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[Senate Report 110-375]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 807
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-375

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                 SAN GABRIEL BASIN RESTORATION FUND ACT

                                _______
                                

                 June 16, 2008.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 123]

    The Committee on Energy and Natural Resources, to which was 
referred the Act (H.R. 123) to authorize appropriations for the 
San Gabriel Basin Restoration Fund, having considered the same, 
reports favorably thereon without amendment and recommends that 
the Act do pass.

                         Purpose of the Measure

    The purpose of H.R. 123 is to authorize appropriations for 
the San Gabriel Basin Restoration Fund.

                          Background and Need

    The San Gabriel Basin supplies drinking water to 1.4 
million people in eastern Los Angeles County, California. 
Volatile organic compounds, including suspected carcinogens, 
were discovered in the groundwater basin in 1979. Efforts to 
remove these compounds were moving forward under the federal 
Superfund program until 1997 when perchlorate was found in 
groundwater. This greatly complicated the cleanup process 
because different treatment methods were required. The 
perchlorate discovery closed a number of wells, cutting off the 
entire water supply for one water district and restricting 
water production for other producers. Faced with these 
problems, water producers and the San Gabriel Basin Water 
Quality Authority (WQA) began joint efforts to solve the 
immediate water supply problems and create a comprehensive 
solution. That effort led to establishment of the San Gabriel 
Basin Restoration Fund (Restoration Fund), originally 
authorized in 2000 as the San Gabriel Basin Water Quality 
Initiative (Public Law 106-554).
    The Restoration Fund's authorized appropriations ceiling 
was established at $85,000,000 in total for groundwater cleanup 
in the San Gabriel Basin and the Central Basin in Southern 
California. Specifically, up to $75,000,000 was dedicated to 
the WQA to address contamination in the San Gabriel Basin, and 
up to $10,000,000 for the Central Basin Municipal Water 
District (CBMWD) to address contamination in the Central Basin. 
Use of the Restoration Fund is restricted to (1) construction 
of groundwater treatment facilities and (2) operation and 
maintenance of facilities for no more than 10 years. The WQA is 
required to provide a 35% non-federal cost share on any federal 
funds obligated for the cleanup. While the initial authorizing 
legislation directed the Secretary of the Army to administer 
the Restoration Fund, Congress in 2002 began appropriating the 
Restoration Fund to the Bureau of Reclamation to administer 
(Public Law 107-66). According to information supplied to the 
Committee by the Bureau of Reclamation, as of November 2007, 
CBMWD has received the full $10,000,000 originally authorized 
in P.L. 106-554, while the WQA has not yet received the full 
$75,000,000 originally authorized. Therefore, all funds 
currently left under the current authorization ceiling of 
$85,000,000 should be directed solely to the WQA.

                          Legislative History

    H.R. 123 was introduced in the House of Representatives by 
Representative David Dreier (CA) on January 4, 2007, and 
referred to the Committee on Natural Resources. Representatives 
Lucille Roybal-Allard, Adam Schiff, Grace Napolitano, Linda 
Sanchez, and Hilda Solis are co-sponsors. Under suspension of 
the rules, H.R. 123 passed the House of Representatives on 
December 11, 2007. The bill was received in the Senate and 
referred to the Committee on Environment and Public Works. On 
April 10, 2008, the bill was discharged, and referred to the 
Committee on Energy and Natural Resources. The Water and Power 
Subcommittee held a hearing on H.R. 123 on April 24, 2008. At 
its business meeting on May 7, 2008, the Committee on Energy 
and Natural Resources ordered H.R. 123 favorably reported.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on May 7, 2008, by voice vote of a quorum 
present, recommends that the Senate pass H.R. 123.

                      Section-by-Section Analysis

    Section 1 amends the provision in P.L. 106-554 which 
established the San Gabriel Restoration Fund, by increasing the 
appropriations ceiling for the Restoration Fund from 
$85,000,000 to $146,200,000. Of this amount, section 1 sets 
aside a total of $21,200,000 for the CBMWD, which provides it 
an additional $11,200,000. The set-aside for CBMWD has the 
effect of reserving the balance of new authorized 
appropriations ($50,000,000) for the WQA. Section 1 also 
declares that both the WQA and CBMWD will be responsible for 
providing a 35% non-federal cost share of any funds they 
receive pursuant to H.R. 123.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

H.R. 123--An act to authorize appropriations for the San Gabriel Basin 
        Restoration Fund

    Summary: H.R. 123 would authorize the appropriation of 
additional amounts to the San Gabriel Basin Restoration Fund 
and would make the use of those funds contingent on the 
provision of matching funds by local entities in the state of 
California. Assuming appropriation of the necessary amounts, 
CBO estimates that implementing H.R. 123 would cost $50 million 
over the 2009-2013 period. Enacting H.R. 123 would not affect 
direct spending or revenues.
    H.R. 123 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 123 is shown in the following table. 
The costs of this legislation fall within budget function 300 
(natural resources and environment).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2009    2010    2011    2012    2013
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...      12      12      12      12      13
Estimated Outlays...............      10      10      10      10      10
------------------------------------------------------------------------

    Basis of estimate: For this estimate, CBO assumes that the 
legislation will be enacted near the beginning of fiscal year 
2009 and that the necessary amounts will be appropriated for 
each year.
    H.R. 123 would increase--from $85 million to $146.2 
million--the total amount authorized to be appropriated to the 
San Gabriel Basin Restoration Fund. Under current law, the 
Secretary of the Interior, working in coordination with 
municipalities, is authorized to use amounts in that fund to 
help design and construct water quality projects in the San 
Gabriel River Basin in California and to reimburse those 
facilities' operation and maintenance costs.
    Based on historical spending patterns from the fund and 
assuming appropriation of the necessary amounts, CBO estimates 
that implementing the legislation would cost $50 million over 
the 2009-2013 period, with additional spending of $11 million 
occurring in later years.
    Intergovernmental and private-sector impact: H.R. 123 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Assuming appropriation of the authorized 
amounts, the San Gabriel Basin Water Quality Authority and the 
Central Basin Municipal Water District would receive an 
additional $50 million over the five-year period for water 
restoration activities. That funding would be contingent on the 
provision of matching funds by those entities, but they would 
incur those costs voluntarily.
    Previous CBO estimate: On December 11, 2007, CBO 
transmitted a cost estimate for H.R. 123 as ordered reported by 
the House Committee on Natural Resources on November 15, 2007. 
The two versions of the legislation would authorize the same 
total amount of funding for the San Gabriel Basin Restoration 
Fund, and our estimates of discretionary spending are the same. 
The House version would allow the Secretary of the Interior to 
invest unspent balances in the fund, which would increase 
direct spending by an estimated $3 million over the 2008-2013 
period.
    Estimate prepared by: Federal costs: Tyler Kruzich; Impact 
on state, local, and tribal governments: Melissa Merrell; 
Impact on the private sector: Amy Petz.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out H.R. 123. The bill is not a regulatory measure in 
the sense of imposing Government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of H.R. 123, as ordered reported.

                   Congressionally Directed Spending

    H.R. 123, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in Rule XLIV of the Standing Rules 
of the Senate.

                        Executive Communications

    The testimony provided by the Bureau of Reclamation at the 
subcommittee hearing on April 24, 2008 on H.R. 123 follows:

 Statement of Robert W. Johnson, Commissioner, Bureau of Reclamation, 
                       Department of the Interior

    Mr. Chairman and Members of the Subcommittee, I am Robert 
Johnson, Commissioner of the Bureau of Reclamation. I am 
pleased to be here today to give the Department's views on H.R. 
123, a proposal to increase the ceiling on funds authorized to 
be appropriated to the San Gabriel Basin Restoration Fund. The 
Administration does not support H.R. 123.
    Groundwater contamination was first detected in the San 
Gabriel Valley in 1979. Following this discovery, the U.S. 
Environmental Protection Agency designated major portions of 
the region's groundwater as Superfund sites. Between 1990 and 
1997, EPA identified Potentially Responsible Parties at the 
site who then engaged in negotiations with local water agencies 
and began initial design work on an EPA-developed basin-wide 
plan to set cleanup priorities. After reaching a detailed 
agreement with seven local water agencies in March 2002, design 
work was completed and construction work began. Construction of 
the four planned groundwater extraction and treatment 
facilities was largely completed in 2006.
    As part of this effort to clean up the groundwater 
contamination in the San Gabriel Basin and prevent the 
contamination from spreading into the adjacent Central Basin, 
the San Gabriel Basin Restoration Fund (Fund) was established 
in 2001 by P.L. 106-554. Originally established as a Defense 
Department account and subsequently transferred to the Interior 
Department, this interest-bearing account reimburses the San 
Gabriel Basin Water Quality Authority (WQA) and the Central 
Basin Municipal Water District (District) for designing and 
constructing facilities that help with groundwater cleanup 
efforts in the Basin. The Fund is also authorized to reimburse 
the WQA and District for operating and maintaining these 
facilities for up to 10 years. A 35 percent non-Federal share 
is required for projects. This cost-share can be met by credits 
given to the WQA for expenditures used for water quality 
projects that have already been built in the San Gabriel Basin, 
in lieu of depositing the required 35 percent non-Federal share 
for these projects into the Fund. To date, the entire non-
Federal share has been met by credits that have been certified 
by Reclamation.
    In Fiscal Year 2001, Congress appropriated $23 million for 
deposit into the Fund. The Energy and Water Appropriations Act 
for Fiscal Year 2002 (P.L. 107-66), transferred administrative 
responsibility for the fund from the Secretary of the Army to 
the Secretary of the Interior, and appropriated an additional 
$12 million. Appropriations in fiscal years 2003-2008 brought 
the total deposits to the Fund to $71.71 million. In addition, 
the Fund has accumulated over $2.8 million in interest.
    Reclamation has executed six grant agreements under the 
Restoration Fund authority. One grant agreement is with the 
Central Basin Municipal Water District, covering design, 
construction, operation, and maintenance of their facility, up 
to the $10 million ceiling established by the legislation for 
this component. The other five agreements are with the WQA. 
Four cover the design and construction of specific facilities, 
and the fifth agreement covers operation and maintenance of 
those four facilities.
    The total estimated cost of the project authorized by the 
legislation is about $204 million. Based on this cost estimate, 
about $69 million would be allocated for the completion of all 
five facilities, and about $135 million would be allocated to 
fund the operation and maintenance of all five facilities for 
10 years, as authorized.
    The San Gabriel Basin Restoration Fund is and will continue 
to be used for important local projects. Reclamation must 
allocate its scarce budget toward funding already authorized 
projects within the agency's traditional mission of delivering 
water and power in an environmentally responsible and cost-
efficient manner, with emphasis on the needs of aging 
infrastructure, the safety of existing facilities and dams, and 
ongoing environmental restoration efforts. The Administration 
has not budgeted for the San Gabriel Basin Restoration Fund in 
any of the preceding fiscal years. The Administration believes 
that resources should be allocated to achieving priorities 
within Reclamation's traditional mission area and does not 
support the $61.2 million cost ceiling increase proposed in 
H.R. 123. Reclamation, however, will continue to work with the 
WQA and the District when possible to advance the goal of 
groundwater cleanup in the San Gabriel Basin.
    Mr. Chairman, this concludes my testimony. Thank you for 
the opportunity to comment on H.R. 123. I would be happy to 
answer any questions at this time.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill H.R. 123 as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, newmatter is printed in italic, existing law in which 
no change is proposed is shown in roman):

                 CONSOLIDATED APPROPRIATIONS ACT, 2001

                     SAN GABRIEL BASIN, CALIFORNIA

                Public Law 106-554 (114 Stat. 2763A-222)

SEC. 110. SAN GABRIEL BASIN, CALIFORNIA.

    (a) San Gabriel Restoration.--
          (1) Establishment of fund.--There shall be 
        established within the Treasury of the United States an 
        interest-bearing account to be known as the San Gabriel 
        Basin Restoration Fund (in this section referred to as 
        the ``Restoration Fund'').
          (2) Administration of fund.--The Restoration Fund 
        shall be administered by the Secretary of the Interior, 
        in cooperation with the San Gabriel Basin Water Quality 
        Authority or its successor agency.
          (3) Purposes of fund.--
                  (A) In general.--Subject to subparagraph (B), 
                the amounts in the Restoration Fund, including 
                interest accrued, shall be utilized by the 
                Secretary--

           *       *       *       *       *       *       *

                  (B) Cost-sharing limitation.--
                          (i) In general.--The Secretary may 
                        not obligate any funds appropriated to 
                        the Restoration Fund in a fiscal year 
                        until the Secretary has deposited in 
                        the Fund an amount provided by non-
                        Federal interests sufficient to ensure 
                        that at least 35 percent of any funds 
                        obligated by the Secretary are from 
                        funds provided to the Secretary by the 
                        non-Federal interests.
                          (ii) Non-federal responsibility.--The 
                        San Gabriel Basin Water Quality 
                        Authority shall be responsible for 
                        providing the non-Federal amount 
                        required by clause (i). The State of 
                        California, local government agencies, 
                        and private entities may provide all or 
                        any portion of such amount.
                          (iii) Credits toward non-federal 
                        share.--For purposes of clause (ii), 
                        the Secretary shall credit the San 
                        Gabriel Basin Water Quality Authority 
                        with the value of all prior 
                        expenditures by non-Federal interests 
                        made after February 11, 1993, that are 
                        compatible with the purposes of this 
                        section, including--
                                  (I) all expenditures made by 
                                non-Federal interests to design 
                                and construct water quality 
                                projects, including 
                                expenditures associated with 
                                environmental analyses and 
                                public involvement activities 
                                that were required to implement 
                                the water quality projects in 
                                compliance with applicable 
                                Federal and State laws; and
                                  (II) all expenditures made by 
                                non-Federal interests to 
                                acquire lands, easements, 
                                rights-of-way, relocations, 
                                disposal areas, and water 
                                rights that were required to 
                                implement a water quality 
                                project.
                          (iv) Non-federal match.--After 
                        $85,000,000 has cumulatively been 
                        appropriated under subsection (d)(1), 
                        the remainder of Federal funds 
                        appropriated under subsection (d) shall 
                        be subject to the following matching 
                        requirement:
                                  (I) San Gabriel Basin Water 
                                Quality Authority.--The San 
                                Gabriel Basin Water Quality 
                                Authority shall be responsible 
                                for providing a 35 percent non-
                                Federal match for Federal funds 
                                made available to the Authority 
                                under this Act.
                                  (II) Central Basin Municipal 
                                Water District shall be 
                                responsible for providing a 35 
                                percent non-Federal match for 
                                Federal funds made available to 
                                the District under this Act.
          (4) Interest on funds in restoration fund.--No 
        amounts appropriated above the cumulative amount of 
        $85,000,000 to the Restoration Fund under subsection 
        (d)(1) shall be invested by the Secretary of the 
        Treasury in interest-bearing securities of the United 
        States.

           *       *       *       *       *       *       *

    (d) Authorization of Appropriations.--
          (1) In general.--There is authorized to be 
        appropriated to the Restoration Fund established under 
        subsection (a) [$85,000,000] $146,200,000. Such funds 
        shall remain available until expended.
          (2) Set-aside.--Of the amounts appropriated under 
        paragraph (1), no more than [$10,000,000] $21,200,000 
        shall be available to carry out the Central Basin Water 
        Quality Project.

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