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TESTIMONY

OF

HAMILTON CANDEE

SENIOR ATTORNEY; CO-DIRECTOR, WESTERN WATER PROJECT

NATURAL RESOURCES DEFENSE COUNCIL

BEFORE THE

SUBCOMMITTEE ON WATER AND POWER

COMMITTEE ON ENERGY AND NATURAL RESOURCES

UNITED STATES SENATE

ON THE

SAN JOAQUIN RIVER RESTORATION SETTLEMENT ACT

S. 27

MAY 3, 2007

Good morning. My name is Hamilton Candee and I am a senior attorney with
the Natural Resources Defense Council (NRDC) and the Co-Director of
NRDC's Western Water Project in San Francisco. Thank you for the
opportunity to testify today in support of S. 27, a bill to approve and
authorize the historic Settlement in *NRDC v. Rodgers* to restore
California's San Joaquin River. For the past 18 years, I have been a
counsel of record in this case, representing a coalition of 14
environmental and fishing groups which, in turn, represent over 2
million people nationwide, and more than 250,000 Californians. With me
today is Philip Atkins-Pattenson, a partner in the California law firm
of Sheppard Mullin Richter & Hampton, who also represents the NRDC
Coalition. Both of us were directly involved in the extensive
multi-party negotiations that produced the landmark agreement that is
the subject of today's hearing.

The bill pending before the Subcommittee will authorize and help fund a
historic and comprehensive settlement agreement and restoration process
which will bestow benefits on millions of Americans while ending one of
California's longest running water disputes and preserving a vibrant
agricultural economy in one of the Country's most significant
agricultural regions. We and others are submitting materials for the
Record that will address the framework and the details of the Settlement
in greater detail. However, before I discuss either the Settlement or
the legislation, I want to first briefly describe the San Joaquin River
\-- how it has been managed for the past 60 years; and why its
restoration is so important.

The San Joaquin is one of California's largest rivers, and
significantly, is one of two major tributaries to the San Francisco
Bay-Delta -- the largest estuary on the west coast. It is an estuary of
international ecological importance and the source of drinking water for
over 22 million people. The San Joaquin River originates in the high
Sierra, and flows west past Fresno, and then north through the heart of
the San Joaquin Valley until it joins the Sacramento River in the Delta
region.

In the early 20th Century, the mighty San Joaquin supported steamboat
travel and commerce between San Francisco and Fresno; and it teamed with
wildlife, including one of the largest Chinook salmon populations on the
entire Pacific Coast. So abundant were these salmon runs that farmers in
the southern San Joaquin Valley used to pitchfork the fish and feed them
to hogs. People who lived near the present site of Friant Dam reported
being kept awake at night by the thunderous noise of spawning salmon. By
the early 1940's when Friant Dam was built, the steamboats were gone,
the abundant wildlife had diminished, but tens of thousands of spring
run Chinook salmon, as well as a smaller fall run, still survived in the
river -- and in fact, continued to survive after completion of Friant
Dam. It wasn't until the Bureau of Reclamation began diverting so much
water from the dam that 60 miles of river downstream were dried up that
the salmon finally disappeared.

For the past half century, over 90% of the river's flow in most years
has been diverted at or immediately below Friant Dam, mostly for
irrigation purposes. Other witnesses will surely speak to you about the
huge agricultural economy that has benefited from these diversions. But
these economic benefits came at a tremendous cost \-- to the
environment, to the recreational and commercial fishing industries, to
groundwater levels in areas adjacent to the river downstream of the dam,
and to the lower San Joaquin River and the Delta, where the de-watering
of the upper San Joaquin River has contributed to chronic water quality
impairments that adversely affect farmers and communities in San Joaquin
county, and millions of people who rely on the Delta for drinking water.
But just as the operation of Friant Dam has contributed to these serious
problems, the operation of Friant Dam under this historic Settlement
will be part of the solution to these problems.

To illustrate the broad benefits of restoration and to show the
remarkably broad support for the Settlement and the restoration program
it provides for, I have attached to my testimony a number of materials,
including a summary of the broad benefits of this settlement, recent
news clippings and editorials, and statements of support from interested
officials and organizations from around California. I would ask the
Chair's permission to have all of the attachments to my written
Statement included in the final record of this Hearing.

A number of the clippings and editorials I have attached are from cities
and towns in the Delta and they document the vital importance of
restoring the San Joaquin River to that region. Communities and farmers
in the Stockton area will see both water quality and water supply
benefits from the Settlement. And other communities and farmers
downstream of Friant Dam will also be benefited by a living river
flowing through the heart of the Valley and into the southern Delta. The
fragile Delta ecosystem and San Francisco Bay will receive a life-giving
infusion at a time when this critical estuary and its threatened
fisheries desperately need it. And for salmon fishermen and fishing
communities on California's North Coast whose livelihoods once depended
on the San Joaquin River's legendary spring-run salmon, this Settlement
heralds a return of the spring run and an important step forward in
rebuilding our recreational and commercial fisheries. Indeed, it is hard
to find a river this large anywhere that has been literally dry for half
a century and then brought back to life. It is equally hard to find a
restoration project with such profound and far-reaching benefits.

It is because of the broad benefits of San Joaquin River restoration for
our environment, our quality of life and our economy, that an almost
unprecedented array of stakeholders from one end of the state to the
other is supporting this Settlement. When we first announced the
Settlement last September, we prepared an initial list of supporters,
which is included in the Exhibits we have submitted to the subcommittee.
Since last fall, that list has continued to increase and now includes
such diverse parties as the Metropolitan Water District of Southern
California, the Bay Area Council -- which is the SF Bay Area's leading
business association -- and the Madera County Farm Bureau. Each of their
letters of support is also included in the Exhibits.

Nevertheless, the Settling Parties have recognized that this landmark
agreement, while supported by the overwhelming majority of stakeholders
and beneficial to millions of Californians, must be carefully
implemented to avoid potential adverse impacts to third parties. Mindful
of that concern, the Settling Parties spent much of the past year
reaching out to third-party stakeholders, briefing them on the proposed
settlement, discussing their concerns, and where appropriate, modifying
the settlement to incorporate their perspectives and interests. That
effort continued as the settlement effort moved from the negotiating
table to the Congress last year.

In this respect, I would like to particularly thank two of the key
players in producing this Settlement and this legislation, Senator
Dianne Feinstein and Congressman George Radanovich, who not only
sponsored the original talks in 2005 that led to the Settlement, but
have consistently supported the fragile consensus that emerged from
these talks ever since. And each of them played a critical role last
fall in identifying and addressing issues of concern to numerous third
parties, starting with the first congressional hearing on the Settlement
on September 21, 2006 which was chaired by Congressman Radanovich in the
House Subcommittee on Water & Power.

At that hearing, the Subcommittee heard from two panels: the first
comprised of representatives of the Settling Parties and the State of
California, and the second comprised of interested third parties.
Immediately following the hearing, the Settling Parties were invited by
Senator Feinstein to commence negotiations with a wide range of third
parties who had asked for revisions to the then-pending proposed
Settlement legislation to address their concerns about potential impacts
of the Settlement. These negotiations included several members of the
House Resources Committee, other interested members of the House, both
of California's Senators, as well as the various parties who testified
on the third-party panel on September 21, 2006. Significantly, the major
water districts in Tulare County that receive water from Friant Dam were
represented by the Friant Water Users Authority, and the Congressmen who
primarily represents Tulare County was also a participant in the talks.
On September 27, 2006, after extensive and difficult negotiations in
Washington, DC and California, the Settling Parties, the State of
California, and all the numerous third parties that crowded into the
Senator's conference room agreed on a large number of changes to the
proposed legislation. To memorialize this remarkable agreement, the
parties signed a written Pledge of Support, which committed all the
signatories to support the Settlement and the revised legislation, and
to oppose any amendments to the revised legislation that are not
agreeable to all of the signatories. A copy of that Pledge of Support
document, along with Senator Feinstein's press release announcing the
agreement, is submitted with the Exhibits to my testimony.

Subsequently, on October 23, 2006, the Federal Court in Sacramento that
had presided over the *NRDC v. Rodgers* litigation for 18 years approved
the Settlement following a hearing on a formal motion brought by the
Department of Justice, the Friant Defendants and our Plaintiff
coalition. The Court approved the Settlement without change after
considering the views of 13 interested individuals and groups who were
not parties to the litigation but who were allowed to file *amicus*
briefs expressing their views on the Settlement.

On November 7, 2006, the voters of the State of California passed two
Initiatives that potentially provide substantial State funding for
implementation of the Settlement. First, the voters passed Proposition
84, which contains \$100 million explicitly dedicated to implementation
of the Settlement, as well as numerous other potential funding sources.
Second, the voters passed Proposition 1E, the flood infrastructure bond,
which provides several billion dollars in bond funds to upgrade the
State's flood protection. Because the Settlement calls for flood
protection upgrades to be implemented along the San Joaquin River, the
State has informed the Settling Parties that Prop 1E could potentially
provide tens of millions of dollars in additional State funding towards
Settlement implementation. In the aggregate, the State anticipates
providing at least \$200 million towards Settlement implementation, as
explained in the November 30, 2006 Letter from California's Resources
Secretary Mike Chrisman to Senator Feinstein that is included in the
Exhibits to my testimony.

In December, 2006, the Settling Parties and the State of California
addressed Senator Feinstein's request to revise further the Settlement
legislation to address the issue of "cost-sharing" between non-Federal
sources of funding and the \$250 million in new Federal funds authorized
in the legislation. The Settling Parties were able to successfully
address the Senator's concerns.

As a result of these two rounds of consensus discussions to make final
revisions to the draft legislation, on December 6, 2006, H.R. 6377 and
S. 4084 were introduced in the House and the Senate with broad,
bi-partisan support, including original co-sponsorship by Senators
Dianne Feinstein and Barbara Boxer and Representatives George
Radanovich, Dennis Cardoza, Jim Costa, George Miller, Grace Napolitano
and Richard Pombo. Action was not taken on the bills given the short
time left in the 109th Congress, but were reintroduced on January 4^th^
of this year as H.R. 24 and S. 27, on the first day of the 110th
Congress, once again with bi-partisan support in the California
delegation. We thank all of the co-sponsors for their strong support,
especially Senators Feinstein and Boxer who have been so critical to
carrying this effort forward.

This is the background of the legislation that is now pending before
you. It is unique legislation in that it has the support of the Settling
Parties -- who represent 22 water districts, 14 conservation and fishing
groups, and 5 federal agencies - as well as a wide array of California
water users and landowners who were not parties to the Settlement but
who have now pledged their support for the Settlement and this
legislation. And it is strongly supported by the State of California,
which was not a party to the litigation, but has nonetheless committed
extensive financial and agency resources to the implementation of the
Settlement. We are also pleased to note that the President's FY 08
federal budget, and Governor Schwarzenegger's FY 08 State budget, both
support increased funding for the relevant government agencies to
implement the Settlement, and the 5 state and federal implementing
agencies have already begun the implementation process.

In closing, I would like to briefly recap the benefits of passing HR 24
and fully implementing the Settlement. The Settlement will:

-   Restore continuous flows to the San Joaquin River -- California's
    second-longest river and one of two main arteries to the
    Sacramento-San Joaquin River Delta, the source of drinking water for
    over 22 million Californians;

-   Restore the Central Valley Spring-run Chinook salmon, fall run
    Chinook salmon, and other fish populations to the San Joaquin, much
    of which had been destroyed by the operation of Friant Dam over the
    past 60 years;

-   Provide certainty to the Friant Division long-term water contractors
    through the specified water releases provided for in the Settlement;

-   Preserve the San Joaquin Valley's strong agricultural economy, while
    enhancing environmental values in the Valley through restoration of
    a living river and associated habitat;

-   Provide flexibility to the Friant Division long-term contractors to
    reduce or avoid the water supply impacts resulting from the
    Settlement through specified water management techniques such as
    ground water banking, low-cost water in wet years, and other
    measures;

-   Provide protections to the interests of third parties, as included
    in the current legislation and in the Settlement, and ensuring that
    all of the settlement provisions will be implemented in accordance
    with all applicable laws, including the National Environmental
    Policy Act, the Endangered Species Act, and State law;

-   And provide for myriad opportunities for public input and
    participation during the implementation of the Settlement.

NRDC, having worked together with the other Settling Parties, the State
and those third parties who have signed the attached Pledge of Support,
is extremely proud of what we have accomplished in this Settlement and
revised legislation. The Federal and State agencies and the Settling
Parties are already actively involved in the process of Settlement
implementation. The Settling Parties have also cooperatively developed
protocols and agreements for public and third party participation and
input. But it is critical for all of us that we obtain passage of this
legislation that is pending before you in order to fully implement what
Secretary Kempthorne and so many other leaders have correctly described
as an "historic settlement." We ask that Congress promptly pass S. 27,
the San Joaquin River Restoration Settlement Act, so that the San
Joaquin River can flow once again and all of the benefits of the
Settlement can be realized. Thank you.