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[Senate Hearing 109-738]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-738
 
  AMENDMENTS TO THE RECLAMATION WASTEWATER AND GROUNDWATER STUDY AND 
                             FACILITIES ACT

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

                                     

                           S. 3638                               S. 3639

                           H.R. 177                              H.R. 2341

                           H.R. 3418

                                     

                               __________

                             JULY 27, 2006

                       Printed for the use of the
               Committee on Energy and Natural Resources

                                 ______

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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho                JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee           BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
RICHARD M. BURR, North Carolina,     TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               KEN SALAZAR, Colorado
GORDON SMITH, Oregon                 ROBERT MENENDEZ, New Jersey
JIM BUNNING, Kentucky

                     Bruce M. Evans, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                    Subcommittee on Water and Power

                    LISA MURKOWSKI, Alaska, Chairman
                  GORDON SMITH, Oregon, Vice Chairman

LARRY E. CRAIG, Idaho                TIM JOHNSON, South Dakota
RICHARD M. BURR, North Carolina      BYRON L. DORGAN, North Dakota
MEL MARTINEZ, Florida                RON WYDEN, Oregon
CONRAD BURNS, Montana                DIANNE FEINSTEIN, California
JIM BUNNING, Kentucky                MARIA CANTWELL, Washington
JAMES M. TALENT, Missouri            KEN SALAZAR, Colorado
                                     ROBERT MENENDEZ, New Jersey

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              subcommittee

                          Nate Gentry, Counsel
                    Mike Connor, Democratic Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Atwater, Richard, Chief Executive Officer, Inland Empire 
  Utilities Agency, on behalf of the WateReuse Association.......    28
City of Austin, TX...............................................    48
Dreier, Hon. David, U.S. Representative From California..........     2
Edwards, Hon. Chet, U.S. Representative From Texas...............     4
Feinstein, Hon. Dianne, U.S. Senator From California.............     6
Grindstaff, P. Joseph, Director, CALFED Bay-Delta Program, 
  Sacramento, CA.................................................    22
Johnson, Hon. Tim, U.S. Senator From South Dakota................     5
Lippe, Chris, Director, City of Austin Water Authority...........    33
Murkowski, Hon. Lisa, U.S. Senator From Alaska...................     1
Ray, J. Tom, Project Manager, Central Texas Water Recycling 
  Project, Lockwood, Andrews & Newnam, Inc.......................    38
Todd, Larry, Deputy Commissioner for Policy, Administration and 
  Budget, Bureau of Reclamation, Department of the Interior......     7

                                APPENDIX

Responses to additional questions................................    49

  AMENDMENTS TO THE RECLAMATION WASTEWATER AND GROUNDWATER STUDY AND 
                             FACILITIES ACT

                              ----------                              

                        THURSDAY, JULY 27, 2006

                               U.S. Senate,
                   Subcommittee on Water and Power,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:34 p.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Lisa 
Murkowski presiding.

           OPENING STATEMENT OF HON. LISA MURKOWSKI, 
                    U.S. SENATOR FROM ALASKA

    Senator Murkowski. I welcome you to the subcommittee's 
legislative hearing. We've got five bills regarding the Bureau 
of Reclamation's Title XVI Water Reclamation and Reuse Program. 
The bills include S. 3638, which is sponsored by Senator 
Feinstein, which authorizes several water projects in southern 
California. We have S. 3639, which I have sponsored, to amend 
the title XVI program. We have H.R. 177, sponsored by 
Congressman Gary Miller. This authorizes several projects in 
southern California. H.R. 2341, sponsored by Congressman 
Doggett, to authorize a project in the city of Austin, TX. And 
H.R. 3418, which is sponsored by Congressman Edwards, which 
authorizes a project in Waco, TX.
    We had an oversight hearing on the title XVI program, which 
we held earlier in the year, and at that time, I raised several 
questions about the program and what legislative changes, if 
any, we might want to undertake. Since that time, working 
together with Senator Feinstein, we have developed this 
legislation. This is S. 3639 and I believe that it is a pretty 
good starting point to address the concerns that have been 
raised relative to the title XVI program.
    I understand that the administration continues to question 
certain aspects of the future of the program, but I think it is 
fair to say that it is important that the United States have a 
Federal role in developing new sources of municipal and 
industrial water supply. The title XVI program has played, and 
should continue to play, a role in municipal and industrial 
water supply. It is my understanding that the administration is 
continuing to develop a legislative proposal to reform the 
title XVI program and I am pleased that they are taking a 
proactive approach. Hopefully, we can incorporate some of these 
ideas into S. 3639.
    We've got a couple panels this afternoon that I will 
introduce, but before we bring the panels on, I would like to 
welcome to the subcommittee this afternoon Congressman Dreier 
from the State of California. As a Congressman, you have been 
very active and very involved in many of the water bills that 
have come before us in the past and your involvement is greatly 
appreciated. And with that, I would like to welcome you and ask 
if you would like to make any comments before we proceed with 
the hearing.

                STATEMENT OF HON. DAVID DREIER, 
              U.S. REPRESENTATIVE FROM CALIFORNIA

    Mr. Dreier. Thank you very much, Madam Chairman. Let me 
just, at the outset, say that I really like water. That's the 
reason that I'm here. And it is difficult for me to imagine a 
greater, more thrilling bipartisan panel of Senators, and my 
California colleague, Diane Feinstein, and you. I'm pleased to 
see Senator Johnson joining us as well, with whom I was 
privileged to serve in the House of Representatives. I'm here 
to say that your opening remarks, Madam Chairman, I think, were 
really right on target in talking about the commitment the 
administration has shown to title XVI reform.
    I am particularly proud of an effort that we have going 
that Senator Feinstein and I have represented in southern 
California. It is the Inland Empire Water Recycling Initiative, 
which has had tremendous success, and great leadership has been 
shown on this. We have found, with this initiative, that has 
twice passed the House of Representatives--we've authorized $30 
million for the Inland Empire Utilities Agency and the 
Cucamonga Valley Water District to assist in constructing two 
water-recycling projects there. The projects will produce 
nearly 100,000 acre-feet of new water annually to the area's 
water supply. The initiative has the support of all member 
agencies of the Inland Empire Utilities Agency, which 
encompasses 240 square miles in southern California.
    It also serves a number of the cities that I represent, 
including the city I mentioned, Rancho Cucamonga, which happens 
to be one of the very top of the fastest growing cities in the 
entire country. When I first represented it many years ago, it 
had a population of 30,000. And the mayor told me not long ago 
that within the next 4 years--and I don't know if you are aware 
of this, Diane--220,000 people in the city of Rancho Cucamonga, 
there in the Inland Empire, by the end of this decade. It's one 
of the fastest growing cities in our State and that is why this 
whole notion of pursuing water recycling there is something 
that I believe is very, very important.
    As you said, Madam Chairman, the issue of pursuing title 
XVI reform is a very high priority. I'd like to say that while 
I'm here with a specific goal of introducing my friend, Rich 
Atwater, I'm also very pleased that we have Joe Grindstaff 
here. Senator Feinstein and I happen to claim among our friends 
the Governor of California, and Mr. Grindstaff is here 
representing the Governor, demonstrating his very strong 
commitment to water recycling and dealing with the challenge of 
water that have in our State today.
    Joe has had a very distinguished career. He headed the Bay-
Delta Authority. He has an outstanding record of achievement as 
the general manager of the Santa Ana Watershed Project 
Authority, and the Monte Vista and Eastern Municipal Water 
District prior to that. He has been on the real forefront of 
dealing with these water issues in California and we all know 
how important that is for our state.
    So now I would like to just take a moment to mention Rich 
Atwater, who you will be hearing from momentarily. He is the 
only water agency manager, Madam Chairman, to receive the 
prestigious Governor's Award for Environmental and Economic 
Balance three times, from three different Governors. I don't 
know if you've followed politics in California, but we've gone 
through sort of a roller coaster in the past several years. 
Governor Pete Wilson, in 1995, gave the Governor's Award for 
Environmental and Economic Balance to Rich, and then Governor 
Gray Davis, in 2002, gave it to him, and then, in 2003, 
Governor Schwarzenegger provided him that award. So he has 
obviously been able to cross party lines and there is broad 
recognition of his stellar work. And I've had the privilege of 
touring facilities with him and getting to know him. In 1994, 
our friend, the former Secretary of the Interior, Bruce 
Babbitt, awarded Rich the Conservation Service Award, which is 
the highest citizen award for resources management. And he has 
also served on a number of drought and water reuse commissions 
for the State throughout the past decade. Most important, he is 
also the CEO and general manager of the Inland Empire Utilities 
Agency that I mentioned and is responsible for getting that 
100,000 acre-feet of new water produced. So I'm very pleased to 
be here and I think that the thoughts and proposals that he 
will have, as you take on this challenge of dealing with title 
XVI reform--he will be very, very helpful to you.
    And I thank you. I know Senator Feinstein has our measure 
included as part of her legislation. And as I've said, we've 
twice been able to move this through the House. I'm looking 
forward to coming to an agreement on it and I thank you and 
congratulate you on all of your great work. And while water is 
beautiful in California, it is no more beautiful than it is in 
Alaska, from all the water that I've seen there.
    Senator Murkowski. Sometimes it is a little colder up 
there, though.
    Mr. Dreier. Yes, I know. I like cold water, too. So thank 
you all very, very much for including me and now you will get 
some real brilliance.
    [The prepared statements of Representatives Dreier and 
Edwards follow:]

     Prepared Statement of Hon. David Dreier, U.S. Representative 
                      From California, on S. 3638

    Thank you, Senator Murkowski, for your leadership on water reuse 
and recycling issues. Having a legislative hearing like this helps to 
highlight a number of important projects being undertaken by various 
local water agencies that have the strong support of Members of 
Congress.
    For many years, I have been fortunate to partner with my good 
friend, Senator Feinstein, on a number of issues. We have often 
introduced companion legislation, and I am very pleased to be working 
with her on Congressional support for water recycling in Southern 
California. In this case, Senator Feinstein's bill, S. 3638, includes 
the Inland Empire Water Recycling Initiative, which I have sponsored in 
the House.
    The Inland Empire Water Recycling Initiative authorizes $30 million 
for the Inland Empire Utilities Agency and the Cucamonga Valley Water 
District to assist in constructing two water recycling projects. The 
projects will produce nearly 100,000 acre-feet of new water annually to 
the area's water supply. This initiative has the support of all member 
agencies of the Inland Empire Utilities Agency, which encompasses 240 
square miles in southern California. It also serves a number of cities 
I represent, including the city of Rancho Cucamonga, one of the fastest 
growing cities in the country.
    These water agencies are using high quality recycled water in many 
water intensive applications, like landscape and agricultural 
irrigation, construction, and industrial cooling. This allows fresh 
water to be conserved or used for drinking, which reduces our 
dependence on expensive imported water. In addition, by recycling water 
which would otherwise be wasted and unavailable, these agencies ensure 
that we ring the last drop of use out of water before it is ultimately 
returned to the environment.
    It is imperative that we continue to approve measures preventing 
water supply shortages in the Western United States. This recycling 
initiative will help meet the water needs of the Inland Empire and 
begin a strategic federal--local partnership to bring a significant 
amount of new water supply to the region. In fact, the Bureau of 
Reclamation has already recognized the Inland Empire Water Recycling 
Initiative as one of the most cost effective water reuse projects.
    The House has passed the Inland Empire Water Recycling Initiative 
twice--once last Congress and once this Congress. As you examine Title 
XVI reform and evaluate these bills before you, I respectfully ask my 
friends here to consider moving Senator Feinstein's bill forward so 
these deserving projects are authorized. I have no doubt that you will 
find that the Inland Empire Water Recycling Initiative is a model 
project for federal investment.
    Before I introduce Richard Atwater, I want to thank Joe Grindstaff 
for traveling to Washington to testify today. His presence here 
demonstrates the great importance that Governor Schwarzenegger has 
placed on developing bold and innovative solutions to ensuring that we 
possess the water resources to meet the needs of the growing economy 
and population we are seeing in California today. Before Joe so ably 
took over the direction of the Bay-Delta Authority, he established an 
outstanding record of achievement as the general manager of the Santa 
Ana Watershed Project Authority. While serving at SAWPA and in the 
Monte Vista and Eastern Municipal Water Districts prior to that, Joe 
has been at the forefront of tackling the complex water management 
issues we face in California--particularly in Southern California--and 
has tremendous experience in understanding and dealing with the issues 
we are discussing today.
    Now, I am very pleased to have the opportunity to introduce to you 
Richard Atwater, who will be testifying before you shortly. Rich is the 
director of the WateReuse Association's National Legislative Committee.
    He is the only water agency manager to receive the prestigious 
Governor's Award for Environmental and Economic Balance three times: by 
Governor Pete Wilson (1995); Governor Gray Davis (2002); and Governor 
Arnold Schwarzenegger (2003). Rich has over twenty-five years 
experience in water resources management and development. He has 
pioneered many award-winning water projects and implemented numerous 
innovative water resource management programs that meet today's high 
standards for quality, reliability and cost-effectiveness. In 1994, 
former Secretary of the Interior Bruce Babbitt awarded Rich the 
Conservation Service Award, the highest citizen award for resources 
management. Rich has also served on a number of drought and water reuse 
commissions for the state throughout the past decade.
    Most important, Rich is also the CEO and General Manager of the 
Inland Empire Utilities Agency. He is responsible for getting that 
100,000 acre-feet of new water produced. So I am pleased he is here to 
share his input on the proposed Title XVI reforms, and to answer any 
questions you all may have on the Inland Empire Water Recycling 
Initiative.
    Again, thank you for the opportunity to join you all today.
                                 ______
                                 
     Prepared Statement of Hon. Chet Edwards, U.S. Representative 
                        From Texas, on H.R. 3418

    The Central Texas Water Recycling Act of 2006 supports efforts to 
manage water resources efficiently in McLennan County by strategically 
locating regional satellite treatment plants that will not only provide 
for conservation of our community's water supply but will also reduce 
cost to the taxpayers.
    The initial projects under this legislation can provide up to 10 
million gallons per day of reuse water; thereby, reducing the water 
demand on Lake Waco. This is enough water supply to meet the needs of 
over 20,000 households.
    Central Texas is plagued with periodic drought and it is important 
to promote water conservation measures that reduce our demand for 
increased water supply.
    Recycling of highly treated wastewater provides an additional 
valuable resource for a large number of identified reuse applications, 
including golf courses, landscape irrigation, industrial cooling water, 
and other industrial applications.
    As Central Texas continues to grow, this project will continue to 
make reuse water available for the major construction project along 
Interstate Highway 35. The reuse water would be an ideal source of 
irrigation water for landscaping after construction and on an ongoing 
basis
    By locating Satellite Wastewater Plants in high growth areas, the 
local mayors in Waco, Hewitt, Woodway, Robinson, Bellmead, Lacy-
Lakeview, and Lorena will all benefit from upgrades to their wastewater 
treatment systems.
    Waco City Manager Larry Groth testified at a hearing last year in 
support of the bill, said ``This bill is a win-win because it is not 
only the right thing to do for the environment; it's good for 
businesses that buy the recycled water from us at a cheaper cost.''
    In the future as water demands increase, additional reuse projects 
will be identified and implemented. As the population and water demands 
grow, uses of reclaimed water will increase, and our environment will 
continue to be protected. Wastewater discharges to our streams and 
rivers will be reduced and potential pollution problems avoided. Water 
reuse projects like this will become more and more valuable to cities 
and states.

    Senator Murkowski. Thank you. We appreciate you not only 
taking a few minutes this afternoon to be here, but for all the 
good work that you are doing on the House side, on not only 
some of these water issues that we have before us today, but 
the good work in other areas. Thank you.
    Mr. Dreier. Please carry my greetings to the Governor as 
well, will you?
    Senator Murkowski. I will do that. Thank you.
    As I mentioned, we do have a couple panels. Before we bring 
the first panel up, I would ask either of you, Senator Johnson 
or Senator Feinstein, if you would have any comments that you 
might like to make about the respective legislation before we 
proceed to the panels.
    Senator Johnson.

          STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR 
                       FROM SOUTH DAKOTA

    Senator Johnson. I'll be very brief about this. Thank you, 
Madam Chairman, for convening today's hearing. I also want to 
thank Senator Feinstein for her extraordinary leadership on 
California-related water issues in general. I would like to 
extend a welcome to Deputy Commissioner Larry Todd and the 
Bureau of Reclamation and to the other witnesses who traveled 
here to provide us with their views on title XVI Water 
Reclamation and Reuse Program.
    While we have not yet made use of the title XVI programs in 
South Dakota, I have no doubt that we will consider it in the 
future, given the growing pressure on our finite water 
resources. In South Dakota and across the West, increasing the 
efficient use of water is a key part of meeting future water 
demands, and with that in mind, I'm very interested in today's 
testimony, which builds on the testimony we heard during the 
title XVI oversight hearing in February.
    At that time, we heard about the importance of a water 
reuse program to many water-stressed communities in the West. 
We also heard from the Congressional Research Service that the 
administration has objected to most, if not all, of the title 
XVI projects that members have proposed for authorization 
during the 108th and 109th Congress. We also heard that the 
administration continues to recommend cutting the funding for 
title XVI projects by over 50 percent each year. Clearly, there 
is a disconnect between water managers in the West and the 
administration as to the value of this program, so I'm 
especially appreciative that you, Madam Chairman, and Senator 
Feinstein have teamed up to try to reform the program so that 
it may better secure administration support and better serve 
all people in the West. I look forward to working with you in 
that effort. I thank you again for your leadership on the 
subcommittee.
    Senator Murkowski. Thank you, Senator Johnson.
    Senator Feinstein, again, I want to thank you for all of 
your work in this area and in working with us as we tried to 
craft something that I think will make a difference. So again, 
thank you.

       STATEMENT OF HON. DIANNE FEINSTEIN, U.S. SENATOR 
                        FROM CALIFORNIA

    Senator Feinstein. Madam Chairman, let me thank you, 
because Alaska is not eligible for title XVI and you have been 
just wonderful and gracious and I am very grateful. You have 
earned a big chip in my book, so thank you very much. Senator 
Johnson, thank you very much for your support. I'd also like to 
welcome the two Californians that are here to testify: Joe 
Grindstaff, the executive director of the CALFED water program 
and Rick Atwater, who is here on behalf of WateReuse and also 
chief executive officer of the Inland Empire Utilities Agency.
    In preparation for this hearing, Madam Chairman, I re-read 
the administration's testimony from our February 28 oversight 
hearing on title XVI, and administration review found that 
title XVI served the admirable goal of ``proactively addressing 
water-related crises in the reclamation States,'' but faulted 
title XVI because the programs, goals and timelines are 
unclear. The title XVI bill that Madam Chairman and I have 
introduced makes quite clear the programs, goals and 
timetables.
    Let me for a moment explain. There was a lot of discussion 
at our February hearing about how we needed more substantive 
criteria for evaluating which projects to authorize for Federal 
funding. We have included those substantive criteria, including 
the cost per acre-foot of water produced by the project, 
whether it can demonstrate regional benefits, whether it has 
environmental benefits, whether it demonstrates new 
technologies and whether it addresses Federal interests, such 
as helping to resolve endangered species issues. We thus ensure 
that title XVI project proposals will be evaluated against 
real, substantive criteria, which some projects will meet and 
some will not. We also put clear timelines in the project 
review process. The Secretary has 180 days to evaluate a 
proposal and submit a recommendation to Congress. If the 
Secretary doesn't act in the time period, Congress can move 
forward with its own review, therefore there is no stalemate.
    I want to emphasize the importance of the clear, 
substantive criteria and the expeditious review process in this 
bill. There is not a large amount of money in the title XVI 
program and I, like you, want to spend it building new water 
supplies, not just studying projects endlessly. There was just 
$25 million appropriated for title XVI in 2006 and the 
administration asked for just $10 million in 2007. So it makes 
no sense, from a cost-effectiveness perspective, to spend most 
of this limited funding on an elaborate review process of 
expensive studies and ranking proposals.
    You have evidence of the West-wide appeal of title XVI 
before you today, with two Texas and two California projects. 
Drought strikes all of us in the West and we all need new water 
supplies. We need to spend our title XVI dollars, matching the 
80-percent local contribution, to build projects on the ground. 
The two California bills before us today will provide some 
300,000 acre-feet of new water annually. Put in context, that 
is nearly 40 percent of the 800,000 acre-foot annual reduction 
that California needs to reduce its use of the Colorado River 
from 5.2 million to 4.4 million acre-feet per year, for a 
Federal cost share of only 20 percent. That is a lot of reduced 
pressure on the Colorado River.
    Not too long ago, in a speech delivered at a water reuse 
conference, John Keys, the recently retired Commissioner of 
Reclamation, called recycled water the last river to tap and I 
believe he is right. So I look forward to working with you, 
Madam Chairman, with my colleague, Senator Johnson, and with 
other members of this subcommittee to pass out this title XVI 
bill into law. I thank you so much for your excellent 
cooperation and leadership. Thank you.
    Senator Murkowski. Thank you.
    With that, we will call up our first panel, consisting of 
Mr. Larry Todd, who is the Deputy Commissioner for Policy, 
Administration and Budget at the Bureau of Reclamation within 
the Department of the Interior. I might also add that we have 
received some written testimony on several bills that are 
before the subcommittee today and all that testimony will be 
made part of the official record. So with that, welcome to the 
subcommittee, Mr. Todd and if you would like to present your 
comments, please proceed.

   STATEMENT OF LARRY TODD, DEPUTY COMMISSIONER FOR POLICY, 
ADMINISTRATION AND BUDGET, BUREAU OF RECLAMATION, DEPARTMENT OF 
                          THE INTERIOR

    Mr. Todd. Thank you, Madam Chairman and members of the 
subcommittee. I am Larry Todd, Deputy Commissioner for the 
Bureau of Reclamation. Thank you for the opportunity to present 
the departmental views on the five bills before the 
subcommittee today.
    I would first like to address S. 3639, which deals with 
reforms to the title XVI program and then address the various 
bills regarding new authorizations for title XVI. We applaud 
both you and Senator Feinstein for recognizing the need for 
legislation that would reformulate Reclamation's title XVI 
program.
    The Department believes that this bill proposes 
improvements that would enable Reclamation to better administer 
the program. Because we believe that additional adjustments to 
the legislation are necessary to ensure that project assessment 
and authorization is prioritized to focus on areas of greatest 
need, the administration cannot support S. 3639 at this time.
    We appreciate the commitment you have made to this issue 
and look forward to the opportunity to work with subcommittee 
to improve the legislation and find common ground on the 
necessary reforms to the title XVI program. We believe that the 
administration and Congress are of like minds in the need to 
reform this program and are confident that we can work out our 
remaining differences to develop reform legislation that 
addresses our mutual concerns.
    Over the past several years, administration witnesses have 
consistently testified against authorization of new title XVI 
projects. This is not because we do not recognize the value of 
water reuse and recycling to the local communities; rather, 
this steadfast opposition has its origins in several issues 
that any reform legislation must address for this to be a 
viable, useful program that the administration can support.
    No. 1, water reuse and recycling is fundamentally a 
responsibility for State and local interests. Federal 
involvement should be used to facilitate these projects in high 
priority areas where the Federal funds can have the greatest 
impact on addressing our long-term water challenges. Two, the 
program currently has inadequate controls on project 
development to allow a reviewer to ascertain whether the 
preferred alternative for a project is in the best interests of 
the taxpayer. Three, a proliferation of authorized projects 
without adequate criteria to judge them makes it difficult or 
even impossible to assess how any one project can contribute to 
meeting Reclamation's long-term goals. Four, the Department, 
the Office of Management and Budget and Congress all need to 
have a consistent, useful suite of performance-oriented metrics 
to help prioritize projects for funding. And five, the project 
development and review process must be workable for all 
parties, meaning that: A, it must have clear standards, 
criteria and processes for project sponsors; B, Reclamation and 
the Department and the Office of Management and Budget must 
have sufficient time and tools to evaluate proposed projects; 
and C, Congress needs a clear----
    Senator Murkowski. Mr. Todd, can you--I think your 
microphone is on, but can you just move it a little bit closer?
    Mr. Todd. Yes. Excuse me.
    Senator Murkowski. It is difficult to hear you.
    Mr. Todd. Is this better? There we go.
    Senator Murkowski. It is a little bit better.
    Mr. Todd. That Congress needs a clear assessment of the 
merits and recommendations regarding each project. We have some 
concerns with S. 3639 as written and we would like to work with 
the committee further to reach common ground on these issues. 
Specifically, we are concerned with the technically and 
financially viable standard for review cited in the bill. While 
we support the bill's sponsors' intention to have the 
administration conduct a formal review and assessment of the 
proposed project prior to acting on additional projects, we are 
concerned that this standard weakens the level of review that 
title XVI projects will go through prior to the Secretary 
making a recommendation to Congress. Using this standard would 
remove any requirement that the project be evaluated as to its 
technical and economic feasibility. A feasibility analysis is 
necessary in order to develop accurate and well-defined cost 
estimates that demonstrate the degree to which the water 
recycling project alternative is cost-effective, relative to 
other water supply alternatives.
    We also have other concerns that are outlined in my written 
statement. We believe that the proposed legislation moves us in 
a direction of satisfactorily addressing these issues 
highlighted above, but that the changes proposed by S. 3639 are 
not sufficient. However, we would be pleased to work with the 
Committee to reach common ground to improve title XVI.
    I will now turn to the new title XVI authorization bills 
that are before the subcommittee today. In summary, with the 
tremendous backlog of existing title XVI projects, and because 
of the concerns I've just noted, we cannot support the addition 
of new projects at this time. It would be our hope that we 
could reach common ground on how to reform title XVI before 
additional projects are authorized.
    S. 3638 is a multi-part authorization for projects in 
southern California. We would note that title II, which would 
authorize the Secretary of the Interior to participate with the 
Western Municipal Water District in the design and construction 
of a water supply project known as the Riverside Corona Feeder, 
does not fit with the title XVI program. In addition, 
feasibility level studies have not yet been completed. 
Consequently, we cannot support this legislation.
    H.R. 177 would authorize a series of additional title XVI 
projects in California. The Department would note that under 
sections 4 and 5, the legislation poses increases to the 
Federal cost share for projects. The Department does not 
believe there is justification to support assigning a cap 
higher than the current $20 million for these projects and 
strongly opposes this provision.
    H.R. 2341 would authorize a water reuse project in Austin, 
TX. A final feasibility report is scheduled to be completed by 
the fall of 2006. We recommend completing this cooperative 
feasibility study and evaluations of the project, including 
NEPA compliance, prior to congressional authorization for 
construction.
    Finally, H.R. 3418 would authorize water reuse facilities 
in McLennan County, TX. The city of Waco has developed 
conceptual plans for this project but Reclamation has not 
reviewed this proposal nor conducted any studies. Until we have 
more information, we cannot comment on the merits of the 
project nor upon H.R. 3418 itself and are unable to support 
this legislation.
    That concludes my testimony and I will be happy to answer 
any questions you might have.
    [The prepared statement of Mr. Todd follows:]

   Prepared Statement of Larry Todd, Deputy Commissioner, Bureau of 
                Reclamation, Department of the Interior

                                S. 3639

    Madam Chairwoman and members of the Subcommittee, I am Larry Todd, 
Deputy Commissioner of the Bureau of Reclamation. I am pleased to be 
here today to give the Department's views on S. 3639, a bill that makes 
amendments to Title XVI of the Reclamation Projects Authorization and 
Adjustment Act of 1992. We applaud both you and Senator Feinstein for 
recognizing the need for legislation that would reformulate the Bureau 
of Reclamation's Title XVI Water Reclamation and Reuse Program. The 
Department believes that this bill proposes improvements that would 
enable Reclamation to better administer the program. Because we believe 
that additional adjustments to the legislation are necessary to ensure 
that project assessment and authorization is prioritized to focus on 
areas of greatest need, the Administration cannot support S. 3639 at 
this time. We appreciate the commitment you have made to this issue and 
look forward to the opportunity to work with the Subcommittee to 
improve the legislation and find common ground on the necessary reforms 
to the Title XVI program. We believe that the Administration and 
Congress are of like minds in the need to reform this program, and are 
confident that we can work out our remaining differences to develop 
reform legislation that addresses our mutual concerns.
    In 1992, Congress adopted, and the President signed, the 
Reclamation Projects Authorization and Adjustment Act (Public Law 102-
575). Title XVI of this Act, the Reclamation Wastewater and Groundwater 
Study and Facilities Act, authorized the Secretary to participate in 
the planning, design and construction of five water reclamation and 
reuse projects. The Secretary was also authorized to undertake a 
program to identify other water recycling opportunities throughout the 
17 western states, and to conduct appraisal level and feasibility level 
studies to determine if those opportunities are worthy of 
implementation. The Bureau of Reclamation has been administering a 
program to fund these Title XVI projects since 1994. The funds are 
passed through from Reclamation to the project sponsor; Reclamation is 
in essence providing a grant to the project sponsoring entities for 
design and construction work.
    In 1996, Public Law 104-266, the Reclamation Recycling and Water 
Conservation Act, was enacted. This law amended Title XVI and 
authorized the Secretary to participate in the planning, design and 
construction of 18 additional projects, including two desalination 
research and development projects. Since 1996, Title XVI has been 
amended several times, and now there are 32 projects authorized for 
construction in nine states.
    With regard to the already existing authorizations, of the 32 
specific projects authorized to date, 21 have received funding. Of 
these, nine have been included in the President's budget request. 
Including anticipated expenditures during FY 2006, approximately $325 
million will have been expended by Reclamation on these authorized 
projects by the end of the current fiscal year. It is estimated that as 
much as $340 million could still be required in order to complete the 
Federal funding for all 21 projects, and another $220 million in 
Federal funding could be needed to complete the remaining 11 authorized 
projects that have yet to receive funding.
    As we stated in testimony before this Committee on February 28, 
2006, Title XVI projects have demonstrated that water recycling can be 
a viable water supply alternative in water short urban areas of the 
West. However, we have also noted that we believe the Title XVI program 
has outgrown its original purpose of demonstrating new technology, and 
that fundamental reform is needed to ensure that the program produces 
meaningful results for the current water needs of the West. We believe 
that before projects are authorized for construction, their appraisal 
and feasibility studies should be completed, reviewed, and approved by 
the Department and the Office of Management and Budget and submitted to 
Congress. We also believe that as projects progress through appraisal 
and, if warranted, feasibility study phases, they should be rated 
against ranking criteria that would help Reclamation, Congress and the 
Administration prioritize projects. Such ranking criteria would address 
whether the project actually alleviates significant water conflict or 
shortage and whether it would add water supply in one of the likely 
crisis areas that we have focused on in efforts like the Water 2025 
program. Additionally, we believe there is a need to clarify the 
research and demonstration project provisions of Title XVI. Given tight 
budget constraints it is particularly important that the Administration 
and the Congress have all the information necessary to identify the 
projects most worthy of federal investment. We would welcome the 
opportunity to work with the Committee to develop mutually acceptable 
language.
    S. 3639 would direct the Secretary of the Interior to provide a 
technical and financial review of any water recycling project proposal 
submitted for consideration by a non-Federal project proponent. The 
purpose of the review would be to determine if the proposed project is 
``technically and financially viable.'' If the Secretary finds that the 
project is ``technically and financially viable,'' the Secretary would 
then be required--with 180 days--to submit his findings to Congress 
along with a recommendation as to whether the project should be 
authorized for construction. We support the bill sponsors' intention to 
have the Administration conduct a formal review and assessment of a 
proposed project prior to acting on legislation to authorize additional 
Title XVI projects. If project authorizations cease to precede the 
formal review and assessment of a proposed project, this would be an 
important improvement to the manner in which the Title XVI program has 
been administered to date.
    However, we are concerned that this bill weakens the level of 
review that Title XVI projects will go through prior to the Secretary 
making a recommendation to Congress. S. 3639 only requires that a 
project proponent demonstrate that its project is ``technically and 
financially viable.'' The bill defines a project as ``technically and 
financially viable'' if it ``meets generally acceptable engineering, 
public health, and environmental standards,'' can obtain all necessary 
permits, and has a project sponsor that is capable of providing its 
share of the costs. Using the viability standard contained in this bill 
removes any requirement that the project be evaluated as to its 
technical and economic feasibility. A feasibility analysis, as 
described in Reclamation's ``Guidelines for Preparing, Reviewing, and 
Processing Water Reclamation and Reuse Project Proposals Under Title 
XVI of Public Law 102-575,'' is necessary in order to develop accurate 
and well defined cost estimates. This level of cost definition is 
required to demonstrate the degree to which the water recycling project 
alternative is cost-effective relative to other water supply 
alternatives that could be implemented by the local project sponsor. It 
is also necessary to determine the economic benefits that are to be 
realized after project implementation. The Department believes that it 
would not be sustainable to make decisions on future project 
authorizations that would commit limited Federal funds to construct 
additional water recycling projects based on whether or not a project 
is simply capable of being constructed.
    The Department believes, as we think the sponsors of the bill do, 
that a new model of reviewing project proposals is needed, provided 
that a new model enhances the Administration and Congress's ability to 
prioritize federal investment and does not exacerbate the problem of 
project authorizations preceding proper review and analysis.
    An important need that S. 3639 does not sufficiently address is in 
the area of project eligibility criteria and funding prioritization. S. 
3639 would require the Secretary to review any and all project 
proposals that are received, rather than a select group of proposals 
for projects that meet minimum standards. In the testimony we presented 
during the February 28, 2006, hearing before this committee, we stated 
that any restructuring of the Title XVI program should aim to create a 
framework under which Title XVI projects will be screened to ensure 
they complement Reclamation's mission, rather than diminishing 
Reclamation's ongoing core programs. S. 3639 does not include such a 
framework.
    A meaningful reform bill must authorize Reclamation to use uniform 
assessment criteria to identify the best projects for funding. The 
practice of project authorization prior to the completion and approval 
of a study demonstrating that a project is technically and economically 
practical is a poor practice and has led to the backlog noted 
previously.
    The Department is also concerned about the provisions in S. 3639 
that would eliminate the Secretary's authority to identify and 
investigate new water recycling opportunities. Under the existing 
planning authorities of Title XVI, Reclamation has provided financial 
and technical assistance to local agencies to conduct over a dozen 
appraisal or feasibility studies for projects not yet authorized for 
construction. The cities of Austin and Brownsville, Texas, Santa Fe, 
New Mexico, and Desert Hot Springs, California, are just a few of the 
many communities that have benefited from the general planning 
authorities afforded Reclamation under Title XVI. The elimination of 
the Secretary's authority to conduct such studies effectively reduces 
the Secretary's range of involvement to that of simple participation in 
the project review process, and only if that participation is requested 
by a non-Federal project sponsor.
    Over the past several years, Administration witnesses have 
consistently testified against authorization of new Title XVI projects. 
This is not because we do not recognize the value of water reuse and 
recycling to local communities. Rather, this steadfast opposition has 
its origins in several issues that any reform legislation must address 
for this to be a viable, useful program that the Administration can 
support:

   Water reuse and recycling is fundamentally a responsibility 
        of state and local interests. Federal involvement should be 
        used to facilitate these projects in high priority areas where 
        the federal funds can have the greatest impact on addressing 
        our long-term water challenges.
   The program currently has inadequate controls on project 
        development to allow a reviewer to ascertain whether the 
        preferred alternative for a project is in the best interest of 
        the taxpayer.
   A proliferation of authorized projects, without adequate 
        criteria to judge them, makes it difficult or even impossible 
        to assess how any one project can contribute to meeting 
        Reclamation's long-term goals.
   The Department, the Office of Management and Budget, and the 
        Congress all need to have a consistent, useful suite of 
        performance-oriented metrics to help prioritize projects for 
        funding.
   The project development and review process must be workable 
        for all parties--meaning that it must have clear standards, 
        criteria, and processes for project sponsors, that Reclamation, 
        the Department, and the Office of Management and Budget must 
        have sufficient time and tools to evaluate proposed projects, 
        and that Congress needs a clear assessment of the merits and 
        recommendations regarding each project.

    Madam Chairwoman, the Department supports efforts to increase local 
water supplies in the West through the implementation of water 
recycling projects. However, the Department believes that Title XVI 
needs to be a focused program that will produce results consistent with 
Reclamation's mission of diversifying water supplies and proactively 
addressing water-related crises in the Reclamation States. We believe 
that the proposed legislation moves us in the direction of 
satisfactorily addressing the five issues highlighted above, but that 
the changes proposed by S. 3639 are not quite sufficient. However, we 
would be pleased to work with the Committee to reach common ground to 
improve Title XVI.
    Madam Chairwoman, this concludes my testimony. Thank you for the 
opportunity to comment on S. 3639. I would be happy to answer any 
questions at this time.

                                S. 3638

    Madam Chairwoman and members of the Subcommittee, I am Larry Todd, 
Deputy Commissioner of the Bureau of Reclamation. I am here today to 
present the views of the Department of the Interior on S. 3638, a bill 
to authorize water supply, reclamation reuse and recycling and 
desalination projects in Southern California. S. 3638 would amend Title 
XVI, the Reclamation Wastewater and Groundwater Study and Facilities 
Act (P.L. 102-575) to include design, planning, and construction 
authority for several regional projects. For reasons described below, 
the Department does not support S. 3638.
    S. 3638 as written would ``encourage'' the Secretary of the 
Interior to participate in projects to plan, design, and construct 
water supply projects, and amend Title XVI to authorize the design, 
planning, and construction of projects to treat impaired surface water, 
reclaim and reuse impaired groundwater, and provide brine disposal in 
the State of California.
    Title I of the bill would authorize the Inland Empire recycling 
project with a Federal cost share not to exceed 25 percent, and a 
funding authorization of $20 million. Title I of the bill would also 
authorize the Cucamonga County Water District Pilot Satellite Recycling 
Plant with a Federal cost share not to exceed 25 percent, and a funding 
authorization of $10 million. With regard to the Inland Empire Regional 
Water Recycling Initiative, Reclamation reviewed the project as part of 
the CALFED/Title XVI review and found the project while close to 
meeting the requirements still lacked 3 of the 9 requirements needed to 
determine feasibility. Absent these items, Reclamation could not 
determine the feasibility of the project. This does not mean the 
project is not feasible, but rather that until the three remaining 
items are completed, Reclamation cannot provide a feasibility 
determination. It is expected that upon completion of the work covered 
by a cooperative agreement between Inland Empire Utilities Agency and 
Reclamation, funded in the FY 2006 appropriation, the missing items 
will be addressed and Reclamation can make a final determination on the 
project's feasibility. Until the feasibility study is completed, the 
Department cannot support authorization of this project.
    With regard to the Cucamonga Valley Water Recycling Project, 
Reclamation also reviewed this project as part of the CALFED/Title XVI 
review and found that the data provided did not meet 5 of the 9 
requirements used to determine feasibility. Absent these items, 
Reclamation could not determine the feasibility of the project. This 
does not mean the project is not feasible, but rather that until the 
five remaining items are completed, Reclamation cannot provide a 
feasibility determination.
    Title II, Section 202 of the bill would authorize the City of 
Corona Water Utility, California Water Recycling and Reuse Project. 
Reclamation also reviewed this project as part of the CALFED/Title XVI 
review and found that the data provided did not meet 8 of the 9 
requirements used to determine feasibility. Based on the technical 
information provided, Reclamation could not determine the feasibility 
of the project. This does not mean the project is not feasible, but 
rather that until the remaining items are completed, Reclamation cannot 
provide a feasibility determination.
    Title II, Section 202 of the bill would also authorize the Yucaipa 
Valley Regional Water Supply Renewal Project. Reclamation has not been 
in consultation with the local district nor received any copies of a 
feasibility study to support the authorization of this project. Without 
a proper analysis to make sure this project meets appropriate federal 
guidelines for consideration for construction authorization, we cannot 
support Reclamation's participation in the planning, design and 
construction activities.
    With regards to all of the Title XVI projects proposed in S. 3638, 
as the Department has consistently stated in prior testimony, it does 
not believe it is prudent to authorize new Title XVI projects while a 
major backlog of projects already exists. The Department also believes 
enactment of this legislation authorizing new Title XVI construction 
projects is likely to place an additional burden on Reclamation's 
already tight budget, and could potentially delay the completion of 
other currently authorized projects. With the tremendous backlog of 
existing Title XVI projects, we cannot support the addition of new 
projects at this time. We note that of the 32 specific projects 
authorized under Title XVI to date, 21 have received funding. Three of 
the projects have been funded to the full extent of their 
authorization. Two more should be fully funded in 2006.
    Title II would also authorize the Secretary of the Interior to 
participate with the Western Municipal Water District in the design and 
construction of a water supply project known as the Riverside-Corona 
Feeder. This is not a project that fits within the Title XVI program. 
This Title provides a new authorization for Federal funding for this 
project of 35 percent of the total project cost or $50 million, 
whichever is greater.
    This project would withdraw water from San Bernardino Valley 
groundwater aquifers that are replenished during wet years from local 
runoff, regulated releases from Seven Oaks Reservoir, and water from 
the State Water Project. It would consist of a number of wells and 
connecting pipelines, which would deliver up to 40,000 acre-feet of 
water annually to communities in western Riverside County. Project 
benefits include local drought protection, better groundwater 
management, and reduced dependence on imported water.
    The economic and efficient use of water is a priority for the 
Department of Interior. The Department strongly encourages local water 
supply, recycling and desalination efforts. Partnering with state and 
local governments is in accord with the Secretary's Water 2025 
framework for anticipating water supply crises and preventing them 
through communication, consultation and cooperation, in service of 
conservation.
    Madam Chairwoman, the Department supports the type of resourceful 
utilization of local water supplies this bill calls for and the 
potential for reducing the use of imported supplies from the Colorado 
River and Bay-Delta. However, we cannot support S. 3638 concerning the 
Riverside-Corona Feeder. First, the language establishing the federal 
share of the project costs needs to be clarified to clearly set a 
maximum federal cost share. Second, we understand that feasibility 
level studies have not yet been completed for this project. Without a 
proper analysis that adheres to the ``Economic and Environmental 
Principles and Guidelines for Water and Related Land Resources 
Implementation Studies,'' and which otherwise meets appropriate federal 
guidelines for consideration of project authorization, we cannot 
support Reclamation's participation in design and construction 
activities.
    Reclamation is currently in consultation with the Western Municipal 
Water District on the project and providing them guidance on their 
feasibility analysis and the appropriate level of NEPA compliance that 
will be needed. Nevertheless, we remain concerned that this is neither 
a Title XVI project nor is it a project with any nexus to an existing 
Reclamation project.
    Thank you for the opportunity to convey our concerns on this 
legislation, and I am happy to take any questions.

                                H.R. 177

    Madam Chairwoman and members of the Subcommittee, I am Larry Todd, 
Deputy Commissioner of the Bureau of Reclamation. I am pleased to be 
here today to give the Department's views on H.R. 177, the Santa Ana 
River Water Supply Enhancement Act of 2005. The Department does not 
support this bill.
    In 1992, Congress adopted, and the President signed, the 
Reclamation Projects Authorization and Adjustment Act (Public Law 102-
575). Title XVI of this Act, the Wastewater and Groundwater Study and 
Facilities Act, authorized the Secretary to participate in the 
planning, design and construction of five water reclamation and reuse 
projects. The Secretary was also authorized to undertake a program to 
identify other water recycling opportunities throughout the 17 western 
states, and to conduct appraisal level and feasibility level studies to 
determine if those opportunities are worthy of implementation. The 
Bureau of Reclamation has been administering a grant program to fund 
these Title XVI projects since 1994.
    In 1996, Public Law 104-266, the Reclamation Recycling and Water 
Conservation Act, was enacted. This law amended Title XVI and 
authorized the Secretary to participate in the planning, design and 
construction of 18 additional projects, including two desalination 
research and development projects. Since 1996, Title XVI has been 
amended several times, and now there are 32 projects authorized for 
construction in nine states.
    The Department recently testified to this Committee regarding the 
need for reforms to the Title XVI program. As noted in our testimony, 
the Department continues to believe that fundamental reform is needed 
to ensure that the program produces results for the current needs of 
the West.
    With respect to H.R. 177, this bill would amend Title XVI, the 
Reclamation Wastewater and Groundwater Study and Facilities Act to 
authorize the Secretary of the Interior to participate in the Prado 
Basin Natural Treatment System Project, to authorize the Secretary to 
carry out a program to assist agencies in projects to construct 
regional brine lines in California, to authorize the Secretary to 
participate in the Lower Chino Dairy Area desalination demonstration 
and reclamation project, and for other purposes.
    Section 2 of the bill authorizes the Secretary of the Interior, in 
cooperation with the Orange County Water District, to participate in 
the planning, design, and construction of the natural treatment systems 
and wetlands for the flows of the Santa Ana River, California, and its 
tributaries into the Prado Basin. Section 2 of the bill authorizes an 
appropriation of $20,000 to carry out this function.
    Section 3 of the bill authorizes the Secretary of the Interior, 
under Federal reclamation law and in cooperation with units of local 
government, to assist agencies in projects to construct regional brine 
lines to export the salinity imported from the Colorado River to the 
Pacific Ocean.
    Section 4 of the bill authorizes the Secretary of the Interior, in 
cooperation with the Chino Basin Watermaster, the Inland Empire 
Utilities Agency, and the Santa Ana Watershed Project Authority, acting 
under Federal Reclamation laws, to participate in the design, planning, 
and construction of the Lower Chino Dairy Area desalination 
demonstration and reclamation project.
    With regards to sections 2, 3 and 4, as the Department has 
consistently stated in previous testimony, it does not believe it is 
prudent to authorize new Title XVI projects while there is a major 
backlog of projects that already exist. We note that of the 32 specific 
projects authorized under Title XVI to date, 21 have received funding. 
Three of the projects have been funded to the full extent of their 
authorization. Two more should be fully funded in 2006.
    The Department also believes enactment of this legislation 
authorizing new construction projects is likely to place an additional 
burden on Reclamation's already tight budget.
    In addition to the proposed three projects, the Department is also 
concerned that under section 4, the legislation proposes a cost sharing 
of 25 per cent not to exceed $50.0 million. The Department does not 
believe there is justification to support assigning a cap higher than 
the current $20.0 million for this project, and strongly opposes this 
provision.
    Section 5 of the bill amends Section 1631(d) of Title XVI by adding 
a new paragraph (3) that would amend section 1624 by increasing the 
Federal share of the costs of the project authorized by Section 1624, 
Phase 1 of the Orange County Regional Water Reclamation Project.
    Section 5 proposes deviation from the existing Title XVI Section 
1631(d)(1) statute capping the federal cost share at $20.0 million. If 
enacted, the new section would increase the federal cost share to 
approximately $52.0 million. The Department does not believe there is 
justification to support raising the cap for this project. Increasing 
the funding for this project would reduce the ability of the Federal 
government to provide funds for other Title XVI projects.
    Section 6 of the bill authorizes a Center for Technological 
Advancement of Membrane Technology and Education to be established at 
the Orange County Water District located in Orange County, California. 
Section 6 of the bill authorizes an appropriation of $2 million for 
each of fiscal years 2006 through 2011 for this purpose.
    Reclamation currently supports several research efforts that are 
assisting in the development and advancement of membrane technologies. 
These efforts include; the Water Quality Improvement Center, located in 
Yuma, Arizona, the Tularosa National Center for Groundwater 
Desalination located in Tularosa, New Mexico, and as directed by 
Congress, funding assistance is provided to the Water Reuse Foundation 
to award research grants to support advanced water treatment research 
and technology transfer. Reclamation also provides research funding for 
the development and advancement of membrane technologies through our 
Desalination Water Purification Research and Development Program.
    The Bureau of Reclamation and other Federal agencies are currently 
working to determine the appropriate role, involvement and level of 
federal funding for additional advanced water treatment systems 
research. Madam Chairwoman, the Department is not familiar with the 
specific research that would be supported by this Center and the 
specific activities to which the funding would be applied. The 
Department is therefore not able to determine at this time if the 
Center as proposed will add value to those activities already being 
supported through Federal funds.
    Madam Chairwoman, this concludes my testimony. Thank you for the 
opportunity to comment on H.R. 177. I would be happy to answer any 
questions at this time.

                               H.R. 2341

    Madam Chairwoman and members of the Subcommittee, I am Larry Todd, 
Deputy Commissioner of the Bureau of Reclamation. I am here to present 
the views of the Department of the Interior on H.R. 2341, concerning 
the City of Austin water reclamation project in the State of Texas. 
While the Department encourages local water recycling efforts, we must 
oppose authorizing this additional water recycling project for the 
reasons described below.
    H.R. 2341 would authorize the Secretary of the Interior to 
participate in the design, planning, construction of, and land 
acquisition for, the City of Austin water reclamation project in the 
State of Texas. The authority proposed in H.R. 2341 is an amendment to 
the Reclamation Projects Authorization and Adjustment Act, (Public Law 
102-575), which limits the Federal share of project costs to 25 percent 
of the total project costs and restricts the Secretary from providing 
funding for the operation and maintenance of this project.
    In 1992, the Reclamation Projects Authorization and Adjustment Act 
(Public Law 102-575) became law. Title XVI of this Act, the Reclamation 
Wastewater and Groundwater Study and Facilities Act, authorized the 
construction of five water reclamation and reuse projects. In addition, 
the Secretary was authorized to conduct research and to construct, 
operate, and maintain demonstration projects. The Bureau of Reclamation 
has been administering a cost share program to fund these Title XVI 
activities since FY 1994.
    In 1996, Public Law 104-266, the Reclamation Recycling and Water 
Conservation Act, was enacted. This Act amended Title XVI and 
authorized the Secretary to participate in the planning, design, and 
construction of 18 additional projects, including two desalination 
research and development projects. Since 1996, Title XVI has been 
amended several times and other specific pieces of legislation have 
been enacted such that there now are 32 projects authorized for 
construction in nine states, not including newly authorized projects in 
the Hawaii Water Resources Act of 2005.
    The Department opposes authorizing additional construction projects 
prior to completion of feasibility studies to determine whether these 
particular projects warrant Federal funding. In general, Reclamation 
places priority on funding new projects that: (1) are economically 
justified and environmentally acceptable in a watershed context; (2) 
are not eligible for funding under another Federal program; and (3) 
directly address Administration priorities for the Reclamation program, 
such as reducing the demand on existing Federal water supply 
facilities.
    It should be noted that the Department, through the Bureau of 
Reclamation, has completed an appraisal study of this proposed project 
in cooperation with the City of Austin. As a result of the appraisal 
investigation, a draft Feasibility Report and Environmental Assessment 
was prepared by the City and reviewed by Reclamation in December 2005. 
The drafts are currently being revised based on extensive agency 
comments and in accordance with Reclamation's Title XVI criteria. The 
final planning reports are scheduled to be completed by the fall of 
2006. H.R. 2341 would authorize construction of the initial phases of 
this 27 year, $158 million project to convey recycled water to 
customers. This planning work would afford the opportunity for 
Reclamation to determine if the proposed actions match Title XVI 
authority and objectives. This feasibility study is authorized under 
the existing provisions of P.L. 102-575, Title XVI. We recommend 
completing this cooperative feasibility study to prepare the necessary 
analyses and evaluations of the project, including National 
Environmental Policy Act (NEPA) compliance, prior to congressional 
consideration of authorization for construction.
    The Department also opposes enactment of this legislation because 
authorizing new construction projects is likely to further burden 
Reclamation's already strained budget. At current funding levels, it 
will take Reclamation more than 10 years to complete funding of the 
currently authorized Title XVI projects.
    We would bring the attention of the Committee to the fact that this 
project goes beyond the original purpose of Title XVI, which was to 
support development of projects that demonstrated the feasibility of 
water reuse and recycling. Since the viability of this technology has 
been demonstrated, additional water reuse and recycling infrastructure 
most clearly falls within the purview of state and local governments 
which have already taken the lead in project development.
    Finally, the Department opposes enactment of the provision in H.R. 
2341 authorizing land acquisition prior to completion of the 
feasibility study. Federal authorization for land acquisition should 
await the outcome of the feasibility study and the determination that 
such lands are legitimate project components and necessary for project 
implementation.
    In summary, the Department encourages local water recycling 
efforts, and is engaged in numerous water reuse and recycling projects 
throughout the West. However, for the reasons provided above, the 
Department cannot support authorizing this new construction request.
    Thank you for the opportunity to comment on H.R. 2341. This 
concludes my statement and I would be happy to answer any questions.

                               H.R. 3418

    Madam Chairwoman and members of the Subcommittee, I am Larry Todd, 
Deputy Commissioner of the Bureau of Reclamation. I am pleased to 
present the views of the Department of the Interior on H.R. 3418, 
concerning the Central Texas Water Recycling and Reuse Project in the 
State of Texas. The Administration cannot support this bill.
    H.R. 3418 would amend the Reclamation Wastewater and Groundwater 
Study and Facilities Act (Public Law 102-575), to authorize the 
Secretary of the Interior, in cooperation with the City of Waco and 
other participating communities, to participate in the design, 
planning, and construction of permanent facilities to reclaim and reuse 
water in McLennan County, Texas.
    In 1992, the Reclamation Projects Authorization and Adjustment Act 
(Public Law 102-575) became law. Title XVI of this Act, the Reclamation 
Wastewater and Groundwater Study and Facilities Act, authorized the 
construction of five water reclamation and reuse projects. In addition, 
the Secretary was authorized to conduct research and to construct, 
operate, and maintain demonstration projects. The Bureau of Reclamation 
has been administering a cost-share program to fund these Title XVI 
activities since FY 1994.
    In 1996, Public Law 104-266, the Reclamation Recycling and Water 
Conservation Act, was enacted. This Act amended Title XVI and 
authorized the Secretary to participate in the planning, design, and 
construction of 18 additional projects, including two desalination 
research and development projects. Since 1996, Title XVI has been 
amended several times and other specific pieces of legislation have 
been enacted such that there now are 32 projects authorized for 
construction in nine states.
    While the Department strongly encourages local water recycling 
efforts, we oppose authorizing this additional water recycling project 
for the reasons described below.
    The Department opposes authorizing additional construction projects 
prior to completion of feasibility studies to determine whether these 
particular projects warrant Federal funding. In general, Reclamation 
places priority on funding new projects that: (1) are economically 
justified and environmentally acceptable in a watershed context; (2) 
are not eligible for funding under another Federal program; and (3) 
directly address Administration priorities for the Reclamation program, 
such as reducing the demand on existing Federal water supply 
facilities.
    The City of Waco has developed conceptual plans for this project. 
However, Reclamation has not reviewed this proposal, nor conducted an 
appraisal study. An appraisal study will be needed to determine if the 
preliminary work initiated by the city meets Reclamation's requirements 
and to evaluate the potential for a feasibility study according to 
Title XVI criteria. In that respect, until we have more information, we 
cannot comment on the merits of the project itself and therefore cannot 
support H.R. 3418.
    The Department also opposes enactment of this legislation because 
authorizing new construction projects is likely to further burden on 
Reclamation's already strained budget. At current funding levels, it 
will take Reclamation more than 10 years to complete funding of the 
currently Title XVI authorized projects.
    We would bring the attention of the Committee to the fact that this 
project goes beyond the original purpose of Title XVI, which was to 
support development of projects that demonstrated the feasibility of 
water reuse and recycling. Since the viability of this technology has 
been demonstrated, additional water reuse and recycling infrastructure 
most clearly falls within the purview of state and local governments 
which have already taken the lead in project development.
    In summary, the Department encourages local water recycling 
efforts. However, for the reasons provided above, the Department cannot 
support authorizing this new construction request.
    Thank you for the opportunity to comment on H.R. 3418. This 
concludes my statement and I would be happy to answer any questions.

    Senator Murkowski. Thank you, Mr. Todd. I think your 
comments about the four additional water projects that we have 
up before us, your statement that the Bureau can't support them 
until we reform title XVI, goes to the importance of the 
legislation that Senator Feinstein and I have been working on. 
I appreciate your statements that you intend to continue to 
work with us on the remaining differences that relate to S. 
3639.
    In listening to your comments and also in reading your 
testimony that was submitted, I have to wonder if perhaps it is 
just that we are not necessarily defining, but choosing the 
terminology. In our legislation, we speak to the technical and 
financial viability. In the past, we've called it feasibility. 
Whichever wording you choose, ultimately you'd like to think 
you're getting to the same place in terms of determination as 
to whether or not you've got a project that works. So I would 
like to think that we can work through the issues and perhaps 
some of the semantics that might be bogging us down because, as 
you indicate, and we would certainly agree, this is too 
important to not move forward.
    I guess I would ask for your support as well as knowing 
that you will be in a position to provide to us the people 
within your Department that we can be working with, in the very 
immediate future, to see if we can't work out some of these 
differences.
    Mr. Todd. I believe that the terminology has been a problem 
and we're very willing to work with you on that and provide 
individuals to work with your staff.
    Senator Feinstein. I'm sorry. I can't hear you.
    Senator Murkowski. Just move that right up close.
    Mr. Todd. I do believe that the terminology is a problem, 
but I think that we can work those definitions out. And 
certainly, we would be willing to provide the necessary staff 
to work with your committee staff to work out these issues.
    Senator Murkowski. We would like to do that in a relatively 
expedited timeframe here, if we can. Earlier this year, the 
Bureau had given us a copy of the findings of the CALFED title 
XVI review. The Committee had asked for this report and as part 
of that document, the Bureau made a determination on whether a 
project is feasible by evaluating the title XVI projects 
relative to nine specific criteria that had been laid out. Is 
it the position of the Bureau, I guess, to conclude that the 
project is feasible if it meets these nine criteria that are 
set out?
    Mr. Todd. Yes, I believe that is our position. We have 
these guidelines for preparing, reviewing and processing water 
reclamation and reuse project proposals under title XVI and 
that is on our Web site. The nine steps are right here in the 
feasibility section. And certainly, if those are met, we 
believe that it would meet the criteria for being feasible.
    Senator Murkowski. So we ought to be able to take these 
nine criteria and as long as they are part of the technical 
viability and the financial capability, we ought to be able to 
get from where you are with your nine criteria to where we are 
with our language and get to the same point, which is a 
recommendation that could be made to the Secretary as to the 
viability, feasibility--whatever you want to call it--of the 
project; is that correct?
    Mr. Todd. We believe so. As a matter of fact, one of the 
steps in here, one of the criteria is the financial capability 
and it is the same as, I think, in your bill.
    Senator Murkowski. So it sounds like we should be able to 
work through these issues. I look forward to doing that with 
you and your staff as well.
    Mr. Todd. I believe so.
    Senator Murkowski. OK. Senator Johnson.
    Senator Johnson. Mr. Todd, your testimony on S. 3639 states 
that before projects are authorized for construction, their 
appraisal and feasibility studies should be completed, 
reviewed, and approved by the Department and OMB and then 
submitted to Congress. Now it is my understanding that 
Reclamation is not actively supporting a significant number of 
appraisal and feasibility studies. How much of the Department's 
2007 budget request of $10.1 million for title XVI projects is 
committed to reviewing and completing appraisal and feasibility 
studies for potential project authorizations?
    Mr. Todd. Well, I don't have that figure on me. We can get 
that to you. I believe, though, that most of the funding level 
is going directly to fund construction of projects.
    Senator Johnson. All right. But if you could get that 
dollar number back----
    Mr. Todd. We will get that for you.
    Senator Johnson [continuing]. That would be useful. 
Because, obviously, if we are not going to do the appraisal and 
feasibility studies, then things become more difficult. Your 
testimony on the specific project authorizations sets forth an 
administrative position that the title XVI program was intended 
to be a demonstration program and that it has fulfilled its 
purposes. You then go on to state that additional water reuse 
and recycling infrastructure most clearly falls within the 
purview of State and local governments that have already taken 
the lead in project development. That position seems to convey 
that the administration does not support continuing the title 
XVI program. How do you reconcile that with your other 
statements that you, in fact, want to work with the committee 
on title XVI reform?
    Mr. Todd. I think the statement that the water supply for 
local communities is a local responsibility--now, where the 
Federal Government can fit in is helping and assisting in areas 
where we have critical water areas, and in particular, those 
that are particular water challenges for the Reclamation 
projects themselves. So, I don't think at all that we do not 
believe that these water reuse projects are bad projects at 
all. I think they are all good. But in fact, it is when does 
the Federal Government step in and actually assist in these. I 
believe that issue--and we have to have the right criteria in 
order to figure that out and be able to recommend when those 
taxpayer dollars are helping fund those projects.
    Senator Johnson. But you see it then, that so long as we 
can come together on criteria--and I appreciate your nine 
criteria that your Department has worked up, working with this 
committee, but so long as we can come together on criteria, you 
see--and the Department's view is that title XVI ought to be an 
ongoing program?
    Mr. Todd. Yes.
    Senator Johnson. And not simply a one-time-only 
demonstration project, but, in fact, a continuing program of a 
Federal, State, and local partnership kind of project?
    Mr. Todd. That's correct. Now, it has evolved and largely--
a lot of the techniques have been developed, that's true and 
demonstrated. But as long as we can get to the right criteria 
and get management of the program, then yes, that's where we 
would be. We would see it as a program.
    Senator Johnson. Very good. I yield back.
    Senator Murkowski. Senator Feinstein.
    Senator Feinstein. Thank you very much, Madam Chairman.
    Mr. Todd. I've just read your statement where you take on a 
number of California projects, specifically the Inland Empire 
Recycling Project, the Cucamonga Valley Water Recycling 
project, the City of Corona Water Utility, the Yucaipa Valley 
Regional Water Supply, and the Riverside Corona Feeder, all of 
which you say have shortfalls in meeting some of the 
requirements; right?
    Mr. Todd. That's true.
    Senator Feinstein. Now, my question is this: What process 
do you recommend to reconcile this to be able to get a clear 
understanding of what you are asking for, so that these 
projects can get approved?
    Mr. Todd. Well, the current nine points that we are using, 
we believe, are very useful for really what is out there right 
now and what we measure projects against. For instance, on 
Inland Empire, I'm told that we are very close to assembling 
the information or that they are close to assembling the 
information into a feasibility report and we have a cooperative 
agreement with them to do that.
    Senator Feinstein. Then it is likely that they will be 
approved?
    Mr. Todd. Pardon?
    Senator Feinstein. It is likely that that project will be 
approved?
    Mr. Todd. Well, I won't know until we get the report in 
front of us, but I believe there is a lot of information out 
there and we do believe that they are close. We believe it is 
in assembly, putting together the information that is there. 
Cucamonga is similar, although there were a few more things 
that they needed to do. So I think the feasibility nine points 
is right now the place where we need to start. And I don't 
necessarily----
    Senator Feinstein. Well, is there a misunderstanding from 
these projects, as to what the nine points are?
    Mr. Todd. There could be some communication problems. I 
wouldn't necessarily deny that. But as I have referred to 
this----
    Senator Feinstein. I'd be very happy to convene a meeting 
between you and the representatives of these projects and go 
over the nine points and see that there is no misunderstanding.
    Mr. Todd. We'd definitely do that. Certainly.
    Senator Feinstein. All right. I'd offer to do that then. 
I'll set it up, hopefully as soon as possible, and see if we 
can't sort of clear the decks. Now let me ask you a couple of 
questions about the national bill. Would you be willing to sit 
down with Senator Murkowski's staff, and my staff, and other 
key staff to work through your concerns on the national bill 
during the month of August?
    Mr. Todd. Oh, I think so, yes. Absolutely.
    Senator Feinstein. So that we have it done by the end of 
the month? Would that be agreeable with you, Madam Chairman and 
Senator Johnson, so that we might take a look at that?
    Senator Murkowski. Absolutely.
    Mr. Todd. We'd make every effort to do that.
    Senator Feinstein. Because we thought our criteria for 
reviewing these projects is pretty good: the cost per acre-
foot, the regional benefits, the environmental benefits, the 
new technologies, the cost-effectiveness compared to other 
alternatives, and the Federal interest quotient. If there are 
other substantive criteria that you think ought to be there, as 
long as they are not unduly cumbersome, I think it would be a 
good idea to know what that is. So those meetings might be able 
to turn that up.
    Let me say very clearly, one of my concerns about an 
elaborate, convoluted review process that goes on and on is 
that the dollars are so limited and if we can spend them on 
projects that deliver more water bang for the buck, we're all 
better off than we are on endless review. Would you agree with 
that?
    Mr. Todd. Yes, I would agree.
    Senator Feinstein. Well, then we ought to be able to get 
there. That's my hope. The two California bills before us today 
create 300,000 acre-feet of new water. Can you suggest a more 
cost-effective way to come up with 300,000 acre-feet of new 
water for the growing cities in the West?
    Mr. Todd. Well, I certainly have not read any of the 
background material and studies. No, I don't have any kind of 
information like that.
    Senator Feinstein. See, I think this is the most cost-
effective way we can go. And the Federal investment is so low, 
in the main, the communities are doing 80 percent of it and I 
think it is so important--I'm puzzled by the fact that 
Reclamation doesn't want any new projects, because the new 
projects may very well be more cost-effective and deliver more 
water than some of the older projects.
    Mr. Todd. Let me speak to the support. It is a matter of 
backlog. We've got a tremendous backlog right now of projects 
that we are funding. We have about 21 of them, I believe, and 
in order to finish those projects, it's going to be over 
$300,000 million. At the current rate, it's just a tremendous 
backlog in order to get to finishing any of these that we 
already have on the books. That's not counting the 11 or so 
projects that are already authorized that haven't received any 
funding.
    Senator Feinstein. Let me ask you this. We have a specific 
sunset provision in our national bill and it would sunset a 
specific project authorization if they received no funding for 
10 years. Is that helpful in addressing your concerns?
    Mr. Todd. I believe a sunset provision would be helpful.
    Senator Feinstein. How many projects would sunset if that 
were the provision?
    Mr. Todd. Well, I'd have to get you that information. I 
don't--I didn't bring that kind of analysis with me, but we 
would certainly give that to you.
    Senator Feinstein. OK, because it seems to me----
    Mr. Todd. Right now, for instance----
    Senator Feinstein [continuing]. There has to be some way of 
moving this process.
    Mr. Todd. We would definitely work with the committee staff 
in order to do that.
    Senator Feinstein. We have California jurisdictions, you 
know, clamoring for attention in the Reclamation area and it 
seems to be the one area where local jurisdictions really 
believe they can make some headway.
    Mr. Todd. We believe so, too. We believe that these are 
good projects. That's not the sticking point. The sticking 
point is about criteria and about the backlog and the funding 
levels and how we deal with that, management of that issue, 
those two issues.
    Senator Feinstein. OK, then what I would like to do is, on 
the five California projects that you mention in your written 
remarks, I'd like to convene a meeting next week and get the 
representatives from those projects, the key people back here 
and let's all sit down together and go over them, see where we 
are and we'll all be in the same room and hear the same thing. 
Does that make sense?
    Mr. Todd. We would commit to that.
    Senator Feinstein. OK, we'll set it up then, for next week. 
I thank you very much.
    Mr. Todd. Thank you.
    Senator Murkowski. Thank you. We will be working with you 
then.
    I think, Senator Feinstein, your point of making it happen 
during the August recess so that we can get it done, so that we 
can have something to move on when we come back after the 
recess is important. You mentioned the backlog and how we deal 
with that, and the reality of where we are is when you have 
these projects that keep getting authorized but no funding, 
it's almost, ``Where do you start first?'' And as you've 
mentioned, you may have new projects coming on that might have 
a higher benefit to a higher number of people, with better 
technology, but you're put down at the bottom of a list that is 
seemingly endless, and because it looks that bad, nobody can 
even get started with it, so you're doomed before you even get 
going. It seems that we've got to have a process where you can 
kind of clear out some of the stuff that just doesn't have that 
viability and figure out a way to move forward.
    Mr. Todd. We agree wholeheartedly with that statement. 
Absolutely.
    Senator Murkowski. Are there any other questions of Mr. 
Todd?
    Senator Johnson. Let me only comment that the underlying 
problem here has been the allocation of funding to the BLR for 
these projects. We've got several in my home State that have 
been stretched out. In fact, we've had to come back and re-
authorize a later completion date because the funding has been 
so deficient, compared to what their construction capability 
is, that the projects are costing more and more money and it 
stretches out a great deal of time to the disadvantaged people 
who need the water and to the taxpayers both. So if we're going 
to have these water project programs, we're going to have to do 
a far better job of creating a funding stream that is adequate 
to what it is we're attempting to do; otherwise, we're going to 
wind up with very worthy projects getting nothing. We're going 
to wind up with projects that are stuck in a very slow walk 
toward their completion, which is immensely costly to the 
taxpayers at both the State and Federal level. So we're going 
to have to do a much better job working with our friends at OMB 
to get a much more adequate level of funding so that the BLR 
isn't stuck with this world of backlogged projects that grow 
costlier by the day and then an inability to address new 
projects that may be even more worthy than the ones that are 
under construction, for all we know. But it is going to come 
down to a question of budget priority, and so far, this 
Congress hasn't done a very good job in that regard, nor has 
the White House.
    Senator Murkowski. Mr. Todd, thank you.
    Mr. Todd. Thank you.
    Senator Murkowski. Let's call forward the second panel. We 
have Mr. Joe Grindstaff, the director of the California Bay-
Delta Authority out of Sacramento. We've got Chris Lippe, the 
director of the city of Austin Water Utility out of Austin, TX, 
along with Mr. Richard Atwater, who is chair of the National 
Legislative Committee for the WateReuse Association, and Mr. 
Tom Ray, an engineering consultant from the city of Waco in 
Texas. Gentlemen, good afternoon. Do we have Mr. Ray? OK. All 
right.
    Since Mr. Ray is the last one to get here, we'll start with 
you, Mr. Grindstaff. Why don't we start with you then and just 
proceed to the right. Welcome to the committee. Thank you for 
traveling the distances that you have to be with us to provide 
your comments.

 STATEMENT OF P. JOSEPH GRINDSTAFF, DIRECTOR, CALFED BAY-DELTA 
                    PROGRAM, SACRAMENTO, CA

    Mr. Grindstaff. Thank you very much. I will assume that my 
written remarks are included. Thank you very much for being 
here, Senator Feinstein. We have worked together quite a bit on 
CALFED. I wanted to talk today specifically about water use 
efficiency and recycling, because that is really key to the 
future of water in California and indeed, for all the West, 
probably for the entire world.
    As we think about water, the projects that are before you 
today in California have ties both to CALFED, because water 
supplies go from northern California down to the Inland Empire 
and to the Colorado River. There are links to the Federal nexus 
that are incredibly important. As I listened to arguments about 
money, I also think, to some extent, there is a false economy 
here, because if we have a drought and we have major economic 
impacts, who is going to step up? USDA and the Federal 
Government are going to be called to come help subsidize the 
impacts of a drought. It seems to me that this is one of the 
best ways to proactively avert the problem.
    Just a couple of years ago, we were forced as a State to 
decrease our take, as Senator Feinstein pointed out, from the 
Colorado River. We decreased it by 800,000 acre-feet a year. We 
did that all at one time. We would not have been able to do 
that had we not had a CALFED program, had we not had projects 
like this in place. In fact, last year, Metropolitan Water 
District had a right to take water from behind Hoover Dam and 
decided not to take that water and benefited all of the other 
basin States, I think partly because we had implemented these 
kinds of programs. They had a right, under the interim surplus 
criteria, to take more water than they took, but were able to 
make the choice to benefit everyone in all seven basin States 
by not taking that water because we had made these kinds of 
investments. I think making these kind of investments is the 
right thing to do. I think that in the big picture, they really 
do save money for the Federal Government and for the economy of 
the Nation, and so I encourage you to proceed with the bill in 
terms of figuring out criteria.
    I do want to point out, I was the general manager of Santa 
Ana Watershed Project Authority, a regional agency that co-
sponsored a study with the Bureau of Reclamation that looked at 
a number of these projects, starting in the 1990's, that was 
completed 4 or 5 years ago, that actually came out listing what 
the projects were, what the benefits were, what the cost per 
acre-foot was. Many of those projects remain unauthorized, and 
so my concern, also, is that the bureaucracy not take over, but 
that we actually be able to move ahead and get the projects on 
the ground and that we don't change the standards along the way 
as a way of really preventing the projects from moving. Thank 
you.
    [The prepared statement of Mr. Grindstaff follows:]

         Prepared Statement of P. Joseph Grindstaff, Director, 
                        CALFED Bay-Delta Program

    Chairman Murkowski and members of the Subcommittee on Water and 
Power, I appreciate the opportunity to appear before you today to 
discuss ways the federal government could or should partner with state 
and local governments to increase the supply and improve the quality of 
water resources. I have been intimately familiar with these issues both 
as a manager for local and regional water agencies in Southern 
California, then as Chief Deputy Director for the California Department 
of Water Resources, and now as the Director of the CALFED Bay-Delta 
Program.
    Today I will provide an overview of the California Water Plan as it 
relates to recycled wastewater and conjunctive groundwater management. 
I will also provide you with some examples of how this works across 
California and discuss some of the major challenges facing us. Finally, 
I will conclude with recommendations from the State of California's 
perspective about how these vital forms of water management can be 
improved.
    In particular, the kinds of projects envisioned by S. 3638 and H.R. 
177--treating impaired surface and groundwater, wastewater reclamation 
and brine disposal--fit well with goals of the California Water Plan 
and the policy of multi-level governmental partnerships.
    The recently updated California Water Plan recognizes the need for 
a comprehensive approach and the need to work cooperatively--with local 
and regional agencies and with the state and federal governments--in 
order to succeed in managing the state's water resources. The Plan 
looks at water as a resource whose management involves many 
responsibilities and raises many issues.
    I am a firm believer that the water supply reliability and water 
quality issues facing California and many other parts of the nation and 
the world cannot be solved by any one management strategy implemented 
by any one level of government or private sector enterprise. Only by 
using all of the management options available, and through 
collaboration and cooperation at all levels of government and the 
private sector, will we be able to meet the demands of a growing 
population, maintain economic growth and prosperity, and do all this in 
a way that preserves and protects the natural environment.

                          WASTEWATER RECYCLING

    Californians have used recycled water since the late 1800s and 
public health protections have been in effect since the early part of 
the 1900s. Recycled water use has dramatically increased in the past 
several decades as water agencies needed to supplement their water 
supplies. Today, California's water agencies recycle about 500,000 
acre-feet of wastewater annually. In fact, this increase in water 
recycling and the addition of 1 million acre-feet of new groundwater 
storage are success stories for the CALFED Bay-Delta Program's efforts 
to increase water supply reliability.
    In 2001, the state Legislature established a 40-member Recycled 
Water Task Force to identify opportunities for, and constraints and 
impediments to, increasing the use of recycled water in California. 
Over the course of nearly 14 months, the Task Force conducted intensive 
study in collaboration with many other experts and the public to 
develop recommendations for actions at many levels.
    Many of the Task Force recommendations are in the process of being 
implemented and will significantly improve both the way projects are 
planned and the regulatory frameworks within which they must operate. A 
key issue remains: increasing state and federal financial support for 
research and project construction.
Recycled Water Use Affordability
    The cost of recycled water, relative to other water sources, will 
influence how much recycled water is produced for each region. Costs 
are dependent on the availability of treatable water, demand for 
treated water, the quality of the source as well as the product water, 
the type of the intended beneficial use, and the proximity of recycled 
water facilities to the end users. In addition, the need for disposal 
brine lines is considered a major issue for some inland agencies.
    The lack of adequate local funding to plan feasible recycled water 
projects can slow the construction of new projects. Public funding as 
well as incentive measures can help advance water recycling for 
irrigation, making more potable water supply available. In California, 
we estimate there is a potential of about 0.9 million to 1.4 million 
acre-feet annually of additional water supply from recycled water by 
the year 2030.
    When looking at California's overall water supply, recycling 
provides new water for the state only in areas where wastewater is 
discharged to the ocean or to salt sink. Recycling in other areas may 
provide new water for the water agency, but does not necessarily add to 
the state's water supplies. In these locations, discharged wastewater 
in interior California mixes with other water and becomes source water 
for downstream water users.
    For many communities, an investment in recycled water could also 
provide other benefits, including:

          1. More reliable and drought-proof local sources of water, 
        including nutrients, and organic matter for agricultural soil 
        conditioning and a reduction in fertilizer use
          2. Reduction of pollutants discharged into water bodies 
        beyond levels prescribed by regulations with the ability to 
        increase natural treatment by land application
          3. Improved groundwater and surface water quality that 
        contribute to wetland and marsh enhancement
          4. Energy savings because the use of recycled water as a 
        local source offsets the need for even-more energy-intensive 
        imported water

Potential Costs of Recycled Water
    The estimated capital cost for the range of potential recycling in 
California by 2030 is approximately $6 billion to $9 billion. The 
actual cost will depend on the quality of the wastewater, the treatment 
level to meet recycled water intended use, and the availability of a 
distribution network. Uses, such as irrigation near the treatment 
plant, will benefit from lower treatment and distribution costs.
    Irrigation of a wide array of agriculture and landscape crops can 
even benefit from the nutrients present in the recycled water by 
lowering the need for applied fertilizer. However, the use of recycled 
water for irrigation without adequate soil and water management may 
cause accumulation of salts or specific ions in soil and groundwater. 
Some uses, such as an industrial recycled water user farther away from 
the treatment plant, may need to pay higher costs for treatment and 
distribution. Given the wide range of local conditions that can affect 
costs, the majority of applications would cost between $300 and $1,300 
per acre-foot of recycled water. Costs outside this range are plausible 
depending on local conditions. Uses that require higher water quality 
and have higher public health concerns will have higher costs.

Affordability
    The cost of recycled water, relative to other water sources, will 
influence how much recycled water is produced for each region. The 
costs are dependent on the availability of treatable water, demand for 
treated water, the quality of the source as well as the product water, 
the type of the intended beneficial use, and the proximity of recycled 
water facilities to the end users. In addition, the need for disposal 
brine lines is considered a major issue for some inland agencies. The 
lack of adequate local funding to plan feasible recycled water projects 
can slow the construction of new projects. Public funding as well as 
incentive measures can help advance water recycling projects that 
provide local, regional and statewide benefits.

Water Quality
    The quality of the recycled water will affect its usage. Public 
acceptance of recycled water use depends on confidence in the safety of 
its use. Four water quality factors are of particular concern: 1) 
microbiological quality; 2) salinity; 3) presence of heavy metals, and 
4) the concentration of stable organic and inorganic substances or 
emerging contaminants originating from various pharmaceuticals and 
personal care products, household chemicals and detergents, 
agricultural fertilizers, pesticides, fungicides, animal growth 
hormones, and many other sources.

Public Acceptance
    Public perception and acceptance of some recycled water uses 
currently limits its application. In some areas, public concerns about 
potential health issues have limited the use of recycled water for 
indirect potable purposes, such as groundwater recharge and 
replenishment of surface storage, and even for irrigation of parks and 
school yards.

Potential Impacts
    Areas in interior California that discharge their wastewater to 
streams, rivers, or the groundwater contribute to downstream flows. 
Recycling water would remove this source of water and potentially 
affect downstream water users, including the environment. In some 
instances, recycling is discouraged when dischargers are required to 
maintain a certain flow in the stream for downstream users.

                      CONJUNCTIVE WATER MANAGEMENT

    During the last three years, the Conjunctive Water Management 
Branch of the California Department of Water Resources has implemented 
several integrated programs to improve the management of groundwater 
resources in California. These improvements cover many facets of 
groundwater management. They include developing a basic understanding 
of individual groundwater basins, identifying basin management 
strategies or objectives, planning and conducting groundwater studies, 
and designing and constructing conjunctive use projects. The goal is to 
increase water supply reliability statewide through the planned, 
coordinated management and use of groundwater and surface water 
resources.
    When the Conjunctive Water Management Program was formed five years 
ago, local agencies had little trust in the overall objectives of the 
program and minimal interest in participating. Since that time, the 
Program has been able to establish strong relationships with many local 
agencies and has made commitments to assist efforts to plan and 
implement conjunctive water use projects pursuant to the program goal 
while, at the same time, providing both local management opportunities 
and water supply system reliability measures.
    There is no comprehensive statewide data on the planning and 
implementation of conjunctive water management at the local agency 
level, but Department of Water Resources' Conjunctive Water Management 
Program data provides an indication of the types and magnitude of 
projects that water agencies are pursuing. In fiscal years 2001 and 
2002, the Program awarded more than $130 million in grants and loans to 
leverage local and regional investment in projects throughout 
California with total costs of about $550 million.

Examples of Conjunctive Management
    Some examples illustrate the types of conjunctive management under 
way on a regional and local scale. In Southern California, including 
Kern County, conjunctive management has increased average-year water 
deliveries by more than 2 million acre-feet. Over a period of years, 
artificial recharge in these areas has increased the water now in 
groundwater storage by about 7 million acre-feet.
    In Northern California, Santa Clara Valley Water District releases 
local supplies and imported water into more than 20 local creeks for 
artificial in-stream recharge and into more than 70 recharge ponds with 
an average annual recharge capacity of 138,000 acre-feet. Conjunctive 
management has virtually stopped land subsidence caused by heavy 
groundwater use and has allowed groundwater levels to recover to those 
of the early 1900s.
    In Southern California, the Groundwater Replenishment System is a 
groundwater management and water supply project jointly sponsored by 
the Orange County Water District and Orange County Sanitation District. 
The project will take highly treated urban wastewater and treat it to 
better-than drinking water standards using advanced membrane 
purification technology. The water will be used to expand an existing 
underground seawater intrusion barrier as well as augment water 
supplies for municipal and industrial uses. Phase 1 of the project is 
expected to produce up to 72,000 acre-feet per year of recycled water 
for groundwater recharge beginning in 2007.

Major Issues
    Lack of Data--There is rarely a complete regional network to 
monitor groundwater levels, water quality, land subsidence, or the 
interaction of groundwater with surface water and the environment. Data 
is needed to evaluate conditions and trends on three planes: laterally 
over an area, vertically at different depths, and over time. Also, 
there is often a reluctance of individuals who own groundwater 
monitoring or supply wells to provide information or allow access to 
collect additional information. The result is that decisions are often 
made with only approximate knowledge of the system.
    This uncertainty can make any change in groundwater use 
controversial. Additional investment in a monitoring network and data 
collection can help reduce this uncertainty, but must be done in 
accordance with a groundwater management plan that is acceptable to 
stakeholders in the basin.
    Infrastructure and Operational Constraints--Physical capacities of 
existing storage and conveyance facilities are often not large enough 
to capture surface water when it is available in wet years. Operational 
constraints may also limit the ability to use the full physical 
capacity of facilities. For example, permitted export capacity and 
efforts to protect fisheries and water quality in the Sacramento-San 
Joaquin Delta often limit the ability to move water to groundwater 
banks south of the Delta. Facilities that are operated for both 
temporary storage of flood water and groundwater recharge require more 
frequent maintenance to clean out excessive sediment that often is 
present in flood water.
    Surface Water and Groundwater Management--In California, water 
management practices and the water rights system treat surface water 
and groundwater as two unconnected resources. In reality, there is 
often a high degree of hydrologic connection between the two and a 
separation of management authority.
    Authority is separated among local, state and federal agencies for 
managing different aspects of California's groundwater and surface 
water resources. Several examples highlight this issue:

   First, the State Water Resources Control Board regulates 
        surface water rights dating from 1914, but not rights dating 
        before 1914;
   If that's not confusing enough, SWRCB also regulates 
        groundwater quality, but not the rights to use groundwater;
   On a local level, county groundwater ordinances and local 
        agency groundwater management plans often only apply to a 
        portion of the groundwater basin, and those with overlapping 
        boundaries of responsibility do not necessarily have consistent 
        management objectives; and finally,
   Except in adjudicated basins, individuals have few 
        restrictions on how much groundwater they can use, provided the 
        water is put to beneficial use on the overlying property.

    Failure to integrate water management across jurisdictions makes it 
difficult to manage water for multiple benefits and provide for 
sustainable use, including the ability to identify and protect or 
mitigate potential impacts to third parties, ensure protection of legal 
rights of water users, establish rights to use vacant aquifer space and 
banked water, protect the environment, recognize and protect 
groundwater recharge and discharge areas, and protect public trust 
resources.
    Water Quality--Groundwater quality can be degraded by naturally 
occurring or human-introduced chemical constituents, low quality 
recharge water, or chemical reactions caused by mixing water of 
differing qualities. Protection of human health, the environment, and 
groundwater quality are all concerns for programs that recharge urban 
runoff or reclaimed/recycled water. The intended end use of the water 
can also influence the implementation of conjunctive management 
projects. For example, agriculture can generally use water of lower 
quality than needed for urban use, but certain crops can be sensitive 
to some constituents like boron.
    New and changing water quality standards and emerging contaminants 
add uncertainty to implementing conjunctive management projects. A 
water source may, at the time it is used for recharge, meet all 
drinking water quality standards. Over time, however, detection 
capabilities improve and new or changed water quality standards become 
applicable. As a result, contaminants that were not previously 
identified or detected may become future water quality problems 
creating potential liability uncertainties. In some cases, conjunctive 
water management activities may need to be coordinated with groundwater 
clean up activities to achieve multiple benefits to both water supply 
and groundwater quality.
    Environmental Concerns--Environmental concerns related to 
conjunctive management projects include potential impacts on habitat, 
water quality, and wildlife caused by shifting or increasing patterns 
of groundwater and surface water use. For example, floodwaters are 
typically considered ``available'' for recharge. However, flood flows 
serve an important function in the ecosystem. Removing or reducing 
these peak flows can negatively impact the ecosystem. A key challenge 
is to balance the in-stream flow and other environmental needs with the 
water supply aspects of conjunctive management projects. There may also 
be impacts from construction and operation of groundwater recharge 
basins and new conveyance facilities.
    Funding--There is generally limited funding to develop the 
infrastructure and monitoring capability for conjunctive management 
projects. This includes funding to develop and implement groundwater 
management plans, study and construct conjunctive management projects, 
and to track--statewide and regionally--changes in groundwater levels, 
groundwater flows and groundwater quality.
    Grant applications from DWR's fiscal year 2001-2002 Conjunctive 
Water Management Program show project costs of increasing average 
annual delivery ranging from $10 to $600 per acre-foot. This wide range 
of costs is due to many factors, including project complexity, regional 
differences in construction and land costs, availability and quality of 
recharge supply, availability of infrastructure to capture, convey, 
recharge, and extract water, intended use of water, and treatment 
requirements. In general, urban uses can support higher project costs 
than agricultural uses. The average project cost of all applications 
received by DWR is $110 per acre-foot of increase in average annual 
delivery. This average unit cost translates to approximately $1.5 
billion in statewide implementation costs of for the conservative level 
of implementation, and $5 billion for the aggressive implementation.

                            RECOMMENDATIONS

    California Water Plan Update 2005 is the product of a collaborative 
process that brought together the Department of Water Resources; a 65-
member advisory committee representing urban, agricultural, and 
environmental interests; a 350-member extended review forum; and 2,000 
interested members of the public. The result is a plan that includes 
the very best ideas for meeting our water challenges, and the following 
recommendations about conjunctive water management and wastewater 
recycling:

Wastewater Recycling
          1. Federal, state and local funding should be increased 
        beyond Proposition 50 and other existing sources toward 
        sustainable technical assistance and outreach, advanced 
        research on recycled water issues, and adequate water reuse/
        recycling infrastructure and facilities.
          2. The state, with assistance from the federal government, 
        should encourage an academic program on one or more campuses 
        for water reuse research and education; develop education 
        curricula for public schools; and encourage institutions of 
        higher education to incorporate recycled water education into 
        their curricula.
          3. Federal, state and local agencies should engage the public 
        in an active dialogue and participation using a community 
        value-based decision-making model (determining what a community 
        values, then making decisions based on that information) in 
        planning water recycling projects.

Conjunctive Management
          4. Local water management agencies should coordinate with 
        other agencies that are involved in activities that might 
        affect long term sustainability of water supply and water 
        quality within or adjacent to a basin situation. Regional 
        groundwater management plans should be developed with 
        assistance from an advisory committee of stakeholders to help 
        guide the development, educational outreach, and implementation 
        of the plans.
          5. Continue funding for local groundwater monitoring and 
        management activities and feasibility studies that enhance the 
        coordinated use of groundwater and surface water. Additional 
        monitoring and analysis is needed to track, both statewide and 
        regionally, changes in groundwater levels, groundwater flows, 
        groundwater quality (including the location and spreading of 
        contaminant plumes) land subsidence, changes in surface water 
        flow, surface water quality, and the interaction and 
        interrelated nature of surface water and groundwater. There is 
        a need to develop comprehensive data and data management 
        systems to track existing, proposed, and potential conjunctive 
        management projects throughout the state and identify and 
        evaluate regional and statewide implementation constraints, 
        including availability of water to recharge, ability to convey 
        water from source to destination, water quality issues, 
        environmental issues, and costs and benefits.
          6. Give priority for funding and technical assistance to 
        conjunctive management projects that are conducted in 
        accordance with a groundwater management plan, increase water 
        supplies, and have other benefits including the sustainable use 
        of groundwater, maintaining or improving water quality, and 
        enhancing the environment be given priority. Additional 
        preference should be given for projects conducted in accordance 
        with a regional groundwater management plan. In addition, allow 
        funding for projects that make use of wet-season/dry-season 
        supply variability, not just wet-year/dry-year variability.
          7. Assess groundwater management to provide an understanding 
        of how local agencies are implementing actions to use and 
        protect groundwater, an understanding of which actions are 
        working at the local level and which are not working, and how 
        state and federal programs can be improved to help agencies 
        prepare effective groundwater management plans.
          8. Improve coordination and cooperation among local, state, 
        and federal agencies with differing responsibilities for 
        groundwater and surface water management and monitoring to 
        facilitate conjunctive management, to ensure efficient use of 
        resources, to provide timely regulatory approvals, to prevent 
        conflicting rules or guidelines, and to promote easy access to 
        information by the public.
          9. Encourage local groundwater management authorities to 
        manage the use of vacant aquifer space for artificial recharge 
        and to develop multi-benefit projects that generate source 
        water for groundwater storage by capturing water that would 
        otherwise not be used by other water users or the environment. 
        For example, through reservoir re-operation, water recycling 
        and reuse, and water conservation.
          10. Include wildlife agencies in the loop to streamline the 
        environmental permitting process for the development of 
        conjunctive management facilities, like recharge basins, when 
        they are designed with pre-defined benefits or mitigation to 
        wildlife and wildlife habitat.

    Senator Murkowski. Thank you, Mr. Grindstaff. And your full 
written testimony will be included as part of the record, as it 
will with everyone testifying today.
    Mr. Atwater, welcome.

 STATEMENT OF RICHARD ATWATER, CHIEF EXECUTIVE OFFICER, INLAND 
EMPIRE UTILITIES AGENCY, ON BEHALF OF THE WATEREUSE ASSOCIATION

    Mr. Atwater. Thank you again for inviting me to testify, 
Chairman Murkowski, Senator Feinstein, Senator Johnson. Of 
course, I was here with you on February 28, when we did the 
oversight hearing, and we've worked closely with your staff and 
on behalf of the WateReuse Association. We strongly support the 
introduction to the bill and we've been working with your 
staff. Based upon your conversation today, we are more than 
happy to work during the month of August to fine-tune the 
language and work with your staff and the Bureau of 
Reclamation. We've also had many meetings with the Bureau and 
the Department of the Interior staff over the last couple of 
months and I am also optimistic that we ought to be able to get 
through the definitions and terminology of what is financially 
viable and technically feasible and all that. And certainly as 
a person who has worked on the program since its inception in 
1992 and worked with Senator Feinstein to fund the first 
project that replaced the lost supply for the city of Los 
Angeles from Mono Lake and helped recover Santa Monica Bay and 
such, it is clear that these projects, as Joe just outlined, 
have many Federal benefits.
    And when you consider that Lake Mead and Lake Powell and 
the Colorado River are half full and this year--last year was 
about normal, but this year is 75 percent under normal, it 
means we are still in this 7 to 8 year drought on the Colorado 
River and we all realize the economic problems that will happen 
from Denver to Salt Lake City to Albuquerque to Phoenix and 
certainly southern California and Las Vegas. It is clear that 
the time to act and to work together to fund these very cost-
effective projects, not only given our California perspective 
and certainly Joe--his testimony does a very nice job of 
pointing out that for the last 4 or 5 years, through the CALFED 
process, the State of California and the Governor's Task Force 
in 2003 did a thorough review and identified the cost-effective 
projects.
    In fact, the Department, which is too bad--not to be 
critical, but in the deputy commissioner's submittal, in his 
testimony, in 2002, they did submit to this committee and to 
the House the report that Joe referred to and it did rank--and 
it took 10 years of feasibility studies. And for context, the 
projects that you asked about, they were included in that 
report. They've been thoroughly evaluated. It is unfortunate 
because we have spent a lot of time and effort and just to 
remind you, the State of California, the Fish and Wildlife 
Service, the Army Corps of Engineers have granted permits, have 
thoroughly reviewed those projects and we don't need to be 
redundant about reviews on top of reviews.
    Let me just speak a little bit about as S. 3639 and the re-
authorization. The last time the program was re-authorized was 
in 1996 and Congress, at that time, reduced the cost share of 
this program to 25 percent. Now we are proposing--which we 
endorsed in February and you've put in the draft bill--reducing 
the cost share to 20 percent. As Senator Feinstein said--and I 
would heartily agree, and you asked Deputy Commissioner Larry 
Todd about it--this is the most cost-effective Federal water 
program in the United States and we're reducing it even 
further, to a 20 percent cost share. When you look at it from a 
dollars per acre-foot perspective and strategically developing 
new water supplies, water recycling, reclamation, 
desalinization, recovering poor quality groundwater, which is 
critically important in New Mexico and throughout the arid West 
and developing new technologies to use water and recover it so 
that we can beneficially use it, it is clearly the highest 
priority in the 21st century, not only in the United States, 
but as Joe said, it is an international problem.
    But clearly, it is an opportunity for us to develop new 
technology and solve problems very cost effectively. So we look 
forward to working with you. In our written testimony, we have 
provided some details and we have already communicated that 
with your staff and we look forward to working with you. I 
guess I'll be back here next week and through the month of 
August. The only thing I can say is in southern California, 
since July 1, we have been over 100 degrees every day, so the 
weather is no different back home than it is here. So we'll be 
happy to work with you and get this done over the next month. 
Thank you, again, very much for inviting the WateReuse 
Association to work with you on this very, very important 
legislation.
    [The prepared statement of Mr. Atwater follows:]

    Prepared Statement of Richard Atwater, Chief Executive Officer, 
Inland Empire Utilities Agency, on Behalf of the WateReuse Association, 
                               on S. 3639

                              INTRODUCTION

    Madam Chairman and members of the Subcommittee, the WateReuse 
Association is pleased to have the opportunity to present this 
testimony on S. 3639 to reauthorize the Bureau of Reclamation's Reuse 
and Recycling Program (Title XVI) in ensuring an adequate water supply 
for the nation in the 21st century. I am Richard Atwater, Chairman of 
the WateReuse Association's National Legislative Committee, and I am 
representing the Association today.
    I want to thank the Chairman and Senator Feinstein for introducing 
S. 3639 to streamline the review criteria and enhance the cost-
effectiveness of the Bureau of Reclamation's Title XVI Water Reuse and 
Recycling Program.
    As a way of introduction, the WateReuse Association (WateReuse) is 
a non-profit organization whose mission is to advance the beneficial 
and efficient use of water resources through education, sound science, 
and technology using reclamation, recycling, reuse, and desalination 
for the benefit of our members, the public, and the environment. Across 
the United States and the world, communities are facing water supply 
challenges due to increasing demand, drought, and dependence on a 
single source of supply. WateReuse address these challenges by working 
with local agencies to implement water reuse and desalination projects 
that resolve water resource issues and create value for communities. 
The vision of WateReuse is to be the leading voice for reclamation, 
recycling, reuse, and desalination in the development and utilization 
of new sources of high quality water.
    I am also Chief Executive Officer of Inland Empire Utilities Agency 
(IEUA), located in Chino, California. By implementing aggressive 
conservation programs and using innovative recycling and desalting 
technologies to reuse our water supplies, we have reduced our potable 
water demand by 20% over the past five years. IEUA is a municipal water 
district that distributes imported water from the Metropolitan Water 
District of Southern California and provides municipal/industrial 
wastewater collection and treatment services to more than 800,000 
people within a 242 square mile area in the western portion of San 
Bernardino County. The Inland Empire region is the ``economic engine'' 
of California and among the top 10 job creating regions in the US.
    The IEUA service area population is expected to double during the 
next 20 years. About 7,000 new homes each year are being built in the 
IEUA service area. Inland Empire is not depending on new imported 
supplies from the Colorado River or Northern California through the 
CALFED Bay-Delta Program to meet our future water supply needs. 
Instead, we have developed an integrated water resources plan that will 
develop 95,000 acre-feet of new recycled water, desalinate over 50,000 
acre-feet of brackish groundwater supplies, and, with the Metropolitan 
Water District of Southern California, develop 150,000 acre-feet of 
conjunctive use in the Chino groundwater basin. These will be the 
primary new water supplies to meet the rapidly growing needs of the 
Inland Empire region of Southern California.
    A critical partner in making these new local water supplies 
available in our region is the Federal government. Pending in Congress 
are Title XVI bills that would authorize a $20 million grant to provide 
a 10% Federal cost-share for the IEUA regional water recycling project 
of 95,000 acre-feet (total cost is $200 million). Without a doubt this 
cost-sharing arrangement to develop a critical new supply for a rapidly 
growing region without asking for more supplies from the Colorado River 
or Northern California (CALFED) is incredibly cost-effective when 
compared to the other supply options available in the CALFED Bay-Delta 
Program.
    On behalf of the Association's Board of Directors, I want to 
commend you, Madam Chairman, for convening this hearing regarding S. 
3639. The hearing is especially timely, given the increasing number of 
challenges facing local agencies in their continuing quest to ensure 
adequate water supplies in the future.

   THE BUREAU OF RECLAMATION'S TITLE XVI REUSE AND RECYCLING PROGRAM

    Today, the West faces two daunting challenges simultaneously. The 
first is drought and the impacts of continued climate gyration--wild 
swings in previously established weather patterns. The second is the 
unprecedented growth throughout the Western States. Population 
continues to not just grow, but accelerate throughout the West! The 
Title XVI Water Recycling Program enables water users in the West to 
stretch existing supplies through the application of reclamation, 
reuse, recycling and desalination technologies. Title XVI was initially 
authorized in 1992, following a severe multi-year drought in California 
and other Western States. A drought of equal severity reduced the 
mighty Colorado River to record lows only a few years ago. We must find 
ways to expand the nation's water supplies, and do so without 
generating regional or environmental conflicts. Reusing our existing 
supplies and stretching those supplies is a significant part of the 
solution. The Title XVI program provides the authority and framework to 
accomplish these water resource development objectives to meet the 
needs of our cities and urban areas, our farms and ranches, and our 
diverse environment.
    This legislation clarifies and makes permanent the U.S. Department 
of the Interior and Bureau of Reclamation's Title XVI water reuse/
reclamation/recycling grant authority for the development of new 
sources of water. In so doing, this proposed legislation will help 
state and local governments and water departments and agencies develop 
new water and reliable water supplies.
    The bill amends the Reclamation and Wastewater and Groundwater 
Study and Facilities Act (1992) to provide new standards and procedures 
for the review of water reclamation and reuse projects by the Interior 
Department's Bureau of Reclamation. Additionally, the legislation sets 
forth specific criteria to assist Congress in the evaluation and 
selection of projects for Federal grant funding and sets the Federal 
cost share at 20%. This is lower than the cost sharing requirement 
specified in the 1996 amendments to Title XVI, and represents the most 
cost-effective leveraging of Federal funds for any current Federal 
water resources investment!
    We believe that S. 3639 addresses the important question of how to 
establish funding priorities. For the first time, a program is being 
established that provides a road map for the Secretary to determine if 
a project should be recommended for construction authorization. This 
would allow Subcommittees such as yours, Madam Chairman, to consider 
the value of a project to ameliorate a water supply shortage. Clearly, 
the ability to define priorities is critical to an enhanced Title XVI 
program and S. 3639 provides this framework.

Experiences with the Title XVI Program and Program Benefits
    The Association and its members have a long-standing and productive 
working relationship with the USBR and its Title XVI program. The Title 
XVI program has benefited many communities in the West by providing 
grant funds that made these projects more affordable. The Federal cost 
share--although a relatively small portion of the overall project 
cost--often makes the difference in determining whether a project 
qualifies for financing. In addition, the Federal funding and the 
imprimatur of the United States government typically results in a 
reduced cost of capital.
    The Association believes, first and foremost, that the Title XVI 
program serves a Federal interest as discussed below. Although the 
level of funding that the program has received over the past decade has 
been limited, it is still an unqualified success. Simply stated, this 
is one program that represents a sound investment in the future of the 
West by the Federal government. It delivers multiple benefits to 
stakeholders throughout the West, ranging from municipal and industrial 
to agricultural needs. Through FY 2004, the Federal investment of 
$272.5 million has been leveraged by a factor of approximately 5:1. 
According to a recently completed study by the Council on Environmental 
Quality (CEQ), the non-Federal investment to date during this same 
period amounted to $1.085 billion.
    In enumerating specific project benefits, we must not forget the 
intangible benefits that exist when this critical new water supply is 
brought on line in addition to the financial value of such projects. 
These benefits include the following:

   Environmental benefits realized through the conversion of 
        treated wastewater into a valuable new water supply;
   Reduction of the quantity of treated wastewater discharged 
        to sensitive or impaired surface waters;
   Alleviating the need to develop new costly water supply 
        development projects unless they are a last resort (e.g., new 
        dams and other expensive importation aqueducts);
   Reduced dependence on the Colorado River and on the CALFED 
        Bay-Delta System, especially during drought years when 
        conflicts on both of these water systems are particularly 
        intense;
   Creation of a dependable and controllable local source of 
        supply for cities in arid and semi-arid climates such as El 
        Paso, Phoenix, and Las Vegas;
   Reduced demand on existing potable supplies; and
   Energy benefits, including reduced energy demand and 
        transmission line constraints during peak use periods, realized 
        by the replacement of more energy-intensive water supplies such 
        as pumped imported water with less energy-intensive water 
        sources such as recycled water.

    A fundamental question is ``why would we want to use valuable, high 
quality water from the Bureau of Reclamation's Shasta Reservoir in 
Northern California or Lake Powell in Utah and pump and transport it 
over 500 miles to irrigate a park or golf course in the Los Angeles or 
San Diego metropolitan areas?'' Also remember that the replacement of 
that imported water with local recycled water will save enough energy 
and related greenhouse gas impacts from reduced pumping equivalent to a 
500 megawatt power plant! Obviously the energy and water policy issues 
facing the arid West clearly justify a ``strategically'' small grant 
program to use recycled water as a means to continue to support the 
economic vitality of the major metropolitan areas throughout the 
Colorado and Rio Grande River basins.

            GENERAL COMMENTS AND RECOMMENDATIONS FOR S. 3639

    Overall S. 3639 provides a solid redirection of the Title XVI 
program. It ensures that locally developed and supported projects have 
a clear process to secure Federal construction authorization. As we 
have discussed, most recently during the Subcommittee on Water and 
Power's oversight hearing on February 28, one of the most vexing 
challenges of the existing Title XVI program is the uncertainty that 
USBR will provide timely reviews of a proposed project. The ability to 
invest responsibility with a local community should remedy this 
deficiency. We are also encouraged that the Secretary has clear 
deadlines to act on any proposal that is submitted. This is vital to a 
successful program. We also believe that the decision to limit federal 
support to 20% of a project's costs is reasonable and will allow local 
communities to commit expeditiously their share of a project's cost.
    There are a limited number of issues contained in the draft 
legislation that we would like to highlight as critical to a successful 
Title XVI program. These are outlined below.

                       SPECIFIC ISSUES OF CONCERN

    1. The bill provisions dealing with ``financially capable'' and 
``technically viable'' project sponsors should be clarified through 
report language to ensure an understanding that the Secretary is to 
provide a project sponsor with a determination that the project is 
viable within 30 days or the project is deemed to be viable. We believe 
that the success of Title XVI reforms hinge on compliance with this key 
deadline.
    2. The checklist to determine viability provides clear direction 
for how sponsors are required to submit project data to the Bureau of 
Reclamation for review.
    3. The bill appears to limit demonstrations activities to the 
Western States by virtue of the language in Section 1602 (Purposes; 
Definitions). We recommend that the Secretary be provided authority to 
conduct research and demonstration activities in any geographic area 
where technology demonstrations may prove most effective, provided they 
have direct application and benefit to the Western States.
    4. We endorse the bill's provisions to require a project's value to 
be considered within the context of how it may contribute to improving 
a number of circumstances, including the environment. This clearly 
illustrates that any project priority will deliver multiple benefits.
    5. The 10-year sunset provision for projects is an important 
element to ensure timely review and recommendations of a project.
    6. The bill's transition process may inadvertently create 
unnecessary burdens. The requirement to make existing projects submit 
new information pursuant to the new mandates would effectively change 
the rules, creating new costs and delays to the project sponsor. We 
strongly recommend that feasibility proposals that have already been 
submitted not be required to comply with new rules. If a concern exists 
over limiting the universe of proposals that would be grandfathered 
into the program under the old rules, we recommend establishing a date 
from which the new rules would apply.

                               CONCLUSION

    Once again, the WateReuse Association wants to thank you, Madam 
Chairman, for convening this hearing. We would be pleased to work with 
you in addressing critical issues related to water reuse and recycling, 
desalination, and water use efficiency. We are strongly supportive of 
the Subcommittee's efforts to ensure adequate and safe supplies of 
water in the future for the entire country.

    Senator Murkowski. And we do appreciate all the work that 
you have contributed to date, Mr. Atwater. Thank you.
    Mr. Lippe, your testimony, please.

   STATEMENT OF CHRIS LIPPE, DIRECTOR, CITY OF AUSTIN WATER 
                      UTILITY, AUSTIN, TX

    Mr. Lippe. Thank you. Good afternoon, Chairman Murkowski, 
Ranking Member Johnson, and Senator Feinstein. I really want to 
thank you for the opportunity to testify in support of H.R. 
2341. I would also like to thank Representative Doggett for 
introducing this bill and our entire congressional delegation 
for all the hard work on Austin's behalf.
    Austin Water Utility has a history of innovation and, with 
your assistance, we hope to pursue more pioneering work in the 
development of a phased, large-scale, water reclamation and 
reuse project. First, let me provide some background 
information on Austin and its water needs, its efforts to meet 
those needs and the role we envision for the Bureau of 
Reclamation's title XVI program. The city of Austin owns and 
operates the Austin Water Utility, which has more than 180,000 
residential multi-family, commercial, industrial and wholesale 
connections, serving a total population of roughly 770,000 
persons. The utility service area covers 450 square miles and 
features three major drinking water treatment plants with a 
combined capacity of 260 million gallons per day. On the 
wastewater side, Austin is served by three large and eight 
small wastewater treatment plants that have a combined capacity 
of over 150 million gallons per day.
    We have operated a reclaimed water program since 1974 that 
provides, on average, more than two million gallons per day and 
growing. Austin is located in a rapidly growing region where 
long-range water supply planning and management is critical. As 
one of the several measures to assist us in meeting our water 
needs, Austin is relying on water reclamation. The expansion of 
our water reclamation system will provide a number of benefits. 
First, it alleviates the potential for water shortages in near- 
and long-term. Second, it delays and reduces annual payments 
under our raw water contract by millions of dollars. And 
finally, it reduces infrastructure costs by reducing and 
postponing water treatment plant and transmission mains.
    The city faces two major challenges in meeting the needs of 
its customers. First, there is a projected water need. The 
city's current water rights and water contracts are expected to 
meet demand until approximately 2042. By 2050, however, there 
will be an anticipated water shortage of 42,000 acre-feet per 
year, which is enough water to serve 63,000 residences or 
220,000 people, in contrast to our currently served population 
of 770,000. Water conservation measures are expected to provide 
half of this shortfall, leaving the other half to be provided 
by some alternative measure, such as our reclaimed water 
program.
    The second need is financial in nature and relates to 
funding constraints under our capital improvements plan. The 
city has identified almost $1 billion in infrastructure needs 
in the next 5 years, through its capital improvement planning. 
Much of that is devoted to water and wastewater treatment plant 
expansions, and rehabilitation of our aging wastewater 
collection system to meet the needs of the growing community. 
This, of course, also includes funding for expanding the 
reclaimed water program.
    The Bureau of Reclamation operates a well-respected cost 
share program to improve efficiency in the use of water 
resources. Section 1602 of P.L. 102-575 establishes those broad 
goals for the Bureau of Reclamation in administering title XVI 
programs, including identifying opportunities for reclamation 
and reuse of municipal waste water, investigating those 
opportunities and providing a 25 percent cost share for the 
design and construction of infrastructure. I am happy to say 
that an appraisal report prepared jointly by the city and the 
Bureau confirmed that the city of Austin's reclaimed project 
fits well within these broad goals.
    The city continues to collaborate with the Bureau of 
Reclamation on investigating the potential for reclaimed water 
in Austin through a feasibility report. We submitted our 
feasibility report on December 5, 2005. Reclamation provided 
written comments on March 22, 2006 and we are currently 
addressing those comments. In addition to conforming to the 
general goals of the title XVI program, the city of Austin's 
Reclamation project meets title XVI program requirements in the 
areas of applicability, eligibility, financial capability, 
ownership, regionalism, postponed expanded water supplies, 
reduced diversions from water courses and improved surface 
water quality.
    In summary, H.R. 2341 provides Federal authorization for 
the city of Austin to formally enter the Bureau of 
Reclamation's title XVI program and we are proactively working 
to address an anticipated water need and have developed a 
large-scale, phased project for the reclamation and reuse of 
municipal wastewater in the Austin area that fits within the 
goals and objectives of title XVI. We appreciate your time and 
support and respectfully request that the subcommittee approve 
H.R. 2341 and seeks its final passage. We thank you very much 
for your time today. This concludes my presentation.
    [The prepared statement of Mr. Lippe follows:]

   Prepared Statement of Chris Lippe, Director, City of Austin Water 
                         Utility, on H.R. 2341

    Chairman Murkowski, Ranking Member Johnson and Members of the 
Subcommittee, thank you for the opportunity to appear before you today 
to testify in favor of H.R. 2341. I would also like to thank 
Representative Doggett, for introducing this bill and our entire 
Congressional delegation for all of their hard work on Austin's behalf.
    My name is Chris Lippe, P.E., and I am the Director of the City of 
Austin's Water Utility. We provide water, reclaimed water, and 
wastewater service in Austin, the capital of Texas. With a population 
of approximately 770,000 Austin offers the best of big city and small 
town life. Austin is recognized as a leader in sustainable growth that 
enhances communities, enables economic development and supports the 
environment. Our Reclaimed Water Program is a component of that effort.
    In my testimony, I will provide information on H.R. 2341, Austin 
and its water needs, our efforts to meet those needs, and the role that 
we envision for the Bureau of Reclamation's Title 16 Program in helping 
to meet those needs.

                               H.R. 2341

    H.R. 2341 amends the Reclamation Wastewater and Groundwater Study 
and Facilities Act to authorize the Secretary of the Interior to 
participate in the design, planning, and construction of a project to 
reclaim and reuse wastewater within the service area of the Austin 
Water Utility.

                        ABOUT THE CITY OF AUSTIN

    Austin, Texas is a vibrant community of approximately 770,000 
citizens located in Central Texas and serves as the State Capital. The 
City owns and operates the Austin Water Utility, which has more than 
180,000 residential, multifamily, commercial, industrial, and wholesale 
connections and draws its water supply from the Colorado River.
    The City faces two major challenges in meeting the needs of its 
customers. First, there is a projected water need. The City's current 
water rights and water contracts are expected to meet demand until 
approximately 2042. By 2050, however there will be an anticipated water 
shortage of 42,096 af/yr. That is enough water to serve 63,000 
residences, or an equivalent population of 221,000 in contrast to our 
served population of 770,000. Water conservation measures are expected 
to provide half of the shortfall, leaving the other half to be provided 
by some alternative measure, such as reclaimed water.
    The second need is financial in nature and relates to funding 
constraints under our capital improvement plan. The City, through its 
current capital improvement plan has identified almost $1 billion in 
infrastructure needs in the next five years. Much of that is devoted to 
water treatment plant expansion, wastewater treatment plant expansion, 
and rehabilitation of the wastewater collection system to meet the 
needs of a growing community. This of course does include some funding 
for a growing reclaimed water program.
    The expansion of our water, reclamation system will provide a 
number of benefits. It alleviates the potential for water shortages. It 
defers millions of dollars in annual payments under our raw water 
contract. Finally, it can help defer the need for the construction of 
additional water treatment plants.

                      THE RECLAIMED WATER PROGRAM

    Based on the quality of the reclaimed water, the major uses for it 
in Austin are for irrigation, cooling towers, and manufacturing. During 
peak summer demands, reclaimed water use is more than three million 
gallons per day, predominantly for irrigation. The Sand Hill Energy 
Center recently connected to the system. The Combined Transportation 
and Emergency Communication Center is in the process of connecting and 
will use reclaimed water for irrigation purposes. In the next few 
years, we anticipate numerous additional customers as a result of 
redevelopment of the City's former airport. Other potential customers, 
such as the University of Texas and the Austin-Bergstrom International 
Airport, are interested in using reclaimed water if distribution lines 
can be extended to their property. Major Austin employers such as 
Samsung are interested in using reclaimed water. The University of 
Texas, is making plans to connect to our reclaimed water system.

             RECLAMATION AND REUSE PROJECT--CENTRAL SYSTEM

    The central reclaimed system provides water from the Walnut Creek 
Wastewater Treatment Plant (WWTP). In 2005, the most recent full year 
of data, customers used almost 60 million gallons of reclaimed water. 
Piping in the central reclaimed system consists of 4 miles of 
transmission main. Pumping equipment consists of two low-service pumps, 
a one million gallon ground storage tank, and three high-service pumps 
at the Walnut Creek WWTP. The central reclaimed system has one project 
in the preliminary engineering design stage a two million gallon 
elevated storage tank and an additional mile of transmission main.

              RECLAMATION AND REUSE PROJECT--SOUTH SYSTEM

    The south reclaimed system consists of a pump station, a booster 
pump station, a 0.5 million gallon elevated storage tank, and 15 miles 
of piping carrying treated wastewater effluent from the South Austin 
Regional WWTP. Customers include the award winning Hornsby Bend 
Biosolids Management Facility, the Sand Hill Energy Center, and two 
golf courses. In 2005 these customers used 587 million gallons of 
reclaimed water.

        RECLAMATION AND REUSE PROJECT--SATELLITE SYSTEM DETAILS

    The Austin Water Utility operates three satellite systems that are 
located on the fringes of its service area. With a satellite system, 
wastewater flows are geographically matched with potential customers 
and a water reclamation plant is built in the immediate vicinity. In 
2005, the Davenport WWTP provided 81 million gallons of reclaimed water 
for golf course irrigation. The Onion Creek WWTP produced 58 million 
gallons of reclaimed water for golf course irrigation. Finally, the 
Balcones and Pickfair WWTPs provided 79 million gallons of reclaimed 
water, again for golf course irrigation.

              RECLAMATION AND REUSE PROJECT--SYSTEM GROWTH

    As mentioned above, the City has approximately 19 miles of existing 
transmission main in the southern and central part of its service area 
as well as pump stations and storage tanks at the Walnut Creek and 
South Austin Regional WWTPs. This existing infrastructure serves as the 
backbone for the growth of the reclaimed water system. Eventually, the 
central and south systems will connect. A schematic showing the 
existing and proposed reclaimed water system is attached.
    With Federal assistance, the reclaimed water system can grow 
dramatically. The miles of transmission mains will expand to from 19 to 
137, an increase of more than 700%. Storage tanks in the distribution 
system will grow from zero to seven with a combined storage capacity of 
14.3 million gallons. Pump stations in the distribution system will 
increase from one to a total of five. The number of pressure zones will 
increase from two to five. Plant storage tanks will increase from two 
to three and their capacity will increase from 2.5 million gallons to 
3.5 million gallons. The magnitude of system growth requires that 
improvements be built over a period of years. Construction is projected 
to ramp up in 2008 and concludes in 2035, with the system reaching full 
capacity in 2039.

                            Table 1.--EXISTING AND ANTICIPATED RECLAIMED WATER DEMAND
----------------------------------------------------------------------------------------------------------------
                                                                                     Reclaimed         2050
                                                                                  Water Supplied   Reclaimed\1\
                    Source                               Major 2050 Uses           in 2005  (af/  Water Supplied
                                                                                        yr)           (af/yr)
----------------------------------------------------------------------------------------------------------------
Walnut Creek WWTP (Central System)............  Irrigation (47%), cooling towers        104          19,231
                                                 (29%), process water (24%).
SAR WWTP (South System).......................  Irrigation (63%), cooling towers      1,307           6,433
                                                 (11%), process water (26%).
Balcones/Pickfair WWTPs.......................  Irrigation (100%)...............        239             239
Davenport WWTP................................  Not in service..................        249               0
Onion Creek WWTP..............................  Irrigation (100%)...............        209             209
                                               -----------------------------------------------------------------
    Total.....................................    ..............................      2,108          26,112
----------------------------------------------------------------------------------------------------------------
\1\ Exceeds 21,096 goal.

    FINANCIAL CONSTRAINTS FACING AUSTIN'S WATER RECLAMATION PROGRAM

    A significant constraint to implementing our Reclaimed Water 
Program is funding. The Environmental Protection Agency, the American 
Water Works Association and the Association of Metropolitan Sewerage 
Agencies have all documented the enormous infrastructure needs of water 
and wastewater utilities. Austin's infrastructure needs reflect this 
national phenomena. Our recently approved 5-year Capital Improvement 
Plan contains nearly $1 billion worth of projects. This includes 
funding to alleviate sanitary sewer overflows, the construction of 
water treatment plants, the upgrading of wastewater treatment plants, 
and the rehabilitation of water and sewer mains. Construction of 
reclaimed water projects is part of this and promotes prudent financial 
management by offering the potential to defer some of the water 
treatment plant projects.
    We acknowledge that under the Title 16 Program, federal funding is 
capped and that the City will have to cover the bulk of the costs under 
Title 16. We estimate the City's portion as being 87% of the total cost 
and the City is prepared and committed to fully fund its portion. 
However given the importance of addressing water needs and water 
quality, federal assistance with this project is appropriate and 
welcome.

             Table 2.--MAJOR RECLAIMED WATER COMPONENT COSTS
                           [In millions of $]
------------------------------------------------------------------------
                                 Project               Total
         Service Area           Completed   Future    Project   Funding
                                or Funded  Projects    Cost    Shortfall
------------------------------------------------------------------------
Early System Improvements....      4.0                   4.0
Central/South................     19.0       158.4     177.4      158.4
Satellite....................      4.3                   4.3
                              ------------------------------------------
    Total....................     27.3       158.4     185.7      158.4
------------------------------------------------------------------------

                BUREAU OF RECLAMATION'S TITLE 16 PROGRAM

    The Bureau of Reclamation operates a well-respected water 
reclamation program, referred to as the Title 16 Program. It is 
designed to improve efficiency in the use of water resources in the 
western states. Section 1602 of Public Law 102-575 establishes broad 
goals for Reclamation in administering the Title 16 Program. These 
goals include:

   Identifying opportunities for reclamation and reuse of 
        municipal wastewater,
   Investigating those opportunities and,
   Providing a cost-share opportunity for an appraisal and 
        feasibility study and for the design and construction of 
        permanent facilities to reclaim and reuse municipal wastewater.

    The City of Austin's Reclaimed Water Program fits well within these 
broad goals. An Appraisal Report prepared jointly by the City and the 
Bureau of Reclamation that was completed in April 2004 confirmed this. 
The Appraisal Report concluded that there was a Federal interest in 
pursuing water reclamation and reuse investigations in Austin and 
recommended that a Feasibility Report be done.
    The City continues to collaborate with the Bureau of Reclamation on 
investigating the potential for reclaimed water in Austin. 
Specifically, we signed a cooperative agreement with the Bureau of 
Reclamation in September 2003 to jointly prepare a Feasibility Report. 
Austin submitted its Feasibility Report to Reclamation on December 5, 
2005. Comments were received from the Bureau on March 22, 2006. We are 
currently addressing those comments and will resubmit the Feasibility 
Report soon. While the Feasibility Report is not final, we are 
confident that it will support Austin's entry into the Bureau of 
Reclamation's Title 16 Program.
    In addition to conforming to the general goals of the Title 16 
Program, the City of Austin's Reclamation project meets the following 
specifics for the Title 16 Program:

          Applicability--Austin is located in Texas, which is one of 
        the seventeen western states under the Bureau of Reclamation's 
        jurisdiction.
          Eligibility--Austin is a municipality and therefore capable 
        of entering into a cost-sharing agreement with the Bureau of 
        Reclamation.
          Financial capability--Austin has dedicated revenue sources 
        through water and wastewater user fees and has demonstrated 
        financial capabilities as evidenced by the investment grade 
        rating of its outstanding bonds.
          Ownership--Austin will hold title to the facilities and be 
        responsible for their operation and maintenance.
          Regional perspective--Austin's Reclamation Project is 
        consistent with state authorized regional water supply plans 
        for the Colorado River.
          Postpones new or expanded water supplies--Austin's 
        Reclamation Project has the potential to postpone the expansion 
        of water treatment plants through more efficient use of 
        existing water resources.
          Reduces diversions from existing watercourses--Austin's 
        Reclamation Project will reduce existing diversions from the 
        Colorado River through more efficient use of existing water 
        resources.

                               CONCLUSION

    In summary, the expansion of our water reclamation system provides 
a number of benefits. It alleviates the potential for water shortages 
in the near-and long-term. It delays and reduces annual payments under 
our raw water contract by millions of dollars. Finally, it reduces 
infrastructure costs by reducing and water plant sizing.
    H.R. 2341 will authorize federal participation in the City of 
Austin's Reclaimed Water project under the Bureau of Reclamation's 
Title 16 Program. I believe that the project fits within the goals and 
objectives of the Title 16 program and respectfully request that the 
Subcommittee approve H.R. 2341 and seek its final passage. We 
appreciate your time and support. Thank you again for this opportunity 
to testify.

    Senator Murkowski. Thank you, Mr. Lippe.
    Mr. Ray, welcome.

 STATEMENT OF J. TOM RAY, PROJECT MANAGER, CENTRAL TEXAS WATER 
      RECYCLING PROJECT, LOCKWOOD, ANDREWS & NEWNAM, INC.

    Mr. Ray. Thank you. Good afternoon, Madam Chairman, Senator 
Feinstein. It is a privilege. My name is Tom Ray. I am the 
project manager for the Central Texas Water Recycling Project. 
I am also an engineer and a program manager with the firm of 
Lockwood, Andrews & Newnam, a long-time Texas firm.
    You have my written comments, so I just want to highlight a 
few points out of that testimony. First of all, I do want to 
extend my appreciation to Senator Hutchison and certainly my 
sincere gratitude to Congressman Chet Edwards for introducing 
this legislation, and Congressman John Carter for co-sponsoring 
the measure. Senator Hutchison, Congressman Edwards and 
Congressman Carter have been very supportive of water measures 
in central Texas, and certainly central Texans appreciate all 
of those efforts and I wanted to note that. Also, I certainly 
appreciate the efforts of this subcommittee in moving forward 
with modifications, including H.R. 3418, in consideration 
today.
    I think it is appropriate with the hot weather that is 
occurring in Texas and California that these measures be 
considered on a timely basis. Certainly, in Texas, we have been 
faced with record drought conditions. In fact, the drought that 
we are in today has exceeded, in many part of our State, the 
historical record drought. So we are looking for every means 
possible to preserve and conserve our water resources.
    The association that I represent, the Texas Water 
Conservation Association, has recognized water reuse and 
recycling as an important step throughout the State to augment 
our water supplies. The recent statewide planning process that 
has been done in 16 different areas of the State--each of those 
areas has recognized water reuse and water recycling as an 
important component of the strategies to meet the long-term 
future water shortages in the State of Texas.
    The long drought conditions are one thing; we also are 
having additional stress on our water supplies by additional 
growth that is taking place. The area of McLennan County is 
located along the Interstate Highway 35 corridor that is 
between Austin to the south and the Dallas/Fort Worth Metroplex 
to the north. Rapid growth is occurring along that corridor and 
increasing water demands result from that. So the citizens of 
Central Texas are taking steps to meet that growth and to deal 
also with the drought conditions that have happened recently in 
Central Texas.
    The local cost for water supply, for augmenting our water 
supply, has been very high of late. They have included water 
quality protection measures for both our surface water and 
ground water supplies. They've included water treatment, 
expansion and advanced treatment processes to meet Federal and 
State requirements, as well as to remove taste and odor 
components from our drinking water supply. As a result, the 
drinking water itself is very expensive. So reuse is a means of 
avoiding the use of this very expensive water and to be able to 
use recycled water for such applications as irrigation, cooling 
water and other industrial processes.
    To do that, the citizens of Central Texas have looked to 
move the location of wastewater treatment in McLennan County 
from a downstream remote area to the area where growth is 
taking place in central Texas. What that means is the treatment 
plants are available to provide recycled, highly-treated 
effluent to this growing area along the IH-35 corridor. Also, 
our industrial users are located in that area, as well, so the 
central Texans are looking at ways to maximize the potential 
for use and reuse.
    Reuse, I would also mention to you, helps us to meet peak 
demands. And, again, on days and summers like this where we 
have extremely hot conditions, our peak use increases very, 
very high, very much. And today, treated water is being used to 
apply for irrigation and industrial cooling water and other 
uses. Tomorrow, we hope to be able to use reuse water for those 
purposes during these types of days and be able to reduce the 
stress on our surface water supplies and our water treatment 
plants.
    I would mention, Madam Chairman, I think you've done this 
in the right order. The Waco and McLennan County project is 
somewhat modest, but I think it does typify the importance of 
title XVI to Texas. We would generate about 10,000 to 11,000 
acre-feet of additional water for our area, which is very 
important to us in these drought conditions.
    In summary, let me say that we certainly support H.R. 3418. 
We think that this particular project could provide enough 
water that 10,000 to 11,000 acre-feet would be equivalent to 
the use of about 20,000 households and we think it is 
significant, and again, we appreciate your consideration and we 
strongly support H.R. 3418. It is what can make the difference 
in whether this reuse component of this overall project is done 
or not. The local cost to our taxpayers and rate payers is very 
high, so if we have that additional partnership from the 
Federal Government, it could make the difference between 
whether we do this environmentally-sound and water-conserving 
measure or not, and I think that is the importance of H.R. 
3418. And I appreciate your being here today and being able to 
testify on the bill.
    [The prepared statement of Mr. Ray follows:]
Prepared Statement of J. Tom Ray, Project Manager, Central Texas Water 
   Recycling Project, Lockwood, Andrews & Newnam, Inc., on H.R. 3418
    Good afternoon, Senator Murkowski and Senators. My name is Tom Ray. 
I am project manager for the Central Texas Water Recycling project and 
an engineer and program manager with the engineering firm of Lockwood, 
Andrews & Newnam, Inc.
    Thank you for the opportunity to testify in support of including 
H.R. 3418, the Central Texas Water Recycling Act of 2005 and for the 
leadership of this subcommittee in scheduling this hearing. The 
incredibly hot summer that we are having in Texas and that our friends 
are having in California is a reminder of how our water resources can 
be stretched to the limit by forces of nature and the demands of 
rapidly increasing populations. It is also a reminder of the importance 
of the projects that are being considered today before this 
subcommittee. I also want to express my sincere gratitude to 
Congressman Chet Edwards for introducing this legislation and to 
Congressman John Carter for cosponsoring this measure. Both Congressman 
Edwards and Congressman Carter have been very supportive of initiatives 
to support water resources throughout Central Texas, and Central Texans 
certainly appreciate their work on this legislation.
    Much of Texas is in the grips of an extreme drought. It is 
recognized that every existing water resource that has the potential to 
augment our water supplies must be conserved and used efficiently. This 
is recognized on a statewide basis by the Texas Water 
Conservation.Association that has emphasized the value of water reuse 
throughout the State. Recently adopted Statewide water plans, under the 
direction of the Texas Water Development Board, have identified water 
reuse as a critical component of future strategies to meet water 
shortages in each of the 16 planning areas of the State. In Central 
Texas, and particularly among the cities located in McLennan County, 
reuse is a major component of our current plans. Reuse of treated 
wastewater effluent is included in the current expansion of the area's 
regional wastewater treatment system.
    In addition to prolonged drought conditions that stress our 
existing surface and groundwater supplies in Central Texas, demands on 
our water supplies continue to increase due rapid population growth 
that is occurring, particularly along the IH-35 corridor. As a result 
of these two factors, increasing demands due to population growth and 
continuing drought conditions, cities in Central Texas have invested 
significant local funds in a number of supply enhancement and water 
treatment projects in recent years. These costly efforts include water 
quality protection programs for our major surface water and groundwater 
resources, enlargement of the conservation pool of Lake Waco, and 
investments in advanced water treatment processes to meet and exceed 
federal and state standards as well as to remove taste and odor. All of 
these investments are substantial for the citizens of McLennan County 
and Central Texas. As a result, the cities are actively pursuing means 
to maximize those investments and to conserve our valuable water 
resources. Water recycling and reuse of reclaimed wastewater effluent 
is therefore a key component of this effort. H.R. 3418 will help us to 
succeed in this effort to replace the use of costly, treated water 
supplies for uses such as irrigation, cooling water and other 
industrial uses.
    Reuse supplies will help us cope with seasonable demands and peak 
water use. With temperature repeatedly reaching well over 100 degrees 
this month, it emphasizes the seasonal effects on water use and water 
demands. To help address the spikes in demand due to seasonal water 
use, the community of cities in McLennan County is incorporating reuse 
into the current plans to expand the regional wastewater treatment 
system. As opposed to expanding the central wastewater treatment 
located in a remote, downstream area, the expansion will be 
accomplished with ``satellite'' wastewater treatment plants that will 
be located in areas near the high growth corridors. This growing areas 
that include industrial, commercial, and residential as well as park 
lands and gold courses owned by the cities, will have the opportunity 
to reduce dependence on the use of costly treated water by having high 
quality, wastewater effluent available for irrigation and industrial 
uses. The ``McLennan County Regional Satellite and Reuse Project'' will 
provide a unique combination of reuse benefits at an outlying treatment 
facilities located in the major growth corridor.
    The Central Texas Water Recycling Act will help support these 
efforts to provide sustainable water supplies in this area of Texas.
    With this background, let me summarize the specific need for and 
benefits of the reclamation and water recycling project. Today, the 
growth areas of the regional wastewater collection facilities are 
hydraulically overloaded. In addition, the Central Wastewater Treatment 
Plant, which currently treats all wastewater generated by the serves 
all of the six cities that comprise the regional wastewater system. is 
nearing its permitted discharge capacity. The Texas Commission on 
Environmental Quality is requiring plans for the expansion of the 
existing wastewater treatment capacity.
    A comprehensive engineering solution to this wastewater challenge 
is the construction of a satellite wastewater reclamation plants and 
facilities to in part provide benefits from the reuse of the reclaimed 
effluent. The benefits of satellite plants are significant, in addition 
to avoiding expensive relocation of infrastructure and downstream 
conveyance improvements (estimated at $2.1 million), the plants will 
provide capacity for future growth in the ``high growth'' corridor, and 
significantly, the reclaimed water produced at the proposed reclamation 
plant can be readily delivered to dozens of end users within the nearby 
vicinity. Not only would this reclaimed water be a revenue generator, 
it would also help reduce the summertime peak water demands at the 
regional-water treatment plant.
    In summary, this legislation will not only provide for conservation 
of our community's water supply but will also reduce cost to the 
taxpayers and provide benefits to the environment as treated effluent 
is not dumped into river but is used to sustain habitat in our parks 
and recreational areas. Recycling of highly treated wastewater provides 
an additional valuable resource for a large number of identified reuse 
applications, including golf courses, landscape irrigation, industrial 
cooling water, and other industrial applications. The initial projects 
eligible for funding under this legislation can provide up to 10 
million gallons per day of reuse water; thereby, reducing the water 
demand on Lake Waco. This is enough water supply to meet the needs of 
over 20,000 households.
    Senator Murkowski and members of this subcommittee, we strongly 
support H.R. 3418, and the assistance it will provide for the McLennan 
County Regional Satellite and Reuse Project. The community of cities in 
McLennan County has committed significant funding to support the 
development of this project.
    We welcome the opportunity to partner with the Bureau of 
Reclamation to design, plan and construct a consolidated system to 
improve the efficient use of water resources in McLennan County.
    Thank you for allowing me to appear before you today.

    Senator Murkowski. Thank you. It is important for us to 
hear the reminders of the specific application to these water 
projects in their areas and the significance of why we need to 
reform this title so we can make these happen. I appreciate 
your comments.
    Mr. Atwater, I've got some questions for you, and these are 
all in context as they relate to S. 3639. As you know, we've 
got a series of deadlines that have been incorporated into our 
proposed legislation, deadlines where the Secretary has to 
comply, and it has been suggested to us that perhaps some of 
our deadlines are a little bit too tight. Can you speak to the 
issue of the deadlines, whether we are giving enough time for 
the appropriate proposal to be reviewed? Just give me your 
sense as to where we are with these deadlines.
    Mr. Atwater. Thank you. That's an excellent question. 
Working with your staff, the WateReuse Association thinks 
generally--we've reviewed it among our membership--that those 
deadlines are reasonable. We've had some discussions with the 
Department of the Interior and the Bureau of Reclamation and 
they would like a little bit more flexibility. And that is 
certainly a dialog we ought to have, but on the face of it, I 
think those deadlines are very workable. And as we all know, 
without deadlines, reviews don't get done, so having a deadline 
is a good thing. And we ought to, as we discussed, have that 
conversation during the month of August, and if there needs to 
be a little bit of fine tuning, we are certainly willing to 
participate in that discussion.
    Senator Murkowski. Good. We will put that on our list of 
to-do's then for August. It was suggested by Mr. Todd that 
really what we needed to be focusing on was to create this 
priority ranking system to guide the projects that are funded, 
and he spoke about defining the criteria and getting the 
management right and we're going to be OK. In terms of creating 
a priority ranking system, do you think that this is the 
appropriate approach to take?
    Mr. Atwater. We certainly welcome a competitive ranking 
system. At the last hearing on February 28, I think we 
discussed this. And I pointed out that certainly in California, 
the State of California has a process and Joe's organization, 
the CALFED Bay-Delta, in fact, had a task force report and was 
working with the State Water Board that funds water recycling 
projects by the State, with EPA funding. They rank projects.
    And this is a good example where the Bureau doesn't have to 
do a new set of rankings. We have existing processes. And, in 
fact, since 1992, they've done a Bay Area study and they've 
done the southern California one, and I can say that because 
our project in Inland Empire was ranked No. 1. We've gone 
through that process and we've already spent many millions of 
dollars and I know that's why Senator Feinstein keeps pointing 
out that we don't need to reinvent the wheel here and do a new 
procedure.
    I think there are ample reviews already developed and 
certainly we may need to have maybe a little bit of a history 
lesson for the Bureau that we don't need to redo that process. 
I think that is something that we ought to discuss with them in 
August, that there are existing detailed studies that have 
looked at both, in isolation, individual projects within a 
watershed, within the region and within the State and within 
the context of the Colorado River problems. I think Joe 
mentioned that quite clearly, that we've already done that kind 
of analysis.
    Senator Murkowski. And if we move forward with our 
provision, that provides for a sunset after 10 years.
    Mr. Atwater. Absolutely.
    Senator Murkowski. This, in fact, also helps to establish a 
priority, does it not?
    Mr. Atwater. Yes, it does, and both the House--in the 
passage of bills, they've already put in individual 
authorizations--and with your S. 3639 making that a generic 
sunset provision, I think that really addresses the backlog 
issue.
    Senator Murkowski. We, in our legislation, lay out a number 
of criteria and Senator Feinstein has mentioned what those 
specific criteria are. These are the criteria that the 
Secretary would be looking to. They are not exactly identical 
to what came out, the criteria that I referenced with Mr. Todd. 
In terms of establishing a set of criteria that are workable 
from all perspectives, are you satisfied with the set of 
criteria that we have laid out with in S. 3639?
    Mr. Atwater. Yes, we are. The Association thinks the 
criteria is an improvement over the existing Bureau of 
Reclamation's 1998 guidelines that they haven't updated since 
then. It will work well in being clear what project sponsors 
are expected to document to meet the congressional and 
administration goals for the program.
    Senator Murkowski. I think this is where we want to get to. 
We don't want to have to have a Member of Congress call a 
meeting between those that are putting together the specific 
water projects and the Bureau so that we all can agree that we 
are in alignment on the criteria. They need to be out there, 
transparent and understandable. Everybody has to know that this 
is what we are dealing with, it can't be subject to 
interpretation, if you are trying to put together the proposal, 
as opposed to what the agency might be looking at. So I'm 
hopeful that we're able to really give some parameters to this 
criteria so that the expectations are well understood.
    Mr. Atwater. Yes. And the only thing we would suggest is 
when you move this bill, the Committee report language, you can 
provide further, if you will, administrative details, so that 
there is no ambiguity and clarify, so we avoid, in the future, 
unfortunately having hearings where maybe there is some clarity 
that needs to be explained to the Bureau of Reclamation as to 
how they apply your criteria.
    Senator Murkowski. It has been pointed out a couple of 
times this afternoon that we deal with a series of reviews, and 
the analysis process that is 10 years in the making, that 
oftentimes what we're doing is just spending all of our time 
reviewing something and we are not actually getting to the 
water, we are not making the project happen. Does this 
legislation, as we currently have it now, does it get us away 
from that continual review by use of the financial and 
technical viability, moving it away from the approach that we 
have had in the past. Do you think we're getting there?
    Mr. Atwater. I think it is a major step forward and I think 
at this point in time, obviously we have to apply it, but I 
think it will be a significant improvement over the current 
practice.
    Senator Murkowski. We know that we can improve the current 
practice. We, in the legislation, authorize funding to the 
Secretary to allow for planning assistance to the interested 
communities; how do you think this is going to help?
    Mr. Atwater. I think it does help. There are some cases, 
the city of Austin is a good example, where they are working 
very closely and they've completed an appraisal report and now 
they are working with the Bureau of Reclamation on a detailed 
feasibility report. As we discussed at the February 28 hearing, 
at the Association, there are many agencies who are willing to 
be very proactive and fund all of the feasibility report, 
complete all their studies, technical work, financial, all of 
the pre-construction activities, submit to the Bureau and have 
them review it, and that works well, too.
    I think your criteria allow for both approaches, which I 
think is an excellent example where, again, it highlights the 
cost effectiveness of the program where the local sponsors are 
really investing and actively developing their project and the 
Bureau's partnership role can be just a review and 
certification that has been completed, meeting your criteria.
    Senator Murkowski. We have talked about some of the 
research and the technology development that goes into many of 
the projects as they relate to water recycling, and this 
committee has certainly supported that. The legislation 
encourages a strong, vibrant research program. Is that 
necessarily where we should be going with the research or 
should we be focused more on making these projects that are 
happening on the ground right now? Just give your opinion on 
that.
    Mr. Atwater. We strongly support that at the Association. 
We have an excellent partnership between our WateReuse 
Association Research Foundation and the Bureau of Reclamation. 
And, of course, Chairman Domenici's legislation and the work 
that he has sponsored with Sandia Labs, with the Bureau of 
Reclamation and the Research Foundation and other research 
entities has really been cutting edge over the last half a 
dozen years and it continues to grow. So we would say that the 
research component is a significant part of expanding the use 
and recovery of poor-quality water, whether it is reclamation 
of wastewater, cleaning up contaminated groundwater, recovering 
water, or improving water use efficiency throughout the United 
States. And obviously it has international implications.
    New technology is an important part of what we want to 
promote, but in the overall scheme of things, I would say that 
if we had $100 million, we would want to spend $90 million on 
constructing new projects and developing new water supplies, 
spend maybe another $5 million on the technical planning, all 
of that, and then the remaining $5 million per year would be on 
the R&D. Just to throw out numbers and have my constituents, 
who will probably change the numbers. But in round numbers, 
that kind of conceptually--we ought to continue that level of--
there is always a research cutting edge to try new technology 
and we think that ought to continue to be a key part of the 
Bureau of Reclamation's title XVI program.
    Senator Murkowski. I think that is important. I may have an 
extra question for you, but Senator Feinstein, if you want to 
go ahead.
    Senator Feinstein. Thank you very much, Madam Chairman. Mr. 
Atwater, really for my own benefit, I was looking at the Inland 
Empire Utilities project in this and the process that you have 
to go through, and because you are associated with that 
project, it is my understanding it meets six out of the nine 
requirements and it doesn't meet three, one being NEPA 
compliance, one being specific financial capability 
information, and one being research needs. Let me ask you this. 
I don't even understand why research needs is a requirement.
    Mr. Atwater. That is a very good question. We did submit 
the paperwork and complied with that in January 2006. On the 
financial capabilities, of course, that's been reviewed and 
approved by the State of California. And last year, we gave the 
Bureau of Reclamation our detailed 10-year, $200 million 
capital improvement program and our adopted financial plan.
    Senator Feinstein. So they have a 10-year capital 
improvement program?
    Mr. Atwater. We submitted all of that paperwork and they 
have it. So going back to your new criteria of financial 
viability, we have adopted rates, approved financial plans, and 
all that has been submitted to the Bureau of Reclamation. We 
met that criteria and we have submitted all of the NEPA 
documentation. Just as a footnote, we completed our 
Comprehensive California Environmental Act EIR in 2002, which 
has been reviewed and approved by both EPA and the Corps of 
Engineers. We sent all the paperwork to the Bureau of 
Reclamation, they have just not finished. And it really is--
it's not even a public review, it's just a minor administrative 
review of the NEPA document. So we've completed all the 
paperwork.
    Senator Feinstein. Now, NEPA compliance is not one of our 
requirements in this bill.
    Mr. Atwater. Nor should it be. We had a meeting with--and I 
don't know if Ted Bolin is here, but the Council of 
Environmental Quality, which reviewed the title XVI program. 
Working with your staff, we've had discussions with him. We 
really do think that the NEPA review, from a Federal 
standpoint, ought to be earlier, and I just pointed that out 
and we talked about this briefly.
    Senator Feinstein. You mean before it is even submitted?
    Mr. Atwater. Well, yes. When you are doing the planning is 
when you ought to do the NEPA review, not at the time of 
construction. The truth is, in the title XVI program--let's be 
real clear, in the history of the program, not one of the 
projects has ever risen to a full environmental impact 
statement. And, in fact, they are not controversial, they 
really are an administrative paperwork issue. So it suggests 
that NEPA review is a critical element for project feasibility 
review, when it really is ``Check the box, did you complete the 
paperwork?''
    Senator Feinstein. So would you suggest that we have 
something in the bill that deals with that?
    Mr. Atwater. I don't think it is necessary, because under 
the existing Federal requirements with CAQ and each Federal 
agency, if the Department of Commerce or the USDA gives a 
cooperative--any type of grant, they always do NEPA compliance, 
but it always is that level of review. I don't know if you need 
any new statutory language to have them comply with NEPA, the 
National Environmental Policy Act, and the CAQ guidelines. Each 
Federal agency's department already has adequate requirements 
on that. It is pretty routine.
    Senator Feinstein. I don't know if you've looked through 
these. It is sort of interesting to look through the actual 
projects and then the requirements. I mean you have to--you're 
required to study other alternatives. I mean, I don't know a 
better alternative than recycling. So if you have to--coming 
from local government, if I would look at this, I'd say, hmmm. 
It's all bureaucracy.
    Mr. Atwater. Well, we do. And as Joe will tell you, at the 
CALFED level, they've done extensive stakeholder discussions 
and an evaluation of water recycling, water use efficiency, the 
whole comprehensive strategy to solve the State-wide problems. 
And, of course, the Department of Water Resources adopted the 
State water plan and they do that every 5 years. And they 
comprehensively evaluate and that's, of course, your point. 
They recommend that water recycling, ground water management, 
water conservation, were all, as you stated quite clearly, the 
key measures to solve water supply problems in California and 
at the local level. When they say alternatives, we do things 
like, ``Do we run the pipe down this street versus another 
street?'' We do that level of engineering, but it is certainly 
not to do with the basic question, ``Should you do more water 
recycling in Rancho Cucamonga?'' As Congressman Dave Dreier 
pointed out, it's clear that we ought to do it.
    Senator Feinstein. Let me ask this question of all of you. 
Let me quickly run through, once again, the requirements that 
we would have: the cost per acre-foot of water produced, 
whether it can demonstrate regional benefits, what the 
environmental benefits are, whether it demonstrates new 
technologies, the cost-effectiveness of the project compared to 
others and whether it addresses certain Federal interests. Now 
I candidly think we have to be more specific about what we mean 
by each of these or they're going to get in the same conundrum 
they were in before, because these are pretty non-specific. If 
I put on my local government hat and look at this: ``Well, what 
Federal interests are they talking about? Is it just endangered 
species? Is it something else?'' I think we have to have very 
specific requirements. So I would respectfully submit that this 
needs more work and if the four of you have any input right 
now, I'd certainly love to hear it. Let's hear from the great 
State of Texas.
    Mr. Lippe. I had one thought on the new technology and the 
research question and that is that it seems a natural outcome 
of developing an operating system, an operating program. For 
example, in Austin, there are a number of chip makers, chip 
manufacturers for computer chips, and they are very interested 
in using reclaimed water for--huge amounts of water that that 
industry uses and so there is some--but it is very important to 
them that it work, that it not interfere in any way with their 
processes, so there is some research that those companies would 
be interested in doing. But the water needs to be----
    Senator Feinstein. Very pure, very high quality.
    Mr. Lippe. We would need to be able to deliver the water at 
a high quality to those locations in the first place. Second, 
the next phase of our project is to deliver the reclaimed water 
to the University of Texas campus. They have a number of 
cooling towers and a lot of landscaped irrigation. It is a very 
large campus, so I just connect that with a research university 
being able to take one further step once they have the water 
around their campus. They are actually putting pipes in the 
ground, in advance, in anticipation of this reclaimed water 
arriving to their campus. But, obviously, a university could 
grab that as an opportunity to do some research as well. So, 
not necessarily an either/or, do we do the projects, do we do 
the research, but to me, it is going to be a natural outcome. 
And I guess I was--well, this is a separate question, but 
something that was on my mind was, as we enter into this 
process or the new criteria, is there a--I guess you would call 
it a grandfathering of programs like ours that are hopefully 1 
month away from finishing feasibility or having a final one 
accepted?
    Senator Feinstein. Good question. What do we do? I'm told 
there are transition procedures in the bill. Well, let me go 
on. Mr. Grindstaff, Mr. Atwater, do you have any concerns about 
these requirements or beefing them up or changing them, making 
them more specific?
    Mr. Grindstaff. I'll answer. We run a lot of grant programs 
at the State level and have had a lot of experience, and to a 
large extent, what we are talking about here today is 
transitioning the Bureau of Reclamation from an agency that 
really helped build the West. I mean, we have to give them 
credit for a lot of what is in the western United States, but 
transitioning them from what they have always done, which is 
design things and build them themselves, to a grant-making 
agency, I think the more policy direction you give them, having 
received policy direction from the State legislature, from 
Congress myself, I think that is very helpful in their efforts 
to set up this new program, because this will become then kind 
of something that I would expect, over time, will expand within 
their budget. People will recognize this.
    Senator Feinstein. Joe, let me ask you this. Would you put 
on your grant hat and then go back and look at the bill 
language for these sections?
    Mr. Grindstaff. I will commit to do that. And beyond just 
me, I'll have staff look at it that are smarter than I am.
    Senator Feinstein. OK. And give us some recommendations, 
because I think the requirements ought to be crisp, and not 
vague, but specific, so that even somebody like me reading them 
would know exactly what I have to do to satisfy them.
    Mr. Grindstaff. Agreed. I will do that.
    Senator Feinstein. Thank you, Madam Chairman. I appreciate 
it.
    Senator Murkowski. Mr. Atwater?
    Mr. Atwater. There are good examples of it. All the States 
work with either a--am I on?
    Senator Murkowski. There should be a little light in the 
button.
    Mr. Atwater. I know. I'm going to have to practice this. 
But what I was going to say is a good example is EPA with its 
Clean Water program, with all the States. They have guidelines 
and that has worked well over the years and that is an example 
of where their grants and SRF low-interest loans--they have 
specific statutory guidelines in the State of California. All 
the States administer that in a like manner. As Joe pointed 
out, in the CALFED program, they have administered a wide range 
of grant programs with both the Federal agencies and the State. 
I think the Senator is right. We ought to be able to work 
together with the Bureau and make sure there is no ambiguity 
when we get done in the month of August.
    Senator Feinstein. Thank you. If I were looking at this, I 
would have a criteria bang for the buck. I mean, I know exactly 
what that means.
    Mr. Grindstaff. Absolutely.
    Senator Feinstein. I think that is the kind of thing that 
we have to get down to--in other words, the number of acre-feet 
per dollar spent--so that you really know whether you've got a 
cost-effective project before you.
    Mr. Grindstaff. And that really adds incentives for 
agencies to really cut down their requests for money because 
they know they are going to be judged by how many dollars per 
acre-foot it costs the Federal Government to get this project 
done. So they may reduce the amount of the request in order to 
be more competitive. So I agree 100 percent.
    Senator Murkowski. It seems that so many of the problems 
that we have had, historically, as we try to move forward with 
any of these programs, has been a competition. Everybody has 
their project that they are trying to advance. Senator Johnson 
mentioned the funding aspect of it and that is a reality that 
we must deal with. But we also have to deal with the reality 
that definable, concrete--not vague, not ambiguous--criteria 
need to be set so that those of you who are working to advance 
these projects, coming to Congress, seeking the authorization 
and, ultimately, the funding. Know what you can count on and 
what you cannot count on and what you are up against.
    I think it is our job to help you in that effort. As I look 
at projects that we have had before the subcommittee this 
afternoon and roll them in with all the others that we have had 
an opportunity to hear since I've been chairing this 
subcommittee, I don't think we've had one project where the 
Bureau has been able to give their support, because we don't 
have the criteria, the management and the funding all pulled 
together so that we can move forward with it. You either fix 
and reform the title XVI program or you have to deal with the 
reality that we're just offering legislative carrots out there 
that have nothing inside of them.
    The programs are far too important to do that. I would like 
to think that if we are successful with good legislation--and I 
will ask all of you that are at the table here today and those 
that are listening from the audience's perspective, because you 
have an interest in this, we are looking for assistance in 
making sure that we've got good legislation moving forward that 
will accomplish what we have set out to do. I'd like to think 
that if we can get the reform right, that we can actually see 
some of these projects checked off this list and this backlog 
that you have been living with for far too long can be made to 
disappear, that we move forward with it. We will look forward 
to seeing many of you in August and I appreciate your 
contribution, your hard work. And Senator Feinstein, thank you 
for all of yours. I appreciate it.
    [Whereupon, at 4:07 p.m., the hearing was adjourned.]

    [The following statement was received for the record:]

              Statement of the City of Austin, on S. 3639

    The City has reviewed S. 3639 and came up with the comments pasted 
below. If you would like to talk about these issues in more detail, I 
can arrange put you in touch with the person in the City who is working 
on its Title XVI project. Please let us know if you have any questions 
or need more information. I hope your August recess is going well. 
Thanks.
    The good news is that S. 3639's grandfathering provisions are 
flexible and we can easily work within them. The bill also streamlines 
the Title XVI process, which is needed. We did however notice two 
things that will improve the bill if changed:

          1) Section 1604(c)(2)(B) requires that within 30 days of the 
        submission of a project, the Secretary issues written notice on 
        whether or not their is sufficient information to evaluate the 
        project. The checklist for this includes ``engineering plans''. 
        Our experience is that engineering plans can be a significant 
        component (up to 15%) of project costs and, ideally, are 
        finalized immediately prior to construction. A Title XVI 
        Program participant would want to know whether or not federal 
        matching grants are available well in advance of expending 
        funds for engineering plans. A preliminary engineering report 
        is done to scope a project. It is conducted earlier and at much 
        less expense. It also contains enough information to determine 
        whether or not a project is technically viable. We recommend 
        that ``engineering plans'' be replaced with ``preliminary 
        engineering report'' in Section 1604 (c)(2)(B).
          2) In Section 1604(c)(2)(D) there is a requirement for a 
        ``financial plan'' for a project. We feel this is vague, 
        especially since many of our current difficulties with the 
        Title XVI Feasibility Study review relate to financing. Does 
        this mean an engineering cost study, does this mean a schedule 
        for the expenditure of funds, does this mean a life cycle cost 
        study, does this mean an analysis on the impact of rates? We 
        recommend that ``financial plan'' be changed to ``evidence of 
        financial capability, such as a bond rating or prospectus/
        underwriter's report for a planned bond issuance''.

                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

 Responses of P. Joseph Grindstaff to Questions From Senator Murkowski

    Question 1a. Reclamation's testimony indicates that under 
the CALFED Program, it has reviewed at least three of the Title 
XVI projects that would be authorized by S. 3638.
    Does the CALFED Program share Reclamation's view that the 
feasibility of those projects cannot be determined? Is the 
State of California providing financial assistance for the 
projects included in S. 3638?
    Answer. S. 3638 includes four projects for funding under 
Title XVI of Public Law 102-575 and one project that may not be 
related to Title XVI.
    For the Cucamonga Valley Water District Recycling Project, 
a feasibility study is currently underway. The feasibility 
study is funded through a plan of study grant that the State 
Water Resources Control Board (Board) has awarded to the 
District. Because the study has not been completed, the Board 
has not determined that the project is feasible.
    Some phases of the Inland Empire Utilities Agency Regional 
Water Recycling Project (Phases 1 and 2), Yucaipa Valley Water 
Supply Renewal Project, and City of Corona Water Recycling and 
Reuse Project have been approved and/or received funding from 
the Board. Feasibility of these projects has been determined 
based on state and federal requirements and provisions of state 
bond funding requirements (see discussion below on selection 
criteria).
    The Riverside-Corona Feeder Project, and other phases of 
the three projects listed above, is included in an Integrated 
Regional Water Management Implementation proposal that has been 
submitted to the Board for funding consideration. This proposal 
is currently under review as part of a competitive ranking and 
selection process according to state bond law.
    Question 1b. What Funding Criteria does the state use in 
deciding on whether or not to provide financial assistance?
    Answer. The Board provides funding to local agencies for 
water reclamation projects from a variety of funding sources. 
The State Revolving Fund Loan Program (SRF) is a low interest 
revolving loan program that was initially capitalized through 
federal grants and state bond sales. The other primary source 
of funds for water reclamation projects has been general 
obligation bonds approved by the voters. The Board provides 
construction grants and loans as well as planning grants to 
assist local agencies to conduct feasibility studies for water 
reclamation projects before they are implemented.
    Federal provisions applicable to the SRF and state bond 
legal requirements are incorporated into the funding criteria 
for each of the funding programs. For the SRF and water 
recycling program, applications are reviewed 1) based on 
readiness to proceed, 2) for determination of engineering, 
institutional, and financial feasibility, 3) based on 
assessment and assurances of there being a recycled water 
market, 4) for compliance with California Environmental Quality 
Act, and 5) for cost-effectiveness. Projects funded through 
other grant programs are selected for funding through a 
competitive process as required by the state bond law. The 
review and selection criteria are established in the bond 
funding program guidelines that are adopted through a public 
review process. The review criteria include scientific merit 
and project effectiveness evaluation.
    Because some water reclamation projects benefit the 
Sacramento-San Joaquin-San Francisco Bay-Delta region by 
reducing water diversions from the bay and delta, CALFED has a 
role in the administration of state funds. Proposition 50, 
passed in 2002, requires that Proposition 50 funds for water 
reclamation provide benefits to the Delta. The California Bay 
Delta Authority, which administers CALFED, reviewed and 
concurred with the Board Water Recycling Funding Program 
Guidelines and approved the projects eventually recommended for 
funding.
    Question 2. During your testimony at the subcommittee 
hearing, you indicated that during the last year, California 
entities had not taken Colorado River water that they were 
otherwise entitled to because of projects such as those 
authorized under Title XVI. Could you please elaborate on that 
situation and how much water was retained for use or carry-over 
in the Colorado River system (thereby benefiting other states)?
    Answer. The U.S. Department of the Interior adopted a 
Record of Decision for Colorado River Interim Surplus Criteria 
(ISC) in 2001 and California's Colorado River water contractors 
executed the Quantification Settlement Agreement and other 
related agreements in 2003. Together, these documents establish 
a framework under which California local agencies holding 
federal water delivery agreements may receive surplus Colorado 
River water. The ISC allows contractors serving municipal and 
industrial uses, namely Metropolitan Water District of Southern 
California (MWD) in California's case, to take surplus water 
based on specified hydrologic/reservoir storage criteria. Based 
on hydrologic conditions, surplus water was available to MWD in 
2003 and 2004, but not in 2005. Surplus water is again 
available in 2006. However, MWD has not taken any of the ISC 
surplus water to which it was entitled. Annual maximum amounts 
of that surplus water: 2003--107 TAF; 2004--70 TAF; 2005--0; 
2005--272 TAF (projected).
    For comparison purposes, MWD's 2005 Urban Water Management 
Plan shows that, in 2004, MWD member agencies produced the 
following amounts of water in their service areas: Water 
recycling--75 TAF (with MWD financial support), 134 TAF 
(without MWD financial support); Groundwater recovery--43 TAF 
(with MWD financial support), 21 TAF (without MWD financial 
support).
    MWD is not planning to take surplus Colorado River water in 
2006 because this year was very wet in Northern California and, 
hence, MWD received a full allocation from the California State 
Water Project. Colorado River water not taken by MWD will 
remain in storage in Lake Mead. Following the recent five year 
drought in the Colorado River system, overall reservoir storage 
remains low. Current reservoir system storage is at only 58% of 
capacity.
                                ------                                

    Responses of Richard Atwater to Questions From Senator Murkowski

    Question 1. As noted in the February oversight hearing, the 
Administration has opposed most, if not all the Title XVI 
projects that members of Congress have proposed for 
authorization in the last 2 Congresses. Has the lack of 
Administration support stymied the progress in developing and 
implementing water reuse projects in the West?
    Answer. Yes. Federal support can often make the difference 
in the financibility of a project. If a local government agency 
can demonstrate to the capital markets that even a small 
Federal subsidy is available, this can make the difference in 
whether a proposed financing package is accepted. General 
Eugene Habiger, former General Manager of the San Antonio Water 
System (SAWS), emphasized the value of Title XVI grants in 
testimony before the House Subcommittee on Water and Power on 
March 27, 2003. Habiger noted that ``in terms of Title XVI, we 
received $200,000 about six years ago, which proved to be 
invaluable with [SAWS'] recycled water program.'' Habiger 
continued by noting that these Federal programs are viable and 
shouldn't be considered as ``cash cows,'' but as leveraging 
mechanisms.
    Douglas Scott, Director of U.S. Water/Sewer Group for Fitch 
Ratings, testifying at the same hearing, made the following 
statement. ``Opportunities exist for the Federal government to 
participate in types of projects or in individual projects with 
direct grants which would leverage local dollars and possibly 
decrease the need for Federal involvement on a larger scale in 
the future.'' The WateReuse Association agrees strongly with 
Scott's statement.
    The Federal imprimatur can also result in a lower cost of 
capital (i.e., a lower interest rate) which can save the local 
agency and its ratepayers substantial dollars over the life of 
a bond. In sum, many more beneficial water reuse projects might 
have been initiated over the past five years had the current 
Administration been more supportive of Title XVI.
    At the February 28 hearing of the Senate Subcommittee on 
Water and Power, Virginia Grebbien (General Manager, OCWD) and 
Richard Atwater (Chairman of the WateReuse Association's 
National Legislative Committee), both indicated that based on 
their experiences, that Federal grants under Title XVI do 
provide a significant financial boost and ``Federal stamp of 
approval'' that provide the incentives to implement a water 
recycling project.
    Question 2. Reclamation opposes the authorization of any 
new Title XVI projects prior to Administration review and 
approval of appraisal and feasibility studies. Do you agree 
that Congress should not authorize any projects that have not 
had the benefit of an in-depth feasibility analysis? What are 
the primary issues that exist with having Reclamation being the 
entity with responsibility for assessing the feasibility of a 
project?
    If the Bureau would adhere to its own guidelines and 
provide timely responses to local government agencies which are 
applying for Title XVI projects, the current process would be 
workable. The Bureau appears to be saying that, due to lack of 
funds and the existing sizeable backlog of projects, they are 
reluctant to approve any new projects. The Bureau needs to set 
forth a clear set of rules and guidelines and then be 
responsive to local agencies that are spending large sums of 
money on the preparation of feasibility studies.
    With respect to whether Congress should or should not 
authorize projects that have not had the benefit of an in-depth 
feasibility analysis, S. 3639 provides a mechanism for Congress 
to authorize projects if the Bureau does not respond to a local 
agency within 180 days after completion of a feasibility study. 
The Association strongly supports this ``trigger,'' which would 
allow the Congress to authorize a project in the absence of a 
timely response by the Bureau.
    The primary issues that exist with having Reclamation being 
the entity with responsibility for assessing the feasibility of 
a project are as follows: 1) the Bureau appears reluctant to 
approve any project, regardless of the degree of diligence and 
the appropriateness of a local water reuse project; 2) the 
Bureau does not appear to be applying its own guidelines in an 
even handed, equitable manner; 3) the Bureau does not provide 
timely responses; and 4) the Bureau, through its actions during 
the current Administration, appears to have relegated the Title 
XVI program to the ``back burner'' and has focused most of its 
attention on its Water 2025 program.
    Through its Water 2025 program, the Department of the 
Interior has recognized that there are critical water shortages 
facing the Western U.S. and it is clear that water recycling is 
one of the most cost-effective solutions for alleviating these 
problems. As retired Commissioner John Keys has stated many 
times, recycled water is the ``last river'' that can be tapped 
to solve the water problems in the West. Therefore, the 
Association strongly recommends increased funding for Title XVI 
given that the benefits of water recycling are significantly 
higher than the modest 10-20 Federal share of the capital 
costs!

    [Responses to the following questions were not received at 
the time the hearing went to press.]

         Committee on Energy and Natural Resources,
                  Subcommittee on Public Lands and Forests,
                                    Washington, DC, August 3, 2006.
Mr. Larry Todd,
Deputy Commissioner for Policy, Administration, and Budget Bureau of 
        Reclamation, Department of the Interior, Washington, DC.
    Dear Mr. Todd: I would like to take this opportunity to thank you 
for appearing before the Senate Subcommittee on Water and Power of the 
Committee on Energy and Natural Resources on Thursday, July 27, 2006 to 
give testimony on S. 3638, S. 3639, H.R. 177, H.R. 2341, and H.R. 3418.
    Enclosed herewith please find a list of questions which have been 
submitted for the record. If possible, I would like to have your 
response to these questions by Thursday, August 17, 2006.
    Thank you in advance for your prompt consideration.
            Sincerely,
                                            Lisa Murkowski,
                                                          Chairman.
[Enclosure.]

                    Questions From Senator Murkowski

    Question 1. Your testimony on S. 3639 states that ``before projects 
are authorized for construction, their appraisal and feasibility 
studies should be completed, reviewed, and approved by the Department 
and 0MB and submitted to Congress.'' It's my understanding that 
Reclamation is not actively supporting a significant number of 
appraisal and feasibility studies.How much of the Departments' 2007 
budget request of $10.1 million for Title XVI projects is committed to 
reviewing and completing appraisal and feasibility studies for 
potential project authorizations?
    Question 2. The Administration's position promotes the use of 
``ranking criteria'' to help identify the projects most worthy of 
federal investment. Has Reclamation developed such ranking criteria? 
Given the very limited amount of funding for Title XVI projects in the 
President's budget, there must be some objective assessment being used 
to determine which projects should be funded. How does Reclamation 
develop its annual budget request for Title XVI projects?
    Question 3. Please identify with specificity the factors that 
Reclamation believes that must be met in order for a Title XVI project 
to demonstrate ``feasibility''.
    Question 4. In Reclamation's view, would any of the projects within 
S.3638 help alleviate significant water conflicts or shortages or add 
to the water supply in a crisis area? What is the nexus between the 
projects in S. 3638 and other Reclamation projects or interests?
    Question 5. With respect to H.R. 177, have feasibility studies and 
cost estimates been provided for the projects that would be authorized 
under sections 2, 3, & 4? If so, are the projects ``feasible'', 
applying Reclamation's criteria?
    Question 6. With respect to H.R. 2341, the Administration testimony 
raises 2 issues: (1) that the feasibility studies and NEPA analysis 
need to be completed; and (2) that there will still be a need to an 
evaluation of whether the project meets Title XVI authority and 
objectives. When do you expect to both the feasibility studies and the 
NEPA analysis to be complete? Please state with specificity and 
completeness, what Reclamation's views are with respect to ``Title XVI 
authority and objectives''.
    Question 7. The Administration testimony continues to reference the 
backlog of Title XVI projects already authorized. Yet the 
Administration's budget proposals continue to suggest budget cuts in 
excess of 50% for this program. Why does the Administration continue to 
recommend slashing the funding for Title XVI projects? If you believe 
that some projects that are currently authorized do not merit funding, 
please identify those projects.
                                 ______
                                 
         Committee on Energy and Natural Resources,
                  Subcommittee on Public Lands and Forests,
                                    Washington, DC, August 3, 2006.
Mr. Chris Lippe,
Director, City of Austin Water Utility, Austin, TX.
    Dear Mr. Lippe: I would like to take this opportunity to thank you 
for appearing before the Senate Subcommittee on Water and Power of the 
Committee on Energy and Natural Resources on Thursday, July 27, 2006 to 
give testimony on H.R. 2341.
    Enclosed herewith please find a list of questions which have been 
submitted for the record. If possible, I would like to have your 
response to these questions by Thursday, August 17, 2006.
    Thank you in advance for your prompt consideration.
            Sincerely,
                                            Lisa Murkowski,
                                                          Chairman.
[Enclosure.]

                    Questions From Senator Murkowski

    Question 1. Your testimony makes clear that Austin has already 
implemented some reclaimed water projects.
    Question 2. Is federal assistance necessary to continue with 
expansion of Austin's reclaimed water system? With respect to the 
additional facilities contemplated in H.R. 2341, how long would it take 
to initiate construction upon enactment of H.R. 3418? What additional 
activities would need to occur prior to construction?
                                 ______
                                 
         Committee on Energy and Natural Resources,
                  Subcommittee on Public Lands and Forests,
                                    Washington, DC, August 3, 2006.
Mr. Tom Ray,
Engineering Consultant, Waco, TX.
    Dear Mr. Ray: I would like to take this opportunity to thank you 
for appearing before the Senate Subcommittee on Water and Power of the 
Committee on Energy and Natural Resources on Thursday, July 27, 2006 to 
give testimony on H.R. 3418.
    Enclosed herewith please find a list of questions which have been 
submitted for the record. If possible, I would like to have your 
response to these questions by Thursday, August 17, 2006.
    Thank you in advance for your prompt consideration.
            Sincerely,
                                            Lisa Murkowski,
                                                          Chairman.
[Enclosure.]

                    Question From Senator Murkowski

    Question 1. Has a detailed study been completed for the McLennan 
County Regional Satellite and Reuse Project? If so, what is the overall 
cost of the project? How long would it take to proceed to construction 
upon enactment of H.R. 3418? What additional activities would need to 
occur prior to construction?

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