[House Report 106-435]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    106-435

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



 
  ELIMINATION OF RESTRICTIONS ON USE OF SAN LUIS UNIT FACILITIES FOR 
             WATER TRANSFERS IN THE CENTRAL VALLEY PROJECT

                                _______


November 2, 1999.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3077]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 3077) to amend the Act that authorized construction of 
the San Luis unit of the Central Valley Project, California, to 
facilitate water transfers in the Central Valley Project, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. ELIMINATION OF RESTRICTIONS ON USE OF SAN LUIS UNIT 
                    FACILITIES FOR WATER TRANSFERS IN THE CENTRAL 
                    VALLEY PROJECT.

  (a) Elimination of Statutory Restrictions.--Public Law 86-488 (74 
Stat. 156) is amended--
          (1) in section 2 by striking ``and the use of the additional 
        capacity for water service shall be limited to service outside 
        of the Federal San Luis unit service area''; and
          (2) in section 3 by adding ``and'' after the semicolon at the 
        end of paragraph (h), by striking the semicolon at the end of 
        paragraph (i) and inserting a period, and by striking paragraph 
        (j).
  (b) Requirements for Delivery Inside Federal Service Area.--Such Act 
is further amended--
          (1) in section 2 by inserting ``(subject to section 9)'' 
        after ``a perpetual right to the use of such additional 
        capacity''; and
          (2) by adding at the end the following:
  ``Sec. 9. The State of California may not, under section 2, use 
additional capacity to deliver water inside the Federal San Luis unit 
service area unless--
          ``(1) such delivery is managed so as to ensure that--
                  ``(A) agricultural drainage discharges arising from 
                use of the delivered water--
                          ``(i) comply with any waste discharge 
                        requirements issued for such discharges; or
                          ``(ii) if there are no such waste discharge 
                        requirements, do not cause water quality 
                        conditions in the San Joaquin River and the 
                        Sacramento-San Joaquin Delta and San Francisco 
                        Bay to be degraded or otherwise adversely 
                        affected; and
                  ``(B) use of the delivered water for irrigation does 
                not frustrate or interfere with efforts by the United 
                States and the State of California to manage 
                agricultural subsurface drainage discharges from the 
                San Luis unit; and
          ``(2) such delivery is consistent with those provisions of 
        operating agreements between the Secretary and the Department 
        of Water Resources of the State of California that are 
        consistent with this Act.''.
  (c) Amendment of Existing Agreements.--The Secretary of the 
Interior--
          (1) shall seek to amend each agreement entered into by the 
        United States and the State of California under section 2 of 
        Public Law 88-488 before the date of the enactment of this Act, 
        as necessary to delete from such agreement restrictions on use 
        of additional capacity for water service for land in the 
        Federal San Luis unit service area that are not consistent with 
        the amendments made by this Act; and
          (2) pending such amendment, shall not enforce any such 
        restriction.

                          Purpose of the Bill

    The purpose of H.R. 3077 is to amend the act that 
authorized construction of the San Luis Unit of the Central 
Valley project, California, to facilitate water transfers in 
the Central Valley Project.

                  Background and Need for Legislation

    The Central Valley of California is one of the most fertile 
agricultural areas in the world. Although the land is capable 
of growing a wide variety of crops, prior to the Central Valley 
Project Act, most of the area lacked an adequate water supply. 
In particular, when debate commenced on the San Luis Unit, a 
component of the Central Valley Project, in the late 1950s and 
early 1960s, Congressional testimony noted (86th Congress, 
Report No. 154) that the areas to be served from the San Luis 
Unit had ``no appreciable natural surface water supplies.'' In 
addition the record stated, ``About three-fourths of the area 
now is irrigated from wells but the ground water is poor in 
quality, and limited in amount. The wells are expensive to 
develop and the water levels have been receding without 
interruption for more than a decade.'' Thus, an adequate and 
dependable water supply became an important reason for the 
passage of the San Luis Act (Public Law 86-488, 74 Stat. 156). 
Since the passage of the San Luis Act, the County of Fresno 
(which receives water from the Unit) has become the number one 
agriculture producing county in the nation.
    Not only has the San Luis Act served its purpose to bring 
water to an arid area, it has also accomplished its two other 
primary objectives: to create a ``unique opportunity for 
pooling of Federal and State resources and abilities''; and to 
provide an assurance that water supplied from the federally-
developed project would continue to be governed by federal 
reclamation law. H.R. 3077 continues to support the policy that 
water supplied through the federal facilities would be subject 
to federal law even if the source of the water is the State 
project. And likewise it is understood that the State water 
delivered without the federal project remains controlled by 
State law.
    Federal agricultural contractors in the Central Valley 
Project (CVP) of California who rely on exported water supplies 
from the Sacramento-San Joaquin River Delta have seen a 
reduction in their federal water supplies over the last several 
years, even though these last few years have been ``wet'' 
years. This reduction has been increased because of the 
accumulated impacts of implementation of the Endangered Species 
Act, Central Valley Project Improvement Act (CVPIA), and the 
Bay Delta Accord.
    This reduction in CVP export supply reliability has 
increased the desire of many water managers to pursue water 
transfers. Additionally, numerous state laws, and federal laws 
(Section 225 of the 1982 Reclamation Law and Section 3405 of 
the CVPIA), have been enacted in an attempt to facilitate water 
transfers to assist agricultural and urban water users in 
maintaining reliable water supplies.
    The San Luis Act prohibits the State of California from 
providing water service to the San Luis Unit of the CVP. The 
Committee believes that this prohibition is inconsistent with 
current federal and state policies which encourage and 
facilitate water transfers. The amendment pursuant to this 
legislation would meet current needs while remaining consistent 
with the original intent of the underlying Act.

                            Committee Action

    H.R. 3077 was introduced on October 14, 1999, by 
Congressman Cal Dooley (D-CA). H.R. 3077 was referred to the 
Committee on Resources and within the Committee to the 
Subcommittee on Water and Power. A legislative hearing was held 
on the bill on October 21, 1999, by the Subcommittee on Water 
and Power. On October 27, 1999, the Full Resources Committee 
met to consider the bill. The Subcommittee was discharged from 
further consideration of the measure by unanimous consent. 
Congressman George Miller (D-CA) offered an amendment that 
ensured that additional water to the San Luis Unit would be 
subject to both State and federal law and not aggravate 
drainage issues in the region. The Miller amendment was adopted 
by voice vote. The bill was then ordered reported, as amended, 
by voice vote to the House of Representatives.

                      Section-by-Section Analysis


Section 1. Elimination of restrictions on use of San Luis unit 
        facilities for water transfers in the Central Valley project.

    This section amends the San Luis Act of 1960 by removing 
the provisions that restrict the State of California from using 
additional water capacity to service in the Federal San Luis 
unit service area.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation.--Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act.--As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in tax 
expenditures. The Congressional Budget Office estimates that 
enactment of this bill would increase offsetting receipts (and 
thus reduce direct spending) by $2 million annually.
    3. Government Reform Oversight Findings.--Under clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives, the Committee has received no report of 
oversight findings and recommendations from the Committee on 
Government Reform on this bill.
    4. Congressional Budget Office Cost Estimate.--Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 29, 1999.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3077, a bill to 
amend the act that authorized construction of the San Luis Unit 
of the Central Valley Project, California, to facilitate water 
transfers in the Central Valley Project.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Megan 
Carroll.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 3077--A bill to amend the act that authorized construction of the 
        San Luis Unit of the Central Valley Project, California, to 
        facilitate water transfers in the Central Valley Project

    CBO estimates that implementing H.R. 3077 would not have a 
significant impact on discretionary spending over the 2001-2004 
period. The bill would increase offsetting receipts from water 
users, thus reducing direct spending by about $2 million 
annually; therefore, pay-as-you-go procedures would apply. H.R. 
3077 contains no intergovernmental or private-sector mandates 
as defined in the Unfunded Mandates Reform Act and would impose 
no costs on state, local, or tribal governments.
    Under current law, the state of California cannot use 
federal water project facilities to provide water to users of 
the San Luis Unit of the Central Valley Project. H.R. 3077 
would allow the state to use the San Luis Unit facilities to 
carry nonproject water to federal irrigation districts. Based 
on information from the Westlands Water District, we estimate 
the state would use federal water facilities to supply about 
60,000 acre feet a year of nonproject water. CBO estimates that 
this activity would increase the Bureau of Reclamation's cost 
of operating and maintaining the project by $400,000 annually. 
This amount would be subject to annual appropriation and would 
be reimbursed by water users in the year the costs are 
incurred.
    In addition, this activity would generate increased 
receipts to the Bureau under the Warren Act, which allows the 
Secretary of the Interior to charge nonproject water users fees 
that are consistent with those charged to users of federal 
water. These receipts and reimbursements for operation and 
maintenance costs would be deposited in the Treasury as 
offsetting receipts. Based on information from the Bureau and 
Westlands Water Districts, CBO estimates that these receipts 
would average $1.6 million a year, starting in 2001.
    The CBO staff contact is Megan Carroll. This estimate was 
approved by Peter H. Fontaine, Deputy Assistant Director for 
Budget Analysis.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

               Preemption of State, Local, or Tribal Law

    This bill is not intended to preempt any State, local, or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                          ACT OF JUNE 3, 1960


AN ACT To authorize the Secretary of the Interior to construct the San 
 Luis unit of the Central Valley project, California, to enter into an 
agreement with the State of California with respect to the construction 
and operation of such unit, and for other purposes.

           *       *       *       *       *       *       *


  Sec. 2. The Secretary is authorized, on behalf of the United 
States, to negotiate and enter into an agreement with the State 
of California providing for coordinated operation of the San 
Luis unit, including the joint-use facilities, in order that 
the State may, without cost to the United States, deliver water 
in service areas outside the Federal San Luis unit service area 
as described in the report of the Department of the Interior, 
entitled ``San Luis Unit, Central Valley Project'', dated 
December 17, 1956. Said agreement shall recite that the 
liability of the United States thereunder is contingent upon 
the availability of appropriations to carry out its obligations 
under the same. No funds shall be appropriated to commence 
construction of the San Luis unit under any such agreement, 
except for the preparation of designs and specifications and 
other preliminary work, prior to ninety calendar days (which 
ninety days, however, shall not include days on which either 
the House of Representatives or the Senate is not in session 
because of an adjournment of more than three calendar days to a 
day certain) after it has been submitted to the Congress, and 
then only if neither the House nor the Senate Interior and 
Insular Affairs Committee has disapproved it by committee 
resolution within said ninety days. If such an agreement has 
not been executed by January 1, 1962, and if, after 
consultation with the Governor of the State, the Secretary 
determines that the prospects of reaching accord on the terms 
thereof are not reasonably firm, he may proceed to construct 
and operate the San Luis unit in accordance with section 1 of 
this Act: Provided, That, if the Secretary so determines, he 
shall report thereon to the Congress and shall not commence 
construction for ninety calendar days from the date of his 
report (which ninety days, however, shall not include days on 
which either the House of Representatives or the Senate is not 
in session because of an adjournment of more than three days). 
In considering the prospects of reaching accord on the terms of 
the agreement the Secretary shall give substantial weight to 
any relevant affirmative action theretofore taken by the State, 
including the enactment of State legislation authorizing the 
State to acquire and convey to the United States title to lands 
to be used for the San Luis unit orassistance given by it in 
financing Federal design and construction of the unit. The authority 
conferred upon the Secretary by the first sentence of this section 
shall not, except as is otherwise provided in this section, be 
construed as a limitation upon the exercise by him of the authority 
conferred in section 1 of this Act, but if the State shall agree that, 
if it later enlarges the joint-use facilities, or any of them, it will 
pay an equitable share of the cost to the United States of those 
facilities as initially constructed before utilizing them for the 
storage or delivery of water and will bear the entire cost of enlarging 
the same and if, as a part of said equitable share, it makes available 
to the Secretary sufficient funds to pay the additional cost of 
designing and constructing the joint-use facilities so as to permit 
enlargement, it shall have an irrevocable right to enlarge or modify 
such facilities at any time in the future, and a perpetual right to the 
use of such additional capacity (subject to section 9): Provided, That 
the performance of such work by the State, after approval of its plans 
by the Secretary, shall be so carried on as not to interfere unduly 
with the operation of the project for the purposes set forth in section 
1 of this Act [and the use of the additional capacity for water service 
shall be limited to service outside of the Federal San Luis unit 
service area]: And provided further, That this right may be 
relinquished by the State at any time at its option.
  Sec. 3. The agreement between the United States and the State 
referred to in section 2 of this Act shall provide, among other 
things, that--
          (a) * * *

           *       *       *       *       *       *       *

          (h) Notwithstanding transfer of the care, operation, 
        and maintenance of any works to the State, as 
        hereinbefore provided, any organization which has 
        theretofore entered into a contract with the United 
        States under the Reclamation Project Act of 1939, and 
        amendments thereto, for a water supply through the 
        works of the San Luis unit, including joint-use 
        facilities, shall continue to be subject to the same 
        limitations and obligations and to have and to enjoy 
        the same rights which it would have had under its 
        contract with the United States and the provisions of 
        paragraph (4) of section 1 of the Act of July 2, 1956 
        (70 Stat. 483, 43 U.S.C. 485h-1) in the absence of such 
        transfer, and its enjoyment of such rights shall be 
        without added cost or other detriment arising from such 
        transfer; and
          (i) if a nonreimbursable allocation to the 
        preservation and propagation of fish and wildlife has 
        been made as provided in section 2 of the Act of August 
        14, 1946 (60 Stat. 1080, 16 U.S.C. 662), as amended, 
        the features of the unit to which such allocation is 
        attributable shall, notwithstanding transfer of the 
        care, operation, and maintenance to the State, be 
        operated and maintained in such wise as to retain the 
        basis upon which such allocation is premised and, upon 
        failure so to operate and maintain those features, the 
        amount allocated thereto shall become a reimbursable 
        cost to be paid by the State[;].
          [(j) the State shall not serve any lands within the 
        Federal San Luis unit service area except as such 
        service is required as a consequence of its acceptance 
        of the care, operation, and maintenance of works under 
        paragraph (g) of this section.]

           *       *       *       *       *       *       *

  Sec. 9. The State of California may not, under section 2, use 
additional capacity to deliver water inside the Federal San 
Luis unit service area unless--
          (1) such delivery is managed so as to ensure that--
                  (A) agricultural drainage discharges arising 
                from use of the delivered water--
                          (i) comply with any waste discharge 
                        requirements issued for such 
                        discharges; or
                          (ii) if there are no such waste 
                        discharge requirements, do not cause 
                        water quality conditions in the San 
                        Joaquin River and the Sacramento-San 
                        Joaquin Delta and San Francisco Bay to 
                        be degraded or otherwise adversely 
                        affected; and
                  (B) use of the delivered water for irrigation 
                does not frustrate or interfere with efforts by 
                the United States and the State of California 
                to manage agricultural subsurface drainage 
                discharges from the San Luis unit; and
          (2) such delivery is consistent with those provisions 
        of operating agreements between the Secretary and the 
        Department of Water Resources of the State of 
        California that are consistent with this Act.

                            ADDITIONAL VIEWS

    H.R. 3077 would for the first time allow water users within 
the San Luis Unit of the Central Valley Project to become full 
entitlement contractors of California's State Water Project. 
Specifically, Westlands Water District is proposing to purchase 
a 20,500 acre-feet State Water Project entitlement from several 
water districts in Kern County.
    This is significant legislation affecting water management 
in California. H.R. 3077 obviously provides water users in the 
Federal San Luis Unit service area with significant 
opportunities to access supplemental water supplies. However, 
only a very limited time was allowed for Committee 
consideration and to receive testimony and comment from 
affected parties. The bill was introduced, heard, and reported 
from Committee in less than two weeks. The only witness at the 
Subcommittee's October 21, 1999 hearing was the Westlands Water 
District. The Committee record does not include testimony from 
the State of California, the State Water Contractors, the 
Department of the Interior, environmental groups, or fish 
conservation and protection organizations.
    It may be that these groups and organizations will be only 
slightly affected by enactment of H.R. 3077, or perhaps not 
affected at all, or even affected in a positive way. But 
because of the limited time provided for consideration of this 
legislation, the Committee records do not include statements 
from any of them.
    A key issue raised by any proposal to provide additional 
supplies of irrigation water to the San Luis Unit is subsurface 
drainage. Discharges of subsurface agricultural drainage from 
the San Luis Unit caused the deaths of hundreds of waterfowl at 
the Kesterson Reservoir site in the mid 1980s, and drainage 
management in the San Luis Unit continues to be a critical and 
unresolved issue. The committee accepted my amendment that 
would allow the State to deliver water to the San Luis Unit 
only after specific requirements have been met to protect water 
quality.
    The purpose of the Miller Amendment is to ensure that 
irrigation water deliveries from the State Water Project to the 
Federal San Luis Unit service area are carefully managed and 
are not directed to lands that are known to contribute to 
agricultural drainage problems with resultant adverse effects 
on water quality in the San Joaquin River, the Sacramento-San 
Joaquin Delta, or San Francisco Bay.
    The amendment:
          Specifically prohibits delivery of State water to 
        lands within the Federal San Luis service area unless 
        we are assured that adverse water quality impacts will 
        not result from the use of this new supply of 
        irrigation water.
          Further protects water quality by prohibiting the use 
        of water deliveries from the State Water Project if 
        using this new water supply would aggravate or 
        frustrate our efforts to manager drainage discharges to 
        the San Joaquin River and the Bay-Delta system.
          Requires that delivery of water from the State of 
        California must be consistent with project operating 
        agreements between the State of California and the 
        United States.

                                                     George Miller.

                                  
