[Federal Register Volume 73, Number 235 (Friday, December 5, 2008)]
[Rules and Regulations]
[Pages 74031-74039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-28738]


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DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

43 CFR Part 419

RIN 1006-AA48


Truckee River Operating Agreement

AGENCY: Bureau of Reclamation, Interior.

ACTION: Final rule.

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SUMMARY: The Bureau of Reclamation is publishing this rule to comply 
with the requirements of the Truckee-Carson-Pyramid Lake Water Rights 
Settlement Act. The Settlement Act requires that the operating 
agreement negotiated with the States of California and Nevada for the 
operation of Truckee River Reservoirs (the five Federal reservoirs in 
the Truckee River basin) be promulgated as a Federal Regulation.

DATES: This rule is effective January 5, 2009. The Truckee River 
Operating Agreement provides that it cannot be implemented until the 
last of the conditions set forth in Sections 12.A.4(a) through 
12.A.4(g) is satisfied. The incorporation by reference of certain 
publications listed in this rule is approved by the Director of the 
Federal Register as of January 5, 2009.

FOR FURTHER INFORMATION CONTACT: Kenneth Parr, Bureau of Reclamation, 
705 N. Plaza St., Carson City, NV 89701; telephone (775) 882-3436; or 
for a copy of TROA, visit the TROA Web site at http://www.usbr.gov/mp/troa/.

SUPPLEMENTARY INFORMATION: 

I. Background

    Section 205(a) of the Truckee-Carson-Pyramid Lake Water Rights 
Settlement Act, title II of Public Law 101-618, November 16, 1990 
(Settlement Act), directs the Secretary (Secretary) of the Department 
of the Interior (Interior) to negotiate an operating agreement that 
must:
     Satisfy all applicable dam safety and flood control 
requirements;
     Provide for the enhancement of spawning flows available in 
the Lower

[[Page 74032]]

Truckee River for the Pyramid Lake fishery (endangered cui-ui and 
threatened Lahontan cutthroat trout [LCT]) in a manner consistent with 
the Secretary's responsibilities under the Endangered Species Act, as 
amended (ESA);
     Carry out the terms, conditions, and contingencies of the 
Preliminary Settlement Agreement between the Pyramid Lake Paiute Tribe 
(Pyramid Tribe) and Sierra Pacific Power Company (Power Company), as 
modified by the Ratification Agreement of the United States (PSA);
     Ensure that water is stored in and released from Truckee 
River Reservoirs to satisfy the exercise of water rights in conformance 
with the Orr Ditch and Truckee River General Electric (TRGE) decrees, 
except for any rights voluntarily relinquished by the parties to the 
operating agreement; and
     Minimize the Secretary's costs associated with operation 
and maintenance of Stampede Reservoir.
    The Settlement Act further provides that the following may be 
addressed in the operating agreement:
     Administration of the operating agreement;
     Means of assuring compliance with PSA;
     Operations of Truckee River system that will not change;
     Operations and procedures for using Federal facilities to 
meet the Secretary's responsibilities under ESA;
     Methods of reducing the likelihood that Lake Tahoe will 
drop below its natural rim and improving the efficient use of Lake 
Tahoe during extreme drought situations;
     Procedures for managing and operating Truckee River 
Reservoirs;
     Procedures for operating Truckee River Reservoirs for 
instream beneficial uses;
     Operation of other reservoirs in the Truckee River basin 
to the extent owners of affected storage rights become parties to the 
operating agreement; and
     Procedures and criteria for implementing California's 
allocation of Truckee River water.
    The Truckee River Operating Agreement (TROA) was signed by all 
signatory parties on September 6, 2008. TROA, among other things, will: 
(1) Enhance conditions for threatened and endangered fishes in the 
Truckee River and its tributaries; (2) increase municipal and 
industrial (M&I) water supplies to provide drought protection for the 
Truckee Meadows (the Cities of Reno and Sparks, Nevada, metropolitan 
area); (3) improve river water quality downstream from the City of 
Sparks and Derby Dam; (4) enhance stream flows and recreational 
opportunities in the Truckee River basin; and (5) provide procedures 
for implementing the interstate allocation of Lake Tahoe basin and 
Truckee River basin waters between Nevada and California. While the 
Settlement Act also confirms the allocation of the waters of the Carson 
River and its tributaries between California and Nevada represented by 
the Alpine Decree, TROA does not affect the Carson River.
    Section 205(a)(9) of the Settlement Act requires the Secretary to 
satisfy the requirements of the National Environmental Policy Act 
(NEPA). Because the State of California is a mandatory signatory party, 
it is also necessary to comply with the California Environmental 
Quality Act (CEQA). Consequently, Interior and the California 
Department of Water Resources jointly prepared an Environmental Impact 
Statement/Environmental Impact Report (EIS/EIR). The final EIS/EIR 
concludes that TROA will:
     Provide better conditions for threatened LCT and 
endangered cui-ui in many reaches of the Truckee River and its 
tributaries;
     Provide greater potential for enhancing riparian 
vegetation along some reaches of the Truckee River in median hydrologic 
conditions and along all mainstem and tributary reaches under dry and 
extremely dry hydrologic conditions; and
     Enhance riparian habitat along some mainstem and tributary 
reaches under wet and median hydrologic conditions and along most 
mainstem reaches in dry and extremely dry hydrologic conditions.
    Section 205(a)(9) also provides that the Secretary may not become a 
party to TROA if the Secretary determines that the effects of TROA, 
together with cumulative effects, are likely to jeopardize the 
continued existence of any threatened or endangered species or be 
adverse to designated critical habitat of such species. The final EIS/
EIR concludes that implementation of TROA will not adversely affect LCT 
or cui-ui, but in fact is likely to benefit both species. The U.S. Fish 
and Wildlife Service has concurred in that determination through the 
consultation process required by Section 7 of the Endangered Species 
Act of 1973, as amended, 16 U.S.C. 1531 et seq.
    Since TROA is the result of negotiations and agreement among at 
least the five mandatory signatory parties and must be promulgated as a 
Federal regulation, this rule incorporates by reference the signed 
agreement exactly as negotiated.

II. Overview of Rule

    The main provisions of TROA were summarized in the Notice of 
Proposed Rulemaking, published in the Federal Register on September 15, 
2008 (73 FR 53180). TROA, which constitutes the rule, is incorporated 
by reference. It provides the framework, rules, and procedures for the 
operation of Truckee River Reservoirs, Independence Lake, and Donner 
Lake (to the extent Donner Lake is made available), and for management 
of flows in the Truckee River with more flexibility than is available 
under current operations. It also provides for implementation of the 
interstate allocation of waters of the Lake Tahoe and Truckee River 
basins between California and Nevada, as provided in Sections 204 and 
210(a)(2) of the Settlement Act. The maintenance of Floriston Rates and 
Reduced Floriston Rates (prescribed rates of flow in the Truckee River 
at the California-Nevada State border) is the basic foundation of TROA.
    TROA retains most current procedures and management authorities for 
operating Truckee River Reservoirs, including maintaining the storage 
priorities for project water (water associated with the license or 
permit for a particular reservoir) and water dedicated to maintenance 
of Floriston Rates. Applicable flood control and safety of dams 
requirements will continue to be in effect. Truckee River Reservoirs 
will continue to be operated to satisfy the exercise of water rights in 
conformance with the decrees entered in United States v. Orr Water 
Ditch Company, et al., In Equity No. A3, Case No. 73-cv-00003 (D. Nev. 
1944) and United States v. Truckee River General Electric Co., No. 
14861 (N.D. Cal. 1915) now designated Case No. 68-cv-643 (E.D. Cal.), 
except for any water rights that are voluntarily relinquished by any 
persons or transferred under State law. The Federal Water Master will 
continue to assure that Truckee River operations satisfy the exercise 
of water rights recognized by the Orr Ditch Decree.

 III. Comments on the Proposed Rule

    Fourteen comment letters were received from the public during the 
comment period. Eleven letters expressed support for TROA, and three 
letters opposed TROA. Letters in support were received from the City of 
Fernley, City of Reno, City of Sparks, Washoe County, Truckee Meadows 
Water Authority (Water Authority) (two letters), Pyramid Lake Paiute 
Tribe, Fallon Paiute-Shoshone Tribe, State of California, State of 
Nevada, and Senator Harry Reid of Nevada. These letters of

[[Page 74033]]

support generally encouraged the expeditious implementation of TROA and 
required no response.
    Letters in opposition were received from the City of Fallon, 
Churchill County, and Truckee-Carson Irrigation District (TCID).
    No change was made to the rule as a result of the comments as 
compared to the previously proposed rule.
    Comments are addressed by subject; related comments have been 
combined. A response follows each comment.
    Comment: The Fallon Paiute-Shoshone Tribe wishes to become a 
signatory party to TROA.
    Response: The Fallon Paiute-Shoshone Tribe may become a signatory 
party to TROA as provided in Section 14.E of TROA with the prior 
unanimous consent of the mandatory signatory parties to TROA. Mandatory 
signatory parties are the United States, State of California, State of 
Nevada, Pyramid Tribe, and Water Authority.
    Comment: TROA is incomprehensible, partly because Churchill County 
did not participate in negotiations.
    Response: All TROA negotiation plenary sessions and most working 
group and committee meetings were open to any interested persons. If 
Churchill County was not represented at any TROA sessions or meetings, 
it was because it chose not to participate.
    Comment: Newlands Project water right owners have had no role in 
the complex and lengthy negotiation process. TROA does not include 
these entities as signatories.
    Response: Consistent with Section 205(a)(1) of the Settlement Act, 
the TROA negotiations were open to all parties who expressed an 
interest in participating and becoming a signatory party to TROA. To 
the extent the Newlands Project water right holders, TCID, Churchill 
County, and City of Fallon were not represented at TROA sessions or 
meetings, it was because they chose not to participate.
    Comment: TROA negotiation meetings were not conducted under the 
auspices of the Federal Advisory Committee Act (FACA).
    Response: The United States has complied with all applicable laws, 
including the Settlement Act, in negotiating TROA.
    Comment: The potential of replacing the Water Master with the 
Administrator who is appointed based on the preference of the TROA 
signatories interferes with the Orr Ditch court's authority and 
violates the separation of powers doctrine.
    Response: The TROA Administrator will not replace the Federal Water 
Master. The Federal Water Master position will still exist and is 
different from the TROA Administrator position. The same person will 
serve as both the Federal Water Master and the TROA Administrator. 
Section 2.A of TROA provides that the Federal Water Master in office on 
the date TROA enters into effect will be the first Administrator. When 
there is a vacancy, the TROA parties nominate replacement candidates 
for consideration by the Orr Ditch court. The Orr Ditch court 
ultimately appoints the Administrator.
    TROA keeps the powers of the Federal Water Master and Administrator 
separate. According to TROA Section 1.C.1, the Federal Water Master 
under the Orr Ditch Decree will retain full authority to ensure that 
Orr Ditch Decree water rights are fully enforced, while TROA Section 
2.A.1 states the Administrator will be responsible for carrying out the 
terms and conditions of TROA.
    Comment: Under TROA Section 2.B.2(a), the Special Hearing Officer 
is appointed by a four-member appointing committee comprised of one 
representative appointed by each of the Sovereign Parties. These 
provisions grant entirely too much decision-making power related to the 
management of the Truckee River to the TROA signatories.
    Response: Parties not signatory to TROA are not constrained by 
proceedings before the Special Hearing Officer and will retain access 
to the remedies that are currently available. Disputes under the 
authorities of the Orr Ditch Decree and TROA would be considered 
separately. TROA Section 2.B.1 states, ``[d]isputes arising under the 
Orr Ditch Decree shall remain subject to the jurisdiction of the Orr 
Ditch court and the Federal Water Master.'' Disputes arising under TROA 
would be submitted to the Truckee River Special Hearing Officer 
pursuant to TROA Section 2.B.2.
    Comment: TROA or its associated documents do not set forth any 
factual scenarios that attempt to describe how TROA works.
    Response: Selected TROA operational scenarios were presented in 
Exhibit 16 of the Water Resource Appendix of the final EIS/EIR.
    Comment: The computer model used for TROA is not understandable, 
was never fully explained, and is flawed in various aspects that make 
it inappropriate to use to support the TROA ``management scheme.''
    Response: The Truckee River Operations Model was explained in 
detail in the NEPA/CEQA process for TROA, including the revised draft 
and final EIS/EIR. In response to numerous comments on the model, the 
section in chapter 3, ``Use of the Truckee River Operations Model,'' 
was greatly expanded in the final EIS/EIR to further explain 
development and limitations of the operations model, as well as its use 
as a comparative tool in the negotiations and EIS/EIR process.
    In the development and analysis of TROA, the negotiating parties 
relied on their respective goals and objectives for TROA; professional 
judgment of their respective staffs; professional judgment of 
experienced Truckee River system water managers; the historic 
hydrograph and other records for the system; and the results produced 
by use of the operations model with consideration of its recognized 
limitations.
    No comment on the model was received following publication of the 
final EIS/EIR.
    Comment: TROA cannot supersede the Truckee River Agreement (TRA) 
without agreement of TCID, and it is presumptuous to discard TRA in 
favor of a ``management scheme'' that benefits only certain entities. 
TROA violates many provisions of TRA, which is incorporated into the 
Orr Ditch Decree; thus, TROA violates the Orr Ditch Decree.
    Response: The Congress, in Section 205(a)(1) of the Settlement Act, 
directed the Secretary to negotiate an agreement for the operation of 
Truckee River Reservoirs that includes the required provisions set 
forth in Section 205(a)(2) of the Settlement Act. The Settlement Act 
requires the Secretary, the State of Nevada, and the State of 
California, in consultation with other parties, to negotiate an 
operating agreement to carry out the terms of the PSA between Power 
Company (now Water Authority) and the Pyramid Tribe, and that the 
Secretary promulgate the operating agreement as the exclusive Federal 
regulation governing the operation of Truckee River Reservoirs.
    Further, Section 205(a)(4) of the Settlement Act requires that TROA 
be submitted to the Orr Ditch and TRGE courts for approval of any 
necessary modifications to the Orr Ditch Decree (which incorporates 
TRA) and the TRGE Decree. Section 205(a)(2)(D) of the Settlement Act 
directs that, under TROA, Truckee River Reservoirs are to be operated 
to ``ensure that water is stored in and released from [those 
reservoirs] to satisfy the exercise of water rights [including those 
for the Newlands Project] in conformance with the Orr Ditch Decree and 
[TRGE] Decree * * *'' The provisions of TROA have been negotiated to 
satisfy the statutory requirements.

[[Page 74034]]

    No interested and potentially affected entity was excluded from 
TROA negotiations or prevented from being a signatory to TROA.
    Comment: Any unused water in the Truckee River is to inure to the 
benefit of the Washoe County Water Conservation District (Conservation 
District) and TCID. Attempts to alter the division of unused water are 
in violation of TRA and undermine the Orr Ditch Decree.
    Response: As to TCID, the amount of Truckee River water which can 
be diverted to the Newlands Project is governed by the Operating 
Criteria and Procedures for the Newlands Project (OCAP), not by TROA. 
The Conservation District is a signatory to TROA.
    Comment: The parties to TRA agreed that saved water would flow in 
the river and that 31 percent of this diverted flow would be available 
for TCID to divert and place to beneficial use. TROA makes no provision 
for this term in TRA.
    Response: The Ninth Circuit Court of Appeals held that the TRA's 
diverted flow provisions did not confer any water rights on the TCID, 
but instead that ``TCID's rights were strictly managerial.'' Truckee 
Carson Irrigation District v. Secretary of Interior, 742 F.2d 527, 531 
(1984).
    Comment: The resolution of unappropriated water as required in the 
Settlement Act and TROA has not occurred, and unappropriated water 
cannot be managed as envisioned under TROA.
    Response: TROA parties recognize the concerns expressed in this 
comment. Settlement Act Section 210(a)(2)(B) and TROA Section 12.A.4 
expressly provide that TROA will not go into effect until the 
unappropriated water issue is finally resolved in a manner satisfactory 
to the State of Nevada and the Pyramid Tribe.
    Comment: No transportation losses are assigned to credit waters, 
elevating these waters above other decreed water rights with clearly 
higher priority.
    Response: TROA Section 5.E.1 specifies that conveyance losses shall 
be calculated by the Administrator. Section 5.E.2 provides that when 
project water or credit water is released, conveyance loss shall be 
allocated to each release using the proportion that each category of 
water in each stream reach bears to the total flow in each stream 
reach. In determining conveyance losses, the Administrator must comply 
with Section 205(a)(2) of the Settlement Act, which requires TROA to 
satisfy the exercise of Orr Ditch Decree water rights, including 
Newlands Project water rights, but excludes those that are voluntarily 
relinquished or transferred under State law. Credit water operations 
would not affect this requirement.
    Comment: Donner Lake water cannot be used for TROA purposes.
    Response: The TROA parties in TROA Section 1.C.5 recognize the 
ongoing dispute between TCID and Water Authority over their respective 
ownership interests in and use of Donner Lake water and that the water 
will be used to the extent it is available.
    Comment: Under what authority can Privately Owned Stored Water 
(POSW) owned by TCID be used to meet the increased minimum releases 
specified in TROA?
    Response: Minimum releases from Donner Lake under TROA are made 
pursuant to the Donner Lake Indenture. Under TROA, TCID's POSW in 
Donner Lake may only be used for enhanced minimum releases with the 
approval of TCID.
    Comment: Newlands Project water right owners do not appear to 
benefit from Newlands Project Credit Water (NPCW) as described in TROA, 
and the NPCW provisions are contrary to the water rights of such 
owners.
    Response: The concept of NPCW is neither intended to benefit nor 
adversely affect the Newlands Project. NPCW provisions are predicated 
on the authority in OCAP (referred to in TROA as Truckee Canal 
Diversion Criteria) to ensure, to the extent possible, that the water 
supply for the Carson Division stored in Lahontan Reservoir meets but 
does not exceed Lahontan Reservoir storage targets. (See Newlands 
Project Credit Water in chapter 2 of the final EIS/EIR, TROA Section 
7.H, and TROA Appendix 7.D.) The model analysis for NPCW in the final 
EIS/EIR incorporates operations that are consistent with both OCAP and 
TROA.
    Comment: There may not be sufficient room to accommodate all of the 
entities seeking credit water storage.
    Response: The priorities for accumulating, exchanging, releasing, 
and spilling credit water categories as well as the amounts of each 
category were negotiated by the TROA parties and based in part on 
provisions of PSA. TROA parties recognize that all categories of credit 
water may not simultaneously be in storage or that the amount of credit 
water stored may be limited by hydrologic conditions.
    Comment: TROA provisions regarding credit water and Floriston Rates 
would impair Orr Ditch Decree water rights in the Newlands Project.
    Response: As required in Section 205(a)(2)(D) of the Settlement 
Act, operation of Truckee River Reservoirs under TROA must satisfy the 
exercise of water rights in conformance with the Orr Ditch Decree, 
meaning that Newlands Project water rights will not be impaired by 
TROA. Water that may previously have been available for diversion to 
the Newlands Project may no longer be available under TROA because 
senior upstream water right owners can more efficiently and fully 
exercise their water rights. TROA also complies with Section 210(b)(13) 
of the Settlement Act, which expressly recognizes the authority of the 
Orr Ditch court ``to ensure that the owners of vested and perfected 
Truckee River water rights receive the amount of water to which they 
are entitled under the Orr Ditch decree or the Alpine decree.'' TROA 
protects Orr Ditch Decree water rights, including the water which may 
be legally diverted at Derby Diversion Dam pursuant to the Orr Ditch 
Decree and Newlands Project OCAP.
    Comment: The provisions of TROA are contrary to Nevada water code 
and supplant the authority of the State Engineer to review and approve 
changes to existing water rights.
    Response: TROA does not supplant the authority of either the Nevada 
State Engineer or the California State Water Resources Control Board to 
review and approve changes to existing water rights that will be 
managed in accordance with the provisions of TROA.
    Comment: TROA Section 5.E.1 specifies conveyance losses shall be 
calculated by the Administrator using procedures developed by the 
Administrator. This is a clear violation of Nevada Revised Statutes 
Section 533.055 and directly interferes with the authority of the State 
Engineer.
    Response: Section 210(b)(12) of the Settlement Act states: 
``Nothing in this title is intended to abrogate the jurisdiction of or 
required approvals by the Nevada State Engineer or the California State 
Water Resources Control Board.'' TROA will be implemented in accordance 
with procedures of the State Engineer for determining conveyance 
losses.
    Comment: It is not clear that TROA benefits cui-ui or LCT; cui-ui 
is better off without TROA.
    Response: Section 7 consultation pursuant to ESA concluded that 
TROA is not likely to adversely affect endangered cui-ui and threatened 
LCT and, in fact, is likely to directly or indirectly benefit both 
species. This conclusion satisfies Section 205(a)(9) of the Settlement 
Act.
    Comment: The United States did not consult with the City of Fallon 
pursuant to Section 210(b)(16) when negotiating TROA.

[[Page 74035]]

    Response: Section 210(b)(16) of the Settlement Act is independent 
of and not related to TROA.
    Request for Extension: In its letter, TCID requested a 120-day 
extension. No other member of the public requested an extension. TCID 
has been involved in the TROA process since it began 18 years ago and 
provided substantial comments that were responded to during the NEPA/
CEQA process. No extension of time is warranted.

IV. Procedural Requirements

1. Regulatory Planning and Review (E.O. 12866)

    The Office of Management and Budget (OMB) has determined that this 
rule is not a significant rule and has not reviewed it under the 
requirements of Executive Order 12866. We have evaluated the impacts of 
the rule as required by E.O. 12866 and have determined that it is not a 
significant regulatory action. The results of our evaluation are given 
below.
    a. This rule will not have an annual effect of $100 million or more 
on the economy. It will not adversely affect in a material way the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities.
    TROA is a mechanism negotiated by its signatories to facilitate 
more flexibility in water use and storage and more effective 
coordination of reservoir operations on the Truckee River. The 
increased flexibility and more effective coordination of operations 
will provide a more stable water supply for Reno, Sparks, and Washoe 
County, Nevada, will enhance stream flow in the Truckee River below 
Derby Dam for threatened and endangered fishes, and will improve water 
quality.
    The credit water and exchange provisions of TROA allow parties to 
more efficiently use the water resource and, more particularly, realize 
more efficient and effective utilization of their own water rights. 
Historically, senior water right holders could not always fully divert 
the water to which they were entitled under their water right because 
of their inability to use or store the water when available. At times 
some junior water right holders have been able to benefit from this 
water. The additional storage options made available under TROA will 
permit senior water right holders to more fully exercise their water 
rights. To the extent the exercise of senior Orr Ditch Decree water 
rights under TROA makes less water available to junior water right 
holders than has in the past been available because the senior rights 
could not be fully exercised, there is no unlawful injury to junior 
water right holders.
    The total cost of implementing TROA is estimated to be 
approximately $15.8 million annually ($2.1 million for storage fees, 
operation and maintenance, and administration; $1.4 million in lost 
income from water transfers; and approximately $12.3 million annually 
for the purchase of water rights until 10,000 acre feet of water rights 
have been acquired to meet future water demand). Operation of Truckee 
River Reservoirs under TROA will result in new storage contracts which 
will reflect average storage and operation costs of approximately $1.5 
million annually. The administration cost associated with implementing 
TROA is estimated to be $600,000 annually to be shared by the Federal 
Government and the States of California and Nevada. Under TROA 
irrigation water rights acquired by Water Authority and others are to 
be transferred in accordance with applicable State law to meet water 
conservation and water quality objectives. This reduction of water 
rights used for irrigation is projected to result in a loss of 
approximately 100 agricultural jobs and the loss of $1.4 million in 
personal income. Water rights will also be purchased from willing 
sellers to meet future water demand. The cost of such purchases is 
approximately $12.3 million annually based on current market value of 
water rights. Because TROA implementation actions rely on market 
mechanisms, any reductions in economic activity or productivity, 
including employment or income reductions occasioned by the sale of 
irrigation water rights and reduced agricultural activity, will be 
fully compensated by the monetary or other compensation derived from 
the sale of the water rights.
    One of the benefits of TROA would be the avoided costs to the water 
users in the area of developing additional water storage facilities to 
meet increasing water demands in the region. The construction costs and 
operation and maintenance for new water storage facilities to meet that 
demand would be approximately $5 million annually. In addition to the 
avoided costs from implementing TROA, there is the additional benefit 
of supporting the Reno-Sparks economy by providing the storage capacity 
for M&I water demand in the future. It is estimated that in 2033, 
through the operation of TROA, the stored M&I water will support 
approximately 74,000 jobs and approximately $2.6 billion in associated 
personal income annually. There are also the annual nonmonetary 
benefits of improving water quality, improving fish and wildlife 
habitat, and meeting Indian trust responsibilities. Accordingly, TROA 
is not an economically significant rule under E.O. 12866.
    b. This rule will not create a serious inconsistency or otherwise 
interfere with an action taken or planned by another Federal agency. 
Bureaus within Interior are the only Federal agencies directly affected 
by the agreement. For instance, all TROA actions are specifically 
subordinated to Army Corps of Engineers (Corps) flood control criteria 
so that the Corps is free to adjust them as necessary apart from this 
regulation. In addition, TROA specifically provides that any use of the 
Corps' Martis Creek Reservoir for a TROA purpose (e.g., for 
conservation or credit water storage) would require a written agreement 
with the Corps. Upon TROA taking effect, Section 206(c) of the 
Settlement Act, which pertains to water use on the U.S. Naval Air 
Station, Fallon, Nevada, will also become effective. This is a 
consequence of the Settlement Act and not a direct effect of the 
provisions of TROA.
    c. This rule does not alter the budgetary effects of entitlements, 
grants, user fees, or loan programs or the rights or obligations of 
their recipients. The rule is a negotiated agreement, and it directly 
affects only the signatories of that agreement.
    d. OMB has determined that this rule does not raise novel legal or 
policy issues. TROA explicitly incorporates or accommodates all 
relevant laws and judicial decisions. By law TROA cannot have an 
adverse effect on any other person's water rights under the Orr Ditch 
or TRGE Decrees, and any modifications to those decrees necessary to 
implement TROA must be approved by the two courts with jurisdiction 
over the two decrees before TROA can become effective. TROA is required 
to be consistent with the decision in Pyramid Lake Paiute Tribe v. 
Morton, 354 F. Supp. 252 (D.D.C. 1973) and with the Secretary's 
responsibilities under ESA.

2. Regulatory Flexibility Act

    The Department of the Interior certifies that this document will 
not have a significant economic effect on a substantial number of small 
entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.).
    The rule will not affect a substantial number of small entities. 
TROA directly affects only its signatories. While TCID may be 
considered a small entity, TROA neither directly affects TCID nor the 
water rights of the individual water

[[Page 74036]]

right holders on the Newlands Project. Specifically, the parties likely 
to be directly affected by TROA are:
     U.S. Department of the Interior;
     State of California;
     State of Nevada;
     Pyramid Lake Paiute Tribe;
     Truckee Meadows Water Authority;
     Washoe County Water Conservation District;
     City of Reno, Nevada;
     City of Sparks, Nevada;
     City of Fernley, Nevada;
     Washoe County, Nevada;
     Sierra Valley Water Company;
     Carson-Truckee Water Conservancy District;
     North Tahoe Public Utilities District; and
     Truckee Donner Public Utilities District.
    Power Company joined in the execution of TROA for a limited purpose 
through a Special Joinder on September 6, 2008.
    Water operations of the Water Authority (successor in interest to 
Power Company), Conservation District, City of Reno, City of Sparks, 
and Washoe County, Nevada, are all intertwined within one geographic 
area in western Nevada. The criterion for a small entity is less than 
50,000 population. All of these entities are located within Washoe 
County, Nevada. The population of Washoe County is approximately 
346,000 people (2000 Census). The Reno-Sparks division of Washoe County 
has a population of approximately 256,000. Only if Conservation 
District, a taxing authority water purveyor of M&I and irrigation water 
supplies, were considered a separate entity would it be considered 
small as it has 33,000 people within its taxing jurisdiction; Water 
Authority serves 77,000 customers. The City of Fernley, in Lyon County, 
with a population of approximately 8,600 (2000 Census), would be 
considered small.
    Carson-Truckee Water Conservancy District's office is located in 
Reno, Nevada, and the District has no service population. It is 
authorized under Nevada State statutes to collect fees and taxes to do 
conservation work.
    North Tahoe Public Utility District, Tahoe Vista, Placer County, 
California, has a service population of 5,300 and, therefore, is 
considered a small entity. It consists of the Sewer and Water 
Department, Recreation and Parks Department, North Tahoe Beach Center, 
and the North Tahoe Community Conference Center.
    Truckee Donner Public Utilities District, Truckee, California, is a 
non-profit utility providing electric and water service in the Truckee 
area. The District serves 12,000 electric customers and 12,000 water 
service connections. It is considered a small entity.
    Sierra Valley Water Company is a small water purveyor in Sierra and 
Plumas Counties, California. It provides domestic and irrigation water 
to 29 customers. It is, therefore, considered small.
    Pyramid Lake Paiute Indian Reservation is located in Washoe County, 
with approximately 1,734 tribal members residing on the reservation. 
Indian tribes are not covered by the Regulatory Flexibility Act.
    Power Company's service territory covers approximately 50,000 
square miles in northern Nevada including the cities of Reno, Sparks, 
and the Lake Tahoe area of northeastern California. It employs in 
excess of 1,100 people and services approximately 500,000 electric and 
gas customers. It has assets in excess of $2.5 billion and revenue in 
excess of $1 billion. It is not, therefore, considered a small entity.
    Of the current signatories, only five are considered to be small 
entities. There is, therefore, not a significant effect on a 
substantial number of small entities.

3. Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    a. Does not have an annual effect on the economy of $100 million or 
more.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. The availability of additional water 
management options is expected in the long term to lower overall 
operation costs.
    c. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. TROA 
has only regional effects and will not have national or international 
implications.

4. Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments in the aggregate, or on the private sector, of more 
than $100 million per year. The rule does not have a significant or 
unique effect on State, local, or tribal governments or the private 
sector. The costs of the new water management opportunities made 
available by the agreement will only accrue to the signatories, and the 
costs will be small relative to the benefits and will apply only if a 
signatory avails itself of the options under the agreement. Therefore, 
a statement containing the information required by the Unfunded 
Mandates Reform Act (2 U.S.C. 1531 et seq.) is not required.

5. Takings (E.O. 12630)

    Under the criteria in Executive Order 12630, the rule does not have 
significant takings implications. The provisions of the agreement are 
accepted voluntarily by the signatories and the exercise of water 
rights under existing decrees is expressly provided for. Therefore, 
this rule will not result in a taking of private property, and a 
takings implication assessment is not required.

6. Federalism (E.O. 13132)

    Under the criteria in Executive Order 13132, this rule does not 
have sufficient federalism implications to warrant the preparation of a 
Federalism Assessment. The State of California and the State of Nevada 
are signatories to TROA and participated fully in negotiations that 
culminated in the agreement. TROA would have two principal effects on 
the State governments.
    First, when TROA enters into effect, an allocation of the waters of 
the Lake Tahoe and Truckee River basins, and confirmation of the 
allocation of the Carson River and its tributaries represented by the 
Alpine Decree, automatically enters into effect in a manner similar to 
an interstate compact. Generally, these allocations limit the amount of 
water that can be used or diverted from Lake Tahoe basin for use within 
the basin under procedures of the two States, and the amount of water 
that can be used or diverted from the California portions of the 
Truckee River basin and the Carson River and its tributaries under 
relevant decrees and procedures of the State of California. The balance 
of the water of these two rivers that flows into Nevada can be 
allocated pursuant to the water allocation procedures of the State of 
Nevada and various court decrees. Generally, these allocations were 
negotiated by and agreed to by the two States. Though not required by 
law to do so, both States have voluntarily abided by their provisions 
pending passage of the Settlement Act, initially, and pending 
implementation of TROA, subsequently. TROA merely aids in the 
implementation of the allocation of the waters of the Lake Tahoe and 
Truckee River basins provided for in the Settlement Act. By signing 
TROA, the two States have, effectively, bound themselves to this 
interstate allocation.

[[Page 74037]]

    Second, there are modest (i.e., expected to be approximately 
$600,000 in total) financial requirements for funding the annual 
administration of TROA. Subject to the limits on the authority in the 
constitutions of the two States to commit future appropriations, it is 
reasonable to expect the two States to pay their allocated shares of 
the funding. By signing TROA, the two States signaled their intention 
to secure funding for their shares of the administration of TROA. 
Neither of these effects is considered to rise to the level of 
significance requiring a Federalism Assessment. The rule, which governs 
only the responsibilities of the signatories, does not have substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. The rule 
provides for the application of State law in its implementation in the 
same manner as does the Settlement Act. Therefore, a Federalism 
Assessment is not required.

7. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of Executive Order 12988. 
Specifically, this rule:
    a. Does not unduly burden the judicial system;
    b. Meets the criteria of Section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    c. Meets the criteria of Section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

8. Consultation With Indian Tribes (E.O. 13175)

    Under the criteria in Executive Order 13175, we have evaluated this 
rule and determined that it has no potential effects, within the 
requirements of the Executive Order, on Federally recognized Indian 
tribes. Implementation of this rule will benefit the Pyramid Tribe, as 
described below.
    Indian trust resources are legal interests in property or natural 
resources held in trust by the United States for Indian Tribes or 
individuals. The Secretary is the trustee for the United States on 
behalf of Indian Tribes. Examples of trust resources are lands, 
minerals, hunting and fishing rights, and water rights. Indian trust 
resources have been assessed in consultation with the following tribes 
during the development of TROA: Pyramid Lake Paiute Tribe--Pyramid Lake 
Indian Reservation in Nevada; Reno-Sparks Indian Colony--Reno and 
Hungry Valley, in Nevada; Fallon Paiute-Shoshone Tribe--Fallon Paiute-
Shoshone Reservation and Fallon Colony in Nevada; and Washoe Tribe of 
Nevada and California--colonies in Nevada and in California with 
cultural interests at and near Lake Tahoe.
    For the Pyramid Tribe, flow in the Truckee River below Derby Dam 
and discharge to Pyramid Lake will increase slightly under TROA. With 
increased flow and the increased capacity to manage Truckee River 
water, TROA will: Assist in improving lower river water quality; 
enhance slightly the elevation of Pyramid Lake; enhance the riparian 
canopy; assist in stabilizing the lower river; enhance recreational 
opportunities at Pyramid Lake; enhance spawning opportunities for cui-
ui and LCT; and enhance river habitat for Pyramid Lake fishes. In 
addition, the exercise of Truckee River agricultural and M&I water 
rights below Derby Dam, including those of the Pyramid Tribe, will 
continue to be satisfied. For Reno-Sparks Indian Colony, TROA will have 
no effect on the exercise of Truckee River water rights. The Fallon 
Paiute-Shoshone Tribe will receive a full water supply with the same 
frequency as at present. TROA will have no effect on flows of the 
Carson River or on resources of the Washoe Tribe.
    The Federal Government negotiated TROA on a government-to-
government basis with the Pyramid Tribe, as well as with the States of 
California and Nevada. As a result, TROA incorporates the principles of 
sovereignty for each sovereign signatory.

9. Paperwork Reduction Act

    This rule does not contain any requirement for information 
collection by a Federal entity or Federal employee, and a submission 
under the Paperwork Reduction Act (PRA) is not required.
    There are several provisions of TROA which require information to 
be submitted by the signatory parties to the TROA Administrator. With 
respect to the Paperwork Reduction Act, it is important to note that 
the TROA Administrator is not a Federal employee and the Office of the 
TROA Administrator is not a Federal entity. The signatory parties have 
agreed to provide to the Administrator the information requested and 
necessary for proper implementation and administration of TROA. Thus, 
even though there are requirements to provide information contained in 
the negotiated TROA and, as required by Congress, are provisions of the 
rule, the information is not sought or requested by a Federal employee 
or a Federal agency. Accordingly, the subject provisions are not 
information collection requirements for purposes of the Paperwork 
Reduction Act.

10. National Environmental Policy Act

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. The final EIS/EIR has 
concluded that implementation of TROA would not significantly affect 
the quality of the human environment and that no unavoidable adverse 
impacts are expected as a result of implementing TROA. No mitigation 
measures are identified or required. Because of exchanges and storage 
agreements that are components of TROA, a more assured long-term 
drought water supply for Truckee Meadows would be obtainable, and 
improved flow conditions would be possible for Pyramid Lake fishes and 
aquatic species in general. California's allocation of water for M&I 
purposes in the long run would be assured and could be utilized in the 
short run to improve environmental conditions in the Truckee River. 
Compliance with NEPA has been accomplished.

11. Data Quality Act

    In developing this rule we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554).

12. Effects on Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in Executive Order 13211. A Statement of Energy Effects is not 
required.
    Analysis contained in the final EIS/EIR shows that under TROA, 
hydropower generation and gross revenues are about 3.5 percent less 
under wet hydrologic conditions than under current conditions due to 
the increased conservation and improved water quality applications of 
TROA; about 6.0 percent less in median hydrologic conditions, and about 
55.0 percent greater in dry hydrologic conditions. Net reduced 
hydroelectric power generation, if any, resulting from implementation 
of TROA would be compensated consistent with the provisions of the 
Agreement.

13. Clarity of This Regulation

    We are required by Executive Orders 12866 and 12988 and by the 
Presidential Memorandum of June 1, 1998, to write all rules in plain 
language. This means that each rule we publish must:
    a. Be logically organized;

[[Page 74038]]

    b. Use the active voice to address readers directly;
    c. Use clear language rather than jargon;
    d. Be divided into short sections and sentences; and
    e. Use lists and tables wherever possible.

List of Subjects in 43 CFR Part 419

    Agriculture, Endangered and threatened species, Incorporation by 
reference, Irrigation, Natural resources, Reclamation, Reservoirs, 
Water resources, Water supply.

    Dated: November 28, 2008.
Kameran L. Onley,
 Acting Assistant Secretary--Water and Science.

0
For the reasons given in the preamble, the Bureau of Reclamation is 
adding to title 43 of the Code of Federal Regulations a new part 419 to 
read as follows:

PART 419--TRUCKEE RIVER OPERATING AGREEMENT

Sec.
419.1 What is the purpose of this part?
419.2 What are the definitions used in this part?
419.3 What general principles govern implementation of the TROA?
419.4 What specific provisions govern operations of the reservoirs?

    Authority: Public Law 101-618 (104 Stat. 3289, 3294).


Sec.  419.1   What is the purpose of this part?

    (a) This part satisfies the requirement of Section 205(a)(5) of the 
Truckee-Carson-Pyramid Lake Water Rights Settlement Act (Settlement 
Act) that the negotiated agreement for operation of Truckee River 
Reservoirs be promulgated as a Federal regulation. The Truckee River 
Operating Agreement (TROA), published in September 2008 by the Bureau 
of Reclamation, is the agreement negotiated pursuant to Section 205(a) 
of the Settlement Act and is incorporated by reference into this 
section with the approval of the Director of the Federal Register under 
5 U.S.C. 522 (a) and 1 CFR part 51. All approved material is available 
for inspection at the National Archives and Records Administration 
(NARA). For information on the availability of this material at NARA, 
call 202-741-6030 or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. Also, a copy of 
TROA may be obtained from or inspected at the Bureau of Reclamation, 
705 N. Plaza St., Carson City, NV 89701, 775-884-8356, where copies are 
on file, or at the following Web site: http://www.usbr.gov/mp/troa/.
    (b) This part implements the Settlement Act by providing for 
operation of the Truckee River Reservoirs and other reservoirs in a 
manner that:
    (1) Implements California's allocation of Truckee River basin water 
and the Nevada and California allocations of Lake Tahoe basin water;
    (2) Enhances fish, wildlife, and recreational beneficial uses of 
water in the Truckee River basin;
    (3) Carries out the terms, conditions, and contingencies of the 
Preliminary Settlement Agreement;
    (4) Ensures that water is stored in, released from, and passed 
through Truckee River Reservoirs to satisfy the exercise of water 
rights in conformance with the Orr Ditch Decree and Truckee River 
General Electric Decree, except for rights voluntarily relinquished by 
any persons or transferred under State law;
    (5) Provides for the enhancement of spawning flows available in the 
Lower Truckee River for Pyramid Lake Fishes in a manner consistent with 
the Secretary of the Interior's responsibilities under the Endangered 
Species Act, as amended;
    (6) Satisfies all applicable dam safety and flood control 
requirements; and
    (7) Minimizes the Secretary of the Interior's costs associated with 
operation and maintenance of Stampede Reservoir.


Sec.  419.2   What are the definitions used in this part?

    Act means the Truckee-Carson-Pyramid Lake Water Rights Settlement 
Act of 1990, title II, Public Law 101-618 (104 Stat. 3289, 3294).
    Administrator means the individual appointed in accordance with 
Sections 2.A.2 through 2.A.3 of the Truckee River Operating Agreement 
(incorporated by reference at Sec.  419.1).
    Preliminary Settlement Agreement means that Agreement between the 
Pyramid Lake Paiute Tribe and Sierra Pacific Power Company of May 23, 
1989, as subsequently modified and ratified by the United States.
    TROA means the Truckee River Operating Agreement.
    Truckee River basin means the area which naturally drains into the 
Truckee River and its tributaries and into Pyramid Lake, including 
Pyramid Lake, but excluding the Lake Tahoe basin.
    Truckee River Reservoirs means Boca Reservoir, Prosser Creek 
Reservoir, Martis Creek Reservoir, Stampede Reservoir, and the storage 
provided by the dam at the outlet of Lake Tahoe.


Sec.  419.3   What general principles govern implementation of the 
TROA?

    The following are general operational principles which provide a 
framework for the Administrator in implementing the TROA (incorporated 
by reference at Sec.  419.1). These general principles are intended to 
be consistent with the specific provisions of TROA, but if they 
conflict with those specific provisions, the specific TROA provisions 
control. Operations should meet all of the following criteria:
    (a) Be conducted, consistent with the TROA and applicable legal 
requirements, so that the available water supply in the Truckee River 
basin satisfies, to the maximum extent possible, multiple beneficial 
purposes, including municipal and industrial, irrigation, fish, 
wildlife, water quality, and recreation purposes.
    (b) Satisfy vested and perfected rights to use the water of the 
Truckee River and its tributaries, to the extent that water rights are 
scheduled to be exercised, and to the extent that water is lawfully 
available. This includes, but is not limited to, the exercise of water 
rights under the provisions of the Orr Ditch Decree, except as 
expressly provided in the Settlement Act and the TROA.
    (c) Maintain minimum releases and, to the extent practicable 
consistent with existing water rights and the TROA, maintain enhanced 
minimum releases, preferred stream flows, and reservoir recreation 
levels as described in Article Nine of the TROA.
    (d) Comply with applicable flood control requirements for Prosser 
Creek, Stampede, Boca, and Martis Creek Reservoirs.
    (e) Comply with all applicable dam safety requirements.
    (f) Use the integrated schedules developed by the Administrator 
through coordination with the scheduling parties.
    (g) Respond to declared Federal, State, or local water-related 
emergencies presenting a clear and immediate danger to public health, 
life, property, or essential public services involving an upset or 
other unexpected occurrence to facilities and resources addressed in 
the TROA.


Sec.  419.4   What specific provisions govern operations of the 
reservoirs?

    The specific provisions governing operations of the Truckee River 
Reservoirs and other reservoirs are contained in the TROA (incorporated 
by reference at Sec.  419.1). The following table shows the location of 
the provisions in the TROA.

[[Page 74039]]



----------------------------------------------------------------------------------------------------------------
          Provisions governing . . .                     Are in the following sections of the TROA . . .
----------------------------------------------------------------------------------------------------------------
Recitals, Definitions.........................  Recitals 1 through 9. Definitions (1) through (106).
Satisfaction of provisions of law, general      Sections 1.A through 1.F.
 operational principles, protection of water
 rights, imported water, remaining water of
 the Truckee River, and emergencies.
Administration................................  Sections 2.A through 2.C.
Accounting, reporting, forecasting, and         Sections 3.A through 3.E.
 monitoring.
Incorporation of certain provisions of the      Sections 4.A through 4.G.
 preliminary settlement agreement.
Operation of Floriston Rate and Project Water.  Sections 5.A through 5.E.
Truckee River and Lake Tahoe Basin Allocation   Sections 6.A through 6.E.
 and Accounting.
Credit Water Establishment, Storage, and        Sections 7.A through 7.H.
 Conversion.
Priorities and Rules for Operations Following   Sections 8.A through 8.V.
 Impoundment or Accumulation of Water in
 Reservoirs.
Beneficial Uses of Water for Instream Flows     Sections 9.A through 9.F.
 and Recreation in California.
Design of Water Wells in the Truckee River      Sections 10.A through 10.H.
 Basin in California.
Scheduling....................................  Sections 11.A through 11.H.
Effectiveness of the TROA.....................  Sections 12.A and 12.B.
Relation of TROA to Settlement Act,             Sections 13.A through 13.E.
 Adjustments to Operations and Changes to
 Agreement.
Miscellaneous areas...........................  Sections 14.A through 14.Q.
----------------------------------------------------------------------------------------------------------------

[FR Doc. E8-28738 Filed 12-4-08; 8:45 am]
BILLING CODE 4310-MN-P