**Statement of Larry Todd, Deputy Commissioner for**

**Policy, Administration and Budget**

**Bureau of Reclamation**

**U.S. Department of the Interior**

**Before the**

**Senate Energy and Natural Resources Committee**

**Subcommittee on Water and Power**

**H.R. 1025**

**July 26, 2007**

Mr. Chairman and Members of the Subcommittee, my name is Larry Todd, and
I am Deputy Commissioner of the Bureau of Reclamation. I am pleased to
provide the Administration's views on H.R. 1025, legislation authorizing
a feasibility study to improve water management in the Republican River
Basin between Harlan County Lake in Nebraska, and Milford Lake in
Kansas.

Reclamation was included in the early stages of the project planning
process that resulted in completion of the Lower Republican River Basin
Appraisal Report in January 2005. We support the goal of the States, as
project sponsors, to develop a locally-supported solution that is
economical, affordable and environmentally sensible. However, funds have
not been allocated to carry out the provisions of H.R. 1025 in the
Administration's budgets for fiscal years 2007 and 2008. Given
Reclamation's need to focus its limited resources on maintaining its
existing infrastructure and completing on-going construction projects,
the Administration cannot support this bill.

**[Background]{.underline}**

Reclamation has been working with the States on Republican River Compact
water supply issues for many years. There is some important background
information that I would like to share with you today to provide context
for consideration of this legislation.

In 1998, Kansas filed a U.S. Supreme Court lawsuit against Nebraska and
Colorado because of their belief that Nebraska was using more than its
allocation of water under the Republican River Compact. The three States
negotiated a settlement that was approved by the United States Supreme
Court in May 2003.

In accordance with the Final Settlement Stipulations, the States agreed
to pursue in good faith, and in collaboration with the United States,
system improvements in the basin, including measures to improve the
ability to utilize the water supply below Hardy, Nebraska, on the
Republican River's mainstem. Reclamation's appraisal study analyzed a
number of alternatives recommended by the Compact Commissioners. The
results from the study indicate that the water supply in the basin is
not being fully utilized. With improvements in the existing systems and
possibly with additional storage capability, the systems could be
managed to alleviate some of the water shortage problems that exist in
the lower reaches of the basin. The Settlement provided for Compact
accounting which is indicating overuse of the allocations by Colorado
and Nebraska. Reclamation has been working with the States in an effort
to achieve and sustain Compact compliance. These efforts have included
the release of 2007 storage water at Bonny Reservoir in Colorado in
response to a "call" placed by the State Engineer; and approval of
temporary sales of project water in 2006 and 2007 to reduce consumptive
use in Nebraska and provide additional water supply to project lands in
Kansas. Reclamation has worked closely with project beneficiaries and
the States to find more effective and efficient ways to deliver water,
and will continue to do so in the future.

Mr. Chairman, that concludes my testimony, I would be pleased to answer
any questions.

**Statement of Larry Todd**

**Deputy Commissioner, U.S. Bureau of Reclamation**

**U.S. Department of the Interior**

**Before the Committee on Energy and Natural Resources**

**Subcommittee on Water and Power**

**U.S. Senate**

**S. 300**

**July 26, 2007**

Mr. Chairman and members of the Subcommittee, my name is Larry Todd and
am here today to present the views of the Department of the Interior on
S. 300, a bill to authorize a habitat conservation program on the lower
Colorado River in the States of Arizona, California, and Nevada.

S. 300 authorizes the Lower Colorado River Multi-Species Conservation
Program (LCR MSCP) and addresses issues associated with implementation
of the program, including Colorado River water use, investment of
appropriated funds, and the enforceability of program documents. The
Lower Colorado River is a critical resource to citizens of the
southwest. Maintaining compliance with the Endangered Species Act and
avoiding water supply conflicts that have been occurring in other areas
of the West is critical to the Department. The Department supports the
LCR MSCP as well as the intent of S. 300 to further this program.
However, the Department remains concerned about language in Section 2,
4(b), 5(c), and 5(d), which I will discuss below.

The LCR MSCP was developed through a collaborative partnership with
State leaders, local stakeholders and the Administration. This
innovative program addresses the needs of threatened and endangered fish
and wildlife on the lower Colorado River while assuring greater
reliability of water deliveries and hydropower production. By meeting
the needs of fish and wildlife listed under the Endangered Species Act,
as well as preventing the need to list additional species, the plan
provides greater certainty of continued water and power supplies from
the river for Nevada, California and Arizona - and is designed to allow
future water transfers within or among water users for a 50-year period.

Reclamation began work to develop the LCR MSCP in 1997 and the program
was formally approved and adopted by Secretary Norton in 2005. Under
existing authorities, Reclamation has been implementing activities that
are similar in nature to those described in this program since 1997 when
the U.S. Fish and Wildlife Service issued a Biological Opinion for
southwestern willow flycatcher, bony tail chub, Yuma clapper rail and
razorback sucker fish. In 2001, Reclamation adopted interim Surplus
Guidelines that define when water operations can provide surplus water
to water users in the Lower Colorado River Basin, and the Biological
Opinion for that action is being implemented through the LCR MSCP. With
these and other actions, Reclamation has been meeting the requirements
of the Endangered Species Act (ESA) for over a decade.

Reclamation has spent a total of \$9.5 million in FY2004 and FY2005, and
spent \$13 million in FY2006 from both Federal and non-Federal sources
pursuant to the Program's Funding and Management Agreement with
non-Federal entities. The LCR MSCP Steering Committee supports a budget
of over \$16 million for FY 2007. In addition to establishing over 270
acres of new habitat along the Colorado River, Reclamation has stocked
46,079 razorback suckers and 14,836 bony tail chub into the lower
Colorado River since 2004. A significant amount of money has been spent
on the research and monitoring needed to develop a sound scientific
foundation for this 50-year program. Accomplishment reports for FY2004
and FY2005 have been approved by the MSCP Steering Committee, reviewed
by the U.S. Fish and Wildlife Service, and found to be in compliance
with the LCR MSCP ESA Section 10 Permit. The FY2006 report has been
approved by the Steering Committee and U.S. Fish and Wildlife Service.
All reports can be found on Reclamation\'s website at
[www.lcrmscp.gov.]{.underline}

In Reclamation's FY2008 budget, which is awaiting Congressional
approval, \$7 million has been identified from Federal funding for the
program, with a \$7 million match from non-Federal partners.

Since presenting testimony on HR 5180 last year, the Department is
pleased to report progress toward resolving issues surrounding section
3(b). As written, this Section would direct the Secretary to enter into
an agreement with the States of Arizona, California and Nevada providing
for the use of Colorado River water specifically for habitat creation
and maintenance purposes. The Department believes that through existing
contract terms, willing seller transactions, and current policies,
Reclamation can utilize Colorado River (and non-Colorado River) water to
implement the program. However, Reclamation has made progress with our
funding partners in the Lower Basin States to develop an agreement
acceptable to all parties on the use of Colorado River water for program
purposes. Such an agreement could facilitate program implementation, and
we look forward to continuing productive efforts with our partners on
this proposed agreement.

We do have a couple of concerns with provisions contained in S. 300. The
geographic definition of the Lower Colorado River in section 2 should be
clarified to match that contained in the MSCP Program Documents. The
Administration cannot support the language in section 4(b) of this bill
allowing the Secretary to invest appropriated moneys that are not
required to meet current program expenditures. Investing appropriations
provides additional monies to finance a governmental purpose outside of
the normal appropriations process.

We are also concerned about section 5(c), which addresses judicial
review of program documents. We note that this provision has been
modified from the language introduced in the last session of Congress,
and that language has been added clarifying that the United States would
not be liable for claims for money damages. Nevertheless, we have been
advised by the Department of Justice and we are concerned that this
provision could expand Federal litigation exposure in significant
respects and open the door for judicial intrusion into administrative
decision making. We would appreciate the opportunity to continue to work
with the committee to address our concerns regarding section 5(c).

Section 5(d) seeks an explicit exemption from the Federal Advisory
Committee Act. The Department believes that this exemption is not
necessary as the program was determined by the Director of the U.S. Fish
and Wildlife Service to be an Ecosystem Recovery and Implementation Team
(ECRIT) pursuant to section 4(f)(2) of the ESA, thereby making the LCR
MSCP Steering Committee exempt. Therefore, we believe section 5(d) is
superfluous and we recommend deleting it.

The Department already has clear authorities to administer this program
under existing statutes, and Reclamation began actively implementing the
full LCR MSCP program in 2005. Through implementation of this program,
the likelihood of a water conflict on the lower Colorado River is
reduced.

The Department supports the LCR MSCP and will continue to work with
interested stakeholders that seek to enhance the program. Thank you for
the opportunity to comment on this legislation. We look forward to
working with you on the various concerns we have. I am happy to take any
questions.

**Statement of Larry Todd, Deputy Commissioner for**

**Policy, Administration and Budget**

**Bureau of Reclamation**

**Department of the Interior**

**Before the**

**Senate Energy and Natural Resources Committee**

**Subcommittee on Water and Power**

**On**

**S. 1258**

**July 26, 2007**

Mr. Chairman and Members of the Subcommittee, I am Larry Todd, Deputy
Commissioner of the Bureau of Reclamation. I am pleased to be here today
to present the Department of the Interior's views on S. 1258,
legislation to amend the Reclamation Safety of Dams Act and redirect
reimbursable costs for dam safety activities. The Department opposes S.
1258, as introduced.

S. 1258 would make major changes to the process and revenues used by
Reclamation to secure its facilities resulting in a loss of receipts to
the Treasury. This proposed legislation addresses two components of
Reclamation's site security program: 1. capital investment (mainly
facility fortification) and 2. operation and maintenance (O&M), which
consists mainly of guards and patrol functions. Currently, Reclamation
treats security-related capital investment as non-reimbursable costs,
and security-related O&M expenses as project costs subject to
reimbursement based on project cost allocation. S. 1258 would change
this methodology, eliminating the distinction between capital investment
and O&M costs so that Reclamation would be required to treat 85% of the
capital investment and O&M security costs as non-reimbursable, while the
remaining 15% would be recovered from the reimbursable project purposes.

Reclamation understands that the impetus for this legislation is concern
over increased security related costs incurred for all Federal
facilities after September 11, 2001. However, our agency has been and
remains committed to working with our customers and with Congress to
ensure fair, consistent and efficient policies related to the treatment
of these costs. The Department does not believe that the changes
instituted under S. 1258 would be a positive step in this direction.

As explained in reports submitted by Reclamation to Congress in May 2005
and February 2006, Reclamation distinguishes capital costs of
security-related fortifications from security-related O&M costs. Since
the beginning of increased security levels in fiscal year 2002,
Reclamation has treated security-related capital investment as
non-reimbursable. From fiscal year 2002 through the end of fiscal year
2007, for example, Reclamation will have funded over \$66 million in
fortification costs, none of which has been passed on to customers.

Treatment of post-9/11 O&M (guard and patrol) costs has been different,
however. Early on, when security was increased at Reclamation facilities
immediately after 9/11, Reclamation took the position that while these
are clearly O&M costs, until a stable budget pattern emerged, and until
customers had sufficient time to make the necessary adjustments to their
planning and budgets, these costs should be non-reimbursable. Therefore,
from FY 2002 through FY 2004, Reclamation's budget proposals called for
post 9/11 security-related O&M costs to be treated as nonreimbursable.

However, in its FY 2005 and all subsequent budget proposals, Reclamation
returned to the pre-9/11 practice of treating security-related O&M costs
as reimbursable by project allocation. Report language which accompanies
the FY 2005 Energy and Water Development Appropriation, however,
directed Reclamation not to begin reimbursement in FY 2005, and
additionally, provide a report to Congress on the delineation of planned
reimbursable costs. Later, Congress' FY 2006 appropriations report
language limited security-related O&M reimbursement to \$10 million out
of total costs of \$20.9 million in FY 2006.

Reclamation's FY 2007 budget proposal anticipated total security-related
O&M guard costs of \$20.9 million. Of that amount, \$2 million is
allocated to non-reimbursable project purposes and requires
appropriations. Reclamation anticipated full reimbursement of the
remaining \$18.9 million, of which approximately \$11.6 million is in
up-front funding not requiring appropriations, and approximately \$7.3
million would be repaid to the Treasury and requires appropriations.
However, because a Continuing Resolution in FY 2007 left unanswered the
reimbursement amounts for the current fiscal year, Reclamation has moved
to collect \$14.5 million as a mid-point between the \$10 million cap in
FY 2006 and the full \$18.9 million we expect to be reimbursable in FY
2008.

Under S. 1258, instead of the \$18.9 million future annual reimbursement
Reclamation currently anticipates, Reclamation would instead receive
only 15% of roughly \$33.1 million in total security-related O&M guard
and fortification costs, or at most, about \$5 million each year
depending upon the structure of repayment. This would result in an
additional financial burden to the United States of about \$13.9 million
per year in reduced reimbursement. Up-front funding would be reduced by
approximately \$9.7 million annually and Reclamation would need
additional appropriations in order to carry out planned security
activities.

Reclamation believes this legislation could bring unintended results for
Reclamation water and power customers. While the change to 15%
reimbursement of security-related O&M costs would benefit some
customers, the change to 15% reimbursement of currently non-reimbursable
security-related capital costs would work to the detriment of customers
in projects where future capital fortification expenditures are planned.
Water and power customers of projects whose security fortifications were
lower in priority and therefore not completed prior to the bill's
enactment would be particularly disadvantaged. Furthermore, Reclamation
would be required to collect these costs under multiple repayment
contracts that could extend as long as 50 years.

Indeed, what is less certain are the future costs for facility
fortifications that Reclamation's water and power customers would absorb
as reimbursable. The total cost of internally-approved fortifications
for FY 2007 and future years is \$35.4 million (\$78.8 million minus the
\$43.4 million that was spent through FY 2006), and this figure does not
include potentially significant additional fortification activities
still under study. Under S. 1258, 15% of these fortification costs would
become reimbursable by customers.

Reclamation has met with its customers frequently in the past several
years on this issue, and we understand and share our contractors' desire
for stable, predictable security assessments. We recognize that
certainty, accountability, and transparency are important in the
financing of this program. However, we believe that the site security
program is now sufficiently established, and the benefits to contractors
is sufficiently clear, so that reimbursable costs for our customers are
adequately quantified, fairly allocated and understood in the ratepaying
community.

Reclamation is interested in working with the subcommittee to address
its customers' concerns in the administration of the security program.
However, S. 1258 does not provide a workable solution to address those
concerns. Mr. Chairman, this concludes my testimony. I am pleased to
answer any questions the subcommittee may have.

**Statement of Larry Todd, Deputy Commissioner for**

**Policy, Administration and Budget**

**Bureau of Reclamation**

**U.S. Department of the Interior**

**Before the**

**Senate Energy and Natural Resources Committee**

**Subcommittee on Water and Power**

**S. 1477**

**July 26, 2007**

Mr. Chairman and Members of the Subcommittee, my name is Larry Todd, and
I am Deputy Commissioner at the Bureau of Reclamation. Thank you for the
opportunity to appear today to present the Administration's views on S.
1477, a bill to authorize funding for repair to the Mancos Project
(Project) and referred to as the Jackson Gulch Rehabilitation Project
(Rehabilitation). This bill would require that 80% of the costs of
project rehabilitation activity that would be authorized under this
bill's provisions be borne by taxpayers. Project rehabilitation is
currently the contractual obligation of the Mancos Water Conservancy
District (District) to fulfill pursuant to its standing O&M contract.
Relieving the District of this obligation would set a precedent for
other projects across the country in need of rehabilitation. For these
reasons, the Administration opposes this bill.

The Project is located in southwestern Colorado near Mancos, consisting
of a 10,000 acre-foot reservoir, an inlet canal, and an outlet canal.
This Project provides supplemental irrigation water for approximately
13,746 acres of irrigated farmland. Additionally, this project provides
municipal and industrial (M&I) water for the Town of Mancos and the
surrounding rural area, and to Mesa Verde National Park.

The Project was completed in 1948. During the twenty-year period from
1942 to 1962, the District paid Reclamation in advance for O&M costs for
Project facilities. However, in 1962, responsibility for O&M of the
facilities was fully transferred to the District as provided for in the
Repayment Contract. Title to Project facilities remains with the United
States.

The proposed legislation would authorize \$6,452,311 for the federal
share of the cost of rehabilitating the 59-year old Project. This amount
represents 80% of the costs of rehabilitation. Reclamation has
previously assisted the District in cost estimates for the new work and
has also assisted in reviewing their current project needs for a long
term rehabilitation plan. The District has completed a study through a
private engineering firm to assess the Project needs and to prepare a
study for the repair/replacement of facilities. The requested funds
appear sufficient to make the needed repairs and improvements, as
outlined in the District's plan.

Reclamation agrees that there is a need for rehabilitation of the
Project. Due to its age, major rehabilitation is needed on the inlet and
outlet canals and associated structures. Delivery of agricultural and
M&I water could be affected if these repairs are not completed. The
District, however, is solely responsible for the operation, maintenance,
and replacement of these facilities, pursuant to their contract and
should not be relieved of that obligation.

Mr. Chairman, this concludes my testimony. I am pleased to answer any
questions.

**STATEMENT FOR THE RECORD**

**UNITED STATES FISH AND WILDLIFE SERVICE**

**UNITED STATES DEPARTMENT OF THE INTERIOR**

**ON**

**S. 1522, TO AMEND THE BONNEVILLE POWER ADMINISTRATION PORTIONS OF THE
FISHERIES RESTORATION AND IRRIGATION MITIGATION ACT OF 2000 TO AUTHORIZE
APPROPRIATIONS FOR FY 2008 THROUGH 2014**

**COMMITTEE ON ENERGY AND NATURAL RESOURCES**

**SUBCOMMITTEE ON WATER AND POWER**

**UNITED STATES SENATE**

Chairman Johnson and Members of the Subcommittee, thank you for inviting
the U.S. Fish and Wildlife Service (Service) to provide a written
statement on S.1522, to reauthorize the Fisheries Restoration and
Irrigation Mitigation Act of 2000 (FRIMA) for fiscal years 2008 through
2014. The Administration supports the principles of FRIMA as one of the
tools to conserve and restore native anadromous and resident fish
populations in the Pacific Northwest.

On November 13, 2000, Congress enacted Public Law 106-502, the Fisheries
Restoration and Irrigation Mitigation Act (FRIMA). This Act created a
voluntary fish passage partnership program administered by the
Department of the Interior. The geographic scope of the FRIMA program is
the Pacific drainage area of Idaho, Oregon, Washington, and western
Montana.

For decades, state, tribal, and federal fishery agencies in the Pacific
Northwest have identified the screening of irrigation and other water
diversions, and the resultant improvements to fish passage as an
effective and important means to protect, recover, and restore native
anadromous and resident fish populations. Irrigation districts in the
Pacific Northwest also recognize that poorly-designed or unscreened
water diversions result in fish mortality. Nearly 80 percent of water
diversions in the Pacific Northwest are unscreened, and many have
passage obstructions that pose a major risk to juvenile and adult
threatened and endangered fish, including salmon, steelhead, bull trout,
cutthroat trout, and Klamath basin suckers.

The FRIMA program is carried out by the Service on behalf of the
Secretary of Interior, and the program focuses on screening water
diversions and improving fish passage. FRIMA projects can result in
nearly 100 percent survival of fish at what were often impassable and
deadly water control structures. The program promotes both sustainable
agriculture and sustainable fisheries and has strong support from both
the public and the states -- it is an example of the cooperative
approach needed to restore depleted, native fish stocks.

The States of Idaho, Montana, Oregon, and Washington, along with tribal
and local governments have worked closely with the Service to assure
projects are carefully evaluated and prioritized before being funded.
Local and state governments have shown a strong commitment to the
program, investing their own staff time and dollars to ensure projects
are well designed and properly implemented. The FRIMA Steering
Committee, made up of state, tribal, and federal representatives,
ensures a collaborative approach to program implementation. FRIMA
projects have involved the active participation and support of over 200
partners who make up the wide array of conservation districts, counties,
cities and towns, irrigation districts, tribes, resource conservation
and development councils, and environmental organizations that support
this program. One indication of the strong support for this program is
the amount of local cost share for FRIMA projects. Although the
legislation only requires a non-federal cost share of 35 percent, the
local cost share for the FRIMA program has averaged 55 percent.

From fiscal years 2002 through 2006, 121 FRIMA projects have been
funded, 59 of which have been completed. In addition, there are many
more acceptable projects with partners that are willing to provide their
cost share amount. Through 2004 (the most recent year for which summary
accomplishment reports are available), FRIMA projects protected 656
miles of stream, fixed 15 fish barriers, installed 68 fish screens,
conducted nine inventories, completed five pre-design analyses, and
developed one database.

The Administration supports the principles of FRIMA and recognizes that,
in some instances, BPA funds are treated as non-federal cost share
amounts. However, more study and evaluation is needed to determine
whether Bonneville funds should be counted toward the non-federal
component of FRIMA.

In conclusion, FRIMA projects contribute to our efforts to restore and
conserve anadromous and resident fish populations in the Pacific
Northwest. The FRIMA program is cost-effective and operates in a
collaborative, partnership-driven manner with private landowners,
non-governmental organizations, community leaders, and local, state, and
tribal governments. The Administration supports the principles of FRIMA
and looks forward to working with the Committee to address concerns with
the legislation