled properly. CVPIA water transfer limitations were instituted 
specifically to avoid such impacts including the risk of increasing 
groundwater overdraft to replace transferred water supplies. The 
proposed changes to water transfers legislation must similarly avoid 
unintended impacts and mitigate for unavoidable impacts.
    Our comments relate to the bill's language that:

          1) could impact essential water supplies for national 
        wildlife refuges and state wildlife areas as mandated by the 
        CVPIA;
          2) addresses the processes for analyzing impacts on listed 
        species and overall environmental effects (Sec. 2);
          3) references the applicability of other laws and agreements 
        (Sec. 2 and 3);
          4) specifies the geographic scope of the transfers (Sec. 2); 
        and
          5) specifies the content of a report by the Commissioner of 
        the Bureau of Reclamation ordered by this legislation (Sec. 4).

1. Refuge Water Supply
    A major environmental accomplishment of CVPIA was the commitment to 
deliver to refuges and wildlife areas in the Central Valley a firm 
(Level 2) yield of 422,252 acre-feet, 37% of the annual water needs for 
existing wetlands. In addition, CVPIA mandated that an additional 
133,264 acre-feet of so-called Level 4 water be acquired over a ten-
year period commencing in 1992, thus ensuring that roughly half of 
refuge water needs would be met by the project. Since 1992 legally 
mandated water supplies for the refuges has fallen short by a full 
40,000 acre-feet from mandated Level 4 quantities. In 2008, refuge 
water supplies reached approximately 450,000 acre-feet, a full 100,000 
acre feet below congressionally mandated levels.
    We remain concerned that as written S. 1759 would allow a broader 
range of all CVP contractors to compete--with fewer limitations--for 
the water usually obtained by the refuges from existing CVP sources. 
This could in turn greatly increase the cost or reduce the availability 
of water that federal and state refuges currently depend on toward 
meeting their Level 2 and Level 4 water needs as promised by CVPIA. 
Congress should ensure that all federal water transfer actions fully 
mitigate against wetlands becoming a ``third party impact.''
2. Environmental Review Processes
    The environmental impacts analysis called for by the legislation 
should include in addition to the species listed, wetlands, wetlands 
dependent wildlife and/or species covered by the Migratory Bird Treaty 
Act. For example, one of the areas targeted by the legislation, the 
Sacramento Valley, is home to significant wetland-dependent species and 
is one of America's most important habitats for migratory birds. The 
maintenance and restoration of federal and state wildlife areas in the 
Central Valley is a stated purpose of the CVPIA itself and including 
mitigation measures that protect such wildlife areas will help ensure 
that there are no unintended impacts from new provisions that expedite 
water transfers.
    The bill mandates that the Interior Department must expeditiously 
issue all permits necessary to facilitate water transfers. It is our 
understanding that the Department is already in the process of 
developing a comprehensive environmental review on issues that pertain 
to water transfers in the CVP. Further, as specified by the relevant 
language in the 2010 Energy and Water Appropriations Bill the 
Department through the Fish and Wildlife Service has been instructed as 
soon as is practicable to ``revise, finalize, and implement the 
applicable draft recovery plan for the Giant Garter Snake (Thamnophis 
gigas).'' Therefore we question whether '2 of the bill is actually 
necessary to bring added efficiency to the water transfer process.
3. Applicability of other laws and agreements
    We appreciate that the bill includes a condition to ensure no 
impacts to the San Joaquin River Settlement. This protection should be 
expanded so that any transfers are conditioned to ensure they are 
consistent with all other applicable federal and state laws, including 
but not limited to ESA, NEPA, CVPIA and state water transfer laws.
4. Geographic Scope of Sec. 2
    It is not clear to us whether or not '2 of the bill would apply to 
transfers through the Delta. It is our understanding that the author's 
intent in '2 focuses only on south of the Delta transfers with no 
intention to increase export demands on the Delta.
5. Bureau of Reclamation Report
    The Report on Transfers called for by the bill would not speak to 
past problems involving water transfers such as the allowance for 
certain current transfers to proceed without complying with CVPIA 
conditions simply by employing questionable contract assignments or 
forbearance agreements that avoid restoration charges required by 
CVPIA. We suggest that any new water transfer study mandated by this 
bill should also require a report on these existing problems including 
previous experience on the water costs for Level 4 refuge water supply 
purchases occurring alongside water transfer activity.
    In addition to these specific recommendations, we believe that 
modest amendments to the legislation could be helpful in addressing the 
unintended impacts of additional water transfers to the refuge water 
supply. We endorse the proposed language offered by the Grassland Water 
District in their November 18, 2009 letter to Senators Feinstein, 
Stabenow and Boxer that would 1) facilitate the use of carry over water 
for unused refuge water supplies; 2) facilitate transfers between and 
among federal, state and private wetland areas that receive CVP water; 
and 3) directs Reclamation to develop and implement a process to secure 
funding to fully implement Level 4 funding for refuge water supplies as 
mandated by CVPIA. Including these provisions as a new section in the 
bill would be beneficial toward meeting the important wetland 
conservation goals of the CVPIA and would be consistent with the ``get 
the water where it is needed'' intent in the bill.
    Thank you for your consideration of our views. We look forward to 
working with the Senator and the Senate Committee on Energy and Natural 
Resources to achieve an outcome that makes water more available to 
agriculture in a manner that avoids or minimizes unintended 
environmental consequences.
            Sincerely,
                                             Daniel Taylor,
                                         Director of Public Policy.
                                 ______
                                 
      Statement of Dan Taylor, Audubon California, Sacramento, CA
 comments on current legislation pertaining to central valley project 
                            water transfers
    Audubon California respects the need to transfer water to affected 
farmers in order to help reduce the loss of agricultural productivity 
and to minimize unemployment due to the drought. Such an effort 
however, needs to be accompanied by key provisions to protect against 
unintended consequences and to fully mitigate for adverse impacts. 
Previous state and federal laws addressing water transfers have 
recognized the potential for adverse impacts and the need for third 
party protections. These new transfers bills should as well.

   Unlimited or poorly designed transfers can cause significant 
        harm to Valley farmers, communities and the environment unless 
        they are handled properly. CVPIA water transfer limitations 
        were instituted specifically to avoid such impacts including 
        the risk of increasing groundwater overdraft to replace 
        transferred water supplies. The proposed changes to water 
        transfers legislation must similarly avoid unintended impacts 
        and mitigate for unavoidable impacts as well.
   The environmental impacts analysis called for by the 
        legislation should include in addition to listed species, 
        wetlands, wetlands dependent wildlife and/or species covered by 
        the Migratory Bird Treaty Act. For example, one of the areas 
        targeted by the legislation, the Sacramento Valley, is home to 
        significant wetland-dependent species and is one of America's 
        most important habitats for migratory birds. The maintenance 
        and restoration of federal and state wildlife areas in the 
        Central Valley is a stated purpose of the CVPIA itself and 
        including mitigation measures that protect such wildlife areas 
        will help ensure that there are no unintended impacts from the 
        new provisions.
   Congress should ensure that all federal water transfer 
        actions fully mitigate against wetlands becoming a ``third 
        party impact.'' For example moving water away from wetland and 
        agricultural regions can result in higher water market prices 
        that wetlands management agencies cannot afford. Therefore, 
        adding provisions to facilitate the movement of water between 
        refuges can help carry out one of CVPIA's important goals while 
        also helping to minimize new impacts from this legislation.
   If the transfers bills as written became law a broader range 
        of all CVP contractors would be able to compete--with fewer 
        limitations--for the water usually obtained by the refuges from 
        existing CVP sources. This could in turn greatly increase the 
        cost or reduce the availability of water that federal and state 
        refuges currently depend on toward meeting their Level 2 and 
        Level 4 water needs as promised by CVPIA.
    The bills appear to mandate that the Interior Department 
        must expeditiously issue all permits necessary to facilitate 
        water transfers. Unless corrected this wording could 
        potentially undermine objective review and assessment of 
        transfers impacts, both social and environmental.
   The Report on Transfers called for by the bills says nothing 
        about addressing past problems areas such as Reclamation 
        allowing certain current transfers to proceed without complying 
        with CVPIA conditions simply by employing questionable contract 
        assignments or forbearance agreements to get around the 
        restoration charges required by CVPIA. Any new legislation 
        calling for a new study of CVPIA transfers should also require 
        a report on these existing problems with implementing water 
        transfers.
   Transferred water should be required to be used locally by 
        effected farmers and should not be eligible for sale or trade 
        on a secondary market.
   The legislation can help address potential impacts to 
        refuges by facilitating wetland-to-wetland water transfers to 
        allow managers to get CVPIA water where it is needed most in 
        any given year. If CVPIA refuge supplies are not needed by one 
        refuge area but could be beneficially used by other refuge 
        areas, wetland managers should be afforded the same ability as 
        any other water user to put diminishing water supplies to the 
        best use for the needs of wildlife.
   The current bills include a condition to ensure no impacts 
        to the San Joaquin River Settlement. This protection should be 
        expanded so that any transfers are conditioned to ensure they 
        are consistent with all other applicable federal and state 
        laws, including but not limited to ESA, NEPA, CVPIA and state 
        water transfer laws.
                                 ______
                                 
                         Banta-Carbona Irrigation District,
                                        Tracy, CA, October 2, 2009.
Hon. Dianne Feinstein,
331 Hart Senate Office Building, Washington, DC.
Hon. Dennis Cardoza,
1224 Longworth Building, Washington, DC.
Hon. Jim Costa,
1314 Longworth House Office Building, Washington, DC.
Re. ``Water Transfer Facilitation Act of 2009''

    Dear Honorable Public Servants: We encourage you to pass this 
proposed bill as it can only help Californians best use the waters 
within the state. It is a waste of storage and conveyance systems to 
limit the uses of these facilities to strictly one brand of water, ie. 
CVP water. When facilities can be used to move various sources of water 
to diverse destinations and beneficial uses then the facilities are 
doing the most good for the American public. These public facilities 
will then better serve municipal, industrial and agricultural water 
needs while the environment is being served during times of drought. 
This bill will clarify a portion of law that federal regulatory 
agencies are interpreting in such a way as to prevent conveyance and 
storage of otherwise legal water transfers within the State of 
California in Federal facilities. Please pursue passage of this 
legislative correction.
            Sincerely,
                                        David Weisenberger,
                                                   General Manager.
                                 ______
                                 
                               Butte Environmental Council,
                                       Chico, CA, November 4, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Hon. Barbara Boxer,
U.S. Senate, 112 Hart Senate Office Building, Washington, DC.
RE: BEC concerns regarding S. 1759: Central Valley Project water 
transfer facilitation

    Dear Senators Feinstein and Boxer: BEC opposes the pending transfer 
legislation bills (S-1759 and HR-3750): they are inappropriate and 
unnecessary. These bills are shortsighted attempts to dismantle the 
Central Valley Project Improvement Act (CVPIA), and call for permanent 
authority to approve and expedite transfers beyond what law currently 
allows. These bills essentially link the State Water Project (SWP) and 
Central Valley Project (CVP) and institutionalize water transfers.
    Delta exports have reached unsustainable all-time highs -greater 
demands, increasing populations, climate change, and diminishing 
supplies-pointing to a collapse of epic proportions. There are no 
remaining great quanti ties of water that will fix this system. We 
cannot engineer or legislate our way out of this dilemma. The 
unintended consequences are numerous and many remain unquantifiable. 
Especially troublesome is further facilitation of more transfers from 
the north to the south because these transfers have a direct and 
historic effect in the form of groundwater mining and depletion.

          Section 3405(a)(1) (J) The Secretary shall not approve a 
        transfer authorized by this subsection unless the Secretary 
        determines, consistent with paragraph 3405(a)(2) of this title, 
        that such transfer will have no significant long-term adverse 
        impact on groundwater conditions in the transferor's service 
        area.

    The provisions set in Section 3405(a) of the CVPIA are currently 
ignored and transfers take place without the appropriate oversight and 
research. Transfers must not increase total water used or stored during 
the driest times of the year. Groundwater substitution plays a major 
role in producing the water for transfers that originate north of the 
Delta. In our region, groundwater substitutions impact an aquifer 
system directly connected to the Tuscan aquifer. This system underlies 
6 North Valley and foothill counties and is crucial for many endangered 
species and threatened habitats. There are approximately 17,000 private 
wells over the Tuscan, with the vast majority being domestic wells. 
Homes scattered throughout the rural areas have no other water source.
    If the Senate promulgates this bill, it must adhere to CVPIA and 
address the following:

   Applies to specific emergency conditions only-this should 
        protect from willing sellers out to make a profit and curtail 
        dependency and ever increasing demands south of the Delta.
   HR-1759, Sec. 3(b) must be expanded to include recognized 
        species of HCP/NCCPs of affected regions. It must also include 
        all applicable environmental reviews, permitting, and 
        consultations, including the environmental documentation needed 
        to address groundwater quantity and quality.
   The Department of the Interior should lead the retirement of 
        western San Joaquin Valley lands per the March 2007 Record of 
        Decision and support the development of a comprehensive 
        approach to sustaining the water supply in the North State. The 
        natural systems cannot be further disrupted, salmon runs and 
        wetlands must be improved from years of disruption that has 
        caused the current endangerment of many species.

    BEC hopes that you recognize that groundwater substitutions are 
already occurring and that these bills will further the abuse and 
decimation of one of the last functioning, natural groundwater 
dependent ecosystems in the State. Consider this unintended consequence 
and reevaluate the purpose of your bill.
            Sincerely,
                                             Carol Perkins,
                                           Water Resource Advocate.

    [The article ``Reaping Riches in a Wretched Region: Subsidized 
Industrial Farming and its Link to Perpetual Poverty'' by Lloyd G. 
Carter has been retained in subcommittee files.]
                                 ______
                                 
                   California Water Impact Network,
               California Sportfishing Protection Alliance,
                               Santa Barbara, CA, November 3, 2009.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, 304 Dirksen Senate 
        Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Committee on Energy and Natural Resources, 304 Dirksen 
        Senate Building, Washington, DC.
Re: Water Transfer Facilitation Act of 2009-S 1759

    Dear Chairman Bingaman, Ranking Member Murkowski and Members of the 
Water and Power Subcommittee: We hereby request that this 
correspondence be included in the hearing record for S 1759 and that it 
be provided to the committee members in anticipation of the hearing on 
November 5, 2009.
    Our organizations oppose the Water Transfer Facilitation Act of 
2009 as introduced. As California continues to seek resolution to water 
conflicts, we agree that water transfers can play a role but we point 
out that there is already comprehensive water transfer authority in the 
Central Valley Project Improvement Act (CVPIA). Pub. L. 102-575 
Sec. 3405. Moreover, significant progress in facilitating water 
transfers has already been made by the Bureau of Reclamation and the 
California Department of Water Resources through the federal/state 
Drought Water Bank. Reclamation and DWR successfully petitioned the 
California State Water Resources Control Board to combine the Permitted 
Places of use for the Central Valley Project and State Water Project. 
However, without adequate protections, the language contained in S. 
1759 will go too far to expedite transfers, and will likely create a 
market for paper water, create third party impacts, impact federal 
Indian Tribes, and further exacerbate regional conflicts over water in 
California.
    A determination of availability and need for additional water to be 
transferred must precede any transfers and should come from a 
comprehensive package of facts. Since we are committed to working with 
you toward a sustainable hydrologic future for California, we 
respectfully urge you to amend the bill to prevent redirected impacts 
to other beneficial uses of water. Our specific concerns and 
suggestions are provided below.
Section 2
    Section 2 (a), as written, creates a water transfer market for 
paper water-water that does not exist. Paper water would be created 
through exemption of transfers from the existing requirement in 
paragraphs (A) and (I) of section 3405(a)(1) of the CVPIA that 
transferred water not exceed the actual 3 year average delivery amount 
and the requirement to show proof that the transferred water would 
otherwise be beneficially used or irretrievably lost during the time 
period of the transfer. This exemption will likely result in additional 
upstream reservoir drawdown and an impact on water supplies for CVP-
dependent rivers and wildlife refuges.
    The legislation, as proposed is also redundant in its description 
of eligible CVP contractors in Section 2(a)1 which refers specifically 
to the CVP's San Felipe, West San Joaquin, and Delta division 
contractors as eligible for water transfers , but they are also 
included again in the description of all CVP contractors, past and 
present in Section 2(a)2 as eligible for water transfers.
    Section 2(b) creates a preferential status for the San Joaquin 
River Restoration Program over any other CVPIA program, something never 
done before for ANY portion of a CVP program. It also supersedes 
federal and state area of origin protections by favoring the one CVP 
river system-the San Joaquin, which is a net importer of water, over 
other basins such as the Sacramento, Trinity and American river basins 
which are net exporters of water to the San Joaquin and Tulare basins. 
It further aggravates the continued failure of the Bureau of 
Reclamation to charge CVP contractors for restoration of the Trinity 
River as pointed out by the Hoopa Valley Tribe in their October 22nd 
letter.
    Section 2(a) of the legislation, by exempting transferred water 
from proof of actual beneficial use, will further delay fulfillment of 
Federal Indian Trust responsibilities arising under Section 3406(b)(23) 
of the CVPIA. As pointed out in the letter by the Hoopa Valley Tribe, 
it would do so financially. However, we believe it may also do so 
physically by transferring water stored in Trinity Reservoir which is 
specifically dedicated to the preservation and propagation of the 
Trinity River fishery. It also jeopardizes stored in Trinity, Shasta, 
Folsom and other CVP reservoirs specifically dedicated to Central 
Valley fisheries and wildlife refuges made available under CVPIA 
Sections 3406(b)(2) and 3406(d), respectively.
    The attached* 1977 Interior Solicitor's Opinion on a request by the 
Grasslands Water District for additional water supplies explains the 
federal obligations to protect areas of origin such as the Trinity 
River from impacts to export water to areas such as the Grasslands 
during periods of drought.
---------------------------------------------------------------------------
    * Document has been retained in subcommittee files.
---------------------------------------------------------------------------
    We therefore recommend that Section 2(a)1 be deleted in its 
entirety, and that if this legislation is adopted in any form it 
include a condition on transfers that requires as a prerequisite the 
fulfillment of the contractors' payment obligations and establish 
additional protections for the Trinity River and Central Valley fish 
and wildlife refuges as provided in Sections 3406(b)2 and 3406(b)23) 
and 3406(d) of Public Law 102-575 by adding them as prohibitions of 
harm under new Sections 2(b)3, 2(b)4) and 2(b)(5), respectively:

          (3) The protection of Central Valley fish and wildlife water 
        supplies, as described in Section 3406(b)(2) of Public Law 102-
        575
          (4) The Trinity River Restoration Program, as described in 
        Section 3406(b)23 of Public Law 102-575, and as embodied in the 
        Interior Secretary's December 2000 Trinity River Record of 
        Decision
          (5) Central Valley Refuges and Wildlife Habitat areas, as 
        described in Section 3406(d) of Public Law 102-575.
Section 3
    We appreciate your emphasis to follow all environmental laws to 
analyze the impacts to both the areas of origin and the receiving areas 
from Central Valley Project water transfers. As you are aware, the 
Bureau of Reclamation and the California Department of Water Resources 
have struggled to produce programmatic federal and state environmental 
review for water transfers (including those proposed in your bill) 
since the signing of the Sacramento Valley Water Management Agreement 
in 2001. We suggest that beyond emphasizing that the Bureau of 
Reclamation, `` . . . shall initiate and complete, on the most 
expedited basis practicable, the programmatic development of 
environmental documentation to facilitate voluntary water transfers 
within the Central Valley Project,'' that you add companion language 
that will protect the areas of origin from harm.
    A programmatic National Environmental Policy Act document will not 
be completed for 2010 transfers and very likely won't be finished even 
for 2011 water transfers. In light of that fact, we request that you 
add the following provisions that will safeguard family farms, 
communities, and myriad species:

   Prohibit ground water substitution.
   Fallowing patterns should err on the side of preventing 
        species impacts.
   All water transfers under this bill must be monitored by 
        independent, third parties that are paid for by the buyers and 
        hired through USFWS or NMFS

    Past experience demonstrates just how destructive surface water 
sales with ground water substitution can be in the northern Sacramento 
Valley. For example, in 1994, following seven years of low annual 
precipitation, Western Canal Water District and other irrigation 
districts in Butte, Glenn and Colusa counties exported 105,000 af of 
water extracted from the Tuscan aquifers to buyers outside of the area. 
This early experiment in the conjunctive use of the groundwater 
resources--conducted without the benefit of environmental review--
caused a significant and immediate adverse impact on the environment. 
(Msangi 2006). Until the time of the water transfers, groundwater 
levels had dropped but the aquifers had sustained the normal demands of 
domestic and agricultural users. The water districts' extractions, 
however, lowered groundwater levels throughout the Durham and Cherokee 
areas of eastern Butte County. (Msangi 2006). The water level fell and 
the water quality deteriorated in the wells serving the City of Durham. 
(Scalmanini 1995). Irrigation wells failed on several orchards in the 
Durham area. One farm never recovered from the loss of its crop and 
later entered into bankruptcy. Residential wells dried up in the upper-
gradient areas of the aquifers as far north as Durham.
    In 2009, the U.S. Fish and Wildlife Service failed to comply with 
the ESA and provide information necessary to establish the impact on 
the threatened giant garter snake. The Service also failed to provide 
measures to minimize the impact of take from transfers. To fully comply 
with the law and minimize the potential for legal challenges to surface 
water transfers, your bill could emphasize the importance of including 
the essential baseline data and mitigation measures to protect the 
species.
Section 4
    The Bureau of Reclamation could bring to Congress many of the facts 
that have been absent from the water transfer debate. For example, a 
State Water Resources Control Board Strategic Plan report\1\ (2008) 
reveals that there are rights, permits, and licenses for at least five 
times the amount of water than exists. A review of the Bureau of 
Reclamation's seven Trinity River water permits reveals that 
Reclamation has permits to store and divert twelve times the average 
annual flow of the Trinity River at Lewiston (Stroshane 2009). It is 
also well known that many speculators in hydrologically dry area of 
California have abused their own water supplies, and some have planted 
permanent crops even when their contracts clearly articulate that there 
will be years that water deliveries may drop to zero. To the detriment 
of all Californians, local, state, and federal agencies have failed to 
stop blatantly wasteful and inappropriate uses and diversions of water 
and have failed to pursue aggressive planning for regional water self-
sufficiency. The water transfer legislation, as proposed, encourages 
more of the same.
---------------------------------------------------------------------------
    \1\ See page 10, paragraph 2 at http://www.waterboards.ca.gov/
water_issues/hot_topics/strategic_plan/2007update.shtml
---------------------------------------------------------------------------
Conclusion
    We appreciate your consideration of our concerns. If you decide 
after hearing testimony, that there is still a need and desire to move 
ahead with this legislation, we urge you to strongly consider our 
recommendations so that you do not, in your haste to facilitate water 
transfers,redirect impacts to the areas of origin, harm Central Valley 
fish and wildlife, and violate Federal Indian Trust responsibilities to 
the Hoopa Valley and Yurok Tribes.
            Sincerely,
                                           Carolee Krieger,
                        President, California Water Impact Network.
                                             Bill Jennings,
             Chairman, California Sportfishing Protection Alliance.
                                 ______
                                 
      Statement of Tovey Giezentanner, President and CEO, Conaway 
                 Preservation Group, LLC, Woodland, CA
    On behalf of the Conaway Preservation Group, LLC (CPG), thank you 
for introducing legislation authorizing and establishing a permanent 
long-term program to promote and manage water transfers in the Central 
Valley of California. We support your efforts and this legislation as a 
means of providing greater flexibility in the management of Central 
Valley Project (CVP) and other water supplies to help meet unmet needs 
critical to the future of the State of California.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation have been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP. Further, the language 
in your legislation directing the Bureau of Reclamation to work with 
other federal agencies to develop the necessary long-term environmental 
documentation addressing impacts of a water transfer program on the 
ESA-listed Giant Garter Snake is a critical and necessary near-term 
next step.
    CPG owns the Conaway Ranch in Yolo County. The Conaway Ranch 
property covers more than 17,000 acres on the west side of the 
Sacramento River between the cities of Davis and Woodland. Conaway 
Ranch has been operated for many years to meet goals of agricultural 
production and waterfowl/wildlife habitat. Approximately 40 percent of 
the Ranch is located within the Yolo Bypass and the remainder lies west 
of the bypass. Conaway Ranch's water rights and Bureau of Reclamation 
Settlement Contract are held by CPG. CPG's Settlement Contract water is 
a major contributor to the Conaway Ranch water supply during its annual 
summer operational term of April 1 through October 31.
    We look forward to working with you and your staff in the coming 
months in this important legislative effort, and appreciate your 
leadership in advancing this legislation and addressing California 
water issues so important to our collective future.
                                 ______
                                 
                                    Department of Commerce,
                         National Marine Fisheries Service,
                                  Long Beach, CA, November 2, 2009.
Ms. Kathy Mrowka,
State Water Resources Control Board, Division of Water Rights, PO Box 
        2000, Sacramento, CA.
    Dear Ms. Mrowka: By this letter, NOAA's National Marine Fisheries 
Service (NMFS) registers its protest to the US Bureau of Reclamation's 
(USBR) Petitions for Extension of Time petitions for the Central Valley 
Project (CVP) (Applications 5625, 5626, 5627, 5628, 9363, 9364, 9365, 
9366, 9367, 9368, 13370, 13371, 13372, 14662, 14858A, 14858B, 14859, 
15374, 15375, 15376, 15764, 16767, 16768, 17374, 17375, 17376, 18115, 
19303, 19304, 21542, 22316, 27319).
    NMFS is responsible for managing fisheries under the Magnuson-
Stevens Fishery Conservation and Management Act and for implementation 
of the Federal Endangered Species Act ESA with respect to marine 
species, including anadromous fish. NMFS' ESA responsibility includes 
working with federal agencies to assist them in complying with their 
ESA duty to avoid jeopardizing the continued existence oflisted species 
or adversely modifying their critical habitat. (ESA Sec.  7(a)(2)) 
Further, the ESA provides that it is Congressional policy that all 
Federal agencies shall cooperate with State and local agencies to 
resolve water resource issues in concert with conservation of 
threatened and endangered species. (ESA Sec.  2(c)(2))
    NMFS is filing this protest to preserve party status in these 
proceedings in order to work with the USBR and the State Water 
Resources Control Board (SWRCB) for conservation of federally protected 
marine species in the CVP service area; NMFS must bring its technical 
expertise to bear in these proceedings if we are to fulfill our legal 
mandates to manage and protect anadromous fish. There is substantial 
uncertainty regarding future environmental conditions in the Sacramento 
Valley and Trinity River Basin. Additionally, the feasibility of 
providing conservation measures such as fish passage above currently 
impassable dams remains unclear. We are concerned that the petitions at 
issue could limit future operational flexibility and result in 
significant adverse environmental impacts and, therefore, may be 
contrary to the public interest.
Project Description
    On July 23, 2009, the USBR filed petitions for extension of time to 
put water to full and beneficial use for 32 water rights associated 
with the Central Valley Project (CVP). These include 16 permits 
previously approved under SWRCB decision 1641 (D1641), 9 permits for 
power generation,\1\ permit for Black Butte Reservoir, and 6 permits 
for the New Melones Reservoir. Operations covered under these permits 
affect water supplies in the: Trinity River (Trinity Reservoir), Clear 
Creek (Whiskeytown Reservoir), Sacramento River Shasta Reservoir, 
American River (Folsom Reservoir), Stanislaus River, the San Francisco 
Bay Delta, the Westside ofthe San Joaquin Valley, and the San Joaquin 
River. Purposes of use include direct diversion and storage for 
irrigation, stock watering, domestic, municipal and industrial use, 
power production, fish and wildlife enhancement, salinity control, 
water quality control, and recreation. The current petitions supersede 
and replace USBR's September 19, 1985 petition and the June 26, 1996 
request for partial amendment.
---------------------------------------------------------------------------
    \1\ The power generation permits are companion filings to the 
consolidated place of use consumptive use permits.
---------------------------------------------------------------------------
    NMFS, the USBR, and other agencies (including the SWRCB) have been 
working together to address fisheries issues in the Sacramento Valley 
region for several years, and in several forums. Most recently, 
pursuant to its duty to determine whether a proposed federal action is 
likely to jeopardize the continued existence of any listed species, on 
June 4, 2009, NMFS issued a Biological Opinion on the long-term 
operation of the CVP and State Water Project (SWP) (the ``OCAP 
Biological Opinion''). NMFS concluded that proposed operations were 
likely to jeopardize five listed species and, as the ESA requires, 
offered an extensive set of actions as a ``reasonable and prudent 
alternative'' (RPA) for project operations that would be likely to 
avoid jeopardizing these species. The USBR has provisionally accepted 
the RPA. Consequently, the delivery of water by the CVP and the SWP is 
governed by the terms of the NMFS RPA, as well as by other federal and 
state decisions. In addition, NMFS and USBR are currently engaged in 
formal ESA consultation regarding USBR Proposed Action to continue 
operation of the Trinity River Division ofthe CVP from 2010 to 2030. 
This consultation is scheduled to be completed in January of 2010.
Basis of Protest
    Our protest is based on threats to the conservation of species 
exposed to potential impacts of ongoing and future operations of the 
CVP in the event petitions are granted without appropriate conditions. 
These species include: Endangered Sacramento River winter-run Chinook 
salmon (Oncorhynchus tshawytscha), Threatened spring-run Chinook salmon 
(O. tshawytscha), Southern Oregon/Northern California Coasts coho 
salmon (O. kisutch), Central Valley steelhead (O. mykiss), the Southern 
Distinct Population Segment of North American green sturgeon (Acipenser 
medirostris), and Southern Resident Killer Whales (Orcinus orca). The 
storage, release, and diversion of surface flows at multiple facilities 
affect stream flows, habitat conditions, and temperatures important to 
the successful completion of spawning, rearing, and migration life-
stages for these protected fish, as well as for fall-run Chinook 
salmon, an important commercial and recreational fishery and food 
source for Endangered killer whales. Detailed analyses ofthese effects 
are presented in the OCAP Biological Opinion and in the 2000 Trinity 
River Biological Opinion.
            A. Sacramento River
    While NMFS' OCAP Biological Opinion concluded that the operations 
under the RPA are not likely to jeopardize listed species, the 
Sacramento Bay Delta ecosystem is extraordinarily complex, and future 
environmental conditions are largely uncertain. Two important variables 
are climate change and future growth patterns. NMFS used the best 
scientific information available at the time of our analysis, including 
current projections for climate change and future growth patterns, but 
we expect that new answers to a variety of important questions will 
become available during the coming years that could affect our analysis 
and conclusions.
    Federal regulations require that NMFS revisit a previous biological 
opinion ``if new information reveals effects of the action that may 
affect listed species or critical habitat in a manner or to an extent 
not previously considered.' (C.F.R. Sec.  402.16) The Opinion requires 
cooperative research to address many of these uncertainties. For 
example, partially as a response to anticipated climate change in 
California, the RPA requires that the project agencies lead studies to 
determine how to provide fish passage above currently impassable dams 
so fish can have access to cold water spawning habitat. The RPA's ``no 
jeopardy'' conclusion rests in part on the assumption that fish passage 
will be provided. If this turns out to be infeasible, modification of 
project operations will most likely be necessary. These modifications 
could require additional cold water releases from Shasta Darn to 
provide suitable conditions for salmon spawning below the dam. Even 
under the current ``no jeopardy'' RPA, there is still high mortality of 
winter-run Chinook, and changed conditions could require provision of 
additional cold water while passage is being studied and engineered.
    However, depending on the nature of, and conditions appurtenant to, 
the water rights that are the subject of those agreements, the USBR may 
or may not be able to provide the cold water that could be required for 
ESA compliance in the future. A federal court has ruled that the use of 
a majority of stored water in Shasta is governed by settlement 
agreements between the USBR and pre-existing water right holders. The 
court determined that USBR has no discretion to amend the agreements. 
If these water rights are not appropriately conditioned, via the 
petition process, to allow measures to conserve listed species, 
conservation of some species simply may not be possible.
    The SWRCB proceedings in this matter are a key intersection of 
federal and state law. Flexibility for USBR to comply with the ESA in 
the future under changed conditions must be preserved if imperiled 
anadromous species in the Sacramento Valley are to be conserved. The 
SWRCB has the authority to preserve that flexibility by determinations 
made in these proceedings. The proceedings provide an opportunity for 
federal and state agencies to work in concert on critical water 
resource issues, with NMFS contributing its technical expertise on 
conservation strategies and fishery management.
            B. Trinity River
    The petitions do not conform to decisions previously made by 
federal agencies and tribal governments regarding instream flow, 
temperature, and minimum pool levels for the Trinity River. NMFS 
completed formal ESA Section 7 Consultation on October 12, 2000 on the 
flows provided by the Trinity River Record of Decision and concluded 
that the flows would not jeopardize listed species. A flow regime 
different than that consulted upon in the Biological Opinion may not 
meet this standard. Similarly, the October 12, 2000 Biological Opinion 
on the Trinity River assumed that the water temperature objectives and 
the minimum pool levels would be met because they were either included 
in the proposed action or formalized as an reasonable and prudent 
measure. As submitted, these petitions may limit the potential for USBR 
to comply with the ESA on the Trinity River in the future. We have 
outlined the factual bases for our protest with regard to the Trinity 
River, and specific recommendations for action, in the 
``Recommendations'' section, below.
Recommendations
          1. Evaluate alternatives associated with the allocation of 
        water rights under settlement contracts to address impacts of 
        CVP operations to stream temperatures for winter-run Chinook 
        salmon below Shasta Reservoir. The majority of the water stored 
        behind Shasta Dam has been deemed not subject to USBR 
        discretionary control. Additional alternatives could facilitate 
        future temperature compliance for winter-run Chinook salmon on 
        the Sacramento River, which is critically important to the 
        survival and recovery ofthis species.
          2. Provide for operational consistency between flow regimes 
        in the CVP and the OCAP Biological Opinion RPA. NMFS and USBR 
        have agreed to a suite of protective measures using flow 
        manipulations of associated portions of CVP water that are 
        designed to avoid jeopardy to species. Fish resources would be 
        well served by insuring that all elements of the RPA are fully 
        integrated into the water rights permits and licenses held by 
        the USBR for the CVP.
          3. NMFS has recently issued a public review draft of our 
        Central Valley Salmon and Steelhead Recovery Plan. This 
        document analyzes current conditions and threats to threatened 
        and endangered salmonids in the Central Valley and provides a 
        comprehensive suite of strategies and actions to achieve their 
        recovery. With protest standing, our agency will be better able 
        to provide technical assistance to the USBR and SWRCB for the 
        purposes of integrating recovery strategies into CVP 
        operations.
          4. The petitions do not include the U.S. Interior 
        Department's 2000 Record of Decision that reduced diversions to 
        the Sacramento River from the Trinity River from 90 to 53 
        percent of average annual Trinity River runoff. The petitions 
        call for minimum instream flows for the Trinity River of 
        120,500 acre feet, well below the minimum agreed upon in the 
        2000 Trinity River Record of Decision. USBR should submit a 
        petition that conforms to water volumes for the Trinity River 
        as established in Trinity River Record of Decision.
          5. The petitions do not include Trinity River water 
        temperature objectives that were reviewed and adopted by the 
        Environmental Protection Agency EPA as an amendment to the 
        Water Quality Control Plan for the North Coast Region Basin 
        Plan approved by the State Board in Resolution No. 91-94 on 
        September 26, 1991. The Basin Plan amendment establishes site-
        specific temperature objectives and an Interim Action Plan for 
        the Trinity River. The review of the temperature objectives 
        found them to be protective ofbeneficial uses on the Trinity 
        River, and to be based on sound scientific rationale. USBR 
        should submit a petition that includes these water temperature 
        objectives for the Trinity River.
          6. The petitions do not include minimum pool levels for 
        Trinity Reservoir. NMFS established a 600,000 acre feet minimum 
        pooi level for Trinity Reservoir in the October 12, 2000 
        Biological Opinion on the Trinity River. This minimum pool 
        level was deemed necessary at that time to ensure sufficient 
        cold water resources to meet the temperature objectives. USBR 
        should submit a petition that includes minimum pool levels for 
        Trinity Reservoir.

    Thank you for considering our protest of the above petitions. We 
hope that by establishing a formal nexus for our agency to participate 
in the review and conditioning ofthe subject permits via the SWRCB 
permitting process, we may provide technical assistance and make 
significant contributions to the survival and recovery of threatened 
and endangered species and management of important commercial and 
recreational stocks. Ifyou have any questions or comments concerning 
this issue, please contact Steve Edmondson, Habitat Manager for 
Northern California at 707 575-6052 or Steve.Edmondsonnoaa.gov.
            Sincerely,
                                         Rodney R. Mclnnis,
                                            Regional Administrator.
                                 ______
                                 
Statement of C. Mark Rockwell, D.C., Endangered Species Coalition, Penn 
                         Valley, CA, on S. 1759
    I am writing for a second time on this legislation, and our group 
letter, sent to you on November 3, 2009, is also attached for 
reference. Our concern with the current legislation is that we feel it 
does not adequately protect the environmental water designated for the 
California Bay-Delta ecosystem, and for the central valley salmon 
fishery (Central Valley Improvement Act(Title 34, Public law 102-575). 
As you may know, under the CVPIA 800,000 acre feet of water, classified 
as b(2) or surplus water, was supposed to be allocated for the purpose 
of Bay Delta estuary protection/restoration, and to meet the salmon 
doubling goals of the CVPIA legislation. Additionally, this water is 
designated to allow the Secretary of Interior to meet Endangered 
Species Act responsibilities to protect and recover listed salmon 
species in the California central valley.
    As you probably also know, the salmon doubling goals have never 
been reached, and in fact, the central valley salmon populations have 
severely declined to the point where salmon fishing in both California 
and Oregon has been closed the past two years. This has caused both 
economic hardship on many business and commercial fishing families, as 
well as hardships on the recreational fishing communities in both 
states. It has caused hundreds of millions of dollars to be lost to the 
California economy, and contributed to the climbing unemployment 
figures in these states. Loss of salmon is, frankly, a disaster for our 
state.
    One of the goals of this legislation is to make available water 
easier to move within the state to those in need. However, as stated by 
Senator Feinstein's staff, it has to be done with no un-intended 
consequences. or negative impacts. We are concerned about negative 
impacts to CVPIA goals and intent, as well as its impact on salmon 
populations in the central valley. Therefore, we recommend the 
following language to firm up the goals and prescribed outcomes of 
CVPIA (in blue italics):

          (b) CONDITION.--A transfer under subsection (a) shall be 
        subject to the condition that the transfer not interfere with--
        --
          (1) Implementation of Section 34060)(2) of the Central Valley 
        Project Improvement Ac (Title 34, Public Law 102-575), 
        partiarlarly with regard to the Secretary's obligations under 
        Section 3406(b)(1)(B) and the Endangered Species Act as spelled 
        out in that Section;
          (2) the San Joaquin River Restoration Settlement Act (Public 
        Law 111-11; 123 Stat. 1349), including the priorities described 
        in section 10004(a)(4)(B) of that Act (123 Stat. 1350) relating 
        to implementation of paragraph 16 of the Settlement (as defined 
        in section 10003 of that Act (12320 Stat. 1349)); and
          (3) the Settlement.

    We feel this addition would achieve the goals of Senator Feinstein 
and Boxer of making water easier to move to needed locations, while 
continuing to protect the central valley salmon fishery, and meeting 
the goals and objectives of the Central Valley Improvement Act. I can't 
stress enough how important it is to recovery the west coast salmon 
fishery for the economy and families of this state. We cannot risk any 
further declines. People's livelihoods and families are at stake.
                                 ______
                                 
                                Environmental Defense Fund,
                               San Francisco, CA, November 4, 2009.
Hon. Dianne Feinstein
Hart Senate Office Building, Washington, DC.
Re: Environmental Defense Fund recommendations on S 1759 (water 
transfers)

    Dear Senator Feinstein: Environmental Defense Fund greatly 
appreciates your efforts to help resolve California's pressing water 
issues. In particular, we thank you for bringing balance to the 
discussions and fending off attempts to undermine fundamental 
protections of existing law, including, but not limited to, the federal 
Endangered Species Act (ESA). EDF is engaged at all levels to find 
solutions to these problems, including work on the pending state 
legislation, participation on the Bay Delta Conservation Plan (BDCP) 
steering committee, open dialogue with key players in the agricultural 
and municipal water sectors and engagement with the Department of the 
Interior on various issues. It is in this context of constructive 
engagement that we offer the following comments on S 1759.
    As you know, EDF is supportive of the use of appropriate market 
mechanisms to solve environmental problems, and we played a central 
role in including such provisions in CVPIA originally. The record is 
clear that voluntary water transfers provide important economic 
incentives to sellers and buyers alike, resulting in improvements in 
agricultural efficiency and on-farm productivity. We thus appreciate 
and agree with the general stated intent behind S 1759.
    We do have a few concerns about S 1759 as filed. First, we are 
concerned that Section 2(a) not undo basic important and carefully 
negotiated provisions of CVPIA by providing too broad of an exemption 
for certain transfers from Sec. 3405(a)(1) of the Act. We suggest the 
following amendment to ensure that S 1759 is limited to intended 
purposes of reducing non-environmental impact related barriers to 
appropriate transfers and that it does not undermine the environmental 
protection inherent in CVPIA (additional language in underlined):

          Sec. 2 (b) Condition--A transfer under subsection (a) shall 
        be subject to all applicable provisions of existing state and 
        federal law and to the condition that it not interfere with . . 
        . 

    Second, we understand that the primary intent of Section 3 of S 
1759 is primarily to streamline the process for review and approval of 
through Delta transfers that may affect the giant garter snake, 
currently listed as a threatened species under the federal ESA. EDF 
generally supports this objective. However, we believe the language in 
Section 3 of the bill as filed may be interpreted to go far beyond the 
stated purpose. We suggest that Section 3 be amended to read as follows 
(additional language in underline):

          Sec. 3 (a) In General--As soon as practicable after the date 
        of enactment of this Act, the Secretary of Interior, acting 
        through the Director of the United States Fish and Wildlife 
        Service and the Commissioner of the Bureau of Reclamation 
        (referred to in this section as the ``Secretary), using such 
        sums as are necessary, shall initiate and complete, on the most 
        expedited basis practicable the programmatic development of 
        environmental documentation to facilitate voluntary water 
        transfers within the Central Valley Project, consistent with 
        all applicable provisions of state and federal law.

    Third, we share the concern of the Grasslands Water District and 
other members of the Central Valley Joint Venture that S 1759 should 
guarantee no loss of water to wetlands. We ask that S 1759 include 
language assuring that if a Central Valley refuge is unable to take 
full delivery of its annual water allocation, the water is made 
available to other refuges that are not in receipt of their full level 
2 or level 4 supplies.
    We are happy to discuss these issues further with your staff, and, 
again, we appreciate all your efforts to help California meet the 
overarching dual goals of water supply reliability and healthy river 
and delta ecosystems.
            Sincerely,
                                             Mary E. Kelly,
                                 Senior Counsel, Rivers and Deltas.
                                          Spreck Rosekrans,
                                                    Senior Analyst.
                                 ______
                                 
                              Friant Water Users Authority,
                                      Lindsay, CA, October 1, 2009.
Hon. Dianne Feinstein,
331 Hart Senate Office Building, Washington, DC.
Re: SUPPORT for Transfer legislation for the Central Valley Project

    Dear Senator Feinstein, On behalf of Friant Water Users Authority 
(Authority), we thank you for introducing transfer legislation for the 
Central Valley Project (CVP) and we support your efforts and this 
legislation as a means of providing greater flexibility for management 
of CVP water supplies.
    The diminished water deliveries to the CVP as a result of three 
years of below average precipitation amplified by various regulatory 
restrictions, including the ESA and the most recent delta smelt and 
salmon Biological Opinions, have, as you know, created a desperate 
situation in the San Joaquin Valley.
    While long-term solutions are being sought, numerous short term 
efforts are needed to help bridge the water supply gap and greater 
flexibility, as provided in your legislation, to move water supplies 
across the San Joaquin Valley would be a useful tool. In addition, the 
legislation would help Friant districts affected by the SJR Settlement 
improve management of surface and groundwater supplies.
    The Authority consists of nineteen member water, irrigation and 
public utility districts. The Friant Service area includes 
approximately one million acres and 15,000 mostly small family farms on 
the east side of the southern San Joaquin Valley (Madera, Fresno, 
Tulare and Kern County). Friant Division water supplies are also relied 
upon by several cities and towns, including the City of Fresno, as a 
major portion of their municipal and industrial water supplies.
    We look forward to engaging in this effort and working closely with 
you and your staff in advancing this legislation and addressing 
California water issues.
            Sincerely,
                                        Ronald D. Jacobsma,
                                        Consulting General Manager.
                                 ______
                                 
                           Glen-Colusa Irrigation District,
                                      Willows, CA, October 2, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Re: Support for Water Transfer Legislation

    Dear Senator Feinstein: On behalf of Glenn-Colusa Irrigation 
District (GCID), we thank you for introducing legislation authorizing 
and establishing a permanent long-term program to promote and manage 
water transfers in the Central Valley of California. We support your 
efforts and this legislation as a means of providing greater 
flexibility in the management of Central Valley Project (CVP) and other 
water supplies to help meet unmet needs critical to the future of the 
State of California.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation has been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP.
    GCID is the largest and one of the oldest diverters of water from 
the Sacramento River, dating back to 1880. As a senior water right 
holder and CVP Sacramento River Settlement Contractor, we believe we 
can and will actively participate in this water transfer program. The 
language in your legislation directing the Bureau of Reclamation to 
work with other federal agencies to implement the necessary long-term 
environmental processes addressing impacts of a water transfer program 
on the ESA-listed Giant Garter Snake will be imperative to its 
usefulness and success.
    We look forward to working with you and your staff in the coming 
months in this important legislative effort, and appreciate your 
leadership in advancing this legislation and addressing California 
water issues so important to our collective future.
            Sincerely,
                                       Thaddeus L. Bettner,
                                                   General Manager.
                                 ______
                                 
                                     State Capitol,
                                    Office of the Governor,
                                  Sacramento, CA, November 4, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Hon. Barbara Boxer,
U.S. Senate, 112 Hart Senate Office Building, Washington, DC.
    Dear Senator Feinstein and Senator Boxer, I am writing to express 
my support for S. 1759, the Water Transfer Facilitation Act of 2009. I 
appreciate your efforts to help alleviate the conditions brought on by 
drought in our state.
    California is entering what could be its fourth consecutive year of 
drought. The state has a history of supporting water transfers and in 
2009 implemented a Drought Water Bank as a tool for helping with 
worsening drought conditions. Given the challenges facing California's 
water supply, water transfers are likely to play an increasingly 
important role in meeting the state's water needs. My administration, 
through the Department of Water Resources (DWR), is working in 
partnership with the U.S. Bureau of Reclamation to facilitate transfers 
in 2010. DWR and the Bureau of Reclamation are also working to develop 
a long-term water transfers program.
    I appreciate your recognition of the importance of this effort in 
meeting California's water supply needs. As Congress considers this 
legislation, I look forward to working with you and your colleagues to 
ensure that the final version meets the needs of both California and 
the federal government.
            Sincerely,
                                     Arnold Schwarzenegger,
                                                          Governor.
                                 ______
                                 
                          Grassland Water District,
                  San Luis & Delta-Mendota Water Authority,
                                       Los Banos, CA, July 9, 2009.
Mr. Donald Glaser,
Regional Director, U.S. Bureau of Reclamation, 2800 Cottageway-MP100, 
        Sacramento, CA.
    Dear Director Glaser: We are writing to request a meeting between 
you, Pablo Arroyave, and ourselves--as respective representatives of 
the San Luis & Delta-Mendota Water Authority and Grassland Water 
District--to discuss the future of the Refuge Water Supply Program and 
how wetland and agricultural interests can further our mutual goals 
while meeting the mandates of the Central Valley Project Improvement 
Act (CVPIA).
    In that regard, the matter of the ``March'' toward Level 4 
acquisition and Level 2 diversification are at the top of our agenda, 
as well as how we might be able to improve upon the current structure 
of the Refuge Water Supply Program. We both concur that just as Level 4 
supplies are an obligation of the CVPIA, so is the requirement to 
diversity sources of Level 2 supplies to alleviate pressure on 
agricultural contractors. We wish to discuss how to move both of these 
objectives forward, which we believe possess connectivity in terms of 
the Bureau's ability to eventually meet both objectives. Our current 
actions to work together to seek solutions to these issues are a 
reflection of our commitment to work together. Nonetheless, the Bureau 
maintains exclusive regulatory authority over actually meeting, and 
thus funding, these objectives. It is in this regard we wish to meet 
and begin a more formal dialogue as to how we can move forward.
    We believe that as a starting point, it would be helpful to have 
this meeting with you and Pablo Arroyave. We then envision a follow-up 
meeting with other members of your staff to further refine the ideas 
which we will develop at this meeting.
    We are both ready to make ourselves available to you based on your 
schedule. Considering recent actions related to changes in Refuge Water 
Supply Program staffing, and the yet to be released PART document 
related to the refuge water program, we believe it is important we meet 
at your earliest convenience.
    Thank you for your consideration of our request. We look forward to 
your response.
            Sincerely,
                                           David L. Widell,
                         General Manager, Grassland Water District.
                                          Daniel G. Nelson,
      Executive Director, San Luis & Delta-Mendota Water Authority.
                                 ______
                                 
                       Hoopa Valley Tribal Council,
                                                Hoopa Valley Tribe,
                                       Hoopa, CA, October 26, 2009.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, 304 Dirksen 
        Building, U.S. Senate, Washington, DC.
Hon.  Lisa Murkowski,
Ranking Member, Committee on Energy and Natural Resources, 304 Dirksen 
        Building, U.S. Senate, Washington, DC.
Hon. Nick J. Rahall II,
Chairman, Committee on Natural Resources, 1522 Longworth Building, U.S. 
        House of Representatives, Washington, DC.
Hon. Doc Hastings,
Ranking Member, Committee on Natural Resources, 1522 Longworth 
        Building, U.S. House of Representatives, Washington, DC.
    Dear Chairmen and Ranking Members: S. 1759 and H.R. 3750 would 
interfere with fulfillment of a long-deferred federal trust 
responsibility owed to the Hoopa Valley Tribe that was identified in 
the Central Valley Project Improvement Act (CVPIA). Pub. L. 102-575 
Sec. 3406(b)(23) (October 30, 1992). The purpose of this letter is to 
request an amendment to the legislation that would ensure 
implementation of the requirement in the CVPIA that the cost of Trinity 
River restoration be paid as a cost of service by Central Valley 
Project (CVP) contractors. These contractors have repeatedly and 
persistently fought to avoid their statutory and contractual financial 
obligations to Trinity River restoration. They should not be provided 
any further benefits of Trinity River water until they recognize and 
pay for the full cost of Trinity River restoration. Also, many of these 
same contractors oppose the fulfillment of the CVP water supply 
obligations to Trinity River basin communities established by Congress 
in 1955 when it authorized the Trinity River Division.
    The Tribe will respectfully oppose this legislation unless the 
issues we raise are resolved favorably to our Tribe.
    Below are a proposed amendment, an explanation of the need for the 
amendment, and a background statement of the Hoopa Valley Tribe's 
interest in this legislation. In the event your Committees hold 
hearings on this legislation, we request that this letter be include in 
the record of your proceedings.
1. Amendment
    Add at the end of section 2:

          (c) The Secretary shall not approve a transfer authorized by 
        this section unless the Secretary determines first that there 
        are funds appropriated and presently available to meet the 
        costs of implementing the Trinity River Mainstem Fishery 
        Restoration Record of Decision adopted by the Secretary with 
        the concurrence of the Hoopa Valley Tribe pursuant to section 
        3406(b)(23)(B) of the Reclamation Projects Authorization and 
        Adjustment Act of 1992 (Public Law 102-575; 106 Stat. 4720) in 
        the amount of $16,400,000 per year (October 2007 price levels) 
        through completion of construction and $11,000,000 per year 
        (October 2007 price levels) thereafter for so long as the 
        Trinity River Division of the Central Valley Project diverts 
        water to the Central Valley.
2. Statement of Need for the Amendment
    S. 1759 and H.R. 3750 would authorize San Joaquin Valley CVP 
contractors to market CVP water exempt from two critical conditions 
established in the CVPIA. The first condition is that a contractor may 
not market water that exceeds the average of the contractor's actual 
use in the prior three years. Public Law 102-575Sec. 3405(a)(1)(A). The 
second condition limits transfers to water that would have been 
consumed or lost to beneficial use during the year of the transfer. 
Public Law 102-575Sec. 3405(a)(1)(I). The elimination of the two 
conditions will result in a financial windfall to the contractors at 
the expense of both the federal taxpayers and restoration of 
environmental damage caused by the diversion of Trinity River water to 
the Central Valley.
    In addition, the legislation would streamline environmental reviews 
of the impacts of proposed water transfers. We support improved 
efficiency in the application of environmental laws to economic 
activity. We note, however, that many of the contractors who would 
benefit by S. 1759 and H.R. 3750 spent nearly five years in court 
between 2000 and 2004 trying to prevent restoration of the Trinity 
River by invoking the same environmental laws under which S. 1759 and 
H.R. 3750 would provide them with favored treatment.
    The amendment the Tribe requests would ensure that no transfer 
could occur unless CVP contractors, in paying for CVP water at the 
``full cost or cost-of-service rates'' established by section 
3405(a)(1)(B) of the CVPIA, included the cost of Trinity River 
restoration in their payments. This amendment would not entail direct 
spending. Rather, it would require that contractors pay as they go for 
the benefits ofCVP water. We request that the Committees consider 
making the amendment applicable to all transfers, not just those that 
would be authorized by S. 1759 and H.R. 3750.
3. Background
    The Trinity River Division of the CVP was authorized in 1955 and 
completed in 1963. The Division is the only source of water imported by 
the CVP. Congress included area-of-origin protections for the Trinity 
River including one establishing flow release procedures for Trinity 
River fish and wildlife preservation and propagation. The Bureau of 
Reclamation informed Congress that it would divert approximately 50 
percent of Trinity River water regulated by the Division. However, 
until the enactment of the CVPIA in 1992, the Bureau consistently 
diverted 90 percent. The Trinity River fishery was devastated.
    Subsequently, several legislative, judicial, and administrative 
initiatives culminated with the enactment of a Trinity River 
restoration provision in the CVPIA. Public Law 102-575 
Sec. 3406(b)(23); 106 Stat. 4720. The CVPIA required the Secretary of 
the Interior and the Hoopa Valley Tribe to develop a restoration plan. 
If the Secretary and Tribe concurred in the plan, the Secretary was 
required to implement it according to its terms. Public Law 102-575 
Sec. 3406(b)(23)(B). In 2000, the Secretary and the Tribe concurred in 
a plan that retained approximately 47 percent of the Trinity River 
Division's water in storage for scheduled releases to the Trinity River 
for fishery restoration. To enable that amount of water to be effective 
for restoration, the plan identified funding requirements to carry out 
habitat restoration and construction, gravel replenishment, and various 
monitoring programs that would have to remain in place so long as CVP 
diversions continued.
    The Trinity River restoration provision of the CVPIA concludes with 
the statement:

          Costs associated with implementation of this paragraph shall 
        be reimbursable as operation and maintenance expenditures 
        pursuant to existing law.

    Public Law 102-575 Sec. 3406(b)(23). However, the Bureau of 
Reclamation has not incorporated the full cost of Trinity restoration 
in its operation and maintenance rate books or annual rate-setting 
process, and funding has otherwise not been provided in the amounts 
identified in the restoration plan by the Secretary and the Tribe. As a 
result, critical restoration activities have not occurred in a timely 
manner, some restoration activities have not been implemented according 
to prescriptions in the restoration plan and have been ineffective, and 
others have not been implemented at all. As a result, the fishery 
remains in decline.
    In the last Congress, legislation entitled ``Trinity River 
Restoration Fund Act of 2007'' was introduced to address this issue. 
H.R. 2733, 110th Cong., 1st Sess. The costs set out in the requested 
amendment above were identified by the Secretary of the Interior in 
consultation with the Hoopa Valley Tribe in February 2007 and were 
included in H.R. 2733. The prior Administration subsequently opposed 
enactment of H.R. 2733, and supported enactment of the San Joaquin 
River Settlement that became law in April of this year. The San Joaquin 
settlement included provisions promoted by San Joaquin Valley 
contractors, among others, that undermined the future availability of 
funds for all CVPIA restoration activities, including Trinity River 
restoration. See Public Law 111-11 Title X Sec. 10007(2) and Draft 
Central Valley Project Improvement Act Program Activity Review Report 
at 41 (December 22, 2008) (The report concluded that the amount 
available for CVPIA restoration activities will be reduced by enactment 
of the San Joaquin River settlement.)
    The primary beneficiaries of S. 1759 and H.R. 3750 will be some of 
the same CVP contractors who not only secured enactment of the above-
mentioned reduction in their environmental restoration funding 
obligation, but also have litigated and lobbied against the Trinity 
River restoration program from its inception. Among them are west side 
contractors who testified against enactment of H.R. 2733, the Trinity 
restoration funding legislation, which would have offset the San 
Joaquin settlement's financial impacts on environmental restoration. 
The San Joaquin settlement was negotiated behind closed doors. When the 
settlement was published in the fall of 2006, the Tribe immediately 
notified the Committees and the Administration that it would harm the 
Tribe's trust resources and undermine environmental restoration 
funding. Several members of the House and Senate acknowledged our 
concerns and pledged to address Trinity River restoration while urging 
the Tribe to withdraw its opposition to the San Joaquin Settlement. Our 
Tribe did withdraw its opposition. But the pledge from Congress remains 
unfulfilled. As Supreme Court Justice Hugo Black wrote in 1960, ``Great 
Nations, like great men, should keep their word.''
    Instead, CVP contractors are on the verge of being rewarded for 
their aggression with yet another special benefit in the form of S. 
1759 and H.R. 3750. This is particularly offensive to our Tribe because 
San Joaquin Valley irrigation operations profit from federally 
subsidized water that is delivered at direct expense to our fishery. 
The major portion of irrigation development on the west side of the San 
Joaquin Valley was made possible by Trinity River diversions to the 
CVP. See Senate Rept. 1154, 84th Cong. 1st Sess. 5 (1955). (``An 
average of 704,000 acre-feet of Trinity River water would be diverted 
annually to the Sacramento River Basin . . .  and about 525,000 acre-
feet annually would be available for use on land of the west side of 
the San Joaquin Valley.'') However, actual diversions prior to the 
adoption of the Trinity River ROD in 2000 were far in excess of that, 
often exceeding 1 million acre-feet annually. Trinity River Flow 
Evaluation-Final Report Table 4.4 (1999).
    S. 1759 and H.R. 3750 represent an opportunity to enforce the 
existing obligations of CVP contractors, meet the federal trust 
responsibility, and serve the goal of environmental justice. 
Accordingly, we urge that you not let this legislation proceed in the 
absence of the amendment we request. Your attention to this matter is 
appreciated.
            Sincerely,
                                     Leonard E. Masten, Jr.
                                                          Chairman.
                                 ______
                                 
        Metropolitan Water District of Southern California,
                                  Los Angeles, CA, October 5, 2009.
Hon. Dianne Feinstein
U.S. Senate, SH-331 Hart Senate Office Building, Washington, DC.
    Dear Senator Feinstein: The Metropolitan Water District of Southern 
California is pleased to support the legislation you are introducing 
related to water transfers for the Central Valley Project (CVP). This 
legislation will help provide good water management while providing 
flexibility for CVP customers.
    As a regional wholesale water provider, Metropolitan provides water 
for nearly 19 million people throughout our 6-county service area in 
Southern California. As Metropolitan and the entire state continue to 
address water supply challenges throughout California, the vitality of 
our economy and environment has been seriously affected. Your proposed 
legislation will help address these critically important issues.
    Please let me know if we can be helpful in any way.
            Sincerely,
                                       Jeffrey Kightlinger,
                                                   General Manager.
                                 ______
                                 
                     Northern California Water Association,
                                   Sacramento, CA, October 2, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Re: Support for Water Transfer Legislation

    Dear Senator Feinstein: On behalf of the Conaway Preservation 
Group, LLC (CPG), thank you for introducing legislation authorizing and 
establishing a permanent long-term program to promote and manage water 
transfers in the Central Valley of California. We support your efforts 
and this legislation as a means of providing greater flexibility in the 
management of Central Valley Project (CVP) and other water supplies to 
help meet unmet needs critical to the future of the State of 
California.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation have been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP.
    NCWA was formed in 1992 to present a unified voice working to 
resolve California's water issues and protect the water rights and 
supplies of the diverse Northern California region, now and into the 
future. NCWA represents 54 agricultural water districts and agencies, 
private water companies, and individual water rights holders with 
rights and entitlements to the surface waters and groundwater resources 
of the Sacramento Valley. Many of our members can and will actively 
participate in this water transfer program. The language in your 
legislation directing the Bureau of Reclamation to work with other 
federal agencies to implement the necessary long-term environmental 
processes addressing impacts of a water transfer program on the ESA-
listed Giant Garter Snake will be imperative to its usefulness and 
success.
    We look forward to working with you and your staff in the coming 
months in this important legislative effort, and appreciate your 
leadership in advancing this legislation and addressing California 
water issues so important to our collective future.
            Sincerely,
                                                  Donn Zea,
                                                 President and CEO.
                                 ______
                                 
                     Northern California Water Association,
                                   Sacramento, CA, October 2, 2009.
Hon. Barbara Boxer,
U.S. Senate, Washington, DC.
Re: Support for Water Transfer Legislation

    Dear Senator Boxer: On behalf of the Northern California Water 
Association (NCWA), we thank you for introducing legislation 
authorizing and establishing a permanent long-term program to promote 
and manage water transfers in the Central Valley of California. We 
support your efforts and this legislation as a means of providing 
greater flexibility in the management of Central Valley Project (CVP) 
and other water supplies to help meet unmet needs critical to the 
future of the State of California.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation have been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP.
    NCWA was formed in 1992 to present a unified voice working to 
resolve California's water issues and protect the water rights and 
supplies of the diverse Northern California region, now and into the 
future. NCWA represents 54 agricultural water districts and agencies, 
private water companies, and individual water rights holders with 
rights and entitlements to the surface waters and groundwater resources 
of the Sacramento Valley. Many of our members can and will actively 
participate in this water transfer program. The language in your 
legislation directing the Bureau of Reclamation to work with other 
federal agencies to implement the necessary long-term environmental 
processes addressing impacts of a water transfer program on the ESA-
listed Giant Garter Snake will be imperative to its usefulness and 
success.
    We look forward to working with you and your staff in the coming 
months in this important legislative effort, and appreciate your 
leadership in advancing this legislation and addressing California 
water issues so important to our collective future.
            Sincerely,
                                                  Donn Zea,
                                                 President and CEO.
                                 ______
                                 
       Pacific Coast Federation of Fishermen's Associations
                               San Francisco, CA, November 3, 2009.
Hon. Dianne Feinstein,
U.S. States Senate, 331 Hart Senate Office Building, Washington, DC.
Hon. Barbara Boxer,
U.S. Senate, 112 Hart Senate Office Building, Washington, DC.
RE: PCFFA concerns with S. 1759 re Central Valley Project water 
transfer facilitation; suggested amendment

    Dear Senators Feinstein and Boxer: The purpose of this letter is to 
bring to your attention the inadvertent harm that your bill S. 1759, as 
introduced, can bring to the fish and wildlife resources of the San 
Francisco Bay-Delta estuary and to offer an amendment that we at the 
Pacific Coast Federation of Fishermen's Associations believe will 
mitigate such potential harm.
    We apologize for the lateness of communicating our S. 1759 concerns 
to you, but the ongoing wrangling in Sacramento over the future of the 
Bay-Delta--the ``Delta water package''--has been all-consuming for 
weeks now.
    As introduced, S. 1759 strikes at the heart of the principal 
purpose of the Central Valley Project Improvement Act (CVPIA), PL 102-
575, co-authored by then-Senator Bill Bradley and Congressman George 
Miller and signed into law 17 years ago last week by President George 
H. W. Bush.
    The principal purpose of the CVPIA was to repair the damage dealt 
to fish and wildlife resources by (then) 57 years of federal Central 
Valley Project (CVP) development and operation in the Central Valley 
and on the Trinity River. From a fisheries perspective the two most 
important provisions of the CVPIA are (1) a commitment to double the 
Central Valley salmon resource over 1960s-80s population numbers; and 
(2) the provision of 800,000 acre-feet of water from the CVP's yield 
with which to protect and restore Project-impacted fish and wildlife 
resources, particularly those of the San Francisco Bay-Delta estuary.
    We know that the CVPIA has yet to accomplish its salmon-doubling 
purpose. Central Valley salmon are, as you know, in dire straits.
    The Bureau of Reclamation has defied Congress. It has been gaming 
the CVPIA's environmental water
    Last year a panel of independent scientists conducted an Office of 
Management & Budget-prescribed evaluation of the CVPIA's Anadromous 
Fisheries Restoration Program, that which purports to implement the 
Act's salmon-doubling provisions. That panel's report\1\ sends a clear 
message why S. 1759, as introduced, threatens the health of the Bay-
Delta estuary and the implementation of the CVPIA's salmon-doubling 
purpose.
---------------------------------------------------------------------------
    \1\ Listen to the River : An Independent Review of the CVPIA 
Fisheries Program'', available at http://
www.cvpiaindependentreview.com/FisheriesReport12_12_08.pdf
---------------------------------------------------------------------------
    Section 3406(b)(2) of the CVPIA explicitly directs the Secretary of 
the Interior to

          dedicate and manage annually 800,000 acre-feet of Central 
        Valley Project yield for the primary purpose of implementing 
        the fish, wildlife, and habitat restoration purposes and 
        measures authorized by this title; to assist the State of 
        California in its efforts to protect the waters of the San 
        Francisco Bay/Sacramento-San Joaquin Delta Estuary; and to help 
        meet such obligations as may be legally imposed upon the 
        Central Valley Project under state or federal law following the 
        date of enactment of this title, including but not limited to 
        additional obligations under the federal Endangered Species 
        Act.

    The independent science panel literally struggled to get the Bureau 
of Reclamation to explain, in any straightforward manner, how it was 
managing that 800,000 acre-feet of water that Congress directed it to 
use for salmon-doubling and for meeting the Secretary's ESA obligations 
in the Bay-Delta estuary. Rather than attempt to paraphrase what the 
scientists learned--and how ``flabbergasted'' they were by what they 
finally learned, we provide the text of their report here\2\:
---------------------------------------------------------------------------
    \2\ Ibid. at the bottom of page 41, top of page 42

          When viewed in combination with the broad directive in 
        Section 3406(b)(1)(B) to ``modify Central Valley Project 
        operations to provide flows of suitable quality, quantity, and 
        timing to protect all life stages of anadromous fish,'' for 
        which the 800 kaf is one explicit tool, the panel expected to 
        find that implementation of 3406(b)(2) had occurred in this 
        way: The agencies identify 800 kaf of dedicated storage in the 
        system--essentially, a water volume budget--and then consistent 
        with an identified system-wide flow regime to improve 
        conditions for anadromous fish, Reclamation would release this 
        stored water in requested amounts at the call of the fish 
        managers and then protect that amount of altered flow through 
---------------------------------------------------------------------------
        the rivers, through the Delta, and into the bay.

          We were flabbergasted to learn this is not how the agencies 
        implement this provision. The agencies have not identified a 
        system-wide flow regime and set of system flow objectives. 
        Worse, Reclamation does not dedicate and manage 800 kaf of 
        water from headwaters storage through the Delta [our emphasis]. 
        Instead, Reclamation releases approximately 400 kaf from CVP 
        storage each year, aimed at supporting the needs of particular 
        life stages at particular locations. These augmented amounts 
        are then diverted out of the system at a later point. The 800 
        kaf accounting then includes approximately 400 kaf realized in 
        pump restrictions in the Delta. This approach seems 
        fundamentally at odds with the intent and language of the 
        legislation. It is symptomatic of a program focused on local 
        upstream watershed factors and not on the Delta and especially 
        not on the problem at the system scale.

    In short, Reclamation has defied Congress' directive to apply 
800,000 acre-feet of water to salmon doubling and to meeting the 
Secretary's ESA and Clean Water Act obligations in the San Francisco 
Bay-Delta estuary.
    S. 1759 as introduced will legitimate Reclamation's gaming of the 
CVPIA environmental water
    S. 1759 as introduced would explicitly waive the application of 
CVPIA section 3405(a)(1), subparagraphs (A) and (I) in order to further 
unfetter the marketing of CVP water.
    CVPIA section 3405(a)(1), subparagraph (A) reads `` No transfer or 
combination of transfers authorized by this subsection shall exceed, in 
any year, the average annual quantity of water under contract actually 
delivered to the contracting district or agency during the last three 
years of normal water delivery prior to the date of enactment of this 
title.''
    Subparagraph (I) reads ``The water subject to any transfer 
undertaken pursuant to this subsection shall be limited to water that 
would have been consumptively used or irretrievably lost to beneficial 
use during the year or years of the transfer.''
    The purpose of these subparagraphs was to assure that the water 
being freed up for sale under the then-new CVPIA policy was real water 
that had been used on-farm for three years prior to enactment of the 
CVPIA, that it was not water that Congress intended be used to meet the 
Secretary's fish and wildlife protection and restoration obligations in 
the San Francisco Bay-Delta estuary, or for that matter, in the Trinity 
River restoration program or elsewhere.
    S. 1759, as introduced, will bring CVP contractors explicitly in on 
the gaming of the CVPIA environmental water by specifically waiving the 
environmental water safeguards Congress provided in the CVPIA at 
section 3405(a)(1), subparagraphs (A) and (I).
    PCFFA's proposed amendment to S. 1759, as introduced, will prevent 
gaming of the CVPIA environmental water
                               amendment
    At subsection (b) ``CONDITION'' of Section 2, following ``A 
transfer under subsection (a) shall be subject to the condition that 
the transfer not interfere with--'', insert

          (I) Implementation of Section 3406(1)(2) of the Central 
        Valley Project Improvement Act (Title 34, Public Law 102-575) , 
        particularly with regard to the Secretaiy's obligations under 
        the Endangered Species Act as spelled out in that Section:

    (and renumber the other sections of the subparagraphs accordingly).

    Two additional concerns that have been raised by PCFFA members in 
reviewing S. 1759 are:

          1) The need to mandate a flow study (scientific proceedings 
        by the State Water Resources Control Board were abruptly halted 
        by the State administration, first in 1988 and then again in 
        1993) to determine the amount of freshwater inflow to the Delta 
        and Bay to maintain the estuarine fimetion of the Bay-Delta 
        ecosystem. Without this, transfers could be occurring of water 
        that may be needed for the protection and recovery of the most 
        important estuary on the West Coast of the Americas; and
          2) The need to prohibit growers from transferring 
        agricultural water for non-agricultural uses (e.g., land 
        development in the Mojave Desert) when shortages of 
        agricultural water exist.or transfers to growers who have sold 
        their water for non-agricultural uses. We are sympathetic to 
        the need for water for legitimate food production operations, 
        but we cannot see placing the environment or fisheries--our 
        livelihoods and communities--at any further risk to facilitate 
        profiteering from water sales or accommodating new development, 
        such as golf courses in the desert.

    Again, we apologize for the delay in communicating our concerns It 
has been a hectic time for those of us struggling to secure some water 
for salmon and other public trust resources. We assume that neither of 
you understood clearly the connection between your bill, as introduced, 
and the CV PIA environmental water, that which took us, literally, 
generations to secure for the San Francisco Bay-Delta estuary and 
Central Valley river environments.
    Thank you for your consideration of our concerns and the amendment 
to your bill that we offer here.
            Sincerely,
                                  W.F. ``Zeke'' Grader, Jr.
                                                Executive Director.
                                 ______
                                 
      Pacific Coast Federation of Fishermen's Associations,
                               San Francisco, CA, November 3, 2009.
Hon. Jeff Bingaman,
Chairman, Committee on Energy & Natural Resources, 304 Dirksen 
        Building, U.S. Senate, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Committee on Energy & Natural Resources, 304 Dirksen 
        Building, U.S. Senate, Washington, DC.
Hon. Nick J. Rahall II,
Chairman, Committee on Energy & Natural Resources, 1522 Longworth 
        Building, U.S. House of Representatives, Washington, DC.
Hon. Doc Hastings,
Ranking Member, Committee on Natural Resources, 1522 Longworth 
        Building, U.S. House of Representatives, Washington, DC.
RE: S. 1759 and H.R 3750, 111th Cong., 1st Sess.--Central Valley 
Project water transfer facilitation

    Dear Chairmen and Ranking Members: The Pacific Coast Federation of 
Fishermen's Associations represents working men and women in the West 
Coast commercial fishing fleet. Water policy within California and the 
Pacific Northwest affects the health and abundance of many of our 
region's economically important fish species, including salmon, and 
some estuarine-dependent species such as Dungeness crab. The water 
transfer language within S.1759 and H.R. 3750, as introduced, could 
have an inadvertent harmful affect on Central Valley salmon stocks and 
other fish native to the San Francisco Bay/Sacramento-San Joaquin Delta 
estuary.
    As introduced, S. 1759 and H.R 3750 threaten to undo legislation 
intended to protect and restore fish and wildlife resources of the San 
Francisco Bay-Delta estuary. These fish and wildlife protection and 
restoration obligation of the Secretary of the Interior are found in PL 
102-575, the Central Valley Project Improvement Act signed into law 17 
years ago last week by President George H. W. Bush.
    We have brought our concerns to the attention of the authors and we 
would respectfully request the Committees' help in assisting the 
authors to incorporate the amendment that we provide below--to make 
absolutely clear that the proposed legislation shall not be used to 
interfere with the CVPIA's principal purpose, the repair of damage done 
to fish and wildlife resources over the Central Valley Project's (CVP) 
57 years of development and operation prior to 1992.
    We will set out our proposed amendment together with an explanation 
of the need for the amendment. We request that this letter be included 
in any record of hearings on these bills.

          1. Amendment
          At subsection (b) ``CONDITION'' of Section 2, following ``A 
        transfer under subsection (a) shall be subject to the condition 
        that the transfer not interfere with--``, insert

          (1) Implementation of Section 3406(b)(2) of the Central 
        Valley Project Improvement Act (Title 34, Public Law 102-575) , 
        particularly with regard to the Secretary's obligations under 
        the Endangered Species Act as spelled out in that Section;

    (and renumber the other sections of the subsection accordingly).

          2. Explanation of the need for the amendment
          As we note above, the principal purpose of Public Law 102-
        575, the Central Valley Project Improvement Act, was repair of 
        the damage done to fish and wildlife populations over the years 
        of Central Valley Project development and operation beginning 
        in the mid-1930s.
          In order to gain sufficient support for passage of the CVPIA 
        the proposed Act's backers worked with California 
        municipalities and agricultural irrigation interests to 
        liberalize the use of CVP water, historically confined to 
        designated places of use, or ``service areas''. The CVPIA 
        authorized the sale of CVP water outside the Project's 
        designated service areas.

    Section 3406(b)(2) of the CVPIA explicitly directs the Secretary of 
the Interior to

          dedicate and manage annually 800,000 acre-feet of Central 
        Valley Project yield for the primary purpose of implementing 
        the fish, wildlife, and habitat restoration purposes and 
        measures authorized by this title; to assist the State of 
        California in its efforts to protect the waters of the San 
        Francisco Bay/Sacramento-San Joaquin Delta Estuary; and to help 
        meet such obligations as may be legally imposed upon the 
        Central Valley Project under state or federal law following the 
        date of enactment of this title, including but not limited to 
        additional obligations under the federal Endangered Species 
        Act.

    Given the uncertain nature of the CVP's yield (in the run-up to 
California's 1986-93 drought, Interior was preparing to sell nearly 2 
million acre-feet of water it claimed remained uncommitted within the 
CVP's yield--water that has not been heard from since) the CVPIA 
imposed a ``reality check'' on those who would market their CVP water 
into the new urban market--subparagraphs (A) and (I) of CVPIA section 
3405(a)(1).
    Subparagraph (A) reads ``No transfer or combination of transfers 
authorized by this subsection shall exceed, in any year, the average 
annual quantity of water under contract actually delivered to the 
contracting district or agency during the last three years of normal 
water delivery prior to the date of enactment of this title.''
    Subparagraph (I) reads ``The water subject to any transfer 
undertaken pursuant to this subsection shall be limited to water that 
would have been consumptively used of irretrievably lost to beneficials 
use during the year of years of the transfer.''
    Again, the purpose of these subparagraphs was to assure that the 
water being freed up for sale under the new CVPIA policy was real water 
that had been used on-farm for three years prior to enactment of the 
CVPIA and that it was not the water that Congress intended be used to 
meet the Secretary's fish and wildlife protection and restoration 
obligations in the San Francisco Bay-Delta estuary, or for that matter, 
in the Trinity River restoration program or elsewhere.
    It is these CVPIA safeguards against the marketing of water needed 
to repair the damage to fish and wildlife resources caused by the CVP's 
decades of development and operation that S. 1759 and H.R 3750 would 
sweep away.
    If the proponents of the present bill do not intend to deny San 
Francisco Bay-Delta fish and wildlife resources the water dedicated to 
them by Congress in the 1992 CVPIA then the amendment we propose should 
work to make that fact even clearer to the Secretary.
    Thank you for your consideration of our concerns and our proposed 
amendment.
            Sincerely,
                                 W.F. ``Zeke'' Grader, Jr.,
                                                Executive Director.
                                 ______
                                 
                                    Panoche Water District,
                                    Firebaugh, CA, October 5, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Hon. Barbara Boxer,
U.S. Senate, 112 Hart Senate Office Building, Washington, DC.
Hon. Dennis Cardoza,
U.S. House of Representatives, 1224 Longworth Building, Washington, DC.
Hon. Jim Costa,
U.S. House of Representatives, 1314 Longworth, House Office Building, 
        Washington, DC.
RE: Water Transfer Facilitation Act of 2009

    Dear Senator Feinstein, Senator Boxer, Mr. Cardoza, and Mr. Costa: 
I am writing on behalf of the Panache Water District express our 
enthusiastic support for your bill, the Water Transfer Facilitation Act 
of 2009, authorizing certain transfers of water in the Central Valley 
Project and other purposes. Water transfers are essential to sound 
water management and often are time sensitive. Your legislation will 
bring important reform to existing transfer authorization thus 
increasing the efficacy of this essential water management tool.
    As you are keenly aware, coping with California's water crisis and, 
in particular, the chronic water supply shortages impacting the Central 
Valley Project demands utilization of various best management practices 
including water transfers. Moreover, the need to transfer water is 
often urgent and in response to climactic conditions that are 
frequently sporadic and ephemeral. Regrettably, bureaucratic process 
can unnecessarily thwart successful execution of a transfer and the 
best management of this all too precious resource. The clarity your 
legislation brings to existing authorizations will only improve the 
capability of water managers throughout the State to effectively 
respond to the ongoing crisis and put our scant water resources to use 
even more efficiently.
    The Westside of the great San Joaquin Valley is inarguably the most 
transfer dependent region of the State. Your efforts to address this 
important matter as well as your vast knowledge of and longstanding 
commitment to water resource issues vital to the State are most deeply 
appreciated. If there is anything I can do to be of further service to 
you in this cause, please do not hesitate to call.
            Very truly yours,
                                           Dennis Falaschi,
                                                   General Manager.
                                 ______
                                 
 Statement of Placer County Water Agency Transfer Legislation Proposal
                               background
    PCWA has extensive water transfer experience. PCWA has transferred 
water to willing buyers in nearly every dry year over the past 20 
years. Most recently, in 2009 we transferred 20,000 af to San Diego 
County Water Authority. In 2008 we transferred 20,000 af to Westlands 
Water District. Previously we have transferred water to the State Water 
Bank, the Environmental Water Account and the City of San Francisco.
    These transfers are consistent with the PCWA's commitment to the 
Sacramento Area Water Forum to provide additional dry year flows to 
help sustain fisheries in the lower American River.
                         time consuming process
    The administrative and regulatory process necessary to gain 
permission to complete a water transfer has become so cumbersome that 
it almost cannot be completed in a single year. For many potential 
transfer partners, these processes have become a huge barrier and may 
impede drought response and impact future opportunities for transfer 
transactions. One of the more time consuming administrative elements is 
the negotiation and execution of Reclamation's Warren Act Contract\1\. 
The process involves many steps and the execution of the contract 
becomes the ``federal action'' triggering NEPA compliance, all of which 
can take several months to complete.
---------------------------------------------------------------------------
    \1\ The Warren Act (WA)--The WA (43 U.S.C. Sec. 523) of 1911 
provides authorization to the Secretary of the Interior to enter into 
WA contracts with water purveyors to carry non-CVP water (i.e., water 
not developed as part of the CVP) through Federal facilities. Under 
Section 305 of the States Emergency Drought Relief Act of 1991 (43 
U.S.C. Sec. 2211 et seq.). ``Excess Storage and Carrying Capacity,'' 
the Secretary is authorized to execute contracts with municipalities, 
public water districts and agencies, other Federal agencies, State 
agencies, and private entities pursuant to the WA. These contracts 
provide for the impounding, storage, and conveyance of non-CVP water 
for domestic, municipal, fish and wildlife, industrial, and other 
beneficial uses using any CVP facilities identified in the law, 
including Shasta Reservoir, Folsom Reservoir, Jones Pumping Plant, the 
Delta-Mendota Canal, San Luis Reservoir, O'Neill Forebay, the San Luis 
Canal.

    The WA (43 U.S.C. Sec. 523) of 1911 provides authorization to the 
Secretary of the Interior to enter into WA contracts with water 
purveyors to carry non-CVP water (i.e., water not developed as part of 
the CVP) through Federal facilities. Under Section 305 of the States 
Emergency Drought Relief Act of 1991 (43 U.S.C. Sec. 2211 et seq.), 
``Excess Storage and Carrying Capacity,'' the Secretary is authorized 
to execute contracts with municipalities, public water districts and 
agencies, other Federal agencies, State agencies, and private entities 
pursuant to the WA. These contracts provide for the impounding, 
storage, and conveyance of non-CVP water for domestic, municipal, fish 
and wildlife, industrial, and other beneficial uses using any CVP 
facilities identified in the law, including Shasta Reservoir, Folsom 
Reservoir, Jones Pumping Plant, the Delta-Mendota Canal, San Luis 
Reservoir, O'Neill Forebay, the San Luis Canal.
                            pcwa case study
    PCWA owns and operates the Middle Fork American River Hydroelectric 
Project (MFP), which is above Folsom Reservoir. Any water that PCWA 
does not ``use or otherwise dispose of'' becomes CVP water once it 
reaches Folsom Reservoir.
    In dry years there are generally willing buyers and excess delta 
pumping capacity (currently in a very limited time ``window'') 
available to move the water south.
    The operation of the MFP necessary to release additional water for 
transfer into Folsom Reservoir is permitted within PCWA's existing FERC 
license conditions and water rights. The storage and conveyance of PCWA 
transfer water, by Reclamation, to the buyer (if a CVP contractor) or 
to the State Water Project facilities, is within Reclamation's normal 
operating limits and consistent with all of the water right conditions 
and biological opinions governing the operation of the CVP.
    In all of its previous transfers neither PCWA nor Reclamation have 
identified any adverse environmental impacts associated with these 
transfers. On the contrary, the most recent Environmental Assessment 
stated the impacts of releasing more water from MFP would likely have a 
positive impact to the fish habitat downstream.
    The following Steps were necessary in order to complete a one-year 
temporary transfer of 20,000 acre-feet of PCWA water to a State Water 
Project contractor in 2009.

          1) State Water Resources Control Board (SWRCB) Permit--
        Willing Seller prepares a comprehensive project description and 
        transfer application, including an assessment of potential 
        impacts.

                  Submit application to SWRCB for permits to change the 
                place of use of this water to a new area. After review 
                of the application by SWRCB staff and completion of any 
                necessary corrections or additions, publish a 
                comprehensive notice for 30 day public review.
                  Water transfers are exempted under CEQA due to the 
                temporary nature of the transfer, which eliminates the 
                need for a separate public notice and protest period on 
                the subject of the impacts. However, the SWRCB must 
                make an independent determination that the water 
                transfer will not cause unnecessary environmental 
                impacts.
                  After public notice and review closes, SWRCB seeks 
                any resolution for any public comment, or input. 
                Willing seller/buyers respond appropriately as 
                necessary. SWRCB issues an order granting the permit.

          2) Refill Agreement--In cases involving reservoir re-
        operations upstream of Central Valley Project (CVP) storage 
        facilities, steps are taken by both Reclamation and DWR to 
        ensure no other users are harmed by the changes in reservoir 
        operation. A refill criteria agreement, setting forth 
        limitations on future year upstream reservoir operations, is 
        required between the parties to ensure the following year water 
        supply is not impacted by the refilling of vacated storage 
        space if the following year is also dry. Reclamation has 
        recently determined the execution of this agreement triggered a 
        federal action under NEPA and required an Environmental 
        Assessment (EA) and a Finding of No Significant Impact 
        (FONSI)\2\.
---------------------------------------------------------------------------
    \2\ This is stated in Chapter 1 of the Environmental Assessment 
document and the Finding of No Significant Impact -09-05 July 2009.
---------------------------------------------------------------------------
          3) Warren Act Contract--If non-project water is to be moved 
        through Central Valley Project facilities, a temporary Warren 
        Act Contract between the willing seller/buyer and Reclamation 
        is required. It can take several weeks to negotiate this 
        agreement.

                  Executing the temporary wheeling agreement is a 
                discretionary federal action, which triggers the need 
                for review under NEPA. NEPA review can only begin after 
                the wheeling agreement negotiations are complete so 
                that the ``federal action'' can be clearly defined.
                  The preparation of a Warren Act project description 
                and an assessment of the potential impact of all 
                required changes in seller, Reclamation and buyer 
                operations necessary to complete the transfer can be 
                very time consuming. Then a 30 day public review of the 
                Environmental Assessment is required. Following the 
                public review if comments are received, they are 
                addressed and Reclamation may then publish a record of 
                decision and execute the agreement(s).

          4) SWP Conveyance Agreement--When the buyer is a SWP 
        contractor a delivery and conveyance agreement, which sets 
        forth SWP conditions for the transfer conveyance and delivery 
        must be reached between the seller and buyer and DWR. Since 
        transfers are exempt from CEQA, no additional impact analysis 
        is required as a condition of the execution of this agreement.
          5) Coordinated Operations--DWR and Reclamation consult under 
        their Coordinated Operating Agreement to ensure that the 
        storage and conveyance of transfer water does not have 
        unintended water supply consequences for SWP and CVP 
        contractors. These are peer to peer discussions between SWP and 
        CVP operations staff and any adjustments in operation are not 
        subject to CEQA or NEPA.
                                proposal
    If Reclamation were given the authority to facilitate and expedite 
temporary transfers, including non-CVP water transfers, without the 
need to execute a temporary Warren Act Contract, one of the biggest 
impediments to water transfers throughout the state would be removed. 
..
    To do this Reclamation would need authorization to acquire water 
from a willing seller, to treat that water as CVP water and then 
deliver that water to the party that provided the funding for the 
acquisition. We propose to give Reclamation those authorizations.
    We further propose to make these action(s) categorically excluded 
under NEPA so long as all parties are acting within their separate 
existing authorities and within system capacities.
    Together, the elimination of the need for a Warren Act Contract and 
extensive NEPA review would cut the processing time to facilitate these 
transfers by many months.
                                 ______
                                 
                                    Revive the San Joaquin,
                                     Fresno, CA, December 14, 2009.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, 304 Dirkscn Senate 
        Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Committee on Energy and Natural Resources, 304 Dirksen 
        Senate Building, Washington, DC.
Re: Opposition to S 1759 [Senators' Feinstein and Boxer], Water 
Transfer Facilitation Act of 2009

    Dear Chairman Bingaman, Ranking Member Murkowski and Members of the 
Water and Power Subcommittee: Revive the San Joaquin is a San Joaquin 
Valley based nonprofit working for the protection of the San Joaquin 
River system and a successful restoration of its valuable resources. 
For nearly 60 years the State's second largest river system has been 
dried up, and with it so has the economy of the valley communities who 
now rely heavily on groundwater and surplus Delta water imports. The 
unreliability of San Joaquin Valley water supplies has led our 
communities to experience extreme hardships and resulted in a severe 
over-drafting of groundwater supplies as well as creating entire local 
economies based on empty promises for water exports from the Delta.
    Please listen to ALL stakeholder interests in the San Joaquin 
Valley when reviewing this water legislation. Far too often large 
corporations and single-interest stakeholders dominate the political 
discussions and misrepresent the needs of San Joaquin Valley 
communities and stakeholders. As Westside farming interests 
increasingly weigh decisions to farm or sell water (example Dudley 
Ridge Water District fallows land to sell 14,000 af/yr at $5,500 to 
Mojave Water Agency for new desert developments), it is our local 
communities and jobs that suffer. Inequitable access by large 
agribusiness corporations to water storage infrastructure further 
enables sales of water destined for Valley farms to be privatized and 
sold for purposes other than irrigation to the Valley's Westside.
    The proposed water transfer legislation does little more than add 
complexity and gut existing environmental protections for a water 
supply that must be made more sustainable if the Valley's economy is to 
thrive in the future. Water quality in the Delta must be improved if we 
are to convey surplus water supplies to San Joaquin Valley farmers. 
Conservation efforts and new governance in the Delta are key elements 
of the long-term recovery efforts that will eventually lead to a 
sustainable water supply from the Delta.
San Joaquin River Restoration Adds Storage and Conveyance Opportunities
    The San Joaquin River Restoration Program is probably the best 
short-term solution to South Delta water quality issues. Releases of a 
significant water supply from Friant Darn may improve water supply and 
water quality impacts by 2012 creating water supply benefits to both 
Northern San Joaquin Valley water districts and also Westside water 
districts through improved water quality and reduced salinity at the 
export pumps. New storage capacity created from the Friant releases may 
also provide new water supplies and reduce flood frequencies, changing 
the nature of fishery management in the South Delta. Restoration 
creates new conveyance opportunities between the Friant division and 
other State and Federal projects that have yet to be explored. New 
legislation is not needed to facilitate beneficial transfers.
    The State's water crisis is real and our State legislature is 
seeking a comprehensive solution including increased oversight of Delta 
water quality, a task that can only be accomplished through improved 
oversight by the State Water Resources Control Board (SWRCB), and 
through a coordinated accounting of Delta-based water rights. Delta 
exports have seen drastic increases this decade from the years 2001-
2006 in contrast to the SWRCB 1978 decision D-1485 which identifies the 
need to reduce exports and protect Delta water quality (See Exhibit 
1).* The lack of oversight of exports from the Delta has created an 
unrealistic and unsustainable supply for Valley farmers.
---------------------------------------------------------------------------
    * Exhibit has been retained in subcommittee files.
---------------------------------------------------------------------------
New Legislation Must Reinforce State Actions, Not Add Complexity
    Our local Congressmen have consistently looked to temporary fixes, 
emergency exemptions, and other agency-based ``do not enforce'' orders 
to remedy the concerns of NVestside farm interests. This has provided 
false hope and unrealistic expectations for water supplies out of the 
Delta. Federal legislation should not stand in conflict to existing 
State and federal governance of the Delta, but rather should support 
on-going efforts to improve water quality in the Delta. Creating a 
healthy environment for fish and habitat. will also create a favorable 
environment for continued exports. Sucking up the last drip of 
freshwater from the South Delta is a formula for immediate extinction 
of multiple fish species and a guarantee that continued export capacity 
will fail.
    Revive the San Joaquin opposes the current 5.1759 legislation as it 
is counterproductive to ongoing efforts to improve local water supplies 
and improve water quality in the South Delta. Revive the San Joaquin 
represents many local residents, farmers, and businesses who believe 
coordinated and unified actions by our State and Federal legislature is 
the only path to ensure economic and. environmental progress can be 
made during this water crisis.
            Sincerely,
                                               Chris Acree,
                                                Executive Director.
                                 ______
                                 
                                 Reclamation District 2035,
                                     Woodland, CA, October 6, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Re: Support for Water Transfer Legislation

    Dear Senator Feinstein: On behalf of Reclamation District 2035, 
thank you for introducing legislation authorizing and establishing a 
permanent long-term program to promote and manage water transfers in 
the Central Valley of California. Reclamation District 2035 (RD 2035) 
was formed in 1919 to provide flood control and water delivery for 
approximately 22,000 acres in Yolo County, California. While RD2035 
does not own water rights, it is responsible for the delivery of CVP 
water to its agricultural customers whose crops represent the top three 
agricultural commodities in Yolo County.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation have been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP. Further, the language 
in your legislation directing the Bureau of Reclamation to work with 
other federal agencies to develop the necessary long-term environmental 
documentation addressing impacts of a water transfer program on the 
ESA-listed Giant Garter Snake is a critical and necessary near-term 
next step.
    We look forward to working with you and your staff on this 
important legislative effort.
            Sincerely,
                                       Regina J. Cherovsky,
                                                       Chairperson.
                                 ______
                                 
                                 Reclamation District 2035,
                                     Woodland, CA, October 6, 2009.
Hon. Dennis Cardoza,
U.S. House of Representatives, Washington, DC.
Re: Support for Water Transfer Legislation

    Dear Congressman Cardoza: On behalf of Reclamation District 2035, 
thank you for introducing legislation authorizing and establishing a 
permanent long-term program to promote and manage water transfers in 
the Central Valley of California. Reclamation District 2035 (RD 2035) 
was formed in 1919 to provide flood control and water delivery for 
approximately 22,000 acres in Yolo County, California. While RD2035 
does not own water rights, it is responsible for the delivery of CVP 
water to its agricultural customers whose crops represent the top three 
agricultural commodities in Yolo County.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation have been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP. Further, the language 
in your legislation directing the Bureau of Reclamation to work with 
other federal agencies to develop the necessary long-term environmental 
documentation addressing impacts of a water transfer program on the 
ESA-listed Giant Garter Snake is a critical and necessary near-term 
next step.
    We look forward to working with you and your staff on this 
important legislative effort.
            Sincerely,
                                       Regina J. Cherovsky,
                                                       Chairperson.
                                 ______
                                 
                                 Reclamation District 2035,
                                     Woodland, CA, October 6, 2009.
Hon. Jim Costa,
U.S. House of Representatives, Washington, DC.
Re: Support for Water Transfer Legislation

    Dear Congressman Costa: On behalf of Reclamation District 2035, 
thank you for introducing legislation authorizing and establishing a 
permanent long-term program to promote and manage water transfers in 
the Central Valley of California. Reclamation District 2035 (RD 2035) 
was formed in 1919 to provide flood control and water delivery for 
approximately 22,000 acres in Yolo County, California. While RD2035 
does not own water rights, it is responsible for the delivery of CVP 
water to its agricultural customers whose crops represent the top three 
agricultural commodities in Yolo County.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation have been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP. Further, the language 
in your legislation directing the Bureau of Reclamation to work with 
other federal agencies to develop the necessary long-term environmental 
documentation addressing impacts of a water transfer program on the 
ESA-listed Giant Garter Snake is a critical and necessary near-term 
next step.
    We look forward to working with you and your staff on this 
important legislative effort.
            Sincerely,
                                       Regina J. Cherovsky,
                                                       Chairperson.
                                 ______
                                 
                                 Reclamation District 2035,
                                     Woodland, CA, October 6, 2009.
Hon. Barbara Boxer,
U.S. Senate, Washington, DC.
Re: Support for Water Transfer Legislation

    Dear Senator Boxer: On behalf of Reclamation District 2035, thank 
you for introducing legislation authorizing and establishing a 
permanent long-term program to promote and manage water transfers in 
the Central Valley of California. Reclamation District 2035 (RD 2035) 
was formed in 1919 to provide flood control and water delivery for 
approximately 22,000 acres in Yolo County, California. While RD2035 
does not own water rights, it is responsible for the delivery of CVP 
water to its agricultural customers whose crops represent the top three 
agricultural commodities in Yolo County.
    As you are aware, the devastating impacts of diminished water 
deliveries to the CVP as a result of three years of below average 
precipitation have been made even greater by the various regulatory 
restrictions, including the requirements established by the recent 
federal biological opinions for endangered fish under the ESA. Your 
legislation will provide immediate, much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP. Further, the language 
in your legislation directing the Bureau of Reclamation to work with 
other federal agencies to develop the necessary long-term environmental 
documentation addressing impacts of a water transfer program on the 
ESA-listed Giant Garter Snake is a critical and necessary near-term 
next step.
    We look forward to working with you and your staff on this 
important legislative effort.
            Sincerely,
                                       Regina J. Cherovsky,
                                                       Chairperson.
                                 ______
                                 
                                      Friends of the River,
                                    Sierra Club California,
                                                 December 14, 2009.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, 304 Dirksen Senate 
        Building, Washington, DC.
Hon. Lisa Murkowski,
Ranking Member, Committee on Energy and Natural Resources, 304 Dirksen 
        Senate Building, Washington, DC.
    Dear Chairman Bingaman, Ranking Member Murkowski and Members of the 
Water and Power Subcommittee: The undersigned oppose S 1750. As 
representatives of California fishing, river and environmental 
organizations we have worked for decades to achieve, in the words of 
the 1992 Central Valley Project Improvement Act [CVPIA] Public Law 102-
575 Section 3401(f), ``a reasonable balance among competing demands for 
use of Central Valley Project (CVP) water, including the requirements 
of fish and wildlife, agricultural, municipal and industrial and power 
contractors.''
    The stated intention of Senator's Boxer and Feinstein S 1759 is 
purportedly to smooth the transfer sale of water among irrigation 
districts south of the Delta by directing Interior Department officials 
to complete under ``the most expedited basis practicable'' all 
necessary environmental reviews and by lifting several safeguards that 
assure fish and wildlife protections that the 1992 Central Valley 
Project Improvement Act [CVPIA], PL 102-575 imposed on the water that a 
CVP contractor can transfer. The unfortunate effect will be a free pass 
for the Bureau of Reclamation and CVP contractors to resell taxpayer 
funded water and by-pass present laws designed to protect the 
environment and repair some of the environmental damage caused by the 
project.
    According to BOR testimony, over 600,000 acre feet of water was 
approved under existing law this year for sale and transfer of water by 
CVP irrigators. For 57 years, the taxpayer-subsidized CVP has damaged 
fish, wildlife, natural river resources and damaged the economic 
livelihood of Indians, farmers, commercial and sport fishing in the San 
Francisco Bay-Delta and in rivers throughout California. The 1992 CVPIA 
protections still have not been implemented nor followed by the Bureau 
of Reclamation and now this legislation will undo even these modest 
provisions by allowing these taxpayer subsidized agricultural interests 
to profit from this public funded largesse at the further expense of 
our fishery resources.
    We oppose the passage of S 1759. It strikes at the heart of the 
principal purpose of the CVPIA, co-authored by Senator Bill Bradley and 
Congressman George Miller, and signed into law 17 years ago by 
President George H. W. Bush. There is no evidence to support the 
purported problem that the legislation attempts to solve--unless the 
intent is to by-pass environmental protections that are part of the 
CVPIA.
    We also are concerned about the unintended harm this legislation, 
if passed, can bring to the fish and wildlife resources of the San 
Francisco Bay-Delta and its estuary. We urge the bill be remanded to 
the Water and Power Subcommittee so the full effects and potential 
unintended consequences of the legislation can be analyzed. We are 
concerned that this legislation, if it should pass, will be contrary to 
its intended purpose, for three main reasons outlined below:

There is little or no evidence that the bill is needed, unless the 
        purpose of the legislation is to get around existing safeguards

    If, as is asserted, this legislation is to benefit agriculture by 
reallocation of water resources through the sale of water only south of 
the Delta, then the authors should not object to inserting language 
that would require any such transfer sale be entirely and exclusively 
water that originates south of the Delta in the San Joaquin Valley. The 
authors have refused this simple change. Agricultural interests 
indicate there are insufficient water resources south of the Delta to 
``solve'' their need for water. And yet these same taxpayer-subsidized 
corporate agricultural interests have yet to provide evidence to 
support how removing the safeguards enacted under the CVPIA will solve 
their water supply problems by allowing them to sell water to one 
another--unless they intend to further deplete water that Congress 
intended be used to remedy over 57 years of damage to the fisheries of 
the state.
    Under the CVPIA legislation only real water that had been used on-
farm for three years prior to enactment of the CVPIA is allowed to be 
sold for a profit outside of the congressionally designated service 
areas. [Section 3405(a) (1), subparagraph (A)] The purpose of these 
safeguards was to assure water being freed up for sale was ``real 
water'', water beyond that which Congress intended to be used to meet 
the Secretary of Interior's legal obligations to fish and wildlife 
protection and restoration of the San Francisco Bay-Delta estuary or to 
the Trinity River, its communities and the Secretary's Tribal trust 
responsibilities.

Removing the Congressionally adopted safeguards will adversely impact 
        the San Francisco Bay, the Sacramento-San Joaquin Delta 
        Estuary, Tribal trust responsibilities and the economic health 
        of the State of California

    Congress allowed Central Valley irrigators to profit from taxpayer 
funded water supplies by selling their water provided that they 
followed federal obligations as outlined above. Also they could not use 
water that was intended to meet the Secretary's obligation under 
federal law to remedy and restore damage to fish and wildlife. Water 
diversions under the federal Central Valley Project have decimated 
salmon, steelhead and trout populations causing huge economic 
dislocations and putting many thousands of people out of work.
    One of the CVPIA's major intended purposes was to rebuild the 
salmon population devastated by the water diversions by the Central 
Valley project contractors. To do this Congress required the Bureau of 
Reclamation to dedicated and manage 800,000 acre feet of water from the 
project annually to fish and wildlife populations damaged by operations 
of the Central Valley Project. Further Congress set a numeric goal for 
the Secretary of Interior to meet--a doubling of the salmon 
populations. Neither of these objectives has been met. Removing the 
CVPIA safeguards to allow these contractors to profit from the sale of 
this taxpayer subsidized water allows these federal contractors to 
undercut Congress's intent and mandates.

The Bureau of Reclamation has consistently failed to carry out 
        Congressional directives

    Congressional action until now has been clear. The Secretary of 
Interior and the Bureau of Reclamation are not exempt from the Clean 
Water Act, the Endangered Species Act, the Central Valley Project 
Improvement Act and various other provisions of federal and state law. 
And yet the history of the Central Valley Project is replete with 
examples of how the project is operated in violation of the law and the 
intent of Congress. Court case after court case has found the Bureau of 
Reclamation in violation of the Clean Water Act, Endangered Species 
Act, and National Environmental Policy Act and in a landmark Supreme 
Court case, California water rights law. Only expensive, time-consuming 
legal effort has resulted in compliance and at times only additional 
court action has brought compliance with court orders.
    And now under S 1759, the Bureau of Reclamation and these 
subsidized irrigators are asking Congress to change the law because 
they do not want to comply with the existing laws that would safeguard 
the environment if they were followed. We urge that this legislation be 
remanded to the Water and Power Subcommittee to analyze the impacts of 
the legislation on the environment, groundwater aquifers, refuges, 
fisheries and water quality and to consider amendments to safeguard 
taxpayer funds that have provided this water that will profit 
irrigators. Absent this action we urge the full committee not to pass 
this legislation.
            Sincerely,
                                            Jim Metropulos,
                           Senior Advocate, Sierra Club California.
                                               Steve Evans,
                       Conservation Director, Friends of the River.
                                 ______
                                 
                         San Joaquin River Water Authority,
                           San Joaquin Valley, CA, October 5, 2009.
Hon. Dianne Feinstein,
331 Hart Senate Office Building, Washington, DC.
RE: SUPPORT for Transfer Legislation for the Central Valley Project

    Dear Senator Feinstein: On behalf of the San Joaquin River Exchange 
Contractors Water Authority (Exchange Contractors), we thank you for 
introducing transfer legislation for the Central Valley Project (CVP) 
and we support your efforts and this legislation as a means of 
providing greater flexibility for management of CVP water supplies.
    The diminished water deliveries to the CVP as a result of various 
regulatory restrictions, including the most recent delta smelt and 
salmon Biological Opinions and three years of below average 
precipitation statewide, have, as you know, created a desperate 
situation in the San Joaquin Valley.
    While long-term solutions are being sought, numerous short term 
efforts are needed to help bridge the water supply gap and great 
flexibility, as provided in your legislation, to move water supplies 
within the San Joaquin Valley would be a useful tool.
    The Exchange Contractors consist of 4 member agencies serving over 
240,000 acres in the San Joaquin Valley in Fresno, Madera, Merced, and 
Stanislaus Counties.
    We look forward to engaging in this effort and working closely with 
you and your staff in advancing this legislation and addressing 
California water issues.
            Sincerely,
                                           Steve Chedester,
                                                Executive Director.
                                 ______
                                 
                  San Luis & Delta-Mendota Water Authority,
                                    Los Banos, CA, October 5, 2009.
Hon. Dianne Feinstein
U.S. Senate, 331 Hart Senate Office Building, Washington DC.
Hon. Barbara Boxer,
U.S. Senate, 112 Hart Senate Office Building, Washington, DC.
Hon. Dennis Cardoza,
U.S. House of Representatives, 1224 Longworth Building, Washington, DC.
Hon. Jim Costa,
U.S. House of Representatives, 1314 Longworth House Office Building, 
        Washington, DC.
RE: Water Transfer Facilitation Act of 2009

    Dear Senator Feinstein, Senator Boxer, Mr. Cardoza, and Mr. Costa: 
I am writing on behalf of the Panache Water District express our 
enthusiastic support for your bill, the Water Transfer Facilitation Act 
of 2009, authorizing certain transfers of water in the Central Valley 
Project and other purposes. Water transfers are essential to sound 
water management and often are time sensitive. Your legislation will 
bring important reform to existing transfer authorization thus 
increasing the efficacy of this essential water management tool.
    As you are keenly aware, coping with California's water crisis and, 
in particular, the chronic water supply shortages impacting the Central 
Valley Project demands utilization of various best management practices 
including water transfers. Moreover, the need to transfer water is 
often urgent and in response to climactic conditions that are 
frequently sporadic and ephemeral. Regrettably, bureaucratic process 
can unnecessarily thwart successful execution of a transfer and the 
best management of this all too precious resource. The clarity your 
legislation brings to existing authorizations will only improve the 
capability of water managers throughout the State to effectively 
respond to the ongoing crisis and put our scant water resources to use 
even more efficiently.
    The Westside of the great San Joaquin Valley is inarguably the most 
transfer dependent region of the State. Your efforts to address this 
important matter as well as your vast knowledge of and longstanding 
commitment to water resource issues vital to the State are most deeply 
appreciated. If there is anything I can do to be of further service to 
you in this cause, please do not hesitate to call.
            Very truly yours,
                                          Daniel G. Nelson,
                                                Executive Director.
                                 ______
                                 
                                   San Luis Water District,
                                    Los Banos, CA, October 5, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Hon. Barbara Boxer,
U.S. Senate, 112 Hart Senate Office Building, Washington, DC.
Hon. Dennis Cardoza,
U.S. House of Representatives, 1224 Longworth Building, Washington, DC.
Hon. Jim Costa,
U.S. House of Representatives, 1314 Longworth House Office Building, 
        Washington, DC.
RE: Water Transfer Facilitation Act of 2009

    Dear Senator Feinstein, Senator Boxer, Mr. Cardoza, and Mr. Costa: 
I am writing on behalf of the San Luis Water District and its Board of 
Directors. We strongly support the Water Transfer Facilitation Act of 
2009. Given the regulatory impacts of recent Biologic Opinions, the 
survival of our commercial, residential and agricultural water users is 
increasingly dependent on supplemental water transfers. Your 
legislation will bring important. reform to existing transfer 
authorization and this essential water management tool.
    Coping with chronic water supply shortages impacting the Central 
Valley Project requires implementation of best management practices 
including water transfers. The need to transfer water is often urgent. 
Regrettably, bureaucratic process can unnecessarily thwart successful 
execution of a transfer. Your legislation will improve the capability 
of water managers throughout the State to effectively and efficiently 
respond to the ongoing crisis.
    Your continuing efforts to address these important matters are 
critical and deeply appreciated.
            Sincerely,
                                        Martin R. McIntyre,
                                                   General Manager.
                                 ______
                                 
                                  South Delta Water Agency,
                                    Stockton, CA, October 14, 2009.
Hon. Dianne Feinstein,
One Post Street, Suite 2450, San Francisco, CA.
Re: Draft Water Transfer Facilitation Act of 2009

    Dear Dianne Feinstein: I am counsel and manager of the South Delta 
Water Agency. The diverters in our area are directly affected by 
operation of the state and federal projects (SWP and CVP, 
respectively), especially their export pumps. Because water transfers 
oft times are routed through the state and federal Delta export 
facilities, we try to comment on all proposals affecting exports and 
the operation of the SWP and CVP in general. I have reviewed an undated 
draft of the above referenced bill and would like to comment.
    As you know, CVPIA (Public Law 102-575) attempted to do a number of 
things, one of which was to ease/allow transfers among CVP users, At 
the time, the notion of transfers was believed by many to be a means by 
which supply inconsistencies and unanticipated export limitations might 
be addressed, at least to some extent. This idea was controversial as 
it resulted in Federal project water becoming more of a commodity than 
a subsidy to agriculture.
    One of the discussions at the time CVPIA was being contemplated 
dealt with the impacts that transfers had on the water demand and 
consumption in the state. Any new transfer had the very real potential 
of increasing demand on the entire system as the buyer became reliant 
on the same supply to which the seller was reliant. Although the seller 
might be satisfied with the money instead of the water, more likely he/
she would try to make up for the sold water. The net result was either 
both buyer and seller becoming dependent on the same supply, or the 
seller becoming dependent (or partially dependent) on a new supply 
(his/her alternate supply). This would not only increased or finned up 
overall demand, it also resulted in a net increase in the consumptive 
use without increasing the supply at all.
    Two of the provisions of CVPIA which dealt with this demand/supply 
issue are at the core of the new bill, and are proposed to be changed. 
Section 3405 (a) 1 (A) precluded transfers of more water than the 
seller receives each year (or received on average). The specific 
purpose of this was to make sure that the seller was not ``mining'' or 
turning to alternate supplies of water, but was rather transferring 
only the water he/she received from the CVP, Section 3405 (a)(1)(I) 
precluded transfers of water which was not previously consumed or 
previously lost to beneficial use. This provision attempted to make 
sure that the seller sold only water that he would have used in the 
absence of the transfer, or water that was previously lost somehow from 
the system (e.g., drains to a salt sink). The idea was that he/she sold 
X amount of water, and decreased his/her use by X amount of water.
    These two provisions were to make sure that transfers did not 
result in a net increase in demand or consumption, or otherwise affect 
other beneficial users and uses. State law has similar provisions (see 
for example Water Code sections 1707(b), 1725, and 1727). 
Unfortunately, both the federal CVPIA limitations and the California 
Water Code restrictions have been generally ignored in practice.
    The proposed changes do not so much further facilitate transfers, 
as they undo the well thought-out protections of CVPIA. The bill's 
language makes virtually any and all transfers of CVP water legally 
consistent with the restrictions in CVPIA even though they may be 
directly inconsistent with them. By ignoring the specific restrictions 
of CVPIA or pretending they are met, the demand (especially the dry 
year demand) for water will increase and the net consumptive use will 
undoubtably increase. Although we sympathize with those who are 
experiencing shortages in this time of drought, it would seem to be bad 
policy to encourage increased demand and increased consumption (above 
that which would have occurred in the absence of the transfer). Unless 
the system ``learns'' to live within the current supply shortages, or 
actually develops a greater supply, things will only get worse under 
the proposed changes. Sellers will sell to those without a reliable 
supply and then seek alternate supplies to make up for that which they 
sold. The necessary result will be an increased demand, a worsening of 
the over drafted groundwater basins, greater diversions and use from 
other streams, etc., all of which hurts other users and uses and 
predetermines a greater crisis during the next drought.
    There is another problem I see with the bill.Section 3 therein 
directs the Secretary of the Interior to expedite environmental review 
of the transfers. This language appears to he an attempt to create 
federal law to facilitate the Bay Delta Conservation Plan (BDCP) 
process and a peripheral canal (PC). This is because the PC is largely 
dependent on transfers to make it cost effective.
    Let me explain further. Current BDCP modeling indicates that use of 
the massive PC is severely limited in many years during many times. 
This is because in drier times there is little or no ``excess'' or 
``surplus'' water in the system to export. In addition and as we have 
seen this year, at some times there is no stored water available for 
exports either, [This past February the USSR notified the Exchange 
Contractors they would likely receive San Joaquin River water instead 
of (or in addition to) Delta-Mendota Canal water. When the Exchange 
Contractors cannot get their full contract amount from the Delta-
Mendota Canal, it means there is no stored water available for export, 
it all being needed for instrean-i uses, upstream right holders and 
fishery requirements.] Hence, the $20 Billion plus PC would be empty in 
many years. Since the BDCP does not proposed to increase the available 
supply (and in fact will decrease it by replacing agricultural use with 
habitat/wetland use) the only method by which the PC would have water 
at certain times would be via transfers. This reliance on purchasing 
water to meet export needs rather than increasing the supply available 
for exports is central to the BDCP process. I note that the use of the 
PC for transfers in dry times deprives the Delta of the benefit of the 
transfer water going through the Delta channels; an apparent violation 
of Water Code section 12205.
    With that said, you can see that any new federal law which directs 
an expedited environmental process to facilitate transfers would of 
course be used to expedite the BDCP process and a PC. Although we are 
opposed to any PC as a violation of existing priority rights and an 
avoidance of project mitigation and other obligations, I am sure 
everyone would agree that the process analyzing massive changes to the 
Delta should go through a deliberate and comprehensive process; not an 
expedited one. We are after all, facing the extinction of some 
fisheries and a collapse of the Delta ecosystem.
    Please feel free to contact me if you have any questions.
            Very truly yours,
                                              John Herrick,
                                                 Counsel & Manager.
                                 ______
                                 
                             Tehama-Colusa Canal Authority,
                                      Willows, CA, October 5, 2009.
Hon. Dianne Feinstein,
U.S. Senate, 331 Hart Senate Office Building, Washington, DC.
Re: Support for Central Valley Project Water Transfer Legislation

    Dear Senator Feinstein: On behalf of the Tehama Colusa Canal 
Authority (TCCA), we thank you for introducing legislation authorizing 
and establishing a programmatic program to promote and manage water 
transfers in California, including the Sacramento Valley. We support 
your efforts and this legislation as a means of providing greater 
regulatory certainty for the management of Central Valley Project (CVP) 
water supplies for water users.
    As you are aware, the TCCA is intimately aware of the impacts of 
diminished water deliveries to the CVP as a result of below average 
precipitation and regulatory requirements placed upon the CVP and its 
water users through the requirements established by the recent National 
Marine Fisheries Service biological opinions for endangered salmon. 
Your legislation will provide much needed relief in the form of a 
flexible and useful tool that will allow water to be transferred from 
willing parties to those in need within the CVP.
    Many of our members have participated in water transfer programs in 
the past and would continue under this legislation in a more flexible 
manner. Also, the language in your legislation directing the Bureau of 
Reclamation to work with other federal agencies to implement the 
necessary long-term environmental processes addressing impacts of a 
water transfer program on the ESA-listed Giant Garter Snake will be 
imperative to its usefulness and success.
    We look forward to working with you and your staff in the coming 
months in this important legislative effort, and appreciate your 
leadership in advancing this legislation and addressing California 
water issues so important to our collective future.
            Sincerely,
                                            Jeffrey Sutton,
                                                   General Manager.
                                 ALL 
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