[Senate Report 116-133]
[From the U.S. Government Publishing Office]
Calendar No. 253
116th Congress } { Report
SENATE
1st Session } { 116-133
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CLEAN WATER FOR RURAL COMMUNITIES ACT
_______
October 22, 2019.--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. 334]
The Committee on Energy and Natural Resources, to which was
referred the bill (S. 334) to authorize the construction of the
Musselshell-Judith Rural Water System and study of the Dry-
Redwater Regional Water Authority System in the States of
Montana and North Dakota, and for other purposes, having
considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
PURPOSE
The purpose of S. 334 is to authorize the construction of
the Musselshell-Judith Rural Water System and study of the Dry-
Redwater Regional Water Authority System in the States of
Montana and North Dakota.
BACKGROUND AND NEED
The Rural Water Supply Act (43 U.S.C. 2405) was enacted in
2006 to authorize the Secretary of the Interior (Secretary),
acting through the Bureau of Reclamation (BOR or Bureau), to
work with rural communities and tribes to assess potable water
supply needs, identify options to address those needs through
investigations and studies, and recommend if a project should
be authorized for construction. Further Congressional
authorization is required for BOR to participate in or provide
funding for the design and construction of a rural water
project.
Project sponsors have been working through the Bureau's
rural water program to assess the feasibility of the Dry-
Redwater and Musselshell-Judith Rural Water Projects. The
Musselshell-Judith Rural Water System is designed to provide
drinking water to about 6,500 residents through the Central
Montana Regional Water Authority. The population served by this
project currently relies on low quality groundwater, drought-
sensitive surface supplies and, in some cases, hauled water.
Water quality is also poor in the service area and
concentrations of total dissolved solids, sulfates, iron, and
manganese exceed secondary drinking water standards.
The proposed Musselshell-Judith project would include a
well field, four new buried water storage tanks, a pumping
station, and distribution system. Over $3 million in Federal,
State, and local funds have been spent on studies and planning,
and in January 10, 2017, the Bureau of Reclamation Commissioner
notified the Office of Management and Budget that the final
feasibility report found the project to be feasible and met the
criteria set forth in the Rural Water Supply Act.
The Dry-Red Water Authority System would treat and deliver
water to communities in Eastern Montana and North Dakota.
Currently, individual municipal water systems, reliant on
groundwater that is high in sodium, sulfates, and fluoride,
serve residents in these communities and often do not meet
primary drinking water standards without expensive treatment.
At least one of these systems is also out of compliance with
the Clean Water Act due to high levels of sodium and dissolved
solids.
The Dry-Redwater Regional Water Authority submitted a
feasibility study to BOR for the Dry-Redwater Regional Water
Authority System in 2012, but the Bureau found that the
proposal did not meet economic feasibility requirements. That
project would deliver water from the Fort Peck Reservoir and
require construction of storage tanks, pump stations, and
pipelines.
The Dry-Redwater Regional Water Authority has been working
to revise initial plans for the system since that time, but a
project meeting BOR's feasibility criteria has not been
reviewed or approved at this time. Because the Rural Water
Supply Act has expired, further authorization is necessary for
BOR to continue working with the Dry-Redwater Regional Water
Authority to find a feasible project.
LEGISLATIVE HISTORY
S. 334 was introduced by Senators Daines and Tester on
January 16, 2019.
Representative Gianforte introduced companion legislation,
H.R. 967, in the House of Representatives on February 5, 2019,
which was referred to the Natural Resources Committee.
In the 115th Congress, Senators Daines and Tester
introduced a similar measure, S. 685, on March 21, 2017. The
Subcommittee on Water and Power held a hearing on S. 685 on
June 14, 2017 (S. Hrg. 115-38). The Senate Committee on Energy
and Natural Resources met in an open business session on
October 2, 2018, and ordered S. 685 favorably reported with an
amendment in the nature of a substitute and an amendment to the
title (S. Rept. 115-373).
Representative Gianforte introduced companion legislation,
H.R. 5073, in the House of Representatives on February 20,
2017, which was referred to the Natural Resources Committee.
In the 114th Congress, Senator Daines introduced similar
legislation, S. 1552, on June 11, 2015. The Subcommittee on
Water and Power held a hearing on the bill on June 18, 2015 (S.
Hrg. 114-399).
The measure was also included in Title III of S. 2902,
legislation introduced by Senators Flake, Barrasso, Daines,
Heller, McCain, and Risch on May 9, 2016. The Subcommittee on
Water and Power held a hearing on S. 2902 on June 18, 2016. The
Committee on Energy and Natural Resources met in open business
session on July 13, 2016, and ordered S. 2902 favorably
reported with amendments.
Representative Zinke introduced companion legislation, H.R.
3867, in the House of Representatives on October 29, 2015,
which was referred to the Natural Resources Committee.
The Senate Committee on Energy and Natural Resources met in
open business session on September 25, 2019, and ordered S. 334
favorably reported.
COMMITTEE RECOMMENDATION
The Senate Committee on Energy and Natural Resources, in
open business session on September 25, 2019, by a majority
voice vote of a quorum present, recommends that the Senate pass
S. 334. Senator Lee asked to be recorded as voting no.
SECTION-BY-SECTION ANALYSIS
Sec.1. Short title
Section 1 sets forth the short title.
Sec. 2. Purpose
Section 2 states the bill's purpose.
Sec. 3. Definitions
Section 3 defines key terms.
Sec. 4. Musselshell-Judith Rural Water System
Subsection (a) authorizes the Secretary to plan, design and
construct the Musselshell-Judith Rural Water System in
substantial accordance with the Musselshell-Judith Rural Water
System Feasibility Report.
Subsection (b) directs the Secretary to enter into a
cooperative agreement with the Central Montana Regional Water
Authority to provide Federal assistance in furtherance of
subsection (a).
Subsection (c) limits the Federal cost share to 65 percent
of the total project cost and makes clear that such Federal
cost share funds shall not be returnable or reimbursable. The
subsection further outlines the allowable uses for Federal
funds, prohibits Federal funding for the operation,
maintenance, and replacement of the Musselshell-Judith Rural
Water System, and specifies that title to the Musselshell-
Judith Rural Water System shall be held by the Central Montana
Regional Water Authority.
Sec. 5. Dry-Redwater Feasibility Study
Subsection (a) defines key terms for the section.
Subsection (b) authorizes the Secretary, in consultation
with the Dry-Redwater Regional Water Authority, to study the
feasibility of constructing the Dry-Redwater Regional Water
System. This subsection further states that the study must
comply with BOR feasibility standards.
Subsection (c) authorizes the Secretary to enter into a
cooperative agreement with the Dry-Redwater Regional Water
Authority to complete additional work to ensure that the study
complies with BOR feasibility standards.
Subsection (d) authorizes $5 million to carry out this
section.
Subsection (e) terminates the authority provided under this
section five years after the date of enactment.
Sec. 6. Water rights
Section 6 states that nothing in the Act preempts state
water law or affects a State's authority to manage its water
resources.
Sec. 7. Authorization of appropriations
Section 7 authorizes $56,650,000 to be appropriated for the
planning, design and construction of the Musselshell-Judith
Rural Water System and authorizes the indexing of the
authorized amount based on cost fluctuations after November 1,
2014.
COST AND BUDGETARY CONSIDERATIONS
The Congressional Budget Office estimate of the costs of
this measure has been requested but was not received at the
time the report was filed. When the Congressional Budget Office
completes its cost estimate, it will be posted on the internet
at www.cbo.gov.
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. 334. 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. 334, as ordered reported.
CONGRESSIONALLY DIRECTED SPENDING
S. 334, as ordered reported, authorizes $56,650,000 to be
appropriated for the planning, design, and construction of the
Musselshell-Judith Rural Water System in the State of Montana.
EXECUTIVE COMMUNICATIONS
Executive views on S. 334 were not requested by the
Committee. The testimony provided by the Department of the
Interior at the June 14, 2017, hearing on S. 685, similar
legislation, follows:
Statement of Scott Cameron, Acting Assistant Secretary--Water and
Science, U.S. Department of the Interior
Chairman Flake, Ranking Member King, and members of the
Subcommittee, I am Scott Cameron, Acting Assistant Secretary
for Water and Science at the Department of the Interior. Thank
you for the opportunity to provide the views of the Department
of the Interior (Department) on S. 685, 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.
In the 114th Congress, Reclamation provided testimony on S.
2902 and S. 1552, which contained language identical to S. 685.
My testimony today will update Reclamation's previous
statements on these projects to include recent events; however,
the Department's position overall on funding has not changed
from these earlier testimonies.
Like the sponsors of this legislation, the Department
supports the goals of encouraging a vibrant rural economy and
ensuring safe, reliable sources of drinking water in Montana
and North Dakota. Rural water projects help build strong,
secure communities and are important to supporting the
livelihood of local economies. Public Law 109-451, which
expired September 30, 2016, authorized Reclamation to establish
a Rural Water Supply Program to help rural communities and
Tribes in the western United States analyze and develop options
for meeting water supply needs through the completion of
appraisal investigations and feasibility studies.
While the Department acknowledges the important functions
rural water projects offer to communities across the West, we
have concerns with S. 685 as currently written. We request the
opportunity to work with the Committee to adequately address
our concerns, as identified below.
The legislation authorizes construction of two separate
projects and my statement will speak to each of those projects
separately.
Dry-Redwater
Section 4(a)(1) of S. 685 applies to the planning, design,
and construction of the regional Dry-Redwater Rural Water
Authority System in eastern Montana and a small service area in
northwest North Dakota, and would authorize the Federal
Government to provide up to 75 percent of the System's overall
construction cost. Reclamation estimates that this
authorization would amount to Federal appropriations of at
least $200 million dollars. The Department last testified
before this Subcommittee on legislation related to the Dry-
Redwater Project in May of 2016, and prior to that, in June
2015, May 2011, and July of 2009. Since 2016, two things have
occurred; the Dry-Redwater Regional Water Authority (Authority)
changed their project plans from that provided in the initial
study by adding the cities of Sidney and Glendive, Montana, to
the Authority's service area which changed the population
served from 15,000 to over 26,500; and secondly, Reclamation's
authority to continue work on rural water appraisal and
feasibilities studies under P.L. 109-451 expired. Reclamation
did not receive a feasibility study that was evaluated and
determined to be economically feasible for the new project
envisioned by the Authority.
The Department is concerned about language in the
legislation authorizing a project for construction without a
complete Feasibility Study. Specifically, the potential strain
on Reclamation's budget that could come about from this
authorization, the cost share requirement proposed in the bill,
and the proposed use of power from the Pick-Sloan Missouri
Basin Program (P-SMBP) for non-irrigation purposes are a
problematic issues.
In 2012, the Authority submitted a Feasibility Study to
Reclamation for review. Upon initial review of the Feasibility
Study, Reclamation was unable to identify a technically viable
water supply alternative that presented a National Economic
Development (NED) plan with net positive benefits to the
nation. Reclamation informed the Authority that the Feasibility
Study could not be supported as being financially or
economically feasible under the requirements of Reclamation's
Rural Water Supply Program. Consequently, there are significant
review findings and recommendations that must be addressed to
bring the Feasibility Study up to Reclamation's standards.
Since project costs have not been fully developed by the
Sponsor and reviewed by Reclamation, there is also the
potential for this project to be financially unsustainable for
the project sponsors.
Because of the importance of this issue, a Reclamation
Design, Cost Estimating, and Construction (DEC) review further
evaluated the Feasibility Study in 2012 in order to provide an
independent analysis. The estimated cost to address the DEC
Report Findings and Recommendations in 2012 was in excess of
$5.5 million. Neither Reclamation nor the Authority had
sufficient funding to revise the Feasibility Study to address
the DEC Report Findings. The authority for Reclamation to
further review the feasibility study expired in 2016. In order
to maintain their original service area and related project
benefits, the Authority ruled out a scaled down approach.
As a result of this decision, Reclamation entered into a
Memorandum of Understanding (MOU) with the Authority on April
27, 2015, with the objective of completing a summary report
that documented the current status of the draft Feasibility
Study and identified the additional level of effort needed to
revise the Feasibility Study technically in order to meet the
requirements of Reclamation's Rural Water Supply Program.
However, before a final summary report could be completed,
Reclamation's authority under the program expired and
Reclamation was required to generate a Feasibility Study
Concluding Report (Concluding Report) since the Feasibility
Study was not completed. The Concluding Report was completed in
September 2016 and provided an overview of the Feasibility
Study up to the point of concluding it, and identified the
reasons for ending the Feasibility Study. The Concluding Report
provided findings that primarily due to the economics of the
proposed alternative and the incomplete level of the
Feasibility Study, Reclamation is not in a position to support
the project as financially viable or able to verify that the
total project cost estimate is economically sound.
The Department is also concerned about the non-Federal cost
share for the System. As stated above, S. 685 contemplates that
the United States would fund 75 percent of the cost of
constructing the System for the benefit of Montana citizens of
Dawson, Garfield, McCone, Prairie, Richland Counties, and North
Dakota citizens of McKenzie County. While this has been the
cost share level proposed in other rural water projects enacted
into law, it represents the maximum Federal cost share
previously allowed under Title I of the Rural Water Supply Act
of 2006 (PL 109-451, now expired), which included a requirement
for a Feasibility Report that comprised an analysis of the
sponsor's capability-to-pay and identified an appropriate
contribution by the local sponsors.
Section 5 of S. 685 authorizes the delivery of 1.5
megawatts of P-SMBP pumping power to be used and delivered
between May 1 and October 31 for the benefit of this System at
the firm power rate. Section 5(b)(2)(A) of the bill requires
that the System be operated on a ``not-for-profit basis'' in
order to be eligible to receive power under those terms.
Reclamation is not certain of the impact the bill's
requirements could have on Western Area Power Administration's
existing contractual power obligations. In addition to those
concerns mentioned above, we have yet to verify whether or not
water rights issues associated with the System have been
adequately addressed.
Reclamation's authority to continue work on rural water
appraisal and feasibilities studies has expired. At this time,
there is no general programmatic authority for continued work
by Reclamation on rural water appraisal and feasibility
studies. Reclamation's review of Dry--Redwater Authority's
proposed system was conducted under the authority of the Rural
Water Supply Act of 2006 (Title I of Public Law 109-451) and
this authority expired on September 30, 2016. Reclamation
generated a Concluding Report which provided an overview of the
Feasibility Study up to the point of concluding it and
identified the reasons for ending the study.
If legislative authority is granted, we suggest System
sponsors work with Reclamation to evaluate the System for scale
and economic viability in an effort to refine the National
Economic Development accounting such that the ratio of total
benefits exceeds costs. The System should meet appropriate
guidelines and be updated to include new infrastructure
required to accommodate the large increase in population
served. S. 685 allows the Authority to acquire property and
existing systems. Details of these systems should be fully
identified and incorporated into the new evaluation and the
evaluation should incorporate recommendations from the DEC
review or, if necessary, require a new DEC review be conducted.
It should address all federal environmental compliance
activities. There are substantial costs believed to be in the
millions of dollars associated with these efforts that are
outside of any costs projections previously considered. We also
recommend that they work with the Western Area Power
Administration and their contractors on the issues related to
the System's pumping power needs.
Musselshell-Judith
Section 4(a)(2) of S. 685 would authorize the planning,
design, and construction of the Musselshell-Judith Rural Water
System in central Montana and would authorize appropriations of
75 percent of total project costs. Since the total estimated
construction cost of the project is $87,102,000, Reclamation
estimates that the total Federal contribution of 75 percent
would equate to $65,327,000 (2014 dollars). While a 75 percent
cost share level has been proposed in other rural water
projects enacted into law, this represents the maximum Federal
cost share previously allowed under the Rural Water Supply Act
of 2006.
In 2015, the Central Montana Rural Water Authority's
(Authority) Musselshell-Judith Rural Water System Feasibility
Study (Feasibility Study) was submitted to Reclamation for
technical review under Public Law 109-451. The Department found
the proposed project to be feasible and to meet the broad
criteria of the program, however, the Department is concerned
about our ability to fund even currently authorized rural water
projects, and does not want to unreasonably raise expectations
that new authorized projects would receive the desired federal
funding.
Common Both Water Systems
Section 7(b) of S. 685 addresses the cost indexing for the
authorization of appropriations. As previously testified,
Reclamation is not aware of a specific rationale for the
differing indexing dates prescribed in the legislation. For the
Dry-Redwater System, appropriations are to be indexed to
January 1, 2008. For the Musselshell-Judith, the appropriations
are to be indexed to November 1, 2014.
Authorized rural water projects compete with a number of
priorities within Reclamation's Budget, including aging
infrastructure, Indian water rights settlements, environmental
compliance, restoration actions, developing sustainable water
supply strategies, and other priorities intended to address
future water and energy related challenges.
The Department has concerns about adding to the backlog of
Reclamation's authorized rural water projects seeking Federal
construction funding. Discretionary rural water funding has
enabled Reclamation to make progress in promoting certainty,
sustainability, and resiliency in support of basic drinking
water needs of rural western communities. However,
Reclamation's ability to make Federal investments that match
on-the-ground capabilities has its limitations. Of
Reclamation's six currently authorized rural water projects
under construction or funded at some level today, all of the
projects pre-date Title I of the Rural Water Supply Act of 2006
(now expired). Authorizing additional rural water projects may
delay rural water projects that are already under construction.
Conclusion
The Department recognizes that the people who would be
served by S. 685 have legitimate needs for better quality
drinking water. We are concerned, given the past history and
future prospects of funding for the rural water program, not to
raise unreasonable expectations for future federal funding
should this bill become law.
That concludes my written statement. I am pleased to answer
questions at the appropriate time.
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 S. 334 as ordered reported.
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