[Senate Report 109-30]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 43
109th Congress                                                   Report
                                 SENATE
 1st Session                                                     109-30
======================================================================


 
     WALLOWA LAKE DAM REHABILITION AND WATER MANAGEMENT ACT OF 2005

                                _______
                                

                 March 10, 2005.--Ordered to be printed

                                _______
                                

   Mr. Domenici, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 231]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 231) to authorize the Bureau of 
Reclamation to participate in the rehabilitation of the Wallowa 
Lake Dam in Oregon, and for other purposes, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                         PURPOSE OF THE MEASURE

    The purpose of S. 231 is to authorize the Bureau of 
Reclamation to participate in the rehabilitation of the Wallowa 
Lake Dam in Oregon.

                          BACKGROUND AND NEED

    Wallowa Lake Dam is a privately owned dam constructed in 
1918 and raised in 1929. It is owned and operated by the 
Associated Ditch Companies, Inc. (ADC). Dam safety deficiencies 
have been identified by the U.S. Army Corps of Engineers and 
the Oregon Water Resources Department, causing the reservoir to 
be held below full pool elevation since 1996. ADC, in 
conjunction with the Grande Ronde Model Watershed Council, the 
Bureau of Reclamation, and other local, State, and Federal 
agencies developed the Wallowa Lake Dam Rehabilitation and 
Water Management Program to address dam safety deficiencies and 
to tie correction of those deficiencies to larger environmental 
issues in the Wallowa River Basin.
    S. 231 authorizes the Secretary of the Interior, acting 
through the Commissioner of Reclamation, to participate in: (1) 
the Wallowa Lake Dam Rehabilitation Program, in cooperation 
with ADC; and (2) phases II and III of the Wallowa Valley Water 
Management Plan, in cooperation with tribal, State, and local 
governmental entities. The Wallowa Lake Dam Rehabilitation 
Program, as described in the February 2001 Vision Statement, 
focuses on planning, designing, and constructing recommended 
improvements to Wallowa Lake Dam. When this phase is completed, 
ADC will be able to raise pool levels and work closely with the 
Oregon State Parks Department to assess the impact on nearby 
park facilities.
    Phase II of the Wallowa Valley Water Management Plan will 
focus on the planning and implementation of fish screens, 
automated head gates, and flow measurement devices at 
unscreened diversions. The Nez Perce Tribe is currently working 
with the Oregon Department of Fish and Wildlife to plan and 
implement fish recovery measures. S. 231 provides that only the 
Tribe may own and operate fish passage facilities constructed 
with Federal funds at Wallowa Lake Dam.
    Phase III focuses on planning, designing, and implementing 
the institutional framework and infrastructure, including pumps 
and pipelines, needed for a water exchange between the Wallowa 
River and the Lostine and Bear Creek Valley irrigation system.

                          LEGISLATIVE HISTORY

    S. 231 was introduced on February 1, 2005 by Senator Smith 
for himself and Senator Wyden. S. 231 is similar to S. 1355, as 
passed by the Senate in the 108th Congress.
    During the 108th Congress, S. 1355 was introduced by 
Senators Smith and Wyden on June 26, 2003. The Subcommittee on 
Water and Power held a hearing on S. 1355 on October15, 2003. 
S. Hrg. 108-271. At the business meeting on March 10, 2004, the 
Committee on Energy and Natural Resources ordered S. 1355 favorably 
reported, with an amendment in the nature of a substitute. S. Rept. 
108-250. S. 1355 was passed by the Senate, as amended, by unanimous 
consent on September 15, 2004.
    During the 107th Congress, a similar measure, S. 1883, was 
introduced by Senators Smith and Wyden. The Subcommittee on 
Water and Power held a hearing on S. 1883 on June 6, 2002. S. 
Hrg. 107-817. The Committee on Energy and Natural Resources 
ordered S. 1883 favorably reported on July 31, 2002, with an 
amendment. S. Rept. 107-284. S. 1883 passed the Senate as title 
III of S. 2556 on November 20, 2002.
    At a business meeting on February 9, 2005, the Committee on 
Energy and Natural Resources ordered S. 231 favorably reported.

                        COMMITTEE RECOMMENDATION

    The Senate Committee on Energy and Natural Resources, in 
open business session on February 9, 2005, by unanimous voice 
vote of a quorum present, recommends that the Senate pass S. 
231.

                      SECTION-BY-SECTION ANALYSIS

    Section 1 entitles the bill the ``Wallowa Lake Dam 
Rehabilitation and Water Management Act of 2005''.
    Section 2 defines key terms used in the Act.
    Section 3(a) authorizes the Secretary to provide grants or 
enter into cooperative or other agreements with tribal, State, 
and local governmental entities and the ADC, to plan, design, 
and construct facilities needed to implement the Wallowa Lake 
Dam Rehabilitation Program and Phases II and III of the Wallowa 
Valley Water Management Plan.
    The Committee recognizes that this bill, by authorizing the 
Bureau of Reclamation to provide grant money for the 
rehabilitation of the Wallowa Dam, and for Phase II and Phase 
III of the Wallowa Valley Water Management Plan, provides a 
unique, cost-effective means of enhancing flood control 
protection for downstream communities, and of re-establishing a 
fishery for the Nez Perce Tribe.
    The Wallowa Basin is aboriginal territory for the Nez 
Perce, who are co-managers with the Federal Government of 
certain fish resources and support enactment of the bill. S. 
231 will help provide water for the recovery of ESA-listed 
species in an important sub-basin within the Columbia River 
Basin, where actions by the Bureau of Reclamation are covered 
by the 2000 Columbia River biological opinion. The Nez Perce 
Tribe, as well as numerous State, Federal and local agencies 
have collaborated on this successful project since 1992. The 
management plan for the Wallowa Valley is consistent with 
action plans associated with the Bonneville Power 
Administration's Fish and Wildlife Program and the Wallowa 
County/Nez Perce Tribe Salmon Habitat Recovery Plan. 
Rehabilitation of the dam is necessary to provide for 
additional water storage.
    With the ability to fill the lake to a higher elevation, 
the water rights holders have agreed to make an additional 
4,300 acre-feet of water available each year, in accordance 
with State water law. This will help the Nez Perce restore 
sockeye and coho salmon passage at the dam, and provide for the 
downstream water exchange, and it will also aid in resolving 
issues related to Federally-listed salmon runs. The Committee 
notes that these circumstances are unique and the Committee 
does not intend this legislation to set precedent for Federal 
assistance to private projects.
    Section 3(b)(1) requires the Secretary, as a condition of 
providing funds, to ensure that the program meet the standards 
of the dam safety program in the State of Oregon.
    Section 3(b)(2) requires that as a condition of receiving 
funding, ADC must assume liability for work performed or 
supervised with funds provided to it under this Act.
    Section 3(b)(3) provides a liability waiver for the United 
States for damages arising out of any act, omission, or 
occurrence, relating to a facility rehabilitated or constructed 
under this Act.
    Section 3(c) limits the Federal share of the cost of 
activities authorized under this Act to 80 percent.
    Section 3(c)(2)(A) excludes any expenditures by the 
Bonneville Power Administration from being credited against the 
Federal cost share.
    Section 3(c)(2)(B) excludes any expenditures made by 
individual agricultural producers in any Federal commodity or 
conservation program from being credited against the Federal 
share of the costs.
    Section 3(d) requires the Secretary to comply with 
applicable State water law.
    Section 3(e) prohibits the Federal Government from holding 
title to any facility rehabilitated or constructed under this 
Act.
    Section 3(f) provides that the Federal Government is not 
responsible for the operation and maintenance of any facility 
constructed or rehabilitated under this Act.
    Section 3(g) provides that any facility constructed using 
Federal funds for trapping and transporting migratory salmon 
may be owned and operated only by the Nez Perce tribe.
    Section 4 states that activities funded under this Act 
shall not be considered a supplemental or additional benefit 
under Federal reclamation law.
    Section 5 authorizes $25.6 million in appropriations for 
the Federal cost share.

                   COST AND BUDGETARY CONSIDERATIONS

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 14, 2005.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 231, the Wallowa 
Lake Dam Rehabilitation and Water Management Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

S. 231--Wallowa Lake Dam Rehabilitation and Water Management Act of 
        2005

    Summary: S. 231 would authorize the Bureau of Reclamation 
to participate in the rehabilitation of the Wallowa Lake Dam in 
Oregon and the implementation of the Wallowa Valley Water 
Management Plan. The bill would limit the bureau's share of the 
rehabilitation costs to 80 percent. Assuming appropriation of 
the necessary amounts, CBO estimates that implementing S. 231 
would cost $25 million over the 2006-2010 period. In addition, 
we estimate that implementing S. 231 would result in additional 
net direct spending by the Bonneville Power Administration 
(BPA) of $5 million over the 2006-2010 period. The federal 
government would not hold title to any facility rehabilitated 
or constructed under this bill, nor would the federal 
government be responsible for the operation and maintenance of 
those facilities.
    S. 231 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 231 is shown in the following table. The 
costs of this legislation fall within budget function 300 
(natural resources and environment).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2006     2007     2008     2009     2010
----------------------------------------------------------------------------------------------------------------
  8CHANGES IN SPENDING SUBJECT TO APPPROPRIATION...................

Rehabilitation Spending by the Bureau of Reclamation:
    Estimated Authorization Level..................................        5        7        7        7        0
    Estimated Outlays..............................................        2        4        7        7        5

                                           CHANGES IN DIRECT SPENDING

 Net BPA Spending:
    Estimated Budget Authority.....................................        5        0        0        0        0
    Estimated Outlays..............................................        2        2        1      (1)      (1)
----------------------------------------------------------------------------------------------------------------
\1\ Collections of less than $500,000.

    Basis of estimate: For this estimate, CBO assumes that S. 
231 will be enacted by the end of fiscal year 2005 and that 
spending would occur at the same rate as similar bureau and BPA 
projects.

Spending subject to appropriation

    Based on information from the Bureau of Reclamation, CBO 
estimates that the total cost of rehabilitating the Wallowa 
Lake Dam in Oregon and implementing the Wallowa Valley Water 
Management Plan would be about $32.6 million. S. 231 would 
authorize the appropriation of $25.6 million for the bureau's 
share of the cost of those projects. The remaining $7 million 
would be paid by the BPA and the Bonneville Power Foundation, a 
nonprofit organization. Based on information from the bureau, 
we expect that rehabilitation of the dam and implementation of 
the management plan would take five years and that funds will 
be appropriated in roughly equal installments over that period 
to complete the projects. Assuming appropriation of the 
authorized amount, we estimate that implementing the bill would 
cost the bureau $25 million over the 2006-2010 period, and an 
additional $1 million after that period.

Direct Spending

    Implementing S. 231 also would result in additional direct 
spending by BPA of $5 million over the 2006-2010 period for 
structures to allow for safe passage of fish through the 
Wallowa Lake Dam projects authorized in the bill. Such spending 
is authorized under current law, but BPA would not make these 
investments without the bureau's involvement in the Wallowa 
Lake projects. Because BPA must recover its costs through the 
sale of electricity, any additional spending would be offset by 
slightly higher proceeds from electricity sales over the next 
15 to 20 years. Consequently, BPA's additional spending would 
have a negligible net budgetary impact over many years.
    Intergovernmental and private-sector impact: S. 231 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Julie Middleton and 
Lisa Cash Driskill. Impact on State, Local, and Tribal 
Governments: Marjorie Miller. Impact on the Private Sector: 
Selena Caldera.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                      REGULATORY IMPACT EVALUATION

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 231.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 231.

                        EXECUTIVE COMMUNICATIONS

    The testimony provided by the Department of the Interior at 
the Subcommittee hearing on S. 1355 in the 108th Congress, 
before the Committee adopted an amendment in the nature of a 
substitute, follows:

  Statement of John W. Keys III, Commissioner, Bureau of Reclamation, 
                       Department of the Interior

    Mr. Chairman and Members of the Subcommittee I am John 
Keys, Commissioner of the Bureau of Reclamation. I appreciate 
the opportunity to present the Department's views on S. 1355, a 
bill that would authorize Reclamation to participate in 
implementation of the Wallowa Lake Dam Rehabilitation Program 
and Wallowa Valley Water Management Plan in Oregon. Reclamation 
believes the Wallowa Lake Dam Rehabilitation Program and 
Wallowa Valley Water Management Plan are potentially 
worthwhile, with numerous benefits. While we believe there may 
be merit to this proposed project, the Department does not 
support S. 1355, as currently drafted.
    Wallowa Lake Dam is a privately-owned dam constructed in 
1918 and raised in 1929, and is owned and operated by the 
Associated Ditch Companies, Inc. (ADC). Dam safety deficiencies 
have been identified by the United States Army Corps of 
Engineers and Oregon Water Resources Department. ADC, in 
conjunction with the Grande Ronde Model Watershed, Reclamation, 
and other local, state, and Federal agencies, developed the 
Wallowa Lake Dam Rehabilitation Program to address dam safety 
deficiencies and developed the Wallowa Valley Water Management 
Plan to tie correction of those deficiencies to larger 
environmental issues in the Wallowa River Basin. The Dam 
Rehabilitation Program and Water Management Plan is a six year 
proposal with an estimated total cost of $38,800,000. S. 1355 
sets out an 80/20 cost share for these efforts, under which the 
Federal government would pay $32 million funded through the 
Bureau of Reclamation.
    While the programs developed by the ACD and the Model 
Watershed provide a concept, they do not meet Federal standards 
established in the Principals and Guidelines for planning water 
development programs. Furthermore, the project may affect 
species listed under the Endangered Species Act (ESA). Should 
Reclamation be authorized to fund this project, a funding 
decision may constitute a major Federal action subject to 
consultation under Section 7 of the ESA. It would also require 
environmental analysis in compliance with the National 
Environmental Policy Act (NEPA). The bill, as currently 
drafted, does not provide for Reclamation's participation in 
the planning stages of the dam rehabilitation aspects of the 
project and separates dam rehabilitation from implementation of 
the water management plan. Consequently, it would be difficult 
for Reclamation to meet the environmental compliance 
requirements for the ESA and NEPA. Until adequate planning can 
be completed, the Administration cannot support funding this 
project.
    The proposed bill would authorize Reclamation to provide 
funding to the ADC for dam rehabilitation activities, [nit] 
however, it does not provide administrative authority to 
transfer those funds. The legislation would need revision to 
provide Reclamation authority to issue grants. We would be 
pleased to work with the Committee in developing appropriate 
language.
    Finally, we are concerned that Reclamation's participation 
in this program would adversely impact ongoing projects and 
operations. S. 1355 would authorize the use of Reclamation 
funds for a non-Federal purpose. Reclamation funds are limited 
and are targeted to perform essential functions at our 
projects, such as security, operations and maintenance (O&M), 
resource management, dam safety, and construction. In addition, 
despite the very high Federal cost share for the project under 
S. 1355, there is no provision for repayment by project 
beneficiaries in accordance with Reclamation law. Funding for 
this project was not included in the President's budget, and we 
cannot support activities which detract from high priority work 
on current Bureau of Reclamation facilities. The Department 
cannot, therefore, support S. 1355.
    Thank you again for the opportunity to provide the 
Administration's position on S. 1355. I would be happy to 
answer any questions you might have.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 231 as ordered 
reported.

                                  
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