[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
                             
                             
                             
                             
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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:]
    
    
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    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:]
    
    
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    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:]
    
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    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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