    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

      H.R. 3176, TO REAUTHORIZE THE RECLAMATION STATES EMERGENCY DROUGHT
     RELIEF ACT OF 1991, AND FOR OTHER PURPOSES; H.R. 3189, WATER RIGHTS
                                PROTECTION ACT

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

                              LEGISLATIVE HEARING

                                   before the

                        SUBCOMMITTEE ON WATER AND POWER

                                     of the

                         COMMITTEE ON NATURAL RESOURCES
                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                October 10, 2013

                                   __________

                               Serial No. 113-46

                                   __________

           Printed for the use of the Committee on Natural Resources

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Available via the World Wide Web: http://www.fdsys.gov
                                       or
              Committee address: http://naturalresources.house.gov
                                    ______

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                         COMMITTEE ON NATURAL RESOURCES

                           DOC HASTINGS, WA, Chairman
                PETER A. DeFAZIO, OR, Ranking Democratic Member

    Don Young, AK                        Eni F. H. Faleomavaega, AS
    Louie Gohmert, TX                    Frank Pallone, Jr., NJ
    Rob Bishop, UT                       Grace F. Napolitano, CA
    Doug Lamborn, CO                     Rush Holt, NJ
    Robert J. Wittman, VA                Raul M. Grijalva, AZ
    Paul C. Broun, GA                    Madeleine Z. Bordallo, GU
    John Fleming, LA                     Jim Costa, CA
    Tom McClintock, CA                   Gregorio Kilili Camacho Sablan,
    Glenn Thompson, PA                       CNMI
    Cynthia M. Lummis, WY                Niki Tsongas, MA
    Dan Benishek, MI                     Pedro R. Pierluisi, PR
    Jeff Duncan, SC                      Colleen W. Hanabusa, HI
    Scott R. Tipton, CO                  Tony Cardenas, CA
    Paul A. Gosar, AZ                    Steven A. Horsford, NV
    Raul R. Labrador, ID                 Jared Huffman, CA
    Steve Southerland, II, FL            Raul Ruiz, CA
    Bill Flores, TX                      Carol Shea-Porter, NH
    Jon Runyan, NJ                       Alan S. Lowenthal, CA
    Mark E. Amodei, NV                   Joe Garcia, FL
    Markwayne Mullin, OK                 Matt Cartwright, PA
    Chris Stewart, UT                    Vacancy
    Steve Daines, MT
    Kevin Cramer, ND
    Doug LaMalfa, CA
    Jason T. Smith, MO

                           Todd Young, Chief of Staff
                    Lisa Pittman, Chief Legislative Counsel
                     Penny Dodge, Democratic Staff Director
                    David Watkins, Democratic Chief Counsel
                                     ------

                        SUBCOMMITTEE ON WATER AND POWER

                          TOM McCLINTOCK, CA, Chairman
               GRACE F. NAPOLITANO, CA, Ranking Democratic Member

    Cynthia M. Lummis, WY                Jim Costa, CA
    Scott R. Tipton, CO                  Jared Huffman, CA
    Paul A. Gosar, AZ                    Tony Cardenas, CA
    Raul R. Labrador, ID                 Raul Ruiz, CA
    Markwayne Mullin, OK                 Alan S. Lowenthal, CA
    Chris Stewart, UT                    Peter A. DeFazio, OR, ex officio
    Doug LaMalfa, CA
    Doc Hastings, WA, ex officio

                                     ------
                                    CONTENTS

                                  ----------
                                                                       Page

    Hearing held on October 10, 2013.................................     1

    Statement of Members:
        Amodei, Hon. Mark E., a Representative in Congress from the
          State of Nevada............................................    21
        Bishop, Hon. Rob, a Representative in Congress from the State
          of Utah....................................................    22
        Costa, Hon. Jim, a Representative in Congress from the State
          of California..............................................    19
        DeFazio, Hon. Peter A., a Representative in Congress from the
          State of Oregon............................................    16
            Prepared statement of....................................    17
        Gosar, Hon. Paul A., a Representative in Congress from the
          State of Arizona...........................................    18
        McClintock, Hon. Tom, a Representative in Congress from the
          State of California........................................     1
        Napolitano, Hon. Grace F., a Representative in Congress from
          the State of California....................................     3
        Tipton, Hon. Scott R., a Representative in Congress from the
          State of Colorado..........................................     6

    Statement of Witnesses:
        Corbin, David, (H.R. 3189), Vice President, Aspen Skiing
          Company, Aspen, Colorado...................................    23
            Prepared statement of....................................    24
        Crews, Wayne, (H.R. 3176), Vice President, Competitive
          Enterprise Institute, Washington, DC.......................    44
            Prepared statement of....................................    46
        Parker, Randy, (H.R. 3189), CEO, Utah Farm Bureau Federation,
          Sandy, Utah................................................    26
            Prepared statement of....................................    28
        Porzak, Glenn, (H.R. 3189), Attorney, National Ski Areas
          Association, Boulder, Colorado.............................    36
            Prepared statement of....................................    38
        Willardson, Tony, (H.R. 3176), Executive Director, Western
          States Water Council, Murray, Utah.........................    39
            Prepared statement of....................................    41

    Additional Materials Submitted for the Record:
        Heavenly Mountain Resort, Lake Tahoe, Letter submitted for
          the record on H.R. 3189....................................    79
        Letters of support submitted for the record by Representative
          Napolitano.................................................     4
        Letters of support submitted for the record by Representative
          Tipton.....................................................     8
        Letter from Chairman McClintock to U.S. Bureau of Reclamation
          on H.R. 3176...............................................    76
        Letter from Chairman McClintock to U.S. Forest Service on
          H.R. 3189..................................................    76
        Response letters to Chairman McClintock from U.S. Department
          of the Interior and U.S. Forest Service on H.R. 3189.......    77
        National Association of Conservation Districts, Washington,
          DC, Letter submitted for the record on H.R. 3189...........    80
        Rio Grande Water Conservation District, Alamosa, Colorado,
          Letter submitted for the record on H.R. 3189...............    80

    LEGISLATIVE HEARING ON H.R. 3176, TO REAUTHORIZE THE RECLAMATION STATES
      EMERGENCY DROUGHT RELIEF ACT OF 1991, AND FOR OTHER PURPOSES; H.R.
                       3189, WATER RIGHTS PROTECTION ACT

                                  ----------

                           Thursday, October 10, 2013

                         U.S. House of Representatives

                         Subcommittee on Water and Power

                         Committee on Natural Resources

                                 Washington, DC

                                  ----------

        The subcommittee met, pursuant to call, at 2:25 p.m., in
    room 1334, Longworth House Office Building, Hon. Tom McClintock
    [Chairman of the Subcommittee] presiding.
        Present: Representatives McClintock, Tipton, Gosar,
    Stewart, Napolitano, Costa, Huffman, Lowenthal, and DeFazio.
        Also Present: Representatives Bishop of Utah and Amodei.

       STATEMENT OF THE HON. TOM McCLINTOCK, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Mr. McClintock. The Subcommittee on Water and Power will
    come to order. I want to apologize to all concerned regarding
    the late start today. The consolation is there are no further
    votes scheduled, so there won't be any interruptions except
    from the members.
        So welcome to all of you. A quorum is present. And today
    the Water and Power Subcommittee meets to hear two bills, one
    of which protects valuable private water rights from efforts by
    the Federal Government to expropriate those rights through what
    should be a routine permitting process. The other bill
    reauthorizes the Emergency Drought Relief Act, which provides
    Federal taxpayer dollars for local drought-related water
    projects.
        H.R. 3189, the Water Rights Protection Act, is a
    straightforward measure to prevent the U.S. Forest Service from
    demanding that privately owned ski resorts surrender long-held
    water rights under State law as a condition of receiving
    special use permits for longstanding uses of public land.
        Despite over 100 years of Federal deference to State law,
    Federal agencies have adopted the practice of demanding that
    water users transfer rights granted to them by States over to
    the Federal Government as a condition of getting a permit to
    operate on Federal lands. This amounts to an uncompensated
    taking and is a violation of both the Fifth Amendment to the
    Constitution and a violation of State law, under which the
    Federal Government must acquire water rights through the proper
    channels as would any other user.
        There are 121 ski areas on Federal public lands, 14 of
    which, by the way, are on Forest Service lands in my district.
    These ski areas rely on privately held water rights for
    snowmaking, using this water as collateral for financing to
    build and maintain their facilities, and for supplying water to
    the local communities that they support.
        In 2011 the Forest Service issued a directive that would
    effectively take these private property rights without
    compensation, in violation of State law, while jeopardizing
    these enterprises altogether, and all of the direct employment
    and spinoff economic activity and tax revenues that they
    provide. This action illustrates an increasingly hostile
    attitude by this agency toward those who make productive use of
    our vast natural forests, in this case by enhancing and
    attracting the tourism upon which our mountain communities
    depend.
        Although the principal victims of this policy have been our
    ski resorts, this subcommittee has also received reports of
    similar tactics directed against farm and ranch operations that
    rely on State-recognized water rights for irrigation and stock
    watering.
        Mr. Tipton's bill simply prohibits the Federal Government
    from using what should be a routine permitting process to
    extract long-held water rights from private users. This bill
    seeks to restore Federal accountability and responsibility and
    gets the Forest Service out of what has been historically a
    State prerogative.
        Mr. McClintock. We will also hear H.R. 3176, the Drought
    Relief Act, offered by Mr. DeFazio. This measure reauthorizes a
    program that provides Federal money for drought relief
    programs. Given the disappointing rainfall last year in many
    parts of the country, this is an important and timely subject.
        Of course the whole purpose of Federal water and power
    projects is to assure that there are ample supplies of water in
    times of drought. We will hear from the Competitive Enterprise
    Institute that natural processes produce some 45,000 gallons of
    fresh water each day for every man, woman, and child on the
    planet. The problem is that this abundant supply is unevenly
    distributed over both time and distance, which is the whole
    reason that we build dams and aqueducts in the first place. The
    more dams and aqueducts we have, the fewer water shortages we
    suffer. The problem is we haven't been building a lot of these
    projects for quite some time for reasons that this subcommittee
    has often discussed.
        When we did build them, they were financed on the
    beneficiary pays principle in which Federal money fronted for
    these projects is repaid by the users of the water and power
    that these projects provide. I am interested in knowing why
    that principle is not applicable here and whether our approach
    to drought relief ought to be aimed at producing permanent
    abundance rather than managing temporary shortages. It is
    certainly an important and timely discussion to have.
        Although the Federal agencies are not here today, we look
    forward to getting their submitted testimony and answers to
    many questions for the record. For those that are here, I look
    forward to today's testimony on how we can protect State-
    recognized water rights and all the many industries and uses
    that rely on them, and how we can better prepare for drought
    conditions to avoid needless expenditures of taxpayer dollars.
        And with that, I am happy to yield to the Ranking Member,
    the gentlelady from California, Mrs. Napolitano, for 5 minutes.

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

        Mrs. Napolitano. Thank you, Mr. Chairman, and good
    afternoon to everybody.
        Today's hearing focuses on the two bills that address
    important water issues in the West, H.R. 3176, the
    reauthorization of the Drought Relief Act, and H.R. 3189, the
    Water Rights Protection Act. And thank you to our witnesses for
    being with us even in the presence of this government shutdown.
        I am proud to cosponsor H.R. 3176, legislation sponsored by
    my colleague, Ranking Member Peter DeFazio, which provides
    reclamation with the authority and flexibility to get water to
    entities, tribes who need it during times of drought.
        Drought costs the U.S. economy between $6 billion to $8
    billion annually, with 2012 drought costs possibly exceeding
    $35 billion. In 2013 almost 50 percent of our country is in
    moderate to severe drought. We will hear more of the effects of
    the drought in the West from the Western States Water Council
    witness. And may I add that many of the entities that are
    trying to figure out how to cope with the drought are not able
    do it alone.
        We will also hear testimony that the Federal Government
    should not help the States during times of drought. That the
    Federal Government should not help--God help California--home
    to the five most productive agricultural counties in the Nation
    and the eighth-largest economy, with their water issues. The
    argument is that California's problems are not the Nation's
    problems. I beg to differ with that. It is not that simple.
    What affects California affects the rest of the Nation. That is
    why we are the United States of America.
        H.R. 3189, offered by Representative Tipton, is legislation
    that seeks to address an issue between Forest Service and the
    ski areas in his region. The ski areas are concerned about the
    Forest Service interim directive that requires they transfer
    their water rights to the Federal Government. The Forest
    Service is concerned about their ability to manage the land if
    the ski resorts were to sell their rights. The legislation is
    so broadly written that it could apply to many actions on
    Federal lands, not just the ski resorts. So we must be careful
    about how unintended consequences may affect some other folks.
        It is the responsibility of this committee to ensure
    proposed legislation receives the proper vetting. We did not
    receive agency testimony because of the shutdown. We don't have
    all the answers to the questions we have asked of the
    administration, again because of the shutdown. Yet this hearing
    is moving forward and it will be the only, and, I repeat, the
    only opportunity for stakeholders to weigh in before markup. We
    are missing key information, without the administration's
    position on these bills and our ability to question them
    directly.
        This is not the best way to do business, nor is it the best
    way to ensure that the legislation we pass serves the best
    interest of our taxpayers and our American public. The best way
    we can help our communities with their water challenges is to
    reopen the Federal Government, and we must focus on bringing
    government back to work so employees of not only the U.S.
    Geological Survey, but other critical agencies, can work and be
    participants and comment on our issues.
        Because of the government shutdown, only 43, and, I repeat,
    only 43 people out of 8,623 USGS employees--that is less than
    half of 1 percent--are at work. We must bring back 3,311 of the
    5,077 reclamation employees that have been furloughed and are
    waiting to go back to work for our country.
        Next year is expected to be a very dry water year and we
    need them all back in their jobs to help plan for our future
    and to help our Nation's not only Ag economy, but the rest of
    our Nation. It is ironic, though, that it takes the absence of
    these employees to value their presence. They are essential to
    this country and to the legislative process, and we need them
    back at work.
        As we consider these important pieces of legislation we
    must first prioritize reopening government. We must vote on a
    clean resolution, continuing resolution, with no add-ons, I
    mean none, clean; open the Federal Government and put people
    back to work. Let us work for our citizens because that is what
    they sent us here to do.
        And, Mr. Chairman, I would like to submit for the record
    three letters of support, from the Association of California
    Water Agencies, the Family Farm Alliance, and the Western
    States Water Council, associated with the Western Governors'
    Association.
        Mr. McClintock. Without objection.
        [The letters submitted for the record by Mrs. Napolitano
    follow:]
         Letters Submitted for the Record by Representative Napolitano
              Association of California Water Agencies,
                                          Sacramento, CA 95814,
                                                       October 4, 2013.
    Hon. Tom McClintock, Chairman,
    Hon. Grace Napolitano, Ranking Member,
    House Subcommittee on Water and Power,
    Washington, DC 20515.

        Dear Chairman McClintock and Ranking Member Napolitano:

        The Association of California Water Agencies is pleased to support
    H.R. 3176, Reauthorization of the Reclamation States Emergency Drought
    Relief Act of 1991. ACWA's 450 public water agency members supply over
    90 percent of the water delivered in California for residential,
    agricultural, and industrial uses.
        The Drought Relief Act provides the Bureau of Reclamation with the
    tools it needs to help states plan for and mitigate the impacts of
    droughts. As you are aware, California is currently facing drought
    conditions and the forecast for 2014 is not looking good. ACWA believes
    programs like this will help water managers during this time of
    drought.
        ACWA appreciates your work on this legislation. If we can be of any
    assistance, please feel free to contact our Washington office at
    202.434.4760.
                Sincerely,
                                                David Reynolds,
                                         Director of Federal Relations.

                                     ______

                                  Family Farm Alliance,
                                       Klamath Falls, OR 97601,
                                                       October 4, 2013.
    Hon. Tom McClintock, Chairman,
    Hon. Grace Napolitano, Ranking Member,
    House Subcommittee on Water and Power,
    1522 Longworth House Office Building,
    Washington, DC 20515.

    Re: Support for H.R. 3176

        Dear Chairman McClintock and Ranking Member Napolitano:

        On behalf of the Family Farm Alliance, I write to show our strong
    support for H.R. 3176, ``Reauthorization of the Reclamation States
    Emergency Drought Relief Act of 1991''.
        The Family Farm Alliance is a grassroots organization of family
    farmers, ranchers, irrigation districts and allied industries in 17
    Western states. Many of our members throughout this area have benefited
    from the Drought Relief Act in the past to help drill wells, install
    temporary pipelines and haul water during drought periods.
        The Drought Relief Act provides the Bureau of Reclamation with the
    tools it needs to help states plan for and mitigate the impacts of
    droughts. With historic drought conditions on the Colorado River, and
    grim water challenges facing our members in California, Idaho, Oregon
    and elsewhere, the Alliance believes programs like this will help water
    managers during this time of drought.
        Thank you for your work on this legislation. If we can be of any
    assistance, please do not hesitate to call me at 541-892-6244 or
    dankeppen@charter.net.
                Sincerely,
                                                    Dan Keppen,
                                                    Executive Director.

                                     ______

                          Western States Water Council
                               San Antonio, Texas
                                October 12, 2012
                                Position No. 347
    position of the western states water council regarding reauthorization
             of the reclamation states emergency drought relief act
        WHEREAS, the Western States Water Council is a policy advisory body
    representing eighteen states affiliated with the Western Governors'
    Association; and
        WHEREAS, since 1976, the Council has been actively involved in
    national drought preparedness, planning and response, as well as
    related policy development and implementation; and
        WHEREAS, in 2012 severe to extreme drought conditions exist
    throughout much of the western and central parts of the U.S., covering
    an area amounting to about two-thirds of the Nation; and
        WHEREAS, drought has been, is, and will be an ongoing fact of life
    in the relatively arid West; and
        WHEREAS, the Reclamation States Emergency Drought Relief Act of
    1991 (43 U.S.C. 2214(c)) and subsequent reauthorization through Fiscal
    Year 2012 has expired; and
        WHEREAS, Title I provided the Bureau of Reclamation with authority
    for construction, management, and conservation measures to alleviate
    the adverse impacts of drought, including mitigation of fish and
    wildlife impacts, and provided Reclamation with the flexibility to meet
    contractual water deliveries by allowing acquisition of water to meet
    requirements under the Endangered Species Act, benefiting contractors
    at a time when they are financially challenged; and
        WHEREAS, additionally, Title I authorized Reclamation to
    participate in water banks established under state law, facilitate
    water acquisitions between willing buyers and willing sellers, acquire
    conserved water for use under temporary contracts, make facilities
    available for storage and conveyance of project and non-project water,
    make project and non-project water available for nonproject uses, and
    acquire water for fish and wildlife purposes on a non-reimbursable
    basis; and
        WHEREAS, Title I also allowed Reclamation, as a ``last resort,'' to
    help smaller, financially strapped towns, counties, and tribes without
    the financial capability to deal with the impacts of drought; and
        WHEREAS, Title II authorized Reclamation to prepare or participate
    in the preparation of cooperative drought contingency plans for the
    prevention or mitigation of adverse effects of drought conditions; and
        WHEREAS, Title II authorized Reclamation to conduct studies to
    identify opportunities to conserve, augment, and make more efficient
    use of water supplies available to Federal Reclamation projects and
    Indian water resource developments in order to be prepared for and
    better respond to drought conditions; and
        WHEREAS, Title II authorized the Secretary of the Interior to study
    establishment of a Reclamation Drought Response Fund to be available
    for defraying those expenses which the Secretary determined necessary
    to implement drought plans prepared under the Act, and to make loans
    for nonstructural and minor structural activities for the prevention or
    mitigation of the adverse effects of drought; and
        WHEREAS, there is a continuing need for authority allowing
    Reclamation the flexibility to continue delivering water to meet
    authorized project purposes, meet environmental requirements, respect
    state water rights, work with all stakeholders, and provide leadership,
    innovation, and assistance; and
        WHEREAS, proposed legislative action would reauthorize the Act
    through 2017, and raise the limit on authorized appropriations.
        NOW THEREFORE BE IT RESOLVED, that the Western States Water Council
    strongly supports legislation to reauthorize the Reclamation States
    Emergency Drought Relief Act.

                                     ______

        Mrs. Napolitano. And my last plea is that I would
    respectfully request that we wait to move any of these bills
    until our government is open and we can hear from the agency
    that is supposed to be here.
        Thank you, Mr. Chair. And I yield back.
        Mr. McClintock. Thank you. Before we proceed the Chair
    would ask unanimous consent that Mr. Bishop of Utah and Mr.
    Amodei of Nevada be allowed to sit with the subcommittee and
    participate in the hearing. Hearing no objection, so ordered.
        It is customary for us to recognize any other members who
    wish to make opening statements. And the Chair is now pleased
    to recognize Mr. Tipton of Colorado for 5 minutes.

      STATEMENT OF THE HON. SCOTT R. TIPTON, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF COLORADO

        Mr. Tipton. Thank you, Chairman McClintock, for convening
    today's hearing, and thank you for your support and engagement
    working with me on this critical issue. I would also like to
    thank Mr. Bishop, Mr. Amodei, Mrs. Lummis, Mr. Gosar, Mr.
    Simpson, Mr. Coffman, and Mr. Polis, who have all joined in
    this bipartisan effort and continue to work with me to
    safeguard Western water rights. Finally, I want to thank David
    Corbin and Glenn Porzak from Colorado and Randy Parker from
    Utah for making the trip to DC to be able to testify on behalf
    of the Water Rights Protection Act.
        Recent Federal attempts to manipulate Federal permit lease
    and land management process to circumvent long-established
    State water law and hijack privately held water rights have
    sounded the alarm for all non-Federal water users that rely on
    these water rights for their livelihood. The most recent case
    of the Federal Government's overreach and infringement on
    private property rights, which we will discuss today in the
    hearing, involves the U.S. Forest Service attempt to require
    the transfer of privately held water rights to the Federal
    Government as a permit condition on our National Forest System
    lands.
        There is no compensation for the transfer of these
    privately held water rights, despite the fact that many
    stakeholders have invested millions of their own capital in
    developing them. This Forest Service permit condition has
    already hurt a number of stakeholders in my home State of
    Colorado, including the Powder Horn ski area in Grand Junction
    and the Breckenridge ski area resort. Despite having been
    excellent stewards of the environment and their water rights,
    the Forest Service has demanded the relinquishment of State
    grant of water rights from these ski areas in order to continue
    their operations.
        These same nefarious tactics have been used in Utah,
    Nevada, and other Western States where agencies have required
    surrender of possession of water rights in exchange for
    approving the conditional use of grazing allotments. This
    Federal water grab has broad implications that have begun to
    extend beyond recreation and farming and ranching communities
    and are now threatening municipalities and other businesses.
        To add insult to injury, the Forest Service claims,
    remarkably with a straight face, that it is implementing these
    Federal agency permit conditions to prevent water rights from
    being sold off and/or used improperly. However, according to
    the Chief Forest Service Officer, Tom Tidwell, comments made in
    this very committee, there have never been any cases where
    privately held rights have been used improperly. Furthermore,
    the language of the Forest Service's water clause offers no
    guarantee that the Forest Service could not divert water to
    other locations or direct water for other purposes altogether.
        As a result of the efforts that began in October of 2011
    and encompass testimony from several hearings, conversations,
    and with numerous stakeholders across Colorado and the West,
    close collaboration with my friends on this committee, I
    introduce the bipartisan Water Rights Protection Act. This
    legislation provides critical protection for water rights and
    holders from Federal takings by ensuring that the Federal
    Government agencies cannot extort private property rights
    through unevenhanded negotiations.
        The Water Rights Protection Act offers a sensible approach
    that preserves water rights and the ability to be able to
    develop water requisite to living in the arid West. This is
    without interfering with water allocations for non-Federal
    parties or allocations that protect the environment cherished
    by all Westerners.
        As could be expected of the West-wide legislation that
    seeks to protect all water users from the relentless efforts of
    the Federal Government to extort non-Federal water rights, this
    bill is work in progress. I look forward to continuing to work
    with my colleagues from other Western States to ensure that no
    State-recognized water right goes unprotected from the class
    actions this bill prohibits.
        To this end, the brief two-page bill prohibits Federal
    agencies from pilfering water rights through the use of
    permits, leases, and other land management arrangements which
    would otherwise have to pay just compensation under the Fifth
    Amendment of the Constitution. The bill also prohibits Federal
    land management agencies from forcing water users to apply or
    acquire rights for the United States rather than for the water
    users themselves.
        Finally, this commonsense legislation provides certainty by
    upholding the longstanding Federal deference to State water law
    on which countless water users rely. The Water Rights
    Protection Act has already received endorsements of the
    American Farm Bureau Federation, the Associated Governments of
    Northwest Colorado, the California Ski Area Association, CLUB
    20, the Colorado River Water Conservation District, Colorado
    Ski Country USA, the Colorado Water Congress, the National
    Cattlemen's Beef Association, National Ski Areas Association,
    the Pacific Northwest Ski Area Association, and the
    Southwestern Water Conservation District. Mr. Chairman, I would
    like to be able to submit for the record their letters of
    support.
        Mr. McClintock. Without objection.
        Mr. Tipton. Thank you, Mr. Chairman.
        And further, we just received a letter of support that came
    in from the Family Farm Alliance for the record as well. Their
    testimony supports my bill and indicates that more water
    storage is a long-term solution to the drought.
        Mr. McClintock. Also without objection.
        [The letters submitted for the record by Mr. Tipton
    follow:]
           Letters Submitted for the Record by Representative Tipton
                       American Farm Bureau Federation,
                                          Washington, DC 20024,
                                                       October 4, 2013.
    Hon. Scott Tipton,
    Hon. Jared Polis,
    House Subcommittee on Water and Power,
    Washington, DC 20515.

        Dear Representatives Tipton and Polis:

        On behalf of more than 6 million Farm Bureau member families across
    the United States, I commend you for your introduction of H.R. 3189,
    the Water Rights Protection Act. The American Farm Bureau Federation
    endorses the Tipton-Polis bill, and will work closely with you to
    broaden bipartisan support for this measure and to gain its swift
    consideration and approval by the House of Representatives.
        H.R. 3189 grants no new rights to any party, nor does it in any way
    infringe on existing rights of individuals, states or the Federal
    Government. This legislation simply reaffirms what has been existing
    law for generations and which is expressed in numerous places in
    Federal law, including the Mining Act of 1866; the 1897 Organic Act
    establishing the U.S. Forest Service; the Taylor Grazing Act; and the
    Federal Land Policy and Management Act of 1976.
        There is no provision in Federal law authorizing or permitting the
    Forest Service or the Bureau of Land Management to compel owners of
    lawfully acquired water rights to surrender those rights or to acquire
    them in the name of the United States. Thus, H.R. 3189 does nothing
    more than assure holders of BLM or Forest Service permits that their
    lawfully acquired rights will not be abridged and that Federal agencies
    may not unlawfully use the permit process to acquire rights they do not
    currently possess.
        We look forward to working with you on this important legislation
    and again commend you for your leadership in this important area.
                Sincerely,
                                                  Bob Stallman,
                                                             President.

                                     ______

                  ASSOCIATED GOVERNMENTS OF NORTHWEST COLORADO
        resolution to support the water rights protection act h.r. 3189
        WHEREAS, The United States Forest Service (USFS) recently attempted
    to condition the issuance of a use permit on the permit applicant's
    transfer of privately held water rights to the USFS; and
        WHEREAS, Federal land management agencies are using coercion to
    acquire private water rights by requiring that water users seeking to
    operate on Federal land apply for water rights under the name of the
    United States rather than the name of the purchaser; and
        WHEREAS, These and related actions constitute a Federal taking of
    private property without just compensation, in violation of the Takings
    Clause of the Fifth Amendment of the United States Constitution; and
        WHEREAS, These actions are also in violation of long established
    state water laws; and
        WHEREAS, These actions have already had a negative impact on local
    ski businesses, which are important contributors to our regional
    economy; and
        WHEREAS, Many municipalities and agricultural operations in our
    region have water storage facilities similar to those owned by the ski
    resorts, and could therefore be subject to a similar taking; and
        WHEREAS, These and similar actions could be used against other
    important industries in our region, including, but not limited to,
    agriculture and energy development; and
        WHEREAS, The majority of Colorado's absolute and conditional water
    rights originate on federally controlled land, and could be subject to
    a similar taking at any point in the future; and
        WHEREAS, The Water Rights Protection Act, H.R. 3189, would protect
    communities, businesses, family farms, and other stakeholders in
    northwest Colorado that rely on privately held water rights from having
    these property rights taken by any agency of the Federal Government,
        BE IT THEREFORE RESOLVED, that the Associated Governments of
    Northwest Colorado (AGNC) fully support H.R. 3189, the Water Rights
    Protection Act; and
        BE IT FURTHER RESOLVED, that the AGNC will furnish a letter to any
    and all interested parties, attesting to our support of this Act.

                                     ______

                   California Ski Industry Association,
                                               Mill Valley, CA,
                                                       October 4, 2013.
    Hon. Doc Hastings, Chairman,
    House Natural Resources Committee,
    1324 Longworth House Office Building,
    Washington, DC 20515.

    Re: Support for H.R. 3189

        Dear Chairman Hastings:

        On behalf of the members and directors of the California Ski
    Industry Association I am writing to add our support to H.R. 3189, the
    Water Rights Protection Act.
        This narrowly focused bill is designed to resolve an unfair
    regulation requiring Forest Service permittees to cede, without
    compensation, their water rights to the agency. Nineteen of
    California's twenty-six ski areas operate on Forest Service lands. We
    have a long history of working with the agency and will continue to do
    so in the future. However, our winter sports facilities on Federal
    lands are strongly opposed to the clauses that would require California
    permittees to cede their valuable water rights to the agency without
    compensation, Such clauses represent a taking and carry far-reaching
    legal and economic implications, not only for our industry but also for
    all other permittees operating on Forest Service lands.
        A recent study by San Francisco State University reported that
    California's winter sports resorts generate $1.3 billion in economic
    activity and over 16,000 Jobs in our mountain communities. Our resorts
    have millions of dollars invested in their water rights. In many cases
    the source of these rights are located outside of the permit
    boundaries.
        We appreciate your scheduling a hearing on H.R. 3189 and thank you
    and the sponsors of this important legislation.
                Sincerely,
                                                   Bob Roberts,
                                                       President & CEO.

                                     ______

                                               CLUB 20,
                                      Grand Junction, CO 81502,
                                                       October 8, 2013.
    Hon. Scott Tipton,
    House Subcommittee on Water and Power,
    218 Cannon House Office Building,
    Washington, DC 20515.

    Re: CLUB 20 strongly urges Congressional support and passage of H.R.
            3189, known as the ``Water Rights Protection Act''

        Dear Congressman Tipton:

        CLUB 20 is a 60-year-old coalition of businesses, individuals and
    local governments with members representing 22 counties west of the
    Continental Divide in Colorado. Our members have been coming together
    over the past six decades to discuss matters of common concern to
    Western Colorado communities and citizens. Water has often been a focal
    point for CLUB 20 members as there are far reaching implications to
    many of the industries, communities and residents on the West Slope
    regarding privately held water rights in the region.
        Water rights are considered private property under Colorado water
    law and are managed under a strict system that has served the state
    over time. For many years, CLUB 20 policy has opposed, ``. . . any
    Federal requirement that permittees assign water rights to the United
    States in order to obtain, renew or modify Federal permits.'' CLUB 20
    understands that the McCarran Amendment requires the Federal
    Government, when requested, to adjudicate any water rights it requires
    under the substantive and procedural elements of state water law within
    the state of the desired rights.
        Our members have openly opposed and. continue to oppose the efforts
    of the U.S. Forest Service (USFS) to unilaterally require ski areas or
    agriculture producers to turn over their privately held water rights to
    the USFS as a condition of obtaining, modifying or renewing a permit to
    conduct ski area activities or maintain infrastructures to convey water
    on USFS lands. We further oppose any such provision or ruling that may
    apply to other private water rights with regard to, natural resource
    development interests or other domestic water interests.
        The explanation offered by the USFS for the ``taking'' of these
    privately held water rights, often developed at great expense to the
    owner, is that they wish to maintain the designated use of the water
    for the permit. We find that explanation disingenuous for the following
    reasons:

      1.  Requiring that the USFS be named the owner of valid, existing
                water rights is taking a private property right without
                compensation and appears to be a violation of the Fifth
                Amendment to the U.S. Constitution.
      2.  It would appear that Federal ownership of these water rights
                could be used to disallow future use of the area as a ski
                area or other designated enterprise because the agency that
                holds title to the water rights could deny permits based on
                their withholding of those same water rights.
      3.  Once promulgated by the USFS regarding ski area and agriculture
                water rights, similar decisions could be made regarding
                grazing rights, mining rights, milling rights, energy
                rights even municipal water rights.
      4.  This effort by the Federal Government seeks to undermine states'
                rights with regard to water management, which our members
                find unacceptable.

        Ski area and agriculture operators invest significant amounts of
    capital to develop their operations; in order to attract the investment
    capital necessary, they must show that they have adequate ability to
    construct and operate the facility. Without demonstrating that they
    have adequate water rights, attracting capital will be difficult if not
    impossible. Further, it has been shown time after time that Federal
    regulations can be, and are, routinely modified for one reason or
    another creating uncertainty for developers of all sorts on public
    lands. Once held in the name of the USFS, there is no guarantee that
    these water rights won't be redirected, withheld or otherwise made
    unavailable to those who made significant investments in developing
    those rights.
        We support the protections inherent in H.R. 3186 and urge passage
    of this or similar legislation which accomplishes the same purpose.
    Thank you for addressing this critical issue through the legislative
    process; we look forward to working with you to see this bill through
    the process.
                Sincerely,
                                               Bonnie Petersen,
                                                    Executive Director.

                                     ______

                               Colorado River District,
                                    Glenwood Springs, CO 81602,
                                                       October 9, 2013.
    Hon. Scott Tipton,
    House Subcommittee on Water and Power,
    218 Cannon House Office Building,
    Washington, DC 20515.

    Re: H.R. 3189

        Dear Congressman Tipton:

        The Colorado River Water Conservation District sincerely
    appreciates your leadership in Colorado and Western water matters. H.R.
    3189 is just one more example. The Colorado River District will
    recommend that its Board support H.R. 3189 with the consensus
    amendments developed by your staff, the national ski areas and the
    River District.
        With the clarifying amendments, H.R. 3189 provides responsible side
    boards to agency actions when permitting allowable activities and uses
    on Federal lands. It prohibits the transfer of ownership of privately
    held water rights in exchange for required permits. We are also pleased
    that your staff will prepare a sponsor's statement to confirm that the
    bill will not change existing law that allows reasonable permit
    conditions that can protect both the natural environment and present
    and future downstream water users dependent on the forest for critical
    water supplies.
        I want to express my genuine appreciation for your and your staff's
    willingness to work with us on language that accomplishes our mutual
    goals of protecting private property interests in western water while
    maintaining the authority to condition permits to ensure responsible
    exercise of those rights.
                Sincerely,
                                                  R. Eric Kuhn,
                                                       General Manager.

                                     ______

                              Colorado Ski Country USA,
                                                    Denver, CO,
                                                       October 4, 2013.
    Hon. Doc Hastings, Chairman,
    House Natural Resources Committee,
    1324 Longworth House Office Building,
    Washington, DC 20515.

        Dear Chairman Hastings:

        I am writing on behalf of Colorado Ski Country USA (CSCUSA), the
    industry association and global voice of skiing and snowboarding in
    Colorado, in support of H.R. 3189, the Water Rights Protection Act.
    CSCUSA represents 20 ski areas in Colorado that operate on National
    Forest System lands under a special use permit from the U.S. Forest
    Service. These public land resorts hosted over 6.3 million skier visits
    in Colorado in the 2012/13 ski season alone, and skiing and
    snowboarding constitute a $3.0 billion annual economic impact to our
    state.
        CSCUSA supports H.R. 3189 because it would prohibit the U.S. Forest
    Service from requiring our resorts to transfer valuable water rights to
    the Forest Service as a condition of receiving a permit, or to apply
    for water rights in the name of the United States, without
    compensation.
        While the Forest Service insists that such actions would be
    intended only to maintain the long-run viability of the resorts as ski
    and snowboard areas, requiring resorts to transfer the water rights
    they need to operate so as to prevent their sale to a third party is a
    solution in search of a problem. Moreover, required transfers of water
    rights that are critical to ski area operations would politicize their
    use, with each change in administration changing priorities for water
    use.
        Furthermore, requiring transfer of valuable water rights to the NFS
    as a condition of receiving a permit raises serious Fifth Amendment
    concerns. Our member resorts' water rights were acquired and developed
    at great expense pursuant to Colorado law, and in some cases predate
    the Forest Service itself. If the NFS wants to secure its own water
    rights, it should buy them on Colorado's well-regulated water market
    like everyone else.
        Thank you for scheduling a hearing on H.R. 3189 and for your
    leadership on this issue. It means a great deal to CSCUSA and our
    member ski resorts operating across Colorado on NFS lands.
                Sincerely,
                                                  Melanie Mills
                                                     President and CEO.

                                     ______

                               Colorado Water Congress,
                                              Denver, CO 80203,
                                                       October 9, 2013.
    Hon. Scott Tipton,
    House Subcommittee on Water and Power,
    Washington, DC 20515.

    Re: Colorado Water Congress Supports H.R. 3189, Water Rights Protection
            Act

        Dear Congressman Tipton:

        The Colorado Water Congress is pleased to see the introduction of
    and hearing for Water Rights Protection Act (WRPA), H.R. 3189. The
    bipartisan bill was introduced last week. This legislation, with the
    consensus amendments developed by your office, the national ski areas
    and Colorado water users would prohibit the conditioning of any permit,
    lease, or other use agreement on the transfer or surrender of any water
    right to the United States by the Secretaries of Interior or
    Agriculture.
        The issue is of particular importance to Colorado's ski areas that
    are located in national forests. The U.S. Forest Service, through a
    2012 Interim Directive recently attempted to require the transfer of
    privately owned water rights on Federal lands to the Federal Government
    as a condition of issuing standard land use permits.
        The National Ski Areas Association sued the Forest Service alleging
    that the directive amounts to a taking of private property rights
    without due compensation and asked for a declaration that the Forest
    Service cannot condition a ski area special use permit on the
    assignment or severance of water rights. In December 2012, the Federal
    district court entered an injunction prohibiting the Forest Service
    from enforcing the directive. The court found that the Forest Service
    violated Federal procedural laws in adopting the directive.
        This matter is of importance to the Colorado legislature that as
    recently as late August 2013 continues to investigate Forest Service
    activities in this regard. It is unfortunate that Colorado water users
    have to had to pursue both litigation and legislation to protect our
    water rights from takings by our Federal Government.
        We hope that passage of H.R. 3189 will put us on the right path
    toward a permanent resolution. We urge the House to pass this
    legislation without delay.
        The Colorado Water Congress supports H.R. 3189. Thank you for
    sponsoring the bill.
                Sincerely,
                                                Douglas Kemper,
                                                    Executive Director.

                                     ______

                                  Family Farm Alliance,
                                       Klamath Falls, OR 97601,
                                                       October 8, 2013.
    Hon. Scott Tipton,
    House Subcommittee on Water and Power,
    218 Cannon House Office Building,
    Washington, DC 20515.

    Re: Support for ``Water Rights Protection Act'' (H.R. 3189)

        Dear Congressman Tipton:

        On behalf of the Family Farm Alliance, this letter expresses our
    formal support for your ``Water Rights Protection Act'' (H.R. 3189).
    This important legislation would prohibit the conditioning of any
    Federal permit, lease, or other use agreement on the transfer,
    relinquishment, or other impairment of any water right to the United
    States by the Secretaries of the Interior and Agriculture.
        The Alliance is a grassroots organization of family farmers,
    ranchers, irrigation districts and allied industries in 16 Western
    states. The Alliance is focused on one mission: To ensure the
    availability of reliable, affordable irrigation water supplies to
    Western farmers and ranchers. The Alliance has long advocated that
    solutions to conflicts over the allocation and use of water resources
    must begin with recognition of the traditional deference to state water
    allocation systems. Federal agencies must recognize and respect state-
    based water rights and develop their management decisions according to
    state law and abide by state decrees defining both Federal and non-
    Federal rights. Federal agencies need to work within the framework of
    existing prior appropriation systems instead of attempting to fashion
    solutions which circumvent current water rights allocation and
    administration schemes.
        Unfortunately, in recent years, some agencies within the Federal
    Government have repeatedly demonstrated they will not abide by this
    philosophy. These efforts constitute a Federal overreach and a
    violation of private property rights.
        For example, the U.S. Forest Service (USFS) has attempted to
    implement a permit condition that requires the transfer of privately
    held water rights to the Federal Government as a permit condition on
    National Forest System lands. There is no compensation for the transfer
    of these privately held rights despite the fact that many stakeholders
    have invested their own capital in developing the rights. Additionally,
    Federal land management agencies are leveraging Western water users in
    an effort to acquire additional water supplies for the Federal
    Government by requiring water users to apply for their rights under
    state law in the name of the United States rather than for themselves.
    USFS continues to take private water rights hostage through their
    permit conditions, despite objections from elected officials, business
    owners, private property advocates and a U.S. District Court ruling.
        Our farmers and ranchers rely on their vested water rights to
    secure operating loans, as well as irrigate crops and water livestock.
    Federal agencies should not be able to leverage those water rights
    against farming and ranching families who have long depended upon
    Federal permits and leases to support actions like grazing.
        The Water Rights Protection Act would protect communities,
    businesses, recreation opportunities, farmers and ranchers as well as
    other individuals that rely on privately held water rights for their
    livelihood from Federal takings. It would do so by prohibiting Federal
    agencies from extorting water rights through the use of permits,
    leases, and other land management arrangements, for which it would
    otherwise have to pay just compensation under the Fifth Amendment of
    the Constitution. The Water Rights Protection Act protects privately
    held water rights, prohibits Federal takings, and upholds state water
    law by:

         Prohibiting agencies from implementing a permit condition
                that requires the transfer of privately held water rights
                to the Federal Government in order to receive or renew a
                permit for the use of land;
         Prohibiting the Secretary of the Interior and the
                Secretary of Agriculture from requiring water users to
                acquire rights for the United States rather than for the
                water user themselves;
         Upholds longstanding Federal deference to state water law;
         Has no cost to the American taxpayer.

        Some Family Farm Alliance members in Arizona and Colorado have
    expressed some concerns with language contained in the original bill.
    We understand that they are working with you and Rep. Gosar to modify
    the language so that changes can be easily made by the Water and Power
    Subcommittee. We support H.R. 3189 with those changes.
        Thank you for this opportunity to provide support for your bill,
    which is very important to the family farmers and ranchers of our
    membership. If you have any questions about this letter, I encourage
    you or your staff to contact me at (541)-892-6244.
                Sincerely,
                                                    Dan Keppen,
                                                    Executive Director.

                                     ______

                 National Cattlemen's Beef Association,
                                          Washington, DC 20004,
                                                       October 3, 2013.
    Hon. Doc Hastings, Chairman,
    Hon. Peter DeFazio, Ranking Member,
    House Natural Resources Committee,
    Washington, DC 20515.

    Re: Support of the Water Rights Protection Act (H.R. 3189)

        Dear Chairman Hastings and Ranking Member DeFazio:

        The Public Lands Council (PLC) and the National Cattlemen's Beef
    Association (NCBA) strongly support the Water Rights Protection Act
    (WRPA) (H.R. 3189). PLC is the only national organization dedicated
    solely to representing the roughly 22,000 ranchers who operate on
    Federal lands, some of which are U.S. Forest Service (USFS) lands. NCBA
    is the beef industry's largest and oldest national marketing and trade
    association, representing American cattlemen and women who provide much
    of the nation's supply of food and own or manage a large portion of
    America's private property. Many of our members also hold private water
    rights on Federal lands, which serve as an integral part of their
    operations; thus, these water rights keep our members in business and
    rural communities thriving. However, landowners face an unprecedented
    threat to the future of their water rights on lands managed by the
    USFS.
        The USFS has been notorious for violating private property rights,
    as they have recently attempted to require the transfer of privately
    owned water rights to the Federal Government. The USFS has not provided
    adequate compensation as required by Article V of the Constitution;
    instead, they have attempted to acquire these rights in exchange for
    special use permits, likely in violation of a recent Supreme Court
    ruling in Koontz. Furthermore, the USFS has repeatedly ignored
    established state water laws in order to perform these takes, which
    amounts to a vast overreach by the Federal Government.
        H.R. 3189, introduced by Congressmen: Scott Tipton (R-Colo.), Mark
    Amodei (R-Nev.), Rob Bishop (R-Utah), Tom McClintock (R-Calif.), and
    Jared Polis (D-Colo.) comes as a means to combat the recent directive
    that allows the USFS to execute the seizure of these water rights
    without just compensation. The language in the directive is applicable
    to ski areas specifically; however, this issue is a threat to all water
    users, including ranchers, as they depend on these rights to keep their
    business viable.
        This legislation would prohibit the Secretary of the Interior and
    the Secretary of Agriculture from, requiring the transfer of water
    rights without adequate compensation. Additionally, the bill supports
    long-established state water laws, clarifying that the Federal
    Government does not have jurisdiction.
        We strongly encourage the Natural Resource Committee to support
    this important legislation. We thank you for your attention to this
    crucial issue, and for supporting our members as they continue to be an
    essential part of rural communities and stewards of our public lands.
                Sincerely,
                                                  Scott George,
                                                        NCBA President.

                                                     Brice Lee,
                                                         PLC President.

                                     ______

                        National Ski Areas Association,
                                                  Lakewood, CO,
                                                       October 4, 2013.
    Hon. Doc Hastings, Chairman,
    House Natural Resources Committee,
    1324 Longworth House Office Building,
    Washington, DC 20515.

    Re: Support for H.R. 3189

        Dear Chairman Hastings:

        I am writing on behalf of the National Ski Areas Association (NSAA)
    in support of H.R. 3189, the Water Rights Protection Act. NSAA
    represents 121 ski areas in the U.S. that operate on National Forest
    System lands under a special use permit from the U.S. Forest Service.
    These public land resorts accommodate the majority of skier visits in
    the U.S. and are located in the states of Arizona, California,
    Colorado, Idaho, Montana, Nevada, New Hampshire, New Mexico, Oregon,
    Utah, Vermont, Washington and Wyoming. The ski industry generates $12.2
    billion in economic activity annually and is a major employer in rural
    economies. NSAA would like to thank the lead sponsors of this bill,
    Representatives Tipton, Polis, Amodei and McClintock, for their
    leadership on this critical issue for ski areas.
        NSAA supports H.R. 3189 because it would prohibit the Forest
    Service from issuing permit clauses that require ski areas to transfer
    ownership of valuable water rights to the United States, or apply for
    water rights in the name of the United States, without compensation.
    Water is crucial to ski area operations. Ski areas collectively hold
    water rights worth over a hundred million dollars. We developed these
    rights through our own effort and expense, and we have no intention of
    surrendering ownership of these water rights to the U.S. without
    compensation.
        This bill would prevent the Federal Government from making an end
    run around state law by merely taking water rights that it does not own
    through its permitting authority. It would not only protect ski area
    water rights--it would protect any water rights owners that operate on
    Federal land.
        In closing, we would like to thank you for scheduling a hearing on
    H.R. 3189 and for your leadership on this issue. It means a great deal
    to NSAA and all ski areas across the country operating on NFS lands.
                Sincerely,
                                                 Michael Berry,
                                                             President.

                                     ______

               Pacific Northwest Ski Areas Association,
                                           La Conner, WA 98257,
                                                    September 26, 2013.
    Hon. Doc Hastings, Chairman,
    House Natural Resources Committee,
    1324 Longworth House Office Building,
    Washington, DC 20515.

    Re: H.R. 3189/Water Rights Protection Act

        Dear Chairman Hastings:

        I am writing on behalf of ski areas in the Pacific Northwest
    operating on National Forest System lands. PNSAA represents 34 ski
    resorts in Washington, Oregon, Alaska, Idaho, Montana and California.
    Of the 34 members 30 operate on public land.
        PNSAA supports H.R. 3189/Water Rights Protection Act that would
    prohibit the Forest Service from issuing permit clauses that require
    ski areas to transfer ownership of valuable water rights to the United
    States without compensation. Water is crucial to ski area operations.
    Ski areas collectively hold water rights worth over a hundred million
    dollars. We developed these rights through our own effort and expense,
    and we have no intention of surrendering ownership of these water
    rights to the U.S. without compensation.
        We would like to thank you for your leadership on protecting ski
    area water rights. It means a great deal to PNSAA and all ski areas
    across the country operating on NFS lands.
                Sincerely,
                                               John A. Gifford,
                                                             President.

                                     ______

          The Southwestern Water Conservation District,
                                             Durango, CO 81301,
                                                      October 10, 2013.
    Hon. Scott Tipton,
    House Subcommittee on Water and Power,
    218 Cannon House Office Building,
    Washington, DC 20515.

        Dear Congressman Tipton:

        On behalf of the Southwestern Water Conservation District
    (``District''), we thank you for sponsoring the Water Rights Protection
    Act, H.R. 3189. This vital bipartisan bill would prohibit the
    conditioning of any permit, lease, or other use agreement on the
    transfer, relinquishment, or other impairment of any water right to the
    United States by the Secretaries of the Interior or Agriculture.
        The Southwestern Water Conservation District (SWCD) was established
    by the Colorado legislature to conserve and protect the waters of the
    San Juan and Dolores Rivers and their tributaries. Therefore, we see it
    as our statutory obligation to safeguard privately held water rights in
    the region and uphold the primacy of state water law, as H.R. 3189
    would do.
        The U.S. Forest Service has recently attempted to require the
    transfer of privately held water rights to the Federal Government as a
    condition of acquiring a National Forest System lands permit. The
    District considers such requirements tantamount to a Federal taking,
    and applauds H.R. 3189's prohibition of such conditions,
        The District encourages the House of Representatives to pass this
    legislation without delay.
        We thank you for introducing the Water Rights Protection Act and
    for your leadership on this issue of great consequence.
                Sincerely,
                                               Bruce Whitehead,
                                                    Executive Director.

                                     ______

        Mr. Tipton. My hope is that today's hearing further
    strengthens the bipartisan efforts to be able to protect local
    water rights from the Federal Government and their overreach
    and takings. I appreciate the opportunity to discuss this
    important legislation, and I, along with the Ranking Member, do
    look forward to the Federal Government trying to justify taking
    Western water rights.
        With that, Mr. Chairman, I yield back.
        Mr. McClintock. Thank you. The Chair is now pleased to
    recognize Mr. DeFazio for 5 minutes.

      STATEMENT OF THE HON. PETER A. DeFAZIO, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF OREGON

        Mr. DeFazio. Thank you, Mr. Chairman. Mr. Chairman, thanks
    for the hearing today on 3176. I appreciated being put on the
    agenda. I want to thank the Western States Water Council for
    coming to DC to testify, especially at this odd time of
    government shutdown.
        It does two simple things. It reauthorizes the 1991
    Reclamation States Emergency Act for an additional 5 years,
    until 2018. It gives BuRec the flexibility to expedite water
    transfers between projects, move nonproject water on Federal
    facilities, construct temporary structures and wells during
    times of drought. These are not long-term solutions, but they
    are sometimes required to mitigate these episodic events of
    drought.
        It also authorizes Reclamation to assist in drought
    contingency planning with all 50 States, tribes, and
    territories. The Drought Relief Act is by no means a solution,
    a total solution, but I believe it is an authority that is
    vital to BuRec when they are turned to as a last resort in
    times of emergency. But the second authority here, drought
    contingency planning, could also go to some of the issues
    raised earlier about storage and other things.
        Second, we are hearing 3189. Obviously, whenever you begin
    to discuss water rights and water law in the West it is
    incredibly emotional, it is something that is unbelievably
    complicated within and across State borders and not easily
    understood. I don't know what the Forest Service was attempting
    to do in its first directive, which I believe was overly broad
    and didn't seem to distinguish between water rights which might
    be actual, existing within the leasehold or the ski area itself
    that pertained to the Federal land or those which were acquired
    from offsite by the operator. It was thrown out by the courts
    mostly on procedural grounds, but I think in the interim they
    did hear concerns, they were in the process of developing a new
    directive, which unfortunately we won't be able to hear about
    today, and it was supposed to come out next month for a period
    of public comment, and that probably will be allowed.
        I look forward to an opportunity to have that discussion. I
    am concerned that the legislation as drafted would seem to go
    far beyond protecting the rights of the ski operators who are
    probably the object of this unknown new directive, but we don't
    know that exactly either, but it applies to all actions
    requiring a permit on Federal lands. You know, what does that
    mean for grazing? I don't quite understand the full
    implications of that. What would it mean for oil and gas
    development? Fracking takes a lot of water. There are some very
    serious issues there. There is fracking, a tremendous amount of
    fracking on private land, but there are also applications
    pending in areas of Federal land.
        So I think it could go very, very far beyond and have
    unintended consequences given the way it is broadly written. I
    appreciate that the author said it was a work in progress, and
    I think there are legitimate rights to be protected here and
    want to work to protect those, but I don't want to overreach
    either. So hopefully we won't move forward until we have an
    opportunity with a restored government to have the Forest
    Service come in and explain its new directive and see if that
    doesn't do what we think it needs to do, then take more
    targeted action.
        Thank you, Mr. Chairman.
        Mr. McClintock. Thank you.
        [The prepared statement of Mr. DeFazio follows:]
    Prepared Statement of Ranking Member Peter DeFazio, a Representative in
                       Congress from the State of Oregon
        Good afternoon and thank you for including H.R. 3176 as part of
    today's agenda. I especially would like to thank the Western States
    Water Council for coming to DC to testify on this legislation,
    especially in light of the government shutdown.
        My legislation reauthorizes the 1991 Reclamation States Emergency
    Act for an additional 5 years until 2018. This provides the Bureau
    Reclamation with the needed flexibility to expedite water transfers,
    move non-project water on Federal facilities, and construct temporary
    structures and wells during times of drought. This Act also authorizes
    Reclamation to assist in drought contingency planning with all 50
    States, tribes, and territories. The Drought Relief Act is by no means
    a silver bullet to drought. This is the authority Reclamation turns to
    as a last resort during times of emergency.
        At the time the Act was originally authorized in 1992, California
    was experiencing its sixth consecutive year of drought. Unfortunately,
    we are facing the same dry conditions as before, except that our
    droughts are more prolonged and the demands on the resource have only
    increased. In Oregon, nearly $10 million dollars was used for
    activities in the Klamath Region in 2010. Predictions for next year's
    water year in Klamath Basin and across the west are bleak, yet the
    authorization for this program has already expired. H.R. 3176 simply
    provides Reclamation with one more tool to help our communities during
    times of drought.
        I come from a region where water issues are complicated and
    complex. Water can also be expensive. H.R. 3189, legislation introduced
    by Rep. Tipton, touches at the heart of these issues. Ski Areas are
    concerned about the Forest Service's Directive to transfer their water
    rights to the Federal Government. While at the same time, the Forest
    Service is concerned about their ability to manage the land if the ski
    resorts were to sell their rights.
        A recent court ruling found that the Forest Service did not follow
    the proper administrative procedures prior to issuing the directive,
    and threw out the 2012 Directive. The Forest Service is in the process
    of revising its directives and receiving comments, which prior to the
    shutdown, would have been released next month. The public would then
    have 60 days prior to the release to comment on the new directives.
    This is an issue that seems resolvable without the need for
    legislation.
        Yet the proposed legislative solution goes above and beyond the
    disagreement between the Forest Service and the Ski Resorts, and
    overreaches to apply to all actions that require a permit on Federal
    lands. The consequences of this legislation on grazing practices and
    oil and gas development are unknown. And due to Congress's own inaction
    to reopen the Federal Government, the Administration is not here to
    testify on the impacts of this legislation.
        I know there are unanswered questions for both bills, including for
    the Drought Relief Act. We have requested this information from the
    Department and were not able to get prior to the shutdown. As a result,
    we do not have all the information available to properly consider these
    bills and will be submitting questions for the record.
        It is our responsibility to ensure that legislation receives the
    proper vetting to ensure that they are of the best interest of the
    public. Part of the process is feedback from our Federal partners. We
    cannot do this when nearly 60,000 Department of Interior employees
    remain furloughed because of the shutdown.
        We must stop fiddling while Rome burns. The answers we need for
    this hearing demand that the government be reopened.

                                     ______

        Mr. McClintock. The Chair is now pleased to recognize Mr.
    Gosar for 5 minutes.

       STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF ARIZONA

        Dr. Gosar. Thank you, Chairman McClintock, for holding
    today's hearing, and to my friend, Congressman Scott Tipton,
    for introducing this important legislation.
        In the West we have a saying: Whiskey is for drinking,
    water is for fighting over. And nowhere is that more true than
    the State of Arizona. In Arizona water means life. The majority
    of my State would be an underpopulated desert without the
    forward thinking of leaders when it comes to water policy.
    Those leaders recognize that Arizona faces constraints on its
    water supply more severe than almost any other State in the
    Nation and took careful, proactive precautions to protect and
    manage our water resources. In fact, before Arizona even became
    a State, the territorial legislature adopted the 1864 Howell
    Code that established our prior appropriations doctrine over
    surface water rights.
        The pursuit of water enabled a small State of ranchers,
    miners, and farmers to take off economically and become the
    beautiful, diverse place to live in today. And the century-long
    battles over our natural resources, in particular water rights,
    had an integral role in formulating our State's political
    landscape. Today Arizona is a very independent State
    politically shaped by people of all walks of life who have
    valued States rights and self-determination. That is why this
    bill we are considering today is so important.
        Arizona has one of the most, if not the most, intricate
    State water laws in our country. The right to water is a
    carefully guarded property right held at a higher value than a
    person's home or material possessions. So the notion that the
    government can come in and hold permits, leases, and rights of
    way hostage in efforts to get a private entity to forfeit its
    private property rights, its water right, is downright
    offensive, and that is exactly what the United States Forest
    Service is currently doing.
        Under a 2011 directive pertaining to ski area special use
    permits, the Forest Service is trying to require an applicant
    for a permit to relinquish privately held water rights to the
    Federal Government as a permit condition. There is no
    compensation for this transfer of rights even though our
    constituents or their descendents have spent major portions of
    their lives and their money to develop these rights. This is an
    egregious policy that must be stopped and is a violation of our
    State sovereignty and individual property rights.
        In rural Arizona our economy is heavily reliant on
    activities on Federal lands, including the northern Arizona ski
    area, Arizona Snowbowl, our mines, our ranches, and our
    agricultural production. These industries are the bedrock of
    Arizona's five C's and our economic viability. And the Forest
    Service's policies could bring all of these important economic
    drivers to a halt.
        My friend Congressman Tipton's legislation, the Water
    Rights Protection Act, shields our constituents from this kind
    of Federal regulatory water grab and upholds our State's
    sovereignty to protect its water interests. I strongly support
    these goals. In fact, I see fighting for these goals as my
    obligation as one of Arizona's rural representatives to the
    Federal Government.
        I look forward to working with some of the experts on the
    ground in Arizona and with Scott to ensure that no State-
    recognized water rights go unprotected from the class of
    actions this bill prohibits. Ultimately I look forward to
    helping the bill's sponsors quickly advance this bipartisan
    legislation. Its enactment is critical to reasserting State
    sovereignty over water rights and the economic viability of our
    Western communities.
        I look forward to hearing from the witnesses, and I yield
    back the balance of my time. Thank you.
        Mr. McClintock. Thank you. The Chair is now pleased to
    recognize the gentleman from California, Mr. Costa, for 5
    minutes.

     STATEMENT OF THE HON. JIM COSTA, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF CALIFORNIA

        Mr. Costa. Thank you very much, Mr. Chairman.
        For the purposes of my opening comments I will direct them
    to the DeFazio bill as it relates to drought relief. And I
    think it is important that the subcommittee at the time
    consider the benefits that have accrued over the years when we
    have had to deal with States, particularly Western States, that
    have dealt with the challenges of drought conditions that we
    know are cyclical as we look at over 100 years of recorded
    weather history.
        And the fact is that the drought relief assistance from the
    Federal level has made a difference. I am looking at a series
    of printouts that indicate from 2007 to 2012, from Arizona to
    Utah, to States that have benefited from drought relief
    assistance by the Federal Government. I think it is important
    that we continue to provide support. Obviously the States have
    their own sovereignty as it relates to many of the water issues
    that are in their jurisdiction.
        However, the fact is that we know that where water flows
    food grows, and it is an absolute essential key resource as it
    relates to our urban populations as well. So there is a hand-
    in-glove relationship between our water resources in America,
    and nowhere is that felt greater than in Western States because
    of the arid conditions, of course.
        The fact is that most of our infrastructure that has been
    developed for water in the West is aging. It varies in length,
    but some of it is over 100 years old. If it were not for the
    development of that water resource when the West was being
    developed, we would not have the ability to provide the
    multiple, various economies that exist in our Western States.
        I am very worried that we are treating water as we are
    treating many of the other issues around here; i.e., a
    political football. We can have differences, but the fact of
    the matter is we must invest in our water infrastructure. We
    know that the climate is changing. I don't care whether folks
    want to just discern that man has a limited role in that, I
    think that is subject to debate. But the fact is the weather
    has been changing for millions and millions of years. You just
    look at the tree ring studies done in the sequoias of the
    Sierra Nevada Mountains, where over the last thousand years,
    because these trees are as old as 2,000 years old, and older in
    some cases, where they can determine cycles that have occurred
    between the narrowness of the rings of the trees between wet
    cycles and dry cycles.
        So the fact is weather is changing, it will always continue
    to change. And if in fact the weather patterns continue to
    change, our water systems may be inadequate to deal with our
    future needs. They are inadequate to deal with California's
    current needs. We have a water system that was designed for 20
    million people. Today we have 38 million people. By the year
    2030 we will have 50 million people. And the fact is we are not
    making the same kind of commonsense solutions that our parents
    and our grandparents did generations ago.
        So obviously I will be speaking in support when we get to
    the DeFazio measure on how we can continue to support efforts
    by States that have benefited from this drought relief
    assistance, and I look forward to continue working with all of
    my colleagues--all of my colleagues--on a bipartisan basis,
    because that is the only way--only way--we ever get anything
    done in this place.
        Thank you very much, Mr. Chairman.
        Mr. McClintock. The Chair is pleased to recognize Mr.
    Amodei for an opening statement.

       STATEMENT OF THE HON. MARK E. AMODEI, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF NEVADA

        Mr. Amodei. Thank you, Mr. Chairman. And I want to thank my
    colleague from Colorado for introducing this measure.
        In the short time that I have been here this has come up
    several times, and I think it is important to note, as it
    always is, what the bill actually says. It talks about
    requiring transfer. Nothing in the legislation says please
    ignore water issues when you are making permitting decisions.
    They are legitimate things to be considered as you make any
    land use permit.
        The part that necessitates this bill in my experience is
    this: On multiple occasions you have had Federal land
    management officials not consult the State water administrator,
    State water engineer, whatever they are called in your
    particular district. They have usurped that authority
    completely and said, I have groundwater concerns and therefore
    I am conditioning your permit or I am denying it without ever
    talking to the individual who under State law has exclusive
    authority to adjudicate those matters.
        That is an important first part because those matters, if
    you don't like the way they adjudicate them, you have
    administrative processes, you have judicial processes, you have
    due process for addressing that. In a Federal permitting
    context if you usurp that State engineer's authority without
    ever even really talking to him, then what you have left is
    almost nothing. And so it is not ignore groundwater issues, it
    is please go to the person who has jurisdiction.
        And then we move to the second part, which the bill does
    say on multiple occasions we are in violation of the law in my
    State. And by the way, it is not much different from the
    Ranking Member, all Western States, it is a large amount of
    surface area that the Federal Government owns. That is the
    fact. No sense lamenting it or whatever. We can talk about what
    to do about that. But the fact is you own a large amount. And
    really you need to own the water rights, too, to have control
    over it, when you control the surface area?
        So when you tell somebody in the agricultural industry when
    there is a State law in my State that says you cannot hold
    stock water groundwater rights unless you own stock, and the
    Forest Service says we don't own stock but we want to condition
    a permit on you issuing your stock water permit to the Forest
    Service, it is a condition for a Federal permit which is in
    black letter law violation of State law.
        And when you say, what are you doing? Well, we kind of
    think we have authority under NEPA to do that. Could you please
    point that out? We just think we do for supposition for this
    connection, for that connection. And the idea is not to bash
    those folks, but it is to say you really don't have the
    authority to do that. What an ultimate act of hypocrisy to
    condition a Federal permit on violation of a State water law
    for which you really don't have that.
        I want to make two more points, though, because if it is
    really about the resource, in my State the Federal Government
    can hold water rights, just comply with State law and you can
    be issued. So it is not that you can't have them, but this
    thing where you skip the State engineer and do your own
    basically no due process process to rule on State water law or
    you require an absolute violation of State law for a Federal
    permit is not good business. And I join with my colleagues both
    from California, that is not good business regardless of what
    side of the fence you are on.
        So I want to give a shout-out to my colleague from
    Colorado, and the drafting of this is actually very, very
    elegant in terms of, my god, it is a page long and just says,
    hey, play by the State rules on water issues. If the BLM or the
    Forest Service have a concern about groundwater then go talk to
    the State engineer and whatever he or she says is what
    everybody lives with. But do not ignore the State engineer and
    bring those duties onto yourself.
        So with that, Mr. Chairman, I appreciate the opportunity to
    participate today and the courtesies the subcommittee has
    extended me, and I yield my remaining time to my colleague from
    Utah.

    STATEMENT OF THE HON. ROB BISHOP, A REPRESENTATIVE IN CONGRESS
                         FROM THE STATE OF UTAH

        Mr. Bishop. Thank you, Mr. Amodei. I appreciate that.
        I want to say two things very quickly. Number one is, I
    appreciate the committee holding a hearing on these bills, very
    good bills, and I am cosponsor of one of them, and I appreciate
    the leadership of that.
        Number two, I want to specifically recognize and welcome
    Randy Parker from the State of Utah, Utah Farm Bureau
    Association, here as one of the witnesses. He understands the
    significance of water as it relates to agriculture and ranching
    in our areas and how important it is. Obviously it cannot be
    done without water rights.
        I mean, there is a cliche we have in Utah that it would be
    far better to be head of the ditch than it would be head of the
    church. That is one the issues that we have at hand here. And I
    appreciate his comments on this. He will explain why it is so
    significant to maintain water rights that have traditionally
    been there as these people have entered into these operations
    and guarantee that they are maintained.
        And so I appreciate his willingness to be here. I
    appreciate your willingness to indulge me as part of this
    committee. I came in late, so I will make up for that by
    leaving early because I have another committee right now. And
    this does not give Mr. Costa and others, and Mrs. Napolitano, a
    chance to abuse me if I leave. So I think that is probably the
    best thing I could possibly do. But I do want to thank you for
    inviting Mr. Parker and inviting me to be part of this
    committee.
        Mr. McClintock. Well, here is your hat, what is your hurry?
    Mr. Bishop actually is entitled to another 4\1/2\ minutes on
    his own.
        Mr. Bishop. To which I will yield back for everything else.
        Mr. McClintock. Well, the committee always appreciates a
    dramatic exit.
        Just for the record, the Chair wants to allay the concerns
    that were expressed earlier regarding the shutdown and the
    absence of the U.S. Forest Service. The U.S. Forest Service
    actually informed the subcommittee before the shutdown that
    they could not appear on the Tipton bill, would not discuss it.
    Their new directive is being reviewed by the OMB and they said
    they can't talk about it until the review is done and the
    directive is out for public comment. And so the shutdown does
    not affect the Forest Service's willingness to be here today.
    They were not willing to be here anyway.
        With that, and if there are no other opening statements by
    committee members, the Chair is pleased to welcome our panel of
    witnesses and once again to thank them for their patience and
    indulgence. Each witness' written testimony will appear in the
    full hearing record, so I would ask that you keep your comments
    down to 5 minutes. The timing lights are pretty simple, green
    you have all the time in the world, yellow is 1 minute, red
    means that you are out of time and out of attention of the
    membership. I think there was a study done some time ago that
    indicates that 5 minutes is about the maximum attention span of
    a Member of Congress, so keep that in mind when that red light
    goes off.
        And with that, the Chair is pleased to welcome our first
    witness today, Mr. David Corbin, Vice President for Planning
    and Development at Aspen Skiing Company from Aspen, Colorado,
    to testify.

     STATEMENT OF DAVID CORBIN (H.R. 3189), VICE PRESIDENT, ASPEN
                    SKIING COMPANY, ASPEN, COLORADO

        Mr. Corbin. Thank you, Mr. Chairman. I understand the
    limitation on time and will try to briefly summarize the
    comments.
        My name is David Corbin. I am Vice President of Planning
    and Development for Aspen Skiing Company. We are a ski area
    operator and hospitality company located in Aspen, Colorado.
    Personally, I have 25 years experience in the ski industry,
    working first with Vail Resorts, and for the past 8 years I
    have been with Aspen Skiing Company. I had the privilege of
    working in the industry from Lake Tahoe, to the Central
    Rockies, to the White Mountains of New Hampshire, and worked on
    Federal lands in all of those locations at some point or
    another.
        Aspen Skiing Company owns four ski areas. We have four
    special use permits. We employ about 3,400 people locally in
    peak season and we host 1.4 million skier visits in Aspen,
    again on public lands. We are members of Colorado Ski Country,
    and we are likewise members of the National Ski Areas
    Association. The National Ski Areas Association is essentially
    our national body that represents our interests as an industry
    before Congress and other public agencies and performs a
    variety of activities on our behalf, but represents 121
    different ski areas across the country who operate on the
    public lands.
        We very much support--and by we, I mean Aspen Skiing
    Company, Colorado Ski Country, and NSAA--very much support this
    bill and thank Congressmen Tipton and Polis in particular as
    Colorado Representatives and sponsors, as well as the other
    sponsors. We believe the Water Rights Protection Act is very
    much essential to our business and protects our business
    interests in ways that we appreciate a great deal.
        We value and respect our partnership with the U.S. Forest
    Service. We indeed work quite closely with them. I regard my
    White River forest supervisor as a very close colleague
    personally and professionally. We likewise believe we are very
    capable and intelligent stewards of the land and work quite
    carefully to protect the environmental standards that this
    country aspires to.
        In the course of that, we likewise think that water is
    absolutely an essential element to our business. And in
    response to one of the comments I heard before, we do not get
    any water with our special use permits. When a special use
    permit comes to us, the Federal Government hasn't given us
    additional water in the course of issuing that permit. We go
    out and acquire it, we buy it, we procure it, we go ahead and
    buy it from other providers as well.
        We look to Congress to provide some assistance. Indeed the
    agency is in the process of promulgating rules and has proposed
    rules before. We believe this bill is very helpful in guiding
    or steering the agency toward what we believe would be more
    prudent rules and regs. We very much like the bill in the sense
    that it does not require us to transfer those separate water
    rights that we have purchased and developed and built
    infrastructure for on our own. We like the fact that there
    would be a prohibition against such a compulsory transfer,
    which we very much think is a taking. And we would hope
    Congress would likewise see it that way and help and support us
    in that regard.
        Ourselves, we use a fair amount of water, 200 to 250
    million gallons a year in snowmaking. That is essential to us.
    Snowmaking essentially provides the base for us to begin and
    completes our season. And for our purposes we cannot see those
    rights evaporate or be lost as it would severely jeopardize our
    ability to operate, and it would likewise financially subject
    us to very difficult circumstances because we need both
    Christmas season and end of season to essentially make our
    economics work. So to lose snowmaking and to lose the water
    associated with it would very much jeopardize our operations
    and our continued financial viability.
        We hope that you would take our testimony, written as it
    is, before you into account, and I very much appreciate the
    opportunity to speak to you today.
        Mr. McClintock. Thank you very much for your testimony.
        [The prepared statement of Mr. Corbin follows:]
       Prepared Statement of David Corbin, Vice President of Planning &
                 Development, Aspen Skiing Co., Aspen, Colorado
        Thank you for the opportunity to testify today on behalf of Aspen
    Skiing Co. Aspen Skiing Co. owns and operates four resorts in Colorado,
    Aspen Mountain, Aspen Highlands, Snowmass and Buttermilk. During its
    winter peak, ASC employs approximately 3,400 people in Pitkin County,
    Colorado, hosts nearly 1.4 Million skier visits annually, and pursuant
    to four Special Use Permits issued by the United States Forest Service,
    operates on National Forest System land, as do 120 other ski areas
    nationally. Collectively, these 121 public land resorts accommodate the
    majority of skier visits in the U.S. and are located in the states of
    Arizona, California, Colorado, Idaho, Montana, Nevada, New Hampshire,
    New Mexico, Oregon, Utah, Vermont, Washington and Wyoming. The ski
    industry generates $12.2 Billion in economic activity annually.
        At the outset, I would like to emphasize that Aspen Skiing Co., our
    state association Colorado Ski Country USA, and the national
    association, NSAA, are united in our support of H.R. 3189, the Water
    Rights Protection Act. We would like to thank the sponsors of this
    legislation, and I would like to especially thank Colorado Congressmen
    Tipton and Polis, for working together to protect the rights of ski
    areas.
        Aspen Skiing Co. greatly values and respects our partnership with
    the U.S. Forest Service. We likewise take seriously our
    responsibilities with respect to stewardship of the land and water
    resources arising from it. At the same time, we view protection of ski
    area water rights, typically privately acquired, developed and applied
    and unrelated to the original issuance of our Special Use Permits, as
    essential to our business sustainability and as a top priority for the
    ski industry as a whole.
        The ski industry is united in looking to Congress to take action to
    protect water rights and to protect the state laws that govern water
    rights allocation, administration and adjudication. We collectively
    believe that protecting water rights from encroachment by the Federal
    Government will help ensure the future success of ski areas on public
    land and the mountain communities that depend on them.
        The proposed Water Rights Protection Act would prohibit the Forest
    Service from requiring that ski areas apply for water rights in name of
    the U.S. or transfer water rights to the U.S. as a condition of our
    special use permit. As such, the Act would prohibit the Forest Service
    from issuing the very ski area water clause that it issued in 2012,
    that was the subject of a legal challenge and lawsuit brought by the
    National Ski Areas Association last year. The proposed law would
    protect ski area water rights and provide certainty to ski areas and
    other water rights holders that the Federal Government is not going to
    seize these valuable property rights without compensation. This will
    benefit ski areas and the rural economies dependent on them. Finally,
    it upholds state water law. For all of these reasons, the ski industry
    wholeheartedly supports H.R. 3189.
        By way of background, water is an essential element of our business
    and snowmaking insures that we are able to operate and offer winter
    recreation in any given year, even in years of low snowfall. Although
    Aspen Skiing Company's domestic use per year is comparatively modest,
    less than 3 million gallons a year, we use on average from 200 to 250
    million gallons a year to make snow, which returns to the watershed in
    the form of ground water and surface runoff each spring. Our cost in
    water, labor and energy to make and distribute this snow is roughly $2
    M to $2.5 M per year. Our sources of supply include rivers and streams,
    wells and springs, and municipal providers. We have acquired and hold a
    wide array of rights and interests in water, some of which include
    conventional stream and ditch appropriations dating back to 1882.
    Others include a recent $3 MM investment in a storage reservoir fed by
    a stream from which we've historically drawn, which essentially enabled
    us to open Snowmass ski area last year despite a very dry fall and
    early winter.
        The magnitude of our operational costs, acquisition and investment
    in water rights and infrastructure is not unusual. Collectively, ski
    areas invest hundreds of millions of dollars on water rights to support
    and enhance their operations and water rights are considered highly
    valuable assets to ski area owners. These water rights have been and
    are presently obtained by ski areas under long standing State law.
        Water is crucial not just to our current operations, but to our
    very sustainability and on-going vitality as recreational businesses,
    particularly in an era of drought and warming temperatures. For reasons
    both altruistic and commercial it is in our own interests to protect,
    conserve and optimize the sensible use and application of our water
    resources.
        Beyond our own viability and commercial health, ski areas are major
    employers in rural economies helping maintain employment and driving
    job creation in rural and mountain economies. The physical and economic
    sustainability of ski areas directly impacts the future health,
    maturation and growth of rural economies associated with ski areas.
        USFS water clauses that demand transfer of ownership of ski area
    water rights to the United States substantially impair the value of
    these ski area assets. The taking of these assets by the government
    hinders a ski area's access to capital, creates uncertainty with
    respect to a resort's ability to make adequate snow and operate
    successfully in the future, and most importantly, provides a huge
    disincentive for ski areas to invest in water rights and infrastructure
    in the future. Ask yourself this question: why would a ski area invest
    in water rights and infrastructure if they are simply going to be taken
    by the government? It is obviously not sound business practice to
    acquire and improve assets that are going to be taken from you.
    Unfortunately, the impact of such a punitive disincentive does not stop
    with the ski area. In so far as it adversely affects our business
    sustainability over time, it inevitably ripples through our companion
    rural economies.
        The Forest Service is now in the process of developing a new ski
    area water clause. It is our hope that this proposed legislation will
    positively shape the forthcoming policy. Like the proponents of this
    bill, the ski industry will not accept a Forest Service water policy
    that takes private water rights from ski areas. As an alternative, the
    ski industry offered a new approach to a ski area water clause in
    conjunction with the Forest Service's ongoing public process on water
    policy. This new approach would address the Forest Service's concerns
    about having sufficient water for future ski area operations, but does
    not involve government seizure of assets.
        Briefly, we offered a two part framework:

      1.  For future projects which require water for implementation, ski
                areas will demonstrate that sufficient water is available
                to support those projects. This would be a part of the
                review and approval process going forward for proposals
                that include on mountain facilities or snowmaking;
      2.  Upon sale of a ski area, resorts will provide an option to
                purchase at fair market value sufficient water to
                reasonably run the ski area to a successor ski area owner.
                If the successor ski area declines to exercise such option,
                the ski area would offer it to the local government; if the
                local government declined to exercise the option, the
                Forest Service would have the option to buy the water.

        As an express condition of supporting this approach, water clauses
    previously imposed upon ski area permittees by the agency must be
    declared unenforceable, superseded, and null and void, and would be
    removed from every ski area permit.
        We offered this compromise to demonstrate our willingness to work
    constructively toward resolution of this issue, and to demonstrate that
    the Federal Government need not take and own these private water rights
    to accomplish its objectives of ensuring ski area operational
    sustainability and local economic health, which we share. The bill
    under consideration today and the ski area's alternative approach to
    water policy are complimentary. We urge passage of this bill as soon as
    possible to send a clear message to the Forest Service to shape its
    policy and write its rules and regulations in a manner that respects
    water rights and state water law.
        Thank you for the opportunity to address this committee. I would be
    happy to answer or respond to any questions you may have.

                                     ______

        Mr. McClintock. The Chair is now pleased to recognize Mr.
    Randy Parker, the CEO of the Utah Farm Bureau Federation, from
    Sandy, Utah, to testify.

     STATEMENT OF RANDY PARKER (H.R. 3189), CEO, UTAH FARM BUREAU
                        FEDERATION, SANDY, UTAH

        Mr. Parker. Thank you, Mr. Chairman, Ranking Member, and
    committee members. Thank you for the opportunity to be here.
        My name is Randy Parker. I am CEO of the Utah Farm Bureau
    Federation. I am here today representing more than 28,000
    member families in Utah and more than 6 million families who
    are members of the American Farm Bureau. Through our grassroots
    process, Farm Bureau provides policymakers with recommendations
    on water in Utah and in the Western public land States.
        Farm Bureau is concerned with the Federal Government
    expanding its reach and control over Utah and its natural
    resources. Utah farmers and ranchers want Federal agencies to
    honor State water law and to not claim ownership of water
    developed on public lands. Utah Farm Bureau supports H.R. 3189
    because it recognizes the State sovereign water rights and
    protects livestock water rights from illegal Federal claims and
    takings.
        The American Farm Bureau policy calls on Congress to dispel
    uncertainty. The Intermountain Region of the U.S. Forest
    Service has filed more than 16,000 diligence claims on Forest
    System lands in Utah challenging ownership and increasing
    uncertainty. The agency says its claims are based on Federal
    ownership of the land and water the ranchers used prior to
    Congress granting Utah statehood. Couldn't that be argued to be
    the same in every State in the Union?
        American Farm Bureau opposes any preemption of State law,
    pointing out water rights as property rights cannot be taken
    without just compensation and due process of law. Farm Bureau
    supports H.R. 3189, the Water Rights Protection Act, because it
    is designed to dispel uncertainty and recognizes State
    sovereignty and historic water law. In addition, it underscores
    the constitutional protections of just compensation and due
    process of law.
        To illustrate the need to protect livestock water rights,
    the experience of a Tooele County, Utah, grazing association is
    instructive. In the spring of 2012 ranchers were presented with
    a packet from the Forest Service that requested that they sign
    a change of use application. Change applications allow the
    Forest Service to change use of the water from livestock to
    other uses as determined by the agency. The ranchers were told
    if they did not comply it could adversely affect their turnout
    onto their forest grazing allotment. The ranchers were not only
    concerned how the action impacted their water rights, but how
    it would impact cattle grazing on those allotments into the
    future.
        The Forest Service protested, suggesting the request was in
    error and that they were only asking ranchers to sign a joint
    ownership agreement. In either case, signing a change of use
    application or agreeing to a certificate of joint ownership,
    the Federal agency is seeking a relinquishment either in whole
    or in part as a condition of access to the grazing allotment.
        In Tooele County, Utah, or anywhere across the Utah
    landscape where livestock graze on the public lands and use the
    State's water, it is the economic driver for our rural
    communities. Livestock production is the economic engine of
    Utah's rural cities and towns. Passage of H.R. 3189 will build
    rural communities by providing certainty, not by seizing assets
    through relinquishment or diminishment of livestock water
    rights.
        Livestock water is available in stock water troughs, in
    guzzlers, in seeps, and in small streams scattered across
    Utah's back country. It benefits not only sheep and cattle, but
    wildlife, like sage grass, deer and elk, and even threatened
    and endangered species like the Utah prairie dog.
        Utah has joined other Western States, like Idaho and
    Nevada, in protecting historic livestock water rights and
    limiting Federal ownership. Utah's Livestock Water Rights Act
    defined the beneficial user as the owner of the grazing permit.
    The Forest Service seized on that opportunity, filing on
    livestock water rights on every active allotment in Utah,
    claiming they are the owner of the grazing permit.
        In closing, it is important to note that the Utah Livestock
    Water Rights Act makes livestock water rights pertinent to the
    grazing allotment on which the livestock is watered. It
    provides certainty to ranchers and underscores our commitment
    to rural Utah that grazing will continue on the public lands.
    This commitment in H.R. 3189 provides greater certainty to
    ranchers and the future of public land grazing than the
    assurances of Federal bureaucrats and being at the whims of our
    fickle legal system.
        Thank you, Mr. Chairman. I look forward to questions.
        Mr. McClintock. Thank you, Mr. Parker.
        [The prepared statement of Mr. Parker follows:]
     Prepared Statement of Randy N. Parker, Chief Executive Officer, Utah
                      Farm Bureau Federation, Sandy, Utah
        The Utah Farm Bureau Federation, Utah's largest farm and ranch
    organization, supports passage of H.R. 3189, the Water Rights
    Protection, an Act prohibiting Federal agencies from conditioning
    ongoing use of grazing permits or other use agreements based on the
    transfer, relinquishment or impairment of water rights sovereign to the
    States.
        The Utah Farm Bureau represents more than 28,000 member families
    including a significant number of livestock producers who use the
    Federal lands for sheep and cattle grazing. Livestock ranching is an
    important part of the history, culture and economic fabric of Utah and
    is a major contributor to the State's economy.
        Utah food and agriculture contributes to the State's economic
    health and provides jobs to thousands of our citizens. Utah farm gate
    sales in 2012 exceeded $1.6 billion. Utah State University analyzed the
    forward and backward linkages to industries like transportation,
    processing, packaging and determined food and agriculture are the
    catalyst for $17.5 billion in economic activity, or about 14 percent of
    the State GDP, and provides employment for nearly 80,000 Utahns with a
    payroll of more than $2.7 billion.
                               farm bureau policy
        Delegates to the November 2012 annual convention of Utah Farm
    Bureau Federation adopted policy calling on the Federal Government to
    ``not claim ownership of water developed on Federal land.'' In
    addition, Utah Farm Bureau policy calls for State control of water
    rights and for livestock water rights to be held by the ranchers
    holding grazing rights as a protection against Federal encroachment on
    sovereign State waters.
        American Farm Bureau Federation representing more than 6 million
    members from across our Nation adopted policy at the January 2013
    annual convention calling on Congress to ``dispel uncertainty'' and
    provide that the ``water flowing from the reserved lands and other
    Federal lands shall be subject to State authority.'' American Farm
    Bureau opposes reserved water rights on Federal lands except through
    filing with the State for rights in accordance with State law.
        American Farm Bureau policy continues expressing opposition to
    ``any Federal domination or pre-emption of State water law'' and that
    ``water rights as property rights cannot be taken without compensation
    and due process of law.''
                                    history
        Scarcity of water in the Western United States led to the
    development of a system of water allocation that is very different from
    how water is allocated in regions graced with abundant moisture. Rights
    to water are based on actual use of the water and continued use for
    beneficial purposes as determined by State laws. Water rights across
    the west are treated similar to property rights, even though the water
    is the property of the citizens of the States. Water rights can be and
    often are used as collateral on mortgages as well as improvements to
    land and infrastructure.
        The arid west was transformed by our pioneer forefathers through
    the judicious use of the precious water resources. Utah is the Nation's
    second most arid State, second only to Nevada. For our predecessors,
    protecting and maximizing the use of the water resources was not only
    important, it was a matter of life and death.
        Land ownership patterns and where precipitation, rain and snow,
    accumulates in the Intermountain Region of the U.S. Forest Service
    especially in Utah has been a long running cause for debate and
    conflict. The U.S. Forest Service reports that the Forest System Lands
    are the single largest source of water in the continental United States
    providing more than 14 percent of the available supply. (Attachment A)
        A review of the Forest Service maps would suggest a large portion
    of agency's captured water takes place in the western public States
    within the Snake and Colorado River Basins and in the mountains of the
    Sierra-Nevadas, the Cascades and the Rocky Mountains. These lands in
    the Intermountain Region are the source of a large portion of the
    States surface water and underground recharge. (Attachment B)
                             congressional actions
        The settlers in the arid west developed their own customs, laws and
    judicial determinations to deal with mining, agriculture, domestic and
    other competing uses recognizing first in time, first in right. Out of
    these grew a fairly uniform body of laws and rights across the western
    States. The Federal Government as original sovereign and owner of the
    land and water prior to Congress granting statehood ultimately chose to
    acquiesce to the territories and later the States on control,
    management and allocation of water.
    Act of July 26, 1866
        The U.S. Congress passed the Act of July 26, 1866 [subsequently the
    Ditch Act of 1866] that became the foundation for what today is
    referred to ``Western Water Law.'' The Act recognized the common-law
    practices that were already in place as settlers made their way to the
    western territories including Utah. Congress declared:

            Whenever, by priority of possession, rights to the use of water
            for mining, agriculture, manufacturing, or other purposes, have
            vested and accrued, and the same are recognized and
            acknowledged by the local customs, laws and decisions of
            courts, the possessors and owners of such vested rights shall
            be maintained and protected in the same; and the right of way
            for the construction of ditches and canals for the purposes
            herein specified is acknowledged and confirmed; but whenever
            any person, in the construction of any ditch or canal, injures
            or damages the possession of any settler on the public domain,
            the party committing such injury or damage shall be liable to
            the party injured for such injury or damage. (43 U.S.C. Section
            661)

        This Act of Congress obligated the Federal Government to recognize
    the rights of the individual possessors of water, but as important,
    recognized ``local customs, laws and decisions of State courts.''
        Western water law or the ``doctrine of prior appropriation''
    governs the use of water in many of the States in the west. The
    fundamental principle embodied in the doctrine of prior appropriation
    is that while no one may own the publicly owned resource, persons,
    corporations or municipalities have the right to put the water to
    beneficial use any defined by State law. For purposes of beneficial
    use, the allocation of right rests in the principle of ``first in time,
    first in right.'' The first person to use the water is the senior
    appropriator and later users are junior appropriators. In Utah, and
    across the west, this principle protects the senior water right
    priority for this scarce and valuable resource.
        Beneficial uses are determined by State legislatures generally
    including livestock watering, irrigation for crops, domestic and
    municipal use, mining and industrial uses.
    The Desert Land Act of 1877
            ``All surplus water over and above such actual appropriation
            and use . . . shall remain and be held free for appropriation
            and use of the public for irrigation, mining and manufacturing
            . . .''
    The Taylor Grazing Act of 1934
            ``nothing in this Act shall be construed or administered in a
            way to diminish or impair any right to the possession and use
            of water for mining, agriculture, manufacturing and other
            purposes . . .''
    The McCarran Amendment of 1952
        Congress established a unified method to allocate the use of water
    between Federal and non-Federal users in the McCarran Amendment. (43
    U.S.C. Section 666) The McCarran Amendment waives the sovereign
    immunity of the United States for adjudications for all rights to use
    water.

            ``waives the sovereign immunity of the United States for
            adjudications for all rights to use water.''
    The 1976 Federal Land Policy Management Act
            ``All actions by the Secretary concerned under this act shall
            be subject to valid existing rights.''

        The rights of the States to govern water has been recognized by
    generations of Federal land management agencies as directed by the U.S.
    Congress.
    Gifford Pinchot
        In 1907, Gifford Pinchot, ``father'' of the United States Forest
    Service (USFS) and the First Chief Forester explicitly reassured
    western interests in the agency's ``use book'' noting that water is the
    sovereign right of the State. Pinchot declared:

        ``The creation of the National Forest has no effect whatever on the
    laws which govern the appropriation of water. This is a matter governed
    entirely by State and Territorial law.''
                                 court actions
    Joyce Livestock vs. United States
    Idaho Supreme Court 2007--Opinion No. 23
    ``Beneficial Use Standard Defined''

        In the Joyce Livestock Company vs. United States, the Owyhee County
    based cattle operation had ownership dating back to 1898 including in-
    stream stock water rights. The United States over-filed on the Joyce
    water rights based on a priority date of June 24, 1934--the date of
    passage of the Taylor Grazing Act. A special master recommended the
    water right claimed by the United States be granted. District Court
    said the special master erred and that the agency lacked the necessary
    intent. District Court determined that Joyce needed to show evidence
    that they believed they had acquired such water rights in their grazing
    permit applications. The United States could not show that Joyce or any
    of its predecessors were acting as it agents when they acquired or
    claimed to have acquired the water rights. As had been required, Joyce
    made application for grazing rights under the Taylor Grazing Act on
    April 26, 1935. The District Court awarded Joyce water rights with a
    priority date of April 26, 1935.
        The United States appealed the District Court ruling to the Idaho
    Supreme Court regarding the in-stream water rights for stock watering
    claimed by the United States based on ownership and control of the
    Federal land under its management obligation in the Taylor Grazing Act.
    The Idaho Supreme Court denied the United States claim and defined the
    standard of beneficial use under the constitutional method. The Idaho
    Supreme Court said:

            ``The District Court held that such conduct did not constitute
            application of the water to beneficial use under the
            constitutional method of appropriation, and denied the claimed
            rights. The Idaho Supreme Court concurred holding that because
            the United States did not actually apply the water to a
            beneficial use the District Court did not err in denying its
            claimed water rights.''

        H.R. 3189 supports this important legal finding: Ownership or
    control of the land does not meet the constitutional method of putting
    the water to beneficial use, generally defined in State law as non-
    wasteful use of water such as agriculture, municipal, industrial,
    mining, and so forth for establishing ownership and control.

    United States vs. Wayne Hage
    Nevada Federal District Court (2013)
    ``Trespass and Access Rights Defined''

        The U.S. Forest Service and BLM in 2007 filed suit in Nevada
    Federal District Court against the estate of Wayne Hage alleging
    trespass on Federal lands arising from a long-standing conflict. Nevada
    District Court Chief Judge Robert C. Jones presided.
        At issue were water rights established by the Hage family in 1865
    based on beneficial use recognized long before Nevada was a State or
    the Forest Service was an agency of the Federal Government. Following
    the enactment of FLPMA, a pattern of harassment ensued by the Federal
    Government challenging cattle grazing rights, over-filing on livestock
    water rights and frustrating the rights of the ranchers to maintain 28
    miles of ditches across the Nevada desert to deliver long held water
    rights to pastures and livestock. The Congressional Act of July 1866
    (The Ditch Act) clearly protected the rancher's right to move water
    across the Federal lands. The Federal agency agreed, but held the
    maintenance to an impossible pick and shovel standard. The ongoing
    ditch dispute and the impoundment and sale by the U.S. Forest Service
    of $39,000 worth of cattle in 1991 moved the conflict into a series of
    lawsuits on takings and trespass.
        The U.S. Forest Service filed suit against the Hage Estate (Wayne
    died in 2006) for trespass related to cattle grazing and use of
    livestock water rights on the Federal grazing allotments. During
    questioning in a Reno courtroom on witness credibility Intermountain
    Regional Forester Harv Forsgren was found to be lying to the court. In
    a statement, Judge Jones stated: ``The most pervasive testimony of
    anybody was Mr. Forsgren. I asked him, has there been a decline in the
    region or district in AUMs (permitted animal unit months grazing). He
    said he didn't know. He was prevaricating. His answer speaks volumes
    about his intent and his directives to Mr. (Steve) Williams.'' Anybody
    of school age or older knows ``the history of the Forest Service in
    seeking reductions in AUMs and even the elimination of cattle grazing .
    . .''
        The agency's arrogance and view of the sovereign water rights of
    the State was highlighted when Steve Williams, Humbolt-Toiabe Forest
    Ranger, testified in a court deposition:

    ``despite the right (of the Hages) to use the water, there was no right
    to access it, so someone with water rights but no permit from the U.S.
    Forest Service would have to lower a cow out of the air to use the
    water, for example, if there were no (agency granted) permit to access
    it.''

        Judge Jones found:

         Congress prescribed grazing rights on Federal lands were
                to be granted based on a rancher's ownership of water
                rights established under local law and custom.
         Hage has a right of access to put his livestock water
                rights to beneficial use, therefore the livestock could not
                be found in trespass.
         USFS employee Steve Williams was found in contempt of
                court and guilty of witness intimidation.
         Tonopah BLM manager Tom Seley as found in contempt of
                court and guilty of witness intimidation.
         Williams and Seley were held personally liable for damages
                with fines exceeding $33,000.
         The Hage's were found guilty of only two minor trespass
                violations and were fined $165.88
         Regional Forester Harv Forsgren was excluded from
                testifying at trial during witness credibility hearing for
                lying to the Court.

        Chief Judge Robert C. Jones stated at the conclusion of the case:

            ``I find specifically that beginning in the late '70s and '80s,
            first, the Forest Service entered into a conspiracy to
            intentionally deprive the defendants here of their grazing
            rights, permit rights, preference rights.''

        In the related ``Constitutional Takings'' case, Wayne Hage in 1991
    sued the U.S. Forest Service in the U.S. Court of Federal Claims. The
    case went to trial in 1998 to determine property interests. In 2004, a
    second trial was commenced to determine which property had been taken
    and its value. In 2008, Chief Judge Loren E. Smith ultimately awarded a
    $4.4 million plus interest judgment against the Federal Government.
        As expected the United States appealed in the Federal Circuit Court
    of Appeals in Washington DC. The Appeals Court, a three judge panel in
    2012, overturned portions of the Smith decision including the financial
    judgment citing the claims were not ripe. But the Appeals Court
    expressly did agree that the Hage's have ``an access right'' to their
    waters on the Federal lands.

        H.R. 3189 supports historic ownership of livestock water rights and
    access: The bill recognizes water rights are the sovereign rights of
    the States and provides that livestock water rights established through
    the beneficial use method shall not be surrendered as a condition of
    use or access to livestock grazing rights on Federal allotments.

    Solid Waste Agency of Northern Cook County (SWANCC) vs. U.S. Army Corps
    of Engineers
    United States Supreme Court 159, 172-173 (2001)
    ``Defining Federal Agency's Administrative Authority''

        Without clear Congressional authorization, Federal agencies may not
    use their administrative authority to ``alter the Federal-State
    framework by permitting Federal encroachment upon traditional State
    power.''
        In SWANCC vs. U.S. Army Corps of Engineers the U.S. Supreme Court
    held that the Corps' use of the long controversial ``migratory bird
    rule'' adopted by the Corps and the U.S. Environmental Protection
    Agency to expand regulatory authority over isolated wetlands exceeded
    the authority granted by Congress.
        The Court chided the agency for over-reaching in its regulatory
    obligations and authority:
            ``Where an administrative interpretation of a statute invokes
            the outer limits of Congress's power, we expect a clear
            indication that Congress intended that result. This requirement
            stems from our prudential desire not to needlessly reach
            constitutional issues and our assumption that Congress does not
            casually authorize administrative agencies to interpret a
            statute to push the limit of congressional authority. This
            concern is heightened where the administrative interpretation
            alters the Federal-State framework by permitting Federal
            encroachment upon traditional State power. Unless Congress
            conveys its purpose clearly, it is not deemed to have
            significantly changed the Federal-State balance.

        H.R. 3189 supports limiting Federal agency interpretation of
    Congressional action: The bill clearly establishes Congressional intent
    supporting the historic Federal-State relationship and rights under
    western water law. Congress, beginning with the ``Ditch Act'' and more
    recently the McCarran Amendment and FLPMA, established a Federal-State
    framework for water ``waiving the sovereign immunity of the United
    States'' in water adjudications. H.R. 3189 backs this historic Federal-
    State relationship. It precludes the Forest Service and BLM from
    acquiring livestock water rights as a condition of the rancher's use of
    the grazing allotment and protects the holder of the livestock water
    right--a taking under the Constitution.
                                 utah conflict
        Water conflicts between Federal land management agencies and Utah
    have challenged sovereignty, ownership and access. The conflict seems
    to be about exercising Federal control, even over the State's water.
    Increased demands, growth and higher value of water has complicated the
    relationship leading to increasing conflict between Federal agents and
    Utah's livestock ranchers. This conflict is easily detailed in the
    Intermountain Region's filing claims on all livestock water associated
    with Utah's Forest grazing allotments to its demands of individual
    ranchers to relinquish their water rights or agreeing to ``joint
    ownership'' with the Forest Service. The demands for Utah water by the
    United States Forest Service control are unrelenting.
        Via FLPMA Congress declared that the United States would retain
    remaining public domain lands unless disposal of a parcel served the
    national interest. This Federal action changed resource management
    authority and undid land grant laws that had been in place for more
    than a century. The 1960 Multiple Use--Sustained Yield Act granted
    rights, privileges, use and occupancy with a legal status and non-
    revocable easement. FLPMA transitioned to greater use of ``permits''
    and special use authorization. ``Permit holders'' now were required to
    conduct activities based on conditions specified by the granting
    Federal agency. The reasonableness of the regulations and conditions of
    use are constantly in question. Whether its regulations issued by
    headquarters or the local determination, ``reasonable'' has become a
    contentious concept.
        The current test for reasonable regulations does not address the
    constitutional takings implications specifically as relates to
    livestock water rights on Federal lands.
        The issue of ``right'' vs ``permit'' has been hotly debated for
    generations among ranchers, rancher advocates and the Federal agencies
    since FLPMA altered the relationship.
        The Taylor Grazing Act of 1934 granted a ``grazing right'' that was
    tied to a Federal grazing allotment. The courts have held that the
    rights granted by Congress to harvest forage on Federal grazing
    allotment are ``Chiefly valuable for livestock grazing.'' This legally
    recognized right in turn provided a level of assurance for ranchers to
    use their livestock water rights and ultimately to put them to
    beneficial use as required by Utah law.
        When conflicts arose, the courts generally upheld the United States
    right to control and regulate often adversely impacting access to
    Federal grazing allotments and use which were often adverse to grazing
    rights and use of livestock water rights.
        Confrontation between Federal land managers and livestock grazing
    interests became a part of doing business. Mostly, those with sheep and
    cattle grazing permits capitulated to the force of the Federal agents
    and the courts. Cuts in grazing permits and the Federal agencies
    accumulating suspended use grazing permits became common place in Utah
    and across the west. Reducing livestock numbers or limiting access to
    grazing allotments, can provide a defacto water right to the Federal
    agency based on the rancher's inability to use their livestock water
    rights.
        Under Utah law if water is not put to beneficial use for a
    prescribed period of 7 years, the water right is forfeited. Forest
    Service agents have the ability to control allotment access, determine
    use at the location of the livestock water right, set the numbers of
    sheep and cattle on the allotment using the water and ultimately the
    Federal Government determines the ability of the rancher to put his
    livestock water right to beneficial use.
        Challenging Federal authority has been almost futile. Few have the
    financial resources to engage in what the Federal agencies assured
    livestock ranchers would be costly and protracted litigation. The
    ranchers were and continue to be at a decided disadvantage to the tax-
    payer funded deep Federal pockets and army of agency lawyers they would
    meet at trial.
    Diligence Claims
        The aggressive posture of the Forest Service in collecting western
    water rights shows that the Intermountain Region (Utah, Nevada, Idaho
    and Colorado) has filed on or holds in ``excess of 38,000 stock water
    rights.'' These claims has been ongoing in Utah for generations. To
    date, these demands exceed 16,000 diligence claims made on livestock
    water rights scattered across Utah's forest allotments. Regional
    Forester Harv Forsgren argued these diligence claims are made on behalf
    of the United States, which was the owner of the land where livestock
    grazed prior to statehood and livestock watering took place which
    action established the Federal Government's claim to water rights.
        A ``Diligence Right'' or ``Diligence Claim'' under Utah law is a
    claim to use the surface water where the use was initiated prior to
    1903. In 1903, statutory administrative procedures were first enacted
    in Utah to appropriate water. Prior to 1903, the method for obtaining
    the right to use water was simply to put the water to beneficial use.
    To memorialize a diligence claim, the claimant has the burden of proof
    of the validity of beneficial use prior to 1903. Interestingly, the
    Intermountain Region's diligence claims pre-date the 1905 establishment
    of the Forest Service. These claims will ultimately be determined by
    the State Engineer under the guidance of the Utah Legislature.
    Intermountain Region Policy
        In a letter dated June 29, 1984, Robert H. Tracy, Director of
    Watershed and Air Management for the U.S. Forest Service stated nine
    reasons why his agency needed to control the water and why livestock
    water rights should remain on the land rather than with the ranchers
    holding the grazing permits. This action identifies the transition
    point of the U.S. Forest Service to a more aggressive Federal agency in
    dealing with water issues in the western public lands States.
        The Intermountain Region has made and continues to make the
    argument that it is important for the Federal Government to hold the
    water rights to assure continued livestock grazing on public lands. In
    an August 15, 2008 Intermountain Region Briefing Paper addressing the
    2003 Nevada law that precludes the Nevada State Engineer from approving
    any new applications, permits or certificates filed by the United
    States for stock water the Regional Forester said: ``It is the policy
    of the Intermountain Region that livestock water rights used on
    national forest grazing allotments should be held in the name of the
    United States to provide continued support for public land livestock
    grazing programs.''
        The decision by Nevada to preclude the Forest Service from
    ownership of water rights led to stonewalling and ultimately little or
    no water development or investment (both agency and private) in
    livestock water rights.
        An Intermountain Region guidance document dated August 29, 2008
    provides important insights into the agency's legal strategy on Forest
    Service water claims: ``The United States may claim water rights for
    livestock use based on historic use of the water. Until a court issues
    a decree accepting these claims, it is not known whether or not these
    claims will be recognized as water rights.''
        This aggressive policy continues as Mr. Forsgren presented in
    testimony before the House Subcommittee on National Parks, Forests and
    Public Lands on March 12, 2012. He noted the Nevada legislation that
    precludes the United States from holding livestock water rights telling
    the Subcommittee: ``The Forest Service believes water sources used to
    water permitted livestock on Federal land are integral to the land
    where the livestock grazing occurs; therefore the United States should
    hold the water rights for current and future grazing.''
        The U.S. Forest Service manual currently under consideration for
    reauthorization defines a possessory claim to water rights in the name
    of the United States and directs personnel to:

            ``Claim water rights for water used by permittees, contractors
            and other authorized users of the National Forest System, to
            carry out activities related to multiple use objectives. Make
            these claims if both water use and water development are on the
            National Forest System . . .''

        The United States Constitution and Utah Constitution protect
    private property from being taken by government without just
    compensation. The Utah Constitution further protects private property
    from taking or damage without just compensation. Claiming historic
    water rights without just compensation and due process violates
    Constitutional protections.
    Utah Livestock Water Rights Act
        Recognizing rancher frustrations with protecting livestock water
    rights and armed with the Idaho Supreme Court Joyce Livestock decision,
    in early 2008 Utah Representative Mike Noel introduced legislation to
    define and protect the rights of ranchers holding State livestock water
    rights on Federal grazing allotments.
        As relates to H.R. 3189, The Utah Livestock Water Rights Act (Utah
    Code Title 73 Chapter 3 Section 31) provided two important and
    fundamental principles:

      1.  ``the beneficial user of a livestock watering right is defined as
                the grazing permit holder for the allotment to which the
                livestock watering right is appurtenant.''

        This is important because it identified livestock using the water
    as a beneficial user and associated it with the allotment managed by
    the Federal Government agencies. The Utah State Engineer was directed
    to issue a ``Livestock Water Right'' Certificate. The State Engineer
    noted for the record, the Certificate does not quantify or establish an
    adjudicated Utah water right.
        The Act however defined the ``beneficial user'' as the ``person who
    owns the grazing permit.'' The Regional Forester immediately argued the
    United States is the owner and filed for the livestock water rights on
    every active livestock grazing allotment in Utah. Recognizing the
    Nevada conundrum and faced with the claim by the Regional Forester to
    water ownership on every grazing allotment, the Utah Legislature
    amended the Utah Livestock Water Rights Act providing ``joint
    ownership''--the rancher and the Federal agency. Forest employees
    immediately and actively encouraged ranchers to sign the joint
    ownership agreement.
        In addition, Utah's Livestock Water Right Statute also provides
    that the livestock water right is tied to the grazing right and
    appurtenant to the Federal grazing allotment. It reads:

      2.  ``A livestock water right is appurtenant to the allotment on
                which the livestock is watered.''

        This is an important provision in Utah law that addresses the
    Federal agency's argument they need to hold the water right to assure
    the multiple use and grazing mandate. Utah provides a greater level of
    assurance to this end than the Federal agency's assurances and the
    whims of the legal system.
        Utah joining Idaho and Nevada in precluding the Forest Service from
    holding or acquiring livestock water rights increased the pressure from
    the agency. The Journal of Land, Resources and Environmental Law in
    2009 noted the 2008 Utah Livestock Water Rights Act impacted Federal
    agencies and that dispute could affect their relationship with
    livestock producers ``who depend on cooperation for management of these
    grazing allotments on Federal land.''
        Before the 2009 Utah Legislature, the Regional Forester pointed out
    the Nevada conundrum to policymakers. With no interest in the water for
    the United States on Federal land in Nevada, the approvals for
    maintenance and development of water came to a standstill. This very
    real threat by the Federal Government was the catalyst for amending the
    Utah Act to provide for a certificate of ``joint ownership'' in
    livestock water.
                                   h.r. 3189
                        the water rights protection act
    Tooele County Grazing Association
        H.R. 3189 specifically addresses conflicts and potential
    misunderstanding between agencies and ranchers as happened in Tooele
    County Utah.
        Ranchers with livestock grazing rights on Forest Service
    administered lands in Utah's Tooele County west of Salt Lake City in
    the spring of 2012 were confronted with a packet from the local Forest
    agents seeking a ``sub-basin claim'' from the Utah Division of Water
    Rights. The packet specifically called for the ranchers to sign a
    ``change of use'' application allowing the Forest Service to then
    determine what and where the use of the livestock water would be. In
    effect, the request would allow the Federal agents to then determine
    use, including changing it from livestock to wildlife, recreation or
    elsewhere.
        The ranchers objected to the Forest service request. The request
    then became a demand and the ranchers were told that not complying
    could adversely affect their ``turn-out'' or the release of their sheep
    or cattle onto their Forest grazing allotments.
        The ranchers were concerned that the actions of the Federal agents
    compromised their livestock water rights and ultimately take from them
    not only the value of their water rights, but could take the value of
    the livestock feed associated with the grazing allotment.
        The ranchers brought Utah Farm Bureau into discussions with the
    Forest personnel, Utah water rights authorities, State and local
    officials and Farm Bureau leaders. It should be noted the Forest
    personnel objected to the acquisition of strong arming to get the
    ``change'' documents signed. The ranchers stood their ground pointing
    out they were in fact told not complying could hurt access onto their
    grazing allotment. This Forest Service action called for the
    relinquishment of the water right in exchange for approving the
    conditional use of the grazing allotment.
        In a follow up meeting with ranchers and Farm Bureau, local Forest
    employees were now accompanied by the Regional Forester. Mr. Forsgren
    told the group there must have been a misunderstanding. The local
    Forest agents in asking for the ``change'' application should have been
    asking for a joint ownership certificate. He further stated, any
    inference that not complying with the request would adversely impact
    access to the grazing allotment was a misunderstanding as well.
        H.R. 3189 will assure that these ``misunderstandings'' and Federal
    agents seeking ownership of livestock water rights as a condition of
    access to the Federal grazing allotment does not happen in the future.
    Congress provided for grazing on Federal lands to harvest renewable
    forage to invest in the rural economy and provide meat protein to all
    Americans. As Federal agencies manage under multiple use principles,
    the State of Utah has provided assurances that livestock water will
    remain on the land with the grazing allotment.
        This concludes my prepared testimony.

                                  attachment a
                              U.S. Forest Service
                   Importance of National Forest System Lands
                      in the U.S. Continental Water Supply

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

       National Forest System Lands are the largest single
    source of water in the continental United States, over 14 percent of
    available supply.
                                  attachment b
                          United States Forest Service
                              Intermountain Region

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. McClintock. The Chair is now pleased to recognize Mr.
    Glenn Porzak, attorney for the National Ski Area Association,
    from Boulder, Colorado to testify. Welcome.

     STATEMENT OF GLENN PORZAK (H.R. 3189), ATTORNEY, NATIONAL SKI
                  AREAS ASSOCIATION, BOULDER, COLORADO

        Mr. Porzak. Thank you very much. I appreciate the
    opportunity to testify today in support of H.R. 3189. I am here
    principally on behalf of the National Ski Areas Association,
    but also here on behalf of the Eagle River Water and Sanitation
    District and the Upper Eagle Regional Water Authority. With
    regard to the National Ski Areas Association, as has been
    mentioned, it has 121 members that operate under Forest Service
    lands, and that constitutes the majority of the ski area visits
    in the United States, and they are located in 13 separate
    States. Those ski areas generate over $12.2 billion in annual
    revenue.
        With regard to the Eagle River Water and Sanitation
    District and the Upper Eagle Regional Water Authority, they
    serve the over 60,000 people from the areas of Vail to Wolcott.
    That spans the congressional districts of both Congressman
    Tipton and Congressman Polis. And they are the second-largest
    municipal water supplier on the Western slope of Colorado.
        The ski industry, as has been mentioned, literally spends
    collectively hundreds of millions of dollars on the water
    rights that they use for their various operations. They are
    valuable assets to the ski area owners, and that water is
    absolutely crucial to their operations and their future growth.
        In turn, those operations and that future growth directly
    impacts the rural and mountain economies in which those ski
    resorts operate. They employ over 160,000 people in those rural
    and mountain environments, and their economies as well depend
    on that investment in the water. If there is not enough water
    for the snowmaking, for the domestic uses, then you are going
    to see a major impact to the resort communities that are in the
    vicinity of those ski areas.
        One of the important points that I want to make is that we
    talk in terms of the fact that this is a ski area issue. It is
    far more than a ski area issue. In the course of the original
    litigation over the first water right directive that was
    issued, it was discovered that not only is there a directive
    issued specifically at the ski areas, but there are other
    directives that are issued at municipal water providers, the
    grazing industry, and others. And indeed the legislation
    proposed would prevent the taking of water rights, not just of
    the ski areas, but also the municipalities and the grazers and
    other resort communities. And that is an important thing to
    keep in mind, that there is a systemwide impact, if you will,
    that we believe violates not only the Fifth Amendment of the
    U.S. Constitution, but also the congressional authorization
    that the Forest Service has.
        The next point that I want to make is that Congress has not
    delegated the authority to the Forest Service to use its
    Federal land use power to seize water rights owned by non-
    Federal entities. Whether you look to the Federal Land Policy
    Management Act, to the National Forest Management Act, or any
    other of the organic Acts, they defer to State law and make it
    clear that the Forest Service does not have the authority to
    take water rights under their land use authorities.
        And the last point is that this is not a new issue. Over 20
    years ago this effort was attempted by the Forest Service, and
    as a result of that Congress formed the Federal Water Rights
    Task Force, and it issued a report in August of 1997, and I
    will just quote from that. ``Congress has not delegated to the
    Forest Service the authority necessary to allow it to require
    that water users relinquish a part of their existing water
    supply or transfer their water rights to the United States as a
    condition of the grant or renewal of the Federal permits.''
        Thank you very much. I look forward to answering any
    questions you may have.
        Mr. McClintock. Thank you, Mr. Porzak.
        [The prepared statement of Mr. Porzak follows:]
       Prepared Statement of Glenn Porzak, Attorney, National Ski Areas
                         Association, Boulder, Colorado
        Thank you for the opportunity to testify today in support of H.R.
    3189 on behalf of the National Ski Areas Association (NSAA), the Eagle
    River Water and Sanitation District (District) and the Upper Eagle
    Regional Water Authority (Authority). The NSAA has 121 member ski areas
    that operate on National Forest System lands under a special use permit
    from the U.S. Forest Service. These public land resorts accommodate the
    majority of skier visits in the U.S. and are located in 13 States. The
    ski industry generates $12.2 billion in economic activity annually. The
    District and Authority collectively provide municipal water service to
    over 60,000 people from Vail to Wolcott. This area spans the districts
    of Congressmen Polis and Tipton in Colorado. The District and Authority
    are the second largest municipal water provider on Colorado's western
    slope.
        Collectively, ski areas have invested hundreds of millions of
    dollars on water rights to support and enhance their operations. Water
    is crucial to ski area operations and ski area water rights are
    considered valuable assets to ski area owners. Water is crucial to
    future growth of ski areas, and that future growth directly impacts the
    rural economies associated with ski areas. Ski areas are major
    employers in rural economies, employing 160,000 people, and help drive
    job creation in rural and mountain economies. The same is true for
    municipal water providers; in particular, those that provide water
    service to the resort communities. They have invested hundreds of
    millions of dollars on their water rights, and those water rights are
    essential to meeting their water service obligations to many thousands
    of people.
        This bill responds to recent Forest Service attempts to implement
    permit conditions that require the transfer of privately and publically
    held water rights on National Forest system lands to the Federal
    Government as a permit condition. There is no compensation for these
    mandated water right transfers despite the fact that the ski areas and
    municipal providers have invested millions of dollars in developing
    these water rights. The Forest Service has issued directives to this
    effect that apply to not only the ski industry, but all other special
    use permit holders on Forest System lands, including municipal water
    providers, recreation residences, resorts, marinas and other users. By
    issuing these directives, the Forest Service has not only violated the
    Fifth Amendment to the U.S. Constitution by taking property without
    paying compensation, it has attempted to use its permitting authority
    to circumvent long established Federal and State water laws. The Water
    Rights Protection Act protects these privately and publically held
    water rights, prohibits Federal takings, and upholds State water law
    by:

        --Prohibiting agencies from implementing a permit condition that
                requires the transfer of water rights to the Federal
                Government in order to receive or renew a permit for the
                use of land;
        --Prohibiting the secretary of the Interior and the Secretary of
                Agriculture from requiring water users to acquire water
                rights for the United States, rather than for the water
                user themselves;
        --Upholding longstanding Federal deference to State water law.

        This bill does not create new law as Congress has not delegated
    authority to the Forest Service to use its Federal land use power to
    seize water rights owned by non-Federal entities. Specifically, none of
    the governing Federal statutes delegate such authority to the Forest
    Service, including the Organic Administration Act of 1897 (16 U.S.C.
    Sec. 475, 481, & 526), Sec. 505 of the Federal Land Policy and
    Management Act of 1976 (``FLPMA'') (43 U.S.C. Sec. 1765), NFMA (16
    U.S.C. Sec. 1604(i)), or the Ski Area Permit Act of 1986 (16 U.S.C.
    Sec. 497b). In fact, FLPMA and NFMA provide for the protection of valid
    existing rights and FLPMA requires that water is to be allocated in
    accordance with water rights established under State law. See
    Sec. 701(g) and (h) of FLPMA (43 U.S.C. Sec. 1701, note re: Savings
    Provisions, Pub. L. 94-579); Sec. 505 of FLPMA (43 U.S.C. Sec. 1765);
    and NFMA, 16 U.S.C. Sec. 1604(i).
        In 1996, Congress created a Federal Water Rights Task Force, P.L.
    104-127 Sec. 389(d)(3), in response to a controversy in Colorado over
    the attempt by the Forest Service to require permit holders to
    relinquish part of their water supply for secondary National Forest
    purposes as a permit condition. In its August 25, 1997 Report, the
    Federal Water Rights Task Force concluded that ``Congress has not
    delegated to the Forest Service the authority necessary to allow it to
    require that water users relinquish a part of their existing water
    supply or transfer their water rights to the United States as a
    condition of the grant or renewal of Federal permits. . . .'' The Task
    Force further concluded that ``[u]nless Congress explicitly granted to
    the Forest Service the authority to use permitting authority to require
    bypass flows or the transfer of title to the United States, the Forest
    Service must respect and protect non-Federal water rights in its
    planning and decisions, and it must attain National Forest purposes
    through the acquisition and exercise of Federal water rights in
    priority.'' (Part VI, Paragraph 1).
        The Task Force also stated that the Forest Service must recognize
    that:

            water rights established under State law are property rights
            for purposes of the Fifth Amendment to the United States
            Constitution [and that] because Congress severed water from the
            public lands and allowed third parties to obtain vested rights
            in and to the continued use of water derived from public lands
            absent an explicit grant of authority by Congress, the
            authority of the Forest Service derived from the Property
            Clause of the United States Constitution and land management
            statutes does not include the ability to use land management
            authority to reallocate or otherwise obtain for Federal use,
            without the payment of just compensation, water that has been
            appropriated by or on behalf of non-Federal parties. (Part VII
            B, Paragraph 2).

        For the same reasons detailed by the Task Force Report, the Forest
    Service's efforts to gain control over water rights are invalid because
    they exceed the Forest Service's legal authority and the implementation
    would result in an unlawful taking of property without just
    compensation in violation of the Fifth Amendment of the U.S.
    Constitution. Thus, H.R. 3189 complies with and is supported by both
    Federal constitutional and statutory law.

                                     ______

        Mr. McClintock. The Chair is now pleased to recognize Mr.
    Tony Willardson of the Western States Water Council, based in
    Murray, Utah, to testify.

     STATEMENT OF TONY WILLARDSON (H.R. 3176), EXECUTIVE DIRECTOR,
               WESTERN STATES WATER COUNCIL, MURRAY, UTAH

        Mr. Willardson. Thank you, Mr. Chairman and Representative
    Napolitano and the other members of the subcommittee. The
    Council is an advisory body to the Western Governors and our
    members are appointed by the Governors and represent senior
    water managers and administrators. It is actually a little
    ironic that I am here after being snowed-in in South Dakota for
    3 days, that I am here to talk about drought. And I spent 3
    days in a hotel with a good friend of Mr. Amodei's, Mr. Roland
    Westergard, who is a member of the Council.
        My testimony is based on a position, which is included for
    your review. And as part of that I would also like to recognize
    that part of this Act authorizes the Secretary to work with
    other Federal and State agencies in providing hydrologic data
    collection and water supplier forecasting. And before you, I
    believe you have a brochure which talks about another program
    that we support, the National Integrated Drought Information
    System, which includes the support of the Department of the
    Interior.
        Drought has been and continues to be serious in the West.
    This is an October 1 diagram of the extent of the drought.
    While there has been some alleviation, there is still most of
    the West that is afflicted by moderate to extreme drought, with
    a few exceptions, and with a few areas where there is still
    exceptional drought.
        NOAA has determined that three of the five most costly
    weather-related disasters, including Katrina and Superstorm
    Sandy, the other three are drought. We are still calculating
    the cost of the drought last year. Actually, it was record-
    breaking and compares only to the drought of 1934 in terms of
    its persistence and magnitude. It is also unusual in its quick
    onset and has become known as a flash drought. And it will be
    some time before we can fully calculate all of the costs. But
    that highlights the need to focus resources on planning for and
    mitigating drought impacts.
        These antecedent conditions we anticipate will mean the
    drought will be with us for some time, with continuing impacts
    on the economy, the environment, and other interests. As was
    mentioned by Representative Napolitano, it is estimated that
    drought costs $6 to $8 billion a year in the United States. To
    the ski industry last year, it is estimated that skier visits
    were down nearly 12 percent in 2012 compared to 2011. Seventy
    percent of the Nation's crop and livestock production was
    affected last year. There was over a billion dollars in damages
    due to wildfire. And the Colorado River experienced its worse
    or its driest year since records began in 1985, with only 44
    percent of the average annual runoff.
        But notwithstanding the severity, in the past we have taken
    a reactive approach to responding to drought on an ad hoc
    basis, and we need to be much more proactive. In 1996 the
    Western Governors set a goal, an aggressive goal, changing the
    way we deal with drought and responding to drought and being
    more prepared. And we have worked with a number of Federal
    agencies, including the Bureau of Reclamation, to improve our
    management. One out of every five farmers in the West is served
    by the Bureau of Reclamation, along with 31 million people. And
    they have a very important role to continue to play in water
    supply management and reliability in the West.
        I mentioned, too, that with respect to the assistance that
    they provide under the Act, the authorities that are unique,
    they have the ability to participate in drought banks, as well
    as to acquire water from willing buyers and facilitate trades
    between buyers and sellers, to provide water under temporary
    contracts, and also make reclamation facilities available for
    the storage and conveyance of both project and nonproject
    water, as well as to acquire water for fish and wildlife.
        With respect to planning, Benjamin Franklin said, ``By
    failing to plan, you are preparing to fail.'' And the planning
    aspects of this bill are also important. States have primary
    authority over the allocation of use of water, and I want to
    emphasize that. But we have long supported integrated water
    resources management and planning and the need for
    comprehensive respond to drought.
        And I just conclude by saying that if the exceptional
    drought conditions that we have, and absent reauthorization of
    this bill, it will be even more difficult to address many of
    the challenges that we face and there will be serious
    consequences for small communities, for tribes, and others who
    do not have the resources that are available to them and
    assistance through this Act. Thank you very much, Mr. Chairman.
        Mr. McClintock. Great. Thank for your testimony.
        [The prepared statement of Mr. Willardson follows:]
     Prepared Statement of Anthony Willardson, Executive Director, Western
                       States Water Council, Murray, Utah
      H.R. 3176--to reauthorize the Reclamation States Emergency Drought
                               Relief Act of 1991
                                i. introduction
        Chairman McClintock, Ranking Member Napolitano and Members of the
    Subcommittee, the Western States Water Council (WSWC) is a non-partisan
    policy advisory body closely affiliated with of the Western Governors'
    Association (WGA). The WSWC represents 18 western States and WSWC's
    members are appointed by their respective Governors to represent their
    States. Our membership includes senior state water managers and
    administrators. Moreover, 12 Federal agencies, including the U.S.
    Bureau of Reclamation, have appointed representatives that comprise a
    Western Federal Agency Support Team (WestFAST) working with western
    Governors to address pressing western water issues, including drought.
        Our testimony is primarily based on WSWC Position #347, which
    strongly supports legislation to reauthorize the Reclamation States
    Emergency Drought Relief Act (43 U.S.C. 40), providing the Bureau of
    Reclamation with much-needed tools to respond to record-breaking
    drought. Of note, ``The Secretary is authorized to work with other
    Federal and State agencies to improve hydrologic data collection
    systems and water supply forecasting techniques to provide more
    accurate and timely warning of potential drought conditions and drought
    levels that would trigger the implementation of contingency plans.''
        The WSWC strongly supports such authorized activities and similarly
    reauthorization of the National Integrated Drought Information System
    (NIDIS).
                            ii. drought in the west
        Drought has been, is, and will be an ongoing fact of life in the
    arid West. While conditions in many areas have improved recently, much
    of the West and Midwest continue to be affected by moderate to extreme
    drought, with a few areas of exceptional drought, as illustrated by the
    U.S. Drought Monitor of October 1, 2013. In the Summer of 2012, some
    two-thirds of the country was experiencing some level of drought, and
    this past spring nearly half the Nation was affected by moderate to
    exceptional drought conditions.\1\
    ---------------------------------------------------------------------------
        \1\ Kelly Helm Smith, Drought Shifts West on April 23 U.S. Drought
    Monitor as Heavy Rains Drench the Midwest, Nat'l Drought Mitigation
    Ctr. News (Apr. 18, 2013), http://drought.unl.edu/NewsOutreach/
    NDMCNews.aspx?id=90.
    ---------------------------------------------------------------------------
        Unfortunately, the most up-to-date information is unavailable due
    to the shut-down of National Oceanic and Atmospheric Administration's
    (NOAA) Web site, www.drought.gov.
        Of note, NOAA estimates that three of the five most costly U.S.
    weather related disasters were droughts--with Hurricane Katrina ranked
    #1, and Super Storm Sandy #4. The cost of the Drought of 2012 has yet
    to be fully calculated. Still, the figures available underscore the
    economic, environmental and social costs related to drought, and the
    need to focus more resources on planning for and mitigating drought
    impacts, as well as facilitating a prompt response during drought
    emergencies.
        Although recent precipitation has somewhat improved drought
    conditions, particularly in the Midwest,\2\ the U.S. Seasonal Drought
    Outlook suggests drought will likely persist in much of the West for
    some time.
    ---------------------------------------------------------------------------
        \2\ Id.
    ---------------------------------------------------------------------------
        Dry conditions this past summer follow the record breaking drought
    of 2012, which was unique in terms of its sudden onset, persistence,
    and magnitude--both in terms of extremes and the large geographic area
    affected.\3\ For example, over 60 percent of the contiguous U.S.
    experienced moderate to extreme and exceptional drought during 2012,
    with only 1934 comparable in duration and geographic extent.\4\ Last
    year, was also the warmest year on record for the contiguous U.S.
    dating back to 1895.\5\
    ---------------------------------------------------------------------------
        \3\ Hearing on Drought, Fire and Freeze: The Economics of Disasters
    for America's Agricultural Producers before the U.S. Senate Committee
    on Agriculture, Nutrition, and Forestry, 113th Cong. 1, 3 (Feb. 14,
    2013) (statement of Roger Pulwarty, Director, National Integrated
    Drought Information System).
        \4\ Id.
        \5\ Nat'l Climatic Data Center, Wildfires--Annual 2012 (Jan. 7,
    2013), http://www.ncdc.noaa.gov/sotc/fire/2012/13.
    ---------------------------------------------------------------------------
        Not surprising, these antecedent conditions coupled with the
    ongoing drought have adversely impacted a broad spectrum of economic,
    environmental, and other interests across the West and the Nation as a
    whole, the effects of which will reverberate for years to come.
    Examples include:

         According to some estimates, drought costs the U.S.
                economy between $6 billion to $8 billion per year,\6\ with
                the cost of the 2012 drought possibly exceeding $35
                billion.\7\
    ---------------------------------------------------------------------------
        \6\ W. Governors Ass'n, Creating a Drought Early Warning System for
    the 21st Century, preface (2006), http://westgov.org/reports/
    doc_download/394-creating-a-drought-early-warning-system-for-the-21st-
    century-nidis.
        \7\ Pulwarty, supra note 3 at 2 (citing Aon Benfield Reinsurance
    Group's Annual Global Climate and Catastrophe Report).
    ---------------------------------------------------------------------------
         Agriculture accounted for much of the economic costs of
                the 2012 drought,\8\ due in part to moderate or exceptional
                drought conditions affecting around 70 percent of the
                Nation's crop and livestock production at certain times
                during the year.\9\
    ---------------------------------------------------------------------------
        \8\ Id.
        \9\ U.S. Dep't of Ag., Economic Research Service, U.S. Drought
    2012: Farm and Food Impacts, http://www.ers.usda.gov/topics/in-the-
    news/us-drought-2012-farm-and-food-impacts.aspx#.UXhHzbU4udh.
    ---------------------------------------------------------------------------
         For only the third time in over 40 years, wildfires across
                the country burned more than 9 million acres in 2012,
                causing over $1 billion in damage.\10\ The most damaging
                fires occurred in the West, including the Whitewater-Baldy
                Fire which burned 297,845 acres in New Mexico's Gila
                National Forest.\11\
    ---------------------------------------------------------------------------
        \10\ Pulwarty, supra note 2 at 1; Nat'l Climatic Data Center,
    Wildfires--Annual 2012 (Jan. 7, 2013), http://www.ncdc.noaa.gov/sotc/
    fire/2012/13.
        \11\ U.S. Forest Serv., Whitewater-Baldy Complex Final Community
    Update (June 28, 2012), http://www.fs.usda.gov/detail/gila/news-events/
    ?cid=STELPRDB5377297.
    ---------------------------------------------------------------------------
         The Colorado River Basin experienced one of its driest
                years in the 1895-2012 period of record, with only 44
                percent of its annual average runoff.\12\
    ---------------------------------------------------------------------------
        \12\ Pulwarty, supra note 3 at 1.
    ---------------------------------------------------------------------------
         Skier visits to the 21 resorts that comprise Colorado Ski
                Country USA were down 11.5 percent in 2012, compared to
                2011.\13\
    ---------------------------------------------------------------------------
        \13\ Id.

        Notwithstanding the severity of these impacts and the relative
    frequency of drought in many parts of the West and the Nation, in
    general, we have to often taken a reactive approach to drought,
    responding on an ad hoc basis to each drought crisis as it develops.
    However, over the years, many western States and Federal agencies have
    undertaken more proactive approaches to coordinated planning and
    preparedness intended to avoid or mitigate adverse impacts before they
    happen.
        Of note, in the 1996 Drought Response Action Plan, the WGA set an
    aggressive goal of changing the way our Nation prepares for and
    responds to drought, with subsequent efforts by the WGA and the WSWC
    designed to promote a comprehensive, coordinated, and integrated
    response to drought at all levels of government. We have worked with
    Federal agencies, including the Bureau of Reclamation, to promote,
    proactive, cooperative drought contingency planning and response.
            iii. the reclamation states emergency drought relief act
        The Bureau of Reclamation is the Nation's largest wholesale water
    supplier, providing water to over 31 million people and supplying
    irrigation water to one out of five western farmers.\14\
    Notwithstanding Reclamation's vital role as a water supplier in the
    West, the Act constitutes the whole of its specific drought response
    and planning authority. Consequently, failure to reauthorize the Act
    will limit Reclamation's ability to deliver assistance in response to
    present drought impacts and also limit its ability to help States,
    tribes, and other stakeholders plan for mitigating and minimizing
    future drought impacts.
    ---------------------------------------------------------------------------
        \14\ U.S. Bureau of Reclamation, Bureau of Reclamation: Facts and
    Information, (Jan. 4, 2013), http://www.usbr.gov/main/about/fact.html.
    ---------------------------------------------------------------------------
    A. Title I--Assistance During Drought
        Title I of the Act authorizes Reclamation to undertake
    construction, management, and conservation measures during drought to
    minimize or mitigate damage or loss, including authority to act as a
    ``last resort'' to aid smaller towns, counties, and tribes that lack
    the financial capacity to address drought impacts on their own. It also
    authorizes Reclamation to acquire water to meet diverse requirements
    under the Endangered Species Act, while at the same time benefiting
    water users and water delivery contractors at a time when they often
    face significant financial challenges. Other beneficial drought
    response actions that Reclamation can undertake under Title I include:

         Participation in water banks established under Federal
                law;
         Facilitation of water acquisitions between willing buyers
                and willing sellers;
         Acquisition of conserved water for use under temporary
                contracts;
         Making Reclamation facilities available for storage and
                conveyance of project and non-project water;
         Making project and non-project water available for non-
                project uses; and
         Acquisition of water for fish and wildlife purposes.

    B. Title II--Drought Contingency Planning
        Title II of the Act responds to Benjamin Franklin's oft-quoted
    adage: ``By failing to plan, you are preparing to fail.'' Specifically,
    it authorizes Reclamation to assist and participate in the preparation
    of drought contingency plans in all 50 States and U.S. territories to
    help prevent or mitigate future drought-related losses. Title II also
    authorizes Reclamation to conduct studies to identify opportunities to
    conserve, augment, and make more efficient use of water supplies that
    are available to Federal Reclamation projects and Indian water resource
    developments to better prepare for and respond to drought conditions.
        States have primary authority over the allocation and protection of
    water resources within their borders. However, the WSWC has long
    supported integrated water resource management and encourages the
    development of comprehensive water plans with State leadership and
    Federal assistance. This includes a comprehensive and integrated
    response to drought in which States work with Federal agencies, local
    communities, and other stakeholders to develop proactive drought
    preparedness and contingency plans.
        Title II authorizes Reclamation to engage in exactly this type of
    planning, which is critical to the social, environmental, and economic
    well-being of the West. Reauthorization of the Act is needed to
    maintain Reclamation's ability to carry out this important work.
    Otherwise, States, tribes, and local communities will likely be
    deprived of much needed technical assistance and expertise at a time
    when some projections indicate that large portions of the West,
    particularly the Southwest, will become hotter and drier in coming
    years. Many of these areas are also experiencing increasing demands on
    already scarce water supplies due to rapidly growing populations,
    environmental requirements, energy resource development and other
    factors. As a result, the need for effective drought preparedness and
    contingency plans has never been greater. Of note, many of the
    enumerated elements of such plans, including water banks and water
    rights transfers (both temporary and permanent), may require State
    authorization.
                                 iv. conclusion
        The exceptional drought conditions of 2012 and the ongoing drought
    that covers much of the West underscores the need to reauthorize the
    Act. Reauthorization will provide Reclamation with clearer direction
    and greater flexibility to continue delivering water and much needed
    financial and technical assistance to States, tribes and local
    communities suffering from record-breaking drought impacts.
    Reauthorization will also facilitate more effective State-based and
    other grassroots drought preparedness and mitigation efforts. Absent
    reauthorization, Reclamation will lack critical authority to provide
    emergency assistance.
        Moreover, given our member States' experience with implementation
    of the Act, it may be well to further evaluate the current needs of the
    States, tribes and local communities and Reclamation's existing
    authorities and capability to assist in meeting those needs as
    appropriate. With minor exceptions, such as the drilling of wells, the
    Act authorizes only temporary, non-structural actions. To maximize the
    effectiveness and efficiency of such actions, they should be considered
    and undertaken within the context of both State emergency drought
    response plans, but broader State water planning activities.
        Notably, the Act provides that the programs and authorities become
    operative ``only after the Governor or Governors of the affected State
    or States . . . has made a request for temporary drought assistance. .
    . .'' Further, the Act states, ``All actions taken pursuant to this
    chapter pertaining to the diversion, storage, use, or transfer of water
    shall be in conformity with applicable State and applicable Federal
    law.'' Last, ``Nothing in this chapter shall be construed as expanding
    or diminishing State, Federal, or tribal jurisdiction or authority over
    water resources development, control, or water rights.''
        The WSWC appreciates the opportunity to submit this testimony and
    urges the Committee to favorably report H.R. 3176 to reauthorize the
    Act.

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. McClintock. And the Chair is now pleased to recognize
    Mr. Wayne Crews, Vice President for Policy and Director of
    Technology Studies for the Competitive Enterprise Institute
    based in Washington, DC, to testify. Welcome to the committee.

         STATEMENT OF WAYNE CREWS (H.R. 3176), VICE PRESIDENT,
            COMPETITIVE ENTERPRISE INSTITUTE, WASHINGTON, DC

        Mr. Crews. I am Wayne Crews, Vice President for Policy at
    CEI, and I thank the committee for the invitation to address
    Federal drought relief funding and planning. I come at this
    issue from the perspective of one who spends most of my time on
    tech and frontier policy issues, industry policy issues,
    including compiling an annual Federal regulation report called
    ``Ten Thousand Commandments.''
        Given environmental barriers to urgently needed water in
    the West, I completely understand the desire for the funding in
    H.R. 3176, and granted the dollars sought are trivial in
    context of the current budget battles, but I caution against
    any fostering of any further declaration of dependence on
    Federal dollars in any sector.
        The regulatory reforms and infrastructure liberalization
    actually needed for plentiful, adaptable, environmentally
    conscious Western water should dominate our attention. The good
    news is water is not getting more scarce overall, it is an
    earthly constant. The bad news is we artificially interrupt
    access to water, so management and allocation of that constant
    supply does matter.
        The Western and California natural environment is a world
    wonder, but so, too, is the remarkable manmade infrastructure.
    Western environments are some of the most altered on Earth, and
    yet environmental protection is not alien to providing
    plentiful water, the opposite is true. Restraints like waste
    stream recapture, conservation and stewardship, property rights
    regimes, liability and insurance all must evolve alongside
    infrastructure. Governments often magnify environmental damage
    and risks. Water resources and environmental amenities should
    be better integrated into the property rights wealth-creating
    sector, an evolution long since derailed not just here but
    elsewhere, like in electromagnetic spectrum, electricity and
    transportation grids.
        Instead of the Drought Reclamation Act, I advocate
    increasing separation of water and State. We should lessen
    having government steer while the market merely rows.
        Federal policies can be contradictory, too. We hear a lot
    about a Federal infrastructure bank and we are endlessly
    regaled about the urgency of bolstering critical
    infrastructure, but these sentiments are certainly undercut by
    onerous permitting and environmental regulations that aggravate
    drought out West.
        The fact is, as a free society becomes wealthier, cross-
    industry creation of infrastructure like water should become
    easier, not harder. The vastly poorer America of 100 years ago
    built overlapping, redundant infrastructure. So if we can't do
    it today, it is largely because of manmade policies, not
    genuine drought.
        Infrastructure can take many forms, but all around better
    reservoir storage, pipelines and canals, trucking and
    transport, and crude oil carriers can aid supply and lessen
    artificial drought and lessen impetus for Federal funding. So,
    too, can improved trade between cities, farmers, and private
    conservation campaigns. Improving water infrastructure can also
    reduce the waste that now depletes some 17 percent of annual
    supply, as noted in a Competitive Enterprise Institute by
    Bonner Cohen last year.
        All this can supplement direct sourcing alternatives,
    including drilling, gray and wastewater treatment and
    reclamation, storm water harvesting and surface storage, and,
    OK, even desalination where it is economically rational. When
    linking investment to human needs, private investors can test
    low-probability projects, counting on rare successes to offset
    the failures. Markets need to be good at killing bad projects.
    As CEI's founder Fred Smith puts it, instead of trying to
    improve speeds by picking particular horses to run on the
    economic racetrack, we must improve the track itself so all the
    horses can go faster, and letting jockeys keep more of their
    earnings means more jobs in these suffering areas, too. Thus we
    also need sweeping regulatory liberalization. In my written
    testimony I cover reform options to enable a private sector
    flush with research and development cash and investment cash to
    dwarf H.R. 3176.
        Finally, this is the Water and Power Subcommittee, and I
    think it is vital to step back and explore dismantling these
    regulatory silos that artificially separate our great network
    industries like water, electricity, transportation,
    telecommunications. Leaving antique 19th and 20th century
    infrastructure regulation intact hampers 21st century
    investment.
        [3:25 p.m.]
        Mr. Crews. Our primary challenge is to integrate modern
    water resources further into the market process and the
    sophisticated property rights and capital market systems of the
    modern world. Despite everything, gallons cost less than a
    penny and, yes, even fill swimming pools and quench lawns in
    deserts.
        The last time I spoke in the subcommittee I was asked if I
    thought access to water was a right. Now committee members who
    believe it is must consider the full implications of that
    question. What makes abundant water the most critical of
    critical infrastructures possible? Thank you.
        [The prepared statement of Mr. Crews follows:]
         Prepared Statement of Clyde Wayne Crews Jr., Vice President,
                Competitive Enterprise Institute, Washington, DC
           For every action, there is an equal and opposite government
                                                               program.
                                                                  --unknown

        The Competitive Enterprise Institute (CEI) is a non-profit public
    policy research organization dedicated to advancing individual liberty
    and free enterprise with an emphasis on regulatory policy. We
    appreciate the opportunity to discuss issues surrounding H.R. 3176, a
    bill reauthorizing parts of the Reclamation States Emergency Drought
    Relief Act, which ``authorizes emergency response and planning
    assistance that would minimize and mitigate losses and damages
    resulting from drought conditions.'' \1\
    ---------------------------------------------------------------------------
        \1\ U.S. Department of the Interior, Bureau of Reclamation Web
    site: http://www.usbr.gov/drought/.
    ---------------------------------------------------------------------------
        We see issues surrounding water access and supply in the West and
    notably Central Valley California as elements of broader
    infrastructure, property rights and economic growth policy.
        Competitive and localized rather than Federal approaches to
    expanding infrastructure industries and the technologies and
    innovations underlying them, along with broader Federal regulatory
    liberalization more generally, will be more effective than Federal
    funding of particular projects at boosting innovation and resource
    wealth, enhancing consumer well-being, facilitating commerce and trade
    and advancing national prosperity.
        Water, like other ``public goods'' resources largely non-privatized
    prior to the Progressive era, largely has never been brought into the
    competitive realm since the progressive era interruption of extensions
    of private property rights, which has had long-term consequences.\2\
    Like spectrum, airsheds and environmental amenities generally, water is
    one of the fundamental resources that never fully entered the wealth
    creating sector.
    ---------------------------------------------------------------------------
        \2\ See Fred L. Smith Jr., Eco-Socialism: Threat to Liberty Around
    the World, paper presented at the Mont Pelerin Society Regional
    Meeting, Chattanooga, Tennessee, September 20, 2003. http://cei.org/
    pdf/3818.pdf.
    ---------------------------------------------------------------------------
               a manmade western waterscape needs less washington
            California is a beautiful fraud; a magnificent put-on, an
            exquisitely lush illusion. From the farmlands of the Central
            Valley to the swimming pools, green lawns and flowering
            landscapes of Southern California, it is all a brilliantly
            engineered masterpiece, an extensive rearrangement of the
            existing natural order, created by the ingenuity and will of
            man, and costing billions of taxpayer dollars in the process.
                                                           --Aquafornia \3\

        \3\ http://www.aquafornia.com/index.php/where-does-southern-
    californias-water-come-from/.
    ---------------------------------------------------------------------------
        The Reclamation States Emergency Drought Relief Act, H.R. 3176,
    covers 17 western states (and Hawaii), and all 50 with respect to
    planning.
        My summary with regard to H.R. 3176, the reauthorization of the
    Reclamation States Emergency Drought Relief Act, is that one needn't
    give the world's 8th largest economy $15 million from Federal taxes for
    relief actions and planning. California is not the only recipient of
    course, but the bill is counterproductive with respect to water access
    goals. If that money is allocated, there's no reason it should not be
    paid back. Meanwhile, regulatory liberalization is a better option for
    strengthening this vital industry.
        California is the land of milk and honey but also the realm of
    hundreds of dams, canals, aqueducts and reservoirs. Granola and hippie
    legacy notwithstanding, California's is perhaps the most manipulated
    environment on the planet, but the nature lovers seem happy remaining
    there marinating in the ``artificiality.''
        That's not an insult. Water resource development supports entire
    cities and towns. Remake of the landscape is total. When one turns on
    the tap, that water often comes from hundreds of miles away. Nothing
    water-wise is natural in the State, which--one can dream--should make
    it easier rather than harder to address grave political battles.
        While today's California would have shut down yesterday's before it
    ever started, a dose of reality is required in western water policy. If
    ruthless, brutal drought and flood cycles--which would render most
    lifestyles impossible--are unacceptable, and they most assuredly are,
    then active water management is necessary, and is a good thing.
        Western states should fund resolution of their environmental
    problems and water access issues without involving the far less blessed
    rest of the Nation, who have their own crises. If funds from are
    received, they should be reimbursed.
        Longer term we must emphasize regulatory liberalization,
    environmental rationality, and, longer term, better bring California's
    vast delta and glacial and reservoir water resources under market
    systems/regimes to ``balance'' the warring agricultural/irrigation in
    lower central valley, drinking water, industrial, environmental set-
    asides and recreational uses.
        Californian's actions show that they've accepted irretrievable
    change, even though, as John McPhee pointed out, there are only a
    handful of river deltas where two rivers combine. There is no denying
    the grandeur of the Central Valley, ``Far more planer than the planest
    of plains'' as McPhee put it, noting that the got there before the
    ``mountains set up like portable screens.'' The Central Valley Project
    (CVP) irrigates three million acres, water that could come from the
    Delta or nearby or hundreds of miles further.
        Like the natural environment, the manmade water infrastructure
    itself is a world wonder. The valley is the most productive
    agricultural economy; almonds, artichokes, everything. With pipelines
    and pumps traversing hills, the CVP is said to be a net producer of
    energy/ recapture in the Valley at CVP; that's good, what are lessons
    from that in terms of liberalizing infrastructure to better meet
    consumers' needs.
        But it gets hot, and fruit trees are painted white to avoid
    sunburn. Geologically the Delta levees are tissue paper. The State will
    have to upgrade them since they aren't going to last. The State is home
    to the highly energy intensive tech industry; it is friendly toward
    high levels of immigration; its population is growing. So droughts must
    be managed, water better stored and allocated. Anticipation and
    planning matter. Policymakers' job is to prevent further derailment of
    bringing environmental resources and amenities into the pricing
    institutions of markets and property rights, regardless of the failure
    (universal, not just in California) of building those institutions in
    the past. Such regimes are too young as human institutions to have done
    it right.
        It's one thing to argue against taxpayer dollars for unreimbursed
    well drilling and Reclamation plans as in the H.R. 3176 instance, and
    this report does that; It also advocates regulatory reforms, and
    environmental rationality so as to ease production. Long term, it is
    worthwhile and meaningful to fit this debate into the context of the
    context of ``big assets,'' critical infrastructure, water pricing and
    access and environmental health. Rather than send money, policymakers'
    job is the opposite: to prevent the machinations that interrupt market
    clearing prices and result in shortages and misallocations.
         what's in the reclamation states emergency drought relief act
        Water availability is a core national infrastructure concern. The
    specific legislative issue in H.R. 3176, a bill reauthorizing parts of
    the Reclamation States Emergency Drought Relief Act, is what role the
    Federal Government should play in drought planning and mitigation. At
    the core is reauthorization to spend $15 million in remaining funds.
    The original act passed in 1991, created largely because of a 6-year
    California drought, but the planning applies to all 50 States.
        The Bureau of Reclamation says (BOR) ``The Act authorizes emergency
    response and planning assistance that would minimize and mitigate
    losses and damages resulting from drought conditions.'' \4\
    ---------------------------------------------------------------------------
        \4\ http://www.usbr.gov/drought/.
    ---------------------------------------------------------------------------
        The Act itself can be summarized as follows: \5\
    ---------------------------------------------------------------------------
        \5\ http://www.usbr.gov/drought/102-250.html.

            Title I: Assistance During Droughts: Allows Reclamation to
            undertake activities that would minimize or mitigate drought
            damages or losses within the 17 Reclamation States including
            tribes within those States, and Hawaii. Any construction
            activities undertaken shall be limited to temporary facilities,
    ---------------------------------------------------------------------------
            with the exception of well construction.

            Title II: Drought Contingency Planning: Provides for assistance
            in drought planning. All 50 States and U.S. territories are
            eligible.

        The bill is rather open-ended, providing for conducting studies and
    technical assistance that even includes controversial desalination
    projects. The ``Plan Provisions'' including but not limited to the
    below are precisely what market actors should manage, not the Federal
    Government as a mini-FEMA.

      1.  Water banks.
      2.  Appropriate water conservation actions.
      3.  Water transfers to serve users inside or outside authorized
                Federal Reclamation project service areas in order to
                mitigate the effects of drought.
      4.  Use of Federal Reclamation project facilities to store and convey
                nonproject water for agricultural, municipal and
                industrial, fish and wildlife, or other uses both inside
                and outside an authorized Federal Reclamation project
                service area.
      5.  Use of water from dead or inactive reservoir storage or increased
                use of ground water resources for temporary water supplies.
      6.  Water supplies for fish and wildlife resources.
      7.  Minor structural actions.

        Water utilities and irrigation districts are not required to repay
    Federal funds used for well drilling (the bulk of support under the
    law) in times of drought; they benefit in perpetuity. In California,
    most went to the San Joaquin Valley district.
        We require alternatives to this flawed program, at the very least,
    repayment of funds. The San Joaquin Water Reliability Act of Rep. Devin
    Nunes is another alternative; he stresses jobs and seeks to turn on the
    Delta water export pumps to former levels.\6\ Fishery groups criticize
    Nunes for an ``assault on California's fisheries and rivers'' and for
    wanting to ``seize much of the water devoted to California's fisheries
    and the environment, delivering it instead to the agribusiness barons
    of the western San Joaquin Valley.'' \7\ In the face of such
    opprobrium, it is understandable that irrigation districts and
    utilities that receive less water owing to Delta related environmental
    restrictions would like the ``compensation'' the $15 million
    represents, but that is less than a band-aid particularly if the
    funding discourages needed conservation or is seen as a replacement for
    regulatory liberalization needed. So at the least, the bill should
    require that the funds be returned to taxpayers.
    ---------------------------------------------------------------------------
        \6\ Nunes bill http://www.gpo.gov/fdsys/pkg/BILLS-112hr1837ih/pdf/
    BILLS-112hr1837ih.pdf and summary; http://nunes.house.gov/
    uploadedfiles/legislative_summary_of_the_sacramento-
    san_joaquin_valley_water_reliability_act.pdf.
        \7\ http://blog.sfgate.com/zgrader/2011/07/25/congressman-nunes-
    attempt-to-destroy-californias-salmon-and-fishing-jobs/.
    ---------------------------------------------------------------------------
        Irrigation once was a more individualized matter; the 1877 Desert
    Land Act that amended the Homestead Act provided for a 25 cents per
    acre down payment on 640 acres; the new owner would bring a portion
    under irrigation within three years, and could receive full title upon
    proof of irrigation and payment of an additional dollar per acre.\8\ In
    that former world, one was to prove one had irrigated land oneself to
    receive a land grant, however fraud-riddled that was.
    ---------------------------------------------------------------------------
        \8\ Fite-Reese, An Economic History of the United States, 2nd
    Edition.
    ---------------------------------------------------------------------------
        Make no mistake, property rights claims are a mish-mash in the
    West; Native Americans have rights dating back to time immemorial; the
    BOR to 1905; the National Wildlife Refuges to 1928 and 1964; the
    homesteaders have rights claims dating to whenever they first settled
    in the basin extending into perpetuity.\9\
    ---------------------------------------------------------------------------
        \9\ Observation by CEI Fellow Robert J. Smith.
    ---------------------------------------------------------------------------
        Policymakers' objective should be to increasingly liberalize the
    marketplace, including improving the regulatory environment such that
    we better avoid man-made droughts; and payments under the guise of this
    bill at the very least should achieve that end. Longer term, subjecting
    water strategy decisions and investment to marketplace pressures that
    address competing interests will become increasingly important, and if
    those pressures have been subverted by past political choices, to
    return them to the private realm, or to make the private realm more
    relevant to future choices.
                   a fountain of solutions for western states
        Periodic western droughts and environmental fallout from water
    access policy is not unique. Rather, such issues are globally
    contentious. A Wall Street Journal book review on the ``unhappy
    descent'' of Turkey's Meander River couldn't help but invoke common
    laments that: \10\
    ---------------------------------------------------------------------------
        \10\ Alice Albinia, ``A Famous River's Unhappy Descent,'' Wall
    Street Journal, July 23, 2012. p. A11 (A review of Meander, by Jeremy
    Seal).

            In North America, so much water is taken out of the Colorado
            that it no longer reaches the sea. Nor does the Rio Grande. Or
    ---------------------------------------------------------------------------
            the River Jordan. Or China's Yellow River.

        Access to water in times of plenty and in times of drought is a
    fundamental infrastructure concern everywhere; further, the issues
    surrounding innovation and research in water policy are elements of
    broader science and manufacturing policy.
        Aggravations abound locally and so do penalties. One Oregon man
    catching rainwater on his own property received 30 days in jail for
    apparently breaking a 1925 law against personal reservoirs,\11\ but
    when scarcity and emotions run high, strange things happen.
    ---------------------------------------------------------------------------
        \11\ Kendra Alleyne, ``Man Sentenced to 30 Days for Catching Rain
    Water on Own Property Enters Jail'', CNS News, August 8, 2012. http://
    cnsnews.com/news/article/man-sentenced-30-days-catching-rain-water-own-
    property-enters-jail.
    ---------------------------------------------------------------------------
        In addition to developments like rainwater theft prosecution, water
    policy can be fundamentally perverse and distortionary: water supply
    systems may not cover their debts, operations and capital replacement
    needs, and as governmental monopolies, they sometimes ``are used as
    cash cows to support more labor-intensive functions of local
    government, such as fire and police.'' \12\
    ---------------------------------------------------------------------------
        \12\ G. Tracy Meehan III, ``Flood Zones: A Market Solution to the
    Challenge of Water Supply,'' (A book review of The End of Abundance by
    David Zetland), Weekly Standard, July 16, 2012. pp. 36-37.
    ---------------------------------------------------------------------------
        Efforts like H.R. 3176, the Reclamation States Drought Relief Act,
    and the desalination programs this Committee has addressed add to such
    problems.
        The first Delta levees appeared around the time of the Gold Rush so
    the altered landscape has long been a fixture. The Federal Government
    role enlarged during the Great Depression.
        But impulses that foster national governmental programs that
    exacerbate misallocation of water and money should be resisted. That is
    the problem with H.R. 3176; Policymakers should subject water policy
    decisions, pricing, investment and conservation to marketplace
    pressures, alien as that may be. In the current battle that means
    requiring reimbursement for well drilling at the very least.
        But further, streamlining permitting and competitive approaches to
    infrastructure and the technologies underlying it and regulatory
    liberalization represent ``fountain'' of solutions be more effective
    than politics at boosting innovation, enhancing consumer well-being,
    facilitating commerce and trade, and contributing to California's and
    United States prosperity.
        How can we be sure? Charles Fishman, author of The Big Thirst: The
    Secret Life and Turbulent Future of Water, penned a rundown of myths
    about water, noting even our ignorance of where it goes upon
    disappearing down the drain.\13\ In terms of quantity, water is
    actually not getting more scarce; it's constant on earth. And the salty
    oceans? They're actually:
    ---------------------------------------------------------------------------
        \13\ Charles Fishman, ``Five Myths About Water,'' Washington Post,
    April 6, 2012. http://www.washingtonpost.com/opinions/five-myths-about-
    water/2012/04/06/gIQAS6EB0S_story.html.

            Olympian springs of fresh water--every day, the sun, the sea
            and evaporation combine to make 45,000 gallons of rainwater for
            each man, woman and child on Earth. . . . Even in the United
            States, where we use water with profligacy, the oceans are
            making more fresh water for each of us in a month than we'll
    ---------------------------------------------------------------------------
            use in a decade.

        Fishman continues, ``We never really use it up. Water reemerges
    from everything we do with it, whether it's making coffee or making
    steel, ready to use again.''
        That's a useful insight for California's feast/famine water
    predicament. Water is constant; its allocation and pricing that matter,
    and it is regulations and environmental over-reach that often
    discourage properly priced supply. Shortages are not really at hand
    when demand has grown without price adjustments.
        Water is both a necessity and a luxury good. We use more as we get
    wealthier, which requires more energy, which itself requires still more
    water. Nonetheless, overall the Nation uses less water than in the
    1980s (agriculture and power remain the largest users); families use a
    little more than back then.\14\
    ---------------------------------------------------------------------------
        \14\ EPA on average family use http://www.epa.gov/WaterSense/pubs/
    indoor.html.
    ---------------------------------------------------------------------------
        But it doesn't always rain in the same places, and over time
    populations shift (sometimes even in response to artificially prolific
    water supplies). California represents the peak expression of this
    reality.
        Challenges loom. ``America's population is expected to grow by 100
    million--a 30-percent increase--by the middle of the 21st century,''
    notes Bonner Cohen in ``Fixing America's Crumbling Underground Water
    Infrastructure.'' \15\ And infrastructure won't be cheap. Cohen
    continues, ``Over the next 20 years, upgrading municipal water and
    wastewater systems is expected to cost between $3 [trillion] and $5
    trillion. Building and replacing water and sewage lines alone will cost
    some $660 billion to $1.1 trillion over the same time period.''
    ---------------------------------------------------------------------------
        \15\ Bonner R. Cohen, ``Fixing America's Crumbling Underground
    Water Infrastructure,'' Competitive Enterprise Institute, Issue
    Analysis 2012 No. 3, April 11, 2012. http://cei.org/sites/default/
    files/Bonner%20Cohen%20-
    %20Fixing%20America%27s%20Water%20Infrastructure.pdf.
    ---------------------------------------------------------------------------
        There's no need for Malthusian despair, because in the face of it
    all, gallons of water cost Californians and Americans less than a
    penny. Decisions may be reacting to broader mismanagement.\16\ Fifteen
    million seems trivial. But on the other hand, as G. Tracy Mehan,
    writing in The Environmental Forum, put it, ``Scottish lawns and
    recreational swimming are luxury items in arid areas and should bear
    the cost of scarcity in the price of water. Moreover, low water rates
    are basically middle-and upper-class subsidies.'' \17\
    ---------------------------------------------------------------------------
        \16\ David Zetland has noted an interesting co-existence of cheap
    water and bad finances more generally http://www.aguanomics.com/2012/
    02/link-between-cheap-water-and-bad.html.
        \17\ G. Tracy Mehan III., ``The Future of Water: Technology,
    Economics, Political Will,'' The Environmental Forum, May/June 2012, p.
    6-7.
    ---------------------------------------------------------------------------
     policy context: avoid having government steer while the market merely
                                      rows
        The Reclamation States Drought Relief Act program is
    counterproductive and unnecessary. When one knows the Federal
    Government will step in, it changes behavior. Like other interventions
    in free society, it changes the trajectory and risk calculus of those
    acting within the framework.
        Economic calculation requires market signals; Federal planning
    approaches are extra-market and distortionary. Even without drought,
    economic miscalculation plagues planned systems.
        We need more fresh water in estuaries, but rarely is there mention
    of property rights. Notwithstanding environmental battles, which often
    take on religious overtones, allowing price of water to fluctuate is a
    part of the answer. Reacting to market price of water is a means of
    conservation, just as in every other walk of life.
        As policy discussions unfold surrounding drought preparedness and
    water policy generally, several challenges confront policymakers. These
    involve such matters as:

         Federal Spending's Distortionary Impact and the
                Limitations of Federal Research and Planning
         Federal Policy vs. Markets in Drought Preparedness

    Federal Spending's Distortionary Impact and the Limitations of Federal
            Research and Planning
        Subsidies like that in the Reclamation States Drought Relief Act
    are not merely unneeded, they can be unfair, since only certain States
    are involved yet all required to pay.
        Funding of western water is unfair to taxpayers across the rest of
    the country who are far less resource-blessed. America's economy is
    faced not with just scarcity of water, but a scarcity of funds.
    Granted, the scale of projects under H.R. 3176 of a few million is not
    a lot of money compared to America's several trillion in Federal
    outlays.
        While the sums involved are virtually irrelevant in the modern
    spending context, they matter in other ways for how California and
    other western States conduct water policy, and provide lessons for the
    rest of the Nation.
        The expectation of funds, and the impression created in the
    original legislation and the H.R. 3176 reauthorization can set up
    unhelpful prioritization of paltry Federal dollars when far graver
    concerns exist for which Federal funding is not and cannot be the
    answer in California and the rest of the West.
        More importantly, Federal spending's effects on the nature of water
    research, production and conservation itself reverberate beyond the
    dollars at issue. The dollars foster a ``leveraging'' of a negative
    rather than the positive kind in that parties should not look to the
    Federal Government and Reclamation for guidance. In the United States,
    private investors, localities, states and regions are the proper locus
    of investment to avoid the perpetuation of water policy's detachment
    from marketplace pressures.
        Government research has been underway for decades on energy
    reduction, desalination, treatment of waste capture and more. In
    markets, research is itself competitive, driven by reaction to consumer
    needs and to what rivals do. But in typical funding legislation of
    which H.R. 3176 is one example, competition and rivalry aren't central,
    making both the goals and the methods to achieve them questionable with
    respect to sustainability in the proper sense of the term.
        The supporters of Federal research and projects tend to be from
    States that would directly benefit, but of course that's the case with
    many government programs. Except when a local earmark or project is at
    stake, politicians commonly accept that government has no innate
    ability to pick among competing technologies using taxpayer money.
    Moreover, government plans operate on an election timeline that doesn't
    conform to market schedules, undermining efficient execution by
    governmental bodies on research, development and construction efforts
    on desalination.
        Politicians cannot assign rational priorities to the stream of
    ``significant'' projects, thus they will select popular ones benefiting
    local constituencies; simply note the continuing funding of new
    libraries in the digital age (as opposed to, say, handing out wireless-
    enabled laptops), new post offices, and clamoring over tech programs
    for rural small businesses.
        The hazards of a government appropriations process and the
    accompanying lobbying for sub-optimal projects are numerous. In the
    space program, entrenched contractors and legislators from flight-
    center districts enjoy cost overruns, and lobby against cheaper
    unmanned flights. An ethic of revolutionizing space flight becomes
    unthinkable. There's no need to recreate or perpetuate such a situation
    in water policy or any realm.
        In the Federal R&D sweepstakes, bolstering promising technologies
    has been compared to efforts to improve the speed records at a
    racetrack by picking the R&D horses to run.\18\ Beyond the technologies
    for generating clean water and a clean environment, however, the
    condition of that racetrack and the rewards available also matter.
    Greater ``speeds'' might be had by improving the track--the business
    and regulatory environment--and by letting ``jockeys'' (private
    investors) keep more of their earnings.\19\
    ---------------------------------------------------------------------------
        \18\ The horse and track analogy appears in Fred L. Smith, Jr.,
    Testimony before the Subcommittee on Energy and Environment, House
    Committee on Science, Hearings on the Fiscal Year 1999 Budget. March
    24, 1998. http://cei.org/outreach-regulatory-comments-and-testimony/
    testimony-subcommittee-energy-and-environment-house-commi.
        \19\ Fred L. Smith, Jr., 1998. http://cei.org/outreach-regulatory-
    comments-and-testimony/testimony-subcommittee-energy-and-environment-
    house-commi.
    ---------------------------------------------------------------------------
        The government-picking-technologies model undermines economic
    liberty, innovation, wealth creation, ``national competitiveness'' (a
    frequent rationale for government R&D) and consumer benefits, and is
    itself a source of risk. Many have argued that viable technologies
    don't need subsidy, and non-viable technologies probably can't be
    helped by one. Otherwise, we distort markets, create bubbles and tee up
    future rippling recessions. Rather than picking the winning horses (or
    worse, the Federal Government actually being one of the horses, which
    worsens the situation with water policy), government's legitimate role
    is to improve the track on which all the horses run; that means
    liberalizing the regulatory environment within which entrepreneurs
    operate, for starters (the Appendix offers regulatory reform
    alternatives).
        One aspect of liberalization must be privatization of Federal
    research efforts rather than creating new ones as research legislation
    does (which itself would remove constituencies for government funding).
    The typical emphasis is on government spending rather than
    privatization. During the 1990s, it was proposed that essential
    military aspects of Federal labs be transferred to the Department of
    Defense, while commercial aspects should be privatized by offering them
    to the industries they supposedly benefit or by allowing research
    staffs to take them over via an employee buyout approach.
        Privatization of Federal research is a particularly hard sell when
    the topic at hand is public funding expansion. Perhaps one approach is
    to limit Federal funding for technologies that do not yet exist, and
    grow out of the problem.
        Overly abundant taxpayer funding is incompatible with a future
    optimally and lightly regulated water sector specifically, or with
    limited government generally. With interventionist water policy, we
    already observe the seeds for new regulation created by the direct
    impacts, indirect impacts and externalities of the intervention itself.
        Normally, America urges developing nations to embrace markets and
    reject government-steering philosophies for enterprises like growing
    wheat or making shoes. Yet we enable government oversight of advanced
    networks and infrastructure at home, such as water, the Federal
    Communications Commission's National Broadband Plan and net neutrality
    rules, and the heavy regulation of electricity.
        Government steering and subsidies can offload technologies onto
    inefficient paths, and can generate artificial booms. One lesson of the
    telecom meltdown is that government can contribute to the inflation of
    unsustainable technology and research bubbles; we may be at risk of a
    similar ``green technology'' bubble now.\20\ Note again that Federal
    legislation currently artificially favors use of renewable energies,
    precisely the kind of distortions being noted here. Regardless, we have
    a regional or state issue on our hands, not a Federal one.
    ---------------------------------------------------------------------------
        \20\ Spain's King Juan Carlos University released findings that
    each ``green job'' created by the Spanish wind industry cost four other
    jobs elsewhere. ``The Big Wind Power Cover-Up,'' Investor's Business
    Daily, March 12, 2010. http://www.investors.com/NewsAndAnalysis/
    Article.aspx?id=527214.
    ---------------------------------------------------------------------------
        Moreover, there are opportunity costs to governmental funding of
    technological research. Politics cannot determine optimal research
    portfolios: Why the mix of activities and contingency planning (like
    unreimbursed gifts of wells) instead of investments in permanent
    pipelines from northern California or from other states or corridors;
    or repair of leaky infrastructure; or water portage via cargo shipping?
    Or other options.
        We can lessen burdens of the inevitable drought and flood periods
    while avoiding the distortions and bubbles created by governmental
    steering undisciplined by markets. The dilemma is by no means special
    with regard to water. In other sectors, why might we witness a National
    Nanotechnology Initiative and a National Broadband Plan, instead of a
    biotech agenda? Why not space travel, robotic asteroid mining, or more
    dollars for fuel cells and the hydrogen economy? The proper emphasis
    for research is impervious to political resolution. Political dominance
    of production can and will create entire industries, even an economy,
    disconnected from actual consumer demands and preferences.
        Of course, no political party is immune from channeling Federal
    dollars to districts in defiance of scientific or economic merit.
    Problems arise when the Federal Government heavily involves itself in
    the very production of knowledge itself rather than in laying the
    legal, property rights, and contractual foundations of new commercial
    endeavors.
        Policy ought not to disconnect research and planning from the
    voluntary market process. Policy can advance human welfare and remain
    most relevant when pulled into being by the actual needs of mankind,
    including practical ones; that best occurs in private-sector investment
    as opposed to taxpayer funded.
        Congress continually revisits the question of what the Federal
    Government should be doing; but rather than embrace the invitation to
    expand spending on damsel-in-distress endeavors (obviously Washington
    can't fund every crisis resolution in every state), Congress should
    foster private research (primarily via economic liberalization) rather
    than appropriate funds or steer research and investment.
        A bit of the ``broken window fallacy'' \21\ comes into play here:
    we may see H.R. 3176's ``ceremony'' and ribbon-cutting, but not seen is
    the alternatives neglected thanks to the redirection of resources and
    changed behavior.
    ---------------------------------------------------------------------------
        \21\ See Frederic Bastiat, ``That Which is Seen, and that Which is
    Not Seen,'' 1850. http://bastiat.org/en/twisatwins.html.
    ---------------------------------------------------------------------------
        Furthermore, it is inappropriate for network industries to all
    remain walled off from one another in a legislative appropriations
    environment whether for commercial purposes or with respect to
    ``critical infrastructure'' security goals. When governments set the
    agenda it undermines the swirling competition, cooperation, and ``co-
    opetition'' needed for U.S. economic health, such as hypothetical
    alliances with other network industries for, say, water transport and
    storage options.
        Outcome-oriented Federal interventions as opposed to broader
    liberalizations that leave outcomes up to the choices and dispersed
    knowledge of others will produce prominent successes that advocates can
    point to, but fall short taken as a whole and compared to the
    potential. Policymakers could easily use the $15 million provided in
    H.R. 3176 to ``prove'' how great it was that Washington spent it, but
    what a interventions, subsidies, and regulations create an economy made
    up of suboptimal entities and approaches (in this case water
    infrastructures and all the attendant social and environmental ills
    that may resemble what they would under enterprise). Those
    inefficiencies will propagate throughout the economy and over the
    years. Unpreparedness for drought is one of those results.
    Federal Policy vs. Markets in Drought Preparedness
        Scarcity of water itself in a free, highly mobile society like the
    United States--if that is what drives political fights and
    intervention--is a creature of poor policy. We ought to recognize the
    true causes of scarcity and drought unpreparedness, and avoid
    perpetuating the ``Declaration of Dependence'' on Federal dollars and
    decisions that affects some of America's most crucial infrastructure
    industries and technologies.
        Conversely, however, even if the private sector did not invest
    ``enough'' in research like that authorized in H.R. 3176, that too is
    reason for Federal restraint. States reliant on the process may have a
    role, but that's their business and their prerogative to fund (although
    State funding can be similarly vulnerable inefficient.)
        Indeed, water markets are hardly free ones. Because of heavy
    governmental involvement and the distortions and shifting of relative
    pricing it creates, it's not even clear in every case of private sector
    investment that it should be doing so particularly if subsidies or
    grants are the impetus.
        The costs and benefits of water policy decisions should always be
    as explicit as possible, never obscured. Policy must never mask the
    otherwise necessary confrontation of underlying water scarcity and the
    reality of recurring drought, which exacerbates problems and induce
    calls for Federal intervention.
        Federal and local policymakers' primary task, as distinct from
    programs like the H.R. 3176, should be unwinding of interference with
    water price signals so that private investors can react and build the
    robust critical infrastructure actually needed, the scale of which
    could be far beyond today's infrastructure, perhaps founded upon
    business models not contemplated today.
        Those price signals should incorporate mitigation of state actors'
    own potential negative environmental impacts, as property-rights based
    production demands. Among much else, such market pressures can do a
    better job compelling a polluter to internalize or treat waste streams,
    and to conserve for the inevitable drought stretch better than H.R.
    3176's studies and planning.
        Diverting energy and effort into policies that may further disguise
    real prices by spreading costs to non-involved taxpayers, such as H.R.
    3176 does with well drilling will further delay any needed general or
    specific reckoning with the way water is marketed and priced in
    California and the Reclamation states (and by extension the United
    States) and will aggravate environmental disputes. Bearing burdens and
    dealing with ``externalities'' is a critical yet normal part of well-
    functioning markets. Prince signals matter: Better sometimes for the
    water to cost more and reduce demand and usage.
        Bolstering industry requires vigorous competition among ideas for
    private funding. The national government's role in actually fostering
    such knowledge wealth is limited, but its role in liberalizing the
    American economy so that others can foster that wealth is a profound
    responsibility, perhaps the primary duty of government.
      Separation of State and Water: Options for Expanding Reliable Water
                                    Supplies
        A few non-exhaustive options for improving water supply follow.
    These are alternatives to the Reclamation States Drought Relief Act
    approach.
    Infrastructure Advances and Other Innovations
        Markets in infrastructures matter. Innovation and basic research
    itself do not proceed in isolation in genuine markets. Economic sectors
    can inform and enrich one another, making it advisable to tear down
    regulatory silos artificially separating infrastructure industries and
    better exploitations of rights-of-way (water, power, communications,
    transportation) wherever possible so that knowledge, ideas, products,
    and collaboration--and water--flow more freely.
        As a free society becomes wealthier, creation of infrastructure for
    needs like water should become easier, not harder. The America of 100
    years ago that built overlapping, tangled infrastructure with a
    developing-world-level GDP can build today's, if allowed. Well-
    functioning capital markets already are our ``infrastructure bank.''
    Energy infrastructure, communications infrastructure, electricity
    infrastructure, the infrastructure capabilities of the water sector--
    all would benefit far more from a concerted deregulation and
    liberalization campaign than government spending and research. Pushing
    politically favored infrastructure projects while leaving 19th and 20th
    century infrastructure and antitrust regulation intact, undermines the
    goals of legislation like the Reclamation States Drought Relief Act.
    (The Appendix, ``Economic Liberalization: An Alternative to Government
    Spending In Service to Water Abundance'' presents such an outline.)
        The pricing of regulated-utility water will frequently diverge from
    the optimum, compounding allocation and availability problems over
    time. In any event, without advocating for any particular alternative,
    and while stressing the underlying issue of water's character as a non-
    competitive, non-market enterprise out of sync with the modern world,
    other infrastructure expansion approaches could be appropriate, and
    would benefit from regulatory liberalization. These include:

         Better transport, including pipelines/aqueducts/trucking/
                shipping: Advances among these matter and change economics
                drastically, particularly if other network industries with
                rights of way collaborated far more than they do today.\22\
                Crude oil carriers can be converted to water carriers.\23\
    ---------------------------------------------------------------------------
        \22\ See introduction in Adam Thierer and Wayne Crews, What's Yours
    Is Mine, Cato Institute: Washington, D.C. 2003.
        \23\ Noted in Wikipedia's entry on desalination, http://
    en.wikipedia.org/wiki/Desalination.
    ---------------------------------------------------------------------------
         Greater stored supplies in the event of levee breach and
                drought; more efficient collaborative use of reservoirs and
                capturing of runoff.
         Trade: Relatedly, trade allows for coping with competing
                priorities and grappling with scarcity. G. Tracy Mehan for
                example notes that ``[E]merging water markets allow . . .
                for trades between cities, farmers, and even NGOs such as
                Trout Unlimited.'' \24\
    ---------------------------------------------------------------------------
        \24\ Mehan, May/June 2012.
    ---------------------------------------------------------------------------
         Gray/wastewater treatment and reclamation is an
                alternative for sourcing, for agriculture and industry if
                not for drinking, taking pressure off the latter.
         Improvements in stormwater harvesting techniques.
         Conservation: Anderson and Snyder in Water Markets note
                that ``Markets are providing agricultural and urban users
                with more reliable supplies and with an incentive to
                conserve, and are enabling environmentalists to purchase
                instream flows to protect fish and recreational
                opportunities.''
         Unleash affordable energy: There is no workaround for the
                fact that Federal and State policies disdainful of
                conventional energy are inconsistent with the presumed goal
                in proposed Federal legislation of advancing access to
                water. Reducing onerous energy regulations would reduce
                economic uncertainty and enhance water markets.

        President Obama and others have suggested a desire to boost
    antitrust enforcement.\25\ That's unfortunate. Instead, policymakers
    should relax antitrust so that firms within and across industry sectors
    can collaborate on business plans to bring infrastructure wealth to a
    higher level, including water infrastructure. Markets require
    competition, sometimes merger, and sometimes merely the kind of
    cooperation or ``partial merger'' often miscast as damaging collusion.
    ---------------------------------------------------------------------------
        \25\ http://www.nytimes.com/2009/05/12/business/economy/
    12antitrust.html?_r=1&adxnnl=1&adxnnlx=1268514088-MohE/8/
    mpcqIAEXJNqJ1JQ.
    ---------------------------------------------------------------------------
    Reduction of Water Waste and Improved Contracting
        Another ``alternative'' alongside regulatory liberalization is to
    avoid wasting existing supplies. Regulatory and tax relief in the
    industry can aid this endeavor. And ending such waste might be a
    condition of receiving H.R. 3176 funding. Bonner Cohen notes that
    leaking pipes alone cost 17 percent \26\ of the annual water supply:
    ---------------------------------------------------------------------------
        \26\ Cohen, 2012, p. 4.

            Water main breaks and leaking water supply pipes cost American
            taxpayers billions of dollars every year in lost water and
            repair costs. Necessary upgrades promise to place additional
            stresses on taxpayers long into the future. Building and
            replacing water and sewage lines alone will cost some $660
            billion to $1.1 trillion.\27\
    ---------------------------------------------------------------------------
        \27\ Cohen, 2012, p. 3.

        Repairs can sometimes be cheaper than other funding schemes. Cohen
    further notes that changing inefficient policies such as restrictions
    on PVC pipe use, and emphasizing competitive procurement bidding for
    crumbling underground infrastructure,\28\ and particularly
    privatization, can save great sums.\29\ Such forms of non-market
    inertia make ordinary infrastructure more costly than it needs to be
    and may improperly inflate the appeal of costly projects.
    ---------------------------------------------------------------------------
        \28\ Cohen 2012.
        \29\ For example see Leonard Gilroy and Harris Kenny, Annual
    Privatization Report 2010: Water and Wastewater, Reason Foundation, May
    2011. http://reason.org/files/
    water_annual_privatization_report_2010.pdf.
    ---------------------------------------------------------------------------
    Streamline General Regulatory Burdens
        Permitting nightmares and other regulations that can make it an
    overly difficult process to construct and operate water infrastructure
    should be reviewed and relaxed,\30\ particularly since legislation
    often would paradoxically promote regulation of the technology and its
    byproducts.
    ---------------------------------------------------------------------------
        \30\ ``Substantial uncertainties remain about the environmental
    impacts of desalination, which have led to costly permitting delays.''
    The National Academies' Water Information Center, Desalination: A
    National Perspective, 2008. http://dels-old.nas.edu/water/
    dyn.php?link_id=5291&session_id=0kqg3jkjuqrkq740sim7g15b77.
    ---------------------------------------------------------------------------
        Government funding like that in H.R. 3176 too often invites
    regulation. Regulatory concerns propel government regulatory oversight
    of the technology when Federal dollars become involved; the thrust
    becomes one of government funding projects yet endlessly studying and
    regulating their risks. Since recipient businesses and contractors can
    become so dependent on political funding, they go along with the
    oversight, cutoff from envisioning alternative approaches to either
    securing funding or managing hazards. The Valley just wants its water
    and could be seduced into acquiescing to unnecessary rules.
        Options for general reform of regulatory policy in the Appendix.
    Taxpayer Funding Misdirects Resources by Prolonging Inefficient
            Projects
        Markets have to be good at killing bad projects as well as at
    creating new ones.\31\ Governmental programs like the Reclamation
    States Drought Relief Act are less capable of systematic pruning.
    ---------------------------------------------------------------------------
        \31\ Auren Hoffman, ``To Grow a Company, You Need to Be Good at
    Killing Things,'' Summation, February 21, 2010. http://
    blog.summation.net/2010/02/to-grow-a-company-you-need-to-be-good-at-
    killing-things.html.
    ---------------------------------------------------------------------------
        Once entrenched virtually all interested parties seek to grow
    government rather than pull the plug on exhausted or ill-considered
    funding projects, from relatively tiny ones like H.R. 3176's few
    millions to the gargantuan like the Superconducting Supercollider. The
    result is higher taxation and dollars directed to multiplying,
    uncoordinated ends. Science resembles any other rent-seeking interest
    in this respect. In testimony before congressional panels, most seek
    more money, not less; more government rather than less.
        In proposing an end to the Advanced Technology Program years ago,
    Michael Gough offered a real test of taxpayer support: ``Let the
    government give taxpayers who want to invest . . . a deduction from
    their income . . . [and] share in any profits that flow from it. That's
    what taxpayers get from private investments. It's not what they get
    [when government] takes tax money . . . and invests it in private
    enterprise.''
    Salt Water Distillation to Freshwater
        One approach specifically referred to expanding supply to in H.R.
    3176, the Reclamation States Emergency Drought Relief Act, is
    desalination, or the removal of salt (sodium chloride) from seawater or
    brackish water to render it fit for human consumption or other uses.
        The problem is that Desalination at bottom is an energy-intensive,
    by-product-laden means of making expensive potable water. And given its
    energy intensity, more expensive electric power is a factor undermining
    its prospects. Higher electricity prices would cause ``less
    electricity-intensive'' substitutes like conservation, water purchases,
    and pricing changes to rise in relative importance.\32\
    ---------------------------------------------------------------------------
        \32\ Congressional Research Service, August 15, 2011. p. 3.
    ---------------------------------------------------------------------------
        Still, desalination may have a role to play but probably not the
    one envisioned in the Reclamation States Emergency Drought Relief
    Act.\33\ If we are to judge by private sector involvement, desalination
    is on a trajectory to become increasingly cost-effective for certain
    applications, particularly as water prices respond to market signals as
    demand for fresh water increases. Public and private investment
    overseas where the incentives line up differently probably inform
    domestic policy better than anything H.R. 3176 could do.
    ---------------------------------------------------------------------------
        \33\ Clyde Wayne Crews Jr., House of Representatives Testimony,
    Gov't Role in Investment, Water Desalination Policy, May 23, 2013.
    http://www.scribd.com/doc/143263731/Wayne-Crews-House-of-
    Representatives-Testimony-Gov-t-Role-in-Investment-Water-Desalination-
    Policy-May-23-2013.
    ---------------------------------------------------------------------------
        Desalination at bottom is one category of purification; some
    industries require even higher purities of water than desalination
    would create, conduct substantial research, and pay the price to
    achieve purity. Water augmentation, driven by industrial needs, is
    where the advances are most likely to be most efficient and broadly
    informative. Lessons from this sweep of experimentation are
    transferable and more on point than H.R. 3176.
    Address Environmental Concerns With All Interests Involved
        Environmental concerns plague virtually every project of any kind.
    Ironically, governments often alter environments and generate
    environmental problems. Environmental impacts of subsidized
    desalination in H.R. 3176, for example, such as the impact on aquatic
    creatures and the uncertainty over numerous options for disposal of
    waste streams, are the very types of impacts that in other contexts
    like pipelines and fracking are deal breakers.
        It is more than understandable that irrigation districts and
    utilities would appreciate the funds in H.R. 3176 to in a sense
    ``compensate'' for failure to deal with excesses of the Endangered
    Species Act that have restricted their access to water. Their
    frustration is understandable; it is a constant debate of how much
    water to leave in streams for environmental purposes vs. how much to
    allocate to urban, agricultural and recreational uses when the right
    answer depends upon how much precipitation happens, which varies.
        Free enterprise can excel at managing environmental risks and waste
    streams when given a chance. In normal markets, before firms can
    attract investors and launch, disciplinary institutions like liability
    and insurance must be secured. One must satisfy many stakeholders,
    including capital markets, insurers, upstream business suppliers,
    horizontal business partners, downstream business customers, consumers,
    public and global markets. And environmental interests; property rights
    mean one must not pollute a neighbor's property.
        The Endangered Species Act is at the root of California water
    disputes; farmers and southern Central Valley would have the water they
    need if the pumps at the Sacramento/Joaquin delta were turned on, as
    dramatically pointed out by Rep. Nunes. and others. State Water
    Contractors General Manager Terry Erlewine said: \34\
    ---------------------------------------------------------------------------
        \34\ http://www.acwa.com/news/delta/water-supplies-curtailed-once-
    again-protect-delta-smelt.

            This year is proving to be another example of why the current
            system is unreliable and unsustainable. The water supply for 25
            million people and millions of acres of farmland depends on
            where a few dozen fish are located in the Delta's sprawling
            waterways. Until we build a better infrastructure system that
            protects both fish and water supplies, we're forced to operate
            under regulations that have high costs for California's public
            water agencies, farms and economy, while producing little if
    ---------------------------------------------------------------------------
            any benefit for the fish.

        Fifty mayors from the San Joaquin Valley also wrote a letter to
    President Barack Obama to observe the impact of the water rules in
    California. And Association of California Water Agencies Executive
    Director Timothy Quinn: \35\
    ---------------------------------------------------------------------------
        \35\ Ibid.

            We have the wrong infrastructure in the Delta, and it's been
            apparent for decades. . . . Conveyance improvements, coupled
            with habitat restoration and other measures to address Delta
            stressors, can get us out of this cycle of conflict and on the
            road to a water system that works for the economy and the
    ---------------------------------------------------------------------------
            environment.

        One big problem with allowing the Endangered Species Act to
    interfere with California's water needs is that it isn't clear that
    water use as opposed to other factors is the cause of the problem.
    Ballast discharge has been blamed; ammonia from waste treatment has
    been blamed.
        The second big problem is that the ESA doesn't work. Over 2000
    endangered species are listed; As of September 2012, only 56 had been
    delisted: 28 due to recover, 10 due to extinction.
        The ESA's punitive nature makes it particularly bad at enlisting
    landowners in the effort to save species with incentives.
        Apart from the Federal Government's worsening the problem,
    conservationists, biologists policymakers have the actual decisions
    about banking species, farming them, relocating them, ``sponsorship''
    programs, habitat restoration and other creative options, likely
    themselves prevented by the act. There are alternative approaches that
    deserve consideration, such as a ``salmon certificate'' system proposed
    in a 1999 Washington Policy Center paper that makes economic and
    environmental tradeoffs more clear.\36\
    ---------------------------------------------------------------------------
        \36\ http://www.washingtonpolicy.org/publications/brief/saving-our-
    salmon-using-free-market-protect-environment.
    ---------------------------------------------------------------------------
        Unless California wants to go back to unmanaged droughts and
    floods, they are going to have to accept infrastructure and perhaps
    projects like the Bay Delta Conservation Plan, especially if they value
    is the environment. The population is going to grow; levees will fail.
    Better Pricing of Water Supplies
        As Adam Smith and the classical economists teach, water and
    diamonds have vastly different marginal and total utilities.\37\ Each
    can be worthless or priceless under different circumstances. Both the
    supply side of life and the demand side of life matter across the
    board.
    ---------------------------------------------------------------------------
        \37\ See also G. Tracy Mehan III. and Ian Kline's reference to the
    same in ``Pricing as a Demand-Side Management Tool: Implications for
    Water Policy and Governance,'' Journal of the American Water Works
    Association, February 2012. pp 61-66.
    ---------------------------------------------------------------------------
        Long term, we should embrace the opportunity to solve more than one
    problem at a time when it comes to integrating flood management with
    water supply planning. The need to pay for one's own wells has been
    mentioned, since more Federal dollars delays having to deal with bigger
    problems, like the need to change permitting regulations, use more
    groundwater in drought years, create new insurance products, and create
    alternatives to the Endangered Species Act that actually--brace for
    it--save species. This requires enlisting the property owner and
    downstream consumer in positive ways.
        Water utilities are usually sourcing-to-delivery monopolies, rarely
    subject to market forces. Problems with efficient investment exist in
    such models, as do disincentives of local elected officials to tolerate
    the rate increases that a market would dictate and perhaps implement.
        The state of play is reviewed in books like Water Markets: Priming
    the Invisible Pump by Terry L. Anderson and Pamela Snyder, which
    surveys water law and how water markets have emerged in the United
    States, ``including discussion of the restrictions by state and Federal
    governments, which increased over the past century.'' \38\
    ---------------------------------------------------------------------------
        \38\ Terry L. Anderson and Pamela S. Snyder, ``Priming the
    Invisible Pump: Water Markets Emerge,'' PERC Policy Series No. 9,
    February 1997. Property and Environment Research Center, http://
    www.perc.org/articles/article198.php.
    ---------------------------------------------------------------------------
        Steve Maxwell in The Future of Water makes an important note about
    a sometimes overly casual attitude toward the miracle of easily
    available fresh water: ``The most important job utilities around the
    world may have in the coming decades is convincing people that water is
    valuable--and that it is reasonable to pay more for this luxury than
    the bargain prices we have traditionally taken for granted.'' \39\
    ---------------------------------------------------------------------------
        \39\ Cited in Mehan, May/June 2012.
    ---------------------------------------------------------------------------
        In reviewing top water expert and researcher David Zetland's book
    The End of Abundance, G. Tracy Meehan summarized: ``[T]he water sector
    can encourage better stewardship and a greater degree of social harmony
    by substituting pricing and market allocation of limited water supplies
    for political management.'' \40\
    ---------------------------------------------------------------------------
        \40\ Mehan, May/June 2012.
    ---------------------------------------------------------------------------
        Water isn't unique in widespread inefficient pricing and
    allocation, of course: anything politically or bureaucratically managed
    can be vulnerable to quantity and pricing shocks and constraints. Where
    water prices are artificially low, shortages will result. The chapter
    ``Why Water Crises?'' in Water Markets: Priming the Invisible Pump, by
    Anderson and Snyder, describes the price mechanism's essential role in
    preventing crises: \41\
    ---------------------------------------------------------------------------
        \41\ Terry L. Anderson and Pamela Snyder, Water Markets: Priming
    the Invisible Pump, Cato Institute: Washington, D.C., 1997. p. 11.

            Higher water prices would also reduce the need to build costly
            supply projects and delivery systems that dam and divert free-
            flowing streams. Higher prices would encourage private, profit-
            making firms to enter the water supply industry, taking the
            burden off the public treasury. If the price mechanism were
            allowed to operate, demand could be reduced, supply could be
            increased, water would be reallocated, and water crises would
    ---------------------------------------------------------------------------
            become obsolete.

        Proper pricing is an ``alternative'' to ``costly supply projects.''

        Similarly, David Zetland notes that ``Shortages can be ended much
    more quickly by a change of incentives than supply side actions to
    build a desalination plant or transfer water from neighbors who
    probably can't spare a drop.'' \42\ As it stands, the realities of non-
    scarcity pricing of water and of permitting and approval barriers seem
    to defy the vision of legislative instruments. As Zetland puts it in a
    hypothetical context regarding supplying California's municipal needs
    via desalination:
    ---------------------------------------------------------------------------
        \42\ David Zetland, The End of Abundance: Economic Solutions to
    Water Scarcity, 2011. p. 6.

            But if it's possible to get approval for this kind of project
            and raise prices so far, why not just raise prices and skip the
            project? Higher prices would leave more water for nature, save
            a lot of money, and still leave humans with adequate supplies.
            . . . [T]the policies affecting supply and demand are more
            important for ending shortages than technology.\43\
    ---------------------------------------------------------------------------
        \43\ Zetland, The End of Abundance, p. 183.

        As a longer term vision in a very complex world, we need to attune
    competitive markets more thoroughly to the task of discovering the
    value of water itself.
        Politically expanding a fundamentally scarce and poorly priced
    supply of a resource like water in less-blessed places seems to have
    entrenched artificial new problems and can encourage difficult-to-
    sustain migratory and settlement patterns. Such perverse incentives
    echo the policy of Federal flood insurance for continuously building on
    hurricane-prone areas after consecutive knock-downs. Policymakers
    shouldn't make it artificially attractive for more people to move into
    areas like arid regions. That would be create perverse justification
    for legislation, and worse, would sow the seeds ``necessitating'' more
    legislation years hence.
                                   conclusion
        Like many industries, water policy often suffers from too much
    government.
        Occasionally the problem isn't market failure, but the failure to
    have markets. ``Doing something'' about legitimate water needs is not
    the same as spending money and initiating governmental research and
    coordination. When linking innovation to human needs and promoting
    infrastructure, markets trump the legislative process--and where they
    don't, policy should shift to ensure that they can.
        America's great infrastructure firms are segregated into regulatory
    silos (telecommunications, electricity, water, sewer, cable, railroad,
    airline, satellite, air traffic control, roads). In a freer market,
    they could collaborate to expand infrastructure wealth development and
    boost environmental amenities, but it would require a mindset different
    from the constricted legislative one that sets terms today.
        Interestingly, the dollars allocated to water in the various
    Federal acts over the decades seems to total perhaps a few billion.
    Removing barriers to private research and manufacturing and
    infrastructure could yield far greater gains than relying upon
    appropriations that invite rent-seeking and that may threaten safety
    and environmental improvements. Government's proper stance is one of
    benevolent indifference or neutrality, since many technologies, most
    not in existence yet, will always compete for scarce investment dollars
    whether the projects are small scale or grand infrastructure.
        Congress has a far more important job to do that it can't escape by
    sprinkling cash around as in H.R. 3176. As discussed in Still
    Stimulating Like It's 1999: Time to Rethink Bipartisan Collusion on
    Economic Stimulus Packages,\44\ there exists a natural tendency toward
    stagnation when government fails to perform its ``classical'' function
    of ensuring that prices of materials, labor and other inputs aren't
    distorted by interference in the economy.
    ---------------------------------------------------------------------------
        \44\ Wayne Crews, Still Stimulating Like It's 1999: Time to Rethink
    Bipartisan Collusion on Economic Stimulus Packages, Competitive
    Enterprise Institute, February 2008. http://cei.org/cei_files/fm/
    active/0/6425.pdf.
    ---------------------------------------------------------------------------
        With water supplies, we have, not a funding problem, but a larger
    resource management problem. As David Zetland summarizes in The End of
    Abundance:

            The end of abundance means the supply side/cost recovery model
            of water management no longer delivers the results we want, but
            that model still dominates the business--from California to
            China, Florida to Fiji--and it will cause trouble until we
            change the way we manage water. Economics offers an alternative
            focus on balancing supply and demand.\45\
    ---------------------------------------------------------------------------
        \45\ Zetland, The End of Abundance, p. 6.

        Unlike Zetland, I don't think there needs to be an end to
    abundance. Markets expand output in tangible products and intangible
    services. They also help maximize the production of useful
    information--including research and scientific information about
    technologies whose applicability is uncertain yet holds promise for
    people and the environment.
        The task is to bring modern water resources further into the market
    process, and to lay the groundwork for tomorrow's discoveries and
    advances to be informed and funded by market rather than political
    processes. Reauthorizing Federal water projects would do the opposite
    in many respects. It will take legislation of a different form than
    H.R. 3176 to address the underlying boom/flood and bust/drought
    problems in water supply.
        Appendix: Economic Liberalization--An Alternative to Government
                     Spending in Service to Water Abundance
        We've noted some specific hazards of government steering the
    market. We need alternative approaches--other than Federal spending--to
    advance science and manufacturing, of which water infrastructure an
    example. Such approaches involve fostering a general business
    environment wherein a private sector flush with health can fund its own
    research and ventures. There is a need for cataloging and limiting
    Federal over-regulation to foster a wealthier economy, one capable of
    carrying out an array of research regimes with less temptation to seek
    an ear in Washington.\46\
    ---------------------------------------------------------------------------
        \46\ More detail on the suggestions here appear in Wayne Crews,
    ``The Other National Debt Crisis: How and Why Congress Must Quantify
    Federal Regulation,'' Competitive Enterprise Institute, Issue Analysis
    2011 No. 4. http://cei.org/sites/default/files/Wayne%20Crews%20-
    %20The%20Other%20National%20Debt%20Crisis.pdf.
    ---------------------------------------------------------------------------
    Sunset Regulations and Implement a Regulatory Reduction Commission
        More than 60 departments, agencies, and commissions issue some
    3,500 regulations a year in thousands of Federal Register pages
    (documented in Ten Thousand Commandments: An Annual Snapshot of the
    Federal Regulatory State.\47\) Costs of regulations are estimated to
    top $1 trillion annually. Congress should implement a bi-partisan
    ``Regulatory Reduction Commission'' to survey existing rules and
    assemble a package to eliminate with a straight up-or-down vote, no
    amendments allowed.
    ---------------------------------------------------------------------------
        \47\ http://cei.org/sites/default/files/Wayne%20Crews%20-
    %2010,000%20Commandments%202011.pdf.
    ---------------------------------------------------------------------------
    Require Congressional Approval for Major Business Regulations
        Of 3,500 annual regulations, 100 plus are ``economically
    significant.'' These rules should require an expedited congressional
    approval before they are effective. Apart from the competitiveness and
    innovation issues at issue in legislation, the delegation of
    legislative power to unelected agencies has long needed attention.
    Perform Basic Deregulatory Housekeeping

         Re-discover federalism, that is, circumscribe the Federal
                role regarding investment and regulatory matters best left
                to States and private enterprise. Congress should look at
                what the Federal Government does that it could eliminate,
                or that States could do instead to provide a research and
                manufacturing boost.
         Improve the ethic of quantifying regulatory costs and
                selecting the least-cost compliance methods.
         Codify the executive order on ``Regulatory Planning and
                Review'' (E.O. 12866), or, Reagan's E.O. 12291, which
                provided for more external review.
         Require OMB's Regulatory Information Service Center to
                publish details on major and minor rules produced by each
                agency and strengthen its oversight.
         Reinstate the Regulatory Program of the U.S. Government,
                which formerly appeared routinely as a companion document
                to the Budget.
         Declare Federal Register notices as insufficient notice to
                small business.
         Hold hearings to boost the scope of the Small Business
                Administrations' ``r3'' regulatory review program.
         Lower the threshold at which a point-of-order against
                unfunded mandates applies.
         Implement a supermajority requirement for extraordinarily
                costly mandates.
         Lower the threshold for what counts as an ``economically
                significant'' rule, and improve explicit cost analysis.
         Explore, hold hearings on, and devise a limited
                ``regulatory budget.''
         Establish an annual Presidential address or statement on
                the state of regulation and its impact on productivity and
                GDP.
         Sunset regulations after a fixed period unless explicit
                reauthorization is made.
         Publish data on economic and health/safety regulations
                separately.
         Disclose transfer, administrative, and procedural
                regulatory costs.
         Explicitly note indirect regulatory costs.
         Require agencies and the OMB to recommend rules to
                eliminate rules and to rank their effectiveness.
         Create benefit yardsticks to compare agency effectiveness.

    Implement Annual Regulatory Transparency to Accompany the Federal
            Budget
        In attempting to implement economic liberalization for the wealth-
    creating sector, a ``Regulatory Report Card'' should be part of the
    basic housekeeping just noted.

    Regulatory Transparency Summary. . .with five-year historical tables. .

         Total major ($100 million-plus) rules and minor rules by
                regulatory agency.
         Numbers/percentages of rules impacting small business.
         Numbers/percentages featuring numerical cost estimates.
         Tallies of cost estimates, with subtotals by agencies and
                grand total.
         Numbers and percentages failing to provide cost estimates.
         Federal Register analysis: pages, proposed, and final
                rules by agency.
         Most active rulemaking agencies.
         Rules that are deregulatory rather than regulatory.
         Rules that affect internal agency procedures alone.
         Numbers/percentages required by statute vs. rules agency
                discretionary rules.
         Rules for which weighing costs and benefits is statutorily
                prohibited.
         Detail on rules reviewed by the OMB, and action taken.

                                     ______

        Mr. McClintock. I want to thank all of the witnesses for
    their testimony. We will now go to questions by the members.
    Each member will have 5 minutes and may be submitting
    additional questions if they can't get all of them in during
    the constraints on the time.
        The Chair will begin, and I would like to begin with the
    Tipton bill. Mr. Corbin, Mr. Parker, and Mr. Porzak, each of
    you have highlighted attempts by the administration to
    expropriate water rights that are recognized under State law by
    various types of water users. Heavenly Mountain Resort near
    Lake Tahoe in my district employs about 1,215 people. The jobs
    are contingent on the availability of millions of gallons of
    water annually that are held by the ski area to make snow. I
    know the loss of that privately held water would be
    catastrophic for the local economy.
        Mr. Corbin, representing a ski area in the second-nicest
    part of the country, I wonder if you could tell us what impact
    this would have on the resorts in your ski area.
        Mr. Corbin. Thank you, Mr. Chairman. I appreciate it. And I
    have worked in Tahoe, as well the Rockies, so I view them both
    quite fondly.
        Mr. McClintock. Why in the world would you go to the
    Rockies? Have you no ambition?
        Mr. Corbin. I have been in the Rockies and then worked at
    Northstar, sir.
        If we were to lose our water rights and literally lose the
    use of that water we would be very severely impacted, both
    operationally and financially, as I alluded to earlier. It is
    very key for us to make sure that we have adequate snow in the
    opening of the season, for example, Christmas holidays, and
    likewise in the spring season.
        Our business of offering winter recreation is really one
    done in 120 days, and if we lose any significant portions of
    that because we don't have adequate snow, then we would be very
    severely compromised. Guests would not have a good experience,
    we might not have an adequate base for people to ski on, we
    might not then last an adequate number of days to basically
    cover our sort of fixed cost, if you will----
        Mr. McClintock. So basically what is at stake with the
    Federal Government taking these water rights as a condition of
    special use permits for you to use Federal land is the resorts
    and the economy that they support would be severely impacted,
    perhaps to the point of closing down?
        Mr. Corbin. We would be very severely impacted, yes, sir.
        Mr. McClintock. And, Mr. Parker, what about your
    operations?
        Mr. Parker. Yes, and I am going to be specific to Utah
    here, and you can extrapolate this across the public land West.
    But if you take Utah as an example, livestock agriculture makes
    up about 75 percent of our farm gate sales. Agriculture and
    food in Utah is a $17.5 billion industry, making up 14 percent
    of the State's GDP. It provides 80,000 jobs--this is just Utah,
    this is 1 of the 12 public land States--provides 80,000 jobs
    and about $2.7 billion in wages. And the foundation of that is
    sheep and cattle grazing on the public land. So it would be
    very problematic to our State's economy.
        Mr. McClintock. So, Mr. Porzak, if I wanted to shut down
    these operations, destroy the economies in the local
    communities, is there a more effective way of doing that than
    demanding that the local ski resorts turn over their water
    rights as a condition of continuing to operate?
        Mr. Porzak. A more effective way is just to deny the
    special use permit. You are effectively doing the same thing.
    Two practical issues----
        Mr. McClintock. Well, essentially we are giving you the
    right to continue to operate but taking away the means of doing
    so, is that essentially it?
        Mr. Porzak. That is correct. And just one practical matter
    is that the water rights are valuable assets, and they are
    collateral for the operation loans for the ski resorts. So if
    you take away that asset, you have destroyed the collateral for
    that loan and undercut the ability to obtain that loan.
        The other factor is that, as I mentioned, the ski industry
    collectively has spent hundreds of millions of dollars to
    develop these water rights. If they know that the Federal
    Government is just going to take those water rights away from
    them, you have destroyed the incentive for that investment, and
    that investment is the driving force for that ski area and then
    in turn the local economy.
        Mr. McClintock. OK. Very briefly, turning to Mr. Crews, all
    of our water projects have been based or at least are supposed
    to be based on a beneficiary pays principle, meaning the
    Federal Government will front money, but ultimately the local
    water users will repay it through the water that is purchased.
    The DeFazio bill obviously is simply grants by Federal
    taxpayers to local water users. Is there a better way of
    providing the programs financially?
        Mr. Crews. Yeah, if you are going to do it, surely the
    beneficiary should pay. And in programs like that the wells are
    drilled and in perpetuity those wells get to be maintained in
    that area. Ideally you would have those----
        Mr. McClintock. Hold that thought. I will get back to you.
    My time is out.
        Mrs. Napolitano.
        Mrs. Napolitano. Thank you, Mr. Chairman.
        Well, Mr. Willardson, why is the Federal drought planning
    important?
        Mr. Willardson. Well, as I mentioned, the Bureau of
    Reclamation controls a lot of water in the West. This bill also
    provides it with authority to provide help to the communities
    that cannot otherwise help themselves, as well as to provide
    for assistance to Indian tribes. Under the drought planning
    authority that has helped Arizona develop its drought plan, as
    well as the State of New Mexico and the State of Hawaii. They
    have also assisted the Hopis, the Navajo, the Zunis, and also
    the Hualapai in Arizona, in the Southwest, in development of
    drought plans.
        Because of the situation with the Bureau of Reclamation and
    as you are intimately familiar in the State of California with
    the coordinated operation of the State Water Project and the
    Central Valley Project, there are limitations on the ability of
    the Bureau to move nonproject water, and that authority is also
    provided through this bill.
        And one other important fact is----
        Mrs. Napolitano. Quickly.
        Mr. Willardson [continuing]. This legislation exempts those
    kinds of contracts from restrictions of the Reclamation Reform
    Act with respect to acreage, and it does require that water
    provided by the Bureau be repaid with interest, including a
    portion of the capital costs.
        Mrs. Napolitano. Would you explain briefly please, because
    my time is running out, what would happen, what would be the
    impact on States--California is a donor State, we give more
    taxes than we get back, that said--if the Drought Relief Act
    was not reauthorized.
        Mr. Willardson. I think you would see a very limited
    ability for the Bureau of Reclamation to participate in State
    drought planning and response activities, and that would have a
    significant impact, primarily on those small and local
    communities and disadvantaged communities.
        Mrs. Napolitano. Do you have any comment as to what some of
    the States are currently planning, the Western States, to
    effectively look at how drought is going to be affecting them,
    since we are running into drought cycles?
        Mr. Willardson. There are a number of things that the
    States are trying to do. Obviously conservation and more
    efficient use is key to any of our water issues. Also, the
    development of other storage alternatives, groundwater
    management. They are trying to diversify their portfolios,
    water reuse and recycling. Desalinization is something that
    California and Texas have goals to provide water.
        So there are many different areas on both the supply and
    the demand side that impact us not only in drought, but
    obviously in trying to increase the reliability of future
    supplies.
        Mrs. Napolitano. Thank you. And there are some concerns as
    to infrastructure itself. It is guesstimated that there are 22
    water main breaks a day, which lose as much water as we
    normally would use.
        Mr. Willardson. Infrastructure and aging infrastructure is
    a huge challenge in the West and elsewhere.
        Mrs. Napolitano. Right.
        Mr. Corbin, we understand the Forest Service is in the
    process of developing or was in the process of developing a new
    directive to be released this fall, but what is the urgency of
    moving this legislation now and why not work with the Forest
    Service to solve the issue administratively? And I say that
    because I have had issues with some of my transportation folks,
    with some of my water agencies. And I work with the
    administration, the agencies bring them to the table and say,
    OK, sit down and try to figure it out and let us know where we
    can help, but certainly as much as we can stay out of their
    way.
        Mr. Corbin. I think it is urgent because indeed this
    process of rulemaking has been going on for some time. And in
    the course of that we have previously seen proposed rules that
    indeed have been, I think, very harsh with respect to our
    industry. We have previously offered compromise to the Forest
    Service suggesting that indeed if the stated goal is to protect
    water for use in the permit areas----
        Mrs. Napolitano. Is this before or after the directive was
    put out?
        Mr. Corbin. This compromise was proposed this past summer,
    following the 2012 directive, yes. And it was a compromise
    suggesting that the water could be, in effect, protected for
    use within the permit areas simply by going ahead and having
    the permittees recognize that we would provide water if it were
    necessary for some action we requested approval of, and
    subsequently, if we were to sell and transfer our permit, that
    we would offer it indeed to the subsequent transferees so it
    would stay with the ski area. If that transferee did not want
    the water, we would offer it to the local government; if not
    them, the Forest Service. So we have already suggested a
    compromise.
        Mrs. Napolitano. Thank you. My time has run out. I will
    look for a second round.
        Mr. McClintock. Great. Thank you.
        Mr. Tipton.
        Mr. Tipton. Thank you Mr. Chairman.
        And I think what I would like to start out with is, Mr.
    Willardson, I know you were here to be able to testify on H.R.
    3176, but since you are with the Western States Water Council,
    maybe briefly could you say are you supportive of the Water
    Rights Act bill that we have.
        Mr. Willardson. The Council has not addressed the bill or
    taken a position, but I can tell you on my reading that it is
    very consistent with our long-term support for protecting
    State-granted private property rights, and I would expect that
    we will be sending a letter in support of the legislation for
    the record.
        I would also note that we are working with the Federal
    agencies in what we call our Federal Agency Support Team,
    including the Forest Service, to identify potential needs of
    the Federal agencies and how those needs can be met within
    State law.
        Mr. Tipton. Great. Well, I truly appreciate your support
    for State rights and private property rights. And I would like
    to follow up a little bit in terms of the question of my good
    friend, the Ranking Member's question in regards to the urgency
    of being able to pass this legislation and to be able to have
    it move forward.
        And, Mr. Corbin, Mr. Porzak, perhaps you would like to be
    able to address this.
        Does it disturb you--well, first of all, let's go, Mr.
    Porzak, to your point.
        Mr. Corbin, I think you addressed it as well.
        You have invested millions of dollars developing, paying
    for water rights. That is a balance sheet item for you, I think
    that you noted. Is that correct?
        Mr. Porzak. That is correct.
        Mr. Tipton. Does it disturb you that as you noted, Mr.
    Porzak, that there has been no authority granted by the
    Congress of the United States--by the Congress of the United
    States--but we have an agency, through a rulemaking process,
    that is trying to take your private property. Does that speak
    to you of the urgency?
        Mr. Porzak. It absolutely does it, and it creates great
    uncertainty, and great uncertainty inhibits investment.
        Mr. Tipton. You know and I know when we are looking at some
    of the bureaucracy here in Washington it mystifies them when we
    are talking about a balance sheet item. You seem to indicate
    that there is some actual value with water. Is that correct?
        Mr. Porzak. The Forest Service has admitted that, that they
    see enormous value, and that is the principal reason they want
    control over that value.
        Mr. Tipton. And with the proposed rule that they put
    forward that was only slapped down because they did not follow
    their own administrative procedures initially to be able to
    come forward with, what is the Forest Service going to offer
    you for this valuable resource that you have invested money in
    and paid for?
        Mr. Porzak. They have offered nothing.
        Mr. Tipton. Nothing. That speaks to the urgency, really, of
    legislation of Congress acting on behalf of private property
    rights and Western water rights, don't you think?
        Mr. Porzak. Absolutely.
        Mr. Tipton. Great. Do you have any insights, Mr. Porzak,
    why you noted 20 years this goes back, which I think speaks to
    the urgency. It is Groundhog Day every day for the Forest
    Service, they just keep doing the same thing over and over
    again in terms of overreach. What do you suppose, why do they
    continue to try and pursue your water rights?
        Mr. Porzak. They have actually, one of the principal
    attorneys for the Forest Service has written a Law Review
    article, which is a road map to exactly what they are doing.
    And they tried in the U.S. Supreme Court, U.S. v. New Mexico,
    and lost there to get the right to this water under Federal
    Reserve rights, they have tried in the State supreme courts,
    and they lost in that venue as well. And so now the strategy is
    to use their permitting authority as an end run around State
    water law to basically obtain those water rights for free. That
    has always been their game plan.
        Mr. Tipton. Ignore State water law, ignore Congress, just
    write a rule.
        Mr. Porzak. Yes. And there has always been a Federal
    deference to State water laws. And that is particularly
    important throughout the West because so much water rises on
    the Forest Service or Federal lands, and that is the issue that
    we face where it is basically an end run around, as I
    mentioned, to that State water law.
        Mr. Tipton. We are talking about the U.S. Forest Service.
    Do you see any other Federal agencies that are going to try and
    pursue these policies as well?
        Mr. Porzak. In your area the CLUB 20, which you are
    familiar with. That question was put to the regional head of
    the BLM, and they asked, it was in May of 2012, what they
    thought about the Forest Service efforts. And they announced at
    that public meeting that they thought what the Forest Service
    was doing was great and if they succeeded they were going to do
    the same. And as a result of that, CLUB 20 passed its policy in
    May of 2012 opposing those efforts by all Federal agencies.
        Mr. Tipton. So the people don't want it, the State doesn't
    want it, the private property owners don't want this, but the
    Federal Government, the BLM, the Forest Service, perhaps others
    are going to continue a policy of taking.
        Mr. Porzak. That is correct.
        Mr. Tipton. With that, I yield back.
        Mr. McClintock. Mr. Huffman.
        Mr. Huffman. Thank you, Mr. Chair.
        And thanks to the witnesses for being here and testifying.
    I am struck by some interesting contradictions in the testimony
    that we have heard today. And we have heard some very
    passionate testimony about deferring to State water law, a
    proposition I generally agree with. But we also heard some
    testimony on the issue of Western drought planning and drought
    relief, that we should simply clear away environmental
    obstacles to accessing water and leave more to the private
    sector and to market forces rather than becoming more dependent
    on public dollars.
        Well, if we are to listen to this side of the table and
    defer to State water law, the State of California says all
    water belongs to the people, that it is not a public commodity
    that can just be bought and traded and moved around without
    regard for the multiple beneficial uses that have to be
    balanced. And so there is an interesting contradiction that
    emerges on these complex issues. And I guess I would say
    nothing is quite as simple as it sometimes seems in these types
    of hearings.
        I had practiced enough water law in my career to know that
    these are very complicated issues, and I respect the testimony
    that we have heard from the ski industry and others. I want to
    understand this issue better. But I also know that we are
    hearing all kinds of legal terms of art and legal theories and
    legal issues about takings being discussed, and we have only
    one side of the story represented.
        You may be right, all right? But I am having a hard time
    sorting it out and understanding the merits of what I am
    hearing because we don't have anyone from the Forest Service
    here to explain. I hear a lot of concerns and anxieties about
    what might happen if the policy goes in a certain direction,
    but I haven't heard anybody say that their snowmaking water has
    been actually taken away from them, that they are not able to
    make snow with it, or maybe that they wouldn't even be able to
    make it under this policy change.
        So there are a lot of questions I would love to ask of the
    folks who actually are being accused of these things, but they
    are not here. And there are a lot of questions I would like to
    ask, technical, legal, policy questions to folks like CRS,
    which would be a wonderful resource to have in the room. They
    are not here either because we are in the middle of this absurd
    government shutdown.
        So I appreciate that we have scratched the surface of some
    interesting things today, but I just want to also express my
    frustration that we haven't been able to go beyond a pretty
    selective piece of that surface by virtue of the limitations
    that I have just discussed. And I hope perhaps the next time we
    discuss it--I am happy to continue the discussion--that we can
    have a more complete set of facts before us.
        Thanks, Mr. Chairman.
        Mr. McClintock. If the gentleman will yield, I just want to
    assure him that the U.S. Forest Service informed the
    subcommittee prior to the shutdown that it would not be able to
    testify on this bill, it was not willing to testify on this
    bill because the new directive was being reviewed by the OMB,
    and that they were embargoed to comment on it. And so that has
    nothing to do----
        Mr. Huffman. And reclaiming my time, Mr. Chair, if I might,
    I guess I would suggest that maybe instead of just leaving it
    at that and vilifying them for the problem they had in being
    unable to testify, work with them. Why does everything have to
    be so adversarial with the Forest Service and these other
    agencies? Find a time that works for them when they are not
    subject to that constraint, get them in here so that we can
    have a complete discussion.
        Mr. McClintock. If the gentleman will yield again, I would
    also point out that the minority had the opportunity to name a
    witness to this panel for this bill and did not.
        Mr. Huffman. Well, we have the same government shutdown
    problems that you do right now in getting witnesses. And I
    yield back.
        Mr. McClintock. Mr. Gosar.
        Mrs. Napolitano. The gentleman wants to respond.
        Mr. Porzak. If I might respond to two issues that you
    raised. One is, as one who has specialized in Western water law
    for 40 years now, one thing I recognize is that each of the
    Western States are different. And while they have common water
    principles, they are very different. And that is why it is so
    important to defer to that State water law because what may
    work in California might not work in Colorado or Utah or other
    States.
        The second issue is that when you do question the Forest
    Service, one question that I would ask them is that they say
    they want to preserve this water for that ski area or for the
    municipality or whatnot, but yet when the ski industry and the
    municipal interests ask them to agree to limit, if they took
    the water right, to limit it to the use to which it was
    previously put, and they absolutely refused to do that. They
    wanted the ability to change the water and to determine how
    much was truly needed for a ski use or a municipal use, and
    then be free to use the rest of that water for another purpose.
    I would challenge them on that.
        Mr. McClintock. Mr. Huffman, we are still on your time.
        Mr. Huffman. Thank you, Mr. Chairman. I would just say I
    hope we can get a chance to hear from them, and it is a
    discussion I would be happy to continue if we can get all the
    parties around the table to actually have it in the right way.
    Thank you, Mr. Chair. I will yield back.
        Mr. Parker. In Utah, it is interesting, there are a couple
    of points that I think are important. One is by statute the
    State of Utah has said those water rights that are related to
    livestock are appurtenant to the land, so they can't be
    transferred outside of that grazing allotment. The second part
    that I think is important is--it just left me, but----
        Mr. McClintock. Mr. Huffman's time is about to expire. We
    will go to Mr. Gosar and perhaps you can continue it there.
        Dr. Gosar. You want to start me at a new 5?
        Mr. McClintock. Yes, you will start at a new 5, that is
    correct.
        Dr. Gosar. Thank you. I think the last two people asking
    questions recalibrated mine.
        So, Mr. Corbin, what kind of financial aspect can you
    quantify for me in legal fees you spend to validate your water
    rights? What kind of money do you spend to validate those
    rights from the industry?
        Mr. Corbin. For the industry?
        Dr. Gosar. For the industry.
        Mr. Corbin. I honestly couldn't tell you. I know that we as
    a ski company made a contribution to NSAA to participate in the
    lawsuit that occurred last year. I could not tell you off the
    top of my head how much we individually contributed or what the
    legal fees incurred by NSAA were in that lawsuit last year. I
    can tell you in any litigation we are involved in they are
    substantial.
        Dr. Gosar. I would like to quantify that. I would like that
    question answered. I would like you to go back into your
    records and quantify that for me.
        For you, Mr. Parker, how about you? Can you quantify
    legally what it costs you--let's just say over the last 20
    years and break it down in those areas--how much it costs you
    to legitimize your water claims?
        Mr. Parker. This is a broad area because there is continual
    challenges legally in Utah that are related to access to the
    land. And that access to the land is basically the access to
    the water. And so you have got to almost lump those together
    because as the Federal agencies reduce livestock numbers, let's
    say an allotment has 300 head of cattle that use the water on
    there and it is cut to 150, the Forest Service gains de facto
    water for 150 cattle because there are only half of the number
    there drinking now. Even without going through a court action,
    they gain water rights because of an action that reduces cattle
    numbers on it.
        Stock producers and the agencies are at legal loggerheads.
    It is almost a continual battle. But the problem is, as we
    know, that the deep pockets of the Federal Government are
    pretty tough to beat when you are a rancher with a----
        Dr. Gosar. And that is what I am after. You know, the whole
    portal in the Western States is, if it doesn't have the water,
    you don't have a right. There is no access for that. So there
    is a purpose to where I am coming back to.
        So Mr. Porzak, from your legal opinion and from law over
    the last 40 years, are there some remedies, are there some
    opportunities for the industries that are dictated by this
    water usage to be compensated for their plight versus the
    Federal Government?
        Mr. Porzak. You cannot compensate. Water is a threshold and
    indispensable commodity. It is why it is often difficult to
    settle water cases, because it is not a traditional business
    transaction where you can just compensate people with dollars
    and cents. You can't do without the water. If you don't have
    the water for the municipal providers you can't serve the
    residents. If you don't have the water for the ski industry you
    can't make snow, you can't provide the domestic requirements
    and all the other uses. So it is so indispensable that there is
    no other alternative.
        Dr. Gosar. So in regards to the private industry and the
    segments that are dependent upon this versus, as you quantified
    it, the deep pockets of the Federal Government, wouldn't
    something like equal access to justice, shouldn't that have
    some application for those that are egregiously harmed by the
    Federal Government? Shouldn't there be some type of
    compensation for an egregious action by the Federal Government
    over States and individuals?
        Mr. Porzak. There should be, but that is not what the ski
    industry or the municipal providers are asking for. They are
    just asking----
        Dr. Gosar. Well, I am well aware that is not what they are
    asking. The problem is, I have been sitting here for 2 years
    and I am a dentist impersonating a politician and there is a
    core problem here, we see radical environmental groups, we see
    the Federal Government chastising over and over and over again
    borrowing from the Federal Government's power of the purse to
    manipulate and negate your ability to defend yourself. So to me
    I think that there has got to be some mechanism here, whether
    it be the Equal Access to Justice funding that is equivocal in
    funding to your needs.
        I see you want to talk.
        Mr. Parker. Yes. Generally, ranchers don't have access to
    the Equal Access to Justice Act because we are not claiming
    something is in violation of the law in these circumstances.
    You have to find the agency at fault in some way violating the
    Federal law, and this may rise to that level.
        Dr. Gosar. But that is what they are doing. My whole point
    is they are violating the Federal law because there is no
    Federal law that allows this jurisdiction. That is my whole
    point.
        I am trying to live outside the box. My time has expired.
        Mr. McClintock. Thank you.
        Mr. Stewart.
        Mr. Stewart. Thank you, Mr. Chairman, for holding this
    hearing.
        To the witnesses, thank you for coming. I know that it is
    inconvenient for you, for some of you it is expensive, you have
    other things to do. Thanks for being here with us today. Thanks
    for the service you give to your country.
        If you don't mind I am going to spend a little time with
    you, Mr. Parker, both of us coming from Utah. And we have known
    each other for a little time. I look at you and I think, OK,
    here is a guy who maybe has spent a little time on a horse----
        Mr. Parker. Yes.
        Mr. Stewart [continuing]. Knows a little bit about
    ranching, knows a little bit about farming. I want you to know
    that I do as well. I grew up farming and ranching. We still
    have both my family farm and my in-laws have a ranch and it is
    deep in our blood and we appreciate that lifestyle. I mean,
    there is nothing more American than the family farm or the
    family ranch, and it is something that we want to protect.
        Mr. Parker, would you consider yourself an expert on
    ranching and farming concerns?
        Mr. Parker. I have been involved in ranching since I was
    born, yes, cattle and sheep ranching, yes, sir.
        Mr. Stewart. And you represent a fairly large organization,
    as I understand, right?
        Mr. Parker. We do, 6 million member families in the United
    States that I am speaking for today.
        Mr. Stewart. Six million. That is a substantial number.
        Mr. Parker. Yes.
        Mr. Stewart. And I appreciate that. It seems to me, as I
    said, that you can speak with some authority then about farming
    and ranching concerns. And I would like to go back to your
    opening statement, if I could, something that you mentioned
    briefly, but I think it is worth coming back to, and that is
    your telling of what happened in Tooele County, which is a
    fairly rural county in Utah, it is west of Salt Lake. It is a
    county that I represent by the way. And you go back a few
    years, 2012, where we had agents from the Forest Service who
    were denying ranchers and farmers grazing permits unless they
    agreed to relinquish their private livestock water rights.
        Look, that to me is just unheard of, and it is egregious to
    think of the impacts that that could have on these, what are
    almost in every case, family farms and family ranches. And I
    just wondered if you would elaborate on that and maybe just
    ask, have you ever heard or seen an example of such what I
    consider an abuse of power?
        Mr. Parker. This is, as far as I have seen it, as
    aggressive as I have seen it based on the livestock industry.
        I think I want to start by noting that, like the ski
    industry, water is part of the balance sheet for livestock
    producers as well. It is part of the asset base that they
    borrow against.
        For that group in Tooele County, they initially were asked
    to sign a change of use application, which would have
    transferred the right to use that as livestock water to the
    Federal agency, and then they would determine what they wanted
    to use it for. That is what a change of use application would
    allow. So they would turn over their ability to maintain that
    as livestock water on that allotment.
        The Forest Service objected and said, well, we made a
    mistake, we only wanted them to sign a joint ownership
    agreement, and we really didn't mean it, they wouldn't be able
    to use their grazing allotment. Well, you know, that is after
    the cow is out of the gate, so to speak.
        And either way you cut it, that is a diminishment----
        Mr. Stewart. Right.
        Mr. Parker [continuing]. Or a relinquishment of value and
    of a right that is granted under the sovereign rights of the
    State of Utah through the State engineer. It is a taking. There
    is no question about it.
        Mr. Stewart. There is no question. I mean, I may own my
    home, but if someone demands joint ownership agreement of my
    home that is a substantial reduction of my rights and private
    property.
        Can you tell us very quickly, how was that resolved? What
    was the outcome of that?
        Mr. Parker. The regional forester intervened and said, we
    really didn't mean to go there, and so they have kind of backed
    away from it at this point. But my view is what happens with
    the ski industry will be a telltale sign of how much further
    this creep could get into the livestock industry.
        Livestock water across the State of Utah, the second most
    arid State in the Nation, if we don't have that broadly
    dispersed water for those livestock to graze out there on those
    rangelands the grazing value is gone, as is the water value.
        Mr. Stewart. Well, and so in this case maybe they backed
    off a little, although they haven't backed off entirely on
    this, it hasn't been closed. But we know there are instances in
    Nevada, for example, where BLM and Forest Service agents ended
    up, some of them, in criminal charges and actually going to
    jail for----
        Mr. Parker. In the Hage case, yes, absolutely.
        Mr. Stewart. Yes.
        Mr. Parker. They overfiled on their water, it went to
    court. The Supreme Court wouldn't hear it because they said it
    isn't ripe. But, yes, that is where we have been.
        Mr. Stewart. That is exactly right.
        So I see my time is up, but just very quickly, Mr.
    Chairman, look, when you have Federal agents that are acting in
    direct conflict of the law and they are doing what I consider
    extorting something as precious as water rights out of private
    citizens, well, how would we expect those citizens to react?
    How would we expect them not to have some, you know----
        Mr. McClintock. We will take that as a rhetorical question.
        Mr. Stewart. Yes.
        Mr. McClintock. But there has been a request for a second
    round, so we will get back to that in a few minutes.
        Mr. Stewart. OK. Thank you, Mr. Chairman. I appreciate it.
        Mr. McClintock. And I would like to pick up on that very
    point with Mr. Parker and Mr. Porzak.
        Are we seeing an adversarial relationship begin to develop
    between this Government and the people, and particularly
    between the U.S. Forest Service and the users of our public
    lands? I raise that point because I am getting increasingly
    frantic complaints throughout my district of abusive behavior,
    most recently with the shutdown. Concessionaires who own their
    own shops, who own their own businesses literally being forced
    to close their doors solely because they are leasing land from
    the Federal Government.
        Now, in the 17 shutdowns that have occurred over the past
    37 years this has never happened before. It seems that the U.S.
    Forest Service is going out of its way to make life difficult
    for people, to inconvenience people, and almost seem to be
    reversing the entire original purpose of the Forest Service,
    which Gifford Pinchot described as managing the public lands
    for the greatest good for the greatest number in the long run.
    Are we seeing a fundamental change in this relationship?
        Mr. Porzak. The Forest Service and the ski industry, as Mr.
    Corbin pointed out, have always had a great working
    relationship. They have truly worked as partners on many
    issues. Where the line got drawn, though, was with respect to
    the takings of their water rights. That was the one time that
    the ski industry turned around and actually initiated a lawsuit
    against the Forest Service. It is clear on this issue a wedge
    has really been driven by the administration.
        Mr. McClintock. So this is unprecedented, and it is a
    fundamental shift in the relationships that have previously
    existed between the Government and the people.
        Mr. Porzak. Yes, Mr. Chairman.
        Mr. Parker. Mr. Chairman, from a livestock and agriculture
    standpoint, this is timber as well, if you go back to the 1960
    Multiple Use Sustained Yield Act, there was a right granted to
    do certain things on the public land under that multiple use
    banner. FLIPMA changed that, and everything now is based on
    permitting, and those permits can be changed based on the whims
    of either Washington, DC, or the agents out there on the
    ground.
        So, yes, we have seen a much more adversarial relationship
    because we have changed from a right to a permit and those
    permits can basically go all over the place based on whatever
    the politics of the day are.
        Mr. McClintock. Mr. Corbin, I am not going to put you in
    that hot seat, but I have talked to a number of operators over
    the years who tell me they are simply scared to death of giving
    candid answers because of their fear of retaliatory actions by
    the Forest Service. So I will excuse you from being placed in
    that position.
        Mr. Crews, under the drought relief program, in your view,
    are the authorities provided under the program narrowly
    tailored toward the purpose of drought relief?
        Mr. Crews. No, I don't think they are. There are too many
    provisions there that are unreimbursed. The bulk of the money
    does go to well drilling, but contingency planning and
    transport and all these other provisions that are there don't
    get reimbursed by the beneficiary of the program. And I think
    in essence the approach is wrong.
        Mr. McClintock. Are there also expenditures in this other
    than drought relief in the narrow sense?
        Mr. Crews. Well, there is drought relief, there is solar
    panel, there is desalination, there are program choices that
    don't necessarily make a lot of sense.
        Mr. McClintock. Mr. Willardson, I have got two basic
    propositions. The first is that cheaper water is better than
    more expensive water, and that more water is better than less
    water. If we can agree on these propositions then I think we
    can also agree that the entire purpose of our water policy is
    to protect against droughts; in other words, to store water
    during wet years in order to have it in dry years, to move it
    from wet areas to dry areas, and to assure that in times of
    drought there is plenty to go around. Doesn't that mean we
    should be building more storage?
        Mr. Willardson. I agree with your premise. And also I would
    point out that in 1995, I believe, with the Western Water
    Policy Review Commission, that the comments from the States all
    included storage as a solution to the problems that they face.
        I would also point out, being a quasi-economist, that in
    Utah we have been criticized for having low water rates. Well,
    in the Salt Lake Valley we are at the base of the mountain
    which is fed by snowpack. There is very little distribution,
    there is very little treatment required, and subsequently the
    water is cheap. Now, does that mean we should artificially
    increase the price above what it is for production to encourage
    conservation? The State has set a goal of 25 percent reduction
    in use, but it is through other areas besides increasing price
    artificially.
        Mr. McClintock. Thank you. My time has expired.
        Mrs. Napolitano.
        Mrs. Napolitano. Thank you, Mr. Chairman.
        Mr. Corbin, in April this year, nearly 108 ski resorts in
    24 of those States sent a letter of support of climate change
    plan. Are the resorts concerned about the impact of climate
    change and drought on the water resources available to the ski
    resorts, and how does this affect your business? And as a
    follow-up to that, what do you think the Federal role is in
    helping to deal with those two issues?
        Mr. Corbin. Indeed, we are very concerned about climate
    change or certainly the ongoing droughts that we have been
    experiencing recently in the West. As I said, water is kind of
    existential to our business. Without the water we are not in
    business. So to the degree that climate change, increasing
    temperatures, those sorts of things affect us, the desire on
    our own part to very carefully manage, conserve, optimize the
    use of our own water that we have obtained is very critical to
    us. So we believe we are incented perhaps more than anyone, for
    reasons that are both altruistic and economic, to preserve that
    water and use it wisely.
        Mrs. Napolitano. Thank you.
        There are so many questions that I would have. And I agree
    with Mr. Jared Huffman that there are many things that we
    cannot ask because the people are not here to ask.
        And, Mr. Chair, my staff was only given 6 business days to
    find a witness, so it is a little hard, especially with a
    shutdown, to be able to ensure that we have adequate
    representation.
        But I don't disagree on 3176. I just think we need to have
    more input and more information to be able to make a more
    informed decision. Because we are here--well, it is 3189,
    sorry--that our role is to ensure that whatever law is passed,
    that whatever we look at, whatever input we have, that it is
    good for the people that we represent. That should be our
    number one priority. Second, that it is fair for the people,
    that they have a voice. We are supposed to be their voice. And
    also the last one, and I consider that just as important, is
    that it is good for business and it is good for the economy,
    because without that the people will suffer.
        So with all that, we need to continue to ensure that we
    have all of the parties represented, that we have the voices of
    those that sometimes don't speak, can't speak for themselves,
    they can't afford attorneys, they don't have the ability to
    come in and say to Congress, you need to help us, whether it is
    financially or economically or viably, whatever. So I would
    suggest that we continue to have conversations and be able to
    figure out whether this can be resolved administratively, with
    our help or without our help, and that we understand that our
    responsibility is to all of you, as well as to the people that
    we all represent, and that we continue to find solutions that
    don't include spending an inordinate amount of money in
    attorney fees.
        So with that, Mr. Chair, I yield back.
        Mr. McClintock. And I would remind the gentlelady that the
    notice was the same as the minority party used to give the
    majority party when the minority was the majority and the
    majority was the minority.
        Chair recognize Mr. Tipton.
        Mr. Tipton. Thank you, Mr. Chairman. Just a couple of
    follow-up questions.
        Mr. Parker, when you were commenting about permits that can
    be changed on a whim, if I wrote down your comment correctly,
    effectively what you are saying is, correct me if I am in
    error, but you are worried that once a rule is put into place
    they can also change it. Does that speak to the importance of
    the Water Rights Protection Act?
        Mr. Parker. That is absolutely right. In fact, one of the
    big challenges in the Hage case that Mr. Stewart brought up was
    whether or not the Federal Government could, in fact, stop
    access to the water. The Federal Court in Nevada and the
    District Court of Appeals in Washington, DC, both agreed that
    there is a right of access to those water rights, those
    livestock water rights.
        Mr. Tipton. I appreciate that.
        And, Mr. Porzak, maybe you would like to get in on this as
    well, because we have talked about ski areas. We know the
    economic importance that Mr. Corbin has pointed out, certainly
    in my district and Mr. Polis' district, who is cosponsor of
    this legislation as well.
        But you had spoken to the point that this is far more than
    just a ski area issue. You had mentioned the municipal water,
    grazing rights that Mr. Parker can certainly speak to, Mr.
    Amodei had to step out, but we have heard of water rights being
    taken by the Forest Service down in the State of Nevada as a
    condition of permit.
        When we are talking about the municipal water that we are
    dealing with in Colorado, is this a real threat? And, again,
    why do you suppose the Federal Government, the Forest Service,
    is trying to pursue this taking?
        Mr. Porzak. It is control over a resource that is
    indispensable and enormously valuable. And they have made it
    clear that they want to have the control so that they can
    decide how that water is allocated and used. And time is of the
    essence on this issue to avoid future litigation.
        Mr. Tipton. So we can settle it once and for all to be able
    to protect your private property rights. We don't have to worry
    about rules being rewritten. To use your quote, going back 20
    years, this is not a new issue, it is time that we settle it,
    and this is a good piece of legislation to be able to
    accomplish that?
        Mr. Porzak. That is correct. And that is why we are so
    supportive of this legislation.
        Mr. Tipton. Thank you.
        Mr. Parker.
        Mr. Parker. And the point I wanted to add to this is the
    States do allow, Utah does allow the Federal Government
    ownership of water. They just have to go through the same
    process as anybody else. They have to step up and show that
    they are going to put it to beneficial use. They have to apply,
    like anybody else. And if they are taking a water right that
    belongs to somebody else, they have to pay for it. What in the
    world is wrong with that?
        Mr. Tipton. You know, and I believe that is accurate in
    Colorado as well. We are just not going to allow the Federal
    Government to be able to put themselves in the first position
    at the expense of our ski areas, at the expense of our farm and
    ranch communities, at the expense of our municipalities. They
    have to play by the same rules as the rest of us.
        Thank you, gentlemen. I appreciate your testimony here
    today. We do look forward to the Forest Service coming up and
    trying to express why in the world they believe they have the
    right to be able to take private property. Thank you.
        And with that I yield back, Mr. Chairman.
        Mr. McClintock. Thank you.
        Mr. Stewart is next. Mr. Stewart, if I could request, if
    you have any questions of Mr. Porzak could you make them first?
    He has to get out of here to the airport.
        Mr. Stewart. Actually, I don't, Mr. Chairman.
        Mr. McClintock. Mr. Porzak, I want to thank you so much for
    being here and welcome you to leave at your discretion.
        Mr. Porzak. Thank you, Mr. Chairman. I appreciate it.
        Mr. Stewart. I want to know how come he can go home and we
    don't get to.
        Mr. Porzak. I got the last seat on this airplane today.
        Mr. McClintock. Mr. Stewart.
        Mr. Stewart. Yes. I am going to be very brief. You all have
    been patient with us as we delayed for the vote, and it is
    getting late, so I won't take but a few minutes. But I want to
    pursue what Mr. Tipton was saying and maybe draw some
    conclusions from it. Let's for the moment give the Forest
    Service or BLM agents the benefit of the doubt. Let's suppose
    that they have reasons for some of the things that they have
    done or at least that they had some objective that they were
    trying to achieve. And I would ask maybe Mr. Corbin or again my
    friend Mr. Parker, have they explained to you what it is that
    they are hoping? Why is it that they would exert these rights
    when it would be contrary to tradition and law?
        Mr. Parker. The argument that they have made from a
    livestock standpoint is they suggest that that is the way they
    can assure that it will be there in the future to maintain
    their multiple use obligation and allow grazing. But we have
    already made that happen in Utah under State statute, we have
    made it livestock water rights appurtenant to the land.
        Mr. Stewart. I think that is exactly right, their desire to
    tie that water to the land. And I am going to come back to
    that.
        Mr. Corbin, did you want to add to that?
        Mr. Corbin. I would agree. And the same rationale has been
    given to us, that the stated purpose is to have the water
    available for the special use permit in the ski area per se.
    But as has been testified here already, in the rule that was
    proposed in 2012 there really wasn't such a restriction. It was
    indeed contemplated that uses might be other than skiing and
    outside of our permit areas for other purposes, whether that is
    aquatic systems elsewhere or not.
        Mr. Stewart. Whatever it might be.
        Mr. Corbin. It could be anything, yes.
        Mr. Stewart. That is right. Which brings me to the point I
    would like to make on that, and that is, while they wanted to
    ensure that the land and the water were tied so that it would
    continue to be used for the purpose that it was being used,
    they were afraid essentially that the water rights would be
    sold downstream for other uses or for some other cause. But,
    you know, we asked--not myself, I wasn't in Congress at the
    time--but the Congress asked the Chief if he had any examples,
    even one, of that occurring, and this was several years ago and
    his answer was no, we don't have a single occurrence where that
    has actually been what took place.
        And I am wondering, in the ensuing 2 or 3 years since then,
    are either of you aware of any example of that occurring?
        Mr. Corbin. In my experience, no sir, I am not aware of any
    ski area that has essentially stripped itself of its water and
    sold it as----
        Mr. Stewart. Of course not. Of course they wouldn't do
    that.
        Mr. Corbin. It would severely hamper your ongoing
    enterprise. So there is no real reason to strip your water off
    your ski area.
        Mr. Stewart. There is no-self interest of you doing that.
        Mr. Parker, do you----
        Mr. Parker. And if you take where livestock water is,
    across Utah in particular, it has been developed out there
    across the landscape and it is an arid landscape. And a lot of
    them are just troughs where seeps have been run into it for
    water for livestock and wildlife. It would be impossible to be
    able to transfer that dispersed water out there across the Utah
    landscape, put it into a pipe, and send it to some
    municipality. It can't happen. The best use of it is livestock
    water for the economic opportunities that it affords rural
    Utah.
        Mr. Stewart. Well, and so I started out my questions to you
    by saying let's give the agency agents the benefit of the doubt
    trying to understand why they are doing this. But their own
    reason, their justification, it is chasing a ghost. I mean,
    they are trying to solve a problem that doesn't exist. What
    they are trying to do is to preclude a problem that by their
    own admission does not exist.
        Mr. Parker. If you look at the findings in the Hage case,
    particularly when the Federal Government, the agents filed a
    trespass suit against the family, the agencies are strong
    arming these individuals out of being able to clean their
    ditches, out of using their water right. These are Federal
    agents that by court were fined for illegal activities against
    those ranching families. Very few of them have the financial
    wherewithal to do this. The Hage's did and they found it pretty
    tough treading to go through the court system.
        Mr. Stewart. Well, thank you. Again, to all of the
    witnesses, you have helped me make I think some important
    points with your experience.
        And, Mr. Chairman, I yield back.
        Mr. McClintock. Thank you.
        I would like to thank our witnesses for their valuable
    testimony today and again for their patience on our late start.
    Members of the subcommittee may have additional questions, and
    we would ask that you respond to those in writing. The hearing
    record will be open for 10 business days to receive those
    responses.
        And if there is no further business, without objection, the
    subcommittee stands adjourned.
        [Whereupon, at 4:17 p.m., the subcommittee was adjourned.]

                                    ------

                [ADDITIONAL MATERIALS SUBMITTED FOR THE RECORD]

     Letter from Chairman McClintock to Bureau of Reclamation on H.R. 3176
                       U.S. House of Representatives,
                        Committee on Natural Resources,
                                                Washington, DC,
                                                      October 18, 2013.
    Hon. Michael L. Connor, Commissioner,
    U.S. Bureau of Reclamation,
    1849 C Street, NW,
    Washington, DC 20240.

        Dear Commissioner Connor:

        As you know, I invited you to testify on H.R. 3176 at the Water and
    Power Subcommittee's October 10, 2013 hearing. However, you or any
    other agency personnel did not testify or submit comments on the
    legislation.
        While you unfortunately chose not to attend, it is your agency's
    responsibility to provide the Administration's views on H.R. 3176. As
    such, I request that you provide written comments on the bill no later
    than November 1, 2013.
        Thank you for your attention to this matter.

                Sincerely,
                                      Tom McClintock, Chairman,
                                       Subcommittee on Water and Power.

                                     ______

      Letter from Chairman McClintock to U.S. Forest Service on H.R. 3189
                       U.S. House of Representatives,
                        Committee on Natural Resources,
                                                Washington, DC,
                                                      October 18, 2013.
    Hon. Tom Tidwell, Chief,
    United States Forest Service,
    1400 Independence Ave., SW,
    Washington, DC 20250.

        Dear Chief Tidwell:

        As you know, I invited you to testify on H.R. 3189 at the Water and
    Power Subcommittee's October 10, 2013 hearing. However, you or any
    other agency personnel did not testify or submit comments on the
    legislation.
        While you unfortunately chose not to attend, it is your agency's
    responsibility to provide the Administration's views on H.R. 3189. As
    such, I request that you provide written comments on the bill no later
    than November 1, 2013.
        Thank you for your attention to this matter.

                Sincerely,
                                      Tom McClintock, Chairman,
                                       Subcommittee on Water and Power.

                                     ______

    Response to Chairman McClintock from U.S. Department of the Interior on
                                   H.R. 3189
                       U.S. Department of the Interior,
                                                Washington, DC,
                                                     November 13, 2013.
    Hon. Tom McClintock, Chairman,
    House Subcommittee on Water and Power,
    Washington, DC 20515.

        Dear Mr. Chairman:

        This letter provides the views of the Department of Interior
    (Department) on H.R. 3189, the Water Rights Protection Act, which was
    the subject of a legislative hearing by the Subcommittee on Water and
    Power. The Department has serious concerns that H.R. 3189 could
    significantly impact the Department's ability to manage water-related
    resources within public lands managed by the Department. The
    legislation is overly broad and could have numerous unintended
    consequences that would affect existing law and voluntary agreements.
    The Federal Government retains the right to regulate government lands
    under Article IV, Section 3 of the Constitution. Pursuant to that
    provision, the United States has authority to reserve water rights for
    its reservations and its property. Although the Federal Government
    generally defers to the States in the allocation and regulation of
    their water rights, a bill prohibiting two Federal departments from
    exerting some control over the exercise of water rights located on
    Federal lands threatens to undermine their longstanding authority to
    manage property and claim proprietary rights for the benefit of Indian
    tribes and reserved Federal lands. The bill would create uncertainty
    for many existing voluntary arrangements that are designed to produce a
    more efficient operation of U.S. facilities in the wake of climate
    change and reduction of water supplies.
        H.R. 3189 may prohibit parties from voluntarily entering into
    agreements with the Department or its bureaus with respect to water
    rights in order to protect State, Federal or third party interests. For
    example, this bill could prevent the Bureau of Reclamation from
    partnering with parties who use groundwater for recreational activities
    on Reclamation lands, since the recreational users often apply jointly
    with Reclamation for a State permit since Reclamation is the land
    owner. Further, there are numerous examples where the Bureau of
    Reclamation has contracts with water users that include the transfer or
    relinquishment of pre-existing private water rights in exchange for a
    license or contract that provides project benefits at Reclamation
    facilities, e.g. storage or delivery of water. The bill, as written,
    may prohibit renewal of such contracts, thus interfering with
    voluntary, mutually beneficial agreements that improve water resource
    management. We do not believe it was the intent of this legislation to
    prohibit such agreements and we believe the Department should be
    explicitly excluded.
        The legislation would also prohibit the National Park Service from
    exercising its authority to perfect water rights in the interest of the
    United States for waters diverted from or used on National Park Service
    lands, including operations associated with National Park Service
    concessioners, lessors or permittees. The requirement that all water
    rights on National Park Service lands be held in the name of the United
    States is grounded, in part, on the potential damage and disruption
    that privately held water rights could cause to park resources and
    operations.
        As drafted, the legislation would also impose unnecessary
    restrictions on the Bureau of Land Management's ability to
    cooperatively mitigate impacts to sensitive water resources. The BLM
    frequently partners with public land users through collaborative
    agreements to plan, finance, and develop water resources. The
    legislation would not provide additional protections for the holders of
    water rights beyond current BLM policy, and if enacted, would
    jeopardize the BLM's ability to manage water-related resources vital to
    many multiple uses on public lands.
        We appreciate the opportunity to present the Department's views on
    H.R. 3189. The Office of Management and Budget has advised that there
    is no objection to the transmittal of these views from the standpoint
    of the Administration's program. If you have any questions, please call
    me, or Libby Washburn, Deputy Commissioner for External & Governmental
    Affairs, Bureau of Reclamation, at 202.513.0616.

                Sincerely,
                                                   Anne Castle,
                             Assistant Secretary for Water and Science.

                                     ______

                   Prepared Statement of USDA Forest Service
                     h.r. 3189, water rights protection act
        Chairman McClintock, Ranking Member Napolitano, and Members of the
    Subcommittee, thank you for the opportunity to provide the U.S.
    Department of Agriculture's views on H.R. 3189, the Water Rights
    Protection Act. We defer to the U.S. Department of the Interior for its
    views on this bill as it pertains to its bureaus.
        It is not in our interest or policy to take private water rights.
    Our interest is in sustaining skiing as a recreation opportunity on
    National Forest System (NFS) lands now and in the future. Water rights
    are increasingly critical to many ski areas for the purpose of
    snowmaking. Our interest is not in taking the water right, but in
    assuring that a necessary amount of water is available so that skiing
    can continue to be an important recreation opportunity in the National
    Forests.
        Based on comments and a series of town hall meetings held this
    year, we will be proposing changes to the ski area water rights clause
    that address the concerns associated with the previous ski area water
    rights clause. We believe that these changes will provide assurances to
    the public and communities that depend on economic activities from ski
    areas that they will continue to provide recreation opportunities.
    Further, we believe that these objectives can be met without requiring
    the transfer of privately owned water rights to the Government. Once
    the proposed permit clause is published in the Federal Register, the
    public will have an opportunity to comment, and the Forest Service will
    determine how to proceed based on those comments.
        Because we are moving forward expeditiously with an opportunity for
    public comment on the ski area water rights clause in response to a
    2012 court decision, the Department believes H.R. 3189 is unnecessary.
    Further, the Department is concerned that H.R. 3189 as drafted would
    impede the statutory mission of the Forest Service to provide for
    multiple uses, including recreation, under the Organic Administration
    Act and Multiple Use Sustained Yield Act (MUSYA). Specifically, the
    bill would preclude the Forest Service from requiring as a condition of
    a permit issued for MUSYA purposes, such as a ski area or grazing
    permit, the transfer of associated water rights to a succeeding
    permittee. Thus, the bill could complicate the United States' ability
    to prevent severance of water rights from associated permitted uses of
    Federal lands, as necessary to ensure the continuing availability of
    water for snowmaking and other forest uses.
        In addition, the legislation could also generate litigation over
    imposition of conditions on a special use authorization or a Federal
    Energy Regulatory Commission license to require a bypass flow.
    Inability to impose bypass flow requirements would significantly affect
    the Forest Service's management of water resources to protect the
    environment, e.g., to ensure adequate water is available for fisheries
    or threatened and endangered species.
        Thank you again for this opportunity to comment on H.R. 3189.

                                     ______

                 Letters Submitted for the Record on H.R. 3189

                              Heavenly Mountain Resort,
                                                Lake Tahoe, NV,
                                                       October 7, 2013.
    Hon. Tom McClintock, Chairman,
    Hon. Mark Amodei,
    House Subcommittee on Water and Power,
    1522 Longworth House Office Building,
    Washington, DC 20515.

    Re: H.R. 3189--Water Rights Protection Act

        Dear Chairman McClintock and Congressman Amodei:

        Heavenly Mountain Resort operates a public land ski area in the
    States of California and Nevada under a Special Use Term Permit from
    the USDA Forest Service.
        Heavenly supports H.R. 3189 the Water Rights Protection Act as
    proposed for the following reasons:

      1.  Water rights developed, paid for and perfected by the ski area
                permittee are a right of use that is protected by the State
                Constitution: any taking of those rights by the Federal
                Government requires fair and equitable compensation;
      2.  In Nevada for example, all surface and groundwater water is owned
                by the State which grants the rights to use it through the
                State Engineer to private and public entities through a
                detailed permitting system. It is not possible for a
                private ski area permittee to transfer to the Federal
                Government something that it does not own;
      3.  Tourism and outdoor recreation is the economic base of our
                community and provides several thousand direct and indirect
                jobs annually;
      4.  In the Sierra Nevada mountains in particular where natural
                snowfall has been inconsistent in recent years, the ability
                to acquire and utilize water rights for snowmaking is a
                critical business issue that allows resorts like Heavenly
                to have successful ski seasons;
      5.  Using the water rights to make snow and manage it throughout the
                season supports a significant number of jobs in our
                community: in particular early season snowmaking is
                critical to our local economy both directly and indirectly
                because it provides consistency as to when we can open to
                the public;
      6.  Based on our presence in the community and our long-term
                commitment to its sustainability and economic well-being,
                Heavenly is clearly better suited than the Federal
                Government to responsibly use and reliably protect this
                valuable resource; and
      7.  While we enjoy a close working relationship with the Forest
                Service in providing high-quality outdoor recreation to the
                American public, their previous attempts at requiring
                transfer of water rights as a permit condition is
                unnecessary and appears to be a solution in search of a
                problem that does not actually exist in our industry.

        Thank you for the opportunity to provide our input to this
    important bill. I am sorry that I cannot be with you in person to
    present our testimony.
        Please share it with members of the subcommittee and add it to the
    hearing record.

                Sincerely,
                                                 Andrew Strain,
                     Vice President of Planning & Governmental Affairs.

                                     ______

        National Association of Conservation Districts,
                                                Washington, DC,
                                                      October 21, 2013.
    Chairman Hastings, and Ranking Member DeFazio,
    Committee on Natural Resources,
    Chairman McClintock, and Ranking Member Napolitano,
    Subcommittee on Water and Power,
    1324 Longworth House Office Building,
    Washington, DC 20515.

    Re: The Water Rights Protection Act--H.R. 3189

        Dear Chairman Hastings, Ranking Member DeFazio, Chairman McClintock
    and Ranking Member Napolitano:

        The National Association of Conservation Districts (NACD) supports
    the bipartisan H.R. 3189, the Water Rights Protection Act. NACD
    represents America's 3,000 locally led conservation districts working
    with millions of cooperating landowners and operators to help them
    manage and protect land and water resources on private and public lands
    in the United States. Established under State law, conservation
    districts share a single mission: to work cooperatively with Federal,
    State and other local resource management agencies and private sector
    interests to provide technical, financial, and other assistance to help
    landowners and operators apply conservation to the landscape.
        NACD understands that water is a vital natural resource that needs
    to be protected. This bill would prevent Federal agencies from
    requiring public-lands users to turn over water rights as a condition
    of issuing or renewing permits. Not only is compelling individuals to
    relinquish water rights for permits unfair to those who have paid to
    use their water permits, the required waiver of water rights to the
    Federal Government overlooks State laws concerning water rights
    transfer and ownership as well as Constitutional takings issues.
        Stakeholders ranging from individual ranchers and farmers to
    municipalities rely on private water rights to provide drinking water,
    provide agricultural water, run their operations, and secure loans. The
    loss of these water rights would take away their ability to address
    local water concerns and plan ahead to meet their specific long-term
    water needs. H.R. 3189 would secure water rights for those that have
    paid for them and provide stakeholders the stability they need to
    appropriately plan for and manage natural resources at the local level.
        Thank you for your consideration of these important water resource
    issues as they pertain to H.R. 3189.

                Sincerely,
                                                Earl J. Garber,
                                                             President.

                                     ______

                Rio Grande Water Conservation District,
                                             Alamosa, Colorado,
                                                      October 15, 2013.
    Hon. Scott Tipton,
    218 Cannon House Office Building,
    Washington, DC 20515.

        Dear Representative Tipton:

        One of the Rio Grande Water Conservation District's purposes is
    ``for the conservation, use and development of the water of the Rio
    Grande''. We understand that there has been an attempt by certain
    Federal agencies to require Federal permittees to assign their private
    water rights to the Federal Government as a condition of the permit. If
    this policy continues it will create a great risk to the water users
    both in the San Luis Valley and statewide. The Rio Grande Water
    Conservation District supports H.R. 3189, The Water Rights Protection
    Act, aid will work with you to garner support for this bill to ensure
    protection of privately owned water rights from claims by Federal
    agencies.
        As we understand, H.R. 3189 was introduced as a means to protect
    water users from the seizure of privately owned water rights without
    just compensation. We believe that H.R. 3189 grants no new rights to
    any party, nor does it in any way infringe on existing rights of
    individuals, States or the Federal Government. It appears to us that
    this legislation simply reaffirms what has been existing law for
    generations and which is expressed in numerous places in Federal law,
    including the Mining Act of 1866; the 1897 Organic Act establishing the
    U.S. Forest Service; the Taylor Grazing Act; and the Federal Land
    Policy and Management Act of 1976. The bill supports long-established
    recognition of the primacy of State water law and the title to water
    rights that are established thereunder.
        We are aware of no provision in Federal statutory law authorizing
    or permitting the Forest Service or the Bureau of Land Management to
    compel owners of lawfully acquired water rights to surrender those
    rights or to require that they be in the name of the United States.
    H.R. 3189 does nothing more than assure holders of BLM or Forest
    Service permits that their lawfully acquired water rights will not be
    abridged and that Federal agencies may not use the permit process to
    acquire water rights that are owned by non-Federal entities.
        We thank you for taking a leadership role in addressing this
    crucial issue and look forward to working with you on this important
    legislation.

                Sincerely,
                                               Steven Vandiver,
                                                       General Manager.

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