Senate Report 114-353 - WESTERN WATER SUPPLY AND PLANNING ENHANCEMENT ACT OF 2016

[Senate Report 114-353]
[From the U.S. Government Publishing Office]

Calendar No. 631

114th Congress } { Report
SENATE
2d Session } { 114-353

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

WESTERN WATER SUPPLY AND PLANNING ENHANCEMENT ACT OF 2016

_______

September 15, 2016.--Ordered to be printed

_______

Ms. Murkowski, from the Committee on Energy and Natural Resources,
submitted the following

R E P O R T

[To accompany S. 2902]

The Committee on Energy and Natural Resources, to which was
referred the bill (S. 2902) to provide for long-term water
supplies, optimal use of existing water supply infrastructure,
and protection of existing water rights, having considered the
same, reports favorably thereon with amendments and recommends
that the bill, as amended, do pass.
The amendments are as follows:
1. Beginning on page 4, strike line 7 and all that follows
through page 13, line 5, and insert the following:

SEC. 101. RESERVOIR OPERATION IMPROVEMENT.

(a) Definitions.--In this section:
(1) Operational document.--The term ``operational
document'' includes a water control plan, water control
manual, water control diagram, release schedule, rule
curve, operational agreement with a non-Federal entity,
and any associated environmental documentation.
(2) Reserved works.--The term ``reserved works''
means any Bureau of Reclamation project facility at
which the Secretary of the Interior carries out the
operation and maintenance of the project facility.
(3) Secretary.--The term ``Secretary'' means the
Secretary of the Army.
(4) Transferred works.--The term ``transferred
works'' means a Bureau of Reclamation project facility,
the operation and maintenance of which is carried out
by a non-Federal entity, under the provisions of a
formal operation and maintenance transfer contract.
(5) Transferred works operating entity.--The term
``transferred works operating entity'' means the
organization that is contractually responsible for
operation and maintenance of transferred works.
(b) Report.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall submit to the
Committee on Environment and Public Works of the Senate and the
Committee on Transportation and Infrastructure of the House of
Representatives a report including, for any State in which a
county designated by the Secretary of Agriculture as a drought
disaster area during water year 2015 is located, a list of
projects, including Corps of Engineers projects, and those non-
Federal projects and transferred works that are operated for
flood control in accordance with rules prescribed by the
Secretary pursuant to section 7 of the Act of December 22, 1944
(commonly known as the ``Flood Control Act of 1944'') (58 Stat.
890, chapter 665), including, as applicable--
(1) the year the original operational documents were
approved;
(2) the year for any subsequent revisions to the
operational documents;
(3) a list of projects for which--
(A) operational deviations for drought
contingency have been requested;
(B) the status of the request; and
(C) a description of how water conservation
and water quality improvements were addressed;
and
(4) a list of projects for which permanent or
seasonal changes to flood control capacity have been
requested, and the status of the request.
(c) Identification of Eligible Projects.--Not later than 60
days after the date of completion of the report under
subsection (b), the Secretary shall identify any projects
described in the report--
(1) for which the modification of the operational
document, including flood control rule curve, would be
likely to enhance existing authorized project purposes;
(2) for which the operational documents and
hydrometeorological information establishing the flood
control rule curves of the project have not been
substantially revised during the 15-year period ending
on the date of review by the Secretary; and
(3) for which individuals or entities responsible for
operations and maintenance costs or that have storage
entitlements or contracts at a Corps of Engineers
project, the owner of a non-Federal project, or the
non-Federal transferred works operating entity, as
applicable, has submitted to the Secretary a written
request to revise operational documents, including
flood control rule curves, based on the use of improved
weather forecasting or run-off forecasting methods, new
watershed data, changes to project operations, or
structural improvements.
(d) Pilot Projects.--
(1) In general.--Not later than 1 year after the date
of identification of projects under subsection (c), if
any, the Secretary shall carry out not less than 15
pilot projects, which shall include not less than 6
non-Federal projects, to implement revisions of
operational documents, including flood control rule
curves, based on the best available science, which may
include--
(A) forecast-informed operations;
(B) new watershed data, including data
submitted by a non-Federal applicant; and
(C) if applicable, in the case of non-Federal
projects, structural improvements.
(2) Consultation.--In implementing a pilot project
under this subsection, the Secretary shall consult with
all affected interests, including--
(A) entities responsible for operations and
maintenance costs of a Federal facility;
(B) individuals and entities with storage
entitlements;
(C) a Federal power management agency that
markets power produced by a facility; and
(D) local agencies with flood control
responsibilities downstream of a facility.
(e) Coordination With Non-Federal Project Entities.--If a
project identified under subsection (c) is--
(1) A Non-Federal Project, the Secretary, prior to
carrying out an activity under this section, shall--
(A) consult with the non-Federal project
owner; and
(B) enter into a cooperative agreement,
memorandum of understanding, or other agreement
with the non-Federal project owner describing
the scope and goals of the activity and the
coordination among the parties; and
(2) A Federal Project, the Secretary, prior to
carrying out an activity under this section, shall--
(A) consult with each Federal and non-Federal
entity (including a municipal water district,
irrigation district, joint powers authority,
transferred works operating entity, or other
local governmental entity) that currently--
(i) manages (in whole or in part) the
Federal dam or reservoir; or
(ii) is responsible for operations
and maintenance costs; and
(B) enter into a cooperative agreement,
memorandum of understanding, or other agreement
with each such entity describing the scope and
goals of the activity and the coordination
among the parties.
(f) Consideration.--In designing and implementing a
forecast-informed reservoir operations plan under subsection
(d) or subsection (g), the Secretary may consult with the
appropriate agencies within the Department of the Interior and
the Department of Commerce with expertise in atmospheric,
meteorological, and hydrologic science to consider--
(1) the relationship between ocean and atmospheric
conditions, including--
(A) the El Nino and La Nina cycles; and
(B) the potential for above-normal, normal,
and below-normal rainfall for the coming water
year, including consideration of atmospheric
river forecasts;
(2) the precipitation and runoff index specific to
the basin and watershed of the relevant dam or
reservoir, including incorporating knowledge of
hydrological and meteorological conditions that
influence the timing and quantity of runoff;
(3) improved hydrologic forecasting for
precipitation, snowpack, and soil moisture conditions;
(4) an adjustment of operational flood control rule
curves to optimize authorized project purposes, without
a reduction in flood safety; and
(5) proactive management in response to changes in
forecasts.
(g) Funding.--
(1) In general.--The Secretary may accept and expend
amounts from entities described in subsection (d)(2),
the owners of non-Federal projects regulated for flood
control by the Secretary, and public or private
entities holding contracts with the Federal Government
for water storage or water supply at Federal projects
to fund all or a portion of the cost of carrying out a
review or revision of operational documents for--
(A) a Corps of Engineers project;
(B) a non-Federal project regulated for flood
control by the Secretary; or
(C) a Bureau of Reclamation facility
regulated for flood control by the Secretary.
(2) Inclusion.--Funds received from entities under
paragraph (1) may include amounts provided by non-
Federal entities through agreements, partnerships, or
joint ventures with public or private nonprofit
entities or Indian tribes.
(3) In-kind contributions.--The Secretary may accept
and use materials and services contributed by an entity
under this paragraph and credit the value of the
materials and services toward the cost of carrying out
a review or revisions of operational documents.
(h) Effect.--
(1) Manual revisions.--A revision of an operational
document shall not reduce the water supply available
for any authorized purposes of a Federal project or the
existing purposes of a non-Federal project regulated
for flood control by the Secretary.
(2) Effect of Section.--
(A) Nothing in this section authorizes the
Secretary to carry out, at a Federal dam or
reservoir, any project or activity for a
purpose not otherwise authorized as of the date
of enactment of this Act.
(B) Nothing in this section affects or
modifies any obligation of the Secretary under
State law.
(C) Nothing in this section affects or
modifies any obligation to comply with any
applicable Federal law.
(3) Application.--
(A) Certain facilities.--This section applies
only to a facility located in a State in which
a Bureau of Reclamation project is located.
(B) Certain projects excluded.--This section
shall not apply to--
(i) any project authorized by the Act
of December 31, 1928 (43 U.S.C. 617 et
seq.) (commonly known as the ``Boulder
Canyon Project Act''); or
(ii) the initial units of the
Colorado River Storage Project, as
authorized by the first section of the
Act of April 11, 1956 (43 U.S.C. 620)
(commonly known as the ``Colorado River
Storage Project Act'').
(C) Bureau of reclamation reserved works
excluded.--This section--
(i) shall not apply to any dam or
reservoir operated by the Bureau of
Reclamation as a reserved work, unless
all non-Federal project sponsors of a
reserved work jointly provide to the
Secretary a written request for
application of this section to the
project; and
(ii) shall apply only to Bureau of
Reclamation transferred works at the
written request of the transferred
works operating entity.
(i) Prior Studies.--In carrying out subsections (b), (c),
and (d), to the maximum extent practicable, the Secretary
shall--
(1) coordinate with the efforts of the Secretary to
complete the reports required under subparagraphs
(A)(iii) and (B) of subsection (a)(2) of section 1046
of the Water Resources Reform and Development Act of
2014 (33 U.S.C. 2319 note, 128 Stat. 1251); and
(2) consider the findings of the reports described in
paragraph (1) if the reports are available prior to
carrying out subsections (b), (c), and (d).
(j) Modifications to Manuals and Curves.--Not later than
180 days after the date of completion of a modification to an
operational document, the Secretary shall submit to the
Committees on Environment and Public Works and Energy and
Natural Resources of the Senate and the Committees on
Transportation and Infrastructure and Natural Resources of the
House of Representatives a report regarding the components of
the forecast-based reservoir operations plan incorporated into
the change.

2. Beginning on page 19, line 24, strike ``shall--'' and
all that follows through ``(1) fund'' on page 20, line 1, and
insert ``shall fund''.
3. On page 20, line 7, strike the semicolon at the end and
insert a period.
4. Beginning on page 20, strike line 8 and all that follows
through page 21, line 3.
5. On page 22, line 7, strike ``$10,000,000'' and insert
``$8,000,000''.
6. Beginning on page 102, strike line 22 and all that
follows through page 103, line 5, and insert the following:

water right beyond any applicable limitations under State water
law; or
(4) the modification of the terms and conditions

7. On page 107, line 15, strike ``$35,000,000'' and insert
``$30,900,000''.
8. On page 108, line 3, strike ``$35,000,000'' and insert
``$30,900,000''.
9. On page 108, line 6, strike ``$35,000,000'' and insert
``$30,900,000''.
10. On page 110, line 1, strike ``$35,000,000'' and insert
``$30,900,000''.
11. On page 124, line 7, strike ``75'' and insert ``65''.
12. On page 124, line 15, strike ``75'' and insert ``65''.

Purpose

The purpose of S. 2902 is to provide for long-term water
supplies, optimal use of existing water supply infrastructure,
and protection of existing water rights.

Background and Need

Across the West, federal agencies, farmers, American Indian
tribes, irrigation districts, and a broad array of others face
a wide range of water-related challenges including drought,
aging infrastructure, limited supply and competing uses, and
lengthy permitting processes. In the face of prolonged drought,
the Colorado River Basin states have joined together in a
``system conservation program'' that includes water
conservation projects designed to reduce the demands on Lake
Mead's water supply. Despite the program's success, there is
continuing risk that water elevations in the Colorado River
system could drop to levels that would trigger shortages. In
addition, the federal water storage permitting process for
analyzing the feasibility, cost effectiveness, and
environmental impacts of dams and other infrastructure is often
lengthy, complex, and costly as multiple agencies are involved.
While cost efficiencies and feasibility are the major barriers
to developing new storage, addressing the length of reviews and
number of agencies involved is often cited by proponents as
further hindering the opportunities to develop needed storage.
The maintenance backlog at Bureau of Reclamation facilities is
significantly hindering the agency's ability to ensure the
upkeep of existing infrastructure and completion of needed
rural water projects. Similarly, challenges at the Bureau of
Indian Affairs hamper the agency's ability to complete water
related projects and improvements in a timely fashion.

Legislative History

S. 2902 was introduced on May 9, 2016, by Senator Flake.
Original cosponsors include Senators Barrasso, McCain, Risch,
Heller, and Daines. The Water and Power Subcommittee held a
hearing on May 17, 2016.
The Committee on Energy and Natural Resources met in open
business session on July 13, 2016, and ordered S. 2902
favorably reported as amended.

Committee Recommendation and Tabulation of Votes

The Senate Committee on Energy and Natural Resources, in
open business session on July 13, 2016, by a recorded vote of
12-10, with a quorum present, ordered S. 2902 as amended
reported S. 2902 and recommends that the Senate pass the bill
if amended as described herein.
The roll call vote on reporting the measure was 12 yeas and
10 nays, as follows:

YEAS NAYS
Ms. Murkowski Ms. Cantwell
Mr. Barrasso Mr. Wyden
Mr. Risch Mr. Sanders *
Mr. Lee Ms. Stabenow
Mr. Flake Mr. Franken *
Mr. Cassidy Mr. Manchin *
Mr. Gardner Mr. Heinrich
Mr. Daines Ms. Hirono *
Mr. Portman Mr. King
Mr. Hoeven Ms. Warren
Mr. Alexander
Ms. Capito

*Indicates vote by proxy.

Committee Amendments

During its consideration of S. 2902, the Committee adopted
12 amendments that would: (1) modify the reservoir operations
provisions to ensure affected interests are consulted by
federal agencies implementing a pilot project and provided for
contributions of non-Federal funds by public or private non-
profit entities or Indian tribes through agreements
partnerships or joint-ventures; (2) strike language regarding
the release or delivery of surplus water in Lake Mead; and, (3)
reduce the total authorization funding levels in the bill by
$89 million; and (4) strike redundant language regarding
applicability of state water law in the water rights protection
provision.

Section-by-Section

TITLE I--LONG-TERM IMPROVEMENTS FOR WESTERN STATES SUBJECT TO DROUGHT

SUBTITLE A--WATER SUPPLY IMPROVEMENTS

Section 101. Reservoir operations

Section 101 provides the authority for not less than 15
pilot projects to be carried out to update flood control
operations (USACE, USBR, or non-federal) in order to ensure
application of the best available science, including up-to-date
forecasting methods and hydrology, to enhance water supply and
other benefits.

Section 102. Authority to make the entire active capacity of Fontenelle
Reservoir available for use

Section 102 provides authority for the Secretary of
Interior to enter into cooperative agreements with the state of
Wyoming to make improvements to the Fontenelle Reservoir to use
the entire active capacity of the Reservoir.

Section 103. Saltcedar control efforts

Section 103 directs a study by the National Academy of
Sciences on the effectiveness of tamarisk/salt cedar control
efforts as well as specifying existing authorities that could
be used to implement such controls and a list of Federal
permits that would be required by such a program. It also
requires a report on a plan to implement such a program.

Section 104. Colorado River system

Section 104 directs the Secretary of the Interior to
develop a voluntary program to increase water in Colorado River
reservoirs and authorizes $8 million per year for 10 years to
carry out this section.

SUBTITLE B--PROTECTING CRITICAL WATER SUPPLY WATERSHEDS

Section 111. Definitions

Section 111 provides definitions for this title.

Section 112. Analysis of only two alternatives in proposed
collaborative management activities

Section 112 provides the agency with authority for limiting
evaluation in permit processed for forest and wildland
restoration activities on Federal Lands in critical water
supply watersheds assuming certain criteria are met to only two
alternatives: (1) the management activity as proposed; and (2)
the alternative of no action.

Section 113. Categorical exclusion to expedite certain critical
response actions

Section 113 provides authority to the Secretary concerned
to use a categorical exclusion to carry out a management
activity on National Forest System land or public land under
certain conditions and within certain criteria.

Section 114. Compliance with land use plans

Section 114 directs that a management activity covered by a
categorical exclusion granted by this provision shall be
conducted in a manner consistent with the applicable land use
plan.

SUBTITLE C--BUREAU OF RECLAMATION TRANSPARENCY ACT

Section 121. Short title

Section 121 provides the title for the section.

Section 122. Findings

Section 122 describes the findings for the subtitle.

Section 123. Definitions

Section 123 provides the definitions for the subtitle.

Section 124. Asset management report enhancements for reserved works

Section 124 requires the Secretary of the Interior to
submit to Congress a report on the efforts of the Bureau of
Reclamation to manage its infrastructure assets, including
reserved works--facilities owned and operated by the Bureau of
Reclamation--and a detailed assessment and ranking of major
repair and rehabilitation needs for all reserved works.

Section 125. Asset management report enhancements for transferred works

Section 125 requires the Secretary of the Interior to
develop requirements for Asset Management Reports for
transferred works--facilities owned by the Bureau of
Reclamation but operated by others--and develop and implement a
rating system to prioritize efforts to address major repair and
rehabilitation needs for transferred works.

Section 126. Offset

Section 126 provides a two million dollar reduction in
authorizations to offset the estimated additional cost to carry
out this section.

SUBTITLE D--WATER SUPPLY PERMITTING ACT

Section 131. Short title

Section 131 provides the short title of the subtitle.

Section 132. Definitions

Section 132 provides the definitions used in the subtitle.

Section 133. Establishment of lead agency and cooperating agencies

Section 133 establishes the Bureau of Reclamation as the
lead agency for a wide range of activities related to
coordinating new water supply projects. Agency action would
include coordination of all reviews, analyses, opinions,
statements, permits, licenses, or other approvals required
under Federal law. It also directs that the Commissioner of
Reclamation identify and notify, as early as practicable, any
other federal agency that will have jurisdiction, and play a
role in activities associated with a project.

Section 134. Bureau responsibilities

Section 134 describes the principal responsibilities of the
Bureau of Reclamation, including serving as the point of
contact for applicants for projects, state agencies, and
others. The Bureau would also provide direction and
coordination of all federal agency reviews necessary for
project development and construction of qualified project as
well as preparation of unified environmental documentation that
will serve as the basis for all federal decisions necessary to
authorize the use of federal lands and construction of
qualifying projects.

Section 135. Cooperating agency responsibilities

Section 135 describes cooperating agency responsibilities,
including the need for the head of each agency to submit a
timeframe to the Bureau under which the cooperating agency will
reasonably be able to complete its authorized responsibilities.

Section 136. Funding to process permits

Section 136 authorizes the Secretary of Interior to accept
and expend funds contributed by a non-federal public entity to
expedite the evaluation of a permit related to a qualifying
project.

SUBTITLE E--BUREAU OF RECLAMATION PROJECT STREAMLINING ACT

Section 141. Short title

Section 141 provides the short title of the subtitle.

Section 142. Definitions

Section 142 provides the definitions used in the subtitle.

Section 143. Acceleration of studies

Section 143 directs that, to the extent practicable, a
project study initiated by the Secretary of Interior shall
result in the completion of a final feasibility report not
later than three years after the date of initiation, have a
maximum Federal cost of $3 million, and ensure personnel from
the local project, region, and headquarters concurrently
conduct the required reviews. The section also prescribes other
guidance regarding the acceleration of studies and requires
reports to Congress on the implementation of the required
reforms.

Section 144. Expedited completion of reports

Section 144 requires the Secretary of Interior to expedite
the completion of any ongoing project study initiated before
the date of enactment of the Act, and if the Secretary
determines the project is justified in a completed report,
proceed directly to preconstruction planning, engineering, and
design of the project.

Section 145. Project acceleration

Section 145 establishes process reforms to promote timely
completion of project studies and environmental reviews for
project studies. Among other steps, the section requires the
Secretary to develop a coordinated environmental review process
for the development of project studies. The Section also
imposes financial penalties on the agency for failure to render
a decision relating to applicable project studies.

Section 146. Annual report to Congress

Section 146 requires that by February 1 of each year, the
Secretary shall submit to relevant committees of Congress a
report that, among other things, provides a description of the
status, benefits, and costs of Bureau of Reclamation projects,
reports, and studies that require specific congressional
authorization, proposed project studies, and proposed
modifications to authorized projects.

TITLE II--PROTECTING EXISTING WATER RIGHTS

Section 201. Short title

Section 201 establishes the short title for the title.

Section 202. Definitions

Section 202 establishes definitions for title

Section 203. Applicability

Section 203 makes clear that this title applies to each
action by the Secretary of Agriculture and Secretary of the
Interior to, among other actions, issue, renew, amend, or
extend any permit, approval, license, allotment, or easement.

Section 204. Prohibitions

Section 204 prohibits the Secretary from conditioning or
withholding action, in whole or in part, on-- (1) the transfer
of any State water right to the United States or any other
designee; or (2) the acquisition of a State water right in the
name of the United States. This Section also prohibits the
Secretary from (1) limiting the date, time, quantity, location
of diversion or pumping, or place of use of a State water right
beyond any applicable limitation under State water law; or (2)
the modification of the terms and conditions of groundwater
withdrawal, guidance and reporting procedures, and conservation
and source protection measures established by a State.

Section 205. Policy development

Section 205 requires that in developing a rule, policy,
directive or other similar federal action, the Secretary shall
recognize the authority of States to evaluate, protect, and
regulate groundwater and shall coordinate with states to ensure
any federal action, such as a rule or directive, is consistent
with, and imposes no greater restriction or regulatory
requirement than applicable state law.

Section 206. Effect of title

Section 206 includes seven savings provisions clarifying
that nothing in the title limits or expands and reserved water
right of the Federal Government on land administered by the
Secretary, affects implementation of the Endangered Species
Act, or limits or expands the Federal Power Act.

TITLE III--COMPLETING AND MAINTAINING RURAL WATER SUPPLY INFRASTRUCTURE
AND INDIAN IRRIGATION PROJECTS

SUBTITLE A--THE IRRIGATION REHABILITATION AND RENOVATION FOR INDIAN
TRIBAL GOVERNMENTS AND THEIR ECONOMIES (IRRIGATE) ACT

Section 301. Short title

Section 301 establishes the short title for the title.

Section 302. Definitions

Section 302 establishes definitions for title.

PART I--INDIAN IRRIGATION FUND

Section 311. Establishment

Section 311 establishes an Indian Irrigation Fund that will
consist of amounts deposited in the Fund plus interest earned
on investment of the Fund.

Section 312. Deposits to Fund

Section 312 authorizes deposits of $30.9 million annually
into the Indian Irrigation Fund (Fund) each year from Fiscal
Year 2017 to 2038 of funds that would otherwise be deposited
into the Reclamation Fund.

Section 313. Expenditures from Fund

Section 313 establishes that the Secretary of the Interior
may expend not more than $30.9 million and interest accrued for
each of Fiscal Years 2017 through 2038, subject to
appropriations. The Secretary may expend more than $30.9
million if additional funds are available in the Fund as a
result of a failure of the Secretary to expend all the amounts
available in 1 or more prior years.

Section 314. Investments of amounts

Section 314 establishes that the Secretary of the Treasury
shall invest excess amounts from the Fund if there is enough
money to meet current withdrawals. Interest accrued and any
sales from such investments shall be credited to and become a
part of the Fund.

Section 315. Transfers of amounts

Section 315 provides that amounts to be transferred in the
Indian Irrigation Fund shall be transferred at least monthly
from the general fund on the basis of estimates by the
Secretary of the Interior.

Section 316. Termination

Section 316 provides that at the end of Fiscal Year 2038,
the Indian Irrigation Fund shall terminate and the unexpended
and unobligated balances of the funds shall be returned to the
reclamation fund.

PART II--REPAIR, REPLACEMENT, AND MAINTENANCE OF CERTAIN INDIAN
IRRIGATION PROJECTS

Section 321. Repair, replacement, and maintenance of certain Indian
irrigation projects

Section 321 requires the Secretary of the Interior to
establish a program to address the deferred maintenance needs
of Indian irrigation projects that: pose risks to public or
employee safety or natural or cultural resources or impede
management and efficiency. The section also requires that the
Secretary of the Interior shall transfer $30.9 million, plus
any accrued interest, from the Fund to the Bureau of Indian
Affairs (BIA) every year from 2017 to 2038 to carry out the
program to address the deferred maintenance needs of Indian
irrigation projects. This section also ensures that the funds
expended shall not be subject to reimbursement or assessment as
debt against landowners that are served by the BIA irrigation
systems, consistent with the Federal Government's
responsibility for these systems.

Section 322. Eligible projects

Section 322 establishes that projects eligible for funds
from the Indian Irrigation Fund, are specific Indian irrigation
projects in the western United States and are owned by the
Federal Government, managed and operated by the BIA (or Indian
tribes through Indian Self Determination and Education
Assistance Act contracts or compacts), and have documented
deferred maintenance.

Section 323. Requirements and conditions

Section 323 requires that within 120 days after enactment
the Secretary, in consultation with the Assistant Secretary for
Indian Affairs and representatives of affected Indian tribes,
shall develop and submit to Congress (1) programmatic goals to
carry out the new Indian irrigation program and (2) funding
prioritization criteria to serve as a methodology for
distributing the funds.

Section 324. Study of Indian irrigation program and project management

Section 324 establishes that within 2 years, the Secretary,
acting through the Assistant Secretary for Indian Affairs,
shall complete a study that evaluates options for improving
programmatic and project management of BIA-managed Indian
irrigation projects. The study report, to be submitted to
Congress, will also include recommendations for improvement in
each qualifying project area. Prior to conducting the study,
the Secretary is required to consult with Indian tribes with
jurisdiction over the land on which an eligible project is
located and consider input of landowners served by the project.
This section also requires the Secretary of the Interior to
report not less frequently than every two years to Congress on
the progress being made to improve the irrigation systems with
the fund.

Section 325. Tribal consultation and user input

Section 325 establishes that, within 120 days of enactment
and prior to spending any funds on a project, the Secretary
shall consult with impacted Indian tribes and consider the
input of landowners.

Section 326. Allocation among projects

Section 326 establishes that, for every year funding is
available through 2038, each eligible project with critical
maintenance needs qualifies for at least some funding. This
section establishes additional considerations for prioritizing
funding for Indian irrigation projects.
The section also limits the total allocation for any
individual project to no more than $15 million during any
consecutive three year period. Notwithstanding the cap, if the
full amount of $30.9 million cannot be allocated because the
costs of the remaining maintenance activities exceed the cap,
the Secretary may allocate funds in accordance with this title.
This section authorizes the Indian Self Determination and
Education Assistance Act to apply to activities under this
section.

SUBTITLE B--THE CLEAN WATER FOR RURAL COMMUNITIES ACT

Section 331. Short title

Section 331 provides the short title for subtitle.

Section 332. Purpose

Section 332 establishes that the purpose of the title is to
ensure a safe and adequate water supply for municipal, rural,
and industrial customers in several counties in Montana and
North Dakota.

Sec. 333. Definitions

Section 333 provides definitions for terms in the subtitle.

Section 334. Dry-Redwater Regional Water Authority System and
Musselshell-Judith Rural Water System

Section 334 authorizes the Secretary of the Interior to
carry out the Dry-Redwater Regional Water Authority System and
the Musselshell-Judith Rural Water System rural water projects,
consistent with the applicable feasibility studies for each
project. The section also authorizes cooperative agreements and
cost sharing arrangements between the Federal government and
the applicable water system authorities.

Section 335. Use of power from Pick-Sloan program by Dry-Redwater
Regional Water Authority System

Section 335 authorizes the Western Area Power Administrator
to provide electric power--up to 1.5 megawatts--to the Dry-
Redwater Regional Water System under certain conditions
(including rates to be set by the Administrator) to meet the
systems' needs regarding pumping stations, water treatment
facilities and storage tanks among others. The cost of
additional power if needed, would be reimbursed to the Western
Area Power Administration by the Dry-Redwater Regional Water
Authority.

Section 336. Water rights

Section 336 makes clear that nothing in the subtitle
preempts or affects any state water law or state authority to
manage water resources within that state.

Section 337. Authorization of appropriations

Section 337 authorizes to be appropriated such sums as are
necessary to carry out the planning, design, and construction
of the Water Systems, substantially in accordance with the
applicable cost estimates.

TITLE VI--OFFSET

Sec. 401. Accelerated revenue, repayment, and surface water storage
enhancement

Section 401 directs the Department of the Interior to
convert any existing water service contracts between the United
States and water users' associations to repayment contracts to
allow for prepayment of such contracts, upon the request of the
water users association.

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, August 12, 2016.
Hon. Lisa Murkowski,
Chairman, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
Dear Madam Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2902, the Western
Water Supply and Planning Enhancement Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Aurora
Swanson.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.

S. 2902--Western Water Supply and Planning Enhancement Act of 2016

Summary: S. 2902 would direct the Bureau of Reclamation
(BOR) to convert water service contracts with water districts
in 17 western states to repayment contracts if a contractor
requests it, which would allow contractors to repay their share
of capital costs to the federal government earlier than would
otherwise occur under current law. CBO estimates that
accelerating those payments would, on net, increase offsetting
receipts, which are treated as reductions in direct spending,
by $635 million over the next 10 years. Additionally, the staff
of the Joint Committee on Taxation (JCT) expects that some
nonfederal water contractors would finance those accelerated
payments to the government with bonds that are exempt from
federal taxation. JCT estimates that enacting the legislation
would decrease revenues by $77 million over the 2017-2026
period.
On net, CBO estimates that those changes in direct spending
and revenues would decrease budget deficits over that 10-year
period by $558 million. Because enacting the bill would affect
direct spending and revenues, pay-as-you-go procedures apply.
S. 2902 also would authorize multiple water projects. Based
on information from BOR and the Bureau of Indian Affairs (BIA),
CBO estimates that implementing those provisions would cost
$319 million over the next five years and $669 million over the
2017-2026 period, assuming appropriation of the authorized and
estimated amounts.
CBO estimates that enacting the bill would not increase net
direct spending or on-budget deficits by more than $5 billion
in any of the four consecutive 10-year periods beginning in
2027.
S. 2902 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 effect of S. 2902 is shown in table 1. The costs of
this legislation fall within budget function 300 (natural
resources and environment).

TABLE 1.--SUMMARY OF BUDGETARY EFFECTS UNDER S. 2902
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES OR DECREASES (-) IN DIRECT SPENDING

Estimated Budget Authoritya........... -170 -350 -396 -165 39 83 82 81 81 80 -1,042 -635
Estimated Outlays..................... -170 -350 -396 -165 39 83 82 81 81 80 -1,042 -635

DECREASES IN REVENUES

Estimated Revenuesb................... * -2 -4 -7 -9 -11 -11 -11 -11 -11 -22 -77

NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES

Effect on Deficit..................... -170 -348 -392 -158 48 94 93 92 92 91 -1,020 -558

INCREASES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level......... 50 75 90 77 78 78 65 66 67 68 370 714
Estimated Outlays..................... 27 54 81 80 77 78 70 68 67 67 319 669
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding. * = between zero and -$500,000.
aCBO estimates that offsetting receipts would decline by $1.1 billion in years after 2026 for a net loss of about $470 million over the next 30 years.
bEstimates prepared by the staff of the Joint Committee on Taxation.

Basis of estimate: For this estimate, CBO assumes that S.
2902 will be enacted near the end of 2016.

Direct spending

BOR delivers water under 860 water service and repayment
contracts in 17 western states. In addition to paying for the
water, contractors also pay for a portion of the estimated
capital costs of constructing the reservoirs and conveyance
systems that store and deliver that water. CBO estimates that
in each of the next several years, those contractors will pay
about $245 million annually for their share of construction
costs (including interest) to the federal government.
Collectively those water contractors have an outstanding
obligation to the government of about $5.5 billion (including
principal and interest) over the next 30 years.
Generally, BOR contractors receive water under service
contracts until construction of an entire project is complete.
At that time, new contracts are negotiated (known as repayment
contracts) with annual payments adjusted to reflect the final
capital costs. The repayment period under those contracts
cannot exceed 40 years and water contractors typically cannot
pay their share of the construction costs on an accelerated
schedule.\1\
---------------------------------------------------------------------------
\1\Agreements between the federal government and water contractors
for delivering water for irrigation, municipal, and industrial purposes
from federally built projects are generally governed by either water
service contracts or repayment contracts. Water service contracts are
used when construction of a project is still in progress and the final
costs--including the contractors' share of those costs--are not yet
known. They are also used when a contractor does not want a permanent
contract. Repayment contracts are available to contractors when final
construction costs and the contractor's share of those costs are known.
---------------------------------------------------------------------------
S. 2902 would require BOR to convert any water service
contract to a repayment contract if the contractor requests it.
Amounts due under such a repayment contract would be based on
an estimate of final costs if construction of the project is
not yet complete. Under the bill, contractors that choose to
convert would be required to repay their share of the capital
costs of the project on an accelerated schedule. Those
contractors that are already operating under repayment
contracts would have the option to repay the government on an
accelerated schedule.
Under the bill irrigation contractors would pay, either in
one lump sum or in equal installments over three years, the
present value of their future contract payments discounted at
one-half of the 20-year maturity rate for Treasury securities.
Municipal and industrial contractors would be required to
prepay their entire outstanding principal balance in a lump
sum.
Based on information from BOR about the terms of current
water contracts, CBO expects that about 35 percent of the
current contractors would choose to convert to repayment
contracts in the first few years after the bill's enactment.
CBO estimates the receipts from those accelerated payments
would total $1.4 billion over the 2017-2026 period. During the
same period there would be a corresponding loss of annual
repayments (including applicable interest costs) that would
otherwise occur totaling $807 million. On net, under S. 2902,
CBO estimates that offsetting receipts would increase by $635
million over the 2017-2026 period. However, the reduction in
offsetting receipts after 2026 would be greater than the net
increase in receipts that would occur over the 2017-2026
period. CBO estimates that the net loss in offsetting receipts
from enacting this provision would total about $470 million
over the next 30 years.

Revenues

JCT estimates that some of the accelerated payments from
water districts to the federal government would be financed
with bonds that are exempt from federal taxation and that
issuing those bonds would lead to a revenue loss of $77 million
over the next 10 years.

Spending subject to appropriation

As shown in Table 2, CBO estimates that implementing the
discretionary components of the bill would cost $319 million
over the 2017-2021 period and $669 million over the 2017-2026
period, assuming appropriation of the authorized and estimated
amounts.

TABLE 2.--INCREASES IN SPENDING SUBJECT TO APPROPRIATION UNDER S. 2902
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars----
-----------------------------------------------------------------------------------------------------
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2017-2021 2017-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
INCREASES IN SPENDING SUBJECT TO APPROPRIATION

Indian Irrigation Projects:
Estimated Authorization Level................. 31 31 32 32 32 32 32 32 32 32 158 320
Estimated Outlays............................. 15 23 30 32 32 32 32 32 32 32 133 294
Rural Water Projects:
Estimated Authorization Level................. 3 14 30 31 32 33 20 21 22 22 110 229
Estimated Outlays............................. 2 9 22 28 31 32 25 23 21 22 93 216
Colorado River Basin Projects:
Authorization Level........................... 8 8 8 8 8 8 8 8 8 8 40 80
Estimated Outlays............................. 5 7 8 8 8 8 8 8 8 8 36 76
Accelerating Project Reviews:
Estimated Authorization Level................. 6 6 6 6 5 5 5 5 5 5 29 54
Estimated Outlays............................. 4 5 6 6 5 5 5 5 5 5 26 51
Other Provisions:
Estimated Authorization Level................. 2 15 15 0 0 0 0 0 0 0 32 32
Estimated Outlays............................. 1 10 15 6 0 0 0 0 0 0 32 32
Total Increases:
Estimated Authorization Level............. 50 75 90 77 78 78 65 66 67 68 370 714
Estimated Outlays......................... 27 54 81 80 77 78 70 68 67 67 319 669
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note:Components may not sum to totals because of rounding.

Indian Irrigation Projects. S. 2902 would establish a new
Indian Irrigation Fund and transfer $31 million from the
existing Reclamation Fund into the proposed fund each year over
the 2017-2038 period. The bill would authorize the
appropriation of those annual deposits (plus any interest
credited to the fund) to maintain irrigation projects owned by
the federal government and operated by BIA. According to BIA,
the agency operates 18 Indian irrigation projects that would be
eligible to receive appropriated funds under the bill, CBO
estimates that implementing those provisions would cost $294
million over the 2017-2026 period and about $390 million
thereafter.
Rural Water Projects. S. 2902 would authorize the
construction of two water projects for treatment, storage and
delivery of water to rural communities in Montana and North
Dakota. Based on information from BOR, CBO estimates that the
federal share (65 percent) of costs for constructing those
projects would total $216 million over the 2017-2026 period.
Those projects and their respective costs are described below:
The Dry-Redwater Rural Water Project in
Montana would construct water treatment and
distribution facilities to deliver water to existing
storage tanks in rural communities in eastern Montana
and a small area in northwestern North Dakota. Based on
information from BOR, including adjustments for
anticipated inflation as specified by the bill, CBO
estimates that the federal share of costs for
constructing this project would total $151 million over
the 2017-2026 period and about $57 million after 2026.
The Musselshell-Judith Rural Water Project
located in Montana would construct groundwater wells
and distribution facilities to deliver water to rural
communities in central Montana. Based on information
from BOR, including adjustments for anticipated
inflation as specified by the bill, CBO estimates that
the federal share of costs for constructing the project
would total $65 million over the 2017-2026 period.
Colorado River Basin Projects. S. 2902 would permanently
authorize a pilot program to construct water storage projects
on some reservoirs in the Colorado River Basin that is
scheduled to expire in 2018. The bill would authorize the
appropriation of $8 million a year to provide grants to certain
public entities for projects that would increase water storage
capacity. The bill also would authorize BOR to provide grants
for renewing or implementing existing agreements with
nonfederal public entities that focus on conserving water to
mitigate drought conditions. Based on historical spending
patterns for similar projects, CBO estimates that implementing
those provisions would cost $76 million over the 2017-2026
period.
Accelerating Project Reviews. S. 2902 would establish BOR
as the lead federal agency to coordinate with states, other
federal agencies, and the public to:
Expedite environmental reviews and
evaluations of permit applications,
Facilitate early detection and resolution of
environmental issues, and
Construct a publicly accessible database
that would include a list of requirements for the study
for each project and information on the progress toward
completing each requirement.
S. 2902 also would require BOR to identify water projects
across the United States that were excluded from environmental
reviews because they were determined to have no significant
effect on the environment. The agency would be tasked with
developing guidelines for new exclusions based on the
characteristics of those projects.
S. 2902 would limit BOR to spending $3 million or less on
studies conducted as part of its reviews; those studies would
have to be completed within three years. If a study could not
be completed within that period for $3 million or less, BOR
would be required to provide written notice to the Congress and
any other agencies involved. Finally, the bill would direct BOR
to annually solicit proposals to build water projects through
the Federal Register and to report to the Congress on the
preliminary costs and benefits of each of those proposals.
Based on information from BOR and other federal agencies,
CBO estimates that the additional activities required to
implement those provisions would cost $51 million over the
2017-2026 period for additional staff to coordinate agency
reviews, consolidate project data and documentation, and
conduct reviews.
Other Provisions. Other costs under S. 2902 would stem from
provisions that would direct the Corps, in coordination with
BOR, to identify 15 federal and nonfederal projects designed to
control the risk of flooding in states that were declared
federal disaster areas in 2015 because of drought. Based on
information from the BOR and the Army Corps of Engineers, CBO
estimates that implementing those provisions would cost $31
million over the 2017-2026 period.
Finally, the bill would direct BOR to contract with the
National Academy of Sciences (NAS) to conduct a study to
evaluate the efforts to control saltcedar in combination with
increasing water supplies and improving riparian habitats.\2\
S. 2902 would direct BOR to use the results of the NAS study
and develop a plan to control the spread of saltcedar. Based on
information from BOR, CBO estimates that implementing those
provisions would cost $1 million over the 2017-2026 period.
---------------------------------------------------------------------------
\2\Saltcedar (also called tamarisk) is considered an invasive
species in the western United States. It is a small shrub that
displaces native plants and harms riparian ecosystems.
---------------------------------------------------------------------------
Pay-As-You-Go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in Table 3.

TABLE 3.--PAY AS YOU GO CONSIDERATIONS FOR S. 2902
--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars----
---------------------------------------------------------------------------------------------------------------
2016
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016 2021 2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact.......... 0 -170 -348 -392 -158 48 94 93 92 92 91 -1,020 -558
Memorandum:
Changes in Outlays.................. 0 -170 -350 -396 -165 39 83 82 81 81 80 -1,042 -635
Changes in Revenues................. 0 0 -2 -4 -7 -9 -11 -11 -11 -11 -11 -22 -77
--------------------------------------------------------------------------------------------------------------------------------------------------------

Intergovernmental and private-sector impact: S. 2902
contains no intergovernmental or private-sector mandates as
defined in UMRA. State, local, and tribal governments, as well
as other public entities that manage water infrastructure,
would benefit from greater flexibility provided in the bill to
study, permit, manage, and finance water projects supported by
federal agencies. Any costs incurred by those entities under
agreements with federal agencies, including cost-sharing
contributions, would result from complying with conditions of
federal assistance. The bill also would benefit water user
associations by allowing them to prepay what they own in
remaining capital obligations to the federal government for
their use of federal water infrastructure.
Increase in long-term net direct spending and deficits: CBO
estimates that enacting the bill would not increase net direct
spending or on-budget deficits by more than $5 billion in any
of the four consecutive 10-year periods beginning in 2027.
Previous CBO estimate: On July 14, 2015, CBO transmitted a
cost estimate for H.R. 2898, the Western Water and American
Food Security Act of 2015, as ordered reported by the House
Committee on Natural Resources on July 9, 2015. Some of the
provisions of H.R. 2898 are similar to those in S. 2902--
including those regarding the accelerated repayment of debt and
expediting project reviews. CBO's estimate of the cost of those
provisions reflects current and new information about the
status of debt repayments.
On March 30, 2015, CBO transmitted a cost estimate for S.
438, the IRRIGATE Act, as ordered reported by the Senate
Committee on Indian Affairs on March 30, 2015. S. 438 and S.
2902 have similar provisions that would establish a new Indian
Irrigation Fund.
Estimate prepared by: Federal spending: Aurora Swanson;
Federal revenues: Staff of the Joint Committee on Taxation;
Impact on state, local, and tribal governments: Jon Sperl;
Impact on the private sector: Amy Petz.
Estimate approved by: H. Samuel Papenfuss, 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. 2902. 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. 2902, as ordered reported.

Congressionally Directed Spending

S. 2902, as ordered reported, does not contain any
congressionally directed spending items, limited tax benefits,
or limited tariff benefits as defined in rule XLIV of the
Standing Rules of the Senate.

Executive Communications

The testimony provided by the Bureau of Reclamation of the
U.S. Department of the Interior and the U.S. Forest Service of
Department of Agriculture before the Water and Power
Subcommittee on May 17, 2016, follows:

Statement of Estevan Lopez, Commissioner, Bureau of Reclamation, U.S.
Department of the Interior

Chairman Lee, Ranking Member Hirono and Members of the
Subcommittee, I am Estevan Lopez, Commissioner of the Bureau of
Reclamation. Thank you for the opportunity to provide the views
of the Department on S. 2902, the Western Water Supply and
Planning Enhancement Act. Several provisions of S. 2902 include
distinct and targeted provisions that touch on operational,
environmental, planning and budget functions, many of which the
Department has previously testified on. For this reason, much
of my statement will summarize the Department's previously
expressed views on the proposals in those provisions rather
than the bill as a whole.

title i, subtitle a--water supply improvements

Section 101 of S. 2902 contains language of interest to the
Bureau of Reclamation (Reclamation) and Army Corps of
Engineers. Section 101, dealing with Reservoir Operation
Improvement, would direct the creation of pilot projects to
implement revisions of water operations manuals. The Department
notes that the directives of Section 101 fall on the U.S. Army
Corps of Engineers (Corps), and that, pursuant to subparagraph
101(h)(3) the activities referenced would exclude Bureau of
Reclamation (Reclamation) facilities except under certain
conditions.
Reclamation believes that maintaining operations standards
that reflect both the current state of science as well as
changes in climate and hydrology to be an important part of
supporting water resource management. In Fiscal Year 2015
Reclamation began a Reservoir Operations Pilot Initiative as
part of the WaterSMART program. Historically, uncertainties in
weather prediction and assumptions of an unchanging climate
have resulted in conservative federal operating criteria for
reservoir management. It is expected that in some locations
these criteria will have to be updated with consideration for
weather forecast technology and shifts in climate conditions.
In 2015 Reclamation selected five pilot studies, one within
each of Reclamation's regions, to initiate work that is
expected to be completed in FY 2018 as part of the
Administration's Federal Drought Action Plan. The Reservoir
Operations Pilot Initiative is a high priority action under
Reclamation's Climate Change Adaptation Strategy with a goal to
increase water management flexibility in light of changing
conditions. These activities are critical to understanding
where flexibilities may be increased through identifying trends
in historic and projected climate, hydrology, sedimentation,
and conjunctive groundwater management.
Section 102 would amend the Colorado River Storage Project
Act (Public Law 84-485) to authorize Reclamation to increase
the active capacity and, as a result, the amount of water
developed by Fontenelle Reservoir in Wyoming. Reclamation
appreciates the efforts of Senator Barrasso and his staff to
work with Reclamation to address ours concerns identified in
our June 18, 2015 testimony on similar legislation (S. 1305)
before this Committee. With the subsequent amendment to S.
1305, the Department can now support this provision.
Section 103 would require the Department and the U.S.
Department of Agriculture to enter into an arrangement with
National Academy of Sciences to conduct a study on the impact
of salt cedar control efforts in increasing water supply and
improving riparian habitat. The Departments of the Interior and
Agriculture would then have 180 days to submit a report to
Congress that describes a feasible plan to implement a tamarisk
control plan, including a description of applicable timelines
and costs.
The U.S. Geological Survey conducted an authoritative study
on the effectiveness of the removal of salt cedar, which found
that the removal of salt cedar from floodplain areas along
rivers leads can lead to replacement by other vegetation that
consumes roughly equal amounts of water. The study found that
removing salt cedar from these areas is unlikely to produce
measurable water savings once replacement vegetation becomes
established. We look forward to working with the bill sponsor
and the Committee to ensure that the previous report's
conclusions are considered, and any new reporting requirements
add value to our current understanding of salt cedar impacts.
Section 104 would amend Section 206 of the 2015
Appropriations Act and provide additional statutory direction
on Colorado River operations. The Department fully recognizes
the severity of the ongoing historic drought in the Colorado
River basin and the importance of proactive, consensus-based
efforts to conserve the limited, and declining, water resources
of the Colorado River Basin. Subsection 206(a)(1), as amended,
would continue Congressional direction to fund or participate
in projects to increase storage of Colorado River water in Lake
Mead and upstream reservoirs constructed under the 1956
Colorado River Storage Project Act. The Department supports
these continued efforts.
Subsection (a)(2) would add a new provision that would
preclude release of Colorado River water from Lake Mead
pursuant to a 2014 Memorandum of Understanding and the ongoing
efforts pursuant to the Pilot System Conservation program.
While the Department recognizes that the provisions of
subsection (a)(2) are narrow in scope, the Department does not
believe this section is necessary for the successful
implementation of these efforts and is duplicative of currently
applicable provisions of Departmental policies and agreements
already in force. Additionally, the language of this subsection
does not appear to currently have consensus support among all
seven Colorado River Basin States. We recognize that interstate
cooperation is particularly essential in a time of increased
risk of shortages on the Colorado River. We are currently
investing significant effort to find solutions that will
generate consensus support in the Basin, and suggest that
subsection (a)(2) may distract from the ongoing efforts to
identify consensus tools and mechanisms to contribute to
conservation of water in the Colorado River system with broad
stakeholder support.
We believe Subsections (b) through (e) are intended to
enhance the Department's efforts to conserve additional water
in the Colorado River system in a manner consistent with
current efforts. The Department supports the goals of
addressing ongoing drought in portions of the western United
States and the reservoir elevations in Lakes Powell and Mead.
The Department continues to monitor the situation and has taken
a number of steps to address these issues. The Administration
is still reviewing the full implications that these sections
would have and does not have a position on these sections at
this time.

title i, subtitle b--protecting critical water supply watersheds

Title I, Subtitle B of S. 2902 contains provisions of
interest to the Bureau of Land Management (BLM). (We defer to
the U.S. Forest Service on provisions of this Subtitle
affecting National Forest System lands.) This subtitle seeks to
exclude certain vegetation treatments conducted for specific
purposes from the environmental analysis and public involvement
requirements in the National Environmental Policy Act (NEPA).
These treatments may range from hazardous fuels reduction and
treatment for invasive species to timber harvest, and the bill
sets out specific purposes (e.g., increase water yield) and
administrative criteria (e.g., treatment proposed by a Resource
Advisory Council) for these treatments. Under the bill, if the
BLM's proposed activity is for one of the enumerated purposes,
the agency could remove vegetation under an exclusion from
NEPA, on up to 5,000 acres. If the proposed activity also meets
the administrative criteria of the bill, the BLM would be
authorized to remove vegetation, under an exclusion from NEPA,
on up to 15,000 acres. The Department opposes this provision
because of the scale of these treatments without environmental
analysis and public involvement as required in NEPA.
Title I, Subtitle B also would limit public input through
the NEPA process by requiring the BLM to analyze only the
proposed action and a ``no-action'' alternative when a BLM
proposed vegetation treatment project meets the administrative
criteria set out in the bill. This provision would limit the
breadth and value of NEPA analysis to decision-makers.
The Department shares the sponsor's goals of efficient and
effective procedures. Indeed, one of the priorities under
Secretarial Order 3336 on Rangeland Fire Prevention,
Management, and Restoration (Jan 5, 2015) is to encourage
efforts to expedite processes, streamline procedures and
promote innovations that can improve overall rangeland fire
prevention, suppression and restoration efficiency and
effectiveness. We would be glad to discuss these objectives
further with the bill's sponsor.

title i, subtitle c--bureau of reclamation transparency act

Subtitle C, the Bureau of Reclamation Transparency Act,
requires the Secretary of the Interior to submit to Congress a
report on the efforts of Reclamation to manage its
infrastructure assets. As stated in our June 18, 2015,
testimony on similar legislation (S. 593), Reclamation
recognizes the value in obtaining additional information on the
status of our infrastructure. The Bureau of Reclamation
Transparency Act is consistent with a draft Infrastructure
Investment Strategy and process Reclamation has initiated
proactively; therefore, the Department supports this provision.

title i, subtitle d--water supply permitting act

Subtitle D mirrors language in HR 2898 (Title VII), which
with some modifications, largely consists of language from S.
1533 (114th), the Water Supply Permitting Coordination Act.
Reclamation expressed concern in our October 8, 2015, testimony
on HR 2898 before this Committee that there is already ample
basis for review of projects and coordination among federal
agencies involved in water supply planning, remain regarding
the language in this current bill.

title i, subtitle e--bureau of reclamation project streamlining act

Subtitle E aims to facilitate and streamline Reclamation's
process for creating or expanding surface water storage under
Reclamation law. As we testified on Title VIII of HR 2898
before this Committee, this provision would restrict the time
available to establish the merits of a surface water storage
project and to consider a project's potential environmental
effects. Constraining or circumventing project environmental
reviews and permits impedes the opportunity to consider
alternatives with potential impacts on communities and the
environment which may be less adverse. Such constraints could
make favorable recommendations for project construction less
likely and increase the potential for delay as a result of
litigation, which, I would note, would have the opposite effect
of the provisions' intentions. The Department does not support
this provision.

title ii--protecting existing water rights

Title II of S. 2902 resembles S. 982 (Barrasso), for which
the Department provided testimony before this Subcommittee in
June of 2015. While we are still analyzing the new language in
view of the recent introduction of S. 2902, in the Department's
June statement, we continue expressed concern that the Water
Rights Protection Act legislation as drafted was overly broad,
drafted in ambiguous terms, and would if enacted likely have
numerous unintended consequences that would have adverse
effects on existing law, tribal water rights, and voluntary
agreements. We are working to ascertain the extent to which the
Department's previously stated concerns may or may not apply to
Title II of S. 2902.

title iii--completing and maintaining rural water supply infrastructure

Title III of S. 2902 incorporates S. 438, the Irrigation
Rehabilitation and Renovation for Indian Tribal Governments and
Their Economies Act, which creates a steady stream of funding
to repair, replace and maintain certain Indian irrigation
projects. As stated before the Senate Committee on Indian
Affairs' March 4, 2015, hearing on S. 438, the Department
supports the goals of working with tribes to address the
maintenance of irrigation projects, and we look forward to
working with you to address the best means of doing so given
current budget constraints and the ability of irrigation
projects to financially sustain themselves in the long run.
Subtitle B incorporates S. 1552, the Clean Water for Rural
Communities Act, which would authorize construction of the Dry-
Redwater Regional Water Authority System and the Musselshell-
Judith Rural Water System in the States of Montana and North
Dakota. As stated in our June 18, 2015, testimony before this
Committee, the Department cannot support this language at this
time, based on constraints on program resources and other rural
water project commitments.

title iv--offset

Title IV includes language from Title IX of HR 2898, the
Accelerated Revenue, Repayment and Surface Water Storage
Enhancement Act on which Reclamation testified before this
Committee on October 8, 2015. The bill contains provisions to
enable the conversion of any water service contract to a
repayment contract, with allowance for pre-payment. While
Reclamation's October 2015 testimony identified several
programmatic concerns about the bill, it is also noteworthy
that current CVP water service contracts already contain
language for their eventual conversion to repayment contracts
at such time that it is determined that the remaining
construction costs of the CVP can be repaid within a specified
repayment term and without adversely affecting the operations
of the CVP. Additionally, the bill proposes a one-year
timeframe to convert existing contracts, which may not be
reasonable given the realities of CVP operations and repayment
status.

conclusion

We stand ready to work with this Committee and bill
sponsors to find common ground on legislation that can
complement the Administration's efforts to assist communities
impacted by drought. This concludes my written statement. I am
pleased to answer questions at the appropriate time.
----------

Statement of Leslie Weldon, Deputy Chief, National Forest System, U.S.
Forest Service, U.S. Department of Agriculture

Mr. Chairman and members of the Subcommittee, thank you for
the opportunity to present the views of the U.S. Department of
Agriculture (USDA) regarding S. 2902, Western Water Supply and
Planning Enhancement Act and S. 2524, Bolts Ditch Access and
Use Act. I am Leslie Weldon, Deputy Chief for the National
Forest System (NFS), USDA Forest Service.

s. 2902, title ii--protecting existing water rights

Water on National Forest System (NFS) lands is important
for many reasons, including fish and wildlife habitat, public
recreation, and providing a clean and plentiful supply of water
for downstream beneficial uses. Today, water from national
forests and grasslands contributes to the economic and
ecological vitality of rural and urban communities across the
nation, and those lands supply more than 60 million Americans
with clean drinking water.\1\
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\1\http://www.fs.fed.us/publications/policy-analysis/water.pdf.
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The purposes of the NFS were established by Congress in
1897 and were primarily focused on the protection of water and
watersheds and securing a continuous supply of timber. National
forests in the arid West typically occupy the very top of
critical watersheds, where water is stored in winter snow packs
and underground and slowly released through the spring and into
the summer. National forests in the East also occupy critical
watersheds, preserving water quality for downstream users and
moderating floods to protect downstream landowners.
Communities, farmers and ranchers, Native American Tribes, and
the general public depend on delivery of clean water from the
national forests and grasslands. Careful consideration of
activities that can have an adverse impact on waters and
watersheds on NFS lands is critical to downstream water users
and other inhabitants that can be impacted if these watersheds
are not protected.
USDA has not had time to fully analyze the effect of this
bill. USDA recognizes the fundamental role of States to
adjudicate water rights under state law. However, based on an
initial review, the bill appears to restrict USDA's ability to
protect water resources. USDA maintains its opposition to
provisions in any bill that would prohibit the Secretary of
Agriculture from regulating uses of NFS lands, or denying
authorizations for uses of NFS lands, because these
prohibitions have potential to adversely affect water resources
on those lands. It is USDA's position that the existing
statutory framework protects privately-held water rights in
balance with the ability of the Forest Service to protect water
resources. An example of the Forest Service work with
stakeholders within this framework is the recent publication of
final directives for ski areas operating on NFS lands under
term special use permits.
For the last 30 years, the Forest Service has required
ownership by the United States, either solely or in narrow
circumstances jointly with the permit holder, of water rights
developed on NFS lands to support operation of ski areas in
prior appropriation doctrine states. This policy was motivated
by the concern that if water rights used to support ski area
operations are severed from a ski area--for example, are sold
for other purposes--the Forest Service would lose the ability
to offer the area to the public for skiing.
On June 23, 2014, the Forest Service published a notice of
a proposed directive in the Federal Register to add riparian
and prior appropriation doctrine water clauses for ski area
permits to the Forest Service's Directive System. The final
clauses, published in the Federal Register on December 30,
2015, were the result of extensive public input, including
input from the ski industry and a wide range of other water
rights holders.
The final directive contains two ski area water clauses,
one for eastern States that follow the riparian doctrine for
water rights and one for western States that follow the prior
appropriation doctrine for water rights. Under a riparian
doctrine system, water rights are appurtenant to the land,
whereas under a prior appropriation doctrine system, water
rights may be severed from the land. Most ski areas on NFS
lands are in western states that adhere to the prior
appropriation doctrine.
The final directive does not require that ski area water
rights be acquired in the name of the United States. Instead,
the final directive focuses on assuring sufficiency of water to
operate ski areas on NFS lands. This modified approach for ski
area permits was determined to be appropriate given the
characteristics of ski area water rights and ski areas. Unlike
water rights diverted and used on NFS lands by holders of other
types of authorizations, ski area water rights may involve
long-term capital expenditures. In western States like Colorado
and New Mexico, holders of ski area permits may have to
purchase senior water rights at considerable expense to meet
current requirements for snowmaking to maintain viability.
Holders of ski area permits need to show the value of these
water rights as business assets, particularly during
refinancing or sale of a ski area. The value of these water
rights is commensurate with the significant investment in
privately owned improvements at ski areas. These investments
were recognized by Congress in enactment of the National Forest
Ski Area Permit Act, which authorizes permit terms of up to 40
years. 16 U.S.C. 497b(b)(1).
In addition to these financial issues, the land ownership
patterns at ski areas--particularly the larger ones--often
involve a mix of NFS and private lands inside and outside the
ski area permit boundary, which makes it difficult to implement
a policy of sole Federal ownership for ski area water rights.
Much of the development at ski areas is on private land at the
base of the mountains. As a result, water diverted and used on
NFS lands in the ski area permit boundary is sometimes used on
private land, either inside or outside the permit boundary.
With respect to sufficiency of water for ski area
operations, the final directive includes a definition for the
phrase, ``sufficient quantity of water to operate the ski
area,'' and clarifies when and how the holder must demonstrate
sufficiency of water to operate the permitted ski area and new
ski area water facilities; addresses availability of Federally
owned ski area water rights during the permit term; and
addresses availability of holder-owned ski area water rights
during the permit term and upon permit revocation or
termination.
At this time, ski industry representatives have indicated
support for the final directive, and members of Congress have
indicated appreciation for the agency's efforts to work
collaboratively on this solution. It is USDA's position that
additional legislation is not necessary to ensure protection of
privately-owned water rights.
USDA has not had adequate time to analyze the effects of
the bill on Forest Service groundwater policies. However, since
the Forest Service published its proposed groundwater directive
for notice and comment on May 6, 2014, the Agency has heard
from several States and other parties who are concerned about
the intent of and language in the proposal. By the end of the
comment period, the Agency had received 260 comments from
elected officials, States, Tribes, organizations, and
individuals from across the country. The House Natural
Resources Committee, as well as several States, asked the
Agency not to proceed with the proposed draft and to consult
with them before moving forward. The Forest Service has heard
these concerns and stopped work on the proposed groundwater
directive, and the Agency will not move forward with our
original proposal. Rather, we have committed to engaging with
States, Tribes, and citizens to fully understand concerns and
work collaboratively to address them before any future actions
or proposals would result. Should the Forest Service choose to
move forward with a new proposed directive in the future, it
would only be after engaging with States and making sure that
the Agency thoroughly understands their concerns in order to
address them. The Forest Service continues to consider
improvements to direction to Agency staff on groundwater to
maintain its stewardship responsibilities in a consistent,
credible, and transparent manner.

s. 2902, title i subtitle b--protecting critical water supply
watersheds

USDA has not had adequate time to analyze the effects of
this subtitle but upon initial review opposes NEPA provisions
that are beyond the scope of Farm Bill and HFRA authorities. As
a general matter, the Forest Service welcomes legislation that
incentivizes collaboration and expands the toolset we can use
to complete critical work on our nation's forests, without
overriding environmental laws.
While we support efforts to provide tools to support
improved forest management, capacity constraints due to the
present approach to budgeting for wildfire continue to hinder
further efforts to improve the health and resiliency of the
nation's forests. In fiscal year 1995, the Forest Service spent
16 percent of its budget on firefighting. Today the agency
spends more than half of its budget in fire management
activities and has seen a corresponding decline in non-fire
staffing of 39 percent since 1998. Notwithstanding these
challenges, through collaboration, the Forest Service has
consistently increased both the number of acres treated
annually to improve watershed resilience and timber
production--increasing timber harvest by 18 percent since 2008.
The frequency and intensity of wildfire, the rising cost of
assets needed to deploy against the spread of wildfire, and the
way that fire suppression is paid for constrain the agency's
capacity to realize additional gains through efficiencies and
partnerships alone. The most important action Congress can make
now in advancing the pace and scale of forest restoration is to
fix the fire funding problem.
The health of the national forests and the communities we
serve are our shared priority. The Forest Service is
accelerating restoration and management of the national forests
through innovative approaches and increased collaboration,
though it is clear that more work needs to be done, and we
welcome practical legislation that provides for expedient and
responsible efficiencies in the execution of that work. USDA
defers to the Department of the Interior on provisions that
most directly affect their agencies.
This concludes my remarks. I would be happy to answer any
questions. Thank you for the opportunity to testify.

Changes in Existing Law

In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the original 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):

CONSOLIDATED AND FURTHER CONTINUING APPROPRIATIONS ACT, 2015

* * * * * * *

[Sec. 206. (a) In General.--The Secretary of the Interior
may fund or participate in pilot projects to increase Colorado
River System water in Lake Mead and the initial units of
Colorado River Storage Project reservoirs, as authorized by the
first section of the Act of April 11, 1956 (43 U.S.C. 620), to
address the effects of historic drought conditions.
[(b) Administration.--Pilot projects under this section are
authorized to be funded through--
[(1) grants by the Secretary to public entities that
use water from the Colorado River Basin for municipal
purposes for projects that are implemented by 1 or more
non-Federal entities; or
[(2) grants or other appropriate financial agreements
to provide additional funds for renewing or
implementing water conservation agreements that are in
existence on the date of enactment of this Act.
[(c) Limitations.--
[(1) Funds in the Upper Colorado River Basin Fund
established by section 5 of the Colorado River Storage
Project Act (43 U.S.C. 620d) and the Lower Colorado
River Basin Development Fund established by section 403
of the Colorado River Basin Project Act (43 U.S.C.
1543) shall not be used to carry out this section; and
[(2) the authority to fund these pilot projects
through grants shall terminate on September 30, 2018.
[(d) Report and Recommendation.--Not later than September
30, 2018, the Secretary shall submit to the Committees on
Appropriations and Natural Resources of the House of
Representatives and the Committees on Appropriations and Energy
and Natural Resources of the Senate a report evaluating the
effectiveness of the pilot projects described in subsection (a)
and a recommendation to Congress whether the activities
undertaken by the pilot projects should be continued.]

SEC. 206. COLORADO RIVER SYSTEM.

(a) In General.--Notwithstanding any other provision of
law, as soon as practicable after the date of enactment of the
Western Water Supply and Planning Enhancement Act of 2016, the
Secretary of the Interior (referred to in this section as the
`Secretary') shall fund or participate in projects to increase
Colorado River System water in Lake Mead and the initial units
of Colorado River Storage Project reservoirs, as authorized by
the first section of the Act of April 11, 1956 (commonly known
as the `Colorado River Storage Project Act') (43 U.S.C. 620),
to address the effects of historic drought conditions.
(b) Administration.--Projects under this section may be
funded through--
(1) grants by the Secretary to public entities that
use water from the Colorado River Basin for municipal
purposes for projects that are implemented by one or
more non-Federal entities; or
(2) grants or other appropriate financial agreements
to provide additional funds for renewing or
implementing water conservation agreements that are in
existence on the date of enactment of the Western Water
Supply and Planning Enhancement Act of 2016.
(c) Limitation.--Funds in the Upper Colorado River Basin
Fund established by section 5 of the Act of April 11, 1956
(commonly known as the `Colorado River Storage Project Act')
(43 U.S.C. 620d), and the Lower Colorado River Basin
Development Fund established by section 403 of the Colorado
River Basin Project Act (43 U.S.C. 1543) shall not be used to
carry out this section.
(d) Report and Recommendation.--Not later than September
30, 2026, the Secretary shall submit to the Committees on
Appropriations and Natural Resources of the House of
Representatives and the Committees on Appropriations and Energy
and Natural Resources of the Senate a report evaluating the
effectiveness of the projects described in subsection (a).
(e) Appropriations.--There is authorized to be appropriated
to the Bureau of Reclamation to carry out this section
$8,000,000 for each of fiscal years 2017 through 2027, to
remain available until expended.

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