    [Senate Hearing 114-399]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-399

                      PENDING WATER AND POWER LEGISLATION

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

                                    HEARING

                                   BEFORE THE

                                SUBCOMMITTEE ON
                                WATER AND POWER

                                     of the

                                  COMMITTEE ON
                          ENERGY AND NATURAL RESOURCES
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                       ON

                      S. 593                           S. 1365

                      S. 982                           S. 1533

                      S. 1291                          S. 1552

                      S. 1305

                                   __________

                                 JUNE 18, 2015

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

             Available via the World Wide Web: http://www.fdsys.gov

                                _________

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     95-284                   WASHINGTON : 2017
    ____________________________________________________________________
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                   COMMITTEE ON ENERGY AND NATURAL RESOURCES

                        LISA MURKOWSKI, Alaska, Chairman
    JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
    JAMES E. RISCH, Idaho                RON WYDEN, Oregon
    MIKE LEE, Utah                       BERNARD SANDERS, Vermont
    JEFF FLAKE, Arizona                  DEBBIE STABENOW, Michigan
    STEVE DAINES, Montana                AL FRANKEN, Minnesota
    BILL CASSIDY, Louisiana              JOE MANCHIN III, West Virginia
    CORY GARDNER, Colorado               MARTIN HEINRICH, New Mexico
    ROB PORTMAN, Ohio                    MAZIE K. HIRONO, Hawaii
    JOHN HOEVEN, North Dakota            ANGUS S. KING, JR., Maine
    LAMAR ALEXANDER, Tennessee           ELIZABETH WARREN, Massachusetts
    SHELLEY MOORE CAPITO, West Virginia

                        Subcommittee on Water and Power

                               MIKE LEE, Chairman
    JEFF FLAKE                           MAZIE K. HIRONO
    JOHN BARRASSO                        RON WYDEN
    JAMES E. RISCH                       BERNARD SANDERS
    STEVE DAINES                         AL FRANKEN
    CORY GARDNER                         JOE MANCHIN III
    ROB PORTMAN                          ANGUS S. KING, JR.

                        Karen K. Billups, Staff Director
                    Patrick J. McCormick III, Chief Counsel
       Christopher Kearney, Budget Analyst and Senior Professional Staff
                                     Member
               Angela Becker-Dippmann, Democratic Staff Director
                    Sam E. Fowler, Democratic Chief Counsel
            Melanie Stansbury, Democratic Professional Staff Member

                                C O N T E N T S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Barrasso, Hon. John, a U.S. Senator from Wyoming.................     1
    Hirono, Hon. Mazie K., Subcommittee Ranking Member, and a U.S.
      Senator from Hawaii............................................    82
    Daines, Hon. Steve, a U.S. Senator from Montana..................    90

                                   WITNESSES

    Thompson, Dionne, Deputy Commissioner for External and
      Intergovernmental Affairs, Bureau of Reclamation, U.S.
      Department of the Interior.....................................     3
    Meissner, Jerry, Chairman, Dry-Redwater Regional Water Authority.    33
    Schempp, Adam, Senior Attorney and Director of the Western Water
      Program, Environmental Law Institute...........................    43
    Stern, Charles, Specialist in Natural Resources Policy,
      Congressional Research Service.................................    49
    Willardson, Anthony, Executive Director, Western States Water
      Council........................................................    58
    Yates, Ryan, Director of Congressional Relations, American Farm
      Bureau Federation..............................................    73

              ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

    American Rivers:
        Letter for the Record........................................   126
    Ankney, Hon. Duane:
        Letter for the Record........................................   128
    Assiniboine and Sioux Tribes and Dry Prairie Rural Water
      Authority:
        Statement for the Record.....................................   129
    Barrasso, Hon. John:
        Opening Statement............................................     1
    Daines, Hon. Steve:
        Opening Statement............................................    90
        Photograph...................................................    91
    Eastern New Mexico Water Utility Authority:
        Statement for the Record.....................................   133
    Hirono, Hon. Mazie K.:
        Opening Statement............................................    82
    Meissner, Jerry:
        Opening Statement............................................    33
        Written Testimony............................................    35
    Montana Department of Natural Resources and Conservation:
        Letter for the Record........................................   139
    Schempp, Adam:
        Opening Statement............................................    43
        Written Testimony............................................    45
    Stern, Charles:
        Opening Statement............................................    49
        Written Testimony............................................    51
    Thompson, Dionne:
        Opening Statement............................................     3
        Written Testimony............................................     5
        Responses to Questions for the Record........................   104
    U.S. Department of Agriculture, Forest Service:
        Statement for the Record regarding S. 982....................    85
        Statement for the Record regarding S. 1533...................    89
    Willardson, Anthony:
        Opening Statement............................................    58
        Written Testimony............................................    60
        Responses to Questions for the Record........................   112
    Yates, Ryan:
        Opening Statement............................................    73
        Written Testimony............................................    75

    ----------
    The text for each of the bills which were addressed in this hearing can
    be found on the committee's website at: http://www.energy.senate.gov/
    public/index.cfm/hearings-and-business-meetings?ID=545782e0-2ade-47b3-
    98f9-726dfefd4d59

                      PENDING WATER AND POWER LEGISLATION

                                  ----------

                            Thursday, June 18, 2015

           U.S. Senate Subcommittee on Water and Power,
             Committee on Energy and Natural Resources,
                                                        Washington, DC.
        The Subcommittee met, pursuant to notice, at 2:05 p.m. in
    Room SD-366, Dirksen Senate Office Building, Hon. John
    Barrasso, presiding.

      OPENING STATEMENT OF HON. JOHN BARRASSO, U.S. SENATOR FROM
                                WYOMING

        Senator Barrasso. [presiding] I want to thank all of the
    witnesses for being here today. I call the meeting to order.
        We are in the middle of votes and members may come and go
    based on that.
        Today we are having a hearing on a series of water bills
    that address protecting water rights and promoting water
    development in the West. Four of the bills are ones I am
    sponsoring. They are S. 593, the Bureau of Reclamation
    Transparency Act; S. 1305, a bill to amend the Colorado River
    Storage Project Act to authorize the use of the active capacity
    of the Fontenelle Reservoir in my home State of Wyoming; S.
    982, the Water Rights Protection Act; and S. 1533, the Water
    Supply Permitting Coordination Act.
        I would also like to note that I am pleased to be sitting
    in for Subcommittee Ranking Member, Mike Lee. He and I share a
    commitment to ensuring that we protect water rights and examine
    ways to promote more water for rural and Western communities.
        I will briefly explain the four bills I am sponsoring and
    then if other members arrive, they will have an opportunity to
    give opening statements. After that I will recognize any other
    sponsors of the bills being discussed today for their
    statements.
        S. 593, the Bureau of Reclamation Transparency Act, is a
    bill to require the Secretary of the Interior to submit to
    Congress a report on the maintenance backlog of the Bureau of
    Reclamation. S. 593 seeks to expand on the information provided
    by Bureau of Reclamation Asset Management Plan by providing a
    detailed assessment of major repair and rehabilitation needs at
    the project level at Bureau of Reclamation owned and managed
    sites known as reserved works. The legislation also asks the
    Bureau to develop a similar assessment for sites owned by the
    Bureau but managed by other entities. They are known as
    transferred works. I believe it is important for Congress to
    know the maintenance backlog of these sites so that we can
    begin to address it. I will note that this bill unanimously
    passed the Senate in the last Congress.
        S. 1305 is a bill which would amend the Colorado River
    Storage Project Act to authorize the use of the active capacity
    of the Fontenelle Reservoir in my home State of Wyoming. The
    purpose of S. 1305 is to have the Bureau of Reclamation enter
    into an agreement with the State of Wyoming to complete the
    area around the Fontenelle Reservoir to increase the storage
    capacity of the facility. Fontenelle Reservoir is one of the
    projects authorized by the Colorado River Storage Project Act
    of 1956. This bill directs that the State of Wyoming pay for
    the entire project. This includes paying for the study, the
    design, the planning and construction of the project. This
    common sense bill would provide much needed water storage for
    Southwestern Wyoming.
        S. 982, the Water Rights Protection Act, is a bill to
    prohibit Federal agencies from withholding approving permits
    unless the permitee gives up that privately held water right to
    the Federal Government. This bill also prevents the
    implementation of the Forest Service Groundwater Directive
    which would essentially allow the Forest Service to comment on
    and require permits for anything the agency claims would impact
    Forest Service groundwater. This includes activities that would
    occur in any watershed where there is Forest Service land. This
    legislation would prohibit the Secretary of the Interior and
    the Secretary of Agriculture from asserting jurisdiction over
    groundwater that has been historically controlled by the
    states. The bill also recognizes the state's long standing
    authority related to protecting, evaluating and allocating
    groundwater resources.
        The purpose of S. 1533, the Water Supply Permitting
    Coordination Act, is to streamline the current multiple agency
    permitting process that delays the construction of new or
    expanded surface water storage by creating a one stop shop
    permitting process through the Bureau of Reclamation.
    Currently, Federal agencies are not required to coordinate
    their permits and approvals with one another which can lead to
    significant delays in the development of new water storage.
    This legislation would put the Bureau of Reclamation in the
    lead role as a coordinating agency to expedite the process. I
    believe this important bill will help expedite the construction
    of new water storage projects throughout the West.
        As other members appear I will call on them. I would like
    to recognize our witnesses today. Ms. Dionne Thompson, Deputy
    Commissioner of External and Intergovernmental Affairs at the
    Bureau of Reclamation (BOR); Mr. Jerry Meissner, Chairman of
    the Dry Red-water Regional Water Authority; Mr. Adam Schempp,
    the Director of Western Water Program, Environmental Law
    Institute; Mr. Charles Stern, Specialist in Natural Resource
    Policy, Congressional Research Service; Mr. Tony Willardson,
    Executive Director, Western States Water Council; and Mr. Ryan
    Yates, Director of Congressional Relations, American Farm
    Bureau.
        With that let me please call on Ms. Thompson.

    STATEMENT OF DIONNE THOMPSON, DEPUTY COMMISSIONER FOR EXTERNAL
      AND INTERGOVERNMENTAL AFFAIRS, BUREAU OF RECLAMATION, U.S.
                       DEPARTMENT OF THE INTERIOR

        Ms. Thompson. Chairman Barrasso, I am Dionne Thompson,
    Deputy Commissioner for External and Intergovernmental Affairs
    at the Bureau of Reclamation. Thank you for the opportunity
    today to testify on the seven bills before the Subcommittee
    today.
        In the interest of time I will summarize the Department's
    views briefly and submit my full testimony on each bill for the
    record.
        I will do my best to answer any questions proposed today;
    however, as you know, these bills deal with very specific
    ongoing issues in some of your home states, so I may need to
    defer with detailed answers on some questions and reply in
    writing for the record.
        S. 593, the Reclamation Transparency Act. To begin, S. 593
    directs Reclamation to improve and expand upon the information
    developed on the state of its infrastructure. The bill reflects
    extensive edits made by the sponsors during the prior Congress
    and is consistent with the draft infrastructure investment
    strategy Reclamation is initiating concurrently. For these
    reasons we are pleased to support the bill.
        S. 982, the Water Rights Protection Act. My written
    statement on S. 982 explains the Department's views that this
    bill compromises the Federal Government's long standing
    authority to manage Federal lands and associated water
    resources, uphold proprietary rights for the benefit of Indian
    Tribes and insure proper management of the public lands and
    resources for the benefit of all citizens. This legislation is
    overly broad and could have numerous unintended consequences
    that would have adverse effects on existing law and voluntary
    agreements. The Department opposes S. 982.
        S. 1291, the Northport Irrigation Bill. S. 1291 deals with
    early repayment by the Northport Irrigation District. The
    Department supports this legislation and supported it in prior
    Congresses, and we are pleased to support it today.
        S. 1305, the Fontenelle Reservoir bill. S. 1305 amends the
    Colorado River Storage Project Act to authorize Reclamation to
    modify Fontenelle Dam on the Green River in Wyoming and as a
    result increase the amount of water developed by Fontenelle.
    With positive statements detailed in my written statement, the
    Department does not oppose S. 1305.
        S. 1365, Rural Water Project Completion Act. S. 1365
    creates a fund in the Treasury which would provide Reclamation
    with a dedicated funding stream to pay for construction of
    authorized rural water projects and to implement Indian water
    rights settlements. The Department appreciates the sponsor's
    desire to assist Reclamation with its important budget
    obligations, and we support the goals of this bill. We have
    some specific concerns, however, described in my written
    statement.
        S. 1533, the Water Supply Permitting Coordination Act. S.
    1533 directs the Secretary of the Interior to coordinate
    Federal and State permitting processes related to the
    construction of new surface storage projects on lands managed
    by Interior or the Department of Agriculture. The Department
    does not find the provisions of S. 1533 to be necessary and
    consequently does not support the bill.
        S. 1552, the Clean Water for Rural Communities Act. Lastly,
    as S. 1552 would authorize destruction, construction rather, of
    the Dry-Redwater Regional Water Authority System and the
    Musselshell-Judith Rural Water System in the States of Montana
    and North Dakota. These projects would create several hundred
    million dollars of new budget obligation on Reclamation's Rural
    Water Program. For that reason and the reasons described in my
    written statement, the Department does not support S. 1552.
        Clean, safe, reliable water is essential to the well being
    of our citizens and the continuing progress of America's
    economic endeavors, a concept at the very heart of the Bureau's
    mission. We appreciate the efforts of the Subcommittee to
    address the water-related needs of the communities we serve.
    The Bureau, as well, recognizes the growing water challenges
    confronting families, farmers, tribes, businesses and rural
    economies, particularly in the face of a changing climate.
        We believe and we have always believed that such challenges
    can only be met through tenacious collaboration on the ground
    and here in our nation's capital. With that in mind and noting
    the constraints of--budgetary resources, Federal budgetary
    resources, we extend our continuing commitment to work with the
    Subcommittee to strengthen Federal programs and projects and
    that deliver water and power to the people we all serve.
        Thank you for the opportunity to present these views. I
    would be pleased to answer any questions at the appropriate
    time and glad to respond in more detail in writing on any
    questions requiring input from on the ground experts.
        [The prepared statement of Ms. Thompson follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Thank you so much for your testimony.
        Mr. Meissner?

     STATEMENT OF JERRY MEISSNER, CHAIRMAN, DRY-REDWATER REGIONAL
                            WATER AUTHORITY

        Mr. Meissner. Good afternoon, Senator Barrasso, Senator
    Daines in attendance and members of the Subcommittee. I am
    Jerry Meissner, Chairman of the Dry-Redwater Regional Water
    Authority from Circle, Montana. I appreciate the opportunity to
    discuss our support of both S. 1552, the Clean Water for Rural
    Communities Act, and S. 1365, the Authorized Rural Water
    Projects Completion Act.
        The Dry-Redwater Regional Water Authority System, also
    called DRWA, is a rural water project in Eastern Montana with a
    current service area about 11,000 square miles covering the
    Montana counties of McCone, Richland, Dawson, Prairie, and
    Garfield. In addition, Dry-Redwater includes McKenzie County,
    North Dakota which sets atop the Bakken shale play and is North
    Dakota's leading oil producing county. This bakken boom has
    brought a population increase to our Eastern Montana
    communities increasing the stress on our drinking water
    situation.
        Historically this part of Eastern Montana does not have
    good quality, water quality. Simply stated, the water is unsafe
    to drink. The majority of the rural residents obtain their
    water from private wells. Many haul all of their drinking and
    cooking water. The treatment of water in a private well is very
    costly and often complicated.
        The majority of the proposed communities to be served by
    Dry-Redwater are currently operating their own municipal water
    systems and are unable to meet the requirements of the Safe
    Drinking Water Act without expensive, energy intensive
    treatments.
        All of the communities are using wells as a source of
    water, and these wells are not providing the quality or
    quantity of water needed. Many of the existing systems treat
    their water with chlorine which, in turn, has caused problems
    with elevated levels of disinfection byproducts. In addition,
    there are problems with bacterial contamination. Total
    dissolved solids, organic levels, iron, manganese, lead, copper
    sulfate, sodium, and fluoride that render the water
    undrinkable.
        These small rural towns cannot afford to operate, maintain
    and replace their own water treatment facilities; therefore, in
    2002 a steering committee of volunteers was formed and the Dry-
    Redwater Regional Water Authority became a legal entity. In
    2005, the Regional Water System will allow the small
    communities to come together and provide citizens with access
    to a reliable, safe, high quality water supply.
        From a regulatory aspect, a regional water system has
    significant benefits. At a present time when a rule changes all
    area systems must react to the change individually. That means
    that the Montana Department of Environmental Quality is
    perennially facing problems with compliance issues as these
    smaller systems have a reduced capacity to maintain and
    operate. The regional water system would provide one point of
    regulation for all the member systems. If a rule were changed
    it would only affect one treatment plant and a regional system
    can be upgraded and operated at a higher level of oversight
    than an individual municipal water system.
        Dry-Redwater has been working with the Bureau of
    Reclamation in Billings to install this water project as
    stipulated in the Rural Water Supply Act of 2006 and has
    expressed in the interim final rules; however, various
    interpretations of the interim final rules has significantly
    strung out Dry-Redwater's approval with over $4 million spent
    thus far and over ten years of commitment, we respectfully
    request the Committee to favorably report this bill and
    Congress to pass it into law so that the Dry-Redwater will be
    Federally authorized. As it stands now our system planning has
    reached a point beyond which we can easily move forward without
    the ability to work formally with Federal agencies.
        In summary, Dry-Redwater will provide a dependable regional
    water supply for public systems and rural water users. We have
    spent ten years working to provide a clean drinking water to
    this service area of approximately 15,000 people. We sincerely
    hope for our legislation to be passed into law so we may go
    forward with our plans to provide something that is often taken
    for granted in most areas in the United States, safe and clean
    drinking water.
        I would also like to add to my testimony that the Dry-
    Redwater fully supports S. 1365, the Authorized Rural Water
    Projects Completion Act, which was introduced by Senators
    Tester and Daines. This bill provides funding for authorized
    water projects and provides a way to pay for our water system.
    Dry-Redwater is grateful for this inclusion in this funding
    bill written by our Montana Senators and respectfully urges the
    Subcommittee and Congress to pass this bill into law so that
    the rural water projects can receive funds from the Reclamation
    Fund to finance Western Water Development.
        The BOR, in previous testimony before this Committee, has
    stated current projected funding levels may not be sufficient
    to complete the Federal funding portion of the authorized rural
    water systems. S. 1365 will assist the BOR in providing a level
    of funding to support the construction of authorized rural
    water projects. The Reclamation Fund was established in 1902 by
    Congress to be used as a funding source to construct water
    projects in the West.
        So we fully support this legislation. It paves a pathway to
    actual construction of these authorized rural water systems.
        Thank you for your time.
        [The prepared statement of Mr. Meissner follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Thank you so very much, Mr. Meissner, for
    your testimony.
        Now, Mr. Schempp.

    STATEMENT OF ADAM SCHEMPP, SENIOR ATTORNEY AND DIRECTOR OF THE
           WESTERN WATER PROGRAM, ENVIRONMENTAL LAW INSTITUTE

        Mr. Schempp. Senator Barrasso, thank you for the
    opportunity to be here today to provide my views on Senate bill
    982, otherwise known as the Water Rights Protection Act.
        I am Adam Schempp, a senior attorney and Director of the
    Western Water Program at the Environmental Law Institute (ELI).
    Founded in 1969 ELI is an internationally recognized,
    nonpartisan NGO with a mission of providing the highest quality
    research, publications, educational materials and training in
    environment energy and natural resources law and management.
        While my testimony is intended in part to advance ELI's
    educational mission, the views presented here are my own and
    they do not necessarily reflect the views of ELI's Board of
    Directors or its members.
        Senate bill 982 appears to address some of the concerns
    that prompted it including the effect of private rights to
    water from the Forest Service's 2011 interim directive which
    sought to require ski areas operating on public land to
    transfer their water rights to the Federal Government, but the
    bill would introduce into Federal law some broad and ambiguous
    language which, along with some internal inconsistencies could
    make its potential impacts sweeping. At the very least the bill
    could prove challenging for Federal agencies to implement and
    for courts to interpret.
        For example, Subsection 5-1, the savings clause concerning
    the bill's effect on existing authority, reads in part:
    ``Nothing in this act limits or expands any existing legally
    recognized authority of the Secretary of the Interior or the
    Secretary of Agriculture to issue, grant or condition, any
    permit approval, license lease, allotment, easement, right of
    way or other land use or occupancy agreement.''
        If the Secretaries do not have the authority to condition
    permits, leases and the like in the way prohibited in Section 3
    of this bill, then the bill is unnecessary. If the Secretaries
    do have that authority then those prohibitions are trumped by
    the savings clause. The only way to square the savings clause
    with Subsection 3-1 is to place great emphasis on the phrase,
    ``legally recognized,'' which itself is unclear. What if the
    Secretaries have this authority as a critical aspect of this
    issue and handling it in such a vague manner likely hampers
    rather than helps regulatory clarity?
        Other vagueness in the savings clauses arises in Subsection
    5-D which reads: ``Nothing in this act limits or expands any
    existing or claimed reserved water rights of the Federal
    Government on land administered by the Secretary of Interior or
    the Secretary of Agriculture.'' The term ``existing'' clearly
    refers to reserved water rights that are already established at
    the time of the bill's passage, but the term ``claimed'' is
    unclear as to its temporal meaning. If it is interpreted to
    mean reserved water rights already claimed at the time of the
    bill's passage then there are no protections in this bill for
    future assertions of reserved water rights.
        Turning to Section 3 of the bill, the prohibitions
    identified here lack specificity in their restrictions. A
    limitation of a water right is not a term of art and could be
    interpreted very broadly leading to disputes between applicants
    and the Federal land management agencies which might provoke
    delay in permit issuance and even litigation over whether a
    proposed permit or license condition is actually a limitation.
        Also, these prohibitions may have the unintended
    consequence of fewer land use occupancy agreements or would
    circumscribe the ability of the Secretaries to protect against
    adverse water impacts from land use or occupancy agreements.
    The multiple uses for which Secretaries of the Interior and
    Agriculture manage lands and the environmental laws that apply
    still remain. Thus, if a proposed surface use activity might be
    acceptable but it would produce incompatible impacts on other
    Federal resources if water is used in a certain way, the
    Federal agency might be inclined not to enter the agreement at
    all.
        Senate bill 982 also includes a prohibition against
    withholding, in whole or in part, land use or occupancy
    agreements. If withhold is interpreted to mean not issuing the
    land use or occupancy agreement, the Secretaries could deny any
    permit or could not deny any permit or application solely
    because of the potential impact of the resulting use of a water
    right. They could neither condition the use of water nor deny
    the use of land to ensure compliance with their other federally
    mandated obligations.
        Senate bill 982, by using ambiguous terms and by coupling
    that with sweeping savings clauses in Section 5, may in fact
    reduce regulatory certainty rather than improve it resulting in
    delay, confusion and litigation.
        I thank you, and I will be pleased to answer any questions
    at the appropriate time.
        [The prepared statement of Mr. Schempp follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Barrasso. Thank you very much, Mr. Schempp.
        Mr. Stern?

      STATEMENT OF CHARLES STERN, SPECIALIST IN NATURAL RESOURCES
                 POLICY, CONGRESSIONAL RESEARCH SERVICE

        Mr. Stern. Senator Barrasso, my name is Charles Stern. I'm
    a specialist in Natural Resources Policy at the congressional
    Research Service. Thank you for inviting CRS to testify on S.
    593, S. 1365 and S. 982. CRS takes no position on these bills
    but has been asked to provide background and analysis of their
    potential effects. S. 593, the Bureau of Reclamation
    Transparency Act, would require that the Bureau of
    Reclamation's asset management reporting be expanded to include
    several new components. The mixed management structure of
    Reclamation water resource facilities complicates reporting on
    needed upgrades. Reclamation has undertaken efforts to improve
    this reporting including annual asset management plans. These
    reports summarize Reclamation's infrastructure management
    efforts but have not included lists of facility specific repair
    needs.
        S. 593 would make several changes to Reclamation's
    reporting process. Notably Section 4-B would require that the
    Bureau's asset management plan include an itemized list of
    repair needs that reserve works. This would include a cost
    estimate for repair needs and a categorical rating for each
    item. Section 5 requires Reclamation to work with local project
    sponsors to develop similar requirements for transferred works.
        S. 593 does not address the management of projects rather
    it focuses on what information is made available to Congress
    and the general public about these facilities. Some may
    question how much of the information required by the
    legislation is already available. While some of this data
    appears to be tracked internally by Reclamation, it is not
    available in a consolidated public report. A more in depth
    review of some facilities, especially transferred works, could
    also be required by the bill.
        S. 1365, the Authorized Rural Water Settlement Project
    Completion Act, would establish dedicated funding for ongoing
    and newly authorized rural water projects and certain
    settlement agreements with Indian tribes. Since 1980, Congress
    has authorized Reclamation to undertake 12 rural water supply
    projects, six of which are ongoing. According to Reclamation
    total cost to complete these projects would be about $2.4
    billion. In the current budget levels they may not be complete
    for 50 years or more.
        Indian water right settlements are also expected to be
    significant in terms of future year costs relative to
    Reclamation's budget. Overall, 29 Indian water right
    settlements have been approved by Congress since 1978. To date,
    Congress has appropriated more than $2 billion in discretionary
    funds to these settlements and more funding will be needed.
    According to the Department of the Interior, 20 other
    settlements between the Federal Government and Federally
    recognized tribes are under negotiation or have negotiation
    teams appointed.
        S. 1365 would establish a new fund in the Treasury and
    transfer to it $115 million annually from 2015 to 2029 without
    further appropriation. These funds would be made available from
    future balances accruing to the Reclamation Fund. The mandatory
    appropriation would be divided between two accounts with an
    account designated for authorized rural water projects
    designated to receive $80 million annually and an account for
    Indian water rights and other related settlement agreements to
    receive $35 million annually.
        Mandatory funding for rural water projects would be a
    contrast to the discretionary appropriations which typically
    fund these and other Reclamation projects and programs.
    Supporters argue that this funding is crucial to securing water
    supplies for these communities. Some may question elevating the
    priority of these projects by removing them from Reclamation's
    regular appropriations process. Others may ask whether rural
    communities are eligible for other Federal funding.
        Several agencies are authorized to provide assistance of
    this type; however, the authorities for each agency's programs
    are unique and the eligibility and competitiveness of
    individual communities may vary. In contrast, Congress has in
    some cases provided mandatory funding for Indian water right
    settlements. Thus, the bill's proposed funding approach for
    these projects is not without precedent.
        S. 982 would establish prohibitions related to the
    conditioning of certain Federal actions on the transfer of
    water rights. The Subcommittee asked CRS to limit its testimony
    to abbreviated background on Federal Reserve water rights as
    they relate to this legislation.
        Federal Reserve water rights often arise in questions of
    water allocation and uses related to Federal lands. These
    rights co-exist with water rights administered under state law.
    Federal Reserve water rights were recognized by the Supreme
    Court in Winters v. United States in 1908.
        Under the Winters Doctrine when Congress reserves land from
    the public domain for a Federal purpose it also, by
    implication, reserves water resources sufficient to fulfill the
    specific purposes of the reservation. Although the Winters
    Doctrine was originally interpreted as applying to Indian
    reservations, it has since been applied to other Federal land
    reservation including water uses in national parks, national
    wildlife Refuges, and other Federal areas. As a result Federal
    agencies have, in some cases, asserted or negotiated reserve
    water rights in accordance with Federally authorized purposes.
    There is ongoing debate as to the limits of these rights.
        This concludes my statement. I would be happy to answer any
    questions you may have at the appropriate time.
        [The prepared statement of Mr. Stern follows:]

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        Senator Daines. [presiding] Thank you, Mr. Stern.
        Mr. Willardson?

     STATEMENT OF ANTHONY WILLARDSON, EXECUTIVE DIRECTOR, WESTERN
                          STATES WATER COUNCIL

        Mr. Willardson. Senator Daines, Senator Hirono, I
    appreciate the opportunity to testify on behalf of the Western
    States Water Council.
        This is our 50th anniversary since our creation as a policy
    advisory body to the Western Governors. Our members are
    appointed and serve at the pleasure of their Governors. We
    believe that the Authorized Rural Water Project Completion Act
    provides an appropriate and timely Federal investment of modest
    amounts that will minimize long term, Federal expenditures,
    create jobs and fulfill long standing promises and trust
    responsibilities in rural and tribal communities, some of which
    date back decades.
        We strongly support the policy of encouraging negotiated
    settlement of any water rights claims is the best solution to
    this critical problem. We also support the proposed Rural Water
    Construction and Settlement Implementation Fund for financing
    these needs as identified in S. 1365.
        The Council believes that receipts accruing to the
    Reclamation Fund, subsequent to the 1902 Reclamation Act and
    other acts, should be fully appropriated for their intended and
    authorized purposes.
        We also would suggest that Congress consider converting the
    Reclamation Fund from a special account to a true revolving
    trust fund.
        Some rural and tribal communities face serious water
    shortages now due to drought and declining stream flows and
    groundwater levels and inadequate infrastructure with some
    communities hauling water. Many rural and tribal communities
    are also suffering from high unemployment and lack the
    financial capability and expertise to meet their drinking water
    needs. The Reclamation Rural Water Project Supply Program was
    created in 2006 to provide an assessment of these rural water
    needs which were found to range from $5 to $8 billion as well
    as $1.2 billion for specific Indian water supply projects.
        In 2012, Reclamation estimated that to complete eight of
    those projects would cost $2.6 billion and that they would
    likely, at current funding levels, not be completed until 2063.
    The constant resolving outstanding Indian water rights claims
    is also growing and the Administration's request for this
    Fiscal Year of $18.6 million for construction of authorized
    rural water projects and $18 million for tribal features of
    specific projects is not sufficient to complete them in a
    timely manner as would be provided by the S. 1365.
        This is a relatively modest Federal investment compared to
    the increasing costs which will likely occur if construction is
    further delayed, and we recognize the Federal budget
    constraints but still remains this obligation to fulfill
    Federal trust responsibilities and other promises to states and
    tribes who lost land from Federal flood control projects.
        I would mention the Garrison Diversion project in North
    Dakota which flooded 300,000 acres of private farmland as part
    of the Pick-Sloan Missouri Basin program as well as inundating
    550 square miles of Native American lands and displacing some
    900 Native American families.
        Similarly the North Central Rocky Boy's rural water project
    in the State of Montana would implement that tribe's settlement
    with the United States. According to the U.S. Conference of
    Mayors, $1 invested in water and sewer infrastructure increases
    gross domestic product by $6.35.
        Similarly in the HDR study of economic impacts of the Lewis
    and Clark rural water system found a total economic impact of
    $14.4 million in direct and indirect job creation of some 7,441
    jobs. Improving the infrastructure in these rural tribal
    communities will improve their ability to attract business and
    develop their economies as well as provide a higher quality of
    life and safe drinking water and the associated health
    benefits.
        And despite the benefits, many of these smaller rural
    communities and tribal communities do not have the capacity to
    finance, design and construct these projects on their own. For
    this purpose of funding authorized Reclamation projects, the
    Reclamation Fund was created; however, current expenditures
    from that fund are far below current receipts and at the end of
    2016 the Administration estimates that the unobligated balance
    in the Reclamation Fund will be $15 billion. So S. 1365 would
    set aside just a small amount of this money to complete and
    fulfill these obligations to these communities and further
    postponing these expenditures will only perpetuate the
    hardships that currently exist.
        We very much appreciate the opportunity to testify here on
    the Subcommittee to approve S. 1365 and work with the states
    toward its effective implementation.
        Thank you again.
        [The prepared statement of Mr. Willardson follows:]

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        Senator Daines. Thank you, Mr. Willardson.
        Mr. Yates?

     STATEMENT OF RYAN YATES, DIRECTOR OF CONGRESSIONAL RELATIONS,
                    AMERICAN FARM BUREAU FEDERATION

        Mr. Yates. Senator Daines, Ranking Member Hirono, Senator
    Franken, other members of the Subcommittee, thank you for
    calling this important hearing on S. 982, the Water Rights
    Protection Act, and inviting me to testify on behalf of the
    American Farm Bureau Federation and the nation's farmers and
    ranchers.
        On behalf of the nearly six million Farm Bureau member
    families across the United States I commend you for your
    leadership in advancing legislation to prevent attempts by
    Federal land management agencies to circumvent long standing
    state water law. The Farm Bureau has a strong interest in
    ensuring that the relationship between Federal land management
    agencies and public land ranchers is maintained.
        Federal land management agencies have begun to pressure
    private land owned businesses to surrender long held water
    rights which they have paid for and developed as a condition of
    receiving renewals in their special use permits that allow them
    to operate on public land. Specifically the Forest Service has
    applied a water clause to special use permits which requires an
    applicant to transfer his or her lawfully acquired water right
    into a joint ownership agreement with the United States
    Government as a condition of granting a renewal of the permit.
        What's more troubling is that the clause also grants the
    United States Government sole ownership of the water right in
    the event of revocation of the permit. Use of the D30 water
    clause was struck down by a Federal judge in 2012 in a lawsuit
    brought by the National Ski Areas Association. These kinds of
    actions by the Federal Government violate Federal and State law
    and will ultimately upset water allocation systems and private
    property rights on which western economies have been built.
        It is no secret that the Forest Service has long sought to
    expand Federal ownership of water rights in the Western United
    States. In an August 15th 2008 Intermountain Region briefing
    paper addressing applications, permits or certificates filed by
    the United States for stock water, the Forest Service claimed,
    ``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.''
        During a House Natural Resources hearing held on March
    12th, 2012 the Forest Service testified 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.
        Lastly, the recently withdrawn Forest Service Groundwater
    Directive would have formally codified the Forest Service
    efforts to require the transfer of privately held water rights
    to the Federal Government as a condition of a permit's renewal.
        The Forest Service has even argued that the Clean Water Act
    provides the agency the statutory authority to implement their
    policies concerning the transfer or takings of water rights.
    Thus, while the EPA's final Waters of the U.S. rule raises many
    policy questions and concerns, one additional cause for alarm
    is the impact that it may have on lawfully held water rights
    held by farmers and ranchers.
        During a recent hearing of the House Natural Resources
    Committee this year Forest Service Deputy Chief Leslie Weldon
    acknowledged that the Chief of the Forest Service stated that
    the proposed directive has been put on hold. While we applaud
    the agency's withdrawal of the flawed proposal we remain
    concerned that this withdrawal is only temporary. After
    acknowledging the withdrawal, Deputy Chief Weldon testified
    that the Forest Service, ``will publish a new draft for a new
    round of public comment before any direction is finalized.''
        In addition to land perhaps the most valuable resource for
    every farmer and rancher in America is water. In order to
    provide the food, feed, fuel and fiber for the nation and the
    world farmers and ranchers simply need to have access to water.
    This is especially crucial in the West.
        Moreover we believe they have the right to expect that
    their lawfully acquired water rights should be respected by the
    Federal Government. Passage of S. 982 represents an important
    and necessary step in protecting private property rights and
    upholding long established water law by prohibiting Federal
    agencies from expropriating water rights through the use of
    permits or leases.
        Further, this legislation recognizes the ability of states
    to confer water rights, acknowledges that the Federal
    Government will respect those lawfully acquired rights and
    assures valid holders of water rights under state law cannot
    have those rights diminished or otherwise jeopardized by
    assertions of rights by Federal agencies.
        It is important to note that S. 982 does not confer any new
    rights or diminish any existing rights. Passage of S. 982 will
    not provide landowners with more than they currently have nor
    will it diminish any existing authority from the Federal
    Government. The Water Rights Protection Act simply assures that
    Federal agencies will respect long standing State and Federal
    water law and uphold the Federal Government's long standing
    deference to the states on matters of water rights.
        The American Farm Bureau Federation appreciates the
    Committee's willingness to listen to the concerns of our
    members. The need for permanent legislation to protect private
    property rights from the ongoing threats of Federal takings
    cannot be overstated. Farmers, ranchers, and small businesses
    rely on regulatory certainty and the constitutional protection
    of private property rights to make sound business decisions.
        We look forward to working with the Committee on securing
    enactment of this critically important legislation.
        Thank you.
        [The prepared statement of Mr. Yates follows:]

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        Senator Daines. Thank you, Mr. Yates.
        The Chair will now yield to the Ranking Member of the
    Subcommittee, Senator Hirono, for her opening remarks.

      STATEMENT OF HON. MAZIE K. HIRONO, U.S. SENATOR FROM HAWAII

        Senator Hirono. Thank you, Senator Daines, and I would like
    to thank Chairman Barrasso for holding this hearing.
        Good afternoon to all of you, and I thank all the panelists
    for being here.
        This is the first hearing of the Subcommittee on Water and
    Power of the 114th Congress. The Subcommittee's work is
    critical to communities across the nation as water is
    fundamental to all aspects of life.
        In the native Hawaiian culture, you can guess I represent
    Hawaii, water or wai, is considered a sacred source of life.
    Water was the most sought after resource by native Hawaiians
    and streams often provided the boundaries for land subdivisions
    or Ahupua'a. It was water that shaped communities as native
    Hawaiians understood that a constant supply of fresh water was
    critical to sustain their lives. It is because of this
    understanding that the protection and sharing of water is so
    fundamental to Hawaiian culture.
        Fast forward to today and water remains an essential
    concern. Hawaii has to be especially creative when it comes to
    maximizing benefits of our limited water resources. We do not
    have other states to lean on, and water can be a limited factor
    as we search for ways to be more food as well as energy
    sustainable.
        Hawaii just recently committed to being 100 percent reliant
    on renewable energy sources by 2045, a bold and ambitious move.
    Yet we often have to make such bold and ambitious commitments
    far in advance of other states. Just recently the Hawaii State
    Legislature passed a bill to expand the development of hydro
    electric projects on agricultural lands, which would contribute
    to making Hawaii more energy and food sustainable.
        Of course water is fundamental to every state. The
    stewardship of this precious resource includes developing smart
    policies that protect, conserve and manage water at the
    watershed scale, balancing the many water needs of our
    communities, supporting sustainable development of our
    economies and protecting the ecosystem and special places that
    depend on those waters. These responsibilities are at the heart
    of our work here on the Subcommittee, and I look forward to
    working with all of you and my colleagues to advance water
    legislation.
        Regarding the legislation that is before us today, one
    bill, in particular, stands out as good public policy to
    support sustainable water supplies. Senators Tester and
    Daines's Rural Water Project Act, S. 1365, would provide
    dedicated funding for rural water projects and Indian water
    rights settlements. I know that when I came in at least one of
    you testified to that point.
        It is hard to imagine that in the 21st century there are
    still communities in the United States that do not have
    adequate drinking water supplies. We have a responsibility to
    ensure that all communities have access to clean, potable
    water. Providing dedicated funding to complete rural water
    projects is critical to doing so and will save taxpayers money
    over the long run.
        This bill is also important because it supports the United
    States in meeting its responsibilities to Native American
    tribes. Since the 1970's the U.S. has enacted more than 29
    Indian water rights settlements. However, the claims of
    hundreds of tribes remain unresolved and funding remains a
    major barrier.
        In the coming decades, nearly two dozen settlements,
    costing billions of dollars, are likely to be enacted. S. 1365
    would provide modest, dedicated funding for these settlements
    which would enable the Federal Government to better plan for
    settlement costs and save money over time. It would enable more
    timely resolution of the tribal claims, support economic
    development in Indian Country and bring greater certainty to
    water in the West, which is especially important as competition
    for water and drought intensify.
        Among the other bills before us today, I am particularly
    interested in hearing the thoughts of our witnesses on S. 982,
    the Water Rights Protection Act. The Administration and others
    have raised concerns about the potential impacts of this bill
    on the Federal Government's authority to manage public lands
    and waters, protect tribal and Federal rights and ensure water
    is available for environmental uses. It is important that we
    fully understand what this bill does and its potential
    implications.
        In developing new policies, we should be looking at how to
    improve the way the Federal Government does business. S. 593,
    the Bureau of Reclamation Transparency Act, and S. 1533, the
    Water Supply Permitting Act, are aimed at improving Reclamation
    practices in managing our nation's water infrastructure and
    permitting processes. We can always improve government business
    practices so long as they do not adversely impact the public
    good or the environment.
        I look forward to hearing more from the experts. We will
    have some questions for you today about your thoughts on these
    legislative proposals.
        Finally, the remaining bills on the agenda today involve
    specific infrastructure projects including a reservoir project
    in Wyoming, two rural water projects in Montana and an
    irrigation project in Nebraska. These bills are relatively
    straight forward.
        We face significant challenges in the stewardship of our
    nation's water supplies, particularly in a time of
    unprecedented drought and climate changes.
        I just read yesterday that NASA published a report
    indicating that 21 of our world's 37 largest aquifers are being
    depleted at unsustainable rates. Of those 21 troubled aquifers,
    two are located within the United States. There is no denying
    that water supply issues will continue to be a critical piece
    of our national conversation.
        As we grapple with these issues in this Subcommittee,
    developing solutions will require that we work together and
    think creatively about water management and use, infrastructure
    and financing--all critical to the long term resilience of our
    communities and the environment.
        Again, I look forward to working with all of you and the
    members of this Committee. Thank you very much.
        I would like to ask for unanimous consent that the two
    statements that were submitted by the Forest Service be
    included in the record.
        Senator Daines. So ordered.
        Senator Hirono. Thank you.
        [The information referred to follows:]

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          STATEMENT OF STEVE DAINES, U.S. SENATOR FROM MONTANA

        Senator Daines. Thank you, Ranking Member Hirono.
        Let me start off by first thanking Chairman Barrasso for
    holding this hearing on this very important topic ensuring that
    all Americans have access to clean drinking water and water
    infrastructure.
        I would also like to recognize Mr. Meissner for appearing
    today before the Committee. It is always good to have another
    Montanan back here in D.C. Welcome, Mr. Meissner.
        Mr. Meissner. Thank you.
        Senator Daines. You know, some of the earliest water
    projects built by the Bureau of Reclamation were built in
    Montana. These projects provide a critical infrastructure for
    Montana homesteaders and were a vital importance to the long
    term growth of our state.
        Water is a precious resource in Montana, and there are
    still rural communities that face barriers to access and are in
    dire need of clean drinking water. Water is a basic need of
    life.
        In Montana we depend on a steady supply to irrigate our
    crops, to water our livestock and to provide energy through
    hydropower. In fact, if you look at this chart behind me, this
    picture, that is not in some Third World country.
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        That is Roundup, Montana, and the quality of water that we
    see in a community that has about 2,000 people there in
    Roundup.
        So the struggle for water continues to create health
    problems in Indian country and nearby communities in addition
    to making economic development that much more difficult. For
    far too long perpetual delays and maintenance backlogs have
    caused inefficient water delivery and damaged infrastructure on
    Montana's reservations. Every year we wait to delay funding of
    these essential projects.
        The more expensive the construction becomes, operation
    maintenance costs become more expensive, and year after year
    these projects continue to fall by the wayside without any
    action to address and prioritize our limited resources for
    critical infrastructure like rural water project. These short-
    term fixes must stop. It is time that the Federal Government
    fulfills its obligations and promises to Montana's rural
    communities and provides needed funding to ensure our rural
    water projects are completed.
        I would also like to bring the Committee's attention to two
    bills on the agenda today that I introduced with my colleague
    from Montana, Senator Jon Tester, S. 1365, the Authorized Rural
    Water Project Completion Act, and S. 1552, the Clean Water for
    Rural Communities Act.
        The first bill, S. 1365, would enable the completion of
    construction of congressionally authorized rural water projects
    as expeditiously as possible. It would ensure adequate funding
    is directed to projects in rural communities in North Dakota,
    South Dakota, Montana, New Mexico, Minnesota and Iowa. It would
    also provide much needed access to water supplies.
        The second bill, Senate bill 1552, authorizes two Bureau of
    Reclamation rural water projects critical to Montana, the Dry-
    Redwater Rural Water System and the Musselshell-Judith Rural
    Water System. This bill would collectively facilitate water
    treatment and deliver to 22,500 Montanans and North Dakotans.
    Senator Tester is also a co-sponsor.
        It is important that our rural communities have access to
    clean and drinkable water, and I urge my colleagues to join me
    in supporting these critical measures.
        I would like to start by asking a question. Mr. Meissner,
    in your testimony you discuss the challenges you face in
    working toward approval of the Dry-Redwater Authority water
    project which the BOR still has not granted, and I think
    everyone here can agree that you have had to go through much
    more trouble than you should have. Could you elaborate a bit
    further on the benefits to having this project approved as soon
    as possible?
        Mr. Meissner. Benefits? Are you talking about if we started
    construction today?
        Senator Daines. Yes, what are the benefits of the project
    by having this approved as soon as possible?
        Mr. Meissner. We have a long range goal to bring water out
    of Fort Peck into those counties that I suggested. Without the
    ability of having BOR as a Federal agency working side by side
    in partnership with us we are at odds. There's things that they
    can do. There's things we can't do.
        Up to this time, it seems like bureaucracy is the issue.
    They have things that they have to have in order to move, and
    we have continually tried to meet those goals. It's like an
    ongoing target. We meet feasibility, and the target is changed.
    We've been at this like ten years, and the BOR has done
    everything, bureaucratically, to assist us, but the target
    keeps moving.
        But without the ability of you to have the bills and have
    money in hand we can't go forward with our construction. They
    can't go forward with their planning.
        I think financially we've proven in Sidney with the
    construction that we have done with assistance from Richland
    County and the city of Sidney, we can do this. But we need
    Federal assistance to complete the planning, and we need
    dollars.
        Senator Daines. Thank you, Mr. Meissner.
        Ms. Thompson, do you believe that spending several years of
    staff time and resources into developing these feasibility
    studies for the Dry-Redwater Rural Water System and the
    Musselshell-Judith Rural Water System is a worthwhile use of
    time?
        Ms. Thompson. Senator Daines, thank you for the question.
        We, at Reclamation, believe that in order to move forward
    on rural water projects we need to meet our feasibility study
    requirements, and we have worked in concert with the Dry-
    Redwater, Musselshell folks to get to the point where they have
    a feasibility study that can be approved so we can move
    forward. We do believe that that sometimes takes time, but we
    are committed to working with them.
        Senator Daines. So considering all the time and the money
    that has already been invested by BOR staff on these projects,
    isn't it about time Congress authorized them?
        Ms. Thompson. Senator, if Congress authorizes the program
    and provides appropriations we are happy to assist with that,
    but until we have a feasibility study and appropriations we
    cannot move forward.
        Senator Daines. Can I get your commitment to work with us
    and our Committee on creative ways we can expedite construction
    on these important projects?
        Ms. Thompson. We would be happy to work with you and
    project sponsors on this if we have an authorization in place
    and the funding to go forward or to explore options for
    creative funding. We're happy to look into that.
        Senator Daines. Thanks so much.
        Mr. Chairman?
        Senator Barrasso. [presiding] Thank you very much, Senator
    Daines.
        Senator Hirono?
        Senator Hirono. Thank you, Mr. Chairman.
        This is a question for Mr. Schempp. S. 982, the Water
    Rights Protection Act, contains several broad provisions which
    prohibit the Secretary of the Interior and Secretary of
    Agriculture from taking any action to limit or adversely affect
    a water right in a land use agreement. At the same time the
    bill includes several provisions stating that the bill does not
    affect a number of existing laws. It seems to me that these
    savings provisions are in conflict with the other parts of the
    bill.
        You touched on these issues in your testimony noting that
    the bill would create ambiguity that could result in delays,
    confusion and litigation in its implementation. Can you help us
    better understand the potential legal uncertainties and
    challenges that this bill presents?
        Mr. Schempp. Ranking Member Hirono, I will do my best to do
    so.
        I would particularly identify subsection 5-1 and subsection
    3-1 as being potentially in conflict, particularly with regard
    to the effects of existing authority and the savings clauses. I
    think there is a significant question as to what legally
    recognized will consist of. And if this bill is passed that
    there will be a great deal of discussion, potentially
    litigation, over whether or not what has basically, whether the
    savings clause winds up trumping Subsection 3-1 or to what
    extent Subsection 3-1 is avoided via the savings clause.
        Senator Hirono. Thank you.
        For Ms. Thompson, your testimony on S. 982 states that the
    Department opposes this bill. I understand that the
    Administration issued a formal SAP opposing the House version
    of this bill last year and that about 60 outside groups oppose
    the bill. In your testimony you state that the bill would
    potentially negatively impact the Department's ability to
    manage water, protect public lands and the environment and
    Federal land and tribal water rights. Can you please expand on
    these potential impacts and be concise? Thank you.
        Ms. Thompson. Sure.
        Senator Hirono, the impacts we expect could occur as a
    result of this legislative language would involve impacting our
    ability to carry out mandates for natural resource protection
    as mandated by Congress. I believe in the testimony we
    referenced potential impacts to the Bureau of Land Management,
    to the National Park Service with respect to water rights where
    they have obligations pursuant to legislation and statute.
        We can provide more detail for the record, but at this
    point some of these impacts are--haven't been explored all the
    way simply because this is very complicated legislation.
        Senator Hirono. Thank you.
        I can see that just in reading the bill I think that it
    does create, a lot of areas of uncertainty that would need to
    be clarified if we are going to go forward.
        For you, again, Ms. Thompson. As you probably know many
    members of the Hawaii delegation, both past and present, have
    initiated efforts to make Hawaii eligible for resources
    provided by the Bureau of Reclamation. While we, as well as
    Alaska, are located in the Western region of the U.S. and face
    many similar water challenges as our friends in the 17 Western
    states that you cover, we have not been afforded the same
    opportunities to participate in these programs. As water
    resources become constrained and climate patterns shift, states
    will, no doubt, become more proactive in addressing water
    needs. So as it stands Hawaii is not eligible to take advantage
    of funding for drought resiliency projects under the SECURE
    Water Act and many other water projects and conservation
    programs.
        Wouldn't it be a better use of Federal dollars to support
    drought resiliency projects in our states proactively instead
    of waiting for emergency assistance? Basically I really think
    that Hawaii and Alaska need to be part of what the Bureau
    covers.
        Ms. Thompson. Sure, Senator, recently the Bureau of
    Reclamation has revisited its drought response program and we
    issued funding opportunity announcements for a new drought
    program that would allow the State of Hawaii or Alaska to apply
    for contingency planning assistance. That funding opportunity
    announcement closes on June 25th and we will welcome the state
    to apply for that, to benefit from the assistance that they
    could provide.
        Senator Hirono. Does that include other programs that your
    Bureau has where Hawaii and Alaska would not apply right now?
    So are you saying that administratively you can affect this
    change so that our two states can participate?
        Ms. Thompson. Actually this authority is through the
    Drought Relief Act of 1992, and Hawaii has been eligible
    through that statute for drought contingency planning
    assistance. But as you said, we are not able to afford the
    resiliency assistance that you have spoken of.
        Senator Hirono. Thank you for that clarification. So we
    would require statutory change which I hope we can get your
    support on.
        Thank you, Mr. Chairman.
        Senator Barrasso. Thank you very much.
        Senator Flake?
        Senator Flake. Thank you, Mr. Chairman.
        I am glad, once again, to co-sponsor the Water Rights
    Protection Act. I wish this bill was not necessary, but two
    recent proposals by the Forest Service have created the need
    for the bill and to stand up for private property.
        It may be lost on some not familiar with the West, but
    water rights, like land and vehicles and other assets used in
    business are private property and they are extremely valuable.
    Requiring a business to turn over their water rights to the
    Federal Government as a condition of getting a permit is about
    like asking the oil man to sign over his drilling rig to the
    BLM or making a rancher sign over the title to his truck just
    to use Forest Service land. It is asking a bit much.
        What this bill does say is that the Federal agencies can
    issue permits, they can condition these permits and they can
    enforce environmental laws. They just cannot take people's
    private land or private property, I should say, as they do
    this. So I think this is an important piece of legislation, and
    I am glad to support it.
        I have just a couple of questions on some of the bills
    before us.
        Ms. Thompson, there are two projects that would be
    authorized as part of S. 1552. Can you tell whether these
    projects have completed all the necessary reviews that are
    required of the Rural Water Supply Act of 2006?
        Ms. Thompson. Senator Flake, those two projects are the
    Dry-Redwater and Musselshell-Judith projects, and neither has a
    complete feasibility study before the Bureau of Reclamation
    although it's my understanding that the Musselshell-Judith has
    completed work in the region and that particular feasibility
    study is with our Denver Office who completes the programmatic
    review.
        Senator Flake. Okay. So Reclamation has not developed a
    recommendation on these projects that have not completed the
    review?
        Ms. Thompson. We have been in consultation with the parties
    who are putting forward the feasibility studies.
        Senator Flake. But would going forward with them, kind of,
    circumvent some of the process that we have compared to those
    who have gone through all the reviews?
        Ms. Thompson. I'm sorry. Could you repeat the question?
        Senator Flake. Putting a program like this or authorizing
    funding for it when Reclamation hasn't yet issued a
    recommendation is, kind of, circumventing the process as we
    have it or not?
        Ms. Thompson. Indeed. Indeed.
        We have six projects already in construction in the West
    for which there is a deficit of, I'm sorry, of backlog of about
    $1.4 billion, so adding two more authorizations to that, of
    course, we would have to find additional funding for those.
        Senator Flake. Good.
        Mr. Meissner, in a June hearing on drought Deputy Secretary
    Connor discussed a number of water projects and provided a back
    of an envelope number on the cost per acre foot. What is the
    approximate cost per acre foot that the water for these two
    projects that would be authorized under S. 1552?
        Ms. Thompson. Senator, I'm afraid I'm not able to provide
    information along those lines at this time. I'm not certain
    that we have calculated that expense, especially since those
    feasibility studies haven't been completed.
        Senator Flake. Mr. Meissner, have you? Do you have any back
    of the envelope, kind of, cost per acre foot on these projects?
        Mr. Meissner. Are you asking?
        Senator Flake. Yes.
        Mr. Meissner. No, I can't answer that as well. However, the
    question you asked about the feasibility. We entered into a
    memorandum of understanding with BOR so that we could come into
    an agreement with them to proceed to this point. Without the
    bills and funding BOR cannot do any more administrative
    planning for us. I don't know if that answers your question,
    but no, we have not yet.
        Senator Flake. Okay.
        Mr. Yates, ranching has long been an important part of
    Arizona's economy. I grew up on a cattle ranch myself. Can you
    briefly talk about the amount of grazing on public lands and
    the importance of water rights for these grazing operations to
    continue?
        Mr. Yates. Well certainly, and ranching is an important
    part of the American West and certainly provides jobs and
    management of Federal Western range lands and certainly
    including the State of Arizona.
        What has been troubling when you talk about the long
    standing practice of Federal land permitting and ranching
    across the American West is that, you know, public land
    ranchers have fought Federal land management agencies and
    environmental pressures through litigation on decreases in
    opportunities for continued Federal land grazing.
        In 1949, the BLM and the Forest Service managed 5.4 million
    AUMs across all western rangelands. From 1949 to 2012 the
    government has reduced livestock grazing by just over three
    million AUMs or a total reduction in excess of 70 percent.
        So again, as we look to continue to provide a tool to
    Federal land management agencies these kinds of pressures that
    continued efforts to reduce the ability for Federal land
    ranchers to maintain western rangelands and landscapes is
    certainly troubling.
        When we look at the use and the application of the water
    clause as been used by the Forest Service the potential impacts
    on, not only private property rights, but the ability for a
    rancher to continue operating and certainly operating with a
    degree of certainty that he'll be able to come back not only to
    have his grazing permit renewed but to be able to manage that
    resource is certainly concerning.
        So again, we appreciate your support of S. 982 and
    certainly hope for its passage.
        Senator Flake. Thank you, Mr. Chairman.
        Senator Barrasso. Thank you very much, Senator Flake.
        Senator Franken?
        Senator Franken. Thank you, Mr. Chairman for holding this
    hearing on rural water bills.
        I am proud to co-sponsor the Authorized Rural Water
    Projects Completion Act, S. 1365, introduced by Senators Tester
    and Daines. I support this bill because rural communities in
    Southwestern Minnesota have critical water needs.
        In 2000, Congress authorized the Lewis and Clark Regional
    Water System. The State of Minnesota and the local communities
    involved have prepaid their full share, $154 million, to bring
    this project to completion, but the funding at the Federal
    level has been woefully inadequate. And so far just until last
    month no water at all to Minnesota, finally we got Rock County
    Rural Water District got connected. But there are other
    communities there that have paid their full share plus, $17
    million on top of that. These are small towns, and so far no
    water at all, not one drop.
        The Authorized Rural Water Projects Completion Act would
    provide dedicated annual funding for Lewis and Clark and
    projects like it. Today's hearing is a step forward for getting
    that bill passed, I hope.
        As I said, lack of Federal funding has delayed this project
    and these delays have been costing these communities money.
    Meanwhile the cost of construction increases, as Mr. Willardson
    noted in his testimony, due to inflation and rising costs of
    material and labor. And that is just the immediate costs, but
    there are also costs of the economics of these communities.
        You refer to Lewis and Clark in your testimony, Mr.
    Willardson. Can you talk more about these costs for local
    communities when projects like Lewis and Clark are delayed?
        Mr. Willardson. Thank you for the question, Senator
    Franken.
        While I do not have specific economic information,
    obviously water is critical. It's part of the infrastructure of
    any of the economy of a rural community. So business, in fact,
    more and more businesses are considering or including in their
    bond evaluations the access to water and the security of that
    water. So anytime that you're restricting a community's water
    supply you're going to also limit economic growth.
        Senator Franken. Thank you.
        Ms. Thompson, I want to clarify a few things about the
    Reclamation Fund. This year the Bureau of Reclamation requested
    about $856 million in total appropriations but left some $37
    million of that for rural water projects. About how much does
    the Reclamation fund collect each year from receipts on public
    lands?
        Ms. Thompson. Senator, I am not familiar with the exact
    number, but I'd be happy to get back to you for the record on
    that.
        [The information referred to was not provided as of the
    time of printing.]
        Senator Franken. Mr. Stern, do you have an answer to that?
        Mr. Stern. Senator Franken, are you asking receipts from
    natural resource royalties on public lands?
        Senator Franken. Yes.
        Mr. Stern. I believe the total last year was around $1.7
    billion.
        Senator Franken. Okay, there is a billion, about, each year
    that goes into the Reclamation Fund but it is not appropriated
    to the Bureau of Reclamation, my math, maybe $900 million. How
    much of an unobligated balance does that leave in the
    Reclamation Fund? I will go to you, Mr. Stern.
        Mr. Stern. Senator Franken, I have the number here, if you
    give me one second.
        Senator Franken. Sure.
        Mr. Willardson. Senator, if you would like I can tell you.
        Mr. Stern. Sorry.
        Senator Franken. Sure.
        Mr. Stern. As far as the unobligated balance goes it would
    be around, I think, there was a balance of $13.2 billion in the
    Reclamation Fund as of the end of FY2014.
        Senator Franken. Is that about right to you, Mr.
    Willardson?
        Mr. Willardson. Yes, and the Administration's estimated
    balance at the end of this fiscal year will be over $15
    billion.
        Senator Franken. Okay. So here is what is troubling to me.
    The Bureau of Reclamation requested less than $3 million for
    Lewis and Clark this year, less than $3 million. That is less
    than these individual communities have been paying after they
    fully prepaid what they were supposed to, what their share was,
    after the state had done it. That is just not fair to these
    communities.
        The Minnesota State legislature, we finally got this last
    piece connected because the Minnesota State legislature
    approved a $22 million, Federal funding advance for or it
    allocated $22 million. Does this seem fair to you, Mr.
    Willardson?
        Mr. Willardson. Well, many of these communities have been
    waiting a long time to see these commitments fulfilled. As
    you're aware some of these were in compensation for the
    Missouri Pick-Sloan program, so some have been waiting 70 years
    to see those promises fulfilled.
        And no, it is a little hard to explain that with an excess
    of $1 billion a year coming in that's not being spent from the
    Reclamation Fund that we can't fund completion of these
    projects.
        Senator Franken. My thoughts exactly. I am sorry to have
    gone over time, but I believe Mr. Stern took four minutes to
    find that data. [Laughter.]
        Senator Barrasso. But you did a great job pronouncing his
    name today compared to the hearing yesterday we had on Indian
    Affairs. So this was----
        Senator Franken. Well, that was Mr. Desiderio.
        Senator Barrasso. Beautifully spoken.
        Senator Franken. Desiderio. [Laughter.]
        Senator Franken. Thanks a lot for bringing that up, by the
    way. [Laughter.]
        Senator Franken. Stern is easy.
        Senator Barrasso. It is. It is good.
        Senator Franken. Love my background too, pronounced.
        Senator Barrasso. Thank you, Senator Franken.
        Ms. Thompson, in your written testimony you talk about the
    Doctrine of Federal Reserve Water Rights. You said,
    ``Originally expressed as the power to reserve water associated
    with an Indian reservation.'' You also said, ``Over time
    Supreme Court and other courts have revisited and built on the
    Doctrine and holding that reserved rights applied to all
    Federal lands.'' So my question is does all Federal land come
    with reserved Federal water rights and do these rights trump
    state water rights including privately held water?
        Mr. Thompson. Senator, Reclamation follows the Reclamation
    Act and Section 8 of the 1902 Act says that state waters have
    primacy. State rights have primacy over water rights. So we
    adhere to that particular statutory mandate.
        Senator Barrasso. And how about the state control of
    groundwater? Same?
        Ms. Thompson. For the most part, I believe that's correct.
        Senator Barrasso. Folks in my state and across the West are
    obviously in serious need of more water, ranchers, farmers and
    rural communities trying to make a living. They depend on water
    to grow crops like to grow alfalfa or raise cattle. Many have
    junior water rights and worry about getting the water they need
    to keep their livelihoods. They worry about drought. They are
    also worried about losing their water rights to Federal
    agencies as a condition of renewing their grazing permits.
        So they are worried about the EPA and the Army Corps
    expanding Federal jurisdiction over state waters, the waters of
    the U.S. and the WOTUS rule that is out there. All these things
    are happening at once and feels to be threatening of Western
    and rural economies. We, on this Committee, are offering some
    solutions, some bills before us today to address these
    problems. We do not want to interfere with the Bureau of
    Reclamation operations, but we do have constituents that need
    to be protected.
        So my question is will you work with us to improve and to
    move these bills to protect water rights, to expand water
    storage and to provide more water to rural and Western
    communities?
        Ms. Thompson. Senator, we'd be happy to work with you on
    these matters.
        Senator Barrasso. Thank you.
        Mr. Yates, in your written testimony you state that with
    regard to the Forest Service requesting water rights in
    exchange for renewing permits, you write that these kinds of
    actions by the Federal Government violate Federal and State law
    and will ultimately upset the water allocation systems and
    private property rights on which Western economies have been
    built. Can you explain how the water allocation system and the
    farmers and ranchers who hold private property water rights
    have been negatively impacted by these actions?
        Mr. Yates. Thank you, Senator, for the question.
        Certainly it's been noted that not only agriculture, but
    ski areas have had a vested interest in this issue. But frankly
    all industries and public land users who require a special use
    permit should be equally concerned about these types of water
    grabs.
        Obviously for any farmer or rancher good soil, good
    sunlight and most certainly water is a very valuable resource
    and asset to continue their day to day operations to continue
    to provide food, feed and fiber for the country.
        But I think it's important to know as we look at this
    larger issue we have great concerns over the takings issues
    that the Forest Service and other land management agencies have
    begun to pursue. Again, obviously, the concerns over Fifth
    Amendment protections are critically important.
        I think it's also important to go back a little bit, and
    when you look historically through statute and case law
    Congress has granted management and authority of waters to the
    states going back to the Ditch Act in 1866 through the McCarran
    amendment in 1952. The Federal Government has acquiesced to the
    states on all state water matters. Certainly this legislation,
    your legislation, would not change the status quo, but it would
    ensure that any future actions by these Federal agencies to go
    around this long standing relationship between the Federal
    Government and the State Government would be maintained.
        Senator Barrasso. And the final question, Mr. Yates. As you
    stated in your written testimony the Forest Service has
    temporarily withdrawn their groundwater directive. You go on to
    say the Forest Service Deputy Chief Weldon testified that the
    Service will publish a new draft after public comment. You go
    further to state that the Forest Service, ``Does not currently
    own or manage groundwater nor does it have the authority to
    approve or disapprove uses of water that are granted under
    state law.''
        Since the Forest Service does not even have the authority
    to regulate ground water, is it possible for the agency to
    craft an acceptable directive or should it just be permanently
    withdrawn?
        Mr. Yates. Well, certainly I appreciate the question. We
    were certainly thrilled following our criticism of the
    Groundwater Rule that the agency did decide to take a time out
    and withdraw the rule. You know, specifically from the proposed
    water clause to the expansion of authority through the
    establishment of an interconnectivity clause. And those of you
    that have followed the issue of the WOTUS rule know that
    there's similarities in definitions when we're talking about
    that interconnectivity clause to the frankly, their disregard
    for the historic Federal deference to states and water
    authorities.
        I see no reason for the agency, frankly, to pursue a second
    or a third groundwater directive. I'd just assume have them
    leave it alone. They got caught with their hand in the cookie
    jar and they should probably stop there.
        Senator Barrasso. Thank you, Mr. Yates.
        I thank everyone who has come to testify today in this
    important hearing. Senator Hirono has a second round of
    questions which she will do, and then she will adjourn the
    meeting. Thank you for being here today.
        The record will stay open and there may be some written
    questions as well from both members on each side.
        Thank you.
        Senator Barrasso. Thank you, Senator Hirono.
        Senator Hirono. [presiding] Thank you.
        I would like to just do a very short second round. I have a
    question involving the Indian Water Rights Settlements issue,
    and that is addressed in S. 1365.
        Mr. Willardson, thank you for being here with us today. In
    your testimony you state that the Western States Water Council
    supports the policies advanced by S. 1365, and I am
    particularly interested in the Western States' support for
    advancing Indian water right settlements.
        I think you have probably noted that Ms. Thompson's
    testimony states that the current, basically piecemeal,
    approach to funding settlements which competes with other
    tribal and water priorities is the appropriate approach, but
    clearly your organization, your position is that you support
    this more permanent approach. Could you expand on that and help
    us understand why the Council supports settlements and a strong
    fiscal commitment to them?
        Mr. Willardson. Yes, thank you, Senator.
        We have worked for 30 years with the Native American Rights
    Fund to resolve negotiated settlements of these claims. These
    claims continue to be a cloud over other private property
    rights, and until they can be settled and settled permanently
    it is a challenge to economic development on those both Indian
    and non-Indian lands that are adjacent.
        Finding a permanent funding source has been a challenge as
    well as finding offsets for some of the direct funding in
    recent settlements that have passed Congress. We have been
    supportive of legislation that set aside money for the
    Reclamation Fund in 2009 for a settlement fund which has yet to
    be funded but will in the future.
        This is another opportunity to provide a small amount of
    money which will go a long ways to help with those settlement
    negotiations and implementation of those to the extent that it
    involves projects that are built by the Bureau of Reclamation,
    and that's an important point.
        Now this is money just for funding the infrastructure as
    part of those settlements and is something that we continue to
    strongly support and look for these permanent sources of
    funding given as you noted that there are many outstanding
    claims yet to be resolved.
        Thank you.
        Senator Hirono. Thank you very much.
        I recognize that there is a very strong economic argument
    to be made for something, a much more permanent approach, not
    to mention that we certainly have a Federal responsibility to
    the American Indian tribes to live up to our obligations to
    them.
        I would like to echo the Chairman's thanks to all of you
    for participating today and being witnesses.
        Some members of the Committee may submit additional
    questions in writing and if so, we will ask you to submit
    answers for the record, so I hope that that will be alright
    with you all.
        We will keep the hearing record open for two weeks to
    receive any additional comments.
        This Subcommittee hearing is adjourned.
        [Whereupon, at 3:20 p.m., the hearing was adjourned.]

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