[Federal Register Volume 69, Number 50 (Monday, March 15, 2004)]
[Notices]
[Pages 12202-12215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5401]



[[Page 12201]]

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Part II





Department of the Interior





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Bureau of Reclamation



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Colorado River Water Delivery Agreement--Implementation Agreement, 
Inadvertent Overrun and Payback Policy, and Related Federal Actions, 
Colorado River, Arizona, California and Nevada; Notice

  Federal Register / Vol. 69, No. 50 / Monday, March 15, 2004 / 
Notices  

[[Page 12202]]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation


Colorado River Water Delivery Agreement--Implementation 
Agreement, Inadvertent Overrun and Payback Policy, and Related Federal 
Actions, Colorado River, Arizona, California and Nevada

AGENCY: Bureau of Reclamation, Interior.

ACTION: Notice of Availability of a Record of Decision for the Colorado 
River Water Delivery Agreement--Implementation Agreement, Inadvertent 
Overrun and Payback Policy, and Related Federal Actions Final 
Environmental Impact Statement.

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SUMMARY: The Bureau of Reclamation (Reclamation) published a Federal 
Register notice on November 8, 2002 (67 FR 68166) which informed the 
public of the availability of the Final Environmental Impact Statement 
on the ``Implementation Agreement, Inadvertent Overrun and Payback 
Policy, and Related Federal Actions'' (Final IA EIS). Execution of the 
Implementation Agreement (IA) would commit the Secretary of the 
Interior (Secretary) to make Colorado River water deliveries in 
accordance with the terms and conditions of the IA, to enable certain 
southern California water agencies to implement the proposed California 
Quantification Settlement Agreement. Subsequent to the filing of the 
Final IA EIS, the IA described in that document was renamed and 
redrafted and is now titled the ``Colorado River Water Delivery 
Agreement.'' We are now notifying the public that the Secretary signed 
the Record of Decision (ROD) on October 10, 2003. The text of the ROD 
is provided below.

FOR FURTHER INFORMATION CONTACT: For additional information, contact 
Ms. Jayne Harkins by telephone at (702) 293-8414, faxogram (702) 293-
8156. The ROD is also available for viewing on the Internet at http://www.usbr.gov/lc/region/lcrivops.html.

    Dated: February 5, 2004.
Gale A. Norton,
Secretary, Department of the Interior.

Record of Decision

Colorado River Water Delivery Agreement--Implementation Agreement, 
Inadvertent Overrun and Payback Policy, and Related Federal 
Actions; Final Environmental Impact Statement

I. Introduction

    On December 21, 1928, Congress conditioned ratification of the 
Colorado River Compact of 1922, construction of Boulder (now Hoover) 
Dam, and authorization of the Boulder Canyon Project Act as follows:
    ``[T]he State of California, by act of its legislature, shall 
agree irrevocably and unconditionally with the United States and for 
the benefit of the [six] States, as an express covenant and in 
consideration of the passage of this act, that the aggregate annual 
consumptive use * * * of water of and from the Colorado River for 
use in the State of California * * * shall not exceed four million 
four hundred thousand acre feet.'' \1\
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    \1\ Boulder Canyon Project Act, Sec.  4(a), 43 U.S.C. 617c(a).
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    By execution of this Record of Decision, and implementation of 
the Colorado River Water Delivery Agreement, California will take 
specific, incremental steps to fulfill this promise.
    The Supreme Court has found that the Secretary of the Interior 
(Secretary) is vested with the responsibility of managing the 
mainstream waters of the lower Colorado River pursuant to Federal 
law. This document constitutes the Record of Decision (ROD) of the 
Department of the Interior regarding the preferred alternative for 
the Colorado River Water Delivery Agreement (Water Delivery 
Agreement), Inadvertent Overrun and Payback Policy (IOP) and related 
Federal actions.
    Reclamation, as the agency designated to act on the Secretary's 
behalf with respect to these matters, is the lead Federal agency for 
purposes of National Environmental Policy Act (NEPA) compliance. The 
Final Environmental Impact Statement--Implementation Agreement, 
Inadvertent Overrun and Payback Policy, and Related Federal Actions 
dated October 2002 (INT-FES-02-35) (Final IA EIS) was prepared 
pursuant to NEPA, the Council on Environmental Quality's Regulations 
for Implementing the Procedural Provisions of NEPA (40 Code of 
Federal Regulations [CFR] Parts 1500 through 1508), Department of 
Interior Policies, and Reclamation's NEPA procedures implementing 
these regulations. The Final IA EIS described the potential 
environmental impacts from execution of an Implementation Agreement 
(IA),\2\ adoption of the IOP, and implementation of biological 
conservation measures that would offset potential impacts to listed 
species on the Colorado River from the proposed water transfers. The 
Final IA EIS was filed with the U.S. Environmental Protection Agency 
(EPA) on November 1, 2002, and noticed by EPA and Reclamation in the 
Federal Register on November 8, 2002. The Federal actions called for 
in the Water Delivery Agreement are the same as those contained in 
the draft IA, and analyzed in the Final IA EIS (see section V 
below). For the remainder of this document, reference will be made 
to the Water Delivery Agreement, unless the notation is specific to 
the draft IA.
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    \2\ Subsequent to the filing of the Final IA EIS, the IA 
described in that document was renamed and redrafted and is now 
titled the ``Colorado River Water Delivery Agreement'' (Water 
Delivery Agreement). The Water Delivery Agreement therefore replaces 
the IA. As with the IA, the function of the Water Delivery Agreement 
is to address any contracting requirements applicable to the Boulder 
Canyon Project Act of 1928, and implements quantification and 
transfers of Colorado River water. The Water Delivery Agreement also 
serves as a quantification settlement agreement for purposes of 
section 5(B) of the Interim Surplus Guidelines. The Water Delivery 
Agreement is different from and, from a Federal perspective, much 
improved on the IA in a number of important respects: the Water 
Delivery Agreement is effective upon execution; it does not contain 
conditions precedent or subsequent that could terminate its 
effectiveness; and, it does not provide for early termination. Thus, 
the Water Delivery Agreement provides certainty regarding water 
entitlements that are necessary for continued effective 
implementation of the Secretary's responsibilities as Water Master 
on the lower Colorado River. Importantly, these agreements are 
consensual agreements among the parties and therefore are more 
likely to remain effective as compared with alternative regulatory 
based approaches.
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II. Decision

    This document effects the approval of the following Federal 
actions: \3\
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    \3\ This recommendation contemplates that Departmental officials 
will simultaneously execute a number of complementary agreements 
which will collectively implement the provisions of the Water 
Delivery Agreement. Included in this suite of agreements are the 
following: this Record of Decision, the Colorado River Water 
Delivery Agreement, the Allocation Agreement (regarding conservation 
of water from the All-American and Coachella canal lining projects); 
two agreements relating to Supplemental Water and the Conveyance of 
Water for the San Luis Rey Settlement Parties; two agreements 
relating to implementation of species conservation actions; and a 
contract amendment with the Coachella Valley Water District. These 
related agreements do not cause incremental environmental impacts in 
addition to those described in the Final IA EIS and the supplemental 
memorandum referenced in Section 5 of this ROD, but only serve to 
implement various aspects of the water transfers. Where appropriate, 
the Final IA EIS and this ROD make commitments for subsequent 
environmental compliance for Federal actions to be carried out 
pursuant to the Agreements.
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    A. Execution of the proposed Water Delivery Agreement;
    B. Adoption of the proposed IOP described in the Final IA EIS 
and originally noticed in the Federal Register as a proposed draft 
policy on January 18 and March 9, 2001; and
    C. Implementation of biological conservation measures identified 
in the U.S. Fish and Wildlife Service (Service) January 2001 
Biological Opinion for Interim Surplus Criteria, Secretarial 
Implementation Agreements for California Water Plan Components, and 
Conservation Measures on the Lower Colorado River, and the Service's 
December 2002 Biological Opinion on Bureau of Reclamation's 
Voluntary Fish and Wildlife Conservation Measures and Associated 
Conservation Agreements with the California Water Agencies.

III. Background

    Under the Boulder Canyon Project Act, and the Decree entered by 
the U.S. Supreme Court in Arizona v. California, in 1964 California 
has a legal right in normal years to 4.4 million acre-feet (MAF).\4\ 
California has historically been legally diverting more than its 
normal year apportionment of 4.4

[[Page 12203]]

MAF of Colorado River water. Prior to 1996, California's demands in 
excess of 4.4 million acre-feet per year (MAFY) were met by 
diverting unused apportionments of other Lower Division States 
(Arizona and Nevada) that were made available by the Secretary under 
applicable provisions of the Decree. Since 1996, California also has 
utilized surplus water pursuant to Art. II(B)(2) of the Decree as 
made available by Secretarial determinations contained in the Annual 
Operating Plans for Colorado River Reservoirs. The other Lower 
Division States have reached full utilization of their 
apportionments, and declared surpluses of Colorado River water are 
expected to diminish in future years. California, therefore, needs 
to reduce its consumptive use of Colorado River water to its 4.4 MAF 
apportionment in normal years.
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    \4\ California's basic apportionment may, on an annual basis, be 
augmented by access to surplus apportionment or unused 
apportionment.
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    In a major step toward achieving this goal, the California water 
agencies consisting of Coachella Valley Water District (CVWD), 
Imperial Irrigation District (IID), and The Metropolitan Water 
District of Southern California (MWD), developed a draft 
Quantification Settlement Agreement (QSA). The QSA is a proposed 
agreement among CVWD, IID, and MWD to quantify each entities' 
portion of California's apportionment of Colorado River water and to 
transfer Colorado River water among the California agencies. These 
transfers are for the benefit of IID, CVWD, MWD, and the San Diego 
County Water Authority (SDCWA). The QSA water transfers would 
continue for a period of up to 75 years and provide an important 
mechanism to assist California's efforts to reduce its diversions of 
Colorado River water in normal years to its 4.4 MAF apportionment, 
as required by the Boulder Canyon Project Act of 1928 and the 
California Limitation Act of March 4, 1929.
    The QSA water transfers are implemented by the Water Delivery 
Agreement, an agreement among CVWD, IID, MWD, SDCWA, and the 
Secretary. The Water Delivery Agreement serves a number of 
complementary functions. During its term, the Water Delivery 
Agreement implements a quantification of Priority 3(a) entitlements. 
As such, this agreement serves as a Federal quantification 
agreement. As noted above, the Water Delivery Agreement addresses 
requirements applicable to the Boulder Canyon Project Act of 1928. 
The Water Delivery Agreement specifies the Federal actions that are 
necessary to implement the QSA. Execution of the Water Delivery 
Agreement would effectuate the changes in the amount and/or location 
of deliveries of approximately 400 thousand acre-feet per year 
(KAFY) of Colorado River water.
    The Water Delivery Agreement also includes provisions that are 
intended to facilitate California's reduction of its historic 
overuse of Colorado River supplies and provide greater certainty 
with regard to future Colorado River operations.\5\ The Federal 
objective in executing the Water Delivery Agreement is to achieve 
actual implementation of the identified transfers and scheduled 
reductions in California's agricultural water use. In particular, 
Paragraph 8 of the Water Delivery Agreement was carefully 
constructed to address future Boulder Canyon Project Act 
administration if the Quantification Settlement Agreement and 
associated transfers proceed as contemplated by all parties, 
including: adoption of a policy regarding prospective inadvertent 
overruns of Colorado River diversions (] 8.b.1), an extension of the 
repayment period for past overruns of Colorado River diversions (] 
8.b.1), and provisions regarding the anticipated annual reviews 
pursuant to 43 CFR Pt. 417 through December 31, 2037 (] 8.b.2).\6\
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    \5\ The California agencies did not execute the QSA by December 
31, 2002 in compliance with the relevant provisions of Section 5(B) 
of the Interim Surplus Guidelines (ISG). As a result the Secretary 
automatically suspended application of Sections 2(B)(1) and 2(B)(2) 
of the ISG as provided in the 2003 Annual Operating Plan. See, e.g., 
Notice of Assistant Secretary Bennett W. Raley regarding Section 5 
of Interim Surplus Guidelines. 67 FR 41733-35 (June 19, 2002). The 
Water Delivery Agreement serves as the quantification agreement for 
purposes of section 5(B) of the ISG and accordingly, section 7 of 
the Water Delivery Agreement provides for reinstatement of interim 
surplus determinations under Sections 2(B)(1) and 2(B)(2) of the 
Interim Surplus Guidelines. This Record of Decision does not modify 
in any manner the Record of Decision for the Interim Surplus 
Guidelines, including the Secretary's authority to monitor 
prospective compliance with Section 5 of the Interim Surplus 
Guidelines.
    \6\ Like the draft IA, the Water Delivery Agreement addresses 
the reasonable and beneficial use of Colorado River water. This 
provision, in particular, required significant discussions and 
negotiations among the parties to the Water Delivery Agreement. 
Resolution of this issue was of particular importance in light of 
the ongoing Imperial Irrigation District v. United States litigation 
involving all parties to the Water Delivery Agreement with the 
exception of the San Diego County Water Authority (see also Water 
Delivery Agreement at ]] 10.a., 10.b.). Imperial Irrigation District 
had sought certainty both with respect to future inquiries in this 
regard and with respect to future approvals of water orders. The 
Department did not acquiesce to this request, and does not believe 
that such an approach is compatible with provisions of applicable 
Federal law. In this regard, the Department concurs with the 
statement of the California Board of Water Resources (SWRCB) in a 
similar context, that ``we do not intend to bind the SWRCB in any 
future proceeding, particularly if circumstances change. To do so 
would be an abdication of the SWRCB's ongoing responsibility to 
prevent the unreasonable use of water.'' State of California, State 
Water Resources Control Board, Order WRO 2002-0013 (Revised), at 81 
(Dec. 20, 2002). Similar concerns informed the negotiations by the 
Department regarding ] 8 of the Water Delivery Agreement. See, e.g., 
43 U.S.C. 372. Ultimately, clarification and agreements with the 
parties to the Water Delivery Agreement are incorporated in ] 8 with 
respect to the circumstances and analyses that will be considered 
during the term of the Agreement.
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    Paragraph 8 also provides certain consequences in the event that 
the QSA and the associated transfers are not carried out as 
anticipated by the parties. These consequences include: suspension 
of a policy regarding prospective inadvertent overruns of Colorado 
River diversions (] 8.c.1), a reduced period for repayment of past 
overruns of Colorado River diversions (] 8.c.2), mandatory 
forbearance by The Metropolitan Water District from accessing any 
surplus Colorado River water otherwise available pursuant to 
sections 2(B)(1) and 2(B)(2) of the Interim Surplus Guidelines (] 
8.c.3), and provisions regarding the anticipated annual reviews of 
water orders pursuant to 43 CFR Pt. 417 through December 31, 2037 (] 
8.c.4).
    In addition, under the Water Delivery Agreement, the Secretary 
adopts the IOP as set forth in section IX(A) below. The IOP 
establishes requirements for payback of any inadvertent overuse of 
Colorado River water by users in the Lower Division States.
    The primary objective of the IOP policy is to insure operational 
compliance with the applicable provisions, and limitations on use of 
Colorado River water, as set forth in the Decree. Repayment of any 
overuse of Colorado River water, in accordance with the structured 
repayment schedule, insures that the system is repaid for 
inadvertent overuse. Prior to adoption of the IOP, contractors of 
Colorado River water were required to repay any overuse of water 
beyond annual approved quantities, see e.g., 1992-1996 Annual 
Operating Plans for Colorado River Reservoirs, Supplement to 1992 
Annual Operating Plan (Nov. 22, 2002). Adoption of the IOP 
formalizes this requirement and provides for specific payback (or 
repayment) periods which are linked to hydrological conditions on 
the Colorado River. See, e.g., IOP at sec. 6, infra. This linkage to 
hydrologic conditions on the Colorado River, primarily by reference 
to elevations of Lake Mead, is consistent with efforts by 
Reclamation to further develop objective operational guidance for 
lower Colorado River operations. In particular, this approach was 
the basis for the Secretary's adoption of Interim Surplus Guidelines 
which determine available surplus quantities pursuant to Art. II of 
the Decree in Arizona v. California based on Lake Mead elevations 
and projected hydrological conditions on the Colorado River. See, 
e.g., ISG at Section 2 (``Determination of Lake Mead Operation 
during the Interim Period.'').
    These two actions, as well as the implementation of biological 
conservation measures from two Service Biological Opinions (BO), are 
the Federal actions described in the Final IA EIS.

IV. Alternatives Considered in the Final IA EIS

    In the Final IA EIS, the proposed action was described as the 
execution of the IA, adoption of the IOP, and implementation of the 
biological conservation measures. For each element of the proposed 
Federal action, a No Action alternative was considered, and for the 
IOP, one action alternative was considered in addition to the 
proposed IOP. No other action alternatives were considered for the 
reasons described below. Because of the important benefits to the 
entire Colorado River Basin of reducing California's over-reliance 
on the Colorado River,\7\ and while

[[Page 12204]]

avoiding the impacts of a more precipitous reduction in California's 
Colorado River diversions, the proposed action is considered the 
environmentally preferred alternative.
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    \7\ For example, the Final EIS for adoption of Colorado River 
Interim Surplus Criteria stated the findings of the Secretary as 
follows: ``As a result of operating experience over recent years, it 
is clear that one of the most important issues for Colorado River 
management is the need to bring use of Colorado River water into 
alignment with the allocation regime adopted by Congress in section 
4 of the Boulder Canyon Project Act of 1928.'' Interim Surplus 
Criteria FEIS, Vol. III at p. 2 (citations omitted).
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A. Implementation Agreement

    1. Proposed Action. Under the proposed IA, the Secretary would 
commit to certain actions required to facilitate implementation of 
the QSA.\8\ Chief among these is the change in location of the 
delivery point of Colorado River water to the QSA parties. The IA 
would result in a change in the amount of water the Secretary would 
deliver to MWD's diversion point at Lake Havasu (above Parker Dam), 
and CVWD's and IID's diversion point at Imperial Dam. In a 
``normal'' year under Art. II(B)(1) of the Decree, in aggregate, 
deliveries to Imperial Dam would be reduced by as little as 
approximately 200 to as much as approximately 400 thousand acre-feet 
(KAF), and this water would instead be delivered to the MWD facility 
at Lake Havasu. Therefore, there would be a reduction in flow in the 
Colorado River of this same amount of Colorado River water from 
Parker Dam to Imperial Dam. As part of the QSA, IID would implement 
agricultural water conservation measures (including land fallowing) 
to conserve as much as 300 KAFY, and an equal amount of Colorado 
River water would be transferred to SDCWA, CVWD, and/or MWD.
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    \8\ For consistency purposes, this section refers to the IA, the 
title of the principal Federal agreement at the time the Final IA 
EIS was published. As noted above, the IA has been renamed and 
replaced by the Water Delivery Agreement.
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    2. No Action. Because execution of the IA (now styled as the 
Water Delivery Agreement) is required to enable full implementation 
of the QSA, under No Action in the Final IA EIS, neither the IA nor 
the QSA would be implemented. The Secretary would continue to make 
Colorado River water deliveries subject to the Law of the River, 
including the existing priority system, Section 5 contracts, and 
determinations identified in the ISG ROD. Significant unresolved 
issues would remain regarding how Colorado River water would be 
delivered to the participating agencies within the California's 
normal year diversion limit of 4.4 MAF of Colorado River water. This 
4.4 MAF limit required by applicable provisions of Federal law, 
would involve a reduction of approximately 600 KAFY from the 1990 to 
1999 average Colorado River diversion for the State of 
California.\9\
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    \9\ See, e.g., the Colorado River Compact of 1922, the Boulder 
Canyon Project Act of 1928, Arizona v. California 1964 Supreme Court 
Decree [Decree], and the Long-Range Operating Criteria.
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    3. Implementation Agreement Alternatives Considered in the EIS. 
Because the purpose of the proposed action is to provide Federal 
approval of an agreement negotiated among the California parties, no 
other action alternatives were considered. Accordingly, any other 
action alternative would have entailed provisions unacceptable to 
one or more of the parties, and therefore would not have constituted 
a reasonable and feasible alternative for NEPA purposes.

B. Inadvertent Overrun Policy

    1. Proposed Action. The IOP component of the proposed action 
includes adoption of a policy that would identify and define 
inadvertent overruns of approved diversions of Colorado River water 
by lower Basin Colorado River contractors, establish procedures that 
account for inadvertent overruns, and define subsequent mandatory 
payback requirements to allow repayment to system storage for any 
inadvertent overruns. It is not anticipated that it would be 
necessary to materially modify the IOP for a 30-year period absent 
extraordinary circumstances such as significant Colorado River 
infrastructure failures. The IOP would be applicable to all lower 
Basin States users with quantified entitlements. The adoption of the 
IOP does not affect nor is it applicable to the United States' 
obligations under the 1944 Treaty with the Republic of Mexico.
    Under the provisions of the IOP, an inadvertent overrun is 
defined as Colorado River water that is diverted, pumped, or 
received by an entitlement holder in excess of the water user's 
entitlement for that year. Under the IOP, payback would be required 
to begin in the calendar year that immediately follows the release 
date of the final Decree Accounting Record \10\ that reports 
inadvertent overruns for a Colorado River water user. Prior to the 
beginning of the calendar year, the user's water order, along with 
the payback plan, and the user's existing Reclamation-approved 
conservation plan, would be submitted to Reclamation for review and 
approval within the annual 43 CFR Pt. 417 process regarding annual 
water order approvals.
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    \10\ These records are published as: Compilation of Records in 
Accordance with Article V of the Decree of the Supreme Court of the 
United States in Arizona v. California, et. al., dated March 9, 
1964.
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    2. No Action. Under the No-Action Alternative, the IOP would not 
be adopted, and Reclamation would enforce its obligations under the 
Decree to ensure that no Colorado River water user exceeds its 
entitlement amount. Currently, diversions of Colorado River water 
are reported monthly for most water users, and Reclamation releases 
a monthly cumulative tabulation of the year's diversions and return 
flows. In enforcing its obligations under the Decree, Reclamation 
may reduce deliveries for those water users who would overrun based 
on diversions to date and projected diversions for the remainder of 
the year, and/or stop deliveries for water users who are at their 
entitlement amount. However, due to the nature of measurement, 
reporting, and accounting practices, there would continue to be some 
level of inadvertent overruns.
    3. IOP Alternatives. Many alternative concepts were considered 
in the development of the proposed IOP. Much interest and many ideas 
were identified during the scoping process and in response to the 
draft policy published in the Federal Register. As a result of 
public comments, one additional IOP alternative, No Forgiveness 
During Flood Releases Alternative, was developed and considered in 
the EIS. The proposed IOP contains a provision that in a year during 
which the Secretary makes a flood control release or a space-
building release pursuant to the Water Control Manual for Hoover 
Dam, Lake Mead, any accumulated amount in an overrun account would 
be forgiven. The No Forgiveness Alternative would eliminate that 
provision. Under this alternative, during a flood control or space-
building release year, the overrun account would be deferred, but 
not forgiven. Payback would resume in the next year when such flood 
control or space-building releases is not scheduled. All other 
provisions in this alternative would be the same as the proposed 
IOP.

C. Implementation of Biological Conservation Measures

    1. Proposed Action. This component of the proposed action 
involves implementation of biological conservation measures from two 
Service BOs. The first, dated January 2001 (Biological Opinion for 
Interim Surplus Criteria, Secretarial Implementation Agreements, and 
Conservation Measures on the Lower Colorado River, Lake Mead to the 
Southerly International Boundary Arizona, California, and Nevada), 
addresses potential impacts from the proposed change in point of 
diversion that could occur to federally-listed fish and wildlife 
species or their associated critical habitats within the historic 
floodplain of the Colorado River between Parker Dam and Imperial 
Dam. The conservation measures related to the water transfers 
include stocking of listed Razorback suckers in the lower Colorado 
River, restoration or creation of 44 acres of backwaters along the 
Colorado River between Parker Dam and Imperial Dam, provision of 
funding for capture and rearing efforts for listed Bonytail chubs 
from Lake Mohave, and a two-tiered conservation plan to minimize 
potential effects to occupied habitat of the listed Southwestern 
willow flycatcher on the Colorado River between Parker and Imperial 
Dams.
    Based on the concern that IID would not be able to complete work 
necessary to obtain ``take'' authorization for effects of its 
proposed QSA-related water conservation actions through a Section 10 
Habitat Conservation Plan (HCP) process by December 31, 2002, 
Reclamation, in July 2002, voluntarily submitted a Biological 
Assessment (BA) to the Service on a proposed voluntary species 
conservation program (Biological Assessment of Reclamation's 
Proposed Section 7(a)(1) Conservation Measures for Listed Species in 
the Imperial Irrigation District/Salton Sea Areas). This voluntary 
species conservation program serves as an alternative means for 
obtaining the necessary ``take'' authorization for the relevant 
California agencies under the ESA for IID's water conservation 
actions. The BA, prepared on a voluntary basis by Reclamation, 
included voluntary species conservation measures to address listed 
species in the IID/Salton Sea area that could be affected by water 
conservation actions taken by IID pursuant to the QSA. The 
conservation measures included beneficial measures for the Desert 
pupfish, Yuma clapper rail, Southwestern willow flycatcher, and 
California brown pelican.
    The Final IA EIS addresses the conservation measures from both 
the 2001

[[Page 12205]]

BO and Reclamation's 2002 BA. The Final IA EIS indicates that as 
detailed plans are developed and specific land-disturbing activities 
are identified, Reclamation will determine and carry out 
supplemental NEPA compliance evaluations, for Federal implementation 
of the conservation measures, as appropriate.
    2. No Action. Under the No-Action Alternative in the Final IA 
EIS, the biological conservation measures identified for the 2001 BO 
would not be implemented. Reconsultation with the Service would be 
required prior to any additional required Federal approvals to 
effectuate any additional changes in point of delivery and diversion 
from the lower Colorado River.
    3. Alternatives to Biological Conservation Measures. No 
alternatives to the biological conservation measures identified in 
the 2001 BO or 2002 BA were considered in the EIS. If Reclamation 
was unable to implement these measures as proposed, reinitiated 
consultation with the Service would be required.

V. Analysis of Post-Final IA EIS QSA Revisions

    Subsequent to the filing of the Final IA EIS, on December 18, 
2002, the Service issued its final BO (Biological Opinion on the 
Bureau of Reclamation's Voluntary Fish and Wildlife Conservation 
Measures and Associated Conservation Agreements with the California 
Water Agencies for Listed Species in the Imperial Irrigation 
District/Salton Sea Areas). The measures described in the Final BO 
were refined and improved from those Reclamation described in its 
July 2002 Biological Assessment and included in its October 2002 
Final IA EIS, particularly with respect to the California brown 
pelican.
    In addition, in September 2003, the California water agencies 
finalized the terms of the QSA, and came to agreement with the 
Department of the Interior regarding terms of the Water Delivery 
Agreement, which replaced the draft IA.
    The final terms of these documents resulted in minor changes to 
the water delivery (``ramp-up'') schedule for the transfer of water 
from IID to SDCWA and from IID to CVWD. In general, there would be a 
decrease in the transfer of water to SDCWA during the first 18 years 
and a slight increase in years 19 and 20. There is a decrease in the 
water delivered to CVWD during the first 17 years and a slight 
increase through year 45. These changes to the QSA water transfers 
were made in an effort to avoid material impact to the salinity of 
the Salton Sea for a 15-year period, in order to assist the 
California agencies to comply with State legislation and California 
Department of Fish and Game (CDFG) permitting requirements under 
State law.
    In addition, the Water Delivery Agreement: (1) Provides for 
additional water conservation by IID (not to exceed 145 KAF total) 
if needed to meet ISG agricultural benchmark reduction targets in 
2006, 2009, and 2012; (2) reflects transfer of the water conserved 
by lining the All-American and Coachella Canals to San Diego instead 
of MWD; and (3) provides a schedule for payback of 2001 and 2002 
Colorado River water overruns.
    Reclamation evaluated the environmental impacts associated with 
the final 2002 BO and all of the refinements to the QSA/Water 
Delivery Agreement in a memorandum dated October 9, 2003. As a 
result of its evaluation, Reclamation concluded that the minor 
changes in environmental impact were within the scope of the Final 
IA EIS, and that no supplemental NEPA compliance documentation was 
required.

VI. Basis for Decision

    Reclamation has selected the proposed Water Delivery Agreement 
and IOP based on the need to reduce California's consumptive use of 
Colorado River water to its apportionment of 4.4 MAF in a normal 
year. In conjunction with the ISG, the proposed Water Delivery 
Agreement will gradually reduce California's over-reliance on 
Colorado River water and bring the State's use of Colorado River 
water into alignment with its allocation under the applicable 
provisions of the Law of the River, specifically the BCPA.\11\
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    \11\ See, e.g., Final EIS Interim Surplus Criteria at Sec.  
1.3.2.1.
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    The QSA is a consensual agreement among the three parties (IID, 
CVWD, and MWD) that resolves longstanding disputes regarding the 
priority, use (including quantification), and transferability of 
Colorado River water. The QSA was developed in response to the 
Secretary's insistence that California must implement a strategy 
that enables the State to limit its use of Colorado River water to 
4.4 MAF during a normal year, or develop the means to meet its water 
needs from sources that do not jeopardize the delivery of Colorado 
River water to other States. The proposed Water Delivery Agreement 
implements the Federal water delivery components of that consensual 
agreement.
    This historic agreement among the California parties is 
considered the best approach to achieve a timely and lasting 
reduction of California's overuse of Colorado River water. In the 
absence of this consensual agreement, it is clear that alternative 
approaches would have entailed provisions unacceptable to one or 
more of the parties. In fact, the differences among the parties have 
plagued efforts to resolve these issues since 1931. Moreover, a 
continued failure to adopt a plan in compliance with the structured 
reductions provided in section 5 of the ISG would require the 
Secretary to continue to enforce the precipitous reduction in 
available supplies from the Colorado River that California 
experienced during this calendar year. These factors were 
specifically considered by the Secretary as the basis for this 
decision.
    The IOP will provide a mechanism for pay-back to the Colorado 
River system from inadvertent over-use of Colorado River water by 
entitlement holders, thus keeping system storage whole in spite of 
overruns, which are inevitable to some degree.
    In making its decision, Reclamation carefully evaluated 
environmental impacts on the river system that are anticipated to 
result from the change in point of delivery and diversion from water 
transfers identified in the Water Delivery Agreement. This 
evaluation involved review of river stage impacts (change in water 
surface elevation), reservoir storage impacts (Lake Mead and Lake 
Powell), change in frequency and magnitude of flood control 
releases, and any potential transboundary impacts.
    Reclamation has elected to implement all of the biological 
conservation measures included in the 2001 BO. Reclamation and the 
California water agencies, through execution of a Conservation 
Agreement, have agreed to implement all the biological conservation 
measures identified in the 2002 BO.

VII. Environmental Commitments

    The Final IA EIS describes the impacts of the Federal action on 
the Colorado River, such as changes in flow and reservoir storage. 
The Final IA EIS also summarizes and incorporates by reference 
analyses of off-river impacts that would result from actions taken 
by the QSA participating agencies as a result of implementing the 
QSA. This is because the changes in water deliveries agreed to by 
the Secretary in the Water Delivery Agreement will enable the QSA to 
be fully implemented.
    It is important to recognize that while the EIS describes the 
off-river impacts of actions taken by the QSA participating 
agencies, it does not ``federalize'' those actions, nor does it 
create a requirement for supplemental NEPA compliance for those 
actions. The Department recognizes that the non-Federal actions 
carried out by the participating California agencies pursuant to the 
QSA will need to comply with the California Environmental Quality 
Act (CEQA), California Endangered Species Act, and other State and 
local requirements. Toward that end, the California participating 
agencies prepared a Programmatic Environmental Impact Report (PEIR) 
for the QSA (Implementation of the Colorado River Quantification 
Settlement Agreement, June 2002), CVWD prepared a PEIR for the 
Coachella Valley Water Management Plan (Coachella Valley Water 
Management Plan and State Water Project Entitlement Transfer PEIR, 
October 2002), and an EIR/EIS was prepared for the IID Water 
Conservation and Transfer Project, October 2002, pursuant to these 
State and local requirements.\12\
---------------------------------------------------------------------------

    \12\ This EIR/EIS included a proposed HCP to address IID's 
identified actions. Efforts to finalize an HCP have not been 
completed as of the date of this Record of Decision.
---------------------------------------------------------------------------

    The following environmental commitments are those relating to 
the proposed Federal action affecting water diversions and reservoir 
storage. Based on the impact analysis, mitigation measures were 
determined not to be necessary, and none are proposed, for land use, 
recreation, agricultural resources, socioeconomics, environmental 
justice, or transboundary impacts. Implementation of environmental 
commitments from the CEQA documents relating to actions taken by the 
QSA parties is the exclusive responsibility of those California 
parties.
    A. Hydrology/Water Quality/Water Supply. The biological 
conservation measures included as part of the proposed action (from 
the January 2001 BO) were developed to mitigate impacts in the 
changes in point of

[[Page 12206]]

delivery of Colorado River water. The changes in point of delivery 
result in reduced flows from Parker Dam to Imperial Dam. 
Implementation of all biological conservation measures would be 
subject to site-specific NEPA review. Mitigation measures 
specifically related to implementation of biological conservation 
measures would be developed as part of such site-specific review. 
The conservation measures related to river-flow reductions are 
described in detail in the Service's January 2001 BO, and are 
summarized below.
    1. Reclamation would stock 20,000 Razorback suckers, 25 
centimeters (cm) or greater in length, into the Colorado River 
between Parker and Imperial Dams. This stocking effort would be a 
continuation of present efforts and would bring the total number of 
razorbacks of 25 cm or greater in length stocked below Parker Dam to 
70,000. These stocking efforts would be completed by 2006.
    2. Reclamation would restore or create 44 acres of backwaters 
along the Colorado River between Parker Dam and Imperial Dam. This 
effort could include restoring existing decadent backwaters for 
which no ongoing effort provides funding or responsibility for 
restoration, or the creation of new backwaters where water 
availability, access, and other considerations can be met. 
Maintenance of these backwaters for native fish and wildlife would 
be ensured for the life of the water transfers. This backwater 
restoration and/or creation effort would be completed within 5 years 
of the first water transfers under the QSA (excluding the ongoing 
water transfer under the IID/MWD 1988 Agreement and subsequent 
agreements).
    3. Reclamation would provide $50,000 in funding for the capture 
of wild-born or first generation (F1) Bonytail chubs from Lake 
Mohave to be incorporated into the broodstock for this species and/
or to support rearing efforts at Achii Hanyo, a satellite rearing 
facility of Willow Beach National Fish Hatchery. These efforts would 
be funded for 5 years.
    4. A two-tiered conservation plan has been developed to minimize 
potential effects to occupied Southwestern willow flycatcher habitat 
that could result from reduced flows on the Colorado River between 
Parker and Imperial Dams as water transfers and associated changes 
in point of delivery are implemented. The details of the Plan may be 
found in the 2001 BO in Appendix E of the Final IA EIS.
    B. Biological Resources--Vegetation. Implementation of 
biological conservation measures described above would mitigate 
impacts to vegetation along the river.
    C. Biological Resources--Fish and Wildlife. Implementation of 
biological conservation measures described above would mitigate 
impacts to fish and wildlife along the river.
    D. Biological Resources--Sensitive Species. Implementation of 
biological conservation measures described above would mitigate 
impacts to special status species.
    E. Hydroelectric Power. Under the Law of the River and specific 
project legislation, power production has a priority subservient to 
Colorado River water delivery for authorized consumptive uses. 
Reclamation would continue to work closely with Western Area Power 
Authority to schedule water releases for satisfaction of water 
orders and to optimize power production at the various facilities. 
However, based on the fact that power production is a result of 
water releases to meet water orders, no mitigation for reduced 
opportunities to produce hydroelectric power is proposed.
    F. Cultural Resources. At this time, Reclamation does not 
perceive a need to develop mitigation measures specific to historic 
properties for this action. On August 13, 2002, Reclamation 
transmitted a report to the Arizona, California and Nevada State 
Historic Preservation Officers (SHPOs) entitled ``A Class I Overview 
and Effects Analysis for Execution of an Implementation Agreement, 
Development and Adoption of an Inadvertent Overrun and Payback 
Policy, and Associated Biological Conservation Measures on the lower 
Colorado River Between Lake Mead and Imperial Dam.'' In the 
transmittal letter to the SHPOs, Reclamation requested SHPO 
concurrence with the following:
    1. Because effects of the IOP on reservoir and river elevations 
are projected to be well within the historic parameters for 
reservoir and river operations, the potential effects of the IOP on 
historic properties are indistinguishable from those that might be 
occurring as a result of ongoing river operations. Thus, 
consultation concerning development and adoption of an IOP would 
best be deferred to the broader consultation effort regarding its 
operation of the lower Colorado River that Reclamation previously 
committed to conduct with the Advisory Council on Historic 
Preservation and other interested parties under Section 110 of the 
National Historic Preservation Act (NHPA) in the ROD for ISG;
    2. Section 106 consultation concerning the implementation of the 
biological conservation measures (associated with the change in 
diversion of up to 400 KAFY of Colorado River water) can be deferred 
until the specifics of the projects have been developed to the point 
where potential effects to historic properties can be better 
ascertained and assessed; and
    3. There will be no adverse effect to historic properties 
located in Arizona and California as a result of the execution of a 
Water Delivery Agreement which provides for a change in the point of 
delivery from Imperial Dam, upstream to Park Dam, of up to 400 KAFY 
of Colorado River water.
    In letters dated September 16, 2002, and November 2, 2002, 
respectively, both the Arizona and California SHPOs concurred with 
Reclamation's findings. Development and implementation of an IOP is 
the only one of the three proposed actions that could result in 
effects to historic properties in Nevada. In a letter dated 
September 6, 2002, the Nevada SHPO indicated it would concur with 
Reclamation's request to defer a determination of effect for the IOP 
to the broader NHPA Section 110 consultation on river operations.
    G. Tribal Resources. Specific locations for the construction and 
maintenance of biological conservation measures along the Colorado 
River have not yet been determined. Conservation measures would not 
be located on tribal lands without the express consent of and desire 
by the tribe(s).
    H. Air Quality. One or more of the following measures could be 
implemented as standard operating practices to minimize combustive 
particulate matter (PM10/PM2.5) and fugitive 
dust (PM10) emissions from proposed construction 
activities associated with the implementation of biological 
conservation measures (this list does not preclude the use of other 
mitigation measures):
    1. Use particulate traps on diesel-powered equipment.
    2. Minimize the use of diesel-powered equipment where feasible.
    3. Use alternative diesel fuels in construction equipment where 
feasible.
    4. Properly tune and maintain all construction equipment.
    5. Apply water to areas where vehicles and equipment are 
involved in ground-disturbing activities.
    6. Pave dirt roads or keep them wet, or apply non-toxic soil 
stabilizers, such as salts or detergents.
    7. Increase water applications or reduce ground-disturbing 
activities as wind speeds increase.
    8. Minimize the amount of disturbed area and vehicle speeds on 
site.
    9. Cover inactive soil stockpiles or treat them with soil 
binders, such as crusting agents or water them to keep moist.
    10. Cover trucks that haul soils or fine aggregate materials.
    11. Designate personnel to monitor dust control program 
activities to ensure that they are effective in minimizing fugitive 
dust emissions.
    12. Clean dirt from construction vehicle tires and 
undercarriages when leaving the construction site and before 
entering local roadways.
    13. Sweep streets near the construction area at the end of the 
day if visible soil material is present.
    I. Biological Conservation Measures from the December 2002 BO. 
Reclamation and the California water agencies, through a 
Conservation Agreement, propose to implement the following species 
conservation measures as a result of Reclamation's voluntary 
Endangered Species Act Section 7(a)(1) consultation regarding listed 
species in the IID/Salton Sea areas. Following is a summary of the 
conservation measures. The full text of the conservation measures, 
Reasonable and Prudent Measures, and Terms and Conditions may be 
found in the December 2002 BO.
    1. Desert Pupfish Conservation Measure 1: Connectivity Impacts. 
In cooperation with its conservation agreement partners, Reclamation 
will ensure that an appropriate level of connectivity is maintained 
between pupfish populations in individual drains (in CVWD's area at 
the north end of the Salton Sea and in IID's area at the south end 
of the Sea) connected to the Salton Sea either directly or 
indirectly and that drain habitat below the first check will be 
maintained in the event that conditions in the Salton Sea become 
unsuitable for pupfish.

[[Page 12207]]

    2. Desert Pupfish Conservation Measure 2: Selenium Impacts. 
Reclamation and its conservation agreement partners will commit to 
fund a study program to determine the impacts of selenium on desert 
pupfish. The objective of the study program will be to identify 
specific selenium thresholds at which pupfish survival or 
reproduction is adversely affected. Within 2 years of completion of 
the study program, Reclamation and its conservation agreement 
partners will meet with the Service and CDFG to review the results 
of the study program and the monitoring data. If the available 
information reviewed in this process indicates that the pupfish 
inhabiting the Imperial Valley drains that discharge directly to the 
Salton Sea are at risk from selenium, Reclamation will work in 
cooperation with IID, the Service and CDFG to identify and implement 
the best means for managing IID's drain channels to minimize 
potential selenium impacts on pupfish.
    3. Desert Pupfish Conservation Measure 3: Management and 
Monitoring. In cooperation with its conservation agreement partners, 
Reclamation will carry out routine monitoring of pupfish presence to 
confirm continued presence in the drains and to develop information 
useful in adjusting management actions for this species.
    4. Rail Conservation Measure 1: Salinity Impacts. Thirty-one 
acres of high quality managed marsh will be created to offset 
potential salinity impacts. In cooperation with its conservation 
agreement partners, Reclamation will work with the Service and CDFG 
to determine the design and location of these marshes. Design 
considerations will include the needs of both the Yuma clapper rail 
and California black rail.
    5. Rail Conservation Measure 2: Selenium Impacts. Forty-two 
acres of additional high quality managed marsh habitat will be 
created to offset the potential selenium impacts on rail egg 
hatchability. The total amount of 73 acres of habitat will be 
created within 10 years of completion of this consultation.
    6. Rail Conservation Measure 3: Management and Monitoring. A 
long-term adaptive management and monitoring plan will be developed 
for the mitigation marsh and submitted to the Service and CDFG for 
review and approval prior to initiation of habitat creation 
activities. The management plan will consider the requirements of 
both the Yuma clapper rail and the California black rail.
    7. Southwestern Willow Flycatcher Conservation Measure 1: 
Evaluate Habitat. All potential cottonwood-willow and tamarisk 
stands will be evaluated for Southwestern willow flycatcher breeding 
habitat suitability.
    8. Southwestern Willow Flycatcher Conservation Measure 2: 
Suitable Habitat Monitoring. If suitable Southwestern willow 
flycatcher breeding habitat is identified during Conservation 
Measure 1, this habitat will be monitored to quantify changes in the 
amount and quality of habitat. If suitable breeding habitat is lost 
or the quality of the habitat declines as a result of IID's water 
conservation activities so that it is no longer considered suitable 
breeding habitat, this loss will be offset through the creation and/
or acquisition and preservation of higher quality, native riparian 
replacement habitat at a 1:1 ratio.
    9. Southwestern Willow Flycatcher Conservation Measure 3: 
Management and Monitoring of Habitat. A long-term adaptive 
management and monitoring plan will be developed for any replacement 
habitat whether created or acquired.
    10. Southwestern Willow Flycatcher Conservation Measure 4: Take 
Minimization During Construction. If suitable breeding habitat for 
Southwestern willow flycatchers is identified in the seepage 
communities adjacent to the East Highline Canal or in locations to 
be impacted by lateral interceptor construction, removal of suitable 
habitat in association with these construction activities will be 
scheduled to occur outside the breeding season for the Southwestern 
willow flycatcher. Specifically, removal of habitat would not occur 
between April 15 and August 15.
    11. Brown Pelican Conservation Measure 1 B: Roost Site Creation. 
Reclamation, in cooperation with its conservation agreement 
partners, will construct at least two roost sites for California 
brown pelicans along the Southern California Coast. The objective of 
this conservation measure is to provide at least two major roost 
sites that in combination support roosting by at least 1,200 
pelicans. The roosts will be sized to accommodate up to 1,000 
pelicans each. A major roost site is defined as supporting at least 
100 pelicans during June through October based on maximum counts. 
The roost sites are to be installed and functioning by 2018 and 
demonstrated to support at least 100 pelicans each and to support at 
least 1,200 pelicans in combination. They will be maintained through 
2048.

VIII. Comments Received on Final EIS

    Three comment letters were received on the Final IA EIS. Comment 
letters from the Southern Nevada Water Authority and Colorado River 
Commission of Nevada requested a wording change in the final IOP to 
reflect that introduction of non-system water could be considered as 
a source of payback, but only after appropriate environmental review 
and approval by Reclamation. Reclamation has concluded that such a 
change is within the scope of the environmental analysis in the 
Final IA EIS, and has made this change in the final IOP 
language.\13\
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    \13\ Other minor changes in the final IOP Policy language were 
made for purposes of clarity. In addition, clarifications have been 
included to more carefully link calculation and repayment of 
overruns to the annual approvals of water orders by Reclamation 
pursuant to 43 CFR Pt. 417. These changes and clarifications to the 
IOP Policy do not result in any new or additional environmental 
impacts beyond those described in the Final IA EIS.
---------------------------------------------------------------------------

    The third letter of comment was from the EPA. The EPA stated 
that the Final IA EIS addressed many of its concerns, but that EPA 
remained concerned about potential cumulative impacts on drinking 
water quality and on Indian Trust Assets. EPA suggested an EIS on 
the HCP would be an appropriate forum to address their remaining 
concerns, and that Reclamation should commit to extending 
Cooperating Agency status to the Service in the EIS for the HCP. 
Reclamation agrees that the NEPA process for the HCP is the 
appropriate forum to consider EPA's remaining concerns. Reclamation 
expects that the Service will be the lead agency for such NEPA 
evaluation, and will consider whether a new EIS is appropriate 
depending on the magnitude of change in the proposed HCP from that 
considered in the IID Transfer EIR/EIS.
    In addition, two comment letters were received on the IID Water 
Conservation and Transfer Project EIR/EIS. Although this ROD is not 
based on that EIR/EIS, the issues raised in the comment letters are 
related to the IA (now Water Delivery Agreement), and are summarized 
here. Mr. Les W. Ramirez provided a comment letter on behalf of the 
Torres Martinez Band of Desert Cahuilla Indians. The letter stated 
the IID water conservation and transfer project will have direct 
impacts on the Tribe's fish, wildlife, land, water, and cultural 
assets. The Tribe is concerned that IID has not committed to 
implement the Salton Sea Habitat Conservation Strategy identified in 
the Final IID Transfer EIR/EIS. The Tribe also expressed concerns 
about potential air quality impacts, water quality (perchlorate) 
impacts to drinking water, and requested delay of CVWD recharge 
projects in Martinez Canyon and Dike 4. As noted above, Reclamation 
has included a description of off-river impacts associated with 
IID's water conservation actions pursuant to the QSA water transfer, 
but Reclamation does not have any control over the methods used by 
IID to conserve water. Since the potential impacts to Torres-
Martinez resources result from decisions made by IID, mitigation of 
impacts is appropriately dealt with by IID and, in the case of CVWD 
recharge projects, by CVWD.
    The second comment letter was from EPA. It raised concerns about 
substitution of a ``15-year'' plan for the Salton Sea Habitat 
Conservation Strategy after the Final IID Transfer EIR/EIS was filed 
(see Section V above). Based on this concern, and because 
supplemental NEPA compliance has not been carried out on the 
differences between the two approaches, EPA reiterated its 
objections to potential impacts on surface and groundwater quality, 
air quality, and biological resources.\14\ EPA stated that its 
substantive objections could be addressed by the Habitat 
Conservation Plan and the Salton Sea Restoration Project. 
Reclamation notes that the Final IA EIS included the Section 7 
approach as an alternative to the Salton Sea Habitat Conservation 
Strategy, and described the resulting environmental impacts in the

[[Page 12208]]

absence of the Salton Sea Habitat Conservation Strategy.
---------------------------------------------------------------------------

    \14\ On October 9, 2003, as this ROD was being finalized, the 
United States Court of Appeals for the Ninth Circuit issued an 
opinion directing the EPA to classify the Imperial Valley as a 
serious non-attainment area because of PM-10 concentrations 
exceeding standards established pursuant to the Clean Air Act. 
Sierra Club v. EPA, No. 01-71902. While the implications of this 
ruling are unclear at this time, the Department of the Interior will 
monitor developments and undertake additional review under NEPA, as 
appropriate.
---------------------------------------------------------------------------

    Lastly, in an October 2, 2003 letter to Secretary Norton, the 
Colorado River Indian Tribes (CRIT) expressed concerns regarding the 
QSA's possible effect on the senior decreed rights of the CRIT. 
Specifically, the tribes noted that the agreements would allow 
additional deliveries of water from Lake Havasu into the Colorado 
River Aqueduct. The CRIT was unsure of any impact but expressed a 
desire for further information. The tribe's Colorado River rights 
would not be affected by the changes in points of diversion 
contemplated under the QSA. The QSA creates no new rights to 
Colorado River water, but only facilitates the movement of water 
from one user to another within California. The CRIT's use of 
Colorado River water will not be compromised by the QSA transfers.
    The CRIT also expressed concern about how changes in points of 
diversion might affect hydropower production at the Headgate Rock 
Dam, the tribe's diversion point for Colorado River water. As 
described in the Draft and Final IA EIS, the QSA water transfers 
will result in less flow of water through the dam and will cause an 
associated reduction in hydropower generation. However, hydropower 
generation under the Boulder Canyon Project Act of 1928 is a 
secondary function and is available only to the extent that releases 
of water are required for downstream water use. The Boulder Canyon 
Act and the Supreme Court Decree in Arizona v. California make it 
clear that no right to water is created by hydropower generation 
and, therefore, the change in points of diversion will not impact 
the CRIT's senior water right. As described in the Final IA EIS, the 
QSA water transfers are estimated to reduce the opportunity to 
produce power at Headgate Rock Dam by an average of about 5 percent. 
The variation in Colorado River flow is within the range that occurs 
as a normal course of river operation.

IX. Implementing the Decision

A. Inadvertent Overrun and Payback Policy

    Reclamation is adopting a policy that will identify inadvertent 
overruns, will establish procedures that account for inadvertent 
overruns and will define subsequent payback requirements for users 
of Colorado River mainstream water in the Lower Division States. The 
Inadvertent Overrun and Payback Policy is effective beginning on 
January 1, 2004. The language of the policy has been modified from 
the language published in Appendix I of the Final IA EIS. The 
comments from Southern Nevada Water Authority and Colorado River 
Commission of Nevada were accommodated. Edits were made for grammar 
and consistency, and to eliminate duplication. None of the changes 
would result in environmental impacts different from those described 
in the Final IA EIS. The policy as finalized follows.

1. Background

    In its June 3, 1963 opinion in the case of Arizona v. California 
(373 U.S. 546), the Supreme Court of the United States held that 
Congress has directed the Secretary of the Interior (Secretary) to 
administer a network of useful projects constructed by the Federal 
Government on the lower Colorado River, and has entrusted the 
Secretary with sufficient power to direct, manage, and coordinate 
their operation. The Court held that this power must be construed to 
permit the Secretary to allocate and distribute the waters of the 
mainstream of the Colorado River within the boundaries set down by 
the Boulder Canyon Project Act (45 Stat. 1057, 43 U.S.C. 617) 
(BCPA). The Secretary has entered into contracts for the delivery of 
Colorado River water with entities in Arizona, California, and 
Nevada in accordance with section 5 of the BCPA. The Secretary has 
the responsibility of operating Federal facilities on the Colorado 
River and delivering mainstream Colorado River water to users in 
Arizona, California, and Nevada that hold entitlements, including 
present perfected rights, to such water.
    Article V of the Decree of the Supreme Court of the United 
States in Arizona v. California dated March 9, 1964 (376 U.S. 340) 
requires the Secretary to compile and maintain records of diversions 
of water from the mainstream, of return flow of such water to the 
mainstream as is available for consumptive use in the United States 
or in satisfaction of the Mexican Treaty obligation, and of 
consumptive use of such water. Reclamation reports this data each 
year in the Decree Accounting Record.\15\
---------------------------------------------------------------------------

    \15\ These records are published as: Compilation of Records in 
Accordance with Article V of the Decree of the Supreme Court of the 
United States in Arizona v. California, et. al., dated March 9, 
1964.
---------------------------------------------------------------------------

    Pursuant to the Criteria for Coordinated Long-Range Operation of 
Colorado River Reservoirs developed as a result of the Colorado 
River Basin Project Act of September 30, 1968, the Secretary 
annually consults with representatives of the governors of the 
Colorado River Basin States, general public and others and issues an 
Annual Operating Plan (AOP) for the coordinated operation of the 
Colorado River reservoirs. Reclamation also requires each Colorado 
River water user in the Lower Basin to schedule water deliveries in 
advance for the following calendar year (calendar year is the annual 
basis for decree accounting of consumptive use in the lower Colorado 
basin) and to later report its actual water diversions and returns 
to the mainstream.
    Pursuant to 43 CFR part 417, prior to the beginning of each 
calendar year, Reclamation consults with entities holding BCPA 
section 5 contracts (Contractor) for the delivery of water. Under 
these consultations, Reclamation makes recommendations relating to 
water conservation measures and operating practices in the 
diversion, delivery, distribution, and use of Colorado River water. 
Reclamation also makes a determination of the Contractor's estimated 
water requirements for the ensuing calendar year to ensure that 
deliveries of Colorado River water to each Contractor will not 
exceed those reasonably required for beneficial use under the 
respective BCPA contract or other authorization for use of Colorado 
River water. Reclamation sends a letter approving the Contractor's 
water order for the ensuing year in the amount determined to be 
appropriate by Reclamation. Reclamation then monitors the actual 
water orders, receives reports of measured diversions and return 
flows from major Contractors and Federal establishments, estimates 
unmeasured diversions and return flows, calculates consumptive use 
from preliminary diversions and measured and unmeasured return 
flows, and reports these records on an individual and aggregate 
monthly basis. Later, when final records are available, Reclamation 
prepares and publishes the final Decree Accounting Record on a 
calendar year basis.
    For various reasons, a user may inadvertently consumptively use 
Colorado River water in an amount that exceeds the amount available 
under its entitlements as provided in annual approved water orders 
(inadvertent overrun). Further, the final Decree Accounting Record 
may show that an entitlement holder inadvertently diverted water in 
excess of the quantity of the entitlement that may not have been 
evident from the preliminary records. Reclamation is therefore 
adopting an administrative policy that defines inadvertent overruns, 
establishes procedures that account for the inadvertent overruns and 
defines the subsequent requirements for payback to the Colorado 
River mainstream.

2. Inadvertent Overruns

    Effective January 1, 2004, Reclamation adopts the following 
Inadvertent Overrun and Payback Policy for the Lower Colorado River 
Basin:
    1. Inadvertent overruns are those which the Secretary deems to 
be beyond the control of the entitlement holder; for example, 
overruns due to the discrepancy between preliminary and final stream 
flow and diversion records.
    2. An inadvertent overrun is Colorado River water diverted, 
pumped or received by an entitlement holder of the Lower Division 
States that is in excess of the water user's entitlement for that 
year. This IOP policy provides a structure to payback the amount of 
water diverted, pumped or received in excess of entitlement for that 
year. This IOP policy does not create any right or entitlement to 
this water, nor does it expand the underlying entitlement in any 
way. An entitlement holder has no right to order, divert, pump or 
receive an inadvertent overrun. If, however, water is diverted, 
pumped or received inadvertently in excess of annual approved 
orders, and sources of unused Colorado River water are not available 
to accommodate adjustment of water orders by Reclamation, the 
inadvertent overrun policy will govern the payback. This IOP Policy 
will not be applied in any manner to the deliveries made under the 
United States Mexico Water Treaty of 1944.
    3. Payback will be required to commence in the calendar year 
that immediately follows the release date of a final Decree 
Accounting Record that reports uses that are in excess of an 
individual's entitlement.
    4. Payback must be made only from measures that are above and 
beyond the normal reasonable and beneficial consumptive use of water 
(extraordinary conservation measures). Extraordinary conservation 
measures mean actions taken to conserve water that otherwise would 
not return to the mainstream of the Colorado

[[Page 12209]]

River and be available for beneficial consumptive use in the United 
States or to satisfy the Mexican treaty obligation. Any entitlement 
holder with a payback obligation must submit to Reclamation, along 
with its water order, a plan which will show how it will 
intentionally forbear use of Colorado River water by extraordinary 
conservation measures, including fallowing, sufficient to meet its 
payback obligation and which demonstrates that the measures being 
proposed are in addition to those being implemented to meet any 
existing transfer or conservation agreement, and are in addition to 
the measures found in its Reclamation approved conservation plan. 
Plans for payback could also include supplementing Colorado River 
system water supplies with non-system water supplies through 
exchange or forbearance or other acceptable arrangements, provided 
that non-system water is not physically introduced into the system 
without appropriate environmental review and approval by 
Reclamation. Water banked off-stream or groundwater from areas not 
hydrologically connected to the Colorado River or its tributaries 
are examples of such supplemental supplies. Water ordered but 
subsequently not diverted is not included in this policy in any 
manner.
    5. Maximum cumulative inadvertent overrun accounts will be 
specified for individual entitlement holders as 10 percent of an 
entitlement holder's normal year consumptive use entitlement. 
(Normal year means a year for which the Secretary has determined 
that sufficient mainstream Colorado River water is available for 
release to satisfy 7.5 maf of annual consumptive use in the States 
of California, Arizona and Nevada.)
    6. The number of years within which an overrun, calculated from 
consumptive uses reported in final Decree Accounting Records, must 
be paid back, and the minimum payback required for each year shall 
be as follows:
    a. In a year in which the Secretary makes a flood control 
release or a space building release pursuant to the applicable Water 
Control Manual for Hoover Dam, Lake Mead, any accumulated amount in 
the overrun account will be forgiven.
    b. If the Secretary has declared a 70R surplus in an AOP 
applicable to the calendar year of payback, any payback obligation 
for that calendar year will be deferred at the entitlement holder's 
option.
    c. In a year when Lake Mead elevation is between the elevation 
for a 70R surplus determination and elevation 1,125 feet above mean 
sea level on January 1, the payback obligation incurred in that year 
must be paid back in full within 3 years of the reporting of the 
obligation, with a minimum payback each year being the greater of 20 
percent of the individual entitlement holder's maximum allowable 
cumulative overrun account amount or 33.3 percent of the total 
account balance.
    d. In a year when Lake Mead elevation is at or below elevation 
1,125 feet above mean sea level on January 1, the total account 
balance must be paid back in full in that calendar year.
    e. For any year in which the Secretary declares a shortage under 
the Decree, the total account must be paid back in full that 
calendar year, and further accumulation of inadvertent overruns will 
be suspended as long as shortage conditions prevail.
    7. A separate inadvertent overrun account may be established in 
those limited cases in which a lower priority user is contractually 
responsible for payback of other senior entitlement holders. The 
separate inadvertent overrun account will be limited to a maximum 
cumulative amount of 10 percent of the senior entitlement holder's 
average consumptive use. Such inadvertent overrun accounts will be 
the assigned responsibility of the lower priority user in addition 
to its own entitlement-based inadvertent overrun account. If, 
however, senior entitlement holder's approved aggregate calendar 
year water orders are in excess of the specified amount for which 
the lower priority user will be responsible, such excess will not be 
deemed inadvertent and the lower priority user's water order for 
that year will be reduced accordingly by Reclamation.
    8. Each month, Reclamation will monitor the actual water orders, 
receive reports of measured diversions and return flows from 
Contractors and Federal establishments, estimate unmeasured 
diversions and return flows, and project individual and aggregate 
consumptive uses for the year. Should preliminary determinations 
indicate that monthly consumptive uses by individual users, or 
aggregate uses, when added to the approved schedule of uses for the 
remainder of that year, exceed entitlements pursuant to annual 
approved water orders but are not exceeding the maximum inadvertent 
overrun account amount, Reclamation will notify in writing the 
appropriate entities that the preliminary determinations are 
forecasting annual uses in excess of their entitlements.
    9. During years in which an entitlement holder is forbearing use 
to meet its payback obligation, Reclamation will monitor the 
implementation of the extraordinary conservation measures, and 
require that the entitlement holder's consumptive use be at or below 
its approved water order for that year. Should the entitlement 
holder's actual monthly deliveries for the first 5 months of the 
year exceed their forecasted orders, and projections indicate the 
entitlement holder's end of year use is likely to be 5 percent or 
more above their adjusted entitlement, Reclamation will notify the 
entitlement holder in writing. At the end of 7 months, if it 
continues to appear that the entitlement holder is likely to be 
above its adjusted entitlement, Reclamation will notify the 
entitlement holder that they are at risk of exceeding their adjusted 
entitlement, and having their next year's orders placed under 
enforcement proceedings. Reclamation will monitor the implementation 
of the extraordinary conservation measures and monitor the 
forbearance of consumptive use of Colorado River water. Should 
preliminary determinations of the implementation of extraordinary 
conservation or of monthly Colorado River consumptive uses indicate 
that sufficient extraordinary conservation or sufficient forbearance 
of Colorado River consumptive use is not projected to occur, 
Reclamation will notify the appropriate entitlement holders in 
writing that the preliminary determinations are forecasting that 
their annual payback obligations are not on target or being met. If 
this condition occurs for two consecutive years, in the second year 
Reclamation will begin enforcement proceedings, and will so advise 
the entitlement holder in writing by July 31 of the second year. 
Reclamation will consult with the entitlement holder on a modified 
release schedule and will limit releases to the entitlement holder 
for the remainder of the year such that by the end of the year the 
individual entitlement holder has met its payback obligation.
    10. Procedures will be established for accounting for 
inadvertent overruns on an annual basis and for supplementing the 
final Decree Accounting Record. The procedures and measures for 
administering the IOP will be reviewed every 5 years. Final 
determinations under this IOP policy shall be made by Reclamation's 
Lower Colorado Regional Director.

B. Colorado River Water Delivery Agreement

    Effective upon signature, under the authority of the Secretary, 
the Department proposes to execute the following Colorado River 
Water Delivery Agreement.

Colorado River Water Delivery Agreement

    Federal Quantification Settlement Agreement--for purposes of 
Section 5(B) of Interim Surplus Guidelines.
    The United States by and through the Secretary of the Interior 
(Secretary) hereby enters into this Colorado River Water Delivery 
Agreement (Agreement) with the Imperial Irrigation District (IID), 
the Coachella Valley Water District (CVWD), The Metropolitan Water 
District of Southern California (MWD) (these three districts are 
collectively referred to herein as the Districts), and the San Diego 
County Water Authority (SDCWA). The Secretary, IID, CVWD, MWD and 
SDCWA hereby agree as follows:

Recitals

    A. By regulations dated September 28, 1931, the Secretary 
incorporated the schedule of priorities provided in the Seven Party 
Agreement dated August 18, 1931, and established priorities One 
through Seven for use of the waters of the Colorado River within the 
State of California. The regulations were promulgated pursuant to 
the Boulder Canyon Project Act (BCPA) and required that contracts be 
entered into for the delivery of water within those priorities.
    B. The Secretary has entered into contracts with, among others, 
the Palo Verde Irrigation District (PVID), IID, CVWD, and MWD, for 
the delivery of Colorado River water pursuant to Section 5 of the 
BCPA (Section 5 Contracts). Under those Section 5 Contracts, PVID, 
IID, CVWD and MWD have certain rights to the delivery of Colorado 
River water, which for PVID and IID include the satisfaction of 
present perfected rights in accordance with Section 6 of the BCPA. 
MWD and CVWD also have surplus water delivery contracts with the 
Secretary.
    C. IID, CVWD, MWD and SDCWA have entered into agreements 
relating to, among other matters, their respective beneficial 
consumptive use of Colorado River water and

[[Page 12210]]

desire that, for the term of this Agreement, Colorado River water be 
delivered by the Secretary in the manner contemplated in this 
Agreement.
    D. The Secretary has the authority to enter into this Agreement 
on behalf of the United States pursuant to the BCPA, the 1964 Decree 
in Arizona v. California, and other applicable authorities.

Operative Terms

1. Water Delivery Contracts

    a. Priorities 1, 2, 3(b), 6(b), and 7 of current Section 5 
Contracts for the delivery of Colorado River water in the State of 
California and Indian and miscellaneous Present Perfected Rights 
(PPRs) within the State of California and other existing surplus 
water contracts are not affected by this Agreement.
    b. The Secretary agrees to deliver Colorado River water in the 
manner set forth in this Agreement during the term of this 
Agreement. The Secretary shall cease delivering water pursuant to 
this Agreement at the end of the term of this Agreement; provided, 
however, that the Secretary's delivery commitment to the San Luis 
Rey Indian Water Rights Settlement Parties (SLR) shall not terminate 
at the end of the term but shall instead continue, pursuant to 
Section 106 of Pub. L. 100-675, 102 Stat. 4000 et seq., as amended, 
subject to the terms and conditions of any applicable agreement to 
which the Secretary is a party concerning the allocation of water to 
be conserved from the lining of the All-American and Coachella 
Canals.
    c. The Districts' respective Section 5 Contracts shall remain in 
full force and effect and, with this Agreement, shall govern the 
delivery of Colorado River water.

2. Quantification of Priority 3(a)

    a. Except as otherwise determined under the Inadvertent Overrun 
and Payback Policy identified in Section 9 of this Agreement, the 
Secretary shall deliver Priority 3(a) Colorado River water to IID in 
an amount up to but not more than a consumptive use amount of 3.1 
million acre-feet per year (AFY) less the amount of water equal to 
that to be delivered by the Secretary for the benefit of CVWD, MWD, 
SDCWA, SLR, and Indian and miscellaneous PPRs as set forth in 
Exhibits A and B hereto. Colorado River water acquired by IID after 
the date of this Agreement, and where necessary approved by the 
Secretary, shall not count against this cap.
    b. Except as otherwise determined under the Inadvertent Overrun 
and Payback Policy, the Secretary shall deliver Priority 3(a) 
Colorado River water to CVWD in an amount up to but not more than a 
consumptive use amount of 330,000 AFY less the amount of water equal 
to that to be delivered by the Secretary for the benefit of IID, 
MWD, SDCWA, SLR, and Indian and miscellaneous PPRs as set forth in 
Exhibits A and B hereto. Colorado River water acquired by CVWD in 
any transaction to the extent agreed upon prior to or concurrent 
with the execution of this Agreement by IID and MWD and, where 
necessary approved by the Secretary, shall not count against this 
cap.

3. Quantification of Priority 6(a)

    a. Subject to any rights that PVID may have, and except as 
otherwise provided under the Interim Surplus Guidelines, or under 
the agreements contemplated by those guidelines, the Secretary shall 
deliver Priority 6(a) water to MWD, IID and CVWD in the following 
order and consumptive use volumes: (i) 38,000 AFY to MWD; (ii) 
63,000 AFY to IID; and (iii) 119,000 AFY to CVWD, or as those 
parties may agree to occasionally forbear.
    b. Any water not used by MWD, IID or CVWD as set forth above 
will be available to satisfy the next listed amount in Section 3.a. 
above. Any additional water available for Priority 6(a) shall be 
delivered by the Secretary in accordance with IID and CVWD's 
entitlements under their respective Section 5 Contracts in effect as 
of the date of this Agreement.

4. Transfers and Other Water Delivery Commitments

    a. The Secretary shall deliver IID's Priority 3(a) entitlement 
for the benefit of IID and others as specified in Exhibits A and B 
hereto and in the amounts and to the points of delivery set forth 
therein.
    b. The Secretary shall deliver CVWD's Priority 3(a) entitlement 
for the benefit of the CVWD and others as specified in Exhibits A 
and B hereto and in the amounts and to the points of delivery set 
forth therein.
    c. At SDCWA's election, the Secretary shall deliver water made 
available for SDCWA's benefit as set forth in Exhibits A and B 
hereto to the intake facilities for the Colorado River Aqueduct and 
SDCWA may then exchange up to 277,700 AFY of Colorado River water 
with MWD at Lake Havasu.
    d. If in any given calendar year that the use of Colorado River 
water in accordance with Priorities 1 and 2, together with the use 
of Colorado River water on PVID Mesa lands in accordance with 
Priority 3(b), exceeds the consumptive use amount of 420,000 AFY, 
the Secretary will reduce the amount of water otherwise available to 
MWD in Priorities 4, 5 or 6(a) by the amount that such use exceeds 
420,000 AFY. To the extent that the amount of water used in 
accordance with Priorities 1, 2 and 3(b) is less than 420,000 AFY, 
the Secretary shall deliver to MWD the difference.
    e. 1. The Secretary shall deliver to CVWD at Imperial Dam the 
consumptive use amount of 20,000 AFY or such lesser consumptive use 
amount as may be requested by CVWD of Priority 3(a) Colorado River 
water made available to MWD under the Agreement for the 
Implementation of a Water Conservation Program and Use of Conserved 
Water between IID and MWD dated December 22, 1988, as amended.
    2. Beginning in 2048 and in each year thereafter, the Secretary 
shall deliver to CVWD at Imperial Dam the consumptive use amount of 
50,000 AFY or such lesser consumptive use amount as may be requested 
by CVWD from the Colorado River water available to MWD.
    3. When requested by MWD for the purpose of satisfying an 
exchange obligation to CVWD under an agreement between CVWD and MWD 
for exchange of CVWD's State Water Project water, the Secretary 
shall deliver to CVWD at Imperial Dam the consumptive use amount of 
135,000 AFY or such lesser amount as may be requested by MWD.
    f. CVWD may decline to take a portion of the water to be 
conserved by IID for CVWD. In this event, the Secretary shall 
instead deliver such portion of the water to IID or MWD, or to other 
unspecified water users provided, further, that any such delivery to 
an unspecified user is, where necessary, subject to Secretarial 
approval.
    g. Colorado River water will be made available to MWD through 
forbearance under the existing priority system as a result of a 
proposed land management program between PVID landowners and MWD. 
Neither IID nor CVWD will make any claim to or object to delivery to 
MWD of PVID program water to the extent agreed upon prior to or 
concurrent with the execution of this Agreement by IID and CVWD. If 
the transfer of PVID program water is not implemented, then IID has 
agreed to transfer for the benefit of MWD/SDCWA amounts necessary to 
meet the minimum Benchmark Quantities as set forth in Section 5(C) 
of the Interim Surplus Guidelines, not to exceed 145,000 AF in the 
aggregate.
    h. CVWD may utilize Colorado River water outside of Improvement 
District No. 1 to the extent consented to and agreed upon prior to 
or concurrent with the execution of this Agreement by IID and MWD.
    i. Notwithstanding the transfers set forth in this section and 
Exhibit B, IID, CVWD, MWD and SDCWA recognize and agree that at the 
conclusion of the effective period of the Interim Surplus 
Guidelines, they shall have implemented sufficient measures to be 
able to limit total uses of Colorado River water within California 
to 4.4 million AFY, unless the Secretary determines a surplus under 
a 70R strategy.

5. Shortages

    a. The Secretary's authority under II.B.3 of the 1964 Decree in 
Arizona v. California is not limited in any way by this Agreement.
    b. If for any reason there is less than 3.85 million AFY 
available under Priorities 1, 2 and 3 during the term of this 
Agreement, any water which is made available by the Secretary to IID 
and CVWD shall be delivered to IID, CVWD, MWD, and SDCWA in 
accordance with the shortage sharing provisions agreed upon prior to 
or concurrent with the execution of this Agreement by IID, CVWD, MWD 
and SDCWA.

6. Term

    a. This Agreement will become effective upon execution of this 
Agreement by all Parties.
    b. This Agreement will terminate on December 31, 2037, if the 
1998 IID/SDCWA transfer program terminates in that year.
    c. If this Agreement does not terminate on December 31, 2037, 
then this Agreement will terminate on December 31, 2047 unless 
extended by agreement of all parties until December 31, 2077, in 
which case this Agreement will terminate on December 31, 2077.
    d. The Secretary's delivery commitment to the SLR and the 
Districts' recognition and

[[Page 12211]]

acceptance of that delivery commitment, shall not terminate but 
shall instead continue, pursuant to Section 106 of Public Law 100-
675, 102 Stat. 4000 et seq., as amended.

7. Interim Surplus Guidelines

    The Secretary finds that execution of this Agreement constitutes 
``all required actions'' that the relevant California Colorado River 
water contractors are required to undertake pursuant to Section 5(B) 
of the Interim Surplus Guidelines. Accordingly, upon execution of 
this Agreement by all parties, the interim surplus determinations 
under Sections 2(B)(1) and 2(B)(2) of the Interim Surplus Guidelines 
are reinstated.

8. Benchmarks for the State of California's Agricultural Use

    a. The parties to this Agreement agree to carry out the 
transfers identified in Section 4 above and in Exhibit A hereto in 
accordance with the schedule set forth in Exhibit B hereto. Nothing 
in this Agreement authorizes or precludes carrying out the transfers 
on a timetable sooner than provided in the schedule set forth in 
Exhibit B hereto. The transfers in the schedule set forth in Exhibit 
B hereto are undertaken to allow California agricultural usage (by 
PVID, Yuma Project Reservation Division, IID, and CVWD) plus 14,500 
af of PPR use to be at or below the Benchmark Quantities as set 
forth in Section 5(C) of the Interim Surplus Guidelines. Nothing in 
this Agreement authorizes or precludes additional transfers of 
Colorado River water as agreed upon prior to or concurrent with the 
execution of this Agreement by the Districts to meet the Benchmark 
Quantities as set forth in Section 5(C) of the Interim Surplus 
Guidelines. All determinations by the Secretary with respect to this 
section shall be based upon Decree Accounting. Repayment of overrun 
amounts shall not count toward compliance with the transfers in the 
schedule set forth in Exhibit B hereto or toward compliance with the 
Benchmark Quantities set forth in Section 5(C) of the Interim 
Surplus Guidelines.
    b. In the event that (i) the transfers are carried out as set 
forth in the schedule in Exhibit B hereto or additional Colorado 
River transfers as agreed upon prior to or concurrent with the 
execution of this Agreement by the Districts are carried out and 
(ii) California's Agricultural usage plus 14,500 af of PPR use is at 
or below the Benchmark Quantities as set forth in Section 5(C) of 
the Interim Surplus Guidelines, the provisions of this subparagraph 
shall apply.
    1. Notwithstanding the provisions of the November 22, 2002 
Supplement to the 2002 Annual Operating Plan, any existing overruns 
in calendar years 2001 and 2002 by parties to this Agreement must be 
repaid within an eight-year period beginning in calendar year 2004 
in accordance with the schedule attached in Exhibit C hereto, except 
that in the event that any Annual Operating Plan 24-Month Study 
indicates that a shortage will occur within months 13 through 24, 
any remaining balance of the 2001 and 2002 overruns shall be fully 
repaid during the next calendar year. Repayment of any overruns 
other than from calendar years 2001 and 2002 shall be pursuant to 
the Inadvertent Overrun and Payback Policy identified in Section 9 
below.
    2. The Secretary has considered the quantification of Priority 
3(a) as set forth in Section 2 of this Agreement and the water 
transfers set forth in the schedule in Exhibit B hereto. These water 
transfers were developed to assist the Districts and SDCWA to meet 
the provisions of Section 4(i) of this Agreement and to reduce the 
occurrence of future reasonable and beneficial use reviews under 43 
CFR Pt. 417 to unique circumstances. These water transfers are based 
upon water conservation activities to be implemented over the term 
of this Agreement. For these reasons, the Secretary does not 
anticipate any further review of the reasonable and beneficial use 
of Colorado River water by IID pursuant to the annual 43 CFR Pt. 417 
reviews that are conducted during the initial term of this Agreement 
as set forth in Section 6.b. (December 31, 2037). Should the 
Secretary engage in any further review of the reasonable and 
beneficial use of Colorado River water by IID pursuant to 43 CFR Pt. 
417 under this Section, the Secretary will base her decision on (i) 
the purpose of the quantification of Priority 3(a) and the 
reductions and transfers set forth on Exhibit B hereto, and (ii) the 
implementation of the water transfers by IID as set forth in the 
schedule in Exhibit B, in addition to the consideration of the 
factors in 43 CFR 417.3
    c. Notwithstanding any other provision of this Agreement, and in 
addition to any applicable provisions of the Interim Surplus 
Guidelines, in the event that either (i) the transfers are not 
carried out as set forth in Exhibit B hereto or additional Colorado 
River transfers as agreed upon prior to or concurrent with the 
execution of this Agreement by the Districts are not carried out, or 
(ii) California's Agricultural usage plus 14,500 af of PPR use is 
above the Benchmark Quantities as set forth in Section 5(C) of the 
Interim Surplus Guidelines, the provisions of this subparagraph 
shall apply.
    1. For each District that has not implemented the water 
transfers to which it is a party upon the agreed upon schedule as 
set forth in Exhibit B hereto, the Inadvertent Overrun and Payback 
Policy identified in Section 9 below will be immediately suspended. 
During suspension of the Inadvertent Overrun and Payback Policy, for 
previously incurred overruns, the payback period shall be as 
provided in the existing Inadvertent Overrun and Payback Policy were 
such Policy not suspended. The Inadvertent Overrun and Payback 
Policy will be reinstated at such time as a District has implemented 
the water transfers to which it is a party upon the agreed upon 
schedule as set forth in Exhibit B hereto.
    2. Any remaining existing overruns from calendar years 2001 and 
2002 by parties to this Agreement must be repaid within a three-year 
period.
    3. In addition to any applicable provisions of the Interim 
Surplus Guidelines, in the event that the transfers are not 
implemented in accordance with Column 23 in Exhibit B hereto, MWD 
shall not place any order to the Secretary for any Colorado River 
water otherwise available pursuant to sections 2(B)(1) and 2(B)(2) 
as set forth in the Interim Surplus Guidelines.
    4. The Secretary anticipates that a further review of the 
reasonable and beneficial use of Colorado River water by the 
Districts will be required pursuant to the annual 43 CFR Pt. 417 
reviews that are conducted during the initial term of this Agreement 
as set forth in Section 6.b. (December 31, 2037). In any such 
review, the Secretary will base her decision on the factors set 
forth in Section 8.b.2 above as well as the basis for any District's 
non-implementation of the transfers set forth in Exhibit B hereto, 
in addition to the consideration of the factors in 43 CFR 417.3.

9. Inadvertent Overrun and Payback Policy

    For so long as the provisions of Section 8.b of this Agreement 
are applied, the Secretary will not materially modify the 
Inadvertent Overrun and Payback Policy for a 30-year period, absent 
extraordinary circumstances such as significant Colorado River 
infrastructure failures, and subject to the provisions of Section 5 
of this Agreement. In the event that extraordinary circumstances 
arise, the Secretary will consult with the Districts and other 
interested parties before initiating any material change.

10. Additional Provisions

    a. Imperial Irrigation District v. United States of America, et 
al., CV 0069W (JFS) (D. Cal. filed January 10, 2003) (JFS), is 
dismissed pursuant to Stipulation under Fed. R. Civ. P. 41(a)(1). 
Nothing in this Agreement shall affect the preclusive and non-
preclusive effects of the Stipulation during the term of this 
Agreement and thereafter.
    b. Upon dismissal of Imperial Irrigation District v. United 
States, et al., as provided in subsection 10(a) above, the Secretary 
will irrevocably terminate the de novo ``Recommendations and 
Determinations Authorized by 43 CFR Pt. 417, Imperial Irrigation 
District'' for 2003, and IID's water order for 2003 is approved 
subject to the terms of this Agreement.
    c. 1. IID, CVWD, MWD, and SDCWA do not agree on the nature or 
scope of rights to the delivery, use or transfer of Colorado River 
water within the State of California. Furthermore, the Districts and 
SDCWA agree not to use this Agreement or any provision hereof, as 
precedence for purposes of evidence, negotiation or agreement on any 
issue of California or federal law in any administrative, judicial 
or legislative proceeding, including without limitation, any attempt 
by IID and SDCWA to obtain further approval of any water 
transaction.
    2. The terms of this Agreement do not control or apply to the 
nature or scope of rights to the delivery, use or transfer of 
Colorado River water within the State of California, except as those 
rights are defined and addressed in this Agreement during the term 
hereof.
    3. By executing this Agreement, the Districts and SDCWA are not 
estopped from asserting in any administrative, judicial or 
legislative proceeding, including those involving the United States, 
that neither this Agreement nor any of its terms was necessary or 
required to effectuate the transactions contemplated herein.

[[Page 12212]]

    4. Nothing herein waives the ability of any party to challenge 
the exercise of particular miscellaneous and Indian PPRs.
    d. This Agreement shall not be deemed to be a new or amended 
contract for the purpose of Section 203(a) of the Reclamation Reform 
Act of 1982 (Public Law 97-293, 93 Stat. 1263).
    e. This Agreement does not (i) Guarantee or assure any water 
user a firm supply for any specified period, (ii) change or expand 
existing authorities under applicable federal law, except as 
specifically provided herein with respect to the Districts, (iii) 
address interstate distribution of water; (iv) change the 
apportionments made for use within individual States, (v) affect any 
right under the California Limitation Act (Act of March 4, 1929; Ch. 
16, 48th Sess.), or any other provision of applicable federal law.
    f. This Agreement is not intended nor shall it be construed to 
create any third party beneficiary rights to enforce the terms of 
this Agreement in any person or entity that is not a party.
    g. Each party to this Agreement represents that the person 
executing this Agreement on behalf of such party has full power and 
authority to do so, and that his/her signature is legally sufficient 
to bind the party on whose behalf he/she is signing.
    h. This Agreement shall remain in full force and effect 
according to its terms regardless of whether the Interim Surplus 
Guidelines are in effect or terminated.
    i. This Agreement with the United States is subject to and 
controlled by the Colorado River Compact of 1922.
Signatures by: United States Secretary of the Interior, Coachella 
Valley Water District, Imperial Irrigation District, The 
Metropolitan Water District of Southern California, and San Diego 
County Water Authority.
    Exhibit A: Delivery of Priority 3(a) consumptive use entitlement 
to the Imperial Irrigation District and the Coachella Valley Water 
District

Imperial Irrigation District

    The Secretary of the Interior shall deliver Imperial Irrigation 
District's Priority 3(a) consumptive use entitlement under this 
Colorado River Water Delivery Agreement, pursuant to this Exhibit A 
and Exhibit B hereto as follows:

----------------------------------------------------------------------------------------------------------------
          Delivered to (entity)              At (point of diversion)     Amount not to exceed (AF)      Notes
----------------------------------------------------------------------------------------------------------------
CVWD.....................................  Imperial Dam...............  103,000....................
MWD......................................  Lake Havasu................  110,000....................            1
SDCWA....................................  Lake Havasu................  56,200.....................            2
SDCWA....................................  Lake Havasu................  200,000....................            3
SLR......................................  see note 4.................  see note 4.................            4
Misc. & Indian PPRs......................  Current points of delivery.  11,500.....................            5
For benefit of MWD/SDCWA.................  Lake Havasu................  145,000....................            6
IID......................................  Imperial Dam...............  Remainder..................  ...........
IID's Priority 3(a) Total................  ...........................  3,100,000..................  ...........
----------------------------------------------------------------------------------------------------------------
Notes to Exhibit A, Imperial Irrigation District:
1. Agreement for the Implementation of a Water Conservation Program and Use of Conserved Water, dated December
  22, 1988; Approval Agreement, dated December 19, 1989. Of amount identified: up to 90,000 af to MWD and 20,000
  af to CVWD.
2. Water conserved from the construction of a new lined canal parallel to the All-American Canal from Pilot Knob
  to Drop 3.
3. Agreement for Transfer of Conserved Water, dated April 29, 1998, as amended. As set forth in Exhibit B,
  delivery amounts shall be 205,000 AF in calendar year 2021 and 202,500 AF in calendar year 2022.
4. Water conserved from All-American Canal lining project and made available for benefit of San Luis Rey
  Settlement Parties under applicable provisions of Pub. L. 100-675, as amended. Quantity may vary, not to
  exceed 16,000 afy, as may the point of diversion, subject to the terms of the Allocation Agreement.
5. Water to be delivered to miscellaneous and Indian PPRs identified in the Decree in Arizona v. California, as
  supplemented. The delivery of water will be to current points of delivery unless modified in accordance with
  applicable law.
6. As provided in subsection 4(g) of this Agreement.

Coachella Valley Water District

    The Secretary of the Interior shall deliver Coachella Valley 
Water District's Priority 3(a) consumptive use entitlement under 
this Colorado River Water Delivery Agreement pursuant to this 
Exhibit A and Exhibit B hereto as follows:

----------------------------------------------------------------------------------------------------------------
           Delivery to (entity)              At (point of diversion)     Amount not to exceed (AF)      Notes
----------------------------------------------------------------------------------------------------------------
SLR......................................  see note 1.................  see note 1.................            1
SDCWA....................................  Lake Havasu................  21,500.....................            2
Misc. & Indian PPR.......................  Current points of delivery.  3,000......................            3
CVWD.....................................  Imperial Dam...............  Remainder..................  ...........
Coachella Valley Water District's          ...........................  330,000....................  ...........
 Priority 3(a) Total.
----------------------------------------------------------------------------------------------------------------
Notes to Exhibit A, Coachella Valley Water District:
1. Water conserved from Coachella Canal lining project and made available for benefit of San Luis Rey Settlement
  Parties under applicable provisions of Pub. L. No. 100-675, as amended. Quantity may vary, not to exceed
  16,000 afy, as may the point of diversion, subject to the terms of the Allocation Agreement.
2. Water conserved from lining the unlined portion of the Coachella Canal.
3. Water to be delivered to miscellaneous and Indian PPRs identified in the Decree in Arizona v. California, as
  supplemented. The delivery of water will be to current points of delivery unless modified in accordance with
  applicable law.

BILLING CODE 4310-MN-P

[[Page 12213]]

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[[Page 12214]]


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[[Page 12215]]


BILLING CODE 4310-MN-C
    Notes to Exhibit B:
    1. Exhibit B is independent of increases and reductions as 
allowed under the Inadvertent Overrun and Payback Policy.
    2. Any higher use covered by MWD, any lesser use will produce 
water for MWD and help satisfy ISG Benchmarks and Annual Targets.
    3. IID/MWD 1988 Conservation Program conserves up to 110,000 AFY 
and the amount is based upon periodic verification. Of amount 
conserved, up to 20,000 AFY to CVWD (column 19), which does not 
count toward ISG Benchmarks and Annual Targets, and remainder to 
MWD.
    4. Ramp-up amounts may vary based upon construction progress, 
and final amounts will be determined by the Secretary pursuant to 
the Allocation Agreement.
    5. Any amount identified in Exhibit B for mitigation purposes 
will only be from non-Colorado River sources and these amounts may 
be provided by exchange for Colorado River water.
    6. Water would be transferred to MWD subject to satisfaction of 
certain conditions and to appropriate federal approvals. For 
informational purposes only, these transfers may also be subject to 
state approvals. Schedules are subject to adjustments with mutual 
consent. After 2006, these quantities will count toward the ISG 
Benchmarks (column 22) and Annual Targets (column 23) only if and to 
the extent that water is transferred into the Colorado River 
Aqueduct for use by MWD and/or SDCWA.
    7. MWD can acquire if CVWD declines the water. Any water 
obtained by MWD will be counted as additional agricultural reduction 
to help satisfy the ISG Benchmarks and Annual Targets. MWD will 
provide CVWD 50,000 AFY of the 100,000 AFY starting in year 46.
    8. IID has agreed to provide transfer amounts to meet the 
minimum ISG benchmarks, not to exceed a cumulative total of 145,000 
AF. Maximum transfer amounts are 25,000 AF in 2006, 50,000 AF plus 
the unused amount from 2006 in 2009, and 70,000 AF plus the unused 
amounts from 2006 and 2009 in 2012. In addition to the maximum 
transfer amounts IID has also committed that no more than 72,500 AF 
of reduced inflow to the Salton Sea would result from these 
additional transfers.
    9. Up to the amount shown, as agreed upon reduction to IID or 
CVWD to cover collectively the sum of individual Miscellaneous PPRs, 
federal reserved rights and decreed rights. This is a reduction that 
counts towards ISG Benchmarks and Annual Targets.
    10. For purposes of Subparagraph 8(b)(2)(i) and (ii) and 8(c)(1) 
and (4) the Secretary will take into account: (i) the satisfaction 
of necessary conditions to certain transfers (columns 7 and 9) not 
within IID's control; (ii) the amounts of conserved water as 
determined, where such amounts may vary (columns 4, 6, 9 and 10); 
and (iii) with respect to column 7, reductions by IID will be 
considered in determining IID's compliance regardless of whether the 
conserved water is diverted into the Colorado River Aqueduct.
    11. For purposes of Subparagraph 8(c)(1) and (4) the Secretary 
will take into account: (i) The satisfaction of necessary conditions 
to certain transfers (columns 15 and 16) not within CVWD's control; 
and (ii) the amounts of conserved water as determined, where such 
amounts may vary (column 15).
    12. All consumptive use of priorities 1 through 3 plus 14,500 AF 
of PPRs must be within 25,000 AF of the amount stated.
    13. Assumes SDCWA does not elect termination in year 35.
    14. Assumes SDCWA and IID mutually consent to renewal term of 30 
years.

    Notes:  Substitute transfers can be made provided the total 
volume of water to be transferred remains equal or greater than 
amounts shown consistent with applicable federal approvals.
    The italicized columns (4, 6, 9, 10, 15 and 19) represent 
amounts of water that may vary.


                    Exhibit C.--Payback Schedule of Overruns for Calendar Years 2001 and 2002
----------------------------------------------------------------------------------------------------------------
                            Year                                  IID          CVWD         MWD         Total
----------------------------------------------------------------------------------------------------------------
2004........................................................       18,900        9,100       11,000       39,000
2005........................................................       18,900        9,100       11,000       39,000
2006........................................................       18,900        9,100       11,100       39,100
2007........................................................       18,900        9,100       11,100       39,100
2008........................................................       18,900        9,200       11,100       39,200
2009........................................................       18,900        9,200       11,100       39,200
2010........................................................       19,000        9,200       11,100       39,300
2011........................................................       19,000        9,200       11,100       39,300
Cumulative..................................................      151,400       73,200       88,600     313,200
----------------------------------------------------------------------------------------------------------------
Note to Exhibit C: Each district may, at its own discretion, elect to accelerate paybacks to retire its payback
  obligation before the end of the eight-year period ending in calendar year 2011. Each district's payback
  obligation is subject to acceleration in anticipation of a shortage in the Lower Colorado River Basin as
  provided for in section 8(b).


[FR Doc. 04-5401 Filed 3-12-04; 8:45 am]
BILLING CODE 4310-MN-P