[Congressional Record Volume 168, Number 84 (Tuesday, May 17, 2022)]
[Senate]
[Pages S2545-S2548]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself, Mr. Kelly, and Ms. Sinema):
  S. 4231. A bill to support water infrastructure in Reclamation 
States, and other purposes; to the Committee on Energy and Natural 
Resources.
  Mrs. FEINSTEIN. Mr. President, I rise today to speak about the STREAM 
Act (Support to Rehydrate the Environment, Agriculture and 
Municipalities Act), which I am introducing today alongside my 
cosponsors Senators Mark Kelly and Kyrsten Sinema. This is a bill 
intended to address the massive drought affecting much of the Western 
United States.
  As the past 2 years demonstrate all too painfully, drought 
exacerbated by climate change--increasingly severe and prolonged 
drought--is a stark reality for California and the West.
  This has resulted in shortages of water for agriculture, for 
irrigation, and increasingly threatens residential and business uses. 
The drought has threatened endangered species and results in a drying 
of the ground and plantlife that makes wildfire an even greater threat.
  If we don't take action now, it is only going to get worse. Lawrence 
Berkeley National Laboratory scientists project that climate change 
will cause a 54-percent drop in the Sierras' snowpack within the next 
20 to 40 years and a 79-percent drop by the end of the century. This 
change alone could be devastating for California, because we absolutely 
depend on this snowpack. The Sierra snowpack provides 30 percent of our 
water supply and is our biggest reservoir.
  For these reasons and others we need an ``all of the above'' water 
strategy, including No. 1, increased water supply; No. 2, incentivizing 
projects that build in environmental benefits and drinking water for 
disadvantaged communities, and No. 3, investing in separate 
environmental restoration efforts.
  The bill I am introducing today helps meet this challenge in four 
fundamental ways:
  No. 1, it authorizes significant water supply funding that, in 
combination with the bipartisan infrastructure law, would provide 
California with 1.04 million additional acre-feet of water per year on 
average, enough water for over 6 million people;
  No. 2, it provides additional financial incentives for water supply 
projects that include environmental benefits and drinking water for 
disadvantaged communities;
  No. 3, it reforms the Congressional review process to more quickly 
approve water supply projects, and a new loan program combined with 
grants to more cost-effectively fund new non-Federal water supply 
projects; and
  No. 4, it significantly invests not only in water supply projects but 
also in environmental restoration to help imperiled species adapt to 
climate change as well.
  To demonstrate why this bill is so desperately needed, let me 
illustrate the extent and damage caused by the current drought in the 
West.
  A precursor of the even more prolonged dry spells coming with climate 
change, California's 2020 to 2022 drought has had severe impacts on 
farms, cities, and the environment.
  In 2021, the drought caused the California agriculture industry to 
shrink by an estimated 8,745 jobs and incur $1.2 billion in direct 
costs, according to a report prepared for the California Department of 
Food and Agriculture by researchers at the University of California at 
Merced. In addition, reduced water deliveries resulted in 395,000 acres 
of cropland left dry and unplanted.
  Counting ``spillover effects'' in the broader economy, the U.C. 
Merced analysis found the total impacts were more than 14,600 lost 
jobs, both full time and part time, and $1.7 billion in gross revenue 
losses.
  In both 2021 and 2022, homes in significant parts of the State have 
been at risk of running dry. Last year, large parts of Marin and Sonoma 
Counties and the Mendocino coast came very close to losing all water 
supply. This year, much of Los Angeles, Ventura, and San Bernardino 
Counties have been placed under emergency orders limiting them to once 
a week landscape irrigation, with the possibility of a complete 
irrigation shutoff by fall.

[[Page S2546]]

  In California, one in eight acres statewide has burned from wildfires 
in the last decade, with the past 2 years being the worst on record. 
With 95 percent of the State experiencing drought as we enter into the 
traditional wildfire season, we are poised for an even worse year this 
year.
  The drought has been devastating to the aquatic ecosystem as well as 
our forests. As just one example, the endangered winter-run Chinook 
salmon depend on sufficient cold water released by Shasta Dam to rear 
juveniles in the Sacramento River.
  With limited water available in 2021, NOAA Fisheries models predict 
that approximately 75 percent of the winter run chinook salmon's eggs 
died from elevated water temperatures. This is a species with three 1-
year age classes, and a prolonged drought could threaten the survival 
of the species.
  In order to increase drought resiliency in California and other 
Western States, the bill authorizes the following funding over the next 
5 years: $750 million for surface and groundwater storage projects, and 
supporting conveyance, including $50 million for natural water 
retention and release projects; $300 million for water recycling 
projects; $150 million for desalination projects; $250 million for 
environmental restoration projects; $100 million for drinking water for 
disadvantaged communities; and $150 million for low-interest loans for 
water supply projects.
  This funding builds on the bipartisan infrastructure law's funding of 
$1.15 billion for storage projects, $550 million for water recycling 
projects, and $250 million for desalination projects.
  The STREAM Act, in combination with the bipartisan infrastructure 
law, would provide California with the Federal cost-share for 
approximately 1,042,000 acre-feet per year of additional water supply, 
or enough water for over 6 million people. This comes from the 
following:
  Enough funding for California to finally build three major off-stream 
storage projects providing 370,000 acre-feet of water on average each 
year: Sites Reservoir, the Los Vaqueros Expansion, and the BF Sisk 
raise. In addition, the storage funding could provide an additional 
55,000 acre-feet per year from some combination of other smaller 
surface and groundwater storage projects like the Sacramento Regional 
Groundwater Bank or Del Puerto Canyon Reservoir. All of the projects 
are non-Federal projects with a 25 percent Federal cost share, with the 
exception of the Federal BF Sisk Raise with a 50 percent Federal cost-
share.
  Enough funding for 532,000 additional acre-feet from water recycling 
projects, from the $300 million authorized in the bill plus $550 
million in the bipartisan infrastructure legislation, with a 25 percent 
Federal cost-share for projects.
  Enough funding for approximately 85,000 additional acre-feet from the 
$150 million authorized in the bill for desalination projects, plus 
$250 million in the bipartisan infrastructure legislation, with a 25 
percent Federal cost-share for projects.
  While virtually everyone supports water recycling projects, surface 
and groundwater storage projects are sometimes more controversial. I 
want to point out a report just released today by the widely respected 
Public Policy Institute of California, PPIC, which relates to the 
benefits of additional surface and groundwater storage as California's 
climate is changing.
  Many climate forecasters emphasize that as climate change 
intensifies, California will get more of its precipitation in a few 
large to extraordinarily large storms fueled by atmospheric rivers, and 
more of the precipitation will fall as rain rather than snow. In 
between the bursts of atmospheric rivers, there will be longer and more 
intense droughts. We have definitely seen a preview of this pattern 
this year.
  PPIC has studied these projections and estimated that there is 
substantial water in wet years that is not needed to maintain healthy 
Delta outflows but currently cannot be captured because California 
lacks the infrastructure to store for future dry periods. PPIC suggests 
that given this reality, cost-effective storage projects in appropriate 
locations could help improve California's drought resiliency.
  PPIC also argues that these storage projects should be managed for 
environmental flow benefits as well as water supply benefits. This bill 
would help with that because Federal funding for Sites Reservoir would 
help provide cold water for salmon, and Federal funding for the 
expansion of Los Vaqueros Reservoir would provide needed water for 
wildlife refuges. Regarding cold water reserves for salmon in 
particular, these reserves will be critical to prevent salmon runs from 
being wiped out during the potential fourth, fifth, sixth and seventh 
years of devastating droughts.
  The bill's funding authorizations apply not just to California but 
throughout the 17 Western States where the Bureau of Reclamation has a 
presence. Many of these States have recently benefited from the Bureau 
of Reclamation's storage, water recycling, and desalination programs 
and/or have projects currently seeking funding from these programs, 
including Arizona, Idaho, Washington, Oregon, Texas, Utah, Nevada, and 
New Mexico. I believe the Federal funding assistance authorized by this 
bill will be particularly important for all seven Colorado River basin 
States as the States negotiate the next painful round of water supply 
cuts from the Colorado River between now and 2026 in order to meet the 
challenge of an increasingly dry Colorado River basin.
  In Arizona, the STREAM Act would significantly advance the Salt River 
Project's proposal to raise Bartlett Dam on the Verde River to 
counteract the loss of approximately one-third of the nearby Horseshoe 
Dam's capacity from accumulating sediment. The Bartlett Dam raise would 
provide an additional 60,000 to 115,000 acre-feet per year or enough 
water for 360,000 to 690,000 people.
  The bill uses financial incentives to encourage storage and 
conveyance projects to include environmental benefits and other public 
benefits such as drinking water for disadvantaged communities. This is 
important to ensure that the environment and disadvantaged communities 
are included in our drought resilience strategies.
  The bill authorizes low-interest loans for sponsors of storage and 
conveyance projects if those projects solely provide irrigation and 
general municipal and industrial water supply benefits.
  In contrast, the bill authorizes grants for storage and conveyance 
projects that include environmental benefits, drinking water benefits 
for disadvantaged communities, or other public benefits either as part 
of the project design or as part of a watershed restoration plan 
adopted together with the project.
  This access to grants gives project sponsors a strong financial 
incentive to design environmental and disadvantaged community benefits 
into their projects. This approach builds on the experience of the 
Proposition 1 water bond California's voters passed by a 2-to-1 margin 
in 2014, which also incentivizes projects with environmental and other 
public benefits.
  If storage and conveyance projects take these steps, they can get 
Federal grants both directly for the public benefits and for an equal 
value investment in the water supply component of the project. Thus, 
the Federal Government will provide $50 million for the general water 
supply benefits of a project if the project also has $50 million in 
fish and wildlife or water quality benefits either directly from the 
project or from an associated watershed restoration plan.
  The bill not only increases funding for drought resiliency projects, 
it expedites their approvals and assists them more cost-effectively, 
stretching taxpayer dollars further.
  The traditional Bureau of Reclamation model for approving and funding 
new water supply projects has involved the following:
  No. 1, reclamation studies new projects in detail, which can take a 
decade or more for major projects;
  No. 2, once Reclamation's studies are complete, Congress authorizes 
projects individually, which can take another 3-5 years or longer in 
many cases; and
  No. 3, the design and construction can take a decade or longer.
  One can quickly see that this model can end up taking decades to 
construct significant new water supply projects. This is especially the 
case given the limitations of Federal budgets and the increasing cost 
of major protein recent years. Given the tremendous challenge

[[Page S2547]]

posed by climate change to western water supply, we need a nimbler and 
more responsive model.
  Mike Connor, the Deputy Secretary of the Interior during the Obama 
Administration and currently Assistant Secretary of the Army for Civil 
Works, testified in support of a new model during an October 8, 2015, 
hearing before the Senate Committee on Energy and Natural Resources. 
Deputy Secretary Connor stated:

       The traditional Reclamation business model, in which 
     feasibility studies, consistent with the 1983 Principles and 
     Guidelines for Water and Related Resources Development, are 
     first authorized, funded, and submitted to Congress, and then 
     construction is authorized and funded, does not always 
     address the needs of project sponsors at the state and local 
     levels. Moreover, given budget limitations and the 
     availability of other available financing mechanisms, the 
     historic federal role in financing water storage projects 
     through the Bureau of Reclamation must be revisited with a 
     greater emphasis on non-federal financing.

  In response to the concerns articulated by then-Deputy Secretary 
Connor and others, the bill we are introducing today, building on the 
2016 Water Infrastructure Improvements for the Nation Act, makes five 
significant changes to the traditional reclamation model. These changes 
expedite project approvals and make more cost-effective use of 
available federal funding.
  No. 1, Congressional authorization no longer required for non-Federal 
projects.
  First, the bill eliminates the need for Congress to authorize 
individual water recycling and desalination projects and non-Federal 
storage projects with a Federal investment of less than $250 million. 
It can take 3 to 5 years or longer for projects to get legislatively 
approved. In fact, zero new water recycling projects were authorized 
from 2009 to 2017 despite dozens of meritorious projects with approved 
feasibility studies.
  Federal storage projects, which are often more controversial, 
continue to require congressional authorization, as do non-Federal 
storage projects with a greater than $250 million Federal investment. 
The bill shortens the timeline for congressional approval of these 
projects through directing Reclamation to follow a process that the 
Army Corps of Engineers uses to notify Congress of completed 
feasibility studies each year to set up an orderly timeline to 
authorize projects.
  No. 2, non-Federal funding is required up front.
  Second, the bill no longer requires 100 percent Federal funding up 
front as was necessary under the traditional Reclamation model. 
Instead, the bill allows a maximum of 50 percent Federal funding for 
federally owned projects and a maximum of 25 percent Federal funding 
for non-Federal projects that are built by States, water districts, or 
Indian Tribes.
  Federal dollars can be stretched further by the partnerships with 
States and water districts that will be fostered under the bill. For 
example, the proposed expansion of Los Vaqueros Reservoir in California 
would be funded nearly 50 percent by the State of California, which has 
already conditionally awarded funding, in addition to potentially 20 to 
25 percent by the Federal Government and the remaining 25 to 30 percent 
by water users.
  Multipartner projects like the Los Vaqueros expansion frequently have 
multiple benefits. For example, much of the State and Federal funding 
for the Los Vaqueros expansion would go to augment the water supply of 
wildlife refuges that provide essential water for migratory birds on 
the Pacific flyway. These benefits would complement the project's water 
supply benefits for many Bay Area water districts.
  No. 3, the new loan program is cost-effective.
  Third, the low-interest loan program created by the bill for water 
supply projects is an exceptionally cost-effective program. This 
program, known as the Reclamation Infrastructure Finance and Innovation 
Act, RIFIA, would use existing criteria for loans under the successful 
WIFIA Program, the Water Infrastructure. Finance and Innovation Act.
  The Office of Management and the Budget, OMB, has approved loans of 
$2.3 billion for WIFIA in fiscal year 2018 backed by appropriations of 
just over 1 percent of that amount, or $25 million in budget authority. 
OMB was able to approve loans backed by just l percent of the loan 
amount because there is a virtually non existent default rate for water 
projects. Only 4 in 1,000 water infrastructure projects default, based 
on a study conducted by the Fitch credit rating agency.
  Given OMB's experience that Federal outlays need only cover l percent 
of the loan cost for water projects, the $125 million in authorized. 
Federal spending in the draft bill likely could support $12.5 billion 
in water project lending authority.
  Federal funding of 1 percent of the loan amount will typically return 
10 to 25 percent savings in the repayment cost of the loans for the 
water districts funding the projects. The total savings can be about 10 
percent for AAA-rated districts and 20 to 25 percent for AA-rated 
districts.
  For example, the water users who are supporting the proposed Sites 
Reservoir in northern California have estimated that the loans 
authorized by this bill would allow them to pay only $512/acre-foot for 
water delivered by the project instead of $682/acre-foot, or a 25 
percent reduction in their costs.
  Thus, the Federal Government can provide a loan at 1 percent of the 
loan amount and save the project sponsors 10 to 25 percent of the 
project cost. That is an exceptionally cost-effective Federal 
investment.
  There are at least three significant reasons that the loans are so 
beneficial for the project sponsors:
  The sponsors pay a substantially lower interest rate on their loans 
than they would under the alternative of municipal bond financing.
  The districts would not need to start loan repayments until 5 years 
after substantial completion of the project, a substantial cost saver.
  Loans are for 35 rather than 30 years, lowering annual debt service 
costs.
  Significantly, the loans include all the taxpayer protections from 
the successful WIFIA and TIFIA, Transportation Infrastructure Finance 
and Innovation Act, programs. In particular, the RIFIA loans would be 
limited to 49 percent of the project costs, and the Federal loans would 
have senior status in the event of any default. These provisions ensure 
the taxpayer won't be harmed in any default where the project retains 
at least 50 percent of its value, which is extremely likely for 
ratepayer backed water supply projects.
  No. 4, Federal grants and loans work together.
  Fourth, the combination of low-interest loans and Federal grants of 
up to 25 percent of project costs for non-Federal projects can allow 
water users to make up the difference where the Federal Government is 
no longer funding l00 percent of project costs up front. Many rural 
communities, and in particular agricultural communities, are not able 
to pay 100 percent of the cost of new water supply projects.
  Under the bill I am introducing today, these communities will still 
have to provide a significant cost-share for improving their water 
supplies, and new water projects will have to be cost-effective enough 
to justify that investment. However, the Federal--Government can help 
build the best and most effective projects in increasing drought 
resiliency by providing assistance through both grants and loans.
  Finally, the longer and more severe droughts coming with climate 
change will adversely affect not just farms and cities but also the 
natural environment. The bill includes provisions to improve species' 
drought resiliency as well.
  The significant funding authorization of $250 million for 
environmental restoration can be used to benefit many different 
species, including fish and migratory birds. Some authorized uses of 
this funding include: improved habitat for salmon, Delta smelt and 
other fish species adversely affected by the Bureau of Reclamation's 
water projects; additional water for wildlife refuges hosting migratory 
birds along the Pacific flyway; improved stream gauges, monitoring, and 
science to better understand how to restore species and to operate 
Reclamation water projects with reduced environmental impacts; ensuring 
that when Sacramento Valley rice growers sell their water and idle 
their crops, some water is left behind and applied to bare fields in 
late summer and early fall to create shallow flooded habitat during a 
critical

[[Page S2548]]

shorebird migration period; and assistance in implementing water-
related settlements with State agencies and State water quality laws.
  The bill would also authorize $50 million of the broader storage 
funding for natural water retention and release projects.
  These projects would help restore stream and river channels with 
natural materials like wetlands. Like many other projects prioritized 
by the bill, these projects could have multiple benefits, including 
increased groundwater recharge, improved flood protection, and 
increased floodplain habitat to benefit salmon and other species. I 
look forward to receiving comments on ways to prioritize multibenefit 
projects like natural water storage projects as we move forward with 
the bill.
  The bill also authorizes pay-for-performance environmental 
restoration approaches that award grants contingent on the success of 
the restoration effort. These approaches can expedite environmental 
restoration and build public/private partnerships to increase the 
number of acres restored.
  In addition, the bill makes clear that it must be implemented 
consistently with all Federal environmental laws, including the 
Endangered Species Act, the National Environmental Policy Act, the 
Clean Water Act, and all other environmental laws. All applicable State 
laws must also be followed.
  California is home to more than 40 million people, but our major 
statewide water infrastructure hasn't significantly changed in the past 
50 years, when we had only 16 million people.
  We must modernize the system or we risk becoming a desert State. 
Critically, this means putting in place infrastructure to allow our 
cities, our farmers, and our natural communities to withstand the 
severe droughts that we are projected to face as a result of climate 
change.
  I hope my western colleagues will join my cosponsors and me on this 
bill because drought is a serious threat for all of our States.

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